Exhibit 99.1
For Further Information Contact
Harry J. Cynkus
(404) 888-2922
FOR IMMEDIATE RELEASE
ROLLINS, INC. REPORTS CONTINUED GROWTH IN QUARTERLY EARNINGS
14TH Consecutive Quarter of Improved Earnings Per Share Results
o Net Income Rose 18.6% to $13.9 million
o Cash increased 41.0% to $64.9 million
o Margin Improved 19.0%.
ATLANTA, GEORGIA, July 22, 2003: Rollins, Inc. (NYSE:ROL), a premier North
American consumer services company, today reported net income grew 18.6% to
$13.9 million or $0.30 per diluted share for the second quarter ended June 30,
2003, compared to $11.7 million or $0.26 per diluted share for the same period
in 2002. Revenue for the second quarter increased to $185.1 million from $184.2
million for the second quarter ended June 30, 2002.
Net income for the first six months of 2003 rose 27.1% to $21.1 million or $0.46
per diluted share compared to net income of $16.6 million or $0.37 per diluted
share for the comparable six months in 2002. Revenues increased to $340.2
million for the first six months compared to $337.5 million for the prior
year-to-date period.
The Company's balance sheet continued to strengthen as of June 30, 2003, with
cash and short-term investments of $64.9 million, total assets of $344.0 million
and stockholders' equity increasing to $112.2 million.
Gary W. Rollins, President and Chief Executive Officer of Rollins, Inc. stated,
"We are pleased that the strength of our recurring business continued to be
reflected in our improved profitability for the second quarter. This was
accomplished despite disappointing revenue resulting from unseasonably wet and
cold weather conditions in most of the country. Our termite business was
impacted as was our pest control business, although to a lesser degree. The
Company continues to benefit from our service initiatives and home office
reorganization. The second quarter of 2003 marked the fourteenth consecutive
quarter in which Rollins has generated year-over-year improvement in earnings
per share."
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.
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;
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 STATEMENTS OF FINANCIAL POSITION
(In thousands)
2003 2002
At June 30 (Unaudited) (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------
ASSETS
Cash and Short-Term Investments $ 64,865 $ 46,010
Trade Receivables, Net 54,392 54,773
Materials and Supplies 11,073 11,596
Deferred Income Taxes 19,800 20,138
Other Current Assets 11,037 8,131
----------------- ---------------
Current Assets 161,167 140,648
Equipment and Property, Net 34,391 41,318
Goodwill and Other Intangible Assets 106,198 110,515
Deferred Income Taxes 42,278 37,751
----------------- ---------------
Total Assets $ 344,034 $ 330,232
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- ------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Accounts Payable $ 15,912 $ 15,416
Accrued Insurance 12,668 12,739
Accrued Payroll 30,354 31,676
Unearned Revenue 44,848 39,705
Other Current Liabilities 38,360 29,515
----------------- ---------------
Current Liabilities 142,142 129,051
Long-Term Accrued Liabilities 89,733 101,288
----------------- ---------------
Total Liabilities 231,875 230,339
----------------- ---------------
- ------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Common Stock 45,102 45,150
Retained Earnings and Other Equity 67,057 54,743
----------------- ---------------
Total Stockholders' Equity 112,159 99,893
----------------- ---------------
Total Liabilities and Stockholders' Equity $ 344,034 $ 330,232
================= ===============
ROLLINS, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
FOR THE SECOND QUARTER AND SIX MONTHS ENDED JUNE 30
(In thousands except per share data)
Second Quarter Six Months
--------------------------- ---------------------------
2003 2002 2003 2002
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------ ------------- ------------ -------------
REVENUES $ 185,105 $ 184,189 $ 340,227 $ 337,491
------------ ------------- ------------ -------------
COSTS AND EXPENSES
Cost of Services Provided 95,550 97,205 179,628 181,227
Depreciation and Amortization 5,037 5,446 10,193 10,873
Sales, General and Administrative 62,253 62,720 116,475 118,557
Interest (Income)/Expense (94) (39) (160) 10
------------ ------------- ------------ -------------
TOTAL COSTS AND EXPENSES 162,746 165,332 306,136 310,667
------------ ------------- ------------ -------------
INCOME BEFORE INCOME TAXES 22,359 18,857 34,091 26,824
PROVISION FOR INCOME TAXES 8,497 7,166 12,955 10,193
------------ ------------- ------------ -------------
NET INCOME $ 13,862 $ 11,691 $ 21,136 $ 16,631
============ ============= ============ =============
EARNINGS PER SHARE - BASIC $ 0.31 $ 0.26 $ 0.47 $ 0.37
============ ============= ============ =============
EARNINGS PER SHARE - DILUTED $ 0.30 $ 0.26 $ 0.46 $ 0.37
============ ============= ============ =============
AVERAGE SHARES OUTSTANDING - BASIC 45,117 45,227 45,015 45,211
AVERAGE SHARES OUTSTANDING - DILUTED 46,404 45,543 46,258 45,516
ROLLINS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30
(In thousands)
(Unaudited)
2003 2002
--------------- --------------
Operating Activities
Net Income $ 21,136 $ 16,631
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and Amortization 10,193 10,873
Other Operating Activities 1,546 20,097
--------------- --------------
Net Cash Provided by Operating Activities 32,875 47,601
--------------- --------------
Investing Activities
Purchases of Equipment and Property (2,332) (4,611)
Net Cash Used for Acquisition of Companies (1,508) (1,358)
--------------- --------------
Net Cash Used In Investing Activities (3,840) (5,969)
--------------- --------------
Financing Activities
Dividends Paid (4,500) (3,016)
Common Stock Purchased 0 (1,292)
Other 2,015 36
--------------- --------------
Net Cash Used in Financing Activities (2,485) (4,272)
--------------- --------------
Net Increase in Cash and Short-Term Investments 26,550 37,360
Cash and Short-Term Investments at Beginning of Year 38,315 8,650
--------------- --------------
Cash and Short-Term Investments at End of Period $ 64,865 $ 46,010
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