Strong Revenue Growth Drives Double-Digit
Increase to Earnings in Fourth Quarter and Full Year
ATLANTA, Feb. 14,
2024 /PRNewswire/ -- Rollins, Inc. (NYSE:ROL)
("Rollins" or the "Company"), a premier global consumer and
commercial services company, reported financial results for the
fourth quarter and full year of 2023.
2023 Fourth Quarter Highlights
(All comparisons against the fourth quarter of 2022 unless
otherwise noted.)
- Revenues increased 14% to $754
million. Organic revenues* increased over 7% and
acquisition-related revenue increased approximately 7%.
- Operating income increased 16% to $139
million. Operating margin increased 30 basis points to 18.4%
of revenue. Adjusted operating income* increased 20% to
$144 million. Adjusted operating
income margin* increased 100 basis points to 19.1% of revenue.
Adjusted EBITDA* increased 14% to $167
million. Adjusted EBITDA margin* was 22.1%, flat versus last
year due to lower non-operational gains included in other income
associated with vehicle and property sales.
- Net income increased 29% to $109
million. Adjusted net income* increased 20% to $101 million.
- EPS increased 29% to $0.22 per
diluted share. Adjusted EPS* increased 24% to $0.21 per diluted share.
- Operating cash flow increased 24% to $153 million. During the quarter, the Company
invested $18 million in acquisitions,
$11 million in capital expenditures,
and paid dividends totaling $73
million.
2023 Full Year Highlights
(All comparisons against the full year 2022 unless otherwise
noted.)
- Revenues increased 14% to $3.1
billion. Organic revenues* increased over 8% while
acquisition-related revenue increased nearly 6%.
- Operating income increased 18% to $583
million. Operating margin increased 70 basis points to 19.0%
of revenue. Adjusted operating income* increased 22% to
$604 million. Adjusted operating
income margin* increased 140 basis points to 19.7%. Adjusted
EBITDA* increased 18% to $698 million
and Adjusted EBITDA margin* was 22.7%, up 70 basis points.
- Net income increased 18% to $435
million. Adjusted net income* increased 19% to $439 million.
- EPS increased 19% to $0.89 per
diluted share. Adjusted EPS* increased 20% to $0.90 per diluted share.
- Operating cash flow increased 13% to $528 million. For the full year, the Company
invested $367 million in
acquisitions, $32 million in capital
expenditures, paid dividends totaling $264
million and repurchased $300
million of its stock.
*Amounts are non-GAAP financial measures. See the schedules
below for a discussion of non-GAAP financial metrics including a
reconciliation of the most closely correlated GAAP measure.
2024 Outlook
For 2024, the Company anticipates:
- The underlying health of core pest control markets, as well as
Rollins' ongoing commitment to operational execution, should
support another year of strong organic growth, further complemented
by a strategic and disciplined approach to acquisitions.
- A focus on pricing, ongoing modernization efforts, and a
culture of continuous improvement should support healthy
incremental margins.
- Compounding cash flow and strong balance sheet should continue
to enable a balanced capital allocation strategy.
Management Commentary
"Our team delivered a strong finish in the fourth quarter as we
achieved record revenue and a healthy margin profile for the full
year," said Jerry Gahlhoff, Jr.,
President and CEO. "Organic growth remains strong while we continue
to be active on the acquisition front. As we look to 2024, demand
for our services is solid and our pipeline for acquisitions is
robust. We are well positioned for continued growth and remain
focused on continuous improvement initiatives to enhance
profitability across our business" Mr. Gahlhoff added.
"It was encouraging to see the strong quarterly and full year
growth in revenue, cash flow and profitability. We delivered
double-digit revenue and cash flow growth, as well a 70 basis point
improvement in operating margins for 2023," said Kenneth Krause, Executive Vice President, CFO
and Treasurer. "Additionally, we continued to execute a balanced
capital allocation program, deploying nearly $1 billion of capital in 2023, with a focus on
investing for growth while returning cash to shareholders through a
growing dividend and share repurchases," Mr. Krause concluded.
