Park Lawn Corp

TSX:PLC

Earnings Call Transcript 2019-Q2

[Operator]

Good morning, ladies and gentlemen. My name is Casey, and I will be your conference operator today.At this time, I'd like to welcome everyone to the Park Lawn Corporation second quarter results conference call.[Operator Instructions] Thank you.Suzanne Cowan, you may begin your conference.

[Suzanne Cowan]

Thank you. Good morning, everyone.My name is Suzanne Cowan. I'm the Vice President, Business Development and Corporate Affairs, at Park Lawn. With me on the call are Andrew Clark, our Chairman and CEO; and Joe Leeder, our CFO.Today's call is being recorded, and a replay will be available later today.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 this call, we will refer to 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 meaning under IFRS. Please see our public filings for additional information regarding our non-IFRS financial measures, including for reconciliation to the nearest IFRS measures.I will now turn the call over to Andrew Clark, Chairman and CEO, who will provide a brief overview of our business highlights for Q2 2019. Following Andrew's comments, Joe Leeder, CFO, will provide a more detailed review of our financial results and outlook. After their prepared remarks, they will take your questions.Thank you.

[Andrew Clark, Chairman of the Board & CEO]

Thank you, Suzanne. And good morning, everyone.Our results for the quarter ended June 30, 2019, reflect the continued successful execution of our business plan.During the second quarter, the company completed a bought deal financing, issuing approximately 5.6 million common shares at a price of $25.65 per common share, for total gross proceeds of $143.8 million, including the exercise in full of the over-allotment option.In the second quarter, we announced and completed the acquisition of all the outstanding stock and membership interests of The Baue Funeral Home Co., which operates a large cemetery and 3 funeral homes, including 1 combo in St. Charles, Missouri. We also announced the acquisition of Horan & McConaty Funeral Services, Inc. Horan operates 11 funeral homes and 2 cemeteries, including 2 combo operations in Denver and Aurora, Colorado. This transaction was completed early in the third quarter. We also announced the acquisition of John L. Ziegenhein & Sons Undertaking Inc., a 2-location funeral business in St. Louis, Missouri; and Integrity Funeral Care, Inc., a funeral business located in Houston, Texas.Over the period from January 1, 2017, to June 30, 2019, PLC has added 134 properties to its portfolio; and diversified its geographic footprint to include 12 U.S. states and 1 Canadian province while adding to existing operations in Ontario, Manitoba and Saskatchewan.I'd now like to turn the call over to Joe Leeder to review our Q2 2019 financial results in more detail as well as our outlook.

[James Joseph Leeder, CFO & Director]

