Stewart Enterprises Reports a 40 Percent Increase in Earnings per Share to $.14 for the Second Quarter of 2013

Stewart Enterprises Reports a 40 Percent Increase in Earnings per Share to
$.14 for the Second Quarter of 2013

JEFFERSON, La., June 10, 2013 (GLOBE NEWSWIRE) -- Stewart Enterprises, Inc.
(Nasdaq:STEI) reported today its results for the second quarter of 2013.
Earnings from continuing operations were $11.9 million compared to $9.6
million for the second quarter of 2012. On a diluted per share basis for the
three months ended April 30, 2013, the Company reported earnings from
continuing operations of $.14 and adjusted earnings from continuing operations
of $.15 per share, compared to $.11 per share for reported earnings and $.13
per share for adjusted earnings for the same period of last year.

            Three Months Ended April 30,      Six Months Ended April 30,
            2013              2012            2013            2012
            millions  per     millions per    millions per    millions per
                       share            share           share           share
Net earnings $ 11.9   $.14  $8.7   $.10 $ 27.4  $.32 $ 17.3  $.20
Net earnings
from         $ 11.9   $.14  $9.6   $.11 $ 27.4  $.32 $ 18.5  $.21
continuing
operations
Adjusted
earnings
from         $ 12.9   $.15  $ 11.4  $.13 $ 26.0  $.30 $ 20.5  $.23
continuing
operations
^(1)
                                                                
^(1) See table "Reconciliation of Non-GAAP Financial Measures" for additional
information on adjusted earnings and adjusted earnings per share from
continuing operations.

Thomas M. Kitchen, President and Chief Executive Officer, stated, "The
previously announced definitive merger agreement by Service Corporation
International ("SCI") is evidence of the value we have created in the Company,
and we are pleased to see that benefit recognized for our shareholders.We
will continue to operate the business with a high degree of performance and
believe that fiscal year 2013 is off to a strong start. For the six months
ended April 30, 2013, we improved adjusted earnings from continuing operations
by 27 percent and adjusted earnings per share by 30 percent. These
improvements were driven by a $12 million increase in revenue and a $10
million increase in gross profit, which reflects the highest six months of
revenue and gross profit in six years.We are pleased with our second quarter
results which include an increase in gross profit by 10 percent, adjusted
earnings from continuing operations by 13 percent and adjusted earnings per
share by 15 percent as compared to the second quarter of 2012. Our funeral
business benefitted from an improvement in same-store calls for the fourth
consecutive quarter, which contributed to a 3 percent improvement in funeral
revenue compared to the second quarter of last year.Overall our cemetery
business produced a 29 percent improvement in gross profit, primarily from an
increase in our revenue related to trust activities, combined with a reduction
in our expenses throughout the quarter.Some additional highlights of the
second quarter compared to the same quarter of last year include:

  *Improving overall revenue, gross profit and earnings from continuing
    operations for the fifth consecutive quarter and improving same-store
    funeral services for the fourth consecutive quarter;
    
  *Generating operating cash flow of $33.2 million, an improvement of $12.5
    million, and free cash flow of $29.9 million, an improvement of $13.0
    million;
    
  *Realizing an 8 percent improvement in adjusted EBITDA to $32.3 million or
    a 24.1 percent adjusted EBITDA margin, as discussed in the table
    "Reconciliation of Non-GAAP Financial Measures;"
    
  *Producing total returns for the quarter of 6 percent in our preneed trusts
    and 5 percent in our cemetery perpetual care trusts; and
    
  *Announcing a 12.5 percent increase in the Company's quarterly dividend to
    $.045 per share and returning $3.8 million in dividends to our
    shareholders."

Mr. Kitchen concluded, "Our balance sheet and liquidity remain strong with
$103.4 million in cash and marketable securities on hand as of April 30, 2013,
with no amounts borrowed on our $150 million credit facility.For the first
six months of fiscal year 2013, we have generated $45 million in operating
cash flow.We believe our ability to consistently produce strong cash flow is
one of the many reasons why SCI is paying a significant premium for the
Company."

Definitive Merger Agreement with Service Corporation International

On May 29, 2013, the Company announced that it has entered into a definitive
merger agreement with SCI.Pursuant to the agreement, holders of the Company's
Class A and Class B common stock will receive $13.25 in cash for each share of
common stock they hold. The transaction is subject to the approval of the
Company's shareholders and the satisfaction of customary closing conditions
and regulatory approvals, including expiration or termination of the
applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976.The proposed transaction is expected to close in late calendar
year 2013 or early 2014.For additional information, see the Company's Form
10-Q for the quarter ended April 30, 2013.

