[PCO News] The Long Road Back

It’s been a year since Hurricane Katrina forever changed the landscape and way of life for Gulf Coast residents, including PCOs who built thriving businesses in an area often referred to as the nation’s "termite belt."

PCT reported on Hurricane Katrina’s impact on the pest control industry for our October 2005 cover story "What’s Next?" Included in this coverage were first-hand accounts from leading PCOs.

How are PCOs doing one year after Katrina? PCT checked in with many of the same PCOs we spoke to last year, as well as several others, and filed this report.

Eddie Martin

Terminix Service Co.

Metairie, La.

As a lifelong New Orleans resident, Eddie Martin, owner of Terminix Service Co., Metairie, La., was devastated and saddened by the damage Katrina caused to his city. But even in the bleakest of times Martin did not ever consider leaving.

"It’s been a disaster for everyone but we just have to look forward instead of backwards," he said. "It’s our town, it’s where we’ve been for generations, it’s where we want to live. It has its own personality that we are used to. It’s too difficult to leave."

Like others in his area, Martin, his management team and his employees, regrouped and found other ways to supplement lost pest control revenues with additional services, including mold work. These additional services have generated enough money that Martin estimates his 2006 revenues will be at most nine percent short of 2005 revenues. Martin estimates these supplemental services will account for 6 to 8 percent of 2006 revenues. However, these are mostly one-time services; thus, there still is uncertainty about the future since many of the company’s lost customers provided fixed income (in other words, these were customers under contract for renewal services).

Martin said the process of regaining (and attracting new) employees has been challenging. "The main reason is they have no housing," he said. "Numbers-wise, we are probably close to where we were before the storm. But we are short in our inspection department. You can’t put someone out there that you just hired a few months ago to inspect houses. We have the people but we are behind on the experienced people."

Competition for labor has been fierce. For example, Martin said a fast-food restaurant was offering $12 an hour with a substantial signing bonus.

Martin added that it is difficult to gauge the impact of the storm on termite populations since so many residents have not returned, but he believes numbers are rebounding. He also said that since so many homes were missing doors and windows, dogs, rats, raccoons and other wildlife pests had free roam of homes; as a result, flea populations flourished.

Gordon Redd

Redd Pest Solutions

Gulfport, Miss.

Gordon Redd, president of Gulfport, Miss.-based Redd Pest Solutions, expressed optimism about the rebuilding effort in South Mississippi.

"There is going to be a resurgence of growth that will make South Mississippi better than we ever expected," he said. "We have the commitment of local officials, state government, national government and professional planners who are dedicated to making South Mississippi more beautiful than ever before. Therefore, I believe the pest management industry is going to progress extremely well."

Currently Redd reports that he has seen a 15 percent reduction in core business that existed pre-Katrina. This reduction is from customers who lost most, if not all, of their residences or businesses, he said. The percentage was greater than this just following the hurricane and has gradually improved month to month thereafter. In addition to existing customers returning, Redd Pest Solutions has acquired many new customers (new sales to date were up by 53.5 percent, Redd reports). Thus, as of August, Redd’s customer base actually had increased by 15 percent.

"We have fortunately acquired customers who previously may not have used a professional pest management operator," Redd said. "Just as it did to the communities along the Gulf Coast, the hurricane devastated and scattered nature too.

"We have seen the influx of many pests moving into homes and businesses since the storm. Ants, smokybrown cockroaches, flying pests and especially spiders, have really been a problem this year. In the last few months, black widow spiders have really been a problem in and around many buildings. The Asian cockroach has been a real pest in some of our commercial and industrial accounts."

Currently, Redd Pest Solutions has focused much of its efforts on the general pest control market, but Redd believes future growth will come from acquiring other pest control companies and from pretreating newly constructed/reconstructed structures for termites.

Iley Coleman

Coleman’s Pest Control

New Orleans, La.

It’s been a slow recovery process for Iley Coleman, owner of Coleman’s Pest Control. The vast majority of Coleman’s customers were in the city of New Orleans. "My customer base is gone," he said. "They are just scattered all around."

"I’m not rebounding real well for various reasons," he said. "We don’t have all the equipment I had prior to Katrina as well as vehicles. I am operating one vehicle trying to stay afloat, but I am having to use it to haul material back and forth to renovate my office space and my house. As a result I am not able to generate the money I used to."

Coleman said that prior to the storm he had three employees, but now he just has one full-time employee and one part-time employee. He currently operates out of a trailer and does not have all of his office equipment (e.g., copy and fax machines), and the computer he is using is more outdated than the one he lost in the storm.

In time, Coleman said he believes his customer base will be as large as it was before, but he believes it will be changed. "I think that the individual customers I will get will be better able to pay," he said. "I have been servicing people that can’t always afford it. I’ve been hoping to build upon that because I feel they deserve just as high a quality of life as anyone else. My prices have not been as much as it should have been because of some of my customers’ ability to pay."

Coleman said he has working hard to "hold on" and continue growing his business.

Wayne Zimmerman

Orkin Pest Control

New Orleans, La.

Wayne Zimmerman returned as manager of Orkin’s New Orleans branch in April 2006, and has overseen the branch during much of its recovery. Zimmerman said that immediately after Katrina, the branch lost 50 percent of its general pest control customer base. Throughout the year, however, Zimmerman said Orkin has been able to re-capture about half of that lost customer base.

