Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Jul. 15, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'ROLLINS INC | ' |
Entity Central Index Key | '0000084839 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 145,749,359 |
Document Fiscal Period Focus | 'Q2 | ' |
Document Fiscal Year Focus | '2014 | ' |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
ASSETS | ' | ' |
Cash and cash equivalents | $101,519 | $118,216 |
Trade receivables, short-term, net of allowance for doubtful accounts of $7,893 and $9,078, respectively | 86,156 | 72,849 |
Financed receivables, short-term, net of allowance for doubtful accounts of $1,731 and $1,777, respectively | 12,821 | 12,220 |
Materials and supplies | 13,136 | 12,251 |
Deferred income taxes, net | 40,781 | 39,518 |
Other current assets | 19,052 | 19,388 |
Total Current Assets | 273,465 | 274,442 |
Equipment and property, net | 94,678 | 87,215 |
Goodwill | 255,515 | 211,847 |
Customer contracts and other intangible assets, net | 139,231 | 128,569 |
Deferred income taxes, net | 4,564 | 4,544 |
Financed receivables, long-term, net of allowance for doubtful accounts of $1,469 and $1,423, respectively | 12,955 | 11,608 |
Prepaid Pension | 10,393 | 7,113 |
Other assets | 13,788 | 13,879 |
Total Assets | 804,589 | 739,217 |
LIABILITIES | ' | ' |
Accounts payable | 27,972 | 23,194 |
Accrued insurance | 24,212 | 25,631 |
Accrued compensation and related liabilities | 63,408 | 66,175 |
Unearned revenues | 105,455 | 91,014 |
Other current liabilities | 38,384 | 29,778 |
Total current liabilities | 259,431 | 235,792 |
Accrued insurance, less current portion | 31,340 | 28,245 |
Accrued pension | 475 | 691 |
Long-term accrued liabilities | 37,801 | 36,234 |
Total Liabilities | 329,047 | 300,962 |
Commitments and Contingencies | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Preferred stock, without par value; 500,000 shares authorized, zero shares issued | ' | ' |
Common stock, par value $1 per share; 250,000,000 shares authorized, 145,952,711 and 145,864,443 shares issued and outstanding, respectively | 145,953 | 145,864 |
Treasury Stock, par value $1 per share; 192,583 and 0 shares, respectively | -193 | ' |
Paid in capital | 57,338 | 53,765 |
Accumulated other comprehensive loss | -27,531 | -31,771 |
Retained earnings | 299,975 | 270,397 |
Total Stockholders' Equity | 475,542 | 438,255 |
Total Liabilities and Stockholders' Equity | $804,589 | $739,217 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Trade receivables, short-term, allowance for doubtful accounts (in dollars) | $7,893 | $9,078 |
Financed receivables, short-term, allowance for doubtful accounts (in dollars) | 1,731 | 1,777 |
Financed receivables, long-term, allowance for doubtful accounts (in dollars) | $1,469 | $1,423 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, no par value (in dollars per share) | ' | ' |
Common stock, par value (in dollars per share) | $1 | $1 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 145,952,711 | 145,864,443 |
Common stock, shares outstanding | 145,952,711 | 145,864,443 |
Treasury Stock, par value | $1 | $1 |
Treasury Stock, Shares | 192,583 | 0 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
REVENUES | ' | ' | ' | ' |
Customer services | $369,357 | $350,798 | $682,745 | $650,512 |
COSTS AND EXPENSES | ' | ' | ' | ' |
Cost of services provided | 182,642 | 174,361 | 343,950 | 329,967 |
Depreciation and amortization | 10,608 | 9,768 | 20,822 | 19,662 |
Sales, general and administrative | 110,522 | 109,518 | 211,106 | 208,652 |
Interest income, net | -86 | -127 | -162 | -172 |
INCOME BEFORE INCOME TAXES | 65,671 | 57,278 | 107,029 | 92,403 |
PROVISION FOR INCOME TAXES | 24,811 | 21,284 | 40,403 | 33,230 |
NET INCOME | $40,860 | $35,994 | $66,626 | $59,173 |
NET INCOME PER SHARE - BASIC AND DILUTED (in dollars per share) | $0.28 | $0.25 | $0.46 | $0.40 |
DIVIDENDS PAID PER SHARE (in dollars per share) | $0.11 | $0.09 | $0.21 | $0.18 |
Weighted average participating shares outstanding - basic and diluted (in shares) | 145,875 | 146,210 | 145,933 | 146,224 |
CONDENSED_CONSOLIDATED_STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' |
NET INCOME | $40,860 | $35,994 | $66,626 | $59,173 |
Other comprehensive earnings (loss), net of tax | ' | ' | ' | ' |
Foreign currency translation adjustments | 2,706 | -1,335 | 4,240 | -2,112 |
Other comprehensive earnings (loss) | 2,706 | -1,335 | 4,240 | -2,112 |
Comprehensive earnings | $43,566 | $34,659 | $70,866 | $57,061 |
CONDENSED_CONSOLIDATED_STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
OPERATING ACTIVITIES | ' | ' |
Net Income | $66,626 | $59,173 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 20,822 | 19,662 |
Provision for deferred income taxes | 509 | 963 |
Provision for bad debts | 2,813 | 2,438 |
Stock based compensation expense | 5,367 | 5,092 |
Excess tax benefits from share-based payments | -4,455 | -3,132 |
Other, net | -899 | -63 |
Changes in operating assets and liabilities | -772 | -10,992 |
