Stewart Enterprises Reports a 15 Percent Earnings Per Share Increase for the Second Fiscal Quarter of 2008


NEW ORLEANS, June 10, 2008 (PRIME NEWSWIRE) -- Stewart Enterprises, Inc. (Nasdaq:STEI) reported today its results for the fiscal quarter ended April 30, 2008.

The Company reported a 15 percent increase in diluted earnings per share from continuing operations to $.15 per share for the quarter ended April 30, 2008 from $.13 per share for the same period of last year. After taking into account a $1.5 million unusual tax benefit in fiscal 2007, the Company reported a 25 percent increase in adjusted diluted earnings per share to $.15 per share for the quarter ended April 30, 2008 from $.12 per share for the same period of last year. See table under "Reconciliation of Non-GAAP Financial Measures" for further information on adjusted diluted earnings per share and adjusted net earnings from continuing operations.

Net earnings from continuing operations for the quarter ended April 30, 2008 increased to $13.9 million compared to $13.8 million for the quarter ended April 30, 2007. Adjusted net earnings from continuing operations for the quarter ended April 30, 2008 increased to $14.1 million from $12.5 million for the same period of last year.

Thomas J. Crawford, President and Chief Executive Officer, stated, "We are pleased with our second quarter performance as we achieved a 13 percent increase in our adjusted net earnings on a comparable basis with last year and a 25 percent increase in adjusted earnings per share. This is especially gratifying considering the challenging economic environment we are experiencing and that the second quarter of 2007 enjoyed strong growth compared to the previous year. We are encouraged with our funeral operations for the quarter as we grew funeral revenues by 5 percent or $3.5 million while increasing funeral gross profit by $3.6 million. This translates into a 350 basis point improvement in funeral gross profit margin to 29.3 percent, our highest funeral gross profit margin in the past four years. For the quarter, same-store calls increased 2.9 percent and we were able to prudently increase average revenue per call, including trust earnings, by 3.3 percent, as traditional funeral average revenue increased by 2.6 percent and cremation service average revenue increased by 3.2 percent. Additionally, given these increases in revenue we are especially pleased that our organization successfully managed funeral costs which decreased by $0.1 million compared to the same quarter in the prior year."

Mr. Crawford continued, "We experienced a $3.7 million decrease in cemetery revenue for the quarter due to a decrease of $4.3 million in construction on various cemetery projects when compared to the previous year. However, last year we benefited from increased revenue in the second quarter due to focused efforts to reduce the production backlog in existing cemetery projects. The strong results of the cemetery operations during 2007 make comparisons of our results for the current quarter difficult. We remain pleased with the process improvements made last year that produced these strong results. We now have effective procedures in place to manage these projects and maintain the backlog at more appropriate levels. Despite not being able to keep pace with the level of revenue from construction on cemetery projects in the current quarter, our at-need cemetery production performed well with an increase in cemetery merchandise delivered and services performed of $1.1 million, or 5 percent, and we produced a slight increase in cemetery gross profit margin of 10 basis points to 21.8 percent."

Mr. Crawford concluded, "In addition to the positive operating and financial performance for the quarter, thus far in fiscal year 2008 our operating cash flow has remained strong at $28 million and we returned $4.8 million to our shareholders through dividends and repurchased $37.2 million, or 5.0 million shares, of Stewart Enterprises' common stock. Our active share buy back program has resulted in a decrease in our current quarter's weighted average diluted shares outstanding to 94.6 million shares compared to 105.5 million shares in the prior year quarter and is yielding a positive impact on our earnings per share. We remain focused on the execution of our 'Best in Class' initiative and our overall continuous improvement initiatives to produce greater efficiencies and reduce costs while developing opportunities to further grow our revenue."

Second Quarter Results From Continuing Operations


 FUNERAL
 * Funeral revenue increased $3.5 million, or 4.8 percent, to $76.8
   million.

 * The Company's same-store funeral operations achieved a 2.9
   percent, or 448 event increase in funeral services performed, to
   15,806 events, due in part to an increase in the number of
   deaths.

 * The Company's same-store funeral operations achieved a 2.6
   percent increase in average revenue per traditional funeral
   service and a 3.2 percent increase in average revenue per
   cremation service due primarily to the continued refinement of
   funeral packages and pricing.  These increases along with a
   quarter-over-quarter increase in funeral trust earnings resulted
   in an increase in the same-store average revenue per funeral
   service of 3.3 percent.

 * The cremation rate for the Company's same-store operations was
   39.9 percent for the second quarter of 2008 compared to 38.9
   percent for the second quarter of 2007.

