ATLANTA, July 26,
2023 /PRNewswire/ -- Rollins, Inc. (NYSE:ROL)
("Rollins" or the "Company"), a premier global consumer and
commercial services company, reported unaudited financial results
for the second quarter of 2023.
Quarterly Highlights
- Second quarter revenues were $821
million, an increase of 14.9% over the second quarter 2022
with organic revenues* increasing 7.7%. The stronger dollar versus
foreign currencies in countries where we operate reduced revenues
by 30 basis points during the quarter.
- Quarterly operating income was $155
million, an increase of 14.9% over the second quarter of
2022. Quarterly operating margin was 18.9% of revenue, consistent
with the second quarter of 2022. Adjusted operating income* was
$160 million, an increase of 18.8%
over the prior year. Adjusted operating income margin* was 19.5%,
an increase of 60 basis points over the prior year.
- Quarterly net income was $110
million, an increase of 8.4% over the prior year net income.
Adjusted net income* was $114
million, an increase of 12.2% over the prior year.
- Quarterly EPS was $0.22 per
diluted share, a 4.8% increase over the prior year EPS of
$0.21. Adjusted EPS* was $0.23 per diluted share, an increase of 9.5% over
the prior year.
- Adjusted EBITDA* was $183 million
for the quarter, an increase of 15.1%. Adjusted EBITDA* was 22.3%
of sales, which was equal to the second quarter of 2022.
- Operating cash flow was $147
million, an increase of 15.8% compared to the second quarter
a year ago. The Company invested $312
million in acquisitions, $7
million in capital expenditures, and paid dividends totaling
$64 million for the quarter. Free
cash flow* was $141 million, an
increase of 17.8% compared to the second quarter of 2022.
Management Commentary
"The strong growth in revenue in the second quarter provides a
sense of optimism to start the second half of 2023," said
Jerry Gahlhoff, Jr., President and
CEO. "The demand environment is healthy and our pipeline for
acquisitions remains robust to start the third quarter. We
continued to invest in customer acquisition activities in the
quarter and we remain very well positioned to continue to drive
growth through acquisition. I am encouraged by the improvement in
quarterly gross margin, which was above 53%," Mr. Gahlhoff
added.
"As we start the second half, we are focused on driving growth
while evaluating several initiatives aimed at improving
productivity. While we remain very well positioned to continue to
deliver strong results in 2023 and beyond, we are focused on
executing additional programs that we believe will improve the
efficiency of our business model," Mr. Gahlhoff added.
"We saw healthy demand for our services in the second quarter
and are positioned well to start the third quarter," said
Kenneth Krause, Executive Vice
President, and CFO. "Cash flow generation was strong, with
operating cash flow increasing approximately 16% for the
quarter," he added. "While operating margins were pressured on
higher insurance and legacy claims activity, the improvement in
gross margin and current demand environment provides a sense of
optimism to start the second half," Mr. Krause concluded.
