Rollins, Inc. Reports Third Quarter And Nine Month 2021 Financial Results
Rollins, Inc. (NYSE:ROL) reported strong financial results for Q3 and the first nine months of 2021. Revenues for Q3 reached $650.2 million, an increase of 11.4% from $583.7 million in Q3 2020. Net income for Q3 rose to $93.9 million or $0.19 per diluted share, up from $79.6 million or $0.16 per diluted share. For the first nine months, revenues increased 12.2% to $1.824 billion, with net income at $285.4 million or $0.58 per diluted share. The company also realized a $31.5 million pre-tax gain from property disposals. Rollins expressed confidence in continued success.
- Q3 revenues increased to $650.2 million, up 11.4% from last year.
- Net income for Q3 rose to $93.9 million, or $0.19 per diluted share.
- Revenues for the first nine months increased 12.2% to $1.824 billion.
- Net income for the first nine months reached $285.4 million, or $0.58 per diluted share.
- Realized a $31.5 million pre-tax gain from property disposals.
- None.
ATLANTA, Oct. 27, 2021 /PRNewswire/ -- Rollins, Inc. (NYSE:ROL), a premier global consumer and commercial services company, reported strong unaudited financial results for its third quarter and nine months ended September 30, 2021.
The Company recorded third quarter revenues of
Rollins' revenues rose
The Company, as planned and previously disclosed, disposed of the majority of the properties received through the 2019 acquisition of Clark Pest Control of Stockton, Inc. The gain related to the disposition of these properties in the nine months ended September 30, 2021 was
Gary W. Rollins, Chairman and Chief Executive Officer of Rollins, Inc. stated, "We are proud of the performance and dedication of our employees and are very pleased with our strong financial results for both the quarter and first nine months of 2021. We remain confident of our continued success for 2021."
Rollins, Inc. is a premier global consumer and commercial services company. Through its family of leading brands, Orkin, HomeTeam Pest Defense, Clark Pest Control, Orkin Canada, Western Pest Services, Northwest Exterminating, McCall Service, Critter Control, The Industrial Fumigant Company, Trutech, Orkin Australia, Waltham Services, OPC Services, PermaTreat, Rollins UK, Aardwolf Pestkare, Crane Pest Control and MissQuito, the Company provides essential pest control services and protection against termite damage, rodents and insects to more than two million customers in North America, South America, Europe, Asia, Africa, and Australia from more than 700 locations. You can learn more about Rollins and its subsidiaries by visiting our web sites at www.orkin.com, www.pestdefense.com, www.clarkpest.com, www.orkincanada.ca, www.westernpest.com, www.callnorthwest.com, www.mccallservice.com, www.crittercontrol.com, www.indfumco.com, www.trutechinc.com, www.orkinau.com, www.walthamservices.com, www.opcpest.com, www.permatreat.com, www.safeguardpestcontrol.co.uk, www.aardwolfpestkare.com, www.cranepestcontrol.com, www.missquito.com and www.rollins.com. You can also find this and other news releases at www.rollins.com by accessing the news releases button.
*Adjusted amounts presented in this release 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 closely correlated GAAP measure.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This press release may contain or incorporate by reference information that includes or is based on forward-looking statements within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the Company's confidence in its continued success. Forward-looking statements give expectations or forecasts of future events and can be identified by the fact that they relate to future actions, performance or results rather than strictly to historical or current facts.