Thanks, Andrew. And good morning, everyone.You'll find a detailed breakdown of our 2019 second quarter operating results in our financial statements and MD&A, which are available on our website and on SEDAR. And my comments will focus on the 3-month results for second quarter of 2019.Our total revenue for the quarter was $58.6 million, an increase of 45.2% compared with revenue of $40.3 million in 2018. And if I exclude revenue from acquired businesses over the past year, the currency-adjusted growth from our comparable business units grew organically by 3.5%. This revenue growth was primarily attributable to our cemetery operations both in the United States and Canada, with most operating regions contributing to this organic growth. This revenue growth came as a result of an increase in pre-need sales production, expansion of our cemetery inventory, opening of new properties and increased investment income from our trust funds. If you recall, we had grown our revenue in Q2 2018 by 5.2%, so this was a good result coming off a strong comparable quarter last year.In addition to the revenue growth this quarter, we also had a nice improvement in our preconstruction sales in the U.S. We cannot recognize this revenue until construction is complete and mausoleum projects are available for sale, but it represents a growth in our backlog.We also saw continued improvement in our gross margin for this quarter improving by 120 basis points to 80.6% compared with 79.4% last year. And this overall improvement in gross margin is largely attributable to acquired cemetery businesses, as these businesses require a little contribution to perpetual care trust funds on our property sales; inclusion of additional funeral businesses at higher gross margin; and higher investment income from comparable businesses.Our overall operating expenses for the first (sic) [ second ] quarter increased to approximately $41.4 million from $27.8 million last year as a result of the inclusion of the acquired businesses. Looking specifically at general, admin, maintenance and selling expenses from comparable business operations and adjusted for foreign currency, there was a net increase in these operating expenses of approximately $790,000 this year over the same quarter last year. The additional expenses were incurred to support the company's current and longer-term growth initiatives, including increased personnel costs; higher public company costs such as listing fees, regulatory expenses, legal, audit and trust fund management; et cetera. This increase was offset by a decrease in advertising and selling from comparable business operations, which were largely in line with management's expectations and consistent with our prior years.During the current quarter, we completed the purchase price accounting at fair value allocation for the Signature acquisition, and this resulted in an allocation of approximately $3.5 million to a noncompete agreement with a former owner who is no longer involved with the business. This intangible asset is being amortized now over a 3-year period, and our operating expenses increased this quarter by $727,000 to account for this noncash expense.Our interest expense in 2019 was higher this quarter by $823,000 as a result of the increase in our outstanding bank debt, which was used to fund acquisitions.Also, share-based incentive compensation, another noncash expense, associated with the issuance of awards under our employee incentive plan was $933,000 compared to $249,000 last year. The increase is largely associated with the issuance of performance options approved at our Annual General Meeting earlier this year. And the details of our equity incentive plans and the grants made during the year are detailed in our year-end financial statements and our management information circular.This quarter, we also incurred $3.6 million in acquisition integration costs associated with recently announced transactions. And as discussed in the past, these costs must be expensed as incurred rather than capitalized and amortized through future periods.Our effective income tax rate for the current quarter was 27.7%. This is slightly higher than our Canadian and U.S. statutory tax rates of approximately 26% because of the increase in certain expenses that are not deductible for tax purposes, such as the share-based compensation expense. And as a result, going forward, we would expect that our effective tax rate would continue to be modestly above the statutory tax rates.So as a result of the above, our net earnings attributable to our shareholders was $1.5 million this quarter compared to a small loss of $400,000 in 2018. And it represents fully diluted earnings per share of $0.05 this year compared to a loss of $0.02 per share in 2018.As you know, we also report 2 non-IFRS earnings measures in our financial statements and MD&A. And the purpose of the non-IFRS measure is to adjust for the after-tax impacts of certain nonoperating, nonrecurring or noncash expenses. In the current quarter, these included acquisition integration expenses and share-based compensation expense. After making these adjustments, our adjusted net earnings to our shareholders was $5.7 million compared to $3.7 million in 2018, an increase of 54 -- 52.4%. On a per-share basis, which is how we like to look at growth, adjusted net earnings was $0.19 per share this year compared to $0.182 per share last year, a 4.4% increase year-over-year. And just for the record, our 6 months ended June 30, this adjusted net earnings per share was $0.414 per share compared with $0.365 per share last year, and that's an increase of 13.4% year-over-year.Our adjusted EBITDA to shareholders for Q2 was $13 million compared to $8.3 million last year, an increase of 56.4%. And on a per-share basis, the adjusted EBITDA was $0.438 per share compared to $0.409 per share last year, an increase of 7.1% year-over-year. And for the 6 months ended June 30, the adjusted EBITDA per share was $0.932 per share compared to $0.788 last year, and that's an increase of 18.3%.Although we achieved quarter-over-quarter and year-over-year growth in our per-share earnings, the current year increase was impacted by the shares issued in April relating to our $144 million common share financing that Andrew referenced. The capital raised in this financing was used to fund certain acquisitions and repay our bank debt. We ended the quarter with only $34.4 million in net outstanding debt under our revolving credit facility. And this left us with significant capital available to fund future growth initiatives, which once deployed should provide opportunity for higher growth per share -- in per-share earnings going forward. However, we did suffer some short-term dilution in our per share growth metrics this quarter pending deployment of this capital.Our adjusted EBITDA profit margin in the current quarter increased 150 basis points to 22.6% compared to 21.1% last year. We have seen an improvement in EBITDA profit margins in recent quarters as a result of the acquisition of higher-margin businesses and overall improvement in our margins from comparable business units, and that is a trend we expect will continue as we integrate acquired businesses and execute our growth strategy.And just a few words on our balance sheet now.At June 30, 2019, we had net consolidated bank debt and other debt of approximately $42 million. This is comprised of $34 million of net bank debt and another $8 million in notes payable and vendor take-back financings related to prior acquisitions. Subsequent to the end of the quarter, we borrowed an additional $77 million to close the acquisition of Horan and Integrity and to fund internal growth initiatives, bringing our current net debt to approximately $119 million. On a pro forma basis, this would continue to leave as well below our communicated comfort range of up to 2.5x debt-to-EBITDA leverage ratio and give us the capacity to fund growth initiatives.Also, a pipeline of future revenue currently sits on our balance sheet in the form of deferred revenue, cash and pre-need trusts and pre-need insurance contracts. And this backlog of future revenue currently sits at approximately $558 million, representing a significant source of future revenue for the company.During our Q2 earnings call last year, we indicated we were targeting approximately $25 million in organic growth spending over the next 18 to 24 months and $40 million over the next 3 to 4 years. This capital was to be deployed on organic growth initiatives such as cemetery expansion, on-site and stand-alone funeral homes, visitation centers and new mausoleum construction. And during Q2 this year, we spent approximately $3.6 million on the shorter-term targets, and that brings us to approximately $13.7 million in total spend on the shorter-term targets of $25 million. Our maintenance capital expenditures for Q2 were approximately $1.4 million, which is below our intended goal to be in line with our annual depreciation expense which runs about $6.5 million annually.I will now turn the call back over to Andrew for some closing remarks.

