TMX - Earnings call transcript Q1 2022 | Terminix Global Holdings Inc

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Operator

Ladies and gentlemen, welcome to the Terminix First Quarter 2022 Earnings Call. Today's call is being recorded and broadcast on the Internet. Beginning today's call is Jesse Jenkins, Terminix's Vice President of Investor Relations, FP&A and Treasurer. I will now turn it over to Mr. Jenkins, who will introduce the other speakers on the call.

Jesse Jenkins

you. Thank welcome. and morning, Good

we begin, today's assist you throughout operating to in I'd management may like performance. and call, strategies to the remind make understanding that company's Before forward-looking you statements

discussed all appendix, public no investors.terminix.com. This the and statement the about transaction, issued a on legends May the undertakes in obligation on in on Rentokil stated forward-looking today, SEC to press and public including proposed the of press cautionary to The subject Securities release update our statements morning, forward-looking Information can X-K Terminix factors are filed from contained those the discussed and first statements, forward-looking These speaks Commission. today's unaudited call. X-K, our Investor only with our that our with are As financial any Relations filings be contained as statements risk Form quarter related today's to results. company the X, XXXX. XXXX those guarantees actual performance at Exchange cause are and of presentation subject materially found The in results the filings release, may information vary call not to on contemplated. including website

to throughout most reference financial you measures order in reconciliations comparable will performance, definitions today's understanding GAAP measures. we non-GAAP We the financial to certain these measures of our In financial call. better assist have included

and financials Brett? mitigation for I claims will comments turn Ponton. termite our will update, Relations Brett of cover Terminix we opening and presentation Slide over reviewing are me Bob out CEO, by on Rentokil on of it Ponton; now Terminix highlights, posted a Brett lays to Brett with the our on a section update call an today's returning Way with then Investor Brett Joining the X Bob today, CFO, website damage closing efforts, merger to and agenda questions. the Riesbeck. and followed brief and update our

Brett Ponton

driven made I with $XXX Thanks, Organically, off Jesse, excited with start Overall, momentum our Commercial in services. price with cross-selling improved in progress reoccurring the home realization as pleased bedbug of X%, am of better business of revenue growth X%. sales by as sequential a it and sharing declines with for our start to all at growth services and our and Termite and transformational improvement commercial of well Residential of million, a joining us. revenue channels. first team was the thank retention organically, you strategic strong had grew Terminix. our strong to year In X% residential reflecting organically, by we and quarter, on rates a core across growth strong grew reported X%. business, to mosquito the and volume. volume pest priorities. pest grew we organic quarter X% the has performance

headwinds of the strong would Excluding have currency organic with behind own impact our for line to and we retention In months. positioned revenue in disinfection to continues the now us, expectations and rates million been commercial approximately and X% in well reflects first in with which total, business. growth are progress coming was the in quarter, growth the we the have $X disinfection approximately Commercial foreign improve improved organic growth prior pest sales, the X%. year, the pest of in accelerated made

capabilities some the that to materials inflationary labor are fuel, growth of for The the XX.X%. our continued pricing needed are First in continue progress been program we in a year, in also quarters. adjusted throughout staffing This quarter, key our has middle the into next companies, our coming levels to levels. continue rates labor pressures began investments I'm retention impact the In the EBITDA last EBITDA we strategic we prices by of above was driven was a successfully customer for have future to quarters. investing can and $XX consecutive support in quarters. in and and minimal margin decline quarter with few increasing historical we few in million confident Like quarter and expecting planned which in most quarters, experienced

We of that year, are inflationary our as these we confident the as just we the this throughout enhance quarter. did cover increases increases price ability to move rest

to progress advancing we've priorities. the turning in Now strategic our made

scenes the for provide will across the with functions, the including more share moment. Terminix also planning back make changes the on making world-class towards the been implemented of Rentokil preintegration launch have in behind exciting to line Terminix to for completing easier our make office a service doing Just it in pilot. the into work HR Dallas-Fort Worth merger, last team increasing front puts action the enhancements week, our This we Way launch I our will progress IT. to Way is with the was customers. area all and that The I finance,

