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Rollins, Inc. Reports Fourth Quarter and Full-Year 2008 Financial Results

January 28, 2009

ATLANTA, Jan. 28 /PRNewswire-FirstCall/ — Rollins, Inc. (NYSE: ROL), a
premier North American consumer and commercial services company, today
reported unaudited financial results for its fourth quarter and year ended
December 31, 2008.

(Logo: http://www.newscom.com/cgi-bin/prnh/20080723/CLW029LOGO )

The Company recorded fourth quarter revenues of $248.1 million, an
increase of 14.9% over the prior year’s fourth quarter revenue of $216.0
million
. The increase was primarily due to revenues from HomeTeam Pest
Defense. Revenue growth excluding the April 2008 acquisition of HomeTeam Pest
Defense improved 0.2%(1). Revenue growth in the 4th quarter was impacted
somewhat by the poor economic conditions as well as the decline in the
Canadian dollar.

Net income increased 5.2% to $12.6 million or $0.13 per diluted share for
the fourth quarter ended December 31, 2008, compared to $11.9 million or $0.12
per diluted share for the same period in 2007. EBITDA increased 28.4% for the
quarter(2).

During the fourth quarter, the Company repurchased 835,300 shares of
common stock at a weighted average price of $15.57 per share, with a total of
1,385,475 shares repurchased in 2008.

For the year-ended December 31, 2008, revenues rose 14.0% to slightly over
$1.0 billion, compared to $894.9 million for the prior year. This increase is
principally due to the Company’s efforts to increase its commercial business,
an increase in the number of sales, while maintaining customer retention and
the acquisition of HomeTeam. Excluding the revenue of HomeTeam Pest Defense,
revenues for the year improved 3.0%(1).

Rollins’ net income for the full year rose 6.5% to $68.9 million, or $0.69
per diluted share, compared to net income of $64.7 million, or $0.64 per
diluted share for the prior year. EBITDA increased 13.5% for full year
2008(2).

Rollins’ balance sheet continued to grow with total assets increasing to
$572.5 million and stockholder’s equity of $228.4 million.

Gary W. Rollins, President and Chief Executive Officer of Rollins, Inc.
stated, “We are pleased with the results we have achieved for both our fourth
quarter and full year. Despite the tough economy, we made headway this year
growing our revenues and increasing our profitability. In addition, we
achieved a milestone this year when the Company’s revenues topped $1.0 billion
for the first time. We continued to see the benefits from our program
investments, which have generated improved sales growth as well as improved
service efficiency”.

“Our strong balance sheet has allowed us to continue our plan to make
strategic acquisitions. HomeTeam Pest Defense has been a great addition to
our Company. We are extremely pleased with the contributions that HomeTeam
has made to our revenues and profits. They have exceeded our expectations,
and we look forward to them playing a significant role in the company going
forward.”

Mr. Rollins concluded, “It is difficult to determine when the economy will
turnaround and the financial crisis will end; however we believe that we are
well positioned to respond appropriately and adjust our business to meet these
uncertainties. We will continue our plan to make prudent investments to grow
our business both organically and through strategic acquisitions. We are
positive about our Company’s opportunities in the new year.”

Rollins, Inc. is a premier North American consumer and commercial services
company. Through its wholly owned subsidiaries, Orkin, Inc., PCO Services,
HomeTeam Pest Defense, Western Pest Services and The Industrial Fumigant
Company, the Company provides essential pest control services and protection
against termite damage, rodents and insects to over 2 million customers in the
United States
, Canada, Mexico, Central America, the Caribbean, the Middle East
and Asia from over 500 locations. You can learn more about our subsidiaries by
visiting our web sites at www.orkin.com, www.pestdefense.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. These forward-looking statements include the Company’s expectation
that Home Team Pest Defense will play a significant role in our growth
strategy going forward; the Company believes that it is well positioned to
adjust its business to meet uncertainties in the economy; the Company’s plan
to continue its strategy to make prudent investments to grow its business both
organically and through strategic acquisitions; and the Company’s excitement
about its opportunities in the new 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,
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; 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,
2007
.


    (1) Additional disclosure regarding this financial measure is included in
        the financial tables attached to this press release.

    (2) EBITDA is a financial measure which does not conform to generally
        accepted accounting principles (GAAP). Additional disclosure regarding
        this non-GAAP financial measure is included in the attachment to this
        press release.

                         ROLLINS, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                                 (in thousands)

    At December 31, (unaudited)                     2008              2007
    ASSETS
       Cash and cash equivalents                  $13,716           $71,280
       Trade receivables, short-term               56,884            52,618
       Accounts Receivable - Other                  2,185             1,839
       Materials and supplies                      10,893             8,846
       Deferred income taxes                       20,018            17,162
       Other current assets                        13,142             8,495
         Total Current Assets                     116,838           160,240

       Equipment and property, net                 78,625            77,370
       Goodwill                                   187,266           126,684
       Other Intangible Assets                     25,719             9,232
       Customer Contracts                         129,092            63,056
       Deferred income taxes                       17,886             7,576
       Trade receivables, long-term                11,124             8,409
       Prepaid Pension                                  -            16,624
       Other assets                                 5,967             6,037
         Total Assets                            $572,517          $475,228

