MEMPHIS, Tenn. - ServiceMaster Global Holdings announced unaudited second-quarter 2020 results. For the second quarter of 2020, the Company reported a year-over-year continuing operations revenue increase of eight percent to $534 million and net income of $53 million, or $0.40 per share. Continuing operations Adjusted EBITDA(1) for the quarter increased $15 million to $119 million with Adjusted net income(2) increasing $4 million to $53 million, or $0.40 per share. Both Adjusted EBITDA and Adjusted net income for continuing operations included $3 million of costs historically allocated to ServiceMaster Brands.
“ServiceMaster’s strong performance this quarter despite the unprecedented challenges created by the COVID-19 pandemic is a testament to the dedication of our people and their commitment to serving our customers,” said ServiceMaster Chairman and interim CEO Naren Gursahaney. “Terminix saw strong organic growth in termite services leading to solid performance in its residential business. The Terminix commercial business saw improving trends as businesses reopened, underscoring the resilience and essential nature of our services. In addition, our actions to reduce costs resulted in improved Adjusted EBITDA margins and free cash flow conversion year-over-year. ServiceMaster Brands also performed well, with growth in national accounts and enhanced cleaning and disinfection services more than offset by the impact of COVID-19 on Merry Maids franchisees, as well as the impacts of a mild winter on ServiceMaster Restore.”
“Despite the difficult economic climate, we also made meaningful progress during the quarter on our key strategic priorities, which are continuing to contribute to greater focus and improved customer service levels across the organization. While pandemic related uncertainty remains, we are well-positioned to navigate these challenges and I am confident in the growth prospects of our business in both the short and long term.”
TERMINIX RESULTS. Terminix reported five percent year-over-year total revenue growth and flat organic revenue growth in the second quarter of 2020. Termite organic revenue growth, including wildlife exclusion, crawl space encapsulation and attic insulation, which are managed as a component of the termite line of business, was seven percent. The growth in this service line reflects an increase in core termite new unit sales driven by the launch of a new monthly pay tiered product offering and a strong termite swarm season in certain markets. Residential pest control organic revenue declines of one percent reflected lower summer sales units, bed bug and other one-time sales and service postponements in recurring pest, all driven by COVID-19. Service postponements peaked in April, but moderated throughout the rest of the second quarter as customers became comfortable with the safety protocols we implemented in response to COVID-19, but remain higher than the second quarter of 2019. New one-time sales of bed bug declined by approximately $3 million in the quarter due to COVID-19. The delayed start and reduction in scope of our summer sales program also resulted in a $3 million revenue decline in the quarter. These declines were offset by improved price realization. Commercial pest control organic revenue decline of nine percent was driven by lower sales of non-recurring services and service postponements due to business closures from COVID-19.
Terminix Adjusted EBITDA was $120 million for the second quarter, a year-over-year increase of $15 million. The flow-through from higher revenue was $4 million. Direct, indirect, and general and administrative cost reductions in the quarter amounted to approximately $18 million. Terminix also had year-over-year cost increases of $8 million for termite damage claims and mitigation program costs, primarily in the Mobile Bay area.
European Pest Control and Other. European Pest Control and Other includes pest control operations in Europe and the Company’s captive insurance subsidiary. Nomor Holdings AB, operating in Sweden and Norway, and Terminix UK reported $17 million in revenue and $2 million in Adjusted EBITDA in the second quarter. Revenue from European pest control operations was impacted by COVID-19 related business closures, including severe disruptions in the UK. Adjusted EBITDA margins in the mid-teens at Nomor were partially offset by expenses incurred at Terminix UK as part of our efforts to separate it from its former owner’s operations and systems.