Park Lawn Corporation

Thank you, Grant, and good morning, everybody. We'd like to thank you for joining us today.

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 the 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 Lawn's CEO, Brad Green, to open our discussion today.

Thank you, Jennifer, and good morning, everyone. In addition to Jennifer, with me on the call today is our CFO, Dan Millett.

I'll begin with a discussion of our business highlights from the quarter, and Dan will follow with a more detailed review of our financial results. Next, I will provide a brief outlook of what we expect from our businesses in the second-half of the year, and then we will take your questions.

Park Lawn, again, experienced significant revenue growth in the second quarter of $88.4 million. Revenue was approximately 8.5% over Q2 2020 despite significant foreign exchange headwinds year-over-year.

Revenue growth from comparable businesses was approximately 13%, excluding the aforementioned foreign exchange headwind. And Park Lawn achieved adjusted EBITDA of $22.7 million, and an approximate 26% margin.

So, what's behind these numbers? Well, as we all head down the path towards some level of normalcy in both the U.S.

and Canada, the COVID-19 virus continues to defy the experts' predictions almost constantly. However, one prediction that has proven to be true through the first-part of 2021 is that COVID and COVID-related death have deceased from the highs in 2020, which was reflected in the at-need volume of our comparable businesses.

However, the total funeral home call volume as well as the total cemetery interments increased quarter-over-quarter. These increases were driven by both our acquisition and continued improvements in operating performance.

Again, as we anticipated, our funeral average revenue per call increased quarter-over-quarter as jurisdictional restrictions were lifted in the markets where we operate, and families, quite simply, pivoted back to their pre-pandemic choices of celebrating their loved ones with a service and memorialization. That increase was approximately 7%.

Furthermore, we continue to see a substantial increase in demand for both pre-need cemetery and pre-need funeral products, including property, services, and merchandise. In addition to closing on the three previously announced acquisitions in North Carolina, Tennessee, and Wisconsin, we closed another acquisition earlier this week in Mississippi, and anticipate closing on another premier business in the greater Nashville, Tennessee market later this month.

With these two new acquisitions, we have deployed approximately USD7 million so far this year, and we're not done making acquisitions in 2021; $75 million; sorry, my apologies, USD75 million, so far this year. Our entire team has worked diligently to successfully close these acquisitions in rapid succession, and they deserve credit for making Park Lawn not only the fastest growing, but also the premier company in our profession.

While I would say the impact of COVID-19 pandemic is far from over, it was reassuring to see our businesses perform exceptionally well with a more normalized call volume. I'd now like to turn the call over to Dan to review our financial results in more detail.

Thanks, Brad, and good morning, everyone. You'll find a detailed breakdown of our second quarter results in our financial statement and MD&A, which are available on our Web site and on SEDAR.

My comments this morning will focus on the second quarter operating results. As Brad mentioned, the second quarter saw a decrease in call volumes from comparable operations relative to Q2 2020.

Total call volume although increased, helping to contribute to total revenue growth of approximately 8.5%. Revenue grew from $81.5 million in Q2 2020 to $88.4 million in Q2 2021, all while experiencing an 11% foreign exchange headwind due to the appreciation of the Canadian dollar.

Currently, approximately 88% of our revenue is generated from our U.S. businesses, and this headwind can have a meaningful impact on our results, and is something that does not impact our competitors to the same degree.

Ignoring the impact of foreign exchange, our total revenue increased approximately 20%, and revenue from comparable operations grew approximately 13%. With call volumes and interments returning to more traditional levels, averages per event and pre-need sales drove the strong revenue growth from comparable operations seen in Q2.

It goes without saying that 2020 was not a typical year as call volumes were affected by the COVID-19 pandemic. However, for Park Lawn, we expect to see continued financial growth driven principally from acquisitions, average revenue per event, and pre-need sales, as the pandemic has acted as a trigger event for our cemetery businesses.