Net cash provided by operating activities | 90,011 | 73,141 |
INVESTING ACTIVITIES | ' | ' |
Cash used for acquisitions of companies, net of cash acquired | -59,660 | -2,617 |
Purchases of equipment and property | -11,471 | -9,614 |
Other | 1,108 | 233 |
Net cash used in investing activities | -70,023 | -11,998 |
FINANCING ACTIVITIES | ' | ' |
Cash paid for common stock purchased | -12,789 | -9,145 |
Dividends paid | -30,612 | -26,296 |
Proceeds received upon exercise of stock options | ' | 6 |
Excess tax benefits from share-based payments | 4,455 | 3,132 |
Net cash used in financing activities | -38,946 | -32,303 |
Effect of exchange rate changes on cash | 2,261 | -2,325 |
Net increase/(decrease) in cash and cash equivalents | -16,697 | 26,515 |
Cash and cash equivalents at beginning of period | 118,216 | 65,082 |
Cash and cash equivalents at end of period | $101,519 | $91,597 |
BASIS_OF_PREPARATION_AND_OTHER
BASIS OF PREPARATION AND OTHER | 6 Months Ended |
Jun. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
BASIS OF PREPARATION AND OTHER | ' |
NOTE 1. BASIS OF PREPARATION AND OTHER | |
Basis of Preparation -The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. There has been no material change in the information disclosed in the notes to the consolidated financial statements included in the Annual Report on Form 10-K of Rollins, Inc. (the “Company”) for the year ended December 31, 2013. Accordingly, the quarterly condensed consolidated financial statements and related disclosures herein should be read in conjunction with the 2013 Annual Report on Form 10-K. | |
The preparation of interim financial statements requires management to make estimates and assumptions for the amounts reported in the condensed consolidated financial statements. Specifically, the Company makes estimates in its interim condensed consolidated financial statements for the termite accrual which includes future costs including termiticide life expectancy and government regulations, the insurance accrual which includes self insurance and worker’s compensation, inventory adjustments, discounts and volume incentives earned, among others. | |
In the opinion of management, all adjustments necessary for a fair presentation of the Company’s financial results for the interim periods have been made. These adjustments are of a normal recurring nature. The results of operations for the three and six month periods ended June 30, 2014 are not necessarily indicative of results for the entire year. | |
The Company has only one reportable segment, its pest and termite control business. The Company’s results of operations and its financial condition are not reliant upon any single customer, or a few customers, or the Company’s foreign operations. |
RECENT_ACCOUNTING_PRONOUNCEMEN
RECENT ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2014 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ' |
RECENT ACCOUNTING PRONOUNCEMENTS | ' |
NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS | |
New Accounting Standards | |
Recently adopted accounting standards | |
In February 2013, the Financial Accounting Standard Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (ASU 2013-02) to Comprehensive Income. The guidance requires disclosure of significant amounts reclassified out of accumulated other comprehensive income by component and their corresponding effect on the respective line items of net income. The provision of the new guidance was effective as of the beginning of our 2014 fiscal year. Adoption of this new guidance did not have a material impact on the Company’s reported results of operations or financial position. | |
In February 2013, FASB issued ASU No. 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date (a consensus of the FASB Emerging Issues Task Force). This guidance requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date. This stipulates that (1) it will include the amount the entity agreed to pay for the arrangement between them and the other entities that are also obligated to the liability and (2) any additional amount the entity expects to pay on behalf of the other entities. The objective of this update is to provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements. The provision of the new guidance was effective as of the beginning of our 2014 fiscal year. Adoption of this new guidance did not have a material impact on the Company’s reported results of operations or financial position. | |
