- Terminix residential organic revenue growth of three
percent, including seven percent organic growth in termite
- ServiceMaster net income of $53 million and net income
margin of 9.9%
- Terminix delivered 23.3% Adjusted EBITDA margins,
year-over-year improvement of 190 basis points
- Strong free cash flow generation increased cash to $302
million with $677 million in total liquidity
- Third-Quarter 2020 continuing operations guidance:
- Revenue expected between $495 and $515 million
- Adjusted EBITDA expected between $80 and $90
million
ServiceMaster Global Holdings, Inc. (NYSE: SERV), a leading
provider of essential services to residential and commercial
customers in the termite, pest control, cleaning and restoration
markets, today announced unaudited second-quarter 2020 results.
For the second quarter of 2020, the Company reported a
year-over-year continuing operations revenue increase of eight
percent to $534 million and net income of $53 million, or $0.40 per
share. Continuing operations Adjusted EBITDA(1) for the quarter
increased $15 million to $119 million with Adjusted net income(2)
increasing $4 million to $53 million, or $0.40 per share. Both
Adjusted EBITDA and Adjusted net income for continuing operations
included $3 million of costs historically allocated to
ServiceMaster Brands.
“ServiceMaster’s strong performance this quarter despite the
unprecedented challenges created by the COVID-19 pandemic is a
testament to the dedication of our people and their commitment to
serving our customers,” said ServiceMaster Chairman and interim CEO
Naren Gursahaney. “Terminix saw strong organic growth in termite
services leading to solid performance in its residential business.
The Terminix commercial business saw improving trends as businesses
reopened, underscoring the resilience and essential nature of our
services. In addition, our actions to reduce costs resulted in
improved Adjusted EBITDA margins and free cash flow conversion
year-over-year. ServiceMaster Brands also performed well, with
growth in national accounts and enhanced cleaning and disinfection
services more than offset by the impact of COVID-19 on Merry Maids
franchisees, as well as the impacts of a mild winter on
ServiceMaster Restore.”
“Despite the difficult economic climate, we also made meaningful
progress during the quarter on our key strategic priorities, which
are continuing to contribute to greater focus and improved customer
service levels across the organization. While pandemic related
uncertainty remains, we are well-positioned to navigate these
challenges and I am confident in the growth prospects of our
business in both the short and long term.”
Consolidated Performance
Three Months Ended June
30,
Six Months Ended June
30,
$ millions
2020
2019
B/(W)
2020
2019
B/(W)
Revenue
$
534
$
494
$
40
$
990
$
913
$
77
YoY growth
8
%
8
%
Gross Margin
237
218
18
413
401
12
% of revenue
44.3
%
44.1
%
0.2
pts
41.8
%
43.9
%
(2.1
)pts
SG&A
143
138
(4
)
283
261
(22
)
% of revenue
(26.7
)%
(28.0
)%
1.3
pts
(28.6
)%
(28.6
)%
(0.0
)pts
Income from Continuing Operations
before Income Taxes
57
56
1
56
112
(56
)
% of revenue
10.7
%
11.3
%
(0.6
)pts
5.7
%
12.3
%
(6.6
)pts
Net Income
53
59
(6
)
67
129
(61
)
% of revenue
9.9
%
11.9
%
(2.0
)pts
6.8
%
14.1
%
(7.3
)pts
Adjusted Net Income(2)
53
48
4
64
75
(11
)
% of revenue
9.9
%
9.8
%
0.1
pts
6.5
%
8.2
%
(1.7
)pts
Adjusted EBITDA(1)
119
104
15
179
187
(8
)
% of revenue
22.4
%
21.1
%
1.3
pts
18.1
%
20.5
%
(2.4
)pts
Net Cash Provided from Operating
Activities from Continuing Operations
117
51
66
172
124
48
Free Cash Flow(3)
112
47
65
157
111
46
The Company also generated $17 million and $28 million in cash
from discontinued operations, in the second quarter and full year
of 2020 respectively.