[Andrew Clark, Chairman of the Board & CEO]

Thank you very much, Joe.We remain confident here at Park Lawn in the progress that we've made in moving towards our aspirational 2022 target, which includes a continued and disciplined approach to our acquisition program; investments, as Joe referenced, in organic growth initiatives; and margin expansion. We are pleased with the progress we have made on all fronts; and look forward to continuing to build strength in each of these areas over the short, medium and long term.We're now ready to open up the lines for questions, so operator, please go ahead.

[Operator]

[Operator Instructions] And your first question here comes from Paul Bilenki from TD Securities.

[Paul Bilenki, Associate]

On the organic growth, can you just drill into that a little bit more; and maybe provide a breakdown, as far as Canada versus the U.S.? And then what were some of the bright spots and more challenging areas this quarter?

[Andrew Clark, Chairman of the Board & CEO]

Well, Canada versus U.S., organic growth was -- it was 2-and-a-bit percent in Canada. It was a hair under 4% in the U.S., all adjusted for currency. Generally speaking, the organic growth on the cemetery side of the business was very, very strong; and softer on the funeral side. So it's not necessarily -- the organic growth story is not necessarily, in fact not at all, a Canada-U.S. story. It's more a segment story between cemetery and funeral home. And from a bright spots' perspective, we had strength in the Midwest region, in Michigan. We had strength in the Mid-Atlantic region, the New Jersey properties. And we had strength in our Toronto cemetery properties. And there was some softness on -- in the Southeast region. That's the legacy Saber and Signature -- I beg your pardon, Saber and Citadel businesses and -- but that has more to do with, as Joe referenced, the number of sales that were made. But because we were not able to deliver merchandise or other elements of the transaction, we weren't able to recognize the revenue. So that's more of a timing issue than it is anything else, but there was generally some softness on the funeral side as there can be seasonally through this time of year. It's not unheard of for there to be significant pockets of softness on the funeral side of the business through the summer.