 * Net preneed funeral sales decreased 13.7 percent during the
   second quarter of 2008 compared to the second quarter of 2007,
   due in part to current economic conditions. Preneed funeral
   sales are deferred until a future period and have no impact on
   current revenue.

 * Funeral gross profit increased $3.6 million to $22.5 million for
   the second quarter of 2008 compared to $18.9 million for the same
   period of 2007, primarily due to the increase in revenue, as
   noted above, and a $0.1 million decrease in expenses primarily
   due to decreased property, casualty and general liability
   insurance.  These variances resulted in a 350 basis point
   increase in funeral gross profit margin to 29.3 percent for the
   second quarter of 2008 from 25.8 percent for the same period of
   2007.

 CEMETERY
 * Cemetery revenue decreased $3.7 million, or 5.8 percent, to $60.0
   million for the second quarter of 2008.  This decrease is due
   primarily to a $4.3 million decrease in construction on various
   cemetery projects.  In the prior year, the Company addressed the
   need to better execute and monitor the construction process which
   resulted in an increase in prior year revenue making a quarter-
   over-quarter comparison difficult.  The Company also experienced
   a $1.2 million, or 4.3 percent, decrease in cemetery property
   sales, net of discounts, due in part to current economic
   conditions.  The decreases were partially offset by a $1.1
   million, or 4.9 percent, increase in cemetery merchandise
   delivered and services performed.

 * Cemetery gross profit decreased $0.7 million to $13.1 million for
   the second quarter of 2008 compared to $13.8 million for the same
   period of 2007. However, cemetery gross profit margin increased
   by 10 basis points to 21.8 percent for the second quarter of 2008
   from 21.7 percent for the same period of 2007.  The decrease in
   gross profit is primarily due to the decrease in revenue, as
   discussed above, offset by a $3.0 million decrease in expenses.
   The decrease in cemetery expenses is primarily due to a decrease
   in construction costs on various cemetery projects.

 OTHER
 * Interest expense decreased $0.2 million to $6.1 million during
   the second quarter of 2008 due to a 201 basis point decrease in
   the average rate primarily related to the issuance of the $250.0
   million of senior convertible notes in fiscal year 2007.  The
   senior convertible notes carry an average interest rate of 3.25
   percent.  The decrease was partially offset by an increase in
   interest due on federal, state and other tax liabilities.  In May
   2008, Financial Accounting Standards Board Staff Position No. APB
   14-1, "Accounting for Convertible Debt Instruments That May be
   Settled in Cash upon Conversion (Including Partial Cash
   Settlement)" ("FSP No. APB 14-1") was issued.  This opinion is
   effective as of the beginning of an entity's first fiscal year
   beginning after December 15, 2008, which corresponds to the
   Company's fiscal year beginning November 1, 2009, and must be
   applied retrospectively to all periods presented.  The Company is
   currently evaluating the impact the adoption of FSP No. APB 14-1
   will have on its consolidated financial statements, but expects
   to record higher interest expense related to its senior
   convertible notes beginning in fiscal year 2010.

 * Investment and other income, net, decreased $0.2 million to $0.4
   million due primarily to a decrease in the average rate earned on
   the Company's cash balances from 4.7 percent in the second
   quarter of 2007 to 1.5 percent in the second quarter of 2008.

 * Other operating income, net, decreased $0.8 million to $0.1
   million for the quarter ended April 30, 2008 primarily due to the
   sale of excess cemetery property and proceeds related to the sale
   of an investment during the quarter ended April 30, 2007.

 * The effective tax rate for continuing operations for the quarter
   ended April 30, 2008 was 36.7 percent compared to 30.4 percent
   for the same period in 2007.  The reduced rate in 2007 was
   primarily due to a tax benefit of $1.5 million resulting from the
   utilization of a capital loss carryforward.  The effective tax
   rate for 2007 exclusive of the tax benefit would have been 38.0
   percent, which is more comparable to the 2008 tax rate.

 * The Company's weighted average diluted shares outstanding
   decreased to 94.6 million shares for the quarter ended April 30,
   2008 compared to 105.5 million shares for the same period in
   2007.  The decrease is primarily due to the Company's $50.0
   million share repurchase program in which the Company has
   repurchased $37.2 million, or 5.0 million shares, of the
   Company's Class A common stock.  In addition, the Company
   repurchased $64.2 million, or 7.7 million shares, of the
   Company's Class A common stock in the third quarter of fiscal
   year 2007 in relation to the issuance of the $250.0 million of
   senior convertible notes.  The decrease in diluted shares
   outstanding is yielding a positive impact on the Company's
   earnings per share.