Segment Performance
Revenue and Adjusted EBITDA for our reportable segment and
European Pest Control and Other, comprising continuing operations,
and the ServiceMaster Divestiture Group, comprising discontinued
operations, were as follows:
Three Months Ended June
30,
Six Months Ended June
30,
Revenue
Adjusted EBITDA
Revenue
Adjusted EBITDA
$ millions
2020
B/(W) vs. PY
2020
B/(W) vs. PY
2020
B/(W) vs. PY
2020
B/(W) vs. PY
Terminix
$
517
$
22
$
120
$
15
$
955
$
41
$
184
$
(5
)
YoY growth / % of revenue
5
%
23.3
%
1.9
pts
5
%
19.2
%
(1.4
)pts
European Pest Control and
Other(4)
17
17
2
—
35
35
1
(3
)
Costs historically allocated to
ServiceMaster Brands
—
—
(3
)
—
—
—
(6
)
—
Total Continuing Operations
$
534
$
40
$
119
$
15
$
990
$
77
$
179
$
(8
)
YoY growth / % of revenue
8
%
22.4
%
1.3
pts
8
%
18.1
%
(2.4
)pts
Discontinued Operations - ServiceMaster
Brands Divestiture Group
63
(2
)
24
(3
)
128
(1
)
47
(5
)
Total Company
$
597
$
37
$
143
$
12
1,118
$
76
$
226
$
(13
)
Reconciliations of net income to Adjusted net income and
Adjusted EBITDA, as well as a reconciliation of net cash provided
from operating activities from continuing operations to free cash
flow, are set forth below in this press release.
Second-Quarter Performance
Terminix
Terminix reported five percent year-over-year total revenue
growth and flat organic revenue growth in the second quarter of
2020. Termite organic revenue growth, including wildlife exclusion,
crawl space encapsulation and attic insulation, which are managed
as a component of the termite line of business, was seven percent.
The growth in this service line reflects an increase in core
termite new unit sales driven by the launch of a new monthly pay
tiered product offering and a strong termite swarm season in
certain markets. Residential pest control organic revenue declines
of one percent reflected lower summer sales units, bed bug and
other one-time sales and service postponements in recurring pest,
all driven by COVID-19. Service postponements peaked in April, but
moderated throughout the rest of the second quarter as customers
became comfortable with the safety protocols we implemented in
response to COVID-19, but remain higher than the second quarter of
2019. New one-time sales of bed bug declined by approximately $3
million in the quarter due to COVID-19. The delayed start and
reduction in scope of our summer sales program also resulted in a
$3 million revenue decline in the quarter. These declines were
offset by improved price realization. Commercial pest control
organic revenue decline of nine percent was driven by lower sales
of non-recurring services and service postponements due to business
closures from COVID-19.
Terminix Adjusted EBITDA was $120 million for the second
quarter, a year-over-year increase of $15 million. The flow-through
from higher revenue was $4 million. Direct, indirect, and general
and administrative cost reductions in the quarter amounted to
approximately $18 million. Terminix also had year-over-year cost
increases of $8 million for termite damage claims and mitigation
program costs, primarily in the Mobile Bay area.
European Pest Control and Other
European Pest Control and Other includes pest control operations
in Europe and the Company’s captive insurance subsidiary. Nomor
Holdings AB, operating in Sweden and Norway, and Terminix UK
reported $17 million in revenue and $2 million in Adjusted EBITDA
in the second quarter. Revenue from European pest control
operations was impacted by COVID-19 related business closures,
including severe disruptions in the UK. Adjusted EBITDA margins in
the mid-teens at Nomor were partially offset by expenses incurred
at Terminix UK as part of our efforts to separate it from its
former owner’s operations and systems.
Costs Historically Allocated to ServiceMaster Brands
The Company has historically incurred the cost of certain
corporate-level activities that were performed on behalf of its
businesses, including ServiceMaster Brands, such as executive
functions, communications, public relations, finance and
accounting, tax, treasury, internal audit, human resources
operations and benefits, risk management and insurance, supply
management, real estate management, legal, facilities, information
technology and other general corporate support services. The costs
of such activities were historically allocated to the segments,
including ServiceMaster Brands. Certain corporate expenses that
were historically allocated to the ServiceMaster Brands segment are
not permitted to be classified as discontinued operations under
GAAP (“Historically Allocated Services”). Such Historically
Allocated Services amounted to $3 million in both the three months
ended June 30, 2020 and 2019.
