8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 12, 2009

STEWART ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

LOUISIANA
(State or other jurisdiction
of incorporation) 1-15449
(Commission
File Number) 72-0693290
(I.R.S. Employer
Identification No.)

1333 South Clearview Parkway
Jefferson, Louisiana 70121
(Address of principal executive offices) (Zip Code)

(504) 729-1400
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

     On March 12, 2009, Stewart Enterprises, Inc. (the “Company”) issued a press release reporting its results for the first quarter of fiscal year 2009. A copy of this press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

     The information in this Item 2.02 (and in Item 9.01) shall be deemed to be furnished to the Securities and Exchange Commission but not filed, and shall not be deemed to be incorporated by reference into any filings by the Company under the Securities Act of 1933, as amended, unless the Company expressly states otherwise in such filing.

Item 9.01 Financial Statements and Exhibits

     (d) Exhibits

Exhibit Number	Description
99.1	Press release by Stewart Enterprises, Inc. dated March 12, 2009 reporting its results for the first quarter of fiscal year 2009

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	STEWART ENTERPRISES, INC.
March 12, 2009	/s/ Angela M. Lacour
	Angela M. Lacour
	Vice President Corporate Controller Chief Accounting Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release by Stewart Enterprises, Inc. dated March 12, 2009 reporting its results for the first quarter of fiscal year 2009

EX-99.1

Exhibit 99.1

CONTACT: Thomas M. Kitchen
Stewart Enterprises, Inc.
1333 S. Clearview Parkway
Jefferson, LA 70121
504-729-1400 FOR IMMEDIATE RELEASE

STEWART ENTERPRISES REPORTS RESULTS FOR THE FIRST FISCAL QUARTER OF 2009

NEW ORLEANS, LA March 12, 2009 . . . Stewart Enterprises, Inc. (Nasdaq GS: STEI) reported today its results for the first quarter ended January 31, 2009.

The Company reported net earnings for the quarter ended January 31, 2009 of $5.7 million, or $.06 per diluted share, compared to net earnings of $8.9 million, or $.09 per diluted share, for the quarter ended January 31, 2008. After adjusting net earnings for the $0.3 million tax valuation allowance recorded in the first quarter of 2009, the Company reported adjusted earnings of $6.0 million, or $.07 per diluted share, for the quarter ended January 31, 2009, compared to adjusted earnings of $8.9 million, or $.09 per diluted share, for the quarter ended January 31, 2008. See table under “Reconciliation of Non-GAAP Financial Measures” for further information on adjusted diluted earnings per share and adjusted net earnings.

Thomas J. Crawford, President and Chief Executive Officer, stated, “Despite current economic conditions, we were able to achieve solid growth in average revenue per funeral service, grow funeral segment gross profit and increase overall cash flow. Additionally, we were able to achieve this increase in funeral gross profit despite a decline in funeral events and trust related revenue. Our liquidity position remains strong with $71.5 million in cash on hand as of January 31, 2009, no amounts drawn on our $125 million revolving credit facility and no near-term significant debt maturities. We generated $7.3 million in operating cash flow during the quarter which is an increase of $3.2 million over the prior year, primarily due to a decrease in our net tax payments in the current year. Our cash flow is not even throughout the year. In fact, due to the timing of our insurance, property tax and other annual payments made on or around year end, we have historically had negative to slightly positive cash flow in the first quarter while generating greater amounts of cash in later quarters.”

Mr. Crawford continued, “The difficult economic environment has been challenging for our Company. Our cemetery segment has felt the largest impact from the weak economy, with property sales down $7 million from the first quarter of last year. In this economic environment, there is a segment of the market that will postpone purchasing cemetery property on a preneed basis. While no one can predict when the economy will begin to recover and consumer confidence will improve, we believe the postponement of the decision to buy preneed cemetery property today remains an opportunity for our Company in the future. With that in mind, we took actions during fiscal 2008 to strengthen our cemetery sales organization to produce solid gains by improving the length and quality of our training and improving the caliber of new employees joining our Company. We are optimistic that our

investments in this area will produce stronger returns in the future.”

First Quarter Results

FUNERAL

• Funeral revenue decreased $1.7 million, or 2.3 percent, to $71.7 million.

• The Company’s same-store funeral operations achieved a 6.0 percent increase in the same-store average revenue per funeral service, including trust earnings, primarily due to the continued refinement of new funeral packages and pricing. Same-store funeral services performed decreased 6.3 percent.

