MEMPHIS, Tenn., Nov. 14, 2012 /PRNewswire/ --
- Third-quarter operating revenue decreased 3.2% to $901 million
- Third-quarter operating loss was $724 million, which included goodwill and trade name impairment charges of $845 million
- Third-quarter operating performance decreased 12.8% to $169 million
- September YTD operating revenue increased 0.2% to $2.5 billion
- September YTD operating loss was $572 million, which included goodwill and trade name impairment charges of $913 million
- September YTD operating performance improved 0.1% to $482 million
- Issued $750 million of 7% senior notes in third quarter
- Retired $396 million of 10.75% senior notes and repaid $276 million under Term Facility
- Extended maturity date of $1 billion under Term Facility from 2014 to 2017
The ServiceMaster Company, one of the world's largest residential and commercial service networks, today announced preliminary, unaudited third-quarter 2012 results, including revenue of $901 million, a decline of 3.2 percent compared to third-quarter 2011 results. The company's third-quarter operating loss, which included non-cash goodwill and trade name impairment charges of $794 million and $51 million, respectively, was $724 million. The company's operating performance decreased 12.8 percent to $169 million compared to the same period in 2011.
ServiceMaster's overall operating revenue for the first nine months of the year increased 0.2 percent, to $2.5 billion. The company's operating performance for the first nine months increased 0.1 percent, to $482 million.
"Obviously, our third-quarter results overall, and TruGreen's in particular, didn't meet our expectations," said Hank Mullany, ServiceMaster's chief executive officer who is also serving as the interim TruGreen president. "But as we lay out a plan to retool TruGreen, there are some very positive things happening in our other businesses."
He noted that excluding TruGreen, for the third quarter, ServiceMaster's operating revenue was up 4.2 percent and operating performance was up 6.9 percent. Customer satisfaction for the company overall also increased in the third quarter.
"We will get TruGreen on track," said Mullany, "and we're putting the people, processes and technology in place to help make that happen. We believe TruGreen has the right fundamentals and is positioned for success in the marketplace. We're number one in the professional lawn care service category and four times larger than our nearest competitor based on revenue. We have the size and scale to invest in new technology and provide new, improved services. We're already making changes to help drive sustainable, profitable growth at TruGreen."
Mullany said TruGreen still has significant opportunity to grow by increasing penetration into the residential lawn care market segment and by gaining share in the $3 billion commercial lawn care market segment. He noted that ServiceMaster's diverse set of businesses are an important advantage as the company seeks to grow.
"We have work ahead of us," said Mullany, "but we have strong brands and an executive team committed to making the changes necessary to achieve our vision of becoming a rapidly growing, best-in-class service provider – and the best place to work and invest."
Based on the company's current forecast, the company has determined that anticipated 2012 consolidated operating revenue will be slightly below 2011 consolidated operating revenue, and that 2012 consolidated operating performance will be lower by approximately 5 percent to 9 percent when compared to 2011 consolidated operating performance. The forecasted decrease in consolidated operating performance against prior year is primarily the result of decreases in both operating revenue and operating performance that is anticipated at the company's TruGreen segment. In light of these forecasted decreases at TruGreen, the company has undertaken a number of initiatives both at the corporate level and in other business segments designed to partially offset the forecasted shortfall in TruGreen's profitability; these initiatives are reflected in the current consolidated 2012 operating performance forecast.
Excluding TruGreen, we are forecasting that 2012 consolidated revenue will be approximately 5 percent higher than 2011 and that 2012 consolidated operating performance will be approximately 2 percent to 6 percent higher than 2011.
The company expects that TruGreen's full-year 2012 operating revenue will be approximately 10 percent to 12 percent lower compared to its full-year 2011 operating revenue, and that TruGreen's full-year 2012 operating performance will be approximately 27 percent to 31 percent lower compared to its full-year 2011 operating performance. The forecasted reduction in TruGreen's operating revenue is driven primarily by lower anticipated residential revenue production driven by the continued impact of the year-over-year decline in residential full program customer counts. The lower forecasted operating performance at TruGreen is primarily the result of the impact of lower forecasted revenue and higher labor costs, fertilizer costs, fuel prices and technology costs related to a new operating system.
Third-Quarter Earnings Conference Call
The company will discuss its strategic initiatives and third-quarter operating results during a webcast conference call at 2 p.m. Central Time today. To participate on the conference call, interested parties should call 877.256.8248. Additionally, the conference call will be available via webcast. A slide presentation highlighting the company's results and key performance indicators will also be available. To participate via webcast and view the slide presentation, visit the company's investor relations home page at www.servicemaster.com.
For full Segment Review and Forward-looking Statements, please visit the Investor section at ServiceMaster.com (http://phx.corporate-ir.net/phoenix.zhtml?c=118856&p=irol-irhome).
With a global network of more than 6,900 company-owned, franchised and licensed locations, Memphis-based ServiceMaster is one of the world's largest residential and commercial service networks. The company's high-profile brands are Terminix, TruGreen, American Home Shield, ServiceMaster Clean, Merry Maids, Furniture Medic and AmeriSpec. Through approximately 21,000 corporate associates and a franchise network that independently employs over 31,000 additional people, the ServiceMaster family of brands provided services and products to approximately 8.1 million customers during the last 12 months. Our market-leading brands provide a range of residential and commercial services including termite and pest control; lawn, tree and shrub care; home warranties and preventative maintenance contracts; furniture repair; home inspections; home cleaning; janitorial services; and disaster restoration. Go to www.servicemaster.com for more information about ServiceMaster or follow us at twitter.com/ServiceMaster or facebook.com/TheServiceMasterCo.
SOURCE The ServiceMaster Company