In July 2013, FASB issued ASU No 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. Topic 740, Income Taxes, does not include explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. There is diversity in practice in the presentation of unrecognized tax benefits in those instances. Some entities present unrecognized tax benefits as a liability unless the unrecognized tax benefit is directly associated with a tax position taken in a tax year that results in, or that resulted in, the recognition of a net operating loss or tax credit carryforward for that year and the net operating loss or tax credit carryforward has not been utilized. Other entities present unrecognized tax benefits as a reduction of a deferred tax asset for a net operating loss or tax credit carryforward in certain circumstances. The objective of the amendments in this Update is to eliminate that diversity in practice. The provision of the new guidance was effective as of the beginning of our 2014 fiscal year. Adoption of this new guidance did not have a material impact on the Company’s reported results of operations or financial position. | |
Recently issued accounting standards to be adopted | |
In April 2014, FASB issued ASU 2014-08, (Topic 205 and 360): Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity. ASU 2014-08 amends the definition for what types of asset disposals are to be considered discontinued operations, and amends the required disclosures for discontinued operations and assets held for sale. ASU 2014-08 also enhances the convergence of the FASB’s and the International Accounting Standard Board’s reporting requirements for discontinued operations. The amendments in this update are effective for fiscal periods beginning on or after December 15, 2014, and interim periods within annual periods beginning on or after December 15, 2015. The company is currently evaluating the impact of this standard on its consolidated financial statements. | |
In May 2014, FASB issued Accounting Standards Update ASU No. 2014-09, (Topic 606): Revenue from Contracts with Customers (ASU 2014-09) supersedes the revenue recognition requirements in “Topic 605, Revenue Recognition” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective retrospectively for annual or interim reporting periods beginning after December 15, 2016, with early application not permitted. The company is currently evaluating the impact of this standard on its consolidated financial statements. |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
EARNINGS PER SHARE | ' | ||||||||||||||||
NOTE 3. EARNINGS PER SHARE | |||||||||||||||||
The Company follows ASC 260, Earnings Per Share (ASC 260) that requires the reporting of both basic and diluted earnings (loss) per share. Basic earnings (loss) per share is computed by dividing net income available to participating common stockholders by the weighted average number of participating common shares outstanding for the period. The calculation of diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. In accordance with ASC 260, any anti-dilutive effects on net earnings (loss) per share, of which there were none, are excluded at June 30, 2014 and June 30, 2013. | |||||||||||||||||
Basic and diluted earnings per share attributable to common and restricted shares of common stock for the period were as follows: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Basic earnings per share | |||||||||||||||||
Common stock | $ | 0.28 | $ | 0.25 | $ | 0.46 | $ | 0.4 | |||||||||
Restricted shares of common stock | $ | 0.27 | $ | 0.24 | $ | 0.44 | $ | 0.4 | |||||||||
Total shares of common stock | $ | 0.28 | $ | 0.25 | $ | 0.46 | $ | 0.4 | |||||||||
Diluted earnings per share | |||||||||||||||||
Common stock | $ | 0.28 | $ | 0.25 | $ | 0.46 | $ | 0.4 | |||||||||
Restricted shares of common stock | $ | 0.27 | $ | 0.24 | $ | 0.44 | $ | 0.4 | |||||||||
Total shares of common stock | $ | 0.28 | $ | 0.25 | $ | 0.46 | $ | 0.4 |
CONTINGENCIES
CONTINGENCIES | 6 Months Ended |
Jun. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
CONTINGENCIES | ' |
NOTE 4. CONTINGENCIES | |
In the normal course of business, certain of the Company’s subsidiaries are defendants in a number of lawsuits, claims or arbitrations which allege that the subsidiaries’ services caused damage. In addition, the Company defends employment related cases and claims from time to time. We are involved in certain environmental matters primarily arising in the normal course of business. We are actively contesting each of these matters. | |
Presently, the Company and a subsidiary, The Industrial Fumigant Company, LLC, are named defendants in Severn Peanut Co. and Meherrin Agriculture & Chemical Co. v. Industrial Fumigant Co., et al. The Severn lawsuit, a matter related to a fumigation service, has been filed in the United States District Court for the Eastern District of North Carolina. The court dismissed plaintiffs’ claim for breach of contract on March 15, 2014; plaintiffs’ pending claim for damages is for negligence. | |
On April 29, 2014, Foster Poultry Farms sued Orkin, LLC and Orkin Services of California, Inc., for breach of contract, breach of covenant of good faith and fair dealing, and negligence. The lawsuit is pending in the United States District Court for the Northern District of California. Foster Farms is seeking damages related to pest control services performed at its chicken processing facility during a six month period. The Company intends to defend this matter vigorously. | |