 Year to Date Results From Continuing Operations

 FUNERAL
 * Funeral revenue increased $4.8 million, or 3.3 percent, to $150.3
   million.

 * The Company's same-store funeral operations achieved a 2.6
   percent, or 788 event increase in funeral services performed, to
   31,215 events, due in part to an increase in the number of
   deaths.

 * The Company's same-store funeral operations achieved a 1.8
   percent increase in average revenue per traditional funeral
   service and a 1.8 percent increase in average revenue per
   cremation service due primarily to the continued refinement of
   funeral packages and pricing.  These increases were offset by a
   shift in mix to lower-priced cremation services resulting in an
   overall increase in the same-store average revenue per funeral
   service, including trust earnings, of 1.6 percent.

 * The cremation rate for the Company's same-store operations was
   39.9 percent for the first six months of fiscal 2008 compared to
   38.9 percent the first six months of fiscal 2007.

 * Net preneed funeral sales decreased 8.0 percent during the first
   six months of 2008 compared to the same period of 2007, due in
   part to current economic conditions.  Preneed funeral sales are
   deferred until a future period and have no impact on current
   revenue.

 * Funeral gross profit increased $2.9 million to $40.6 million for
   the first six months of 2008 compared to $37.7 million for the
   same period of 2007 primarily due to the increase in revenue, as
   noted above.  Funeral gross profit margin increased 110 basis
   points to 27.0 percent for the first six months of 2008 from 25.9
   percent for the same period of 2007.

 CEMETERY
 * Cemetery revenue decreased $6.6 million, or 5.3 percent, to
   $116.8 million for the first six months of 2008.  This decrease
   is due primarily to a $5.8 million decrease in construction on
   various cemetery projects.  In the prior year, the Company
   addressed the need to better execute and monitor the construction
   process which resulted in an increase in prior year revenue
   making a year-over-year comparison difficult.  The Company also
   experienced a $2.9 million, or 5.4 percent, decrease in cemetery
   property sales, net of discounts, due in part to current economic
   conditions.  The decreases were partially offset by a $1.7
   million, or 3.9 percent, increase in cemetery merchandise
   delivered and services performed.

 * Cemetery gross profit decreased $4.0 million to $22.1 million for
   the first six months of 2008 compared to $26.1 million for the
   same period of 2007. Cemetery gross profit margin decreased by
   230 basis points to 18.9 percent for the first six months of 2008
   from 21.2 percent for the same period of 2007.  The decrease in
   gross profit primarily relates to the decrease in revenue, as
   noted above.

 OTHER
 * Corporate general and administrative expenses increased $1.2
   million to $16.0 million for the six month period of fiscal 2008.
   The increase was primarily due to a $1.2 million increase in
   information technology costs due in part to the implementation of
   the new business systems and a web development project in the
   current year and a $0.8 million increase in costs related to the
   continuous improvement initiative that began in the first quarter
   of 2008. The increases are partially offset by a $0.6 million
   decrease in depreciation expense for the year due to the
   accelerated depreciation of the Company's current computer
   software systems associated with the implementation of the new
   business systems in the prior year.

 * The Company incurred less than $0.1 million in hurricane related
   charges in the first six months of fiscal 2008; however, the
   Company recorded a hurricane related charge of $2.1 million ($1.3
   million after tax, or $.01 per diluted share) for the same period
   of 2007.  The charges in the prior year were due to repairs at
   locations damaged by Hurricane Katrina. The timing of the receipt
   of insurance proceeds is not in line with the timing of cash
   spending related to Hurricane Katrina.  The Company has been
   unable to finalize its negotiations with its carriers related to
   damages caused by Hurricane Katrina.  Accordingly, in August
   2007, the Company initiated litigation to pursue resolution.  In
   2007, the carriers advanced an additional $1.1 million, which the
   Company has not recorded as income, but as a liability pending
   the outcome of the litigation.  The suit involves numerous policy
   interpretation disputes, among other issues, and no assurance can
   be given as to how much additional proceeds the Company may
   recover from its insurers, if any, or the timing of the receipt
   of any additional proceeds.  A trial date has been set in Federal
   Court on December 1, 2008.  With the exception of any legal costs
   related to this suit, the Company does not anticipate any
   additional charges related to Hurricane Katrina.

