99.1 For Further Information Contact
Harry J. Cynkus
(404) 888-2922
FOR IMMEDIATE RELEASE
ROLLINS, INC. REPORTS FOURTH QUARTER AND FULL-YEAR
FINANCIAL RESULTS
o 16th consecutive quarter of improved earnings results.
o Net Income up 60.6% to $6.0 million for the fourth quarter.
o Revenue increased 3.0% for the quarter.
o Earnings Per Share rose $.20 to $.80 for the year, a 33.3% increase.
o Cash and Marketable Securities increased 112.5% to $81.4 million
ATLANTA, GEORGIA, February 17, 2004: Rollins, Inc. (NYSE:ROL), a premier North
American consumer services company, today reported unaudited financial results
for its fourth quarter and year ended December 31, 2003.
The Company reported an increase in net income of 60.6% to $6.0 million or $0.13
per diluted share for the fourth quarter compared to $3.7 million or $0.08 per
diluted share for the same period in 2002. Net income for the quarter included
gains from the sale of assets of $1.0 million net of tax, or $0.02 per share,
which was partially offset by a year-to-date adjustment in the effective state
income tax rate of $0.3 million. Revenue for the quarter grew 3.0% to $158.5
million compared to $153.9 million for the quarter ended December 31, 2002.
Net income for the year climbed 36.2% to $36.9 million or $0.80 per diluted
share compared to net income of $27.1 million or $0.60 per diluted share for
2002. Revenues increased to $677.0 million for the year compared to $665.4
million for the prior year.
Rollins' balance sheet showed marked improvement with total assets increasing to
$352.8 million and stockholder's equity growth to $139.9 million. The Company
ended the year with cash and marketable securities of $81.4 million, up 112.5%
over last year.
Gary W. Rollins, President and Chief Executive Officer of Rollins, Inc. stated,
"We are very pleased with the progress the Company continued to make during our
fourth quarter, which has traditionally been our slowest quarter. The overall
improvement in revenue and net income results for the quarter and full year
reflect the actions Orkin has taken to emphasize sales growth and productivity
improvement. Our strong cash flow allowed us to make a voluntary cash
contribution of $9.8 million to the pension fund in the fourth quarter bringing
our total contribution to $14.8 million for the year, strengthening the funding
of the plan."
Mr. Rollins continued, "Our new sales and marketing organization is having a
positive impact for our Company. As an example, in the summer of 2003, we began
testing our mosquito control program in the Northern U.S. and Canada. The West
Nile virus continues to spread and consumers are increasingly concerned about
its potential health risks. Orkin is working with various health and government
officials to offer this service including the Canadian provincial authorities in
the southwestern and northeastern regions of Ontario."
"Additionally, our Gold Medal Program was introduced this past year, which
provides our high-end commercial customers with a comprehensive service program
to meet their special needs. The food manufacturing and processing industry has
very specific reporting and regulatory requirements that Orkin is uniquely
capable of providing. We expect this comprehensive service offering will play an
important role in our commercial growth in the future."
Mr. Rollins concluded, "Everyone at Rollins and Orkin is excited about the
opportunities that we have to grow our businesses while improving profitability.
We will continue to introduce sales and service initiatives to increase our
revenue and improve productivity during 2004."
Rollins, Inc. is one of the nation's largest consumer services companies.
Through its wholly owned subsidiary, Orkin, 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.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;
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.