Discontinued Operations – ServiceMaster Brands Divestiture
Group
The ServiceMaster Brands Divestiture Group reported $63 million
in revenue, a decrease of 4% from the prior year. Growth in
national accounts and enhanced cleaning and disinfection services
was more than offset by a mild winter and decline in area-wide
events year-over-year in ServiceMaster Restore as well as the
COVID-19 related pressure on Merry Maids drove lower royalty
revenue.
The ServiceMaster Brands Divestiture Group reported Adjusted
EBITDA of $24 million, a decrease of $3 million year-over-year. The
flow-through impact of COVID-19 related royalty revenue reductions
at Merry Maids accounted for approximately half of the decline
while the impact of a mild winter and fewer area-wide events at
ServiceMaster Restore contributed the remaining decline.
Liquidity, Free Cash Flow and Leverage
The Company ended the second quarter with $302 million in
available cash and access to $375 million under its existing
revolving credit facility for total liquidity of $677 million. Year
to date free cash flow from continuing operations was $157 million,
with a free cash flow to continuing operations Adjusted EBITDA
conversion rate of 88 percent. Discontinued operations also
contributed $26 million of free cash flow year to date. Including
Adjusted EBITDA from discontinued operations, the Company’s net
debt leverage ratio improved from the first quarter of 2020 by
roughly half a turn to approximately 3.6 times trailing twelve
month Adjusted EBITDA.
Third-Quarter 2020 Outlook
Continuing Operations
SMB Divestiture Group
(In millions)
Low
High
Low
High
Revenue
$
495
$
515
$
63
$
68
Growth Rate
6
%
11
%
0
%
8
%
Adjusted EBITDA
$
80
$
90
$
23
$
27
Margin
16
%
18
%
37
%
40
%
The Company expects revenue of approximately $20 million from
acquisitions in the Terminix segment as well as revenue between $16
and $18 million from European Pest Control. Organically, the
Company expects continued impacts from the scale down of
door-to-door summer sales and continued pressure on one-time
revenue, primarily bedbug services. The Company expects continued
improvement in the commercial pest business and the guidance
assumes that there will not be a material change in business
closures due to COVID-19 in the third quarter.
Year-over-year margin expansion at Terminix reflects the
flow-through of higher revenue, and the continued benefits of cost
actions taken in the second quarter, partially offset by the
expected year-over-year increase in termite damage claims and
mitigation efforts, primarily in the Mobile Bay area.
The timing and frequency of new termite damage claims litigated
case filings is difficult to predict. The guidance represents the
Company’s best estimate of litigated case filings, but actual pace
and volume could differ.
Costs Historically Allocated to ServiceMaster Brands are
expected to be approximately $3 million in the third quarter. These
costs are reflected in the third quarter guidance.
A reconciliation of the forward looking third-quarter 2020
Adjusted EBITDA outlook to net income is not being provided, as the
Company does not currently have sufficient data to accurately
estimate the variables and individual adjustments for such
reconciliation.
Second-Quarter 2020 Earnings Conference Call
The Company will hold a conference call to discuss its financial
and operating results at 8 a.m. central time (9 a.m. eastern time)
on Thursday, August 6, 2020.
The Company invites all interested parties to join Interim Chief
Executive Officer Naren Gursahaney, Chief Financial Officer Tony
DiLucente and Vice President of Investor Relations and Treasurer
Jesse Jenkins for an update on the Company's operational
performance and financial results for the second quarter ended June
30, 2020. Participants may join this conference call by dialing
800.757.8529 (or international participants, +1.212.231.2938).
Additionally, the conference call will be available via webcast. A
slide presentation highlighting the Company’s results will also be
available. To participate via webcast and view the presentation,
visit the Company’s investor relations home page.
The call will be available for replay until September 5, 2020.
