Rollins, Inc. Reports Record Third Quarter Financial Results
10th Consecutive Quarter of Improved Earnings Results
ATLANTA, Oct. 22 /PRNewswire-FirstCall/ -- Rollins, Inc. (NYSE: ROL), a premier North American consumer and commercial services company, today reported unaudited financial results for the third quarter ended September 30, 2008. Revenues grew 16.7% to $277.9 million compared to $238.1 million for the third quarter ended September 30, 2007. Revenue growth excluding our recent acquisition of HomeTeam Pest Defense improved 2.6%(1).
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The Company recorded net income of $19.8 million or $0.20 per diluted share for the third quarter ended September 30, 2008, compared to $18.8 million or $0.19 per diluted share for the third quarter ended September 30, 2007, a 5.5% increase. EBITDA increased 11.5% for the same period(2).
During the quarter, the Company repurchased 51,400 shares of common stock at a weighted average price of $16.85 per share, with a total of 550,175 shares repurchased year-to-date. In total, approximately 464,000 additional shares may be purchased under programs previously approved by the Board of Directors.
Commenting on the Company's results, Gary W. Rollins, President and Chief Executive Officer of Rollins, Inc. commented, "We were pleased to again report record results for the quarter. Commercial pest control revenue growth remains strong, though demand has weakened slightly in our residential pest control and termite control business.
"The strength of our business model and our ability to generate strong free cash flow mitigates some of the risks that many companies are experiencing from the turmoil of today's credit markets. These positive factors have allowed us to pay off $49 million of the $90 million we borrowed in April of this year to make the HomeTeam acquisition."
Mr. Rollins concluded, "It is difficult to know when the economy might rebound and the financial crisis will end; however we believe that we are well positioned to adjust our business to meet these uncertainties. We will continue our strategy to make prudent investments to grow our business both organically and through strategic acquisitions."
(1) Additional disclosure regarding this financial measure is included in the financial tables attached to this press release.
(2) EBITDA is a financial measure which does not conform to generally accepted accounting principles (GAAP). Additional disclosure regarding this non-GAAP financial measure is included in the attachment to this press release.
Rollins, Inc. is a premier North American consumer and commercial services company. Through its wholly owned subsidiaries, Orkin, Inc., PCO Services, HomeTeam Pest Defense, Western Pest Services, and The Industrial Fumigant Company, 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 and Asia 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.indfumco.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 Company's belief that it is well positioned to adjust its business to meet the economy's uncertainties; and that the Company will continue to make prudent investments to grow its business both organically and through strategic acquisitions. 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, general economic conditions; market risk; 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, 2007.
ROLLINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands)
At September 30, (unaudited) 2008 2007
ASSETS
Cash and cash equivalents $16,334 $81,821
Trade receivables, short-term 68,032 59,584
Accounts Receivable - Other 1,717 1,846
Materials and supplies 11,117 8,244
Deferred income taxes 18,323 16,969
Other current assets 8,320 8,382
Total Current Assets 123,843 176,846
Equipment and property, net 77,963 77,633
Goodwill 182,834 126,577
Other Intangible Assets 25,126 9,167
Customer Contracts 125,354 65,641
