ServiceMaster Global Holdings, Inc (SERV) has reported 42.86 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $70 million, or $0.51 a share in the quarter, compared with $49 million, or $0.36 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $81 million, or $0.59 a share compared with $74 million or $0.54 a share, a year ago.

Revenue during the quarter grew 7.37 percent to $758 million from $706 million in the previous year period. Gross margin for the quarter contracted 65 basis points over the previous year period to 47.23 percent. Total expenses were 79.42 percent of quarterly revenues, up from 78.61 percent for the same period last year. That has resulted in a contraction of 81 basis points in operating margin to 20.58 percent.

Operating income for the quarter was $156 million, compared with $151 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $192 million compared with $174 million in the prior year period. At the same time, adjusted EBITDA margin improved 68 basis points in the quarter to 25.33 percent from 24.65 percent in the last year period.

Rob Gillette, ServiceMaster’s chief executive officer, noted: “ServiceMaster delivered strong top and bottom line growth this quarter. Terminix continues to benefit from acquisitions and organic growth and AHS, despite headwinds associated with record high temperatures, had another solid quarter. Going forward, as we position Terminix for accelerated growth, we are committed to making the investment and operational changes that will lead to higher customer satisfaction, retention and shareholder value.”

The company has spent $185 million cash to meet investing activities during the nine month period as against cash outgo of $34 million in the last year period. It has incurred net capital expenditure of $38 million on net basis during the nine month period, up 80.95 percent or $17 million from year ago period.

The company has spent $97 million cash to carry out financing activities during the nine month period as against cash outgo of $375 million in the last year period.

Cash and cash equivalents stood at $230 million as on Sep. 30, 2016, down 11.54 percent or $30 million from $260 million on Sep. 30, 2015.

Working capital turns negative
Working capital of ServiceMaster Global Holdings, Inc has turned negative to $65 million on Sep. 30, 2016 from positive $33 million on Sep. 30, 2015. Current ratio was at 0.94 as on Sep. 30, 2016, down from 1.04 on Sep. 30, 2015.

Cash conversion cycle (CCC) has increased to 26 days for the quarter from 25 days for the last year period. Days sales outstanding went up to 35 days for the quarter compared with 34 days for the same period last year.

Days inventory outstanding was almost stable at 4 days for the quarter, when compared with the last year period. At the same time, days payable outstanding was almost stable at 14 days for the quarter, when compared with the previous year period.