TORONTO, ONTARIO (November 9, 2023) – Today, Park Lawn Corporation (TSX: PLC; PLC.U) (“PLC”, “Park Lawn”, or the “Company”) announced its financial operating results for the third quarter (“Q3”) ended September 30, 2023.
Financial Results for the Three-Month Period Ended September 30, 2023:
“We had a solid operational performance in the third quarter,” said J. Bradley Green, Chief Executive Officer of PLC. Mr. Green continued, “While the death rate continued to pull back, resulting in an overall decrease in call volume as compared to the third quarter of 2022, our operations were able to largely offset this trend through sustained growth in market share and modestly increasing our average revenue per contract on the funeral side and growing pre-need sales on the cemetery side.”
Key Results from the Three-Month Period Ended September 30, 2023:
- Revenue increased by approximately 8.2% to $87.5M primarily as a result of Acquired Operations as compared to the three-month period ended September 30, 2022.
- Gross profit increased by 9% to $21,091,328 compared to the three-month period ended September 30, 2022.
- Fully Diluted Earnings per share was $0.094 compared to $0.153 for the three-month period ended September 30, 2022.
- Fully Diluted Adjusted Net Earnings per share decreased by $0.071 or 31.7% to $0.153 compared to $0.224 for the three-month period ended September 30, 2022.
- Net Earnings was $3,296,492 compared to $5,323,908 for the three-month period ended September 30, 2022.
- Adjusted EBITDA increased by 3.6% to $18,800,966 as compared to the three-month period ended September 30, 2022.
- PLC achieved an Adjusted EBITDA margin of 21.5%, a 90 bps decrease over the three-month period ended September 30, 2022, primarily as a result of increased corporate costs year-over-year.
- On July 17, 2023, the Company acquired substantially all the assets of Ward Funeral Home Limited with three standalone funeral homes located in Brampton, Woodbridge and Toronto, Ontario (collectively “Ward”). The Ward acquisition expands PLC’s funeral home presence in Ontario and is expected to add approximately $1,800,000 in Adjusted EBITDA annually.
PLC Enters into Agreement to Divest Certain Legacy Assets in Furtherance of its Long-Term Growth Strategy
Subsequent to the quarter, on October 17, 2023, PLC announced that it entered into a definitive agreement to divest substantially all the assets of The Park Lawn Cemetery Company (USA), Inc., PLC Saber Ltd. and PLC Citadel Ltd. to Everstory Acquisition Portfolio, LLC, an affiliate of Everstory Partners. Everstory Partners is a deathcare company that owns and operates cemetery, funeral home and crematory locations throughout the United States and Puerto Rico. The divestiture includes 72 cemeteries in Kentucky, Michigan, North Carolina and South Carolina and 11 funeral homes in Kentucky and North Carolina. The transaction is valued at approximately $70M consisting of $55M in cash and the remaining $15M in deferred compensation, bearing interest at 10% per annum, to be received by PLC within 5 years following the close of the transaction.
The purchase price represents an approximate 8.0x Adjusted EBITDA multiple based on trailing twelve-month results.
In the near term, the cash portion of the proceeds is expected to reduce Park Lawn’s leverage ratio to approximately 2.0x and 2.8x, including Park Lawn’s outstanding debentures. Park Lawn anticipates replacing the divested earnings through the deployment of transaction proceeds into high-growth markets and new business opportunities which align more closely with its long-term growth strategy.
The transaction is scheduled to close prior to year end 2023 following receipt of regulatory approval and the satisfaction of customary closing conditions for a transaction of this type.
The Company will host a conference call to discuss its third quarter 2023 financial results on Friday, November 10, 2023. Details are as follows:
- Date: Friday, November 10, 2023
- Time: 9:30 a.m. EST
- Dial-in Number: Toll Free (888) 506-0062 | Conference ID: 538764
To ensure your participation, please join approximately five minutes prior to the scheduled start of the conference call. The Company’s complete financial results can be found at www.sedarplus.ca or on the Company’s website at www.parklawncorp.com.
A replay of the conference call will be available until Friday, November 24, 2023 and can be accessed as follows: Dial-in Number: Toll Free (877) 481-4010 | Conference ID: 49367. Alternatively, the conference will also be available on the Company’s website at www.parklawncorp.com.
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 three Canadian provinces and nineteen U.S. states.
Adjusted Net Earnings, Adjusted EBITDA and their related per share amounts, Adjusted EBITDA margins, Adjusted Field EBITDA margins, Acquired Operations and Comparable Operations 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.
The Company defines Acquired Operations as business units or operating locations acquired by the Company during the period from January 1, 2022 and ending September 30, 2023. The Company defines Comparable Operations as business units or operating locations owned by the Company for the entire period from January 1, 2022 and ending September 30, 2023.
The following tables indicate how the Company reconciles Adjusted Net Earnings, Adjusted EBITDA and their related per share amount, Adjusted EBITDA margins and Adjusted Field EBITDA margins to the nearest IFRS measure.
Adjusted Net Earnings
EBITDA and Adjusted EBITDA
Adjusted Field EBITDA
Adjusted Net Earnings
EBITDA and Adjusted EBITDA
Adjusted Field EBITDA
Cautionary Statement Regarding Forward‐Looking Information
This news release contains 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”, “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: PLC’s focus on implementing incremental improvements in its operations and making selective and strategic growth decisions that drive shareholder value; PLC’s expectations regarding its strong pipeline and opportunities for continued strategic growth in 2023; PLC’s expectation that the cash portion received from the proposed divestiture of certain legacy businesses will reduce its leverage ratio to approximately 2.0x and 2.8x; that the Christy-Smith acquisition will add approximately $437,391 in Adjusted EBITDA; and regarding the impact of the Ward, MWB and Forrest & Taylor acquisitions on PLC’s annual Adjusted EBITDA. The forward-looking statements in this news release are based on certain assumptions, including the normalization of the death rate, that the CAD to USD exchange rate remains consistent, the Ward, MWB, Forrest & Taylor and Christy-Smith acquisitions will perform as expected, PLC will be able to implement business improvements and costs savings, PLC will be able to retain key personnel, there will be no unexpected expenses occurring as a result of contemplated acquisitions, multiples remain at or below levels paid by PLC for previously announced acquisitions, 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 PLC will operate in the future, expected revenues, expansion plans and PLC’s ability to achieve its aspirational goals and acquisitions targets.
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 impact of inflation on PLC’s business, risks associated with political conflict, including from economic sanctions imposed or to be imposed as a result thereof, and supply chain disruptions resulting therefrom, risks related to the impact of higher interest rates on the Company’s business and the other factors discussed under the heading “Risk Factors” in PLC’s most recent Annual Information Form and most recent Management’s Discussion and Analysis available at www.sedarplus.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.
Unless otherwise stated, all amounts discussed herein are denominated in U.S. dollars.
Chief Financial Officer
(416) 231-1462, ext. 221
 Adjusted Net Earnings, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Field EBITDA Margin and Adjusted Net Earnings per share diluted are non IFRS financial measures. Refer to the non-IFRS Financial Measures section of this document for more information on each non-IFRS financial measure.