8-K
Rollins Inc (ROL)
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO
SECTION 13 OR 15(d) OF
THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 28, 2021
ROLLINS,
INC.
(Exact name of registrant as specified in its charter)
| Delaware | 1-4422 | 51-0068479 |
|---|---|---|
| (State<br> or other jurisdiction of incorporation) | (Commission<br> File Number) | (I.R.S.<br> Employer Identification No.) |
2170 PiedmontRoad, N.E., Atlanta, Georgia 30324
(Address of principal executive offices) (Zip code)
Registrant’s telephone number, including area code: (404) 888-2000
Not Applicable
(Former name of former address, if changes since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| o | Written<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| o | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement<br> communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title<br> of each class | Trading<br> Symbol(s) | Name<br> of each exchange on which registered |
|---|---|---|
| Common<br> Stock | ROL | NYSE |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02. Results of Operations and Financial Condition.
On April 28, 2021, the Company issued a press release announcing its unaudited financial results for the first quarter ended March 31, 2021. The Company hereby incorporates by reference herein the information set forth in its Press Release dated April 28, 2021, a copy of which is attached hereto as Exhibit 99.1. Except as otherwise provided in the press release, the press release speaks only as of the date of such press release and such press release shall not create any implication that the affairs of the Company have continued unchanged since such date.
Except for the historical information contained in this report, the statements made by the Company are forward-looking statements that involve risks and uncertainties. All such statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. The Company’s future performance could differ significantly from the expectations of management and from results expressed or implied in the Press Release. See the risk factors contained in the Press Release for a discussion of certain risks and uncertainties that may impact such forward-looking statements. For further information on other risk factors, please refer to the “Risk Factors” contained in the Company’s Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission. The Company disclaims any obligation or duty to update or modify these forward-looking statements.
Item 9.01. Financial Statements and Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release Dated April 28, 2021 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Rollins, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ROLLINS, INC.
| Date:<br> April 28, 2021 | By: | /s/<br> Paul Edward Northen |
|---|---|---|
| Name: | Paul<br> Edward Northen | |
| Title: | Sr.<br> Vice President, Chief Financial Officer and Treasurer | |
| (Principal<br> Financial and Accounting Officer) |
Exhibit 99.1
For Further Information Contact
Eddie Northen, (404) 888-2242
FOR IMMEDIATE RELEASE
ROLLINS, INC. REPORTS FIRST QUARTER 2021 FINANCIAL RESULTS
- Total Revenue increased 9.8% for the quarter; Total Revenue less SignificantAcquisitions grew 7.9%
- Residential revenues increased 14.9% for the quarter, with Termite increasing12.2%
- Earnings Per Share of $0.19 for the quarter included $0.05 from non-recurringproperty disposition gains of $31.1 million
- Adjusted Earnings Per Share* of $0.14 for the quarter excluded propertydisposition gains
ATLANTA, GEORGIA, April 28, 2021: Rollins, Inc. (NYSE:ROL), a premier global consumer and commercial services company, reported strong unaudited financial results for its first quarter ended March 31, 2021.
The Company recorded first quarter revenues of $535.6 million, an increase of 9.8% over the prior year’s first quarter revenue of $487.9 million. Rollins’ reported net income was $92.6 million or $0.19 per diluted share for the first quarter ended March 31, 2021, compared to $43.3 million or $0.09 per diluted share for the same period in 2020. Adjusted net income* for the first quarter ended March 31, 2021 was $69.8 million or $0.14 per diluted share.
The Company, as planned, 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 quarter ended March 31, 2021 was $31.1 million pre-tax.
Gary W. Rollins, Chairman and Chief Executive Officer of Rollins, Inc. stated, “We are extremely proud of our first quarter results and believe we are well positioned for 2021. Our employees have displayed a strong level of commitment and drive towards taking care of our customers who have shown their trust in our services throughout this pandemic. We are confident in our continued strategic growth and profitability moving forward.”
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, Inc., 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.
CAUTIONCONCERNING FORWARD-LOOKING STATEMENTS This release contains statements that may constitute "forward-looking statements"within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statementsabout the Company’s belief that it is well positioned for 2021 and the Company’s confidence in its continued strategic growthand profitability moving forward. The actual results of the Company could differ materially from those indicated because of variousrisks and uncertainties, including without limitation, the extent and duration of the coronavirus (COVID-19) pandemic and its potentialimpact on the financial health of the Company’s business partners, customers, supply chains and suppliers, global economic conditionsand capital and financial markets, changes in consumer behavior and demand, the potential unavailability of personnel or key facilities,modifications to the Company’s operations, and the potential implementation of regulatory actions; economic and competitive conditionswhich may adversely affect the Company’s business; the degree of success of the Company's pest and termite process, and pest controlselling and treatment methods; the Company's ability to identify and integrate potential acquisitions; climate and weather trends; competitivefactors and pricing practices; the Company's ability to attract and retain skilled workers, and potential increases in labor costs; uncertaintiesof litigation; the results of the SEC’s investigation of the Company; and changes in various government laws and regulations, includingenvironmental regulations. All of the foregoing risks and uncertainties are beyond the ability of the Company to control, and in manycases the Company cannot predict the risks and uncertainties that could cause its actual results to differ materially from those indicated.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 Securitiesand Exchange Commission for the year ended December 31, 2020.