 * Interest expense decreased $1.1 million to $12.0 million during
   the first six months of fiscal 2008 due to a 205 basis point
   decrease in the average rate primarily related to the issuance of
   the $250.0 million of senior convertible notes in fiscal year
   2007.  The senior convertible notes carry an average interest
   rate of 3.25 percent.  The decrease was partially offset by an
   increase in interest due on federal, state and other tax
   liabilities.

 * Investment and other income, net, decreased $0.5 million to $1.1
   million due primarily to a decrease in the average rate earned on
   the Company's cash balances from 4.6 percent in the first six
   months of fiscal year 2007 to 2.5 percent for the first six
   months of fiscal year 2008.

 * Other operating income, net, decreased $0.8 million to $0.3
   million for the six months ended April 30, 2008.  The decrease
   is primarily due to the sale of excess cemetery property and
   proceeds related to the sale of an investment during the six
   months ended April 30, 2007.

 * The Company recorded $0.5 million in separation charges during
   the six months ended April 30, 2007 primarily related to
   separation pay of a former executive officer who retired in the
   first quarter of 2007.

 * The effective tax rate for continuing operations for the six
   months ended April 30, 2008 was 37.0 percent compared to 28.6
   percent for the same period in 2007.  The reduced rate in 2007
   was primarily due to a tax benefit of $3.4 million resulting from
   the utilization of a capital loss carryforward.  The effective
   tax rate for 2007 exclusive of the tax benefit would have been
   38.0 percent, which is more comparable to the 2008 tax rate.

 * The Company's weighted average diluted shares outstanding
   decreased to 95.8 million shares for the six months ended April
   30, 2008 compared to 105.2 million shares for the same period in
   2007.  The decrease is primarily due to the Company's $50.0
   million share repurchase program in which the Company has
   repurchased $37.2 million, or 5.0 million shares, of the
   Company's Class A common stock.  In addition, the Company
   repurchased $64.2 million, or 7.7 million shares, of the
   Company's Class A common stock in the third quarter of fiscal
   year 2007 in relation to the issuance of the $250.0 million of
   senior convertible notes.  The decrease in diluted shares
   outstanding is yielding a positive impact on the Company's
   earnings per share.

 Depreciation and Amortization

 * Depreciation and amortization from continuing operations was $7.0
   million for the second quarter of 2008 compared to $6.7 million
   for the second quarter of 2007.  Depreciation and amortization
   for total operations was $7.0 million for the second quarter of
   2008 compared to $6.8 million for the second quarter of 2007.

 * Depreciation and amortization from continuing operations was
   $14.0 million for the first six months of fiscal year 2008 and
   $13.2 million for the same period of 2007.  Depreciation and
   amortization for total operations was $14.0 million for the six
   months ended April 30, 2008 compared to $13.3 million for the
   same period of 2007.

 Cash Flow Results and Debt for Total Operations

 * Cash flow provided by operating activities for the second
   quarter of fiscal year 2008 was $24.3 million compared to $14.6
   million for the same period of last year.  The Company paid an
   additional $3.2 million in interest payments in the second
   quarter of 2007 compared to the second quarter of 2008 due to the
   timing of payments as a result of the issuance of the senior
   convertible notes. In addition, the Company is better managing
   its payables process, resulting in additional operating cash flow
   in the current quarter.

 * Cash flow provided by operating activities for the first six
   months of 2008 was $28.4 million compared to $32.5 million for
   the same period of last year. The Company paid $5.6 million in
   net tax payments in the first half of 2007 compared to net tax
   payments of $10.7 million in the first half of 2008.  The
   increase in tax payments in fiscal 2008 is primarily due to a
   $3.4 million tax payment reduction in 2007 resulting from the
   utilization of a capital loss carryforward, coupled with a $2.9
   million tax refund in fiscal 2007.  In addition, in the first six
   months of 2007, the Company had $4.9 million, net, cash inflows
   related to Hurricane Katrina, of which $3.2 million related to
   business interruption insurance proceeds. In the first six months
   of 2008, the Company had cash outflows of $0.4 million related to
   Hurricane Katrina.

 * Recurring free cash flow was $20.4 million during the second
   quarter of 2008 compared to $11.5 million for the second quarter
   of 2007.

 * Recurring free cash flow was $21.6 million for the first six
   months of fiscal year 2008 compared to $23.7 million for the same
   period of last year.

 * During the second quarter of 2008, the Company paid $2.4 million,
   or $.025 per share, in dividends compared to $2.6 million, or
   $.025 per share, paid in the second quarter of 2007.

 * As of April 30, 2008, the Company had outstanding debt of $450.2
   million and cash on hand of $35.3 million, or net debt of $414.9
   million.

