ServiceMaster Global Holdings Reports First Quarter 2017 Results

ServiceMaster Global Holdings announced on April 27 unaudited first-quarter 2017 results. The company reported a year-over-year revenue increase of 6 percent driven primarily by organic growth at American Home Shield (“AHS”) and the impact of acquiring OneGuard Home Warranties (“OneGuard”) in June 2016 and Landmark Home Warranty (“Landmark”) in November 2016.

First-quarter 2017 net income was $39 million, or $0.29 per share, versus $39 million, or $0.28 per share, in the same period in 2016.

First-quarter 2017 Adjusted EBITDA was $134 million, a year-over-year increase of $7 million, or 6 percent, primarily driven by an increase in Adjusted EBITDA of $12 million at AHS.

First-quarter 2017 adjusted net income was $46 million, or $0.34 per share, versus $47 million, or $0.34 per share, for the same period in 2016.

Rob Gillette, ServiceMaster’s chief executive officer, noted: “ServiceMaster delivered a good quarter to start 2017. At AHS, organic growth and the contribution from 2016 acquisitions drove strong revenue and Adjusted EBITDA growth again this quarter. At Terminix, our operating performance was in line with our expectation for revenue and Adjusted EBITDA growth as we continue to invest in improving our service delivery and customer service experience. We are confident the operational changes we are making will improve customer retention and result in solid growth in the future.”

Terminix. Terminix reported comparable revenue in the first-quarter of 2017 compared to the first-quarter of 2016, primarily driven by an increase in core termite, wildlife exclusion and attic insulation sales, offset, in part, by the expected decline in revenue associated with Alterra Pest Control, LLC (“Alterra”). Adjusted EBITDA decreased 14 percent, or $13 million, versus prior year, primarily reflecting a $5 million increase in production labor costs associated with the company’s effort to improve safety, customer service and retention, a $4 million increase in damage claims and a $7 million increase in sales and marketing costs, offset, in part, by $2 million from the conversion of higher revenue and a $1 million decrease in fuel costs.