Alderwoods Group, Inc.

Alderwoods Group, Inc.

March 15, 2005 17:00 ET

Alderwoods Group Delays Filing 2004 10-K


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: ALDERWOODS GROUP, INC.

NASDAQ SYMBOL: AWGI

MARCH 15, 2005 - 17:00 ET

Alderwoods Group Delays Filing 2004 10-K

CINCINNATI, OHIO--(CCNMatthews - March 15, 2005) -

Files for 15-Day Extension, Delays Earnings Release and Conference Call
and Provides Update on Sarbanes-Oxley Internal Controls Testing

Alderwoods Group, Inc. (NASDAQ:AWGI) today announced that it will file a
notification of late filing, which will provide Alderwoods with a
fifteen-day extension of the March 17, 2005, filing deadline for its
Annual Report on Form 10-K for the fiscal year ended January 1, 2005,
which would give the Company until April 1, 2005, to file its Form 10-K.

The Company experienced delays in the implementation of a new tax
accounting system used in generating the required accounting and
disclosures for 2004 which delayed the completion of the work of the
independent auditor. The Company is also reviewing its 2004 adoption of
FIN 46R requiring the consolidation of funeral and cemetery trusts to
ensure appropriate accounting and disclosure of the underlying
investments.

Update on Section 404 of the Sarbanes-Oxley Act (SOX 404)

The Company is in the process of completing its evaluation of the
effectiveness of its internal controls over financial reporting in order
to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act,
which requires management's assessment of the effectiveness of the
Company's internal controls over financial reporting as of the end of
its most recent fiscal year. As permitted by the SEC's exemptive order
dated November 30, 2004 (Release No. 50754), the Company expects to
complete its evaluation of the effectiveness of its internal controls
over financial reporting on or before May 2, 2005, and will include the
results of such evaluation in an amendment to its Annual Report on Form
10-K, which amendment will be filed with the SEC.

Based on the preliminary results to date, management has identified a
material weakness in internal controls over financial reporting as of
January 1, 2005. The material weakness identified relates to limitations
in the capacity of the Company's accounting and tax resources to
identify and react in a timely manner to new accounting pronouncements
and non-routine and complex business transactions. In 2004, turnover and
a shortage of experienced personnel in the Company's accounting and
corporate tax functions resulted in untimely identification and
resolution of (i) accounting matters related to the adoption of FIN 46R;
(ii) the accounting for the Company's debt refinancing, and (iii) issues
in implementing the Company's new tax accounting system. All of these
resulted in adjustments to the financial statements before issuance.

As a result of this material weakness, management will not be able to
conclude that the Company's internal controls over financial reporting
are effective as of January 1, 2005, and the Company expects that its
independent auditors will issue an adverse opinion with respect to
internal controls over financial reporting.


The Company is making the following changes to remediate this material
weakness:


- Increasing the internal accounting staff resources and capabilities,
and supplementing the Company's staff with outside consultants on highly
technical and complex issues;

- Implementing a new pre-need trust accounting software system to
simplify transaction accounting, as well as to accelerate transaction
accounting and analytical capabilities;

- Implementing a new tax consolidation process to improve the detail and
accuracy within the tax function;

- Reducing the number of taxable entities by reorganizing and merging
certain legal entities to simplify tax reporting requirements; and

- Further simplifying trust processing and reporting requirements by
reducing the number of third party trust companies utilized.

Management is fully committed to devoting significant resources to
effectively remediate this weakness in the Company's internal controls
and procedures.

These preliminary findings have been presented to the Company's Audit
Committee. As the Company has not completed the evaluation of all its
deficiencies, it is possible that additional deficiencies could be
determined to be individually or in the aggregate a material weakness.

Earnings Release and Conference Call

Alderwoods Group will announce the new date for its fourth quarter and
year end earnings release and conference call on or before April 1, 2005.

Forward Looking Statements

Certain statements contained in this press release, including, but not
limited to, information regarding the status and progress of the
Company's operating activities, the plans and objectives of the
Company's management, assumptions regarding the Company's future
performance and plans, and any financial guidance provided, as well as
certain information in other filings with the SEC and elsewhere are
forward-looking statements within the meaning of Section 27A(i) of the
Securities Act of 1933 and Section 21E(i) of the Securities Exchange Act
of 1934. The words "believe," "may," "will," "estimate," "continues,"
"anticipate," "intend," "expect" and similar expressions identify these
forward-looking statements. These forward-looking statements are made
subject to certain risks and uncertainties that could cause actual
results to differ materially from those stated, including the following:
uncertainties associated with future revenue and revenue growth;
variances in the use of cremation; and various other uncertainties
associated with the funeral service industry and the Company's
operations in particular, which are referred to in the Company's
periodic reports filed with the SEC. The Company undertakes no
obligation to publicly release any revisions to these forward-looking
statements to reflect events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Alderwoods Group, Inc.
    Kenneth A. Sloan
    Executive Vice President, Chief Financial Officer
    (416) 498-2455
    (416) 498-2449 (FAX)
    ken.sloan@alderwoods.com
    or
    Alderwoods Group, Inc.
    Chaya Cooperberg
    Director, Investor Relations and Communications
    (416) 498-2802
    (416) 498-2449 (FAX)
    chaya.cooperberg@alderwoods.com