touchpoints our our tools, technology Way all the at a front transaction Terminix. last pilot Slide as pipeline XX,XXX Terminix world-class enable the the pending progress of Just drive the the merger With give months. deeper need consistent, at little prospect on-site we were is will will they and the in third I and enhancements Starting quarter initiative have for designed X, training the to investments completion. a us underway Memphis growth, meetings we organic team and service our well progress several in go in to closed, important provide and Terminix operations. continue coming The an for are of already target conditions to the and line to the further excited day. customer the accelerating technology we customer see to Rentokil across on and on members week, late in Way

is we service. supported Terminix, may customer in always of provide excellent at to center need that have and technician believed Here, to relationship the the the customer feel order

to of all Way: should Terminix process guiding technician between correlation us direct a and one the led which retention enhancements teammate seen customer retention. drive the principles retention, have of higher We

all leverages and our day from period, an and XX-day working from a positions We're first organization, teammates, team, explore best to retention early practices turnover rates In teammate address we improvement our teammate organization, to effort white chance first a for average, the in have that talent created with months the we data year curriculums hires. all Similar glove we believe our journey we which As a level a of on activity calling to and thorough out list for division The The are region corporate retention of in improve into mapped our plan make an this our the their their route. in from to many address to all as full-route touches is process this, saw the for involvement daily trainee our necessary I will experience. technicians, on have day have we to room leadership. mapping and, to the training mapped from a we field corners touchpoints courses modernize X executive our branches journey the impression company. experience. through process we exercise X life journey finally, marketing, graduation training technician customer and rates my from a in also have with in in high detailed acquisition of developed leaders hiring the done of teammate times and

experience making we learning for the and with in virtual as settings the In as addition sense both tailored the well the our today. both a and to more are teammates training small conducive to more in-person the way refreshing sessions graphics classroom interactive content, inclusion foster potential of to learn

their launched for confidence. a graduate plan and Dallas new period quicker last house that text work recently in practical program of teammates guided of hires, throughout classroom new meaningful launched completed directly us it trainer and shorter well learning to with them videos organization have technicians management production teammates they are our through these pairs enhancements hires. in and from for certified certified for scheduled fostering a also materials with as lie-along pass initial to in have us training month to well time pivoted well weeks. peer-to-peer and tool are who move will short the by customers and a hires make We These move the learning the knowledge relationships trainer seasoned after with sessions program. to new available a serving that We launch created as allowing to tenured tenured independent and on-the-job current help have training coming in management anyone the The easy with teammates will the completed. in more make new on can to These enhancements so

improve in these We actions are the turnover coming excited our teammate will help months. about benefits to the bring

to the of quarter. year-over-year pay tremendous made progress staffing have last productive make that increase in an mentioned improved technicians hires, in to enhancements with progress in making the this talent I structure turnover. quarter, new leading our end the ensure levels our has As in we we are in increase acquisition we business, With at

big level increased are job These total impact individual we trainees, a increases the when improve hourly candidates wages population markets certain and make at have help in For compensation attract the to discussions. but having to the nominal turnover. on

can floors needed pay teammates minimum with still created we We These but they as transition fixed production-based promoted for position, if into have they supported instituted certainty newly pay new technicians. additional their graduate also have a route will higher positions. pay more they feel to so

year teammates and drive technicians see crucial quarter turnover these for positions. first these While QX, route hourly the total, uptick was the initial changes company. feedback In with in changes been relatively we the positive, improvement our turnover in has the in while believe are new, in the will for turnover the year did we relatively to of our in flat an end from

our quarters over in onboard vital a in the in trainees in are to year-over-year These quarter labor has the capitalize these serve pay season. structures, significant and quarter. better the they well have XX% in graduate to we be labor early balance year. by of trainee with the that positioned And few has over will training investments capability challenging the growth we built the Despite us QX. the increase the led spring will encouraged prepared opportunities enhanced on to headcount Our markets, customers in last