Deferred income taxes 8,309 12,588
Trade receivables, long-term 9,009 8,921
Prepaid Pension 18,259 -
Other assets 6,604 6,039
Total Assets $577,301 $483,412
LIABILITIES
Loans outstanding $41,500 $ -
Capital leases 661 1,240
Accounts payable 20,037 15,637
Accrued insurance 14,855 13,277
Accrued compensation and related
liabilities 53,842 49,352
Other current liabilities 29,294 26,938
Unearned revenue 99,297 90,191
Total Current Liabilities 259,486 196,635
Capital leases, less current portion 360 881
Accrued pension - 6,946
Long-term accrued liabilities 54,394 54,288
Total Liabilities 314,240 258,750
STOCKHOLDERS' EQUITY
Common stock 100,864 101,184
Retained earnings and other equity 162,197 123,478
Total Stockholders' Equity 263,061 224,662
Total Liabilities and Stockholders'
Equity $577,301 $483,412
ROLLINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30,
(in thousands except per share data)
(unaudited)
Third Quarter Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
REVENUES
Customer services $277,911 $238,116 $772,488 $678,966
COSTS AND EXPENSES
Cost of services provided 145,415 123,029 401,444 351,466
Depreciation and amortization 9,031 6,885 24,347 20,482
Sales, general and administrative 91,440 78,154 254,958 221,982
(Gain)/loss on sales of assets (154) (17) (189) (113)
Interest (income)/expense, net 174 (466) (152) (1,540)
245,906 207,585 680,408 592,277
INCOME BEFORE TAXES 32,005 30,531 92,080 86,689
PROVISION FOR INCOME TAXES 12,201 11,766 35,699 33,892
NET INCOME $19,804 $18,765 $56,381 $52,797
NET INCOME PER SHARE - BASIC $0.20 $0.19 $0.57 $0.53
NET INCOME PER SHARE - DILUTED $0.20 $0.19 $0.56 $0.52
Weighted average shares
outstanding - basic 99,233 99,912 99,329 100,449
Weighted average shares
outstanding - diluted 100,096 100,977 100,223 101,530
ROLLINS, INC. AND SUBSIDIARIES
RECONCILIATION
REVENUE EXCLUDING HOMETEAM PEST DEFENSE
Three Months Ended
September 30,
$Better/ %Better/
2008 2007 (Worse) (Worse)
Net Revenues $277,911 $238,116 $39,795 16.7 %
Less: Revenues from
HomeTeam Pest Defense 33,499 - 33,499
Revenue Excluding
HomeTeam Pest Defense $244,412 $238,116 $6,296 2.6 %
ROLLINS, INC. AND SUBSIDIARIES
RECONCILIATION
REVENUE EXCLUDING HOMETEAM PEST DEFENSE
Nine Months Ended
September 30,
$Better/ %Better/
2008 2007 (Worse) (Worse)
Net Revenues $772,488 $678,966 $93,522 13.8 %
Less: Revenues from
HomeTeam Pest Defense 67,237 - 67,237
Revenue Excluding
HomeTeam Pest Defense $705,251 $678,966 $26,285 3.9 %
ROLLINS, INC. AND SUBSIDIARIES
RECONCILIATION
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA)
Three Months Ended
September 30,
$Better/ %Better/
2008 2007 (Worse) (Worse)
Net Income $19,804 $18,765 $1,039 5.5 %
Add: Provision For Income
Taxes 12,201 11,766 435 3.7
Interest (income)/
Expense 174 (466) 640 137.3
Depreciation and
Amortization 9,031 6,885 2,146 31.2
EBITDA $41,210 $36,950 $4,260 11.5 %
ROLLINS, INC. AND SUBSIDIARIES
RECONCILIATION
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA)
Nine Months Ended
September 30,
$Better/ %Better/
2008 2007 (Worse) (Worse)
Net Income $56,381 $52,797 $3,584 6.8 %
Add: Provision For Income
Taxes 35,699 33,892 1,807 5.3
Interest (income)/
Expense (152) (1,540) 1,388 90.1
Depreciation and
Amortization 24,347 20,482 3,865 18.9
EBITDA $116,275 $105,631 $10,644 10.1 %
CONFERENCE CALL ANNOUNCEMENT
Rollins, Inc.
(NYSE: ROL)
Management will hold a conference call to discuss
Third Quarter results on:
Friday, October 24, 2008 at:
10:00 a.m. Eastern
9:00 a.m. Central
8:00 a.m. Mountain
7:00 a.m. Pacific
TO PARTICIPATE:
Please dial 866-249-5225 domestic;
303-262-2161 international at least 5 minutes before start time.
REPLAY: available through November 1, 2008 (11:59PM) ET
Please dial 800-405-2236/303-590-3000, Pass code: 11121303
THIS CALL CAN ALSO BE ACCESSED THROUGH THE INTERNET AT
www.viavid.net
SOURCE Rollins, Inc.
Released October 22, 2008