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)
---------------------------------------------- -----------------------
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
                                               ----------- -----------
   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
                                               ----------- -----------
   Total Assets                                   $483,412    $454,185
                                               =========== ===========

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
                                               ----------- -----------
Total Liabilities and Stockholders' Equity        $483,412    $454,185
                                               =========== ===========


                    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
                                               =========== ===========

                  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.