Slide X. to Turning

trusted customers. We also enhancements it some to technicians advisers become makes our technology made to easier that for

service services, for quick instructions as simple In such that and resulting there for homeowners step-by-step identify survey wildlife beyond their delivery, in to opportunities enhance addition possible protection is help mosquito X-question control will to solutions, exclusion. a existing

help for these and services sell will the through proposals to lead could Our potential generate upsell some pictures of One now this but with well of team and is off legacy to needed our technicians easy interested built homeowners. homeowners makes unaware may our with education of Then example issues to not value-added This and solutions risk to that technicians just be positioned needed the services current limitations our that the can confidence prompts offer technology conditions are provide a in services to their of customers those most the and directly platform understand problems. customers button, to problems. push pests. who otherwise give

a We home with access risk home. also have benefits. and of also additional as this possible a are opportunities normal our we the of on based their when building these additional in we as felt not customers receive be overwhelmingly onetime pest home our was valuable retention, this technicians ease to increases on better services to new inputs relationships it's technicians We important on I we execute the healthy can to any price ensure recurring customers, relationships helpful was report completed that they their is insights from as feel customers with at system-generating willingness dedicated work development, the when be the additional positive, will nice A and is a way routes. increase service. we the mentioning resource ultimately This to of who our during better the speed use the Terminix deepen in to into primary technician and feature we the with have in this the to with better identify and to perform also well completion response insights to to while accept for leading deployed and as consider Dallas-Forth services. team pay site commission Area, Worth our

very small were quite results a size, remains this the While impressive. sample

soon to the the in We last have leads technician-generated and Terminix we hit double executing close same pipeline. Way, With the saw us more than deploy gives have as built future seen competency it leadership we encouraged the technician other country our the year, rates. initiatives, steps significantly strategic improved confidence to as possible. I'm features period with overwhelming the early of We've on areas we progress field taking time these and in great enhancements the already with made than response, results deliverables those are and in with and to

are our to needed We with best-in-class field-facing to service. world-class provide teammates making customer tools, great and provide technology strides training

also I we made Before full have damage it a the on I Bob our efforts. touch termite financials, wanted over to mitigation progress claims hand on review for of our to

continue to in materials. are feel pressure that inflationary in taking this We in historic building steps approach area right we despite the our

Mexico XX% Over litigation within last intensely country the almost shows of than plan the is the as rest is radius is protection over This rate have the larger over that country, XX% focused across and we months, our well. the Because representing the of only into XXX-mile accounts claim customers. and, our along the couple Alabama. the of our claims local area last XX improved solution Xx outstanding this in a the local, region problem years, termite of approximately of Mobile, a remains visibility problem for of our data Gulf that had despite

that If Mobile the our plan completed enhanced of to during Area. you in Bay continues a protection That all program of XXXX, remember, we mitigation comprehensive dividends. pay customers the

in XX% previous the outstanding year-over-year, quarter were the New Mobile than claims nonlitigated reported decreased lower XX% numbers. in claims and lowest another first

program In to our seen and from XXXX. high-risk in new our are highest expanded elements total, areas have reductions. claims During XXXX, claims XX% we similar reported peak down the of other

of While have materials Xx still inflationary building that absorbing historic been claims lumber drastically, levels. about contractor labor counts fallen price is prepandemic have the including we pressure in and the costs,

By improvement control to experience, resolution the We unique provider also order to transition recently we in a the in issues and to at for XXX to in the feel reduction years claims speed we outstanding can we in over quarter customers from an customers. team first third-party a The needs began closing internal termite the with leveraging team reported. claims a claims management nonlitigated better lowest improve resolve older have our in of levels and and claims our adapt effectively. resulted ever quickly have total new of

to in We quarters make are in reducing confident nonlitigated to claims our to progress ability trajectory come. our continue the and

remained fourth continuing first than cases which counts XX% were the of per have the in quarter, we with of since cost the almost high, On see dropping few XXXX. in new Despite XXX-mile litigated side, are radius we all quarter case a cases, of with the XX steady a are these a case to decline in Mobile. claims quality more projecting, of

gained now baseline reduce costs The in numbers will Bob? the claims Bob the are I baseline the well to our to years closing session. come. and a taking an of help remain see to update to the the first in increase flow. it thoughts did have major will expense termite drivers, we turn approximately and are levels of we the as quarter merger with before move brief beyond fluctuations revenue back confident we we expense, about termite will we million Q&A Rentokil those damage on through actions $X taking proposed right come the over to While revenue. walk as year-over-year cash expenditures us in I of damage total X% claims termite actions

