Park Lawn Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 11, 2023

There are 5 speakers on the call.

Operator

Greetings, and welcome to the Parq Loan Corporation Second Quarter 2023 Earnings Call. At this time, all participants are on a listen only mode. On a question and answer session, please follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to your host, Jennifer Hain.

Operator

Ma'am, you may begin.

Speaker 1

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,

Speaker 2

please note that you can find

Speaker 1

a detailed breakdown of our 2023 second quarter results in our financial statements and MD and 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 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.

Speaker 1

Although we believe these measures provide 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 I will now hand the call over to Parkland's CEO, Brad Green, to open our discussion today.

Speaker 3

Thank you, Jennifer, and good morning, everyone. In addition to Jennifer, with me on the call today is our CFO, Dan Millen. 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 Q2 2023 operating results, which demonstrate Sustained growth as well as improved business performance in an overall challenging environment.

Speaker 3

Those challenges included a decreased number 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 For the 3 month period ended June 30, 2023, our revenue increased 12.3%, Our adjusted EBITDA increased 20.7 percent 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 high level and continues to provide exemplary service to our client families.

Speaker 3

While the overall operation of our cemetery businesses improved year over year, Certain businesses call decreases in both atneed and preneed revenue, principally due to the decrease in the death rate and as a result of atneed sales being a driver of our preneed Additionally, an uncertain economic environment has certainly posed a challenge for certain consumers. Our sales team continues to regularly evaluate new programs and strategies to serve these customer families. To be clear, we do not believe that this decrease is the result lost consumer that instead is simply the 1st 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.

Speaker 3

During the quarter, we added 3 standalone funeral homes, One standalone cemetery and on-site funeral home and cemetery with the transactions of Seats and Cobbs expanding our presence in both Greater Kansas City area and Georgia. Subsequent to quarter end, we also further expanded our funeral home presence in the Greater Toronto area through the acquisition Ward Funeral Home, which added 3 standalone funeral homes and due to the acquisition of M. W. Becker, which added a single standalone funeral home. Finally, on June 29, Parkland 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 Sprott.

Speaker 3

While we understand that you may have additional questions surrounding this 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 GMV 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, He will provide some additional detail regarding our Q1 results. Thank you, Brad, and good morning, everyone.

Speaker 3

My comments this morning will focus primarily on our operating results from the Q2 of 2023 relative to Q2 2022. For the Q2, we saw revenue increase approximately $9,400,000 as acquired operations continue to contributed to Parkland's positive growth. However, with mortality slightly decreasing year over year, revenue from our comparable operations was essentially flat. The Q2 of this year compared very favorably to 2022 as our focused operating improvements made over the back half of last year into the first half of twenty twenty three started to show improvements. Targeted pricing improvements, incentive compensation restructuring The focus on operations expense controls, our fuel margins increased 250 bps year over year.

Speaker 3

For the 3 month period ended June 30, 2023, Operating expenses, including our direct cost of sales, general and administrative, advertising and selling and maintenance expenses, increased by approximately $5,100,000 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 bureau 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 impacts 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, advanced service offerings and cost efficiencies. On the cemetery side, While margins improved year over year, revenue decreased in line with the decreases in mortality.

Speaker 3

Our sales teams are constantly reviewing ways to further incentivize our meet their needs around installments, financing terms and other value added incentives. However, we believe the decrease in net new sales volume more directly impacted Further, a portion of the decrease in revenue can be attributed to catch up merchandise deliveries, which were made in the Q2 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 twenty twenty three, we have made additional investments in both our accounting and IT functions to better position Parkland for growth, Deliver accelerated development, integration and support of facts within our businesses and help drive further efficiencies, which we expect to keep visible in our reporting beginning in 2024.

Speaker 3

At June 30, 2023, We had approximately $187,000,000 outstanding on our credit facility, other debt of $18,200,000 Finance leases of approximately $6,000,000 and cash on hand of approximately $31,300,000 Excluding our debentures, our net debt was approximately $180,000,000 as at June 30, 2023. Related to our debt profile, Interest rates have had a negative impact on our financial results for the Q2. We have seen interest rates on the variable debt increase over 500 piece 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 The ability to grow and license these headwinds, and we remain prudent on how we are allocating our capital. Our leverage ratio was approximately 2.16 times based on the terms of the credit facility and approximately 2.94 times including our outstanding debentures.

