Exhibit 99.1
For Further Information Contact
Harry J. Cynkus
(404) 888-2922
FOR IMMEDIATE RELEASE
ROLLINS, INC.
REPORTS FIRST QUARTER FINANCIAL RESULTS
SALES INCREASED 3.6%, EPS INCREASED 18.8%
ATLANTA, GEORGIA, April 25, 2007: Rollins, Inc. (NYSE:ROL), a premier North American consumer and commercial services company, today reported revenues for the first quarter ended March 31, 2007 grew 3.6% to $201.2 million compared to $194.2 million for the first quarter ended March 31, 2006.
The Company reported record net income of $12.8 million or $0.19 per diluted share for the first quarter 2007, compared to $10.9 million or $0.16 per diluted share for the same period in 2006, which represents an 18.8% increase.
On January 23, 2007, Rollins increased the Companys regular quarterly cash dividend to shareholders 20 percent to $0.075, returning $5.3 million to investors during the first quarter 2007. The Company also announced that it repurchased 592,000 shares of common stock at a weighted average price of $22.84 per share during the quarter. In total, approximately 1.7 million 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 to have reported solid year-over-year improvement in both revenue and net income for the first quarter. We are continuing to invest in our business and are looking forward to reporting our progress in the important second quarter."
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, Panama and Costa Rica 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. 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 trends; 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, 2006.
ROLLINS, INC. AND SUBSIDIARIES |
| ||||||||
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
| ||||||||
(in thousands) |
| ||||||||
|
|
2007 |
|
|
|
2006 |
| ||
At March 31, |
|
(unaudited) |
|
|
|
(unaudited) |
| ||
ASSETS |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
54,994 |
|
|
|
$ |
53,229 |
|
Trade receivables, short-term |
|
|
50,711 |
|
|
|
|
45,315 |
|
Materials and supplies |
|
|
8,691 |
|
|
|
|
8,899 |
|
Deferred income taxes |
|
|
19,603 |
|
|
|
|
23,904 |
|
Other current assets |
|
|
9,971 |
|
|
|
|
9,276 |
|
Total Current Assets |
|
|
143,970 |
|
|
|
|
140,623 |
|
|
|
|
|
|
|
|
|
|
|
Equipment and property, net |
|
|
76,850 |
|
|
|
|
68,314 |
|
Goodwill and other intangible assets |
|
|
200,375 |
|
|
|
|
207,201 |
|
Deferred income taxes |
|
|
12,956 |
|
|
|
|
18,149 |
|
Trade receivables, long-term |
|
|
8,519 |
|
|
|
|
8,669 |
|
Other assets |
|
|
5,514 |
|
|
|
|
4,368 |
|
Total Assets |
|
$ |
448,184 |
|
|
|
$ |
447,324 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
Capital leases |
|
$ |
1,183 |
|
|
|
$ |
797 |
|
Accounts payable |
|
|
16,965 |
|
|
|
|
18,146 |
|
Accrued insurance |
|
|
13,978 |
|
|
|
|
16,359 |
|
Accrued compensation and related liabilities |
|
|
33,084 |
|
|
|
|
31,562 |
|
Unearned revenue |
|
|
83,674 |
|
|
|
|
84,020 |
|
Other current liabilities |
|
|
34,751 |
|
|
|
|
42,225 |
|
Total Current Liabilities |
|
|
183,635 |
|
|
|
|
193,109 |
|
|
|
|
|
|
|
|
|
|
|
Capital leases, less current portion |
|
|
939 |
|
|
|
|
440 |
|
Accrued pension |
|
|
6,946 |
|
|
|
|
20,651 |
|
Long-term accrued liabilities |
|
|
51,799 |
|
|
|
|
48,969 |
|
Total Liabilities |
|
|
243,319 |
|
|
|
|
263,169 |
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS EQUITY |
|
|
|
|
|
|
|
|
|
Common stock |
|
|
67,946 |
|
|
|
|
68,450 |
|
Retained earnings and other equity |
|
|
136,919 |
|
|
|
|
115,705 |
|
Total Stockholders Equity |
|
|
204,865 |
|
|
|
|
184,155 |
|
Total Liabilities and Stockholders Equity |
|
$ |
448,184 |
|
|
|
$ |
447,324 |
|
ROLLINS, INC. AND SUBSIDIARIES |
|
| ||||||||||||
CONSOLIDATED STATEMENTS OF INCOME |
|
| ||||||||||||
FOR THE FIRST QUARTER ENDED MARCH 31, |
|
| ||||||||||||
(in thousands except per share data) |
|
| ||||||||||||
(unaudited) |
|
| ||||||||||||
|
|
|
|
|
|
|
| |||||||
|
|
Three months ended |
|
| ||||||||||
|
|
March 31, |
|
| ||||||||||
|
|
2007 |
|
|
|
2006 |
| |||||||
REVENUES |
|
|
|
|
|
|
|
|
| |||||
Customer services |
|
$ |
201,232 |
|
|
|
$ |
194,187 |
| |||||
COSTS AND EXPENSES |
|
