Exhibit 99.1

For Further Information Contact

Harry J. Cynkus

(404) 888-2922

 

FOR IMMEDIATE RELEASE

 

 

ROLLINS, INC.

REPORTS SECOND QUARTER FINANCIAL RESULTS

REVENUES INCREASED 3.2%, EPS ROSE 10.7%  

 

ATLANTA, GEORGIA, July 25, 2007 -- Rollins, Inc. (NYSE:ROL), a premier North American consumer and commercial services company, today reported revenues for the second quarter ended June 30, 2007 grew 3.2% to $239.6 million compared to $232.2 million for the second quarter ended June 30, 2006.

 

Net income rose 9.9% to a record $21.2 million or $0.31 per diluted share for the second quarter 2007, compared to $19.3 million or $0.28 per diluted share for the same period in 2006.

 

During the quarter, the Company repurchased 612,700 shares of common stock at a weighted average price of $22.84 per share, with a total of 1,204,700 shares repurchased year-to-date. In total, approximately 1.1 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 had a positive quarter where we saw an increase in revenues and posted record earnings. Key drivers in our business: customer retention, commercial pest controls sales, and termite claims were very favorable. Residential revenue was hampered however by an unseasonably cold April. The most unusual spring weather, in general, impacted insect activity. We were nevertheless pleased that our profit margin continued to improve even with less than expected revenue growth. We remain committed to having a successful year."  

 

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, Central America, and the Middle East 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 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 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 Company’s 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 June 30,

 

(unaudited)

 

 

 

(unaudited)

 

ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

 

$57,044

 

 

 

$37,221

 

Trade receivables, short-term

 

62,118

 

 

 

56,617

 

Materials and supplies

 

8,740

 

 

 

8,545

 

Deferred income taxes

 

18,528

 

 

 

23,983

 

Other current assets

 

9,621

 

 

 

10,023

 

Total Current Assets

 

156,051

 

 

 

136,389

 

 

 

 

 

 

 

 

 

Equipment and property, net

 

77,634

 

 

 

70,908

 

Goodwill and other intangible assets

 

202,022

 

 

 

205,063

 

Deferred income taxes

 

12,886

 

 

 

16,263

 

Trade receivables, long-term

 

8,908

 

 

 

10,170

 

Other assets

 

5,873

 

 

 

4,429

 

Total Assets

 

$463,374

 

 

 

$443,222

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

Capital leases

 

$1,270

 

 

 

$705

 

Accounts payable

 

24,712

 

 

 

14,740

 

Accrued insurance

 

14,225

 

 

 

19,143

 

Accrued compensation and related liabilities

 

40,052

 

 

 

39,185

 

Other current liabilities

 

27,975

 

 

 

35,059

 

Unearned revenue

 

85,754

 

 

 

84,378

 

Total Current Liabilities

 

193,988

 

 

 

193,210

 

 

 

 

 

 

 

 

 

Capital leases, less current portion

 

1,013

 

 

 

287

 

Accrued pension

 

6,946

 

 

 

15,651

 

Long-term accrued liabilities

 

53,117

 

 

 

46,033

 

Total Liabilities

 

255,064

 

 

 

255,181

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Common stock

 

67,361

 

 

 

67,874

 

Retained earnings and other equity

 

140,949

 

 

 

120,167

 

Total Stockholders’ Equity

 

208,310

 

 

 

188,041

 

Total Liabilities and Stockholders’ Equity

 

$463,374

 

 

 

$443,222

 

 

 

 

 

ROLLINS, INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF INCOME

 

FOR THE SECOND QUARTER AND SIX MONTHS ENDED JUNE 30,

 

(in thousands except per share data)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months ended

 

 

 

Six Months ended

 

 

 

June 30,

 

 

 

June 30,

 

 

 

2007

 

 

 

2006

 

 

 

2007

 

 

 

2006

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer services

 

$239,618

 

 

 

$232,222

 

 

 

$440,850

 

 

 

$426,408

 

COSTS AND EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services provided

 

121,601

 

 

 

119,035

 

 

 

228,437

 

 

 

226,049

 

Depreciation and amortization

 

6,911

 

 

 

6,945

 

 

 

13,597

 

 

 

13,738

 

Sales, general and administrative

 

76,787

 

 

 

74,368

 

 

 

143,828

 

 

 

136,868

 

(Gain)/loss on sales of assets

 

(89

)

 

 

2

 

 

 

(96

)

 

 

1

 

Interest income

 

(522

)

 

 

(344

)

 

 

(1,074

)

 

 

(636

)

 

 

204,688

 

 

 

200,006

 

 

 

384,692

 

 

 

376,020

 

INCOME BEFORE TAXES

 

34,930

 

 

 

32,216

 

 

 

56,158

 

 

 

