Park Lawn Corp

TSX:PLC

Earnings Call Transcript 2023-Q2

[Operator]

Greetings and welcome to the Park Lawn Corporation Second Quarter 2023 Earnings Call. At this time, all participants on a listen-only mode and a question-and-answer session will follow the formal presentation. [Operator Instructions] I will now turn the conference over to your host, Jennifer Hay. Ma'am, you may begin.

[Jennifer Hay, Chief Strategy Officer & General Counsel]

Thank you, Ali and good morning, everybody. Thank you for joining us on today's 2023 second quarter earnings call.

Before we begin our prepared commentary on the quarter. Please note that you can find a detailed breakdown of our 2023 second quarter results in our financial statements and MD&A which are available on our website and on SEDAR. 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 Park Lawns CEO, Brad Green, to open our discussion today.

[Brad Green, Chief Executive Officer]

Thank you, Jennifer and good morning, everyone. In addition to Jennifer, with me on the call today is our CFO, Dan Millett. I would like to start this morning by providing an overview of our performance in the quarter, then Dan will provide some additional detail and color around that performance. And finally, I will wrap up the call with some closing remarks.

We are pleased with our second quarter 2023 operating results which demonstrate sustained growth as well as improved business performance in an overall challenging environment. Those challenges included a decreased number of mortality [ph] rate in the United States of approximately 3% according to the CDC. In addition, we continue to navigate a challenging macroeconomic environment with significantly higher interest rates and inflationary pressures. Despite this, we were successful in bettering our performance year-over-year.

For the three-month period ended June 30, 2023, our revenue increased 12.3%. Our adjusted EBITDA increased 20.7% and our adjusted earnings per share increased 16.8%. Our funeral businesses performed well with the call volumes from comparable operations, continuing to reflect better than the national mortality decreases published by the CDC. Further, our average revenue per call increased approximately 5.3% as our operations team executed at a high level and continues to provide exemplary service to our client families.

While the overall operation of our cemetery businesses improved year-over-year, certain businesses saw decreases in both at-need and preneed revenue, principally due to the decrease in the death rate and as a result of at-need sales being a driver of our preneed cemetery sales. Additionally, an uncertain economic environment has certainly posed a challenge for certain consumers. Our sales team will continue to regularly evaluate and implement new programs and strategies to serve these customer families. To be clear, we do not believe that this decrease is the result of a lost consumer but instead it is simply a deferred consumer that will return over time with the normalization of the death rates. Our acquisition strategy continues to be a key driver of our growth.

And despite what is a very difficult capital environment, we continue to add accretive acquisitions and pursue transactions of all sizes that align with our strategy, culture and operating platform. During the quarter, we added three stand-alone fuel homes, one stand-alone cemetery and an on-site funeral home and cemetery with the transactions of Speaks and Cobb, expanding our presence in both Greater Kansas City area and Georgia. Subsequent to quarter end, we also further expanded our funeral in presence in the Greater Toronto area through the acquisition of Ward Funeral Home which added three stand-alone funeral homes and through the acquisition of M.W. Becker which added a single stand-alone funeral home.

Finally, on June 29, Park Lawn confirmed market rumors that it submitted a preliminary all-cash offer to the Board of Directors of Carriage Services on June 13 to purchase all the outstanding shares of stock. While we understand that you may have additional questions surrounding this potential transaction, we will not be providing any further comments on that transaction today except to tell you that we have entered into a nondisclosure agreement with Carriage Services and that it includes customary provisions of this type of transaction. We are engaged in the review process that was subsequently announced by Carriage Services and when we have a substantive update to provide you, we will do so at that time.

With that, I will turn the call over to Dan, who will provide some additional detail regarding our first quarter results.

[Daniel Millett, Chief Financial Officer]

Thank you, Brad and good morning, everyone. My comments this morning will focus primarily on our operating results from the second quarter 2023 relative to Q2 2022. For the second quarter, we saw revenue increase approximately $9.4 million as acquired operations continue to contribute to Park Lawns positive growth. However, with mortality slightly decreasing year-over-year, revenue from our comparable operations was essentially flat. The second quarter of this year compared very favorably in 2022 as our focused operating improvements made over the back half of last year and into the first half of 2023 started to show improvements. Targeted pricing improvements, incentive compensation restructuring and a focus on operations and expense control saw field margins increased 250 bps year-over-year.

