Terminix Global Holdings Inc (TMX) 2022 Q1 法說會逐字稿

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.

女士們，先生們，歡迎參加 Terminix 2022 年第一季財報電話會議。今天的電話會議將進行錄音，並在網路上直播。今天電話會議的主持人是 Terminix 投資者關係、財務規劃與分析 (FP&A) 副總裁兼財務主管 Jesse Jenkins。

I will now turn it over to Mr. Jenkins, who will introduce the other speakers on the call.

現在我將把時間交給詹金斯先生，他將介紹電話會議的其他演講者。

Thank you. Good morning, and welcome. Before we begin, I'd like to remind you that throughout today's call, management may make forward-looking statements to assist you in understanding the company's strategies and operating performance. As stated in the appendix, all forward-looking statements and cautionary statements, including those about the proposed Rentokil transaction, are subject to the forward-looking statement legends contained in our public filings with the Securities and Exchange Commission. These forward-looking statements are not guarantees of performance and are subject to the risk factors contained in our public filings that may cause actual results to vary materially from those contemplated.

謝謝！早安，歡迎！在開始之前，我想提醒您，在今天的電話會議中，管理層可能會做出前瞻性陳述，以幫助您了解公司的策略和營運表現。如附錄所述，所有前瞻性陳述和警示性聲明，包括關於擬議的Rentokil交易的陳述，均以我們向美國證券交易委員會提交的公開文件中的前瞻性聲明說明為準。這些前瞻性陳述並非績效保證，並受我們公開文件中包含的風險因素影響，這些風險因素可能導致實際結果與預期結果有重大差異。

Information discussed on today's call speaks only as of today, May 5, 2022. The company undertakes no obligation to update any information discussed on today's call. This morning, Terminix issued a press release filed with the SEC on Form 8-K, including our unaudited first quarter 2022 financial results. The press release, 8-K and the related presentation can be found on our Investor Relations website at investors.terminix.com.

今日電話會議上討論的資訊僅截至2022年5月5日有效。本公司不承擔更新今日電話會議上討論的任何資訊的義務。今天上午，Terminix發布了一份以8-K表格形式提交給美國證券交易委員會（SEC）的新聞稿，其中包含我們2022年第一季未經審計的財務表現。新聞稿、8-K表格及相關簡報可在我們投資者關係網站investors.terminix.com上查閱。

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

在今天的電話會議中，我們將引用一些非公認會計準則 (non-GAAP) 財務指標。為了更好地幫助您了解我們的財務業績，我們提供了這些指標的定義以及與最具可比性的公認會計準則 (GAAP) 財務指標的對照表。

Joining me on today's call are Terminix CEO, Brett Ponton; and CFO, Bob Riesbeck. Slide 3 of the presentation posted on the Investor Relations section of our website lays out the agenda we will cover today, with Brett opening with highlights, a Terminix Way update and an update on our termite damage claims and mitigation efforts, followed by Bob reviewing our financials and then returning to Brett for a brief Rentokil merger update, closing comments and questions.

參加今天電話會議的還有 Terminix 執行長 Brett Ponton 和財務長 Bob Riesbeck。我們網站「投資者關係」版塊發布的簡報第三張投影片列出了我們今天的議程。 Brett 首先會介紹會議亮點，然後介紹 Terminix Way 的最新動態以及我們白蟻損害索賠和減災措施的最新情況；隨後 Bob 會回顧我們的財務狀況；最後 Brett 會簡要介紹 Rentokil 合併的最新情況，並進行總結發言和提問。

I will now turn it over to Brett Ponton. Brett?

現在我將把時間交給 Brett Ponton。 Brett？

Thanks, Jesse, and thank you for joining us. Overall, it was a strong start to a transformational year at Terminix. I am pleased with the momentum of our performance and excited to start off by sharing the progress the team has made on our strategic priorities.

謝謝傑西，也謝謝你加入我們。總的來說，這是 Terminix 轉型之年的良好開端。我對我們目前的業績動能感到滿意，並很高興首先分享團隊在策略重點上的進展。

In the first quarter, we reported revenue of $496 million, reflecting growth of 5%. Organically, we had a strong quarter in our residential business and sequential improvement in our commercial business, with strong price realization across all channels.

第一季度，我們的營收為4.96億美元，成長5%。從有機成長來看，住宅業務本季表現強勁，商業業務也較上季改善，所有通路的價格實現強勁成長。

Termite revenue growth grew 6% organically, driven by volume growth and reoccurring core services as well as home services. Residential pest grew to 4% organically, with improved retention rates and better cross-selling of mosquito and bedbug sales volume. Commercial pest grew 2%, with organic declines of 1%. Excluding the impact of foreign currency and approximately $1 million of disinfection revenue in the prior year, commercial pest organic growth would have been approximately 2%. Commercial pest continues to improve with strong sales, improved retention rates and the disinfection headwinds now behind us, we are well positioned for growth in the coming months.

白蟻業務收入有機成長6%，這得益於銷售成長、核心服務以及家居服務的持續成長。住宅害蟲防治業務有機成長4%，得益於留存率的提升以及蚊蟲交叉銷售的改善。商業害蟲防治業務成長2%，有機成長下降1%。若不計入外匯影響以及上年約100萬美元的消毒收入，商業害蟲防治業務有機成長約為2%。商業害蟲防治業務持續改善，銷售額強勁增長，留存率提升，且消毒業務的逆境已然過去，我們已為未來幾個月的增長做好了充分準備。

In total, organic growth accelerated to 4% in the first quarter, which was in line with our own expectations and reflects the progress we have made in the business.

整體而言，第一季有機成長率加速至4%，符合我們自身的預期，也反映了我們業務的進步。

First quarter adjusted EBITDA was $86 million for a margin of 17.3%. The decline in EBITDA in the quarter was driven by planned key investments in labor and staffing levels that are needed to support growth in the coming quarters. Like most companies, we also experienced some inflationary pressures in fuel, labor and materials in the quarter, which we are expecting to continue throughout the next few quarters. In the middle of last year, we began investing in our strategic pricing capabilities and have been successfully increasing prices above historical rates with minimal impact to our customer retention levels.

第一季調整後息稅折舊攤提前利潤 (EBITDA) 為 8,600 萬美元，利潤率為 17.3%。本季 EBITDA 的下降是由於我們計劃對勞動力和人員配置進行關鍵投資，這些投資將用於支持未來幾季的成長。與大多數公司一樣，我們在本季也經歷了燃料、勞動力和材料方面的通膨壓力，預計這種壓力將持續到未來幾季。去年年中，我們開始投資於策略定價能力，並成功地將價格提高到歷史水準以上，同時對客戶保留率的影響微乎其微。

This program has continued for a few consecutive quarters, and I'm confident we can continue our progress into future quarters. We are confident that these price increases enhance our ability to cover inflationary increases as we move throughout the rest of the year, just as we did this quarter.

