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Rollins, Inc. Reports Third Quarter And Nine Months 2019 Financial Results

ATLANTA, Oct. 23, 2019 /PRNewswire/ --

  • Record revenue increase of 14.1% for the quarter
  • Strong organic revenue growth of 6.4% for the quarter
  • Earnings Per Share of $0.13 for third quarter 2019 impacted by $0.09 from non-cash pension settlement
  • Adjusted Earnings Per Share* of $0.22 for third quarter 2019 and $0.20 for third quarter 2018

Rollins, Inc. (ROL), a premier global consumer and commercial services company, reported unaudited financial results for its third quarter and nine months ended September 30, 2019.

The Company recorded third quarter record revenues of $556.5 million, an increase of 14.1% over the prior year's third quarter revenue of $487.7 million.  Rollins' reported net income of $44.1 million or $0.13 per diluted share for the third quarter ended September 30, 2019.  Adjusted net income* for the third quarter ended September 30, 2019 was $70.6 million or $0.22 per diluted share, compared to $66.6 million or $0.20 per diluted share for the same quarter in 2018. 

Rollins' revenues rose 9.6% for the first nine months of 2019 to $1.509 billion compared to $1.377 billion for the prior year.  Net income for the first nine months of 2019 was $152.6 million or $0.47 per diluted share.  Adjusted net income* for the nine months ended September 30, 2019 was $179.2 million or $0.55 per diluted share, compared to $180.7 million or $0.55 per diluted share for the same period last year. 

The Company, as planned, terminated its fully-funded pension plan in September 2019 with the completion of the transfer of $198.3 million of U.S. pension obligations.  The non-cash pension expense was $49.9 million pre-tax.  

Gary W. Rollins, Vice Chairman and Chief Executive Officer of Rollins, Inc. stated, "We remain confident in our strategy and action plans, and are working hard to grow the business both organically and through strategic acquisition." 

Rollins, Inc. is a premier global consumer and commercial services company. Through its wholly owned subsidiaries, Orkin LLC., HomeTeam Pest Defense, Clark Pest Control, Orkin Canada, Western Pest Services, Northwest Exterminating, Critter Control, Inc., The Industrial Fumigant Company, Trutech LLC., Orkin Australia, Waltham Services LLC., OPC Pest Services, PermaTreat, Rollins UK, Aardwolf Pestkare, 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 700 locations. You can learn more about Rollins and its subsidiaries by visiting our web sites at www.orkin.com, www.pestdefense.com, www.clarkpest.comwww.orkincanada.ca, www.westernpest.com, www.callnorthwest.com,  www.crittercontrol.com, www.indfumco.com, www.trutechinc.com, www.orkinau.com, www.allpest.com.au, www.murraypestcontrol.com.au, www.statewidepc.com.au, www.walthamservices.com, www.opcpest.com, www.permatreat.com, www.safeguardpestcontrol.co.uk, www.aardwolfpestkare.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 confidence in its strategies and action plans.  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; changes in various government laws and regulations, including environmental regulations; and the impact of the U. S. Government shutdown.  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, 2018.

ROL-Fin

_____________

*"Adjusted" amounts presented in this release are non-GAAP financial measures. See the appendix to this release for a discussion of non-GAAP financial metrics, including a reconciliation to the most closely correlated GAAP measure.

 

ROLLINS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in thousands)

At September 30, (unaudited)

