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Thank you for standing by, and welcome to the Park Lawn Corporation Fourth Quarter 2019 Earnings Results. [Operator Instructions]I would now like to hand the conference over to Andrew Clark. Please go ahead, sir.
Thank you, Cheryl. Good morning, everybody, and 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 actual results to differ materially. Please see our public filings for more information regarding forward-looking statements. During the call today, we will reference non-IFRS financial measures. Although we believe these measures provide useful supplemental information about our financial performance, they're 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. It has been a tremendous privilege to lead PLC and build a strongly -- a strong and highly capable management team over the last 7 years. I must say that I remain highly confident in PLC's future. I look forward to continuing in its continued success. I will hand the call over now to Paul Smith, Park Lawn's Board Chair, to open the discussion today. Paul?
Thank you, Andrew. In addition to Andrew, with me on the call is our incoming interim CEO, Brad Green; and our CFO, Joe Leeder. 2019 was another transformative year for PLC with strong revenue growth, robust acquisition growth as well as a significant focus on the successful integration of our expanding U.S. platform, which is a testament to our strong and highly capable management team. We believe the success of 2019 has strongly positioned us for future success even as the world has started to change in dramatic fashion as a result of COVID-19. The unexpected developments of the last weeks have affected the way we think about our business and our previously announced CEO search. While we continue to move forward as quickly as possible to find a new permanent CEO, COVID-19 has introduced an element of uncertainty, which may affect the pace and timing of that search. From a business perspective, and Brad will discuss this in greater detail in a few minutes, we've made adjustments to ensure the safety of our employees and communities we serve. We are also taking steps to ensure that PLC is optimally positioned for long-term success and growth in this challenging time. In the near term, given the current circumstances, this means ensuring stable leadership with a sharp focus on operations and the continuing integration of our existing business operations. As such, as we announced yesterday, the Board of Directors has appointed J. Bradley Green to serve in the interim role of CEO to increase stability during the company's leadership transition. Mr. Green has served as the President of PLC since May of 2018 and previously served as the CEO of the Signature Group prior to the company's acquisition of the business. Outgoing CEO, Andrew Clark, will continue to work with PLC as the Board pursues a permanent CEO candidate. On behalf of the Board, I want to thank Mr. Clark for his contributions to the success of PLC over the past 7 years and look forward to working with him as we transition to new leadership. Brad?
Thank you, Paul. I'm grateful for the confidence and support of the Board, and I'm excited to be given the opportunity to serve as the interim CEO. I will continue to work with our highly capable management team to navigate these challenging times and continue to deliver value to both the families we serve as well as our shareholders. I'll begin with the discussion of our 2019 business highlights. Joe will follow with a more detailed review of our financial results and outlook. I will then discuss our response to COVID-19. After our prepared remarks, we will, of course, take your questions. During 2019, the company completed 6 acquisitions in the United States, the significant ones being the acquisitions of the Journey Group in November 2019; Horan & McConaty Funeral Services in July 2019; Baue Funeral Homes in June 2019; and Cress Funeral and Cremation Services in April 2019. With these acquisitions, PLC expanded its operations in 2 U.S. states and added operations in 2 new U.S. states, resulting in the company operating in 5 Canadian provinces and 14 U.S. states as of the end of 2019. In 2019, the company continued to invest in its U.S.-based business -- based infrastructure. While this resulted in a drag on earnings, adjusted EBITDA and adjusted EBITDA margins in the fourth quarter, we remain confident that these investments will assist in bringing efficiencies for reduced costs at the regional level in 2020 and beyond and make the business more scalable in the long term. I'd now like to turn the call over to Joe to review our 2019 financial results in more detail. Joe?