Management does not believe that any pending claim, proceeding or litigation, either alone or in the aggregate will have a material adverse effect on the Company’s financial position, results of operations or liquidity; however, it is possible that an unfavorable outcome of some or all of the matters, however unlikely, could result in a charge that might be material to the results of an individual quarter or year. |
FAIR_VALUE_OF_FINANCIAL_INSTRU
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2014 | |
Fair Value Disclosures [Abstract] | ' |
FAIR VALUE OF FINANCIAL INSTRUMENTS | ' |
NOTE 5. FAIR VALUE OF FINANCIAL INSTRUMENTS | |
The Company’s financial instruments consist of cash and cash equivalents, short-term investments, trade receivables, notes receivable, accounts payable and other short-term liabilities. The carrying amounts of these financial instruments approximate their fair values. The Company has a Revolving Credit Agreement with SunTrust Bank and Bank of America, N.A. for an unsecured line of credit of up to $175.0 million, which includes a $75.0 million letter of credit subfacility and a $25.0 million swingline subfacility. There were no outstanding borrowings at June 30, 2014 and December 31, 2013. |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||||||
STOCKHOLDERS' EQUITY | ' | ||||||||||||||||
NOTE 6. STOCKHOLDERS’ EQUITY | |||||||||||||||||
During the six months ended June 30, 2014 the Company paid $30.6 million or $0.21 per share in cash dividends compared to $26.3 million or $0.18 per share during the same period in 2013. | |||||||||||||||||
During the second quarter ended June 30, 2014, the Company repurchased 0.2 million shares from the open market of its $1 par value common stock at a weighted average price of $29.86 per share compared to 0.2 million shares purchased at a weighted average price of $24.41 during the same period in 2013. For the six month period ended June 30, 2014, the Company repurchased 0.2 million shares from the open market of its $1 par value common stock at a weighted average price of $29.47 per share compared to 0.2 million shares purchased at a weighted average price of $24.41 during the same period in 2013. | |||||||||||||||||
The Company repurchased $0.4 million of common stock for each of the second quarters ended June 30, 2014 and 2013, respectively, and repurchased $6.1 million and $4.9 million of common stock for the six months ended June 30, 2014 and 2013, respectively, from employees for the payment of taxes on vesting restricted shares. | |||||||||||||||||
As more fully discussed in Note 14 of the Company’s notes to the consolidated financial statements in its 2013 Annual Report on Form 10-K, stock options, time lapse restricted shares (TLRS’s) and restricted stock units have been issued to officers and other management employees under the Company’s Employee Stock Incentive Plans. The Company issues new shares from its authorized but unissued share pool. At June 30, 2014, approximately 3.6 million shares of the Company’s common stock were reserved for issuance. | |||||||||||||||||
Stock Options | |||||||||||||||||
Stock options generally vest over a five-year period and expire ten years from the issuance date. For the six months ended June 30, 2014, the Company did not issue any shares of common stock under exercise of stock options by employees with one thousand shares issued for the same period in 2013. | |||||||||||||||||
The Company had no options outstanding under the Company’s stock option plan as of June 30, 2014 or December 31, 2013. | |||||||||||||||||
The aggregate intrinsic value of options exercised during the six months ended June 30, 2014 and 2013 was zero and $20 thousand, respectively. There were no options exercised for the second quarters ended June 30, 2014 and 2013, respectively. | |||||||||||||||||
Time Lapse Restricted Shares and Restricted Stock Units | |||||||||||||||||
The following table summarizes the components of the Company’s stock-based compensation programs recorded as expense: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Time lapse restricted stock: | |||||||||||||||||
Pre-tax compensation expense | $ | 2,602 | $ | 2,546 | $ | 5,367 | $ | 5,092 | |||||||||
Tax benefit | (1,001 | ) | (980 | ) | (2,066 | ) | (1,960 | ) | |||||||||
Restricted stock expense, net of tax | $ | 1,601 | $ | 1,566 | $ | 3,301 | $ | 3,132 | |||||||||
The Company recognized a tax benefit of approximately $1.1 million and $0.4 million during the second quarters ended June 30, 2014 and 2013, respectively, and approximately $4.5 million and $3.1 million for the six months ended June 30, 2014 and 2013, respectively, related to the vesting of restricted shares which have been recorded as increases to paid-in capital. | |||||||||||||||||
The following table summarizes information on unvested restricted stock outstanding as of June 30, 2014: | |||||||||||||||||
Number of | Weighted-Average | ||||||||||||||||