2003 2002
At December 31 (Unaudited) (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------
ASSETS
Cash and Short-Term Investments $ 59,540 $ 38,315
Marketable Securities 21,866 0
Trade Receivables, Net 48,471 48,671
Materials and Supplies 9,837 10,662
Deferred Income Taxes 21,799 20,035
Other Current Assets 7,414 9,470
----------------- ---------------
Current Assets 168,927 127,153
Equipment and Property, Net 35,836 38,880
Goodwill and Other Intangible Assets 102,831 107,899
Deferred Income Taxes 20,201 44,406
Other Assets 24,964 0
--------------- -------------
Total Assets $ 352,759 $ 318,338
================= ===============
- ------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Accounts Payable $ 12,290 $ 12,138
Accrued Insurance 13,050 11,740
Accrued Payroll 31,019 29,554
Unearned Revenue 46,007 43,049
Other Current Liabilities 39,443 34,312
----------------- ---------------
Current Liabilities 141,809 130,793
Long-Term Accrued Liabilities 71,018 96,855
----------------- ---------------
Total Liabilities 212,827 227,648
----------------- ---------------
- ------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Common Stock 45,157 44,799
Retained Earnings and Other Equity 94,775 45,891
----------------- ---------------
Total Stockholders' Equity 139,932 90,690
----------------- ---------------
Total Liabilities and Stockholders' Equity $ 352,759 $ 318,338
================= ===============
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
--------------------------- ---------------------------
2003 2002 2003 2002
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------ ------------- ------------ -------------
REVENUES $ 158,524 $ 153,871 $ 677,013 $ 665,425
------------ ------------- ------------ -------------
COSTS AND EXPENSES
Cost of Services Provided 86,687 86,091 362,422 361,318
Depreciation and Amortization 4,921 5,337 20,179 21,635
Sales, General and Administrative 58,599 56,380 236,514 238,180
(Gain)/Loss on Sales of Assets (1,664) 125 (1,700) 762
Interest (Income)/Expense (152) (71) (432) (196)
------------ ------------- ---------------------------
TOTAL COSTS AND EXPENSES 148,391 147,862 616,983 621,699
------------ ------------- ------------ -------------
INCOME BEFORE INCOME TAXES 10,133 6,009 60,030 43,726
PROVISION FOR INCOME TAXES 4,151 2,284 23,112 16,616
------------ ------------- ------------ -------------
NET INCOME $ 5,982 $ 3,725 $ 36,918 $ 27,110
============ ============= ============ =============
EARNINGS PER SHARE - BASIC $ 0.13 $ 0.08 $ 0.82 $ 0.60
============ ============= ============ =============
EARNINGS PER SHARE - DILUTED $ 0.13 $ 0.08 $ 0.80 $ 0.60
============ ============= ============ =============
AVERAGE SHARES OUTSTANDING - BASIC 45,130 44,782 45,069 45,021
AVERAGE SHARES OUTSTANDING - DILUTED 46,313 45,492 46,206 45,409
ROLLINS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED DECEMBER 31
(In thousands)
(Unaudited)
2003 2002
--------------- --------------
Operating Activities
Net Income $ 36,918 $ 27,110
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and Amortization 20,179 21,635
Other Operating Activities 4,922 4,949
--------------- --------------
Net Cash Provided by Operating Activities 62,019 53,694
--------------- --------------
Investing Activities
Purchases of Equipment and Property (10,597) (10,367)
Net Cash Used for Acquisition of Companies (1,543) (1,788)
Marketable Securities, Net (21,866) 0
--------------- --------------
Net Cash Used In Investing Activities (34,006) (12,155)
--------------- --------------
Financing Activities
Dividends Paid (9,010) (6,004)
Common Stock Purchased 0 (6,166)
Other 2,222 296
--------------- --------------
Net Cash Used in Financing Activities (6,788) (11,874)
--------------- --------------
Net Increase in Cash and Short-Term Investments 21,225 29,665
Cash and Short-Term Investments at Beginning of Year 38,315 8,650
--------------- --------------
Cash and Short-Term Investments at End of Period $ 59,540 $ 38,315
=============== ==============
Net Increase in Cash and Marketable Securities 43,091 29,665
Cash and Marketable Securities at Beginning of Year 38,315 8,650
--------------- --------------
Cash and Marketable Securities at End of Period $ 81,406 $ 38,315
=============== ==============
CONFERENCE CALL
Rollins, Inc.
(NYSE: ROL)
Management will hold a conference call to discuss
fourth quarter results on:
- --------------------------------------------------------------------------------
Tuesday, February 17, 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 800-218-0713 domestic;
303-262-2075 international
at least 5 minutes before start time.
REPLAY: through February 24, 2004 at 11:00 p.m.
Please dial 800-405-2236/303-590-3000, Passcode: 567293
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