Good morning, and welcome to the Rollins Incorporated First Quarter Earnings Conference Call. Today's call is being recorded. I would now like to introduce your host for today's call, Marilyn Meek. Ms. Meek, you may begin.
Thank you. By now, you should have all received a copy of the press release. However, if anyone is missing a copy and would like to receive one, please contact our office at 212-827-3746 and we will send you a release and make sure you are on the company's distribution list. There will be a replay of the call, which will begin 1 hour after the call and run for 1 week. The replay can be accessed by dialing 1-eighteighttwothreeone 112 with the passcode 6,386,676.
Additionally, the call is being webcast at www dotviavid.com and a replay will be available for 90 days. On the line with me today is Gary Rollins, Vice Chairman and Chief Executive Officer Harry Cincus, Senior Vice President and Chief Financial Officer and Treasurer and newly elected Chief Financial Officer and Treasurer, Eddie Northen. Management will make some opening remarks and then we'll open up the line for your questions. Gary, would you like to begin?
Yes. Thank you, Marilyn, and good morning. We appreciate all of you joining us for our Q1 2015 conference call. Harry will read our forward looking statement and disclaimer, then we'll begin. Our earnings release discusses our business outlook and contains certain forward looking statements.
These particular forward looking statements and all other statements that have been made on this call, excluding historical facts, are subject to a number of risks and uncertainties, and actual risks may differ materially from any statement we make today. Please refer to today's press release and our SEC filings, including the Risk Factors section of our Form 10 ks for the year ended December 31, 2014, for more information and the risk factors that could cause actual results to differ. Thank you, Harry. Before I delve into our Q1 results, I wanted to take a moment and thank Harry for his 17 years of service to Rollins as our CFO. As most of you know, he will be retiring from our company on May 1.
Harry's leadership, talent and dedication played a major role in the growth and success of Rollins. We'll miss him greatly and wish him and his family all the best in retirement. Be assured however, I'm not going to let him stray too far. I would also like to take this opportunity to welcome Eddie Northen to our company. We're extremely pleased to have him join Rollins as our new CFO.
Eddie comes to us from UPS and brings not only a wealth of financial experience, strong international exposure, but also a great background in routing and supply chain management. These areas are extremely important to us as we continue to grow our company. Eddie, please tell everyone a little bit more about yourself. Thank you, Gary.
I want to also thank Harry for his leadership and support during my transition period. Filling Harry's shoes will be quite the task, but the transition period that Gary has allowed and Harry has taken with me definitely has me ready to take the next step. I had the opportunity to spend time with a number of Rollins team members in Atlanta and in the field as well as meet with numerous investors. This exposure has made me feel even more privileged to be a part of this exceptional company. During my 30 years at UPS, I was extremely fortunate to gain invaluable operational and finance experience.
Early in my career, I worked on the front line and drove a package car. This time enabled me to learn the business from the ground up and helped me to prepare me for the future opportunities in front of me. After spending time in internal audit and several Director of Finance roles around the U. S, our family moved to Hong Kong in 2006, where I was the CFO of the Asia Pacific region. A few years later, I returned back to the States, where I held a similar role as Vice President of Finance of the West Region.
Most recently, I was Vice President of Finance of the Global Business Service Group based here in Atlanta. I believe the fact that UPS and Rollins are both route based businesses with very similar cultures will help me with the transition into my new job and enable me to focus as Harry has on the long term financial strength of Rollins. I'll now turn the call back to Gary.
Thank you, Eddie. Well, winter continued its roll through part of the quarter, particularly in the Northeast. However, this year for much of the quarter, we were blessed with warmer weather in most other parts of the country. New customer demand increased, coupled with our strong recurring revenue resulted in our generating both record revenue and profit for the quarter. Revenues grew 5.6 percent to approximately $331,000,000 compared to $313,000,000 in the prior year's Q1.