 * As of June 9, 2008, the Company has repurchased 6.3 million
   shares for approximately $45.9 million under the Board approved
   $50.0 million stock repurchase program.  The Company currently
   has $4.1 million available under the program.

 Trust Performance

 The following returns include realized and unrealized gains and
 losses:

 * For the quarter ended April 30, 2008, the Company's preneed
   funeral and cemetery merchandise trust funds experienced a total
   return of 0.6 percent, and its perpetual care trust funds
   experienced a total return of (0.3) percent.

 * For the last three years ended April 30, 2008, the Company's
   preneed funeral and cemetery merchandise trust funds experienced
   an annual total average return of 5.9 percent, and its perpetual
   care trust funds experienced a total return of 5.0 percent.

 * For the last five years ended April 30, 2008, the Company's
   preneed funeral and cemetery merchandise trust funds experienced
   an annual total average return of 6.8 percent, and its perpetual
   care trust funds experienced a total return of 5.8 percent.

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 221 funeral homes and 139 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 second quarter results today at 10 a.m. Central Time. The teleconference dial-in number is 800-289-0517. 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 913-312-9315. 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 9810474 until June 17, 2008, at 10:59 p.m. Central 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 July 10, 2008.


                        STEWART ENTERPRISES, INC.
                            AND SUBSIDIARIES

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

                                                Three Months Ended
                                                   April 30,
                                              ---------------------
                                                 2008        2007
                                              ---------   ---------
 Revenues:
  Funeral                                     $  76,855   $  73,333
  Cemetery                                       59,964      63,695
                                              ---------   ---------
                                                136,819     137,028
                                              ---------   ---------
 Costs and expenses:
  Funeral                                        54,289      54,381
  Cemetery                                       46,896      49,872
                                              ---------   ---------
                                                101,185     104,253
                                              ---------   ---------
  Gross profit                                   35,634      32,775
 Corporate general and administrative expenses   (7,803)     (7,744)
 Hurricane related charges, net                    (169)       (283)
 Separation charges                                  --         (47)
 Gains on dispositions and impairment
  (losses), net                                     (19)         (8)
 Other operating income, net                        104         884
                                              ---------   ---------
  Operating earnings                             27,747      25,577
 Interest expense                                (6,093)     (6,295)
 Investment and other income, net                   357         567
                                              ---------   ---------
  Earnings from continuing operations before
   income taxes                                  22,011      19,849
  Income taxes                                    8,071       6,033
                                              ---------   ---------
   Earnings from continuing operations           13,940      13,816
                                              ---------   ---------
 Discontinued operations:
  Loss from discontinued operations before
   income taxes                                      --        (341)
  Income tax benefit                                 --        (154)
                                              ---------   ---------
   Loss from discontinued operations                 --        (187)
                                              ---------   ---------

  Net earnings                                $  13,940   $  13,629
                                              =========   =========

 Basic earnings per common share:
  Earnings from continuing operations         $     .15   $     .13
  Earnings from discontinued operations              --          --
                                              ---------   ---------
  Net earnings                                $     .15   $     .13
                                              =========   =========

 Diluted earnings per common share:
  Earnings from continuing operations         $     .15   $     .13
  Earnings from discontinued operations              --          --
                                              ---------   ---------
  Net earnings                                $     .15   $     .13
                                              =========   =========

 Weighted average common shares outstanding
  (in thousands):
  Basic                                          94,525     105,300
                                              =========   =========
  Diluted                                        94,635     105,540
                                              =========   =========

 Dividends declared per common share          $    .025   $    .025
                                              =========   =========

                     STEWART ENTERPRISES, INC.
                         AND SUBSIDIARIES

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


                                                Six Months Ended
                                                    April 30,
                                              ---------------------
                                                 2008       2007
                                              ---------  ---------
 Revenues:
  Funeral                                     $ 150,304  $ 145,496
  Cemetery                                      116,788    123,378
                                              ---------  ---------
                                                267,092    268,874
                                              ---------  ---------
 Costs and expenses:
  Funeral                                       109,736    107,826
  Cemetery                                       94,652     97,276
                                              ---------  ---------

