Park Lawn Corporation

Good morning, ladies and gentlemen, and welcome to the Parklawn Corporation second quarter 2022 earnings call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Jennifer Hay, General Counsel.

Thank you, Ali, and good morning. Thank you for joining us on today's second quarter 2022 earnings call. Today's call is being recorded and a replay will be available after the call is completed. Please be aware that certain information discussed today is forward-looking in nature. Any such information is subject to risks, uncertainties, and assumptions that could cause actual results to differ materially. Please see our public filings for more information regarding forward-looking statements. During the call, we will reference non-IFRS financial measures. Although we believe these measures provide useful supplemental information about our financial performance, they are not recognized measures and do not have standardized meanings under IFRS. Please see our public filings for additional information regarding our non-IFRS financial measures, including for reconciliations to the nearest IFRS measures. I will now hand the call over to Park Lawn CEO Brad Green to open our discussion today.

Thank you, Jennifer, and good morning, everyone. In addition to Jennifer, with me on the call today is our CFO Dan Millett. During the second quarter of this year, there was a decline in year-over-year mortality, which contributed to a difficult comparison to last year's COVID-impacted second quarter. From a high level, while our funeral homes were not as heavily impacted, we did see some challenges in our cemetery businesses. Specifically, our revenue for the second quarter increased 5.4% to $75.9 million, but was negatively impacted as a result of the decrease in high-margin property sales at certain of our legacy cemetery businesses. Breaking this down a bit more, in our funeral businesses, we were pleased to see an increase in our market share in many of the communities we serve and a strong demand in our average revenue per call. Our call volumes from comparable operations decreased approximately 3% year over year due to the drop in the death rate, and we experienced an increase in the cremation rate of 163 basis points. Despite these circumstances, as a partial offset, we were able to deliver an increase of approximately 2% in average revenue per call for our comparable funeral operations year over year. We believe that this increase in average revenue per coal can be attributed to a few different factors, including the fact that we are still seeing families with a strong desire to memorialize and celebrate their loved ones with enhanced services and merchandise. Also throughout the quarter, we work to implement pricing adjustments where appropriate to help combat some of these impacts of inflation, such as increased labor and fuel expenses. Looking to our cemeteries, our comparable cemetery property sales decreased approximately 4.3 million year-over-year. The majority of this decrease was isolated in a couple of our legacy businesses, and to be more specific, a few properties within those businesses. While some of this decrease is directly attributable to the fact that larger cemetery sales are highly variable from quarter to quarter, we recognize that we could have done a better job in working to close more of these sales during the quarter especially when dealing with a more distracted consumer than we saw during the pandemic. Finally, while our at-need internments were more in line with the national mortality decreases, this decrease in at-need customers also had an impact on our cemetery sales as well. While there was some catch-up in merchandise sales in Q2 2022, as previously ordered merchandise made its way to our cemeteries and was delivered and installed, we continue to experience delays in post-sale supply chain and, in some instances, a further lengthening of lead times. As we continue to grow our company, the impact of any one business will continue to become more muted. Our acquired operations continue to perform at a high level and meaningfully improve the overall quality and caliber of our portfolio. And as we continue our operational focus in the acquisition process, even during these downturns, we've been able to maintain strong momentum and a robust pipeline. And we fully expect to execute within our publicly stated range of $75 to $125 million for acquisitions this year. In line with these expectations, during the second quarter, we closed the previously announced Chancellor acquisition in Mississippi and the Hudson Funeral Home acquisition in North Carolina, both of which are premier firms and strategic to our footprint in each of these two respective markets. Subsequent to the quarter, we also entered a new high-growth market in Virginia with the closing of Ferris Funeral Service, which has over 70 years of dedicated and compassionate service to its community. This business, consisting of a standalone funeral home and on-site funeral home and crematory combination, operationally fits together well with our existing Tennessee and North Carolina businesses. Last week, we also announced that we have entered into a definitive agreement to acquire Shackleford Funeral Directors. Shackleford is a large group of businesses in western Tennessee consisting of eight standalone funeral homes, two standalone cemeteries, and an onsite funeral home and cemetery location. Shackleford, like many of our other acquisitions, is a highly sought after business, not only for its size, but its excellent reputation and history in the community it serves. Finally, on the organic growth front, last week we also announced that the Westminster Funeral Visitation and reception center in Toronto has now been completed and is open to serve families in the greater Toronto area. I'd now like to turn the call over to Dan, who will review our Q2 financial results in more detail.