On Aug. 10, Park Lawn Corp. reported second-quarter adjusted diluted earnings of 22 cents per share compared with 19 cents in the prior-year period — a 17% increase.
J. Bradley Green (pictured at top), chief executive officer of PLC, commented, “We are proud of our operating results this quarter as our overall performance demonstrates the ability of our team to incrementally improve their business operations in a challenging macroeconomic environment while simultaneously staying true to our mission to deliver the highest level of service to our families.”
He added, “Despite a slightly depressed death rate, we were nonetheless able to maintain strong market share in the communities in which we operate while at the same time increasing our Adjusted EBITDA and Adjusted EBITDA margins demonstrating success with both our targeted pricing strategy as well as more intentional expense management.”
- Revenue increased by approximately 12.3% to $85.3 million primarily as a result of acquired operations as compared to the three-month period ended June 30, 2022.
- Gross profit increased by 25.2% to $21,043,308 compared to $16,813,765 for the three-month period ended June 30, 2022.
- Fully diluted earnings per share was $0.109 compared to $0.167 for the three-month period ended June 30, 2022.
- Fully diluted adjusted net Earnings per share increased by about 3 cents, or 16.8%, to about 22 cents compared to 19 cents for the three-month period ended June 30, 2022.
- Net earnings was $3,775,581 compared to $5,807,886 for the three-month period ended June 30, 2022.
- Adjusted EBITDA increased by 20.7% to $18,829,730 as compared to $15,605,747 for the three-month period ended June 30, 2022.
- PLC achieved an adjusted EBITDA margin of 22.1%, an increase of 150 bps over the three-month period ended June 30, 2022.
- 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. 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.
- On June 26, 2023, the company completed the acquisition of substantially all the assets of Cobb Funeral Chapel and Cobb Suncrest Memorial Gardens, a business consisting of one on-site funeral home and cemetery located in Moultrie, Georgia. The Cobb acquisition is expected to add $676,710 in adjusted EBITDA annually.
- Following the close of the quarter, 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 $1,800,000 in adjusted EBITDA annually.
Further Expansion of Ontario Footprint
Subsequent to the quarter, on Aug. 8, 2023, the company completed the acquisition of substantially all the assets of M.W. Becker Funeral Home Ltd., a standalone funeral home business in Keswick, Ontario.
“We take great pride in serving Keswick and the surrounding communities and look forward to continuing to provide outstanding personalized service to our families through our partnership with Park Lawn,” said Yves Larocque, former owner of MWB.
“The addition of the M.W. Becker Funeral Home allows us to enter a growing market north of Toronto, and expands Park Lawn’s footprint in Ontario, in furtherance of our stated growth objectives. We are excited to welcome the M.W. Becker team into the Park Lawn family,” Green said.
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- MWB performs approximately 162 calls per year and was financed with cash on hand and funds from PLC’s credit facility.
- The MWB acquisition is expected to add approximately CAD$375,970 in adjusted EBITDA annually.Â
- For the 12 months ended Dec. 31, 2022, PLC had adjusted EBITDA of U.S. $74,948,868 and net earnings of U.S. $25,124,765.
- The agreed upon purchase price multiple is within PLC’s publicly-stated targeted EBITDA multiple range for transactions of this nature.
Renewal Normal Course Issuer Bid
PLC also announced today that the Toronto Stock Exchange (also known as the “TSX “) has approved the renewal of the company’s normal course issuer bid. Under the terms of the NCIB, PLC may, during the twelve-month period commencing Aug. 17, 2023 and ending Aug. 16, 2024 purchase up to 3,391,575 common shares, representing 10% of its public float of issued and outstanding common shares.
As of Aug. 4, 2023, there were 34,272,395 common shares issued and outstanding and 33,915,751 common shares estimated in the “public float,” calculated in accordance with TSX rules. All common shares purchased by PLC under the renewed NCIB will be cancelled or transferred to and held by a trust established by PLC for the settlement of equity settled incentive plans.
PLC’s board of directors has authorized the NCIB because the board believes that, from time to time, the market price of common shares may be such that their purchase may be an attractive and appropriate use of corporate funds. The NCIB will provide PLC with additional flexibility to manage capital. Decisions regarding the timing of future purchases of common shares will be based on market conditions, share price, capital needs and other factors.
Purchases made by PLC will be made on the open market through the facilities of the TSX and/or alternative Canadian trading systems, in accordance with applicable TSX and other applicable trading system rules. The actual number of common shares purchased under the NCIB and the timing of any such purchases will be at PLC’s discretion. Based on the average daily trading volume of 62,835 during the last six months, daily purchases will be limited to 15,708 common shares, other than block purchase exceptions.
PLC has entered into an automatic securities purchase plan with its designated broker in connection with its NCIB to facilitate the purchase of common shares during times when PLC would ordinarily not be permitted to purchase common shares due to regulatory restrictions or self-imposed black-out periods. Before entering a black-out period, PLC may, but is not required to, instruct the broker to make purchases under the NCIB based on parameters set by PLC in accordance with the ASPP, TSX rules and applicable securities laws.
The ASPP has been pre-cleared by the TSX. Outside of predetermined blackout periods, common shares may be purchased under the NCIB based on management’s discretion, in compliance with TSX rules and applicable securities laws. All purchases made under the ASPP will be included in computing the number of common shares purchased under the NCIB.
Under its prior NCIB that commenced on Aug. 17, 2022 and expires on Aug. 16, 2023, the company had sought and received approval from the TSX to purchase up to 3,385,439 common shares. As of Aug. 9, 2023, the company had purchased 207,885 Common Shares under its prior NCIB through open market purchases on the TSX and/or alternative Canadian trading systems, at a weighted average price of approximately C$24.81 per Common Share for total cash consideration, including commission, of $3,835,438 (C$5,152,539).
A replay of the conference call will be available until Friday, Aug. 25, 2023 and can be accessed as follows: Dial-in Number: Toll Free (877) 481-4010| Conference ID: 48853. Alternatively, the conference will also be available on the Company’s website at www.parklawncorp.com.
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