SERVICEMASTER GLOBAL HOLDINGS INC (SERV) SEC Filing 10-K Annual report for the fiscal year ending Saturday, December 31, 2016
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ServiceMaster Global Holdings, Inc. Reports
Fourth-Quarter and Full Year 2016 Financial Results
Outlook Full Year 2017
Revenue between $2,885 million and $2,915 million, or growth over prior year between 5% and 6%, and Adjusted EBITDA between $700 million and $715 million, or growth between 5% and 7% over prior year
MEMPHIS, TENN, — February 23, 2017 —ServiceMaster Global Holdings, Inc. (NYSE: SERV), a leading provider of essential residential and commercial services, today announced unaudited fourth-quarter and full year 2016 results. For the fourth-quarter, the company reported a year-over-year revenue increase of 5 percent, and, for the full year, the company reported a year-over-year revenue increase of 6 percent. Both the fourth quarter and full year increases in revenue were driven primarily by organic growth at American Home Shield (“AHS”), the impacts of acquiring Alterra Pest Control, LLC (“Alterra”) in November 2015, OneGuard Home Warranties (“OneGuard”) in June 2016 and Landmark Home Warranty (“Landmark”) in November 2016.
Fourth-quarter 2016 net income was $31 million, or $0.23 per share, versus $17 million, or $0.12 per share, in the same period in 2015. Full year 2016 net income was $155 million, or $1.13 per share, versus full year 2015 net income of $160 million, or $1.17 per share. Pre-tax income includes charges for fumigation related matters of $93 million in the full year 2016 and $9 million in the fourth-quarter and full year 2015, an insurance reserve adjustment of $23 million in the full year 2016 and a loss on extinguishment of debt of $32 million in the fourth-quarter and full year 2016 and $58 million in the full year 2015. Additionally, fourth-quarter and full year 2015 include an estimated charge relating to our voluntary correction proposal to our 401(k) plan for $23 million.
Fourth-quarter 2016 Adjusted EBITDA was $144 million, a year-over-year increase of $20 million, or 16 percent, primarily driven by an increase in Adjusted EBITDA of $18 million at AHS. Full year 2016 Adjusted EBITDA was $667 million, a year-over-year increase of $45 million, or 7 percent, driven largely by increases at Terminix and AHS of $24 million and $15 million, respectively.
Fourth-quarter 2016 adjusted net income was $60 million, or $0.44 per share, versus $45 million, or $0.33 per share, for the same period in 2015. Full year 2016 adjusted net income was $281 million, or $2.04 per share, versus full year 2015 adjusted net income of $245 million, or $1.80 per share.
Rob Gillette, ServiceMaster’s chief executive officer, noted: “This was another solid quarter. At American Home Shield, both revenue and Adjusted EBITDA growth increased as we continue to focus on streamlining operations, growing organically and capitalizing on recent acquisitions. At Terminix, our investment in our termite business continues to show progress as year-over-year sales and revenue continue to grow. Challenges remain in our pest control business but we are confident the operational changes we are making will improve customer service and retention and result in solid growth in the future.”
The following information was filed by SERVICEMASTER GLOBAL HOLDINGS INC on Thursday, February 23, 2017 as an 8K 2.02 statement, which is a press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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- serv_10k_2017-02-24_11_8Financial - ExpenseAdditionally, for the years ended December 31, 2016, 2015 and 2014, these charges included severance and other costs of $2 million, $1 million and $6 million, respectively, related to an initiative to enhance capabilities and reduce costs in our headquarters functions that provide company-wide administrative services for our operations.
- serv_10k_2017-02-24_6_33Legal - OtherThe increase in contract claims cost at American Home Shield was driven by an increase in the average cost per service request associated with appliance repairs due to greater use of more expensive out-of-network contractors, largely in the fourth quarter, and, to a lesser extent, by warmer summer temperatures in 2015 and normal inflationary pressure on the underlying costs of repairs.
- serv_10k_2017-02-24_52_71Legal - Otherlaws and governmental regulations increasing our legal and regulatory expenses
- serv_10k_2017-02-24_38_57Other - Otherthe 401k Plan correction contribution and other employee benefit plan compliance issues
- serv_10k_2017-02-24_53_72Financial - Expenseincreases in interest rates increasing the cost of servicing our substantial indebtedness
- serv_10k_2017-02-24_33_18Other - OtherThese obligations include commitments for various products and services including, among other things, inventory purchases, telecommunications services, marketing and advertising services and other professional services.
- serv_10k_2017-02-24_4_31Revenue - ProductIncludes a $33 million and a $17 million reduction in revenue from company-owned branches, offset, in part, by a $2 million and a $1 million increase in royalty fees as result of the branch conversions for the years ended December 31, 2016 and 2015, respectively.
- serv_10k_2017-02-24_9_35Financial - ExpenseRepresents lease termination and other costs driven by the decision to consolidate the stand-alone operations of HSA acquired in February 2014 with those of American Home Shield.
- serv_10k_2017-02-24_45_64Other - Otherour ability to attract and retain key personnel, including our ability to attract, retain and maintain positive relations with trained workers and third-party contractors
- serv_10k_2017-02-24_33_19Other - OtherArrangements are considered purchase obligations if a contract specifies all significant terms, including fixed or minimum quantities to be purchased, a pricing structure and approximate timing of the transactions.
- serv_10k_2017-02-24_10_36Financial - ExpenseRepresents severance costs related to the reorganization of the Franchise Services Group.
- serv_10k_2017-02-24_34_23Other - OtherGoodwill and intangible assets that are not subject to amortization are subject to assessment for impairment by applying a fair-value based test on an annual basis or more frequently if circumstances indicate a potential impairment.
- serv_10k_2017-02-24_54_73Financial - Expenseincreased borrowing costs due to lowering or withdrawal of the ratings, outlook or watch assigned to our debt securities
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- Form Type: Annual
- Number of times amended: 0
- Accession Number: 0001428875-17-000052
- Submitted to the SEC: Friday, February 24, 2017
- Accepted by the SEC: Friday, February 24, 2017
- Period Ending: December 2016
Positive and negative sentiment analysis is available in these filings:
SERVICEMASTER GLOBAL HOLDINGS INC
$46.90 to $47.23
$34.36 to $48.48
Earnings per Share:
PEG / Short / PE Ratios:
2.92 / 6.41 / 28.76