Finance

Park Lawn Corporation reports Year End 2021 — Revenues grow, Acquisitions total $125 million, tell of 5-year aspirations

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Park Lawn Corporation (PLC) the public company whose website tells of the company owning and operating 138 funeral homes and 135 cemeteries located in 16 states and 3 Canadian provinces, reported their 4th Quarter and Year End 2021 results last week.  And, like other public companies they were able to report success in almost all financial categories in 2021.

For instance, for the 4th Quarter of 2021 PLC reported (in US dollars) revenue of $78.15 million in comparison with revenue of $71.0 million in 4Q2020. . . that’s an increase of 10% and was done in what many feel was a “tough comparable” figure because of the high number of Covid-related deaths in December 2020.  For the Full Year 2021 (FY2021) Park Lawn reported (again in US dollars) $290.5 million in revenue as compared to FY2020’s full-year revenue of US $ 254.3 million. . . that’s an approximate 14% increase.

Here’s what Park Lawn’s CEO J. Bradley Green said specific to the 4th Quarter results, “A solid fourth quarter capped yet another strong year of financial performance and growth at PLC. As anticipated, we continued to see a lessening effect of COVID-19 year-over-year in the communities we serve; however, we still had strong earnings growth over a very difficult comparable with the fourth quarter of 2020. We attribute this to our frontline team’s ability to continue to meet the evolving needs of our families.”

You can find a copy of the 4Q and Year End Report here.

Park Lawn Corporation continues growth through acquisition.  Here’s what was said in the report about PLC’s acquisition activity during 2021:

  • In 2021, despite the challenges of COVID-19, the Company successfully executed on its growth strategy by completing a total of 10 acquisitions for a total purchase price of approximately US$125,700,000. The combined transactions represent a total of 6,306 calls and 1,229 interments as well as the addition of 26 stand-alone funeral homes, 7 stand-alone cemeteries, 4 on-sites and 5 event centers. The Company also added a new geographic region – the state of Georgia.”

Park Lawn Corporation announces new 5-Year Aspirational goal:  Here’s what was said about PLC’s former and new aspirational EBITDA goals.

  • In 2018, PLC announced a long-term aspirational goal of achieving CAD$100 million (approximately USD$79 million) in pro forma Adjusted EBITDA by the conclusion of the 2022 calendar year. While the 2022 calendar year has just begun, before considering the impact of any potential future acquisitions, the Company expects to modestly exceed the previously announced 2018 growth target.”
  • “Looking beyond 2022, PLC has set a new five-year long-term aspirational financial target to achieve by the conclusion of the 2026 calendar year. More specifically, PLC has set an aspirational growth target of achieving a total of US$150 million of pro forma Adjusted EBITDA by the end of 2026 translating into Adjusted Net Earnings exceeding US$2.00 per share.”

CEO Green commented on this goal of virtually doubling the size of the Adjusted EBITDA in the next 5 years from roughly US $80 million today to over US $150 million by the end of 2026.  Here’s what he said, “PLC continues to execute its growth strategy at a high level both through organic growth opportunities as well as by partnering with premier independent businesses. At the same time, PLC remains dedicated to its unique operational approach and is committed to delivering a consistent performance in the near term.  It was our laser focus on the above that allowed us to effectively reach the growth targets announced in 2018 a year earlier than anticipated, and it is that same intense focus that will allow us to come close to doubling the size of PLC in the next five years.”

Funeral Director Daily take:  Park Lawn Corporation certainly has lofty goals.  But, you need to remember that in 2013 this company, which now has almost 300 properties under its ownership, had only six cemeteries in Toronto, Ontario, Canada, that they operated.  There is no doubt that they have a clear, concise vision of how they will accomplish their goals and it will be interesting, as death care changes over time, to see how they accomplish what they are setting their goals towards.

Tom Anderson
Funeral Director Daily

Which brings me to a point of individual family funeral home ownership.  Do you just plug along answering the phone when it rings or do you have aspirational goals for your business?  I would argue that the lack of aspirational goals will hinder you business in the long run.

In my opinion, you need to set a goal to reach for. . . and don’t make it so easy that you can get there with your eyes closed.  Dreaming and planning for bigger goals will help you focus on them every day.  It’s interesting that Park Lawn uses EBITDA as their barometer – that’s a good data point because it brings together both revenues and expenses – . . . but for your funeral home, it can be something else altogether.

Back in 2001, our funeral home decided we wanted to dream about getting our preneed sales to an equal level with our at need sales.  At about that time we did about 50 cents of preneed sales for every $1 of at-need.  It was my opinion that if we drove an increase in Preneed we would eventually see an increase in case volume and total revenue with that revenue then flowing mainly to our company’s bottom line because we would, in essence, have more calls to apply towards “fixed costs” so the fixed costs per case would be less and margin per case would be more.

We doubled our efforts on PreNeed and within two years our sales of preneed equaled our at-need sales.  And, it did exactly as we had thought it would — it increased case volume and revenue which led to a much increased profit.

My point — pick out some aspirational goal, much like Park Lawn does, for your funeral home and work towards it.  Give the decision the resources that it will need to succeed and my guess is that over the next few years, if you can stay focused on the goal, it will greatly enhance your business.

Here is the Park Lawn Corporation Investor Presentation of January 2022

Disclosure –– The author of this article holds a position in Park Lawn Corporation stock.

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