Any or all forward-looking statements may turn out to be wrong, and, accordingly, you are cautioned not to place undue reliance on such statements, which speak only as of the date of this press release. Forward-looking statements involve a number of risks and uncertainties that are difficult to predict and are not guarantees of future performance. Among the general factors that could cause actual results and financial condition to differ materially from those indicated by the forward-looking statements and estimated results and financial condition are those factors listed in periodic reports filed by Rollins with the Securities and Exchange Commission ("SEC"), including those factors discussed under Item 1.A., "Risk Factors" of Part I of the Company's Annual Report on Form 10-K, filed with the SEC for the year ended December 31, 2020, which factors include, but are not limited to, the Company's belief that its accounting estimates and assumptions, financial condition and results of operations may change materially in future periods in response to the COVID-19 pandemic; the outcomes of any pending claim, proceeding, litigation, regulatory action or investigation filed against us, which could have a material adverse effect on our business, financial condition and results of operations, including, but not limited to, the Company's ongoing SEC investigation; the Company's belief that the ongoing SEC investigation is primarily focused on how it established accruals and reserves at period-ends and the impact of those accruals and reserves on reported earnings, and the Company's inability to predict the outcome of the SEC investigation; risks related to the Company's belief that its current cash and cash equivalent balances, future cash flows expected to be generated from operating activities and available borrowings under its credit facilities will be sufficient to finance its current operations and obligations, and fund expansion of the business for the foreseeable future; the Company's belief that it maintains adequate liquidity and capital resources that are directed to finance domestic operations and obligations and to fund expansion of its domestic business for the foreseeable future without regard to its foreign deposits; exposure of certain market risks in the ordinary course of our business, including fluctuation in interest rates and foreign currency exchange fluctuations; risks related to changes in industry practices or technologies; and competitive factors and pricing practices.
No assurances can be given that the results and financial condition contemplated in any forward-looking statements will be achieved or will be achieved in any particular timetable. Rollins assumes no obligation to publicly correct or update any forward-looking statements as a result of events or developments subsequent to the date of this press release, including any such statements related to COVID-19. You are advised, however, to consult any further disclosures Rollins makes on related subjects in its filings with the SEC.
(ROL-IR)
ROLLINS, INC. AND SUBSIDIARIES | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | ||||||
(in thousands) | ||||||
At September 30, (unaudited) | 2021 | 2020 | ||||
ASSETS | ||||||
Cash and cash equivalents | $ | 117,655 | $ | 95,440 | ||
Trade accounts receivables, net | 152,866 | 138,392 | ||||
Financed receivables, net | 27,294 | 24,091 | ||||
Materials and supplies | 26,976 | 30,386 | ||||
Other current assets | 48,663 | 43,527 | ||||
Total Current Assets | 373,454 | 331,836 | ||||
Equipment and property, net | 131,549 | 186,825 | ||||
Goodwill | 665,645 | 619,656 | ||||
Customer contracts, net | 284,393 | 275,366 | ||||
Trademarks and tradenames, net | 108,231 | 104,610 | ||||
Other intangible assets, net | 9,914 | 9,966 | ||||
Operating lease, right-of-use assets | 251,374 | 211,345 | ||||
Financed receivables, long-term, net | 45,410 | 37,430 | ||||
Benefit plan assets | 1,118 | 1,198 | ||||
Deferred income tax assets | 2,568 | 2,165 | ||||
