Exhibit 99.1

For Further Information Contact

Harry J. Cynkus

(404) 888-2922

 

FOR IMMEDIATE RELEASE

 

 

ROLLINS, INC.

REPORTS FIRST QUARTER FINANCIAL RESULTS

SALES INCREASED 3.6%, EPS INCREASED 18.8%  

 

ATLANTA, GEORGIA, April 25, 2007: Rollins, Inc. (NYSE:ROL), a premier North American consumer and commercial services company, today reported revenues for the first quarter ended March 31, 2007 grew 3.6% to $201.2 million compared to $194.2 million for the first quarter ended March 31, 2006.

 

The Company reported record net income of $12.8 million or $0.19 per diluted share for the first quarter 2007, compared to $10.9 million or $0.16 per diluted share for the same period in 2006, which represents an 18.8% increase.

 

On January 23, 2007, Rollins increased the Company’s regular quarterly cash dividend to shareholders 20 percent to $0.075, returning $5.3 million to investors during the first quarter 2007. The Company also announced that it repurchased 592,000 shares of common stock at a weighted average price of $22.84 per share during the quarter. In total, approximately 1.7 million additional shares may be purchased under previously approved programs by the Board of Directors.

 

Commenting on the Company's results, Gary W. Rollins, President and Chief Executive Officer of Rollins, Inc. said, “We were pleased to have reported solid year-over-year improvement in both revenue and net income for the first quarter. We are continuing to invest in our business and are looking forward to reporting our progress in the important second quarter."

 

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, Mexico, Panama and Costa Rica 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. 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 March 31,

 

(unaudited)

 

 

 

(unaudited)

 

ASSETS

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

54,994

 

 

 

$

53,229

 

Trade receivables, short-term

 

 

50,711

 

 

 

 

45,315

 

Materials and supplies

 

 

8,691

 

 

 

 

8,899

 

Deferred income taxes

 

 

19,603

 

 

 

 

23,904

 

Other current assets

 

 

9,971

 

 

 

 

9,276

 

Total Current Assets

 

 

143,970

 

 

 

 

140,623

 

 

 

 

 

 

 

 

 

 

 

Equipment and property, net

 

 

76,850

 

 

 

 

68,314

 

Goodwill and other intangible assets

 

 

200,375

 

 

 

 

207,201

 

Deferred income taxes

 

 

12,956

 

 

 

 

18,149

 

Trade receivables, long-term

 

 

8,519

 

 

 

 

8,669

 

Other assets

 

 

5,514

 

 

 

 

4,368

 

Total Assets

 

$

448,184

 

 

 

$

447,324

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

Capital leases

 

$

1,183

 

 

 

$

797

 

Accounts payable

 

 

16,965

 

 

 

 

18,146

 

Accrued insurance

 

 

13,978

 

 

 

 

16,359

 

Accrued compensation and related liabilities

 

 

33,084

 

 

 

 

31,562

 

Unearned revenue

 

 

83,674

 

 

 

 

84,020

 

Other current liabilities

 

 

34,751

 

 

 

 

42,225

 

Total Current Liabilities

 

 

183,635

 

 

 

 

193,109

 

 

 

 

 

 

 

 

 

 

 

Capital leases, less current portion

 

 

939

 

 

 

 

440

 

Accrued pension

 

 

6,946

 

 

 

 

20,651

 

Long-term accrued liabilities

 

 

51,799

 

 

 

 

48,969

 

Total Liabilities

 

 

243,319

 

 

 

 

263,169

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Common stock

 

 

67,946

 

 

 

 

68,450

 

Retained earnings and other equity

 

 

136,919

 

 

 

 

115,705

 

Total Stockholders’ Equity

 

 

204,865

 

 

 

 

184,155

 

Total Liabilities and Stockholders’ Equity

 

$

448,184

 

 

 

$

447,324

 

 

 

 

ROLLINS, INC. AND SUBSIDIARIES

 

 

CONSOLIDATED STATEMENTS OF INCOME

 

 

FOR THE FIRST QUARTER ENDED MARCH 31,

 

 

(in thousands except per share data)

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

 

March 31,

 

 

 

 

2007

 

 

 

2006

 

REVENUES

 

 

 

 

 

 

 

 

 

Customer services

 

$

201,232

 

 

 

$

194,187

 

COSTS AND EXPENSES

 

 

 

 

 

 

 

 

 

Cost of services provided

 

 

106,836

 

 

 

 

107,014

 

Depreciation and amortization

 

 

6,686

 

 

 

 

6,793

 

Sales, general and administrative

 

 

67,041

 

 

 

 

62,500

 

Gain on sales of assets

 

 

(7

)

 

 

 

 

Interest income

 

 

(552

)

 

 

 

(292

)

 

 

 

180,004

 

 

 

 

176,015

 

INCOME BEFORE TAXES

 

 

21,228

 

 

 

 

18,172

 

PROVISION FOR INCOME TAXES

 

 

8,435

 

 

 

 

7,269

 

NET INCOME

 

$

12,793

 

 

 

$

10,903

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - BASIC

 

$

0.19

 

 

 

$

0.16

 

NET INCOME PER SHARE - DILUTED

 

$

0.19

 

 

 

$

0.16

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding - basic

 

 

67,321

 

 

 

 

67,675

 

Weighted average shares outstanding - Diluted

 

 

68,729

 

 

 

 

69,583

 

 

 

 

 

ROLLINS, INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

FOR THE THREE MONTHS ENDED MARCH 31,

 

(in thousands)

 

 

 

 

 

2007

 

 

 

2006

 

 

 

 

 

(unaudited)

 

 

 

(unaudited)

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

 

 

$

12,793

 

 

 

$

10,903

 

Adjustments to reconcile net income to net cash

 

 

 

 

 

 

 

 

 

 

 

Provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

 

6,686

 

 

 

 

6,793

 

Provision for deferred income taxes

 

 

 

 

2,097

 

 

 

 

1,404

 

Stock based compensation

 

 

 

 

477

 

 

 

 

414

 

Gain/(Loss) on sales of assets

 

 

 

 

(7

)

 

 

 

 

Other, net

 

 

 

 

8

 

 

 

 

(8

)

(Increase)/decrease in assets

 

 

 

 

 

 

 

 

 

 

 

Trade receivables

 

 

 

 

2,251

 

 

 

 

3,164

 

Materials and supplies

 

 

 

 

(290

)

 

 

 

183

 

Other current assets

 

 

 

 

(2,771

)

 

 

 

(172

)

Other non-current assets

 

 

 

 

527

 

 

 

 

777

 

Increase/(decrease) in liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 

 

 

(8,300

)

 

 

 

3,571

 

Unearned revenue

 

 

 

 

4,233

 

 

 

 

4,030

 

Accrued insurance

 

 

 

 

298

 

 

 

 

969

 

Accrual for termite contracts

 

 

 

 

(401

)

 

 

 

(600

)

Long-term accrued liabilities

 

 

 

 

1,963

 

 

 

 

(3,116

)

Net cash provided by operating activities

 

 

 

 

19,564

 

 

 

 

28,312

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

Purchase of equipment and property

 

 

 

 

(6,143

)

 

 

 

(5,433

)

Acquisitions of companies

 

 

 

 

(1,097

)

 

 

 

(4,313

)

Cash from sales of franchises

 

 

 

 

 

 

 

 

351

 

Proceeds from sales of assets

 

 

 

 

6

 

 

 

 

 

Net cash used in investing activities

 

 

 

 

(7,234

)

 

 

 

(9,395

)

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

Dividends paid

 

 

 

 

(5,320

)

 

 

 

(4,276

)

Common stock purchased

 

 

 

 

(12,362

)

 

 

 

(4,092

)

Common stock options exercised

 

 

 

 

681

 

 

 

 

281

 

Principal payments on capital leases

 

 

 

 

(1,662

)

 

 

 

(148

)

Other

 

 

 

 

(1,936

)

 

 

 

(436

)

Net cash used in financing activities

 

 

 

 

(20,599

)

 

 

 

(8,671

)

Effect of exchange rate changes on cash

 

 

 

 

(81

)

 

 

 

(82

)

Net increase in cash and cash equivalents

 

 

 

 

(8,350

)

 

 

 

10,164

 

Cash and cash equivalents at beginning of period

 

 

 

 

63,344

 

 

 

 

43,065

 

Cash and cash equivalents at end of period

 

 

 

$

54,994

 

 

 

$

53,229

 

 

 

 

CONFERENCE CALL ANNOUNCEMENT

Rollins, Inc.

(NYSE: ROL)

 

 

 

Management will hold a conference call to discuss

First Quarter results on:

 

Wednesday, April 25, 2007 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 800-240-4186 domestic;

303-205-0033 international

at least 5 minutes before start time.

 

REPLAY: available through May 2, 2007

Please dial 800-405-2236/303-590-3000, Passcode: 11088292

THIS CALL CAN ALSO BE ACCESSED THROUGH THE INTERNET AT

www.viavid.net  

 

Questions?

Contact Janet Jazimin at Financial Relations Board at 212-827-3777

Or email to jjazimin@financialrelationsboard.com