Park Lawn Corp reports 2023. . . Revenues increase 6.6%
Park Lawn Corporation (PLC), a publicly-held funeral home and cemetery operator reported their 2023 4th Quarter and 2023 Full-Year financial results last week. In those results, which you can see here, the company reported revenues for both the 4th Quarter and Full-Year of 2023 increasing from the comparable quarter and year. They did, however, report a Net Loss for both both time periods, explained by the completion of the sale of 83 properties to Everstory Partners which happened in December 2023.
You can read a Funeral Director Daily story about that event here.
In a prepared statement in the Park Lawn Corporation press release PLC Chief Executive Officer J. Bradley Green explained that Net Loss this way:
- “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 December 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. “
A positive attribute of that Everstory transaction was also explained by CEO Green in this manner:
- “At closing, Park Lawn received $70M consisting of $55M 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.”
CEO Green also commented on what the divestiture of those 83 properties would do the the company’s previously disclosed aspirational plans:
- “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. . . 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.”
Tom Anderson
Funeral Director Daily
Funeral Director Daily take: Now that we have seen the Full-Year reports for the “Big 3” public funeral home and cemetery operators it is interesting to try to decipher their individual ambitions and plans for moving forward. It appears to me that the last couple of years have been about “Right-sizing” the ships following what was learned in the pandemic. I think each of those companies — Park Lawn, Carriage Services, and Service Corporation International — have plans on where they hope to bring their companies and each has a definite path that they want to follow to continue to build out the operations.
Once the Service Corporation International moratorium on selected acquisitions (see Funeral Director Daily article here) is lifted, I think we will get a pretty good idea of where those destinations are.
In the meantime, here’s a little chart I put together on the Revenue increases for each of those companies for the 2023 4th Quarter and the 2023 Full-Year. The percentage listed is the company’s revenue over the same periods in 2022:
| 4Q 2023 | Full-Year 2023 | ||
| Service Corp | 2.70% | -0.22% | |
| Carriage Services | 5.20% | 3.30% | |
| Park Lawn Corp | 2.30% | 6.60% |
And here is the total revenues as reported by each of the companies for the Full-Year 2023. You can see, in round numbers, the extreme size of SCI as they continue to have annual revenue of more than 10 times the other companies.
2023 Reported Annual Revenue
- Service Corporation International $ 4.09 billion
- Carriage Services $ 382.5 million
- Park Lawn Corporation $ 347.6 million
More news from the world of Death Care:
- Cardboard coffins, GPS coordinates: New South Wales Council welcomes natural burials. The Senior (Australia)
- Charlotte funeral home director urges parents to buy life insurance for children. Video news story and print article. WCCB – Charlotte (NC)
- How to tap underutilized burial benefits for veterans. Tr-County News (MN)
- When I die, compost me? Massachusetts, Rhode Island could legalize human composting. Boston.com (MA)
- Assisted dying should be legalized in the UK to give people dignity — Mirror Poll results. The Mirror (Great Britain)
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“A servant’s attitude guided by Christ leads to a significant life”
As someone who’s been following and investing in death-care companies for over 30 years and been a fan of PLC and its possibilities…the last 3 months were disappointing and the final nail.
I predict in the next 6-12 months PLC will accept a buy-out offer as it appears PLC mgmt. are out of their depth. Let me explain…
PLC mgmt. has claimed to be a smart operator for the past 5 years. Everytime they missed on something there was an excuse. They were smug when other firms outbid them saying “they overpaid. PLC doesn’t do that.” Margins were always lower and declining but, things were to get better next qtr. after we kick some butt?
The Canadian bank analysts were always given the tone of…we are experts. (when in truth, it was PLC first time running a publicly listed company. Much different from their private one.)
Ok, I’ll agree that with the Mi. cemeteries and a large amount of cemeteries PLC had put them at a disadvantage to their peers. That’s why I was excited to hear last Oct. they were getting rid of them and a bunch of low-margin businesses. So, that closed in Dec.