[Paul Bilenki, Associate]

Okay. Great. And if you could just provide an update on how some of your ongoing capital projects are progressing. Is that funeral home in New Mexico open now? And if so, how are the early days there? And can you talk a little bit about sort of the other ones you have underway?

[Andrew Clark, Chairman of the Board & CEO]

Yes. The funeral home in New Mexico is open. It was serving families within hours of operating, of opening the doors. So it's awfully early to make a meaningful assessment, but I think we're cautiously optimistic that things are going well there. We have opened and are selling in our third floor at the Westminster mausoleum here in Toronto. We haven't done the formal grand opening yet, which will create a bit more of a splash, but it's open and we're selling. And we're under construction with a new mausoleum at Forest Lawn in Houston, Texas. And we are also building a number -- and we expect to have open a number of -- a couple of mausoleum projects in the Southeast region, particularly in Kentucky that I expect we'll open in the latter half of the year. We have some cremation gardens opening at Roseland Cemetery in the Detroit market. And so generally I think we're in pretty good shape, as far as the capital deployment plan goes. We're waiting on formal permits and -- for the on-site funeral operations in both Houston and Toronto. So those are waiting formal permits.

[Paul Bilenki, Associate]

Do you have a time line for when you expect to receive those?

[Andrew Clark, Chairman of the Board & CEO]

If you have an intelligence into those municipalities, I could provide you with a better time line, but we do not, I'm afraid, at this point.

[Paul Bilenki, Associate]

Okay. Fair enough.

[Andrew Clark, Chairman of the Board & CEO]

We've done everything we can on our part.

[Operator]

Your next question comes from Maggie MacDougall from Cormark.

[Maggie Anne MacDougall, Director of of Institutional Equity Research]

I was wondering if you could just give us a bit of a view on how you see your competitive environment currently and realizing that you don't necessarily have direct competitors location to location perhaps worth commenting on but maybe more so just from an industry perspective. What's kind of been going on? We've probably all been following [ Stonemart ] to some extent, as well as the other publicly listed operators in the U.S. So from an M&A standpoint, asset sales, et cetera, anything you could provide on the overall environment in the U.S. would be very interesting.

[Andrew Clark, Chairman of the Board & CEO]

The competitive environment as it stands right now is -- it's active. It is quite competitive right now, particularly on the M&A front. We're seeing, as we have seen for quite some time, a lot of activity on the M&A front. The pipeline, our pipeline, anyway, remains full and robust and -- but we are -- given our increased size and scale, we are seeing -- we are able to play in some more meaningful types of opportunities that we mightn't have otherwise been able to participate in before, at least credibly. And so that has opened us up to a bit more competition from our peers, both the publicly listed peers, who are tough and challenging competitors; and other, whether it's private-equity-sponsored or other private-capital-sponsored peers. So it's a competitive landscape in that respect. From an operating perspective, it really varies market to market, but I would say we -- it's we don't rest on our laurels in any market regardless of whether the competition is a service corp or whether it is one of the large -- other large public players, whether it's a private player, whether it's a religious or municipally run property. I mean we assume that all of them will be -- will put us in for a fight. So the competitive landscape is tough always. And it seems to be -- I wouldn't say particularly challenging, but we're certainly more aware of the challenges right now than we might have been previously.

[Maggie Anne MacDougall, Director of of Institutional Equity Research]

Okay. Great. And then by way of an update on your U.S. integration, could you just give a bit of an overview on where that stands perhaps region by region, if that's appropriate; and how you're feeling on that whole initiative at this point?

