This past year was a challenging one for our company as we redirected our energies from external growth through acquisitions to the generation of cash flow and growth through means other than acquisitions.

The challenges we face in fiscal 2001 and beyond include reducing and restructuring our debt, improving our credit rating and expanding our customer base by offering better and more desired products and services.

Thus far in fiscal 2001, we have made principal payments totaling approximately $80 million on our long-term debt and the outstanding balance on our revolving credit facility, and had a cash balance of approximately $70 million at January 9, 2001. We are also working on a plan to amend or extend the credit facility, which does not mature until April 2002.

While some uncertainty exists in the current climate, our industry is stable and continues to offer considerable opportunity. Families continue to need our products and services as they seek ceremony, tribute, dignified burial and memorialization for their loved ones. Stewart Enterprises itself remains strong, both financially and strategically. We fully expect to be able to generate significant cash, reduce our debt and return to sustainable growth.

We thank you for maintaining your investment with us during this past year and promise you that we will do everything within our means to make this an even better company with improved shareholder value.