    LIABILITIES
       Loans outstanding                          $65,000          $      -
       Capital leases                                 450             1,186
       Accounts payable                            18,782            19,140
       Accrued insurance                           15,404            13,505
       Accrued compensation and related
        liabilities                                56,334            45,910
       Other current liabilities                   28,569            26,587
       Unearned revenue                            88,288            81,678
         Total Current Liabilities                272,827           188,006

       Capital leases, less current portion           171               601
       Accrued pension                             20,353                 -
       Long-term accrued liabilities               50,733            53,068
         Total Liabilities                        344,084           241,675

    STOCKHOLDERS' EQUITY
       Common stock                               100,041           100,636
       Retained earnings and other equity         128,392           132,917
         Total Stockholders' Equity               228,433           233,553
         Total Liabilities and Stockholders'
          Equity                                 $572,517          $475,228

                          ROLLINS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                       (in thousands except per share data)
                                   (unaudited)

                                    Fourth Quarter Ended  Twelve Months Ended
                                        December 31,         December 31,
                                       2008      2007       2008       2007
    REVENUES
       Customer services             $248,076  $215,954  $1,020,564  $894,920
    COSTS AND EXPENSES
       Cost of services provided      133,050   117,199     534,494   468,665
       Depreciation and amortization    9,096     6,586      33,443    27,068
       Sales, general and
        administrative                 84,120    74,633     339,078   296,615
       (Gain)/loss on sales of assets      23        61        (166)      (52)
       Interest (income)/expense, net     913      (749)        761    (2,289)
                                      227,202   197,730     907,610   790,007
    INCOME BEFORE TAXES                20,874    18,224     112,954   104,913
    PROVISION FOR INCOME TAXES          8,321     6,290      44,020    40,182
    NET INCOME                        $12,553   $11,934     $68,934   $64,731

    NET INCOME PER SHARE - BASIC        $0.13     $0.12       $0.69     $0.65
    NET INCOME PER SHARE - DILUTED      $0.13     $0.12       $0.69     $0.64

    Weighted average shares
     outstanding - basic               98,851    99,854      99,209   100,299
    Weighted average shares
     outstanding - diluted             99,659   101,051     100,081   101,409

                       ROLLINS, INC. AND SUBSIDIARIES
                               RECONCILIATION
                 REVENUE EXCLUDING HOMETEAM PEST DEFENSE

                       Three Months Ended Dec. 31,   $Better/   %Better/
                            2008         2007        (Worse)    (Worse)

    Net Revenues          $248,076     $215,954      $32,122     14.9%
    Less: Revenues from
     HomeTeam Pest Defense  31,694            -       31,694
       Revenue Excluding
        HomeTeam Pest
        Defense           $216,382     $215,954         $428      0.2%

                      ROLLINS, INC. AND SUBSIDIARIES
                                RECONCILIATION
                 REVENUE EXCLUDING HOMETEAM PEST DEFENSE

                       Twelve Months Ended Dec. 31,  $Better/   %Better/
                            2008         2007        (Worse)    (Worse)

    Net Revenues        $1,020,564     $894,920     $125,644     14.0%
    Less: Revenues from
     HomeTeam Pest Defense  98,931            -       98,931
       Revenue Excluding
        HomeTeam Pest
        Defense           $921,633     $894,920      $26,713      3.0%

                     ROLLINS, INC. AND SUBSIDIARIES
                                RECONCILIATION
    EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA)

                        Three Months Ended Dec. 31,   $Better/   %Better/
                            2008         2007         (Worse)    (Worse)

    Net Income             $12,553      $11,934         $619      5.2%
      Add: Provision For
            Income Taxes     8,321        6,290        2,031     32.3
           Interest (Income)/
            Expense            913        (749)        1,662    221.9
           Depreciation of
            Fixed
            Assets           3,856        3,276          580     17.7
           Amortization of
            Intangible
            Assets           5,240        3,310        1,930     58.3
    EBITDA                 $30,883      $24,061       $6,822     28.4%

                        ROLLINS, INC. AND SUBSIDIARIES
                                RECONCILIATION
    EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA)

                        Twelve Months Ended Dec. 31,  $Better/   %Better/
                             2008         2007        (Worse)    (Worse)

    Net Income             $68,934      $64,731       $4,203      6.5%
      Add: Provision For
            Income Taxes    44,020       40,182        3,838      9.6
           Interest
            (Income)/Expense   761      (2,289)        3,050    133.2
           Depreciation of
            Fixed Assets    14,205       13,677          528      3.9
           Amortization of
            Intangible
            Assets          19,238       13,391        5,847     43.7
    EBITDA                $147,158     $129,692      $17,466     13.5%

    CONFERENCE CALL ANNOUNCEMENT
    Rollins, Inc.
    (NYSE: ROL)

Management will hold a conference call to discuss Fourth Quarter results
on:

    Wednesday, January 28, 2009 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 800-257-6566 domestic; 303-262-2161 international at least 5
minutes before start time.

REPLAY: available through February 4, 2009

Please dial 800-405-2236/303-590-3000, Passcode: 11124781

THIS CALL CAN ALSO BE ACCESSED THROUGH THE INTERNET AT
www.viavid.net

Questions?

Contact Janet Jazmin at Financial Relations Board at 212-827-3777
Or email to jjazmin@financialrelationsboard.com

SOURCE Rollins, Inc.


Source: newswire



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