Park Lawn Corporation today released the results of their 3rd Quarter operations. The company reported that their revenue increased by over 29% to a $22.4 million mark in 3Q 2017 as compared to $17.3 million in 3Q 2016. All dollar figures are reported in Canadian dollar figures.
The company had several one time non-recurring expense items that contributed to a loss of of $171,116 for the 3rd quarter of 2017 as compared to a net income in 2016 of $749,000. After accounting for the impact of the one time, non-recurring or non-cash items the company reported the following:
- Adjusted net earnings increase to $2.22 million in 3Q 2017 as compared to $1.22 million in Q3 2016.
- Adjusted EBITDA showed growth to $4.03 million in 3Q 2017 as compared to $2.4 million in Q3 2016.
Park Lawn Corporation remains on a rate to finish the year with about $90 million in revenue as compared to $67 million in 2016.
You can see more information at the Park Lawn Corporation web-site here.
Funeral Director Daily take: Park Lawn Corporation is an interesting company to us as it appears to be a company that is not going to sit still and take things as they come. It’s also interesting that they come from a cemetery background in their approach and their big acquisition making more inroads into the United States this past summer was a cemetery based death care company, Saber Management, which was originally spawned from the Rock of Ages firm. While Park Lawn dates back to the 1800’s as a small cemetery operation in the Toronto area it wasn’t until 2013 when they re-emerged as a player in the death care industry by purchasing eight Canadian mortuaries. Four years later, they now have 88 different type total properties.
In looking at their 2017 investor presentation that you can find on their web-site they seem to have a solid grasp on where their growth will come from. They believe that their future revenue generation will be 15% funeral and 85% cemetery and cremation. They also believe that they are positioned to capture market share in and industry that favors low-cost cremation. If they are correct — that is a good spot to be in.
I think Park Lawn has a solid foundation of capital as do some of its competitors in the acquisition market. These companies are smart to use low-cost interest financing to acquire market share at this time. I think that Park Lawn’s aggressiveness has moved them into the category of a national (Canadian and American) players in the funeral industry.
I also think right now is a good time to be thinking about succession planning if you are a death care business that does not have family interested in carrying on. Right now, you not only have solid regional acquisition companies looking for the right targets, but you have those who we believe have larger national or North American aspirations such as Foundation Partners, NorthStar Group, and Park Lawn who are all interested in the the right fits for their respective business models. In my book, with all these firms using low interest money, it can only help the right targets get great opportunities should they want to move their firms.