Park Lawn Corporation Announces Q1 2023 Results

TORONTO, ON / ACCESSWIRE / May 11, 2023 / Today, Park Lawn Corporation (TSX:PLC; PLC.U) (“PLC“, “Park Lawn“, or the “Company“) announced its financial operating results for the first quarter (“Q1“) ended March 31, 2023.

Financial Results for the Three-Month Period Ended March 31, 2023^[1]:

	For the three-month period ended
	31-Mar-23			31-Mar-22			% Increase/(Decrease)
Revenue	$	86,735,504		$	83,173,297		4.3%
Net Earnings	$	4,576,146		$	8,702,018		(47.4%)
Adjusted Net Earnings	$	8,615,331		$	11,176,862		(22.9%)
Adjusted EBITDA	$	20,541,390		$	21,415,073		(4.1%)
Adjusted EBITDA Margin		23.7%			25.7%		(200) bps
Adjusted Field EBITDA Margin		32.2%			32.7%		(50) bps
Net Earnings per share-diluted	$	0.132		$	0.250		(47.2%)
Adjusted Net Earnings per share-diluted	$	0.249		$	0.321		(22.4%)

J. Bradley Green, Chief Executive Officer of PLC, commented, “We are pleased with our operating performance from the first quarter as it demonstrates strength against a tough comparison under challenging macroeconomic conditions. As the impacts of COVID-19 wane, our focus continues to be on implementing incremental improvements in our operations and making selective and strategic growth decisions that drive shareholder value. Overall, for the quarter, this strategy resulted in a slight increase in our average revenue per call on the funeral home side and continued strong pre-need cemetery sales from our larger cemetery businesses.” Mr. Green continued, “On the growth front, during the quarter and shortly thereafter, we opened Waco Memorial Funeral Home in Waco, Texas which adds another on-site to our portfolio, as well as closed two strategic acquisitions adding businesses in Iowa and Nebraska and further expanding our presence in Missouri. We have a strong pipeline and we remain confident in our opportunities for continued strategic growth in 2023.”

Key Results from the Three-Month Period Ended March 31, 2023:

• Revenue increased by approximately 4% to $86.7M primarily as a result of Acquired Operations as compared to the three-month period ended March 31, 2022.
• Revenue from Comparable Operations decreased by approximately 5.6% over the prior heavily impacted COVID-19 three-month period ending March 31, 2022.
• Fully Diluted Earnings per share was $0.132 compared to $0.250 for the three-month period ended March 31, 2022.
• Fully Diluted Adjusted Net Earnings per share was $0.249 compared to $0.321 for the three-month period ended March 31, 2022.
• Net Earnings was $4,576,146 compared to $8,702,018 for the three-month period ended March 31, 2022.
• Adjusted EBITDA was $20,541,390 compared to $21,415,073 for the three-month period ended March 31, 2022.
• PLC achieved an Adjusted EBITDA margin of 23.7%, a decrease of 200 bps over the three-month period ended March 31, 2022.
• On March 1, 2023, the Company completed and opened the Waco Memorial Funeral Home, a new-build funeral home, located on-site at Waco Memorial Park in Waco, Texas. This new on-site facility offers the first funeral home and cemetery combination in the market and is expected to play an important role in the Company’s organic growth strategy.
• On March 13, 2023, the Company completed the acquisition of substantially all the assets of Meyer Brothers Funeral Homes, a business consisting of five stand-alone funeral homes located in Sioux City, Iowa, South Sioux City, Nebraska and Ponca, Nebraska (collectively “Meyer“). The Meyer acquisition is expected to add $1,843,734 in Adjusted EBITDA annually and increases Park Lawn’s geographic presence by adding businesses in Iowa and Nebraska.
• Subsequent to the end of the quarter, on April 10, 2023, the Company completed the acquisition of substantially all the assets of Carson-Speaks Chapel in Independence, Missouri; Speaks Buckner Chapel in Buckner, Missouri; Speaks Suburban Chapel in Independence, Missouri; and Oak Ridge Memory Gardens in Independence, Missouri (collectively “Speaks“). The Speaks acquisition expands Park Lawn’s Kansas City metropolitan market by adding three stand-alone funeral homes and one stand-alone cemetery and is expected to add $2,247,759 in Adjusted EBITDA annually.
• Also subsequent to March 31, 2023, the Company filed a well-known issuer base shelf prospectus to preserve maximum flexibility as it continues to execute on its growth strategy.