Net income increased 17.5 percent to over 30,000,000 dollars with EPS of $0.14 per diluted share compared to $25,800,000 or 0 point 12 dollars per diluted share for the 1st quarter of last year. All of our business lines experienced good growth with residential pest control up 6.2%, commercial pest control grew 4.2% and termite was up 8% for the quarter. Harry will provide greater detail on the contributions acquisitions and the negative currency impact as well. Leads, lead closure and prices were all up. Momentum and leads that we saw last year carried through the Q1 and finished especially strong in March.
Typically, a strong March is followed by a weak April. At this point, we're seeing a contradiction and we could enjoy a strong March April. As many of you might recall, during the Q1 of each year, we conduct tests to determine where customer pricing opportunities exist. This year's testing again shows that our service rates remain inelastic. We believe that this is the result of our strong brand preference and the delivery of value that we provide to our residential and commercial customers.
This past quarter, we executed on some strategic initiatives to help ensure our ongoing growth and profitability. Let me highlight just a few of these initiatives. Employee training has been and will continue to be extremely important to our company. To that end, we recently hired a new Director of Training, John Torres to help us further advance Rollins' award winning training programs. By way of background, John brings over 25 years of experience in creating and implementing learning initiatives that drive positive business results.
Almost every company does training, but many don't measure the effectiveness of the training. And one of John's objectives is to help us improve the tracking and measuring of our training results. We believe that this will lead to better outcomes and help to ensure that we remain a national leader with our training programs. Another training initiative is a new hands on training that our call center agents are receiving at the Rollins Training Center here in Atlanta, where they experienced training in our model home. The company sales and service agent teams nearly double in the busy part of the pest control season to meet the seasonal business demands.
We want to ensure that these new employees are well trained and are able to address our prospects' questions and requirements. They spend the day at the center where the agents can see firsthand how technicians interact with new customers and observe the treatments that they provide during a pest control initial start. That's the customer's first service. When they leave, their ability to paint a picture for our prospects of what a technician does provides confidence and builds value in our services. As many of you are aware, we host a leadership meeting in January of each year with our top management that comes from all over North America.
During this meeting, year. This year's main theme was focused on hiring the right people. Every manager in our company recognizes 1st and foremost that our business is a people's business and it requires great employees to meet our customers' expectations. As the customers' needs and anticipations continue to increase, it is more important now than ever that we have the right person in the right job. We've concluded that it's not the what, but the who that matters.
And one of the things that we're doing is refining our recruiting and interview methodology. We're improving our processes to better identify and hire the right people. Our training in this area is really catching on throughout the company and it's being driven down into the different brands and divisions. As Rollins' President and COO, John Wilson put it, if we do a great job in selecting the who, the what will be much easier. We're continuing to successfully roll out our CRM system or what we refer to as BOSS, branch operations support system.
And we now have 118 Orkin branches converted. It's important to note that even as we bring additional Orkin branches online, we're also taking steps to make technology improvements to other brands in order to improve their customer service and profitability. One such example is at TruTech where they are now in the process of having their technicians use tablets for all their work order processing. Additionally, they are able to handle checks and credit card payments on their tablets. In March, we turned on the switch in the converted branches for the BOSS automated work order processing feature.
We're currently in test and the results thus far are very promising. In the old system, the technician at the end of the day would bring his or her work tickets back to the branch where they had to be keyed into the system and reviewed by an admin. Depending on the volume, this process could take days. What we discovered with our new automation was that less than 1% of the work orders actually needed human intervention. In tests, the average processing time for new work order completion on the iPhone can be done in 18.5 minutes versus the manual paper handling that could take 2 days to get service posted to a customer's account.
We've now freed up approximately 2 hours of an admin's time each day, which allows him or her to take on additional value added projects such as collections and customer schedule. We have other initiatives centered around BOSS, which we're working on and Eddie and I will provide you further updates as they roll out. These initiatives include further improvement of our routing capabilities and a management dashboard, which will allow the service manager to track the progress of technicians throughout the day. I think this gives you a snapshot of several improvements that are provided by BOSS. This is a work in progress and going forward, we will continue to add more platforms and routines.