Thanks, Brad, and good morning to everybody. You'll find a detailed breakdown of our 2019 operating results in our financial statements and MDA, which are available on our website and on SEDAR. And unless otherwise noted, my comments are related to the fourth quarter results of 2019. Total revenue for the 3-month period ended December 31, 2019, was $68.9 million compared with $50.6 million in the same 3-month period in 2018. This represents an increase of $18.3 million or 36.2% over the same period in 2018. And after adjusting for the impact of foreign exchange, our revenue growth from comparable business units in Q4 2019 was 1.3% over 2018, and unadjusted for the FX is 2.3% in that quarter. For the full year, total revenue grew by $82 million, reaching $244.3 million by year-end, 51.3% growth. Revenue from comparable business units, again currency adjusted, grew organically by 2.9%, unadjusted for FX was 4.3%. The revenue growth in the quarter was primarily attributable to our cemetery operations in the U.S. and resulted from an increase in preneed sales production, the completion of construction projects on previously sold cemetery property and increased investment income from our trust funds. And looking at this organic growth in the quarter, you may recall that in Q4 of 2018, our revenue growth from comparable business units was 10.8%. So this was a rather large comparable growth number to measure up against in the current quarter. Revenue from comparable funeral homes was flat quarter-over-quarter. We saw a continued improvement in our gross margin for the quarter as the gross profit margins improved 100 basis points to 80.3% compared with 79.2% last year. Our overall operating expenses in Q4 of '19 increased to approximately $50.7 million from $33.6 million in 2018, and this is an overall increase of $17.1 million, and again, primarily related to the inclusion of acquired businesses. Looking specifically at our general, admin, maintenance and selling expenses from our comparable business operations and adjusted for FX, there was a net increase in operating expenses of $2.7 million in the current quarter over last year. Now approximately $3.2 million of this net increase was attributable to higher corporate costs to support our growth and expansion of our business. And as Brad has previously mentioned, the company invested throughout the year to develop an infrastructure platform to support our goal of achieving $100 million in adjusted EBITDA by the end of 2022. This resulted in a quarter-over-quarter increase in general and admin expenses, which results in a short-term drag on our earnings but makes the business more scalable over the long term. With our enhanced corporate infrastructure, we are able to absorb additional acquisitions as we grow forward, such as the Family Legacy and Harpeth Hills businesses we recently acquired in Tennessee. With respect to other expenses, our advertising and selling expenses were down by approximately $700,000 quarter-over-quarter, and this was offset by an increase in maintenance expenses of approximately $200,000. Other expenses, our interest expense in the quarter was higher as we used our credit facility to acquire new businesses during the year. We also had an increase in amortization expense for intangible assets and higher noncash compensation expense related to the issuance of awards under our employee incentive plan during the year. 2019 was another significant year for M&A activity, and we spent approximately $180 million to acquire 6 businesses during the year, including Journey Group, Horan, Baue and Cress. Associated with this significant level of activity, our acquisition integration costs in Q4 were $3.3 million compared to $2.6 million in the same period last year. And for the year, the costs were $12.9 million compared to $10.4 million in 2018. Other net expenses during the quarter related largely to additional Board and professional fees incurred in connection with the establishment of a committee to assess our governance and succession planning matters, and there were also other small gains offsetting this expense related to the settlement of the Saber earnout liability earlier in the year and a disposition of a small number of assets that resulted in a small gain. Our effective income tax rate for 2019 was $27.7 million, which is in line with this percentage range that we previously communicated and largely in line with both the Canadian and U.S. statutory tax rates of approximately 26%. So as a result of the above, our net earnings attributable to PLC shareholders was $544,000 or $0.02 a share in Q4 of 2019 compared with $2.2 million or 9.5% -- $0.095 per share in 2018. And for the 12 months in 2019, net earnings was $6.9 million or $0.246 per share compared to $6.7 million or $0.326 per share in 2018. So we also report 2 non-IFRS earnings measures in our financial statements and MD&A. The purpose of the non-IFRS measures is to adjust for certain after-tax impact of operating