American Residential Announces Fiscal 1998 Results.

HOUSTON--(BUSINESS WIRE)--March 26, 1999--American Residential Services Inc. (NYSE:ARS), a leading provider of residential and commercial heating, air conditioning, plumbing and electrical services, today announced results for the quarter and year ended Dec. 31, 1998. Earlier in the week the Company announced an agreement providing for the acquisition of ARS by The ServiceMaster Company (NYSE:SVM).

The Company reported revenues of $136.5 million for the fourth quarter ended Dec. 31, 1998 compared to revenues of $109.7 million for the fourth quarter of fiscal 1997. Revenues for the year were $505.6 million compared to revenues of $381.6 million for fiscal 1997. In the fourth quarter of fiscal 1998, the Company recorded a special charge of $3.0 million related primarily to severance charges resulting from planned overhead reductions. Also in this period, ARS discontinued its air-conditioned tent rental business, which was acquired in a previous acquisition. The reported loss to discontinue the rental business was $3.4 million, net of taxes, in the fourth quarter of fiscal 1998. Prior to these non-recurring charges the Company reported a net loss of $6.3 million, or 40 cents per share, for the fourth quarter, and a net loss of $1.8 million, or 11 cents per share, for the fiscal 1998 year, compared to net income of $452 thousand, or two cents per share, and $11.0 million, or 77 cents per share, respectively, for the fourth quarter and fiscal year of 1997, before the fourth quarter of 1997 special charge of $24.2 million. EBITDA before the charges mentioned above was $26.3 million for fiscal 1998.

After accounting for all charges, the net loss for the fourth quarter of fiscal 1998 was $11.9 million, or 75 cents per share, compared to a net loss of $14.9 million, or 98 cents per share, for the same quarter last year. For the year, the net loss was $7.9 million, or 50 cents per share, compared to a net loss of $4.7 million, or 33 cents per share, for fiscal 1997.

"In our efforts to intensify our focus on internal performance going forward, we made several difficult decisions that added to the Company's poor results in the quarter, but will help make the operations more efficient going forward," commented Thomas Amonett, President and Chief Executive Officer. "We streamlined our top management structure and reduced staffing, giving our new management structure direct line responsibility. We are also moving ahead with the implementation of the TEAM Management System, which is effectively aligning the Company's operating procedures. Additionally, we have developed and implemented our plans-of-action for certain under-performing operations and are closely monitoring the results of those locations. We believe that the changes we have made will have a positive effect on fiscal 1999. We also believe that our merger into ServiceMaster will provide further operational efficiencies that would otherwise not be available in the near term."

American Residential Services is engaged principally in providing comprehensive maintenance, repair, replacement and new equipment installation services for heating, air conditioning, plumbing, electrical, indoor air quality systems and major home appliances, primarily in existing homes, homes under construction and commercial buildings.

TABLE TO FOLLOW

         AMERICAN RESIDENTIAL SERVICES, INC. AND SUBSIDIARIES
                  Consolidated Results of Operations
               (in thousands, except per share amounts)

                           For the Three Months       For the Year
                            Ended December 31,     Ended December 31,
                           --------------------    ------------------
                              1998      1997         1998       1997
                             ------    ------       ------     ------

Revenues                   $136,536   $109,675     $505,562   $381,645
 Cost of Services           112,210     81,631      389,269    275,514
                            --------   --------     --------   --------
Gross Profit                 24,326     28,044      116,293    106,131
 Selling, General
  and Administrative
  Expenses                   30,630     25,167      103,310     80,742
 Special Charge               3,045     24,194        4,315     24,194
                            --------   --------     --------   --------
Operating Income (Loss)      (9,349)   (21,317)       8,668      1,195
 Interest Expense            (3,962)    (2,514)     (13,405)    (7,469)
 Interest Income                  -         87          181        227
 Other Income (Expense)         (17)       161          696        836
                            --------   --------     --------   --------
Loss From Operations
 before Income Taxes,
 Discontinued Operations
 and Extraordinary Item     (13,328)   (23,583)      (3,860)    (5,211)
Provision (Benefit) for
 Income Taxes                (4,821)    (8,767)          60       (829)
                            --------   --------     --------   --------
Net Loss before
 Discontinued Operations
 and Extraordinary Item      (8,507)   (14,816)      (3,920)    (4,382)

Discontinued Operations:
  Loss from Discontinued
   Operations, Net of
   Income Tax Benefit of
   $126 and $72 for the
   Fourth Quarter of 1998
   and 1997 and $239 and
   $172 for the Year
   Ended 1998 and 1997         (286)      (133)        (495)      (319)
  Loss on Disposal, Net
   Income Tax Benefit
   of $665                   (3,146)         -       (3,146)         -
                            --------   --------     --------   --------
Loss from Discontinued
 Operations                  (3,432)      (133)      (3,641)      (319)

Net Loss before
 Extraordinary Item         (11,939)   (14,949)      (7,561)    (4,701)

Extraordinary Item -
 Loss on Refinancing of
 Revolving Credit
 Facility, Net of Income
 Tax Benefit of $260              -          -         (300)         -
                            --------   --------     --------   --------
Net Loss                   $(11,939)  $(14,949)     $(7,861)   $(4,701)
                            ========   ========     ========   ========
Diluted Weighted Average
 Shares Outstanding          15,900     15,229       15,702     14,330
                            ========   ========     ========   ========
Loss Per Share before
 Discontinued Operations
 and Extraordinary Item      $(0.54)    $(0.97)      $(0.25)    $(0.31)
Discontinued Operations       (0.22)     (0.01)       (0.23)     (0.02)
Extraordinary Item                -          -        (0.02)         -
                            --------   --------     --------   --------
Loss Per Share               $(0.75)    $(0.98)      $(0.50)    $(0.33)
                            ========   ========     ========   ========
Proforma Income (Loss)
 before Special
 Charge, Discontinued
 Operations and
 Extraordinary Item         $(6,313)      $452      $(1,777)   $10,986
                            ========   ========     ========   ========
Proforma Diluted Earnings
 (Loss) Per Share before
 Special Charge,
 Discontinued Operations
 and Extraordinary Item      $(0.40)     $0.03       $(0.11)     $0.77
                            ========   ========     ========   ========

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current plans and expectations of ARS and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those suggested or described in the forward-looking statements contained in this press release. Important factors that could cause actual results to differ include, among others, risks associated with acquisitions, fluctuations in operating results, variations in stock prices, competition, weather conditions, risks of operations and integration of the newly acquired businesses. Additional information concerning factors that could cause actual results to differ from those in the forward-looking statements is contained from time to time in the Company's SEC filings. Copies of these filings may be obtained by contacting the Company or the SEC.