Exhibit 99.1

For Further Information Contact

Julie Bimmerman (404) 888-2103

FOR IMMEDIATE RELEASE

ROLLINS, INC. REPORTS THIRD QUARTER 2022 FINANCIAL RESULTS

Strong revenue growth drives 14.7% increase in quarterly net income

ATLANTA, GEORGIA, October 26, 2022: Rollins, Inc. (NYSE:ROL) (“Rollins” or the “Company”), a premier global consumer and commercial services company, reported unaudited financial results for its third quarter and nine months ended September 30, 2022.

Quarterly Highlights

Third quarter revenues were $729.7 million, an increase of 12.2% over the third quarter 2021 with organic revenues* increasing 8.6% to $706.0 million. The stronger dollar versus foreign currencies in countries where we operate reduced revenues by 50 basis points during the quarter. Growth in revenues was driven by strong growth across all major service lines.
Quarterly operating income was $143.7 million, an increase of 13.3% over the third quarter of 2021. Quarterly operating margin was 19.7% of revenue, an increase of 20 basis points compared to the third quarter of 2021. Adjusted EBITDA* was $169.9 million for the quarter, an increase of 12.6%. Adjusted EBITDA was 23.3% of sales, an increase of 10 basis points compared to the third quarter of 2021. The Company incurred higher losses stemming from asserted claims associated with automobile accidents. These losses reduced EBITDA margins by 140 basis points, the majority of which was in gross profit margin.
Quarterly net income was $107.6 million, an increase of 14.7% over the prior year. Quarterly EPS was $0.22 per diluted share, an increase from $0.19 in the prior year.
Operating cash flow was $127.7 million, increasing 60.2% compared to the same quarter a year ago.
The Company invested $60.8 million in acquisitions in the quarter.  Dividends totaled $49.2 million for the quarter reflecting a 23.2% increase versus the same period a year ago. The Company announced a 30% increase to the regular quarterly dividend for the fourth quarter.

Comments from Management

“Our third quarter results reflected strong execution by our team across all of the business”, said Gary Rollins, Chairman and Chief Executive Officer.  We continued to see favorable demand for our services with double digit growth across all major service lines.  Our quarterly results reflect our employees’ commitment to deliver exceptional customer service,” Mr. Rollins said.  

“Cash flow generation was strong and our balance sheet positions us well to continue to drive growth through acquisitions while maintaining our balanced approach to capital allocation,” Mr. Rollins said.  

“Overall, we remain well positioned to continue to deliver strong results in the fourth quarter of 2022 and beyond. Demand for our services remains strong as we start the fourth quarter. Our teams remain focused on executing our plans and driving increased revenues and profitability as we close out 2022,” Mr. Rollins concluded.  

About Rollins, Inc.:

Rollins, Inc. is a premier global consumer and commercial services company.  Through its family of leading brands, Orkin, HomeTeam Pest Defense, Clark Pest Control, Northwest Exterminating, McCall Service, Trutech, Critter Control, Western Pest Services, Waltham Services, OPC Pest Services, The Industrial Fumigant Company, PermaTreat, Crane Pest Control, Missquito, Orkin Canada, Orkin Australia, Safeguard (UK), Aardwolf Pestkare (Singapore), and more, the Company and its franchises provide essential pest control services and protection against termite damage, rodents and insects to more than 2.8 million customers in North America, South America, Europe, Asia, Africa, and Australia from more than 800 locations. You can learn more about Rollins and its subsidiaries by visiting our web site at www.rollins.com, where you can also find this and other news releases by accessing the news releases button.

*Amounts are non-GAAP financial measures. See the appendix to this release for a discussion of non-GAAP financial metrics including a reconciliation of the most closely correlated GAAP measure.


CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Statements made in this press release and on our earnings call, may contain forward-looking statements that involve risks and uncertainties concerning the business and financial results of Rollins, Inc. We have based these forward-looking statements largely on our current opinions, expectations, beliefs, plans, objectives, assumptions and projections about future events and financial trends affecting the operating results and financial condition of our business. Such forward looking statements include, but are not limited to, statements regarding the Company’s belief that its balance sheet positions the Company well to continue to drive growth through acquisitions while maintaining a balanced approach to capital allocation, and that the Company is well positioned to continue to deliver strong results in the fourth quarter of 2022.  

Our actual results could differ materially from those indicated by the forward-looking statements because of various risks, timing and uncertainties including, without limitation, the failure to maintain and enhance our brands and develop a positive client reputation; our ability to protect our intellectual property and other proprietary rights that are material to our business and our brand recognition; actions taken by our franchisees, subcontractors or vendors that may harm our business; general economic conditions; the impact of the extent and duration of economic contraction related to COVID-19 on general economic activity for the remainder of 2022 and beyond; the impact of future developments related to the COVID-19 pandemic on the Company’s business, results of operations, accounting assumptions and estimates and financial condition, including, without limitation, inflation and restrictions in customer discretionary expenditures, disruptions in credit or financial markets, increases in fuel prices, raw material costs or other operating costs; potential increases in labor costs; labor shortages and/or our inability to attract and retain skilled workers; competitive factors and pricing practices; changes in industry practices or technologies; the degree of success of our termite process reforms and pest control selling and treatment methods; our ability to identify, complete and successfully integrate potential acquisitions; unsuccessful expansion into international markets; climate change and unfavorable weather conditions; a breach of data security resulting in the unauthorized access of personal, financial, proprietary, confidential or other personal data or information about our customers, employees, third parties, or of our proprietary confidential information; damage to our brands or reputation; possibility of an adverse ruling against us in pending litigation, regulatory action or investigation; changes in various government laws and regulations, including environmental regulations; the adequacy of our insurance coverage to cover all significant risk exposures; the effectiveness of our risk management and safety program; general market risk; management’s substantial ownership interest and its impact on public stockholders and the availability of the Company’s common stock to the investing public; and the existence of certain anti-takeover provisions in our governance documents, which could make a tender offer, change in control or takeover attempt that is opposed by the Company’s Board of Directors more difficult or expensive. All of the foregoing risks and uncertainties are beyond our ability to control, and in many cases, we cannot predict the risks and uncertainties that could cause our actual results to differ materially from those indicated by the forward-looking statements. The Company does not undertake to update its forward-looking statements.


ROLLINS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in thousands)

(unaudited)

     

September 30, 

 

December 31, 

2022

2021

ASSETS

 

  

 

  

Cash and cash equivalents

$

121,876

$

105,301

Trade receivables, net

 

170,274

 

139,579

Financed receivables, short-term, net

 

32,253

 

26,152

Materials and supplies

 

28,572

 

28,926

Other current assets

 

45,981

 

52,422

Total current assets

 

398,956

 

352,380

Equipment and property, net

 

130,362

 

133,257

Goodwill

 

772,325

 

721,819

Customer contracts, net

 

319,382

 

325,929

Trademarks and tradenames, net

 

114,016

 

108,976

Other intangible assets, net

 

9,807

 

11,679

Operating lease right-of-use assets

 

270,365

 

244,784

Financed receivables, long-term, net

 

58,634

 

47,097

Other assets

 

38,636

 

34,949

Total assets

$

2,112,483

$

1,980,870

LIABILITIES

 

  

 

  

Accounts payable

 

42,874

 

44,568

Accrued insurance - current

 

40,424

 

36,414

Accrued compensation and related liabilities

 

95,694

 

97,862

Unearned revenues

 

166,866

 

145,122

Operating lease liabilities - current

 

82,611

 

75,240

Current portion of long-term debt

 

15,000

 

18,750

Other current liabilities

 

66,300

 

73,206

Total current liabilities

 

509,769

 

491,162

Accrued insurance, less current portion

 

35,257

 

31,545

Operating lease liabilities, less current portion

 

191,565

 

172,520

Long-term debt

 

109,878

 

136,250

Other long-term accrued liabilities

 

69,463

 

67,345

Total Liabilities

 

915,932

 

898,822

STOCKHOLDERS’ EQUITY

 

  

 

  

Common stock

 

492,472

 

491,911

Retained earnings and other equity

 

704,079

 

590,137

Total stockholders’ equity

 

1,196,551

 

1,082,048

Total liabilities and stockholders’ equity

$

2,112,483

$

1,980,870


ROLLINS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands except per share data)

(unaudited)

    

Three Months Ended

    

Nine Months Ended

September 30, 

September 30, 

    

2022

    

2021

    

2022

    

2021

REVENUES

Customer services

$

729,704

$

650,199

$

2,034,433

$

1,823,957

COSTS AND EXPENSES

 

  

 

  

 

  

 

  

Cost of services provided (exclusive of depreciation and amortization below)

 

348,158

 

305,474

 

980,316

 

864,888

Sales, general and administrative

 

213,581

 

194,261

 

612,353

 

539,951

Depreciation and amortization

 

24,282

 

23,617

 

73,454

 

70,519

Total operating expenses

586,021

523,352

1,666,123

1,475,358

OPERATING INCOME

143,683

126,847

368,310

348,599

Interest expense, net

 

846

 

222

 

2,294

 

1,334

Other (income), net

(1,980)

(447)

(5,170)

(33,598)

CONSOLIDATED INCOME BEFORE INCOME TAXES

144,817

127,072

 

371,186

 

380,863

PROVISION FOR INCOME TAXES

 

37,195

 

33,219

 

90,820

 

95,513

NET INCOME

$

107,622

$

93,853

$

280,366

$

285,350

NET INCOME PER SHARE - BASIC AND DILUTED

$

0.22

$

0.19

$

0.57

$

0.58

Weighted average shares outstanding - basic

492,316

492,069

492,285

492,058

Weighted average shares outstanding - diluted

 

492,430

 

492,069

 

492,398

 

492,058


ROLLINS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED CASH FLOW INFORMATION

(in thousands)

(unaudited)

    

Three Months Ended

    

Nine Months Ended

September 30, 

September 30, 

    

2022

    

2021

    

2022

    

2021

OPERATING ACTIVITIES

Net income

$

107,622

$

93,853

$

280,366

$

285,350

Depreciation and amortization

 

24,282

23,617

73,454

70,519

Change in working capital and other operating activities

 

(4,184)

 

(37,764)

 

(11,283)

 

(56,958)

Net cash provided by operating activities

 

127,720

 

79,706

 

342,537

 

298,911

INVESTING ACTIVITIES

Acquisitions, net of cash acquired

(60,838)

(11,307)

(110,418)

(39,692)

Capital expenditures

 

(7,040)

 

(6,802)

 

(22,921)

 

(20,031)

Other investing activities, net

6,532

588

9,961

70,827

Net cash (used in) provided by investing activities

 

(61,346)

 

(17,521)

 

(123,378)

 

11,104

FINANCING ACTIVITIES

Net debt repayments

(110,000)

(20,000)

(30,000)

(135,000)

Payment of dividends

 

(49,201)

 

(39,945)

 

(147,635)

 

(119,677)

Other financing activities

(6,444)

(6,849)

(18,650)

(30,011)

Net cash used in financing activities

(165,645)

(66,794)

(196,285)

(284,688)

Effect of exchange rate changes on cash and cash equivalents

183

(6,264)

(6,299)

(6,149)

Net (decrease) increase in cash and cash equivalents

$

(99,088)

$

(10,873)

$

16,575

$

19,178


APPENDIX

Reconciliation of GAAP and non-GAAP Financial Measures

The Company has used the non-GAAP financial measures of organic revenues, adjusted EBITDA, adjusted net income and adjusted earnings per share (“EPS”) in this earnings release, and the non-GAAP financial measures of organic revenues by type, and free cash flow in today’s conference call. Organic revenue is calculated as revenue less acquisition revenue. Acquisition revenue is based on the trailing 12-month revenue of our acquired entities. These measures should not be considered in isolation or as a substitute for revenues, net income, earnings per share or other performance measures prepared in accordance with GAAP.

Management uses adjusted net income, adjusted EPS and adjusted EBITDA as measures of operating performance because these measures allow the Company to compare performance consistently over various periods without regard to the impact of the property disposition gains. Management also uses organic revenues, and organic revenues by type to compare revenues over various periods excluding the impact of acquisitions. Management uses free cash flow, which is calculated as net cash provided by operating activities less capital expenditures, to demonstrate the Company’s ability to maintain its asset base and generate future cash flows from operations. Management believes all of these non-GAAP financial measures are useful to provide investors with information about current trends in, and period-over-period comparisons of, the Company's results of operations.

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 non-GAAP financial measures used in today’s earnings release and conference call with their most comparable GAAP measures.

(unaudited, in thousands except EPS)

    

Three Months Ended

    

Nine Months Ended

 

September 30, 

September 30, 

 

Variance

Variance

    

2022

    

2021

    

$

    

%  

2022

    

2021

    

$

    

%

Reconciliation of Net Income to Adjusted Net Income and EPS

Net income

$

107,622

$

93,853

$

13,769

 

14.7

$

280,366

$

285,350

$

(4,984)

 

(1.7)

Property disposition gains (net of tax $23,230)

 

 

 

 

 

 

(31,517)

 

31,517

 

Adjusted income taxes on excluded items

 

 

 

 

 

 

8,287

 

(8,287)

 

Adjusted net income

$

107,622

$

93,853

$

13,769

 

14.7

$

280,366

$

262,120

$

18,246

 

7.0

Adjusted earnings per share - basic and diluted

$

0.22

$

0.19

$

0.03

 

15.8

$

0.57

$

0.53

$

0.04

 

7.5

Weighted average shares outstanding - basic

492,316

492,069

247

0.1

492,285

492,058

227

0.0

Weighted average shares outstanding - diluted

 

492,430

 

492,069

 

361

 

0.1

 

492,398

 

492,058

 

340

 

0.1

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

Net income

$

107,622

$

93,853

$

13,769

 

14.7

$

280,366

$

285,350

$

(4,984)

 

(1.7)

Depreciation and amortization

24,282

23,617

665

2.8

73,454

70,519

2,935

4.2

Interest expense, net

846

222

624

281.1

2,294

1,334

960

72.0

Provision for income taxes

37,195

33,219

3,976

12.0

90,820

95,513

(4,693)

(4.9)

EBITDA

169,945

150,911

19,034

12.6

446,934

452,716

(5,782)

(1.3)

Property disposition gains

(31,517)

31,517

Adjusted EBITDA

$

169,945

$

150,911

$

19,034

12.6

$

446,934

$

421,199

$

25,735

6.1

Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow

Net cash provided by operating activities

$

127,720

$

79,706

$

48,014

60.2

$

342,537

$

298,911

$

43,626

14.6

Capital expenditures

(7,040)

(6,802)

(238)

(3.5)

(22,921)

(20,031)

(2,890)

(14.4)

Free Cash Flow

$

120,680

$

72,904

$

47,776

65.5

$

319,616

$

278,880

$

40,736

14.6


(unaudited, in thousands)

    

Three Months Ended

    

Nine Months Ended

 

September 30, 

September 30, 

 

Variance

    

2022

    

2021

    

$

    

%  

2022

    

2021

    

$

    

%

Reconciliation of Revenues to Organic Revenues

Revenues

$

729,704

$

650,199

79,505

12.2

$

2,034,433

$

1,823,957

210,476

11.5

Revenue growth from acquisitions

(23,709)

(23,709)

(61,748)

(61,748)

Organic revenues

$

705,995

650,199

55,796

8.6

$

1,972,685

1,823,957

148,728

8.2

Reconciliation of Residential Revenues to Organic Residential Revenues

Residential revenues

$

337,878

$

307,747

30,131

9.8

$

922,448

$

835,871

86,577

10.4

Residential revenues from acquisitions

(13,909)

(13,909)

(35,818)

(35,818)

Residential organic revenues

$

323,969

$

307,747

16,222

5.3

$

886,630

$

835,871

50,759

6.1

Reconciliation of Commercial Revenues to Organic Commercial Revenues

Commercial revenues

$

243,478

$

218,648

24,830

11.4

$

683,748

$

618,183

65,565

10.6

Commercial revenue growth from acquisitions

(3,693)

(3,693)

(9,857)

(9,857)

Commercial organic revenues

$

239,785

$

218,648

21,137

9.7

$

673,891

$

618,183

55,708

9.0

Reconciliation of Termite Revenues to Organic Termite Revenues

Termite revenues

$

139,668

$

117,423

22,245

18.9

$

406,155

$

350,791

55,364

15.8

Termite revenues from acquisitions

(6,107)

(6,107)

(16,073)

(16,073)

Termite organic revenues

$

133,561

$

117,423

16,138

13.7

$

390,082

$

350,791

39,291

11.2

    

Three Months Ended

    

Nine Months Ended

 

September 30, 

September 30, 

 

Variance

    

2021

    

2020

    

$

    

%  

2021

    

2020

    

$

    

%

Reconciliation of Revenues to Organic Revenues

Revenues

$

650,199

$

583,698

66,501

11.4

$

1,823,957

$

1,624,928

199,029

12.2

Revenue growth from acquisitions

(12,689)

(12,689)

(42,677)

(42,677)

Organic revenues

$

637,510

583,698

53,812

9.2

$

1,781,280

1,624,928

156,352

9.6

Reconciliation of Residential Revenues to Organic Residential Revenues

Residential revenues

$

307,747

$

275,581

32,166

11.7

$

835,871

$

738,159

97,712

13.2

Residential revenues from acquisitions

(6,004)

(6,004)

(16,800)

(16,800)

Residential organic revenues

$

301,743

$

275,581

26,162

9.5

$

819,071

$

738,159

80,912

11.0

Reconciliation of Commercial Revenues to Organic Commercial Revenues

Commercial revenues

$

218,648

$

199,561

19,087

9.6

$

618,183

$

562,777

55,406

9.8

Commercial revenue growth from acquisitions

(4,532)

(4,532)

(19,701)

(19,701)

Commercial organic revenues

$

214,116

$

199,561

14,555

7.3

$

598,482

$

562,777

35,705

6.3

Reconciliation of Termite Revenues to Organic Termite Revenues

Termite revenues

$

117,423

$

102,144

15,279

15.0

$

350,791

$

306,188

44,603

14.6

Termite revenues from acquisitions

(2,153)

(2,153)

(6,176)

(6,176)

Termite organic revenues

$

115,270

$

102,144

13,126

12.9

$

344,615

$

306,188

38,427

12.6


Graphic   Graphic CONFERENCE CALL ANNOUNCEMENT Graphic   Graphic

Rollins, Inc.

(NYSE: ROL)

Graphic

Management will hold a conference call to discuss

Third Quarter 2022 results on

Wednesday, October 26, 2022 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 1-877-869-3839 domestic;

1-201-689-8265 international

with conference ID of 13733118

at least 5 minutes before start time.

REPLAY: available through November 2, 2022

Please dial 1-877-660-6853 / 1-201-612-7415, Passcode 13733118

THIS CALL CAN ALSO BE ACCESSED THROUGH THE INTERNET AT

www.rollins.com

Questions?

Contact Samantha Alphonso at Financial Relations Board at 212-827-3746

Or email to salphonso@mww.com