-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AUh6IePaNqKPkrnb+Cmlrrnvo2lQAEc7lVwvYgYLgnDjdRK7NVToyfVhvlDxInP6 qPB/hD98SgM3ETDmi4XREA== 0000084839-04-000059.txt : 20041027 0000084839-04-000059.hdr.sgml : 20041027 20041027091030 ACCESSION NUMBER: 0000084839-04-000059 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041027 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20041027 DATE AS OF CHANGE: 20041027 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROLLINS INC CENTRAL INDEX KEY: 0000084839 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TO DWELLINGS & OTHER BUILDINGS [7340] IRS NUMBER: 510068479 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04422 FILM NUMBER: 041098123 BUSINESS ADDRESS: STREET 1: 2170 PIEDMONT RD NE CITY: ATLANTA STATE: GA ZIP: 30324 BUSINESS PHONE: 4048882000 MAIL ADDRESS: STREET 1: 2170 PIEDMONT ROAD NE CITY: ATLANTA STATE: GA ZIP: 30324 8-K 1 earn3q04.txt 8-K EARNINGS RELEASE UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): October 27, 2004 ROLLINS, INC. (Exact name of registrant as specified in its charter) Delaware 1-4422 51-0068479 (State or other jurisdiction of (Commission File Number) (I.R.S. Employer incorporation) Identification No.) 2170 Piedmont Road, N.E., Atlanta, Georgia 30324 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (404) 888-2000 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): --- Written communications pursuant to Rule 425 under the Securities Act --- (17 CFR 230.425) --- Soliciting material pursuant to Rule 14a-12 under the Exchange Act --- (17 CFR 240.14a-12) --- Pre-commencement communications pursuant to Rule 14d-2(b) under the --- Exchange Act (17 CFR 240.14d-2(b)) --- Pre-commencement communications pursuant to Rule 13e-4(c) under the --- Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02. Results of Operations and Financial Condition. The information provided pursuant to this Item 2.02 is to be considered "filed" under the Securities Exchange Act of 1934 ("Exchange Act") and incorporated by reference into those filings of Rollins, Inc (the "Company") that provide for the incorporation of all reports and documents filed by the Company under the Exchange Act. On October 27, 2004, the Company issued a press release announcing its results for the quarter ended September 30, 2004. The Company hereby incorporates by reference herein the information set forth in its Press Release dated October 27, 2004, a copy of which is attached hereto as Exhibit 99.1. Except as otherwise provided in the press release, the press release speaks only as of the date of such press release and such press release shall not create any implication that the affairs of the Company have continued unchanged since such date. Except for the historical information contained in this report, the statements made by the Company are forward-looking statements that involve risks and uncertainties. All such statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. The Company's future financial performance could differ significantly from the expectations of management and from results expressed or implied in the Press Release. See the risk factors contained in the Press Release for a discussion of certain risks and uncertainties that may impact such forward-looking statements. For further information on other risk factors, please refer to the "Risk Factors" contained in the Company's Form 10-K filed March 15, 2004 with the Securities and Exchange Commission. The Company disclaims any obligation or duty to update or modify these forward-looking statements. Included in Exhibit 99.1, as attached, are the following non-GAAP financial measures: o Revenue, Excluding the Acquisition of Western* * Revenue, excluding the acquisition of Western is presented and deemed useful by management because in order to present revenue in a comparable basis to prior year, the Western acquisition is excluded. Prior year numbers do not include the Western acquisition as it was completed on April 30, 2004. Item 9.01. Financial Statements and Exhibits Exhibit No. Description 99.1 Press Release Dated October 27, 2004 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Rollins, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ROLLINS, INC. Date: October 27, 2004 By: /s/ Harry J. Cynkus --------------------------------------- Name: Harry J. Cynkus Title: Chief Financial Officer and Treasurer EX-99 2 ear9913q.txt EARNINGS RELEASE Exhibit 99.1 For Further Information Contact Harry J. Cynkus (404) 888-2922 FOR IMMEDIATE RELEASE ROLLINS, INC. REPORTS CONTINUED IMPROVEMENT IN QUARTERLY EARNINGS o 19th consecutive quarter of improved earnings results o Net income rose 18.8% to $11.6 million o Income Before Income