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ServiceMaster Overcomes Challenges for 3Q Revenue Increase

Print Article Contributed by BSM Staff

MEMPHIS, TN – Despite challenges, ServiceMaster Global Holdings, Inc., a provider of essential services to residential and commercial customers in the termite, pest control, cleaning and restoration markets, has reported a seven percent increase in third-quarter revenues.

For the quarter ended September 30, 2019, the company reported net income of $25 million, or 19 cents a share, on sales of $528 million, compared to income of $71 million, or 74 cents a share, on $496 million in the same period last year.

“Although we had a challenging quarter, we continue to make progress on the execution of our long-term value creation strategy and remain confident in our ability to deliver sustainable profitable growth,” said ServiceMaster CEO Nik Varty. “We are improving our service levels across all of our businesses, which has resulted in continued stronger retention rates, net promoter scores, customer satisfaction and ultimately organic growth. Terminix Commercial showed strong retention gains in the quarter and added significant additional capabilities and talent with the recent acquisitions of Gregory Pest Solutions and McCloud Services.”

The Company’s ongoing focus in Terminix Residential is continuing the customer-first culture change that is underway with its front-line associates, paying them for their performance, increasing focus on recurring high-margin product lines and enhancing productivity through a disciplined operational cadence. Terminix Residential is improving consistency in its efforts towards operational excellence and ensuring that it delivers an unparalleled customer experience at every customer interaction.

The Company has taken strong actions in addressing two legacy risks, termite damage claims and fumigation services. Meaningful progress has been made to address the previously announced increase in termite damage claims, emerging from a specific species of termite. Those actions were initiated in early 2018 and include better technician training, better documentation, an improved pricing structure, a systematic retreatment process in the high-risk region and working more closely with our customers to proactively resolve problems.

Similar to most industry peers, the Company announced earlier this year that it would outsource its fumigation business to reduce its risk, while ensuring it could continue to provide this service for customers who need it. The initial execution of this transition was challenging, and the results did not meet expectations.

The company has increased full-year 2019 revenue guidance to range from $2.07 billion to $2.085 billion, or an increase of approximately 10 percent compared to 2018.

The company has assets of $5 billion, and liabilities of liabilities of $2.6 billion.