Park Lawn Corporation Announces Q1 2024 Financial Results

Rhea-AI Summary

Park Lawn reported its Q1 2024 financial results, showing a 11.9% revenue decrease but a 14.7% increase in net earnings compared to the prior year. Adjusted EBITDA decreased by 4.4%, but adjusted EBITDA margin and adjusted field EBITDA margin increased. The company completed an acquisition in February 2024, adding to its portfolio.

Positive

• Net earnings increased by 14.7% to $5,247 compared to the prior year.

• Adjusted EBITDA margin increased by 200 basis points to 25.7% over the comparable prior period.

• Adjusted Field EBITDA margin increased by 320 basis points to 35.4% over the comparable prior period.

• Company completed an acquisition in February 2024, adding to its portfolio.

Negative

• Revenue decreased by 11.9% to $76,393 over the comparable prior period.

• Adjusted Net Earnings decreased by 12.2% to $7,565 over the comparable prior period.

• Adjusted EBITDA decreased by 4.4% to $19,646 over the comparable prior period.

TORONTO, ON / ACCESSWIRE / May 9, 2024 / Today, Park Lawn Corporation (TSX:PLC)(TSX:PLC.U) (" Park Lawn " or " PLC ") announced its financial operating results for the first quarter ended March 31, 2024 (" Q1 ").

Financial Results for the Three-Month Period Ended March 31, 2024:

		For the three-month period ended
										% Increase
(in thousands except per share figures)		31-Mar-24				31-Mar-23				(Decrease)
Revenue		$	76,393			$	86,736				(11.9%)
Net Earnings		$	5,247			$	4,576				14.7%
Adjusted Net Earnings 1		$	7,565			$	8,615				(12.2%)
Adjusted EBITDA 1		$	19,646			$	20,541				(4.4%)
Adjusted EBITDA Margin 1			25.7%				23.7%			200 bps
Adjusted Field EBITDA Margin 1			35.4%				32.2%			320 bps
Net Earnings per share-diluted		$	0.149			$	0.132				13.1%
Adjusted Net Earnings per share-diluted 1		$	0.215			$	0.249				(13.6%)

"We are proud of our first quarter operating results and are excited to see the hard work and efforts of our team beginning to take shape," said J. Bradley Green, Chief Executive Officer. Mr. Green further elaborated, "As you have heard in our commentary over the past few quarters, with the reshaping of our platform as a result of the disposition of certain legacy assets which was completed in December, the implementation of a refined operating model, a new and improved sales structure, the launch of a comprehensive educational platform and a stronger more robust internal backbone, Park Lawn is now poised to perform at a higher and more effective level than ever before."

Key Results from the Three-Month Period Ended March 31, 2024

• For the three-month period ended March 31, 2024, revenue decreased by 11.9% to $76,393 over the comparable prior period, primarily as a result of the disposition of certain legacy assets completed in December offset by an increase in acquired operations. On a Comparable Operations basis, revenue decreased only 2.7% over the comparable prior period, principally as a result of the decrease in mortality and large group sales in our cemeteries.
• For the three-month period ended March 31, 2024, Net Earnings increased by 14.7% to $5,247 over the comparable prior period. However, Adjusted Net Earnings for the three-month period ended March 31, 2024, decreased by 12.2% to $7,565, over the comparable prior period, primarily as a result of the disposition of legacy assets completed in December and the increased cost of financing.
• For the three-month period ended March 31, 2024, Adjusted EBITDA decreased by 4.4 % to $19,646 over the comparable prior period, primarily as a result of the disposition of legacy assets completed in December offset by a marginal decrease in Comparable Operations primarily as a result of decreases in large group sales from the Company's cemetery operations.
• For the three-month period ended March 31, 2024, Adjusted EBITDA margin increased by 200 basis points to 25.7% over the comparable prior period, primarily as a result of the disposition of lower margin businesses and operating efficiencies in the Company's funeral operations.
• For the three-month period ended March 31, 2024, Adjusted Field EBITDA margin increased by 320 basis points, or 10%, to 35.4% over the comparable prior period.
• For the three-month period ended March 31, 2024, Fully Diluted Net Earnings per share increased by 13.1% to $0.149. However, Fully Diluted Adjusted Net Earnings per share for the three-month period ended March 31, 2024, decreased by 13.6% to $0.215 over the comparable prior period.
• On February 20, 2024, the Company continued to execute on its growth strategy through the completion of the acquisition of substantially all the assets of Crippin Funeral Home located in Montrose, Colorado; Gunnison Funeral Services located in Gunnison, Colorado; and Grand View Cemetery located in Montrose, Colorado (collectively "Crippin"). The Crippin business adds two stand-alone funeral homes and one stand-alone cemetery to Park Lawn's portfolio and is expected to add approximately 576 calls, 85 placements and $703 in Adjusted EBITDA, annually.¹