該計劃已連續幾個季度持續實施，我相信我們能夠在未來幾個季度繼續取得進展。我們相信，這些價格上漲將增強我們在今年剩餘時間應對通膨上漲的能力，就像我們本季所做的那樣。

Now turning to the progress we've made in advancing our strategic priorities. Just last week, I was in the Dallas-Fort Worth area for the launch of our Terminix Way pilot. This exciting launch puts into action all the work we have been doing behind the scenes to make enhancements for our front line that will make it easier to provide world-class service to our customers. I will share more on the changes implemented with the Terminix Way in a moment.

現在談談我們在推動策略重點方面所取得的進展。就在上週，我前往達拉斯-沃斯堡地區，參加了 Terminix Way 試點計畫的啟動儀式。這項令人興奮的啟動儀式將我們一直以來在幕後所做的所有工作付諸實踐，旨在提升我們的一線服務，從而更輕鬆地為客戶提供世界一流的服務。稍後我將分享更多關於 Terminix Way 實施的變更。

The back office team is also making progress towards completing the Rentokil merger, with preintegration planning increasing across the functions, including finance, HR and IT. Just last week, several members of the Rentokil team were in Memphis for on-site meetings and technology and operations. With progress and all conditions closed, we continue to see late in the third quarter as the target for transaction completion. The pending merger will enable us to further our important investments to drive organic growth, and we are excited at the prospect of accelerating the progress already well underway at Terminix.

後台團隊也正在推進完成Rentokil合併的進程，包括財務、人力資源和IT等各職能部門的整合前期規劃正在加緊推進。就在上週，Rentokil團隊的幾位成員已抵達孟菲斯，參加現場會議以及技術和營運會議。隨著所有條件的滿足和進展，我們預計交易將在第三季末完成。這項即將完成的合併將使我們能夠進一步投資，以推動有機成長，我們對加速Terminix現有進展的前景感到興奮。

Starting on Slide 5, I will go a little deeper on the Terminix Way pilot and the enhancements we have in the pipeline in the coming months. Terminix Way is an initiative designed to give our front line the tools, training and technology they need to provide consistent, world-class customer service across our 50,000 customer touchpoints a day.

從第五張投影片開始，我將更深入介紹 Terminix Way 試點計畫以及我們未來幾個月計畫推出的增強功能。 Terminix Way 旨在為我們的第一線員工提供所需的工具、培訓和技術，使他們能夠每天在 5 萬個客戶接觸點提供一致、世界一流的客戶服務。

Here, at Terminix, we have always believed that the technician is the center of the customer relationship and may need to feel supported in order to provide excellent customer service. We have seen a direct correlation between technician retention and customer retention, which led us to one of the guiding principles of the Terminix Way: all process enhancements should drive higher teammate retention.

在 Terminix，我們始終堅信技術人員是客戶關係的核心，他們需要感受到支援才能提供卓越的客戶服務。我們發現技術人員的留任率與客戶留任率之間存在直接關聯，這促使我們形成了 Terminix Way 的指導原則之一：所有流程改善都應提升團隊成員的留任率。

As we explore the first year turnover data in our organization, we saw room for improvement in our teammate retention rates in the early months of their hires. In an effort to address this, we have created a white glove process for our technicians, which we are calling their journey to route. Similar to a customer journey mapping exercise I have done many times in my life in marketing, we mapped teammate journey from day 1 of hiring as a trainee through the necessary training courses and, finally, to graduation into a full-route technician and have developed a thorough plan to address all of the touchpoints from this experience.

在分析公司第一年員工流動率數據時，我們發現團隊成員入職最初幾個月的留任率仍有提升空間。為了解決這個問題，我們為技術人員創建了一個白手套流程，我們稱之為「從培訓到路線」的流程。與我從事行銷工作期間多次進行的客戶旅程圖譜繪製類似，我們繪製了團隊成員的旅程圖譜，從入職第一天的實習生到完成必要的培訓課程，再到最終成為一名全程技術員，並製定了一套周密的計劃來處理這一過程中的所有接觸點。

The 60-day period, on average, is our first chance to make an impression on our teammates, and we have mapped out a detailed daily activity list from day 1 that we believe will improve the experience. The process leverages best practices from branches with high teammate retention rates and touches all corners of the organization, with involvement from our corporate talent acquisition team, region and division level field leaders and executive leadership.

平均而言，這60天是我們讓團隊成員留下深刻印象的首次機會。我們從第一天起就制定了一份詳細的每日活動清單，相信這將提升體驗。該流程借鑒了團隊成員留任率較高的分支機構的最佳實踐，並觸及組織的各個角落，我們的企業人才招募團隊、區域和部門級現場領導以及高階主管領導都參與其中。

We're also working to modernize our training curriculums for all positions in the company. In addition to refreshing the graphics and content, we are making the training more interactive with the potential for both in-person and virtual sessions in small classroom settings to foster both a sense of inclusion as well as the more conducive learning experience tailored to the way our teammates learn today. We have created short videos that work well for independent learning and have pivoted to more of a on-the-job [lie-alongs] with current technicians guided by management and tenured teammates who have completed a recently launched certified trainer program.

我們也正在努力更新公司所有職位的培訓課程。除了更新圖片和內容外，我們還在提升培訓的互動性，在小班授課環境中提供線下和線上兩種授課方式，以增強包容性，並根據團隊成員當前的學習方式，提供更有益的學習體驗。我們製作了一些適合自主學習的短視頻，並已轉向更傾向於在職（陪讀）培訓，由管理層和已完成近期認證培訓師項目的資深團隊成員指導，由現任技術人員進行。

The certified trainer program launched in Dallas last month and pairs seasoned teammates with new hires, allowing our tenured teammates to pass on their practical knowledge as well as fostering meaningful peer-to-peer relationships with new hires. These enhancements will also help us move new hires through the training quicker so they can graduate throughout text in a shorter period of time and move directly from the classroom to serving customers with confidence.

認證培訓師計畫已於上個月在達拉斯啟動，將經驗豐富的團隊成員與新員工配對，使我們的資深團隊成員能夠傳授實務知識，並與新員工建立有意義的同儕關係。這些改進也將幫助我們更快地完成培訓，使他們能夠在更短的時間內完成文本學習，並直接從課堂走向充滿信心地服務客戶。

We plan to house these materials and a new learning management tool that will make it easy for us to make them available to anyone in the organization well after the initial training sessions are completed. These enhancements are in production and scheduled for launch in the coming weeks. We are excited about the benefits these actions will bring to help improve our teammate turnover in the coming months.

我們計劃將這些資料和一個新的學習管理工具整合在一起，以便在初始培訓課程結束後，方便組織內任何成員使用。這些增強功能正在製作中，並計劃在未來幾週內推出。我們非常期待這些措施將在未來幾個月內帶來的好處，進而有助於改善團隊成員的流失率。

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

正如我上個季度提到的，我們在人才招募方面取得了巨大進展，提升了我們業務的員工水平，使得本季度末高效技術人員的數量同比增長。隨著新員工數量的增加，我們正在優化薪酬結構，以確保在人員流失率方面取得進展。

For hourly trainees, we have increased wages in certain markets to attract candidates to the job and help improve turnover. These increases are nominal on the total population but make a big impact at the individual level when having compensation discussions. We have also instituted additional pay certainty for newly promoted route technicians. These teammates will still graduate into a production-based position, but we have created higher minimum pay floors so they can feel supported with more fixed pay if they needed as they transition to their new positions. While these changes are relatively new, the initial feedback from teammates has been positive, and we believe these changes will drive improvement in turnover in the crucial first year with the company.