Second Quarter Results

FUNERAL

  *Funeral revenue increased $2.5 million, or 3.4 percent, to $75.2 million
    for the second quarter of 2013.
    
  *Same-store services increased 4.4 percent, or 606 events, which the
    Company believes is consistent with industry-wide data.During the second
    quarter of 2013, the Company experienced a $0.5 million increase in
    revenue related to trust activities.These increases were partially offset
    by a 0.6 percent decrease in same-store average revenue per funeral
    service, coupled with a $0.7 million decrease in insurance commission
    revenue primarily as a result of a decline in net preneed funeral sales.
    
  *Funeral gross profit decreased $0.2 million, or 1.1 percent, to $18.3
    million for the second quarter of 2013 compared to $18.5 million for the
    same period of 2012.Funeral gross profit margin declined 110 basis points
    to 24.3 percent for the second quarter of 2013 from 25.4 percent for the
    second quarter of 2012.The Company experienced a decrease in insurance
    commission revenue, as previously mentioned, coupled with an increase in
    advertising, direct merchandise and services costs compared to the same
    period of last year.
    
  *The cremation rate for the Company's same-store operations was 43.8
    percent for the second quarter of 2013 compared to 42.5 percent for the
    second quarter of 2012.
    
  *Net preneed funeral sales decreased 6.5 percent during the second quarter
    of 2013 compared to the second quarter of 2012. Preneed funeral sales are
    deferred until the underlying contracts are performed and have no impact
    on current revenue.

CEMETERY

  *Cemetery revenue decreased $1.2 million, or 2.0 percent, to $58.7 million
    for the second quarter of 2013. The decline in cemetery revenue is
    primarily due to a $6.0 million, or 21.2 percent, decrease in cemetery
    property sales compared to the second quarter of 2012.As part of the
    integration of its operations and sales teams, the Company revised its
    organizational structure and compensation packages.In addition, the
    Company tightened its sales terms for cemetery property sales.These
    actions negatively impacted cemetery property sales for the second quarter
    of 2013.The Company knew these changes would create challenges, and is
    taking the necessary steps to address them.
    
  *During the second quarter, the Company produced a $2.3 million increase in
    revenue related to trust activities, coupled with a $1.7 million
    improvement in revenue recognized for cemetery property sales for which
    construction was completed.In addition, merchandise delivered and
    services performed improved by $0.5 million.
    
  *Cemetery gross profit increased $3.1 million, or 29.2 percent, to $13.7
    million for the second quarter of 2013 compared to $10.6 million for the
    same period of 2012.Cemetery gross profit margin improved 560 basis
    points to 23.3 percent for the second quarter of 2013 from 17.7 percent
    for the same period of 2012.The improvement is due in part to the
    increase in revenue related to trust activities, as previously mentioned,
    coupled with a reduction in costs associated with the decline in cemetery
    property sales and the sales reorganization.

OTHER

  *During the three months ended April 30, 2013, the Company incurred $0.6
    million in merger-related costs which consist primarily of financial
    advisory and legal fees.
    
  *During the second quarter of 2012, the Company recorded $2.5 million in
    restructuring and other charges.These charges were primarily related to
    separation pay, termination benefits and a non-cash asset impairment, due
    in part to the restructuring of the sales and operations of the
    organization, as well as a separate reduction in workforce associated with
    the Company's ongoing continuous improvement initiative.
    
  *The effective tax rate for continuing operations for the quarter ended
    April 30, 2013 was 38.0 percent compared to 35.9 percent for the same
    period in 2012.During the second quarter of 2012, the Company recorded a
    tax benefit of $0.4 million resulting from a reduction in the valuation
    allowance for capital losses, associated with the improved performance of
    the Company's trust portfolio.
    
  *During the second quarter of 2012, the Company decided to hold one of its
    e-commerce businesses for sale with the results of its operations and the
    related impairment included in discontinued operations.

Year to Date Results

FUNERAL

  *Funeral revenue increased $8.6 million, or 5.9 percent, to $153.4 million
    for the first six months of fiscal year 2013.
    
  *Same-store funeral services increased 6.4 percent, or 1,782 events, which
    the Company believes compares favorably to industry-wide data.During the
    first six months of fiscal year 2013, the Company experienced a $0.4
    million increase in revenue related to trust activities. These increases
    were partially offset by a 0.3 percent decrease in same-store average
    revenue per funeral service.
    
  *Funeral gross profit increased $2.5 million, or 6.7 percent, to $39.8
    million for the first half of fiscal year 2013.Funeral gross profit
    margin improved 10 basis points to 25.9 percent for the six months ended
    April 30, 2013 from 25.8 percent for the same period of 2012.The increase
    is primarily due to the $8.6 million improvement in revenue, as previously
    noted.
    