                                                204,388    205,102
                                              ---------  ---------
  Gross profit                                   62,704     63,772
 Corporate general and administrative expenses  (16,038)   (14,786)
 Hurricane related charges, net                     (10)    (2,133)
 Separation charges                                  --       (532)
 Gains on dispositions and impairment
  (losses), net                                     128         90
 Other operating income, net                        346      1,151
                                              ---------  ---------
  Operating earnings                             47,130     47,562
 Interest expense                               (11,981)   (13,052)
 Investment and other income, net                 1,077      1,617
                                              ---------  ---------
  Earnings from continuing operations before
   income taxes                                  36,226     36,127
  Income taxes                                   13,401     10,338
                                              ---------  ---------
   Earnings from continuing operations           22,825     25,789
                                              ---------  ---------
 Discontinued operations:
  Loss from discontinued operations before
   income taxes                                      --       (381)
  Income tax benefit                                 --       (147)
                                              ---------  ---------
   Loss from discontinued operations                 --       (234)
                                              ---------  ---------

  Net earnings                                $  22,825  $  25,555
                                              =========  =========

 Basic earnings per common share:
  Earnings from continuing operations         $     .24  $     .24
  Earnings from discontinued operations              --         --
                                              ---------  ---------
  Net earnings                                $     .24  $     .24
                                              =========  =========

 Diluted earnings per common share:
  Earnings from continuing operations         $     .24  $     .24
  Earnings from discontinued operations              --         --
                                              ---------  ---------
  Net earnings                                $     .24  $     .24
                                              =========  =========

 Weighted average common shares outstanding
  (in thousands):
  Basic                                          95,667    105,097
                                              =========  =========
  Diluted                                        95,838    105,248
                                              =========  =========

 Dividends declared per common share          $     .05  $     .05
                                              =========  =========

                   STEWART ENTERPRISES, INC.
                       AND SUBSIDIARIES

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

                                             April 30,   October 31,
                     ASSETS                    2008         2007
                     ------                 ----------   ----------

 Current assets:
  Cash and cash equivalents                 $   35,252   $   71,545
  Marketable securities                         10,025          262
  Receivables, net of allowances                64,344       60,615
  Inventories                                   36,860       36,061
  Prepaid expenses                              10,285        6,355
  Deferred income taxes, net                     8,283        8,621
                                            ----------   ----------
   Total current assets                        165,049      183,459
 Receivables due beyond one year, net of
  allowances                                    81,264       83,608
 Preneed funeral receivables and trust
  investments                                  471,519      515,053
 Preneed cemetery receivables and trust
  investments                                  234,531      255,679
 Goodwill                                      273,188      273,286
 Cemetery property, at cost                    378,359      374,800
 Property and equipment, at cost:
  Land                                          43,767       43,767
  Buildings                                    314,940      310,968
  Equipment and other                          171,806      164,246
                                            ----------   ----------
                                               530,513      518,981
  Less accumulated depreciation                224,984      213,063
                                            ----------   ----------
  Net property and equipment                   305,529      305,918
 Deferred income taxes, net                    193,933      192,859
 Cemetery perpetual care trust investments     223,547      236,503
 Other assets                                   17,929       17,809
                                            ----------   ----------
   Total assets                             $2,344,848   $2,438,974
                                            ==========   ==========

                   STEWART ENTERPRISES, INC.
                       AND SUBSIDIARIES

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

                                             April 30,  October 31,
  LIABILITIES AND SHAREHOLDERS' EQUITY         2008        2007
  ------------------------------------      ----------  ----------
 Current liabilities:
  Current maturities of long-term debt      $       66  $      198
  Accounts payable                              26,331      26,606
  Accrued payroll and other benefits            13,621      16,316
  Accrued insurance                             22,601      21,252
  Accrued interest                               5,537       5,576
  Other current liabilities                     15,374      17,958
  Income taxes payable                           3,955       4,177
                                            ----------  ----------
   Total current liabilities                    87,485      92,083
 Long-term debt, less current maturities       450,097     450,115
 Deferred preneed funeral revenue              251,179     256,603
 Deferred preneed cemetery revenue             284,263     284,507
 Non-controlling interest in funeral and
  cemetery trusts                              624,037     683,052
 Other long-term liabilities                    19,152      13,869
                                            ----------  ----------
   Total liabilities                         1,716,213   1,780,229
                                            ----------  ----------
 Commitments and contingencies
 Non-controlling interest in perpetual care
  trusts                                       221,804     235,427
                                            ----------  ----------