|
Three and Twelve
Months Ended Financial Highlights
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
|
|
|
|
Variance
|
|
|
|
|
|
Variance
|
|
(in thousands, except
per share data and margins)
|
2023
|
|
2022
|
|
$
|
%
|
|
2023
|
|
2022
|
|
$
|
%
|
|
GAAP
Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
754,086
|
|
$ 661,390
|
|
$
92,696
|
14.0 %
|
|
$
3,073,278
|
|
$
2,695,823
|
|
$
377,455
|
14.0 %
|
|
Gross profit
(1)
|
$
383,781
|
|
$ 333,777
|
|
$
50,004
|
15.0 %
|
|
$
1,603,407
|
|
$
1,387,424
|
|
$
215,983
|
15.6 %
|
|
Gross profit margin
(1)
|
50.9 %
|
|
50.5 %
|
|
40 bps
|
|
|
52.2 %
|
|
51.5 %
|
|
70 bps
|
|
|
Operating
income
|
$
139,073
|
|
$ 119,916
|
|
$
19,157
|
16.0 %
|
|
$
583,226
|
|
$
493,388
|
|
$
89,838
|
18.2 %
|
|
Operating income
margin
|
18.4 %
|
|
18.1 %
|
|
30 bps
|
|
|
19.0 %
|
|
18.3 %
|
|
70 bps
|
|
|
Net income
|
$
108,803
|
|
$
84,269
|
|
$
24,534
|
29.1 %
|
|
$
434,957
|
|
$
368,599
|
|
$
66,358
|
18.0 %
|
|
EPS
|
$
0.22
|
|
$ 0.17
|
|
$ 0.05
|
29.4 %
|
|
$
0.89
|
|
$
0.75
|
|
$
0.14
|
18.7 %
|
|
Operating cash
flow
|
$
152,825
|
|
$ 123,392
|
|
$
29,433
|
23.9 %
|
|
$
528,366
|
|
$
465,930
|
|
$
62,436
|
13.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (2)
|
$
144,339
|
|
$ 119,916
|
|
$
24,423
|
20.4 %
|
|
$
604,217
|
|
$
493,388
|
|
$
110,829
|
22.5 %
|
|
Adjusted operating
margin (2)
|
19.1 %
|
|
18.1 %
|
|
100 bps
|
|
|
19.7 %
|
|
18.3 %
|
|
140 bps
|
|
|
Adjusted net income
(2)
|
$
101,226
|
|
$
84,269
|
|
$
16,957
|
20.1 %
|
|
$
439,080
|
|
$
368,599
|
|
$
70,481
|
19.1 %
|
|
Adjusted EPS
(2)
|
$
0.21
|
|
$ 0.17
|
|
$ 0.04
|
23.5 %
|
|
$
0.90
|
|
$
0.75
|
|
$
0.15
|
20.0 %
|
|
Adjusted EBITDA
(2)
|
$
166,676
|
|
$ 145,946
|
|
$
20,730
|
14.2 %
|
|
$
697,958
|
|
$
592,881
|
|
$
105,077
|
17.7 %
|
|
Adjusted EBITDA margin
(2)
|
22.1 %
|
|
22.1 %
|
|
0 bps
|
|
|
22.7 %
|
|
22.0 %
|
|
70 bps
|
|
|
Free cash flow
(2)
|
$
141,639
|
|
$ 115,685
|
|
$
25,954
|
22.4 %
|
|
$
495,901
|
|
$
435,302
|
|
$
60,599
|
13.9 %
|
|
|
(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.
FORWARD-LOOKING STATEMENTS
Statements made in this press release and on our earnings
call contain "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995 that involve risks and
uncertainties concerning the business and financial results of
Rollins, Inc. 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. The words "may," "should," "will,"
"expect," "believe," "anticipate," "intend," "seek," "project,"
"estimate," "focus," "plan," "continue," "likely," "design,"
"strategies," "outlook," "trend," the negative of such terms and
different forms thereof (e.g., different tenses or number or
principle parts, as well as gerunds and other parts of speech such
as adjectives, adverbs and nouns derived therefrom), and similar
expressions generally identify forward-looking statements.