expenses and nonrecurring expenses and noncash-related expenses. And in the current quarter, these include acquisition integration expenses, share-based compensation expenses. After making these adjustments, our adjusted net earnings for the fourth quarter attributable to our shareholders was $4.8 million or $0.16 per share compared to $5 million and $0.214 per share last year. And for the year, net adjusted EBIT earnings was $22.4 million, $0.795 per share. This was compared to $16.1 million or $0.781 per share in 2018. Our adjusted EBITDA attributable to PLC shareholders for the year was $53.3 million, $1.89 per share, compared with $34.7 million or $1.68 per share for the same period in 2018 and for the 3-month period ended December '19 was $ 13.4 million or $0.45 per share compared to $11.3 million or $0.48 per share last year. As we have previously mentioned, our adjusted EBITDA in the fourth quarter was lower than management's expectation because of the lower earnings from certain companies recently acquired and because of higher corporate expenses, as we have previously mentioned. We fully expect that our earnings will improve as these businesses -- as we are -- continue to integrate the businesses to perform to our operating metrics going forward. And just a few words about our balance sheet. We ended the year with approximately $174 million outstanding under our revolving credit facility compared to $90 million last year. Our cash on hand was $21.3 million this year, resulting in a net debt of $152.7 million. In addition, we had $9.8 million in notes payable to former owners of acquired businesses. These are largely held as security against noncompete agreements and so on. We have a pipeline of future revenue that currently sits on our balance sheet in the form of deferred revenue, cash and preneed trust and preneed insurance contracts. And this backlog of future revenue currently sits at $695 million, representing a significant source of future revenue for the company. And finally, in 2019, we spent approximately $12 million on growth-orientated projects, including new and renovated funeral homes as well as cemetery inventory, including the Eternal Sunset Cemetery in New Jersey and a number of other mausoleum projects throughout the U.S. Our maintenance capital expenditures during the year were $7 million, which is in line with our annual depreciation expense. I will now turn the call back to Brad for some closing remarks.
Thanks, Joe. In North America, we are all obviously adjusting and adapting to the daily changes as a result of the COVID-19 virus. While the health and safety of our employees remains our top priority, it should not be lost on anyone that the company provides an essential public function and has a unique and critical responsibility to the communities and families it serves. We already have in place robust operating policies and procedures to handle these exact type of circumstances and have taken steps to minimize the risk and impact to our employees, such as reducing the number of staff present for a service and restricting the size and number of attendees at our services. To date, the impact to PLC's day-to-day business operations has not been material. In most jurisdictions, funeral homes and cemeteries are classified as essential services, and we plan and have remained open to serve our families at their time of need. As the COVID-19 crisis evolves, the company will continue to monitor its impact on our businesses and will implement contingency plans if and when necessary. Given the uncertain impacts of COVID-19, capital expenditure programs are on hold unless they are deemed necessary. We will also evaluate our acquisition pipeline, and we may defer certain of these opportunities as our immediate focus is on preserving financial flexibility. In the near term, we're going to continue to focus on operating and integrating our existing business operations. I will now turn the call over to Paul for some closing remarks.
Thank you, Brad. I want to reiterate what I suggested at the start of this call. The success of 2019 positions us well for the emerging challenges of 2020. In a time of adversity, the entire PLC team remains focused on what we can control: the continued, consistent execution of PLC's growth strategy via a combination of organic growth, margin expansion and continued acquisition activity. I will now turn it over to the operator to have us take questions.
[Operator Instructions] Our first question comes from George Doumet from Scotiabank.
You called out that the integration isn't going along as well as expected. Can you maybe give us a sense of what acquisitions you're referring to in particular and maybe what we're doing to address that?
Brad? Joe?
Joe, you want to take that one? Where's Joe?
He may be -- so folks, this is all being done by conference call. We're not in the same room. So please forgive us for logistical challenges. Brad, maybe you want to start on that one? Maybe Joe is on hold.