[Andrew Clark, Chairman of the Board & CEO]

Yes. I think we're feeling pretty good. I mean the various teams who are involved in the integration effort have been providing a yeoman service in terms of doing a lot of heavy lifting down there. We're in the -- we've integrated most of the payroll and HR pieces throughout the business -- or the legacy acquired businesses in the U.S. where we're now going through that process with what was the CMS Mid-Atlantic business. It's the final one of the legacy acquired to be dealt with. So that is all on plan from a region-to-region basis. We have staffed the business in Houston more robustly in order to accommodate the onboarding of the Horan and Baue businesses and to make sure that we don't stumble through any of those type of onboarding and integration exercises and then to deal with any future scale M&A we might do, which -- so I think we're feeling pretty good. The last sort of substantive piece, I think, that we need to continue to do some work on is on the IT and systems piece. And then we have obviously a rolling and ongoing need to continue to integrate on the finance side. So that's kind of a fairly -- I think, a fairly good survey of where we are, but I think we're feeling, for the most part, quite confident.

[Operator]

Your next question comes from Scott Fromson from CIBC.

[Scott Douglas Fromson]

Can you give a bit of detail on what we can expect on the OG&A cost structure, particularly with respect to Horan and Baue?

[Andrew Clark, Chairman of the Board & CEO]

Yes. So as you will have seen, the G&A expenses were a little higher in relative terms prior -- to prior periods. I -- that has to do with -- as I mentioned in my response to the previous question, it has to do with a lot of onboarding and sort of prefilling roles in anticipation of taking costs out of the field not only for the Horan and Baue partnerships, but those are obviously were top of mind when we were thinking about our resource requirements but also continuing with the integration efforts for the sort of legacy businesses, if you will, that we acquired. So I -- what we view this to be generally is a timing issue in term of -- in terms of that expense increase. And I -- relative to revenue, so I think we're going to expect to see margins kind of tack back in the direction that they were going in the prior quarter in the subsequent quarters. So not specifically tying those to the Horan and Baue transactions, although that was obviously a significant consideration when we were continuing to ramp up infrastructure in -- particularly in Houston.

[Scott Douglas Fromson]

So are you still on the same time line for hitting the 25% sort of industry leader margins?

[Andrew Clark, Chairman of the Board & CEO]

I don't see -- we've got a few years to do that, so I don't see any reason why we wouldn't be in a position to do that, no.

[Operator]

Your next question comes from Johann Rodrigues from Raymond James.

[Johann Rodrigues, Research Analyst]

Just 2 questions from me. One, do you have a sense as to what comparable business EBITDA growth would have been? And the second one, can you give a little bit of color on that, on the backlog, the $558 million, just kind of where the bulk of that kind of comes from and maybe kind of a time line, if you will?

[Andrew Clark, Chairman of the Board & CEO]

Yes. We don't specifically break out the comparable business, yes, EBITDA growth. I think we've started to get this question more regularly. And certainly we consider it internally, but because we don't break it out in the public disclosures, I'm not at liberty to talk about it at this stage. But what I will do, Johann, is we'll take it onboard and we'll make -- we'll include it in subsequent disclosures. Joe, do you have any...

[James Joseph Leeder, CFO & Director]

Yes. Just our -- we had -- by region, Johann, we had some significant growth in sort of the Midwestern region and in our Northeastern regions and just offset by some smaller growth in other regions, but on comparable businesses we did have strong growth in our operating EBITDA as well. But as Andrew said, we'll take a look at that internally and look to further disclosure going forward.

[Andrew Clark, Chairman of the Board & CEO]

I'm sorry. Remind me of your second question.

[Johann Rodrigues, Research Analyst]

Just a little bit of color on that, the $560 million backlog. Just kind of where the bulk of that maybe comes from and...

[Andrew Clark, Chairman of the Board & CEO]

Well, the -- you would see a bunch of it on the balance sheet. Anything that is not on the balance sheet would be in insurance contracts, pre-need insurance contracts, that we would have sold to families for future funeral services. So that's we would recognize the commission revenue as a result of selling those contracts. And we would receive the full -- obviously the benefit of the policy at the time at-need, if you will. So Joe has maybe some additional color on that.