To access the replay of this call, please call 800.633.8284 and
enter reservation number 21966191 (international participants:
+1.402.977.9140, reservation number 21966191). Or you can review
the webcast on the Company’s investor relations home page.
About ServiceMaster
ServiceMaster Global Holdings, Inc. is a leading provider of
termite and pest control, cleaning and restoration services in both
the residential and commercial markets, operating through an
extensive service network of more than 8,000 company-owned
locations and franchise and license agreements. The Company’s
portfolio of well-recognized brands includes AmeriSpec (home
inspections), Copesan (commercial national accounts pest
management), Furniture Medic (cabinet and furniture repair), Merry
Maids (residential cleaning), Nomor (European pest management),
ServiceMaster Clean (commercial cleaning), ServiceMaster Restore
(restoration and reconstruction), Terminix (termite and pest
control) and Terminix Commercial (commercial termite and pest
control). The Company is headquartered in Memphis, Tenn. Go to
www.servicemaster.com for more information about ServiceMaster or
follow the Company at twitter.com/ServiceMaster or
Facebook.com/ServiceMaster.
Information Regarding Forward-Looking Statements
This press release contains forward-looking statements and
cautionary statements. Forward-looking statements can be identified
by the use of forward-looking terms such as “believes,” “expects,”
“may,” “will,” “shall,” “should,” “would,” “could,” “seeks,”
“aims,” “projects,” “is optimistic,” “intends,” “plans,”
“estimates,” “anticipates” or other comparable terms.
Forward-looking statements are subject to known and unknown risks
and uncertainties, many of which may be beyond our control,
including, without limitation, the risks and uncertainties
discussed in the “Risk Factors” and “Information Regarding
Forward-Looking Statements” sections in the Company’s reports filed
with the U.S. Securities and Exchange Commission. Such risks,
uncertainties and changes in circumstances include, but are not
limited to: the possibility that the review of strategic
alternatives for our ServiceMaster Brands businesses will not
result in a transaction or that the anticipated benefits will not
be realized, and the diversion of management time and other
business disruption during the period of the review; the impact of
reserves attributable to pending Litigated and Non-Litigated Claims
for terminate damages; the impact of COVID-19 on our operations;
lawsuits, enforcement actions and other claims by third parties or
governmental authorities; compliance with, or violation of
environmental health and safety laws and regulations; weakening
general economic conditions; weather conditions and seasonality;
the success of our business strategies, and costs associated with
restructuring initiatives. We caution you that forward-looking
statements are not guarantees of future performance or outcomes and
that actual performance and outcomes, including, without
limitation, our actual results of operations, financial condition
and liquidity, and the development of the market segments in which
we operate, may differ materially from those made in or suggested
by the forward-looking statements contained in this press release.
The Company assumes no obligation to update the information
contained herein, which speaks only as of the date hereof.
Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures.
Non-GAAP measures should not be considered as an alternative to
GAAP financial measures. Non-GAAP measures may not be calculated
like or comparable to similarly titled measures of other companies.
See non-GAAP reconciliations below in this press release for a
reconciliation of these measures to the most directly comparable
GAAP financial measures. Adjusted EBITDA, Adjusted net income,
Adjusted earnings per share, free cash flow, free cash flow to
Adjusted EBITDA conversion rate and ServiceMaster Brands
Divestiture Group Adjusted EBITDA are not measurements of the
Company’s financial performance under GAAP and should not be
considered as an alternative to net income, net cash provided by
operating activities from continuing operations, net earnings from
discontinued operations or any other performance or liquidity
measures derived in accordance with GAAP. Management uses these
non-GAAP financial measures to facilitate operating performance and
liquidity comparisons, as applicable, from period to period. We
believe these non-GAAP financial measures are useful for investors,
analysts and other interested parties as they facilitate
company-to-company operating performance and liquidity comparisons,
as applicable, by excluding potential differences caused by
variations in capital structures, taxation, the age and book
depreciation of facilities and equipment, restructuring initiatives
and equity-based, long-term incentive plans.
