Exhibit 99.1
For Further Information Contact
Harry J. Cynkus
(404) 888-2922
FOR IMMEDIATE RELEASE
ROLLINS, INC. REPORTS FIRST QUARTER FINANCIAL RESULTS
ATLANTA, GEORGIA, April 26, 2006: Rollins, Inc. (NYSE:ROL), a premier North American consumer and commercial services company, today reported revenues for the first quarter ended March 31, 2006 grew 5.6% to $194.2 million compared to $183.9 million for the first quarter ended March 31, 2005. Revenue growth excluding our recent acquisition of the Industrial Fumigant Company (IFC) improved 3.7%.
The Company recorded net income of $10.9 million or $0.16 per diluted share for the first quarter ended March 31, 2006, compared to $11.6 million or $0.17 per diluted share for the first quarter ended March 31, 2005
Rollins balance sheet remains strong with total assets of $447.3 million and stockholders equity increasing to $184.2 million. In the first quarter, the Company announced that it repurchased 211,466 shares of common stock at a weighted average price of $19.35 per share. In total, 3,053,858 additional shares may be purchased under previously approved programs by the Board of Directors.
Commenting on the Company's results, Gary W. Rollins, President and Chief Executive Officer of Rollins, Inc. said, We were pleased with our revenue improvement in the first quarter which reflected positive results in both our pest control and termite business. It is also an indication of the progress we are making with our sales investments. Although operating income for the first quarter was $1.3 million lower than the first quarter 2005, it did exceed our plan for the quarter. Our income was adversely affected by a $1.0 million seasonal loss at IFC, the previously announced investment we are making in expanding our sales force where we added approximately 100 new employees, as well as a $0.4 million increase in stock option expense.
We are optimistic about the year and remain committed to obtaining a positive return on our key operational investments.
Rollins, Inc. is a premier North American consumer and commercial services company. Through its wholly owned subsidiaries, Orkin, Inc., Western Pest Services, and The Industrial Fumigant Company, 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, Mexico and Panama from over 400 locations. You can learn more about our subsidiaries by visiting our Web sites at www.orkin.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 include statements regarding our optimism about the year and our commitment to obtain a positive return on our key operational investments. 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 Companys pest and termite process reforms and pest control selling and treatment methods; the Companys ability to identify and integrate potential acquisitions; climate and weather conditions; competitive factors and pricing practices; expected benefits of the commercial re-engineering project 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 Companys Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2005. The Company does not undertake to update its forward-looking statements.
ROLLINS, INC. AND SUBSIDIARIES | ||||
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | ||||
(In thousands) | ||||
|
|
2006 |
|
2005 |
At March 31 |
(Unaudited) |
|
(Unaudited) | |
|
|
|
| |
ASSETS |
|
|
| |
|
Cash and Cash Equivalents |
$ 53,229 |
|
$ 55,894 |
|
Trade Receivables Short-Term, Net |
45,315 |
|
44,308 |
|
Materials and Supplies |
8,899 |
|
8,600 |
|
Deferred Income Taxes |
23,904 |
|
28,089 |
|
Other Current Assets |
9,276 |
|
9,166 |
|
|
|
|
|
|
Current Assets |
140,623 |
|
146,057 |
|
|
|
|
|
|
Equipment and Property, Net |
68,314 |
|
52,930 |
|
Goodwill and Other Intangible Assets |
207,201 |
|
193,209 |
|
Trade Receivables Long-Term, Net |
8,669 |
|
9,942 |
|
Deferred Income Taxes |
18,149 |
|
11,274 |
|
Other Assets |
4,368 |
|
4,156 |
|
|
|
|
|
|
Total Assets |
$ 447,324 |
|
$ 417,568 |
|
|
|
|
|
LIABILITIES |
|
|
| |
|
|
|
|
|
|
Capital Leases |
797 |
|
- |
|
Accounts Payable |
18,146 |
|
12,859 |
|
Accrued Insurance |
16,359 |
|
13,110 |
|
Accrued Payroll |
31,562 |
|
31,943 |
|
Unearned Revenue |
84,020 |
|
83,735 |
|
Other Current Liabilities |
42,225 |
|