Three and Six Months Ended Financial Highlights
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
Variance
|
|
|
|
|
|
Variance
|
(in thousands, except
per share data)
|
2023
|
|
2022
|
|
$
|
%
|
|
2023
|
|
2022
|
|
$
|
%
|
GAAP
Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
820,750
|
|
$ 714,049
|
|
$ 106,701
|
14.9 %
|
|
$
1,478,765
|
|
$
1,304,729
|
|
$
174,036
|
13.3 %
|
Gross profit
(1)
|
$
436,559
|
|
$ 377,269
|
|
$
59,290
|
15.7 %
|
|
$
767,732
|
|
$
672,571
|
|
$
95,161
|
14.1 %
|
Gross profit
margin (1)
|
53.2 %
|
|
52.8 %
|
|
40 bps
|
|
|
51.9 %
|
|
51.5 %
|
|
40 bps
|
|
Operating
income
|
$
154,789
|
|
$ 134,677
|
|
$
20,112
|
14.9 %
|
|
$
267,029
|
|
$
228,067
|
|
$
38,962
|
17.1 %
|
Operating income
margin
|
18.9 %
|
|
18.9 %
|
|
0 bps
|
|
|
18.1 %
|
|
17.5 %
|
|
60 bps
|
|
Net income
|
$
110,143
|
|
$ 101,620
|
|
$
8,523
|
8.4 %
|
|
$
198,377
|
|
$
175,386
|
|
$
22,991
|
13.1 %
|
EPS
|
$
0.22
|
|
$
0.21
|
|
$
0.01
|
4.8 %
|
|
$
0.40
|
|
$
0.36
|
|
$
0.04
|
11.1 %
|
Operating cash
flow
|
$
147,413
|
|
$ 127,285
|
|
20,128
|
15.8 %
|
|
$
248,186
|
|
$
214,817
|
|
$
33,369
|
15.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (2)
|
$
160,050
|
|
$ 134,677
|
|
$
25,373
|
18.8 %
|
|
$
272,290
|
|
$
228,067
|
|
$
44,223
|
19.4 %
|
Adjusted operating
margin (2)
|
19.5 %
|
|
18.9 %
|
|
60 bps
|
|
|
18.4 %
|
|
17.5 %
|
|
90 bps
|
|
Adjusted net
income (2)
|
$
114,057
|
|
$ 101,620
|
|
$
12,437
|
12.2 %
|
|
$
202,291
|
|
$
175,386
|
|
$
26,905
|
15.3 %
|
Adjusted EPS
(2)
|
$
0.23
|
|
$
0.21
|
|
$
0.02
|
9.5 %
|
|
$
0.41
|
|
$
0.36
|
|
$
0.05
|
13.9 %
|
Adjusted EBITDA
(2)
|
$
183,294
|
|
$ 159,193
|
|
$
24,101
|
15.1 %
|
|
$
322,750
|
|
$
276,989
|
|
$
45,761
|
16.5 %
|
Adjusted EBITDA
margin (2)
|
22.3 %
|
|
22.3 %
|
|
0 bps
|
|
|
21.8 %
|
|
21.2 %
|
|
60 bps
|
|
Free cash flow
(2)
|
$
140,638
|
|
$ 119,399
|
|
$
21,239
|
17.8 %
|
|
$
233,775
|
|
$
198,936
|
|
$
34,839
|
17.5 %
|
(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 closely correlated 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.
CAUTION REGARDING FORWARD-LOOKING
STATEMENTS
Statements made in this press release and
on our earnings call, may contain forward-looking statements that
involve risks and uncertainties concerning the Company's business
and financial results. We have based these forward-looking
statements largely on our current opinions, expectations, beliefs,
plans, objectives, assumptions and projections about future events
and financial trends affecting the operating results and financial
condition of our business. Such forward looking statements include,
but are not limited to, statements regarding the Company's belief
that the demand environment is healthy and the Company's pipeline
for acquisitions remains robust to start the third quarter, the
Company remains very well positioned to continue to drive growth
through acquisition, the Company is focused on driving growth while
evaluating several initiatives aimed at improving productivity, the
Company is well positioned to continue to deliver strong results in
2023 and beyond, that the Company is focused on executing
additional programs that it believes will improve the efficiency of
its business model, improvement in gross margin and current demand
environment provides a sense of optimism to start the second half,
that the Company continues to focus on implementing continuous
improvement initiatives that it believes will improve the
efficiency of its business and position itself well for years to
come.
