Terminix's Q3 Revenues Up 4% Over Previous Year's Third Quarter Results - PCT Online

MEMPHIS - Terminix announced on Nov. 2 unaudited third-quarter 2021 results. For the third quarter of 2021, the Company reported a year-over-year revenue increase of four percent to $530 million. Net income increased year-over-year by $45 million to $38 million, or $0.30 per share. Adjusted EBITDA(1) for the quarter increased year-over-year by $3 million to $102 million, and Adjusted Net Income(2) increased by $17 million to $51 million, or $0.41 per share.

"Solid performance in our termite business highlighted a quarter of continued progress on the Terminix Way and the CxP operating platform initiatives," said Terminix CEO Brett Ponton. "Strong growth in termite renewals, price realization and contribution from eight tuck-in acquisitions in the quarter led to solid revenue growth. On the bottom line, higher revenue contribution and direct cost productivity were partially offset by increased medical expenses and staffing challenges as we manage through pandemic related pressures on the business. Even with continued inflationary pressure on building materials, we also made progress managing termite damage claims, with fewer claims in the quarter leading to the first year-over-year reduction in cost since 2019."

"As we turn to the fourth quarter, we remain focused on building our digital marketing and ecommerce capabilities with a new website scheduled for launch in December," Ponton continued. "We remain on track to begin the implementation of the CxP operating platform before the end of the year and are planning a pilot of the Terminix Way in the first quarter of next year. The combination of these initiatives into 2022 will unlock the selling capabilities of our technician base to deliver better lead generation, customer retention, an improved customer experience and a better teammate experience. We are excited about the work in front of us and remain confident installing these capabilities will support improved profitable growth in 2022 and beyond."

Revenue increased four percent over the prior year, including two percent from acquisitions.

Termite and home services organic revenue growth(4) was three percent. Termite and home services completions increased three percent, driven by sales of our new monthly pay tiered termite product and improved cross-selling of home service to existing customers. Termite renewals increased three percent, due to increased volume and improved price realization, offset by a more than $1 million impact from the change in the timing of revenue recognition in our new monthly subscription-based termite offering. Excluding the impact of the monthly subscription-based termite offering, termite renewal growth would have been six percent and total termite and home services growth would have been four percent.

Residential pest management revenue growth was three percent, reflecting organic revenue growth of one percent. Organic revenue growth was driven by improved price realization and improved trailing 12-month customer retention rates.

Commercial pest management growth was three percent. Organic revenue decline of one percent was driven by a reduction in completed recurring and one-time services as a result of staffing shortages during the insourcing of certain national accounts customers. These declines more than offset continued growth internationally, including favorable foreign currency fluctuations of approximately $1 million.

Sales of products and other revenue growth was 11 percent due to increased chemical demand as we lap the impacts of COVID-19 on the three months ended September 30, 2020.