Yes. So I'll take that one then. So on the integration, the difficulties that we saw in the fourth quarter really dealt with our acquisitions were more funeral home-based than cemetery-based with those particular acquisitions that occurred in the middle of the year. And it just simply takes longer for us to integrate the funeral homes into our current structure and start operating them the way that we expect. Cemeteries are quicker to do that, and we definitely saw some difficulties in doing that in the fourth quarter. We do not expect that to continue at all, especially given the fact that we can -- with the virus that there are not a whole lot of benefits to that, but one of the things that we've been able to do is really dial in and focus on our existing operations during this period of time since we're all basically forced to.
Our next question comes from Paul Bilenki from TD Securities.
Just following up on George's question there. So if I look at margins, EBITDA margins for the full year, they're essentially flat year-over-year at about 22% despite a small tailwind from IFRS 16, and I recognize the issues that you cited there. And I'm just sort of thinking, you previously guided to sort of 150 to 250 basis points of margin improvement a year. So I guess assuming the COVID-19 was not a factor, what should we sort of be looking at for the margin trajectory and the sort of level of improvement that you're anticipating in 2020, all things being equal here?
Joe, are you back on the line? Okay, Brad.
So I guess Joe's not -- I guess Joe has dropped off the line. Obviously, these will be questions for Joe, but I will do my best for you guys. We're trending to the same EBITDA margin at 26%. We can expect as our funeral homes continue -- as we continue to integrate our funeral homes and they continue to improve, obviously the funeral home margins are better than the cemetery margins. So you should see a natural uptick in that. As far as the specifics are concerned on what happened in the past and the guidance in the future, I mean that would be -- Joe would be better to speak to you on that. And clearly, something has happened to him on this -- on the conference call. Hopefully, that answers your question. If not, you can come at me again with it, and I'll try another direction.
Okay. So would the Q4 then -- should we assume that's a trough margin level and that things should hopefully normalize somewhat in Q1 here?
Yes.
Sorry, I just -- I didn't realize I had dropped off, and I'm back on now. I apologize for that.
Would you like to try that question again now that Joe is back on the phone? I think you would probably appreciate his answer better than mine.
I heard the last part of it. I heard the last part of it there, Paul. And yes, we would definitely expect the margins to improve to -- beyond historical levels as we move forward. And we've ramped up our corporate overheads, which was a bit of a drag on those margins. But as we have added the new businesses and as we begin to get better integration of the 2019 acquisitions, I think we would -- we expect -- fully expect that the margins would start to improve towards the 2020 to 26% range that we previously communicated.
Okay. And sort of how quickly would you anticipate that ramp-up to be? So if we're at 19.5% in Q4, do you think we could get back to the 23% that you did in the first half of the year, assuming COVID is not an impact?
Yes, that is our expectation, Paul. The 2014 margin, I think, was an outlier. And we are sort of committed to our stated objectives, and we believe that we will be able to return to those margins going forward.
Our next question comes from Scott Fromson, CIBC.
First question, is there a particular reason why Brad Green has been named CEO on an interim basis only? Does that reflect the timing of the onset of COVID-19? Or is this -- is there something more to it? I'm just wondering why he wasn't named permanent CEO.
Yes. I think this requires a broader conversation, Scott. The -- when Andrew indicated his desire to step down, of course, the first observation that the Board had was to think of Brad Green and Jay Dodds for those roles. They indicated that Jay prefers to run funeral homes and cemeteries, and Brad was running acquisitions and integrations, and dealing with capital markets -- I think while Brad is on the line, he can speak for himself. But dealing with capital markets is perhaps not a first love. And so armed with those answers, the Board undertook the very public search with the very public announcement that we put out in mid-February. The second branch of your question is, so what's changed? And I think COVID has changed everything. Absolutely everything, as you know. So the -- given that, we've stated, Brad said in his remarks earlier, we've stated in the press release that we live in uncertain times. Capital expenditures will only be occurring on an as needed basis, and acquisitions will be slowed down. So given that, given the challenges, quite frankly, of conducting interviews in the CEO search, although there are some good candidates that have come forward, the focus of the company is to give it a strong direction and focus on operations and on those things we can control. And I think Brad's desire to step in the seat, and we thank him for that, is an excellent choice on behalf of the company.