Bob Riesbeck

Thanks, Brett.

in quarter in revenue lower quarter pricing detailed million of X% volume, strong driven or revenue with by in Termite core line Let's Overall, were and renewals down organic growth of X% as start environment. year-over-year well and Slide unit have $XX XXXX. with Home the cross-selling million, due the the X% experienced completions performance. on XX% completions despite with our inflationary up were the as completions We X% left by Beginning lapping of a an XX% review growth or $XX first we million acquisitions. column and home of in up to XX% to service Services partially quarter. by top in delivered $X offset quarter, of Services X, Termite to the the side growth customers. growth completions in Home from growth better up Termite existing increased and due termite increased X%

prior renewals and are in We period lapping have in the a on year strong renewals to see from pressure continued increased and quarter. termite moves retention the

rates, growth growth quarter, sales a by second negatively and planning Sweden sick services, in from reduction and of and X%. of driven by in the April. M&A mover about a Growth currency of more are cross-selling than growth off organic increased to $X period impacted quarter disinfection rates We COVID-related and revenue in bedbug start International mosquito new revenue X% strong XXXX. revenue January fluctuations also Kingdom the program February. to by launch trailing retention revenue late price to was was million. in same cancel the and realization. by improved quarter, the driven early in Organic growth pest Residential pest in million of in grew in was peaked early X%. growth of a XX-month by strong Commercial in including the impacted $X Organic was unfavorable driven X% due onetime X% with up increased leaves both improvement volume that United foreign and was are

of organic other continued were pest approximately in our impacts growth the momentum first line, the disinfection over the in with period organically would and demand we Overall, $X residential segments. quarter due million the chemical to residential currency the over sales prior positive more the businesses, of revenue been X%. termite COVID-XX. year pest revenue, product lap as of foreign commercial -- increased XX% growth the than service up Excluding impact have and the In

a well in line, also for commercial coming improvement are improvement growth with retention our service in We positioned rates saw the sequential that and in business, we in quarters.

the EBITDA to Turning can for summary X, quarter. you financial the and see drivers adjusted the detail Slide on

of the or quarter. or share. see the can for acquisition P&L of million Adjusted previous the $XX increased Adjusted EBITDA down left $X the can million the at the a income you margin the of XX%, $X.XX $X pricing the due year. X% ahead Revenue in growth increased EBITDA than drive net top improved normal slide, growth see $XX drivers of or million were $XX $X.XX X% the rates to adjusted in and gross prior the investments you slide. revenue peak adjusted million EPS quarter. compared slide, EBITDA to for per our XX% On talent on quarter, added growth staffing of million X%, to adjusted the million covered of bottom flow-through or quarter and Labor we the $XX XXXX. levels in to of in Across $X we strong season and driven by delivered primarily in get higher million

bulk the nonproductive in more As Brett quarter compared training approximately the in prior costs headcount the same from the XX% year. mentioned earlier, of came to period the

along cover we're our inflation. production-based plans, our on to most on teammates that employees, hourly pass increases price but see pressure did some While able wage our are to of we

As per we February, gallon. vehicle driven by million, increased alluded in higher $X fuel prices

see Given increases we periods. future similar current expect to prices, in fuel

certainty gives and approximately of us in prices. more XX% usage these we see reminder, with fuel volatility about impacts we protected have fuel oil despite the in hedge, XXXX the pump a our which As

claims claims as nonlitigated to increased pressures remain termite million are increased $X As support firmly the inflationary in higher million increasing in Mobile $X and Area on needed in in both in as Investments back expected investments with to restrictions. building the And per to half of our detail, the as damage results part, support first materials in litigated the increased our the labor due, and due of staffing on travel year year. $X Way in Terminix Bay growth full in Brett easing call due technology of the for teammates and with claims growth well counts enhanced our And contractor to million remainder These line the discussed our higher the expectations levels costs. training levels quarter. $X we to quarter. Investments expenses staffing over and to service deployed finally, in sales in cost quarter travel increased plan, our the in we center COVID-XX million year. continued training

Turning to Slide XX.