Our actual results could differ materially from those
indicated by the forward-looking statements because of various
risks, timing and uncertainties including, without limitation, the
failure to maintain and enhance our brands and develop a positive
client reputation; our ability to protect our intellectual property
and other proprietary rights that are material to our business and
our brand recognition; actions taken by our franchisees,
subcontractors or vendors that may harm our business; general
economic conditions; the effects of a pandemic, such as the
COVID-19 pandemic, or other major public health concern on the
Company's business, results of operations, accounting assumptions
and estimates and financial condition; adverse economic conditions,
including, without limitation, market downturns, inflation and
restrictions in customer discretionary expenditures, increases in
interest rates or other disruptions in credit or financial markets,
increases in fuel prices, raw material costs or other operating
costs; potential increases in labor costs; labor shortages and/or
our inability to attract and retain skilled workers; competitive
factors and pricing practices; changes in industry practices or
technologies; the degree of success of our termite process reforms
and pest control selling and treatment methods; our ability to
identify, complete and successfully integrate potential
acquisitions; unsuccessful expansion into international markets;
climate change and unfavorable weather conditions; a breach of data
security resulting in the unauthorized access of personal,
financial, proprietary, confidential or other personal data or
information about our customers, employees, third parties, or of
our proprietary confidential information; damage to our brands or
reputation; new or proposed regulations regarding climate change;
any noncompliance with, changes to, or increased enforcement of
various government laws and regulations, including environmental
regulations; possibility of an adverse ruling against us in pending
litigation, regulatory action or investigation; the adequacy of our
insurance coverage to cover all significant risk exposures; the
effectiveness of our risk management and safety program; general
market risk; management's substantial ownership interest and its
impact on public stockholders and the availability of the Company's
common stock to the investing public; and the existence of certain
anti-takeover provisions in our governance documents, which could
make a tender offer, change in control or takeover attempt that is
opposed by the Company's Board of Directors more difficult or
expensive. All of the foregoing risks and uncertainties are beyond
our ability to control, and in many cases, we cannot predict the
risks and uncertainties that could cause our actual results to
differ materially from those indicated by the forward-looking
statements. The Company does not undertake to update its
forward-looking statements.
Conference Call
Rollins will host a conference call on
Thursday, July 27, 2023 at
8:30 a.m. Eastern Time to discuss the
second quarter 2023 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 13739505.
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)
|
|
|
June 30,
2023
|
|
December 31,
2022
|
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
154,747
|
|
$
95,346
|
Trade receivables,
net
|
176,567
|
|
155,759
|
Financed receivables,
short-term, net
|
37,495
|
|
33,618
|
Materials and
supplies
|
32,685
|
|
29,745
|
Other current
assets
|
62,489
|
|
34,151
|
Total current
assets
|
463,983
|
|
348,619
|
Operating lease
right-of-use assets
|
282,598
|
|
277,355
|
Financed receivables,
long-term, net
|
72,646
|
|
63,523
|
Other assets
|
1,780,103
|
|
1,432,531
|
Total
assets
|
$
2,599,330
|
|
$
2,122,028
|
LIABILITIES
|
|
|
|
Accounts
payable
|
74,398
|
|
42,796
|
Accrued insurance -
current
|
40,796
|
|
39,534
|
Accrued compensation
and related liabilities
|
94,968
|
|
99,251
|
Unearned
revenues
|
183,253
|
|
158,092
|
Operating lease
liabilities - current
|
86,918
|
|
84,543
|
Current portion of
long-term debt
|
—
|
|
15,000
|
Other current
liabilities
|
95,368
|
|
54,568
|
Total current
liabilities
|
575,701
|
|
493,784
|
Accrued insurance, less
current portion
|
45,659
|
|
38,350
|
Operating lease
