Park Lawn Corporation (PLC), the Toronto based funeral home and cemetery operator released First Quarter 2021 results last week. As expected the results were very strong as deaths from the pandemic in those months, especially January, continued to be high. Park Lawn Corporation’s net revenue grew about 26% to over $89 million for the quarter.
Probably more interesting, however, was CEO Brad Green’s comments on the labor market, acquisitions, preneed, and revenue per case. In the press release from PLC, that you can see here, this was said about those issues, “Keeping that (Covid-19 lessening) in mind, as our communities begin the journey back towards reopening, we are also seeing an increase in the number of families who are engaging in pre-planning activities in both our funeral homes and cemeteries. Likewise, we are also experiencing an increase in the average revenue per call as regulatory guidelines are being relaxed. We believe that this trend will continue as we progress through the 2021 calendar year.”
During the course of Park Lawn Corporation’s conference call with brokerages on Friday, May 14, Park Lawn CEO Brad Green made comments on the funeral labor market, the acquisition arena, preneed trends, and revenue per call. All of these items are of extreme interest to all retail funeral establishments, so we thought we would highlight Green’s responses here. You can access the entire earnings call transcript here.
We’ve heard about a tight labor market in many industries across America recently. Here’s Green’s comments on the funeral and cemetery labor market: “. . .We have not experienced the labor problems that you read about every day . . . . . We just haven’t experienced that. . . . the only reason I can give you for that is a lot of people come into this industry because they want to work in the industry. And people find a place working here and we have a very general a very happy workforce. So, we just haven’t run into those problems. But it’s something that we talked about. . . . But that’s just not an issue that we have right now.”
Green on preneed: “. . . .we continue to see increased pre-need sales activity. . . The trigger event caused by the pandemic has focused many people’s attention on end-of-life planning. . . .our pre-need funeral was up about 22%. . . . a lot of that is insurance. And so you are basically recognizing commission at the time, our pre-needs cemetery sales as a whole . . . is up about 40%.. . .I think we are seeing more of what we saw pre-pandemic. So in other words, the demographics of the individual coming in and talking about this hasn’t changed. They are just more of them, which gets back to, quoting what Jay Dodds said at the very beginning of this (the Covid-19 pandemic). And just to let you see behind the curtain a little bit, this was him telling me this is the very beginning. And when it was just he and I talking, he said this is going to be a trigger event. And those are words that you all heard us use multiple times through the pandemic. And it’s turned out to be true. Pre-planning is in the forefront of a lot of people’s minds, because you never know what’s going to happen. And we have just got reminded of that. So, the demographics are not changing, but the sheer volume of people coming in are.”
Green on Acquisitions: “. . .our M&A activity remains dynamic, closing the three previously announced acquisitions in North Carolina, Tennessee and Wisconsin by May 1. Although we are first and foremost operators and believe highly in our ability to execute the day-to-day operations of funeral homes and cemeteries, we expect M&A to continue to be an extremely relevant and additive component to the growth profile of Park Lawn for the foreseeable future. We also continue to use our resources to support various organic growth initiatives and have for example began the process to construct a new onsite funeral home in Waco, Texas.”
Green on Revenue per Call: “. . average revenue per contract continued to increase in those jurisdictions where restrictions have been relaxed. . . . .I will give you some specific numbers on that. We used Q1. So throughout 2020, we use Q1 as a basis for the average sale. And the reason for that is that was being the first full quarter before things really got going with COVID. And we noted that the second quarter fell about 8%, from Q1, and then it bounced back only about 3.5% off in Q3, and then only about 4%, down in Q4. If you take Q1 of 2021, this last quarter, and compared to Q1 of 2020, we are actually up 7%. So not only did we see it come back, we saw it improve and improved by my opinion, a healthy percentage.
Funeral Director Daily take: This is all interesting information and great information for local funeral directors to hear from a CEO of one of the largest companies in the profession. A stable labor force, revenues per call going up, and increased interest in preneed are all great indicators for our death care businesses.
More news from the world of Death Care:
- Aftershocks: The funeral industry overcomes challenges of the past year. Worth
- StoneMor, Inc. announces closing of Senior Secured notes. Globe Newswire
- Despite strong opposition, advocates push to legalize “Water Cremation” in Hawaii. News video and print article. Hawaii News Now (HI)
- McHatton-Sadler Funeral Chapel announces it will remain open. Times Union Online (IN)
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