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StoneMor Partners L.P. Announces 2014 Fourth Quarter and Full Year Financial Results

LEVITTOWN, Pa., March 13, 2015 (GLOBE NEWSWIRE) -- StoneMor Partners L.P. (NYSE:STON) ("StoneMor") announced its results of operations for the three months and full year ended December 31, 2014.

Larry Miller, StoneMor's President and CEO commented, "We are very pleased with StoneMor's performance in 2014. Not only did we generate record revenues, both GAAP and Production-based (non-GAAP), but the year itself was transformative. Driving this transformation were the two previously announced large transactions with Service Corporation International and the Archdiocese of Philadelphia as well as the large financial commitment from a private investment fund. These three events significantly expanded our growth potential by raising our profile in the four vibrant markets of Florida, North Carolina, Pennsylvania and Virginia and by giving us the financial flexibility to consider similar transactions in the future should the opportunity arise.

"Our quarterly returns reflected solid gains in pre-need cemetery revenues which rose 29.5% (GAAP) compared to the prior year period, at-need cemetery revenues which rose 23.5% (GAAP) and funeral home revenues which rose 5.9% (GAAP), helping to drive a strong increase in operating profit. Excluding the impact of non-recurring items, the comparisons of our adjusted operating profits (non-GAAP), cash flow (GAAP) and distributable cash flow (non-GAAP) were favorable. As we look beyond the impact of one-time items such as legal settlements in 2013, higher than normal investment income in 2013, a large payment to reduce accounts payable in 2014, etc., and examine the ongoing performance of our business, we are very much where we expected to be at this point," said Miller.

Quarterly Financial Highlights

  • Revenues (GAAP) for the three months ended December 31, 2014 were $74.0 million compared to $63.1 million for the three months ended December 31, 2013, a 17.3% increase.
  • Production-based revenues (non-GAAP) for the three months ended December 31, 2014 were $92.7 million compared to $86.2 million for the three months ended December 31, 2013, a 7.6% increase.
  • Operating profits (GAAP) for the three months ended December 31, 2014 were $2.9 million compared to $1.9 million in the prior year period, a 51.1% increase.
  • Adjusted operating profits (non-GAAP) for the three months ended December 31, 2014 were $16.3 million compared to $20.6 million in the same period last year, a decrease of $4.3 million. During the fourth quarter of 2013, we recognized $17.6 million in investment income from our trusts, $9.0 million more than the $8.6 million we recognized in the fourth quarter of 2014. This was due to the inherent irregularity in the timing of income realized in the trusts. Had this irregular income not occurred in 2013, our operating profit would have increased by $4.6 million, or 40%.
  • Cash flows (GAAP) used in operations for the three month period ended December 31, 2014 were $3.8 million compared to $1.8 million used in operations in the prior year period. Operating cash flows were impacted during the quarter by a $9.6 million use of cash to reduce accounts payable compared to $0.8 million used in the prior year period. The increase in the use of cash was also attributable to the ongoing impact of expenses incurred in connection with the build-out of the pre-need sales program at the Archdiocese of Philadelphia.
  • Distributable free cash flow (non-GAAP) for the three-month period ended December 31, 2014 decreased to $11.7 million from $19.0 million for the same period last year. The decline was primarily due to the recognition of $17.6 million in investment income from our trusts in the fourth quarter of 2013 compared to the $8.6 million we recognized in the fourth quarter of 2014, a $9 million difference.
  • Backlog increased by $13.8 million to $543.3 million in the period ended December 31, 2014 from September 30, 2014.
  • Cash, accounts receivable and merchandise trusts, net of merchandise liabilities reached $497.1 million at December 31, 2014.
  • Net loss (GAAP) for the three months ended December 31, 2014 was $7.8 million, as compared to a net loss of $3.5 million in the prior-year period.

"As with our quarterly comparisons, our year-over-year comparisons were impacted by a combination of one-time items as well as the ongoing expenses associated with the build out of pre-need sales programs at the Archdiocese of Philadelphia. Nevertheless, as we look at the overall performance for the company, normalizing revenue and taking into account the various one-time items, we had a tremendous year and are very well positioned for the future."

