The Neptune Society Releases First Quarter Numbers
Wow! What A Great Quarter For NTUN!
There are great opportunities for investors in a lean and mean market environment and The Neptune Society (OTC BB: NTUN) story surpasses all standards.
The company is only now beginning to realize the strength of its brand name and the positive results its management decisions have brought about over the past two years. The eagerly awaited, quarterly report that was just issued far exceeded our expectations and we are truly excited and proud to bring this stock to your attention.
Gaining market share, streamlining operations to peak capacity of production, and a sales and marketing strategy that is paying off with record response rates and contracts signed, has made the Neptune Society the absolute leader in their niche -- the only publicly traded company that deals solely in cremation.
Read On. We’re Confident You’ll Agree.
Recent Highlights
For the last 5 days, made a new high in stock price 5 times
From 6/8 at $2.15 a share, the stock made a 20-day run to $6.20 on 6/26
Relisted to the OTC BB from the Pink Sheets and will be applying for a senior exchange listing
Analyst coverage initiated by Banyan Capital Markets
Multex Market Guide establishes ProVestor company report 6/23
Quarterly Highlights
1) Gross Profit Margin ratio 10% higher than industry average
2) Most recent quarter revenue growth up 67% over the same period prior year
3) First quarter EBITDA increased 37% over same period prior year
4) Pre-Need contracts up 78%
Symbolic of management efficiency, all major categories of Neptune’s Operating
Statement improved as a percentage of revenue for the quarter ended 03/31/01.
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.
HOT OFF THE PRESS !!!
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.
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