  *The cremation rate for the Company's same-store operations was 43.3
    percent for the first six months of fiscal year 2013 compared to 42.9
    percent for the corresponding period of 2012.
    
  *Net preneed funeral sales decreased 6.9 percent during the first six
    months of fiscal year 2013 compared to the same period of 2012. Preneed
    funeral sales are deferred until the underlying contracts are performed
    and have no impact on current revenue.

CEMETERY

  *Cemetery revenue increased $3.5 million, or 3.1 percent, to $116.2 million
    for the six months ended April 30, 2013.During the first six months of
    fiscal year 2013, the Company generated a $4.7 million increase in revenue
    recognized for cemetery property sales for which the down payment required
    for revenue recognition was received.In addition, revenue related to
    trust activities increased by $3.8 million and revenue recognized for
    cemetery property sales for which construction was completed increased by
    $3.0 million.
    
  *Cemetery property sales declined $9.2 million, or 17.7 percent, compared
    to the first six months of fiscal year 2012. As part of the integration
    of its operations and sales teams, the Company revised its organizational
    structure and compensation packages.In addition, the Company tightened
    its sales terms for cemetery property sales.These actions negatively
    impacted cemetery property sales for the first six months of fiscal year
    2013.The Company knew these changes would create challenges, and is
    taking the necessary steps to address them.
    
  *Cemetery gross profit increased $7.2 million, or 41.6 percent, to $24.5
    million for the first half of fiscal year 2013.Cemetery gross profit
    margin improved 570 basis points to 21.1 percent for the six months ended
    April 30, 2013 from 15.4 percent for the corresponding period of fiscal
    year 2012.The increase in gross profit is primarily due to the
    improvement in revenue, as previously noted, coupled with a reduction in
    property and related selling costs associated with the decline in cemetery
    property sales and the previously discussed sales reorganization.

OTHER

  *Corporate general and administrative expenses increased $1.0 million to
    $13.9 million for the six months ended April 30, 2013, compared to $12.9
    million for the same period of 2012.Due to the strong operating results
    for the first six months of fiscal year 2013, the Company increased its
    accrual for annual incentive compensation.
    
  *During the six months ended April 30, 2013, the Company incurred $0.6
    million in merger-related costs which consist primarily of financial
    advisory and legal fees.
    
  *The effective tax rate for continuing operations for the first six months
    ended April 30, 2013 was 31.2 percent compared to 35.0 percent for the
    corresponding period in fiscal year 2012.For the six months ended April
    30, 2013 and 2012, the Company benefitted from a $2.7 million and $1.0
    million, respectively, reduction in the valuation allowance for capital
    losses, associated with the positive performance of its trust portfolio.
    
  *During the first six months of fiscal year 2013, the Company repurchased
    0.2 million shares of its Class A common stock for $1.8 million under its
    stock repurchase program.

Cash Flow Results and Debt for Total Operations

  *Cash flow provided by operating activities for the second quarter of
    fiscal year 2013 was $33.2 million compared to $20.7 million for the same
    period of last year.During the second quarter of 2013, the Company
    generated a $3.1 million improvement in net earnings.In addition, the
    Company experienced a change in working capital, partly driven by a $7.5
    million decrease in receivables due in part to the decline in preneed
    funeral and cemetery property sales, which are typically financed and for
    which the Company has tightened the sales terms.
    
  *Cash flow provided by operating activities for the first six months of
    fiscal 2013 was $45.0 million compared to $28.5 million for fiscal year
    2012.For the first six months of fiscal year 2013, the Company generated
    a $10.0 million improvement in net earnings.In addition, the Company
    experienced a change in working capital, partly driven by a $4.4 million
    decrease in receivables due in part to the decline in preneed funeral and
    cemetery property sales, which are typically financed and a $3.3 million
    decline in spending on cemetery development projects.These changes were
    partially offset by the timing of trust withdrawals and deposits.
    
  *Free cash flow was $29.9 million and $36.5 million for the second quarter
    and first six months of fiscal year 2013, respectively, compared to $16.9
    million and $20.7 million for the second quarter and first six months of
    fiscal year 2012, respectively, primarily due to the changes in operating
    cash flow, as described above.See table "Reconciliation of Non-GAAP
    Financial Measures" for additional information on free cash flow.
    
  *The Company paid $.045 per share in dividends in the second fiscal quarter
    of 2013, compared to $.040 per share in the prior year period.The Company
    paid $.085 per share in dividends in the first six months of fiscal year
    2013, compared to $.075 per share in the prior year period.The Company
    paid $7.2 million in dividends in the first six months of fiscal year
    2013, compared to $6.5 million in the corresponding period of last year.

