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StoneMor Partners L.P. Announces Third Quarter 2014 Financial Results

LEVITTOWN, Pa., Nov. 7, 2014 (GLOBE NEWSWIRE) -- StoneMor Partners L.P. (NYSE:STON) ("StoneMor") announced its results of operations for the three months ended September 30, 2014. Investors are encouraged to read the Company's quarterly report on Form 10-Q to be filed with the SEC, which contains additional details, as well as financial tables, and can be found at www.stonemor.com.

Larry Miller, StoneMor's President and CEO commented, "We are delighted to announce that for the third quarter of 2014, StoneMor reported record GAAP and production based (non GAAP) revenues. Our major business lines, pre-need cemetery contracts, at-need cemetery contracts, investment income from trusts and funeral home revenues, each showed positive growth and contributed to the double digit percentage growth in revenues (GAAP and non-GAAP).

"We are equally excited to report that we have started up an insurance division to assist with the funding of a variety of burial and funeral related services. We believe this will provide us with yet another avenue for revenue growth. In addition, we are on schedule with the integration of the new properties that we acquired last quarter. As with all growth initiatives, the expenses for these endeavors lead the revenue generation, which impacted our quarterly results. In the case of the properties that we acquired, all operating expenses are being incurred while we are still in the ramp-up phase of revenue generation. So, in the short term, these initiatives have had a moderately negative impact on our adjusted operating profits (non-GAAP), cash flow from operations (GAAP) and distributable cash flow (non-GAAP)."

Financial Highlights

  • Revenues (GAAP) and production-based revenues reached record levels for the third quarter period ending September 30, 2014.
  • Revenues (GAAP) for the three months ended September 30, 2014 were $78.2 million compared to $61.5 million for the three months ended September 30, 2013, a 27% increase.
  • Production-based revenue (non-GAAP) for the three months ended September 30, 2014 increased by $11.0 million, or 13.7%, to $91.6 million from $80.6 million during the prior-year period.
  • Operating profits (GAAP) were $2.4 million for the three months ended September 30, 2014 compared to $0.7 million in the prior year period, an increase of $1.7 million.
  • Adjusted operating profits (non-GAAP) were $14.2 million for the three-month period ended September 30, 2014, compared to $15.2 million in the same period last year, a decrease of $1.0 million, or 6.9%. This decline was attributable to the growth initiatives mentioned above and a one-time charge of approximately $1.0 million for a legal settlement.
  • Operating cash flows (GAAP) decreased by $3.9 million to $16.5 million in the three month period ending September 30, 2014 from $20.4 million in the prior year period. The decline was largely due to timing issues inherent in our trusts and the additional expenses related to our growth strategy.
  • Distributable free cash flow (non-GAAP) for the three-month period ended September 30, 2014 decreased to $12.1 million from $14.5 million for the same period last year. The decline was due to the same timing issues mentioned above.
  • Backlog increased by $12.8 million to $527.2 million in the period ending September 30, 2014 from the second quarter period ending June 30, 2014, and increased $61.4 million on a year-over-year basis.
  • Cash, accounts receivable and merchandise trusts, net of merchandise liabilities reached $502.2 million at the end of September 30, 2014.
  • Net loss (GAAP) for the three months ended September 30, 2014 was $3.3 million, as compared to a net loss of $1.5 million in the prior-year period.

"As we previously announced," Miller continued, "we increased our distribution for the third quarter which marks the second increase this year. We continue to expect to be able to increase our distribution by at least $.01 per unit per quarter through 2015. As further evidence of the strength of our business looking forward, our backlog increased on both a sequential and year-over-year basis and despite the large acquisitions we have made this year, we have decreased our long-term debt on a year-to-date basis. We continue to monitor the competitive environment for any opportunities that present themselves and we look forward to our prospects for the balance of the year."

The Company reports its financial results in accordance with U.S. GAAP. However, management believes that certain non-GAAP financial measures used in managing the business may provide investors with additional information regarding underlying trends and ongoing results on a comparable basis. Specifically, management believes that production-based revenues and adjusted operating profit allow the investor to gain insight into the current operating performance of the Company. Please see the section of this press release "Non-GAAP Financial Measures" to view the reconciliation tables. Non-GAAP financial measures used by the Company should not be considered as alternatives to GAAP financial measures, and you should not consider such non-GAAP financial measures in isolation or as a substitute for an analysis of the Company's results as reported under U.S. GAAP. Certain 2013 information has been adjusted to include the effects of retrospective adjustments resulting from the Company's 2013 first quarter acquisition.

