TruGreen's First-Quarter Results 'Disappointing'

5/14/2013

MEMPHIS, Tenn.-The ServiceMaster Company, one of the world's largest residential service networks, today announced preliminary unaudited first-quarter 2013 results, including operating revenue of $608 million, a decline of 7.1 percent compared to the same period in 2012. The company reported first-quarter 2013 operating income of $20 million, a decline of 63.2 percent compared to the same period for 2012. The company's first-quarter 2013 operating performance decreased 35 percent to $65 million compared to the same period for 2012. A reconciliation of operating income (loss) to operating performance is set forth in this press release.

"Our first-quarter 2013 results were disappointing," said John Krenicki, Jr., ServiceMaster's interim chief executive officer. "The path forward for us starts with putting our customers first, executing well and implementing the turnaround agenda at TruGreen." Krenicki assumed the CEO position following the departure of former CEO Hank Mullany, who resigned from the company effective April 12.

Krenicki noted that the decline in revenue and earnings compared to the first quarter of 2012 was largely attributable to TruGreen's performance and the effects of the cool, wet start to the spring season in many parts of the country for both TruGreen and Terminix. The unseasonably late spring delayed production and compared unfavorably to the unusually warm weather that accelerated production into the first quarter last year. Excluding TruGreen, the other ServiceMaster businesses performed about as expected, he said.

"We're confident about the future of ServiceMaster," said Krenicki. "We have leading brands, talented and passionate associates committed to serving customers and a lot of untapped opportunity to improve results. But we need to make progress at TruGreen while continuing to run the rest of our businesses well."

At a Glance

* First-quarter operating revenue decreased 7.1% to $608 million
* First-quarter operating income decreased 63.2% to $20 million
* First-quarter operating performance decreased 35.0% to $65 million
* In the first quarter of 2013, extended maturity date of $1.2 billion under Term Facility from 2014 to 2017
* As of March 31, 2013, $447.7 million of capacity remained available under the revolving credit facility

See also: TruGreen Sags ServiceMaster Earnings in the Memphis Daily News by clicking here.