Arbor announces second quarter results

TSX ABO.A and ABO.B

TORONTO, June 3 /CNW/ - Arbor Memorial Services Inc. announced today its results for the 13 and 26 weeks ended April 25, 2010 and April 26, 2009.

    
                                               13 weeks ended  26 weeks ended
    (In $Millions)                              2010  2009(1)   2010  2009(1)
                                                ----  ----      ----  ----

    Revenue                                     68.0    60.2   132.3   118.8
    Earnings before interest expense and
     income taxes ("EBIT" - a non-GAAP measure)  8.7     7.5    17.3    15.1
    Net earnings from continuing operations      5.8     4.8    11.1     9.5
    Net earnings                                 5.8     4.9    11.1     9.8
    Basic and diluted earnings per share
     from continuing operations ($)             0.55    0.45    1.04    0.89
    Basic and diluted earnings per share ($)    0.55    0.46    1.04    0.92

    (1) Restated to conform with the current period's presentation.
    

Revenue in the second quarter of 2010 increased by $7.8 million or 12.9% over 2009. Sales in the cemetery division increased by $5.2 million or 20.5% due primarily to higher sales of pre-need burial spaces and delivery of pre-need markers. Sales in the funeral division increased by $1.6 million or 5.3% over 2009 due to a higher average sale per funeral service of 3.1%, a higher number of services performed at existing operations of 0.9% and higher sales from new operations of $0.4 million. Investment and other income increased by $1.0 million or 20.5% over 2009 due primarily to higher annuity fee income in the funeral division.

EBIT (a non-GAAP measure) in the second quarter of 2010 increased by $1.3 million or 16.7% over 2009 to $8.7 million. The increase in EBIT was the result of higher earnings in the cemetery division of $1.7 million or 70.4% due to higher sales and higher earnings in the funeral division of $0.5 million or 5.3%. The favourable variances in the cemetery and funeral divisions were partially offset by an increase in the loss of the corporate division of $0.9 million or 24.6%, which was mainly attributable to an increase in expected bonus payments of $0.3 million, a non-recurring adjustment to the tax contingency provision of $0.2 million and higher employee salaries and wages of $0.2 million.

Net earnings in the second quarter of 2010 increased by $0.9 million or 17.8% from 2009 to $5.8 million. The improvement was primarily due to an increase in EBIT of $1.3 million, which was partially offset by higher income taxes of $0.4 million.

Revenue for the first 26 weeks of 2010 increased by $13.5 million or 11.4% over 2009. Sales in the cemetery division increased by $9.6 million or 19.8% due primarily to higher sales of pre-need burial spaces and delivery of both pre-need and at-need markers. Sales in the funeral division increased by $2.2 million or 3.6% due to a higher average sale per service for existing operations of 3.6% and higher sales from new operations of $0.8 million. These favourable variances were partially offset by a decrease in the number of services performed at existing operations of 1.2%. Investment and other income increased by $1.7 million or 18.3% over 2009 due primarily to higher annuity fee income in the funeral division.

EBIT (a non-GAAP measure) for the first 26 weeks of 2010 increased by $2.2 million or 14.8% over 2009 to $17.3 million. The increase in EBIT was the result of higher earnings in the cemetery division of $3.0 million or 68.8% due to higher sales and higher earnings in the funeral division of $0.4 million or 2.1%. The favourable variances in the cemetery and funeral divisions were partially offset by an increase in the loss of the corporate division of $1.2 million or 15.7%, which was mainly due to an increase in expected bonus payments of $0.3 million, a non-recurring adjustment to the tax contingency provision of $0.2 million and a non-recurring provincial sales tax expense of $0.1 million that resulted from a provincial sales tax review in the period.

Net earnings for the first 26 weeks of 2010 increased by $1.2 million or 12.5% from 2009 to $11.1 million. The improvement was primarily due to an increase in EBIT of $2.2 million, which was partially offset by higher income taxes of $1.0 million.

In addition to the GAAP results provided in this press release, some of the discussion of operating performance is based on EBIT. EBIT excludes the impact of interest expense and income taxes as disclosed in the statements of earnings. EBIT is a non-GAAP financial measure that does not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other companies. This non-GAAP financial measure is more fully defined and discussed in the management discussion and analysis of Arbor Memorial Services Inc. for the year ended October 25, 2009, available on the SEDAR website at www.sedar.com.

Arbor Memorial Services Inc. owns 41 cemeteries, 26 crematoria, 5 reception centres located on cemetery premises and 82 funeral homes in eight provinces of Canada.

%SEDAR: 00007478E

SOURCE Arbor Memorial Services Inc.

For further information: For further information: Brian D. Snowdon, President and Chief Executive Officer, Laurel L. Ancheta, Vice-President and Chief Financial Officer, Telephone: (416) 763-4531

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