Exhibit 99.1
For Further Information Contact
Harry J. Cynkus (404) 888-2922
FOR IMMEDIATE RELEASE
ROLLINS REPORTS 2002 RESULTS
- Fourth Quarter Diluted EPS of $0.12 versus $0.05
- 12th Consecutive Quarter Of Year-Over-Year
Improvement In Earnings Per Share
- Fiscal 2002 Earnings Per Share Increases 60.7% to $0.90
- Fiscal 2002 Revenue increases 2.4%
ATLANTA, GEORGIA, January 28, 2003: Rollins, Inc., a premier North American
consumer services company (NYSE Ticker Symbol - ROL), reported record
revenue of $665.4 million for the year ended December 31, 2002. This
represents a 2.4% increase over the $649.9 million generated in fiscal
2001. Net income also increased for the period, rising 60.0% to $27.1
million or $0.90 per share for the year. This compares to $16.9 million or
$0.56 per share for fiscal 2001.
Rollins' strong operations in 2002 resulted in improved liquidity as the
Company generated $65.2 million in EBITDA versus $47.4 million in EBITDA a
year ago. Additionally, in fiscal 2002 Rollins generated $37.3 million in
free cash flow after contributing $20 million towards its pension fund.
Finally, the Company purchased 330,800 shares of common stock during the
year at an average price of $18.70.
For the fourth quarter ended December 31, 2002, revenues increased 2.8% to
$153.9 million compared to $149.7 million for the same period in 2001. Net
income was $3.7 million or $0.12 per share for the fourth quarter of 2002
compared to $1.6 million or $0.05 per share for 2001.
Gary W. Rollins, President and Chief Executive Officer of Rollins, Inc.
stated, "We are proud that our operating and financial initiatives have
resulted in dramatically improved earnings in 2002. Rollins posted its 12th
consecutive quarter of year-over-year improvement in earnings per share in
the midst of one of the most challenging economic periods we have seen in a
decade. We view the improvement in earnings as a tribute to our management
team and the entire organization." Mr. Rollins continued, "Our Home Office
process improvement project will enhance efficiency and the quality of
support that is provided to the field. We look forward to continuing
productivity improvements in branch operations as well and the resulting
earnings growth."
Rollins, Inc. is one of the nation's largest consumer services companies.
Through its wholly-owned subsidiary, Orkin Exterminating Company, Inc., the
Company provides essential pest control services and protection against
termite damage, rodents and insects to approximately 1.6 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.rollinscorp.com.
See accompanying table for reconciliation of EBITDA and Free Cash Flow.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
The above release containsstatements 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; 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.
ROLLINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(In thousands)
2002 2001
At December 31 (Unaudited) (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------
ASSETS
Cash and Short-Term Investments $ 38,315 $ 8,650
Trade Receivables, Net 47,740 48,479
Materials and Supplies 10,662 11,895
Deferred Income Taxes 20,035 21,044
Other Current Assets 9,470 10,415
----------------- ---------------
Current Assets 126,222 100,483
Equipment and Property, Net 38,880 44,273
Goodwill and Other Intangible Assets 107,899 112,450
Deferred Income Taxes 44,406 39,309
Other Assets 0 44
----------------- ---------------
Total Assets $ 317,407 $ 296,559
================= ===============
- ------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Accounts Payable $ 12,138 $ 12,920
Accrued Insurance 11,740 9,912
Accrued Payroll 28,623 30,921
Unearned Revenue 43,049 27,470
Other Current Liabilities 34,312 27,313
----------------- ---------------
Current Liabilities 129,862 108,536
Long-Term Accrued Liabilities 96,855 102,525
----------------- ---------------
Total Liabilities 226,717 211,061
----------------- ---------------
- ------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Common Stock 29,866 30,070
Retained Earnings 60,824 55,428
----------------- ---------------
Total Stockholders' Equity 90,690 85,498
----------------- ---------------
Total Liabilities and Stockholders' Equity $ 317,407 $ 296,559
================= ===============
ROLLINS, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED DECEMBER 31
(In thousands except per share data)
Fourth Quarter Twelve Months
--------------------------- ---------------------------
2002 2001 2002 2001
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------ ------------- ------------ -------------
REVENUES $ 153,871 $ 149,691 $ 665,425 $ 649,925
------------ ------------- ------------ -------------
COSTS AND EXPENSES
Cost of Services Provided 86,088 83,744 361,677 361,961
Depreciation and Amortization 5,337 5,259 21,635 20,292
Sales, General and Administrative 56,508 58,016 238,583 240,544
Interest (Income)/Expense (71) 67 (196) (198)
------------ ------------- ---------------------------
TOTAL COSTS AND EXPENSES 147,862 147,086 621,699 622,599
------------ ------------- ------------ -------------
INCOME BEFORE INCOME TAXES 6,009 2,605 43,726 27,326
PROVISION FOR INCOME TAXES 2,284 990 16,616 10,384
------------ ------------- ------------ -------------
NET INCOME $ 3,725 $ 1,615 $ 27,110 $ 16,942
============ ============= ============ =============
EARNINGS PER SHARE - BASIC $ 0.12 $ 0.05 $ 0.90 $ 0.56
============ ============= ============ =============
EARNINGS PER SHARE - DILUTED $ 0.12 $ 0.05 $ 0.90 $ 0.56
============ ============= ============ =============
AVERAGE SHARES OUTSTANDING - BASIC 29,855 30,070 30,014 30,134
AVERAGE SHARES OUTSTANDING - DILUTED 30,328 30,160 30,273 30,266
ROLLINS, INC. AND SUBSIDIARIES
RECONCILIATION OF EBITDA AND FREE CASH FLOW
FOR THE TWELVE MONTHS ENDED DECEMBER 31
(In thousands except)
Twelve Months
---------------------------
2002 2001
EBITDA: (Unaudited) (Unaudited)
------------ -------------
Net Income 27,110 16,942
Income Taxes 16,616 10,384
Depreciation and Amortization 21,635 20,292
Interest (Income)/Expense (196) (198)
------------ -------------
EBITDA $ 65,165 $ 47,420
============ =============
Free Cash Flow:
Net Cash Provided by Operating Activities 53,694 29,558
Purchase of Equipment and Property (10,367) (8,474)
Dividends (6,004) (6,028)
------------ -------------
Free Cash Flow $ 37,323 $ 15,056
============ =============