Full Year Financial Highlights

  • Reaffirms intention to increase distributions by at least $.01 per unit each quarter through 2015.
  • Revenues (GAAP) and production-based revenues (non-GAAP) reached record levels for the year ended December 31, 2014.
  • Revenues (GAAP) for the year ended December 31, 2014 were $288.1 million compared to $246.6 million for the year ended December 31, 2013, a 16.8% increase.
  • Production-based revenues (non-GAAP) for the year ended December 31, 2014 were $357.0 million compared to $326.6 million in the prior year, a 9.3% increase.
  • Operating profits (GAAP) were $13.9 million in 2014 compared to $6.4 million in the prior year period, a 117% increase.
  • Adjusted operating profits (non-GAAP) were $66.7 million in 2014, compared to $67.2 million in 2013. Contributing to this comparison was investment income from trusts in 2013 which was approximately $2.6 million greater than 2014. Additionally, two one-time items impacted 2014 full year results, namely a $2.8 million increase in net-costs pertaining to legal settlements and approximately $1.0 million in additional payroll processing fees. Absent these non-recurring items, adjusted operating profit for 2014 increased $5.9 million over 2013.
  • Operating cash flows (GAAP) in 2014 were $19.4 million compared to $35.1 million in 2013. The year over year comparison was mostly due to the previously disclosed one-time impact on cash flows of $11.9 million received from a legal settlement in 2013. Excluding the settlement, the decline in operating cash flows from 2013 to 2014 were $3.8 million. This much smaller decline can largely be attributed to the ongoing impact of expenses incurred in connection with the build-out of the pre-need sales program at the Archdiocese of Philadelphia.
  • Distributable free cash flow (non-GAAP) in 2014 was $61.3 million compared to $76.0 million in 2013. The decline was primarily due to the impact of the $11.9 million settlement which contributed to cash flows in 2013 as well as investment returns which were approximately $2.6 million greater than in 2014. Distributable free cash flow for 2014 was impacted by $2.8 million in added costs related to legal settlements as well as approximately $1.0 million in additional payroll processing fees. Absent these one-time items, the distributable free cash flow for 2014 was $65.1 million compared to $61.5 million in 2013, a $3.6 million increase.
  • Backlog rose to $543.3 million in 2014, compared to $481.0 million in 2013, a $62.3 million increase.
  • Net loss (GAAP) for 2014 was $10.8 million, compared to a net loss of $19.0 million in 2013.

