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 19th consecutive quarter of improved earnings results
o Net income rose 18.8% to $11.6 million
o Income Before Income Taxes increased 23.8%
o Revenue increased 13.5%, excluding Western revenues rose by 3.6%
o Earnings Per Share rose 19.0% to $0.25
ATLANTA, GEORGIA, October 27, 2004: Rollins, Inc. (NYSE:ROL), a premier North
American consumer services company, today reported net income grew 18.8% to
$11.6 million or $0.25 per diluted share for the third quarter ended September
30, 2004, compared to $9.8 million or $0.21 per diluted share for the same
period in 2003. Revenue for the quarter grew 13.5% to $202.3 million compared to
$178.3 million for the third quarter ended September 30, 2003. Excluding Western
Pest Services acquired April 30, 2004, revenues increased by 3.6%.
Net income for the first nine months of 2004 climbed 42.8% to $44.2 million or
$0.95 per diluted share compared to net income of $30.9 million or $0.67 per
diluted share for 2003. Revenues increased to $568.6 million for the first nine
months of 2004 compared to $518.5 million for the prior year.
Rollins' balance sheet remains strong with total assets increasing to $427.8
million and stockholders' equity increasing to $179.2 million. Total cash and
cash equivalents rose to $40.9 million.
Gary W. Rollins, President and Chief Executive Officer of Rollins, Inc. stated,
"Our third quarter and first nine months reflect the success that we are
achieving in growing our business at a faster pace. Western was a major
contributor to our third quarter revenue growth and their integration into our
Company is on track. We also achieved organic sales growth in our Commercial and
Residential Pest Control businesses, reflecting the positive impact of the
initiatives that we have in place.
We continue to challenge ourselves to improve our service, customer retention
and growth momentum. As an example, we have initiated a major project in our
commercial division that will ultimately improve the way we service, sell and
administer our commercial customers. It is our plan to begin implementation of
this service segment re-engineering next year."
Mr. Rollins continued "During the third quarter, we signed an agreement with
Univar U.S.A. to provide pest control materials warehousing, logistics and
delivery services for all of our Orkin branches. At the same time Univar
acquired certain assets of Dettelbach Pest Corp., a wholly owned subsidiary of
Orkin that had previously provided these services. This strategic decision will
result in a lower inventory investment and freight savings in the future.
Orkin, like many companies, was affected by the multiple hurricanes that hit the
southeast. It is a credit to the employees of our Company that we were not more
adversely impacted. Our people did an exemplary job servicing our customers
under very difficult circumstances."
Mr. Rollins concluded, "We continue to strengthen our balance sheet and are
committed to our growth strategies, productivity initiatives, and other programs
that will create operating efficiencies and excellent customer service."
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;
expected benefits of the commercial division re-eingeering may not be realized,
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, 2003.
ROLLINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In thousands)
2004 2003
At September 30 (Unaudited) (Unaudited)
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ASSETS
Cash and Cash Equivalents $ 40,894 $ 55,066
Marketable Securities 0 27,000
Trade Receivables, Net 63,358 52,689
Materials and Supplies 11,002 10,646
Deferred Income Taxes 21,838 21,934
Other Current Assets 11,283 13,035
----------------- ---------------
Current Assets 148,375 180,370
Equipment and Property, Net 45,186 37,484
Goodwill and Other
Intangible Assets 193,781 104,470
Deferred Income Taxes 9,701 34,760
Prepaid Pension 24,964 0
Other Assets 5,840 0
----------------- ---------------
Total Assets $ 427,847 $ 357,084
================= ===============
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LIABILITIES
Accounts Payable $ 14,378 $ 13,482
Accrued Insurance 13,049 13,050
Accrued Payroll 38,684 33,218
Unearned Revenue 66,566 49,533