 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 90,262,993 and
   94,865,387 shares at April 30, 2008 and
   October 31, 2007, respectively               90,263      94,865
  Class B authorized 5,000,000 shares;
   issued and outstanding 3,555,020 shares
   at April 30, 2008 and October 31, 2007;
   10 votes per share convertible into an
   equal number of Class A shares                3,555       3,555
 Additional paid-in capital                    549,991     583,789
 Accumulated deficit                          (237,032)   (258,902)
 Accumulated other comprehensive income:
  Unrealized appreciation of investments            54          11
                                            ----------  ----------
  Total accumulated other comprehensive
   income                                           54          11
                                            ----------  ----------
   Total shareholders' equity                  406,831     423,318
                                            ----------  ----------
  Total liabilities and shareholders' 
   equity                                   $2,344,848  $2,438,974
                                            ==========  ==========

                    STEWART ENTERPRISES, INC.
                       AND SUBSIDIARIES

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


                                                 Six Months Ended
                                                     April 30,
                                                -------------------
                                                  2008       2007
                                                --------   --------
 Cash flows from operating activities:
  Net earnings                                  $ 22,825   $ 25,555
  Adjustments to reconcile net earnings to
   net cash provided by operating activities:
   (Gains) on dispositions and impairment
    losses, net                                     (128)       265
   Depreciation and amortization                  13,985     13,268
   Provision for doubtful accounts                 3,638      3,401
   Share-based compensation                          950        691
   Excess tax benefits from share-based
    payment arrangements                            (165)       (37)
   Provision (benefit) for deferred income
    taxes                                          2,594     (3,138)
   Other                                           1,118        806
   Changes in assets and liabilities:
    (Increase) decrease in receivables            (5,706)     9,106
    Increase in prepaid expenses                  (3,933)    (4,281)
    (Increase) decrease in inventories and
     cemetery property                            (4,368)       103
    Decrease in accounts payable and accrued
     expenses                                     (1,644)    (8,561)
    Net effect of preneed funeral production
     and maturities:
     (Increase) decrease in preneed funeral
      receivables and trust investments            6,654     (1,470)
     Decrease in deferred preneed funeral
      revenue                                     (5,070)    (6,132)
     Increase (decrease) in funeral non-
      controlling interest                        (4,814)     2,790
    Net effect of preneed cemetery
     production and deliveries:
     (Increase) decrease in preneed cemetery
      receivables and trust investments            3,101     (2,956)
     Decrease in deferred preneed cemetery
      revenue                                       (244)    (5,575)
     Increase in cemetery non-controlling
      interest                                       453      8,550
    Increase (decrease) in other                    (849)       146
                                                --------   --------
   Net cash provided by operating activities      28,397     32,531
                                                --------   --------

 Cash flows from investing activities:
  Proceeds from sales of marketable
   securities                                     10,219         --
  Purchases of marketable securities             (19,897)      (141)
  Proceeds from sale of assets, net                  338      1,635
  Purchase of subsidiaries and other
   investments, net of cash acquired              (1,378)    (2,805)
  Insurance proceeds related to hurricane
   damaged properties                                 --      1,400
  Additions to property and equipment            (13,385)   (13,605)
  Other                                               21         35
                                                --------   --------
   Net cash used in investing activities         (24,082)   (13,481)
                                                --------   --------

 Cash flows from financing activities:
  Repayments of long-term debt                      (150)   (13,561)
  Issuance of common stock                         1,458      2,414
  Purchase and retirement of common stock        (37,320)        --
  Dividends                                       (4,761)    (5,265)
  Excess tax benefits from share-based
   payment arrangements                              165         37
                                                --------   --------
   Net cash used in financing activities         (40,608)   (16,375)
                                                --------   --------

 Net increase (decrease) in cash                 (36,293)     2,675
 Cash and cash equivalents, beginning of period   71,545     43,870
                                                --------   --------
 Cash and cash equivalents, end of period       $ 35,252   $ 46,545
                                                ========   ========

 Supplemental cash flow information:
  Cash paid during the period for:
  Income taxes, net                             $ 10,697   $  5,632
  Interest                                      $ 11,437   $ 13,246
 Non-cash investing and financing activities:
  Issuance of common stock to executive
   officers and directors                       $    922   $  1,028
  Issuance of restricted stock, net of
   forfeitures                                  $    236   $  2,931

                   STEWART ENTERPRISES, INC.
                       AND SUBSIDIARIES

        RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
        FOR THE PERIODS ENDED APRIL 30, 2008 AND 2007
                         (Unaudited)

The Company recorded several items during the three and six months ended April 30, 2008 and 2007 that impacted earnings including hurricane related charges, separation pay and tax benefits. The Company is presenting adjusted earnings in the table below to eliminate the effects of the specified items, which are not comparable from one period to the next.