On the other side of the coin, the company's operating expenses, including general and administrative, advertising and selling, and maintenance expenses increased by approximately $2.9 million for the three-month period ended June 30, 2021, over the same period in 2020. This increase is primarily the result of acquired operations offset by the impact of foreign exchange.

In addition, when the pandemic hit, in Q2 2020, maintenance projects were put on hold, labor furloughed, and costs tightened due to the uncertainty at that time. This was not the case for the three-month period ended June 30, 2021, as most of PLC's businesses were fully operational.

As a result of another quarter of exceptional sales and a commitment to operations, our net earnings attributable to PLC shareholders for Q2 2021 was approximately $7.1 million or $0.24 per share, compared to $6.6 million or $0.22 per share for Q2 2020. Furthermore, adjusted net earnings attributable to PLC shareholders for the second quarter of this year was approximately $10.8 million or $0.36 per share, compared to $8.8 million or $0.30 per share in Q2 2020.

This represents an increase of approximately 21% in adjusted earnings per share for Park Lawn shareholders. Our adjusted EBITDA attributable to PLC shareholders for the current quarter was approximately $22.7 million or $0.75 per share, compared to $19.5 million or $0.65 per share for the same quarter in 2020.

This represents an increase of adjusted EBITDA of approximately 17% over the same period in 2020. Turning to the balance sheet, we ended the first quarter with approximately $147 million drawn on our revolving credit facility, other debt of approximately $15 million, and cash on hand of approximately $24 million.

Excluding our debentures, our net debt was approximately $138 million at June 30, 2021. At the end of June, our leverage ratio was approximately 1.49 times based on the terms of our credit facility, and approximately 2.43 times including our outstanding debentures.

We believe we are currently well-positioned for and expect future growth through M&A, including the acquisitions announced yesterday, we estimate our current liquidity at approximately $67 million, which is readily available to be deployed in ongoing and future growth initiatives. We continue to see support from the broader credit markets, and our operations continue to generate free cash flow available for strategic initiatives.

I will now turn the call back to Brad for some comments regarding what you can expect as we move forward in 2021, and closing remarks.

Thanks, Dan. Our message today remains consistent with what we suggested following our Q4 2020 and our Q1 2021 results.

We expect difficult financial comparatives relative to our 2020 results due to the at-need volumes experienced throughout the second-half of 2020, and into Q1 2021. However, we still expect to see financial growth over our 2020 results, driven primarily through acquisitions, pre-need sales, market share growth, and continued improvements in our operating performance.

We are proud of the hard work demonstrated by our team this quarter, and the second quarter's results align perfectly with our prior messaging and expectations. Our growth profile remains the best in our profession, and will be part of our success for the foreseeable future.

Further acquisitions of high-quality businesses, on-site developments, and inventory expansion remain key focuses for Park Lawn. Our frontline operation teams perform day in and day out, and are clearly the cornerstone to Park Lawn's success.

While the past year-and-a-half has been nothing short of challenging, it is this group of employees that continue to put our client families first, and provide them and their communities with meaningful experiences in celebrating the lives of their loves ones. As we have repeatedly stated, we are not a consolidator.

Instead, we're an operator of funeral homes and cemetery businesses that grows through acquisitions. I believe strongly that it is this vision that makes us different, makes us successful, and is fundamental to continued performance in a high-touch profession such as death care.

That concludes our prepared remarks. And I will now turn it over for any questions.

Thanks, and good morning, gentlemen. In your opening remarks, you mentioned that you saw a 7% increase in revenue per call in Q2.

So, where would that take us relative to pre-COVID levels, like have we fully caught up or is there more catch-up to do?

So, you notice that this time we're comparing it back to Q1 of 2021, so that's a 7% increase over last quarter. Given that even last quarter, Irene, was a 7% increase over Q1 2020, that's a pretty significant increase over, let's call, a pre-pandemic average.