Great, job on?
Plus…and I’ll quote here…”Park Lawn anticipates replacing the divested earnings through the deployment of transaction proceeds into high-growth markets and new business opportunities which align with its long-term growth strategy.”
Nope, somehow margins decrease?!
and you’ll excuse me and the market who was giving PLC a multiple of 30 (now down to 19) that after 5 years of speaking to everyone in the industry that they’d be able to close on more than 3 tiny business in a small market.
(only 10 businesses sold to them in the last 12 months when they had no real competition out of 5000-10,000 business in the industry, this IMO tells me ppl. don’t want to sell to PLC for some reason.)
But wait there’s more…even though we said we were going to grow via acquisition and pay low multiples because, we are clever. NOW that our debt is much less, we’ve NOW decided it’s good business to not grow too much and buy even less homes.
Because of…wait for it…the big bad interest rates! Seriously?
Hang on, didn’t you try and buy Carriage Services 3 months ago when interest rate were just as high? What were you going to buy them with then?
Ah yes, PE (because PE funds don’t want a better return than prime?)
I just don’t TRUST PLC mgmt. anymore.
The worst of it is the lost opportunity.
*I now know the PLC board hired the wrong mgmt. team to replace the previous one.
5 years ago PLC had an amazing opportunity to go right up to SCI’s markets and start buying and building clusters.
*You’d think there would be a few eager selling tried of competing with SCI?
Look at the 10 most populist states…
Besides Tx and a few others, PLC has no presence! So there are no sellers in Ca., Fl, NY, Oh of homes?
CSV had no problem buying even when they were maxed out on credit.
Legacy, Foundation and Rollings have had no problem growing and they didn’t have the advantage of offering high-valued stock.
*Another reason the high-interest rate fluff is a poor excuse.
Speaking of CSV, they’ve been basically forced out of the market the last 2 years and likely the next 1-2 years til they get their debt under control which is the right thing to do.
Yet, NOW is the time PLC says they need to be careful on buying homes?
NOW and even 2 years ago is when PLC should have been aggressive when it’s stock was high.
and let’s not forget the elephant in the room…
SCI’s 10-year ban on buying which ends in a few months.
As mentioned above, you’d have clear access to SCI’s top 50 markets.
Yet, in PLC’s investor call from a few days ago PLC mgmt. says it’s was a non-event?
What the…???
What we did hear was PLC mgmt. talk glowingly about how great SCI is for 3 mins.
I spent 2 hrs over the weekend overlapping PLC and SCI’s locations.
This is just IMO…
However, I now believe the Oct asset divestiture was a tweaking of the PLC business for SCI to put an offer in.
PLC mgmt. now they can’t get the stock back up to $40 so their options are worthless.
IMO, SCI would put a $32 offer in and knock up to $35 to take out one of it’s main competitors again. Likely not even getting a FTC ban.
*It’s interesting were PLC has been buying their business the last 5 years. Hmmm?
PLC’s mgmt. has figured out it’s too hard to run (They can’t improve margins) and can’t grow the business (couldn’t close CSV and hardly any real growth in homes, can’t even buy a firm in Ca, Fla or NY) .From looking at the margin results…most of the buys PLC has bought were maxed on profit and the sellers knew this.
So, PLC bought low-hanging fruit that no one wanted.
There are 2 market’s where the FTC “may” have an issue but, I’m sure they’ll find a buyer.
As PLC mgmt. live in Dallas they’ll likely get rewarded with profitable options from the PLC sale and get new VP roles.
It’s a mistake the Canadian BOD made in hiring the U.S managers 5 years ago.
Maybe Arbor goes public again and merges with NotherStar, Rollings or Legacy?
It’s would be great to see a public company run by good experienced managers give SCI a run for their money with such a massive opportunity for investors.
Happy to have ANYONE comment or refute my above opinions and comments.