On Nov. 9, Park Lawn Corp. reported its third-quarter financial operating results.

Adjusted diluted earnings per share were 15 cents compared with 22 cents a year ago. Quarterly revenue was $87.5 million compared with $80.9 million.

“We had a solid operational performance in the third quarter,” said J. Bradley Green, CEO of Park Lawn (pictured at top). “While the death rate continued to pull back, resulting in an overall decrease in call volume as compared to the third quarter of 2022, our operations were able to largely offset this trend through sustained growth in market share and modestly increasing our average revenue per contract on the funeral side and growing preneed sales on the cemetery side.”

Quarterly highlights included:

  • Revenue increased by approximately 8.2% to $87.5 million primarily as a result of acquired operations as compared to the three-month period ended Sept. 30, 2022.
  • Gross profit increased by 9% to $21,091,328 compared to the three-month period ended Sept. 30, 2022.
  • Fully diluted earnings per share was $0.094 compared to $0.153 for the three-month period ended Sept. 30, 2022.
  • Fully diluted adjusted net earnings per share decreased by $0.071 or 31.7% to $0.153 compared to $0.224 for the three-month period ended Sept. 30, 2022.
  • Net Earnings was $3,296,492 compared to $5,323,908 for the three-month period ended Sept. 30, 2022.
  • Adjusted EBITDA increased by 3.6% to $18,800,966 as compared to the three-month period ended Sept. 30, 2022.
  • PLC achieved an adjusted EBITDA margin of 21.5%, a 90 bps decrease over the three-month period ended Sept. 30, 2022, primarily as a result of increased corporate costs year-over-year.
  • On July 17, 2023, the company acquired substantially all the assets of Ward Funeral Home Limited with three standalone funeral homes located in Brampton, Woodbridge and Toronto, Ontario. The Ward acquisition expands PLC’s funeral home presence in Ontario and is expected to add approximately $1.8 million in adjusted EBITDA annually.
  • On Aug. 8, 2023, the company expanded its Ontario presence when it completed the acquisition of substantially all the assets of M.W. Becker Funeral Home Ltd., a standalone funeral home business in Keswick, Ontario. The acquisition is expected to add CAD $375,970 in Adjusted EBITDA annually.
  • On Aug. 14, 2023, the company acquired substantially all the assets of Forrest & Taylor Funeral Home Limited, a standalone funeral home located in Sutton, Ontario. The Forrest & Taylor acquisition is expected to add CAD$338,647 in adjusted EBITDA annually.
  • Following the close of the quarter, on Oct. 16, 2023, the company acquired substantially all the assets of Christy-Smith Funeral Homes, consisting of two standalone funeral homes, located in Sioux City, Iowa. The Christy-Smith acquisition expands PLC’s Sioux City footprint and is expected to add $437,391 in Adjusted EBITDA annually.
PLC to Divest Certain Legacy Assets 

Subsequent to the quarter, on Oct. 17, 2023, PLC announced that it entered into a definitive agreement to divest substantially all the assets of The Park Lawn Cemetery Company (USA), Inc., PLC Saber Ltd. and PLC Citadel Ltd. to Everstory Acquisition Portfolio, LLC, an affiliate of Everstory Partners.

Everstory Partners is a death-care company that owns and operates cemetery, funeral home and crematory locations throughout the United States and Puerto Rico. The divestiture includes 72 cemeteries in Kentucky, Michigan, North Carolina and South Carolina and 11 funeral homes in Kentucky and North Carolina. The transaction is valued at approximately $70 million, consisting of $55 million in cash and the remaining $15 million in deferred compensation, bearing interest at 10% per annum, to be received by PLC within five years following the close of the transaction.

The purchase price represents an approximate 8.0x adjusted EBITDA multiple based on trailing twelve-month results.

In the near term, the cash portion of the proceeds is expected to reduce Park Lawn’s leverage ratio to approximately 2.0x and 2.8x, including Park Lawn’s outstanding debentures. Park Lawn anticipates replacing the divested earnings through the deployment of transaction proceeds into high-growth markets and new business opportunities that align more closely with its long-term growth strategy.

The transaction is scheduled to close prior to year end 2023 following receipt of regulatory approval and the satisfaction of customary closing conditions for a transaction of this type.

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