So, if you ask me if we caught up, that's a tough question, right, because there was the death that happened in 2020. We clearly exceeded what the averages were pre-pandemic.

But what makes it difficult for us to figure out is we were also working on those averages as part of the integration of our businesses and continuing to make this a better company. Do I expect our averages to continue to increase or get better?

Yes. Do I expect them to be a 7% increase every quarter?

No. I think what you're seeing is what we started talking about, actually in August of 2020.

We strongly felt that the moment these restrictions were lifted in the different territories or different markets we were in, that families would go back to their preferred choices, basically remembering their loved ones with services and memorialization, and that's exactly what we're seeing now.

That's really helpful. Thanks, Brad.

And then, obviously, on the M&A side, you announced those two transactions yesterday. What does the pipeline look like at this point in time?

And what's your general sense of, now that things are to some degree normalizing, the -- is there more willingness, less willingness, unchanged in terms of those who might have been thinking about selling to actually engage in discussions?

So, I would almost rename it, and instead of calling it a pipeline now, Irene, I'd almost call it a queue, and to answer the question. Meaning, we're getting a number of phone calls to the point that we are telling good businesses or good owners that if they want to join Park Lawn that they're going to have to wait into next year, because that's the level of activity that we're seeing.

So, when we're getting phone calls from broker deals and they say, "You've got 30 days to respond in this, and we need to have it done by the end of the year," we're just telling those people no, because we can't get to those acquisitions right now given the number of people that want to join Park Lawn. So, four out of the five acquisitions we've had have been non-broker deals that were just dealing with Park Lawn, because that's where those people wanted to sell their business to, and those are the people that we're focusing on.

So, that is a very strong way of saying, and this could change in a quarter, or two quarters or three quarters, and if it does I will tell you. But it's less of a pipeline now where we're going out and trying to get people to come to us, and more of us just dealing with the good folks that want to join our company.

I think this is what my grandmother used to call a golden problem. But just thinking this through, what would have to happen for you to increase your ability to sort of -- just to, I guess, to handles a higher pace of deal inflow?

I'm not sure that we would even do that.

Okay.

Kind of contrary to that, I think if you look back to how we describe Park Lawn and what we believe internally in this company, we are firm believes that we operate funeral homes and cemeteries. And part of acquiring them means we have to integrate them and continuing to operate them in the manner in which the former owners and the employees remain proud.

It's a circular argument. By doing that, more former owners, more premier businesses want to join us, and that's what causes that queue.

So, what really tempers our acquisition activity is the same group of people that are working on acquiring them is the same group of people that are integrating them, and then operating them later. We don't have different teams, we all own this.

And so, really, Irene, we could add more people to bring acquisitions on quicker. But it is our belief that if we did that we then wouldn't be able to integrate them and operate them.

And eventually you break that queue, and you start talking about a pipeline again, and then you start talking about having to go out and overpay for businesses to get them to join you. So, I kind of like our acquisition activity.

I think 2019 was a high watermark. I think 2021 will also show that we're very capable of doing a lot of acquisitions.

But I'm not going to leave anyone with the impression that we're going to even ramp that up further, because I just don't think we can do things the way we like to do around here if we start making more acquisitions in kind of the steady drumbeat that we like to see.

And that's a great answer. And then just one more for me, finally, just quickly, and you know which one is coming.

The IT platform, where are we? I think, last quarter, we were kind of -- we had done a [livecast] [Ph].

Where are we at this point? And are we still on track with the timeline?

We are still on track with the timeline. We expect our cemeteries to be online by the end of this year.

Then we'll put the focus more to the funeral homes. We did it in that reverse order -- well, I say reverse order.

We did it in that order because we believe we would get the most impact out of the cemeteries. COVID continues to cause us headaches with that, I mean because sometimes we can get in places, and sometimes we can't.

That's now gone, so our ability for our folks to travel around, it's a lot easier. And also, as we continue to do acquisitions, the same IT team that's rolling out that is the same IT team that I basically dispersed to two locations in Mississippi this week.

