Exhibit 99.1 For Further Information Contact Harry J. Cynkus (404) 888-2922 FOR IMMEDIATE RELEASE ROLLINS, INC. REPORTS CONTINUED IMPROVEMENT IN QUARTERLY EARNINGS o 21st consecutive quarter of improved earnings results o Income Before Change in Accounting Principle increased 17.5% o Revenue increased 14.6%; excluding Western, revenues rose by 2.4% o Earnings Per Share rose 21.4% to $0.17, before the Accounting Change ATLANTA, GEORGIA, April,27 2005: Rollins, Inc. (NYSE:ROL), a premier North American consumer services company, today reported net income grew 17.5% to $11.6 million or $0.17 per diluted share for the first quarter ended March 31, 2005. This is in comparison to $9.9 million or $0.14 per diluted share for the same period in 2004 before the effect of a change in accounting principle. Net income for the first quarter of 2004 was $3.7 million or $0.05 per share after the change. The cumulative effect of the accounting change, recorded in the first quarter of 2004, was a charge against earnings of $6.2 million or $0.09 per diluted share, and resulted in a more preferable method for recording the termite damage reserve valuation and renewal revenues. Revenue for the first quarter grew 14.6% to $183.9 million compared to $160.4 million for the first quarter ended March 31, 2004. Western Pest Services, acquired April 30, 2004, had first quarter 2005 revenues of $19.6 million, and total revenues excluding Western were $164.3 million. Excluding Western Pest Services, revenues increased by 2.4%. This information is included for comparison purposes. Rollins' balance sheet remains strong with total assets increasing to $418.8 million and stockholders' equity increasing to $168.6 million. Total cash and cash equivalents rose to $55.9 million. In addition, the Company has previously announced that during the first quarter it repurchased 641,310 shares of its common stock, completed a three-for-two stock split effective March 10, 2005, and increased the quarterly dividend by 25% to $0.05. Gary W. Rollins, President and Chief Executive Officer of Rollins, Inc. commented, "We are pleased to report that the first quarter of 2005 marks our 21st consecutive quarter of increased earnings per share. This is a direct result of our team's commitment to the Company's growth strategies, productivity initiatives, and other programs that are providing improved operating efficiencies and excellent customer service." "In order to expand our market share, we recognize that we must be progressive and continue to invest in our business. We are fortunate to have a strong cash flow that enables us to make these investments whether they are acquisitions or internal infrastructure improvements. As an example of infrastructure investments, we are taking our training to its next generation with the launching of a satellite delivery system. This will ensure that our employees in all branches receive consistent training on a more frequent basis. We believe that this initiative will be unmatched in the pest control industry." Mr. Rollins continued, "Another example of business investment is the development of our routing and scheduling system. To that end we have selected an outside logistical vendor whose software and experience best meet our needs, with the capability of integration with the Company's FOCUS customer accounting system. When completed, this enhancement should allow our branches to improve their productivity, and on-time service delivery while reducing costs." Mr. Rollins concluded, "Although we're excited about these investments, we continue to focus on service quality, marketing, and expense control which will be complimentary to our business and lead to increasing shareholder value." Rollins, Inc. is one of the nation's largest consumer services companies. Through its wholly owned subsidiaries, Orkin, Inc. and Western Pest Services, 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 and Mexico from over 400 locations. You can learn more about Orkin by visiting our Web sites at www.orkin.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 The above release contains statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.These include statements regarding the impact of growth strategies, productivity initiatives and other programs, the expansion of market share, the impact of the satellite delivery training system, and the ability to increase shareholder value. 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, 2004. ROLLINS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (In thousands) 2005 2004 At March 31 (Unaudited) (Unaudited) - -------------------------------------------------------------------------------- ASSETS Cash and Cash Equivalents $ 55,894 $ 97,888 Trade Receivables Short-Term, Net 44,308 35,794 Materials and Supplies 8,600 10,147 Deferred Income Taxes 28,089 27,332 Other Current Assets 10,398 10,092 --------------- ------------- Current Assets 147,289 181,253 Equipment and Property, Net 52,930 34,618 Goodwill and Other Intangible Assets 193,209 101,445 Trade Receivables Long-Term, Net 9,942 9,755 Deferred Income Taxes 11,274 13,754 Other Assets 4,156 25,351 --------------- ------------- Total Assets $ 418,800 $ 366,176 =============== ============= - -------------------------------------------------------------------------------- LIABILITIES Accounts Payable $ 12,859 $ 15,275 Accrued Insurance 13,110 13,050 Accrued Payroll 31,943 