Exhibit 99.1

 

For Further Information Contact

Harry J. Cynkus (404) 888-2922

 

FOR IMMEDIATE RELEASE

 

ROLLINS, INC. REPORTS FOURTH QUARTER AND FULL-YEAR 2008

FINANCIAL RESULTS

 

Company Records Revenues of $1.0 Billion for Full Year; 11th Consecutive Quarter of Improved Earnings Results

 

·                  Revenue increased 14.9% for the quarter and 14.0% for full year, including the effect of acquisitions.

 

·                  Net income up 5.2% for the quarter and 6.5% for the full year

 

·                  Earnings per diluted share rose 8.3% for the quarter  to  $0.13  from  $0.12 and 7.8% to $0.69 from  $0.64 for the full year

 

ATLANTA, GEORGIA, January 28, 2009: Rollins, Inc. (NYSE:ROL), a premier North American consumer and commercial services company, today reported unaudited financial results for its fourth quarter and year ended December 31, 2008.

 

The Company recorded fourth quarter revenues of $248.1 million, an increase of 14.9% over the prior year’s fourth quarter revenue of $216.0 million.  The increase was primarily due to revenues from Home Team Pest Defense. Revenue growth excluding the April 2008 acquisition of HomeTeam Pest Defense improved 0.2%(1). Revenue growth in the 4th quarter was impacted somewhat by the poor economic conditions as well as the decline in the Canadian dollar.

 

Net income increased 5.2% to $12.6 million or $0.13 per diluted share for the fourth quarter ended December 31, 2008, compared to $11.9 million or $0.12 per diluted share for the same period in 2007.  EBITDA increased 28.4% for the quarter.(2)

 

During the fourth quarter, the Company repurchased 835,300 shares of common stock at a weighted average price of $15.57 per share, with a total of 1,385,475 shares repurchased in 2008.

 

For the year-ended December 31, 2008, revenues rose 14.0% to slightly over $1.0 billion, compared to $894.9 million for the prior year.  This increase is principally due to the Company’s efforts to increase its commercial business, an increase in the number of sales, while maintaining customer retention and the acquisition of HomeTeam.  Excluding the revenue of HomeTeam Pest Defense, revenues for the year improved 3.0%(1).

 

Rollins’ net income for the full year rose 6.5% to $68.9 million, or $0.69 per diluted share, compared to net income of $64.7 million, or $0.64 per diluted share for the prior year. EBITDA increased 13.5% for full year 2008.(2)

 

Rollins’ balance sheet continued to grow with total assets increasing to $572.5 million and stockholder’s equity of $228.4 million.

 

(1) Additional disclosure regarding this financial measure is included in the financial tables attached to this press release.

(2) EBITDA is a financial measure which does not conform to generally accepted accounting principles (GAAP). Additional disclosure regarding this non-GAAP financial measure is included in the attachment to this press release.

 

 

Gary W. Rollins, President and Chief Executive Officer of Rollins, Inc. stated, “We are pleased with the results we have achieved for both our fourth quarter and full year.  Despite the tough economy, we made headway this year growing our revenues and increasing our profitability.  In addition, we achieved a milestone this year when the Company’s revenues topped $1.0 billion for the first time.  We continued to see the benefits from our program investments, which have generated improved sales growth as well as improved service efficiency”.

 

“Our strong balance sheet has allowed us to continue our plan to make strategic acquisitions.  HomeTeam Pest Defense has been a great addition to our Company.  We are extremely pleased with the contributions that HomeTeam has made to our revenues and profits.  They have exceeded our expectations, and we look forward to them playing a significant role in the company going forward.”

 

Mr. Rollins concluded, “It is difficult to determine when the economy will turnaround and the financial crisis will end; however we believe that we are well positioned to respond appropriately and adjust our business to meet these uncertainties.  We will continue our plan to make prudent investments to grow our business both organically and through strategic acquisitions.  We are positive about our Company’s opportunities in the new year.”

 

Rollins, Inc. is a premier North American consumer and commercial services company. Through its wholly owned subsidiaries, Orkin, Inc., PCO Services, HomeTeam Pest Defense, Western Pest Services and The Industrial Fumigant Company, the Company provides essential pest control services and protection against termite damage, rodents and insects to over 2 million customers in the United States, Canada, Mexico, Central America, the Caribbean, the Middle East and Asia from over 500 locations. You can learn more about our subsidiaries by visiting our web sites at www.orkin.com, www.pestdefense.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 forward-looking statements include the Company’s expectation that Home Team Pest Defense will play a significant role in our growth strategy going forward; the Company believes that it is well positioned to adjust its business to meet uncertainties in the economy; the Company’s plan to continue its strategy to make prudent investments to grow its business both organically and through strategic acquisitions; and the Company’s excitement about its opportunities in the new year. 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; 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, 2007.

