Mr. Bradley Green reports

PARK LAWN CORPORATION ANNOUNCES Q3 2023 RESULTS

Park Lawn Corp. has released its financial operating results for the third quarter (Q3) ended Sept. 30, 2023.

"We had a solid operational performance in the third quarter," said J. Bradley Green, chief executive officer of Park Lawn. Mr. Green continued: "While the death rate continued to pull back, resulting in an overall decrease in call volume as compared to the third quarter of 2022, our operations were able to largely offset this trend through sustained growth in market share and modestly increasing our average revenue per contract on the funeral side and growing preneed sales on the cemetery side."

Key results from the three-month period ended Sept. 30, 2023:

• Revenue increased by approximately 8.2 per cent to $87.5-million primarily as a result of acquired operations as compared with the three-month period ended Sept. 30, 2022.
• Gross profit increased by 9 per cent to $21,091,328 compared with the three-month period ended Sept. 30, 2022.
• Fully diluted earnings per share were 9.4 cents, compared with 15.3 cents for the three-month period ended Sept. 30, 2022.
• Fully diluted adjusted net earnings per share decreased by 7.1 cents or 31.7 per cent to 15.3 cents, compared with 22.4 cents for the three-month period ended Sept. 30, 2022.
• Net earnings were $3,296,492, compared with $5,323,908 for the three-month period ended Sept. 30, 2022.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased by 3.6 per cent to $18,800,966, as compared with the three-month period ended Sept. 30, 2022.
• Park Lawn achieved an adjusted EBITDA margin of 21.5 per cent, a 90-basis-point (bps) decrease over the three-month period ended Sept. 30, 2022, primarily as a result of increased corporate costs year over year.
• On July 17, 2023, the company acquired substantially all the assets of Ward Funeral Home Ltd. with three stand-alone funeral homes located in Brampton, Woodbridge and Toronto, Ont. (collectively Ward). The Ward acquisition expands Park Lawn's funeral home presence in Ontario and is expected to add approximately $1.8-million in adjusted EBITDA annually.
• On Aug. 8, 2023, the company expanded its Ontario presence when it completed the acquisition of substantially all the assets of M.W. Becker Funeral Home Ltd. (MWB), a stand-alone funeral home business in Keswick, Ont. The MWB acquisition is expected to add $375,970 (Canadian) in adjusted EBITDA annually.
• On Aug. 14, 2023, the company acquired substantially all the assets of Forrest & Taylor Funeral Home Ltd., a stand-alone funeral home located in Sutton, Ont. The Forrest & Taylor acquisition is expected to add $338,647 (Canadian) in adjusted EBITDA annually.
• Following the close of the quarter, on Oct. 16, 2023, the company acquired substantially all the assets of Christy-Smith Funeral Homes, consisting of two stand-alone funeral homes, located in Sioux City, Iowa (collectively Christy Smith). The Christy-Smith acquisition expands Park Lawn's Sioux City footprint and is expected to add $437,391 in adjusted EBITDA annually.

Park Lawn enters into agreement to divest certain legacy assets in furtherance of its long-term growth strategy

Subsequent to the quarter, on Oct. 17, 2023, Park Lawn announced that it entered into a definitive agreement to divest substantially all the assets of The Park Lawn Cemetery Company (USA) Inc., PLC Saber Ltd. and PLC Citadel Ltd. to Everstory Acquisition Portfolio LLC, an affiliate of Everstory Partners. Everstory Partners is a death care company that owns and operates cemetery, funeral home and crematory locations throughout the United States and Puerto Rico. The divestiture includes 72 cemeteries in Kentucky, Michigan, North Carolina and South Carolina, and 11 funeral homes in Kentucky and North Carolina. The transaction is valued at approximately $70-million, consisting of $55-million in cash and the remaining $15-million in deferred compensation, bearing interest at 10 per cent per annum, to be received by Park Lawn within five years following the close of the transaction.

The purchase price represents an approximate 8.0 times adjusted EBITDA multiple based on trailing-12-month results.

In the near term, the cash portion of the proceeds is expected to reduce Park Lawn's leverage ratio to approximately 2.0 times and 2.8 times, including Park Lawn's outstanding debentures. Park Lawn anticipates replacing the divested earnings through the deployment of transaction proceeds into high-growth markets and new business opportunities that align more closely with its long-term growth strategy.

The transaction is scheduled to close prior to year-end 2023 following receipt of regulatory approval and the satisfaction of customary closing conditions for a transaction of this type.

Important reminder

The company will host a conference call to discuss its third quarter 2023 financial results on Friday, Nov. 10, 2023. Details are as follows.

Date:  Friday, Nov. 10, 2023

Time:  9:30 a.m. EST

Dial-in number:  toll-free 888-506-0062, conference ID No. 538764

To ensure your participation, please join approximately five minutes prior to the scheduled start of the conference call. The company's complete financial results can be found on SEDAR+ or on the company's website.

A replay of the conference call will be available until Friday, Nov. 24, 2023, and can be accessed as follows.

Dial-in number:  toll-free 877-481-4010

Conference ID No.:  49367

Alternatively, the conference will also be available on the company's website.

About Park Lawn Corp.

Park Lawn provides goods and services associated with the disposition and memorialization of human remains. Products and services are sold on a preplanned basis (preneed) or at the time of a death (at need). Park Lawn and its subsidiaries own and operate businesses including cemeteries, crematoria, funeral homes, chapels, planning offices and a transfer service. Park Lawn operates in three Canadian provinces and 19 U.S. states.

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