Investor Conference Call and Webcast

StoneMor will conduct a conference call to discuss 2014 third quarter results today, Friday, November 7, 2014 at 10:00 a.m. EST. The conference call can be accessed by calling (800) 741-3792. An audio replay of the conference call will be available by calling (800) 633-8284 through 12:00 p.m. EST on November 21, 2014. The reservation number for the audio replay is 21738043. A live webcast of the conference call will also be available to investors who may access the call through the investors section of www.stonemor.com. An audio replay of the conference call will also be archived on StoneMor's website at www.stonemor.com.

About StoneMor Partners L.P.

StoneMor Partners L.P., headquartered in Levittown, Pennsylvania, is an owner and operator of cemeteries and funeral homes in the United States, with 303 cemeteries and 98 funeral homes in 28 states and Puerto Rico. StoneMor is the only publicly traded death care company structured as a partnership. StoneMor's cemetery products and services, which are sold on both a pre-need (before death) and at-need (at death) basis, include: burial lots, lawn and mausoleum crypts, burial vaults, caskets, memorials, and all services which provide for the installation of this merchandise. For additional information about StoneMor Partners L.P., please visit StoneMor's website, and the investors section, at http://www.stonemor.com.

Forward-Looking Statements

Certain statements contained in this press release, including, but not limited to, information regarding the status and progress of our operating activities, the plans and objectives of our management, assumptions regarding our future performance and plans, and any financial guidance or guidance related to our future distributions are forward-looking statements.

Generally, the words "believe," "may," "will," "estimate," "continue," "anticipate," "intend (including, but not limited to our intent to maintain or increase our distributions)," "project," "expect," "predict" and similar expressions identify these forward-looking statements.

These forward-looking statements are made subject to certain risks and uncertainties that could cause actual results to differ materially from those stated or implied. Our major risk is related to uncertainties associated with the cash flow from our pre-need and at-need sales, our trusts, and financings, which may impact our ability to meet our financial projections, our ability to service our debt and pay distributions, and our ability to increase our distributions.

Our additional risks and uncertainties, include, but are not limited to, the following: uncertainties associated with future revenue and revenue growth; uncertainties associated with the integration or anticipated benefits of our recent acquisitions or any future acquisitions; our ability to complete and fund additional acquisitions; the effect of economic downturns; the impact of our significant leverage on our operating plans; the decline in the fair value of certain equity and debt securities held in our trusts; our ability to attract, train and retain an adequate number of sales people; uncertainties associated with the volume and timing of pre-need sales of cemetery services and products; increased use of cremation; changes in the death rate; changes in the political or regulatory environments, including potential changes in tax accounting and trusting policies; our ability to successfully implement a strategic plan relating to achieving operating improvements, strong cash flows and further deleveraging; our ability to successfully compete in the cemetery and funeral home industry; litigation or legal proceedings that could expose us to significant liabilities and damage our reputation; the effects of cyber security attacks due to our significant reliance on information technology; uncertainties relating to the financial condition of third-party insurance companies that fund our pre-need funeral contracts; and various other uncertainties associated with the death care industry and our operations in particular.

When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and our other reports filed with the SEC. Except as required under applicable law, we assume no obligation to update or revise any forward-looking statements made herein or any other forward-looking statements made by us, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

Production Based Revenue

We present production based revenue because management believes it provides for a useful measure of both the value of contracts written and investment and other income generated during a given period and is a critical component of adjusted operating profit.

Production based revenue is a non-GAAP financial measure that may not be consistent with other similar non-GAAP financial measures presented by other publicly traded companies.

Adjusted Operating Profit

We present Adjusted Operating Profit because management believes it provides for a useful measure of economic value added by presenting an effective matching of the value of current and future revenue sources generated within a given period to the cost of producing such revenue and managing our day to day operations within that same period. It is a significant measure that we believe is an indicator of eventual profit generated within a given period of time.

Adjusted Operating Profit is a non-GAAP financial measure that may not be consistent with other similar non-GAAP financial measures presented by other publicly traded companies.