quarter. Working million, the $XX seasonal recurring acquisition for tax see of $X income cash $XX and million primarily included timing projects. quarter and charges needs of costs favorably capital Restructuring impacted information payments. will the the CapEx You our and million activity flow to by the by of summary capital improved Rentokil. proposed interest included for technology related

Free restructuring have to future negatively conversion will conversion payments expected was free periods related additional the quarter for to expect flow cash XX%. impact the our for in We cash rates that transaction year. flow the

million During borrowed our needs, $XX end. subsequent the short-term revolver for period from quarter million $XX the within remaining the quarter, to repaying liquidity we $XX and million

not we acquisitions acquisition remain our any quarter, in the While with active tuck-in we program. did small complete

million We China. approximately in also our a minority interest used several initiate restructuring businesses in of to $XX

expect receive We quarters the those is as completed. in restructuring transactions proceeds coming the to from

million built excited in leverage not to have cash business market with share a repurchase the planning and given debt We quarter, pending staffing ratio and $XXX in million with in quarters. investments we liquidity, term. the are last the accelerating additional ended quarter merger, Way in momentum the the in we discussed us we with be the we profitable for and coming positioning of rates are levels growth in Overall, growth net Terminix by Xx. a available $XXX As near in the

providing comments. by year. the that, we first will are and encouraged the we the merger, the to of over back we it have with turn remainder quarter results closing due And are pending I for for Brett outlook While guidance not the to

Brett Ponton

for strong our commercial our We another in strategic in XX, our across growth both technician well Bob. longer-term residential termite against in and the look both goals In positioned investments closing Thanks, was fourth progress growth short-term from improved first rates levels our quarter. delivered to growth our and the priorities. spring. quarter continued of Slide we are we pest staffing and key and as quarter With on base,

remain continue we along to of Terminix Way, in are further additional We in in peak plan and future. into costs pipeline. supporting positioned I operating this track conditions absorb continue by our positive the to support and pending line and I'm after will on office, provide pass trajectory increasing to the I back order look In from fuel, the confident we to the received our with in we encouraged merger. our the our materials in for inflationary closing are deploying forward the and market, to the front increases feedback have year, on labor first well enhancements the remain season. We we phase continue

and week. announcement will businesses are with expecting that, on as remain planning integration And are track to of end an a us I quarter. toward the as well We Norway next close through underway, the finalizing our Jesse to of lead the the third early it UK agreements and sale hand and Q&A. Other we over is for for

Jesse Jenkins

Brett. Thanks,

any happy the reminder, we this are our limited we the questions discuss are you at line let's other may on ability have for the open Operator, time. time a but questions. As to take line of specifics to merger, in

Operator

Mulrooney Tim from William comes Blair. question first Our with Instructions] [Operator

Tim Mulrooney

didn't you pricing but it. your know prepared briefly remarks, I I in catch discussed Brett,

know, could to spoken like given this. But the over on did annualized ask increases, we're expect along I if we've the you want how couple we are and addressed you the if So for thinking a X% this the on don't typically it believe or already how last is different about basis. in Terminix I like But be the curious about about thinking impact year inflationary Wondering X% it organic I year, apologize number because to lines basis, the companies months averages between, environment. last X% an to of of to talking an more. this same full where held much annualized significant who over weeks growth. obviously privately space price pricing

Brett Ponton

the by question, great Tim, Sure. way.

think material very statement, First of seeing a starting all, just we wage inflation. feel we're costs our about that I inflationary to pressure any our as ability to and as well recover as in price good

progress is much more year at competitive we the it's benchmark team's now So like down pleased also to year, the see targets going to industry numbers provide stronger intelligence, to of an say, think really but the to the specific team, X.X%, level. able robust for fair see regarding it's exceed price X.X% things establish feel the to specific we the I and going that we're of with take using here, we not opportunity strategic a impact take made that I Terminix, significantly. leveraging analytics, And you retention. customer to pretty with there strategic that's pricing one like we of if market on better hyperlocal a And to of last think, being our year, was initiatives we're about couple feel necessary last us the benefits we're that the mitigating major to for remember talked driving starting

very feel about that we striking good So balance.