對於小時工培訓生，我們提高了部分市場的工資，以吸引候選人並幫助提高員工流失率。這些漲幅對整體員工而言微不足道，但在薪資討論中，對個人而言卻意義重大。我們也為新晉升的線路技術人員提供了額外的薪酬確定性。這些團隊成員仍將晉升到生產崗位，但我們提高了最低工資下限，以便在他們過渡到新職位時，如有需要，能夠獲得更固定的薪酬支持。雖然這些變化相對較新，但團隊成員的初步回饋是正面的，我們相信這些變化將在公司關鍵的第一年推動員工流失率的改善。

In total, turnover in the quarter for our route technicians was relatively flat to the end of the year in Q1, while we did see an uptick in turnover for our hourly positions. Our significant investments in labor in the quarter has led to a 35% increase in trainee headcount year-over-year in the quarter. These trainees will graduate in early Q2. And with these enhanced onboard training and pay structures, they will be better prepared to serve our customers in the vital spring season. Despite the challenging labor markets, we are encouraged by the capability we have built over the last few quarters that has positioned us well to capitalize on growth opportunities over the balance of the year.

總體而言，本季度我們的線路技術人員的離職率與第一季年底相比基本持平，而小時工崗位的離職率則有所上升。我們在本季對勞動力的大量投資，使實習生人數年增35%。這些實習生將於第二季初畢業。透過這些強化的入職培訓和薪酬結構，他們將更好地準備在重要的春季為客戶提供服務。儘管勞動力市場充滿挑戰，但我們對過去幾季累積的能力感到鼓舞，這使我們能夠在今年餘下的時間裡充分利用成長機會。

Turning to Slide 6. We also made some technology enhancements that makes it easier for technicians to become trusted advisers to our customers. In addition to simple step-by-step instructions for service delivery, there is a quick 5-question survey that will help identify possible opportunities to enhance protection for homeowners beyond their existing services, resulting in solutions, such as mosquito control and wildlife exclusion. Our technicians are well positioned to help customers understand the risk and limitations in their current services and offer solutions to those problems.

翻到第6張投影片。我們也進行了一些技術改進，使技術人員更容易成為客戶值得信賴的顧問。除了簡單的逐步服務說明外，我們還提供了一份包含5個問題的快速調查問卷，旨在幫助客戶發現在現有服務之外，增強房主保護的可能機會，從而提供諸如蚊蟲控制和野生動物隔離等解決方案。我們的技術人員能夠幫助客戶了解其現有服務的風險和局限性，並針對這些問題提供解決方案。

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

舉個例子，透過提示使用者提供可能導致害蟲問題的情況圖片，就能輕鬆實現這一點。然後，只需按下按鈕，技術人員就可以產生方案，並將我們最需要的一些服務直接推銷給有興趣的房主。這項基於我們原有平台的技術將賦予我們的團隊信心，不僅能夠提升客戶銷量，還能為那些原本可能意識不到潛在問題的房主提供增值服務和相關教育。

We also felt it's important to ensure that the customers who are not home when we perform our services also have access to this additional resource to receive better insights into the work we have completed as well as any possible pest risk we identify while at the home. A new healthy home report is in development, and we will be system-generating this based on inputs from the technician during completion of a normal service.

我們還認為，確保在我們提供服務時不在家的客戶也能訪問這一額外資源至關重要，這樣他們才能更好地了解我們已完成的工作以及我們在家中發現的任何潛在蟲害風險。我們正在開發一份新的健康家居報告，我們將根據技術人員在正常服務期間的輸入，由系統產生該報告。

We feel these valuable insights can be helpful in building better relationships with our customers, ultimately leading to better retention, a willingness to accept price increases and to consider Terminix for additional recurring and onetime services. This is also a nice way to increase the pay of our dedicated technicians with additional commission opportunities as they deepen their relationships with customers on their routes.

我們認為這些寶貴的見解有助於我們與客戶建立更良好的關係，最終提高客戶留存率，使他們更願意接受價格上漲，並考慮使用 Terminix 提供額外的定期和一次性服務。隨著我們敬業的技術人員與路線上客戶關係的加深，他們也能透過額外的佣金機會獲得更高的薪資。

I was on site when we deployed this feature to our team in the Dallas-Forth Worth Area, and the response was overwhelmingly positive, with technicians mentioning the speed to execute and ease of use as the primary benefits. While this remains a very small sample size, the results were quite impressive. We have seen more than double the technician-generated leads than we saw in the same time period last year, with significantly improved close rates. With those early results and the overwhelming field leadership and technician response, we are taking steps to deploy these features to other areas of the country as soon as possible. We've already made great progress with the Terminix Way, and I'm encouraged with the competency we have built in executing strategic initiatives, and it gives us confidence to hit our deliverables on future enhancements in the pipeline. We are making great strides to provide our field-facing teammates with best-in-class tools, training and technology needed to provide world-class customer service.

當我們將這項功能部署到達拉斯-沃斯堡地區的團隊時，我當時就在現場。回饋非常積極，技術人員表示執行速度快、使用方便性是主要優勢。雖然樣本量仍然很小，但結果令人印象深刻。與去年同期相比，技術人員產生的銷售線索數量增加了一倍多，成交率也顯著提高。鑑於這些早期成果以及現場領導和技術人員的積極回應，我們正在採取措施，盡快將這些功能部署到美國其他地區。我們已經在 Terminix Way 上取得了巨大進展，我們在執行戰略計劃方面所建立的能力也讓我備受鼓舞，這讓我們對未來改進的交付成果充滿信心。我們正在大力推進，為面向現場的團隊成員提供一流的工具、培訓和技術，以提供世界一流的客戶服務。

Before I hand it over to Bob for a full review of our financials, I also wanted to touch on the progress we have made on our termite damage claims mitigation efforts. We continue to feel that we are taking the right steps in our approach in this area despite historic inflationary pressure in building materials.

在交給Bob全面審查我們的財務狀況之前，我還想談談我們在白蟻損害索賠緩解工作方面取得的進展。儘管建築材料市場面臨歷史性的通膨壓力，但我們仍然認為，我們在這方面採取的措施是正確的。

Over the last couple of years, we have improved our visibility into claims across the country, and the data shows that our problem remains intensely focused in the region along the Gulf of Mexico within a 250-mile radius of Mobile, Alabama. This area accounts for almost 90% of the outstanding litigation and, over the last 12 months, had a claim rate that is over 5x larger than the rest of the country despite representing only approximately 13% of our protection plan termite customers.

過去幾年，我們提高了對全國索賠的可視性。數據顯示，我們的問題仍主要集中在阿拉巴馬州莫比爾市250英里半徑範圍內的墨西哥灣沿岸地區。該地區幾乎佔未決訴訟的90%。在過去12個月裡，儘管該地區僅占我們白蟻保護計畫客戶的約13%，但其索賠率卻是全國其他地區的5倍多。

Because this problem is local, our solution is local as well. If you remember, during 2020, we completed a comprehensive mitigation program that enhanced the protection of all of our customers in the Mobile Bay Area. That plan continues to pay dividends. New nonlitigated claims in Mobile in the first quarter decreased another 10% year-over-year, and outstanding claims were 24% lower than the previous lowest reported numbers.