Like most computer systems, it doesn't all come day 1. BOSS will help us improve our productivity, our margins and most important our customer experience. Growing our business through acquisitions is also an ongoing company goal. We recently enhanced our wildlife line of business with the acquisition of Critter Control, the franchisor of the nation's leading wildlife control company. This has indirectly made us the largest wildlife control company in the country.
For those of you who aren't familiar with this business, these services include trapping and removal of wildlife, exclusion of wildlife from residences and other buildings and the repair and remediation of damages caused by wildlife. Top pest includes squirrels, raccoons, bats, birds and snakes. The market in the U. S. For residential and commercial wildlife control is approximately $300,000,000 and we believe that there's a tremendous opportunity to grow this business and capitalize on the industry's leading brand.
We're off to a good start for the year and excited about all the opportunities that we have to continue the growth and improvement of our company. I'll now turn the call over to Harry. Thank you, Gary for those kind words. It's hard to believe that 17 years have gone by since I joined Rolex. I've been thinking about that next chapter in my life for some time.
I was told a long time ago that the best time to start thinking about your retirement is before the boss does. Anyways, I'm reminded of a Vince Lombardi quote, the harder you work, the harder it is to surrender. And believe me, it's hard to leave such a great company with such great people. However, I am confident that I'm leaving it in good hands with a future as bright as ever. Let's get to the numbers.
I'm sure no one dialed in today to hear me wax poetic and in fact, I hope everyone has forgotten that one call with my poetry. Eddie, I wouldn't recommend trying poetry here. Looking at the numbers, company reported 1st quarter revenues of $330,900,000 an increase of 5.6% over the prior year's Q1's revenue of $313,400,000 We experienced that growth across all of our family of brands if measured in constant currency. We'll talk more about that in a minute. Net income increased an impressive 17.5 percent to $30,300,000 compared to $25,800,000 with EPS up 16.7 percent to $0.14 versus $0.12 per diluted share last year in the Q1, a good start to the New Year.
Having grown up in the Northeast, I've had to learn to speak a little more slowly as I've migrated down South. And when it comes to explaining our revenue between the impact of currency, acquisitions and with and without fumigation, it's important to go slowly. On the surface, revenue is up 5.6%, good growth among all brands and all service lines. Residential pest control is up 6.2%, commercial pest control up 4.2% and termite up 8%. With operations in Canada and Australia, the strong dollar was not our friend.
With the loonie down nearly 12% from last year and the Australian dollar down more 14% in total, it cost us nearly 0.9 percent, I. E. 90 basis points on growth. Ouch. On the other hand, the more significant acquisitions we made over year, all pests that we've lapped in mid February, statewide, PermaTree and our most recent acquisition Critter Control contributed 1.9%.
Put that all together and it means our business excluding currency, excluding acquisitions grew 4.6% versus 4.2% in Q4. Residential Pest Control business, which represents 40% of our revenue, continues to build momentum. For the quarter, it grew 6.2 percent ex acquisition 5.2 percent termite, which makes up 17% was up 8%, excluding acquisition 4.8 percent and commercial pest control, 42 percent of our revenue was up 4.2 percent excluding acquisition 2.5. We're pleased with the growth we are showing for residential pest control and termite. Commercial was heavily impacted by the weak Canadian and Australian dollar as most of our business in these countries is commercial.
If you just look at our domestic commercial business, excluding acquisitions, it grew 4.4%, which does include a 40 basis point lift from fumigation. Fumigation had its best growth quarter in some time, up 12.9%. As we have previously stressed, it's especially important for us to add recurring residential pest control customers to our customer base. Be it good fortune, better weather or just great marketing, we saw strong lead growth, improved closure percent and average price, which enabled Orkin to achieve significant growth in sales in a quarter not always known for its robustness. Last year, we reported that we had nearly 4,000 less calls in the Q1.