Shares | Grant-Date | ||||||||||||||||
Fair Value | |||||||||||||||||
Unvested Restricted Stock Units at December 31, 2013 | 2,454 | $ | 18.75 | ||||||||||||||
Forfeited | (79 | ) | 21.6 | ||||||||||||||
Vested | (674 | ) | 15.42 | ||||||||||||||
Granted | 411 | 28.74 | |||||||||||||||
Unvested Restricted Stock Units at June 30, 2014 | 2,112 | $ | 21.64 | ||||||||||||||
At June 30, 2014 and December 31, 2013, the Company had $35.5 million and $30.7 million of total unrecognized compensation cost, respectively, related to time-lapse restricted shares that are expected to be recognized over a weighted average period of approximately 4.0 years and 3.8 years, respectively. |
PENSION_AND_POST_RETIREMENT_BE
PENSION AND POST RETIREMENT BENEFIT PLANS | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Pension and Other Postretirement Benefit Expense [Abstract] | ' | ||||||||||||||||
PENSION AND POST RETIREMENT BENEFIT PLANS | ' | ||||||||||||||||
NOTE 7. PENSION AND POST RETIREMENT BENEFIT PLANS | |||||||||||||||||
The following table represents the net periodic pension benefit costs and related components in accordance with FASB ASC 715 “Compensation - Retirement Benefits”: | |||||||||||||||||
Components of Net Pension Benefit Gain | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Interest and service cost | $ | 2,375 | $ | 2,166 | $ | 4,750 | $ | 4,332 | |||||||||
Expected return on plan assets | (3,108 | ) | (2,897 | ) | (6,216 | ) | (5,794 | ) | |||||||||
Amortization of net loss | 610 | 977 | 1,220 | 1,954 | |||||||||||||
Net periodic loss/(benefit) | $ | (123 | ) | $ | 246 | $ | (246 | ) | $ | 492 | |||||||
During the six months ended June 30, 2014 and 2013 the Company made $3.3 million and $1.5 million in contributions, respectively, to its defined benefit retirement plans (the “Plans”). The Company made $5.0 million in contributions for the year ended December 31, 2013. The company is planning on making no further contribution to the Plans during the fiscal year ending December 31, 2014. |
BUSINESS_COMBINATIONS
BUSINESS COMBINATIONS | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Business Combinations [Abstract] | ' | ||||||||
BUSINESS COMBINATIONS | ' | ||||||||
NOTE 8. BUSINESS COMBINATIONS | |||||||||
The Company made nine acquisitions during the six month period ended June 30, 2014. | |||||||||
Business combinations completed in fiscal 2014 | |||||||||
Acquisition of Allpest WA “(Allpest”) – The Company completed the acquisition of Allpest on February 17, 2014. This is the Company’s first acquisition outside of North America and places the Company as the number one pest control provider in Western Australia. A valuation of the acquired assets is currently being performed and an estimate of the valuation has been recorded in the Company’s financial statements. The effect of any adjustments to these estimates for Allpest is not expected to have a material effect on the Company’s financial statements as the net total adjustment will effect a combination of goodwill, customer contracts, and other intangible assets at the end of the measurement period. The Company plans to complete the valuation of Allpest’s intangible assets prior to its year-end 2014. | |||||||||
Preliminary Purchase Price Allocation | |||||||||
The total cash purchase price for the Company’s nine acquisitions in 2014 was $59.7 million. | |||||||||
The fair values of major classes of assets acquired and liabilities assumed along with the contingent consideration liability recorded at the date of acquisition is included in the reconciliation of the total consideration as follows (in thousands): | |||||||||
Accounts receivable, net | $ | 2,692 | |||||||
Materials and supplies | 404 | ||||||||
Prepaid expenses | 91 | ||||||||
Equipment and property | 3,555 | ||||||||
Goodwill | 42,248 | ||||||||
Customer contracts | 17,896 | ||||||||
Other intangible assets | 5,061 | ||||||||
Current liabilities | (5,875 | ) | |||||||
Other assets and liabilities, net | 31 | ||||||||
Total consideration paid | $ | 66,103 | |||||||
Less: Contingent consideration liability | (6,443 | ) | |||||||
Total cash purchase price | $ | 59,660 | |||||||
Goodwill from acquisitions represents the excess of the purchase price over the fair value of net assets of businesses acquired. The carrying amount of goodwill was $255.5 million and $211.8 million at June 30, 2014 and December 31, 2013, respectively. Goodwill generally changes due to the timing of acquisitions, finalization of allocation of purchase prices of previous acquisitions and foreign currency translations. The carrying amount of goodwill in foreign countries was $52.9 million at June 30, 2014 and $9.2 million at December 31, 2013. | |||||||||
The Company completed its most recent annual impairment analyses as of September 30, 2013. Based upon the results of these analyses, the Company has concluded that no impairment of its goodwill or other intangible assets was indicated. | |||||||||