That sounds prudent, though I can't imagine why dealing with capital markets wouldn't be Brad's first love. A second question is over the long term, how -- over the, I guess, the medium term, how much revenue impact do you see from COVID-19-related social distancing and the upcoming recession? How does it affect average ticket value?
Joe, do you want me to handle that one?
Yes, please, Brad.
Scott, so in the very short term that we've been dealing with this, right, we're going into basically week 2, Jay and his operations team did an excellent job, in my opinion. They -- the first communication on this went out on March 2. So we were getting prepared for what ultimately happened weeks ago. Right now, we're not seeing a drop in our volume at all. And we're seeing on the average sale around 7% decrease right now, and we're trying -- and we're doing certain things to hopefully even equalize that a little bit better. So while this has been -- I would describe it catastrophic for some businesses, the fact that we remain open and have been able to pull levers means that it's not for us, at least at this time, for sure.
Not to be morbid, but I wouldn't imagine that you'd see much of a change in volumes.
Yes. I -- obviously, that -- with north of 3,000 deaths in the United States that on an individual basis is a lot of people. But given the overall death rate in the United States, that's still not something that you would see impacting a particular business or market of ours yet. But yes, that volume is -- our volume normally in a very stable industry will remain stable, and so we wouldn't expect to see a volume drop. And just to answer a question you haven't asked but people will want to know on the phone, we have also not seen an uptick in our cremation rate, and our business is more than normal. So it doesn't appear that there are customers who are changing their preferences as a result of this either at this...
Our next question comes from Maggie MacDougall, Stifel.
Again, just a little more detail on the differences between funeral home integration and cemetery integration and in terms of timing and maybe, therefore, get a better understanding of sort of the path forward for those initiatives.
So this is Brad again. Differences between a cemetery and a funeral home on an integration, especially when you're buying large premier firms like we did in 2019, we don't go in and immediately disrupt what is already a well-run operation immediately because the relationships in the funeral homes, the relationship of the funeral homes with the community, those things take a little bit of time. And so it -- we normally see 6 months to a year before we're able to do it anyway. Last year, we obviously added a significant amount of acquisitions and had a significant acquisition activity within a 12-month period. I wouldn't expect to see something like that again, and it was heavily funeral home-based, and that's where the integration came in through the fourth quarter. And at cemetery, you normally do not have that type of relationships to the community or relationships to the family. It's more heritage. If my family member has been buried in that cemetery, I know people that have been buried in that cemetery, you go to that cemetery. So it's easier to make operational changes in a cemetery. There's nothing wrong with the acquisitions that we purchased in 2019. There's nothing that we see that surprised us. It's just in the fourth quarter, it didn't happen as fast as we anticipated, but we weren't going to hit the gas just because it wasn't happening as fast as we want and break a perfectly good business. So I wouldn't expect that in the first quarter, you're going to see a difference. That's our jobs, and I expect that we're going to do them.
Okay. That's really helpful. And then we've seen, as a result of COVID, a lot of different circumstances where funeral homes, once the infection rates have gotten to a certain level, have had to sort of disband memorializations. And so I'm wondering if you could maybe talk to how you may anticipate that play out in your various markets, and if you have any view as to how we should be thinking about the potential impact of COVID on your business in Q2.
