Park Lawn Corporation

Greetings, and welcome to the Paragon Corporation's first quarter 2023 earnings call. At this time, all participants are in a listen-only mode, and a question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host. Jennifer Hay. Mom, you may begin.

Thank you, Eileen. Good morning. This is Jennifer Hay, the Chief Strategy Officer and General Counsel at Parklawn. Thank you for joining us today on our 2023 first quarter earnings call. Before we begin our prepared commentary on the quarter, please note that you can find a detailed breakdown of our 2023 first quarter results in our financial statements and MD&A, which are available on our website. and on CDAR. Today's call is being recorded and a replay will be available after the call. 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 Parkland 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. We are very pleased with our first quarter operating results in that we showed strength against tough economic headwinds and a comparable quarter that was heavily impacted by the COVID-19 pandemic. While there were some lingering impacts of the pandemic which continued throughout 2022, they significantly decreased following the first quarter of 2022, and we expect this to be the last quarter of exceptionally difficult comparisons. As the impact of COVID-19 subsides, our focus continues to be on implementing incremental improvements in our operations and making selective and strategic growth decisions that drive shareholder value. As a result, our revenue continued to grow year over year, increasing 4%, while adjusted EBITDA decreased slightly with the decline in the death rate. The results from our cemetery operations were strong during the quarter as pre-need property sales increased over the comparable quarter, primarily due to our large cemetery businesses continuing to perform well. Additionally, the merchandise supply chain continues to self-correct, resulting in greater merchandise deliveries than we experienced in the same quarter last year. Overall, despite the significant variance in the death rate as compared to the first quarter in 2022, our total cemetery revenue from comparable operations decreased only about 1% year over year. We attribute this largely to the refocus on the heritage in our parks through cemetery property sales. Ultimately, we believe that focusing on property sales will continue to improve our overall cemetery sales program and its strength throughout the year. As expected, our at-need sales in both our funeral and cemetery businesses were impacted as a result of the drop in the death rate, although... we are pleased that the decline in our same-store call volume decreased significantly less than the national average. More specifically, recent CDC data suggests deaths in the United States were approximately 14% lower during Q1 2023 versus Q1 2022. However, in looking at our comparable operations, we only saw a decrease in call volume of approximately 11%, which was not only lower than the national average but also compares favorably to our peers. Also, based on CDC data, we have seen the concept of excess deaths begin to lower in the U.S. during the first quarter of 2023 and believe we are beginning to see a more normalized operating environment for death care. During the quarter, we also completed a significant acquisition in the Sioux City and South Sioux City markets, which resulted in PLC entering the states of Iowa and Nebraska. And subsequent to the quarter, we completed another premier acquisition in the greater Kansas City metropolitan market, further expanding our commanding presence in Missouri. The completion of these two transactions alone takes us a long way towards our annual goal of completing $75 to $125 million a year in acquisitions. As we have stated in the past, we have a robust pipeline of premier acquisition opportunities And we continue to believe that our previously stated range of $75 million to $125 million per year in acquisitions is achievable in 2023. Finally, on the organic growth front, we also completed the construction of and opened a Waco Memorial Funeral Home on Waco Memorial Park. As a result, we have the first and only on-site offering in Waco, Texas. With that, I'll turn the call over to Dan, who will provide some additional detail regarding our first Waco funeral home.