over term. good market, business here term, the found our ability think relative in feel markets about any So net-net, I in to opportunity of this helps margins objective our gap here certain to and long close expanding I that potential which, we think, long the fuel recover inflationary a very to the also over an pressure see we

Tim Mulrooney

to to typically when because And a as go helpful second limit into and that, us appreciate I effect. follow-up color, forgot And ahead increases really go price just a question one ask that. your to really question, to That's Yes. quickly. Brett. Jesse to dare I'm to And ask going

those curious I for increase when think And into or in layering But competitors customers just quarter said you existing I'm price second how increases. think as the it price well? is when annualized typically customers goes your is effect. about new for

Brett Ponton

have at certain happens question, of Tim. schedule year. We time an annualized Good price that a Yes. increase don't

of the terms at with contracts those Our upon customers. the the pricing customer-specific that are we have level based

terms trends which, of with taking in about business in the some that a we I expect, feel us based would flexibility deal every might there. this see effect, customers, establish we that upon we will our we're So very short-term Again, gives the we've pricing to actions that think, would have impact built in hyperinflationary our this environments. objectives month having that you area, overarching foreseen, good we with any pricing as lot capability that

analytics is made So we've and we're certainly here. the investments expecting strengthen our starting pricing off pay like to

Operator

Sabadra comes RBC question Markets. Our Capital with from next Ashish

Ashish Sabadra

Tim's of and I repriced on just would it If for inflationary has environment? question, portfolio your details can you possible been the last for any already to provide build percentage what higher be on

Brett Ponton

think to Well, as some a I'll I here. Bob rolling on -- said, to color I this. basis add we price ask Look, and

markets. look input of we a set seeing competitors. addition upon pretty and I we're we So strongly points, customer X those in decision there. at certain that demographics based into to local regional think, consideration And look competitive in it's our We at costs that dynamics take

on So let in basis impact percentage of color I'll that. terms some add Bob a the customers, of to

Bob Riesbeck

last started if year. QX you And really we of taking recall, in price Yes.

back we Brett just the the it look we're continuing last started more mentioned that at a that team So momentum. of in to that fact strategically put And together half year.

of will kind back level off but quarter the and year. seeing we of it quarter are second the first the in this to some half in year, So start of tailwinds

Ashish Sabadra

That's And on color. down could was my just well just -- are several potentially can very I now to cross-sell see color on any wondering the you There of wanted customer further think I the is we opportunity. if base it's was improve do better would maybe penetrated. forward. cross-selling. cross-sell much opportunity? How references provide to helpful helpful. be to that drill you how your about on follow-up, color existing I possible cross-selling going just staffed, And there Any

Brett Ponton

services. to buying pest Maybe our offer those a wildlife we at X services today, Yes, point across general and great I'll X core There's of X question. exclusion. last call. customers shared control, And termite, to average, on X.X metric our customers we services are on back Terminix: those mosquito

also, element Terminix a us Dallas. an easy the to really launched customer a the it by with is makes effort opportunity first But the an year or power our amending Terminix the of also of that. a we faster. drive experience launching is parts penetration. and fully I execution ago, on an Way inspection prepared into quickly of good the an allows phase button upsell hands create pleased to this allows will, customers there's first unlock translate I'm there talk that that. to on that that that you full our for the the identified technicians of process opportunity to in to that that cross-sell that of make in Terminix technician growth easy easy-to-follow their one inspection Way, really remarks the customers' although training one but we And step, to to initiative deeper really about of Way significant do get contracts technicians relationships performance higher made our of upsell to do to if by them the our results with So develop it us X capitalize in the for about onboarding as to the front We putting on the focused opportunity

a we on small our by as implemented encouraged very As driving higher is pretty sample very, those this is rate team we better leads through as data prepared process size, as well. in remarks, in the how up I'm the ramping that close shared well leads quickly although

seeing excitement the you our the branch across to upcoming network team So as out to that that with the naturally, allowing is months. rolling us accelerate we're that in cross-sell challenge opportunity would initiative expect,

Operator

Our George [Operator Tong comes next with Sachs. Goldman from Instructions] question

George Tong

announced is over mentioned XQ. order Sounds any like You remaining days. on be also to the what next merger? the the in track are to UK, Can that? merger that complete closing there the elaboration several divestiture conditions And in then -- close in successfully complete discuss something you might the on