Adjusted Operating Cash Generated

We present adjusted operating cash generated revenue because management believes it provides for a useful measure of the amount of cash generated that is available to make capital expenditures and partner distributions once all cash flow timing issues have been settled.

Adjusted operating cash generated is a non-GAAP financial measure that may not be consistent with other similar non-GAAP financial measures presented by other publicly traded companies.

Distributable Free Cash Flow

We present Distributable Free Cash Flow because management believes this information is a useful adjunct to Net Cash Provided by (Used in) Operating Activities under GAAP. Distributable Free Cash Flow is a significant liquidity metric that we believe is an indicator of our ability to generate cash flow during any quarter at a level sufficient to pay the quarterly distribution to the holders of our common units and for other purposes, such as repaying debt and expanding through strategic investments.

Distributable Free Cash Flow is similar to quantitative standards of free cash flow used throughout the deathcare industry and to quantitative standards of distributable cash flow used throughout the investment community with respect to publicly traded partnerships, but is not intended to be a prediction of the future. However, our calculation of distributable free cash flow may not be consistent with calculations of free cash flow, distributable cash flow or other similarly titled measures of other companies. Distributable Free Cash Flow should not be used as a substitute for the GAAP measure of cash flows from operating, investing, or financing activities.

Production Based Partners' Capital

We present production based partners' capital as a means to provide better insight into the value that our activities contribute to the enterprise. Because a portion of our revenues and direct selling expenses are captured on our balance sheet until we deliver the underlying goods or services, we believe that by including these items in our view of partners' capital, we gain better insight into the value creation.

Backlog

We define backlog as deferred cemetery revenues and investment income less deferred selling and obtaining costs. It does not include deferred unrealized gains and losses on merchandise trust assets.

Reconciliation of Production Based Revenue (non-GAAP) and Adjusted Operating
Profit (non-GAAP) to Revenue (GAAP) and Operating Profit (GAAP)
Three months ended Three months ended
September 30, 2014 September 30, 2013
(in thousands) (in thousands)
Segment Segment Change in Change in
Results GAAP GAAP Results GAAP GAAP GAAP results GAAP results
(non-GAAP) Adjustments Results (non-GAAP) Adjustments Results ($) (%)
Revenues
Pre-need cemetery revenues $ 36,170 $ (5,030) $ 31,140 $ 34,642 $ (10,124) $ 24,518 $ 6,622 27.0%
At-need cemetery revenues 24,746 244 24,990 19,052 (1,325) 17,727 7,263 41.0%
Investment income from trusts 13,985 (6,740) 7,245 12,411 (6,015) 6,396 849 13.3%
Interest income 1,807 -- 1,807 1,484 -- 1,484 323 21.8%
Funeral home revenues 14,457 (2,218) 12,239 12,094 (1,721) 10,373 1,866 18.0%
Other cemetery revenues 455 298 753 890 151 1,041 (288) -27.7%
Total revenues 91,620 (13,446) 78,174 80,573 (19,034) 61,539 16,635 27.0%
Costs and expenses
Cost of goods sold 9,550 (488) 9,062 8,942 (1,840) 7,102 1,960 27.6%
Cemetery expense 18,076 -- 18,076 14,507 -- 14,507 3,569 24.6%
Selling expense 17,377 (883) 16,494 14,217 (2,525) 11,692 4,802 41.1%
General and administrative expense 9,808 -- 9,808 7,902 -- 7,902 1,906 24.1%
Corporate overhead 8,392 -- 8,392 7,997 -- 7,997 395 4.9%
Depreciation and amortization 3,112 -- 3,112 2,378 -- 2,378 734 30.9%
Funeral home expense 10,674 (315) 10,359 9,161 (180) 8,981 1,378 15.3%
Acquisition related costs, net of recoveries 451 -- 451 243 -- 243 208 85.6%
Total costs and expenses 77,440 (1,686) 75,754 65,347 (4,545) 60,802 14,952 24.6%
Operating profit $ 14,180 $ (11,760) $ 2,420 $ 15,226 $ (14,489) $ 737 $ 1,683 228.4%
Nine months ended Nine months ended
September 30, 2014 September 30, 2013
(in thousands) (in thousands)
Segment Segment Change in Change in
Results GAAP GAAP Results GAAP GAAP GAAP results GAAP results
(non-GAAP) Adjustments Results (non-GAAP) Adjustments Results ($) (%)
Revenues
Pre-need cemetery revenues $ 104,555 $ (26,957) $ 77,598 $ 102,383 $ (32,513) $ 69,870 $ 7,728 11.1%
At-need cemetery revenues 67,704 614 68,318 60,387 (4,259) 56,128 12,190 21.7%
Investment income from trusts 39,225 (19,529) 19,696 32,916 (15,892) 17,024 2,672 15.7%
Interest income 5,848 -- 5,848 5,209 -- 5,209 639 12.3%
Funeral home revenues 40,777 (5,313) 35,464 36,904 (4,437) 32,467 2,997 9.2%
Other cemetery revenues 6,163 1,007 7,170 2,592 283 2,875 4,295 149.4%
Total revenues 264,272 (50,178) 214,094 240,391 (56,818) 183,573 30,521 16.6%
Costs and expenses
Cost of goods sold 29,307 (4,091) 25,216 26,841 (5,737) 21,104 4,112 19.5%
Cemetery expense 47,546 -- 47,546 42,700 -- 42,700 4,846 11.3%
Selling expense 48,404 (5,860) 42,544 43,549 (8,415) 35,134 7,410 21.1%
General and administrative expense 26,333 -- 26,333 23,382 -- 23,382 2,951 12.6%
Corporate overhead 22,394 -- 22,394 21,657 -- 21,657 737 3.4%
Depreciation and amortization 7,993 -- 7,993 7,159 -- 7,159 834 11.6%
Funeral home expense 29,813 (732) 29,081 27,582 (501) 27,081 2,000 7.4%
Acquisition related costs, net of recoveries 2,040 -- 2,040 901 -- 901 1,139 126.4%
Total costs and expenses 213,830 (10,683) 203,147 193,771 (14,653) 179,118 24,029 13.4%
Operating profit $ 50,442 $ (39,495) $ 10,947 $ 46,620 $ (42,165) $ 4,455 $ 6,492 145.7%

