Revenues Increased
68%
And As A Percentage Of
Revenues...
Management and finance fees decreased
Direct cost and expenses decreased
Gross profit increased
General and administrative expenses decreased
Amortization and depreciation expense decreased
Professional fees decreased
Total general administrative expenses decreased
Interest expense decreased
We anticipate the Neptune Society’s quarterly
achievements in financial ratios
and valuations will continue to improve in the
next quarter and the Company
will increase asset recognition, increase revenues,
and reduce costs.
FOR IMMEDIATE RELEASE
THE NEPTUNE SOCIETY ANNOUNCES FIRST QUARTER RESULTS
Burbank, CA., June 27, 2001 – The Neptune Society, Inc., (OTC BB:
NTUN) one of the country’s largest publicly traded cremation specialists,
announced its significant strategic accomplishments and financial results
of operations during the three months ended March 31, 2001.
On June 1, 2001, the staff of the Securities and Exchange Commission
(SEC) came to a position of no further comment with respect to Neptune
Society’s Registration Statement Form 10 filed with the SEC to register
its common stock under the Securities Exchange Act of 1934, as amended,
completing an extensive and expensive 18-month process. During the
process, with guidance from the staff of the SEC, Neptune Society developed
its accounting policies related to recognition of pre-need merchandise
revenue prior to the provision of cremation services. Subsequently,
Neptune Society implemented changes to its pre need sales programs that
will allow it to recognize pre-need merchandise revenues at the point-of-sale
in certain states on a going forward basis.
Also with guidance from the staff of the SEC, Neptune Society adopted
new accounting policies, which resulted in the deferral of pre-need merchandise
revenues in the amounts of $1.6 million and $4.3 million during the first
quarter and the year ended December 31, 2000, respectively. Under
United States generally accepted accounting principles, these deferrals
are not recognized in the revenues of Neptune Society. During the
first quarter ended March 31, 2001, Neptune Society recognized revenues
of $2.7 million.
Approximately two and one half years ago, Neptune Society acquired
a group of closely-held corporations and limited partnerships loosely connected
with virtually no standardized policies and procedures for financial and
managerial information reporting. In 2000, Neptune Society invested
heavily to substantially retool these operations for the purposes of realizing
operating efficiencies. Neptune Society has attracted talented management
personnel, expanded its telemarketing operations, updated and expanded
its accounting and management information systems (including networking
office locations together), made two strategic acquisitions, opened two
new offices and implemented the infrastructure and quality controls necessary
to support future growth and expansion.
In the first quarter of 2001, Neptune Society began to realize positive
results from the changes to its business infrastructure and the addition
of new offices. Neptune Society’s first quarter operations generated
positive cash flows, after taking into consideration certain prepaid expenses
and certain payments related to fiscal year 2000, which caused cash flows
related to operating activities to decrease. In addition, Neptune
Society incurred $176,000 in professional fees, primarily related to the
registration of its common stock under the Securities Exchange Act to qualify
its shares for listing on the NASD over-the-counter bulletin board and,
in the future, a listing on a major exchange. The costs incurred
for professional fees are anticipated to begin to trend downward toward
the end of the second quarter.
Management believes that other indicators of growth and progress
of Neptune Society’s performance include transaction volume and non-refundable
sales (sales for which the customer has no refund or cancellation rights
even though these sales may not be recognizable as revenue under the new
accounting policies and US GAAP). Below are selected financial and
operational results for the quarter ended March 31, 2001 compared to the
same period in the prior year:
Pre-need contract sales volume up
76%
Total transaction volume up
58%
Revenues up
68%
Non-refundable sales (non-US GAAP) up
67%
Gross profit up
100%
Gross profit % up
17%
Earnings & deferred earnings before interest,
taxes, depreciation and amortization (non-US GAAP) up $796,099
While other major death-care industry companies reported declining
transaction volumes and top line revenues during the first quarter compared
to the same period in 2000 due in part to declining mortality rates, Neptune
Society experienced increased transaction volume across all product lines.