_______________________________________________ (1) Adjusted
EBITDA is defined as net income before: depreciation and
amortization expense; acquisition-related costs; fumigation related
matters; non-cash stock-based compensation expense; restructuring
and other charges; realized (gain) on investment in frontdoor,
inc.; net earnings from discontinued operations; provision for
income taxes; loss on extinguishment of debt; and interest expense.
The Company’s definition of Adjusted EBITDA may not be comparable
to similarly titled measures of other companies.
(2) Adjusted net income is defined as net income before:
amortization expense; fumigation related matters; restructuring and
other charges; acquisition-related costs; realized (gain) on
investment in frontdoor, inc.; net earnings from discontinued
operations; loss on extinguishment of debt; and the tax impact of
the aforementioned adjustments. The Company’s definition of
Adjusted net income may not be comparable to similarly titled
measures of other companies. Adjusted earnings per share is
calculated as Adjusted net income divided by the weighted-average
diluted common shares outstanding.
(3) Free cash flow is defined as net cash provided from
operating activities from continuing operations less property
additions.
(4) European Pest Control and Other includes our pest control
operations in Europe, primarily under our Nomor brand, our captive
insurance subsidiary and our headquarters operations.
SERVICEMASTER GLOBAL HOLDINGS,
INC. Consolidated Statements of Operations and Comprehensive
Income (In millions, except per share data)
Three Months Ended
Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
Revenue
$
534
$
494
$
990
$
913
Cost of services rendered and products
sold
297
276
577
512
Selling and administrative expenses
143
138
283
261
Amortization expense
9
5
18
10
Acquisition-related costs
—
3
1
4
Fumigation related matters
—
(1
)
—
—
Restructuring and other charges
8
2
12
8
Realized (gain) on investment in
frontdoor, inc.
—
—
—
(40
)
Interest expense
22
18
45
45
Interest and net investment income
(1
)
(3
)
(1
)
(4
)
Loss on extinguishment of debt
—
—
—
6
Income from Continuing Operations
before Income Taxes
57
56
56
112
Provision for income taxes
18
14
16
17
Equity in earnings of joint venture
1
—
1
—
Income from Continuing
Operations
40
42
41
95
Net earnings from discontinued
operations
13
17
26
34
Net Income
$
53
$
59
$
67
$
129
Total Comprehensive Income
$
54
$
55
$
19
$
123
Weighted-average common shares outstanding
- Basic
131.9
136.0
133.4
135.9
Weighted-average common shares outstanding
- Diluted
132.0
136.5
133.5
136.3
Basic Earnings Per Share:
Income from Continuing Operations
$
0.30
$
0.31
$
0.31
$
0.70
Net earnings from discontinued
operations
0.10
0.13
0.19
0.25
Net Income
0.40
0.43
0.50
0.95
Diluted Earnings Per Share:
Income from Continuing Operations
$
0.30
$
0.30
$
0.31
$
0.70
Net earnings from discontinued
operations
0.10
0.13
0.19
0.25
Net Income
0.40
0.43
0.50
0.94
SERVICEMASTER GLOBAL HOLDINGS,
INC. Consolidated Statements of Financial Position (In
millions, except share data)
As of
As of
June 30,
December 31,
2020
2019
Assets:
Current Assets:
Cash and cash equivalents
$
302
$
280
Receivables, less allowances of $22 and
$21, respectively
205
178
Inventories
45
46
Prepaid expenses and other assets
68
81
Current assets held for sale
884
45
Total Current Assets
1,505
629
Other Assets:
Property and equipment, net
189
205
Operating lease right-of-use assets
86
95
Goodwill
2,103
2,096
Intangible assets, primarily trade names,
service marks and trademarks, net
1,146
1,169
Restricted cash
89
89
Notes receivable
33
32
Long-term marketable securities
13
13
Deferred customer acquisition costs
96
94
Other assets
78
72
Long-term assets held for sale
—
829
Total Assets
$
5,339
$
5,322
Liabilities and Stockholders'
Equity:
Current Liabilities:
Accounts payable
$
115
$
96