Trust Performance

The following total returns include realized and unrealized gains and losses:

  *For the quarter ended April 30, 2013, the Company's preneed funeral and
    cemetery merchandise and services trusts experienced a total return of 5.7
    percent, and its perpetual care trusts experienced a total return of 5.2
    percent.
    
  *For the six months ended April 30, 2013, the Company's preneed funeral and
    cemetery merchandise and services trusts experienced a total return of
    10.4 percent, and its perpetual care trusts experienced a total return of
    9.2 percent.
    
  *For the twelve months ended April 30, 2013, the Company's preneed funeral
    and cemetery merchandise and services trusts experienced a total return of
    14.0 percent, and its perpetual care trusts experienced a total return of
    14.4 percent.
    
  *For the five years ended April 30, 2013, the Company's preneed funeral and
    cemetery merchandise and services trusts experienced an average annual
    total return of 5.1 percent, and its perpetual care trusts experienced an
    average annual total return of 6.9 percent.
    
  *For fiscal year 2013, the fair market value of the Company's portfolio
    improved $60.8 million to $917.0 million.

Founded in 1910, Stewart Enterprises, Inc. is the second largest provider of
products and services in the death care industry in the United States. The
Company currently owns and operates 217 funeral homes and 141 cemeteries in
the United States and Puerto Rico. Through its subsidiaries, the Company
provides a complete range of funeral and cremation merchandise and services,
along with cemetery property, merchandise and services, both at the time of
need and on a preneed basis.For additional information on Stewart
Enterprises, Inc. please visit www.stewartenterprises.com.

Important Additional Information Will be Filed with the SEC

The Company plans to file with the Securities and Exchange Commission ("SEC")
and mail to its shareholders a Proxy Statement in connection with the merger
agreement and related transactions, and may furnish or file other materials
with the SEC in connection with the merger agreement and related
transactions.The Proxy Statement will contain important information about the
Company, SCI, the merger agreement and voting agreement, transactions
contemplated by these agreements and related matters.Investors and security
holders are urged to read the Proxy Statement and other materials furnished or
filed with the SEC relating to the transaction carefully when they are
available before making any voting or investment decision.Investors and
security holders will be able to obtain free copies of the Proxy Statement and
other materials furnished or filed with the SEC by the Company through the
website maintained by the SEC at www.sec.gov.In addition, investors and
security holders will be able to obtain free copies of the Proxy Statement and
other materials furnished or filed with the SEC relating to the transaction
from the Company.

Participants in the Solicitation of Proxies

The Company and its directors, executive officers and other members of
management and employees may be deemed to be participants in the solicitation
of proxies from the shareholders of the Company in connection with the
transaction described in this press release.Information regarding the
Company's directors and executive officers is included in the Company's proxy
statement for its 2013 Annual Meeting of Shareholders, which was filed with
the SEC on or about February 22, 2013. Additional information regarding the
potential participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise, will be
included in the Proxy Statement described above. The Company's proxy
statement for its 2013 Annual Meeting of Shareholders is available, and the
Proxy Statement and other materials furnished or filed with the SEC relating
to the transaction, when furnished or filed, will be available, at the SEC's
website at www.sec.gov and from the Company.

STEWART ENTERPRISES, INC.
AND SUBSIDIARIES
                                                               
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Dollars in thousands, except per share amounts)
                                                               
                                                 Three Months Ended April 30,
                                                 2013           2012
Revenues:                                                       
Funeral                                           $75,243      $72,752
Cemetery                                          58,610       59,846
                                                 133,853      132,598
Costs and expenses:                                             
Funeral                                           56,921       54,203
Cemetery                                          44,965       49,257
                                                 101,886      103,460
Gross profit                                      31,967       29,138
Corporate general and administrative expenses     (6,520)       (6,246)
Merger-related costs                              (589)         —
Restructuring and other charges                   —            (2,547)
Net gain (loss) on dispositions                   21           (11)
Other operating income, net                       199          388
Operating earnings                                25,078       20,722
Interest expense                                  (5,956)       (5,804)
Investment and other income, net                  38           45
Earnings from continuing operations before income 19,160       14,963
taxes
Income taxes                                      7,285        5,377
Earnings from continuing operations               11,875       9,586
Discontinued operations:                                        
Loss from discontinued operations before income   —            (1,318)
taxes
Income tax benefit                                —            (468)
Loss from discontinued operations                 —            (850)
                                                               
Net earnings                                      $11,875      $8,736
                                                               
Basic earnings per common share:                                
Earnings from continuing operations               $.14         $.11
Loss from discontinued operations                 —            (.01)
Net earnings                                      $.14         $.10
                                                               