Speaker 3

Although there were many puts and takes in the quarter, net earnings from Q2 2023 decreased relative to Q2 2022. Net earnings for the Q2 was $3,800,000 or $0.09 per share compared to $5,800,000 or 0.167 The changes year over year were in part impacted due to the sale of a non strategic 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 2nd quarter grew year over year And was approximately $7,700,000 or $0.222 per share compared to $6,600,000 or $0.19 per share in Q2 twenty twenty I'll now turn the call back to Brad for some closing comments. Thanks, Dan. While dramatic fluctuations in the debt rates seem to be behind us, Those death rates are still declining.

Speaker 3

And while I'm looking forward to a quarter where we don't have to talk about the pandemic or excess 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 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 We continue to be an operating company 1st and foremost in an exact We still see ourselves as a company in its early stages of the business lifecycle, We believe there are tremendous opportunities to grow, improve and create a company that becomes self sufficient in its capital needs.

Speaker 3

With hard work of our team, we are operating today infinitely better than we were 5 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

A moment please while we poll for questions.

Speaker 3

Thank you. Our first question

Operator

is coming from Tyson Lantree My first question is on your average revenue per service in funeral homes. You touched on it, it's up 5.3%. It's now your strongest increase of 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 Pricing changes that you took recently.

Speaker 3

Hey, Martin, it's Dan here. Yes, that's kind of multifaceted, right? And you hit on obviously the 2 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.

Speaker 3

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 had a bit of an impact on the average and this quarter was a lot more normal. I think in the last 6 quarters, we've kind of fluctuated between 62% and 63% cremation, and it's really been quite stable with the exception of This Q2 last year. But it's kind of those three things that really combine to make the increase up.

Operator

Okay. And then so

Speaker 3

is that case, Could that be continued

Operator

in the coming quarters? Or was that just more of a blip? I'm just trying to get a bit

Speaker 3

of color as to How we should look at net performance on a go forward basis? Yes, Martin, it's Brad. No, I would never 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. No.

Speaker 3

But 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, high 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.

Operator

Okay, that's fair. And just a question, I know you don't want to touch On carriage, 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 2 things?

Speaker 3

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 $75,000,000 $125,000,000 annually. Look, we've often said there could be larger or more transformative Acquisitions out there.

Speaker 3

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 even feel any pressure to hit the target range.

Speaker 3

If at any point in time in any given year, acquisitions that are out there don't meet Parqon standards or not what we want to do, then I'll just tell you guys. This management team has always been and will continue to be prudent stewards of our capital. So if the deal doesn't make sense to our shareholders, we're not to do it irrelevant and besides. So in my mind, it's business as usual. You've seen that

Operator

in the 1st part of the

Speaker 3

year and you'll see that through the remainder part of the year.

Operator

Thank you. Our next question is coming from Irene Nattel with RBC Capital Markets. Your line is live.

Speaker 1

Thanks and good morning everyone.

Speaker 2

Good morning. Just following up on Martin's question. So If we're thinking about larger transactions, is there do you

Speaker 1

think there's going to be any different way or

Speaker 2

in the same way with respect to what you're willing to pay, the qualities that you're looking for. Is there anything we need to keep in mind with regards to transactions that might be different?

Speaker 3

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 look at. But it's the same in my mind from the standpoint of if it doesn't work for Parkland 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, how we started them with our larger shareholders or some of the analysts, but I was just saying Same thing in the beginning I did at the end and that is we're not going to do anything stupid. So when it comes to and it's that simple. When it comes to the larger transactions, we'll Figure out what they look like.

Speaker 3

We'll figure out if it works for Parkland. If it does, we'll do it. If it does, it will walk away. We do the same thing whether the transactions are small Like M. W.