The carrying amount of customer contracts and other intangible assets was $108.9 million and $30.3 million, respectively, at June 30, 2014 and $101.5 million and $27.1 million, respectively at December 31, 2013. The carrying amount of customer contracts and other intangible assets in foreign countries was $19.0 million and $4.9 million, respectively, at June 30, 2014 and $6.3 million and $0.4 million, respectively, at December 31, 2013. | |||||||||
Customer contracts and other amortizable intangible assets are amortized on a straight-line basis over their economic useful lives. The following table sets forth the components of intangible assets as of June 30, 2014 (in thousands): | |||||||||
Usefull Life | |||||||||
Intangible Asset | Fair Value | in Years | |||||||
Customer contracts | $ | 108,905 | 3 - 12.5 | ||||||
Non-compete agreements | 8,900 | 3 - 20 | |||||||
Trademarks and tradenames | 15,075 | 0 - 20 | |||||||
Patents | 3,850 | 15 | |||||||
Internet domains | 2,227 | n/a | |||||||
Know How | 274 | 10 | |||||||
Total customer contracts and other intangible assets | $ | 139,231 |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2014 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
NOTE 9. SUBSEQUENT EVENTS | |
On July 22, 2014, the Company announced that the Board of Directors declared a regular quarterly cash dividend on its common stock of $0.105 per share payable September 10, 2014 to shareholders of record as of August 8, 2014. |
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Schedule of basic and diluted earnings per share | ' | ||||||||||||||||
Basic and diluted earnings per share attributable to common and restricted shares of common stock for the period were as follows: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Basic earnings per share | |||||||||||||||||
Common stock | $ | 0.28 | $ | 0.25 | $ | 0.46 | $ | 0.4 | |||||||||
Restricted shares of common stock | $ | 0.27 | $ | 0.24 | $ | 0.44 | $ | 0.4 | |||||||||
Total shares of common stock | $ | 0.28 | $ | 0.25 | $ | 0.46 | $ | 0.4 | |||||||||
Diluted earnings per share | |||||||||||||||||
Common stock | $ | 0.28 | $ | 0.25 | $ | 0.46 | $ | 0.4 | |||||||||
Restricted shares of common stock | $ | 0.27 | $ | 0.24 | $ | 0.44 | $ | 0.4 | |||||||||
Total shares of common stock | $ | 0.28 | $ | 0.25 | $ | 0.46 | $ | 0.4 |
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||||||
Components of the stock-based compensation programs recorded as expense | ' | ||||||||||||||||
The following table summarizes the components of the Company’s stock-based compensation programs recorded as expense: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Time lapse restricted stock: | |||||||||||||||||
Pre-tax compensation expense | $ | 2,602 | $ | 2,546 | $ | 5,367 | $ | 5,092 | |||||||||
Tax benefit | (1,001 | ) | (980 | ) | (2,066 | ) | (1,960 | ) | |||||||||
Restricted stock expense, net of tax | $ | 1,601 | $ | 1,566 | $ | 3,301 | $ | 3,132 | |||||||||
Summarized information on unvested restricted stock units outstanding | ' | ||||||||||||||||
The following table summarizes information on unvested restricted stock outstanding as of June 30, 2014: | |||||||||||||||||
Number of | Weighted-Average | ||||||||||||||||
Shares | Grant-Date | ||||||||||||||||
Fair Value | |||||||||||||||||
Unvested Restricted Stock Units at December 31, 2013 | 2,454 | $ | 18.75 | ||||||||||||||
Forfeited | (79 | ) | 21.6 | ||||||||||||||
Vested | (674 | ) | 15.42 | ||||||||||||||
Granted | 411 | 28.74 | |||||||||||||||
Unvested Restricted Stock Units at June 30, 2014 | 2,112 | $ | 21.64 |
PENSION_AND_POST_RETIREMENT_BE1
PENSION AND POST RETIREMENT BENEFIT PLANS (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Pension and Other Postretirement Benefit Expense [Abstract] | ' | ||||||||||||||||
Schedule of Net Pension Benefit Gain | ' | ||||||||||||||||
Components of Net Pension Benefit Gain | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Interest and service cost | $ | 2,375 | $ | 2,166 | $ | 4,750 | $ | 4,332 | |||||||||
Expected return on plan assets | (3,108 | ) | (2,897 | ) | (6,216 | ) | (5,794 | ) | |||||||||
Amortization of net loss | 610 | 977 | 1,220 | 1,954 | |||||||||||||
Net periodic loss/(benefit) | $ | (123 | ) | $ | 246 | $ | (246 | ) | $ | 492 |
BUSINESS_COMBINATIONS_Tables
BUSINESS COMBINATIONS (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Business Combinations [Abstract] | ' | ||||||||
Schedule of purchasep price allocation | ' | ||||||||
The fair values of major classes of assets acquired and liabilities assumed along with the contingent consideration liability recorded at the date of acquisition is included in the reconciliation of the total consideration as follows (in thousands): | |||||||||
Accounts receivable, net | $ | 2,692 | |||||||
Materials and supplies | 404 | ||||||||
Prepaid expenses | 91 | ||||||||
Equipment and property | 3,555 | ||||||||
Goodwill | 42,248 | ||||||||
Customer contracts | 17,896 | ||||||||