This year, calls were up 20,000 and it's encouraging to see the trends continue into April. Residential Pest Control isn't quite like other consumer businesses. I read the other week in the Wall Street Journal that retailer sales rose in March, but U. S. Consumers showed signs of continued caution.
Well, thankfully not when it comes to buying pest control. I love repeating Gary's quote that rats and roaches don't read the Wall Street Journal. With insects being the public's 3rd greatest fear and the ever increasing concern over health and safety, the phone has been ringing. We didn't see the same degree of strong consumer response when it came to termite, but with a modest increase in leads, some price improvement realization, we had a respectable Q1 growth. Home team's increase in new home pre treat certainly was a good help.
Speaking of HomeTeam, they came out of the gate fast this year. And as I said before, while trying to figure out HomeTeam, don't waste a lot of time looking at the national statistics on new home starts for sales The national picture doesn't represent well the 50 markets they are in or the tale of installs versus turn ons. Theratex, built in pest control defense systems, installs in new homes was up 7.5% for the quarter. Termite pretreat work was up 8.1% and we saw the largest month over When it comes to revenue, the last thing we're When it comes to revenue, the last thing worth mentioning is bedbugs. Quarter is not typically the big quarter
for growth in this service.
The last couple of years, it has been only 15% to 16%. However, this year, we saw the largest first quarter dollar growth since we've been tracking it year the year to year changes in 2011, up over a 25% increase to $14,600,000 Sadly, for our listeners, the residential bed bug business grew 33%. Unfortunately, bed bugs are good hitchhikers and people are taking them home with them when they travel. As I said before, bed bugs do not make good pets. 1 of the shareholders gave me a good lead on some reading material now that I'll have more time.
It's the number one Amazon bestseller in the entomology category. It's called Infested by Brooke Borrell and I've read that it's a fun wild romp through the wily world of bed bugs. I don't want to give too much of the book away, but I've been told that it's a real page turner. Gross margin for the quarter improved to 49.2% for the Q1 versus 48.5% the prior year. The quarter benefited from improved service administrative salaries with lower fleet costs due to the drop in fuel, while maintaining good cost controls across most spending categories.
Depreciation and amortization expense for the Q1 increased $567,000 totaling $10,800,000 Depreciation was $4,600,000 increasing $1,200,000 a $1,000,000 of the increase related to our new BOSS system. Amortization of intangibles was $6,200,000 which decreased nearly $700,000 as some of the older 8 to 10 years older acquisitions have become fully amortized. For the full year, amortization of intangibles typically from the value assigned to acquired customer contracts will represent a significant after tax non cash charge of approximately $0.07 to $0.08 this year. Sales, general and administrative expenses for the Q1 increased $4,700,000 or 4.7 percent to 31.9 percent of revenues, decreasing from 32.1% from the Q1 last year. The decrease in margin percent is due to being able to leverage our administrative salaries and other costs, keeping them relatively flat to last year despite the increase in revenues.
The margin improvement was partially offset by the $1,200,000 in this year's higher cost related to the CRM system implementation as well as higher sales salaries and professional fees related to procurement and acquisitions. Income before taxes was up 12.7% in the quarter. We caught a break on the tax rate this quarter, which dropped to 35%, having identified some discrete items, which unfortunately won't repeat. We expect the tax rate to return to potentially 38% next quarter. As a result, our net income was up 17.5% for the Q1.
I think that qualifies as Gary said, a good start to the New Year. Our balance sheet remains strong, no surprise there. We continue to look for more opportunities to reinvest in our business. This quarter, we spent nearly $30,000,000 on acquisitions and $8,000,000 on CapEx. To our bankers' chagrin, we won't run out of cash anytime soon, ending the quarter with $93,000,000 in cash and no debt.
