Last week Park Lawn Corporation (PLC) announced their 1st Quarter of 2022 earnings results. For the period ended on March 31, 2022, the company increased their revenue 17.5% to $83.1 million as compared to the 1Q of 2021 when they reported $70.5 million in revenue. The company also reported Net Earnings of $8.7 million in 1Q 2022 as compared to $7.7 million in 1Q 2021 — that’s a 12.9% increase. You can access the Park Lawn Corporation 1Q22 press release here.
PLC achieved these increases in spite of what CEO J. Bradley Green noted was a “slight drop in our call volume”.
Here’s what CEO Green was quoted as saying in the financial press release, “We are pleased with our first quarter results and performance against a very difficult comparison in the first quarter of 2021. As we previously predicted and communicated, we are seeing less impact from the pandemic on our businesses. Irrespective of the decline in impact, we continue to see strong operating performance from our comparable operations as well as through our active acquisition pipeline.” Specifically, in this quarter, while we did see a slight drop in our call volume, as we expected, this was offset by an increase in our average revenue per call. We also experienced strong property sales in our cemeteries as the pandemic continues to act as a trigger event.”
CEO Green and Chief Financial Officer Dan Millet also participated in an Earnings Call, which you can see the transcript here, with stock analysts last week and here are some of their responses to questions:
CEO Green on revenue increases despite lower volumes: “We continue to believe that we are returning to a more normalized operating environment and saw same-store call volumes decrease by 2% relative to the COVID impacted Q1 2021. However, unlike the first quarter of 2021, we demonstrated strong revenue averages at same-store average revenue per call, increased approximately 7% year-over-year.
This increase can likely be attributed to less jurisdictional restrictions, as well as the continued strong desire by our families to celebrate and memorialize the life of their loved ones. Also, we implemented some pricing changes during the quarter in some of our businesses, to help offset the impact of inflation.”
CEO Green on cemetery sales and supply chain challenges: “From the cemetery perspective, property sales have continued to grow. However, post sales supply chain delays have begun to impact merchandise and service revenue, as items that would have historically taken six to eight weeks to deliver and install are now taking six to eight months to receive and install.
As a result, the recognition of the revenue associated with the delivery and installation of this merchandise being delayed, but we expect that this revenue will grow relative to Q1 as the year progresses.”
CFO Dan Millett breaking down the numbers a little more: “My comment this morning will focus on the operating results from the first quarter of 2022 relative to Q1 2021. As Brad mentioned, Q1 of 2021 was anticipated to be and was a tough comparable for Q1 of this year as the dynamics of the COVID pandemic have changed significantly since early 2021.
Despite this, total net revenue growth year-over-year was approximately 17.5% growing from $70.8 million to $83.2 million. Revenue growth from our comparable businesses grew by 0.6%, which was supported by strong call volumes and averages as well as the delivery of a modeling in Michigan.
During the quarter, the company’s operating expenses including general and administrative, advertising and selling and maintenance expenses increased by approximately $8.3 million for the three months period ended March 31 2022 over the same period in 2021. This increase is primarily the result of acquired operations with other cost increases resulting from corporate costs.
These cost increases were offset due to decreases in advertising and selling costs, typically at our cemetery businesses where sales incentives were restructured during the second half of 2021 and where recognized revenue and associated commissions from comparable operations was down year-over-year due in part to the recognition challenges mentioned by Brad.”
CEO Green answering a question about what is better for stockholders — buying back stock or making acquisitions? “That is an interesting question and you know that we are very transparent. One of our Board members that actually I would say probably instrumental in my development as a CEO, and that is a full-time job trust me, Steve Scott, and he has mentioned that in the past up to and including yesterday’s Board meeting. So it’s something that we discussed but I’m not saying it’s anything that we’re going to do right now.
Our acquisition pipeline is quite robust. We still have people that are knocking on our door. Many of the acquisitions we make are still not brokered or if they are they’re just coming to us. And I just – while I don’t believe our stock price is anywhere near where it should be and it kind of boggles the mind as a reason it is where it is right now. I still believe the best use of our capital is acquisitions but that’s not my decision to make alone. And so I guess I would shorten the answer by saying there are lot of smart people that are talking about just that.”
CEO Brad Green on a question about substance abuse (opioid) deaths and if PLC has any data on that: “That’s not something that we track. I will say that, the drug-related deaths are definitely starting to come on to our radar, but that’s not a percentage that you’re going to see that would probably move the needle, we don’t own enough of the market, but you’re starting to see that and you’re starting to hear anecdotal stories of that, and some of the — I don’t think it has anything to do with Texas, if it could be as much as anywhere in the US.
But you read the newspapers, just like I do, there’s a lot of it and all that’s coming over the southern border and that’s not going to help us at all. So we’re starting to see anecdotal evidence of that, in some of our markets no doubt. But it’s not something we track and God forbid it becomes something that’s that big of a deal. But, no, I don’t think that will move the needle for us.”
Funeral Director Daily take: I would encourage you to read the Earnings Call transcript. The questions asked and the answers given are about as robust as I’ve seen in the Death Care space. There is a lot to learn from the Q and A.
It’s also interesting to note that the people at Park Lawn Corporation are doing something right. In less than a 10-year period the company’s revenue has grown from $17.3 million in 2013 with an Operating Profit that year of $2.3 million to 2021’s numbers of $287 million in revenue and $48 million in Operating Profit. I’ve watched almost from the start in seeing a little company become a big company.
Disclaimer – the author of this article holds a stock position in Park Lawn Corporation.
More news from the world of Death Care:
- Things I wish I knew before my grandmother died. The Oaklandside (CA)
- Centralia’s Greenwood Memorial Park to host formal rededication ceremony after years of improvements. The Chronicle (WA)
- Residents object to mortuary plan near Blackpool homes. Blackpool Gazette (United Kingdom)
- City council proposes land for veterans’ cemetery in Lubbock. News video and print article. News 34 – Lubbock (TX)
Enter your e-mail below to join the 2,716 others who receive Funeral Director Daily articles daily: