ROLLINS, INC. REPORTS FIRST QUARTER 2024 FINANCIAL RESULTS

Rhea-AI Summary

Rollins, Inc. reported strong first-quarter 2024 financial results with double-digit revenue growth leading to increased earnings and cash flow. Key highlights include a 13.7% revenue increase, 18.0% operating income growth, 17.7% operating margin, $138 million adjusted operating income, $161 million adjusted EBITDA, and $98 million adjusted net income. Quarterly EPS was $0.19, and adjusted EPS was $0.20, with operating cash flow at $127 million. Management commentary highlighted organic growth, robust acquisitions pipeline, and continuous improvement initiatives for profitability enhancement.

Positive

• Double-digit revenue growth led to a 13.7% increase in revenues for Rollins, Inc. in the first quarter of 2024.
• Operating income grew by 18.0% with an operating margin of 17.7% of revenue, showing a 60 basis point improvement.
• Adjusted operating income surged to $138 million, a 22.7% increase over the prior year.
• Adjusted EBITDA saw a significant increase of 19.3% to reach $161 million, with a 100 basis point improvement in margin.
• Adjusted net income rose by 16.1% to $98 million, with quarterly EPS at $0.19 and adjusted EPS at $0.20.
• Operating cash flow increased by 26.5% to $127 million for the quarter.
• Management highlighted strong organic growth, a robust acquisitions pipeline, and continuous improvement initiatives for profitability enhancement.
• Rollins, Inc. saw a 29% increase in free cash flow during the quarter.

Negative

• None.

Insights

Financial Analyst

Rollins, Inc.'s recent financial results indicate a robust performance characterized by a substantial rise in revenue and earnings, surpassing last year's figures. The 13.7% revenue growth emphasizes the company's ability to expand its market presence effectively. More notable, however, is the 18% increase in operating income which suggests improvements in operational efficiency. This is further corroborated by a 60 basis point increase in operating margin, demonstrating a tighter control over expenses relative to revenue. The organic growth rate of 7.5%, especially amidst reported erratic weather conditions, reflects the company's resilience to external market factors and its strong core business growth.

Market Research Analyst

Diving deeper into the sector-specific performance, Rollins, Inc. has shown a commendable expansion across all major service lines, including residential, commercial and termite and ancillary services. This balanced growth across segments not only mitigates risks but also indicates healthy market demand. The reported acceleration of organic revenue growth to over 10 percent for February and March suggests underlying business momentum that could attract investor optimism for future quarters. Furthermore, the company's robust pipeline for acquisitions is an indicator of strategic growth initiatives that could further solidify its market position. Investors should note the potential for both organic and inorganic expansion as significant drivers of sustained growth.

Investment Analyst

Focusing on shareholder returns, the company's increase in operating cash flow by 26.5% and the subsequent 29% rise in free cash flow are signals of a healthy cash conversion cycle. This financial flexibility has enabled Rollins, Inc. to pursue aggressive acquisition strategies, marked by the $47 million investment, while also maintaining a commitment to shareholder value through dividends, evidenced by the $73 million payout. However, a detail-oriented investor would also weigh these positive cash positions against the capital expenditures and acquisition costs to assess the long-term sustainability of such dividend policies and growth investments.

Double-Digit Revenue Growth Drives Solid Increase in Earnings and Cash Flow

ATLANTA, April 24, 2024 /PRNewswire/ -- Rollins, Inc. (NYSE:ROL) ("Rollins" or the "Company"), a premier global consumer and commercial services company, reported unaudited financial results for the first quarter of 2024.

Key Highlights

• First quarter revenues were $748 million, an increase of 13.7% over the first quarter 2023 with organic revenues* increasing 7.5%.
  
  
• Quarterly operating income was $132 million, an increase of 18.0% over the first quarter of 2023. Quarterly operating margin was 17.7% of revenue, an increase of 60 basis points over the first quarter of 2023. Adjusted operating income* was $138 million, an increase of 22.7% over the prior year. Adjusted operating income margin* was 18.4%, an increase of 130 basis points over the prior year. Adjusted EBITDA* was $161 million, an increase 19.3%. Adjusted EBITDA margin* was 21.5% of revenue, an increase of 100 basis points over the first quarter of 2023.
  
  
• Quarterly net income was $94 million, an increase of 7.0% over the prior year net income. Adjusted net income* was $98 million, an increase of 16.1% over the prior year.
  
  
• Quarterly EPS was $0.19 per diluted share, a 5.6% increase over the prior year EPS of $0.18. Adjusted EPS* was $0.20 per diluted share, an increase of 17.6% over the prior year.
  
  
• Operating cash flow was $127 million for the quarter, an increase of 26.5% over the prior year. The Company invested $47 million in acquisitions, $7 million in capital expenditures, and paid dividends totaling $73 million.

*Amounts are non-GAAP financial measures. See the schedules below for a discussion of non-GAAP financial metrics including a reconciliation of the most directly comparable GAAP measure.

Management Commentary

"The team delivered a strong first quarter with double-digit revenue across all major service lines and an improving margin and cash flow profile," said Jerry Gahlhoff, Jr., President and CEO. "While there was some unfavorable and erratic weather in January compared to last year, we delivered a healthy 7.5 percent organic growth rate for the quarter. We saw significant improvement moving through the quarter, as organic revenue growth accelerated to over 10 percent for February and March, with solid performance across our residential, commercial, and termite and ancillary businesses. Demand for our services remains strong and our pipeline for acquisitions is robust. We are well positioned for continued growth in 2024, both organically, as well as through acquisitions, and remain focused on continuous improvement initiatives to enhance profitability across our business," Mr. Gahlhoff added.

"It was encouraging to see the strong growth in revenue, profitability, and cash flow in the quarter, as the team delivered healthy revenue growth, 130 basis points of improvement in adjusted operating margins, and a 29 percent increase in free cash flow in the quarter," said Kenneth Krause, Executive Vice President and CFO. "We achieved a healthy first quarter gross margin level and saw further leverage in SG&A costs while also making incremental investments in resources and programs to drive growth," Mr. Krause concluded.

Three Months Ended Financial Highlights
	Three Months Ended March 31,
					Variance
(in thousands, except per share data)	2024		2023		$	%
GAAP Metrics
Revenues	$   748,349		$   658,015		$    90,334	13.7 %
Gross profit (1)	$   382,791		$   331,173		$    51,618	15.6 %
Gross profit margin (1)	51.2 %		50.3 %			90 bps
Operating income	$   132,424		$   112,240		$    20,184	18.0 %
Operating income margin	17.7 %		17.1 %			60 bps
Net income	$    94,394		$    88,234		$      6,160	7.0 %
EPS	$        0.19		$        0.18		$        0.01	5.6 %
Operating cash flow	$   127,433		$   100,773		$    26,660	26.5 %
Non-GAAP Metrics
Adjusted operating income (2)	$   137,689		$   112,240		$    25,449	22.7 %
Adjusted operating margin (2)	18.4 %		17.1 %			130 bps
Adjusted net income (2)	$    98,357		$    84,727		$    13,630	16.1 %
Adjusted EPS (2)	$        0.20		$        0.17		$        0.03	17.6 %
Adjusted EBITDA (2)	$   160,783		$   134,742		$    26,041	19.3 %
Adjusted EBITDA margin (2)	21.5 %		20.5 %			100 bps
Free cash flow (2)	$   120,262		$    93,137		$    27,125	29.1 %

(1) Exclusive of depreciation and amortization

(2) Amounts are non-GAAP financial measures. See the appendix to this release for a discussion of non-GAAP financial metrics including a reconciliation of the most directly comparable GAAP measure.

About Rollins, Inc.:

Rollins, Inc. (ROL) is a premier global consumer and commercial services company.  Through its family of leading brands, the Company and its franchises provide essential pest control services and protection against termite damage, rodents, and insects to more than 2.8 million customers in North America, South America, Europe, Asia, Africa, and Australia, with more than 19,000 employees from more than 800 locations. Rollins is parent to Orkin, HomeTeam Pest Defense, Clark Pest Control, Northwest Exterminating, McCall Service, Trutech, Critter Control, Western Pest Services, Waltham Services, OPC Pest Services, The Industrial Fumigant Company, PermaTreat, Crane Pest Control, Missquito, Fox Pest Control, Orkin Canada, Orkin Australia, Safeguard (UK), Aardwolf Pestkare (Singapore), and more. You can learn more about Rollins and its subsidiaries by visiting www.rollins.com. 

Cautionary Statement Regarding Forward-Looking Statements

This press release as well as other written or oral statements by the Company may contain "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current opinions, expectations, intentions, beliefs, plans, objectives, assumptions and projections about future events and financial trends affecting the operating results and financial condition of our business. Although we believe that these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions, or expectations. Generally, statements that do not relate to historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. The words "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "possible," "potential," "predict," "should," "will," "would," and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this press release include, but are not limited to, statements regarding: expectations with respect to our financial and business performance; demand for our services; our pipeline of acquisitions; continuous improvement initiatives enhancing profitability; and a balanced capital allocation program.

These forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts, and assumptions, and involve a number of judgments, risks and uncertainties. Important factors could cause actual results to differ materially from those indicated or implied by forward-looking statements including, but not limited to, those set forth in the sections entitled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and may also be described from time to time in our future reports filed with the SEC.

Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required by law.

Conference Call

Rollins will host a conference call on Thursday, April 25, 2024 at 8:30 a.m. Eastern Time to discuss the first quarter 2024 results. The conference call will also broadcast live over the internet via a link provided on the Rollins, Inc. website at www.rollins.com. Interested parties can also dial into the call at 1-877-869-3839 (domestic) or +1-201-689-8265 (internationally) with conference ID of 13745380. For interested individuals unable to join the call, a replay will be available on the website for 180 days.

ROLLINS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in thousands) (unaudited)
	March 31, 2024		December 31, 2023
ASSETS
Cash and cash equivalents	$      112,971		$      103,825
Trade receivables, net	177,254		178,214
Financed receivables, short-term, net	35,717		37,025
Materials and supplies	35,698		33,383
Other current assets	62,713		54,192
Total current assets	424,353		406,639
Equipment and property, net	127,116		126,661
Goodwill	1,095,141		1,070,310
Intangibles, net	549,390		545,734
Operating lease right-of-use assets	341,639		323,390
Financed receivables, long-term, net	79,040		75,909
Other assets	41,940		46,817
Total assets	$   2,658,619		$   2,595,460
LIABILITIES
Accounts payable	$        40,038		$        49,200
Accrued insurance – current	51,660		46,807
Accrued compensation and related liabilities	79,372		114,355
Unearned revenues	186,021		172,380
Operating lease liabilities – current	97,394		92,203
Other current liabilities	137,451		101,744
Total current liabilities	591,936		576,689
Accrued insurance, less current portion	51,928		48,060
Operating lease liabilities, less current portion	246,614		233,369
Long-term debt	510,909		490,776
Other long-term accrued liabilities	89,736		90,999
Total liabilities	1,491,123		1,439,893
STOCKHOLDERS' EQUITY
Common stock	484,230		484,080
Retained earnings and other equity	683,266		671,487
Total stockholders' equity	1,167,496		1,155,567
Total liabilities and stockholders' equity	$   2,658,619		$   2,595,460

 

ROLLINS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands except per share data) (unaudited)
	Three Months Ended March 31,
	2024		2023
REVENUES
Customer services	$      748,349		$      658,015
COSTS AND EXPENSES
Cost of services provided (exclusive of depreciation and amortization below)	365,558		326,842
Sales, general and administrative	223,057		196,431
Depreciation and amortization	27,310		22,502
Total operating expenses	615,925		545,775
OPERATING INCOME	132,424		112,240
Interest expense, net	7,725		465
Other expense (income), net	61		(4,714)
CONSOLIDATED INCOME BEFORE INCOME TAXES	124,638		116,489
PROVISION FOR INCOME TAXES	30,244		28,255
NET INCOME	$        94,394		$        88,234
NET INCOME PER SHARE - BASIC AND DILUTED	$           0.19		$           0.18
Weighted average shares outstanding - basic	484,131		492,516
Weighted average shares outstanding - diluted	484,318		492,701

 

ROLLINS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED CASH FLOW INFORMATION (in thousands) (unaudited)
	Three Months Ended March 31,
	2024		2023
OPERATING ACTIVITIES
Net income	$        94,394		$        88,234
Depreciation and amortization	27,310		22,502
Change in working capital and other operating activities	5,729		(9,963)
Net cash provided by operating activities	127,433		100,773
INVESTING ACTIVITIES
Acquisitions, net of cash acquired	(47,132)		(15,480)
Capital expenditures	(7,171)		(7,636)
Other investing activities, net	1,838		9,526
Net cash used in investing activities	(52,465)		(13,590)
FINANCING ACTIVITIES
Net borrowings	20,000		10,000
Payment of dividends	(72,589)		(64,053)
Other financing activities, net	(11,665)		(17,029)
Net cash used in financing activities	(64,254)		(71,082)
Effect of exchange rate changes on cash and cash equivalents	(1,568)		1,056
Net increase in cash and cash equivalents	$          9,146		$        17,157

 

APPENDIX

Reconciliation of GAAP and non-GAAP Financial Measures

The Company has used the non-GAAP financial measures of organic revenues, organic revenues by type, adjusted operating income, adjusted operating margin, adjusted net income, adjusted earnings per share ("EPS"), earnings before interest, taxes, depreciation and amortization ("EBITDA"), EBITDA margin, Adjusted EBITDA, adjusted EBITDA margin, incremental EBITDA margin, adjusted incremental EBITDA margin, free cash flow, free cash flow conversion, net debt, net leverage ratio, and adjusted sales, general and administrative expenses ("Adjusted SG&A") in this earnings release. Organic revenue is calculated as revenue less the revenue from acquisitions completed within the prior 12 months and excluding the revenue from divested businesses. Acquisition revenue is based on the trailing 12-month revenue of our acquired entities. Adjusted operating income and adjusted operating income margin are calculated by adding back to the GAAP measures those expenses resulting from the amortization of certain intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisition of Fox Pest Control ("Fox"). Adjusted net income and adjusted EPS are calculated by adding back to the GAAP measure amortization of certain intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisition of Fox and excluding gains and losses on the sale of non-operational assets and by further subtracting the tax impact of those expenses, gains, or losses. Adjusted EBITDA and adjusted EBITDA margin are calculated by adding back to the GAAP measures those expenses resulting from the adjustments to the fair value of contingent consideration resulting from the acquisition of Fox and excluding gains and losses on the sale of non-operational assets. Incremental margin is calculated as the change in EBITDA divided by the change in revenue. Adjusted incremental margin is calculated as the change in adjusted EBITDA divided by the change in revenue. Free cash flow is calculated by subtracting capital expenditures from cash provided by operating activities. Free cash flow conversion is calculated as free cash flow divided by net income. Net debt is calculated as total long-term debt less cash and cash equivalents. Net leverage ratio is calculated by dividing net debt by trailing twelve-month EBITDA. Adjusted SG&A is calculated by removing the adjustments to the fair value of contingent consideration resulting from the acquisition of Fox. These measures should not be considered in isolation or as a substitute for revenues, net income, earnings per share or other performance measures prepared in accordance with GAAP.

Management uses adjusted operating income, adjusted operating income margin, adjusted net income, adjusted EPS, EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, incremental EBITDA margin, adjusted incremental EBITDA margin, and adjusted SG&A as measures of operating performance because these measures allow the Company to compare performance consistently over various periods. Management also uses organic revenues, and organic revenues by type to compare revenues over various periods excluding the impact of acquisitions and divestitures. Management uses free cash flow to demonstrate the Company's ability to maintain its asset base and generate future cash flows from operations. Management uses free cash flow conversion to demonstrate how much net income is converted into cash. Management uses net debt as an assessment of overall liquidity, financial flexibility, and leverage. Net leverage ratio is useful to investors because it is an indicator of our ability to meet our future financial obligations. Management believes all of these non-GAAP financial measures are useful to provide investors with information about current trends in, and period-over-period comparisons of, the Company's results of operations. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.