For the three-month period ended June 30, 2023, our operating expenses, including our direct cost of sales, general and administrative, advertising and selling and maintenance expenses increased by approximately $5.1 million over the same period in 2022. While increases are primarily due to acquired operations, decreases year-over-year were due to various labor costs, including field level bonuses and benefits, management of repairs and maintenance costs as well as changes in structuring and reporting relationships.

As Brad mentioned, our funeral businesses have performed well during the quarter. With our continued focus on providing our families with the highest level of service, the average revenue per call on funeral contracts increased 5.3% despite the impact of inflation on costs such as labor and merchandise. While we are pleased with the year-over-year growth, as we continue to integrate more recently acquired operations, we believe that there is still room to capitalize on further operational improvements such as additional market penetration, enhanced service offerings and cost efficiencies.

On the cemetery side, while margins improved year-over-year, revenue decreased in line with the decreases in mortality. Our sales teams are constantly reviewing ways to further incentivize our customers and meet their needs around installments, financing terms and other value-added incentives. However, we believe the decrease in at-need sales volume more directly impacted our preneed sales. Further, a portion of the decrease in revenue can be attributed to catch-up merchandise deliveries which were made in the second quarter of 2022 as a result of supply chain disruptions which we did not have in this quarter. From a corporate perspective, as we have previously communicated, we continue to make investments in our corporate infrastructure, not only to support our past growth but our anticipated future growth. In doing so, we continue to make improvements to our processes, structure and technology to create a more fully integrated platform to support our businesses.

To this end, during the first half of 2023, we have made additional investments in both our accounting and IT functions to better position Park Lawn for growth, deliver accelerated development, integration and support of facts within our businesses and help drive further efficiencies which we expect to be visible in our reporting beginning in 2024. At June 30, 2023, we had approximately $187 million outstanding on our credit facility, other debt of $18.2 million, finance leases of approximately $6 million and cash on hand of approximately $31.3 million. Excluding our debentures, our net debt was approximately $180 million as at June 30, 2023.

Related to our debt profile, interest rates have had a negative impact on our financial results for the second quarter. We have seen interest rates on our variable debt increase over 500 bps since early 2022 which has impacted our earnings by approximately $0.04 per share in the quarter. However, we still believe our leverage profile provides us the ability to grow in light these headwinds and we remain prudent on how we are allocating our capital. Our leverage ratio was approximately 2.16x based on the terms of our credit facility and approximately 2.94x, including our outstanding debentures. Although there were many puts and takes in the quarter, net earnings from Q2 2023 decreased relative to Q2 2022. Net earnings for the second quarter was $3.8 million or $0.09 [ph] per share compared to $5.8 million or $0.167 per share in Q2 2022.

The changes year-over-year were in part impacted due to the sale of a nonstrategic cemetery business located in New York during Q2 2023 and the sale of a piece of land adjacent to a cemetery in New Mexico in Q2 2022. Furthermore, despite some of the aforementioned headwinds, the adjusted net earnings for the second quarter grew year-over-year and was approximately $7.7 million or $0.222 per share compared to $6.6 million or $0.19 per share in Q2 2022.

I'll now turn the call back to Brad for some closing comments.

[Brad Green, Chief Executive Officer]

Thanks, Dan. While dramatic fluctuations in the death rates seem to be behind us. Those death rates are still declining. And while I'm looking forward to a quarter, we don't have to talk about the pandemic or access mortality in our comparables, I think that we will continue to see these decreases in mortality throughout the remainder of the year. It is our job, however, to manage these declining death rates. And quite frankly, I think we did a good job of doing just that this quarter. Said another way, even with the declining death rate, coupled with the larger macroeconomic challenges, we remain acutely focused on fine-tuning our operations and expect that as we continue to implement incremental improvements, we will be able to continue to strategically grow as we did this quarter.

Again, internally, we are focused on improving EBITDA margins and earnings per share as well as adding premier businesses to our portfolio. As a management team, we still see a lot of opportunity within our platform as we have not had decades-long history with the vast majority of our businesses we are operating today. We continue to be an operating company first and foremost and it is that mentality that will continue to drive our growth, both organically and through M&A. We still see ourselves as a company in its early stages of the business life cycle and we believe there are tremendous opportunities to grow, improve and create a company that becomes self-sufficient in its capital needs.