Accrued liabilities:
Payroll and related expenses
75
54
Self-insured claims and related
expenses
59
72
Accrued interest payable
12
16
Other
108
82
Deferred revenue
112
107
Current portion of lease liability
18
19
Current portion of long-term debt
104
70
Current liabilities held for sale
54
40
Total Current Liabilities
658
557
Long-Term Debt
1,620
1,667
Other Long-Term Liabilities:
Deferred taxes
486
499
Other long-term obligations, primarily
self-insured claims
221
158
Long-term lease liability
103
110
Long-term liabilities held for sale
—
9
Total Other Long-Term Liabilities
811
776
Commitments and Contingencies
Stockholders' Equity:
Common stock $0.01 par value (authorized
2,000,000,000 shares with 148,193,311 shares issued and 131,981,085
outstanding at June 30, 2020 and 147,872,959 shares issued and
135,408,054 outstanding at December 31, 2019)
2
2
Additional paid-in capital
2,348
2,334
Retained Earnings
358
291
Accumulated other comprehensive (loss)
income
(40
)
9
Less common stock held in treasury, at
cost (16,212,226 shares at June 30, 2020 and 12,464,905 shares at
December 31, 2019)
(417
)
(313
)
Total Stockholders' Equity
2,251
2,322
Total Liabilities and Stockholders'
Equity
$
5,339
$
5,322
SERVICEMASTER GLOBAL HOLDINGS,
INC. Consolidated Statements of Cash Flows (In millions)
Six Months Ended
June 30,
2020
2019
Cash and Cash Equivalents and
Restricted Cash at Beginning of Period
$
368
$
313
Cash Flows from Operating Activities
from Continuing Operations:
Net Income
67
129
Adjustments to reconcile net income to net
cash provided from operating activities:
Net earnings from discontinued
operations
(26
)
(34
)
Depreciation expense
37
35
Amortization expense
18
10
Amortization of debt issuance costs
2
2
Amortization of lease right-of-use
assets
9
9
Payments on fumigation related matters
—
(1
)
Realized (gain) on investment in
frontdoor, inc.
—
(40
)
Loss on extinguishment of debt
—
6
Deferred income tax provision
—
8
Stock-based compensation expense
10
8
Gain on sale of marketable securities
—
(1
)
Restructuring and other charges
12
8
Payments for restructuring and other
charges
(6
)
(9
)
Acquisition-related costs
1
4
Payments for acquisition-related costs
(4
)
(3
)
Other
(10
)
(9
)
Change in working capital, net of
acquisitions:
Receivables
(29
)
(12
)
Inventories and other current assets
(6
)
(12
)
Accounts payable
26
27
Deferred revenue
4
6
Accrued liabilities
31
(9
)
Accrued interest payable
(4
)
1
Current income taxes
40
5
Net Cash Provided from Operating
Activities from Continuing Operations
172
124
Cash Flows from Investing Activities
from Continuing Operations:
Property additions
(15
)
(13
)
Business acquisitions, net of cash
acquired
(24
)
(115
)
Origination of notes receivable
(20
)
(56
)
Collections on notes receivable
22
64
Net Cash Used for Investing Activities
from Continuing Operations
(36
)
(119
)
Cash Flows from Financing Activities
from Continuing Operations:
Borrowings of debt
—
600
Payments of debt
(40
)
(624
)
Repurchase of common stock
(103
)
(17
)
Issuance of common stock
3
9
Net Cash Used For Financing Activities
from Continuing Operations
(140
)
(32
)
Cash Flows from Discontinued
Operations:
Cash provided from operating
activities
27
32
Cash provided from investing
activities
—
(2
)
Cash used for financing activities
—
—
Net Cash Provided from Discontinued
Operations
28
30
Effect of Exchange Rate Changes on
Cash
(1
)
—
Cash Increase During the Period
22
3
Cash and Cash Equivalents and
Restricted Cash at End of Period
$
391
$
316
The following table presents reconciliations of net income to
Adjusted net income.
Three Months Ended
Six Months Ended
June 30,
June 30,
(In millions)
2020
2019
2020
2019
Net Income
$
53
$
59
$
67
$
129
Amortization expense
9
5
18
10
Acquisition-related costs
—
3
1
4
Fumigation related matters
—
(1
)
—
—
Restructuring and other charges
8
2
12
8
Realized (gain) on investment in
frontdoor, inc.
