Rollins, Inc. Reports Second Quarter Financial Results
Revenues Increased 3.2%, EPS Rose 10.7%
ATLANTA--(BUSINESS WIRE)--
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)
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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
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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
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Total Assets $463,374 $443,222
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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
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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
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Total Liabilities 255,064 255,181
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STOCKHOLDERS' EQUITY
Common stock 67,361 67,874
Retained earnings and other equity 140,949 120,167
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Total Stockholders' Equity 208,310 188,041
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Total Liabilities and Stockholders' Equity $463,374 $443,222
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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
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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)
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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)
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Net cash provided by operating activities 45,460 34,952
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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)
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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
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Net cash used in financing activities (38,756) (25,735)
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Effect of exchange rate changes on cash 1,380 909
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Net decrease in cash and cash equivalents (6,300) (5,844)
Cash and cash equivalents at beginning of
period 63,344 43,065
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Cash and cash equivalents at end of period $ 57,044 $ 37,221
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CONFERENCE CALL ANNOUNCEMENT
Rollins, Inc.
(NYSE: ROL)
Management will hold a conference call to discuss
Second Quarter results on:
Wednesday, July 25, 2007 at:
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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.
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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
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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 July 25, 2007