Rollins, Inc. Reports Fourth Quarter and Full Year 2018 Record Financial Results

Company posts 51st consecutive quarter of improved revenues and earnings

ATLANTA, Jan. 23, 2019 /PRNewswire/ -- 

  • 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%

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.

ROL-Fin

 

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

For Further Information Contact
Eddie Northen (404) 888-2242  

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

 

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SOURCE Rollins, Inc.