One interesting facet of the business that I enjoyed pointing out is that we continue to have more customers prepay us for services over $100,000,000 recognized currently on our balance sheet as unearned revenue than those who owe us for current services $85,400,000 in trade and finance receivables, which we believe the new BOSS system will help us reduce. What a great business model we have. Before I turn the call back to Gary, let me express our appreciation and thank you to all our associates and others whose hard work and dedication has gotten us off to a good start in 2015. It is with bittersweet emotions that I leave to begin my retirement. I'm excited about what the future offers and enjoying the rewards of a very long career, but I am sad to say goodbye to so many great people I've had the opportunity to work with here at Rollins.
It is through their combined efforts that Rollins is great and I will miss them all. Likewise, I will miss the people that I've gotten to know in the investment community. Thanks for all you do and the positive impact you've had on me and my career. With that, I'll now turn the call back to you, Gary. Thank you, Harry.
We're now ready to open the call for any questions that you might have.
We'll take our first question from Dan Dublow at Jefferies.
Hey, guys. Thanks for taking my question. I actually have 2 questions. Hey, I got 2 questions, one for actually one for Eddie and then I have a question on the operational side. So my question for Eddie is, look, you've been at the company now for a few months.
You've traveled around both internal role in branches and you've been I'm sure you've seen every aspect of the company. What are the things that you've seen that you think where do you see the most opportunity actually improving going forward from what you've seen thus far?
Yes, Dan. Thanks. You mentioned having time to spend learning different parts of the business. Gary has been very supportive with allowing me to spend about a month in the operations learning the different operations. And I think what I've tried to do from that perspective is kind of take what I brought with me from UPS and really kind of look at it through those lens.
As I was visiting the operations, one of the things that I saw was really the depth of the management that we have there and how strong they are from a P and L perspective. And I think that's something that we can really continue to use as we move forward. I think that routing and scheduling continues to be an opportunity for us. And Gary mentioned that when he was talking about the BOSS. So I think that we're going to be able to kind of bring those two pieces together.
And in fact, I have kind of some follow-up meetings with the operations over the coming months. And that's really what I where I want to try to spend some time and energy there is to see what and how we might be able to help from that perspective.
Got it. No, thank you very much. And my other question more on the operational side for you or Harry or Gary. You mentioned Gary that the first that you've had warmer weather April was good, March was good. And clearly, you've had the weather hasn't been that big of an impact.
But if I think about sort of the organic growth acceleration ex M and A, ex FX of 4.6% versus 4.2% in Q4, I can't help but think it's not as impressive as I would have wanted it to be given that the compares organic compares are so much easier. So was there is there something that I'm missing? Or is this just the start of an accelerating year? How should we think about that? Thanks.
Well, while the weather wasn't as difficult, I'd point out it doesn't matter how unless you have record highs in January February, you're just not adding a lot of customers during that time frame. So while I think we're more impressed than you are that we did grow in the Q1. Like I said, it's really the strong March that gets it going. But I'll get we'll get as many leads in June as we get in probably January, February, March combined. So again, it's just you have a big base of customers and trying to get that number accelerated takes a lot of new customers.
And I think the exciting number was there are 20,000 20 4,000 more calls this year than last year. Now all those calls don't turn into customers, but it gives you a good shot at them.
Got
it. Okay. Well, thank you very much. And again, congrats to Eddie and a lot of warm regards to Harry as well in your retirement. Thank you.
Thanks, Dan.
The next question comes from Joan Tong at Sidoti.
Good morning, guys. How are you doing?
Good. Wonderful. Thank you.
Good, good. I have a couple of questions here. First off, regarding the new CRM system. Thanks for all the color in terms of all the new
there's more specific that
we can talk about and there's more specific that we can talk about and discuss going forward. And I understand that like all these good stuff is good. But in terms of how you can incentivize people to use the features and use that all these good stuff in the new CRM system. Can you just talk about like how you're going to do that and approach that in terms of making sure your technicians, your managers are all using the CRS M system in a right way?
I think simply that it makes their job easier. I mean, we've had new programs and processes in the past where we really did have to spend a lot of time following up and making sure that they were being utilized. But in this case, the branches love the system. And although we don't have a routing and scheduling put in, but even beyond that it's just a lot more flexible. It's just a better operating system.
