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 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 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 Company’s 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