"We continue to build up our newly created insurance division and while the results are not yet material, we have high hopes for the eventual contributions from that business," said Miller. "Our backlog continues to grow and cash, accounts receivable and merchandise trusts minus merchandise trust liability reached $497.1 million, reflecting a company with a very strong financial foundation. We also raised our distribution three times during 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 results today, Friday, March 13, 2015 at 10:00 a.m. ET. The conference call can be accessed by calling (800) 738-1032. An audio replay of the conference call will be available by calling (800) 633-8284 through 12:00 p.m. ET on March 27, 2015. The reservation number for the audio replay is 21762581. 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. Additional detailed financial, statistical and business-related information is included in a financial supplement. The earnings release and the financial supplement are available 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 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
December 31, 2014 December 31, 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 $ 41,052 $ (13,514) $ 27,538 $ 32,474 $ (11,201) $ 21,273 $ 6,265 29.5%
At-need cemetery revenues 25,020 (1,173) 23,847 19,613 (309) 19,304 4,543 23.5%
Investment income from trusts 8,687 (2,213) 6,474 17,648 (10,266) 7,382 (908) -12.3%
Interest income 1,780 -- 1,780 1,717 -- 1,717 63 3.7%
Funeral home revenues 14,974 (1,752) 13,222 13,904 (1,416) 12,488 734 5.9%
Other cemetery revenues 1,206 (76) 1,130 853 51 904 226 25.0%
Total revenues 92,719 (18,728) 73,991 86,209 (23,141) 63,068 10,923 17.3%
Costs and expenses
Cost of goods sold 10,535 (2,099) 8,436 8,541 (1,786) 6,755 1,681 24.9%
Cemetery expense 17,126 -- 17,126 14,866 -- 14,866 2,260 15.2%
Selling expense 15,771 (3,038) 12,733 15,233 (2,535) 12,698 35 0.3%
General and administrative expense 8,777 -- 8,777 8,491 -- 8,491 286 3.4%
Corporate overhead 10,060 -- 10,060 7,218 -- 7,218 2,842 39.4%
Depreciation and amortization 3,088 -- 3,088 2,389 -- 2,389 699 29.3%
Funeral home expense 10,883 (254) 10,629 8,737 (164) 8,573 2,056 24.0%
Acquisition related costs, net of recoveries 229 -- 229 150 -- 150 79 52.7%
Total costs and expenses 76,469 (5,391) 71,078 65,625 (4,485) 61,140 9,938 16.3%
Operating profit $ 16,250 $ (13,337) $ 2,913 $ 20,584 $ (18,656) $ 1,928 $ 985 51.1%
Year ended Year ended
December 31, 2014 December 31, 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 $ 145,607 $ (40,471) $ 105,136 $ 134,857 $ (43,714) $ 91,143 $ 13,993 15.4%
At-need cemetery revenues 92,724 (559) 92,165 80,000 (4,568) 75,432 16,733 22.2%
Investment income from trusts 47,912 (21,742) 26,170 50,564 (26,158) 24,406 1,764 7.2%
Interest income 7,628 -- 7,628 6,926 -- 6,926 702 10.1%
Funeral home revenues 55,751 (7,065) 48,686 50,808 (5,853) 44,955 3,731 8.3%
Other cemetery revenues 7,369 931 8,300 3,445 334 3,779 4,521 119.6%
Total revenues 356,991 (68,906) 288,085 326,600 (79,959) 246,641 41,444 16.8%
Costs and expenses
Cost of goods sold 39,842 (6,190) 33,652 35,382 (7,523) 27,859 5,793 20.8%
Cemetery expense 64,672 -- 64,672 57,566 -- 57,566 7,106 12.3%
Selling expense 64,175 (8,898) 55,277 58,782 (10,950) 47,832 7,445 15.6%
General and administrative expense 35,110 -- 35,110 31,873 -- 31,873 3,237 10.2%
Corporate overhead 32,454 -- 32,454 28,875 -- 28,875 3,579 12.4%
Depreciation and amortization 11,081 -- 11,081 9,548 -- 9,548 1,533 16.1%
Funeral home expense 40,696 (986) 39,710 36,319 (665) 35,654 4,056 11.4%
Total costs and expenses 2,269 -- 2,269 1,051 -- 1,051 1,218 115.9%
Total costs and expenses 290,299 (16,074) 274,225 259,396 (19,138) 240,258 33,967 14.1%
Operating profit $ 66,692 $ (52,832) $ 13,860 $ 67,204 $ (60,821) $ 6,383 $ 7,477 117.1%