|
|
|
|
|
|
|
| |||||
Cost of services provided |
|
|
106,836 |
|
|
|
|
107,014 |
| |||||
Depreciation and amortization |
|
|
6,686 |
|
|
|
|
6,793 |
| |||||
Sales, general and administrative |
|
|
67,041 |
|
|
|
|
62,500 |
| |||||
Gain on sales of assets |
|
|
(7 |
) |
|
|
|
|
| |||||
Interest income |
|
|
(552 |
) |
|
|
|
(292 |
) | |||||
|
|
|
180,004 |
|
|
|
|
176,015 |
| |||||
INCOME BEFORE TAXES |
|
|
21,228 |
|
|
|
|
18,172 |
| |||||
PROVISION FOR INCOME TAXES |
|
|
8,435 |
|
|
|
|
7,269 |
| |||||
NET INCOME |
|
$ |
12,793 |
|
|
|
$ |
10,903 |
| |||||
|
|
|
|
|
|
|
|
|
| |||||
NET INCOME PER SHARE - BASIC |
|
$ |
0.19 |
|
|
|
$ |
0.16 |
| |||||
NET INCOME PER SHARE - DILUTED |
|
$ |
0.19 |
|
|
|
$ |
0.16 |
| |||||
|
|
|
|
|
|
|
|
|
| |||||
Weighted average shares outstanding - basic |
|
|
67,321 |
|
|
|
|
67,675 |
| |||||
Weighted average shares outstanding - Diluted |
|
|
68,729 |
|
|
|
|
69,583 |
| |||||
ROLLINS, INC. AND SUBSIDIARIES |
| ||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
| ||||||||||
FOR THE THREE MONTHS ENDED MARCH 31, |
| ||||||||||
(in thousands) |
| ||||||||||
|
|
|
|
2007 |
|
|
|
2006 |
| ||
|
|
|
|
(unaudited) |
|
|
|
(unaudited) |
| ||
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
|
$ |
12,793 |
|
|
|
$ |
10,903 |
|
Adjustments to reconcile net income to net cash |
|
|
|
|
|
|
|
|
|
|
|
Provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
6,686 |
|
|
|
|
6,793 |
|
Provision for deferred income taxes |
|
|
|
|
2,097 |
|
|
|
|
1,404 |
|
Stock based compensation |
|
|
|
|
477 |
|
|
|
|
414 |
|
Gain/(Loss) on sales of assets |
|
|
|
|
(7 |
) |
|
|
|
|
|
Other, net |
|
|
|
|
8 |
|
|
|
|
(8 |
) |
(Increase)/decrease in assets |
|
|
|
|
|
|
|
|
|
|
|
Trade receivables |
|
|
|
|
2,251 |
|
|
|
|
3,164 |
|
Materials and supplies |
|
|
|
|
(290 |
) |
|
|
|
183 |
|
Other current assets |
|
|
|
|
(2,771 |
) |
|
|
|
(172 |
) |
Other non-current assets |
|
|
|
|
527 |
|
|
|
|
777 |
|
Increase/(decrease) in liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
|
|
|
(8,300 |
) |
|
|
|
3,571 |
|
Unearned revenue |
|
|
|
|
4,233 |
|
|
|
|
4,030 |
|
Accrued insurance |
|
|
|
|
298 |
|
|
|
|
969 |
|
Accrual for termite contracts |
|
|
|
|
(401 |
) |
|
|
|
(600 |
) |
Long-term accrued liabilities |
|
|
|
|
1,963 |
|
|
|
|
(3,116 |
) |
Net cash provided by operating activities |
|
|
|
|
19,564 |
|
|
|
|
28,312 |
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
Purchase of equipment and property |
|
|
|
|
(6,143 |
) |
|
|
|
(5,433 |
) |
Acquisitions of companies |
|
|
|
|
(1,097 |
) |
|
|
|
(4,313 |
) |
Cash from sales of franchises |
|
|
|
|
|
|
|
|
|
351 |
|
Proceeds from sales of assets |
|
|
|
|
6 |
|
|
|
|
|
|
Net cash used in investing activities |
|
|
|
|
(7,234 |
) |
|
|
|
(9,395 |
) |
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
Dividends paid |
|
|
|
|
(5,320 |
) |
|
|
|
(4,276 |
) |
Common stock purchased |
|
|
|
|
(12,362 |
) |
|
|
|
(4,092 |
) |
Common stock options exercised |
|
|
|
|
681 |
|
|
|
|
281 |
|
Principal payments on capital leases |
|
|
|
|
(1,662 |
) |
|
|
|
(148 |
) |
Other |
|
|
|
|
(1,936 |
) |
|
|
|
(436 |
) |
Net cash used in financing activities |
|
|
|
|
(20,599 |
) |
|
|
|
(8,671 |
) |
Effect of exchange rate changes on cash |
|
|
|
|
(81 |
) |
|
|
|
(82 |
) |
Net increase in cash and cash equivalents |
|
|
|
|
(8,350 |
) |
|
|
|
10,164 |
|
Cash and cash equivalents at beginning of period |
|
|
|
|
63,344 |
|
|
|
|
43,065 |
|
Cash and cash equivalents at end of period |
|
|
|
$ |
54,994 |
|
|
|
$ |
53,229 |
|
CONFERENCE CALL ANNOUNCEMENT
Rollins, Inc.
(NYSE: ROL)
Management will hold a conference call to discuss
First Quarter results on:
Wednesday, April 25, 2007 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 800-240-4186 domestic;
303-205-0033 international
at least 5 minutes before start time.
REPLAY: available through May 2, 2007
Please dial 800-405-2236/303-590-3000, Passcode: 11088292
THIS CALL CAN ALSO BE ACCESSED THROUGH THE INTERNET AT
www.viavid.net
Questions?
Contact Janet Jazimin at Financial Relations Board at 212-827-3777
Or email to jjazimin@financialrelationsboard.com