Speaker 3

Becker or they're big all the way up to Horent, right? We look at them all the same way. And that will be the case as with any large acquisition we do If we ever do one.

Speaker 2

That's very helpful. And Brad, no, I think I sincerely can do that. Just sticking with transactions for a moment. With the rising rate environment, what we're hearing from other Factors is that they are seeing fewer participants and their ability to capture more end of the range from allocation multiples. What are you seeing?

Speaker 3

That's a good question actually because 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 or highly levered, You see that they pulled back from making acquisitions, especially the ones that have been brokered. I mean, we've seen that and 2 that have recently come along. So yes, I see less activity.

Speaker 3

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 Parkland, they understand what that means and we've got a long track record of that. So we were consistently making Acquisitions in 2021 2022 in the 6 to 8 times range when things were going all over the place.

Speaker 3

As I

Speaker 4

said at the time, Multiples

Speaker 3

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.

Speaker 3

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 of what's going on in the macroeconomic Sectors irrespective of other pressures that we may have to deal with as a publicly traded company, they know what their business is worth and we're going to pay them a 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 to Our steady drumbeat of good acquisitions that are accretive, so I can hopefully sit and throw in every quarter and tell you we continue to grow.

Speaker 2

That's helpful. And then just switching gears, if I might. Looking at the M and A margin, in the Top of 26%. The Q2 was closer to was just around 22%. Can you talk about the various factors that The impact margin and how we should think about the margin evolution on a go forward basis?

Speaker 1

And I guess

Speaker 2

ultimately, are you Are you

Speaker 1

focused on that margin target? Is it

Speaker 2

a relevant margin target? What would be

Speaker 1

to have to happen to get there?

Speaker 3

So you asked if we're focused on that margin target. I can grab any one of our VPs of operations or Our directors can pull them in and they can have a very verbose conversation with you on 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, 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.

Speaker 3

I could talk about the fact that we intentionally had an increase in our corporate As we prepare our infrastructure for potentially larger acquisitions, I can talk about that. But what really is going on here is when the debt rate does what it does With our current mix of businesses, it's going to have an impact on our margin. And we're taking 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 in large part in 2018 into this company. And we really had one non COVID impacted year, which is 2019.

Speaker 3

And we weren't really, for like a better way to put it in charge, right? We kind of took over in early 2020 And you had the front of 2020, 2021 and 2022. Right? This is the 1st year, Irene, that we can really kind of look at it And our business is in what I would call a normalized environment. They really kind of figure out what we have In some of these places.

Speaker 3

And then you put later 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 rule to the small ones versus our metro to large markets. And our smaller parks do less than 150 in term as a year. You've got about 10 to 12 a month.

Speaker 3

I mean, I know I'm routing for everyone who likes precise numbers, but you kind of get my point. We have limited office staff, maybe one counselor. So ACME really drives what goes on in those parks. And so since those parts are so heavily impacted by the death rate, it affects them from quarter to quarter. It doesn't impact businesses, They're not as predictable.

Speaker 3

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? But are we excluding those properties?

Speaker 3

Our same store cemetery margins would have been up 38% this quarter instead of 27. And our consolidated build margin would have been up 400 basis points. So we're not talking about 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.

Operator

So we have 2 options, right?

Speaker 3

One is to focus on those Funeral Homes and Cementaries 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 Farfalon employees and those are Farfalon 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 1 of 2 ways that I just described it.

Speaker 3

Did it happen this quarter? No. Am I happy with the margins we have? Absolutely.

Speaker 2

That's great. And that's really interesting. And For whatever it's worth, 26% is just it's a number, such as businesses in a high return business, but they're high cash flow businesses. Then we maximize the value of those and you need to invest. You have nothing else to do with the money.

Speaker 2

So thank you.

Speaker 3

Yes. And this is you'll probably think that we sit around and talk about free details 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 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.

Speaker 2

That's great. Thank you. And happy to hear the facts from you, sir.

Speaker 3

I couldn't hear you at the last part, Louis.

Speaker 2

It's okay. Just maybe those comments for facts. Thank you.

Operator

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

Speaker 3

Perfect. Thanks guys.