由於這個問題是本地問題，我們的解決方案也同樣本地化。如果您還記得，我們​​在2020年完成了一項全面的緩解計劃，增強了對莫比爾灣區所有客戶的保護。該計劃持續帶來效益。第一季度，莫比爾地區新增非訴訟索賠年減10%，未決索賠比先前報告的最低數字下降了24%。

During 2021, we expanded elements of the program to other high-risk areas and have seen similar claims reductions. In total, our new claims are down 55% from our highest reported peak in 2019. While claims counts have fallen drastically, we have been absorbing historic inflationary pressure in building materials and contractor labor costs, including the price of lumber that is still about 3x the prepandemic levels.

2021年，我們將該計劃的元素擴展到其他高風險地區，並看到了類似的索賠減少。總體而言，我們的新索賠比2019年報告的最高峰值下降了55%。雖然索賠數量大幅下降，但我們一直在吸收建築材料和承包商勞動力成本的歷史性通膨壓力，包括木材價格仍然約為疫情前的三倍。

We also recently began a claims management transition from a third-party provider to an internal team in order to improve the speed to resolution for our customers. By leveraging a team with over 140 years of termite control experience, we feel we can better adapt to the unique needs of our customers and resolve issues quickly and effectively. The reduction in new claims and improvement in closing older claims have resulted in total outstanding nonlitigated claims in the first quarter at the lowest levels we have ever reported.

我們近期也啟動了理賠管理轉型，從第三方供應商轉型為內部團隊，以提升客戶解決問題的速度。憑藉著一支擁有超過140年白蟻防治經驗的團隊，我們能夠更好地適應客戶的獨特需求，快速有效地解決問題。新增理賠數量的減少以及舊理賠結案率的提高，使得第一季未結非訴訟理賠總額達到了我們報告以來的最低水準。

We are confident in our trajectory and our ability to continue to make progress reducing nonlitigated claims in the quarters to come. On the litigated side, case counts have remained high, with 15 new cases in the first quarter, almost all of which are in a 250-mile radius of Mobile. Despite a few more claims than we were projecting, we are continuing to see a steady decline in the quality of these cases, with cost per case dropping 25% since the fourth quarter of 2019.

我們對未來幾季在減少非訴訟索賠方面取得進展的能力充滿信心。訴訟方面，案件數量保持高位，第一季新增15起案件，幾乎全部位於莫比爾250英里半徑範圍內。儘管索賠數量比我們預期的要多，但我們看到這些案件的品質持續下降，自2019年第四季以來，每起案件的成本下降了25%。

While we did see an increase of about $3 million year-over-year in total termite damage claims expense, we remain confident we are taking the right actions to reduce termite damage claims expense to baseline levels of approximately 4% of termite revenue. The expenditures we have gained and the actions we are taking will help us move beyond those baseline numbers in the years to come.

雖然白蟻損害索賠費用總額比去年同期確實增加了約300萬美元，但我們仍然相信，我們正在採取正確的措施，將白蟻損害索賠費用降至白蟻收入約4%的基準水平。我們已節省的支出以及我們正在採取的行動將幫助我們在未來幾年超越這個基準數字。

I will now turn it over to Bob to walk through the revenue drivers, the major fluctuations in costs and the first quarter cash flow. I will come back with a brief update on the proposed Rentokil merger as well as closing thoughts before our Q&A session. Bob?

現在，我將把時間交給鮑勃，他來介紹一下收入驅動因素、成本的主要波動以及第一季的現金流。之後，我將簡要介紹擬議中的 Rentokil 合併案，並在問答環節之前做些總結。鮑伯？

Thanks, Brett. Let's start with a detailed review of our top line performance. Overall, we have delivered revenue growth of $25 million, driven by $19 million of organic growth or 4% and as well as 1% growth from acquisitions.

謝謝，布雷特。我們先來詳細回顧一下我們的營收表現。整體而言，我們的營收成長了2,500萬美元，其中有機成長1,900萬美元，增幅達4%，此外還有1%的收購收入成長。

Beginning with the Termite and Home Services column on the left side of Slide 8, revenue increased by $9 million or 6% in the quarter. Termite and Home Services completions were up 13% in the quarter, with core termite completions up 5% and home service completions up 19% year-over-year due to increased cross-selling to existing customers. We experienced strong unit growth in the quarter despite lapping 12% growth in completions in the first quarter of 2021. Termite renewals were down 1% due to lower volume, partially offset by better pricing in an inflationary environment. We are lapping a strong renewals period in the prior year and have continued to see pressure on retention and termite renewals from increased moves in the quarter. We are planning to launch a new mover program in the second quarter and are off to a strong start in early April.

從第 8 張投影片左側的白蟻和家事服務欄開始，本季營收增加了 900 萬美元，增幅為 6%。本季白蟻和家事服務完成量成長了 13%，其中核心白蟻完成量成長 5%，家事服務完成量年增 19%，這得益於對現有客戶的交叉銷售增加。儘管 2021 年第一季的完成量成長了 12%，但本季我們的單位數量仍然強勁成長。由於交易量下降，白蟻續約量下降了 1%，但通膨環境下價格的改善部分抵消了這一下降。去年我們的續約量表現強勁，但本季搬家次數增加持續給留任率和白蟻續約量帶來壓力。我們計劃在第二季啟動一項新的搬家計劃，並在 4 月初取得了良好的開端。

Residential pest grew 5% in the quarter, with organic revenue growth of 4%. Organic revenue growth was driven by improvement in cancel rates and trailing 12-month retention rates, increased mosquito and bedbug sales volume due to improved cross-selling and strong price realization.

本季住宅除蟲業務成長了5%，有機收入成長了4%。有機收入的成長得益於取消率和過去12個月留存率的改善，以及交叉銷售改善帶來的蚊蟲和臭蟲銷量的增加，以及強勁的價格變現。

Commercial pest was up 2% in the quarter, driven by M&A growth of 4%. Organic revenue growth of 1% was driven by a reduction in onetime services, including more than $1 million of disinfection revenue from the same period in 2021. International growth was negatively impacted by increased COVID-related sick leaves in both Sweden and the United Kingdom that peaked in late January and early February. Growth was also impacted by unfavorable foreign currency fluctuations of about $1 million. Excluding the impact of foreign currency and the more than $1 million of disinfection revenue, commercial pest organic growth would have been approximately 2%.

本季商業害蟲防治業務成長2%，受併購業務4%成長的推動。有機收入成長1%，主要由於一次性服務減少，其中包括2021年同期超過100萬美元的消毒收入。國際業務成長受到瑞典和英國新冠疫情相關病假增加的負面影響，病假在1月底和2月初達到高峰。此外，約100萬美元的不利外匯波動也對業務成長產生了影響。若不計入外匯影響和超過100萬美元的消毒收入，商業害蟲防治業務有機收入成長約為2%。

In the other service revenue line, product sales were up 18% organically over the period -- over the prior year due to increased chemical demand as we lap the impacts of COVID-19.