Diluted earnings per common share:                              
Earnings from continuing operations               $.14         $.11
Loss from discontinued operations                 —            (.01)
Net earnings                                      $.14         $.10
                                                               
Weighted average common shares outstanding (in                  
thousands):
Basic                                             84,512       86,044
Diluted                                           85,232       86,375
                                                               
Dividends declared per common share               $.045        $.040




STEWART ENTERPRISES, INC.
AND SUBSIDIARIES
                                                         
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Dollars in thousands, except per share amounts)
                                                         
                                     Six Months Ended April 30,
                                     2013                 2012
Revenues:                                                 
Funeral                               $153,308           $144,763
Cemetery                              116,226            112,659
                                     269,534            257,422
Costs and expenses:                                       
Funeral                               113,585            107,557
Cemetery                              91,666             95,331
                                     205,251            202,888
Gross profit                          64,283             54,534
Corporate general and administrative  (13,908)            (12,938)
expenses
Merger-related costs                  (589)               —
Restructuring and other charges       (81)                (2,547)
Net gain on dispositions              742                332
Other operating income, net           1,120              582
Operating earnings                    51,567             39,963
Interest expense                      (11,872)            (11,671)
Investment and other income, net      162                91
Earnings from continuing operations   39,857             28,383
before income taxes
Income taxes                          12,448             9,939
Earnings from continuing operations   27,409             18,444
Discontinued operations:                                  
Loss from discontinued operations     (88)                (1,685)
before income taxes
Income tax benefit                    (31)                (522)
Loss from discontinued operations     (57)                (1,163)
                                                         
Net earnings                          $27,352            $17,281
                                                         
Basic earnings per common share:                          
Earnings from continuing operations   $.32               $.21
Loss from discontinued operations     —                  (.01)
Net earnings                          $.32               $.20
                                                         
Diluted earnings per common share:                        
Earnings from continuing operations   $.32               $.21
Loss from discontinued operations     —                  (.01)
Net earnings                          $.32               $.20
                                                         
Weighted average common shares                            
outstanding (in thousands):
Basic                                 84,452             86,546
Diluted                               85,088             86,867
                                                         
Dividends declared per common share   $.045              $.075
^(1)
                                                         
^(1) The first quarter dividend historically declared in December and paid in
January (both the Company's first quarter) was declared in October 2012 (the
Company's fourth quarter) and paid in December 2012.The acceleration of the
declaration and payment of the first quarter 2013 dividend resulted in no
dividends being declared in the first quarter of 2013, although the dividend
was paid in the first quarter of 2013.The Company paid $7.2 million, or $.085
per share, in dividends for the six months ended April 30, 2013, compared to
$6.5 million, or $.075 per share, in dividends during the six months ended
April 30, 2012.




STEWART ENTERPRISES, INC.
AND SUBSIDIARIES
                                                            
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except per share amounts)
                                                            
ASSETS                                         April 30, 2013 October 31, 2012
                                                            
Current assets:                                              
Cash and cash equivalents                      $83,594      $68,187
Restricted cash and cash equivalents           6,250        6,250
Marketable securities                          19,815       10,514
Receivables, net of allowances                 51,960       52,441
Inventories                                    35,762       36,495
Prepaid expenses                               8,605        4,923
Deferred income taxes, net                     19,462       30,671
Total current assets                           225,448      209,481
Receivables due beyond one year, net of        69,909       72,620
allowances
Preneed funeral receivables and trust          459,808      432,422
investments
Preneed cemetery receivables and trust         241,506      225,048
investments
Goodwill                                       249,584      249,584
Cemetery property, at cost                     402,626      401,670
Property and equipment, at cost:                             
Land                                           49,765       49,085
Buildings                                      368,724      360,852
Equipment and other                            199,397      204,971
                                              617,886      614,908
Less accumulated depreciation                  325,890      323,648
Net property and equipment                     291,996      291,260
Deferred income taxes, net                     64,241       62,125
Cemetery perpetual care trust investments      280,071      263,663
Other assets                                   12,533       13,812
Total assets                                   $2,297,722   $2,221,685




STEWART ENTERPRISES, INC.
AND SUBSIDIARIES
                                                            
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except per share amounts)
                                                            