Such forward-looking statements include, but are not limited
to, statements regarding the Company's belief that: the underlying
health of core pest control markets as well as Rollins' ongoing
commitment to operational execution, further complemented by a
strategic and disciplined approach to acquisitions, will support
another year of strong organic growth, that organic growth remains
strong, the Company will continue to focus on a strategic and
disciplined approach to acquisitions, the Company's focus on
pricing, modernization efforts and a culture of continuous
improvement should support healthy incremental margins, the
Company's compounding cash flow and strong balance sheet should
continue to enable a balanced capital allocation strategy, the
demand for the Company's services is solid, the Company's pipeline
for acquisitions remains robust, the Company remains well
positioned for continued growth, and the Company is focused on
continuous improvement initiatives that will enhance
profitability.
Forward-looking statements are based on information available
at the time those statements are made. These statements are not
guarantees of future performance and are subject to risks and
uncertainties 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. These risks and uncertainties include,
but are not limited to, those described in Item 1A "Risk Factors"
of Part I and elsewhere in our Annual Report on Form 10-K for our
fiscal year ended December 31, 2023
and December 31, 2022 and may also be
described from time to time in our other reports filed with the
SEC. You should not rely on our forward-looking statements. The
Company does not undertake to update its forward-looking
statements.
Conference Call
Rollins will host a conference call on Thursday, February 15, 2024, at 8:30 a.m. Eastern Time to discuss the fourth
quarter and full year 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 13743546.
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)
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
$
103,825
|
|
$
95,346
|
|
Trade receivables,
net
|
178,214
|
|
155,759
|
|
Financed receivables,
short-term, net
|
37,025
|
|
33,618
|
|
Materials and
supplies
|
33,383
|
|
29,745
|
|
Other current
assets
|
54,192
|
|
34,151
|
|
Total current
assets
|
406,639
|
|
348,619
|
|
Equipment and property,
net
|
126,661
|
|
128,046
|
|
Goodwill
|
1,070,310
|
|
846,704
|
|
Intangibles,
net
|
545,734
|
|
418,748
|
|
Operating lease
right-of-use assets
|
323,390
|
|
277,355
|
|
Financed receivables,
long-term, net
|
75,909
|
|
63,523
|
|
Other assets
|
46,817
|
|
39,033
|
|
Total
assets
|
$
2,595,460
|
|
$
2,122,028
|
|
LIABILITIES
|
|
|
|
|
Accounts
payable
|
49,200
|
|
42,796
|
|
Accrued insurance –
current
|
46,807
|
|
39,534
|
|
Accrued compensation
and related liabilities
|
114,355
|
|
99,251
|
|
Unearned
revenues
|
172,380
|
|
158,092
|
|
Operating lease
liabilities – current
|
92,203
|
|
84,543
|
|
Current portion of
long-term debt
|
—
|
|
15,000
|
|
Other current
liabilities
|
101,744
|
|
54,568
|
|
Total current
liabilities
|
576,689
|
|
493,784
|
|
Accrued insurance, less
current portion
|
48,060
|
|
38,350
|
|
Operating lease
liabilities, less current portion
|
233,369
|
|
196,888
|
|
Long-term
debt
|
490,776
|
|
39,898
|
|
Other long-term accrued
liabilities
|
90,999
|
|
85,911
|
|
Total
liabilities
|
1,439,893
|
|
854,831
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
Common stock
|
484,080
|
|
492,448
|
|
Retained earnings and
other equity
|
671,487
|
|
774,749
|
|
Total stockholders'
equity
|
1,155,567
|
|
1,267,197
|
|
Total liabilities
and stockholders' equity
|
$
2,595,460
|
|
$
2,122,028
|
|
ROLLINS, INC. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(in thousands except
per share data)
(unaudited)
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
REVENUES
|
|
|
|
|
|
|
|
|
Customer
services
|
$
754,086
|
|
$
661,390
|
|
$
3,073,278
|
|
$
2,695,823
|
|
COSTS AND
EXPENSES
|
|
|
|
|
|
|
|
|
Cost of services
