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ServiceMaster Announces Q2 Results

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The company's operating revenue was $939 million, a decline of 2.4 percent compared to the same period in 2012.

| August 15, 2013

MEMPHIS, TENN, —  The ServiceMaster Company, parent company of Terminix, announced preliminary unaudited second-quarter 2013 results, including operating revenue of $939 million, a decline of 2.4 percent compared to the same period in 2012. The company reported second-quarter 2013 operating loss of $564 million, which included pre-tax non-cash impairment charges of $673 million to reduce the carrying value of TruGreen’s goodwill and trade name. The company’s second-quarter 2013 operating performance decreased 28.9 percent to $151 million compared to the same period in 2012. A reconciliation of operating (loss) income to operating performance is set forth below in this press release.
 
“Our second-quarter 2013 results did not meet our expectations,” said Rob Gillette, ServiceMaster’s chief executive officer. “The decline in revenue and operating performance compared to the prior year was largely attributable to TruGreen’s performance. Excluding TruGreen, our other businesses performed about as we expected.”
 
Gillette, who joined ServiceMaster in June, said the company continues to focus on growing all of its businesses, with particular attention to getting TruGreen back on track.
 
“As we’ve said, TruGreen is going through some challenges,” said Gillette, “but it’s largely self-inflicted. Right now, we’re focused on stabilizing the business, then getting it back on a path toward growth and improved profitability. When I look at our company overall, we have strong brands, passionate associates and great growth opportunities in all of our businesses. I’m excited to be part of the ServiceMaster team.”

Terminix Results.
Terminix reported a 5.1 percent increase in operating revenue, a 17.0 percent increase in operating income and a 10.1 percent increase in operating performance for the second quarter of 2013 compared to the second quarter of 2012. Pest control revenue increased 3.9 percent over second-quarter 2012 results, reflecting improved price realization, partially offset by a 0.6 percent decrease in average customer counts. Termite revenue increased 6.7 percent over second-quarter 2012 results, reflecting improved price realization and the favorable timing of renewal revenue.
 
Terminix’s operating performance increased $9.0 million for the second quarter of 2013 compared to the second quarter of 2012. This increase primarily reflects higher operating revenue, a reduction in incentive compensation expense and a $2.5 million impairment of licensed intellectual property recorded in 2012, which did not recur in 2013, partially offset by higher bad debt expense.
 
 

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