Speaker 4

Sorry for the delay.

Speaker 3

Sorry.

Speaker 4

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

Speaker 3

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, RGTL will be on every one of our websites with every one of our businesses, and we believe it will have absolutely zero impact on what we do, pricing or otherwise.

Speaker 4

Good answer. Thanks. And then looking at preneed, given the easy macro environment and That's right. It's kind of weighing on that need to preheat pipeline.

Speaker 3

What are the specifics of how you

Speaker 4

aim to term out sales on the preheat side?

Speaker 3

Yes. So let me step back a second. We have a new Vice President of Sales. He came through. He actually joined us as the VP of Corporate Development.

Speaker 3

He's been a professional 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 It's been in place for quite some time. It's not like something happened last quarter.

Speaker 3

But our sales programs, they're constantly being implemented, looked at, Tweets when we need to. For people who might need some additional help on the 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 this quarter with atneed dropping, it affects preneed. It's never been an easy job to sell cleaning funeral home or cemetery. Everybody has been doing it for 2 decades.

Speaker 3

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 Counsel for what they need. And I think we're doing a pretty good job of that. That's how that effectively looks. This quarter isn't anything special in my mind.

Speaker 3

It's just Hard to do. And when at me down a little bit, it's going to be smaller parts as I was telling Irene. So 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.

Speaker 3

Everyone was watching the news every day and you had younger consumers Coming in and people were paying more attention to it. 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. Makes sense. Thank you.

Speaker 4

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

Speaker 3

Yes. The pressure is off That as much as it was a year ago, right? It's just a different labor market. I'm not saying there are pressures on labor costs. You all read the same newspapers and watch the same financial shows.

Speaker 3

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 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.

Speaker 3

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 Q2. 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 pressures on us.

Operator

Thank you. And this question is coming from Zack Cantaro with CIBC. Your line is

Speaker 3

That's enough. Thanks. Good morning. I wanted to ask about consumer behavior and sensitivity on pricing. And I would guess based on your average revenue call being higher pretty meaningfully, it doesn't seem like you're seeing any sensitivity.

Speaker 3

Is there any element in mix there versus high income versus low income? Just would like to hear your views of how willing consumers are to spend in this environment. Yes. So John, I know it's you and not Zach. So at least we're good on that side.

Speaker 3

Look, no, I don't 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 in 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.

Speaker 3

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 acting business and in the funeral homes. Now we're very sensitive.

Speaker 3

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 So each of these people are looking at their own competitive landscape 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've been very cautious with the pricing.

Speaker 3

I think the mix from Q222 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 We mean that on the atneed 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. Got it.

Speaker 3

That's helpful. Thank you. And then one more question. On the new disclosure, the index disclosure, we found that 2 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 margin Within either segments that are worth calling out in the back half of the year.

Speaker 3

Yes. John, it's Ken here. 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 mortality rate. We're kind of back to that.

Speaker 3

Q4 and Q1 are very strong quarters. Q2 is probably 3rd and then Q3 lasts with the summer months in some of the cemetery and pre meet stuff. We're kind of back to that normal cadence. And 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.

Speaker 3

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 to the profession, J. D.

Speaker 3

I. Said this to me and it holds true to state because it all the time. Mr. Smith does not know to die on March 30 instead of April 1st to make the quarter better. It's not the way it works.

Speaker 3

So we like to look at it on a trend basis. We like to look at it on an annualized basis, trailing 12 month basis. We just can't make decisions based on Quarter by quarter outlook, it doesn't make sense in our possession. I know that it's absolutely contrary to being a publicly traded company in which you guys have to do with the analysts, it still remains the truth. Yes.

Speaker 3

Understood. Okay. I appreciate your color. Thank you very much. You got

Operator

it. Thank you. Apologies to Mr. Vamparo for getting his name incorrect. At this time, we have no further questions on the line.

Operator

So I'll hand it back to Mr. Green for any closing comments.

Speaker 3

I really appreciate everyone who joined the call today, and we look forward to some exciting times in the next couple of quarters in Parkland. 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.

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