在其他服務收入方面，由於我們克服了 COVID-19 的影響，化學品需求增加，產品銷售額在此期間有機增長了 18%，與上年相比有所增長。

Overall, the first quarter continued positive momentum in the residential businesses, with growth in our termite and residential pest segments. We also saw a sequential improvement in our commercial business, and with improvement in retention rates in that service line, we are well positioned for growth in the coming quarters.

總體而言，第一季住宅業務延續了積極的成長勢頭，白蟻和住宅害蟲防治業務均有所增長。商業業務也實現了環比成長，隨著該服務線留存率的提升，我們已為未來幾季的成長做好了充分準備。

Turning to Slide 9, you can see the financial summary and detail on the adjusted EBITDA drivers for the quarter. On the P&L at the top left of the slide, you can see the $25 million or 5% revenue growth we covered on the previous slide. Adjusted EBITDA of $86 million were down $4 million or 5% compared to prior year. Adjusted net income of $42 million improved $3 million or 7%, and adjusted EPS increased $0.05 or 16% to $0.35 per share.

翻到第9張投影片，您可以看到本季財務摘要和調整後EBITDA驅動因素的詳細資訊。在投影片左上角的損益表中，您可以看到我們在上一張投影片中提到的2500萬美元或5%的收入成長。調整後的EBITDA為8,600萬美元，較上年下降400萬美元或5%。調整後的淨收入為4,200萬美元，成長了300萬美元或7%，調整後的每股盈餘成長0.05美元或16%，達到每股0.35美元。

Across the bottom of the slide, you can see the adjusted EBITDA drivers for the quarter. Revenue growth added $13 million of adjusted EBITDA in the quarter for a gross margin flow-through of 52%, higher than our normal rates due to strong pricing we delivered in the quarter.

在投影片底部，您可以看到本季調整後EBITDA的驅動因素。本季營收成長帶來了1,300萬美元的調整後EBITDA，毛利率流向為52%，高於我們的正常水平，這得益於我們本季強勁的定價策略。

Labor increased $6 million in the quarter, primarily driven by investments in staffing levels and talent acquisition to get ahead of peak season and drive growth in 2022. As Brett mentioned earlier, the bulk of the costs came from approximately 35% more nonproductive training headcount in the quarter compared to the same period in the prior year. While most of our teammates are on our production-based plans, we did see some wage pressure on our hourly employees, but we're able to pass along price increases to cover that inflation.

本季人工成本增加了600萬美元，主要原因是為迎接旺季並推動2022年的成長，在人員配備和人才招募方面進行了投資。正如Brett先前所提到的，成本增加的主要原因是本季非生產性培訓人員數量較去年同期增加了約35%。雖然我們的大多數團隊成員都參與了基於生產的計劃，但我們確實看到了計時員工的薪資壓力，但我們能夠透過價格上漲來彌補通貨膨脹。

As we alluded in February, vehicle fuel increased $2 million, driven by higher prices per gallon. Given current fuel prices, we expect to see similar increases in future periods. As a reminder, we have approximately 90% of our fuel usage in 2022 protected with the fuel hedge, which gives us more certainty about these impacts despite the volatility we see in oil and pump prices.

正如我們2月所提到的，受每加侖價格上漲的影響，汽車燃油費用增加了200萬美元。鑑於目前的燃油價格，我們預計未來一段時間也會出現類似的成長。需要提醒的是，我們2022年約90%的燃油使用量受到燃油對沖的保障，儘管油價和油泵價格波動較大，但這讓我們對這些影響更有把握。

As Brett discussed in detail, termite damage claims increased $3 million due to higher litigated claims counts in the Mobile Bay Area as well as higher cost per nonlitigated claims due, in part, to inflationary pressures on building materials and contractor costs.

正如布雷特詳細討論的那樣，白蟻損害索賠增加了 300 萬美元，原因是莫比爾灣地區的訴訟索賠數量增加，以及由於建築材料和承包商成本的通膨壓力導致每起非訴訟索賠的成本增加。

Investments in Terminix Way increased $1 million as we deployed enhanced technology and training to our teammates in the quarter. Investments in staffing levels and training in both sales and service in our call center increased $3 million to support expected growth in the back half of the year. And finally, travel expenses increased $1 million due to the easing of COVID-19 travel restrictions.

本季度，我們為團隊成員部署了增強型技術和培訓，對 Terminix Way 的投資增加了 100 萬美元。呼叫中心的人員配備和銷售及服務培訓投資增加了 300 萬美元，以支持下半年的預期成長。最後，由於 COVID-19 旅行限制的放寬，差旅費增加了 100 萬美元。

These results are in line with our expectations for the first quarter. And we remain firmly on our full year plan, with needed labor investments in the quarter increasing our staffing levels to support continued growth over the remainder of the year.

這些業績符合我們對第一季的預期。我們將繼續堅定地執行全年計劃，本季度所需的勞動力投資將提升我們的員工水平，以支持今年剩餘時間的持續成長。

Turning to Slide 10. You will see the cash flow summary for the quarter. Working capital improved $11 million, favorably impacted by seasonal activity and the timing of interest and income tax payments. CapEx of $7 million for the quarter included recurring capital needs and information technology projects. Restructuring charges of $10 million primarily included costs related to our proposed acquisition by Rentokil. We expect to have additional restructuring payments related to the transaction in future periods that will negatively impact our expected free cash flow conversion rates for the year. Free cash flow conversion for the quarter was 73%.

翻到第10張投影片。您將看到本季度的現金流摘要。營運資本增加了1100萬美元，這得益於季節性活動以及利息和所得稅支付時間的正面影響。本季700萬美元的資本支出包括經常性資本需求和資訊科技項目。 1000萬美元的重組費用主要包括與我們擬定的Rentokil收購相關的成本。我們預計未來期間將有與該交易相關的額外重組支出，這將對我們本年度預期的自由現金流轉換率產生負面影響。本季的自由現金流轉換率為73%。

During the quarter, we borrowed $80 million from our revolver for short-term liquidity needs, repaying $50 million within the period and the remaining $30 million subsequent to quarter end. While we did not complete any acquisitions in the quarter, we remain active with our small tuck-in acquisition program. We also used approximately $30 million to initiate a restructuring of our minority interest in several businesses in China. We expect to receive proceeds from those transactions in the coming quarters as the restructuring is completed. As we discussed last quarter, given the pending merger, we are not planning to be in the share repurchase market in the near term.

本季度，我們從循環信貸中藉入了8000萬美元，以滿足短期流動性需求，其中5000萬美元已於當季償還，剩餘的3000萬美元則於季度末償還。雖然本季我們未完成任何收購，但我們仍在積極推動小型補充收購項​​目。我們也動用了約3000萬美元，用於重組我們在華多家企業的少數股權。隨著重組的完成，我們預計這些交易的收益將在未來幾季內到達。正如我們上季度所討論的，鑑於即將進行的合併，我們近期不打算進入股票回購市場。

We ended the quarter with $170 million in cash and $518 million in available liquidity, with a net debt leverage ratio of 2x. Overall, we are excited by the momentum we have built in a business with accelerating growth rates and investments in staffing levels and the Terminix Way positioning us for additional profitable growth in the coming quarters.

