Breaking News: Dec. 1998, LandCare USA 3rd Quarter

LandCare USA Reports Third Quarter Results

After a busy year of mergers and acquisitions, LandCare USA Inc., announced its third quarter results, an increased credit facility and additional acquisitions in its third quarter report.

For the quarter ended Sept. 30, 1998, LandCare USA reported revenues for the quarter of $55.5 million, an increase of 58 percent over pro forma revenues of $35.2 million for the same period last year. Pro forma net income for the quarter was $2.4 million, or $0.15 per share, compared to pro forma net income of $1.6 million, or $0.11 per share for the same period last year.

“We are pleased with our results for the quarter, which are in line with analysts’ expectations. Before including acquisitions, our founding companies generated 31 percent revenue growth for the quarter and 24 percent for the year-to-date compared to 1997, demonstrating that they continue to grow considerably faster than the industry,” Bill Murdy, chairman and chief executive officer of LandCare USA, said in the published report.

“In addition, the gross profit margin for the third quarter of 22.1 percent exceeds the 21.1 percent margin for the comparable period in 1997. In addition to our acquisition program, we continue to focus on the growth and profitability of our existing operations,” Murdy added.

During September, LandCare acquired Lighthouse Nursery, Inc., Hilton Head., S.C., and Schumacher Landscaping, Inc., Boston, Mass. These two companies have annualized revenues of $4 million and $15 million respectively.

The company has also completed four additional acquisitions since the end of the third quarter. The organizations are: Landtrends/Miramar, San Diego, Calif.; Golden Bear Arborists, Inc., Monrovia, Calif.; Real Property Maintenance Inc., Englewood, Colo.; and Albuquerque Grounds Maintenance, Inc., Albuquerque, N.M. Together the companies have an annual revenue run rate of about $35 million.

“Following these acquisitions, LandCare comprises 23 companies that service approximately 60 percent of the top 40 commercial real estate markets in the United States,” Murdy stated in the article. “In addition, Golden Bear, which provides primarily tree services, will help to accelerate LandCare’s integration of tree services with traditional landscape maintenance.”

Also following the end of the quarter, the company expended its bank credit facility from $55 million to $110 million.

The credit line expansion will be crucial to Land-Care USA’s ability to continue financing acquisitions, according to its third quarter report.

“The Company intends to continue aggressively pursuing acquisition opportunities. It is believed that the ServiceMaster merger will provide the Company with the liquidity required to continue its acquisition plan,” noted the report. “Although management believes that the Company will generate sufficient cash flow from operations to fund its future operations, there can be no assurances that sufficient capital will be available to the Company at the time it is required or on terms acceptable to the Company.”

“We are extremely pleased to increase our credit facility with a group of strong banks who can support the company’s growth in the future. It was particularly gratifying to receive such an enthusiastic vote of confidence in what has recently becomes a very difficult credit market in general,” Peter Forbes, LandCare’s chief financial office, explained in the article.

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