LIABILITIES AND SHAREHOLDERS' EQUITY           April 30, 2013 October 31, 2012
                                                            
Current liabilities:                                         
Current maturities of long-term debt           $6           $6
Accounts payable and accrued expenses          24,815       25,214
Accrued payroll and other benefits             16,917       19,964
Accrued insurance                              21,995       22,152
Accrued interest                               2,090        2,161
Estimated obligation to fund cemetery          11,947       11,965
perpetual care trust
Other current liabilities                      10,248       14,723
Income taxes payable                           1,776        1,004
Total current liabilities                      89,794       97,189
Long-term debt, less current maturities        324,027      321,887
Deferred income taxes, net                     4,555        4,931
Deferred preneed funeral revenue               239,508      240,415
Deferred preneed cemetery revenue              262,996      265,347
Deferred preneed funeral and cemetery receipts 627,610      585,164
held in trust
Perpetual care trusts' corpus                  277,425      261,883
Other long-term liabilities                    21,219       20,548
Total liabilities                              1,847,134    1,797,364
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 81,960,174 and 81,359,536      81,960       81,360
shares at April 30, 2013 and October 31, 2012,
respectively
Class B authorized 5,000,000 shares; issued
and outstanding 3,555,020 shares at April 30,
2013 and October 31, 2012; 10 votes per share  3,555        3,555
convertible into an equal number of Class A
shares
Additional paid-in capital                     477,379      479,060
Accumulated deficit                            (112,344)     (139,696)
Accumulated other comprehensive income:                      
Unrealized appreciation of investments         38           42
Total accumulated other comprehensive income   38           42
Total shareholders' equity                     450,588      424,321
Total liabilities and shareholders' equity     $2,297,722   $2,221,685




STEWART ENTERPRISES, INC.
AND SUBSIDIARIES
                                                                
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands, except per share amounts)
                                                                
                                                   Six Months Ended April 30,
                                                   2013          2012
Cash flows from operating activities:                            
Net earnings                                        $27,352     $17,281
Adjustments to reconcile net earnings to net cash                
provided by operating activities:
Net (gain) loss on dispositions                     (654)       508
Non-cash restructuring charge                       —           1,236
Depreciation and amortization                       13,032      13,244
Non-cash interest and amortization of discount on   2,875       2,730
senior convertible notes
Provision for doubtful accounts                     2,493      2,060
Share-based compensation                            1,985      1,887
Excess tax benefits from share-based payment        (171)        (23)
arrangements
Provision for deferred income taxes                 9,384       6,724
Estimated obligation to fund cemetery perpetual     —           633
care trust
Other                                              97          30
Changes in assets and liabilities:                               
Increase in receivables                             (129)        (4,519)
Increase in prepaid expenses                        (3,682)      (3,004)
Increase in inventories and cemetery property       (230)        (5,795)
Decrease in accounts payable and accrued expenses   (3,199)      (5,923)
Federal income tax refund received                  740         —
Net effect of preneed funeral production and                     
maturities:
Increase in preneed funeral receivables and trust   (4,293)      (580)
investments
Decrease in deferred preneed funeral revenue        (879)        (468)
Increase (decrease) in deferred preneed funeral     2,379       (812)
receipts held in trust
Net effect of preneed cemetery production and                   
deliveries:
Increase in preneed cemetery receivables and trust  (2,988)      (2,676)
investments
Increase (decrease) in deferred preneed cemetery    (2,352)      3,676
revenue
Increase in deferred preneed cemetery receipts held 2,609       1,905
in trust
Increase in other                                   678         348
Net cash provided by operating activities           45,047      28,462
                                                                
Cash flows from investing activities:                            
Proceeds from sales/maturities of marketable        500         2,006
securities and release of restricted funds 
Deposits of restricted funds and purchases of       (9,628)      (2,036)
marketable securities
Proceeds from sale of assets                        799         533
Purchase of subsidiaries and other investments, net —           (3,113)
of cash acquired
Additions to property and equipment                 (14,262)     (11,914)
Other                                              66          34
Net cash used in investing activities               (22,525)     (14,490)
                                                                
Cash flows from financing activities:                            
Repayments of long-term debt                        (3)          (3)
Debt refinancing costs                              —           (34)
Issuance of common stock                            1,730       626
Purchase and retirement of common stock             (1,833)      (11,615)
Dividends                                           (7,180)      (6,533)
Excess tax benefits from share-based payment        171         23
arrangements
Net cash used in financing activities               (7,115)      (17,536)
                                                                
Net increase (decrease) in cash                     15,407      (3,564)
Cash and cash equivalents, beginning of period      68,187      65,688
Cash and cash equivalents, end of period            $83,594     $62,124
                                                                
Supplemental cash flow information:                              
Cash paid during the period for:                                 
Income taxes, net                                   $1,380      $1,525
Interest                                            $9,103      $9,090
                                                                
Non-cash investing and financing activities:                     
Issuance of common stock to directors               $133        $437
Issuance of restricted stock, net of forfeitures    $924        $699




RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE PERIODS ENDED APRIL 30, 2013 AND 2012
(Unaudited)

The Company recorded several items during the three and six months ended April
30, 2013 and 2012 that impacted earnings from continuing operations: a
non-cash interest expense related to the Company's senior convertible notes,
restructuring and other charges, merger-related costs, a perpetual care
funding obligation, net gains on dispositions and unusual tax adjustments.The
Company is presenting adjusted earnings in the table below to eliminate the
effects of the specified items.