A non-GAAP financial measure is a numerical measure of financial performance, financial position, or cash flows that either 1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of operations, balance sheet or statement of cash flows, or 2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.

Set forth below is a reconciliation of the non-GAAP financial measures used in this earnings release with their most directly comparable GAAP measures.

(unaudited, in thousands, except per share data and margins)
	Three Months Ended March 31,
					Variance
	2024		2023		$		%
Reconciliation of Operating Income to Adjusted Operating Income and Adjusted Operating Income Margin
Operating income	$   132,424		$  112,240
Fox acquisition-related expenses (1)	5,265		—
Adjusted operating income	$   137,689		$  112,240		25,449		22.7
Revenues	$   748,349		$  658,015
Operating income margin	17.7 %		17.1 %
Adjusted operating margin	18.4 %		17.1 %
Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS (5)
Net income	$    94,394		$    88,234
Fox acquisition-related expenses (1)	5,265		—
Loss (gain) on sale of assets, net (2)	61		(4,714)
Tax impact of adjustments (3)	(1,363)		1,207
Adjusted net income	$    98,357		$    84,727		13,630		16.1
EPS - basic and diluted	$        0.19		$        0.18
Fox acquisition-related expenses (1)	0.01		—
Loss (gain) on sale of assets, net (2)	—		(0.01)
Tax impact of adjustments (3)	—		—
Adjusted EPS - basic and diluted (4)	$        0.20		$        0.17		0.03		17.6
Weighted average shares outstanding - basic	484,131		492,516
Weighted average shares outstanding - diluted	484,318		492,701
Reconciliation of Net Income to EBITDA, Adjusted EBITDA, EBITDA Margin, Incremental EBITDA Margin, Adjusted EBITDA Margin, and Adjusted Incremental EBITDA Margin (5)
Net income	$    94,394		$    88,234
Depreciation and amortization	27,310		22,502
Interest expense, net	7,725		465
Provision for income taxes	30,244		28,255
EBITDA	$   159,673		$  139,456		20,217		14.5
Fox acquisition-related expenses (1)	1,049		—
Loss (gain) on sale of assets, net (2)	61		(4,714)
Adjusted EBITDA	$   160,783		$  134,742		26,041		19.3
Revenues	$   748,349		$  658,015		90,334
EBITDA margin	21.3 %		21.2 %
Incremental EBITDA margin					22.4 %
Adjusted EBITDA margin	21.5 %		20.5 %
Adjusted incremental EBITDA margin					28.8 %
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow and Free Cash Flow Conversion
Net cash provided by operating activities	$   127,433		$  100,773
Capital expenditures	(7,171)		(7,636)
Free cash flow	$   120,262		$    93,137		27,125		29.1
Free cash flow conversion	127.4 %		105.6 %

(1) Consists of expenses resulting from the amortization of certain intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisition of Fox. While we exclude such expenses in this non-GAAP measure, the revenue from the acquired company is reflected in this non-GAAP measure and the acquired assets contribute to revenue generation.

(2) Consists of the gain or loss on the sale of non-operational assets.

(3) The tax effect of the adjustments is calculated using the applicable statutory tax rates for the respective periods.

(4) In some cases, the sum of the individual EPS amounts may not equal total non-GAAP EPS calculations due to rounding.

(5) In the first quarter of 2024, we revised the non-GAAP metrics adjusted net income, adjusted EPS, and adjusted EBITDA to exclude gains and losses related to non-operational asset sales. These measures are of operating performance and we believe excluding the gains and losses on non-operational assets allows us to better compare our operating performance consistently over various periods. Revising these metrics for the three months ended March 31, 2023 resulted in a $3.5 million reduction to adjusted net income, a $0.01 reduction to adjusted EPS, and a $4.7 million reduction to adjusted EBITDA.