¹ Adjusted Net Earnings, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Field EBITDA Margin and Adjusted Net Earnings per share diluted are a non-IFRS measure. Refer to the Non-IFRS Measures section of this news release for more information on this non-IFRS measure.

Dividend Reinvestment Plan

On May 9, 2024, the Company's Board of Directors approved the listing of an additional 500 thousand common shares issuable pursuant to the Company's amended and restated dividend reinvestment plan. The increase is subject to approval from the TSX.

Important Reminder

The Company will host a conference call to discuss its Q1 financial results on Friday, May 10, 2024. Details are as follows:

Date: Friday, May 10, 2024

Time: 9:30 a.m. EST

Dial-in Number: Toll Free (888) 506-0062 | Conference ID: 637260

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.sedarplus.ca or on the Company's website at www.parklawncorp.com.

A replay of the conference call will be available until Friday, May 24, 2024 and can be accessed as follows: Dial-in Number: Toll Free (877) 481-4010 | Conference ID: 50541. Alternatively, the conference will also be available on the Company's website at www.parklawncorp.com.

About Park Lawn Corporation:

PLC is the largest publicly traded Canadian-owned funeral, cremation and cemetery provider. PLC and its subsidiaries own and operate businesses including cemeteries, crematoria, funeral homes, chapels and event centers throughout Canada and the United States which provide a full range of services and merchandise to fulfill the desires of individuals and families seeking to honor their loved ones. Products and services can be customized to meet the personal needs of the consumer and are sold on a pre-planned basis (pre-need) or at the time of a death (at-need). PLC operates in three Canadian provinces and seventeen U.S. states. For more information about Park Lawn Corporation, please visit our website at www.parklawncorp.com.

Non‐IFRS Measures

Adjusted Net Earnings, EBITDA, Adjusted EBITDA and their related per share amounts, Adjusted EBITDA margin, Adjusted Field EBITDA, Adjusted Field EBITDA margin, 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, 2023 and ending March 31, 2024. The Company defines Comparable Operations as business units or operating locations owned by the Company for the entire period from January 1, 2023 and ending March 31, 2024.

The following tables indicate how the Company reconciles Adjusted Net Earnings, EBITDA, Adjusted EBITDA, Adjusted Field EBITDA and their related per share amount, and Adjusted EBITDA margin and Adjusted Field EBITDA margin to the nearest IFRS measure.