• In the first quarter of fiscal 2009, the Company realized a $2.2 million, or $.02 per diluted share, decrease in earnings related to trust activities, of which $0.9 million, or $.01 per diluted share, related to the funeral segment and $1.3 million, or $.01 per diluted share, related to the cemetery segment. This decrease is consistent with the Company’s previously announced expectations.

• Funeral gross profit increased $0.3 million to $18.3 million for the first quarter of 2009 compared to $18.0 million for the same period of 2008, primarily due to a $2.0 million decrease in expenses, partially offset by the decrease in revenue, as noted above. The decrease in expenses is primarily due to a decrease in merchandise costs resulting from decreased volume and a decrease in salaries and wages due to effective labor management.

• The cremation rate for the Company’s same-store operations remained flat quarter-over-quarter at 40.3 percent.

• Net preneed funeral sales decreased 14.5 percent during the first quarter of 2009 compared to the first quarter of 2008 due to current economic conditions. Preneed funeral sales are deferred until the underlying contracts are performed and have no impact on current revenue.

CEMETERY

• Cemetery revenue decreased $9.2 million to $47.6 million for the first quarter of 2009. This decrease is due primarily to a $7.2 million, or 27.9 percent, decrease in cemetery property sales, net of discounts, due to current economic conditions, and a $1.3 million, or $.01 per diluted share, decrease in earnings related to trust activities, as noted above.

• Cemetery gross profit decreased $4.2 million from $9.0 million in the first quarter of 2008 to $4.8 million for the first quarter of 2009 due primarily to the decrease in cemetery revenue, as discussed above, partially offset by a $5.0 million decrease in expenses. The decrease in expense is primarily due to a decrease in property costs and selling costs resulting from the decline in cemetery property sales.

OTHER

• Corporate general and administrative expenses decreased $0.7 million to $7.5 million for the first quarter of fiscal 2009 primarily due to a decrease in professional fees and a reduction in compensation, partially offset by an increase in information technology costs.

• The Company incurred $0.3 million in hurricane related charges in the first quarter of fiscal 2009 primarily due to litigation costs associated with the Company’s Hurricane Katrina insurance claim, compared to a $0.1 million hurricane related recovery during the first quarter of fiscal 2008 related to Hurricane Katrina.

• Investment and other income, net decreased $0.7 million to $0.1 million due primarily to a decrease in the average rate earned on the Company’s cash balances from 3.56 percent in the first quarter of 2008 to 0.22 percent in the first quarter of 2009.

• The effective tax rate for the quarter ended January 31, 2009 was 40.4 percent compared to 37.5 percent for the same period in 2008. The change in the 2009 tax rate from the 2008 tax rate was primarily due to a $0.3 million tax expense attributable to an increase in the Company’s valuation allowance on its capital loss carryforward.

• The Company’s weighted average diluted shares outstanding decreased to 91.9 million shares for the first quarter of fiscal year 2009 compared to 97.0 million shares for the same period in 2008, yielding a positive impact on earnings per share.

Depreciation and Amortization

• Depreciation and amortization was $7.4 million for the first quarter of 2009 compared to $7.0 million for the first quarter of 2008.

Cash Flow Results and Debt for Total Operations

• Cash flow provided by operating activities for the first quarter of fiscal year 2009 was $7.3 million compared to $4.1 million for the same period of last year. The increase in operating cash flow is primarily due to a decrease in net tax payments in the current year. The Company paid $3.3 million in net tax payments in the first quarter of 2008 compared to $0.9 million in net tax payments in the first quarter of 2009.

• Free cash flow was $4.2 million during the first quarter of 2009 compared to $0.9 million during the first quarter of 2008 primarily due to a decrease of $2.4 million in net tax payments in the first quarter of fiscal year 2009. See table under “Reconciliation of Non-GAAP Financial Measures” for additional information.

• During the first quarter of 2009, the Company paid $2.3 million, or $.025 per share, in dividends compared to $2.4 million, or $.025 per share, paid in the first quarter of 2008.

• As of January 31, 2009, the Company had outstanding debt of $450.1 million and cash on hand of $71.5 million, or net debt of $378.6 million.

• The Company is negotiating the renewal or replacement of its revolving credit facility which currently has nothing drawn and matures in November 2009.

Trust Performance

The following returns include realized and unrealized gains and losses:

• For the quarter ended January 31, 2009, the Company’s preneed funeral and cemetery merchandise and services trusts experienced a total decline in value of 6.8 percent, and its perpetual care trusts experienced a total decline in value of 5.2 percent. For a portfolio balanced with equity and fixed-income securities, this decline is less than the decline of the overall performance of the equity market as demonstrated by the S&P 500 performance with a total decline in value of 14.1 percent for the same period.

