Rollins, Inc. Reports Fourth Quarter and Full-Year 2009 Financial Results
Company Posts 15th Consecutive Quarter of Improved Earnings Results
- Revenue increased 4.6% for the quarter and 5.2% for full year
- Net income up 59.0% for the quarter and 21.8% for the full year
- Earnings per diluted share rose 53.8% for the quarter to $0.20 from $0.13 and 21.7% to $0.84 from $0.69 for the full year
ATLANTA, Jan. 27 /PRNewswire-FirstCall/ -- Rollins, Inc. (NYSE: ROL), a premier North American consumer and commercial services company, today reported unaudited financial results for its fourth quarter and year ended December 31, 2009.
The Company recorded fourth quarter revenues of $259.6 million, an increase of 4.6% over the prior year's fourth quarter revenue of $248.1 million. Net income increased 59.0% to $20.0 million or $0.20 per diluted share for the fourth quarter ended December 31, 2009, compared to $12.6 million or $0.13 per diluted share for the same period in 2008.
In the fourth quarter of 2009, Rollins converted Orkin, Inc. and certain other operating subsidiaries from C corporations to wholly owned limited liability companies. This change will allow Rollins to use the operating profits generated by these subsidiaries to offset Rollins' state tax losses and reduce state income taxes. The Company also recognized a non-cash pre-tax impairment charge of approximately $2.9 million following management's determination that a routing and scheduling system under development would require substantial changes and expense in order to deliver the product expected. The Company is exploring alternative solutions as the potential benefits of an effective routing and scheduling system would be significant.
Excluding a tax benefit of $6.2 million or $0.06 per diluted share on Rollins' conversion of Orkin to a limited liability company, net of cost associated with a Canadian restructuring and repatriation of cash, and the impairment charge of $0.02 per diluted share associated with the software system write-off, the Company's earnings per share for fourth quarter 2009 were $0.16 per diluted share, an improvement of 23.1% compared to fourth quarter 2008.
The Company repurchased 227,100 shares at a weighted average price of $18.18 per share in the fourth quarter bringing the total number of shares repurchased in 2009 to 1,677,200. In total, 2,951,591 additional shares may be purchased under the share repurchase program.
Revenues for the full year 2009 rose 5.2% to $1.1 billion compared to slightly over $1.0 billion for the prior year. Rollins' net income for the full year rose 21.8% to $84.0 million, or $0.84 per diluted share, compared to net income of $68.9 million, or $0.69 per diluted share for the prior year. Excluding the impact of Rollins conversion of Orkin to a limited liability company, and the impairment charge associated with the software system write off in the fourth quarter of 2009, the Company's earnings for the year were $0.80 per diluted share, an improvement of 15.9% compared to the full year 2008.
Rollins' balance sheet continued to strengthen with total assets increasing to $566.5 million and stockholders' equity of $264.6 million.
Gary W. Rollins, President and Chief Executive Officer of Rollins, Inc. stated, "Once again, the Rollins family of pest control companies has exceeded our objectives. We are pleased to have delivered solid results for the fourth quarter as well as the year. These results reflect our success in navigating through a challenging economy and tough selling environment, while growing market share and controlling our expenses."
Mr. Rollins concluded, "The continued development and deployment of our key programs should enable us to continue to make prudent investments to grow our business both organically and through strategic acquisitions. We believe that Rollins enters the 2010 fiscal year well-positioned to benefit from our 2009 achievements."
Rollins, Inc. is a premier North American consumer and commercial services company. Through its wholly owned subsidiaries, Orkin, PCO Services, HomeTeam Pest Defense, Western Pest Services, The Industrial Fumigant Company and Crane Pest Control, the Company provides essential pest control services and protection against termite damage, rodents and insects to over 2 million customers in the United States, Canada, Mexico, Central America, the Caribbean, the Middle East, Asia and the Mediterranean from over 500 locations. You can learn more about our subsidiaries by visiting our Web sites at www.orkin.com, www.pestdefense.com, www.westernpest.com, www.orkincanada.ca, www.indfumco.com, www.cranepestcontrol.com and www.rollins.com. You can also find this and other news releases at www.rollins.com by accessing the news releases button.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This release contains statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include the statements about the Company's belief that the continued development and deployment of the Company's key programs should enable the Company to continue to make prudent investments to grow its business both organically and through strategic acquisitions, and the Company's belief that it enters the 2010 fiscal year well-position to benefit from its 2009 achievements. The actual results of the Company could differ materially from those indicated by the forward-looking statements because of various risks and uncertainties, including without limitation, economic and competitive conditions which may adversely affect our Company's business; changes in industry practices or technologies; the degree of success of the Company's pest and termite process reforms and pest control selling and treatment methods; the Company's ability to identify and integrate potential acquisitions; climate and weather trends; competitive factors and pricing practices; potential increases in labor costs; uncertainties of litigation; and changes in various government laws and regulations, including environmental regulations. All of the foregoing risks and uncertainties are beyond the ability of the Company to control, and in many cases the Company cannot predict the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. A more detailed discussion of potential risks facing the Company can be found in the Company's Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2008.