Important Reminder

The Company will host a conference call to discuss its first quarter 2023 financial results on Friday, May 12, 2023. Details are as follows:

Date: Friday, May 12, 2023

Time: 9:30 a.m. EST

Dial-in Number: Toll Free (888) 506-0062 | Conference ID: 462890

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, May 26, 2023 and can be accessed as follows: Dial-in Number: Toll Free (877) 481-4010| Conference ID: 48311. 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.

Non‐IFRS Measures

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 March 31, 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 March 31, 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

		Three Months Ended March 31,
		2023				2022
Net Earnings		$	4,576,146			$	8,702,018
Adjusted for the impact of:
Amortization of intangible assets			324,321				382,543
Fair value adjustment on interest rate swaps			1,600,790				–
Share based compensation			1,101,088				1,465,178
Acquisition and integration costs			1,793,282				1,113,839
Other (income) expenses			19,457				296,490
Tax effect on the above items			(799,753	)			(783,206	)
Adjusted Net Earnings		$	8,615,331			$	11,176,862
Adjusted Net Earnings – per share
Basic		$	0.251			$	0.327
Diluted		$	0.249			$	0.321
Weighted Average Shares
Basic			34,258,113				34,163,346
Diluted			34,600,182				34,795,204

EBITDA and Adjusted EBITDA

		Three Months Ended March 31,
		2023				2022
Earnings before income taxes		$	7,057,689			$	11,990,050
Adjusted for the impact of:
Finance costs			3,608,812				1,559,438
Depreciation and amortization			3,774,114				3,225,111
Amortization of cemetery property			1,586,158				1,764,967
EBITDA			16,026,773				18,539,566
Fair value adjustment on interest rate swaps			1,600,790				–
Share based compensation			1,101,088				1,465,178
Acquisition and integration costs			1,793,282				1,113,839
Other (income) expenses			19,457				296,490
Adjusted EBITDA		$	20,541,390			$	21,415,073
EBITDA – per share
Basic		$	0.468			$	0.543
Diluted		$	0.463			$	0.533
Adjusted EBITDA – per share
Basic		$	0.600			$	0.627
Diluted		$	0.594			$	0.615
Weighted Average Shares Outstanding
Basic			34,258,113				34,163,346
Diluted			34,600,182				34,795,204

Adjusted Field EBITDA

		Three Months Ended March 31, 2023
		Cemetery				Funeral Home				Corporate				Total
Earnings before income taxes		$	9,919,329			$	12,647,133			$	(15,508,773	)		$	7,057,689
Adjusted for the impact of:
Finance Costs			11,791				201,081				3,395,940				3,608,812
Depreciation and amortization			857,785				2,739,641				176,688				3,774,114
Amortization of cemetery property			1,586,158				–				–				1,586,158
EBITDA			12,375,063				15,587,855				(11,936,145	)			16,026,773
Fair value adjustment on interest rate swaps			–				–				1,600,790				1,600,790
Share based compensation			–				–				1,101,088				1,101,088
Acquisition and integration costs			–				–				1,793,282				1,793,282
Other (income) expenses			(40,735	)			3,658				56,534				19,457
Adjusted EBITDA		$	12,334,328			$	15,591,513			$	(7,384,451	)		$	20,541,390

		Three Months Ended March 31, 2022
		Cemetery				Funeral Home				Corporate				Total
Earnings before income taxes		$	8,672,775			$	13,410,007			$	(10,092,732	)		$	11,990,050
Adjusted for the impact of:
Finance Costs			51,028				154,215				1,354,195				1,559,438
Depreciation and amortization			836,710				2,303,929				84,472				3,225,111
Amortization of cemetery property			1,764,967				–				–				1,764,967
EBITDA			11,325,480				15,868,151				(8,654,065	)			18,539,566
Share based compensation			–				–				1,465,178				1,465,178
Acquisition and integration costs			–				–				1,113,839				1,113,839
Other (income) expenses			–				19,032				277,458				296,490
Adjusted EBITDA		$	11,325,480			$	15,887,183			$	(5,797,590	)		$	21,415,073

_{^[1] 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.}

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 expectations regarding the impact of the Meyer acquisition and the Speaks acquisition on PLC’s annual Adjusted EBITDA; and PLC’s expectations regarding the important role that Waco Memorial Funeral Home will play in PLC’s organic growth strategy. 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 will continue to execute on its organic growth strategy and the Waco Memorial Funeral Home will perform as expected, the Meyer and Speaks 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 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 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.

Unless otherwise stated, all amounts discussed herein are denominated in U.S. dollars.

Contact Information

Daniel Millett
Chief Financial Officer
(416) 231-1462, ext. 221

SOURCE: Park Lawn Corporation