                 Three Months Ended April 30,  Six Months Ended April 30,
Adjusted
Balances are Net  2013           2012           2013            2012
of Tax
                 millions per   millions per   millions per    millions per
                           share          share          share           share
Consolidated net  $ 11.9  $     $ 8.7   $     $ 27.4  $.32 $ 17.3  $.20
earnings                   .14           .10
Add:Loss from
discontinued      —      —   0.9    .01 —      —    1.2    .01
operations
Earnings from
continuing        11.9   .14 9.6    .11 27.4    .32  18.5   .21
operations
Add:Non-cash
interest expense
on senior         0.6    .01 0.6    —   1.3    .02  1.2    .01
convertible notes
^(1)
Add:
Restructuring and —      —   1.6    .02 —      —    1.6    .02
other charges
^(2)
Add:
Merger-related    0.4    —   —      —   0.4    —    —      —
costs ^(3)
Add: Perpetual
care funding      —      —   —      —   —      —    0.4    —
obligation ^(4)
Subtract: Net
gain on           —      —   —      —   (0.4)   (.01) (0.2)   —
dispositions ^(5)
Subtract:Unusual
tax adjustments   —      —   (0.4)    —   (2.7)   (.03) (1.0)   (.01)
^(6)
Adjusted earnings          $              $
from continuing   $ 12.9  .15  $ 11.4  .13  $ 26.0  $.30 $20.5   $.23
operations

^(1)^ Effective November 1, 2009, the Company adopted Financial Accounting
Standards Board guidance that relates to the Company's senior convertible
notes, which has been applied retrospectively in the Company's financial
statements.For additional information, see Note 3 to the financial statements
included in the Company's Form 10-K for the year ended October 31, 2012.The
tax rate associated with the interest expense related to the Company's senior
convertible notes was 38.0 percent for the three and six months ended April
30, 2013 and April 30, 2012.

^(2)^ The Company recorded $2.5 million in restructuring and other charges
during the second quarter of 2012.This charge was primarily related to
separation pay, termination benefits and a non-cash asset impairment due in
part to the restructuring of the sales and operations of the organization,
along with a reduction in workforce associated with the Company's continuous
improvement initiative.The tax rate associated with this charge for the three
and six months ended April 30, 2012 was 38.0 percent.

^(3)^ On May 29, 2013, the Company announced that it has entered into a
definitive merger agreement with SCI.Pursuant to the agreement, holders of
the Company's Class A and Class B common stock will receive $13.25 in cash for
each share of common stock they hold.The transaction is subject to the
approval of the Company's shareholders and the satisfaction of customary
closing conditions and regulatory approvals, including expiration or
termination of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976.The proposed transaction is expected to
close in late calendar year 2013 or early 2014.During the three months ended
April 30, 2013, the Company incurred $0.6 million in merger-related costs
which consist primarily of financial advisory and legal fees.The tax rate
associated with the Company's merger-related costs for the three and six
months ended April 30, 2013 was 38.0 percent.

^(4)^ As a result of Eastman Kodak's bankruptcy, the Company recorded a
charge to record a probable funding obligation related to the Company's
perpetual care trusts during the first quarter of 2012.The tax rate
associated with the Company's adjustment for the perpetual care funding
obligation for the six months ended April 30, 2013 was 38.0 percent.

^(5)^ The tax rate associated with the Company's adjustment for the net gain
on dispositions for the six months ended April 30, 2013 and April 30, 2012 was
38.0 percent.

^(6) For the six months ended April 30, 2013 and the three and six months
ended April 30, 2012, the Company recorded a reduction in the tax valuation
allowance, primarily resulting from the improved performance of the Company's
trust portfolio.




RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE PERIODS ENDED APRIL 30, 2013 AND 2012
(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 make strategic investments,
repurchase stock, repay debt 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 and six months ended April 30, 2013 and 2012:

Free Cash Flow                           Three Months Ended Six Months Ended 
                                         April 30,          April 30,
(Dollars in millions)                    2013      2012     2013      2012   
Net cash provided by operating           $33.2   $20.7  $45.0   $28.5
activities ^(1)
Less:Maintenance capital expenditures   (3.3)    (3.8)   (8.5)    (7.8)
Free cash flow                           $29.9   $16.9  $36.5   $20.7


^(1)^ Cash flow provided by operating activities for the second quarter of
fiscal year 2013 was $33.2 million compared to $20.7 million for the same
period of last year.During the second quarter of 2013, the Company generated
a $3.1 million improvement in net earnings.In addition, the Company
experienced a change in working capital, partly driven by a $7.5 million
decrease in receivables due in part to the decline in preneed funeral and
cemetery property sales, which are typically financed and for which the
Company has tightened the sales terms.
Cash flow provided by operating activities for the first six months of fiscal
2013 was $45.0 million compared to $28.5 million for fiscal year 2012.For the
first six months of fiscal year 2013, the Company generated a $10.0 million
improvement in net earnings.In addition, the Company experienced a change in
working capital, partly driven by a $4.4 million decrease in receivables due
in part to the decline in preneed funeral and cemetery property sales, which
are typically financed and a $3.3 million decline in spending on cemetery
development projects.These changes were partially offset by the timing of
trust withdrawals and deposits.




RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE PERIODS ENDED APRIL 30, 2013 AND 2012
(Unaudited)

Adjusted EBITDA is defined as earnings from continuing operations plus
depreciation and amortization, interest expense, perpetual care funding
obligations, restructuring and other charges, merger-related costs, income
taxes and less net gain on dispositions.Adjusted EBITDA margins are
calculated by dividing adjusted EBITDA by revenue.

Management believes that adjusted EBITDA is a useful measure for providing
additional insight into the Company's operating performance.Due to the
Company's significant cash investment in preneed activity, management does not
view adjusted EBITDA as a measure of the Company's cash flow.Investors should
be aware that adjusted EBITDA may not be comparable to similarly titled
measures presented by other companies. The following table provides a
reconciliation between net earnings (the GAAP financial measure that the
Company believes is most directly comparable to adjusted EBITDA) and adjusted
EBITDA for the three and six months ended April 30, 2013 and 2012:

Adjusted EBITDA              Three Months Ended      Six Months Ended      
                             April 30,               April 30,
(Dollars in millions)        2013        2012        2013         2012     
Consolidated net earnings    $11.9     $8.7      $27.4      $17.3
Add:Loss from discontinued  —         0.9       —          1.2
operations
Earnings from continuing     11.9      9.6       27.4       18.5
operations
Add:Depreciation and        6.5       6.7       13.0       13.2
amortization
Add:Interest expense        6.0       5.8       11.9       11.7
Add:Perpetual care funding  —         —         —          0.6
obligation ^(1)
Add:Restructuring and other —         2.5       —          2.5
charges
Add:Merger-related costs    0.6       —         0.6        —
Add:Income taxes            7.3       5.4       12.5       9.9
Subtract:Net gain on        —         —         (0.7)       (0.3)
dispositions
Adjusted EBITDA              $32.3     $30.0     $64.7      $56.1
Adjusted EBITDA margin       24.1%      22.6%      24.0%       21.8%
                                                              
^(1) As a result of Eastman Kodak's bankruptcy, the Company recorded a charge
to record a probable funding obligation related to the Company's perpetual
care trusts during the first quarter of 2012.




                          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 substantial unrealized losses in the investments in our
    trusts, 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 weak economy;
    
  *effects on revenue due to the changes in the number of deaths in our
    markets and recent annual declines in funeral call volume;
    
  *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;
    
  *effects on our future revenue and costs of our organizational
    restructuring designed to better integrate operations and sales,
    implemented primarily during the latter part of fiscal year 2012 and the
    beginning of fiscal year 2013;
    
  *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;
    
  *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 our common stock;
    
  *the effects on us as a result of our industry's complex accounting model;
    
  *the occurrence of any circumstances that could give rise to the
    termination of the merger agreement; the outcome of any legal proceedings
    that may be instituted against the Company related to the merger
    agreement; the inability to complete the transaction due to the failure to
    obtain shareholder approval or the failure to satisfy other conditions to
    completion of the transaction, including the receipt of all regulatory
    approvals related to the transaction; the failure of SCI to obtain the
    necessary financing arrangements set forth in the commitment letter
    delivered pursuant to the merger agreement; the disruption of management's
    attention from the Company's ongoing business operations due to the
    transaction; the effect of the announcement of the transaction on the
    Company's relationships with its customers, operating results and business
    generally;

and other risks and uncertainties described in our Form 10-K for the year
ended October 31, 2012 and our Form 10-Q for the quarter ended April 30, 2013,
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.

CONTACT: Lewis J. Derbes, Jr.
         Stewart Enterprises, Inc.
         1333 S. Clearview Parkway
         Jefferson, LA 70121
         504-729-1400

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