TORONTO, ONTARIO (November 12, 2020) – Today, Park Lawn Corporation (TSX: PLC) (“PLC” or the “Company”) announced its results for the third quarter (“Q3”) ended September 30, 2020. PLC had another strong quarter achieving double digit revenue, net earnings, Adjusted Net Earnings and Adjusted EBITDA growth which is summarized as follows:
“We continue to demonstrate a high level of growth and strong performance, and the third quarter was no exception. Even though our work environment remains a challenge, we viewed this quarter as an opportunity to shift our focus back to our core operating objectives and resume our efforts in working towards our stated growth objectives. Our team remains steadfast in its commitment to safely provide the highest level of care to the families and communities we serve,” stated Brad Green, CEO.
Third Quarter Financial Highlights
- Revenue for the quarter was $83.8 million compared to $66.6 million in Q3 2019 which represents an increase of 25.9%.
- Revenue Growth from Comparable Business Units was approximately 11.1% for Q3 2020 relative to Q3 2019.
- Adjusted Net Earnings increased to $7.7 million from $6.6 million during Q3 2019, and Adjusted Net Earnings per share increased to $0.259 from $0.221 for Q3 2019.
- PLC earned Adjusted EBITDA of $19.1 million or $0.638 per share compared to $15.1 million or $0.507, an increase of 26.5% and 25.8%, respectively, over Q3 2019.
- PLC achieved an Adjusted EBITDA margin of 23% for the three-month period ended September 30, 2020, consistent with the year to date Adjusted EBITDA margin.
- Balance sheet strengthened as a result of the recently completed $86.3 million Senior Unsecured Debenture Financing. The proceeds were used to pay down PLC’s credit facility to approximately $138.8 million. As at September 30, 2020 PLC had approximately $157.3 million in liquidity to pursue its growth objectives and a current leverage ratio of 1.48 times.
- On October 1, 2020, PLC completed the acquisition of Bowers Funeral Service Ltd, a three-location funeral home business in British Columbia.
- On November 2, 2020, PLC announced the acquisition of J.F. Floyd Mortuary, Crematory and Cemeteries, consisting of four funeral homes (3 of which are on-sites), nine cemeteries and a stand-alone crematory. The addition of these businesses strengthen PLC’s operational footprint in South Carolina and provides a platform from which it can continue to expand into the southeast region of the U.S.
As previously noted, 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. And, while we continue to make adjustments as local restrictions loosen or tighten, the Company has adapted to the current environment and demonstrated its ability to act swiftly and nimbly in the face of disruption. Although we continued to see an increase in revenue from comparable business operations during the quarter related to both the cemetery and funeral businesses, this has stabilized somewhat from the second quarter. Many of the Company’s businesses throughout the U.S. experienced positive growth from both at-need sales, that may or may not be directly or indirectly related to COVID-19, and pre-need sales.
Comparable pre-need cemetery revenue significantly increased during the quarter as many regions relaxed stay at home orders and the trigger effect of the pandemic created a compelling platform for our sales counselors. Irrespective of any particular market’s challenges, our businesses embraced the overall change to the landscape and remained open and prepared to meet customers under restricted or alternative circumstances.
As the Company has settled into the COVID-19 environment, we have gained confidence and comfort in our contingency planning procedures. With stabilization measures in place, we recognized the Company’s ability to shift focus back to its core strategy – development and growth as North America’s premier funeral, cremation and cemetery provider. Accordingly, we fully re-engaged in our stated growth objectives both through our acquisition program and our internal capital expenditure program.
“Despite the confidence in and implementation of our operational directives, we continue to closely monitor COVID-19 as the resurgence of cases throughout North America continues to pose a threat to the health and economic wellbeing of our employees, their families and the families we serve. As the circumstances evolve, our principal focus is ensuring the safety of each of these individuals to the best of our ability,” said Mr. Green. Further, Mr. Green continued, “Our team members consistently exhibit an unwavering commitment to their job and the families we serve, which is certainly not lost on this executive management team. Without them, none of this would have been possible and I hope that is not lost on our investors.”
The Company will host a conference call to discuss its Q3 2020 financial results on Friday, November 13, 2020. Details are as follows:
- Date: Friday, November 13, 2020
- Time: 9:30am EST
- Dial-in Number: Local (647) 427-7450 | Toll Free (888) 231-8191 | Conference ID: 7388398
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.
A replay of the conference call will be available until November 20, 2020 and can be accessed as follows: Dial-in Number: Local (416) 849-0833 | Toll Free (855) 859-2056 | Conference ID: 7388398. 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 five Canadian provinces and fifteen U.S. states.
Adjusted Net Earnings, Adjusted EBITDA and their related per share amounts, Adjusted EBITDA margins, and Revenue Growth from Comparable Business Units 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 Company’s business; the Company’s ability to adapt to the current environment; and the Company’s ability to shift focus back to the Company’s core strategy and re-engage in its stated growth objectives both through its acquisition program and its internal capital expenditure program. 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.
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Chief Financial Officer
(416) 231-1462, ext. 221