本季末，我們持有1.7億美元現金和5.18億美元可用流動資金，淨負債槓桿率2倍。整體而言，我們對業務發展動能感到興奮，業務成長率不斷加快，人員配置不斷提升，而Terminix Way模式則為我們在未來幾季實現進一步獲利成長奠定了基礎。

While we are not providing guidance due to the pending merger, we are encouraged by the first quarter results and the outlook we have for the remainder of the year.

雖然由於即將進行的合併，我們沒有提供指導，但第一季的業績和今年剩餘時間的展望令我們感到鼓舞。

And with that, I will turn it back over to Brett for closing comments.

最後，我將把發言權交還給 Brett，請他做最後總結。

Thanks, Bob. In closing and on Slide 11, the first quarter was another quarter of progress against both our short-term goals and our longer-term strategic priorities. We delivered strong growth in termite and improved our growth rates in both residential and commercial pest from the fourth quarter. With our key investments in staffing levels across our technician base, we are well positioned for continued growth as we look to spring.

謝謝，鮑伯。最後，在第11張投影片中，我們第一季在短期目標和長期策略重點方面都取得了進展。我們的白蟻防治業務實現了強勁成長，從第四季度開始，住宅和商業害蟲防治業務的成長率均有所提高。憑藉我們在技術人員隊伍建設方面的重點投資，我們已為春季的持續成長做好了準備。

We continue to provide support in this inflationary market, and I remain confident we will continue to pass along increasing costs in order to absorb increases in fuel, labor and materials in the future. I'm encouraged by the positive feedback we have received from our front line after deploying the first phase of Terminix Way, and I look forward to further enhancements in the pipeline.

我們將繼續在通膨市場中提供支持，我堅信，我們將繼續轉嫁不斷上漲的成本，以吸收未來燃料、人工和材料成本的上漲。在部署 Terminix Way 第一階段後，我們收到了來自第一線員工的正面回饋，這令我備受鼓舞，我期待未來專案能夠進一步改進。

We remain on track with our operating plan for the year, and we are well positioned to continue our trajectory into the peak season. In our back office, we are supporting the additional closing conditions on the pending merger. We are finalizing agreements for the sale of our U.K. and Norway businesses and are expecting an announcement as early as next week. Other integration planning is well underway, and we remain on track for a close toward the end of the third quarter.

我們今年的營運計劃仍在按計劃推進，並已做好充分準備，在旺季繼續保持良好勢頭。在後台，我們正在支援待決合併的附加成交條件。我們正在敲定英國和挪威業務的出售協議，預計最快下週發佈公告。其他整合計劃正在順利進行中，我們預計在第三季末完成。

And with that, I will hand it over to Jesse to lead us through the Q&A.

接下來，我將把時間交給傑西 (Jesse)，讓他帶領我們進行問答。

Thanks, Brett. As a reminder, we are limited in our ability to discuss specifics on the time line of the merger, but we are happy to take any other questions you may have at this time.

謝謝，布雷特。需要提醒的是，我們目前無法詳細討論合併的具體時間表，但我們很樂意回答您目前可能提出的任何其他問題。

Operator, let's open the line for questions.

接線員，讓我們打開熱線來回答問題。

(Operator Instructions) Our first question comes from Tim Mulrooney with William Blair.

（操作員指示）我們的第一個問題來自 William Blair 的 Tim Mulrooney。

Brett, I know you discussed pricing briefly in your prepared remarks, but I didn't catch it. So I apologize if you already addressed this. But we did want to ask about pricing given the inflationary environment. I believe it typically averages between, I don't know, 1% to 2% on an annualized basis. But curious how much you expect it to be this year on an annualized basis, like for the full year, where we've spoken to a number of different privately held companies in the space over the last couple of weeks and over the last months who are talking about significant price increases, like 5% or more. Wondering if Terminix is thinking along the same lines because this could obviously impact how we're thinking about organic growth.

布雷特，我知道你在準備好的發言中簡要討論了定價，但我沒聽清楚。如果你已經提到了這個問題，我很抱歉。但我們確實想問通膨環境下的定價問題。我認為年化價格通常平均在1%到2%之間，具體數字我已經記不清了。但我很好奇你預計今年的年化價格會漲多少，例如全年價格。過去幾週和幾個月，我們與該領域的多家私人公司進行了溝通，他們談到了大幅漲價，例如5%或更多。我想知道Terminix是否也有同樣的想法，因為這顯然會影響我們對有機成長的考量。

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

當然。提姆，順便說一句，這個問題問得很好。首先，首先我想說，我們非常有信心，我們有能力透過定價來彌補材料成本和薪資上漲帶來的通膨壓力。

So regarding specific targets for the year, we're not going to provide specific numbers here, but I think it's fair to say, using the industry benchmark of 1.5% to 2.5%, we feel like it's going to exceed that pretty significantly. And a couple of things that's driving that for Terminix, I think, if you remember last year, we talked about one of our major strategic initiatives was to establish a much more robust strategic pricing team, leveraging stronger analytics, better competitive intelligence, down at the hyperlocal market level. And we're really pleased with the progress the team's made last year that we're now starting to see the benefits of us being able to take the necessary price we feel like there is an opportunity to take and also with mitigating the impact we see on customer retention. So we feel very good about striking that balance.

關於今年的具體目標，我們不會在這裡提供具體的數字，但我認為，以1.5%到2.5%的行業基準來看，我們認為實際銷售額會大幅超過這個數字。對Terminix來說，推動這一目標的幾個因素是，如果你還記得去年我們討論過的一項主要戰略舉措，那就是建立一個更加強大的戰略定價團隊，利用更強大的分析能力和更精準的競爭情報，深入到超本地市場。我們對團隊去年的進展感到非常滿意，現在我們開始看到我們能夠以我們認為有機會的合理價格定價，同時也能減輕對客戶保留率的影響，從而帶來好處。因此，我們對實現這一平衡感到非常滿意。

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

因此，總體而言，我認為我們對恢復任何通膨壓力的能力感到非常滿意，同時也看到了縮小我們在某些​​市場中發現的潛在差距的機會，我認為從長遠來看，這有助於推動我們實現長期擴大該業務利潤率的目標。

Yes. That's really helpful color, Brett. And I appreciate that. And because Jesse forgot to limit us to one question, I'm going to go ahead and dare to ask a second question really quickly. And just as a follow-up to that, to ask when your price increases typically go into effect. I think when your competitors said second quarter is typically when the annualized price increase goes into effect. But I'm curious how you think about layering in those price increases. And is it just for new customers or for existing customers as well?