provided (exclusive of depreciation and amortization
below)
|
370,305
|
|
327,613
|
|
1,469,871
|
|
1,308,399
|
|
Sales, general and
administrative
|
218,565
|
|
190,828
|
|
915,233
|
|
802,710
|
|
Restructuring
costs
|
—
|
|
—
|
|
5,196
|
|
—
|
|
Depreciation and
amortization
|
26,143
|
|
23,033
|
|
99,752
|
|
91,326
|
|
Total operating
expenses
|
615,013
|
|
541,474
|
|
2,490,052
|
|
2,202,435
|
|
OPERATING
INCOME
|
139,073
|
|
119,916
|
|
583,226
|
|
493,388
|
|
Interest expense,
net
|
8,258
|
|
344
|
|
19,055
|
|
2,638
|
|
Other income,
net
|
(15,860)
|
|
(2,997)
|
|
(22,086)
|
|
(8,167)
|
|
CONSOLIDATED INCOME
BEFORE INCOME TAXES
|
146,675
|
|
122,569
|
|
586,257
|
|
498,917
|
|
PROVISION FOR INCOME
TAXES
|
37,872
|
|
38,300
|
|
151,300
|
|
130,318
|
|
NET
INCOME
|
$
108,803
|
|
$
84,269
|
|
$
434,957
|
|
$
368,599
|
|
NET INCOME PER SHARE
- BASIC AND DILUTED
|
$
0.22
|
|
$
0.17
|
|
$
0.89
|
|
$
0.75
|
|
Weighted average shares
outstanding - basic
|
483,922
|
|
492,344
|
|
489,949
|
|
492,300
|
|
Weighted average shares
outstanding - diluted
|
484,112
|
|
492,457
|
|
490,130
|
|
492,413
|
|
DIVIDENDS PAID PER
SHARE
|
$
0.15
|
|
$
0.13
|
|
$
0.54
|
|
$
0.43
|
|
ROLLINS, INC. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATED CASH FLOW INFORMATION
(in
thousands)
(unaudited)
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Net income
|
$
108,803
|
|
$
84,269
|
|
$
434,957
|
|
$
368,599
|
|
Depreciation and
amortization
|
26,143
|
|
23,033
|
|
99,752
|
|
91,326
|
|
Change in working
capital and other operating activities
|
17,879
|
|
16,090
|
|
(6,343)
|
|
6,005
|
|
Net cash provided by
operating activities
|
152,825
|
|
123,392
|
|
528,366
|
|
465,930
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Acquisitions, net of
cash acquired
|
(17,542)
|
|
(8,770)
|
|
(366,854)
|
|
(119,188)
|
|
Capital
expenditures
|
(11,186)
|
|
(7,707)
|
|
(32,465)
|
|
(30,628)
|
|
Other investing
activities, net
|
18,167
|
|
5,714
|
|
26,424
|
|
15,675
|
|
Net cash used in
investing activities
|
(10,561)
|
|
(10,763)
|
|
(372,895)
|
|
(134,141)
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Net debt (repayments)
borrowings
|
(106,000)
|
|
(70,000)
|
|
438,000
|
|
(100,000)
|
|
Payment of
dividends
|
(72,543)
|
|
(63,982)
|
|
(264,348)
|
|
(211,618)
|
|
Other financing
activities, net
|
(4,620)
|
|
(5,750)
|
|
(323,072)
|
|
(24,399)
|
|
Net cash used in
financing activities
|
(183,163)
|
|
(139,732)
|
|
(149,420)
|
|
(336,017)
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
2,477
|
|
572
|
|
2,428
|
|
(5,727)
|
|
Net (decrease) increase
in cash and cash equivalents
|
$
(38,422)
|
|
$
(26,531)
|
|
$
8,479
|
|
$
(9,955)
|
|
|
|
|
|
|
|
|
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 the revenue
from acquisitions completed within the prior 12 months and
excluding the revenue from divested businesses. 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 and restructuring costs related to
restructuring and workforce reduction plans. Adjusted EBITDA and
adjusted EBITDA margin are calculated by adding back to net income
charges for interest, taxes, depreciation and amortization, as well
as those expenses resulting from the adjustments to the fair value
of contingent consideration resulting from the acquisition of Fox
Pest Control, restructuring costs related to restructuring and
workforce reduction plans, and gains on the sale of businesses.
Incremental EBITDA margin is calculated as the change in EBITDA
divided by the change in revenue. Adjusted incremental EBITDA
margin is calculated as the change in adjusted EBITDA divided by
the change in revenue. Adjusted net income and adjusted EPS are
calculated by adding back those acquisition-related expenses,
restructuring costs, and gains on the sale of businesses to the
GAAP measures and by further subtracting the tax impact of those
expenses and/or gains. Free cash flow is calculated by subtracting
capital expenditures from cash provided by operating activities.