Taxes increased 23.8% o Revenue increased 13.5%, excluding Western revenues rose by 3.6% o Earnings Per Share rose 19.0% to $0.25 ATLANTA, GEORGIA, October 27, 2004: Rollins, Inc. (NYSE:ROL), a premier North American consumer services company, today reported net income grew 18.8% to $11.6 million or $0.25 per diluted share for the third quarter ended September 30, 2004, compared to $9.8 million or $0.21 per diluted share for the same period in 2003. Revenue for the quarter grew 13.5% to $202.3 million compared to $178.3 million for the third quarter ended September 30, 2003. Excluding Western Pest Services acquired April 30, 2004, revenues increased by 3.6%. Net income for the first nine months of 2004 climbed 42.8% to $44.2 million or $0.95 per diluted share compared to net income of $30.9 million or $0.67 per diluted share for 2003. Revenues increased to $568.6 million for the first nine months of 2004 compared to $518.5 million for the prior year. Rollins' balance sheet remains strong with total assets increasing to $427.8 million and stockholders' equity increasing to $179.2 million. Total cash and cash equivalents rose to $40.9 million. Gary W. Rollins, President and Chief Executive Officer of Rollins, Inc. stated, "Our third quarter and first nine months reflect the success that we are achieving in growing our business at a faster pace. Western was a major contributor to our third quarter revenue growth and their integration into our Company is on track. We also achieved organic sales growth in our Commercial and Residential Pest Control businesses, reflecting the positive impact of the initiatives that we have in place. We continue to challenge ourselves to improve our service, customer retention and growth momentum. As an example, we have initiated a major project in our commercial division that will ultimately improve the way we service, sell and administer our commercial customers. It is our plan to begin implementation of this service segment re-engineering next year." Mr. Rollins continued "During the third quarter, we signed an agreement with Univar U.S.A. to provide pest control materials warehousing, logistics and delivery services for all of our Orkin branches. At the same time Univar acquired certain assets of Dettelbach Pest Corp., a wholly owned subsidiary of Orkin that had previously provided these services. This strategic decision will result in a lower inventory investment and freight savings in the future. Orkin, like many companies, was affected by the multiple hurricanes that hit the southeast. It is a credit to the employees of our Company that we were not more adversely impacted. Our people did an exemplary job servicing our customers under very difficult circumstances." Mr. Rollins concluded, "We continue to strengthen our balance sheet and are committed to our growth strategies, productivity initiatives, and other programs that will create operating efficiencies and excellent customer service." Rollins, Inc. is one of the nation's largest consumer services companies. Through its wholly owned subsidiaries, Orkin, Inc. and Western Pest Services, the Company provides essential pest control services and protection against termite damage, rodents and insects to approximately 1.7 million customers in the United States, Canada and Mexico from over 400 locations. You can learn more about Orkin by visiting our Web sites at www.orkin.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 The above release contains statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. 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 potential acquisitions; climate and weather trends; competitive factors and pricing practices; the cost reduction benefits of the corporate restructuring may not be as great as expected or eliminated positions may have to be reinstated in the future; expected benefits of the commercial division re-eingeering may not be realized, 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, 2003. ROLLINS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (In thousands) 2004 2003 At September 30 (Unaudited) (Unaudited) - -------------------------------------------------------------------------------- ASSETS Cash and Cash Equivalents $ 40,894 $ 55,066 Marketable Securities 0 27,000 Trade Receivables, Net 63,358 52,689 Materials and Supplies 11,002 10,646 Deferred Income Taxes 21,838 21,934 Other Current Assets 11,283 13,035 ----------------- --------------- Current Assets 148,375 180,370 Equipment and Property, Net 45,186 37,484 Goodwill and Other Intangible Assets 193,781 104,470 Deferred Income Taxes 9,701 34,760 Prepaid Pension 24,964 0 Other Assets 5,840 0 ----------------- --------------- Total Assets $ 427,847 $ 