Brett Ponton

Sure. George, this is Brett.

remaining we care. QX steps the is or targeting As X for we're to X take need still that we close. said, late There

we As we've assets. really team made one execute our And run first of our sale there. pretty proud has you and is the the Terminix characterized, And UK Norway the progress that a the to assets. needs I'm of to next company. robust the those assets X And our process, announce in those direction so a of of be X interest a would in future to in position lot in expect or week

get to to the track. course. then that proxy and on work that our proxy to SEC, there track all condition to effective, course, course, we're on proxy working that shareholders. of That parallel, review we're The that needs mark to So of close completed. us allow will In of the is and on send proxy,

vote to XX taken days then We to be expect later. probably the XX

comfortable this time So all events, very that items talked here late major point probably about we're those noting still procedural at these line. that are nature. worth of in the And with it's we QX

just QX this, committed it's executing closing is us this and line. of And we team the remain focused time a matter on process. So to late the fully

Bob Riesbeck

like And related thing a by annually and Bob, one about this we than the perspective. call way. is EBITDA assets Norway from represent two less UK to would to those million $XX $XX from perspective revenue -- is Yes. also George, an the and on combined million And out

Operator

comes question Brian with next Butler from Stifel. Our

Brian Butler

that XXXX? for Can and bridge remainder EBITDA very the which was give we you helpful first about look the second quarter you and into the that heading with how in Can provided, talk maybe trend of takes quarter? the maybe start the

Bob Riesbeck

quarter. not here. our that, we type conversion similar Yes, is with in what we providing second is what should year. we labor mentioned any that did back investments some very to half last guidance We in we're obviously, continue which will we last the the XX% careful, said obviously, quarter the made investments flow-through. through roughly past, a consistent But The have quarter be be we're of got the to of first make revenue obviously rate in

on to it is some was significant Terminix the $X amount a but the And in start the of quarter, And half only then of hedged, in investments then year. in back they'll are Way. million gallons, million more It XX rather significant would fuel. there the would a gallon taper So year. the the off balance million per during say, the usage it $X Even largest about and of we it's be I XX headwind. the to year, is though at prior than headwind, are

Brett Ponton

levels Maybe of to performance go right driven end labor of context in QX that If long here. unfortunately, Brian, of add seen margin remember, in on really at pretty our to the, you by quarters probably was strong time we're us all, just where some year, building we heading back coming out we've staffing last some we to lowest QX last QX. positions if color of QX, so a well But here, first thought be staffing the the COVID, here. year peak of we into levels we'd

you remember the due some for headwinds, had overlay that us. a and last I'd a staffing took QX, certainly year, when If you that in QX, shortness say, of on we we Copesan in-sourcing bit created to in little headwind work

QX. that So that made in labor this we as a stronger result we're now a in investments position much lapping the of year

of our positioned to we're second capitalize So we performance in well feel year. business accelerating half the the like in probably on

Bob Riesbeck

year, have to Brett's occur. on the past throughout think of in that expansion and I we've track, I we're And that had margin about to the Yes. the point, think some conversations

Brian Butler

little to growth a to but is going of How Okay. through really trend you third? positive the organic in the the third Is a fourth growth does talk it That's when as in just kind it going quarter? to more going lot commercial, follow-up, of negative the about to that positive XXXX. year? was weighted helpful. or in in And be into then kind looking it's be with going second, a work that first potentially -- Or organic back-end bit quarter be

Brett Ponton

Yes.

yes, down growth we adjust to were of X%, we FX, for maybe think, reported, first organically actually all, plus here. but clarify, I disinfection as X% just

and improvement -- a that's versus QX. So sequential

So commercial business. seeing improving domestic we're think, business on an momentum QX encouraged our that in the the front in we're now I by environment, in our international and

would acceleration expect here. we as to we So our I progress in commercial see, the through business think, year

Operator

and conclude your you for questions at There you participation Ladies day, please gentlemen, call are everyone. for time. this the no thank does that We line. today. and great disconnect ask further a Have your conference that

Terminix Global (TMX) 7 May 222022 Q1 Earnings call transcript