Other Current Liabilities 49,810 37,787
----------------- ---------------
Current Liabilities 182,487 147,070
Long-Term Accrued Liabilities 66,117 90,173
----------------- ---------------
Total Liabilities 248,604 237,243
----------------- ---------------
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STOCKHOLDERS' EQUITY
Common Stock 45,668 45,108
Retained Earnings and
Other Equity 133,575 74,733
----------------- ---------------
Total Stockholders' Equity 179,243 119,841
----------------- ---------------
Total Liabilities and
Stockholders' Equity $ 427,847 $ 357,084
================= ===============
ROLLINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30
(In thousands except per share data)
Third Quarter Nine Months
--------------------------- ---------------------------
2004 2003 2004 2003
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------ ------------- ------------ -------------
REVENUES $ 202,257 $ 178,262 $ 568,647 $ 518,489
------------ ------------- ------------ -------------
COSTS AND EXPENSES
Cost of Services Provided 106,748 96,065 297,547 275,549
Depreciation and Amortization 6,249 5,065 16,670 15,258
Sales, General and Administrative 70,080 61,413 193,410 178,101
(Gain)/Loss on Sales of Assets (315) 33 (14,457) (36)
Interest Income (68) (120) (265) (280)
------------ ------------- ---------------------------
TOTAL COSTS AND EXPENSES 182,694 162,456 492,905 468,592
------------ ------------- ------------ -------------
INCOME BEFORE INCOME TAXES 19,563 15,806 75,742 49,897
PROVISION FOR INCOME TAXES 7,925 6,006 31,576 18,961
------------ ------------- ------------ -------------
NET INCOME $ 11,638 $ 9,800 $ 44,166 $ 30,936
============ ============= ============ =============
EARNINGS PER SHARE - BASIC $ 0.25 $ 0.22 $ 0.97 $ 0.69
============ ============= ============ =============
EARNINGS PER SHARE - DILUTED $ 0.25 $ 0.21 $ 0.95 $ 0.67
============ ============= ============ =============
AVERAGE SHARES OUTSTANDING - BASIC 45,660 45,115 45,504 45,049
AVERAGE SHARES OUTSTANDING - DILUTED 46,797 45,994 46,731 46,170
ROLLINS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30
(In thousands)
(Unaudited)
2004 2003
--------------- --------------
Operating Activities
Net Income $ 44,166 $ 30,936
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and Amortization 16,670 15,258
Other Operating Activities (856) 12,540
--------------- --------------
Net Cash Provided by Operating Activities 59,980 58,734
--------------- --------------
Investing Activities
Purchases of Equipment and Property (6,707) (8,744)
Net Cash Used for Acquisition of Companies (103,415) (1,543)
Sale of Marketable Securities, Net 21,866 (27,000)
Proceeds from Sale of Assets, Net of Deferred Gain 15,473 0
--------------- --------------
Net Cash Provided by (Used In) Investing Activities (72,783) (37,287)
--------------- --------------
Financing Activities
Dividends Paid (8,187) (6,754)
Other 2,344 2,058
--------------- --------------
Net Cash Used in Financing Activities (5,843) (4,696)
--------------- --------------
Net Increase/(Decrease) in Cash and Cash Equivalents (18,646) 16,751
Cash and Cash Equivalents at Beginning of Year 59,540 38,315
--------------- --------------
Cash and Cash Equivalents at End of Period $ 40,894 $ 55,066
=============== ==============
CONFERENCE CALL
Rollins, Inc.
(NYSE: ROL)
Management will hold a conference call to discuss
third quarter results on:
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Wednesday, October 27, 2004 at:
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10:00 a.m. Eastern
9:00 a.m. Central
8:00 a.m. Mountain
7:00 a.m. Pacific
TO PARTICIPATE:
Please dial 800-240-5318 domestic;
303-205-0066 international
at least 5 minutes before start time.
REPLAY: through November 3, 2004 at 11:00 p.m.
Please dial 800-405-2236/303-590-3000, Passcode: 11011514
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
Revenue Excluding Western
Third Quarter
-----------------------------
2004 2003 $B/(W) %B/(W)
Total Net Revenues $ 202,257 $ 178,262 $ 23,995 13.5 %
Less:
Western Acquisition 17,601 0 17,601
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Revenue Excluding Western $ 184,656 $ 178,262 $ 6,394 3.6 %
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