是的。 Brett，這真是太有幫助了。我很感激。因為Jesse忘了把我們限制在一個問題上，所以我想快速問第二個問題。作為後續問題，我想問一下你們的漲價通常什麼時候會生效。我認為你們的競爭對手所說的年度漲價通常在第二季生效。但我很好奇，你們是如何考慮分階段漲價的？漲價只針對新客戶，還是也針對現有客戶？

Yes. Good question, Tim. We don't have an annualized price increase schedule that happens at a certain time of year. Our pricing are at the customer-specific level based upon the terms of the contracts that we have with those customers. So in effect, we're taking pricing actions every month in this business based upon the terms that we have with our customers, which, as you would expect, gives us a lot of flexibility to deal with any short-term trends that we might see that will impact our overarching pricing objectives that we would establish there. So we -- again, we feel very good about the capability that we've built in this area, having foreseen, I think, some hyperinflationary environments. So we're expecting like the investments we've made and strengthen our pricing analytics is certainly starting to pay off here.

是的。 Tim，問得好。我們沒有在一年中的某個時間制定年度價格上漲計劃。我們的定價是根據我們與客戶簽訂的合約條款，根據客戶的具體情況而定的。實際上，我們每個月都會根據與客戶簽訂的合約條款採取定價行動。正如您所期望的，這給了我們很大的靈活性，可以應對任何可能影響我們制定的整體定價目標的短期趨勢。因此，我們——再次強調，我們對我們在這方面建立的能力感到非常滿意，我認為我們已經預見了一些惡性通貨膨脹的環境。因此，我們預計，我們所做的投資以及加強定價分析的能力肯定會開始在這裡獲得回報。

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

下一個問題來自 RBC Capital Markets 的 Ashish Sabadra。

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

我是否可以就蒂姆的最後一個問題繼續提問，您能否提供一些細節，說明您的投資組合中有多少比例已經根據通膨環境被重新定價了？

Well, as I said, I think -- and I'll ask Bob to add some color to this. Look, we price on a rolling basis here. So we look pretty strongly at customer demographics in certain markets. We look at competitive dynamics based upon a set of local and regional competitors. And it's those 2 decision points, I think, that we take into consideration in addition to our input costs that we're seeing there. So in terms of the impact on a percentage basis of customers, I'll let Bob add some color to that.

嗯，正如我所說，我想——我會請鮑勃對此進行一些解釋。你看，我們這裡是滾動定價的。所以我們非常關注特定市場的客戶人口統計。我們會根據一系列本地和區域競爭對手來觀察競爭動態。我認為，除了目前所看到的投入成本之外，我們還會考慮這兩個決策點。所以，關於對客戶百分比的影響，我會讓鮑伯對此做一些解釋。

Yes. And if you recall, we started taking price really in Q3 of last year. So we're just continuing that momentum. And Brett mentioned the fact that we put together a team that started to look at it more strategically in the back half of last year. So we are seeing some kind of tailwinds in the first quarter and second quarter of this year, but it will start to level off in the back half of the year.

是的。如果你還記得的話，我們實際上是在去年第三季開始考慮價格因素的。所以我們只是在延續這種勢頭。 Brett 提到，我們組建了一個團隊，從去年下半年開始以更具策略性的方式看待價格問題。因此，我們在今年第一季和第二季看到了一些順風，但下半年價格走勢將開始趨於平穩。

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

這非常有幫助。或許在我的後續問題中，我想進一步探討交叉銷售的機會。之前提到過一些改進交叉銷售的措施。現在你們人員配備齊全，未來交叉銷售可能會更好。我想知道能否提供一些信息，說明一下你們在現有客戶群中的滲透率是多少。您如何看待交叉銷售的機會？任何資訊都會有所幫助。

Yes, great question. Maybe I'll point back to a metric we shared on our last call. There's 4 core services we offer to customers at Terminix: general pest control, termite, mosquito and wildlife exclusion. And across those 4 services today, on average, our customers are buying 1.3 of those 4 services.

是的，好問題。或許我可以回顧一下我們上次通話中分享的一個指標。 Terminix 為客戶提供四項核心服務：一般蟲害防治、白蟻防治、蚊蟲防治及野生動物驅除。目前，平均而言，我們的客戶購買了這四項服務中的 1.3 項。

So about a year ago, we identified this as a significant growth opportunity for us to develop deeper relationships with our customers in an effort to drive higher penetration. I'm really pleased that I made the prepared remarks that we launched our first initiative to fully capitalize on that opportunity by launching the first phase of the Terminix Way in Dallas. And although there's 2 parts of the Terminix Way, one is focused on training and onboarding our technicians to create a good experience that allows them to get to their full performance faster. But also, there is an element of Terminix Way to unlock the power of the upsell or the cross-sell by putting in the hands of our technicians an easy-to-follow inspection process that allows us to quickly translate the results of that inspection into an upsell opportunity with the customer but also make it really easy for the technician to do that.

大約一年前，我們認為這是一個重要的成長機會，可以加深與客戶的關係，從而提高滲透率。我很高興能夠發表準備好的講話，我們啟動了首個計劃，充分利用這一機會，在達拉斯啟動了 Terminix Way 的第一階段。雖然 Terminix Way 分為兩個部分，但其中一個部分專注於培訓和引導我們的技術人員，為他們創造良好的體驗，使他們能夠更快地充分發揮其工作能力。此外，Terminix Way 也致力於釋放追加銷售或交叉銷售的力量，為我們的技術人員提供一套易於遵循的檢查流程，使我們能夠快速將檢查結果轉化為對客戶的追加銷售機會，同時也讓技術人員能夠輕鬆完成這項工作。

We talk about one button execution of amending contracts on the customers' front step, if you will, that makes it really easy to do that. As we shared in the prepared remarks, although the data is pretty small sample size, I'm very, very encouraged by how quickly our team is ramping up in driving better leads through this process that we implemented as well as a higher close rate on those leads as well. So naturally, as you would expect, the excitement that we're seeing with that cross-sell opportunity is allowing us to challenge the team to accelerate rolling that initiative out across our branch network in the upcoming months.

我們談到了在客戶面前一鍵修改合約的功能，如果您願意的話，這確實非常容易。正如我們在準備好的演講中所述，雖然樣本量很小，但我非常非常欣慰地看到，我們的團隊正在迅速通過我們實施的這一流程，獲得更優質的銷售線索，並提高這些線索的成交率。因此，正如您所料，交叉銷售機會帶來的興奮感自然促使我們要求團隊在未來幾個月內加速在整個分行網路推廣這項舉措。

(Operator Instructions) Our next question comes from George Tong with Goldman Sachs.

（操作員指示）我們的下一個問題來自高盛的 George Tong。

You mentioned that the merger is on track to close in 3Q. Can you discuss what remaining closing conditions there are in order to complete -- successfully complete the merger? And then also the divestiture in the U.K., any elaboration on that? Sounds like something might be announced over the next several days.

您提到合併預計在第三季完成。能否談談為了成功完成合併，還有哪些剩餘的成交條件？還有英國業務的剝離，能否詳細說明一下？聽起來未來幾天可能會宣布一些消息。

Sure. George, this is Brett. As we said, we're still targeting late Q3 for the close. There is 3 or 4 remaining steps that we need to take care. As you characterized, the first one that Terminix needs to execute is the sale of our U.K. and Norway assets. And I'm really proud of the progress our team has made there. And we've run a pretty robust process, a lot of interest in those 2 assets. And we would expect in the next week or so to be in a position to announce the future direction of those 2 assets in our company. So we're on track there to get that condition to close completed.