26,963 Unearned Revenue 84,967 73,137 Other Current Liabilities 45,353 38,166 --------------- ------------- Current Liabilities 188,232 166,591 Long-Term Accrued Liabilities 61,928 56,798 --------------- ------------- Total Liabilities 250,160 223,389 --------------- ------------- - -------------------------------------------------------------------------------- STOCKHOLDERS' EQUITY Common Stock 68,293 68,098 Retained Earnings and Other Equity 100,347 74,689 --------------- ------------- Total Stockholders' Equity 168,640 142,787 --------------- ------------- Total Liabilities and Stockholders' Equity $ 418,800 $ 366,176 =============== ============= ROLLINS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE FIRST QUARTER ENDED MARCH 31 (In thousands except per share data) First Quarter --------------------------- 2005 2004 (Unaudited) (Unaudited) ------------ ------------- REVENUES $ 183,915 $ 160,416 ------------ ------------- COSTS AND EXPENSES Cost of Services Provided 98,637 86,542 Depreciation and Amortization 5,963 4,657 Sales, General and Administrative 60,283 52,768 Loss on Sales of Assets 3 1 Interest Income (462) (150) ------------ ------------- TOTAL COSTS AND EXPENSES 164,424 143,818 ------------ ------------- INCOME BEFORE INCOME TAXES 19,491 16,598 PROVISION FOR INCOME TAXES 7,896 6,732 ------------ ------------- INCOME BEFORE CUMULATIVE EFFECT CHANGE IN ACCOUNTING PRINCIPLE 11,595 9,866 CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET - (6,204) ------------ ------------- NET INCOME $ 11,595 $ 3,662 ============ ============= NET INCOME PER COMMON SHARE-BASIC: INCOME BEFORE CUMULATIVE EFFECT CHANGE IN ACCOUNTING PRINCIPLE $ 0.17 $ 0.15 CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET - (0.09) ------------ ------------- NET INCOME PER COMMON SHARE-BASIC $ 0.17 $ 0.06 ============ ============= NET INCOME PER COMMON SHARE-DILUTED: INCOME BEFORE CUMULATIVE EFFECT CHANGE IN ACCOUNTING PRINCIPLE $ 0.17 $ 0.14 CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET - (0.09) ------------ ------------- NET INCOME PER COMMON SHARE-DILUTED $ 0.17 $ 0.05 ============ ============= AVERAGE SHARES OUTSTANDING - BASIC 67,942 67,947 AVERAGE SHARES OUTSTANDING - DILUTED 69,609 69,964 ROLLINS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31 (In thousands) 2005 2004 Unaudited Unaudited -------------- -------------- Operating Activities Net Income $ 11,595 $ 3,662 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Change in Accounting Policy, Net - 6,204 Depreciation and Amortization 5,963 4,657 Provision for Deferred Income Taxes 3,347 1,273 Other, Net 198 63 Loss on Sale of Assets 3 1 (Increase) Decrease in Assets: Trade Receivables 1,072 2,873 Materials and Supplies 277 (310) Other Current Assets (3,030) (2,678) Other Non-Current Assets 235 (446) Increase (Decrease) in Liabilities: Accounts Payable and Accrued Expenses 229 3,761 Unearned Revenue 3,773 4,694 Accrued Insurance (1,940) (1,261) Accrual for Termite Contracts 829 (238) Long-Term Accrued Liabilities (2,823) (917) -------------- -------------- Net Cash Provided by Operating Activities 19,728 21,338 -------------- -------------- Investing Activities Purchases of Equipment and Property (6,417) (1,739) Net Cash Used for Acquisition of Companies (1,291) (158) Sales/(Purchases) of Marketable Securities, Net - 21,866 -------------- -------------- Net Cash Provided by (Used In) Investing Activities (7,708) 19,969 -------------- -------------- Financing Activities Dividends Paid (3,436) (2,718) Common Stock Purchased (10,604) - Other 554 (188) -------------- -------------- Net Cash Used in Financing Activities (13,486) (2,906) -------------- -------------- Effect of Exchange Rate Changes on Cash 623 (53) -------------- -------------- Net Increase/(Decrease) in Cash and Cash Equivalents (843) 38,348 Cash and Cash Equivalents at Beginning of Year 56,737 59,540 -------------- -------------- Cash and Cash Equivalents at End of Period $ 55,894 $ 97,888 ============== ============== 640 Fifth Avenue T 212 445 8000 New York, NY 10019 F 212 445 8001 www.webershandwick.com CONFERENCE CALL Rollins, Inc. (NYSE: ROL) Management will hold a conference call to discuss first quarter results on: - -------------------------------------------------------------------------------- Wednesday, April 27, 2005 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 800-240-7305 domestic; 303-262-2175 international at least 5 minutes before start time. REPLAY: through May 4, 2005 at 11:00 p.m. Please dial 800-405-2236/303-590-3000, Passcode: 11027715 THIS CALL CAN ALSO BE ACCESSED THROUGH THE INTERNET AT www.viavid.net Questions?: Janet Jazmin at FRB/Weber Shandwick at 212-827-3777 or email to jjazmin@financialrelationsboard.com
Reconciliation Revenue Excluding Western Pest Services and Dettelbach Pest Corp First Quarter ------------------------------- 2005 2004 $B/(W) %B/(W) -------------- -------------- -------------- -------------- Total Net Revenues $ 183,915 $ 160,416 $ 23,499 14.6 % Less: Western Acquisition 19,594 - 19,594 -------------------------------------------------------------- Revenue Excluding Western Pest Services $ 164,321 $ 160,416 $ 3,905 2.4 % Less: Dettelbach - 553 (553) -------------------------------------------------------------- Revenue Excluding Western Pest Services and Dettelbach $ 164,321 $ 159,863 $ 4,458 2.8 % ==============================================================