With the hard work of our team, we are operating today infinitely better than we were five years ago and given the opportunities in front of us as well as the continuing upgrade of our organization as a whole, we believe that there is a bright future in front of us. That concludes our prepared remarks and I'll now turn it over to Ali for any questions.

[Operator]

Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question is coming from Martin Landry with Steifel.

[Martin Landry, Stifel]

My first question is on your average revenue per service in funeral. You touched on it, it's up 5.3%. It's your strongest increase of the last year. I'd love to get a bit more color on this. Is this a function of a favorable mix? Or is this mostly related to the price increases that you took recently?

[Daniel Millett, Chief Financial Officer]

Yes, that's kind of multifaceted, right? And you hit on, obviously, the two main things. We're focused on ensuring we're meeting the needs of our customers in the arrangement room. So just good selling, good product mix. As we've talked about all through last year, we've been focused on our price increases. I think the other thing is last year, we saw maybe an abnormal spike in kind of the cremation mix which obviously has a bit of an impact on the average. And this quarter was a lot more normal. I think in the last six quarters, we've kind of fluctuated between 62% and 63% cremation. And it's really been quite stable with the exception of kind of the second quarter last year. But it's kind of those three things that really combine to make the increase up.

[Martin Landry, Stifel]

Okay. And then -- so, could that base continue in the coming quarters? Or was that just more of a blip? Just trying to get a bit of color as to how we should look at that performance on a go-forward basis.

[Brad Green, Chief Executive Officer]

No, I would never expect to see 5% increases quarter-over-quarter. That's generally not what you would see in a stable profession such as ours. Now, what it means though is I would answer that a little further by saying we will continue to focus on our pricing. We look at what happens in every market by rooftop every quarter. So that's always going to be something we're looking at as inflationary pressures continue. And we're obviously always working with the field to make sure that they're doing the best job they can in the conference room. So hopefully, you'll see that price increase, or those averages increase over time but I don't think you should expect or anticipate that it would be 5.3% quarter-over-quarter.

[Martin Landry, Stifel]

Okay, that's fair. And just a question. I know you don't want to touch on Carriage and I don't want to talk about Carriage but I'm trying to understand a little bit, given the discussions you're having with them, how is it impacting your acquisition strategy on other files? Is this -- are you a bit on hold with the other files on your desk? Or like just trying to understand how you juggle the two things.

[Brad Green, Chief Executive Officer]

Yes. The short answer is it's not impacting it at all. You can see that in the cadence of the acquisitions that we've made so far this year. We're well on pace to hit our target acquisitions of between $75 million and $125 million annually. Look, we've often said there could be larger or more transformative acquisitions out there. We said that over time, there have been and there remain several opportunities that fit that category. And we're going to treat those just like smaller acquisitions. Every acquisition, every transaction must make sense on its own. I feel no pressure to do a larger transaction any more than I do a smaller one. I don't build any pressure to hit the target range. If at any point in time in any given year, acquisitions that are out there don't meet Park Lawn standards or are not what we want to do, then I will just tell you guys. We -- this management team has always been and will continue to be prudent stewards of our capital. So, if a deal doesn't make sense to our shareholders, we're not going to do it irrelevant in the size. So, in my mind, it's business as usual. You've seen that in the first part of the year and you'll see that through the remainder part of the year.

[Operator]

Our next question is coming from Irene Nattel with RBC Capital Markets.

[Irene Nattel, RBC Capital Markets]

Thanks and good morning, everyone. Just following up on our Martin's question. So, if we're seeing about larger transactions, do you think about them in any different way or in the same way with respect to what you're willing to pay with the qualities that you're looking for? Is there anything that we need to keep in mind with larger transactions that might be different?

[Brad Green, Chief Executive Officer]

Just based on their size, Irene, obviously, we would have to pay attention to what the capital requirements would be to any large transaction we looked at. But it's the same in my mind, from the standpoint of if it doesn't work for Park Lawn and its shareholders, we're just not going to do it. When I got a lot of phone calls a couple of months ago on a similar topic, I always started them with our larger shareholders or some of the analysts by just saying the same thing at the beginning I did at the end and that is we're not going to do anything stupid. It's that simple. When it comes to the larger transactions, we'll figure out what they look like, all figure out if it works for Park Lawn. If it does, we'll do it, if it doesn't we'll walk away. We do the same thing, whether the transactions are small, like M.W. Becker or if they're big all the way up to Horan. We look at them all the same way. And that will be the case with any large acquisition we do if we ever do one.