 

	Three Months Ended March 31,
					Variance
	2024		2023 (6)		$		%
Reconciliation of Revenues to Organic Revenues
Revenues	$   748,349		$   658,015		90,334		13.7
Revenues from acquisitions	(45,987)		—		(45,987)		7.0
Revenues of divestitures	—		(4,753)		4,753		(0.8)
Organic revenues	$   702,362		$   653,262		49,100		7.5
Reconciliation of Residential Revenues to Organic Residential Revenues
Residential revenues	$   329,338		$   282,757		46,581		16.5
Residential revenues from acquisitions	(37,709)		—		(37,709)		13.3
Residential revenues of divestitures	—		(3,032)		3,032		(1.1)
Residential organic revenues	$   291,629		$   279,725		11,904		4.3
Reconciliation of Commercial Revenues to Organic Commercial Revenues
Commercial revenues	$   258,114		$   231,707		26,407		11.4
Commercial revenues from acquisitions	(4,956)		—		(4,956)		2.1
Commercial revenues of divestitures	—		(1,721)		1,721		(0.8)
Commercial organic revenues	$   253,158		$   229,986		23,172		10.1
Reconciliation of Termite and Ancillary Revenues to Organic Termite and Ancillary Revenues
Termite and ancillary revenues	$   152,060		$   136,131		15,929		11.7
Termite and ancillary revenues from acquisitions	(3,322)		—		(3,322)		2.4
Termite and ancillary organic revenues	$   148,738		$   136,131		12,607		9.3
	Three Months Ended March 31,
					Variance
	2023 (6)		2022		$		%
Reconciliation of Revenues to Organic Revenues
Revenues	$   658,015		$   590,680		67,335		11.4
Revenues from acquisitions	(13,155)		—		(13,155)		2.2
Organic revenues	$   644,860		$   590,680		54,180		9.2
Reconciliation of Residential Revenues to Organic Residential Revenues
Residential revenues	$   282,757		$   257,469		25,288		9.8
Residential revenues from acquisitions	(6,003)		—		(6,003)		2.3
Residential organic revenues	$   276,754		$   257,469		19,285		7.5
Reconciliation of Commercial Revenues to Organic Commercial Revenues
Commercial revenues	$   231,707		$   206,975		24,732		11.9
Commercial revenues from acquisitions	(4,194)		—		(4,194)		2.0
Commercial organic revenues	$   227,513		$   206,975		20,538		9.9
Reconciliation of Termite and Ancillary Revenues to Organic Termite and Ancillary Revenues
Termite and ancillary revenues	$   136,131		$   119,369		16,762		14.0
Termite and ancillary revenues from acquisitions	(2,958)		—		(2,958)		2.5
Termite and ancillary organic revenues	$   133,173		$   119,369		13,804		11.5

(6) Revenues classified by significant product and service offerings for the three months ended March 31, 2023 and 2022 were misstated by an immaterial amount and  have been restated from the amounts previously reported to correct the classification of such revenues. There was no impact on our condensed consolidated statements of income, financial position, or cash flows.

 

	Three Months Ended March 31,
	2024		2023
Reconciliation of SG&A to Adjusted SG&A
SG&A	$                  223,057		$                  196,431
Fox acquisition-related expenses (1)	1,049		—
Adjusted SG&A	$                  222,008		$                  196,431
Revenues	$                  748,349		$                  658,015
Adjusted SG&A as a % of revenues	29.7 %		29.9 %
	Period Ended March 31, 2024		Period Ended December 31, 2023
Reconciliation of Long-term Debt to Net Debt and Net Leverage Ratio
Long-term debt (7)	$                  513,000		$                  493,000
Less: cash	112,971		103,825
Net debt	$                  400,029		$                  389,175
Trailing twelve-month EBITDA	$                  725,281		$                  705,064
Net leverage ratio	0.6x		0.6x

(7) As of March 31, 2024, the Company had outstanding borrowings of $513.0 million under the Credit Facility. Borrowings under the Credit Facility are presented under the long-term debt caption of our condensed consolidated balance sheet, net of $2.1 million in unamortized debt issuance costs as of March 31, 2024.