Adjusted Net Earnings

		Three Months Ended March 31,
(in thousands except per share figures)		2024				2023
Net Earnings		$	5,247			$	4,576
Adjusted for the impact of:
Amortization of intangible assets			378				324
Fair value adjustment on interest rate swaps			(919	)			1,601
Share based compensation			2,227				1,101
Acquisition and integration costs			1,246				1,793
Other (income) expenses			(19	)			19
Tax effect on the above items			(595	)			(799	)
Adjusted Net Earnings		$	7,565			$	8,615
Adjusted Net Earnings - per share
Basic		$	0.222			$	0.251
Diluted		$	0.215			$	0.249
Weighted Average Shares
Basic			34,020				34,258
Diluted			35,147				34,600

EBITDA and Adjusted EBITDA

		Three Months Ended March 31,
(in thousands except per share figures)		2024				2023
Earnings before income taxes		$	7,270			$	7,058
Adjusted for the impact of:
Finance costs			3,989				3,609
Depreciation and amortization			4,156				3,774
Cost of cemetery property			1,695				1,586
EBITDA			17,110				16,027
Fair value adjustment on interest rate swaps			(919	)			1,601
Share based compensation			2,227				1,101
Acquisition and integration costs			1,246				1,793
Other (income) expenses			(19	)			19
Adjusted EBITDA		$	19,646			$	20,541
EBITDA - per share
Basic		$	0.503			$	0.468
Diluted		$	0.487			$	0.463
Adjusted EBITDA - per share
Basic		$	0.577			$	0.600
Diluted		$	0.559			$	0.594
Weighted Average Shares Outstanding
Basic			34,020				34,258
Diluted			35,147				34,600

Adjusted Field EBITDA

		Three Months Ended March 31, 2024
(in thousands)		Cemetery				Funeral Home				Corporate				Total
Revenue
Sales		$	20,190			$	52,597			$	-			$	72,786
Income from care and maintenance funds			1,852				10				-				1,861
Interest and other income			721				380				644				1,746
Total revenue			22,763				52,987				644				76,393
Operating expenses
Cost of sales			5,027				7,028				-				12,055
General and administrative			5,233				27,936				-				33,169
Maintenance			2,652				1,405				-				4,057
Advertising and selling			2,663				2,307				-				4,970
Total operating expenses			15,576				38,676				-				54,252
Revenue less operating expenses			7,187				14,311				644				22,142
Other expenses
Corporate general and administrative			-				-				7,969				7,969
Amortization of intangibles			16				318				45				378
Finance costs			(132	)			412				3,709				3,989
Fair value adjustment on interest rate swaps			-				-				(919	)			(919	)
Share-based incentive compensation			-				-				2,227				2,227
Acquisition and integration costs			19				102				1,125				1,246
Other (income) expenses			-				(27	)			9				(19	)
Total other expenses			(98	)			804				14,166				14,871
Earnings (loss) before income taxes			7,285				13,507				(13,521	)			7,270
Income tax expense			1,967				3,647				(3,590	)			2,023
Net earnings (loss) for the period		$	5,318			$	9,860			$	(9,931	)		$	5,247

The following table reconciles EBITDA and Adjusted EBITDA to Earnings (loss) before income taxes. Adjusted EBITDA is broken down into Adjusted Field EBITDA (Cemetery and Funeral Home) and Adjusted Corporate EBITDA:

		Three Months Ended March 31, 2024
		Cemetery				Funeral Home				Corporate				Total
Earnings (loss) before income taxes		$	7,285			$	13,507			$	(13,521	)		$	7,270
Adjusted for the impact of:
Finance Costs			(132	)			412				3,709				3,989
Depreciation and amortization			489				3,483				184				4,156
Cost of cemetery property			1,694				1				-				1,695
EBITDA			9,336				17,402				(9,628	)			17,110
Fair value adjustment on interest rate swaps			-				-				(919	)			(919	)
Share based compensation			-				-				2,227				2,227
Acquisition and integration costs			19				102				1,125				1,246
Other (income) expenses			-				(27	)			9				(19	)
Adjusted EBITDA		$	9,355			$	17,477			$	(7,185	)		$	19,646

EBITDA, Adjusted EBITDA, and Adjusted Field EBITDA are non-IFRS measures. See "Description of non-IFRS measures".

