Exhibit 99.1 For Further Information Contact
Harry J. Cynkus
(404) 888-2922
FOR IMMEDIATE RELEASE
ROLLINS, INC. REPORTS CONTINUED IMPROVEMENT IN QUARTERLY EARNINGS
o 18th consecutive quarter of improved earnings results
o Net Income rose 71.8% to $23.8 million, the increase was 13.6% to $15.7
million excluding one-time gain from sale of assets
o Income Before Income Taxes increased 85.7%, 22.8% excluding one-time gain
from sale of assets o Revenue increased 12.2%, 4.8% excluding
acquisition of Western
o Earnings Per Share rose $0.21 to $0.51, $0.04 to $0.34 excluding one-time
gain from sale of assets
ATLANTA, GEORGIA, July 28, 2004: Rollins, Inc. (NYSE:ROL), a premier North
American consumer services company, today reported net income grew 71.8% to
$23.8 million or $0.51 per diluted share for the second quarter ended June 30,
2004, compared to $13.9 million or $0.30 per diluted share for the same period
in 2003. Net income for the quarter included gains from the sale of assets of
$8.1 million net of tax, or $0.17 per share. Revenue for the quarter grew 12.2%
to $207.7 million compared to $185.1 million for the second quarter ended June
30, 2003. This increase includes $13.7 million in revenue resulting from the
April 30, 2004 acquisition of Western Industries, Inc.
Net income for the first six months of 2004 climbed 53.9% to $32.5 million or
$0.70 per diluted share compared to net income of $21.1 million or $0.46 per
diluted share for 2003. Revenues increased to $366.4 million for the first six
months of 2004 compared to $340.2 million for the prior year.
Rollins' balance sheet remains strong with total assets increasing to $410.0
million and stockholders' equity increasing to $169.6 million.
Gary W. Rollins, President and Chief Executive Officer of Rollins, Inc. stated,
"Our second quarter was extremely positive, beginning with the acquisition of
Western, which is already having a favorable impact on our revenue and cash
flow. We were able to fund all but $15 million of the acquisition primarily from
cash on hand and our strong cash flow enabled us to complete the quarter with no
debt from the purchase, and with almost $22 million in cash and short-term
investments."
"Additionally, in the second quarter, we experienced our strongest organic
growth since the second quarter of 2000. These results were attributable to a
good pest season and the successful implementation of our 2004 sales
initiatives. We were further bolstered by improved customer retention resulting
from our service quality initiatives."
Rollins, Inc. is one of the nation's largest consumer services companies.
Through its wholly owned subsidiaries, Orkin, Inc. and Western Pest Services,
the Company provides essential pest control services and protection against
termite damage, rodents and insects to approximately 1.7 million customers in
the United States, Canada and Mexico from over 400 locations. You can learn more
about Orkin by visiting our Web sites at www.orkin.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 The above release contains
statements that constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. 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 potential acquisitions; climate and weather
trends; competitive factors and pricing practices; the cost reduction benefits
of the corporate restructuring may not be as great as expected or eliminated
positions may have to be reinstated in the future; 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.
ROLLINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In thousands)
2004 2003
At June 30 (Unaudited) (Unaudited)
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ASSETS
Cash and Short-Term Investments $ 21,865 $ 64,865
Marketable Securities 0 0
Trade Receivables, Net 62,765 54,392
Materials and Supplies 12,157 11,073
Deferred Income Taxes 21,633 19,800
Other Current Assets 10,441 11,037
------------ ------------
Current Assets 128,861 161,167
Equipment and Property, Net 45,313 34,391
Goodwill and Other Intangible Assets 196,019 106,198
Deferred Income Taxes 8,860 42,278
Prepaid Pension 24,964 0
Other Assets 5,944 0
------------ ----------
Total Assets $ 409,961 $ 344,034
============ ============
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LIABILITIES
Accounts Payable $ 14,756 $ 15,912
Accrued Insurance 13,050 12,668
Accrued Payroll 33,313 30,354
Unearned Revenue 58,511 44,848
Other Current Liabilities 52,010 38,360
------------ ------------
Current Liabilities 171,640 142,142
Long-Term Accrued Liabilities 68,744 89,733
------------ ------------
Total Liabilities 240,384 231,875
------------ ------------
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STOCKHOLDERS' EQUITY
Common Stock 45,638 45,102
Retained Earnings and Other Equity 123,939 67,057
------------ ------------
Total Stockholders' Equity 169,577 112,159
------------ ------------
Total Liabilities and Stockholders' Equity $ 409,961 $ 344,034
============ ============
ROLLINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE SECOND QUARTER AND SIX MONTHS ENDED JUNE 30
(In thousands except per share data)
Second Quarter Six Months
--------------------------- ---------------------------