The tables above analyze our results of operations and the changes therein for the three months and twelve months ended December 31, 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 Year ended
December 31, December 31,
2014 2013 2014 2013
(in thousands) (in thousands)
Total revenues (a) $ 73,991 $ 63,068 $ 288,085 $ 246,641
Production based revenue consisting of the total value of cemetery contracts written, funeral home revenues and investment and other income (b) 92,719 86,209 356,991 326,600
Operating profit (a) 2,913 1,928 13,860 6,383
Adjusted operating profit (b) 16,250 20,584 66,692 67,204
Net income (loss) (a) (7,796) (3,539) (10,773) (19,032)
Operating cash flows (a) (3,790) (1,819) 19,448 35,077
Adjusted operating cash generated (b) 13,471 20,437 67,436 81,939
Distributable free cash flow generated (b) $ 11,732 $ 18,967 $ 61,307 $ 76,004
As of As of
December 31, 2014 December 31, 2013
Distribution coverage quarters (b) 8.10 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 Year ended
December 31, December 31,
2014 2013 2014 2013
(in thousands) (in thousands)
GAAP operating profit $ 2,913 $ 1,928 $ 13,860 $ 6,383
Increase in applicable deferred revenues 18,728 23,141 68,906 79,959
Increase in deferred cost of goods sold and selling and obtaining costs (5,391) (4,485) (16,074) (19,138)
Adjusted operating profit $ 16,250 $ 20,584 $ 66,692 $ 67,204
Reconciliation of Production Based Revenues (non-GAAP) to Revenues (GAAP)
Three months ended December 31, Increase Increase
2014 2013 (Decrease) ($) (Decrease) (%)
(in thousands)
Value of pre-need cemetery contracts written $ 41,052 $ 32,474 $ 8,578 26.4%
Value of at-need cemetery contracts written 25,020 19,613 5,407 27.6%
Investment income from trusts 8,687 17,648 (8,961) -50.8%
Interest income 1,780 1,717 63 3.7%
Funeral home revenues 14,974 13,904 1,070 7.7%
Other cemetery revenues 1,206 853 353 41.4%
Total production based revenues 92,719 86,209 6,510 7.6%
Less:
Increase in deferred sales revenue and investment income (18,728) (23,141) 4,413 -19.1%
Total GAAP revenues $ 73,991 $ 63,068 $ 10,923 17.3%
Year ended December 31, Increase Increase
2014 2013 (Decrease) ($) (Decrease) (%)
(in thousands)
Value of pre-need cemetery contracts written $ 145,607 $ 134,857 $ 10,750 8.0%
Value of at-need cemetery contracts written 92,724 80,000 12,724 15.9%
Investment income from trusts 47,912 50,564 (2,652) -5.2%
Interest income 7,628 6,926 702 10.1%
Funeral home revenues 55,751 50,808 4,943 9.7%
Other cemetery revenues 7,369 3,445 3,924 113.9%
Total production based revenues 356,991 326,600 30,391 9.3%
Less:
Increase in deferred sales revenue and investment income (68,906) (79,959) 11,053 -13.8%
Total GAAP revenues $ 288,085 $ 246,641 $ 41,444 16.8%
Reconciliation of Adjusted Operating Cash Flows (non-GAAP) and Distributable Free
Cash Flow (Non-GAAP) to Operating Cash Flows (GAAP)
Three months ended December 31, Year ended December 31,
2014 2013 2014 2013
(in thousands) (in thousands)
GAAP operating cash flows $ (3,790) $ (1,819) $ 19,448 $ 35,077
Add net cash inflows into the merchandise trust 2,281 13,208 28,828 36,919
Add net increase (decrease) in accounts receivable 8,379 6,778 11,337 8,926
Add net decrease (increase) in merchandise liabilities 568 3,324 4,361 3,861
Add net decrease (deduct net increase) in accounts payable and accrued expenses 9,601 752 2,219 (7,588)
Other float related changes (3,568) (1,806) 1,243 4,744
Adjusted operating cash flow generated 13,471 20,437 67,436 81,939
Less: maintenance capital expenditures (1,968) (1,620) (8,398) (6,986)
Plus: growth capital expenditures reclassified as operating expenses and deducted from adjusted operating cash generated (a) 229 150 2,269 1,051
Distributable free cash flow generated (b) 11,732 18,967 61,307 76,004
Cash on hand - beginning of the period 22,175 19,984 12,175 7,946
Distributable cash available for the period 33,907 38,951 73,482 83,950
Partner distributions made $ 17,539 $ 13,400 $ 62,836 $ 52,053
(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 year ended December 31, 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
December 31, 2014 December 31, 2013
(in thousands)
Partners' capital $ 208,762 $ 107,520
Deferred selling and obtaining costs (97,795) (87,998)
Deferred cemetery revenues, net 643,408 579,993
Production based partners' capital $ 754,375 $ 599,515
Selected Net Assets
As of As of
December 31, 2014 December 31, 2013
(in thousands)
Selected assets:
Cash and cash equivalents $ 10,401 $ 12,175
Accounts receivable, net of allowance 62,503 55,415
Long-term accounts receivable, net of allowance 89,536 78,367
Merchandise trusts, restricted, at fair value 484,820 431,556
Total selected assets 647,260 577,513
Selected liabilities:
Accounts payable and accrued liabilities 35,382 37,269
Accrued interest 1,219 1,512
Current portion, long-term debt 2,251 2,916
Other long-term liabilities 1,292 1,527
Long-term debt 285,378 289,016
Deferred tax liabilities 17,708 12,407
Merchandise liability 150,192 130,412
Total selected liabilities 493,422 475,059
Total selected net assets $ 153,838 $ 102,454
Distribution coverage quarters (a) 8.10 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 (29,203,595 at December 31, 2014 and 21,377,102 at December 31, 2013, respectively) and multiplying these units by the declared distributions during the quarters preceding the reporting dates. This total is then added to the distribution due to the General Partner based upon the same variables.
StoneMor Partners L.P.
Consolidated Balance Sheet
(in thousands)
December 31, December 31,
2014 2013
Assets
Current assets:
Cash and cash equivalents $ 10,401 $ 12,175
Accounts receivable, net of allowance 62,503 55,415
Prepaid expenses 4,708 3,622
Other current assets 24,266 22,667
Total current assets 101,878 93,879
Long-term accounts receivable, net of allowance 89,536 78,367
Cemetery property 339,848 316,469
Property and equipment, net of accumulated depreciation 100,391 85,007
Merchandise trusts, restricted, at fair value 484,820 431,556
Perpetual care trusts, restricted, at fair value 345,105 311,771
Deferred financing costs, net of accumulated amortization 9,089 8,308
Deferred selling and obtaining costs 97,795 87,998
Deferred tax assets 40 42
Goodwill 58,836 48,737
Intangible assets 68,990 9,655
Other assets 3,136 2,554
Total assets $ 1,699,464 $ 1,474,343
Liabilities and partners' capital
Current liabilities:
Accounts payable and accrued liabilities $ 35,382 $ 37,269
Accrued interest 1,219 1,512
Current portion, long-term debt 2,251 2,916
Total current liabilities 38,852 41,697
Other long-term liabilities 1,292 1,527
Obligation for lease and management agreements, net 8,767 --
Long-term debt 285,378 289,016
Deferred cemetery revenues, net 643,408 579,993
Deferred tax liabilities 17,708 12,407
Merchandise liability 150,192 130,412
Perpetual care trust corpus 345,105 311,771
Total liabilities 1,490,702 1,366,823
Commitments and contingencies
Partners' capital (deficit)
General partner deficit (5,113) (2,137)
Common partners, 29,204 and 21,377 units outstanding as of December 31, 2014 and December 31, 2013, respectively 213,875 109,657
Total partners' capital 208,762 107,520
Total liabilities and partners' capital $ 1,699,464 $ 1,474,343