當然。喬治，我是布雷特。正如我們所說，我們仍然計劃在第三季末完成交易。還有三、四個步驟要我們處理。正如您所說，Terminix 需要執行的第一步是出售我們在英國和挪威的資產。我為我們團隊在這方面取得的進展感到非常自豪。我們已經運行了一個相當穩健的流程，人們對這兩項資產很感興趣。我們預計在下週左右就能宣布這兩項資產在我們公司的未來發展方向。所以，我們正在按計劃完成交易條件。

In parallel, of course, we're working on the proxy, and all that work is on track. The SEC, of course, needs to review that proxy and mark that proxy effective, of course. That will allow us then to send the proxy to our shareholders. We expect the vote then to be taken probably 30 to 45 days later.

當然，同時，我們也在著手製定代理投票方案，所有工作都在按計畫進行。當然，美國證券交易委員會 (SEC) 需要審核該代理投票方案，並將其標記為有效。這樣我們才能將代理投票方案發送給股東。我們預計投票將在 30 到 45 天後進行。

So all of those major events, we're still comfortable with the late Q3 time line. And it's probably worth noting here that these items that we talked about at this point are very procedural in nature. So it's just a matter of us executing the process. And the team is fully focused on this, and we remain committed to this late Q3 closing time line.

所以，所有這些重大事件，我們仍然對第三季末的時間表感到滿意。值得一提的是，我們目前討論的這些事項本質上都是程序性的。所以這只是我們執行流程的問題。團隊正全力以赴，我們仍然致力於在第三季末完成這項時間表。

Yes. And George, this is Bob, by the way. And one thing we would like to call out also related to the U.K. and Norway is those 2 assets combined represent about $60 million annually on -- from a revenue perspective and less than $10 million from an EBITDA perspective.

是的。喬治，順便說一下，我是鮑伯。我們還想指出一點，關於英國和挪威，這兩個國家的資產合計每年約為6000萬美元——從收入角度來看，但從EBITDA角度來看，不到1000萬美元。

Our next question comes from Brian Butler with Stifel.

我們的下一個問題來自 Stifel 的 Brian Butler。

Can we start with the EBITDA bridge that you provided, which was very helpful for the first quarter? Can you talk maybe about how that trend in the give and takes look heading into the second quarter and maybe the remainder of 2022?

我們可以從您提供的EBITDA橋樑開始嗎？它對第一季非常有幫助。您能否談談這種交易趨勢對第二季度甚至2022年剩餘時間的影響？

Yes, we got to be careful, obviously, we're not providing any type of guidance here. But we're very similar to what we have mentioned last quarter is that, obviously, our revenue conversion rate should be consistent with what we said in the past, which is roughly a 30% flow-through. The labor investments that we made in the first quarter will obviously continue through the second quarter. We did make some investments in the back half of last year. So they'll start to taper off in the back half of the year. And then there are some investments in Terminix Way. It was only $1 million in the quarter, but it is a significant amount during the balance of the year. And then the largest headwind, I would say, would be fuel. Even though we are hedged, it is at about $1 per gallon more than the prior year, and on the usage of 10 million to 12 million gallons, it's a rather significant headwind.

是的，我們必須謹慎，顯然我們不會提供任何形式的指引。但與上個季度提到的非常相似，我們的收入轉換率應該與我們過去所說的一致，大約是30%的流轉率。我們在第一季進行的勞動力投資顯然會持續到第二季​​。去年下半年我們確實做了一些投資。所以這些投資將在下半年開始減少。此外，我們也在Terminix Way進行了一些投資。本季只有100萬美元，但在今年餘下的時間裡，這筆投資已經相當可觀了。我想說，最大的阻力是燃料。即使我們進行了對沖，燃料價格也比去年每加侖高出約1美元，而對於1000萬至1200萬加侖的用量來說，這是一個相當顯著的阻力。

Maybe just to add some color here, Brian, to some context here. But first of all, we're right on where we thought we'd be at the end of Q1 here. If we go back to last year, if you remember, pretty strong margin performance in Q1 of last year was driven by probably the, unfortunately, lowest labor staffing levels that we've seen in a long time coming out of COVID, so we building our staffing levels really positions us well heading into the peak quarters of Q2, Q3. If you remember last year, we had some headwinds, I'd say, due to shortness in staffing and when you overlay the Copesan in-sourcing work that we took on in Q2, Q3, that certainly created a little bit of a headwind for us. So we're now lapping that this year in a much stronger labor position as a result of the investments that we made in Q1. So we feel like we're well positioned to capitalize on probably accelerating performance in our business in the second half of the year.

布萊恩，我只是想補充一下背景。但首先，我們第一季末的業績正處於我們預期的水平。回顧去年，如果你還記得的話，去年第一季相當強勁的利潤率表現，很可能是由於疫情爆發以來，勞動力配置水平處於我們長期以來最低的水平。因此，我們提升人員配置水平，確實讓我們在第二季和第三季的業績高峰期佔據了有利位置。如果你還記得去年，我們遇到了一些阻力，我想說，由於人員短缺，再加上我們在第二季和第三季承接的Copesan內部採購工作，這無疑給我們帶來了一些阻力。由於我們在第一季進行的投資，我們今年的勞動力狀況更加強勁。因此，我們覺得自己已經做好了充分的準備，可以利用下半年業務成長的潛力。

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

是的。我認為我們過去就全年利潤率擴張進行過一些討論，我認為我們正在朝著布雷特所說的目標前進，並且正在實現這一目標。

Okay. That's helpful. And then as a follow-up, when you talk about organic growth in the commercial, it was negative in the first quarter but looking to trend positive kind of in 2022. How does that work through the year? Is that going to just be -- it's going to be positive a little bit kind of going into second, third? Or is it going to really be back-end weighted with a lot more organic growth potentially in the third or fourth quarter?

好的。這很有幫助。接下來，您談到商業業務的有機成長，第一季是負成長，但預計2022年會呈現正成長趨勢。全年情況如何？是在第二季或第三季略有成長，還是在第三季或第四季度，有機成長會大幅增加？

Yes. I think, first of all, maybe just to clarify, yes, as reported, we were down 1%, but we adjust for FX, disinfection actually plus 2% growth organically here. So -- and that's a sequential improvement versus Q4. So we're encouraged by the momentum that we're seeing in our commercial business on the domestic front and an improving environment, I think, now in Q2 in our international business. So we would expect to see, I think, acceleration in our commercial business as we progress through the year here.

是的。首先，我想澄清一下，正如報告所述，我們的業績下降了1%，但我們根據外匯、消毒等因素進行了調整，實際上有機增長了2%。所以，與第四季相比，這是一個環比的改善。我們對國內商業業務的良好勢頭感到鼓舞，而且我認為，第二季國際業務的環境正在改善。因此，我們預計，隨著今年的推進，我們的商業業務將會加速成長。

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

目前沒有其他問題。女士們，先生們，今天的電話會議到此結束。感謝您的參與，請您掛斷電話。祝大家有美好的一天。