Other intangible assets | 5,061 | ||||||||
Current liabilities | (5,875 | ) | |||||||
Other assets and liabilities, net | 31 | ||||||||
Total consideration paid | $ | 66,103 | |||||||
Less: Contingent consideration liability | (6,443 | ) | |||||||
Total cash purchase price | $ | 59,660 | |||||||
Schedule of components of intangible assets | ' | ||||||||
Customer contracts and other amortizable intangible assets are amortized on a straight-line basis over their economic useful lives. The following table sets forth the components of intangible assets as of June 30, 2014 (in thousands): | |||||||||
Usefull Life | |||||||||
Intangible Asset | Fair Value | in Years | |||||||
Customer contracts | $ | 108,905 | 3 - 12.5 | ||||||
Non-compete agreements | 8,900 | 3 - 20 | |||||||
Trademarks and tradenames | 15,075 | 0 - 20 | |||||||
Patents | 3,850 | 15 | |||||||
Internet domains | 2,227 | n/a | |||||||
Know How | 274 | 10 | |||||||
Total customer contracts and other intangible assets | $ | 139,231 |
BASIS_OF_PREPARATION_AND_OTHER1
BASIS OF PREPARATION AND OTHER (Details Narrative) | 6 Months Ended |
Jun. 30, 2014 | |
Number | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Number of Reportable Segment | 1 |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Total shares of common stock, basic (in dollars per share) | $0.28 | $0.25 | $0.46 | $0.40 |
Total shares of common stock, diluted (in dollars per share) | $0.28 | $0.25 | $0.46 | $0.40 |
Common Stock [Member] | ' | ' | ' | ' |
Total shares of common stock, basic (in dollars per share) | $0.28 | $0.25 | $0.46 | $0.40 |
Total shares of common stock, diluted (in dollars per share) | $0.28 | $0.25 | $0.46 | $0.40 |
Restricted Stock [Member] | ' | ' | ' | ' |
Total shares of common stock, basic (in dollars per share) | $0.27 | $0.24 | $0.44 | $0.40 |
Total shares of common stock, diluted (in dollars per share) | $0.27 | $0.24 | $0.44 | $0.40 |
FAIR_VALUE_OF_FINANCIAL_INSTRU1
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Line of Credit [Member] | ' | ' |
Short-term Debt [Line Items] | ' | ' |
Line of credit maximum borrowing capacity | $175,000 | ' |
Outstanding borrowings | 0 | 0 |
Letter of Credit [Member] | ' | ' |
Short-term Debt [Line Items] | ' | ' |
Line of credit maximum borrowing capacity | 75,000 | ' |
Swingline Credit Facility [Member] | ' | ' |
Short-term Debt [Line Items] | ' | ' |
Line of credit maximum borrowing capacity | $25,000 | ' |
STOCKHOLDERS_EQUITY_Details_Na
STOCKHOLDERS' EQUITY (Details Narrative) (USD $) | 3 Months Ended | 6 Months Ended | 6 Months Ended | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 |
Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Cash dividend paid | ' | ' | $30,612 | $26,296 | ' | ' | ' |
Cash dividend per share (in dollars per share) | $0.11 | $0.09 | $0.21 | $0.18 | ' | ' | ' |
Number of shares repurchased (in shares) | 200,000 | 200,000 | 200,000 | 200,000 | ' | ' | ' |
Par value of common stock (in dollars per share) | $1 | ' | $1 | ' | $1 | ' | ' |
Weighted average stock price of shares repurchased (in dollars per share) | $29.86 | $24.41 | $29.47 | $24.41 | ' | ' | ' |
Repurchase of common stock from employees | 400,000 | 400,000 | 6,100,000 | 4,900,000 | ' | ' | ' |
Common stock reserved for issuance upon exercise of stock options (in shares) | 3,600,000 | ' | 3,600,000 | ' | ' | ' | ' |
Options vesting period | ' | ' | '5 years | ' | ' | ' | ' |
Options expiration Period | ' | ' | '10 years | ' | ' | ' | ' |
Common stock issued for exercise of stock options | ' | ' | ' | 1,000 | ' | ' | ' |
Options aggregate intrinsic value | ' | ' | 0 | 20 | ' | ' | ' |
Cash receipts for exercise of options | ' | ' | 0 | 10 | ' | ' | ' |
Tax benefits from share-based payments | 1,100 | 400 | 4,500 | 3,100 | ' | ' | ' |
Unrecognized compensation cost | ' | ' | ' | ' | ' | $35,500 | $30,700 |
Unrecognized compensation cost, period for recognition | ' | ' | ' | ' | ' | '4 years | '3 years 9 months 18 days |
STOCKHOLDERS_EQUITY_Details_1
STOCKHOLDERS' EQUITY (Details 1) (Time Lapse Restricted Shares and Restricted Stock Units, USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Time Lapse Restricted Shares and Restricted Stock Units | ' | ' | ' | ' |
Pre-tax compensation expense | $2,602 | $2,546 | $5,367 | $5,092 |
Tax benefit | -1,001 | -980 | -2,066 | -1,960 |
Restricted stock expense, net of tax | $1,601 | $1,566 | $3,301 | $3,132 |
STOCKHOLDERS_EQUITY_Details_2
STOCKHOLDERS' EQUITY (Details 2) (Restricted Stock Units (RSUs) [Member], USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Restricted Stock Units (RSUs) [Member] | ' |
Unvested restricted stock activity | ' |
Balance outstanding at the beginning of the period (in shares) | 2,454 |
Forfeited (in shares) | -79 |
Vested (in shares) | -674 |
Granted (in shares) | 411 |
Balance outstanding at the end of the period (in shares) | 2,112 |
Weighted-Average Grant-Date Fair Value | ' |
Balance at the beginning of the period (in dollars per share) | $18.75 |