So I think that we're blessed that they're going to enjoy it, the ones that are on it enjoy it. Never had we had even when the thing was very immature, do we ever have a branch that says, please take this thing out and just give me what I used to have? So they're very positive. And Eddie, you might share what you saw on your ride alongs.
Yes. Joan, when I was out for the month, I rode with what it what the capabilities were. I mean, making it easier for their interface with the customer, making it easier for them to schedule what it is that they're going to do for their customer, if they need to make changes or adjustments. And I don't really know a lot about the former system. But for technicians as they're trying to teach me about the business and this was something that they wanted to share with me, to me that tells me that they were adopting it very well.
Yes. I just want to say, I think you're going to find like on any curve, you're going to see 20% of the people taking to it and being your power users. And we've identified the bottom twenty who are struggling. In fact, what we're doing is in the way when I say struggling, it's probably could be a misnomer. But what we do is we're measuring the number of calls to the helpline for people who are having problems and call the helpline.
So the branches that are calling more frequently, I. E. Have left more questions about it, we're sending some of the trainers back to those branches to help them overcome the pieces they don't know. So part of it is going to be continued training for and we can measure and that's one of the things we're doing is, if they don't understand it well, they're calling. And so we know who we need to go out and help.
And then I think ultimately, we will find ways to disseminate what the power users are doing and whether we use the trainers to take that to the other branches, best practice. But as both Gary and Eddie have said, there's tremendous excitement in the field. It's making their job easier. They have a cool iPhone and they're more than happy to get rid of what I've started referring to as our turn of the century old CRM system.
That's very good. Thank you for the update. And then on the international side, you guys seems like I just want to get an update on your view in terms of expanding internationally. Is Australia still going to be an area that you're going to focus on? Because I believe in the past you mentioned that area can be as big if not bigger than your Canadian division.
And also maybe Eddie talk about your how your international experience would help Roland maybe over the longer term to maybe even accelerate the international expansion strategy there?
Yes. We continue to be excited by Australia. Yes. We continue to be excited by Australia. I think we realize to be successful there.
We have to follow the same model that we did in Canada and that's to be in all major cities. We're not there yet today. We continue to explore opportunities there. But we're patient. We'll find the right companies with the right culture.
And we will build out our network continue in
Australia. Yes, Joan, I've had a chance to spend some time with Tom, who's in charge of our international operation. In fact, I'm going to be attending the international franchise meeting that they have their annual meeting. So I'm going to get a chance to learn more about where we are right now, what is working for us right now, and then also talk about that as we're moving forward in time. So I'm really kind of going through the learning curve of that.
But Tom and I had some good conversations. But I think that right now the focus is in the areas where we know we have opportunities and of course that being Australia as we've already talked about.
Okay. Thank you very much.
Thank you.
We'll go next to Joe Box at KeyBanc Capital Markets.
Hey, good morning, everyone. This is Sean Egan on for Joe Box. I was hoping to dig in a little bit to the gross margin expansion. I was hoping you could maybe either quantify or place an order of magnitude kind of what that fuel savings benefit was? And within that fuel savings benefit, what was attributed to fuel price declines versus any route optimization efficiencies that you had?
I wish I could answer that question that I could measure my route to operation efficiencies that closely. In fact, I know I drove more miles this Q1, but I have a lot more customers than I had last year this time. And so I can't break it down that finally. I do know approximately the fuel savings, which isn't all CSP, some of it is reflected in SG and A, ran I think it was like around 2 point $3,000,000 is what we estimate the savings in fuel was. And pretty much offsetting that was increased cost due to the BOSS implementation and depreciation, which came in at about 2,200,000 dollars So those 2 pretty much offset each other in the Q1.
Okay, great. And then carrying on with depreciation comment that you made, I guess we kind of expected it to be higher than it came in at given the CRM implementation. So should we expect a similar level that we saw this quarter heading forward? Or do you expect that to bump up as you continue to roll out the system?