Zimmerman said that overgrown grass and vegetation have created conditions conducive for pests like American cockroaches and rodents. But the biggest opportunities for growth, he thinks, will be in the termite pretreat market. "The rebuilding of the city lends itself to the pest control market — especially the pretreat market," he said. "We are hoping to keep the customers we have and grow our pretreat business 8 to 10 percent per year."

Zimmerman said Orkin is helping New Orleans rebuild through efforts such as a recent rebuilding project undertaken by the Orkin Ready Response Team. In July, this volunteer unit of Orkin professionals, working in partnership with several national non-profit partners, helped treat 98 severely flood-damaged homes in New Orleans for mold infestation.

Working with the National Center for Healthy Housing, Orkin donated its employees’ time and services to assist Catholic Charities’ Operation Helping Hands and the Association of Community Organizations for Reform Now’s Home Clean-Out in efforts to clean up neighborhoods and restore homes. After volunteers from these organizations identified and gutted damaged homes, many of which are occupied by low- to mid-income, elderly or disabled residents with little to no flood insurance, Orkin’s volunteer team of 13 went to work.

Ernie Esteve

Billiot Pest Control

Harvey, La.

Ernie Esteve, manager of Billiot Pest Control, estimates that his company lost 300 to 500 customers due to Katrina. Hard hit areas include St. Bernard and Orleans parishes.

Esteve said that pest control has taken on a whole new job description post-Katrina. "We got a call from a guy who had a flea problem. We brought a lawnmower. We had to cut his yard before doing the flea work," Esteve said "It’s not the norm. After (Katrina) there is nothing normal."

Esteve said he "has all the respect in the world" for the smaller operators who have stayed and are trying to make a go of it. "There were guys in the middle of it whose trucks and offices got wiped out who have tried to piecemeal it back together," Esteve said. "Mold care has been big. Right after the storm, they were cutting trees, cleaning yards, helping haul debris. Just anything to survive."

But there are some signs that the area is returning to normal, Esteve said. Specifically, Billiot is back to performing more pest control work and fewer odd jobs. "The ecological system was thrown out of whack. It is trying to make a comeback, but stronger than before. Crickets, fleas, rodents are all over the place. In city environments, rats and mice are very active."

Additionally, Esteve said the storm’s aftermath revealed previously unknown termite damage to structures, so Billiot has been able to secure new termite contracts.

Esteve too, believes New Orleans will be back. "It’s going to be rough and it is going to take years, but I can tell you the pest control industry here is making a big difference in the community. As an industry we help protect pets and property and you can see it first-hand here."

Ashley Quirk

Quirk’s Pest Control

Slidell, La.

Ashley Quirk, owner of Slidell, La.-based Quirk’s Pest Control, was one such small operator who found himself doing whatever it took to survive following Katrina. Quirk had just gone into business himself on Aug. 20, just nine days before Katrina hit.

"I had just finished depositing my first week’s pay and I was evacuating at the same time," he said.

A lifelong Slidell resident, Quirk was in the process of building his business by using his contacts and prospecting. His office, which was in his home, as well as his truck, was flooded with more than six feet of water.

Following the storm, Quirk went door-to-door and greeted people. Services that Quirk’s Pest Control offered that were in demand included pressure washing and mold work.

Slowly but surely Quirk’s business has been growing. He started out with 15 customers and now regularly services 75 to 100 customers per month. Ants, rodents, cockroaches and occasional invaders such as silverfish have been active post-Katrina.

Quirk is optimistic about the future because Slidell is seeing a housing boom as many flooded-out residents of low-lying New Orleans neighborhoods are rebuilding in Slidell.

Bruno Milanese

Bay Pest Control

Biloxi, Miss.

Similar to Gordon Redd, Bay Pest Control President Bruno Milanese has been able to recoup lost revenues through new business. Although Bay’s customer base is down 20 percent from 2005, Milanese reported that his August revenues in 2006 were in line with August 2005 revenues, thanks to new customers.

Bay’s biggest financial hit was to the commercial side. The company serviced a lot of casino spin-off businesses, such as laundry and vending facilities, and only some of the Biloxi/Gulfport area casinos have reopened.

Milanese said his company is doing a brisk pre-treat/retreat business. "On the residential side, the revenues have come back and a lot of the revenues are new business," he said. "People that may not have had pest control or termite before returned to homes with walls and studs opened up that revealed termite damage. You also are having homes built or rebuilt, so this is truly new business."

Although the termite pre-treat market is hot, Milanese believes PCOs can be successful offering general pest control. "I think a PCO could have sustained himself during this time, because immediately after the storm calls kept coming in," he said. "Having no electricity and no water for weeks up to a month led to a lot of insect problems. Insects associated with sanitation, especially drain flies, were huge problems."

Also like Redd, Milanese believes Mississippi’s Gulf Coast is going to rebuild stronger than ever. "I’ve talked to several people in the construction industry who have rebuilt hurricane-ravaged areas, and they consistently have said that in the next five years businesses will be generating revenues at or exceeding pre-Katrina levels."

The author is Internet editor of PCT Online.