Finance

Park Lawn keeps rolling along, CEO Brad Green comments

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Publicly traded funeral home and cemetery operator Park Lawn Corporation (PLC) released their 3rd Quarter 2021 results last week and CEO Brad Green said this in a prepared press release statement, “The third quarter exceeded our expectations, especially given the continued decline of COVID-19 deaths served by our businesses. Despite this, we saw an increase in the number of families that we served in our comparable businesses in both our funeral homes and cemeteries. Likewise, we continued to see an increase in the average revenue per call in our funeral homes as families are now able to memorialize and honor their loved ones in meaningful ways.” 

You can access the press release highlights of the 3rd Quarter 2021 here.

Here are some financial highlights Funeral Director Daily noticed:

  • Revenue increased to US $ 73.3 million for 3Q2021 as compared to US $ 63.9 million in Q32020. . .an increase of 14.7%
  • Year to Date (9 months) Revenue increased to US $215.1 million for 2021 as compared to US $ 185.6 million in 2020. . an increase of almost 16%
  • Net Earnings for 3Q2021 increased to US $7.21 million as compared to US $ 4.3 million in 3Q2020.. . . an increase of 67%
  • Year to Date (9 months) Net Earnings have increased to US $20.6 million for 2021 as compared to  US $10.1 in 2020. . .an increase of over 100%

The following were some highlights pointed out in the prepared press release by Park Lawn Corporation:

  • Park Lawn increased its borrowing capacity and extended its term of maturity out to 2026
  • During the quarter, PLC strengthened its presence in Mississippi and Tennessee through the completion of two acquisitions which added three on-site funeral home/cemetery properties and ten stand-alone funeral homes
  • PLC announced its intention to transition to a USD presentation currency as of January 1, 2022 in order to reduce the volatility from exchange rates in the presentation of the Company’s financial statements. Editor’s Note:  Park Lawn Corporation was a company founded in Toronto, Ontario, Canada, but it appears that over 80% of their business in in the United States.  They have corporate offices in both Toronto and Houston, Texas.  Considering those facts, this appears to be a prudent move by the management.

Park Lawn Corporation also participated in a conference call with stock analysts last week after the release of their financial information.  Here is a complete transcript of that call.  The following statements are exerts from it:

Brad Green
Park Lawn CEO

CEO Brad Green on the 3rd Quarter performance:  “Park Lawn again experienced significant revenue growth in the third quarter. Revenue grew approximately 15% over Q3 2020 to $92 million (Canadian $ figures) despite significant foreign exchange headwinds year-over-year. Revenue growth from comparable businesses was approximately 8%, excluding the aforementioned foreign exchange headwind . . . . .  The third quarter exceeded our expectations, especially given the continued decline of COVID-19 deaths served by our businesses. We saw a modest increase in the call volume and comparable businesses compared to Q3 2020.

And consistent with the first half of this year, we did continue to see average revenue per call increase approximately 14% year-over-year. From the cemetery perspective, at-need sales remained a driver of growth and the pandemic continues to act as a trigger event supporting strong pre-need sales activity. “

CEO Brad Green on “increased preneed activity“I can just say, in my opinion, there was a tremendous amount of the U.S. and Canadian population that was not considering pre-need or getting pre-need to die. When you have a pandemic that was global like it was and that was it’s been on the forefront of everyone’s mind for now 2 years, there is a significant amount of the population that one could surmise is coming into the pre-need. . . . . . So, one could simply make the argument that more people are considering pre-need, because of the trigger effect. And that’s where we are seeing the growth.” 

CEO Brad Green on supply chains, inflation, and employment issues:   “I would just say that the majority of our vendors are what would be a supply chain issue or long-term contracts. And one of the largest one of those, for example would be caskets. And those contracts are multi-year. And when they have annual price increases, normally, we pass those directly on to the consumers. So, most of our vendor relationships and supply chain things that you read about we are just really not experiencing that yet. I mean we do have to buy gas like everyone else does and things of that nature. But our managers, their job is to manage costs to revenue and their businesses. And we would expect them to handle that as that would hopefully be a short-term issue. Regarding the pressure on the labor costs, we are not really seeing that in most of the places that we have businesses, except for what I would consider some of the more transitory positions that we have in the company, like cemetery workers are in high demand in lots of different places. Sales people, things of that nature, we are seeing a little bit of pressure there, but nothing like – broadly, nothing like I read about is happening in other industries.”

CEO Brad Green on acquisitions:  “So, we have as much – we have as many opportunities for acquisitions as we would ever need, relative to the amount of capital that we have access to.

Here is access to the complete financial reports for Park Lawn Corporation for the 3rd Quarter of 2021.

Disclaimer— The author of this article holds a stock position in Park Lawn Corporation

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