Other assets | 31,157 | 25,669 | ||||
Total Assets | $ | 1,904,813 | $ | 1,806,066 | ||
LIABILITIES | ||||||
Accounts payable | 38,509 | 56,393 | ||||
Accrued insurance, current | 34,790 | 31,756 | ||||
Accrued compensation and related liabilities | 96,285 | 88,566 | ||||
Unearned revenue | 151,645 | 139,734 | ||||
Operating lease liabilities, current | 76,684 | 72,197 | ||||
Current portion of long-term debt | 18,750 | 15,625 | ||||
Other current liabilities | 60,833 | 64,868 | ||||
Total Current Liabilities | 477,496 | 469,139 | ||||
Accrued insurance, less current portion | 32,582 | 36,164 | ||||
Operating lease liabilities, less current portion | 177,381 | 140,795 | ||||
Long-term debt | 49,250 | 154,375 | ||||
Deferred income tax liabilities | 13,288 | 15,244 | ||||
Long-term accrued liabilities | 53,187 | 57,633 | ||||
Total Liabilities | 803,184 | 873,350 | ||||
STOCKHOLDERS' EQUITY | ||||||
Common stock | 492,049 | 491,624 | ||||
Retained earnings and other equity | 609,580 | 441,092 | ||||
Total stockholders' equity | 1,101,629 | 932,716 | ||||
Total Liabilities and Stockholders' Equity | $ | 1,904,813 | $ | 1,806,066 | ||
ROLLINS, INC. AND SUBSIDIARIES | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||
(in thousands except per share data) | ||||||||||||
(unaudited) | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||
REVENUES | ||||||||||||
Customer services | $ | 650,199 | $ | 583,698 | $ | 1,823,957 | $ | 1,624,928 | ||||
COSTS AND EXPENSES | ||||||||||||
Cost of services provided | 305,474 | 275,474 | 864,888 | 782,248 | ||||||||
Depreciation and amortization | 23,617 | 22,404 | 70,519 | 65,926 | ||||||||
Sales, general and administrative | 194,261 | 168,006 | 539,951 | 497,121 | ||||||||
Chairman's accelerated stock vesting expense | — | 6,691 | — | 6,691 | ||||||||
(Gain) loss on sale of assets, net | (447) | 1,355 | (33,598) | 629 | ||||||||
Interest expense, net | 222 | 866 | 1,334 | 4,491 | ||||||||
INCOME BEFORE INCOME TAXES | 127,072 | 108,902 | 380,863 | 267,822 | ||||||||
PROVISION FOR INCOME TAXES | 33,219 | 29,323 | 95,513 | 69,617 | ||||||||
NET INCOME | $ | 93,853 | $ | 79,579 | $ | 285,350 | $ | 198,205 | ||||
NET INCOME PER SHARE - BASIC AND DILUTED1 | $ | 0.19 | $ | 0.16 | $ | 0.58 | $ | 0.40 | ||||
Weighted average shares outstanding - basic and diluted | 492,069 | 491,631 | 492,058 | 491,236 | ||||||||
1 All prior year share and per share data have been adjusted to account for the three-for-two stock split effective December 10, 2020. |
APPENDIX
Reconciliation of GAAP and non-GAAP Financial Measures
The Company has used the non-GAAP financial measures of adjusted net income and adjusted EPS in today's earnings release, and the non-GAAP financial measures of organic revenues, organic revenues on a constant exchange rate, adjusted EBITDA, and free cash flow in today's conference call. 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.
The Company uses adjusted net income, adjusted EPS and adjusted EBITDA as measures of operating performance because they allow it to compare performance consistently over various periods without regard to the impact of the property disposition gains or the accelerated stock vesting expense. The Company uses organic revenues and organic revenues on a constant exchange rate to compare revenues over various periods excluding the impact of acquisitions and the change in foreign currency rates. The Company uses free cash flow to demonstrate its ability to generate cash.
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 non-GAAP financial measures used in today's earnings release and conference call with their most comparable GAAP measures.
(unaudited in thousands except EPS)
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
Better/ | Better/ | ||||||||||||||||||||||
2021 | 2020 | (Worse) | % | 2021 | 2020 | (Worse) | % | ||||||||||||||||
Reconciliation of Net Income to Adjusted Net Income and EPS | |||||||||||||||||||||||