See accompanying notes to the Consolidated Financial Statements in the Annual Report to be filed on Form 10-K for the year ended December 31, 2014.

StoneMor Partners L.P.
Consolidated Statement of Operations
(in thousands, except per unit data)
Three months ended Year ended
December 31, December 31,
2014 2013 2014 2013
Revenues:
Cemetery
Merchandise $ 33,903 $ 27,087 $ 132,355 $ 110,673
Services 14,067 10,632 51,827 44,054
Investment and other 12,799 12,861 55,217 46,959
Funeral home
Merchandise 6,290 5,186 21,060 18,922
Services 6,932 7,302 27,626 26,033
Total revenues 73,991 63,068 288,085 246,641
Costs and expenses:
Cost of goods sold (exclusive of depreciation shown separately below):
Perpetual care 1,757 1,457 6,867 5,656
Merchandise 6,679 5,298 26,785 22,203
Cemetery expense 17,126 14,866 64,672 57,566
Selling expense 12,733 12,698 55,277 47,832
General and administrative expense 8,777 8,491 35,110 31,873
Corporate overhead (including $266 and $332 in unit-based compensation for the three months ended December 31, 2014 and 2013, and $1,068 and $1,370 for the year ended December 31, 2014 and 2013, respectively) 10,060 7,218 32,454 28,875
Depreciation and amortization 3,088 2,389 11,081 9,548
Funeral home expense
Merchandise 1,968 771 6,659 5,569
Services 5,447 4,951 20,470 19,190
Other 3,214 2,851 12,581 10,895
Acquisition related costs, net of recoveries 229 150 2,269 1,051
Total cost and expenses 71,078 61,140 274,225 240,258
Operating profit 2,913 1,928 13,860 6,383
Gain on acquisitions -- -- 412 2,530
Gain on settlement agreement, net -- -- 888 12,261
Gain on sale of other assets -- -- -- 155
Gain on sale of funeral home -- -- 244 --
Loss on early extinguishment of debt 214 -- 214 21,595
Loss on impairment of long-lived assets 440 -- 440 --
Interest expense 5,620 5,282 21,610 21,070
Net loss before income taxes (3,361) (3,354) (6,860) (21,336)
Income tax expense (benefit) 4,435 185 3,913 (2,304)
Net loss $ (7,796) $ (3,539) $ (10,773) $ (19,032)
General partner's interest in net loss for the period $ (106) $ (66) $ (155) $ (350)
Limited partners' interest in net loss for the period $ (7,690) $ (3,473) $ (10,618) $ (18,682)
Net loss per limited partner unit (basic and diluted) $ (0.26) $ (0.16) $ (0.40) $ (0.89)
Weighted average number of limited partners' units outstanding (basic and diluted) 29,165 21,368 26,582 20,954
Distributions declared per unit $ .620 $ .600 $ 2.430 $ 2.385

See accompanying notes to the Consolidated Financial Statements in the Annual Report to be filed on Form 10-K for the year ended December 31, 2014.

