Exhibit 99.1
For Further Information Contact
Harry J. Cynkus (404) 888-2922
FOR IMMEDIATE RELEASE
ROLLINS, INC. REPORTS CONTINUED IMPROVEMENT IN QUARTERLY PERFORMANCE
Highlights
o 23rd consecutive quarter of improved performance
o Diluted Earnings per share rose 15.8% to $0.22
o Net income rose 10.8% to $15.1 million compared to $13.6 million for the
same period in 2004.
ATLANTA, GEORGIA, October 26, 2005: Rollins, Inc. (NYSE:ROL), a premier North
American consumer and commercial services company, today reported net income
grew 10.8% to $15.1 million or $0.22 per diluted share for the third quarter
ended September 30, 2005, compared to $13.6 million or $0.19 per diluted share
for the third quarter ended September 30, 2004. Revenues for the third quarter
grew 2.7% to $209.3 million compared to $203.9 million for the third quarter
ended September 30, 2004.
Rollins's net income for the first nine months of 2005 grew 18.9% to $45.4
million or $0.65 per diluted share, compared to $38.2 million or $0.54 per
diluted share for the first nine months of 2004. Revenues for the first nine
months of 2005 grew 7.1% to $607.6 million compared to $567.1 million for the
first nine months of 2004.
Rollins' balance sheet remains strong with total assets of $454.9 million and
stockholders' equity increasing to $178.7 million. Total cash and cash
equivalents rose to $79.5 million.
Commenting on the Company's results, Gary W. Rollins, President and Chief
Executive Officer of Rollins, Inc. said, "We are pleased to report our 23rd
quarter of improved performance.* During the quarter, revenues were negatively
impacted by approximately $1 million as a result of the effect of hurricanes
Katrina and Rita impacting some of our branches in Alabama, Louisiana,
Mississippi and Texas. Currently, it is difficult to estimate exactly when we
will begin to reverse these shortfalls since the ultimate status of many
impacted customer homes is uncertain at this time. Some branches will recover
sooner than others. As a result we expect to see an impact on our fourth
quarter. On a positive note, all of our 246 employees who were affected by the
hurricanes are safe and we are providing all employment either in this area or
other parts of the company.
"On October 4, we announced that we have completed the acquisition of the
Industrial Fumigant Company, (IFC). Prior to the acquisition, IFC had revenues
in excess of $24 million and was the 24th largest company in the pest
control industry. They have over 130 employees, 25 offices nationwide and 17
warehouses. IFC is an exemplary company and we expect their leadership position
in the food and commodity pest management segment to make a significant
contribution to the growth of our commercial operations. We look forward to
working with this talented group of professionals."
Mr. Rollins concluded, "We continue to focus on growing our commercial and
residential businesses through providing excellent pest services to our
customers and acquiring other pest control companies where beneficial."
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 and Mexico
from over 400 locations. You can learn more about Orkin 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.
* See Rollins's Form 8-K dated July 27, 2005, for details regarding improvements
in the quarter ended June 30, 2005.
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 include statements regarding the impact of hurricanes Katrina and Rita and
the success of 2005 for the Company and its shareholders. 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 September 30 (Unaudited) (Unaudited)
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ASSETS
Cash and Cash Equivalents $ 79,489 $ 40,894
Marketable Securities 0 0
----------------- ---------------
Total Cash and Marketable Securities 79,489 40,894
Trade Receivables Short-Term, Net 48,954 52,296
Materials and Supplies 7,358 11,002
Deferred Income Taxes 30,389 28,831
Other Current Assets 9,359 11,283
----------------- ---------------
Current Assets 175,549 144,306
Equipment and Property, Net 57,928 45,186
Goodwill and Other Intangible Assets 189,893 193,781
Trade Receivables Long-Term, Net 9,866 11,063
Deferred Income Taxes 17,441 6,569
Prepaid Pension 0 24,964
Other Assets 4,221 5,840
----------------- ---------------
Total Assets $ 454,898 $ 431,709
================= ===============
- ------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Accounts Payable $ 14,901 $ 14,321
Accrued Insurance 16,516 13,049
Accrued Payroll 38,816 38,741
Unearned Revenue 91,341 91,245
Other Current Liabilities 39,828 40,840
----------------- ---------------
Current Liabilities 201,402 198,196
Accrued Pension 27,291 0
Long-Term Accrued Liabilities 47,522 60,250
----------------- ---------------
Total Liabilities 276,215 258,446
----------------- ---------------
- ------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Common Stock 68,383 68,502
Retained Earnings and Other Equity 110,300 104,761
----------------- ---------------