And we'll be dispersing, next week, to Tennessee. So, it's not going -- I guess, it's going as we planned.

I'd like it to go faster, but we're still on track from what we've been telling you from the beginning.

That is great. Thanks so much.

Yes, thanks. Good morning, guys.

Good morning, George.

Looking at your adjusted EBITDA margin, it looks like we saw about a 100-plus basis points contraction quarter-over-quarter. Is that just mix?

Can you maybe talk to what happened there? And, I guess, looking at the margins, would you expect continued pressure in the second-half, and then rise next year into the 26% kind of goal that you guys called out?

Well, at the end of last quarter, I mentioned that we -- I wouldn't be surprised if we saw a pullback on the margins, simply due to the drop of the at-need calls that we had. I mean, no one was saying, no one predicted, and no one thought that we would have a 27% margin in Q1 of 2021.

So, we did predict a -- I predicted that there would be a small pullback from that, based on that. So, what's less than a mixed question, and more of the fact that the at-need call volume dropped, because of the drop in the COVID-related deaths.

Quite frankly, George, we're very pleased that it's at 26% or 25.8%, for this quarter, because that's where basically the goal that we were heading for anyway, and you're talking about a normalized kind of call volume situation with the new acquisitions coming in at a 26% margin, and we're talking to you guys about having a 26% margin by the end of 2022. And I would be really surprised if we can't maintain margins at this level or above on a go-forward basis.

I mean it's going to be in this range, as we predicted it would be.

Okay, that's helpful, Brad. Thanks and rightfully so you called COVID a trigger event as it relates to the premium business.

I know it's a difficult question to answer, but how long do you think this lasts for it, is it a couple of quarters, is it longer, any thought there?

Yes, that's a good question. The first step is ask the question back in August of 2020.

And I'm not going to take credit for that. It was Jay Dodds who said, "Look, this is going to be a trigger event and a big deal going forward."

And it's if you look back to the transcripts of these calls, we started kind of preaching that. And so it's very difficult to start putting a time limit on it, we've also said we think it's not going to be a short-term issue.

So 18 to 24 months, from kind of the time that the COVID thing starts to really back down or COVID deaths start to really back down is about what we're thinking. But you know, George, your guess is as good as mine, right?

This is going to have a big impact on a lot of people and could be for a long time. And when you talk about a trigger event, you're really just talking about the ability for our sales people to be able to start a conversation about that.

And what that planning looks like if that were to occur. COVID-19 has clearly put that in the front of mind of everyone in the U.S.

So it makes the conversation start easier. So, the question you're really asking is, when does that wane?

So I say 18 to 24 months, but if we're in 18 to 24 months from now, these numbers are still high, it's because people are still thinking about what happened in 2020.

Okay, that's helpful. And just one last one if I may, as we've been putting on more and more funeral based assets compared to a few years ago, in theory, we should be taking on more leverage.

So just wondering, what would be your comfort zone at this point as it relates to the balance sheet?

Yes, George, I think we've kind of been alluding to this over the last few quarters. But simply put, we're much more comfortable taking on some more leverage from where we are today.

I don't want to put a target on it because I find when you put a target on something, you start managing to that number. And with the capital stack, it's very fluid and things are changing daily.

But again, simply put, we have an appetite to use more debt in our structure, based on the risk profile of the company. I mentioned in my remarks, the credit markets are very, very forthcoming to us right now.

We're looking at our credit facility to make sure, we've got the right amount of availability for our growth and expansion plans. So where we sit today at kind of 2.4 times or 1.5 times depending on how you look at it, we expect it to increase from there.

Okay, thanks and again good luck.

Thank you and good morning, gentlemen. Just wondering if you could, you can break down a little bit of the per call growth.

So, are you able to -- are you able to break down the per call growth rates between cemetery and funeral home and are you able to provide a little bit more color on absolute levels currently versus pre-pandemic levels?

