Mr. Bradley Green reports

PARK LAWN CORPORATION ANNOUNCES FOURTH QUARTER AND YEAR END 2023 RESULTS, APPOINTMENT OF NEW DIRECTOR AND ITS 2024 FINANCIAL OUTLOOK

Park Lawn Corp. has released its financial operating results for the fourth quarter (Q4) and year ended Dec. 31, 2023. The company has also appointed a new director and released its 2024 financial outlook.

"Our focus on operational efficiency and cost management contributed to improved profitability and bottom-line growth during the 2023 calendar year," stated J. Bradley Green, chief executive officer. Mr. Green continued: "In addition, during the fourth quarter, we achieved an important milestone in the company's history through the strategic disposition of certain legacy businesses, which has allowed us to reshape our platform and reallocate resources to support a more efficient operating environment. We are excited for the opportunity to fully realize our potential through our strong operating acumen as we look towards 2024 and beyond."

Key results from the three-month period and year ended Dec. 31, 2023:

• For the three-month period and year ended Dec. 31, 2023, revenue increased by approximately 2.3 per cent to $88-million and 6.6 per cent to $347.6-million, respectively, over the comparable prior periods, primarily as a result of acquired operations, offset by a decrease in comparable operations.
• Net (loss) earnings for the quarter and year ended 2023 reflect a loss as a result of the disposition of certain legacy businesses completed in December. However, adjusted net earnings for the three-month period ended Dec. 31, 2023, increased by approximately 5.3 per cent while decreasing by 10.1 per cent over the comparable prior year, principally as a result of the normalization of the death rate.
• For the three-month period and year ended Dec. 31, 2023, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased by 4.0 per cent and 5.1 per cent, respectively, over the comparable period, primarily as a result of acquired operations offset by a marginal decrease in comparable operations.
• For the three-month period and year ended Dec. 31, 2023, Park Lawn achieved an adjusted EBITDA margin of 23.3 per cent and 22.7 per cent, respectively, over the comparable period, a 30-basis-point increase over the prior-period quarter and a 30-basis-point decrease over the prior year, primarily as a result of the normalization of the death rate and the various direct and indirect impacts of the COVID-19 pandemic.
• The adjusted field EBITDA margin increased over the comparable quarter period by 140 basis points to 32.6 per cent and increased by 110 basis points to 31.6 per cent over the comparable annual period.
• Fully diluted earnings per share reflect a loss for both the quarter and year ended Dec. 31, 2023, as a result of the disposition of certain legacy businesses completed in December. However, fully diluted adjusted net earnings per share increased over the three-month period ended Dec. 31, 2023, by 3.4 per cent to 24.7 cents and decreased by 10.5 per cent to 87.4 cents for the year ended Dec. 31, 2023.
• On Oct. 16, 2023, the company completed the acquisition of substantially all the assets of Christy-Smith Funeral Homes in Sioux City, Iowa (collectively Christy-Smith). The Christy-Smith acquisition added two stand-alone funeral homes to Park Lawn's presence in the market. The Christy-Smith business is expected to add 217 calls and $437,391 in adjusted EBITDA annually (1). During the quarter, on Dec. 20, 2023, the company completed the disposition of 72 cemeteries in Kentucky, Michigan, North Carolina and South Carolina, and 11 funeral homes in Kentucky and North Carolina, to Everstory Acquisition Portfolio LLC, an affiliate of Everstory Partners. At closing, Park Lawn received $70-million consisting of $55-million in cash and the remaining 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 cash proceeds were used to pay down debt, resulting in a reduction of Park Lawn's leverage ratio to 1.95 times and 2.75 times, including Park Lawn's outstanding debentures.
• During the year, Park Lawn furthered its organic growth strategy by completing and opening, on March 1, 2023, the Waco Memorial Funeral Home, a new-build funeral home, located on site at Waco Memorial Park in Waco, Tex. This on-site facility offers the first funeral home and cemetery combination in the market and is an important part of the company's organic growth strategy.
• In 2023, the company successfully executed on its growth strategy by completing a total of seven acquisitions for a total purchase price of approximately $50-million (U.S.). The combined transactions represent a total of 3,786 calls and 130 placements, as well as the addition of 15 stand-alone funeral homes, one stand-alone cemetery and one on site.
• Subsequent to the quarter-end and year-end, on Feb. 20, 2024, the company completed the acquisition of substantially all the assets of: Crippin Funeral Home, located in Montrose, Colo.; Gunnison Funeral Services, located in Gunnison, Colo.; and Grand View Cemetery, located in Montrose, Colo. (collectively Crippin). The Crippin business adds two stand-alone funeral homes and one stand-alone cemetery to Park Lawn's portfolio, and is expected to add approximately 576 calls, 85 placements and $703,404 in adjusted EBITDA annually (1).

