Revenue during the quarter grew 5.76 percent to $643 million from $608 million in the previous year period. Gross margin for the quarter contracted 52 basis points over the previous year period to 46.19 percent. Total expenses were 84.76 percent of quarterly revenues, up from 83.88 percent for the same period last year. That has resulted in a contraction of 88 basis points in operating margin to 15.24 percent.

Operating profit was unchanged at $98 million for the quarter, compared with the previous year period.

However, the adjusted EBITDA for the quarter stood at $134 million compared with $127 million in the prior year period. At the same time, adjusted EBITDA margin contracted 5 basis points in the quarter to 20.84 percent from 20.89 percent in the last year period.

Rob Gillette, ServiceMaster’s chief executive officer, noted: “ServiceMaster delivered a good quarter to start 2017. At AHS, organic growth and the contribution from 2016 acquisitions drove strong revenue and Adjusted EBITDA growth again this quarter. At Terminix, our operating performance was in line with our expectation for revenue and Adjusted EBITDA growth as we continue to invest in improving our service delivery and customer service experience. We are confident the operational changes we are making will improve customer retention and result in solid growth in the future.”

For fiscal year 2017, ServiceMaster Global Holdings, Inc projects revenue to be in the range of $2,885 million to $2,915 million.

The company has spent $31 million cash to meet investing activities during the quarter as against cash outgo of $15 million in the last year period.

The company has spent $60 million cash to carry out financing activities during the quarter as against cash outgo of $17 million in the last year period.

Cash and cash equivalents stood at $334 million as on Mar. 31, 2017, down 9.97 percent or $37 million from $371 million on Mar. 31, 2016.

Working capital turns negative
Working capital of ServiceMaster Global Holdings, Inc has turned negative to $131 million on Mar. 31, 2017 from positive $27 million on Mar. 31, 2016. Current ratio was at 0.88 as on Mar. 31, 2017, down from 1.03 on Mar. 31, 2016.

Cash conversion cycle (CCC) has decreased to 47 days for the quarter from 52 days for the last year period. Days sales outstanding went down to 69 days for the quarter compared with 71 days for the same period last year.

Days inventory outstanding has decreased to 6 days for the quarter compared with 11 days for the previous year period. At the same time, days payable outstanding went down to 28 days for the quarter from 30 for the same period last year.