[Irene Nattel, RBC Capital Markets]

That's very helpful and, Brad, no, I don't expect you guys to do anything stupid. Just sticking with transactions for a moment, what's the rising rate environment? What we're hearing from other sectors is that they are seeing fewer participants and the ability to test the lower end of the range on valuation multiples. What are you seeing?

[Brad Green, Chief Executive Officer]

That's a good question, actually. I'll have to bifurcate the answer though. What I'm seeing is there's definitely less activity in the market. And those folks that were private equity-based are highly levered, you could definitely see that they pull back from making acquisitions, especially the ones that have been brokered. I mean we've seen that in two that have recently come along. So yes, I see less activity. And as a result of that, you're not going to see some of the multiples that probably existed in 2022 in 2021.

Now having said that, it doesn't affect us. And that's consistent with the answers that I was giving back then, meaning a lot of our acquisitions are self-sourced. And a lot of folks and a lot of our acquisitions we're not the highest bidder. People want to come, they want to join Park Lawn, they understand what that means and we've got a long track record of that. So, we were consistently making acquisitions in 2021 and 2022 in the 6x to 8x range when things are going all over the place. And I said at the time, multiples were being pushed higher. People were doing things I wouldn't do, yet if you look back, you saw us consistently make those acquisitions. I think you'll still see that. So, while there might not be competitive pressure in the broker deals as much and there might not be people pushing up the multiples in my mind, unnecessarily, you're still going to see us pay what's a fair price for these businesses because the strong independent owners, they're running their business all day every day, irrespective what's going on in the macroeconomic sectors or irrespective of other pressures that we may have to build as a publicly traded company. They know what their business is worth and we're going to pay them with fair price.

So yes, I see less going on. Yes, I see the multiples coming down in the highly competitive areas but I don't think it's going to affect us. You're going to see us do are steady drumbeat of good acquisitions that are accretive so I could hopefully sit in front of you every quarter and tell you we continue to grow.

[Irene Nattel, RBC Capital Markets]

That's helpful. And then just switching gears, if I might. Looking at the M&A margin, in the past we've talked about 26%, this quarter was closer to -- or just around 22%. Can you talk about the various factors that play into that margin? And how we should think about the margin evolution on a go-forward basis? And I guess, ultimately, are you focused on margin target? Is it a relevant margin target? What would need to have to happen to get there?

[Brad Green, Chief Executive Officer]

So, you asked you for focused on that margin target. I could grab any one of our VPs of operations or our directors and pull them in and they could have a very verbose confrontation with you son the level of focus we have on the margins at the field level. And so, I'm going to take a step back and come at this a little differently than I have in the past because we're looking at the margins this quarter and we're pretty happy with where they are. And you'll say but wait a minute, they took a step back from last quarter. Well, I could talk about Q2 being different than Q1, just seasonality-wise, that's true. I could talk about the fact that we intentionally had an increase in our corporate costs as we prepare our infrastructure for potentially larger acquisitions, I could talk about that. But what really is going on here is when the death rate does what it does with our current mix of businesses, it's going to have an impact on our margin. And we're getting a finer focus on that which is why I'm going to take a little bit longer to answer that question.

The management team joined a large part in 2018 into this company and we really had one non-COVID impacted year which is 2019 and we weren't really, for lack of a better way to put it, in charge. We kind of took over in early 2020 and we had the fun [ph] of 2020, 2021 and 2022, right? This is the first year, Irene, that we can really kind of look at our businesses in what I would call a normalized environment and really kind of figure out what we have in some of these places. And then you layer facts on top of that and then all of a sudden, we're getting the data we need. So, I've said in the past, we've got this mix of businesses. We're now looking at them in terms of kind of the rural to the small ones versus our metro to large markets. And our smaller Parks do less than 150 internments a year. You're talking about 10 to 12 a month. I mean, I know I'm rounding for everyone to like precise numbers but you kind of get my point.