• For the last three years ended January 31, 2009, the Company’s preneed funeral and cemetery merchandise and services trusts experienced an annual total average decline in value of 8.3 percent, and its perpetual care trusts experienced an annual total average decline in value of 7.0 percent. For a portfolio balanced with equity and fixed-income securities, this decline is less than the decline of the overall performance of the equity market as demonstrated by the S&P 500 performance with an annual total average decline in value of 11.8 percent for the same period.

• For the last five years ended January 31, 2009, the Company’s preneed funeral and cemetery merchandise and services trusts experienced an annual total average decline in value of 3.2 percent, and its perpetual care trusts experienced an annual total average decline in value of 2.8 percent. For a portfolio balanced with equity and fixed-income securities, this decline is consistent with the overall performance of the equity market as demonstrated by the S&P 500 performance with an annual total average decline in value of 4.3 percent for the same period.

Founded in 1910, Stewart Enterprises is the second largest provider of products and services in the death care industry in the United States. The Company currently owns and operates 220 funeral homes and 140 cemeteries in the United States and Puerto Rico. Through its subsidiaries, the Company provides a complete range of funeral merchandise and services, along with cemetery property, merchandise and services, both at the time of need and on a preneed basis.

Stewart Enterprises, Inc. will host its quarterly conference call for investors to discuss first quarter results on March 12, 2009 at 10 a.m. Central Standard Time. The teleconference dial-in number is 888-668-1643. To participate, please call the number at least 15 minutes prior to the call. If you are calling from outside the United States, the dial-in number is 913-312-1444. A replay of the call will be available by dialing 888-203-1112 (from within the continental United States) or 719-457-0820 (from outside the continental United States), and using pass code 2114942 until March 19, 2009 at 10:59 p.m. Central Standard Time. Interested parties will also have the opportunity to listen to the live conference call via the Internet through Stewart Enterprises’ website http://www.stewartenterprises.com. To listen to the live call, please go to the website at least 15 minutes early to register, download and install any necessary audio software. A replay will be available at this website shortly following the conference call and will be available at the website until April 2, 2009.

STEWART ENTERPRISES, INC.
AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Dollars in thousands, except per share amounts)

	Three Months Ended January 31,
	2009			2008
Revenues:
Funeral	$	71,750		$	73,449
Cemetery		47,580			56,824
		119,330			130,273
Costs and expenses:
Funeral		53,495			55,447
Cemetery		42,752			47,756
		96,247			103,203
Gross profit		23,083			27,070
Corporate general and administrative expenses		(7,506	)		(8,235	)
Hurricane related recoveries (charges), net		(315	)		159
Gains on dispositions and impairment (losses), net		(63	)		147
Other operating income, net		259			242
Operating earnings		15,458			19,383
Interest expense		(5,910	)		(5,888	)
Investment and other income, net		41			720
Earnings before income taxes		9,589			14,215
Income taxes		3,873			5,330
Net earnings	$	5,716		$	8,885
Net earnings per common share:
Basic	$	.06		$	.09
Diluted	$	.06		$	.09
Weighted average common shares outstanding (in thousands):
Basic		91,824			96,784
Diluted		91,896			97,019
Dividends declared per common share	$	.025		$	.025

STEWART ENTERPRISES, INC.
AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except per share amounts)

	January 31,		October 31,
ASSETS	2009		2008
Current assets:
Cash and cash equivalents	$	71,495	$	72,574
Marketable securities		61		55
Receivables, net of allowances		58,299		59,129
Inventories		36,806		35,870
Prepaid expenses		12,367		7,317
Deferred income taxes, net		8,050		8,798
Total current assets		187,078		183,743
Receivables due beyond one year, net of allowances		67,020		70,671
Preneed funeral receivables and trust investments		338,740		368,412
Preneed cemetery receivables and trust investments		170,049		182,141
Goodwill		247,236		247,236
Cemetery property, at cost		384,376		375,832
Property and equipment, at cost:
Land		42,343		42,343
Buildings		321,446		319,839
Equipment and other		181,160		178,589
		544,949		540,771
Less accumulated depreciation		242,563		236,243
Net property and equipment		302,386		304,528
Deferred income taxes, net		180,528		179,515
Cemetery perpetual care trust investments		167,889		173,090
Non-current assets held for sale		2,873		2,873
Other assets		15,746		16,474
Total assets	$	2,063,921	$	2,104,515