Okay. That's a very fair question, and it really hits on a couple of different areas. I know that I have heard similar things about funeral homes that you've mentioned. That's not happening to us, and I can only tell you what it is that we're doing. Obviously, it's an essential public function. And what we do, we obviously must continue to do it, especially in times like this. Our employees at the location level are used to that, and they're rising to the challenge. This is not a surprise to them. They expect to have to go to work every day in this environment. So we immediately just started focusing on -- like most people would think it would be a prep room issue or the back of the house where our people are dealing with actually the deceased. But we already have procedures in place, very specific procedures for them to deal with the deceased when there are viruses that are out in this world that are much more dangerous than this one, although maybe not as -- you can catch it a lot easier. So they were just following their normal procedures on a daily basis. What we are really focusing on though is when it all starts, like our transfer staff going into homes and hospitals and nursing homes and hospice centers, I don't have to tell you guys that's kind of obvious places where you need to be careful, so we're having them do things that wouldn't -- that you would not have and do normally in the past like wearing impervious smocks and making sure they have their masks and their gloves on. We're also asking questions before we go into these places, homes and others, on the phone, has anybody even exposed? Are there any specific cases? Things that would be obvious for you to ask. And then as we get into the planning of the funeral services and things of that nature, we start to utilize our technology platform, and that's why we built it. And so you see us doing a lot of webcasting, a lot of videoconferencing, we have arrangements, things of that nature. So we started, like I said, in early March, trying to get ahead of this. And even when we've had -- we've had 2 situations in the same market where we had employees test positive, and we just simply closed those facilities down for a couple of days, had people come in and do a full cleaning as one might expect. But fortunate for us, we have -- most of our markets have multiple, multiple funeral homes and lots of employees in those markets, and we simply shifted the business from one location to another and then shifted it back after a couple of days. I know that's a lengthy answer to your question, but that's why we're not seeing the hiccups that we're hearing in other places because we're taking -- and that's just scratching -- that's just the tip of the iceberg. I could bore you with more things that we're doing, but I think you're getting a sense of why our funeral homes at this point in time are remaining open. I mean any of that could change.
Okay. And then just one financial question maybe for Joe. I noticed that you had some commentary notes paged out in the fourth quarter, some of which I think were related to the $75 million or -- we're not sure of the purchase price, but the larger funeral home acquisition that you closed in January. Can you just talk to sort of the purpose of having those promissory notes in place and how that flows through into Q1? Did you essentially sort of prepay a portion of that acquisition in Q4, and we can adjust our Q1 cash flow from financing numbers for that?
Yes. Those payments, Maggie, are notes payable to former owners. And we keep the money back because we've been provided with certain reps, warranties, noncompete agreements and so on. And so that's the purpose. There are some shorter-term holdbacks that might get paid out just as we go through closing in the short period after closing. But these are sort of paid out over the longer term. They represent security on reps and warranties, as I said, and noncompete agreements and that type of thing. And we think that's the sort of a prudent way to go about it.
Our next question comes from Zachary Evershed, National Bank Financial.
Jump right in here on Kansas City, both sides, Missouri and Kansas. We've been seeing some reports of some closing general funeral home operations. Have you guys not seen that on a local level?
Not at all.
Okay. Great. And then getting a little bit more into the -- this one's going to be for Joe. In Michigan, you guys realized a capital gain and recognized that in -- for revenue. I've noticed that because of a pretty big spike up in your freed interest income and other, how discretionary are the levers there? Or was that caused by something in specific?
Yes. Thanks, Zach. Yes, discretionary, it's really not something that's under our control. These are the things that we've invested in over a long period of time. They're good in -- they're good investments in terms of cash distributions and so on, and what we hope that is over the longer term that some of these type of investments will, in fact, rise to additional income and capital gains. And that's just what happened here. It was a situation where the owner of the property decided it was time to sell. It was something that's not under our control at all. And the result was very good for us because this had been an investment that had been on our books for a long, long period of time. And we were just fortunate enough to have a nice gain out of that particular investment.
So would you qualify that as a onetime item?
Well, that size, that was significant, but we have a number of those investments on our books. And we would -- we would hope that over time, we're going to see that. It's -- we've always said that there's a number of things in the business that are not -- although sometimes predictable are not linear, and we can see some lumpiness in revenues. This would be one of them. When we make bulk sales at cemetery properties, they're not always linear there. They can be a little bumpy when we close construction on mausoleum projects where we've presold. That revenue comes in, it's lumpy. And this type of thing can be lumpy, but it's certainly not just a onetime thing. But it's -- but it can happen, and we hope it will happen, continue to happen as we go forward.