Forfeited (in dollars per share) | $21.60 |
Vested (in dollars per share) | $15.42 |
Granted (in dollars per share) | $28.74 |
Balance at the end of the period (in dollars per share) | $21.64 |
PENSION_AND_POST_RETIREMENT_BE2
PENSION AND POST RETIREMENT BENEFIT PLANS (Details Narrative) (USD $) | 6 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 |
Pension And Post Retirement Benefit Plans Details Narrative | ' | ' | ' |
Contribution by employer | $3,300 | $1,500 | ' |
Further contributions to defined benefit retirement plan during the fiscal year | ' | ' | $5,000 |
PENSION_AND_POST_RETIREMENT_BE3
PENSION AND POST RETIREMENT BENEFIT PLANS (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Components of net periodic pension benefit Gain | ' | ' | ' | ' |
Interest and service cost | $2,375 | $2,166 | $4,750 | $4,332 |
Expected return on plan assets | -3,108 | -2,897 | -6,216 | -5,794 |
Amortization of net loss | 610 | 977 | 1,220 | 1,954 |
Net periodic loss/(benefit) | ($123) | $246 | ($246) | $492 |
BUSINESS_COMBINATIONS_Details_
BUSINESS COMBINATIONS (Details Narrative) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 |
Number | ||
Business Acquisition [Line Items] | ' | ' |
Number of material acquisitions | 9 | ' |
Carrying amount of goodwill | $255,515 | $211,847 |
Carrying amount of goodwill in foreign countries | 52,900 | 9,200 |
Carrying amount of finite lived intangible assets | 139,231 | 128,569 |
Allpest WA | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Acquisition date | 17-Feb-14 | ' |
Nine acquisitions in 2014 | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Total cash purchase price | 59,660 | ' |
Carrying amount of goodwill | 42,248 | ' |
Customer contracts | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Carrying amount of finite lived intangible assets | 108,900 | 101,500 |
Carrying amount of finite lived intangible assets in foreign countries | 19,000 | 6,300 |
Other intangible assets | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Carrying amount of finite lived intangible assets | 30,300 | 27,100 |
Carrying amount of finite lived intangible assets in foreign countries | $4,900 | $400 |
BUSINESS_COMBINATIONS_Details
BUSINESS COMBINATIONS (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Business Acquisition [Line Items] | ' | ' |
Goodwill | $255,515 | $211,847 |
Nine acquisitions in 2014 | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Accounts receivable, net | 2,692 | ' |
Materials and supplies | 404 | ' |
Prepaid expenses | 91 | ' |
Equipment and property | 3,555 | ' |
Goodwill | 42,248 | ' |
Customer contracts | 17,896 | ' |
Other intangible assets | 5,061 | ' |
Current liabilities | -5,875 | ' |
Other assets and liabilities, net | 31 | ' |
Total consideration paid | 66,103 | ' |
Less: Contingent consideration liability | -6,443 | ' |
Total cash purchase price | $59,660 | ' |
BUSINESS_COMBINATIONS_Details_1
BUSINESS COMBINATIONS (Details 1) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
Business Acquisition [Line Items] | ' |
Finite lived intangible assets fair value | $139,231 |
Internet domains | ' |
Business Acquisition [Line Items] | ' |
Infinite lived intangible assets fair value | 2,227 |
Customer contracts | ' |
Business Acquisition [Line Items] | ' |
Finite lived intangible assets fair value | 108,905 |
Customer contracts | Minimum | ' |
Business Acquisition [Line Items] | ' |
Finite lived intangible assets useful life | '3 years |
Customer contracts | Maximum | ' |
Business Acquisition [Line Items] | ' |
Finite lived intangible assets useful life | '12 years 6 months |
Non-compete agreements | ' |
Business Acquisition [Line Items] | ' |
Finite lived intangible assets fair value | 8,900 |
Non-compete agreements | Minimum | ' |
Business Acquisition [Line Items] | ' |
Finite lived intangible assets useful life | '3 years |
Non-compete agreements | Maximum | ' |
Business Acquisition [Line Items] | ' |
Finite lived intangible assets useful life | '20 years |
Trademarks and tradenames | ' |
Business Acquisition [Line Items] | ' |
Finite lived intangible assets fair value | 15,075 |
Trademarks and tradenames | Minimum | ' |
Business Acquisition [Line Items] | ' |
Finite lived intangible assets useful life | '0 years |
Trademarks and tradenames | Maximum | ' |
Business Acquisition [Line Items] | ' |
Finite lived intangible assets useful life | '20 years |
Patents | ' |
Business Acquisition [Line Items] | ' |
Finite lived intangible assets fair value | 3,850 |
Finite lived intangible assets useful life | '15 years |
Know How [Member] | ' |
Business Acquisition [Line Items] | ' |
Finite lived intangible assets fair value | $274 |
Finite lived intangible assets useful life | '10 years |
SUBSEQUENT_EVENTS_Details_Narr
SUBSEQUENT EVENTS (Details Narrative) (Subsequent Event [Member], USD $) | 0 Months Ended |
Jun. 22, 2014 | |
Subsequent Event [Member] | ' |
Dividend declared quarterly (in dollars per share) | $0.11 |