Pre-need contract sales volume increased 76 percent overall, with existing
offices accounting for 41 percent of the overall increase. At-need
case volume increased 46 percent over the same period last year, with existing
offices accounting for 13 percent of the overall growth.
Revenues were $2.7 million for the for the three month period ended
March 31, 2001 compared to $1.6 million for the same period in 2000.
Non-refundable sales were $4.2 million for the three month period ended
March 31, 2001 compared to $2.5 million for the same period in 2000.
Non-refundable sales increased 67 percent due to increased at-need and
pre-need activity, change in product mix (from installment sales to paid-in-full
sales) and the introduction of a new travel assurance product offering.
The introduction of the Neptune Society Worldwide Travel Assurance Plan,
a new product offering, contributed $295,000 to the increase in non-refundable
sales and revenues during the first quarter of 2001.
Gross profits doubled from $.65 million for the first quarter of
2000 to $1.3 million during for the same period in 2001. Gross
profit percentage increased 17 percent due to the increased volume of activity
and the resulting revenues, which covered certain fixed costs related to
cremation and telemarketing operations.
Earnings and deferred earnings (deferred revenues and costs, net)
before interest, taxes, depreciation and amortization are representative
of the Company’s operating performance if no revenues or costs had been
deferred. This non-US GAAP metric was $387,000, up $796,099 in the
first quarter of 2001 versus the same period in 2000.
Management believes that the Neptune Society is well positioned for
growth in each of its core product lines: Pre-Need contract sales
and at-need case deposition. Neptune Society has consolidated a group
of companies into a strategically focused public company serving the cremation
segment of the death care industry. Neptune Society’s goal in 2001
is to continue to integrate its product offerings, achieve higher organic
and expansion growth, maintain positive cash flows and maximize the value
that management believes to be inherent in Neptune Society for the benefit
of its shareholders.
The Neptune Society’s complete Form 10 and Form 10Q for the quarter
ending March 31, 2001 is available for viewing at www.neptunesociety.com
or the Securities Exchange Commission website at www.sec.gov.
RODNEY M. BAGLEY
CHIEF FINANCIAL OFFICER
NEPTUNE SOCIETY INC.
About The Neptune Society
Headquartered in Burbank, CA., The Neptune Society Inc. is one of
North America’s largest cremation specialists, and is the only publicly
traded company dealing solely in cremation services. The Neptune
Society, operating for nearly three decades with locations in California,
Florida, New York, Washington, Iowa, Oregon and Arizona has provided thousands
of cremation services and currently has close to 60,000 active contracts
and nearly $40 million in trust in its unique Pre-Need program. The
Neptune Society’s goal is to provide a simple, dignified and economic alternative
to the traditional funeral burial service system.
Disclaimer: This press release may contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Readers/Investors are cautioned that the forward- looking
statements are inherently uncertain, including statements related to the
Company’s business strategy and future plans, continuing trends related
to results of operations, success of acquisitions and expansion efforts,
its ability to integrate its current business strategies into its existing
operations, its ability to successfully financing to satisfy its obligations
under promissory notes due during 2001, regulatory or economic changes
affecting the death care industry, and the Company’s expectations for future
success. Actual performance and results of operations may differ
materially from those projected or suggested. The forward-looking
statements contained herein represent the Company’s judgment as of the
date of this release, and the Company cautions the reader not to place
undue reliance on such statements. These forward-looking statements
should not be reprinted, reiterated nor considered an inducement for investment.
-xxx-
Click
here for a PDF version of Neptune's First
Quarter 10Q
Contact The Neptune Society
Investor Relations
Gary R. Loffredo
(800) 535-7935
www.neptunesociety.com
Corporate Headquarters
3500 W. Olive
Suite # 1430
Burbank, CA 91505
Telephone: 888-637-8863
E-mail: info@neptunesociety.com
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here
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