ServiceMaster
Global Holdings, Inc. (NYSE:SERV), a leading provider of essential
residential and commercial services, today announced that its Board of
Directors has approved a three-year share repurchase program, under
which the company may repurchase up to $300 million of its outstanding
common stock. As of December 31, 2015, the company had approximately
135.5 million shares of common stock outstanding.
The share repurchase program is part of the company’s capital allocation
strategy that focuses on sustainable growth and maximizing shareholder
value. As part of the strategy, the company has set a target Net Debt to
Adjusted EBITDA ratio range of 2.5x to 3.0x. As of December 31, 2015,
the company’s ratio of Net Debt to Adjusted EBITDA was 4.2x.
Under the share repurchase program, the company may repurchase shares in
accordance with all applicable securities laws and regulations,
including Rule 10b-18 of the Securities Exchange Act of 1934, as
amended. The extent to which the company repurchases its shares, and the
timing and manner of such repurchases, will depend upon a variety of
factors, including market conditions, regulatory requirements and other
corporate considerations, as determined by the company. The repurchase
program may be suspended or discontinued at any time. The company
expects to fund the purchases from operating cash flow.
Net Debt and Adjusted EBITDA are non-GAAP financial measures and should
not be considered as alternatives to GAAP financial measures. Management
views the leverage ratio of Net Debt to Adjusted EBITDA as the most
useful indicator of when the company would be in a position to
repurchase shares and return funds to shareholders. Net Debt is defined
as face value of debt less unrestricted cash and marketable securities.
A reconciliation of Adjusted EBITDA to income from continuing operations
and the calculation of Net Debt are set forth below.
Non-GAAP Reconciliations
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Year Ended
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|
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December 31,
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(In millions)
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2015
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|
Adjusted EBITDA
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|
$
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622
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|
|
|
|
|
|
|
Adjustments to reconcile Adjusted EBITDA to Income from Continuing
Operations:
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|
|
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Depreciation and amortization expense
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(84
|
)
|
|
401(k) Plan corrective contribution
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|
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(23
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)
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|
Non-cash stock-based compensation expense
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(10
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)
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|
Restructuring charges
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(5
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)
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Gain on sale of Merry Maids branches
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|
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7
|
|
|
Provision for income taxes
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(107
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)
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|
Loss on extinguishment of debt
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|
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(58
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)
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|
Interest expense
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(167
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)
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|
Other non-operating expenses
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|
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(12
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)
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Income from Continuing Operations
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$
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162
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|
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|
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|
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Year Ended
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|
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December 31,
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(In millions)
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2015
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Face value of debt
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$
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2,843
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|
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|
|
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|
Unrestricted cash and marketable securities:
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Cash and cash equivalents
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296
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Marketable securities
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24
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Long-term marketable securities
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57
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Restricted net assets
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(169
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)
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Total unrestricted cash and marketable securities:
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208
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|
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Net Debt
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$
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2,635
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Information Regarding Forward-Looking Statements
This press release contains forward-looking statements and cautionary
statements, including the company’s expectations regarding its share
repurchase program. Some of the forward-looking statements can be
identified by the use of forward-looking terms such as “believes,”
“expects,” “may,” “will,” “shall,” “should,” “would,” “could,” “seeks,”
“aims,” “projects,” “is optimistic,” “intends,” “plans,” “estimates,”
“anticipates, ” “considers” or other comparable terms. Forward-looking
statements are subject to known and unknown risks and uncertainties,
many of which may be beyond our control, including, without limitation,
the risks and uncertainties discussed in the “Risk Factors” and
“Information Regarding Forward-Looking Statements” sections in the
company’s reports filed with the U.S. Securities and Exchange
Commission. We caution you that forward-looking statements are not
guarantees of future performance or outcomes and that actual performance
and outcomes, including, without limitation, our actual results of
operations, financial condition and liquidity, and the development of
the market segments in which we operate, may differ materially from
those made in or suggested by the forward-looking statements contained
in this press release.
Additional factors that could cause actual results and outcomes to
differ from those reflected in forward-looking statements include,
without limitation, lawsuits, enforcement actions and other claims by
third parties or governmental authorities; compliance with, or violation
of environmental health and safety laws and regulations; 401(k) Plan
corrective contribution; the effects of our substantial indebtedness;
changes in interest rates, because a significant portion of our
indebtedness bears interest at variable rates; weakening general
economic conditions; weather conditions and seasonality; the success of
our business strategies, and costs associated with restructuring
initiatives. The company assumes no obligation to update the information
contained herein, which speaks only as of the date hereof.
About ServiceMaster
ServiceMaster Global Holdings, Inc. is a leading provider of essential
residential and commercial services, operating through an extensive
service network of more than 8,000 company-owned locations and franchise
and license agreements. The company’s portfolio of well-recognized
brands includes American Home Shield (home warranties), AmeriSpec (home
inspections), Furniture Medic (furniture repair), Merry Maids
(residential cleaning), ServiceMaster Clean (janitorial), ServiceMaster
Restore (disaster restoration) and Terminix (termite and pest control).
The company is headquartered in Memphis, Tenn. Go to www.servicemaster.com for
more information about ServiceMaster or follow the company at twitter.com/ServiceMaster
or Facebook.com/ServiceMaster.
ServiceMaster Global Holdings, Inc.
Investor Relations:
Jim Shields, 901-597-6839
James.shields@servicemaster.com
or
Media:
Peter Tosches, 901-597-8449
Peter.tosches@servicemaster.com