Rollins Q3 Profit, Revenue Rise

Press release from the issuing company

Thursday, October 30th, 2014

Rollins, Inc., a premier global consumer and commercial services company, today reported strong unaudited financial results for its third quarter and nine months ended September 30, 2014.   

The Company recorded third quarter revenues of $384.9 million, an increase of 6.3% compared to $362.2 millionin the prior year's third quarter.  Net Income increased 13.6% to $41.1 million or $0.28 per diluted share for the third quarter ended September 30, 2014, compared to $36.2 million or $0.25 per diluted share for the same period in 2013.   

Rollins' revenues rose 5.4% for the first nine months of 2014 to $1.068 billion compared to $1.013 billion for the prior year.  Net income for the first nine months of 2014 was $107.7 million, an increase of 13.0%, or $0.74 per diluted share compared to $95.4 million or $0.65 per diluted share for the same period last year.   

In the third quarter, the Company repurchased 779,267 shares under its share repurchase program and 1,005,279 shares have been repurchased year-to-date.  In total, 3,952,205 additional shares may be purchased under previously approved programs by the Board of Directors.  

Commenting on the Company's results, Gary W. Rollins, Vice Chairman and Chief Executive Officer of Rollins, Inc. stated, "We are pleased to report another quarter of improved revenue and earnings.   Our Company's solid financial results for the quarter and first nine months of the year reflect the growth from all business lines and the positive results from the investments we are making." 

Mr. Rollins continued, "We were pleased to add to our family of brands with the acquisition of PermaTreat on August 1 and look forward to working with their fine team.   Our company is on track for another successful year and we are working on 2015 initiatives to ensure continuous improvement in our customer service and increasing value for all our stakeholders."

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 expectation of a successful year in 2014 and of continuous improvement in our customer service and increasing value for all our stakeholders in 2015.  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, 2013. 

ROLLINS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in thousands)

At September 30, (unaudited)

2014

 

2013

ASSETS

     

Cash and cash equivalents

$               114,216

 

$                  116,734

Trade accounts receivables, net

87,755

 

80,902

Financed receivables, net 

12,867

 

12,740

Materials and supplies

12,526

 

11,836

Deferred income taxes, net

42,280

 

34,665

Other current assets

17,701

 

19,804

Total Current Assets

287,345

 

276,681

Equipment and property, net

101,986

 

85,348

Goodwill 

250,540

 

212,201

Customer contracts and other intangible assets, net

150,286

 

134,763

Deferred income taxes, net

-

 

25,903

Financed receivables, long-term, net

12,276

 

12,722

Prepaid Pension

10,533

 

-

Other assets

13,668

 

13,246

    Total Assets

$               826,634

 

$                  760,864

       

LIABILITIES

     

Accounts payable

$                  26,293

 

$                    26,106

Accrued insurance, current

25,024

 

26,551

Accrued compensation and related liabilities

72,074

 

63,695

Unearned revenue

104,296

 

100,114

Other current liabilities

40,170

 

32,093

Total Current Liabilities

267,857

 

248,559

Accrued insurance, less current portion

30,472

 

28,094

Accrued pension

493

 

41,509

Deferred income taxes, net

397

 

-

Long-term accrued liabilities

36,402

 

35,410

Total Liabilities

335,621

 

353,572

       

STOCKHOLDERS' EQUITY

     

Common stock

145,726

 

145,879

Retained earnings and other equity

345,287

 

261,413

Total stockholders' equity

491,013

 

407,292

Total Liabilities and Stockholders' Equity

$               826,634

 

$                  760,864

        

ROLLINS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands except per share data)

(unaudited)

               
 

Third Quarter Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2014

 

2013

 

2014

 

2013

REVENUES

             

Customer services

$  384,870

 

$  362,155

 

$ 1,067,615

 

$ 1,012,667

COSTS AND EXPENSES

             

Cost of services provided

188,810

 

181,135

 

532,760

 

511,102

Depreciation and amortization

11,437

 

10,076

 

32,259

 

29,738

Sales, general and administrative

118,679

 

113,028

 

329,785

 

321,680

Interest (income)/expense

24

 

(101)

 

(138)

 

(273)

 

318,950

 

304,138

 

894,666

 

862,247

INCOME BEFORE INCOME TAXES

65,920

 

58,017

 

172,949

 

150,420

PROVISION FOR INCOME TAXES

24,799

 

21,817

 

65,202

 

55,047

NET INCOME

$    41,121

 

$   36,200

 

$   107,747

 

$      95,373

               

NET INCOME PER SHARE - BASIC AND DILUTED

$        0.28

 

$        0.25

 

$         0.74

 

$          0.65

               

Weighted average shares outstanding - basic and diluted

145,800

 

146,007

 

145,888

 

146,151