Finance

Park Lawn Corporation sees “significant growth in revenue, net earnings”

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Park Lawn Corporation reported their 2020 4th Quarter and Year End financial numbers earlier this week and the press release, which you can read here, states “. . . PLC finished 2020 with a powerful performance in Q4, which included achieving significant growth in revenue, net earnings, Adjusted Net Earnings, Adjusted EBITDA, and Adjusted EBITA margin.

A couple of highlights for the company included a full year revenue increase of 37% primarily due to acquisitions made during 2020 and 2019 and increased demand for the company’s services.  Comparable units alone grew revenue at a 10.8% clip for the year.

While the press release will report financial amounts in Canadian dollars, we have taken the liberty to convert all of the numbers to U.S. dollar denominations for this report.  All dollar amounts listed below are in our converted U.S. dollar denominations.

Park Lawn Corporation Highlights:

  • Fiscal Year 2020 Revenue was $265.5 million as compared to $194.17 million in FY2019 — a 37% increase
  • Net Earnings for FY2020 was $15.12 million as compared to $5.48 million in FY 2019 — a 176% increase
  • Adjusted EBITDA for FY 2020 was $63.48 million as compared to $42.33 million in FY 2019 — a 50% increase

As with the other public companies on whom we have reported 2020 results — Service Corporation International, Carriage Services, and StoneMor —  it appears that the additional deaths brought about by the COVID-19 pandemic more than covered the loss in average revenue per service declines that pandemic social distancing brought about.  In essence, all four public funeral home/cemetery companies reported increases in revenue for the year.  A year ago, at this time, many in the profession wondered if that could be the case seeing what was happening in the early days of the pandemic.

Here’s what Park Lawn Corporation CEO Brad Green said about the year in the press release, “. . . The ability to persevere in 2020’s challenging environment demonstrates not only the capability of our organization but, more importantly, the courage, dedication and commitment of each individual of our team in honorably serving their communities and our families.  I am immensely proud of our frontline team and grateful for the sacrifices that they made in providing our families with the opportunity to care for their loved ones.”

In the press release Park Lawn Corporation also announced a series of purchase agreements for funeral homes, cemeteries, and cremation businesses.  Funeral Director Daily will highlight those events at a later date.

Funeral Director Daily take:  Year-End 2020 shows quite a run for Park Lawn Corporation in the last five year period.  According to E-Trade, Park Lawn Corporation’s revenue for the year ending on December 31, 2015 was US$ 22.4 million.  Compare that to today — 2020 year end revenue of US$265.6 million and you see quite a bit of growth in the company.

When we take a look at the four predominant funeral home/cemetery companies in the public realm you can also see how big Service Corporation International (SCI) is.  Here are the four companies based on 2020 total revenue with their percentage increase of revenue year over year also listed.  As you can see SCI is more than 10 times larger than its next competitor.

  1. Service Corporation International       $ 3.511 billion           +8.6% in 2020
  2. Carriage Services           $329.4 million          +20% in 2020
  3. StoneMor Inc.              $279.5 million             +8.6% in 2020
  4. Park Lawn Corporation               $265.6 million                  + 37.0% in 2020

Disclaimer:  The author of this article holds stock positions in Service Corporation International, StoneMor Inc., and Park Lawn Corporation.

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