 

 

ROLLINS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in thousands)

 

At December 31, (unaudited)		2008			2007
ASSETS
Cash and cash equivalents		$	13,716		$	71,280
Trade receivables, short-term		56,884			52,618
Accounts Receivable - Other		2,185			1,839
Materials and supplies		10,893			8,846
Deferred income taxes		20,018			17,162
Other current assets		13,142			8,495
Total Current Assets		116,838			160,240
Equipment and property, net		78,625			77,370
Goodwill		187,266			126,684
Other Intangible Assets		25,719			9,232
Customer Contracts		129,092			63,056
Deferred income taxes		17,886			7,576
Trade receivables, long-term		11,124			8,409
Prepaid Pension		—			16,624
Other assets		5,967			6,037
Total Assets		$	572,517		$	475,228
LIABILITIES
Loans outstanding		$	65,000		$	—
Capital leases		450			1,186
Accounts payable		18,782			19,140
Accrued insurance		15,404			13,505
Accrued compensation and related liabilities		56,334			45,910
Other current liabilities		28,569			26,587
Unearned revenue		88,288			81,678
Total Current Liabilities		272,827			188,006
Capital leases, less current portion		171			601
Accrued pension		20,353			—
Long-term accrued liabilities		50,733			53,068
Total Liabilities		344,084			241,675
STOCKHOLDERS’ EQUITY
Common stock		100,041			100,636
Retained earnings and other equity		128,392			132,917
Total Stockholders’ Equity		228,433			233,553
Total Liabilities and Stockholders’ Equity		$	572,517		$	475,228

 

 

ROLLINS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands except per share data)

(unaudited)

 

		Fourth Quarter Ended						Twelve Months Ended
		December 31,						December 31,
		2008			2007			2008			2007
REVENUES
Customer services		$	248,076		$	215,954		$	1,020,564		$	894,920
COSTS AND EXPENSES
Cost of services provided		133,050			117,199			534,494			468,665
Depreciation and amortization		9,096			6,586			33,443			27,068
Sales, general and administrative		84,120			74,633			339,078			296,615
(Gain)/loss on sales of assets		23			61			(166		)	(52		)
Interest (income)/expense, net		913			(749		)	761			(2,289		)
		227,202			197,730			907,610			790,007
INCOME BEFORE TAXES		20,874			18,224			112,954			104,913
PROVISION FOR INCOME TAXES		8,321			6,290			44,020			40,182
NET INCOME		$	12,553		$	11,934		$	68,934		$	64,731
NET INCOME PER SHARE - BASIC		$	0.13		$	0.12		$	0.69		$	0.65
NET INCOME PER SHARE - DILUTED		$	0.13		$	0.12		$	0.69		$	0.64
Weighted average shares outstanding - basic		98,851			99,854			99,209			100,299
Weighted average shares outstanding - diluted		99,659			101,051			100,081			101,409

 

 

ROLLINS, INC. AND SUBSIDIARIES

RECONCILIATION

REVENUE EXCLUDING HOMETEAM PEST DEFENSE

 

		Three Months Ended December 31,						$Better/			%Better/
		2008			2007			(Worse)			(Worse)
Net Revenues		$	248,076		$	215,954		$	32,122		14.9	%
Less: Revenues from HomeTeam Pest Defense		31,694			—			31,694
Revenue Excluding HomeTeam Pest Defense		$	216,382		$	215,954		$	428		0.2	%

 

ROLLINS, INC. AND SUBSIDIARIES

RECONCILIATION

REVENUE EXCLUDING HOMETEAM PEST DEFENSE

 

		Twelve Months Ended December 31,						$Better/			%Better/
		2008			2007			(Worse)			(Worse)
Net Revenues		$	1,020,564		$	894,920		$	125,644		14.0	%
Less: Revenues from HomeTeam Pest Defense		98,931			—			98,931
Revenue Excluding HomeTeam Pest Defense		$	921,633		$	894,920		$	26,713		3.0	%

 

ROLLINS, INC. AND SUBSIDIARIES

RECONCILIATION

EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA)

 

			Three Months Ended December 31,						$Better/			%Better/
			2008			2007			(Worse)			(Worse)
Net Income			$	12,553		$	11,934		$	619		5.2	%
Add:	Provision For Income Taxes		8,321			6,290			2,031			32.3
	Interest (Income)/Expense		913			(749		)	1,662			221.9
	Depreciation of Fixed Assets		3,856			3,276			580			17.7
	Amortization of Intangible Assets		5,240			3,310			1,930			58.3
EBITDA			$	30,883		$	24,061		$	6,822		28.4	%

 

 

ROLLINS, INC. AND SUBSIDIARIES

RECONCILIATION

EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA)

 

			Twelve Months Ended December 31,						$Better/			%Better/
			2008			2007			(Worse)			(Worse)
Net Income			$	68,934		$	64,731		$	4,203		6.5	%
Add:	Provision For Income Taxes		44,020			40,182			3,838			9.6
	Interest (Income)/Expense		761			(2,289		)	3,050			133.2
	Depreciation of Fixed Assets		14,205			13,677			528			3.9
	Amortization of Intangible Assets		19,238			13,391			5,847			43.7
EBITDA			$	147,158		$	129,692		$	17,466		13.5	%

 

 

(( CONFERENCE CALL ANNOUNCEMENT ((

 

Rollins, Inc.

 

(NYSE: ROL)

 

 

Management will hold a conference call to discuss

Fourth Quarter results on:

 

Wednesday, January 28, 2009 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 800-257-6566 domestic;

303-262-2161 international

at least 5 minutes before start time.

 

REPLAY: available through February 4, 2009

Please dial 800-405-2236/303-590-3000, Passcode: 11124781

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 jjazimin@financialrelationsboard.com