The tables above analyze our results of operations and the changes therein for the three months and nine months ended September 30, 2014, as compared to the same periods last year. The tables are structured so that our readers can determine whether changes were based upon changes in the level of merchandise and services and other revenues generated during the periods and/ or changes in the timing when merchandise and services were delivered.

Critical Financial Measures
Three months ended Nine months ended
September 30, September 30,
2014 2013 2014 2013
(in thousands) (in thousands)
Total revenues (a) $ 78,174 $ 61,539 $ 214,094 $ 183,573
Production based revenue consisting of the total value of cemetery contracts written, funeral home revenues and investment and other income (b) 91,620 80,573 264,272 240,391
Operating profit (a) 2,420 737 10,947 4,455
Adjusted operating profit (b) 14,180 15,226 50,442 46,620
Net income (loss) (a) (3,268) (1,484) (2,977) (15,493)
Operating cash flows (a) 16,487 20,413 23,238 36,896
Adjusted operating cash generated (b) 13,980 15,719 53,965 61,502
Distributable free cash flow generated (b) $ 12,105 $ 14,516 $ 49,575 $ 57,037
As of As of
September 30, 2014 December 31, 2013
Distribution coverage quarters (b) 9.32 7.65
_______________________________
(a) This is a GAAP financial measure.
(b) This is a non-GAAP financial measure as defined by the Securities and Exchange Commission. Please see the reconciliation to GAAP measures or support calculation within this press release.
Reconciliation of Adjusted Operating Profit (non-GAAP) to Operating Profit (GAAP)
Three months ended Nine months ended
September 30, September 30,
2014 2013 2014 2013
(in thousands) (in thousands)
GAAP operating profit $ 2,420 $ 737 $ 10,947 $ 4,455
Increase in applicable deferred revenues 13,446 19,034 50,178 56,818
Increase in deferred cost of goods sold and selling and obtaining costs (1,686) (4,545) (10,683) (14,653)
Adjusted operating profit $ 14,180 $ 15,226 $ 50,442 $ 46,620
Reconciliation of Production Based Revenues (non-GAAP) to Revenues (GAAP)
Three months ended September 30, Increase Increase
2014 2013 (Decrease) ($) (Decrease) (%)
(in thousands)
Value of pre-need cemetery contracts written $ 36,170 $ 34,642 $ 1,528 4.4%
Value of at-need cemetery contracts written 24,746 19,052 5,694 29.9%
Investment income from trusts 13,985 12,411 1,574 12.7%
Interest income 1,807 1,484 323 21.8%
Funeral home revenues 14,457 12,094 2,363 19.5%
Other cemetery revenues 455 890 (435) -48.9%
Total production based revenues 91,620 80,573 11,047 13.7%
Less:
Increase in deferred sales revenue and investment income (13,446) (19,034) 5,588 -29.4%
Total GAAP revenues $ 78,174 $ 61,539 $ 16,635 27.0%
Reconciliation of Adjusted Operating Cash Flows (non-GAAP) and Distributable Free
Cash Flow (Non-GAAP) to Operating Cash Flows (GAAP)
Three months ended September 30, Nine months ended September 30,
2014 2013 2014 2013
(in thousands) (in thousands)
GAAP operating cash flows $ 16,487 $ 20,413 $ 23,238 $ 36,896
Add net cash inflows into the merchandise trust 10,255 1,100 26,547 23,711
Add net increase (decrease) in accounts receivable (7,065) (5,051) 2,958 2,148
Add net decrease (increase) in merchandise liabilities 2,041 (1,075) 3,793 537
Add net decrease (deduct net increase) in accounts payable and accrued expenses (6,857) (4,663) (7,382) (8,340)
Other float related changes (881) 4,995 4,811 6,550
Adjusted operating cash flow generated 13,980 15,719 53,965 61,502
Less: maintenance capital expenditures (2,326) (1,446) (6,430) (5,366)
Plus: growth capital expenditures reclassified as operating expenses and deducted from adjusted operating cash generated (a) 451 243 2,040 901
Distributable free cash flow generated (b) 12,105 14,516 49,575 57,037
Cash on hand - beginning of the period 15,287 14,075 12,175 7,946
Distributable cash available for the period 27,392 28,591 61,750 64,983
