Rollins, Inc. Reports Fourth Quarter and Full-Year 2009 Financial Results
ATLANTA, Jan. 27 /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, 2009.
The Company recorded fourth quarter revenues of $259.6 million, an increase of 4.6% over the prior year’s fourth quarter revenue of $248.1 million. Net income increased 59.0% to $20.0 million or $0.20 per diluted share for the fourth quarter ended December 31, 2009, compared to $12.6 million or $0.13 per diluted share for the same period in 2008.
In the fourth quarter of 2009, Rollins converted Orkin, Inc. and certain other operating subsidiaries from C corporations to wholly owned limited liability companies. This change will allow Rollins to use the operating profits generated by these subsidiaries to offset Rollins’ state tax losses and reduce state income taxes. The Company also recognized a non-cash pre-tax impairment charge of approximately $2.9 million following management’s determination that a routing and scheduling system under development would require substantial changes and expense in order to deliver the product expected. The Company is exploring alternative solutions as the potential benefits of an effective routing and scheduling system would be significant.
Excluding a tax benefit of $6.2 million or $0.06 per diluted share on Rollins’ conversion of Orkin to a limited liability company, net of cost associated with a Canadian restructuring and repatriation of cash, and the impairment charge of $0.02 per diluted share associated with the software system write-off, the Company’s earnings per share for fourth quarter 2009 were $0.16 per diluted share, an improvement of 23.1% compared to fourth quarter 2008.
The Company repurchased 227,100 shares at a weighted average price of $18.18 per share in the fourth quarter bringing the total number of shares repurchased in 2009 to 1,677,200. In total, 2,951,591 additional shares may be purchased under the share repurchase program.
Revenues for the full year 2009 rose 5.2% to $1.1 billion compared to slightly over $1.0 billion for the prior year. Rollins’ net income for the full year rose 21.8% to $84.0 million, or $0.84 per diluted share, compared to net income of $68.9 million, or $0.69 per diluted share for the prior year. Excluding the impact of Rollins conversion of Orkin to a limited liability company, and the impairment charge associated with the software system write off in the fourth quarter of 2009, the Company’s earnings for the year were $0.80 per diluted share, an improvement of 15.9% compared to the full year 2008.
Rollins’ balance sheet continued to strengthen with total assets increasing to $566.5 million and stockholders’ equity of $264.6 million.
Gary W. Rollins, President and Chief Executive Officer of Rollins, Inc. stated, “Once again, the Rollins family of pest control companies has exceeded our objectives. We are pleased to have delivered solid results for the fourth quarter as well as the year. These results reflect our success in navigating through a challenging economy and tough selling environment, while growing market share and controlling our expenses.”
Mr. Rollins concluded, “The continued development and deployment of our key programs should enable us to continue to make prudent investments to grow our business both organically and through strategic acquisitions. We believe that Rollins enters the 2010 fiscal year well-positioned to benefit from our 2009 achievements.”
Rollins, Inc. is a premier North American consumer and commercial services company. Through its wholly owned subsidiaries, Orkin, PCO Services, HomeTeam Pest Defense, Western Pest Services, The Industrial Fumigant Company and Crane Pest Control, 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, Asia and the Mediterranean 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.orkincanada.ca, www.indfumco.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 the statements about the Company’s belief that the continued development and deployment of the Company’s key programs should enable the Company to continue to make prudent investments to grow its business both organically and through strategic acquisitions, and the Company’s belief that it enters the 2010 fiscal year well-position to benefit from its 2009 achievements. 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 our Company’s business; 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, 2008.
ROLLINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands)
At December 31,
(unaudited) 2009 2008
--------------- ---- ----
ASSETS
Cash and cash
equivalents $9,504 $13,716
Trade receivables,
short-term 60,590 56,884
Accounts Receivable
-Other 2,164 2,185
Materials and
supplies 10,208 10,893
Deferred income
taxes 25,839 20,018
Other current
assets 12,225 13,142
------ ------
Total Current
Assets 120,530 116,838
Trade receivables,
long-term 9,356 11,124
Equipment and
property, net 74,644 78,625
Goodwill 189,658 187,266
Customer Contracts 121,176 129,092
Other Intangible
Assets 24,785 25,719
Deferred income
taxes 17,901 17,886
Other assets 8,446 5,967
Total Assets $566,496 $572,517
======== ========
LIABILITIES
Accounts payable $15,841 $18,782
Accrued insurance 16,567 15,404
Accrued
compensation and
related
liabilities 57,377 56,334
Unearned revenue 85,883 88,288
Capital leases 217 450
Line of Credit 30,000 65,000
Other current
liabilities 26,868 28,569
------ ------
Total Current
Liabilities 232,753 272,827
------- -------
Capital leases,
less current
portion 33 171
Accrued pension 14,895 20,353
Long-term accrued
liabilities 54,249 50,733
------ ------
Total Liabilities 301,930 344,084
STOCKHOLDERS'
EQUITY
Common stock 98,904 100,041
Retained earnings
and other equity 165,662 128,392
------- -------
Total Stockholders'
Equity 264,566 228,433
------- -------
Total Liabilities
and Stockholders'
Equity $566,496 $572,517
======== ========
ROLLINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share data)
(unaudited)
Fourth Quarter Ended
December 31,
2009 2008
---- ----
REVENUES
Customer services $259,567 $248,076
COSTS AND EXPENSES
Cost of services provided 136,562 133,050
Depreciation and amortization 9,045 9,096
Sales, general and administrative 88,563 84,120
(Gain)/loss on impairment/sale
of assets 2,935 23
Interest expense, net 118 913
--- ---
237,223 227,202
------- -------
INCOME BEFORE TAXES 22,344 20,874
------ ------
PROVISION FOR INCOME TAXES 2,383 8,321
----- -----
NET INCOME $19,961 $12,553
======= =======
NET INCOME PER SHARE - BASIC $0.20 $0.13
===== =====
NET INCOME PER SHARE - DILUTED $0.20 $0.13
===== =====
Weighted average shares
outstanding -basic 98,970 98,851
Weighted average shares
outstanding -diluted 99,230 99,659
Twelve Months Ended
December 31,
2009 2008
---- ----
REVENUES
Customer services $1,073,958 $1,020,564
COSTS AND EXPENSES
Cost of services provided 551,002 534,494
Depreciation and amortization 37,169 33,443
Sales, general and administrative 355,590 339,078
(Gain)/loss on impairment/sale
of assets 2,942 (166)
Interest expense, net 964 761
--- ---
947,667 907,610
------- -------
INCOME BEFORE TAXES 126,291 112,954
------- -------
PROVISION FOR INCOME TAXES 42,307 44,020
------ ------
NET INCOME $83,984 $68,934
======= =======
NET INCOME PER SHARE - BASIC $0.84 $0.69
===== =====
NET INCOME PER SHARE - DILUTED $0.84 $0.69
===== =====
Weighted average shares
outstanding -basic 99,453 99,209
Weighted average shares
outstanding -diluted 99,749 100,081
ROLLINS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIALS
(in thousands except per share data)
(unaudited)
Fourth Quarter Twelve Months
Ended Ended
December 31, December 31,
2009 2009
------------- -------------
Net income as
reported $19,961 $83,984
Add: Impairment of
Orion (net of
taxes) 1,809 1,809
Less: Tax benefit
for valuation
allowance related
to LLC conversion
and Canadian
repatriation $(7,889)
Add: Tax cost
related to Canadian
restructuring
and repatriation of
cash $1,737
Less: Net tax
benefit (6,152) (6,152)
------ ------
Adjusted earnings $15,618 $79,641
======= =======
Adjusted earnings
per share -diluted
excluding
impairment charges
and tax benefit $0.16 $0.80
Weighted average
shares outstanding
-diluted 99,230 99,749
ROLLINS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIALS
(in thousands except per share data)
(unaudited)
Fourth Quarter Twelve Months
Ended Ended
December 31, December 31,
2009 2009
------------- -------------
Net income per share
-diluted as
reported $0.20 $0.84
Add: Impairment of
Orion (net of
taxes) 0.02 0.02
Less: Net tax
benefit (0.06) (0.06)
----- -----
Adjusted earnings
per share -diluted $0.16 $0.80
===== =====
CONFERENCE CALL ANNOUNCEMENT
Rollins, Inc.
(NYSE: ROL)
Management will hold a conference call to discuss
Fourth Quarter results on:
Wednesday, January 27, 2010 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 888-561-1721 domestic;
480-629-9868 international
at least 5 minutes before start time.
-------------------------------------
REPLAY: available through February 3, 2010
Please dial 800-406-7325/303-590-3000, Passcode: 4200223
THIS CALL CAN ALSO BE ACCESSED THROUGH THE INTERNET AT
www.viavid.net
Questions?
Contact Samantha Alphonso at Financial Relations Board at 212-827-3746
Or email to salphonso@mww.com
For Further Information Contact
Harry J. Cynkus (404) 888-2922
SOURCE Rollins, Inc.