CIBCEQUITY RESEARCH
March 2, 2023 Flash Research
PARK LAWN CORP.
Q4/F22 First Look: Sales And Earnings Beat
Park Lawn reported Q4 results that were slightly above consensus
expectations on sales, EBITDA and EPS.
Revenue was $86MM (cons. $82MM) and EBITDA was $20MM (cons.
$19MM), while EBITDA margin was slightly better at 23% vs. consensus of
22.7%. Adjusted EPS were $0.24 (cons. $0.23) and down 19% Y/Y.
Comparable operations revenue was -2% Y/Y. Organic call volumes declined
3.9% Y/Y, while average revenue per call declined by 3.8%; these were
partially offset by higher pre-need property sales.
In the quarter and subsequent to it, PLC made a number of tuck-in
acquisitions in the Midwest. Total EBITDA added is expected to be ~$8MM,
and we estimate a price range of $55MM-$60MM. Leverage at the end of the
quarter was 2.8x (LTM, ex-leases) and 2.6x according to the company’s
defined leverage ratio. PLC has $30MM in cash and access to ~$90MM in
liquidity. In the quarter, PLC hedged $50MM of variable debt (~20% of its
total debt balance) for three years at ~4.4%.
On the call, we expect commentary on near-term sales trends in pre-need
and at-need services, expectations on cost inflation, and an updated view on
the M&A pipeline. Management will host a conference call tomorrow morning
at 9:30 a.m. ET. Dial-in is 888-506-0062 (passcode: 934271)