Rollins, Inc. Reports Third Quarter Financial Results
Revenues Increased 4.5%, EPS Rose 12%
ATLANTA--(BUSINESS WIRE)--
Rollins, Inc. (NYSE:ROL), a premier North American consumer and commercial services company, today reported revenues for the third quarter ended September 30, 2007 grew 4.5% to $238.1 million compared to $227.8 million for the third quarter ended September 30, 2006.
Net income rose 10.1% to a record $18.8 million or $0.28 per diluted share for the third quarter 2007, compared to $17.0 million or $0.25 per diluted share for the same period in 2006.
Commenting on the Company's results, Gary W. Rollins, President and Chief Executive Officer of Rollins, Inc. said, "We are pleased by the increased rate of organic revenue growth for the quarter. Our sales and service programs are working and have resulted in improvements in both recurring revenues and customer retention. Commercial pest control, which now represents 44% of our business, continued to accelerate during the second quarter and we expect this area to perform well going forward."
"We continued to expand our footprint globally this quarter having announced two international franchises: one in the Dominican Republic and another in South Korea. We have established four international franchises this year and expect to continue to develop our worldwide presence. Likewise, the Company's strong free cash flow supports our ability to pursue acquisition opportunities. We remain optimistic about having a successful 2007."
Rollins, Inc. is a premier North American consumer and commercial services company. Through its wholly owned subsidiaries, Orkin, Inc., PCO Services, 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, Costa Rica, Honduras, the United Arab Emirates, the Dominican Republic and South Korea 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 forward-looking statements include the Company's expectation that its commercial pest control area will perform well going forward, the Company's expectation to continue to develop its worldwide presence, and the Company's continuing optimism about having a very successful 2007. 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 September 30, (unaudited) (unaudited)
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ASSETS
Cash and cash equivalents $ 81,821 $ 53,787
Trade receivables, short-term 61,430 57,817
Materials and supplies 8,244 8,398
Deferred income taxes 16,969 21,053
Other current assets 8,382 8,974
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Total Current Assets 176,846 150,029
Equipment and property, net 77,633 72,090
Goodwill 126,577 125,536
Other Intangible Assets 9,167 9,219
Customer Contracts 65,641 66,801
Deferred income taxes 12,588 16,867
Trade receivables, long-term 8,921 9,111
Other assets 6,039 4,532
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Total Assets $483,412 $454,185
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LIABILITIES
Capital leases $ 1,240 $ 623
Accounts payable 22,589 14,092
Accrued insurance 13,277 16,633
Accrued compensation and related liabilities 42,533 42,813
Other current liabilities 26,627 31,759
Unearned revenue 90,191 88,945
----------- -----------
Total Current Liabilities 196,457 194,865
Capital leases, less current portion 881 197
Accrued pension 6,946 15,651
Long-term accrued liabilities 54,466 44,593
----------- -----------
Total Liabilities 258,750 255,306
----------- -----------
STOCKHOLDERS' EQUITY
Common stock 67,456 67,783
Retained earnings and other equity 157,206 131,096
----------- -----------
Total Stockholders' Equity 224,662 198,879
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Total Liabilities and Stockholders' Equity $483,412 $454,185
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ROLLINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30,
(in thousands except per share data)
(unaudited)
Three Months ended Nine Months ended
September 30, September 30,
------------------- -------------------
2007 2006 2007 2006
--------- --------- --------- ---------
REVENUES
Customer services $238,116 $227,816 $678,966 $654,225
COSTS AND EXPENSES
Cost of services provided 123,029 119,206 351,466 345,255
Depreciation and
amortization 6,885 6,662 20,482 20,400
Sales, general and
administrative 78,154 74,472 221,982 211,340
(Gain)/loss on sales of
assets (17) (17) (113) (15)
Interest income (466) (332) (1,540) (968)
--------- --------- --------- ---------
207,585 199,991 592,277 576,012
--------- --------- --------- ---------
INCOME BEFORE TAXES 30,531 27,825 86,689 78,213
--------- --------- --------- ---------
PROVISION FOR INCOME TAXES 11,766 10,788 33,892 30,943
--------- --------- --------- ---------
NET INCOME $ 18,765 $ 17,037 $ 52,797 $ 47,270
========= ========= ========= =========
NET INCOME PER SHARE - BASIC $ 0.28 $ 0.25 $ 0.79 $ 0.70
========= ========= ========= =========
NET INCOME PER SHARE - DILUTED $ 0.28 $ 0.25 $ 0.78 $ 0.69
========= ========= ========= =========
Weighted average shares
outstanding - basic 66,608 67,068 66,966 67,184
Weighted average shares
outstanding - diluted 67,318 68,700 67,687 68,926
ROLLINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
(in thousands)
2007 2006
(unaudited) (unaudited)
----------- -----------
OPERATING ACTIVITIES
Net Income $ 52,797 $ 47,270
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 20,482 20,400
Provision for deferred income taxes 3,389 5,144
Stock based compensation 2,381 (1,357)
(Gain)/loss on sales of assets (113) (15)
Excess tax benefits from share-based
payments (2,924) (50)
Other, net (113) 3
(Increase)/decrease in assets
Trade receivables (8,675) (9,747)
Materials and supplies 276 685
Other current assets (1,153) 138
Other non-current assets (2,593) 735
Increase/(decrease) in liabilities:
Accounts payable and accrued expenses 850 3,461
Unearned revenue 10,751 8,955
Accrued insurance 488 1,398
Accrual for termite contracts (600) (3,900)
Accrued pension - (5,000)
Long-term accrued liabilities 3,295 (6,666)
----------- -----------
Net cash provided by operating activities 78,538 61,454
----------- -----------
INVESTING ACTIVITIES
Purchase of equipment and property (13,512) (15,657)
Acquisitions of companies (5,950) (5,050)
Cash from sales of franchises - 550
Proceeds from sales of assets 79 20
----------- -----------
Net cash used in investing activities (19,383) (20,137)
----------- -----------
FINANCING ACTIVITIES
Dividends paid (15,274) (12,790)
Common stock purchased (30,895) (19,761)
Common stock options exercised 1,379 435
Principal payments on capital leases (1,532) (566)
Excess tax benefits from share-based
payments 2,924 50
Other - 1,430
----------- -----------
Net cash used in financing activities (43,398) (31,202)
----------- -----------
Effect of exchange rate changes on cash 2,720 607
----------- -----------
Net increase in cash and cash equivalents 18,477 10,722
Cash and cash equivalents at beginning of
period 63,344 43,065
----------- -----------
Cash and cash equivalents at end of period $ 81,821 $ 53,787
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CONFERENCE CALL ANNOUNCEMENT
Rollins, Inc.
(NYSE: ROL)
Management will hold a conference call to discuss
Third Quarter results on:
Wednesday, OCTOBER 24, 2007 at:
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10:00 a.m. Eastern
9:00 a.m. Central
8:00 a.m. Mountain
7:00 a.m. Pacific
TO PARTICIPATE:
Please dial 800-257-7087 domestic;
303-262-2131 international
at least 5 minutes before start time.
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REPLAY: available through October 31, 2007
Please dial 800-405-2236/303-590-3000, Pass code: 11099316
THIS CALL CAN ALSO BE ACCESSED THROUGH THE INTERNET AT
www.viavid.net
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Questions?
Contact Janet Jazmin at Financial Relations Board at 212-827-3777
Or email to jjazmin@frbir.com
Source: Rollins, Inc.
Released October 24, 2007