liabilities, less current portion
|
200,201
|
|
196,888
|
Long-term
debt
|
337,509
|
|
39,898
|
Other long-term accrued
liabilities
|
98,035
|
|
85,911
|
Total
liabilities
|
1,257,105
|
|
854,831
|
STOCKHOLDERS'
EQUITY
|
|
|
|
Common stock
|
492,821
|
|
492,448
|
Retained earnings and
other equity
|
849,404
|
|
774,749
|
Total stockholders'
equity
|
1,342,225
|
|
1,267,197
|
Total liabilities
and stockholders' equity
|
$
2,599,330
|
|
$
2,122,028
|
ROLLINS, INC. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(in thousands except
per share data)
(unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
REVENUES
|
|
|
|
|
|
|
|
Customer
services
|
$
820,750
|
|
$ 714,049
|
|
$
1,478,765
|
|
$
1,304,729
|
COSTS AND
EXPENSES
|
|
|
|
|
|
|
|
Cost of services
provided (exclusive of depreciation and amortization
below)
|
384,191
|
|
336,780
|
|
711,033
|
|
632,158
|
Sales, general and
administrative
|
255,331
|
|
219,987
|
|
451,762
|
|
398,772
|
Depreciation and
amortization
|
26,439
|
|
22,605
|
|
48,941
|
|
45,732
|
Total operating
expenses
|
665,961
|
|
579,372
|
|
1,211,736
|
|
1,076,662
|
OPERATING
INCOME
|
154,789
|
|
134,677
|
|
267,029
|
|
228,067
|
Interest expense,
net
|
4,785
|
|
880
|
|
5,250
|
|
1,448
|
Other income,
net
|
(1,019)
|
|
(1,911)
|
|
(5,733)
|
|
(3,190)
|
CONSOLIDATED INCOME
BEFORE INCOME TAXES
|
151,023
|
|
135,708
|
|
267,512
|
|
229,809
|
PROVISION FOR INCOME
TAXES
|
40,880
|
|
34,088
|
|
69,135
|
|
54,423
|
NET
INCOME
|
$
110,143
|
|
$ 101,620
|
|
$
198,377
|
|
$ 175,386
|
NET INCOME PER SHARE
- BASIC AND DILUTED
|
$
0.22
|
|
$
0.21
|
|
$
0.40
|
|
$
0.36
|
Weighted average shares
outstanding - basic
|
492,700
|
|
492,327
|
|
492,593
|
|
492,270
|
Weighted average shares
outstanding - diluted
|
492,891
|
|
492,440
|
|
492,764
|
|
492,382
|
Certain consolidated financial statement amounts relative to
prior periods have been revised, the effects of which are
immaterial. See the appendix to this release for a discussion of
this revision.
ROLLINS, INC. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATED CASH FLOW INFORMATION
(in
thousands)
(unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
Net income
|
$
110,143
|
|
$ 101,620
|
|
$
198,377
|
|
$ 175,386
|
Depreciation and
amortization
|
26,439
|
|
22,605
|
|
48,941
|
|
45,732
|
Change in working
capital and other operating activities
|
10,831
|
|
3,060
|
|
868
|
|
(6,301)
|
Net cash provided by
operating activities
|
147,413
|
|
127,285
|
|
248,186
|
|
214,817
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
Acquisitions, net of
cash acquired
|
(312,412)
|
|
(36,357)
|
|
(327,892)
|
|
(49,580)
|
Capital
expenditures
|
(6,775)
|
|
(7,886)
|
|
(14,411)
|
|
(15,881)
|
Other investing
activities, net
|
1,155
|
|
2,139
|
|
10,681
|
|
3,429
|
Net cash (used in)
investing activities
|
(318,032)
|
|
(42,104)
|
|
(331,622)
|
|
(62,032)
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
Net
borrowings
|
275,000
|
|
(60,783)
|
|
285,000
|
|
80,000
|
Payment of
dividends
|
(63,943)
|
|
(49,229)
|
|
(127,996)
|
|
(98,434)
|
Other financing
activities
|
220
|
|
(2,721)
|
|
(16,809)
|
|
(12,206)
|
Net cash provided by
(used in) financing activities
|
211,277
|
|
(112,733)
|
|
140,195
|
|
(30,640)
|
Effect of exchange rate
changes on cash and cash equivalents
|
1,586
|
|
(9,822)
|
|
2,642
|
|
(6,482)
|
Net increase (decrease)
in cash and cash equivalents
|
$
42,244
|
|
$ (37,374)
|
|
$
59,401
|
|
$ 115,663
|
Certain consolidated financial statement amounts relative to
prior periods have been revised, the effects of which are
immaterial. See the appendix to this release for a discussion of
this revision.
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, and free cash flow in this earnings
release. Organic revenue is calculated as revenue less acquisition
revenue. Acquisition revenue is based on the trailing 12-month
revenue of our acquired entities. 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, and adjusted incremental EBITDA margin as measures of
operating performance because these measures allow the Company to
compare performance consistently over various periods. 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. Management
also uses organic revenues, and organic revenues by type to compare
revenues over various periods excluding the impact of acquisitions.
Management uses free cash flow, which is calculated as net cash
provided by operating activities less capital expenditures, to
demonstrate the Company's ability to maintain its asset base and
generate future cash flows from operations. 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.
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 this earnings release with their most comparable
GAAP measures.
(unaudited, in
thousands, except per share data)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
Variance
|
|
|
|
|
|
Variance
|
|
2023
|
|
2022
(3)
|
|
$
|
|
%
|
|
2023
|
|
2022
(3)
|
|
$
|
|
%
|
Reconciliation of
Operating Income to Adjusted Operating Income and Adjusted
Operating Income Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
$
154,789
|
|
$
134,677
|
|
|
|
|
|
$
267,029
|
|
$
228,067
|
|
|
|
|
Fox acquisition-related
expenses (1)
|
5,261
|
|
—
|
|
|
|
|
|
5,261
|
|
—
|
|
|
|
|
Adjusted operating
income
|
$
160,050
|
|
$
134,677
|
|
25,373
|
|
18.8
|
|
$
272,290
|
|
$
228,067
|
|
44,223
|
|
19.4
|
Revenues
|
$
820,750
|
|
$
714,049
|
|
|
|
|
|
$
1,478,765
|
|
$
1,304,729
|
|
|
|
|
Operating income
margin
|
18.9 %
|
|
18.9 %
|
|
|
|
|
|
18.1 %
|
|
17.5 %
|
|
|
|
|
Adjusted operating
income margin
|
19.5 %
|
|
18.9 %
|
|
|
|
|
|
18.4 %
|
|
17.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Income to Adjusted Net Income and Adjusted EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
110,143
|
|
$
101,620
|
|
|
|
|
|
$
198,377
|
|
$
175,386
|
|
|
|
|
Fox acquisition-related
expenses (1)
|
5,261
|
|
—
|
|
|
|
|
|
5,261
|
|
—
|
|
|
|
|
Tax impact of
adjustments (2)
|
(1,347)
|
|
—
|
|
|
|
|
|
(1,347)
|
|
—
|
|
|
|
|
Adjusted net
income
|
$
114,057
|
|
$ 101,620
|
|
12,437
|
|
12.2
|
|
$
202,291
|
|
$
175,386
|
|
26,905
|
|
15.3
|
Adjusted EPS - basic
and diluted
|
$
0.23
|
|
$
0.21
|
|
|
|
|
|
$
0.41
|
|
$
0.36
|
|
|
|
|
Weighted average shares
outstanding - basic
|
492,700
|
|
492,327
|
|
|
|
|
|
492,593
|
|
492,270
|
|
|
|
|
Weighted average shares
outstanding - diluted
|
492,891
|
|
492,440
|
|
|
|
|
|
492,764
|
|
492,382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Income to EBITDA, Adjusted EBITDA, EBITDA Margin, Incremental
EBITDA Margin, Adjusted EBITDA Margin, and Adjusted Incremental
EBITDA Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
110,143
|
|
$
101,620
|
|
|
|
|
|
$
198,377
|
|
$
175,386
|
|
|
|
|
Depreciation and
amortization
|
26,439
|
|
22,605
|
|
|
|
|
|
48,941
|
|
45,732
|
|
|
|
|
Interest expense,
net
|
4,785
|
|
880
|
|
|
|
|
|
5,250
|
|
1,448
|
|
|
|
|
Provision for income
taxes
|
40,880
|
|
34,088
|
|
|
|
|
|
69,135
|
|
54,423
|
|
|
|
|
EBITDA
|
$
182,247
|
|
$ 159,193
|
|
23,054
|
|
14.5
|
|
$
321,703
|
|
$
276,989
|
|
44,714
|
|
16.1
|
Fox acquisition-related
expenses (1)
|
1,047
|
|
—
|
|
|
|
|
|
1,047
|
|
—
|
|
|
|
|
Adjusted
EBITDA
|
$
183,294
|
|
$ 159,193
|
|
24,101
|
|
15.1
|
|
$
322,750
|
|
$
276,989
|
|
45,761
|
|
16.5
|
Revenues
|
$
820,750
|
|
$ 714,049
|
|
106,701
|
|
|
|
$
1,478,765
|
|
$
1,304,729
|
|
174,036
|
|
|
EBITDA
margin
|
22.2 %
|
|
22.3 %
|
|
|
|
|
|
21.8 %
|
|
21.2 %
|
|
|
|
|
Incremental EBITDA
margin
|
|
|
|
|
21.6 %
|
|
|
|
|
|
|
|
25.7 %
|
|
|
Adjusted EBITDA
margin
|
22.3 %
|
|
22.3 %
|
|
|
|
|
|
21.8 %
|
|
21.2 %
|
|
|
|
|
Adjusted incremental
EBITDA margin
|
|
|
|
|
22.6 %
|
|
|
|
|
|
|
|
26.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Cash Provided by Operating Activities to Free Cash
Flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
147,413
|
|
$ 127,285
|
|
|
|
|
|
$
248,186
|
|
$
214,817
|
|
|
|
|
Capital
expenditures
|
(6,775)
|
|
(7,886)
|
|
|
|
|
|
(14,411)
|
|
(15,881)
|
|
|
|
|
Free cash
flow
|
$
140,638
|
|
$ 119,399
|
|
21,239
|
|
17.8
|
|
$
233,775
|
|
$
198,936
|
|
34,839
|
|
17.5
|
|
(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 Pest Control
during the quarter. 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) The tax effect of
the adjustments is calculated using the applicable statutory tax
rates for the respective periods.
|
|
(3) Certain condensed
consolidated financial statement amounts relative to the prior
period have been revised as detailed in our annual report on Form
10-K for the year ended December 31, 2022. The impact of this
revision on the Company's previously reporting condensed
consolidated financial statements for the three and six months
ended June 30, 2022 includes a decrease to depreciation and
amortization expense of $1.7 million and $3.4 million,
respectively, and an increase in the provision for income tax
expense of $0.4 million and $0.8 million, respectively. This
revision affects these specific line items and subtotals within the
consolidated statements of income and cash flows.
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
Variance
|
|
|
|
|
|
Variance
|
|
2023
|
|
2022
|
|
$
|
|
%
|
|
2023
|
|
2022
|
|
$
|
|
%
|
Reconciliation of
Revenues to Organic Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
820,750
|
|
$ 714,049
|
|
106,701
|
|
14.9
|
|
$
1,478,765
|
|
$
1,304,729
|
|
174,036
|
|
13.3
|
Revenue growth from
acquisitions
|
(51,148)
|
|
—
|
|
(51,148)
|
|
—
|
|
(64,302)
|
|
—
|
|
(64,302)
|
|
—
|
Organic
revenues
|
$
769,602
|
|
$ 714,049
|
|
55,553
|
|
7.7
|
|
$
1,414,463
|
|
$
1,304,729
|
|
109,734
|
|
8.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Residential Revenues to Organic Residential Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
revenues
|
$
385,645
|
|
$ 325,311
|
|
60,334
|
|
18.5
|
|
$
669,270
|
|
$
584,570
|
|
84,700
|
|
14.5
|
Residential revenues
from acquisitions
|
(42,089)
|
|
—
|
|
(42,089)
|
|
—
|
|
(48,093)
|
|
—
|
|
(48,093)
|
|
—
|
Residential organic
revenues
|
$
343,556
|
|
$ 325,311
|
|
18,245
|
|
5.6
|
|
$
621,177
|
|
$
584,570
|
|
36,607
|
|
6.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Commercial Revenues to Organic Commercial Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
revenues
|
$
259,964
|
|
$ 234,483
|
|
25,481
|
|
10.9
|
|
$
490,366
|
|
$
440,270
|
|
50,096
|
|
11.4
|
Commercial revenue
growth from acquisitions
|