2019


2018

ASSETS




Cash and cash equivalents

$               104,362


$                 118,652

Trade accounts receivables, net

132,065


122,375

Financed receivables, net 

23,821


20,384

Materials and supplies

17,500


16,093

Other current assets

46,440


25,576

Total Current Assets

324,188


303,080

Equipment and property, net

197,549


136,857

Goodwill 

570,759


365,480

Customer contracts, net

283,830


185,477

Trademarks and tradenames, net

102,657


53,850

Other intangible assets, net

11,008


11,587

Operating lease, right-of-use assets

196,854


-

Financed receivables, long-term, net

30,750


26,882

Benefit plan assets

25,949


-

Prepaid pension

-


19,522

Deferred income taxes, net

-


5,863

Other assets

21,249


20,975

    Total Assets

$            1,764,793


$              1,129,573

LIABILITIES




Accounts payable

$                 32,932


$                   29,991

Accrued insurance, current

29,817


27,722

Accrued compensation and related liabilities

78,699


73,829

Unearned revenue

132,915


123,916

Operating lease liabilities, current

63,952


-

Current portion of long-term debt

12,500


-

Other current liabilities

60,065


53,923

Total Current Liabilities

410,880


309,381

Accrued insurance, less current portion

34,157


33,883

Operating lease liabilities, less current portion

133,703


-

Long-term debt

313,500


-

Long-term accrued liabilities

65,656


51,551

Total Liabilities

957,896


394,815

STOCKHOLDERS' EQUITY




Common stock

327,442


327,318

Retained earnings and other equity

479,455


407,440

Total stockholders' equity

806,897


734,758

Total Liabilities and Stockholders' Equity

$            1,764,793


$              1,129,573

 

 

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,


2019


2018


2019


2018

REVENUES








Customer services

$  556,466


$   487,739


$1,509,492


$ 1,376,942

COSTS AND EXPENSES








Cost of services provided

268,718


236,287


739,309


673,202

Depreciation and amortization

21,690


16,867


58,505


50,149

Pension settlement loss

49,898


-


49,898


-

Sales, general and administrative

167,168


145,072


468,584


414,938

Gain on sale of assets, net 

27


(314)


(406)


(678)

Interest expense, net

2,826


(63)


4,451


70


510,327


397,849


1,320,341


1,137,681

INCOME BEFORE INCOME TAXES

46,139


89,890


189,151


239,261

PROVISION FOR INCOME TAXES

2,078


23,262


36,569


58,566

NET INCOME

$    44,061


$    66,628


$   152,582


$   180,695

NET INCOME PER SHARE - BASIC AND DILUTED

$        0.13


$        0.20


$         0.47


$         0.55

Weighted average shares outstanding - basic and diluted

327,459


327,321


327,490


327,283



 

APPENDIX

Reconciliation of GAAP and non-GAAP Financial Measures

The Company has used the non-GAAP financial measures of adjusted net income and adjusted EPS in today's earnings release.  This measure should not be considered in isolation or as a substitute for net income or other performance measures prepared in accordance with GAAP. 

The Company uses adjusted net income and adjusted EPS as a measure of operating performance because it allows us to compare performance consistently over various periods without regard to the impact of the non-recurring pension settlement loss.

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 adjusted net income and adjusted EPS with net income, the most comparable GAAP measures. 

(unaudited in thousands except EPS)


Three Months Ended



Nine Months Ended


September 30,



September 30,


2019


2018


Better/
(Worse)


%



2019


2018


Better/
(Worse)


%

Net Income

$    44,061


$      66,628


$  (22,567)


(33.9)



$   152,582


$    180,695


$  (28,113)


(15.6)

Pension Settlement Loss

49,898


-


49,898


-



49,898


-


49,898


-

Adjusted Income Taxes on Excluded
Expenses

(23,315)


-


(23,315)


-



(23,315)


-


(23,315)


-

Adjusted Net Income

$    70,644


$      66,628


$      4,016


6.0



$   179,165


$    180,695


$     (1,530)


(0.8)

Adjusted Net Income Per Share - Basic
And Diluted

$        0.22


$          0.20


$        0.02


10.0



$         0.55


$          0.55


$              -


-

Weighted average participating shares outstanding - basic and diluted

327,459


327,321


(138)


-



327,490


327,283


(207)


(0.1)


 

CONFERENCE CALL ANNOUNCEMENT
Rollins, Inc.
(ROL)

Management will hold a conference call to discuss
Third Quarter 2019 results on

Wednesday, October 23, 2019 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 800-367-2403 domestic;
334-777-6978 international

at least 5 minutes before start time.


REPLAY: available through October 30, 2019
Please dial 888-203-1112/719-457-0820, Passcode 2950556
THIS CALL CAN ALSO BE ACCESSED THROUGH THE INTERNET AT
www.viavid.com

Questions?
Contact Samantha Alphonso at Financial Relations Board at 212-827-3746
Or email to salphonso@mww.com

For Further Information Contact
Eddie Northen (404) 888-2242

Cision

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