MEMPHIS, Tenn., Nov. 14, 2013 /PRNewswire/ -- The ServiceMaster Company, one of the world's largest residential and commercial service networks, today announced preliminary unaudited third-quarter 2013 results, including operating revenue of $929 million, an increase of approximately 3 percent compared to the same period in 2012. The increase in revenue was primarily attributable to a strong performance at Terminix versus the prior year period and revenue stabilization at TruGreen.
The company reported third-quarter 2013 net income of $46 million. This compares to a net loss of $704 million one year ago, which included goodwill and trade name impairment charges at TruGreen totaling $845 million. The company reported third-quarter 2013 Operating Performance of $169 million, which was comparable to the same period in 2012. The impact of higher revenue on gross profit in third-quarter 2013 was offset by higher selling expenses, primarily at TruGreen. A reconciliation of Operating Performance to net income is set forth below in this press release.
"Our third-quarter 2013 financial results met our expectations," said Rob Gillette, ServiceMaster's chief executive officer. "While the increase in revenue compared to the third quarter of 2012 was primarily attributable to the strong performance at Terminix, all of our business segments produced revenue growth versus prior year."
"We've talked a lot over the past few months about the TruGreen turnaround, and it has now become clear that while we're making progress," said Gillette, "TruGreen is on a different earnings growth timeline than the rest of ServiceMaster."
Gillette said the company plans to separate the TruGreen business from the ServiceMaster portfolio on or about December 31, 2013. "This separation should enable ServiceMaster to concentrate on growth while providing TruGreen the time and focus it needs to make the changes necessary to complete the turnaround of its business. Separating TruGreen from ServiceMaster should allow both companies to realize their full potential faster," said Gillette.
The separation of the TruGreen business from ServiceMaster is being planned as a tax-free spin-off of TruGreen through a pro rata dividend to the stockholders of ServiceMaster Global Holdings, Inc., the ultimate parent company of ServiceMaster. The separation is subject to a number of important closing conditions, which once completed will result in TruGreen being an independent, private company. J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Goldman, Sachs & Co. and Natixis are acting as financial advisors to ServiceMaster in connection with the proposed separation.
"We believe the most effective way to realize TruGreen's long-term value is to have it operate as a standalone company," said TruGreen President David Alexander. "We have the right team and the right plan, and we're excited about the opportunity ahead of us. What we need to do now is stay focused, execute well and deliver more consistent, reliable performance over the long haul."
Alexander pointed out that TruGreen has made steady progress over the past several months implementing process and technology improvements that should stabilize its operations and deliver better results.
Third-quarter Earnings Conference Call
The company will discuss its third-quarter operating results and strategic initiatives, including the separation of TruGreen from the ServiceMaster portfolio, during a conference call at 3:00 p.m. central time today. To participate on the conference call, interested parties should call 800.786.1918 (or international participants, 212.231.2924). 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.
The call will be available for replay until December 14, 2013. To access the replay of this call, please call 800.633.8284 and enter reservation number 21681168 (international participants: 402.977.9140, reservation number 21681168). Or you can review the webcast on the company's investor relations home page.
For full segment review and forward-looking statements, please visit the Investor section at ServiceMaster.com.
1Operating Performance is defined by the company as operating income excluding certain non-cash charges and other items. See Non-GAAP reconciliations.
With a global network of more than 7,300 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 20,000 corporate associates and a franchise network that we estimate independently employs over 31,000 additional people, the ServiceMaster family of brands provided services and products to approximately 8 million customers during the last 12 months. The company's 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; on-site wood 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