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 21st consecutive quarter of improved earnings results
o Income Before Change in Accounting Principle increased 17.5%
o Revenue increased 14.6%; excluding Western, revenues rose by 2.4%
o Earnings Per Share rose 21.4% to $0.17, before the Accounting Change
ATLANTA, GEORGIA, April,27 2005: Rollins, Inc. (NYSE:ROL), a premier North
American consumer services company, today reported net income grew 17.5% to
$11.6 million or $0.17 per diluted share for the first quarter ended March 31,
2005. This is in comparison to $9.9 million or $0.14 per diluted share for the
same period in 2004 before the effect of a change in accounting principle. Net
income for the first quarter of 2004 was $3.7 million or $0.05 per share after
the change. The cumulative effect of the accounting change, recorded in the
first quarter of 2004, was a charge against earnings of $6.2 million or $0.09
per diluted share, and resulted in a more preferable method for recording the
termite damage reserve valuation and renewal revenues. Revenue for the first
quarter grew 14.6% to $183.9 million compared to $160.4 million for the first
quarter ended March 31, 2004. Western Pest Services, acquired April 30, 2004,
had first quarter 2005 revenues of $19.6 million, and total revenues excluding
Western were $164.3 million. Excluding Western Pest Services, revenues increased
by 2.4%. This information is included for comparison purposes.
Rollins' balance sheet remains strong with total assets increasing to
$418.8 million and stockholders' equity increasing to $168.6 million. Total cash
and cash equivalents rose to $55.9 million. In addition, the Company has
previously announced that during the first quarter it repurchased 641,310 shares
of its common stock, completed a three-for-two stock split effective March 10,
2005, and increased the quarterly dividend by 25% to $0.05.
Gary W. Rollins, President and Chief Executive Officer of Rollins, Inc.
commented, "We are pleased to report that the first quarter of 2005 marks our
21st consecutive quarter of increased earnings per share. This is a direct
result of our team's commitment to the Company's growth strategies, productivity
initiatives, and other programs that are providing improved operating
efficiencies and excellent customer service."
"In order to expand our market share, we recognize that we must be
progressive and continue to invest in our business. We are fortunate to have a
strong cash flow that enables us to make these investments whether they are
acquisitions or internal infrastructure improvements. As an example of
infrastructure investments, we are taking our training to its next generation
with the launching of a satellite delivery system. This will ensure that our
employees in all branches receive consistent training on a more frequent basis.
We believe that this initiative will be unmatched in the pest control industry."
Mr. Rollins continued, "Another example of business investment is the
development of our routing and scheduling system. To that end we have selected
an outside logistical vendor whose software and experience best meet our needs,
with the capability of integration with the Company's FOCUS customer accounting
system. When completed, this enhancement should allow our branches to improve
their productivity, and on-time service delivery while reducing costs."
Mr. Rollins concluded, "Although we're excited about these investments, we
continue to focus on service quality, marketing, and expense control which will
be complimentary to our business and lead to increasing shareholder value."
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.These include statements regarding the impact of growth strategies,
productivity initiatives and other programs, the expansion of market share, the
impact of the satellite delivery training system, and the ability to increase
shareholder value. 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 and integrate
potential acquisitions; climate and weather trends; competitive factors and
pricing practices; expected benefits of the commercial re-engineering project
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, 2004.
ROLLINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In thousands)
2005 2004
At March 31 (Unaudited) (Unaudited)
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ASSETS
Cash and Cash Equivalents $ 55,894 $ 97,888
Trade Receivables Short-Term, Net 44,308 35,794
Materials and Supplies 8,600 10,147
Deferred Income Taxes 28,089 27,332
Other Current Assets 10,398 10,092
--------------- -------------
Current Assets 147,289 181,253
Equipment and Property, Net 52,930 34,618
Goodwill and Other Intangible Assets 193,209 101,445
Trade Receivables Long-Term, Net 9,942 9,755
Deferred Income Taxes 11,274 13,754
Other Assets 4,156 25,351
--------------- -------------
Total Assets $ 418,800 $ 366,176
=============== =============
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LIABILITIES
Accounts Payable $ 12,859 $ 15,275
Accrued Insurance 13,110 13,050
Accrued Payroll 31,943 26,963
Unearned Revenue 84,967 73,137
Other Current Liabilities 45,353 38,166
--------------- -------------
Current Liabilities 188,232 166,591
Long-Term Accrued Liabilities 61,928 56,798