Partner distributions made $ 17,072 $ 13,386 $ 45,297 $ 38,653
_________________________________________________
(a) We maintain a credit facility from which to make acquisitions and pay acquisition related costs. We utilize this line for these costs. Accordingly, distributable free cash flow is not negatively impacted by amounts spent on acquisitions that are recorded as expenses.
(b) Results for the nine months ended September 30, 2013 include the impact of a legal settlement, which added $11.9 million to distributable free cash flow generated.
Production Based Partners' Capital
As of As of
September 30, 2014 December 31, 2013
(in thousands)
Partners' capital $ 233,916 $ 107,520
Deferred selling and obtaining costs (94,853) (87,998)
Deferred cemetery revenues, net 634,805 579,993
Production based partners' capital $ 773,868 $ 599,515
Selected Net Assets
As of As of
September 30, 2014 December 31, 2013
(in thousands)
Selected assets:
Cash and cash equivalents $ 22,175 $ 12,175
Accounts receivable, net of allowance 55,463 55,415
Long-term accounts receivable, net of allowance 86,478 78,367
Merchandise trusts, restricted, at fair value 491,641 431,556
Total selected assets 655,757 577,513
Selected liabilities:
Accounts payable and accrued liabilities 40,831 37,269
Accrued interest 4,944 1,512
Current portion, long-term debt 3,373 2,916
Other long-term liabilities 1,342 1,527
Long-term debt 265,831 289,016
Deferred tax liabilities 13,106 12,407
Merchandise liability 153,511 130,412
Total selected liabilities 482,938 475,059
Total selected net assets $ 172,819 $ 102,454
Distribution coverage quarters (a) 9.32 7.65
__________________________________________
(a) This is a measure of the ratio of selected net assets to a quarterly distribution amount. The quarterly distribution amount is calculated by taking the end of the period outstanding common units (29,131,835 at September 30, 2014 and 21,377,102 at December 31, 2013, respectively) and multiplying these units by the declared distribution. This total is then added to the distribution due to the General Partner based upon the same variables.
StoneMor Partners L.P.
Condensed Consolidated Balance Sheet
(in thousands)
(unaudited)
September 30, December 31,
2014 2013
Assets
Current assets:
Cash and cash equivalents $ 22,175 $ 12,175
Accounts receivable, net of allowance 55,463 55,415
Prepaid expenses 6,535 3,622
Other current assets 23,784 22,667
Total current assets 107,957 93,879
Long-term accounts receivable, net of allowance 86,478 78,367
Cemetery property 341,178 316,469
Property and equipment, net of accumulated depreciation 100,746 85,007
Merchandise trusts, restricted, at fair value 491,641 431,556
Perpetual care trusts, restricted, at fair value 348,950 311,771
Deferred financing costs, net of accumulated amortization 7,124 8,308
Deferred selling and obtaining costs 94,853 87,998
Deferred tax assets 42 42
Goodwill 57,128 48,737
Intangible assets 67,945 9,655
Other assets 5,161 2,554
Total assets $ 1,709,203 $ 1,474,343
Liabilities and partners' capital
Current liabilities:
Accounts payable and accrued liabilities $ 40,831 $ 37,269
Accrued interest 4,944 1,512
Current portion, long-term debt 3,373 2,916
Total current liabilities 49,148 41,697
Other long-term liabilities 1,342 1,527
Obligation for lease and management agreements, net 8,594 --
Long-term debt 265,831 289,016
Deferred cemetery revenues, net 634,805 579,993
Deferred tax liabilities 13,106 12,407
Merchandise liability 153,511 130,412
Perpetual care trust corpus 348,950 311,771
Total liabilities 1,475,287 1,366,823
Commitments and contingencies
Partners' capital (deficit)
General partner deficit (4,132) (2,137)
Common partners, 29,132 and 21,377 units outstanding as of September 30, 2014 and December 31, 2013, respectively 238,048 109,657
Total partners' capital 233,916 107,520
Total liabilities and partners' capital $ 1,709,203 $ 1,474,343