Adjusted Field EBITDA

		Three Months Ended March 31, 2023
(in thousands)		Cemetery				Funeral Home				Corporate				Total
Revenue
Sales		$	32,719			$	50,252			$	-			$	82,971
Income from care and maintenance funds			2,699				-				-				2,699
Interest and other income			855				140				71				1,065
Total revenue			36,273				50,392				71				86,736
Operating expenses
Cost of sales			7,912				7,159				-				15,071
General and administrative			9,575				26,219				-				35,794
Maintenance			4,324				1,373				-				5,697
Advertising and selling			4,493				2,576				-				7,069
Total operating expenses			26,305				37,327				-				63,631
Revenue less operating expenses			9,968				13,065				71				23,104
Other expenses
Corporate general and administrative			-				-				7,599				7,599
Amortization of intangibles			19				272				33				324
Finance costs			12				201				3,396				3,609
Fair value adjustment of interest rate swaps			-				-				1,601				1,601
Share-based incentive compensation			-				-				1,101				1,101
Acquisition and integration costs			-				-				1,793				1,793
Other (income) expenses			-				(37	)			57				19
Total other expenses			31				436				15,580				16,046
Earnings (loss) before income taxes			9,937				12,629				(15,509	)			7,058
Income tax expense			2,683				3,410				(3,611	)			2,482
Net earnings (loss) for the period		$	7,254			$	9,219			$	(11,897	)		$	4,576

The following table reconciles EBITDA and Adjusted EBITDA to Earnings (loss) before income taxes. Adjusted EBITDA is broken down into Adjusted Field EBITDA (Cemetery and Funeral Home) and Adjusted Corporate EBITDA:

		Three Months Ended March 31, 2023
		Cemetery				Funeral Home				Corporate				Total
Earnings (loss) before income taxes		$	9,937			$	12,629			$	(15,509	)		$	7,058
Adjusted for the impact of:
Finance Costs			12				201				3,396				3,609
Depreciation and amoritization			858				2,740				177				3,774
Cost of cemetery property			1,580				6				-				1,586
EBITDA			12,387				15,576				(11,936	)			16,027
Fair value adjustment of interest rate swaps			-				-				1,601				1,601
Share based compensation			-				-				1,101				1,101
Acquisition and integration costs			-				-				1,793				1,793
Other (income) expenses			(41	)			4				57				19
Adjusted EBITDA		$	12,346			$	15,580			$	(7,384	)		$	20,541

EBITDA, Adjusted EBITDA, and Adjusted Field EBITDA are non-IFRS measures. See "Description of non-IFRS measures".

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, PLC's statements regarding: the implementation of various operational and infrastructure initiatives leading to increased efficiency and performance and that the Crippin acquisition will add approximately $703 in Adjusted EBITDA annually. The forward-looking statements in this news release are based on certain assumptions, including the normalization of the death rate, that the CAD to USD exchange rate remains consistent, the Crippin acquisition 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 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 impact of higher interest rates on PLC's business, adverse economic and financial market conditions; a declining level of commercial activity and the resulting negative impact on the demand for, and prices of, PLC's products and services, the impact of inflation on PLC's business; political conflict, including from economic sanctions imposed or to be imposed as a result thereof, supply chain disruptions and product delivery delays 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.sedarplus.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 U.S. dollars and share amounts in thousands.

Contact Information

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

SOURCE: Park Lawn Corporation

View the original press release on accesswire.com

FAQ

What were Park Lawn 's Q1 2024 revenue results?

Park Lawn reported $76,393 in revenue for the first quarter of 2024, showing an 11.9% decrease compared to the prior year.

How did Park Lawn 's net earnings change in Q1 2024?

Park Lawn 's net earnings increased by 14.7% to $5,247 in Q1 2024 compared to the prior year.

What was the impact of the acquisition completed in February 2024 on Park Lawn ?

The acquisition in February 2024 added two stand-alone funeral homes and one stand-alone cemetery to Park Lawn's portfolio, expected to add approximately 576 calls, 85 placements, and $703 in Adjusted EBITDA annually.