TORONTO, ONTARIO (March 3, 2022) – Today, Park Lawn Corporation (TSX: PLC; PLC.U) (“PLC” or the “Company”) announced its results for the fourth quarter (“Q4”) and year ended December 31, 2021. The Company finished the year with a solid performance achieving strong growth in Net Revenue, Net Earnings and Adjusted Net Earnings1:
“A solid fourth quarter capped yet another strong year of financial performance and growth at PLC. As anticipated, we continued to see a lessening effect of COVID-19 year-over-year in the communities we serve; however, we still had strong earnings growth over a very difficult comparable with the fourth quarter of 2020. We attribute this to our frontline team’s ability to continue to meet the evolving needs of our families,” stated J. Bradley Green, Chief Executive Officer. Mr. Green continued, “Additionally, the acquisition of three premier independent groups of businesses in the fourth quarter is further evidence that PLC’s growth years are in front of us, and not behind us.”
Highlights from Q4 and the Year Ended 2021
For the three-month period and year ended December 31, 2021, net revenue grew by approximately 10.1% and 14.3%, respectively, over the comparable prior period, primarily due to acquisitions made during 2021 and 2020.
- For the three-month period and year ended December 31, 2021, net revenue growth from Comparable Operations was 0.7% and 10.4% respectively, excluding the foreign exchange headwind experienced year-over-year.
- Fully Diluted Earnings per share attributable to PLC shareholders was $0.260 and $1.105 for the three-month period and year ended December 31, 2021, respectively, compared to $0.209 and $0.637 for the three-month period and year ended December 31, 2020, respectively.
- Adjusted Net Earnings per share attributable to PLC shareholders was $0.371 and $1.511 for the three-month period and year ended December 31, 2021, respectively, compared to $0.351 and $1.158 for the three-month period and year ended December 31, 2020, respectively.
- For the three-month period ended December 31, 2021, Net Earnings increased 43.1% relative to the three-month period ended December 31, 2020, and increased 83.2% over the year ended December 31, 2020.
- For the three-month period ended December 31, 2021, Adjusted EBITDA increased 4.0% relative to the three-month period ended December 31, 2020, and increased 19.8% over the year ended December 31, 2020.
- PLC achieved an Adjusted EBITDA margin of 25.3% and 25.9% for the three-month period and year ended December 31, 2021, respectively.
- During the quarter, the Company completed five acquisitions including the acquisition of substantially all of the assets of: (1) Pugh Funeral Homes and New Hope Memorial Gardens, a business consisting of five funeral homes and one cemetery located in central North Carolina; (2) Smith Funeral & Cremation Service, Life & Legacy Cremation Center and Smith Event Centers, as well as Grandview Cemetery and Cremation by Grandview comprised of one funeral home, one combination funeral home and cemetery property and five event centers in Maryville, Tennessee; and (3) Ingram Funeral Home & Crematory, Inc, a stand-alone funeral home located in Cumming, Forsyth County, Georgia.
- In 2021, despite the challenges of COVID-19, the Company successfully executed on its growth strategy by completing a total of 10 acquisitions for a total purchase price of approximately US$125,700,000. The combined transactions represent a total of 6,306 calls and 1,229 interments as well as the addition of 26 stand-alone funeral homes, 7 stand-alone cemeteries, 4 on-sites and 5 event centers. The Company also added a new geographic region – the state of Georgia.
- Subsequent to the year end, on January 1, 2022, the Company transitioned to a USD presentation currency and, to support this initiative, also launched a U.S. dollar denominated ticker symbol which has commenced trading on the Toronto Stock Exchange. Purchases and sales of PLC’s common shares under the USD ticker – PLC.U – along with distributions, will be made in U.S. dollars.
PLC Continues to Actively Pursue its Growth Strategy and Announces a New Long-Term Aspirational Target
In 2018, PLC announced a long-term aspirational goal of achieving CAD$100 million (approximately USD$79 million) in pro forma Adjusted EBITDA by the conclusion of the 2022 calendar year. While the 2022 calendar year has just begun, before considering the impact of any potential future acquisitions, the Company expects to modestly exceed the previously announced 2018 growth target.