(continued)

STEWART ENTERPRISES, INC.
AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except per share amounts)

	January 31,			October 31,
LIABILITIES AND SHAREHOLDERS’ EQUITY	2009			2008
Current liabilities:
Current maturities of long-term debt	$	12		$	20
Accounts payable		25,209			27,652
Accrued payroll and other benefits		12,081			14,133
Accrued insurance		21,129			21,287
Accrued interest		6,294			5,864
Estimated obligation to fund cemetery perpetual care trust		12,163			13,281
Other current liabilities		11,291			16,198
Income taxes payable		4,713			2,061
Total current liabilities		92,892			100,496
Long-term debt, less current maturities		450,094			450,095
Deferred preneed funeral revenue		243,128			245,182
Deferred preneed cemetery revenue		281,660			275,835
Deferred preneed funeral and cemetery receipts held in trust		437,585			475,420
Perpetual care trusts’ corpus		166,675			171,371
Other long-term liabilities		21,959			20,479
Total liabilities		1,693,993			1,738,878
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $1.00 par value, 5,000,000 shares authorized; no shares issued		—			—
Common stock, $1.00 stated value:
Class A authorized 200,000,000 shares; issued and outstanding 89,164,401 and 88,693,127 shares at January 31, 2009 and October 31, 2008, respectively		89,164			88,693
Class B authorized 5,000,000 shares; issued and outstanding 3,555,020 shares at January 31, 2009 and October 31, 2008; 10 votes per share convertible into an equal number of Class A shares		3,555			3,555
Additional paid-in capital		535,003			536,902
Accumulated deficit		(257,834	)		(263,550	)
Accumulated other comprehensive income:
Unrealized appreciation of investments		40			37
Total accumulated other comprehensive income		40			37
Total shareholders’ equity		369,928			365,637
Total liabilities and shareholders’ equity	$	2,063,921		$	2,104,515

STEWART ENTERPRISES, INC.
AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands, except per share amounts)

	Three Months Ended January 31,
	2009			2008
Cash flows from operating activities:
Net earnings	$	5,716		$	8,885
Adjustments to reconcile net earnings to net cash provided by operating activities:
(Gains) on dispositions and impairment losses, net		63			(147	)
Depreciation and amortization		7,394			6,962
Provision for doubtful accounts		2,215			2,093
Share-based compensation		802			1,198
Excess tax benefits from share-based payment arrangements		—			(165	)
Provision (benefit) for deferred income taxes		(215	)		1,866
Estimated obligation to fund cemetery perpetual care trust		88			—
Other		66			104
Changes in assets and liabilities:
(Increase) decrease in receivables		2,993			(2,030	)
Increase in prepaid expenses		(5,050	)		(4,963	)
Increase in inventories and cemetery property		(1,043	)		(2,576	)
Decrease in accounts payable and accrued expenses		(7,629	)		(6,208	)
Net effect of preneed funeral production and maturities:
Decrease in preneed funeral receivables and trust investments		3,910			2,758
Decrease in deferred preneed funeral revenue		(2,054	)		(2,329	)
Decrease in funeral receipts held in trust		(1,996	)		(1,856	)
Net effect of preneed cemetery production and deliveries:
Decrease in preneed cemetery receivables and trust investments		1,934			2,461
Increase (decrease) in deferred preneed cemetery revenue		(1,645	)		351
Increase (decrease) in deferred preneed cemetery receipts held in trust		81			(1,919	)
Increase (decrease) in other		1,654			(387	)
Net cash provided by operating activities		7,284			4,098
Cash flows from investing activities:
Proceeds from sales of marketable securities		—			4,984
Purchases of marketable securities		—			(19,802	)
Proceeds from sale of assets		292			338
Purchase of subsidiaries and other investments, net of cash acquired		(1,623	)		—
Additions to property and equipment		(4,789	)		(7,056	)
Other		1			10
Net cash used in investing activities		(6,119	)		(21,526	)
Cash flows from financing activities:
Repayments of long-term debt		(9	)		(77	)
Issuance of common stock		83			1,380
Purchase and retirement of common stock		—			(22,807	)
Dividends		(2,318	)		(2,403	)
Excess tax benefits from share-based payment arrangements		—			165
Net cash used in financing activities		(2,244	)		(23,742	)
Net decrease in cash		(1,079	)		(41,170	)
Cash and cash equivalents, beginning of period		72,574			71,545
Cash and cash equivalents, end of period	$	71,495		$	30,375
Supplemental cash flow information:
Cash paid during the period for:
Income taxes, net	$	874		$	3,262
Interest	$	5,125		$	4,982
Non-cash investing and financing activities:
Issuance of common stock to executive officers and directors	$	305		$	921
Issuance of restricted stock, net of forfeitures	$	312		$	304