357,084 ================= =============== - -------------------------------------------------------------------------------- LIABILITIES Accounts Payable $ 14,378 $ 13,482 Accrued Insurance 13,049 13,050 Accrued Payroll 38,684 33,218 Unearned Revenue 66,566 49,533 Other Current Liabilities 49,810 37,787 ----------------- --------------- Current Liabilities 182,487 147,070 Long-Term Accrued Liabilities 66,117 90,173 ----------------- --------------- Total Liabilities 248,604 237,243 ----------------- --------------- - -------------------------------------------------------------------------------- STOCKHOLDERS' EQUITY Common Stock 45,668 45,108 Retained Earnings and Other Equity 133,575 74,733 ----------------- --------------- Total Stockholders' Equity 179,243 119,841 ----------------- --------------- Total Liabilities and Stockholders' Equity $ 427,847 $ 357,084 ================= ===============
ROLLINS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30 (In thousands except per share data) Third Quarter Nine Months --------------------------- --------------------------- 2004 2003 2004 2003 (Unaudited) (Unaudited) (Unaudited) (Unaudited) ------------ ------------- ------------ ------------- REVENUES $ 202,257 $ 178,262 $ 568,647 $ 518,489 ------------ ------------- ------------ ------------- COSTS AND EXPENSES Cost of Services Provided 106,748 96,065 297,547 275,549 Depreciation and Amortization 6,249 5,065 16,670 15,258 Sales, General and Administrative 70,080 61,413 193,410 178,101 (Gain)/Loss on Sales of Assets (315) 33 (14,457) (36) Interest Income (68) (120) (265) (280) ------------ ------------- --------------------------- TOTAL COSTS AND EXPENSES 182,694 162,456 492,905 468,592 ------------ ------------- ------------ ------------- INCOME BEFORE INCOME TAXES 19,563 15,806 75,742 49,897 PROVISION FOR INCOME TAXES 7,925 6,006 31,576 18,961 ------------ ------------- ------------ ------------- NET INCOME $ 11,638 $ 9,800 $ 44,166 $ 30,936 ============ ============= ============ ============= EARNINGS PER SHARE - BASIC $ 0.25 $ 0.22 $ 0.97 $ 0.69 ============ ============= ============ ============= EARNINGS PER SHARE - DILUTED $ 0.25 $ 0.21 $ 0.95 $ 0.67 ============ ============= ============ ============= AVERAGE SHARES OUTSTANDING - BASIC 45,660 45,115 45,504 45,049 AVERAGE SHARES OUTSTANDING - DILUTED 46,797 45,994 46,731 46,170
ROLLINS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30 (In thousands) (Unaudited) 2004 2003 --------------- -------------- Operating Activities Net Income $ 44,166 $ 30,936 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 16,670 15,258 Other Operating Activities (856) 12,540 --------------- -------------- Net Cash Provided by Operating Activities 59,980 58,734 --------------- -------------- Investing Activities Purchases of Equipment and Property (6,707) (8,744) Net Cash Used for Acquisition of Companies (103,415) (1,543) Sale of Marketable Securities, Net 21,866 (27,000) Proceeds from Sale of Assets, Net of Deferred Gain 15,473 0 --------------- -------------- Net Cash Provided by (Used In) Investing Activities (72,783) (37,287) --------------- -------------- Financing Activities Dividends Paid (8,187) (6,754) Other 2,344 2,058 --------------- -------------- Net Cash Used in Financing Activities (5,843) (4,696) --------------- -------------- Net Increase/(Decrease) in Cash and Cash Equivalents (18,646) 16,751 Cash and Cash Equivalents at Beginning of Year 59,540 38,315 --------------- -------------- Cash and Cash Equivalents at End of Period $ 40,894 $ 55,066 =============== ==============
CONFERENCE CALL Rollins, Inc. (NYSE: ROL) Management will hold a conference call to discuss third quarter results on: - -------------------------------------------------------------------------------- Wednesday, October 27, 2004 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 800-240-5318 domestic; 303-205-0066 international at least 5 minutes before start time. REPLAY: through November 3, 2004 at 11:00 p.m. Please dial 800-405-2236/303-590-3000, Passcode: 11011514 THIS CALL CAN ALSO BE ACCESSED THROUGH THE INTERNET AT www.viavid.net Questions?: Janet Cruz at FRB/Weber Shandwick at 212-445-8453 or email to jcruz@webershandwick.com 640 Fifth Avenue T 212 445 8000 New York, NY 10019 F 212 445 8001 www.webershandwick.com Reconciliation Revenue Excluding Western Third Quarter ----------------------------- 2004 2003 $B/(W) %B/(W) Total Net Revenues $ 202,257 $ 178,262 $ 23,995 13.5 % Less: Western Acquisition 17,601 0 17,601 ------------------------------------------------- Revenue Excluding Western $ 184,656 $ 178,262 $ 6,394 3.6 % ================================================= -----END PRIVACY-ENHANCED MESSAGE-----