For Franchise information visit ServiceMaster on BISON.  

ServiceMaster Reports Record Third Quarter Revenue and Profits

MEMPHIS - (October 20, 1999) - ServiceMaster reported record third quarter revenue of $1.6 billion, up 24 percent over the third quarter ended September 30, 1998, reflecting strong growth from both base operations and acquisitions. Net income rose 18 percent over third quarter 1998 to $67 million, with earnings per share increasing 11 percent to $.21.

For the nine months, revenue rose 21 percent to $4.2 billion. Net income excluding non-recurring unusual items was $172 million, up 21 percent, with earnings per share on that basis increasing 15 percent to $.55. Net income after non-recurring items related to the second quarter restructuring of the Company's Diversified Health Services business and the sale of certain businesses was $120 million and earnings per share were $.38.

For the quarter, Consumer and Commercial Services achieved revenue of $944 million, up 60 percent, resulting from double-digit growth at each company and the successful integration of new businesses. Operating income increased 25 percent to $107 million. TruGreen-ChemLawn reported modest revenue increases, but lower profits in the Company's lawncare operations, resulting from the effects of extreme drought. TruGreen-LandCare, the Company's commercial landscape operations, posted significant revenue and profit gains, reflecting organic growth and successful integration of acquisitions. Terminix achieved strong revenue and profit increases with excellent growth in termite completions and renewals, successful integration of acquisitions, and improved branch efficiencies. Continued strength in sales of warranty contracts, bolstered by an increase in direct-to-consumer sales, resulted in strong revenue and profit growth at American Home Shield. Successful integration initiatives and internal growth from the combined Rescue Rooter and American Residential Services (ARS) operations contributed to favorable results, as ARS continued to meet management expectations. The franchise operations, which include ServiceMaster Residential and Commercial Services and Merry Maids, attained solid double-digit growth in revenue and profits, with increased license sales and excellent results at company-owned branches.

Management Services posted revenue from continuing operations of $482 million, a two percent increase, with annualized revenue for the nine months rising three percent to $1.9 billion. Operating income from continuing operations increased four percent to $20 million, reflecting modest revenue gains and improved profit margins.

ServiceMaster provides outsourcing services to more than 10.5 million customers in the United States and in 41 countries around the world, with annual customer level revenue of $6.4 billion. The core service capabilities of the Company include lawn care and landscaping, termite and pest control, plumbing, heating and air conditioning maintenance and repair, appliance maintenance and repair, cleaning, plant maintenance and supportive management.

These services are provided through a network of over 5,800 company-owned and franchised service centers and business units, operating under leading brands which include TruGreen-ChemLawn, TruGreen-LandCare, Terminix, American Home Shield, Rescue Rooter, American Residential Services, ServiceMaster Residential and Commercial Services, Merry Maids, AmeriSpec, Furniture Medic and ServiceMaster Management Services.

For franchise information visit ServiceMaster on BISON.