So, you mean on the call mix, is that what you're referring to?

Yes, I mean basically like FCI gives average per call revenue for funeral home, and it doesn't do so for cemetery, but are you able to provide something similar to that? And I was just going to say SCI put in 13% growth per funeral home service call on a total of 20% organic growth, 34% from cemetery, look recognizing that your real gross number is 13%.

I'm just wondering if you can kind of put it in context with SCI's performance.

So, the 7% average growth number that we gave you is on funeral homes, and the reason why SCI wouldn't give you, or doesn't I guess give you an average growth in the cemetery is the same reason you don't hear that from us. It kind of moves up and down, and there are things that are in the quarter and not in the quarter based on what you recognize and don't recognize.

So, it just doesn't really tell you whether there is a growth or a retraction. So, no, we don't have that number.

We don't track that number quite frankly, because it doesn't do us any good. But when they're talking about the average contract growth, they're talking about funeral homes just like we are.

So Scott, no, I don't have it for you on the cemetery side, because we don't pay attention to that anyway.

Yes. Look, I recognize it's a weird time and it's always a little bit of a tricky mix, but that's helpful.

And just wondering about the two acquisitions in the first quarter, you've talked about six to eight times guidance range. Can you comment on where in the range these fall, and are you seeing notwithstanding the volume of incoming calls, are you seeing any price pressure on multiples?

Right. So, it does the purchases of both of those businesses fall within that range, and they fall -- and we consistently tell you guys that we obviously are not putting our purchase prices out there.

We learned a very valuable lesson with that that was used against us by competitors, but they definitely fall within that range. We are not seeing any pressure on us for purchase price increases or even on multiple increases.

Now, to my knowledge, there hasn't been a lot of activity in the acquisition market by the other two publicly traded companies. As a matter of fact, pretty limited, I think SCI mentioned that they had deployed $10 million this year in acquisitions and that they intend to do more by the end of the year that put pressure on this.

If we go head-to-head with them on a deal, but that hasn't been the case as of late. And I haven't seen carriage services being a competitor to ours in a year-and-a-half.

So really what we're doing is going in and valuing these businesses in a way that the owners can understand. And then we share it with them.

We tell them how we get there, and how we plan on running their business on a go-forward basis. So we're not seeing any price pressure yet, but if the other two publicly traded companies start getting very active in the acquisition market, that could actually cause an impact, but I don't anticipate that to affect the people who are wanting to join us.

Thanks, Brad. That's helpful.

Just one quick question maybe for Dan, what's your current thinking of shifting to a USB reporting?

Yes, got it. I think you asked that same question last time, and I'll tell you the same thing then, or now that I did them, but I have nothing to announce today, but with 88% of our revenue coming from the U.S.

and that number growing, it is something we are active on and I think it's inevitable.

Great. Thanks very much, gentlemen.

I turn it over.

Thanks, Scott.

Good morning, everyone.

Good morning.

A question around the call volumes, I think you said they have normalized from pre-pandemic levels during the quarter. And would you expect as we go into the back half of the year that those would actually decline just given the drop in that need from COVID-related, and I guess is that in your thinking when you say you would expect year-over-year growth?

So, if I understand the question correctly, we did see a decline in call volume on the at-need side for the comparable stores, right? So, you are -- and I would expect that we would see comparatively in the third and fourth quarter of 2021, compared to 2020 you'll still see a drop off in the comparable stores call volume because the COVID-related deaths aren't in there.

We do not however expect the total call volume to decrease because we've brought acquisitions on since those periods in 2020. We brought them on in 2021.

And we're not done in 2021. So, while the comparable store is definitely going to have an impact, it look the COVID does went away, thank goodness, but our company is a growth story, we're continuing to grow by acquisition.

So, unlike other of our competitors that might see an overall volume increase, or an overall call drop, you're going to see ours increasing, because we're deploying a fair amount of cash given our size, and we're growing at a pretty good clip, given our size. So that's going to make up with that GAAP.

