Rollins, Inc. Reports Fourth Quarter and Full-Year 2009 Financial Results

Company Posts 15th Consecutive Quarter of Improved Earnings Results

- Revenue increased 4.6% for the quarter and 5.2% for full year

- Net income up 59.0% for the quarter and 21.8% for the full year

- Earnings per diluted share rose 53.8% for the quarter to $0.20 from $0.13 and 21.7% to $0.84 from $0.69 for the full year

Jan 27, 2010, 07:30 ET from Rollins, Inc.

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

Twelve Months Ended

December 31,

December 31,

2009

2008

2009

2008

REVENUES

Customer services

$        259,567 

$           248,076 

$     1,073,958 

$        1,020,564 

COSTS AND EXPENSES

Cost of services provided

136,562 

133,050 

551,002 

534,494 

Depreciation and amortization

9,045 

9,096 

37,169 

33,443 

Sales, general and administrative

88,563 

84,120 

355,590 

339,078 

(Gain)/loss on impairment/sale of assets

2,935 

23 

2,942 

(166)

Interest expense, net

118 

913 

964 

761 

237,223 

227,202 

947,667 

907,610 

INCOME BEFORE TAXES

22,344 

20,874 

126,291 

112,954 

PROVISION FOR INCOME TAXES

2,383 

8,321 

42,307 

44,020 

NET INCOME

$           19,961 

$             12,553 

$           83,984 

$             68,934 

NET INCOME PER SHARE - BASIC

$               0.20 

$                 0.13 

$               0.84 

$                 0.69 

NET INCOME PER SHARE - DILUTED

$               0.20 

$                 0.13 

$               0.84 

$                 0.69 

Weighted average shares outstanding - basic

98,970 

98,851 

99,453 

99,209 

Weighted average shares outstanding - diluted

99,230 

99,659 

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, 2009

December 31, 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, 2009

December 31, 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.



RELATED LINKS

http://www.rollins.com