Well, we certainly haven't finished spending money on the CRM system. So it will be some additional but I think it will be a slow creep as opposed to large bump at this point. Okay. Got
you. Thank you. And then can you just talk about a little bit as to what you think is driving that increased momentum in the residential line? Is it simply a function of better tools for the technicians to close leads? Any color there on what's driving that?
Well, our training, we've spent a lot of time on closure. I addressed a little bit about what we're doing to prepare for the surge in our call center. So we really think that we've got some more upside as far as closure is concerned. Our marketing people say it's all them, but I'm not buying that. I think it's just a combination of things.
I mean, our service sales are up, which is important. We're just kind of attacking the thing from various points and so far it is starting to pay off for us.
And finally last item here on the commercial line of business domestically. Can you comment on any potential weather impacts that you saw during the period or in any kind of ramp through the quarter?
Probably the commercial business would be the least impacted by weather. If you're a restaurant, your doors are open and the pest control company is visiting you. So I wouldn't I don't think weather really had any impact on the commercial business. It certainly would impact the termite. It's kind of hard to your termites aren't going to swarm under 3 feet of snow.
And pest control, you're waiting for the weather to get warmer. It hasn't got well, in general, the weather was better overall, but the Northeast was I was up in Washington, D. C. This weekend and it went down to 38 degrees one night. I was wondering when spring was coming.
But so it's impossible exactly to measure weather. And I think I've said a number of times, it really affects us on the fringe of the business. When is it going to get warm in the spring and when is it get cold in the winter? And then in between, it's a case of our us executing our business plans.
All right, great. That's all for me. Thanks guys.
Thank you. Thank you.
We'll take the next question from Jamie Clement at Macquarie.
Good morning, gentlemen.
Hey. Good morning, Jamie.
I was wondering, Harry, I think or Gary, I'm not sure which one of you is in your prepared remarks. You mentioned you had some numbers around folks who turned on the PayEx systems And the numbers sounded pretty strong. So I was wondering if you could give those again. And also can
you give a little bit of
color in terms of what your impression is as to why you saw the increase? Is this the way you've marketed to them? Is this just sort of natural timing based on what you've seen over the last 4 or 6 quarters or so? Just curious for your thoughts.
Yes. The Teix new customers was up nearly it was up 6% over last year with really strong March month. I think last year actually, I think we were a little disappointed with the capture. We had done reorganization on the sales team and I think we did ourselves a little disservice and might have understaffed or improperly staff the sales effort last year. So I think some now is some of that whether it was better in some of the Florida and Texas markets this year, could be is it the sales team's efforts?
Could be is it people who delayed the they bought the system last year and delayed purchase for a year, but all of a sudden they're seeing they got issues probably. The nice thing about those TAC systems is when a customer wants to take care of this insect issue and he's got that system built in, there's only one company that can service it. So I think it's we're open. It's pent up demand and execution. Very good.
I think I can summarize, if I could just summarize that for a minute. I think it was just and Harry's touched on the move in parts, but just more effort. I mean, we were disappointed last year. The home team people were disappointed. And I think that they have an aggressive plan this year and they just they've been attacking this thing every way that they know and the results are showing that they're successful with it.
Can you remind us how many homes are out there with the system that have not been turned on yet approximately?
I don't think. I think inception to date, as soon as I give you a number, I know I'm going to be wrong, but it's 700,000, 800,000 of these systems have been installed and there's probably close to 250,000 to 300,000 active customers. I could be off on those numbers. So I'm getting old, I need to retire. Harry, you
will be missed.
I think that we can research that for you. I'll get you some better numbers.
Terrific. And Harry, you will be very much missed. Congratulations.
Well, thank you. All right. Okay. Well, I guess that's it. We'd like to thank you for joining us today.
And Eddie and I look forward to the next quarter and we'll continue to work hard to grow and improve our business. Thank you. Thank you.
And that concludes today's call. Thank you for your