[James Joseph Leeder, CFO & Director]

Yes. Our insurance backlog, Johann, will be about CAD 200 million. That insurance product, it supports the funeral home pre-need business. The balance would be in our pre-need trusts and then deferred revenue relating to the accounts receivable. So that would account for the balance of that, which is about $360,000. A big chunk of that, of course, is in the cemetery, where we've got a lot of merchandise, pre-need merchandise, trusted.

[Operator]

[Operator Instructions] Your next question comes from Stephen Harris with GMP Securities.

[Stephen C.A. Harris, Head of Research]

Just a quick one because I think most of this has been covered, but one area that's always been complicated for you guys to -- for us to forecast has been the depreciation expense and amortization, which kind of rises steadily as you do more acquisitions. I'm just wondering if you could give us a number on the combined depreciation and amortization, the current run rate, including closing all your pending acquisitions. Or would you have a number like that, that you can share with us?

[James Joseph Leeder, CFO & Director]

The -- Stephen, I mentioned that our CapEx is targeted to depreciation, which is running at $6.5 million. I don't have the exact number offhand, but the acquisitions that we've closed since are funeral home acquisitions and the depreciation would be smaller there. So a CAD 7 million number might be a good run rate on depreciation. That, of course, would probably not include the very large noncompete agreements. And those are going to be specific to the -- each of the deals we do as to how we allocate the purchase price and what the conditions are around any noncompete agreements.

[Stephen C.A. Harris, Head of Research]

Okay. And while you're on that, can you give us a little color on the Signature agreement and this new line on the noncompetes? And basically what's the back story there? And why is that getting addressed now or roughly a year after that deal closed?

[James Joseph Leeder, CFO & Director]

Yes, it's addressed because we make an estimate of things after the acquisition. And then we have a period of time up to a year to finalize all the balance sheets and get all of the valuations done and the parties involved in them, so that takes a considerable amount of time and effort. On the Signature one in particular, we did have some intangible assets and some noncompete agreements in other transactions, but they were much, much smaller. This particular transaction, we had a financial player that was involved in the business who we bought out. And the management owners stayed with us. And so the financial owner we had a noncompete, that's covered territory so that they wouldn't finance and get back into the business. And that's why such a large portion of the purchase price was allocated to that noncompete. It is a noncash expense. It's kind of a "valuation and allocation of purchase price" issue, but when you protect yourself like that against somebody coming back in to compete against you, then you have to allocate a value to that asset and it needs to be amortized over the noncompete period. So that's why the large expense going forward for Signature acquisition...

[Operator]

Your next question comes from Zachary Evershed with National Bank Financial.

[Zachary Evershed, Analyst]

So some of your competitors both in the U.S. and internationally have made reference to not only an increasing cremation rate but also a decline in average revenue per service. Is that something that you're seeing in your markets as well?

[Andrew Clark, Chairman of the Board & CEO]

No, not necessarily. I mean again our business is so and our industry is so fragmented market to market. You could go dive into any specific market and find evidence of that to prove my general comment wrong, but you could -- but generally know that's not something we're seeing as a -- on a longer-term scale as a decline of average revenue per call on the funeral side. We're certainly not seeing it on the cemetery side, where some of the growth in some of the businesses has been as a result of us increasing revenue per transaction or, on the cemetery side, per interment or per call. So I wouldn't say -- it's something we watch very, very closely. There's obviously considerable downward pressure on revenues on the funeral side not only because of cremation rates but because of changing sort of consumer behavior and -- but I don't think we suffer from it in a meaningful way, more or less, than any of our direct substantial competitors.

[Zachary Evershed, Analyst]

That's helpful. And so we had the 4 new acquisitions land in the quarter, with another big one in Q3. In terms of revenue contribution from each, can you give us a little guidance? And should we think about seasonality?

