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Park Lawn Corporation Releases Q2 2020 Results and Provides COVID-19 Update

Published: August 13, 2020

TORONTO, Aug. 13, 2020 /CNW/ - Today, Park Lawn Corporation (TSX: PLC) ("PLC" or the "Company") announced its results for the second quarter ("Q2") ended June 30, 2020. The results show strong revenue growth, with an increase of 44.6% as compared to the same period in 2019. Net Earnings attributable to PLC shareholders were $6,632,514 in Q2 2020 compared to $1,458,782 in Q2 2019. On a fully diluted per share basis, this represents $0.223 for 2020, as compared to $0.049 in 2019.

"Thanks to the hard work, dedication and commitment of our team, we had an exceptional second quarter in a challenging environment.  As we continue to navigate through trying times, our integration efforts established a strong foundation which has allowed us to quickly adapt to a changing operating environment, as well as provide new and innovative solutions to serve our client families.  We have grown together as an organization and are poised to continue with our projected growth targets," stated Brad Green, CEO.

Second Quarter Financial Highlights

  • Revenue for the quarter was $84.7 million compared to $58.6 million in Q2 2019 which is an increase of 44.6%. The currency adjusted growth in revenue from comparable business units was 7.3%. This significant increase in revenue was due, in part, to the successful integration of acquisitions completed in previous quarters.
  • Earned $19.5 million in Adjusted EBITDA this quarter representing $0.654 per common share, an increase of 49.7% and 49.3% respectively over the same quarter last year.
  • Adjusted Net Earnings for the second quarter increased by 55.3% to $8.8 million from $5.7 million in same quarter last year. Adjusted Net Earnings Per Share for the second quarter increased 55.3% to $0.295 from $0.190 for the same period last year.
  • Balance sheet strengthened as a result of the recently completed $86.3 million Senior Unsecured Debenture Financing. Net proceeds from financing were used to pay down credit facility to approximately $100 million. With $34 million in cash on hand, this gives the Company $175 million in liquidity to pursue its growth objectives. At quarter end the Company's leverage ratio was 2.79 times. After closing the Debenture financing and paying down credit facility this leverage ratio was reduced to 1.5 times.

COVID-19 Update

In North America, we all continue to adjust to seemingly daily changes in our lives as a result of the COVID-19 pandemic. At the inception of the pandemic, the Company was fortunate to have implemented specific operational directives in advance of governmental restrictions which allowed us to more quickly address the impact of the pandemic on our business.  The increase in revenue from comparable business operations during the quarter was related to both the cemetery and funeral businesses.  The Company's businesses located in markets such as Colorado, Michigan and New Jersey experienced an overall increase in at-need services associated with the pandemic.  However, there were other markets that saw an increase in at-need services that may or may not have been related to COVID-19. 

At the same time, comparable pre-need cemetery revenue was down during the quarter as many regions were faced with stay at home orders that limited the ability to effectively close sales.  Despite this, pre-need sales greatly improved later in the quarter as stay at home orders were lifted and the trigger effect provided our sales counselors a strong story to tell.  Irrespective of any particular market's challenges, our businesses remained open and were prepared to meet customers under restricted circumstances. 

As the pandemic began to unfold in early 2020 it was unclear as to the severity or the duration of COVID-19 including the financial impact it might have on the Company in the weeks and months ahead. With that in mind, the Company implemented contingency planning procedures in early March to limit the financial risk to our business. As the quarter progressed, however, we realized that the pandemic was not expected to impact the overall financial performance of the business at the present time in a negative way.  Accordingly, certain measures that were adopted out of an abundance of caution in March 2020 were relaxed, including the approval of certain capital expenditure programs and the re-engagement of our acquisition program.

"The outbreak of this contagious illness continues to pose a threat to the health and economic wellbeing of our employees, their families and the families we serve.  As a result, our constant focus is on keeping each of these people safe by quickly adapting to and adopting appropriate health and safety requirements as the health landscape continues to change.  Our team has worked tirelessly and, at times, heroically, on the front lines.  Without that dedication, these exceptional results would not have been possible.  And for that, I am truly impressed and eternally grateful," stated Mr. Green. 

Important Reminder 

The Company will host a conference call to discuss its Q2 2020 financial results on Friday, August 14, 2020.  Details are as follows:

  • Date: Friday, August 14, 2020
  • Time: 9:30am EST
  • Dial-in Number: Local (647) 427-7450 | Toll Free (888) 231-8191 | Conference ID: 5697518

To ensure your participation, please join approximately five minutes prior to the scheduled start of the conference call.

About Park Lawn Corporation

PLC provides goods and services associated with the disposition and memorialization of human remains. Products and services are sold on a pre-planned basis (pre-need) or at the time of a death (at-need). PLC and its subsidiaries own and operate businesses including cemeteries, crematoria, funeral homes, chapels, planning offices and a transfer service. PLC operates in five Canadian provinces and fifteen U.S. states.

Non–IFRS Measures

Adjusted Net Earnings, Adjusted EBITDA and their related per share amounts, and Adjusted EBITDA margins, are not measures recognized under IFRS and do not have standardized meanings prescribed by IFRS. Such measures are presented in this news release because management of PLC believes that such measures are relevant in evaluating PLC's operating performance. Such measures, as computed by PLC, may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to similar measures reported by such other organizations. Please see PLC's most recent Management's Discussion and Analysis for how the Company reconciles Adjusted Net Earnings, Adjusted EBITDA and their related per share amount, and Adjusted EBITDA margins to the nearest IFRS measure. 

Cautionary Statement Regarding Forward–Looking Information

This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to the business of PLC and the environment in which it operates. Forward-looking statements are identified by words such as "believe", "anticipate", "project", "expect", "intend", "plan", "will", "may", "estimate", "pro-forma" and other similar expressions. These statements are based on PLC's expectations, estimates, forecasts and projections and include, without limitation, statements regarding the impact of COVID-19 on the business and the Company's ability to emerge from these uncertain times well positioned to grow the Company. The forward-looking statements in this news release are based on certain assumptions, including that recent acquisitions perform as expected, PLC will be able to implement business improvements and achieve costs savings, PLC will be able to retain key personnel, there will be no unexpected expenses occurring as a result of the acquisitions, multiples remain at or below levels paid by PLC for previously announced acquisitions, the CAD to USD exchange rate remains consistent, the acquisition and financing markets remain accessible, capital can be obtained at reasonable costs and PLC's current business lines operate and obtain synergies as expected, as well as those regarding present and future business strategies, the environment in which the PLC will operate in the future, the anticipated adjustments to operations in the COVID-19 pandemic, expected revenues, expansion plans and the PLC's ability to achieve its goals. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, risks associated with the current COVID-19 pandemic and the other factors discussed under the heading "Risk Factors" in PLC's Annual Information Form and most recent Management's Discussion and Analysis available at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, PLC assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Click Here to Read the Q2 2020 Financial Statements

Click Here to Listen to the Q2 2020 Quarterly Conference Call

Contact Information:

Joseph Leeder

Chief Financial Officer

(416) 231-1462, ext. 226

 

Canada Headquarters

2 St. Clair Ave. W.
Suite 1300 (Floor 12A)

TorontoON M4V 1L5
Tel: 1-416-231-1462

U.S. Headquarters

16801 Greenspoint Park Drive
Suite 376
Houston, Texas 77060
Tel: 1-281-453-1260

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