STEWART ENTERPRISES, INC.
AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE PERIODS ENDED JANUARY 31, 2009 AND 2008
(Unaudited)

The Company recorded a tax valuation allowance during the three months ended January 31, 2009 that impacted earnings. The Company is presenting adjusted earnings in the table below to eliminate the effects of the tax valuation allowance, which is not comparable from one period to the next.

	Three Months Ended January 31,
Adjusted Balances are Net of Tax	2009				2008
	millions		per share		millions		per share
Consolidated net earnings	$	5.7	$	.06	$	8.9	$	.09
Less: Tax valuation allowance		0.3		.01		—		—
Adjusted earnings	$	6.0	$	.07	$	8.9	$	.09

STEWART ENTERPRISES, INC.
AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE PERIODS ENDED JANUARY 31, 2009 AND 2008
(Unaudited)

Free cash flow is defined as net cash provided by operating activities less maintenance capital expenditures. Management believes that free cash flow is a useful measure of the Company’s ability to repay debt, make strategic investments, repurchase stock or pay dividends (subject to the restrictions in its debt agreements). The following table provides a reconciliation between net cash provided by operating activities (the GAAP financial measure that the Company believes is most directly comparable to free cash flow) and free cash flow for the three months ended January 31, 2009 and 2008:

	Three Months Ended
Free Cash Flow	January 31,
(Dollars in millions)	2009			2008
Net cash provided by operating activities (1)	$	7.3		$	4.1
Less: Maintenance capital expenditures		(3.1	)		(3.2	)
Free cash flow	$	4.2		$	0.9

(1) Cash flow provided by operating activities for the first quarter of fiscal year 2009 was $7.3 million compared to $4.1 million for the same period of last year. The increase in operating cash flow is primarily due to a decrease in net tax payments in the current year. The Company paid $3.3 million in net tax payments in the first quarter of 2008 compared to $0.9 million in net tax payments in the first quarter of 2009.

STEWART ENTERPRISES, INC.
AND SUBSIDIARIES

CAUTIONARY STATEMENTS

This press release includes forward-looking statements that are generally identifiable through the use of words such as “believe,” “expect,” “intend,” “plan,” “estimate,” “anticipate,” “project,” “will” and similar expressions. These forward-looking statements rely on assumptions, estimates and predictions that could be inaccurate and that are subject to risks and uncertainties that could cause actual results to differ materially from our goals or forecasts. These risks and uncertainties include, but are not limited to:

• effects on our trusts and escrow accounts of changes in stock and bond prices and interest and dividend rates;

• effects of the recent substantial decline in market value of our trust assets, including:

• decreased future cash flow and earnings as a result of reduced earnings from our trusts and trust fund management;

• the potential to realize additional losses and additional cemetery perpetual care funding obligations and tax valuation allowances;

• effects on at-need and preneed sales of a weakening economy;

• effects on revenue due to the changes in the number of deaths in our markets and decline in funeral call volume;

• our ability to refinance our revolving credit facility maturing in November 2009;

• effects on cash flow and earnings as a result of increased costs, particularly supply costs related to increases in commodity prices;

• effects on our market share, prices, revenues and margins of intensified price competition or improved advertising and marketing by competitors, including low-cost casket providers and increased offerings of products or services over the Internet;

• effects on our revenue and earnings of the continuing national trend toward increased cremation and the increases in the percentage of cremations performed by us that are inexpensive direct cremations;

• risk of loss due to hurricanes and other natural disasters;

• effects of the call options the Company purchased and the warrants the Company sold on our Class A common stock and the effects of the outstanding warrants on the ownership interest of our current stockholders;

• our ability to pay future dividends on and repurchase our common stock;

• possible adverse outcomes of pending class action lawsuits and the continuing cost of defending against them;

• our ability to consummate significant acquisitions successfully;

• the effects on us as a result of our industry’s complex accounting model;

• the effect of the change in accounting method for our senior convertible notes;

and other risks and uncertainties described in our Form 10-K for the year ended October 31, 2008, filed with the SEC. We disclaim any obligation or intent to update or revise any forward-looking statements in order to reflect events or circumstances after the date of this release.