Market Watch

SPRAGUE PEST SOLUTIONS

Tacoma, Wash.

Sprague Pest Solutions, which almost exclusively offers commercial pest management services, has seen steady growth in 2005 thus far, according to Co-Owner Larry Treleven. In 2004, the company had a 6 percent revenue increase, which was smaller than it experienced in previous years.

The company serves the Pacific Northwest, an area of the country where there are a number of tax increases that are either being discussed or have been enacted in several of the states in which Sprague operates. These are the result of continued state budget cuts that have taken place over the last four years, Treleven said.

"The smallest growth for us was in the state of Oregon," Treleven said. "Washington revenue increases were strong for us. Montana was flat. Idaho showed some growth and Utah was very strong. We also do some work in Wyoming and Nevada but not enough to make any valid report on the market conditions of the entire state."

Because of the phase-out of methyl bromide, "We have showed a drop in some fumigation services," Treleven said, "but we still are fumigating a number of railcars, grain elevators and USDA Plant Quarantine fumigations."

Business has been very strong for the company in the first quarter. "All indications for the balance of the year are pointing in the right direction. Three months do NOT make a year, but the first quarter of 2005 is very strong and we are cautiously optimistic."

PESTMASTERS

Richmond, Va.

The Richmond, Va., area has experienced steady population growth throughout the past several years, which has in turn helped PestMasters to generate big growth numbers. "The immediate outlook is very good," said President David R. Boose. "We believe a 10 to 15 percent increase in sales is realistic this year as long as the overall economy remains strong."

Boose reports that the current business conditions in central Virginia are excellent and the area has a diverse economy that does not rely on any one industry. In addition, new construction is booming. "The Richmond area had the distinction of having two upscale shopping malls open a little over a year ago, the only new malls in the country in the year 2003," Boose said.

Even though termites were swarming in April, ants have been and continue to generate the most calls. Over the past decade ants have emerged as the No. 1 pest in the country and it seems that trend is continuing, Boose said.

Boose is positive about the future of pest control in his area and he’s seen a few trends of note. "The economy continues to be strong and people are spending," he said. "It seems that people are much more willing to use credit to pay for services than in the past."

So far, the rapid rise in the cost of gasoline has not had a noticeable impact on the buying habits of PestMasters’ customers but Boose said the company is concerned it could become an issue by summer.

ERADICO SERVICES

Novi, Mich.

Like many pest management professionals, Eradico Services’ Chuck Russell said two aspects of his business that he can’t control are the most negative aspects facing the industry: health insurance costs and the cost of gasoline. "The high cost of health insurance and gasoline are the two most negative impacts to our bottom line," Russell said. "Unfortunately, I do not see either of them improving any time soon."

Despite these high costs, he said the company considers the conditions in its marketplace good. "We are anticipating a 12 percent revenue growth for both our Pest & Lawn Divisions," he said. He added that the figure is "not great, but not bad either."

"I feel the status of our local economy, while certainly not great, will allow us to achieve our business plans this fiscal year. People continue to show a trend to spend money on services in and around their home," he said.

He said he thinks time is the most precious commodity for many people. "People do not want to deal with the pest and lawn problems themselves and will continue to utilize the service of professional companies. I believe this will be a trend that continues as the baby boomers continue to mature."

In his area of Michigan, Russell said ants tend to generate most phone calls. "They seem to continue to be the No. 1 nuisance pest."