ROLLINS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in thousands) At December 31, (unaudited) 2009 2008 ASSETS Cash and cash equivalents $ 9,504 $ 13,716 Trade receivables, short-term 60,590 56,884 Accounts Receivable - Other 2,164 2,185 Materials and supplies 10,208 10,893 Deferred income taxes 25,839 20,018 Other current assets 12,225 13,142 Total Current Assets 120,530 116,838 Trade receivables, long-term 9,356 11,124 Equipment and property, net 74,644 78,625 Goodwill 189,658 187,266 Customer Contracts 121,176 129,092 Other Intangible Assets 24,785 25,719 Deferred income taxes 17,901 17,886 Other assets 8,446 5,967 Total Assets $ 566,496 $ 572,517 LIABILITIES Accounts payable $ 15,841 $ 18,782 Accrued insurance 16,567 15,404 Accrued compensation and related liabilities 57,377 56,334 Unearned revenue 85,883 88,288 Capital leases 217 450 Line of Credit 30,000 65,000 Other current liabilities 26,868 28,569 Total Current Liabilities 232,753 272,827 Capital leases, less current portion 33 171 Accrued pension 14,895 20,353 Long-term accrued liabilities 54,249 50,733 Total Liabilities 301,930 344,084 STOCKHOLDERS’ EQUITY Common stock 98,904 100,041 Retained earnings and other equity 165,662 128,392 Total Stockholders’ Equity 264,566 228,433 Total Liabilities and Stockholders’ Equity $ 566,496 $ 572,517
ROLLINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share data)
(unaudited)
Fourth Quarter Ended Twelve Months Ended
December 31, December 31,
2009 2008 2009 2008
REVENUES
Customer services $ 259,567 $ 248,076 $ 1,073,958 $ 1,020,564
COSTS AND EXPENSES
Cost of services provided 136,562 133,050 551,002 534,494
Depreciation and amortization 9,045 9,096 37,169 33,443
Sales, general and
administrative 88,563 84,120 355,590 339,078
(Gain)/loss on impairment/sale
of assets 2,935 23 2,942 (166)
Interest expense, net 118 913 964 761
237,223 227,202 947,667 907,610
INCOME BEFORE TAXES 22,344 20,874 126,291 112,954
PROVISION FOR INCOME TAXES 2,383 8,321 42,307 44,020
NET INCOME $ 19,961 $ 12,553 $ 83,984 $ 68,934
NET INCOME PER SHARE - BASIC $ 0.20 $ 0.13 $ 0.84 $ 0.69
NET INCOME PER SHARE - DILUTED $ 0.20 $ 0.13 $ 0.84 $ 0.69
Weighted average shares
outstanding - basic 98,970 98,851 99,453 99,209
Weighted average shares
outstanding - diluted 99,230 99,659 99,749 100,081
ROLLINS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIALS
(in thousands except per share data)
(unaudited)
Fourth Quarter Twelve Months
Ended Ended
December 31, 2009 December 31, 2009
Net income as reported $ 19,961 $ 83,984
Add: Impairment of Orion (net
of taxes) 1,809 1,809
Less: Tax benefit for
valuation allowance related
to LLC conversion and Canadian
repatriation $ (7,889)
Add: Tax cost related to
Canadian restructuring
and repatriation of cash $ 1,737
Less: Net tax benefit (6,152) (6,152)
Adjusted earnings $ 15,618 $ 79,641
Adjusted earnings per share -
diluted excluding
impairment charges and tax
benefit $ 0.16 $ 0.80
Weighted average shares
outstanding - diluted 99,230 99,749
ROLLINS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIALS
(in thousands except per share data)
(unaudited)
Fourth Quarter Twelve Months
Ended Ended
December 31, 2009 December 31, 2009
Net income per share - diluted
as reported $ 0.20 $ 0.84
Add: Impairment of Orion (net
of taxes) 0.02 0.02
Less: Net tax benefit (0.06) (0.06)
Adjusted earnings per share -
diluted $ 0.16 $ 0.80
CONFERENCE CALL ANNOUNCEMENT Rollins, Inc. (NYSE: ROL) Management will hold a conference call to discuss Fourth Quarter results on: Wednesday, January 27, 2010 at: 10:00 a.m. Eastern 9:00 a.m. Central 8:00 a.m. Mountain 7:00 a.m. Pacific TO PARTICIPATE: Please dial888-561-1721domestic; 480-629-9868international atleast5 minutes before start time. REPLAY: available through February 3, 2010 Please dial 800-406-7325/303-590-3000, Passcode: 4200223 THIS CALL CAN ALSO BE ACCESSED THROUGH THE INTERNET AT www.viavid.net Questions? Contact Samantha Alphonso at Financial Relations Board at 212-827-3746 Or email to salphonso@mww.com
For Further Information Contact
Harry J. Cynkus (404) 888-2922
SOURCE Rollins, Inc.
Released January 27, 2010