You have limited office staff, maybe one counselor. So, at-need really drives what goes on in those Parks. And so, since those Parks are so heavily impacted by the death rate, it affects them from quarter-to-quarter. It doesn't make them bad businesses but they're not as predictable. So, by its very nature, it causes some headaches in a public traded company portfolio. That's what we've been talking about the mix. So, what are we doing about that now, all right? So, we've identified approximately 82 properties, let's call it, 70 cemeteries, 10 funeral homes roughly, all from legacy acquisitions, right? So, Irene, excluding those properties, our same-store cemetery margins would have been about 38% this quarter instead of 27%. And our consolidated fill margin would have been up 400 basis points. So, we're not talking about a small change, right?

Again, those businesses aren't bad and there's nothing wrong with them. It just kind of takes away from the stability and predictability that you guys want to see and so do our long-term investors. So, we have two options, right? One is to focus on those funeral homes and cemeteries and get the margins where they need to be and that is a possibility. And the other option is figure out whether or not they need to be part of our portfolio. I don't know the answer to that question yet because it's hard to talk about removing businesses from a portfolio because those people are Park Lawn employees and those are Park Lawn businesses and they do really well every quarter. They just don't provide the margins to be expected.

We are going to get to the 26% margin in this business by one of two ways and I just described it. Did it happen this quarter? No. Am I happy with the margins we have? Absolutely.

[Irene Nattel, RBC Capital Markets]

That's good and that's really interesting. And for whatever it's worth, the 26% -- it's a number, if those are good businesses and they're higher term businesses and they're high cash flow businesses, then we maximize the value of those and you move on unless you have something else to do with the money, she says. Thank you.

[Brad Green, Chief Executive Officer]

Yes. And so, this is -- you'll probably think that we sit around and talk about preneed sales and the death rate and things of that nature and we do. But right now, this is probably one of the top three things that this executive team is focused on. And we have pretty much a 100% track record of figuring things out. So, we'll figure out how to deal with it and we'll get back with you on it.

[Irene Nattel, RBC Capital Markets]

That's great. Thank you. And happy to hear [indiscernible].

[Operator]

Thank you. Our next question is coming from Zachary Evershed with National Bank Financial.

[Zachary Evershed, National Bank Financial]

Are pricing dynamics changing in any of your markets, given the additional disclosure that's been waived about?

[Brad Green, Chief Executive Officer]

The hard answer is no. We anticipated this question; we anticipated what would happen because of what's going on in our profession. And we're so unconcerned about that, that by the end of this month, our GPLs will be on every one of our websites of every one of our businesses and we believe it will have absolutely zero impact on what we do, pricing or otherwise.

[Zachary Evershed, National Bank Financial]

Good answer. Thanks. And then looking at preneed, given the easy macro environment and death rates kind of weighing on that at-need to preneed pipeline, what are the specifics of how you aim to drum up the sales on the premium side?

[Brad Green, Chief Executive Officer]

Yes. So let me step back a second. We have a new Vice President of Sales and he came through -- he actually joined us as the VP of Corporate Development. He's been in the profession a long time. He's only been in that role a couple of quarters. We're very happy to see what he's been doing. And so, I'm going to tell you what we're doing but this stuff has been in place for quite some time. It's not like something happened last quarter. But our sales programs, they're constantly being implemented, looked at, tweaked when we need to, for people who might need some additional help on the preneed side. So lower interest financing on installment agreements, down payment matching, other value-added consumer incentives, like rebate options, things of that nature. We're continually looking at that.

This quarter, with at-need dropping, it affects preneed, it's never been an easy job to sell preneed funeral home or cemetery. Everybody has been doing it for two decades. It's not something new that's recently discovered and it's just hard work. And so, what we do is our VP of Sales, is working with the other folks that we have in those management roles. And it goes all the way down to just providing the sales counselor what they need. And I think we're doing a pretty good job of that. But that's how that effectively looks. This quarter isn't anything special in my mind. It's just hard to do. And with at-need down a little bit, it's going to affect these smaller Parks as I was telling Irene but we expect them to go to work and do what they do.

During the pandemic, it was a lot easier, right? I mean, it was front of mind, everyone was watching the news every day and you had younger consumers coming in and people were paying more attention to it. And now it's just back to making phone calls and knocking on doors and we expect them to continue to do a good job of that.

[Zachary Evershed, National Bank Financial]

Makes sense. And just one last one. What's the progress like on finding additional labor to the field, funeral directors, maintenance workers. Are there any catalysts that's changing other than just the general labor market?