Looking beyond 2022, PLC has set a new five-year long-term aspirational financial target to achieve by the conclusion of the 2026 calendar year. More specifically, PLC has set an aspirational growth target of achieving a total of US$150 million of pro forma Adjusted EBITDA by the end of 2026 translating into Adjusted Net Earnings exceeding US$2.00 per share.
Mr. Green elaborated on this new aspirational target by stating, “PLC continues to execute its growth strategy at a high level both through organic growth opportunities as well as by partnering with premier independent businesses. At the same time, PLC remains dedicated to its unique operational approach and is committed to delivering a consistent performance in the near term.” Mr. Green continued, “It was our laser focus on the above that allowed us to effectively reach the growth targets announced in 2018 a year earlier than anticipated, and it is that same intense focus that will allow us to come close to doubling the size of PLC in the next five years.”
To date, PLC’s 2018 long-term aspirational targets have helped the Company achieve the following significant financial milestones between June 30, 2018 and December 31, 2021:
- An increase in market capitalization from $566M on June 30, 2018 to $1.444B as at December 31, 2021;
- Growth in Adjusted EBITDA attributable to PLC shareholders from $23.7M to $95.6M, an increase of over 300%;
- Adjusted Net Earnings Per Share growth of 119% to $1.511 in Adjusted Net Earnings Per Share; and
- Improvement in Adjusted EBITDA Margin by 430 bps to 25.9%.
The Company will host a conference call to discuss its fourth quarter 2021 financial results on Friday, March 4, 2022. Details are as follows:
Date: Friday, March 4, 2022
Time: 9:30 a.m. EST
Dial-in Number: Toll Free (888) 506-0062 | Conference ID: 490276
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.sedar.com or on the Company’s website at www.parklawncorp.com.
A replay of the conference call will be available until Friday, March 18, 2022 and can be accessed as follows: Dial-in Number: Toll Free (877) 481-4010| Conference ID: 44691. 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 sixteen U.S. states.
Adjusted Net Earnings, Adjusted EBITDA and their related per share amounts, Adjusted EBITDA margins, 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 following tables indicate how the Company reconciles Adjusted Net Earnings, Adjusted EBITDA and their related per share amount, and Adjusted EBITDA margins to the nearest IFRS measure.
Adjusted Net Earnings
EBITDA and Adjusted 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”, “aspirational”, “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: PLC’s intention to continue to evaluate new opportunities to partner with premier independent businesses, as well as organic growth opportunities, and to continue a high level of growth into the future; the impact of COVID-19 on the Company’s business; the Company’s ability to adapt to the current operating environment and inflation; PLC’s ability to modestly exceed the 2022 aspirational growth target by the end of 2022; and the growth targets that PLC aspires to achieve by the end of 2026. The forward-looking statements in this news release are based on certain assumptions, including that regulatory restrictions relating to the COVID-19 pandemic in the markets the Company serves will continue to be relaxed through the 2022 calendar year, the CAD to USD exchange rate remains consistent, 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, any adjustments to operations with the ongoing COVID-19 pandemic, expected revenues, expansion plans and PLC’s ability to achieve its goals. In addition, the achievement of PLC’s 2026 aspirational growth target is based on the following key assumptions: that PLC will continue to capitalize on ongoing operational improvements to both existing and acquired businesses; that PLC will achieve efficiencies through the full implementation, deployment and integration of PLC’s proprietary industry software; that PLC’s revenue will continue to increase through organic growth opportunities and the expansion and addition of new inventory at PLC’s existing cemetery properties; and that PLC will pursue acquisition opportunities in high-growth markets at a rate of US$75-$125 per year.
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 most recent 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.
Chief Financial Officer
(416) 231-1462, ext. 221