2024 financial outlook

"Given the recent completion of the transformational disposition of certain legacy businesses at the end of December, as well as the current macroeconomic environment, we no longer believe that our previously announced five-year long-term aspirational financial targets are achievable by the conclusion of 2026," said Mr. Green. Mr. Green continued: "Rather than long-term targets, in an effort to enhance the insight and disclosure around our operating performance, we believe annual guidance will provide improved near-term transparency of our financial expectations and strategic direction to our investors, shareholders and stakeholders. We remain committed to our vision as a premier operating company that grows through acquisition and are excited to share our 2024 annual guidance, which demonstrates our confidence in remaining agile in changing market conditions while, at the same time, reaffirming our commitment in executing on our strategy to deliver long-term value and sustainable growth."

For the fiscal year 2024, Park Lawn believes that it will be able to achieve the financial metrics within the ranges set forth in the corresponding table.

This guidance is based on many assumptions, including, but not limited to, that Park Lawn will continue to grow organically through initiatives such as development of new inventory and business locations (on sites), as well as inorganically through mergers and acquisitions in the approximate amount of $50-million to $100-million on average per year. Likewise, for the 2024 calendar year, the company is assuming that mortality in Canada and the United States remains flat to slightly depressed as a result of the impact from the pull-forward effect associated with the COVID-19 pandemic. Further, in the near term and for the 2024 calendar year, the company anticipates that corporate costs will remain relatively consistent with prior periods as it continues to enhance its corporate support facilities and resources, and continues to pursue M&A (merger and acquisition) growth.

The purpose of the 2024 financial outlook is to assist investors, shareholders and others in understanding certain financial metrics relating to expected 2024 financial results for evaluating the performance of the company's business. This information may not be appropriate for other purposes. The 2024 financial outlook, including the various assumptions underlying it, is forward-looking.

Appointment of Maggie MacDougall to the board of directors

In furtherance of its commitment to deepening and diversifying the skills and backgrounds of its directors, the company also announced the appointment of Ms. MacDougall as an independent director to its board of directors. Ms. MacDougall will serve as a member of the governance and nominating, human resources and compensation, and investment committees.

"We are pleased to welcome Maggie as a new director to the Park Lawn board," said Deborah Robinson, chair of the board. "Maggie's deep experience in working closely with similarly sized organizations, as well as the Canadian capital markets, will provide us with additional expertise as we execute on our growth strategy. Her addition to our team aligns with the board's desire to balance skill set with experience, diversity and tenure."

Ms. MacDougall is the founder of Crescent Capital Partners Ltd., a boutique financial advisory firm serving mid-market and small-cap companies in need of innovative corporate finance and capital markets solutions. Prior to founding Crescent Capital Partners, Ms. MacDougall was the vice-chairman, head of research, at Stifel Nicolaus Canada Inc., where she built and managed a high performance team while implementing a structured approach to technology and processes improvements, advancing the Canadian institutional ranking from No. 12 to No. 9 over all, and from No. 3 to No. 1 small cap in less than three years. She has over 19 years of experience in financial services and has been repeatedly ranked as a TopGun Analyst in the Brendan Wood International's worldwide equity capital markets performance Canadian equities report. Prior to joining Stifel, Ms. MacDougall was a senior partner at an independent investment dealer, a role she held for 11 years after spending three years as part of the award-winning focus plus team at Goodman and Company Investment Counsel, which is today known as 1832.

Important reminder

The company will host a conference call to discuss its fourth quarter 2023 financial results on Friday, March 8, 2024. Details are as follows.

Date:  Friday, March 8, 2024

Time:  9:30 a.m. EST

Dial-in number:  toll-free 888-506-0062

Conference ID No.:  392376

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, March 22, 2024, and can be accessed as follows.

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

Conference ID No.:  50020

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

(1) Adjusted net earnings, adjusted EBITDA, adjusted EBITDA margin, adjusted field EBITDA margin and adjusted net earnings per share diluted are non-IFRS financial measures.

About Park Lawn Corp.

Park Lawn is the largest publicly traded Canadian-owned funeral, cremation and cemetery provider. Park Lawn and its subsidiaries own and operate businesses, including cemeteries, crematoria, funeral homes, chapels and event centres throughout Canada and the United States, which provide a full range of services and merchandise to fulfill the desires of individuals and families seeking to honour their loved ones. Products and services can be customized to meet the personal needs of the consumer and are sold on a preplanned basis (preneed) or at the time of a death (at need). Park Lawn operates in three Canadian provinces and 17 U.S. states.

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