And one last one for me. Brad, you mentioned that the average ticket is down by about 7%. I'm assuming that's on the at-need side as more technology implementation goes in, in the services. On the premium side, are you guys seeing a lower volume level with people self-isolated?
Just a little bit, a little bit lower on the preneed side, to answer your question in reverse. Normally, when there's a trigger event to make people start thinking about preplanning, and this is certainly a triggering event that makes people think about death literally, you normally see an uptick in preneed. A good -- an analogy of this would be like death of a family member or a friend. That's where our sales counselors will go in, and people are thinking about that at that time. At this point, everyone is thinking about that. So we're using, again, Zoom, Teams, Facetime, Facebook Live meetings. We're actually having seminars online, things of that nature. So we are seeing a dip because you can't go meet with people, but we're getting ahead of it. So again, it's not -- it shouldn't be substantial. And yes, as to your first question, the 7% is really on at-need funeral, which is something that we can have visibility on right now, and that was just to give you guys an overall view that: a, we're looking at it on a day-to-day and weekly basis; and b, just to give you information as it's coming in real time since this is happening quickly.
Our next question comes from Raveel Afzaal from Canaccord.
Just diving a bit deeper into the last question. Can you tell us how your pricing varies for the funeral homes based on the number of people that attend the service? Or is there no impact?
There is no impact based on the pricing, based on the number of people that attend the services. And even though most markets that we're in have limited the -- I'd say all markets that we're in have limited the number of attendees, and if they haven't, we have internally, that does not affect our pricing at all. And even those people who are purchasing funerals at this time and electing -- there are a lot of them that are electing not to have a service, and we're just going to postpone those to some point in the future. So that's a long way of saying the number of attendees does not impact our pricing, and we haven't seen at this point in time an impact on that pricing either.
Perfect. And then looking at your 2019 organic growth, can you tell us how much of that came from price increases?
Joe, that would be for you.
Yes, Raveel, I don't have the exact on price versus volume on the organic growth. But historically, it's been on a price versus volume basis on the organic growth. And just understanding where the growth came from, I would say that it's a pricing issue versus a volume issue.
Got it. Perfect. And just finally, just if you can speak a little bit more about the G&A increase in the Houston office. What is that related to back office? More sales professionals? Like can you just give us some more color on what this is relating to?
Yes. It wouldn't be in the sales. The sales numbers are in the field. It would be more of the back office and infrastructure-related expenses, Raveel, to build out the corporate and head office, finance, accounting teams, M&A, payroll, legal, risk management, that type of expense. There's some sales and training and so on that's in the head office, but the actual sales force is in the field and not at -- in either head office.
Our next question comes from Johann Rodrigues, Raymond James.
Just -- sorry, just to go back to the margins for the new acquisitions. Where exactly was the EBITDA margins for Horan, Cress and Baue?
We don't give individual information on individual properties, but they were not as significant margins as the other businesses, and that's what caused the drag. But as Brad has said, Johann, we will -- we are taking immediate steps, and those businesses will be integrated, and we're very confident that we will get those margins back to sort of the historical levels of other Park Lawn funeral and cemetery businesses.
Okay. And I think it was asked before, but I just wanted to clarify, do you expect to be back at that 22%, 23% range in Q1? Or is it more kind of back half of 2020 that you expect to be back there?
Yes. Well, our plans would be to have it for the year back to our historical levels and communicate -- previously communicated levels in an environment that was status quo. I think when we're looking at the COVID to -- environment, to kind of predict timing on that is really uncertain, and we don't want to do that. But we would typically expect that for the year, and it can be bumpy through the year. But overall, we would expect it to be back in a steady state environment by the end of 2020 on a 12-month basis.
And then just turning to the trust, given the allocation equities there, should we be expecting the income from care and maintenance funds to, I don't know, be cut in half or more than that, given what the markets did in Q1?