 Adjusted  Three Months Ended April 30,  Six Months Ended April 30,
  Balances ----------------------------- ---------------------------
  are Net
  of Tax      2008           2007           2008           2007
         -------------- -------------- -------------- --------------
         millions  per  millions  per  millions  per  millions  per
                  share          share          share          share

 Consolidated
  net
  earnings $13.9  $.15   $13.7   $.13   $22.8   $.24   $25.6   $.24
  Add: Loss
   from
   discontin-
   ued
   operations --    --     0.1     --      --     --     0.2     --
           ----- -----   -----  -----   -----  -----   -----  -----
 Earnings
  from
  continuing
  opera-
  tions    $13.9  $.15   $13.8   $.13   $22.8   $.24   $25.8   $.24
  Add:
   Hurricane
   related
   charges,
   net       0.2    --     0.2     --      --     --     1.3    .01
  Add:
   Separation
   charges    --    --     --      --      --     --     0.3     --
  Subtract:
   Tax
   benefit    --    --   (1.5)   (.01)     --     --    (3.4)  (.03)
           ----- -----  -----   -----    ----- -----    ----- -----
 Adjusted
  earnings
  from
  continuing
  opera-
  tions    $14.1  $.15  $12.5    $.12   $22.8   $.24    $24.0  $.22
          ====== =====  =====   =====   =====  =====    ===== =====

                     STEWART ENTERPRISES, INC.
                        AND SUBSIDIARIES

            RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
            FOR THE PERIODS ENDED APRIL 30, 2008 AND 2007
                          (Unaudited)

Free cash flow is defined as net cash provided by operating activities less maintenance capital expenditures. Recurring free cash flow is defined as net cash provided by operating activities less maintenance capital expenditures and specified items not expected to recur. Management believes that free cash flow and recurring free cash flow are useful measures 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 recurring free cash flow) and free cash flow and between net cash provided by operating activities and recurring free cash flow for the three and six months ended April 30, 2008 and 2007:


                          Three Months Ended     Six Months Ended
 Free Cash Flow               April 30,             April 30,
                         --------------------  --------------------
 (Dollars in millions)     2008       2007       2008       2007
                         ---------  ---------  ---------  ---------
 Net cash provided by
  operating activities
  (1)                    $    24.3  $    14.6  $    28.4  $    32.5
   Less: Maintenance
    capital expenditures      (4.0)      (3.5)      (7.2)      (7.1)
                         ---------  ---------  ---------  ---------
 Free cash flow          $    20.3  $    11.1  $    21.2  $    25.4
                         =========  =========  =========  =========

 Net cash provided by
  operating activities   $    24.3  $    14.6  $    28.4  $    32.5
   Add (Subtract): Net
    cash outflows
    (inflows) from
    insurance proceeds
    and expenditures
    recorded related to
    Hurricane Katrina          0.1        0.4        0.4       (1.7)
                         ---------  ---------  ---------  ---------
 Adjusted cash provided
  by operating activities     24.4       15.0       28.8       30.8
   Less: Maintenance
    capital expenditures      (4.0)      (3.5)      (7.2)      (7.1)
                         ---------  ---------  ---------  ---------
 Recurring free cash
  flow (2)               $    20.4  $    11.5  $    21.6  $    23.7
                         =========  =========  =========  =========

 (1) Net cash provided by operating activities for the first six
     months of fiscal 2008 decreased $4.1 million from $32.5 million
     for the first six months of 2007 to $28.4 million for the first
     six months of 2008 primarily due to $3.2 million of business
     interruption insurance proceeds and $1.7 million of insurance
     proceeds, net of expenses, related to Hurricane Katrina,
     received in fiscal year 2007.  In addition, the Company paid
     $5.6 million in net tax payments in the first half of 2007
     compared to net tax payments of $10.7 million in the first half
     of 2008.

 (2) Recurring free cash flow decreased $2.1 million from $23.7
     million for the first six months of fiscal year 2007 to $21.6
     million for the first six months of 2008.  The decrease in
     recurring free cash flow is primarily due to $3.2 million of
     business interruption insurance proceeds received in fiscal
     year 2007.  In addition, the Company paid $5.6 million in net
     tax payments in the first half of 2007 compared to net tax
     payments of $10.7 million in the first half of 2008.

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

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

 * 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;

 * effects on our trust fund and escrow accounts of changes in stock
   and bond prices and interest and dividend rates;

 * risk of loss due to hurricanes;

 * effects of the call options we purchased and the warrants we 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;

 * 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, 2007, our Form 10-Q for the quarter ended April 30, 2008 and our other filings 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.



            

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