Form: 8-K

Current report filing

January 23, 2019

Documents

Exhibit 99.1

For Further Information Contact

Eddie Northen (404) 888-2242

 

 

FOR IMMEDIATE RELEASE

 

 

ROLLINS, INC. REPORTS FOURTH QUARTER AND FULL YEAR 2018

RECORD FINANCIAL RESULTS

 

Company posts 51st consecutive quarter of improved revenues and earnings

 

· Revenue increased 7.2% for the quarter and 8.8% for full year
· Fourth quarter net income of $51.0 million, or $0.16 per diluted share
· Full year net income of $231.7 million, or $0.71 per diluted share
· Fourth quarter Earnings before interest, taxes, depreciation and amortization (EBITDA)1 of $87.8 million, an increase of 5.1% and full year of $377.3 million, an increase of 7.5%

 

ATLANTA, GEORGIA, January 23, 2019: Rollins, Inc. (NYSE:ROL), a premier global consumer and commercial services company, reported strong unaudited financial results for its fourth quarter and year ended December 31, 2018.

 

The Company recorded fourth quarter revenues of $444.6 million, an increase of 7.2% over the prior year’s fourth quarter revenue of $414.7 million. Rollins reported net income of $51.0 million or $0.16 per diluted share in the fourth quarter that ended December 31, 2018, compared to $33.7 million or $0.10 per diluted share for the same period in 2017. EBITDA for the fourth quarter ended December 31, 2018 increased 5.1% to $87.8 million compared to $83.6 million for the same period prior year.

 

All share and per share data have been adjusted to reflect the 3-for-2 stock split effective December 10, 2018.

 

For the full-year ended December 31, 2018, Rollins’ revenues rose 8.8% to $1.822 billion compared to $1.674 billion for the prior year. The Company reported net income of $231.7 million, or $0.71 per diluted share, compared to net income of $179.1 million, or $0.55 per diluted share last year. EBITDA for the year ended December 31, 2018 increased 7.5% to $377.3 million compared to $350.8 million for the same period prior year.

 

On January 22, 2019, Rollins increased its regular quarterly cash dividend to shareholders 12.5% to $0.105 per share. This marks the 17th consecutive year the Board has increased its dividend a minimum of 12.0% or more.

 

 

 

Gary W. Rollins, Vice Chairman and Chief Executive Officer of Rollins, Inc. stated, “Once again, our group of leading pest control companies has achieved Rollins’ major financial objectives for 2018. These results reflect the execution of our strategic programs that were designed to improve our sales, while improving productivity and profit margins. We are very proud of our people who made 2018 successes possible and who now are clearly focused on achieving our Company’s 2019 plans and objectives.”

 

Mr. Rollins concluded, “On January 8, 2019, we announced our agreement to purchase Clark Pest Control of Stockton, Inc. located in Lodi, CA. Clark is a family owned company founded by Charlie Clark in 1950. Clark operates in 26 locations that serve residents and businesses throughout California and northwestern Nevada. They offer both residential and commercial pest control.” Rollins expects to close in the first quarter 2019 subject to regulatory clearance.

 

Rollins, Inc. is a premier global consumer and commercial services company. Through its wholly owned subsidiaries, Orkin LLC., HomeTeam Pest Defense, Orkin Canada, Western Pest Services, Northwest Exterminating, Critter Control, Inc., The Industrial Fumigant Company, Trutech LLC., Orkin Australia, Waltham Services LLC., OPC Pest Services, PermaTreat, Rollins UK, Aardwolf Pestkare, and Crane Pest Control, the Company provides essential pest control services and protection against termite damage, rodents and insects to more than two million customers in the United States, Canada, Central America, South America, the Caribbean, the Middle East, Asia, the Mediterranean, Europe, Africa, Mexico, and Australia from more than 700 locations. You can learn more about Rollins and its subsidiaries by visiting our web sites at www.orkin.com, www.pestdefense.com, www.orkincanada.ca, www.westernpest.com, www.callnorthwest.com, www.crittercontrol.com, www.indfumco.com, www.trutechinc.com, www.orkinau.com, www.allpest.com.au, www.walthamservices.com, www.opcpest.com, www.permatreat.com, www.cranepestcontrol.com, www.murraypestcontrol.com.au, www.statewidepestcontrol.com.au, www.safeguardpestcontrol.co.uk, www.aardwolfpestkare.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 statements about the Company’s focus on achieving our 2019 plans and objectives and the expectation that the transaction will close in the first quarter 2019 and receive appropriate regulatory approvals, including the expiration of the applicable waiting period under the Hart Scott Rodina Act.. 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, economic and competitive conditions which may adversely affect the Company’s business; the degree of success of the Company’s pest and termite process, 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; the Company’s ability to attract and retain skilled workers, and potential increases in labor costs; uncertainties of litigation; changes in various government laws and regulations, including environmental regulations; and the impact of the U. S. Government shutdown. 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, 2017.

 

 

1 EBITDA is a financial measure which does not conform to generally accepted accounting principles (GAAP). Additional disclosure regarding this non-GAAP financial measure is disclosed in Appendix A to this press release.