45,353 |
|
Current Liabilities |
193,109 |
|
187,000 |
|
|
|
|
|
|
Capital Leases |
440 |
|
- |
|
Accrued Pension |
20,651 |
|
10,579 |
|
Long-Term Accrued Liabilities |
48,969 |
|
51,349 |
|
|
|
|
|
|
Total Liabilities |
263,169 |
|
248,928 |
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
| |
|
Common Stock |
68,450 |
|
68,293 |
|
Retained Earnings and Other Equity |
115,705 |
|
100,347 |
|
|
|
|
|
|
Total Stockholders' Equity |
184,155 |
|
168,640 |
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity |
$ 447,324 |
|
$ 417,568 |
|
|
|
|
|
|
|
|
|
|
ROLLINS, INC. AND SUBSIDIARIES | ||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||
FOR THE FIRST QUARTER ENDED MARCH 31 | ||||||
(In thousands except per share data) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter | ||
|
|
|
|
2006 |
|
2005 |
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
REVENUES |
|
$ 194,187 |
|
$ 183,915 | |
|
COSTS AND EXPENSES |
|
|
|
| |
|
Cost of Services Provided |
|
107,014 |
|
100,249 | |
|
Depreciation and Amortization |
|
6,793 |
|
5,963 | |
|
Sales, General and Administrative |
|
62,500 |
|
58,671 | |
|
(Gain)/Loss on Sales of Assets |
|
- |
|
3 | |
|
Interest Income |
|
(292) |
|
(462) | |
|
|
TOTAL COSTS AND EXPENSES |
|
176,015 |
|
164,424 |
|
INCOME BEFORE INCOME TAXES |
|
18,172 |
|
19,491 | |
|
PROVISION FOR INCOME TAXES |
|
7,269 |
|
7,896 | |
|
NET INCOME |
|
$ 10,903 |
|
$ 11,595 | |
|
NET INCOME PER COMMON SHARE-BASIC: |
|
$ 0.16 |
|
$ 0.17 | |
|
NET INCOME PER COMMON SHARE-DILUTED: |
|
$ 0.16 |
|
$ 0.17 | |
|
|
|
|
|
|
|
|
AVERAGE SHARES OUTSTANDING - BASIC |
|
67,675 |
|
67,942 | |
|
AVERAGE SHARES OUTSTANDING - DILUTED |
|
69,583 |
|
70,063 |
ROLLINS, INC. AND SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
FOR THE THREE MONTHS ENDED MARCH 31 | ||||
(In thousands) | ||||
|
|
|
|
|
|
|
|
|
|
|
|
2006 |
|
2005 |
|
|
Unaudited |
|
Unaudited |
|
|
|
|
|
Operating Activities |
|
|
| |
|
Net Income |
$ 10,903 |
|
$ 11,595 |
|
Adjustments to Reconcile Net Income to Net Cash |
|
|
|
|
Provided by Operating Activities: |
|
|
|
|
Depreciation and Amortization |
6,793 |
|
5,963 |
|
Provision for Deferred Income Taxes |
1,404 |
|
3,347 |
|
Other, Net |
(5) |
|
198 |
|
Gain on Sale of Assets |
- |
|
3 |
|
(Increase) Decrease in Assets: |
|
|
|
|
Trade Receivables |
3,164 |
|
1,097 |
|
Materials and Supplies |
183 |
|
277 |
|
Other Current Assets |
(172) |
|
(2,957) |
|
Other Non-Current Assets |
777 |
|
235 |
|
Increase (Decrease) in Liabilities: |
|
|
|
|
Accounts Payable and Accrued Expenses |
3,275 |
|
229 |
|
Unearned Revenue |
4,030 |
|
3,700 |
|
Accrued Insurance |
969 |
|
(1,940) |
|
Accrual for Termite Contracts |
(600) |
|
829 |
|
Long-Term Accrued Liabilities |
(3,236) |
|
(3,118) |
|
Net Cash Provided by Operating Activities |
27,485 |
|
19,458 |
|
|
|
|
|
Investing Activities |
|
|
| |
|
Purchases of Equipment and Property |
(5,433) |
|
(6,417) |
|
Net Cash Used for Acquisition of Companies |
(4,313) |
|
(1,291) |
|
Cash from Sales of Franchises |
351 |
|
270 |
|
Net Cash Used In Investing Activities |
(9,395) |
|
(7,438) |
|
|
|
|
|
Financing Activities |
|
|
| |
|
Dividends Paid |
(4,276) |
|
(3,436) |
|
Common Stock Purchased |
(4,092) |
|
(10,604) |
|
Common Stock Options Exercised |
281 |
|
1,223 |
|
Other |
243 |
|
(669) |
|
Net Cash Used in Financing Activities |
(7,844) |
|
(13,486) |
|
Effect of Exchange Rate Changes on Cash |
(82) |
|
623 |
|
|
|
|
|
|
Net Increase/(Decrease) in Cash and Cash Equivalents |
10,164 |
|
(843) |
|
Cash and Cash Equivalents at Beginning of Year |
43,065 |
|
56,737 |
|
Cash and Cash Equivalents at End of Period |
$ 53,229 |
|
$ 55,894 |
|
|
|
|
|
** CONFERENCE CALL **
Rollins, Inc.
(NYSE: ROL)
Management will hold a conference call to discuss
first quarter results on:
Wednesday, April 26, 2006 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;
303-275-2170 international
at least 5 minutes before start time.
REPLAY: available through May 3, 2006
Please dial 800-405-2236/303-590-3000, Passcode: 11058674
THIS CALL CAN ALSO BE ACCESSED THROUGH THE INTERNET AT
www.viavid.net
Questions?
Contact Janet Jazmin at FRB/Weber Shandwick at 212-827-3777
Or email to jjazmin@financialrelationsboard.com