And you're going to see a total volume increase, I would suspect in Q3 and Q4.

Okay. Fair enough.

I guess maybe a different way to say it would be -- would you expect it to be versus 2019? Would you expect you're at need volumes?

Are you assuming that they would be below 2019 levels?

No way.

Got you.

I mean they should be, I mean with the acquisitions that we've made, as well as the fact that the 2019 numbers, I mean, we shouldn't be losing market share or comparable store growth at all to 2020, 2019 comparison not even close. So I would say that you would see a substantial increase in call volume over 2019 number for 2021.

Including on an -- on a same-store basis?

I would think so. Yes.

And we're in the business of growing these. Yes, we're in -- again, we're operators.

We're in the -- I expect that our same-stores are not losing market share and not losing call volume. That's not our model.

We go in and buy them and improve them not go in and buy them and lose call volume to other people.

Okay. And then on the margin front just, is there any mixed considerations right now with the very strong pre-need sales that would keep margins lower than potentially a normalized run rate?

I guess I'm just trying to flush out how much your operating improvements are in there versus mix?

Yes, no, I'm not really concerned about that at all on the mix side. I mean our pre-need sales, whether it's funeral home or cemetery, that's just locking in future business.

And generally you're put you're selling that at a higher at a higher cost anyway or higher average anyway. So, no, I don't see that as being a problem.

When I talk about the operational performance, there's two things that's going in there, right. One is continuing to grow market share, which is which goes to your previous question, where we I mean, we're constantly focusing on the grassroots and how we continue to make these businesses better on a market share basis.

But also the other things that go into operational performance expenses, things of that nature, that we need to focus on. How we sell things, developing other property things that like.

I mean that's truly operating the business and continue to focusing on our operational performance. But no, I don't see the pre-need sales affecting that at all.

Okay. That's great color.

Thanks, guys.

Good morning, everyone. Congrats on the quarter.

Good morning. Thank you.

So, great color so far on margins and acquisitions. I think most of my questions have been answered there.

So, I guess, could you tell us a little more about the rationale behind the sale of your stake in Parkland?

Yes, so that was a business that was purchased prior to the current management team coming in. And the way that that business was structured or purchased was we owned 50% of it.

And the former owner owned 50% of it. And this is not to speak to his character at all.

As a matter of fact, I think he's a very good business individual and a very good person and runs a very good business. But anybody on this phone call who's been partners with anybody understands that a 50-50 deal is generally not what you want.

Someone's got to be in control of the business. So we approached him about buying a 100% of the business.

And he basically said, "Well, I would like to talk to you about buying it back." So it was -- someone was going to have to buy and someone was going to have to sell.

It wasn't necessarily in a market that we thought we could grow in. It's a matter of fact, he own the market and I think he's going to own it for quite some time.

So we sold our 50% back to him and we're going to deploy those assets. Hopefully very deploy that capital hopefully very quickly back into Canada, if I have my way before the end of 2021.

So, the theory behind that was quite simple. Someone it was a 50:50 deal, you will never hear us do 50:50 deals going forward.

It was a legacy transaction. It made sense to both parties.

We parted very amicably. We would support him, if he needed any help from us whatsoever.

The end is really what happened there.

That makes a ton of sense. And then, I guess the answer is probably no given the ownership structure, but are there any other strategic divestments that could boost your liquidity?

No, and we're not really in the divestment business anyway. It was a struggle to do that good EBITDA is hard to come by, you guys know that.

And again, there was no problem with this business at all. And I want to make that clear, because he has it going forward.

And so, it was a little bit of a struggle to even talk about getting up good EBITDA. But no, we're not interested in divesting any of our businesses at this point in time.

Thanks. Appreciate the color, I'll turn it over.

Thanks. Following up on a bunch of different questions, I just was curious, the platform that you guys have now.