When you look in the care and maintenance specifically, we had just over 40%, I think, allocation at the end of the year in equities and then some preferred shares up to 50%. In speaking with our portfolio managers, and there's a number of them, these are investments in dividend paying equities that you would consider to be quite stable. We're not taking huge, huge risks on those type of cuts in distributions and so on. And so in my discussions with them, and there have been numerous over the last few weeks, they are not expecting that kind -- anywhere close to that kind of reduction in the distributions. And we have another 35% or so in fixed incomes and a small amount in cash and some smaller investments in alternative investments that are continuing to make payments. So the short -- the long -- so that's a long answer to a short answer, which is any discussions I've had with the portfolio managers don't indicate that kind of cut in distribution, Johann.
Okay. And last question. What would your expectation for comparable business growth be for 2020, given the freeze on the CapEx side of things while the pandemic is ongoing?
Yes. I don't think the freeze on the CapEx is going to impact the 2020 in a -- insignificant. Those expenditures would have been to make expansions and to do some building. And so once again, with -- our expectation would have been traditional growth. It's just -- it just depends on how long it takes us to get through this period of this near-term disruption and so on. So it's very difficult to make that prediction in 2020. But going forward beyond that, we would see us back to kind of traditional organic growth rates we've communicated.
Our next question comes from John Novak, CCL.
This is a question for Brad. I just wondered if the bulk sales have been impacted in the current environment or if they continue through this or if you've noticed any recent trends with respect to the selling of the bulk plots.
So not at all yet, and I say that because that's one of the things that Jay and I were just talking about and we're focusing on and watching. And so the only -- the answer I can give you is that we're early in this process, and we haven't seen that impacted yet at all. But with the current COVID environment, who knows? But right now, we're looking at that and haven't seen it.
And on any of the preneed services that you're currently performing, have you had to offer any refunds for services that you haven't been able to provide?
Not yet. I'm not aware of a single incident that, that has occurred.
I think what you said previously was that you've just deferred those services to a later date, whether it's memorialization or an internment of ashes or something like that.
That's correct. And it's always helpful for me, remember, if you step back and remember what it is we do, that individual that you're deferring the service on, I mean that's still someone's mom or dad or sister or brother or family friend, right? And so people are still looking to do that, and they recognize they can't do it now. So putting that off into the future would be, I think, a natural reaction of anyone on this phone call. So it's not that strange, if you will, to -- for them to purchase the service, allow us to care for their loved one in whatever manner in which they've chosen and then us to just wait. That, to me, makes sense.
Okay. And last question for Joe. Should we just assume that you're somewhere in that $7 million to $9 million for CapEx for the year, and any of the expansion CapEx on the mausoleums and the cemeteries is just pushed to the right?
Yes, John. That would be -- we're certainly right on the growth CapEx for the time being. When I say on the maintenance CapEx, to the extent possible, we are in a situation where we're doing what we absolutely need to do. And if there's any opportunity just to defer, we would take that opportunity. But with maintenance CapEx, it's not always possible, but that's the short answer to it.
Okay. And Joe, just for 2019, can you give us the mix on a revenue basis for at-need, preneed and bulk, just rough percentages?
In preneed and bulk, on the cemetery side, it hasn't changed significantly, John, from what we always communicated in that sort of 65% to 75% is preneed. All of the bulk would be included in that number. And on the funeral side, of course, it's -- what we recognize is essentially either at-needs or conversions of preneed to at-need, so it will all be on an at-need basis. And the split there was 60-40, I think, with the traditional cemetery funeral.
And that concludes the questions in the queue at this time. I'll turn the call back to the presenters for closing remarks.
The -- This is Paul Smith. I'm the Chairman, as I mentioned at the outset. I want to thank the -- all those who attended this morning's call in these difficult times. We can assure you that we've doubled down on our efforts to run the corporation the way you would expect us to. And we wish our employees and each one of you and your families the very best during these times. Thank you very much, operator.
This concludes today's conference call. Thank you for participating. You may now disconnect.