ServiceMaster blames TruGreen for poor Q2

August 15, 2013 -  By

TruGreen logoThe ServiceMaster Co., based in Memphis, Tenn., released its preliminary unaudited second-quarter 2013 results, and they fell short of CEO Rob Gillette’s expectations.

Crediting TruGreen for dips in revenue and operating performance, Gillette said, “Excluding TruGreen, our other businesses performed about as we expected.”

Results showed a 2.4 percent decline in ServiceMaster’s $939 million operating revenue compared to the same period last year. Its second-quarter 2013 operating performance decreased by 28.9 percent to $151 million compared to the same period in 2012.

TruGreen reported a 12.4 percent decrease in operating revenue, a $672.2 million increase in operating loss and a 74.6 percent decrease in operating performance for the second quarter of 2013 compared to the second quarter of 2012. The company said the operating revenue results reflect a 6.3 percent decline in average residential full program customer counts, inefficiencies in service delivery, caused, in part, by integration issues with newly implemented technology and a $6.2 million decrease in revenue from commercial customers.

ServiceMaster highlighted three key challenges TruGreen faced at the end of 2012: lower customer counts, a product offering that was too narrow and operational inefficiency due to changes in key technology.

To address these problems, the company has made investments in all sales and marketing channels, including higher staffing levels, improved training programs and new sales tools. It also redesigned its core product offerings and introduced a tiered product structure, giving customers varying price points to choose from. Technology integration issues, however, continue to impact TruGreen’s ability to service its customers, the company said. These inefficiencies are adversely impacting operating revenue, as well as labor, vehicle and chemical costs. The company continues to invest in, and improve, its newly implemented operating systems.

Gillette, who joined ServiceMaster in June, said the company is focusing on growing all of its businesses, with particular attention to getting TruGreen back on track.

“TruGreen is going through some challenges,” Gillette said, “but it’s largely self-inflicted. Right now, we’re focused on stabilizing the business, then getting it back on a path toward growth and improved profitability. When I look at our company overall, we have strong brands, passionate associates and great growth opportunities in all of our businesses. I’m excited to be part of the ServiceMaster team.”

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About the Author:

Former Associate Editor Sarah Pfledderer is a West Coast-based contributing editor for Landscape Management.

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