And once you're fully live on your IT system, what kind of revenue, do you think that that can support? In other words, if I'm thinking about like outside of the next quarter or two, and about the three to five year view considering the scope of opportunity, you likely will have to build your business through acquisitions?

How much can you do on the current platform before adding considerable G&A? Thanks.

So, good question, as far as the IT infrastructure is concerned, or the software package, it's completely scalable. As a matter of fact, that would not be a concern at all.

When you start talking to my G&A, you're really talking about, what's going to happen, when we add these additional acquisitions and what we're going to need from a support basis. Most of them have the operations teams in place, we may add a VP of Ops or Director of operations here and there, but most of the operations folks are baked into the deal.

So what you really see us having to look at is you got HR, you've got accounting, and you got IT. And most of that infrastructure that we built out in 2019, when it was the painful conversations, when we were telling you, folks that we were building that, because we knew this was coming, that's in place.

So when we add multiple acquisitions, you may see us adding an additional resource and accounting over time, or an additional resource in IT or an additional resource in HR. But it's not like we have to add individuals every time we make an acquisition or a lot of them.

In other words, it's very incremental. And it's what you would expect we would do.

I mean, if we double in size in revenue, we're clearly going to have a larger corporate infrastructure. But it doesn't mean it's going to double.

It's just an incremental, an incremental step. So I'm very comfortable that the infrastructure we have right now is a good baseline, but you're going to see it grow.

But it's going to grow in line with the acquisition.

Great, and then another question, this is a bit maybe off the firm. But we've seen over the last 10 years, a number of consumer facing businesses use technology in ways that give them scalability of their sales approach to sales and marketing.

And it's happening right now in automotive, it's happened in a bunch of other industries, yours is a very people oriented business, and to date doesn't appear to be one that's had much change in terms of omnichannel approach. But I'm really curious if there is anything like that on the horizon, where you're seeing some interesting online marketplaces pop-up, or if you've thought about it internally, because the players with scale are the ones that can implement those processes.

And usually, it can result in sort of a dominant situation over time.

Yes, so that's a good question, then a new one for sure. I think if you listen to Tom Ryan, when he talked in the last quarter on the STI Call, the pandemic has been a wake up call for what was effectively been a stagnant funeral industry on change, when it comes to IT and so leaning on your CRM system, that are leaning on your IT infrastructure -- infrastructure more definitely became something that was required during the pandemic.

And we all realize that it was very beneficial to the bottom line to do that. As a result, Jay put a team together of people here in our office that basically is looking at different IT bolt-ons to our facts program, different things that we can work on, basically putting a new set of eyes on what's out there and seeing what we can build because we know that relying on IT is on a go forward basis is going to be yet another strategic advantage.

So, Maggie, you asked the question, I'm not really ready to talk about what exactly we're going to do on that. You're ahead of me a little bit, but that's a good question because it requires, I think it caused all of us in this industry to focus on that.

And we're not going to be last, when it comes to figuring out how to leverage that we're going to be first.

Yes, yes. Okay, great.

We'll stay posted for that. Thanks a lot.

Thank you.

Hi, gentlemen. Just a quick follow-up, what do you think on inflation in terms of effects on margins, both from pre-need pricing and well I guess pre-need and at-need pricing and operating costs?

So, no impact yet, but it's a topic of discussion around here. I mean, obviously, if you -- all you have to do is pick-up the newspaper and or go online in the U.S.

and you're reading about COVID and inflation. So it has not had an impact on us yet, nor has the labor shortage.

I haven't been asked that question. I was asked that last quarter.

I mean, those are -- I mean, those are things we're reading about in the headlines, but it hasn't gotten to us yet. When it gets to us or if it gets to us, we'll figure out how to deal with it.

But nothing yet, Scott is the answer.

Great, thanks very much.

I would like to thank everyone for joining us on the call today and I hope you all have a great weekend. Thanks a lot.