Park Lawn Corp T.PLC

Alternate Symbol(s): T.PLC.DB | PRRWF

Consumer Cyclical Personal Services

Park Lawn Corporation is engaged in providing goods and services associated with the disposition and memorialization of human remains. The Company and its subsidiaries own and operate businesses, including cemeteries, crematoria, funeral homes, chapels, planning offices and a transfer service. Its primary products and services are cemetery lots, crypts, niches, monuments, caskets, urns and other merchandise, funeral services, after-life celebration services and cremation services. Its products and services are sold on a pre-planned basis or at the time of death. It has one stand-alone funeral home located in Durham, North Carolina; one stand-alone funeral home and one on-site funeral home and cemetery located in Abingdon, Virginia; eight stand-alone funeral homes, two stand-alone cemeteries and one on-site funeral home and cemetery located in and around the Savannah, Tennessee area; three stand-alone funeral homes located in Brampton, Woodbridge and Toronto, Ontario and more.

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Park Lawn Corp

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Post by retiredcfon Mar 03, 2023 11:10am

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Post# 35317534

TD

As this is a flash report, there's some potential for them to raise their current target of $34.00. GLTA

Park Lawn Corp.

(PLC-T) C$26.36

~6% EBITDA Beat in Q4; 5-Year C$100mm EBITDA Target Achieved

Event

Q4/22 adj. EBITDA of $19.8mm is essentially flat y/y, but ~6% above TD/cons at $18.6mm/$18.5mm, reflecting stronger-than-expected revenues and modestly higher adjusted EBITDA margins of 23.0% (TD: 22.8%).
CC: 9:30 a.m. ET (888-506-0062; code: 934271).

Impact: POSITIVE

Q4/22 faced a very challenging comp given the elevated Omicron-related deaths in the prior year. However, results remained solid, with PLC driving continued robust pre-need sales and market share wins to mitigate the impacts of moderating mortality rates on at-need demand (preliminary CDC data shows U.S. deaths down ~9% y/y in Q4/22). Additionally, pricing actions and operating-cost-mitigation strategies drove modest sequential margin recovery.

Consolidated Q4/22 revenue increased 9.1% y/y to $86.1mm, reflecting a strong contribution from recent acquisitions, partially offset by -2% organic sales (above TD's -4% estimate). The negative organic sales reflect a decline in call volumes and average revenue per call of 3.9% and 3.8% y/y, respectively across the funeral operations and a decline in at-need cemetery sales as PLC lapped the very strong COVID-19 comps. These declines were partially offset by strong pre-need cemetery sales which benefited from large group sales. Revenue from recent acquisitions was stronger-than-expected given less of an impact from the declining mortality rate and stronger pre-need sales.
Adjusted EBITDA margins of 23.0% increased ~50bps sequentially, reflecting heightened expense controls and pricing. Margins also benefited from lower y/ y repairs and maintenance expenses and improved labour management at its cemetery operations (less contract labour). Advertising and selling costs also declined reflecting reduced commissions from decreased at-need cemetery sales, commission rates on group sales and restructuring of sales incentive plans y/y. PLC has now realized an ~240bps increase in its adj. EBITDA margins since the Q2/22 low but still remains well below its aspirational target of 26%.
Balance sheet: We estimate PLC's pro-forma leverage including recent acquisitions at ~2.7x (including debentures and leases). Pro-forma available liquidity: ~$100mm.
2026 stretch-goal: PLC has slightly exceeded its previous stretch goal of generating C$100mm of adjusted EBITDA in 2022. Management is now executing on its next stretch goal which targets US$150mm of adjusted EBITDA and >US $2.00 of adjusted EPS.