MEMPHIS, Tenn. -- ServiceMaster Global Holdings, Inc, a leading provider of essential residential and commercial services, announced unaudited third-quarter 2017 results. The company reported a year-over-year revenue increase of 5 percent driven primarily by organic growth at American Home Shield (“AHS”), as well as the impact of acquiring Landmark Home Warranty (“Landmark”) in November 2016 and 7 percent growth at the Franchise Services Group.
Third-quarter 2017 net income was $80 million, or $0.59 per share, versus $70 million, or $0.51 per share, in the same period in 2016.
Third-quarter 2017 Adjusted EBITDA was $200 million, a year-over-year increase of $8 million, or 4 percent.
Third-quarter 2017 adjusted net income was $99 million, or $0.73 per share, versus $81 million, or $0.59 per share, for the same period in 2016.
“During the quarter, we achieved continued strong growth at American Home Shield and the Franchise Services Group, while making progress on our transformational initiatives at Terminix,” said ServiceMaster chief executive officer Nik Varty. “At Terminix, third-quarter revenue was $395 million, comparable to prior year. However, excluding the temporary impact of the hurricanes and the attrition of Alterra customers, Terminix revenue increased 2 percent over prior year. We are continuing to focus on improving customer retention by significantly upgrading the customer experience. We are strengthening our leadership team and driving accountability throughout the organization so that we can consistently deliver on our commitments.”
“We are on track with our previously announced plans to spin off American Home Shield in the third quarter of 2018,” Varty added. “The spin-off will allow Terminix to fully focus on its transformational activities, while allowing AHS to pursue its high-growth opportunities.”
Terminix reported a slight year-over-year revenue decrease in the third quarter of 2017 as increases in core termite control, termite renewals, wildlife exclusion, insulation and mosquito sales were offset by a decline in core pest control revenue which included the expected decline in revenue associated with the prior acquisition of Alterra Pest Control. Hurricanes Harvey and Irma also negatively impacted third quarter revenue by $4 million as the result of 53 branches, primarily in Texas and Florida, being temporarily closed for a period of time in August and September. Adjusting for these temporary branch closures and the impact of Alterra customer attrition, revenue would have grown 2 percent in the third quarter. Adjusted EBITDA decreased 11 percent, or $10 million, versus prior year, primarily reflecting a $3 million impact due to the revenue loss from hurricanes Harvey and Irma, a $3 million increase in termite damage claims, a $2 million increase in insurance costs, a $2 million increase in sales and marketing costs and a $1 million increase in production labor costs associated with the company’s effort to improve safety, customer service and retention, offset, in part, by a $1 million increase in revenue conversion.