TORONTO, ONTARIO (May 12, 2020) – Today, Park Lawn Corporation (TSX: PLC) (“PLC” or the “Company”) announced its results for the first quarter (“Q1”) ended March 31, 2020. The results show strong revenue growth, with an increase of 47.5% as compared to the same period in 2019. Net Earnings attributable to PLC shareholders were $734,057 in Q1 2020 compared to $3,325,247 in Q1 2019. On a fully diluted per share basis, this represents $0.025 for 2020, as compared to $0.141 in 2019.
- Earned $17.1 million in adjusted EBITDA this quarter representing approximately $0.58 per common share, an increase of 45.6% and 15.9% respectively over the same period last year
- Adjusted EBITDA margin improved to 23.3% in the first quarter of 2020, in line with the same quarter in 2019 and an improvement of 380 bps over the fourth quarter of 2019
“We had a solid first quarter, especially considering the challenges posed by the market in March due to the onset of COVID-19. These strong financial results in a challenging quarter are the direct result of our intense focus on operations and the integration of our businesses,” stated Brad Green, Interim CEO.
Important Quarterly Milestones
During and subsequent to Q1 2020, PLC executed on the following important milestones:
- On January 31, 2020, the Company completed its previously announced acquisition of Family Legacy and Harpeth Hills in the high-growth middle Tennessee metropolitan market. The businesses added four combination funeral home and cemetery properties, seven stand-alone funeral homes and two stand-alone cemeteries to the Company.
- During the quarter, the Company announced that construction of an on-site funeral visitation and reception centre at the Westminster Cemetery in Toronto, Ontario was underway. The 32,100 square foot facility will be the Company’s first on-site funeral visitation and reception centre in Canada.
- As part of its COVID-19 contingency planning process, the Company requested that its lending syndicate increase its leverage ratio from 3.5 times to 4.0 times on a temporary basis through March 2021 at which time the leverage ratio will gradually step-down returning to its original leverage ratio of 3.5 by the end of September 2021. In addition, the Company requested a temporary increase of $25 million in credit availability to provide additional liquidity for a period of one year. The lending syndicate approved both requests effective May 8, 2020.
Andrew Clark Resigns from Board of Directors
Andrew Clark resigned his position as a member of the Board of Directors of PLC effective today, May 12, 2020. “I would like to once again thank Mr. Clark for his contributions to the success of PLC over the past seven years. We all wish him much success in his next business venture,” stated Paul G. Smith, Chairman of the Board.
COVID-19 Response and Update
The Company continues to adjust and adapt to daily changes resulting from the COVID-19 pandemic. In all communities in which the Company operates, funeral homes and cemeteries have been classified as essential services, and its businesses have remained open to serve families at their time of need. In recognition of the difficult working conditions the Company’s employees face working on the front lines, the Company has taken extensive steps to permit them to safely serve customer families.
Although the Company cannot predict the severity or the duration of the impact of COVID-19, the Company recognizes that it will have a financial impact in the coming weeks and months. However, in early March the Company implemented contingency financial measures to attempt to limit the financial risk to its business. While the Company continues to closely monitor the situation, it believes that those measures, combined with its strong cash flow from operations, have provided the Company with the financial flexibility needed to operate and integrate its existing businesses and that the Company will emerge from these uncertain times well positioned for growth. The Company’s leverage ratio, which is currently the lowest of all of the North American publicly traded companies in the industry, along with the recent changes to the Company’s credit facility and increase in cash on hand, leaves the Company’s balance sheet and liquidity in a strong position to continue performing in the current environment.
“Our team members remain steadfast in their commitment to not only serve, but lead, their communities through this crisis. They demonstrate this commitment each and every day through their unrelenting desire to remain open and available to provide the families they serve with an opportunity to honor their loved ones. I am not surprised by the dedication of the PLC team. As a matter of fact, I absolutely expected it from them. After all, this is what they do all day, every day, pandemic or no pandemic. They are the definition of “essential” to the communities that they serve. I am proud to be a part of this PLC team,” stated Mr. Green.
The Company will host a conference call to discuss its Q1 2020 financial results on Wednesday, May 13, 2020. Details are as follows:
- Date: Wednesday, May 13, 2020
- Time: 9:30am EST
- Dial-in Number: Local (647) 427-7450 | Toll Free (888) 231-8191 | Conference ID: 3167651
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.
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.
Chief Financial Officer
(416) 231-1462, ext. 226