See accompanying notes to the Unaudited Condensed Consolidated Financial Statements in the Quarterly Report to be filed on Form 10-Q for the quarter ended September 30, 2014.

StoneMor Partners L.P.
Condensed Consolidated Statement of Operations
(in thousands, except per unit data)
(unaudited)
Three months ended Nine months ended
September 30, September 30,
2014 2013 2014 2013
Revenues:
Cemetery
Merchandise $ 37,812 $ 28,265 $ 98,452 $ 83,586
Services 14,971 11,051 37,760 33,422
Investment and other 13,152 11,850 42,418 34,098
Funeral home
Merchandise 4,752 4,266 14,770 13,736
Services 7,487 6,107 20,694 18,731
Total revenues 78,174 61,539 214,094 183,573
Costs and expenses:
Cost of goods sold (exclusive of depreciation shown separately below):
Perpetual care 1,898 1,418 5,110 4,199
Merchandise 7,164 5,684 20,106 16,905
Cemetery expense 18,076 14,507 47,546 42,700
Selling expense 16,494 11,692 42,544 35,134
General and administrative expense 9,808 7,902 26,333 23,382
Corporate overhead (including $265 and $348 in unit-based compensation for the three months ended September 30, 2014 and 2013, and $802 and $1,038 for the nine months ended September 30, 2014 and 2013, respectively) 8,392 7,997 22,394 21,657
Depreciation and amortization 3,112 2,378 7,993 7,159
Funeral home expense
Merchandise 1,441 1,573 4,691 4,798
Services 5,522 4,914 15,023 14,239
Other 3,396 2,494 9,367 8,044
Acquisition related costs, net of recoveries 451 243 2,040 901
Total cost and expenses 75,754 60,802 203,147 179,118
Operating profit 2,420 737 10,947 4,455
Gain on sale of funeral home 244 -- 244 --
Gain on acquisition -- 2,530 412 2,530
Gain on settlement agreement, net -- -- 888 12,261
Gain on sale of other assets -- -- -- 155
Loss on early extinguishment of debt -- -- -- 21,595
Interest expense 5,268 5,193 15,990 15,788
Net loss before income taxes (2,604) (1,926) (3,499) (17,982)
Income tax expense (benefit) 664 (442) (522) (2,489)
Net loss $ (3,268) $ (1,484) $ (2,977) $ (15,493)
General partner's interest in net loss for the period $ (44) $ (26) $ (49) $ (284)
Limited partners' interest in net loss for the period $ (3,224) $ (1,458) $ (2,928) $ (15,209)
Net loss per limited partner unit (basic and diluted) $ (.11) $ (.07) $ (.11) $ (.73)
Weighted average number of limited partners' units outstanding - basic and diluted 29,018 21,351 25,712 20,814
Distributions declared per unit $ .610 $ .600 $ 1.810 $ 1.785

See accompanying notes to the Unaudited Condensed Consolidated Financial Statements in the Quarterly Report to be filed on Form 10-Q for the quarter ended September 30, 2014.