--------------- -------------
Total Liabilities 250,160 223,389
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STOCKHOLDERS' EQUITY
Common Stock 68,293 68,098
Retained Earnings and Other Equity 100,347 74,689
--------------- -------------
Total Stockholders' Equity 168,640 142,787
--------------- -------------
Total Liabilities and
Stockholders' Equity $ 418,800 $ 366,176
=============== =============
ROLLINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE FIRST QUARTER ENDED MARCH 31
(In thousands except per share data)
First Quarter
---------------------------
2005 2004
(Unaudited) (Unaudited)
------------ -------------
REVENUES $ 183,915 $ 160,416
------------ -------------
COSTS AND EXPENSES
Cost of Services Provided 98,637 86,542
Depreciation and Amortization 5,963 4,657
Sales, General and Administrative 60,283 52,768
Loss on Sales of Assets 3 1
Interest Income (462) (150)
------------ -------------
TOTAL COSTS AND EXPENSES 164,424 143,818
------------ -------------
INCOME BEFORE INCOME TAXES 19,491 16,598
PROVISION FOR INCOME TAXES 7,896 6,732
------------ -------------
INCOME BEFORE CUMULATIVE EFFECT CHANGE IN
ACCOUNTING PRINCIPLE 11,595 9,866
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE, NET - (6,204)
------------ -------------
NET INCOME $ 11,595 $ 3,662
============ =============
NET INCOME PER COMMON SHARE-BASIC:
INCOME BEFORE CUMULATIVE EFFECT CHANGE
IN ACCOUNTING PRINCIPLE $ 0.17 $ 0.15
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, NET - (0.09)
------------ -------------
NET INCOME PER COMMON SHARE-BASIC $ 0.17 $ 0.06
============ =============
NET INCOME PER COMMON SHARE-DILUTED:
INCOME BEFORE CUMULATIVE EFFECT CHANGE
IN ACCOUNTING PRINCIPLE $ 0.17 $ 0.14
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, NET - (0.09)
------------ -------------
NET INCOME PER COMMON SHARE-DILUTED $ 0.17 $ 0.05
============ =============
AVERAGE SHARES OUTSTANDING - BASIC 67,942 67,947
AVERAGE SHARES OUTSTANDING - DILUTED 69,609 69,964
ROLLINS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31
(In thousands)
2005 2004
Unaudited Unaudited
-------------- --------------
Operating Activities
Net Income $ 11,595 $ 3,662
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Change in Accounting Policy, Net - 6,204
Depreciation and Amortization 5,963 4,657
Provision for Deferred Income Taxes 3,347 1,273
Other, Net 198 63
Loss on Sale of Assets 3 1
(Increase) Decrease in Assets:
Trade Receivables 1,072 2,873
Materials and Supplies 277 (310)
Other Current Assets (3,030) (2,678)
Other Non-Current Assets 235 (446)
Increase (Decrease) in Liabilities:
Accounts Payable and Accrued Expenses 229 3,761
Unearned Revenue 3,773 4,694
Accrued Insurance (1,940) (1,261)
Accrual for Termite Contracts 829 (238)
Long-Term Accrued Liabilities (2,823) (917)
-------------- --------------
Net Cash Provided by Operating Activities 19,728 21,338
-------------- --------------
Investing Activities
Purchases of Equipment and Property (6,417) (1,739)
Net Cash Used for Acquisition of Companies (1,291) (158)
Sales/(Purchases) of Marketable Securities, Net - 21,866
-------------- --------------
Net Cash Provided by (Used In) Investing Activities (7,708) 19,969
-------------- --------------
Financing Activities
Dividends Paid (3,436) (2,718)
Common Stock Purchased (10,604) -
Other 554 (188)
-------------- --------------
Net Cash Used in Financing Activities (13,486) (2,906)
-------------- --------------
Effect of Exchange Rate Changes on Cash 623 (53)
-------------- --------------
Net Increase/(Decrease) in Cash and Cash Equivalents (843) 38,348
Cash and Cash Equivalents at Beginning of Year 56,737 59,540
-------------- --------------
Cash and Cash Equivalents at End of Period $ 55,894 $ 97,888
============== ==============
640 Fifth Avenue T 212 445 8000
New York, NY 10019 F 212 445 8001
www.webershandwick.com
CONFERENCE CALL
Rollins, Inc.
(NYSE: ROL)
Management will hold a conference call to discuss
first quarter results on:
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Wednesday, April 27, 2005 at:
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10:00 a.m. Eastern
9:00 a.m. Central
8:00 a.m. Mountain
7:00 a.m. Pacific
TO PARTICIPATE:
Please dial 800-240-7305 domestic;
303-262-2175 international
at least 5 minutes before start time.
REPLAY: through May 4, 2005 at 11:00 p.m.
Please dial 800-405-2236/303-590-3000, Passcode: 11027715
THIS CALL CAN ALSO BE ACCESSED THROUGH THE INTERNET AT
www.viavid.net
Questions?:
Janet Jazmin at FRB/Weber Shandwick at 212-827-3777 or
email to jjazmin@financialrelationsboard.com
Reconciliation
Revenue Excluding Western Pest Services and Dettelbach Pest Corp
First Quarter
-------------------------------
2005 2004 $B/(W) %B/(W)
-------------- -------------- -------------- --------------
Total Net Revenues $ 183,915 $ 160,416 $ 23,499 14.6 %
Less:
Western Acquisition 19,594 - 19,594
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Revenue Excluding Western Pest Services $ 164,321 $ 160,416 $ 3,905 2.4 %
Less:
Dettelbach - 553 (553)
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Revenue Excluding Western Pest Services
and Dettelbach $ 164,321 $ 159,863 $ 4,458 2.8 %
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