50,388

 

PROVISION FOR INCOME TAXES

 

13,691

 

 

 

12,886

 

 

 

22,126

 

 

 

20,155

 

NET INCOME

 

$21,239

 

 

 

$19,330

 

 

 

$34,032

 

 

 

$30,233

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - BASIC

 

$0.32

 

 

 

$0.29

 

 

 

$0.51

 

 

 

$0.45

 

NET INCOME PER SHARE - DILUTED

 

$0.31

 

 

 

$0.28

 

 

 

$0.50

 

 

 

$0.44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding - basic

 

66,977

 

 

 

67,556

 

 

 

67,148

 

 

 

67,243

 

Weighted average shares outstanding - Diluted

 

67,675

 

 

 

69,243

 

 

 

67,874

 

 

 

69,040

 

 

 

 

 

ROLLINS, INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

FOR THE SIX MONTHS ENDED JUNE 30,

 

(in thousands)

 

 

 

 

 

2007

 

 

 

2006

 

 

 

 

 

(unaudited)

 

 

 

(unaudited)

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

Net Income

 

 

 

$34,032

 

 

 

$30,233

 

Adjustments to reconcile net income to net cash

 

 

 

 

 

 

 

 

 

provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

13,597

 

 

 

13,738

 

Provision for deferred income taxes

 

 

 

2,333

 

 

 

3,210

 

Stock based compensation

 

 

 

959

 

 

 

905

 

(Gain)/loss on sales of assets

 

 

 

(96

)

 

 

1

 

Excess tax benefits from share-based payments

 

 

 

(2,924

)

 

 

(50

)

Other, net

 

 

 

(85

)

 

 

(496

)

(Increase)/decrease in assets

 

 

 

 

 

 

 

 

 

Trade receivables

 

 

 

(9,492

)

 

 

(9,605

)

Materials and supplies

 

 

 

(339

)

 

 

537

 

Other current assets

 

 

 

(2,389

)

 

 

(912

)

Other non-current assets

 

 

 

(1,231

)

 

 

(21

)

Increase/(decrease) in liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 

 

1,975

 

 

 

402

 

Unearned revenue

 

 

 

6,314

 

 

 

4,388

 

Accrued insurance

 

 

 

943

 

 

 

1,768

 

Accrual for termite contracts

 

 

 

(1,900

)

 

 

1,000

 

Accrued pension

 

 

 

 

 

 

(5,000

)

Long-term accrued liabilities

 

 

 

3,763

 

 

 

(5,146

)

Net cash provided by operating activities

 

 

 

45,460

 

 

 

34,952

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

Purchase of equipment and property

 

 

 

(10,099

)

 

 

(11,351

)

Acquisitions of companies

 

 

 

(4,343

)

 

 

(5,020

)

Cash from sales of franchises

 

 

 

 

 

 

401

 

Proceeds from sales of assets

 

 

 

58

 

 

 

 

Net cash used in investing activities

 

 

 

(14,384

)

 

 

(15,970

)

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

Dividends paid

 

 

 

(10,240

)

 

 

(8,556

)

Common stock purchased

 

 

 

(30,868

)

 

 

(17,290

)

Common stock options exercised

 

 

 

879

 

 

 

381

 

Principal payments on capital leases

 

 

 

(1,451

)

 

 

(393

)

Excess tax benefits from share-based payments

 

 

 

2,924

 

 

 

50

 

Other

 

 

 

 

 

 

73

 

Net cash used in financing activities

 

 

 

(38,756

)

 

 

(25,735

)

Effect of exchange rate changes on cash

 

 

 

1,380

 

 

 

909

 

Net decrease in cash and cash equivalents

 

 

 

(6,300

)

 

 

(5,844

)

Cash and cash equivalents at beginning of period

 

 

 

63,344

 

 

 

43,065

 

Cash and cash equivalents at end of period

 

 

 

$57,044

 

 

 

$37,221

 

 

 

 

 

CONFERENCE CALL ANNOUNCEMENT

Rollins, Inc.

(NYSE: ROL)

 

 

 

Management will hold a conference call to discuss

Second Quarter results on:

 

Wednesday, July 25, 2007 at:

11:30 a.m. Eastern

10:30 a.m. Central

9:30 a.m. Mountain

8:30 a.m. Pacific

 

TO PARTICIPATE:

Please dial 800-257-7087 domestic;

303-262-2050 international

at least 5 minutes before start time.

 

REPLAY: available through August 1, 2007

Please dial 800-405-2236/303-590-3000, Pass code: 11093061

THIS CALL CAN ALSO BE ACCESSED THROUGH THE INTERNET AT

www.viavid.net

 

Questions?

Contact Janet Jazmin at Financial Relations Board at 212-827-3777

Or email to jjazmin@frbir.com