[Andrew Clark, Chairman of the Board & CEO]

I, we should absolutely think about seasonality. I would say we haven't provided guidance on any of these from a revenue perspective, so I'd be loath to do so on this call, but look, I think, just given the scale of them, they're going to be meaningful acquisitions for us. The combined purchase price for Baue, Horan, Ziegenhein and Integrity was comfortably [ impressed ] as well, although that was a contributor in the quarter. So comfortably in excess of CAD 140 million. So that's fairly substantial contribution that we'd expect to derive from those. And we'll be able to provide a bit more context on each of those specifically going forward, particularly because the Horan and the Baue acquisitions and Ziegenhein will be included in a new region. So that, we'll be able to provide a bit more regional context going forward, but Baue and Ziegenhein were really only relatively modest contributors in the quarter given the timing of the closing.

[Operator]

Your next question comes from Raveel Afzaal from Canaccord.

[Raveel Afzaal, Analyst]

Just following up on your comment regarding changing consumer behaviors on the funeral side. I'm thinking maybe this is celebration-of-life events and [ such ], for example. So how do you adapt to these changing consumer behaviors? What can you do with respect to your funeral homes to adapt?

[Andrew Clark, Chairman of the Board & CEO]

Well, I think what we strive to do is to provide, to -- we believe very strongly in the value of the services that we provide. We respect our families. We respect our profession, and that comes out in the way that we service those families. And we believe that, with engaged frontline folks in each of the markets that are highly invested in each of their local businesses who ascribe to the respect elements that we strive for, that is -- that will result in, we believe, more engaged and more professional and valuable therefore service. The other thing I can say is that we are continuing -- continually looking, and our capital investment program will point to that, continually looking to invest and refresh those facilities to make them contemporary, to make them appropriate for the markets that they're in and appropriate to service the families that we want to continue to serve. So one very sort of intangible which is delivered by our sort of value statement around respect for families and respecting the work that we do ourselves and then one sort of very tangible and -- by investing in -- our capital and ensuring those facilities. So I hope that answers your question. I think that's the best we can sort of quantify it.

[Raveel Afzaal, Analyst]

No, that sounds great. And I'm wondering. Are there also opportunities to partner with some of these other places that hold such events by providing them with the type of services that you guys do and have an ancillary revenue stream in partnership with some of these [ broad steps ], for example, and other places to further grow your total addressable market? Or that's not how it works.

[Andrew Clark, Chairman of the Board & CEO]

That's -- we haven't done a significant amount of that. Where we have done the most of that up to this point in time has been in the Toronto market with our basic funerals business because, as you may recall, that business is sort of a low-cost funeral business without a funeral home per se. And so by virtue of that type of business model, they end up doing more services at nontraditional locations. So that would be the closest sort of version. And there's versions of that, that exists in other markets, but that would be the most substantive one that we have currently.

[Raveel Afzaal, Analyst]

Well, that's very helpful. And then just on MMG, it looks like the margin has started to improve again in this business. And can you just give us some visibility on what's going on with that?

[Andrew Clark, Chairman of the Board & CEO]

Good revenue growth, good cost control. It's really not much more complicated than that. We're delighted with how things are going there.

[Raveel Afzaal, Analyst]

Perfect. And this may be more difficult to answer. I mean you had a goal for $35 million in EBITDA from acquisitions by 2022. It looks like you're more than halfway through that goal already. So when you're looking at this goal now, do you think there's significant upside to that? I know you have to -- you will probably stick your guidance for now, but when you just look at the blue sky for this up until 2022, any color that you can provide around that?

[Andrew Clark, Chairman of the Board & CEO]

The color that I would provide around that is that we are still hoping to maintain that, to achieve that target that, even if I thought we were going to overachieve, I probably wouldn't tell you. And that's of no disrespect to you, Raveel.

[Operator]

And there are no further questions in queue at this time. I will turn the call back over to Andrew Clark for any closing remarks.

[Andrew Clark, Chairman of the Board & CEO]

Well, again as always, we appreciate your interest and support of Park Lawn, and we continue to believe that the best is yet to come. And we thank you very much for your support and your interest today.

[Operator]

And ladies and gentlemen, this concludes today's conference call. You may now disconnect.