StoneMor Partners L.P.
Condensed Consolidated Statement of Cash Flows
(in thousands)
(unaudited)
For the three months ended September 30, For the nine months ended September 30,
2014 2013 2014 2013
Operating activities:
Net loss $ (3,268) $ (1,484) $ (2,977) $ (15,493)
Adjustments to reconcile net loss to net cash provided by operating activities:
Cost of lots sold 1,525 1,853 7,181 6,047
Depreciation and amortization 3,112 2,378 7,993 7,159
Unit-based compensation 265 348 802 1,038
Accretion of debt discounts 830 665 2,127 1,676
Gain on acquisition -- (2,530) (412) (2,530)
Gain on sale of other assets -- -- -- (155)
Gain on sale of funeral home (244) -- (244) --
Loss on early extinguishment of debt -- -- -- 21,595
Changes in assets and liabilities that provided (used) cash:
Accounts receivable 7,065 5,051 (2,958) (2,148)
Allowance for doubtful accounts (244) (1,080) 2,647 (1,163)
Merchandise trust fund (10,255) (1,100) (26,547) (23,711)
Prepaid expenses (337) (193) (2,913) (1,926)
Other current assets 1,282 (2,645) (1,019) (3,906)
Other assets (268) (399) (1,397) 3,573
Accounts payable and accrued and other liabilities 6,857 4,663 7,382 8,340
Deferred selling and obtaining costs (1,481) (2,700) (6,855) (8,884)
Deferred cemetery revenue 13,271 17,415 45,475 51,181
Deferred taxes (net) 418 (904) (1,254) (3,260)
Merchandise liability (2,041) 1,075 (3,793) (537)
Net cash provided by operating activities 16,487 20,413 23,238 36,896
Investing activities:
Cash paid for cemetery property (1,778) (1,958) (4,692) (4,210)
Purchase of subsidiaries -- (5,000) (54,000) (14,100)
Consideration for lease and management agreements -- -- (53,000) --
Cash paid for property and equipment (2,326) (1,446) (6,430) (5,366)
Proceeds from divestiture of funeral home 297 -- 297 --
Proceeds from sales of other assets -- -- -- 155
Net cash used in investing activities (3,807) (8,404) (117,825) (23,521)
Financing activities:
Cash distributions (17,072) (13,386) (45,297) (38,653)
Additional borrowings on long-term debt 23,493 19,896 63,365 237,002
Repayments of long-term debt (11,639) (12,236) (86,788) (218,036)
Proceeds from public offering (106) -- 120,345 38,377
Proceeds from issuance of common units (193) -- 53,237 --
Fees paid related to early extinguishment of debt -- -- -- (14,920)
Cost of financing activities (275) (374) (275) (5,107)
Net cash provided by (used in) financing activities (5,792) (6,100) 104,587 (1,337)
Net increase in cash and cash equivalents 6,888 5,909 10,000 12,038
Cash and cash equivalents - Beginning of period 15,287 14,075 12,175 7,946
Cash and cash equivalents - End of period $ 22,175 $ 19,984 $ 22,175 $ 19,984
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 908 $ 1,002 $ 10,303 $ 10,756
Cash paid during the period for income taxes $ 384 $ 183 $ 3,536 $ 3,315
Non-cash investing and financing activities:
Acquisition of assets by financing $ 201 $ 15 $ 251 $ 107
Issuance of limited partner units for cemetery acquisition $ -- $ -- $ -- $ 3,718
Acquisition of asset by assumption of directly related liability $ -- $ -- $ 8,368 $ 3,924

See accompanying notes to the Unaudited Condensed Consolidated Financial Statements in the Quarterly Report to be filed on Form 10-Q for the quarter ended September 30, 2014.

CONTACT: John McNamara (215) 826-2800Source:StoneMor Partners L.P.