In the first quarter of 2024, we revised non-GAAP metrics adjusted net income, adjusted EPS, and adjusted EBITDA to exclude gains and losses related to non-operational asset sales. These measures are of operating performance and we believe excluding the gains and losses on non-operational assets allows us to better compare our operating performance consistently over various periods. We have presented the revised metrics for each quarter of 2023 below.

	Three Months Ended
	March 31, 2023		June 30,  2023		September 30, 2023		December 31, 2023
Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS
Net income	$          88,234		$        110,143		$         127,777		$         108,803
Fox acquisition-related expenses (1)	—		5,261		5,262		5,266
Loss (gain) on sale of assets, net (2)	(4,714)		(1,019)		(493)		(410)
Restructuring costs	—		—		5,196		—
Gain on sale of businesses	—		—		—		(15,450)
Tax impact of adjustments (3)	1,207		(1,086)		(2,551)		2,712
Adjusted net income	$          84,727		$        113,299		$         135,191		$         100,921
EPS - basic and diluted	$              0.18		$              0.22		$               0.26		$               0.22
Fox acquisition-related expenses (1)	—		0.01		0.01		0.01
Loss (gain) on sale of assets, net (2)	(0.01)		—		—		—
Restructuring costs	—		—		0.01		—
Gain on sale of businesses	—		—		—		(0.03)
Tax impact of adjustments (3)	—		—		(0.01)		0.01
Adjusted EPS - basic and diluted (4)	$              0.17		$              0.23		$               0.28		$               0.21
Weighted average shares outstanding - basic	492,516		492,700		490,775		483,922
Weighted average shares outstanding - diluted	492,701		492,891		490,965		484,112
Reconciliation of Net Income to EBITDA, Adjusted EBITDA, EBITDA Margin, Incremental EBITDA Margin, Adjusted EBITDA Margin, and Adjusted Incremental EBITDA Margin
Net income	$          88,234		$        110,143		$         127,777		$         108,803
Depreciation and amortization	22,502		26,439		24,668		26,143
Interest expense, net	465		4,785		5,547		8,258
Provision for income taxes	28,255		40,880		44,293		37,872
EBITDA	$        139,456		$        182,247		$         202,285		$         181,076
Fox acquisition-related expenses (1)	—		1,047		1,050		1,050
Loss (gain) on sale of assets, net (2)	(4,714)		(1,019)		(493)		(410)
Restructuring costs	—		—		5,196		—
Gain on sale of businesses	—		—		—		(15,450)
Adjusted EBITDA	$        134,742		$        182,275		$         208,038		$         166,266
Revenues	$        658,015		$        820,750		$         840,427		$         754,086
EBITDA margin	21.2 %		22.2 %		24.1 %		24.0 %
Incremental EBITDA margin	32.2 %		21.6 %		29.2 %		37.9 %
Adjusted EBITDA margin	20.5 %		22.2 %		24.8 %		22.0 %
Adjusted incremental EBITDA margin	27.1 %		23.4 %		31.5 %		25.2 %

For Further Information Contact
Lyndsey Burton (404) 888-2348

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SOURCE Rollins Inc.

FAQ

What was Rollins, Inc.'s first quarter 2024 revenue?

Rollins, Inc.'s first quarter 2024 revenue was $748 million, marking a 13.7% increase over the same period in 2023.

How much was Rollins, Inc.'s operating income growth in the first quarter of 2024?

Rollins, Inc.'s operating income grew by 18.0% in the first quarter of 2024, reaching $132 million.

What was Rollins, Inc.'s adjusted net income in the first quarter of 2024?

Rollins, Inc.'s adjusted net income in the first quarter of 2024 was $98 million, reflecting a 16.1% increase over the prior year.

What was Rollins, Inc.'s adjusted EPS in the first quarter of 2024?

Rollins, Inc.'s adjusted EPS in the first quarter of 2024 was $0.20 per diluted share, showing a 17.6% increase over the prior year.

How much did Rollins, Inc.'s operating cash flow increase in the first quarter of 2024?

Rollins, Inc.'s operating cash flow increased by 26.5% in the first quarter of 2024, reaching $127 million.