Total Stockholders' Equity 178,683 173,263
----------------- ---------------
Total Liabilities and Stockholders' Equity $ 454,898 $ 431,709
================= ===============
ROLLINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30
(In thousands except per share data)
Third Quarter Nine Months
--------------------------- ----------------------------
2005 2004 2005 2004
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------ ------------- ------------- -------------
REVENUES $ 209,346 $ 203,925 $ 607,587 $ 567,066
------------ ------------- ------------- -------------
COSTS AND EXPENSES
Cost of Services Provided 106,398 105,035 315,630 295,585
Depreciation and Amortization 5,800 6,249 17,808 16,670
Sales, General and Administrative 72,258 70,080 203,835 193,411
(Gain)/Loss on Sales of Assets - (315) (544) (14,457)
Pension Curtailment - - (4,176) -
Interest Income (489) (68) (1,305) (265)
------------ ------------- ----------------------------
TOTAL COSTS AND EXPENSES 183,967 180,981 531,248 490,944
------------ ------------- ------------- -------------
INCOME BEFORE INCOME TAXES 25,379 22,944 76,339 76,122
PROVISION FOR INCOME TAXES 10,279 9,311 30,918 31,732
------------ ------------- ------------- -------------
INCOME BEFORE CUMULATIVE EFFECT CHANGE IN
ACCOUNTING PRINCIPLE 15,100 13,633 45,421 44,390
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET - - - (6,204)
------------ ------------- ------------- -------------
NET INCOME $ 15,100 $ 13,633 $ 45,421 $ 38,186
============ ============= ============= =============
NET INCOME PER COMMON SHARE-BASIC:
INCOME BEFORE CUMULATIVE EFFECT CHANGE
IN ACCOUNTING PRINCIPLE $ 0.22 $ 0.20 $ 0.67 $ 0.65
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET - - - (0.09)
------------ ------------- ------------- -------------
NET INCOME PER COMMON SHARE-BASIC $ 0.22 $ 0.20 $ 0.67 $ 0.56
============ ============= ============= =============
NET INCOME PER COMMON SHARE-DILUTED:
INCOME BEFORE CUMULATIVE EFFECT CHANGE
IN ACCOUNTING PRINCIPLE $ 0.22 $ 0.19 $ 0.65 $ 0.63
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET - - - (0.09)
------------ ------------- ------------- -------------
NET INCOME PER COMMON SHARE-DILUTED $ 0.22 $ 0.19 $ 0.65 $ 0.54
============ ============= ============= =============
AVERAGE SHARES OUTSTANDING - BASIC 68,117 68,224 67,999 68,101
AVERAGE SHARES OUTSTANDING - DILUTED 70,042 70,197 70,046 70,113
ROLLINS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30
(In thousands)
2005 2004
Unaudited Unaudited
------------------ ------------------
Operating Activities
Net Income $ 45,421 $ 38,186
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Change in Accounting Principle, Net - 6,204
Depreciation and Amortization 17,808 16,670
Pension Curtailment (4,176) -
Provision for Deferred Income Taxes 2,085 7,319
Other, Net (800) 335
Gain on Sale of Assets (544) (14,457)
(Increase) Decrease in Assets:
Trade Receivables (3,212) (7,980)
Materials and Supplies 1,536 500
Other Current Assets (2,059) (3,420)
Other Non-Current Assets 233 (1,787)
Increase (Decrease) in Liabilities:
Accounts Payable and Accrued Expenses 6,417 13,334
Unearned Revenue 10,147 13,201
Accrued Insurance (2,484) (3,103)
Accrual for Termite Contracts (1,263) (2,826)
Long-Term Accrued Liabilities (424) (2,196)
------------------ ------------------
Net Cash Provided by Operating Activities 68,685 59,980
------------------ ------------------
Investing Activities
Purchases of Equipment and Property (16,999) (6,707)
Net Cash Used for Acquisition of Companies (3,022) (103,415)
Sales of Marketable Securities, Net - 21,866
Proceeds From Sale of Assets 752 15,473
------------------ ------------------
Net Cash Used In Investing Activities (19,269) (72,783)
------------------ ------------------
Financing Activities
Dividends Paid (10,304) (8,187)
Common Stock Purchased (21,313) -
Common Stock Options Exercised 3,229 1,734
Other 979 676
------------------ ------------------
Net Cash Used in Financing Activities (27,409) (5,777)
------------------ ------------------
Effect of Exchange Rate Changes on Cash 745 (66)
------------------ ------------------
Net Increase/(Decrease) in Cash and Cash Equivalents 22,752 (18,646)
Cash and Cash Equivalents at Beginning of Year 56,737 59,540
------------------ ------------------
Cash and Cash Equivalents at End of Period $ 79,489 $ 40,894
================== ==================
CONFERENCE CALL
Rollins, Inc.
(NYSE: ROL)
Management will hold a conference call to discuss
third quarter results on:
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Wednesday, October 26, 2005 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 800-240-6709 domestic;
303-262-2211 international
at least 5 minutes before start time.
REPLAY: available through November 2, 2005
Please dial 800-405-2236/303-590-3000, Passcode: 11041188
THIS CALL CAN ALSO BE ACCESSED THROUGH THE INTERNET AT
www.viavid.net
Questions?
Contact Janet Jazmin at FRB/Weber Shandwick at 212-827-3777
Or email to jjazmin@financialrelationsboard.com