Net income | $ | 93,853 | $ | 79,579 | $ | 14,274 | 17.9 | % | $ | 285,350 | $ | 198,205 | $ | 87,145 | 44.0 | % | |||||||
Property disposition gains | — | — | — | — | (31,517) | — | (31,517) | — | |||||||||||||||
Chairman's accelerated stock vesting expense | — | 6,691 | (6,691) | — | — | 6,691 | (6,691) | — | |||||||||||||||
Adjusted income taxes on excluded items | — | — | — | — | 8,287 | — | 8,287 | — | |||||||||||||||
Adjusted net income | $ | 93,853 | $ | 86,270 | $ | 7,583 | 8.8 | % | $ | 262,120 | $ | 204,896 | $ | 57,224 | 27.9 | % | |||||||
Adjusted net income per share - basic and diluted1 | $ | 0.19 | $ | 0.18 | $ | 0.01 | 5.6 | % | $ | 0.53 | $ | 0.42 | $ | 0.11 | 26.2 | % | |||||||
Weighted average shares outstanding - basic and diluted1 | 492,069 | 491,631 | 438 | 0.1 | % | 492,058 | 491,236 | 822 | 0.2 | % | |||||||||||||
Reconciliation of Revenues to Organic Revenues and Organic Revenues on a Constant Exchange Rate | |||||||||||||||||||||||
Revenues | $ | 650,199 | $ | 583,698 | $ | 66,501 | 11.4 | % | $ | 1,823,957 | $ | 1,624,928 | $ | 199,029 | 12.2 | % | |||||||
Revenues from acquisitions | (12,671) | — | (12,671) | — | (43,931) | — | (43,931) | — | |||||||||||||||
Organic revenues | 637,528 | 583,698 | 53,830 | 9.2 | % | 1,780,026 | 1,624,928 | 155,098 | 9.5 | % | |||||||||||||
Adjustment to organic revenues on a constant exchange rate | (431) | — | (431) | — | (10,314) | — | (10,314) | — | |||||||||||||||
Organic revenues on a constant exchange rate | $ | 637,097 | $ | 583,698 | $ | 53,399 | 9.2 | % | $ | 1,769,712 | $ | 1,624,928 | $ | 144,784 | 8.9 | % | |||||||
Reconciliation of Net Income to EBITDA and Adjusted EBITDA | |||||||||||||||||||||||
Net income | $ | 93,853 | $ | 79,579 | $ | 14,274 | 17.9 | % | $ | 285,350 | $ | 198,205 | $ | 87,145 | 44.0 | % | |||||||
Depreciation and amortization | 23,617 | 22,404 | 1,213 | 5.4 | 70,519 | 65,926 | 4,593 | 7.0 | |||||||||||||||
Interest expense, net | 222 | 866 | (644) | (74.4) | 1,334 | 4,491 | (3,157) | (70.3) | |||||||||||||||
Provision for income taxes | 33,219 | 29,323 | 3,896 | 13.3 | 95,513 | 69,617 | 25,896 | 37.2 | |||||||||||||||
EBITDA | 150,911 | 132,172 | 18,739 | 14.2 | % | 452,716 | 338,239 | 114,477 | 33.8 | % | |||||||||||||
Property disposition gains | — | — | — | — | (31,517) | — | (31,517) | — | |||||||||||||||
Chairman's accelerated stock vesting expense | — | 6,691 | (6,691) | — | — | 6,691 | (6,691) | — | |||||||||||||||
Adjusted EBITDA | $ | 150,911 | $ | 138,863 | $ | 12,048 | 8.7 | % | $ | 421,199 | $ | 344,930 | $ | 76,269 | 22.1 | % | |||||||
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow | |||||||||||||||||||||||
Net cash provided by operating activities | $ | 79,706 | $ | 105,835 | $ | (26,129) | (24.7) | % | $ | 298,911 | $ | 340,607 | $ | (41,696) | (12.2) | % | |||||||
Purchases of equipment and property | (6,802) | (5,249) | (1,553) | (29.6) | (20,031) | (17,690) | (2,341) | (13.2) | |||||||||||||||
Free Cash Flow | $ | 72,904 | $ | 100,586 | $ | (27,682) | (27.5) | % | $ | 278,880 | $ | 322,917 | $ | (44,037) | (13.6) | % | |||||||
1 All prior year share and per share data have been adjusted to account for the three-for-two stock split effective December 10, 2020. |
CONFERENCE CALL ANNOUNCEMENT
Rollins, Inc.
(NYSE: ROL)
Management will hold a conference call to discuss
Third Quarter 2021 results on
Wednesday, October 27, 2021 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 1-877-407-9716 domestic;
1-201-493-6779 international
with conference ID of 13723477
at least 5 minutes before start time.
REPLAY: available through November 3, 2021
Please dial 1-844-512-2921 / 1-412-317-6671, Passcode 13723477
THIS CALL CAN ALSO BE ACCESSED THROUGH THE INTERNET AT
Questions?
Contact Samantha Alphonso at Financial Relations Board at 212-827-3746
Or email to salphonso@mww.com
For Further Information Contact
Julie Bimmerman (404) 888-2103
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SOURCE Rollins, Inc.
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