[Brad Green, Chief Executive Officer]

Yes, the pressures off of that as much as it was a year ago, right? It's just a different labor market. Look, I'm not saying there aren't pressures on labor costs. You all read the same newspapers and lots the same financial shows I do. We all know what's going on. So, there's still pressure on labor costs. It's not as acute as it was last year. We're able to find workers easier than we did last year. It's just not something that was as front of mind as it was. Now listen, we're going to have to pay attention because inflation is still there. Wage pressure is still there. But I think we're doing a pretty good job through the pricing and then managing those costs to get where we are. I'm not going to hang up the phone and make a bunch of phone calls today to people who didn't do their job in the second quarter. Quite frankly, I think they did. So, we'll continue to focus on those costs as we can and labor isn't what it used to be as far as pressure on us.

[Operator]

Thank you. [Operator Instructions] Our next question is coming from Zach Camparo [ph] with CIBC.

[John Zamparo, CIBC]

Thanks. I wanted to ask about consumer behavior and sensitivity on pricing. And I would guess, based on your average revenue per call being higher pretty meaningfully. It doesn't seem like you're seeing any sensitivity but is there any element in mix there versus high income versus low income? Just so like your views on how willing consumers are to spend in this environment?

[Brad Green, Chief Executive Officer]

No and I think I know where that question is coming from. We don't have super high-end consumers in a lot of our markets and some of our markets we definitely touch the lower end. The majority of our consumers kind of fall in the middle. That's just the way it's worked out for us over time. It's not that we don't have high-end businesses we certainly do and it's not that we don't have low-cost businesses, we certainly do. I'm just saying that the majority of it falls in the middle. We have not seen the price sensitivity, certainly on the at-need business and in the funeral homes. Now we're very sensitive. It's market-by-market, rooftop-by-rooftop, local manager making these pricing decisions, right? It's not coming from us. We don't say raise prices 2% across the board. That would be a foolish mistake. So, as each of these people are looking at their own competitive landscape and what's going on and they're making pricing decisions based on that. And they go to the store and buy milk and eggs like everyone else and they know things are going up.

So, we're being very cautious with the pricing. I think the mix from Q2 2022 to Q2 2023 had an impact on that. And when I was asked earlier by Martin, I wouldn't expect it to be 5.3% going forward. But to answer your question, again, specifically, we're not really seeing that on the at-need side. We are feeling it a little bit on the lower end of the preneed side but that's not new to Q2, right? That started last year. And I think we're managing to that quite well, actually.

[John Zamparo, CIBC]

Got it. That's helpful. And then one more question on the new disclosure or newish disclosure. We've now got two quarters of segmented data. I wonder if there's any other elements of seasonality that might meaningfully impact the mix of sales between the two segments or margins within either segment that are worth calling out for the back half of the year?

[Daniel Millett, Chief Financial Officer]

No, I wouldn't say outside of the seasonality which I think we're kind of back to that normal cadence which kind of got thrown out the window during COVID with various spikes and spikes in the mortality rates. We're kind of back to that Q4 and Q1 are very strong quarters. Q2 is probably third. And then Q3 last with the summer months in some of the cemetery preneed stuff. We're kind of back to that normal cadence. And as Brad mentioned several times today, it's a function of the mortality rates. And it's just a fact that more people are dying in the winter than they do in the summer.

[Brad Green, Chief Executive Officer]

And I'll just add one comment to that because it's fun to say it every earnings call. If you look at this profession quarter-by-quarter, it's going to drive you crazy. We don't manage it like that. And when I first came into this profession, Jay Dodds said this to me and it still holds true to this day because he says it all the time, Mr. Smith does not know to die on March 30 instead of April 1 to make the quarter better. It's not the way it works. So, we like to look at it on a trend basis, we like to look at it on an annualized basis, trailing 12-months basis, we just can't make decisions based on a quarter-by-quarter outlook. It doesn't make sense in our profession. I know that it's absolutely contrary to being a publicly traded company and what you guys have to do as analysts but it still remains the truth.

[Operator]

Thank you and apologies to Mr. Zamparo for getting his name incorrect. At this time, we have no further questions on the line. So, I'll hand it back to Mr. Green for any closing comments.

[Brad Green, Chief Executive Officer]

I really appreciate everyone who joined the call today and we look forward to some exciting times in the next couple of quarters from Park Lawn. Thank you very much.

[Operator]

Thank you, everybody. This does conclude today's call. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation.