Rollins Posts $45 Million Q2 Profit

Staff Report From Metro Atlanta CEO

Thursday, July 30th, 2015

Rollins, Inc., a premier global consumer and commercial services company, today reported unaudited financial results for its second quarter and six months ended June 30, 2015.

The Company recorded second quarter revenues of $392.2 million, an increase of 6.2% over the prior year's second quarter of $369.4 million.  Net income increased 10.3% to $45.1 million or $0.21 per diluted share for the second quarter ended June 30, 2015 compared to $40.9 million or $0.19 per diluted share for the same period in 2014.

Rollins' revenues rose 5.9% for the first six months of 2015 to $723.1 million compared to $682.7 million for the prior year.  Net income for the first six months of 2015 was $75.4 million, an increase of 13.1%, or $0.34 per diluted share compared to $66.6 million or $0.30 per diluted share for the same period last year.

Commenting on the Company's results, Gary W. Rollins, Vice Chairman and Chief Executive Officer of Rollins, Inc. stated, "The continued revenue and profit growth that we experienced in the quarter and first half of 2015 is a testament to the success we are having with our sales and service programs.  We are committed to continuous improvement in all areas of our business.  A good example is our investment in new IT technologies which will have a tremendous ongoing impact on the improvement of our customers' service delivery and the company's growth rate.  We are on track and dedicated to achieve our financial goals for the year."

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, Critter Control, Inc., The Industrial Fumigant Company, TruTech LLC., Rollins Australia, Waltham Services LLC., PermaTreat, 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 600 locations. You can learn more about our subsidiaries by visiting our web sites at www.orkin.com, www.pestdefense.com, www.orkincanada.ca, www.westernpest.com, www.crittercontrol.comwww.indfumco.com, www.trutechinc.com, www.allpest.com.au, www.walthamservices.com, www.permatreat.com, www.cranepestcontrol.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 success of our sales and service programs; commitment to continuous improvement; impact of our investment in new IT technologies on customers' service delivery and company's growth rate; being on track and dedicated to achieve the financial goals for the year. 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; 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, 2014. 

ROLLINS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in thousands)

At June 30, (unaudited)

2015

 

2014

ASSETS

     

Cash and cash equivalents

$               109,684

 

$                  101,519

Trade accounts receivables, net

88,267

 

86,156

Financed receivables, net 

14,059

 

12,821

Materials and supplies

14,034

 

13,136

Deferred income taxes, net

40,636

 

40,781

Other current assets

32,377

 

19,052

Total Current Assets

299,057

 

273,465

Equipment and property, net

110,375

 

94,678

Goodwill 

269,867

 

255,515

Customer contracts and other intangible assets, net

132,395

 

139,231

Deferred income taxes, net

8,614

 

4,564

Financed receivables, long-term, net

14,370

 

12,955

Prepaid pension

-

 

10,393

Other assets

14,083

 

13,788

    Total Assets

$               848,761

 

$                  804,589

       

LIABILITIES

     

Accounts payable

$                  28,550

 

$                    27,972

Accrued insurance, current

27,347

 

24,212

Accrued compensation and related liabilities

69,295

 

63,408

Unearned revenue

107,327

 

105,455

Other current liabilities

31,416

 

38,384

Total Current Liabilities

263,935

 

259,431

Accrued insurance, less current portion

28,210

 

31,340

Accrued pension

26,045

 

475

Long-term accrued liabilities

33,328

 

37,801

Total Liabilities

351,518

 

329,047

       

STOCKHOLDERS' EQUITY

     

Common stock

218,595

 

218,640

Retained earnings and other equity

278,648

 

256,902

Total stockholders' equity

497,243

 

475,542

Total Liabilities and Stockholders' Equity

$               848,761

 

$                  804,589

       
       
       

ROLLINS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands except per share data)

(unaudited)

                 
 

Three Months Ended

 

Six Months Ended

 
 

June 30,

 

June 30,

 
 

2015

 

2014

 

2015

 

2014

 

REVENUES

               

Customer services

$   392,150

 

$    369,357

 

$  723,059

 

$    682,745

 

COSTS AND EXPENSES

               

Cost of services provided

190,209

 

182,642

 

358,252

 

343,950

 

Depreciation and amortization

11,245

 

10,608

 

22,026

 

20,822

 

Sales, general and administrative

118,622

 

110,752

 

224,197

 

211,584

 

Gain on sale of assets, net 

(194)

 

(230)

 

(249)

 

(478)

 

Interest income, net 

(66)

 

(86)

 

(113)

 

(162)

 
 

319,816

 

303,686

 

604,113

 

575,716

 

INCOME BEFORE INCOME TAXES

72,334

 

65,671

 

118,946

 

107,029

 

PROVISION FOR INCOME TAXES

27,261

 

24,811

 

43,592

 

40,403

 

NET INCOME

$     45,073

 

$      40,860

 

$    75,354

 

$       66,626

 
                 

NET INCOME PER SHARE - BASIC AND DILUTED

$         0.21

 

$         0.19

 

$        0.34

 

$           0.30

 
                 

Weighted average shares outstanding - basic and diluted

218,613

 

218,813

 

218,577

 

218,899