—
—
—
(40
)
Net earnings from discontinued
operations
(13
)
(17
)
(26
)
(34
)
Loss on extinguishment of debt
—
—
—
6
Tax impact of adjustments
(4
)
(2
)
(8
)
(7
)
Adjusted Net Income
$
53
$
48
$
64
$
75
Weighted-average diluted common shares
outstanding
132.0
136.5
133.5
136.3
Adjusted earnings per share
$
0.40
$
0.35
$
0.48
$
0.55
The following table presents reconciliations of net cash
provided from operating activities from continuing operations to
free cash flow.
Three Months Ended
Six Months Ended
June 30,
June 30,
(In millions)
2020
2019
2020
2019
Net Cash Provided from Operating
Activities from Continuing Operations
$
117
$
51
$
172
$
124
Property additions
(5
)
(4
)
(15
)
(13
)
Free Cash Flow
$
112
$
47
$
157
$
111
Free Cash Flow / Adjusted EBITDA
94
%
45
%
88
%
59
%
The following table presents reconciliations of net income to
Adjusted EBITDA.
Three Months Ended
Six Months Ended
June 30,
June 30,
(In millions)
2020
2019
2020
2019
Net income
$
53
$
59
$
67
$
129
Depreciation and amortization expense
27
22
55
45
Acquisition-related costs
—
3
1
4
Fumigation related matters
—
(1
)
—
—
Non-cash stock-based compensation
expense
5
4
10
8
Restructuring and other charges
8
2
12
8
Realized (gain) on investment in
frontdoor, inc.
—
—
—
(40
)
Net earnings from discontinued
operations
(13
)
(17
)
(26
)
(34
)
Provision for income taxes
18
14
16
17
Loss on extinguishment of debt
—
—
—
6
Interest expense
22
18
45
45
Adjusted EBITDA
$
119
$
104
$
179
$
187
Terminix
$
120
$
106
$
184
$
189
European Pest Control and Other
2
1
1
4
Costs historically allocated to
ServiceMaster Brands
(3
)
(3
)
(6
)
(6
)
Adjusted EBITDA
$
119
$
104
$
179
$
187
Terminix Segment
Revenue by service line is as follows:
Three Months Ended
June 30,
(In millions)
2020
2019
Growth
Acquired
Organic
Residential Pest Control
$
182
$
182
$
—
—
%
$
2
1
%
$
(1
)
(1
)%
Commercial Pest Control
107
105
2
2
%
11
11
%
(10
)
(9
)%
Termite and Home Services
196
183
13
7
%
1
1
%
12
7
%
Other
32
25
7
29
%
9
38
%
(2
)
(9
)%
Total revenue
$
517
$
495
$
22
5
%
$
23
5
%
$
(1
)
—
%
ServiceMaster Brands Divestiture Group
Revenue by service line is as follows:
Three Months Ended
% of
% of
June 30,
Revenue
Revenue
(In millions)
2020
2019
2020
2019
Royalty Fees
$
30
$
35
47
%
53
%
Commercial Cleaning and other National
Accounts
21
19
32
29
Sales of Products
3
3
6
5
Other
9
9
15
14
Total revenue
$
63
$
66
100
%
100
%
A reconciliation of Net earnings from discontinued operations to
the ServiceMaster Brands Divestiture Group’s Adjusted EBITDA is as
follows:
Three Months Ended
June 30,
(In millions)
2020
2019
Net earnings from discontinued
operations
$
13
$
17
Depreciation and amortization expense
—
2
Non-cash stock-based compensation
expense
1
—
Restructuring and other charges
5
1
Provision for income taxes
5
7
ServiceMaster Brands Divestiture Group
Adjusted EBITDA
$
24
$
27
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200806005307/en/
Investor Relations: Jesse Jenkins 901.597.8259
Jesse.Jenkins@servicemaster.com
Media: James Robinson 901.597.7521
James.Robinson@servicemaster.com
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