The company reported a fourth-quarter 2013 pre-tax net loss of $23 million, versus a pre-tax net loss of $20 million one year ago. The company reported a full-year 2013 pre-tax loss of $627 million. This compares to a pre-tax loss of $827 million one year ago. Both periods included goodwill and trade name impairment charges at TruGreen, $673 million in 2013 and $909 million in 2012.
The company reported fourth-quarter 2013 Adjusted EBITDA of $90 million, an increase of $8 million compared to the same period in 2012. The increase was primarily driven by the impact of higher revenue in fourth-quarter 2013 and lower claims costs at American Home Shield, partially offset by higher selling expenses to drive growth, primarily at American Home Shield and discrete charges at Terminix. The company reported full-year 2013 Adjusted EBITDA of $476 million, $95 million lower compared to one year ago, driven by the $127 million Adjusted EBITDA decline at TruGreen, which more than offset the Adjusted EBITDA increase in the remaining businesses. A reconciliation of net loss to Adjusted EBITDA is set forth below in this press release.
Excluding TruGreen, our fourth-quarter and full-year 2013 financial results for the remaining portfolio met our expectations, said Rob Gillette, ServiceMaster’s chief executive officer. “We’re pleased that Terminix, American Home Shield and ServiceMaster Clean all reported full-year 2013 revenue and Adjusted EBITDA growth versus prior year.”
The separation of the TruGreen business from ServiceMaster as a tax-free spin-off of TruGreen through a pro rata dividend to the stockholders of ServiceMaster Global Holdings, Inc., was completed on Jan. 14, 2014.
“This separation should enable ServiceMaster to concentrate on growth and realize our full potential faster,” said Gillette. “We believe the future for the remaining ServiceMaster portfolio is compelling. We have great businesses and great people and we’re committed to taking the steps necessary to continue to drive both revenue and bottom-line growth.”
TruGreen
On Jan. 14, 2014, ServiceMaster Global Holdings, Inc. completed the previously announced separation transaction of the TruGreen business. The TruGreen business is now operated as a private, independent company but is reported in this news release in continuing operations. Beginning with the company’s first-quarter earnings release, the TruGreen business will be reported in discontinued operations.
TruGreen reported a 2 percent revenue decrease in the fourth quarter of 2013, driven by lower customer counts. Adjusted EBITDA declined $8 million versus prior year, reflecting higher bad debt expense and an increase in costs associated with higher sales staffing levels.
TruGreen revenue decreased 8 percent for full-year 2013, driven by lower customer counts. Adjusted EBITDA declined $127 million versus prior year, reflecting the flow-through effect of lower revenue, process inefficiencies, an increase in sales staffing levels and higher bad debt expense.
To read the full ServiceMaster news release, please click here.
