On March 7, Park Lawn Corp. announced fourth-quarter adjusted diluted earnings of 25 cents per share compared to 24 cents in the year-ago period, earning $88.1 million in revenue compared with the $86.1 million it earned a year ago.

The company also announced the appointment of a new director and its 2024 financial outlook.

“Our focus on operational efficiency and cost management contributed to improved profitability and bottom-line growth during the 2023 calendar year,” stated J. Bradley Green, chief executive officer (pictured at top). He continued, “In addition, during the fourth quarter, we achieved an important milestone in the company’s history through the strategic disposition of certain legacy businesses which has allowed us to reshape our platform and reallocate resources to support a more efficient operating environment. We are excited for the opportunity to fully realize our potential through our strong operating acumen as we look towards 2024 and beyond.”

Key Results from the Three-Month Period and Year Ended Dec. 31, 2023

  • For the three-month period and year ended, Dec. 31, 2023, revenue increased by approximately 2.3% to $88 million and 6.6% to $347.6 million, respectively, over the comparable prior periods, primarily as a result of acquired operations, offset by a decrease in comparable operations.
  • Net (loss) earnings for the quarter and year ended 2023 reflect a loss as a result of the disposition of certain legacy businesses completed in December.  However, adjusted net earnings for the three-month period ended Dec. 31, 2023, increased by approximately 5.3% while decreasing by 10.1% over the comparable prior year, principally as a result of the normalization of the death rate.
  • For the three-month period and year ended Dec. 31, 2023, adjusted EBITDA increased by 4.0% and 5.1%, respectively, over the comparable period, primarily as a result of acquired operations offset by a marginal decrease in comparable operations.
  • For the three-month period and year ended Dec. 31, 2023, PLC achieved an adjusted EBITDA margin of 23.3% and 22.7%, respectively, over the comparable period, a 30 bps increase over the prior period quarter and 30 bps decrease over the prior year, primarily as a result of the normalization of the death rate and the various direct and indirect impacts of the COVID-19 pandemic.
  • The adjusted field EBITDA margin increased over the comparable quarter period by 140 basis points to 32.6% and increased by 110 bps to 31.6% over the comparable annual period.
  • Fully diluted earnings per share reflect a loss for both the quarter and year ended Dec. 31, 2023, as a result of the disposition of certain legacy businesses completed in December.  However, fully diluted adjusted net earnings per share increased over the three-month period ended Dec. 31, 2023, by 3.4% to $0.247 and decreased by 10.5% to $0.874 for the year ended Dec. 31, 2023.
  • On Oct. 16, 2023, the company completed the acquisition of substantially all the assets of Christy-Smith Funeral Homes in Sioux City, Iowa (collectively “Christy Smith”).  The Christy-Smith acquisition added two stand-alone funeral homes to Park Lawn’s presence in the market.  The Christy-Smith business is expected to add 217 calls and $437,391 in adjusted EBITDA annually.
  • 72 cemeteries in Kentucky, Michigan, North Carolina and South Carolina and 11 funeral homes in Kentucky and North Carolina to Everstory Acquisition Portfolio, LLC, an affiliate of Everstory Partners.  At closing, Park Lawn received $70 million consisting of $55 million in cash and the remaining in deferred compensation, bearing interest at 10% per annum, to be received by PLC within 5 years following the close of the transaction.  The cash proceeds were used to pay down debt resulting in a reduction of Park Lawn’s leverage ratio to  1.95x and 2.75x, including Park Lawn’s outstanding debentures.
2024 Financial Outlook

“Given the recent completion of the transformational disposition of certain legacy businesses at the end of December, as well as the current macroeconomic environment, we no longer believe that our previously announced five-year long-term aspirational financial targets are achievable by the conclusion of 2026,” Green said. “Rather than long-term targets, in an effort to enhance the insight and disclosure around our operating performance, we believe annual guidance will provide improved near-term transparency of our financial expectations and strategic direction to our investors, shareholders and stakeholders.  We remain committed to our vision as a premier operating company that grows through acquisition and are excited to share our 2024 annual guidance which demonstrates our confidence in remaining agile in changing market conditions while, at the same time, reaffirming our commitment in executing on our strategy to deliver long-term value and sustainable growth.”

For the fiscal year 2024, Park Lawn believes that it will be able to achieve the following financial metrics within the ranges set forth below.

2024 Financial Outlook High Midpoint Low
Adjusted EBITDA $80M $75M $70M
Adjusted Earnings Per Share – Diluted $0.90 $0.85 $0.80

This guidance is based on many assumptions, including, but not limited to, that Park Lawn will continue to grow organically through initiatives such as development of new inventory and business locations (i.e., on-sites), as well as inorganically through mergers and acquisitions in the approximate amount of $50-$100 million on average per year.  Likewise, for the 2024 calendar year, we are assuming that mortality in Canada and the United States remains flat to slightly depressed as a result of the impact from the pull-forward effect associated with the COVID-19 pandemic.  Further, in the near term and for the 2024 calendar year, we anticipate that corporate costs will remain relatively consistent with prior periods as we continue to enhance our corporate support facilities and resources, and continue to pursue M&A growth.

The purpose of the 2024 financial outlook is to assist investors, shareholders, and others in understanding certain financial metrics relating to expected 2024 financial results for evaluating the performance of the Company’s business. This information may not be appropriate for other purposes. The 2024 financial outlook, including the various assumptions underlying it, is forward-looking and should be read in conjunction the section below entitled “Cautionary Statement Regarding Forward‐Looking Information“.

Appointment of Maggie MacDougall to the Board of Directors

In furtherance of its commitment to deepening and diversifying the skills and backgrounds of its directors, the Company also announced the appointment of Maggie MacDougall as an independent director to its Board of Directors (“Board”).  MacDougall will serve as a member of the Governance and Nominating, Human Resources and Compensation and Investment Committees.

“We are pleased to welcome Maggie as a new director to the Park Lawn Board,” said Deborah Robinson, chair of the board. “Maggie’s deep experience in working closely with similarly sized organizations, as well as the Canadian capital markets, will provide us with additional expertise as we execute on our growth strategy.  Her addition to our team aligns with the Board’s desire to balance skillset with experience, diversity and tenure.”

MacDougall is the founder of Crescent Capital Partners Ltd., a boutique financial advisory firm serving mid-market and small cap companies in need of innovative corporate finance and capital markets solutions.  Prior to founding Crescent Capital Partners, MacDougall was the vice chairman, head of research at Stifel Nicolaus Canada Inc., where she built and managed a high-performance team while implementing a structured approach to technology and processes improvements, advancing the Canadian institutional ranking from #12 to #9 overall and from #3 to #1 small cap in less than three years.  She has over 19 years of experience in financial services and has been repeatedly ranked as a TopGun Analyst in the Brendan Wood International’s Worldwide Equity Capital Markets Performance Canadian Equities Report.  Prior to joining Stifel, MacDougall was a Senior Partner at an independent investment dealer, a role she held for 11 years after spending three years as part of the award-winning Focus + team at Goodman and Company Investment Counsel, which is today known as 1832.

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