Rollins, Inc. Reports Fourth Quarter And Full Year 2017 Record Financial Results
Wednesday, January 24, 2018 7:30:00 AM ET
Rollins, Inc. (ROL ), a premier global consumer and commercial services company, reported strong unaudited financial results for its fourth quarter and year ended December 31, 2017.
On December 22, 2017, the Tax Cuts & Jobs Act ("TCJA") was signed into law. The fourth quarter 2017 and full year 2017 results reflect the estimated negative impact of the enactment of the TCJA, which resulted in an $11.6 million decrease in net income, ($8.0 million from transition tax on foreign earnings, $2.9 million from the revaluation of deferred tax assets, and $0.7 million from reductions in tax benefits on stock compensation). This resulted in a $0.06 per diluted share decrease in net income for the quarter and $0.05 per diluted share decrease for the year. Net income and diluted earnings per share excluding significant items are non-GAAP financial measures. Management believes these measures help investors understand the effect of these on reported results.
The Company recorded fourth quarter revenues of $414.7 million, an increase of 7.5% over the prior years fourth quarter revenue of $385.6 million. Rollins reported net income of $33.7 million or $0.15 per diluted share. Excluding significant items Rollins net income increased 19.2% to $45.3 million or $0.21 per diluted share for the fourth quarter ended December 31, 2017, compared to $38.0 million or $0.17 per diluted share for the same period in 2016.
For the full-year ended December 31, 2017, Rollins revenues rose 6.4% to $1.674 billion compared to $1.573 billion for the prior year. The Company reported net income of $179.1 million. Excluding significant items Rollins net income for the year rose 13.9% to $190.7 million, or $0.87 per diluted share, compared to net income of $167.4 million, or $0.77 per diluted share last year.
Gary W. Rollins, Vice Chairman and Chief Executive Officer of Rollins, Inc. stated, "We are pleased to have delivered solid financial results for the fourth quarter and for the year. These results reflect the underlying strength of our business and our initiatives that have benefitted our customers, employees, and shareholders."
Mr. Rollins concluded, "Our strong balance sheet has allowed us to continue to make strategic acquisitions. Northwest Exterminating has been a great addition to our Company and we are extremely pleased with the contributions that they have made to our revenues and profits. We look forward to all of our acquisitions having a significant role in the company going forward."
Eddie Northen, Vice President, Chief Financial Officer and Treasurer of Rollins, Inc. stated, "For Fiscal 2018, we believe the Tax Cuts & Jobs Act will result in an all-in book tax rate for the Company in the mid 20 percent range. Our first quarter 2018 will have the additional tax benefit from share-based compensation, further reducing that quarters tax rate.
Rollins, Inc. is a premier global consumer and commercial services company. Through its wholly owned subsidiaries, Orkin LLC., HomeTeam Pest Defense, Orkin Canada, Western Pest Services, Northwest Exterminating, Critter Control, Inc., The Industrial Fumigant Company, Trutech LLC., Rollins Australia, Waltham Services LLC., PermaTreat, Rollins UK, and Crane Pest Control, the Company provides essential pest control services and protection against termite damage, rodents and insects to more than two million customers in the United States, Canada, Central America, South America, the Caribbean, the Middle East, Asia, the Mediterranean, Europe, Africa, Mexico, 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.orkincanada.ca, www.westernpest.com, www.callnorthwest.com, www.crittercontrol.com, www.indfumco.com, www.trutechinc.com, www.allpest.com.au, www.walthamservices.com, www.permatreat.com, www.cranepestcontrol.com, www.murraypestcontrol.com.au, www.statewidepestcontrol.com.au, www.safeguardpestcontrol.co.uk, 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 This release contains statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements about the Companys expectation that acquisitions will continue to have a significant role in the Company going forward; the expectation that the Tax Cuts and Jobs Act will result in an all-in book tax rate for the Company in the mid 20 percent range; and the expectation that the first quarter 2018 will have an additional tax benefit from share-based compensation, further reducing that quarters tax rate. 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, economic and competitive conditions which may adversely affect the Companys business; the degree of success of the Companys pest and termite process, and pest control selling and treatment methods; the Companys ability to identify and integrate potential acquisitions; climate and weather trends; competitive factors and pricing practices; the Companys ability to attract and retain skilled workers, and 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 Companys Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2016. ROL-Fin
ROLLINS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
At December 31, (unaudited) 2017 2016
Cash and cash equivalents $ 107,050 $ 142,785
Trade accounts receivables, net 97,802 88,490
Financed receivables, net 17,263 15,968
Materials and supplies 14,983 13,724
Other current assets 25,697 29,204
Total Current Assets 262,795 290,171
Equipment and property, net 134,088 133,477
Goodwill 361,475 255,665
Customer contracts and other intangible assets, net 199,456 161,776
Deferred income taxes, net 18,420 41,877
Financed receivables, long-term, net 20,414 16,748
Prepaid pension 17,595 -
Other assets 19,420 16,824
Total Assets $ 1,033,663 $ 916,538
Accounts payable $ 26,161 $ 30,284
Accrued insurance, current 28,018 26,201
Accrued compensation and related liabilities 73,016 75,839
Unearned revenue 109,029 99,820
Other current liabilities 58,345 44,847
Total Current Liabilities 294,569 276,991
Accrued insurance, less current portion 34,245 32,023
Accrued pension - 2,880
Long-term accrued liabilities 50,925 36,099
Total Liabilities 379,739 347,993
Common stock 217,992 217,792
Retained earnings and other equity 435,932 350,753
Total stockholders equity 653,924 568,545
Total Liabilities and Stockholders Equity $ 1,033,663 $ 916,538
ROLLINS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
2017 2016 2017 2016
Customer services $ 414,713 $ 385,614 $ 1,673,957 $ 1,573,477
COSTS AND EXPENSES
Cost of services provided 207,519 192,995 819,943 772,348
Depreciation and amortization 14,950 13,829 56,580 50,902
Sales, general and administrative 123,680 126,321 503,433 490,528
Gain on sale of assets, net (63) (57) (242) (777)
Interest income/expense, net 83 (4) (259) (160)
346,169 333,084 1,379,455 1,312,841
INCOME BEFORE INCOME TAXES 68,544 52,530 294,502 260,636
PROVISION FOR INCOME TAXES 34,809 14,523 115,378 93,267
NET INCOME $ 33,735 $ 38,007 $ 179,124 $ 167,369
NET INCOME PER SHARE - BASIC AND DILUTED $ 0.15 $ 0.17 $ 0.82 $ 0.77
Weighted average shares outstanding - basic and diluted 217,989 217,819 217,988 218,244
CONFERENCE CALL ANNOUNCEMENTRollins, Inc. (ROL )
Management will hold a conference call to discuss Fourth Quarter and Twelve Months 2017 results on
Wednesday, January 24, 2018 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 800-946-0708 domestic; 719-325-2402 international at least 5 minutes before start time.
REPLAY: available through January 31, 2018 Please dial 888-203-1112/719-457-0820, Passcode: 6022650 THIS CALL CAN ALSO BE ACCESSED THROUGH THE INTERNET AT www.viavid.com
Questions? Contact Samantha Alphonso at Financial Relations Board at 212-827-3746 Or email to firstname.lastname@example.org
For Further Information Contact Eddie Northen (404) 888-2242
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SOURCE Rollins, Inc.