2004 2003 2004 2003
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------ ------------- ------------ -------------
REVENUES $ 207,698 $ 185,105 $ 366,390 $ 340,227
------------ ------------- ------------ -------------
COSTS AND EXPENSES
Cost of Services Provided 105,442 95,558 190,799 179,484
Depreciation and Amortization 5,764 5,037 10,421 10,193
Sales, General and Administrative 69,155 62,312 123,330 116,688
(Gain)/Loss on Sales of Assets (14,143) (67) (14,142) (69)
Interest (Income)/Expense (47) (94) (197) (160)
------------ ------------- ---------------------------
TOTAL COSTS AND EXPENSES 166,171 162,746 310,211 306,136
------------ ------------- ------------ -------------
INCOME BEFORE INCOME TAXES 41,527 22,359 56,179 34,091
PROVISION FOR INCOME TAXES 17,717 8,497 23,651 12,955
------------ ------------- ------------ -------------
NET INCOME $ 23,810 $ 13,862 $ 32,528 $ 21,136
============ ============= ============ =============
EARNINGS PER SHARE - BASIC $ 0.52 $ 0.31 $ 0.72 $ 0.47
============ ============= ============ =============
EARNINGS PER SHARE - DILUTED $ 0.51 $ 0.30 $ 0.70 $ 0.46
============ ============= ============ =============
AVERAGE SHARES OUTSTANDING - BASIC 45,552 45,117 45,425 45,015
AVERAGE SHARES OUTSTANDING - DILUTED 46,753 46,404 46,698 46,258
ROLLINS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30
(In thousands)
(Unaudited)
2004 2003
--------------- --------------
Operating Activities
Net Income $ 32,528 $ 21,136
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and Amortization 10,421 10,193
Other Operating Activities (7,178) 1,546
--------------- --------------
Net Cash Provided by Operating Activities 35,771 32,875
--------------- --------------
Investing Activities
Purchases of Equipment and Property (3,751) (2,332)
Net Cash Used for Acquisition of Companies (103,155) (1,508)
Sale of Marketable Securities, Net 21,866 0
Proceeds from Sale of Assets, Net of Deferred Gain 15,468 0
--------------- --------------
Net Cash Used In Investing Activities (69,572) (3,840)
--------------- --------------
Financing Activities
Dividends Paid (5,451) (4,500)
Other 1,577 2,015
--------------- --------------
Net Cash Used in Financing Activities (3,874) (2,485)
--------------- --------------
Net Increase in Cash and Short-Term Investments (37,675) 26,550
Cash and Short-Term Investments at Beginning of Year 59,540 38,315
--------------- --------------
Cash and Short-Term Investments at End of Period $ 21,865 $ 64,865
=============== ==============
CONFERENCE CALL
Rollins, Inc.
(NYSE: ROL)
Management will hold a conference call to discuss
second quarter results on:
- --------------------------------------------------------------------------------
Wednesday, July 28, 2004 at:
11:00 a.m. Eastern
10:00 a.m. Central
9:00 a.m. Mountain
8:00 a.m. Pacific
- --------------------------------------------------------------------------------
TO PARTICIPATE:
Please dial 800-366-7449 domestic;
303-205-0033 international
at least 5 minutes before start time.
REPLAY: through August 4, 2004 at 11:00 p.m.
Please dial 800-405-2236/303-590-3000, Passcode: 11003174
THIS CALL CAN ALSO BE ACCESSED THROUGH THE INTERNET AT
www.viavid.net
Questions?:
Janet Cruz at FRB/Weber Shandwick at 212-445-8453 or
email to jcruz@webershandwick.com
640 Fifth Avenue T 212 445 8000
New York, NY 10019 F 212 445 8001
www.webershandwick.com
Reconciliation
Income Before Income Taxes, Net Income and Earnings Per Share, Excluding One-Time Gain on Sale of Assets
Second Quarter
--------------------------
2004 2003 $B/(W) %B/(W)
------------------------------------------------------
Income Before Income Taxes $ 41,527 $ 22,359 $ 19,168 85.7 %
Less:
Gain on Sale of Assets 14,143 67 14,076
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Income Before Income Taxes, excluding Gain on Sale of Assets $ 27,384 $ 22,292 $ 5,092 22.8 %
======================================================
Net Income $ 23,810 $ 13,862 $ 9,948 71.8 %
Less:
Gain on Sale of Assets 14,143 67 14,076
Provision for Income Taxes on Gain on Sale of Assets (6,035) (26) (6,009)
------------------------------------------------------
Net Income, Excluding Gain on Sale of Assets $ 15,702 $ 13,821 $ 1,881 13.6 %
======================================================
Earnings Per Share - Diluted $ 0.51 $ 0.30 $ 0.21 70.0 %
Less:
Gain on Sale of Assets 0.30 0 0.30
Provision for Income Taxes on Gain on Sale of Assets (0.13) 0 (0.13)
------------------------------------------------------
Earnings Per Share - Diluted, Excluding Gain on Sale of Assets $ 0.34 $ 0.30 $ 0.04 13.3 %
======================================================
Average Shares Outstanding - Diluted 46,753 46,404 349
Reconciliation
Revenue Excluding Western
Second Quarter
--------------------------
2004 2003 $B/(W) %B/(W)
------------------------------------------------------
Total Net Revenues $ 207,698 $ 185,105 $ 22,593 12.2 %
Less:
Western Acquisition 13,747 0 13,747
------------------------------------------------------
Revenue excluding Western $ 193,951 $ 185,105 $ 8,846 4.8 %
======================================================