ROL-Fin
ROLLINS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands)
| At March 31, (unaudited) | 2021 | 2020 | ||
|---|---|---|---|---|
| ASSETS | ||||
| Cash and cash equivalents | $ | 117,322 | $ | 92,582 |
| Trade accounts receivables, net | 122,445 | 123,166 | ||
| Financed receivables, net | 22,402 | 22,209 | ||
| Materials and supplies | 32,645 | 21,527 | ||
| Other current assets | 39,229 | 45,346 | ||
| Total Current Assets | 334,043 | 304,830 | ||
| Equipment and property, net | 143,899 | 194,854 | ||
| Goodwill | 659,795 | 596,067 | ||
| Customer contracts, net | 297,288 | 279,361 | ||
| Trademarks and tradenames, net | 108,761 | 104,863 | ||
| Other intangible assets, net | 10,198 | 10,314 | ||
| Operating lease, right-of-use assets | 252,343 | 207,975 | ||
| Financed receivables, long-term, net | 38,105 | 33,952 | ||
| Benefit plan assets | 1,167 | 15,639 | ||
| Deferred income tax assets | 2,649 | 1,961 | ||
| Other assets | 28,632 | 21,663 | ||
| Total Assets | $ | 1,876,880 | $ | 1,771,479 |
| LIABILITIES | ||||
| Accounts payable | $ | 66,586 | $ | 36,844 |
| Accrued insurance, current | 31,709 | 30,739 | ||
| Accrued compensation and related liabilities | 78,357 | 68,289 | ||
| Unearned revenue | 140,378 | 129,352 | ||
| Operating lease liabilities, current | 75,822 | 69,094 | ||
| Current portion of long-term debt | 18,750 | 12,500 | ||
| Other current liabilities | 96,186 | 71,050 | ||
| Total Current Liabilities | 507,788 | 417,868 | ||
| Accrued insurance, less current portion | 36,062 | 34,921 | ||
| Operating lease liabilities, less current portion | 178,508 | 140,152 | ||
| Long-term debt | 96,250 | 307,300 | ||
| Deferred income tax liabilities | 9,005 | 14,257 | ||
| Long-term accrued liabilities | 60,332 | 56,610 | ||
| Total Liabilities | 887,945 | 971,108 | ||
| STOCKHOLDERS’ EQUITY | ||||
| Common stock | 492,124 | 491,651 | ||
| Retained earnings and other equity | 496,811 | 308,720 | ||
| Total stockholders’ equity | 988,935 | 800,371 | ||
| Total Liabilities and Stockholders’ Equity | $ | 1,876,880 | $ | 1,771,479 |
ROLLINS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share data)
(unaudited)
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | ||||||
| 2021 | 2020 | |||||
| REVENUES | ||||||
| Customer services | $ | 535,554 | $ | 487,901 | ||
| COSTS AND EXPENSES | ||||||
| Cost of services provided | 261,552 | 251,152 | ||||
| Depreciation and amortization | 23,596 | 21,597 | ||||
| Sales, general and administrative | 162,208 | 157,862 | ||||
| (Gains)/losses on sale of assets, net | (32,260 | ) | (275 | ) | ||
| Interest expense, net | 606 | 2,165 | ||||
| 415,702 | 432,501 | |||||
| INCOME BEFORE INCOME TAXES | 119,852 | 55,400 | ||||
| PROVISION FOR INCOME TAXES | 27,209 | 12,132 | ||||
| NET INCOME | $ | 92,643 | $ | 43,268 | ||
| NET INCOME PER SHARE - BASIC AND DILUTED | $ | 0.19 | $ | 0.09 | ||
| Weighted average shares outstanding - basic and diluted | 492,003 | 491,524 |
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. These measures should not be considered in isolation or as a substitute for net income, earnings per share or other performance measures prepared in accordance with GAAP.
The Company uses adjusted net income and adjusted EPS as a measure of operating performance because it allows it to compare performance consistently over various periods without regard to the impact of the property disposition gains.
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 adjusted net income and adjusted EPS with net income, the most comparable GAAP measure.
(unaudited in thousands except EPS)
| Three Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31, | |||||||||||
| 2021 | 2020 | Better/ (Worse) | % | ||||||||
| Net income | $ | 92,643 | $ | 43,268 | $ | 49,375 | 114.1 | % | |||
| Property disposition gains | (31,058 | ) | — | (31,058 | ) | — | |||||
| Adjusted income taxes on excluded gains | 8,165 | — | 8,165 | — | |||||||
| Adjusted net income | $ | 69,750 | $ | 43,268 | $ | 26,482 | 61.2 | % | |||
| Adjusted net income per share - basic and diluted | $ | 0.14 | $ | 0.09 | $ | 0.05 | 55.6 | % | |||
| Weighted average participating shares outstanding - basic and diluted | 492,003 | 491,524 | 479 | 0.1 | % |
(( CONFERENCE CALL ANNOUNCEMENT ((
Rollins,Inc.
(NYSE:ROL)
Managementwill hold a conference call to discuss
FirstQuarter 2021 results on
Wednesday,April 28, 2021 at:
10:00a.m. Eastern
9:00a.m. Central
8:00a.m. Mountain
7:00a.m. Pacific
TO PARTICIPATE:
Pleasedial 877-407-9716 domestic;
201-493-6779international
withconference ID of 13717965at least 5 minutes before start time.
REPLAY: available through May 5, 2021
Please dial 844-512-2921 / 412-317-6671, Passcode 13717965
THIS CALL CAN ALSO BE ACCESSED THROUGHTHE INTERNET AT
www.rollins.com
Questions?
ContactSamantha Alphonso at Financial Relations Board at 212-827-3746
Or email to salphonso@mww.com