[BG Capital Group]
June 15, 2001 Volume 1 Issue 1
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Company History
THE NEPTUNE SOCIETY SERVES ALL FAITHS, TRADITIONS, AND CULTURES
The Neptune Society® (Pink Sheets: NTUN) is a high visibility brand name that has become
the logical option to the traditional funeral and burial. The company has become
synonymous with the simplicity, dignity, and economic feasibility of cremation and the
scattering of ashes at sea. The company has been in operation since 1972 and has sold
more than 80,000 Pre-Need contracts to date. All personnel & facilities of the Neptune
Society are licensed and inspected by the governing state.
On October 14, 1999, the board of directors elected Marco Markin to the positions of
President and CEO. Mr. Markin has an extensive background in the areas of operational
management, business development and mergers and acquisitions. Under Mr. Markins
direction the Neptune Society has posted a 100% increase in revenues. The company
currently operates 18 offices in seven states with gross sales approaching $20 million.
The Neptune Society has had extensive, positive press coverage recently with archived
stories in The Wall Street Journal, USA Today - Money section, The New York Times On The
Web, and the Los Angeles Business Journal.
Neptune Revenues
[Image] INCOME RESULTS THAT ARE VERY POSITIVE, VERY PROFITABLE, AND VERY PREDICTABLE
The Society has four income streams: Recurring trust fund fees and yields, Pre-Need
contracts, At-Need contracts, and Non-member contracts. Approximately 50% of the
revenues of the Pre-Need plans are placed in a state approved and regulated trust fund.
Neptune currently has close to $40 million held in trust from Pre-Need sales. That trust
will grow to nearly $50 million by the end of the year 2002. The trust fund maintains
its capital base and growth by serving At-Need fulfillment withdrawals having been
compensated by the interest generated. Neptune also receives a 4.0% trust management
fee. The company has guaranteed book business for 13 years and interest income on
Pre-Need sales accrue to Neptune and is realized at the time of fulfillment. Neptune has
sold 80,000 pre-need contracts since its inception and its year-over-year sales rate has
never been in the red. The company currently has nearly 60,000 active contracts.
Currently, new members are being added at a rate of over 1,000 per month, up from only
400 per month in 1998, and Neptune handles nearly 7,000 At-Need cases annually, which
makes them the largest cremation company in the U.S.
The Industry
THE NEPTUNE SOCIETY IS THE COUNTRY'S LARGEST PUBLICLY TRADED COMPANY DEALING SOLELY IN
CREMATION
The death-care industry generates approximately $15 billion a year. It is however
tremendously fragmented with 75% of the market being privately owned and the 6 largest
providers comprising less than 25% of the industry. 24% of all Americans have
pre-arranged some details of their own funeral and 80% believe pre-arranging is a good
idea. Cremation accounted for 26.3% of all funeral services in 1999 with expectations of
two out of every five, or 42% by 2010 (according to the Cremation Society of America).
The average cost of a typical casket and burial funeral now exceeds $7,000 and the cost
of a direct cremation runs from $799 to $1,299.
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The Market
"THERE ARE ONLY TWO CERTAINTIES; DEATH AND TAXES"
-- Benjamin Franklin
The growth driver of the post-life market is the U.S. death rate and 72 million aging
baby boomers who are now in their 50s. For the upscale market, some funerals can cost
$30,000. The Neptune Society can provide upscale goods and services as well including:
memorial services at a Neptune Society chapel and private service sea scattering with
clergy and family and friends present.
Cremation is the most common form of disposition in England (70%), Japan (98%), and
Hawaii (58%) and cremation rates will steadily climb from 15% in 1987 to an estimated
50% by the year 2020. Cremation is taking away market share from traditional burials,
increasing from 6% in 1975, to 24% in 1998 and projected to 38% by 2010. The Neptune
Society serves customers in 35 metro areas and currently has seven locations in
California (including its corporate offices), three in Florida, two in New York, two in
Iowa, two in Washington State, one in Arizona, and two in Oregon. The company will be
expanding its presence to Colorado, Idaho, Texas, New Mexico, Illinois, Nebraska, and
Kansas in the next three years.
Neptune Marketing
NEPTUNE CONVERTS 25% OF ITS LEADS INTO CONTRACTS
With the cost of a cremation being up to one-seventh less expensive than a traditional
funeral, baby boomers tend to pre-pay for services. The Neptune society sends out over
3.6 million mailers a year and will send out 6 million in 2001. They receive a
approximately 1% response of which 25-28% have been converted into a Pre-Need contract.
The company targets adults 54+ that have an income of $30k or more with a mailer and
follow up calls are made from a dedicated call center based in Phoenix, AZ that has 20
representatives. Remarkably, statistics prove a closure rate of 70-85% for in-home
visits. They set up approximately 1,500 appointments a month through Neptune offices.
There is no up selling to traditional casket and burial arrangements.
State of Incorporation Florida
Fiscal-year-end 12/31/00
Recent Price $3.93
Market Cap $30,127,533
Shares Out 7,666,039
Float 6,056,170
Auditors KPMG, LLP
Transfer Agent Interwest Transfer Co
Institutional Holdings 15.2%
Officers/Directors 5.5%
Contact The Neptune Society
Management: [Image]
Marco Markin,
President & CEO
Corporate Headquarters
3500 W. Olive
Suite # 1430
Burbank, CA 91505
Telephone: 888-637-8863
E-mail: info(a)neptunesociety.com
Visit The Neptune Society on the Web:Click here
Links to more information:
Recent SEC Filings click here
Click here for Financial Chart
For Trading Technicals click here
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Copyright © 2001 Investors Edge
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