StoneMor Partners L.P.
Consolidated Statement of Cash Flows
(in thousands)
Three months ended December 31, Year ended December 31,
2014 2013 2014 2013
Operating activities:
Net loss $ (7,796) $ (3,539) $ (10,773) $ (19,032)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Cost of lots sold 3,110 1,972 10,291 8,019
Depreciation and amortization 3,088 2,389 11,081 9,548
Unit-based compensation 266 332 1,068 1,370
Accretion of debt discounts 812 627 2,939 2,303
Gain on acquisitions -- -- (412) (2,530)
Gain on sale of other assets -- -- -- (155)
Gain on sale of funeral home -- -- (244) --
Loss on early extinguishment of debt 214 -- 214 21,595
Loss on impairment of long-lived assets 440 -- 440 --
Changes in assets and liabilities that provided (used) cash:
Accounts receivable (8,379) (6,778) (11,337) (8,926)
Allowance for doubtful accounts (1,666) 1,255 981 92
Merchandise trust fund (2,281) (13,208) (28,828) (36,919)
Prepaid expenses 1,849 2,136 (1,064) 210
Other current assets (481) (1,342) (1,500) (5,248)
Other assets 782 (712) (615) 2,861
Accounts payable and accrued and other liabilities (9,601) (752) (2,219) 7,588
Deferred selling and obtaining costs (2,942) (2,797) (9,797) (11,681)
Deferred cemetery revenue 15,366 21,527 60,841 72,708
Deferred taxes (net) 3,997 395 2,743 (2,865)
Merchandise liability (568) (3,324) (4,361) (3,861)
Net cash provided by (used in) operating activities (3,790) (1,819) 19,448 35,077
Investing activities:
Cash paid for cemetery property (1,484) (1,556) (6,176) (5,766)
Purchase of subsidiaries (2,381) -- (56,381) (14,100)
Consideration for lease and management agreements -- -- (53,000) --
Proceeds from divestiture of funeral home -- -- 297 --
Cash paid for property and equipment (1,968) (1,620) (8,398) (6,986)
Proceeds from sales of other assets -- -- -- 155
Net cash used in investing activities (5,833) (3,176) (123,658) (26,697)
Financing activities:
Cash distributions (17,539) (13,400) (62,836) (52,053)
Additional borrowings on long-term debt 29,500 32,500 92,865 269,502
Repayments of long-term debt (11,352) (21,896) (98,140) (239,932)
Proceeds from public offering -- -- 120,345 38,377
Proceeds from issuance of common units (85) -- 53,152 --
Fees paid related to early extinguishment of debt -- -- -- (14,920)
Cost of financing activities (2,675) (18) (2,950) (5,125)
Net cash provided by (used in) financing activities (2,151) (2,814) 102,436 (4,151)
Net increase (decrease) in cash and cash equivalents (11,774) (7,809) (1,774) 4,229
Cash and cash equivalents - Beginning of period 22,175 19,984 12,175 7,946
Cash and cash equivalents - End of period $ 10,401 $ 12,175 $ 10,401 $ 12,175
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 8,493 $ 8,151 $ 18,796 $ 18,907
Cash paid during the period for income taxes $ 779 $ 576 $ 4,315 $ 3,891
Non-cash investing and financing activities:
Acquisition of assets by financing $ 136 $ 83 $ 387 $ 190
Issuance of limited partner units for cemetery acquisition $ -- $ -- $ -- $ 3,718
Acquisition of assets by assumption of directly related liability $ -- $ -- $ 8,368 $ 3,924

See accompanying notes to the Consolidated Financial Statements in the Annual Report to be filed on Form 10-K for the year ended December 31, 2014.

CONTACT: John McNamara (215) 826-2800

Source:StoneMor Partners L.P.