TORONTO, ONTARIO (November 9, 2022) – Today, Park Lawn Corporation (TSX: PLC; PLC.U) (“PLC”, “Park Lawn”, or the “Company”) announced its operating results for the third quarter (“Q3”) ended September 30, 2022:
“Our third quarter operating results exceeded our expectations as it relates to the comparable COVID-19 impacted quarter and in light of the anticipated and continued decline in the death rate,” stated J. Bradley Green, Chief Executive Officer. Mr. Green further commented, “We attribute this performance to the sharp focus of our operations teams. While we saw the national death rate fall sharply during the quarter, Park Lawn’s same store call volume decreased significantly less than the national average and that of our peers, demonstrating market share strength. We also saw a meaningful increase in our pre-need property sales year over year. In addition, we began to see positive results from our heightened expense control of inflationary pressures and expect these efforts and related pricing increases to support further margin growth in the near term.”
Mr. Green concluded, “As we look towards 2023, we remain confident in the strength of our operating acumen and our ability to achieve our previously announced aspirational goal of achieving a pro forma Adjusted EBITDA of $100 million (CAD) by the end of 2022.”
Key Results from Q3 2022
- For the three-month period ended September 30, 2022, net revenue increased by 10.7% to $80,871,605, compared to the three-month period ended September 30, 2021. Revenue growth was supported by strong sales at the Company’s Acquired Operations, which increased by $8,498,984. Revenue from Comparable Operations2 remained consistent with only a slight decrease of $519,455, as a result of the sharp drop in mortality year-over-year demonstrating market share strength.
- Net earnings attributable to shareholders of PLC (the “Shareholders”) decreased by $1,862,610 for the three-month period ended September 30, 2022, as a result of a decrease in revenue from Comparable Operations and increased inflationary costs and expenses including labor and maintenance.
- Net earnings margin for the three-month period ended September 30, 2022 was 6.6% compared to a 9.8% margin for the heavily impacted COVID-19 three month period ended September 30, 2021.
- Diluted net earnings per Common Share to Shareholders decreased by $0.076 or 33.2% for the three-month period ended September 30, 2022, compared to the three-month period ended September 30, 2021.
- Diluted Adjusted Net Earnings per Common Share to Shareholders decreased by $0.081 or 26.6% for the three-month period ended September 30, 2022, compared to the three-month period ended September 30, 2021.
- Adjusted EBITDA to Shareholders decreased by 2.7% to $18,155,459 for the three-month period ended September 30, 2022, compared to the three-month period ended September 30, 2021.
- Adjusted EBITDA margin for the three-month period ended September 30, 2022 was 22.4%, a 310 bps decrease over the COVID-19 impacted comparable period in 2021.
- At September 30, 2022, the Company had $133,493,435 outstanding on the Credit Facility (as hereinafter defined) including letters of credit and an undrawn balance of approximately $106,510,000 leaving the Company with ample flexibility for continued growth in the near term.
- As at September 30, 2022, the Company’s Leverage Ratio was 1.49x.
PLC Continues its Strategic Growth
“Park Lawn’s acquisition opportunities continue to be strong, and our pipeline remains robust with strategic and premier business opportunities. Through the completion of these partnerships, we anticipate meeting our previously announced acquisition target of $75-$125M in both the 2022 and 2023 calendar years,” said Mr. Green.
- During the quarter, the Company entered into a new high growth market in Abingdon, Virginia by acquiring Farris Funeral Service, Inc. and Affiliated Service Group, Inc. a business consisting of one stand alone funeral home and one on-site funeral home and cemetery combination. In addition, the Company also completed the acquisition of substantially all of the assets of Shackelford Corporation, which expanded its presence in Tennessee into the western half of the state. The Shackelford Corporation consists of a group of businesses made up of eight stand-alone funeral homes, two stand-alone cemeteries and one on-site funeral home and cemetery located in and around the Savannah, Tennessee area.
- Also, during the quarter, on August 3, 2022, the Company announced the opening of Westminster Funeral & Reception Centre. This state of the art 32,100 square foot on-site funeral visitation and reception centre is located in Toronto, Ontario and will be additive to Park Lawn’s organic growth strategy.
- Subsequent to the quarter end, PLC strategically expanded its operations in Colorado through the completion of the acquisitions of substantially all of the assets of each of Ertel Funeral Home & Crematory a stand-alone funeral home in Cortez, Colorado; Brown’s Cremation & Funeral Service, a stand-alone funeral home in Grand Junction, Colorado and Taylor Funeral Home, a business which consists of three stand-alone funeral homes and one on-site funeral home and cemetery combination located in Delta, Cedaredge, Hotchkiss and Paonia, Colorado.
- Also subsequent to quarter, PLC announced that it has entered into a definitive agreement to acquire substantially all of the assets of Muehlebach Funeral Care in Kansas City, Missouri, Skradski-Pierce Funeral Home in Kansas City, Kansas and Assurance Cremation Society in Kansas City, Missouri (collectively “Muehlebach”). The Muehlebach acquisition consists of three stand-alone funeral homes and is anticipated to close in mid-November 2022 following the receipt of regulatory approval.
Normal Course Issuer Bid
During the quarter, the Company repurchased a total of 200,985 common shares at an average price of $24.86 per share. The shares were placed into a trust established by PLC and will be used by PLC, at a future date, for the settlement of awards issued under the Company’s equity incentive plans.
Dividend Reinvestment Plan
Subsequent to the quarter, on October 17, 2022, the Company’s Board of Directors approved the listing of an additional 400,000 common shares issuable pursuant to the Company’s amended and restated dividend reinvestment plan. The increase was approved by the TSX on October 20, 2022.
The Company will host a conference call to discuss its third quarter 2022 financial results on Thursday, November 10, 2022. Details are as follows:
Date: Thursday, November 10, 2022
Time: 9:30 a.m. EST
Dial-in Number: Toll Free (877) 545-0320 | Conference ID: 624678
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 Thursday, November 24, 2022 and can be accessed as follows: Dial-in Number: (877) 481-4010, Conference ID: 46967. 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 seventeen U.S. states.
Adjusted Net Earnings, Adjusted EBITDA and their related per share amounts, Adjusted 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, 2021 and ending September 30, 2022. The Company defines Comparable Operations as business units or operating locations owned by the Company for the entire period from January 1, 2021 and ending September 30, 2022. 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.
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 expectations regarding its returns over the long-run and the impact that its acquisition program and continuing focus on premier operating firms will have on its portfolio; PLC’s expectations regarding its ability to meet its aspirational goal of achieving a pro forma Adjusted EBITDA of $100 million (CAD) by the end of 2022; that PLC will meet its acquisition targets; and PLC’s expectation that the Muehlebach acquisition will close in mid-November, 2022. The forward-looking statements in this news release are based on certain assumptions, including the assumed improvement in the COVID-19 pandemic and the normalization of the death rate, that the CAD to USD exchange rate remains consistent, PLC is able to obtain regulatory approval or satisfy regulatory requirements for the Muehlebach acquisition, the Muehlebach acquisition closes in the anticipated timeframe, the Muehlebach acquisition and the other recently completed acquisitions referred to in this press release will perform as expected, PLC will be able to implement business improvements and cost 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 future impacts of the COVID-19 pandemic, as well as other pandemic, epidemic and health risks, risks associated with the impact of inflation on PLC’s business, risks associated with the conflict between Russia and Ukraine, including from the economic sanctions imposed or to be imposed as a result thereof, and supply chain disruptions resulting therefrom, 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
 Adjusted Net Earnings, Adjusted EBITDA, Adjusted 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.
 Acquired Operations and Comparable Operations 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.