On March 2, 2023, Park Lawn Corp. reported fourth-quarter adjusted earnings of 24 cents per share compared with 29 cents in the year-ago period.
While those quarterly earnings represented almost a 19% decline on a comparable-period basis, J. Bradley Green, chief executive officer of Park Lawn, noted that the company is “pleased” with its quarterly performance and year-end operating results “as compared to the heavily COVID-19 impacted fourth quarter and year-end 2021.”
He continued, “While the Centers for Disease Control and Prevention identified a sharp decline in the U.S. national death during the year, our decrease in call volume was notably less than the national decline, as well as that of our peers. Further, as we experienced this change in landscape in conjunction with an inflationary and challenging macroeconomic climate, we were able to quickly adjust our operations in the short-term, and are proud of how this is illustrated by our fourth quarter results. For example, we saw our same store funeral averages increase quarter-over-quarter by 1.3% despite increased inflationary pressures. Likewise, we saw an increase in our adjusted EBITDA margin of 240 basis points from the second quarter of this year, far exceeding our own expectations to make meaningful change in this short period. This significant improvement would not have been possible without the visibility provided by our proprietary software system FaCTS and the hard work of our employees. We remain committed to regularly improving upon and refining our operations to maximize shareholder value.”
Key Results from Q4 and the Year Ended 2022
- For the three-month period and year ended Dec. 31, 2022, revenue grew by approximately 9.1% and 10.6%, respectively, over the comparable prior period, primarily due to acquisitions made during 2022 and 2021.
- For the three-month period and year ended December 31, 2022, revenue from comparable operations decreased only slightly at 2% and 2.3% respectively, far outperforming decreases in mortality rates.
- Fully diluted earnings per share attributable to PLC shareholders was 15 cents and 73 cents for the three-month period and year ended Dec. 31, 2022, respectively, compared to 21 cents and 88 cents for the three-month period and year ended Dec. 31, 2021, respectively.
- Adjusted net earnings per share attributable to Park Lawn shareholders was 24 cents and 98 cents for the three-month period and year ended Dec. 31, 2022, respectively, compared to 29 cents and $1.21 for the three-month period and year ended Dec. 31, 2021, respectively.
- For the three-month period ended Dec. 31, 2022, net earnings decreased 25.6% relative to the three-month period ended Dec. 31, 2021 and decreased 9.7% over the year ended Dec. 31, 2021.
- For the three-month period ended Dec. 31, 2022, adjusted EBITDA was consistent with the three-month period ended Dec. 31, 2021, and decreased 1.8% over the year ended Dec. 31, 2021.
- Park Lawn achieved an adjusted EBITDA margin of 23% for the three-month period and year ended Dec. 31, 2022, respectively.
- During the quarter, the company completed six acquisitions including the acquisition of substantially all the assets of: (1) Ertel Funeral Home & Crematory, a stand-alone funeral home located in Cortez, Colorado; (2) Brown’s Cremation & Funeral Service, a stand-alone funeral home in Grand Junction, Colorado; (3) Taylor Funeral Home, a business comprised of three stand-alone funeral homes and one on-site funeral home and cemetery combination located in Delta, Cedaredge, Hotchkiss and Paonia, Colorado; (4) Muehlebach Funeral Care in Kansas City, Missouri, Skradsi-Pierce Funeral Home in Kansas City, Kansas and Assurance Cremation Society in Kansas City, Missouri, a group of businesses consisting of three stand-alone funeral homes; (5) Park Lawn Funeral Home and Memorial Park Cemetery & Green Lawn Cemetery, Park Lawn Northland Chapel and Glenridge Cemetery in Kansas City and Liberty Mutual, a business made up of one on-site funeral home and cemetery combination, one-stand-alone funeral home and one stand-alone cemetery; and (6) Schrader, Aragon & Jacoby Funeral Home, Mountain View Memorial Park and Bustard & Jacoby Funerals, Cremation, Monuments and Receptions, a group of businesses consisting of two stand-alone funeral homes and one stand-alone cemetery located in Cheyenne and Casper, Wyoming.
- In 2022, the company successfully executed on its growth strategy by completing 11 acquisitions for a total purchase price of approximately $94 million. The combined transactions represent a total of 7,054 calls and 890 interments as well as the addition of 23 stand-alone funeral homes, four stand-alone cemeteries, and five on-sites. The company also added two new geographic regions – the states of Virginia and Wyoming.
- On Aug. 3, 2022, the company announced the opening of Westminster Funeral & Reception Centre located at Westminster Cemetery, making this 32,100 square foot state-of-the-art facility the company’s first on-site in Toronto, Ontario. The company anticipates that this facility will play a meaningful role in its organic growth strategy.
- Subsequent to the quarter and year end, 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 provide an important part of the company’s organic growth strategy.
Park Lawn Achieved its 2022 Aspirational Growth Target
In 2018, Park Lawn announced a long-term aspirational goal of achieving CAD$100 million in pro forma Adjusted EBITDA by the conclusion of the 2022 calendar year. The company is proud to announce that it exceeded this aspirational growth target at the conclusion of 2022.
In response to the company meeting this goal, Green said, “Despite the many adverse conditions experienced during the five year period, including the COVID-19 pandemic as well as the subsequent periods since its height, we are pleased that the Company not only met, but exceeded its aspirational growth target. We look forward to further sharpening our operating acumen as we turn our focus to the achievement of our previously announced 2026 aspirational growth targets.”
Park Lawn Remains Committed to its Comprehensive Growth Strategy
Subsequent to the quarter, the company announced it has entered into a definitive agreement to acquire substantially all of 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, a group of businesses consisting of three stand-alone funeral homes and one stand-alone cemetery. The transaction is anticipated to close in early April 2023 following the receipt of regulatory approval.
The company will host a conference call to discuss its fourth quarter 2022 financial results on Friday, March 3, 2023. Details are as follows:
Date: Friday, March 3, 2023
Time: 9:30 a.m. EST
Dial-in Number: Toll Free (888) 506-0062 | Conference ID: 934271
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, March 17, 2023 and can be accessed as follows: Dial-in Number: Toll Free (877) 481-4010| Conference ID: 47713. Alternatively, the conference will also be available on the company’s website at www.parklawncorp.com.