 

 

 

ROLLINS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in thousands)

 

At December 31, (unaudited)   2018   2017
ASSETS                
Cash and cash equivalents   $ 115,485     $ 107,050  
Trade accounts receivables, net     104,016       97,802  
Financed receivables, net     18,454       17,263  
Materials and supplies     15,788       14,983  
Other current assets     32,278       25,697  
Total Current Assets     286,021       262,795  
Equipment and property, net     136,885       134,088  
Goodwill     368,481       346,514  
Customer contracts     178,075       152,869  
Trademarks & Tradenames     54,140       49,998  
Other intangible assets, net     11,043       11,550  
Financed receivables, long-term, net     28,227       20,414  
Deferred income taxes, net     6,915       18,420  
Prepaid pension     5,274       17,595  
Other assets     19,063       19,420  
Total Assets   $ 1,094,124     $ 1,033,663  
LIABILITIES                
Accounts payable   $ 27,168     $ 26,161  
Accrued insurance, current     27,709       28,018  
Accrued compensation and related liabilities     77,741       73,016  
Unearned revenue     116,005       109,029  
Other current liabilities     50,406       58,345  
Total Current Liabilities     299,029       294,569  
Accrued insurance, less current portion     33,867       34,245  
Long-term accrued liabilities     49,320       50,925  
Total Liabilities     382,216       379,739  
STOCKHOLDERS’ EQUITY                
Common stock     327,308       326,988  
Retained earnings and other equity     384,600       326,936  
Total stockholders’ equity     711,908       653,924  
Total Liabilities and Stockholders’ Equity   $ 1,094,124     $ 1,033,663  

 

 

 

ROLLINS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands except per share data)

(unaudited)

 

    Three Months Ended   Twelve Months Ended
    December 31,   December 31,
    2018   2017   2018   2017
REVENUES                
Customer services   $ 444,623     $ 414,713     $ 1,821,565     $ 1,673,957  
COSTS AND EXPENSES                                
Cost of services provided     221,234       207,519       894,437       819,943  
Depreciation and amortization     16,643       14,950       66,792       56,580  
Sales, general and administrative     135,760       123,680       550,698       503,433  
Gain on sale of assets, net     (196 )     (63 )     (875 )     (242 )
Interest (income)/expense, net     (290 )     83       (220 )     (259 )
      373,151       346,169       1,510,832       1,379,455  
INCOME BEFORE INCOME TAXES     71,472       68,544       310,733       294,502  
PROVISION FOR INCOME TAXES     20,504       34,809       79,070       115,378  
NET INCOME   $ 50,968     $ 33,735     $ 231,663     $ 179,124  
NET INCOME PER SHARE - BASIC AND DILUTED   $ 0.16     $ 0.10     $ 0.71     $ 0.55  
Weighted average shares outstanding - basic and diluted     327,316       326,984       327,291       326,981  

 

 

 

 

(( CONFERENCE CALL ANNOUNCEMENT ((

Rollins, Inc.

(NYSE: ROL)

 

 

 

Management will hold a conference call to discuss

Fourth Quarter 2018 results on

 

Wednesday, January 23, 2019 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 800-458-4148 domestic;

323-794-2598 international
at least 5 minutes before start time.

 

REPLAY: available through January 30, 2018

Please dial 888-203-1112/719-457-0820, Passcode 7939620

THIS CALL CAN ALSO BE ACCESSED THROUGH THE INTERNET AT

www.viavid.com

 

Questions?

Contact Samantha Alphonso at Financial Relations Board at 212-827-3746

Or email to salphonso@mww.com

 

 

 

Appendix A

 

Rollins, Inc. has used the non-GAAP financial measure of earnings before interest, taxes, depreciation and amortization (EBITDA) in today’s earnings release, and anticipates using EBITDA in today’s earnings conference call. EBITDA should not be considered in isolation or as a substitute for operating income, net income or other performance measures prepared in accordance with U.S. GAAP. Rollins, Inc. uses EBITDA as a measure of operating performance because it allows us to compare performance consistently over various periods without regard to changes in our capital structure.

 

A non-GAAP financial measure is a numerical measure of financial performance, financial position, or cash flows that either 1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of operations, balance sheet or statement of cash flows, or 2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.

 

Set forth below is a reconciliation of EBITDA with Net Income, the most comparable GAAP measure.

 

ROLLINS, INC. AND SUBSIDIARIES

RECONCILIATION OF NET INCOME TO EBITDA

(in thousands except per share data)

(unaudited)

 

    Three Months Ended   Twelve Months Ended
    December 31,   December 31,
    2018   2017   2018   2017
Net Income   $ 50,968     $ 33,735     $ 231,663     $ 179,124  
Add:                                
Income tax provision     20,504       34,809       79,070       115,378  
Interest (income)/expense, net     (290 )     83       (220 )     (259 )
Depreciation and amortization     16,643       14,950       66,792       56,580  
EBITDA   $ 87,825     $ 83,577     $ 377,305     $ 350,823