(3,038)
|
|
—
|
|
(3,038)
|
|
—
|
|
(7,232)
|
|
—
|
|
(7,232)
|
|
—
|
Commercial organic
revenues
|
$
256,926
|
|
$ 234,483
|
|
22,443
|
|
9.6
|
|
$
483,134
|
|
$
440,270
|
|
42,864
|
|
9.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Termite and Ancillary Revenues to Organic Termite and Ancillary
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termite and ancillary
revenues
|
$
166,823
|
|
$ 146,781
|
|
20,042
|
|
13.7
|
|
$
303,428
|
|
$
266,487
|
|
36,941
|
|
13.9
|
Termite and ancillary
revenues from acquisitions
|
(6,020)
|
|
—
|
|
(6,020)
|
|
—
|
|
(8,977)
|
|
—
|
|
(8,977)
|
|
—
|
Termite and ancillary
organic revenues
|
$
160,803
|
|
$ 146,781
|
|
14,022
|
|
9.6
|
|
$
294,451
|
|
$
266,487
|
|
27,964
|
|
10.5
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
Variance
|
|
|
|
|
|
Variance
|
|
2022
|
|
2021
|
|
$
|
|
%
|
|
2022
|
|
2021
|
|
$
|
|
%
|
Reconciliation of
Revenues to Organic Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
714,049
|
|
$ 638,204
|
|
75,845
|
|
11.9
|
|
$
1,304,729
|
|
$
1,173,758
|
|
130,971
|
|
11.2
|
Revenue growth from
acquisitions
|
(20,471)
|
|
—
|
|
(20,471)
|
|
—
|
|
(38,039)
|
|
—
|
|
(38,039)
|
|
—
|
Organic
revenues
|
$
693,578
|
|
$ 638,204
|
|
55,374
|
|
8.7
|
|
$
1,266,690
|
|
$
1,173,758
|
|
92,932
|
|
8.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Residential Revenues to Organic Residential Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
revenues
|
$
325,311
|
|
$ 292,945
|
|
32,366
|
|
11.0
|
|
$
584,570
|
|
$
528,124
|
|
56,446
|
|
10.7
|
Residential revenues
from acquisitions
|
(11,625)
|
|
—
|
|
(11,625)
|
|
—
|
|
(21,908)
|
|
—
|
|
(21,908)
|
|
—
|
Residential organic
revenues
|
$
313,686
|
|
$ 292,945
|
|
20,741
|
|
7.0
|
|
$
562,662
|
|
$
528,124
|
|
34,538
|
|
6.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Commercial Revenues to Organic Commercial Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
revenues
|
$
234,483
|
|
$ 210,838
|
|
23,645
|
|
11.2
|
|
$
440,270
|
|
$
399,535
|
|
40,735
|
|
10.2
|
Commercial revenue
growth from acquisitions
|
(3,943)
|
|
—
|
|
(3,943)
|
|
—
|
|
(6,165)
|
|
—
|
|
(6,165)
|
|
—
|
Commercial organic
revenues
|
$
230,540
|
|
$ 210,838
|
|
19,702
|
|
9.3
|
|
$
434,105
|
|
$
399,535
|
|
34,570
|
|
8.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Termite and Ancillary Revenues to Organic Termite and Ancillary
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termite and ancillary
revenues
|
$
146,781
|
|
$ 127,674
|
|
19,107
|
|
15.0
|
|
$
266,487
|
|
$
233,368
|
|
33,119
|
|
14.2
|
Termite and ancillary
revenues from acquisitions
|
(4,903)
|
|
—
|
|
(4,903)
|
|
—
|
|
(9,966)
|
|
—
|
|
(9,966)
|
|
—
|
Termite and ancillary
organic revenues
|
$
141,878
|
|
$ 127,674
|
|
14,204
|
|
11.2
|
|
$
256,521
|
|
$
233,368
|
|
23,153
|
|
9.9
|
For Further Information Contact
Kenneth Krause (404) 888-2242
View original
content:https://www.prnewswire.com/news-releases/rollins-inc-reports-second-quarter-2023-financial-results-301886748.html
SOURCE Rollins, Inc.