Park Lawn Corporation Announces Q3 2023 Results

^{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. Refer to the non-IFRS Financial Measures section of this document for more information on each non-IFRS financial measure.}

"We had a solid operational performance in the third quarter," said J. Bradley Green, Chief Executive Officer of PLC. Mr. Green continued, "While the death rate continued to pull back, resulting in an overall decrease in call volume as compared to the third quarter of 2022, our operations were able to largely offset this trend through sustained growth in market share and modestly increasing our average revenue per contract on the funeral side and growing pre-need sales on the cemetery side."

Key Results from the Three-Month Period Ended September 30, 2023:

• Revenue increased by approximately 8.2% to $87.5M primarily as a result of Acquired Operations as compared to the three-month period ended September 30, 2022.
• Gross profit increased by 9% to $21,091,328 compared to the three-month period ended September 30, 2022.
• Fully Diluted Earnings per share was $0.094 compared to $0.153 for the three-month period ended September 30, 2022.
• Fully Diluted Adjusted Net Earnings per share decreased by $0.071 or 31.7% to $0.153 compared to $0.224 for the three-month period ended September 30, 2022.
• Net Earnings was $3,296,492 compared to $5,323,908 for the three-month period ended September 30, 2022.
• Adjusted EBITDA increased by 3.6% to $18,800,966 as compared to the three-month period ended September 30, 2022.
• PLC achieved an Adjusted EBITDA margin of 21.5%, a 90 bps decrease over the three-month period ended September 30, 2022, primarily as a result of increased corporate costs year-over-year.
• On July 17, 2023, the Company acquired substantially all the assets of Ward Funeral Home Limited with three standalone funeral homes located in Brampton, Woodbridge and Toronto, Ontario (collectively "Ward"). The Ward acquisition expands PLC's funeral home presence in Ontario and is expected to add approximately $1,800,000 in Adjusted EBITDA annually.
• On August 8, 2023, the Company expanded its Ontario presence when it completed the acquisition of substantially all the assets of M.W. Becker Funeral Home Ltd. ("MWB"), a standalone funeral home business in Keswick, Ontario. The MWB acquisition is expected to add CAD$375,970 in Adjusted EBITDA annually.
• On August 14, 2023, the Company acquired substantially all the assets of Forrest & Taylor Funeral Home Limited ("Forrest & Taylor") a stand alone funeral home located in Sutton, Ontario. The Forrest & Taylor acquisition is expected to add CAD$338,647 in Adjusted EBITDA annually.
• Following the close of the quarter, on October 16, 2023, the Company acquired substantially all the assets of Christy-Smith Funeral Homes, consisting of two standalone funeral homes, located in Sioux City, Iowa (collectively "Christy Smith"). The Christy-Smith acquisition expands PLC's Sioux City footprint and is expected to add $437,391 in Adjusted EBITDA annually.

PLC Enters into Agreement to Divest Certain Legacy Assets in Furtherance of its Long-Term Growth Strategy

Subsequent to the quarter, on October 17, 2023, PLC announced that it entered into a definitive agreement to divest substantially all the assets of The Park Lawn Cemetery Company (USA), Inc., PLC Saber Ltd. and PLC Citadel Ltd. to Everstory Acquisition Portfolio, LLC, an affiliate of Everstory Partners. Everstory Partners is a deathcare company that owns and operates cemetery, funeral home and crematory locations throughout the United States and Puerto Rico. The divestiture includes 72 cemeteries in Kentucky, Michigan, North Carolina and South Carolina and 11 funeral homes in Kentucky and North Carolina. The transaction is valued at approximately $70M consisting of $55M in cash and the remaining $15M in deferred compensation, bearing interest at 10% per annum, to be received by PLC within 5 years following the close of the transaction.

The purchase price represents an approximate 8.0x Adjusted EBITDA multiple based on trailing twelve-month results.

In the near term, the cash portion of the proceeds is expected to reduce Park Lawn's leverage ratio to approximately 2.0x and 2.8x, including Park Lawn's outstanding debentures. Park Lawn anticipates replacing the divested earnings through the deployment of transaction proceeds into high-growth markets and new business opportunities which align more closely with its long-term growth strategy.

The transaction is scheduled to close prior to year end 2023 following receipt of regulatory approval and the satisfaction of customary closing conditions for a transaction of this type.

Important Reminder

The Company will host a conference call to discuss its third quarter 2023 financial results on Friday, November 10, 2023. Details are as follows:

Date: Friday, November 10, 2023

Time: 9:30 a.m. EST

Dial-in Number: Toll Free (888) 506-0062 | Conference ID: 538764

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 at www.sedarplus.ca or on the Company's website at www.parklawncorp.com.

A replay of the conference call will be available until Friday, November 24, 2023 and can be accessed as follows: Dial-in Number: Toll Free (877) 481-4010 | Conference ID: 49367. Alternatively, the conference will also be available on the Company's website at www.parklawncorp.com.

About Park Lawn Corporation

PLC provides goods and services associated with the disposition and memorialization of human remains. Products and services are sold on a pre-planned basis (pre-need) or at the time of a death (at-need). PLC and its subsidiaries own and operate businesses including cemeteries, crematoria, funeral homes, chapels, planning offices and a transfer service. PLC operates in three Canadian provinces and nineteen U.S. states.

Non‐IFRS Measures

Adjusted Net Earnings, Adjusted EBITDA and their related per share amounts, Adjusted EBITDA margins, Adjusted Field EBITDA margins, Acquired Operations and Comparable Operations are not measures recognized under IFRS and do not have standardized meanings prescribed by IFRS. Such measures are presented in this news release because management of PLC believes that such measures are relevant in evaluating PLC's operating performance. Such measures, as computed by PLC, may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to similar measures reported by such other organizations.

The Company defines Acquired Operations as business units or operating locations acquired by the Company during the period from January 1, 2022 and ending September 30, 2023. The Company defines Comparable Operations as business units or operating locations owned by the Company for the entire period from January 1, 2022 and ending September 30, 2023.

The following tables indicate how the Company reconciles Adjusted Net Earnings, Adjusted EBITDA and their related per share amount, Adjusted EBITDA margins and Adjusted Field EBITDA margins to the nearest IFRS measure.

Adjusted Net Earnings

EBITDA and Adjusted EBITDA

Adjusted Field EBITDA