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. 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 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 comparable
GAAP measures.
|
(unaudited, in
thousands, except per share data and margins)
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
|
|
|
|
Variance
|
|
|
|
|
|
Variance
|
|
2023
|
|
2022
|
|
$
|
|
%
|
|
2023
|
|
2022
|
|
$
|
|
%
|
|
Reconciliation of
Operating Income to Adjusted Operating Income and Adjusted
Operating Income Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
$
139,073
|
|
$
119,916
|
|
|
|
|
|
$
583,226
|
|
$
493,388
|
|
|
|
|
|
Fox acquisition-related
expenses (1)
|
5,266
|
|
—
|
|
|
|
|
|
15,795
|
|
—
|
|
|
|
|
|
Restructuring costs
(2)
|
—
|
|
—
|
|
|
|
|
|
5,196
|
|
—
|
|
|
|
|
|
Adjusted operating
income
|
$
144,339
|
|
$
119,916
|
|
24,423
|
|
20.4
|
|
$
604,217
|
|
$
493,388
|
|
110,829
|
|
22.5
|
|
Revenues
|
$
754,086
|
|
$
661,390
|
|
|
|
|
|
$
3,073,278
|
|
$
2,695,823
|
|
|
|
|
|
Operating income
margin
|
18.4 %
|
|
18.1 %
|
|
|
|
|
|
19.0 %
|
|
18.3 %
|
|
|
|
|
|
Adjusted operating
margin
|
19.1 %
|
|
18.1 %
|
|
|
|
|
|
19.7 %
|
|
18.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Income to Adjusted Net Income and Adjusted EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
108,803
|
|
$
84,269
|
|
|
|
|
|
$
434,957
|
|
$
368,599
|
|
|
|
|
|
Fox acquisition-related
expenses (1)
|
5,266
|
|
—
|
|
|
|
|
|
15,795
|
|
—
|
|
|
|
|
|
Restructuring costs
(2)
|
—
|
|
—
|
|
|
|
|
|
5,196
|
|
—
|
|
|
|
|
|
Gain on sale of
businesses (3)
|
(15,450)
|
|
—
|
|
|
|
|
|
(15,450)
|
|
—
|
|
|
|
|
|
Tax impact of
adjustments (4)
|
2,607
|
|
—
|
|
|
|
|
|
(1,418)
|
|
—
|
|
|
|
|
|
Adjusted net
income
|
$
101,226
|
|
$
84,269
|
|
16,957
|
|
20.1
|
|
$
439,080
|
|
$
368,599
|
|
70,481
|
|
19.1
|
|
EPS - basic and
diluted
|
$
0.22
|
|
$
0.17
|
|
|
|
|
|
$
0.89
|
|
$
0.75
|
|
|
|
|
|
Fox acquisition-related
expenses (1)
|
0.01
|
|
—
|
|
|
|
|
|
0.03
|
|
—
|
|
|
|
|
|
Restructuring costs
(2)
|
—
|
|
—
|
|
|
|
|
|
0.01
|
|
—
|
|
|
|
|
|
Gain on sale of
businesses (3)
|
(0.03)
|
|
—
|
|
|
|
|
|
(0.03)
|
|
—
|
|
|
|
|
|
Tax impact of
adjustments (4)
|
0.01
|
|
—
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|
Adjusted EPS - basic
and diluted (5)
|
$
0.21
|
|
$
0.17
|
|
0.04
|
|
23.5
|
|
$
0.90
|
|
$
0.75
|
|
0.15
|
|
20.0
|
|
Weighted average shares
outstanding - basic
|
483,922
|
|
492,344
|
|
|
|
|
|
489,949
|
|
492,300
|
|
|
|
|
|
Weighted average shares
outstanding - diluted
|
484,112
|
|
492,457
|
|
|
|
|
|
490,130
|
|
492,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Income to EBITDA, Adjusted EBITDA, EBITDA Margin, Incremental
EBITDA Margin, Adjusted EBITDA Margin, and Adjusted Incremental
EBITDA Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
108,803
|
|
$
84,269
|
|
|
|
|
|
$
434,957
|
|
$
368,599
|
|
|
|
|
|
Depreciation and
amortization
|
26,143
|
|
23,033
|
|
|
|
|
|
99,752
|
|
91,326
|
|
|
|
|
|
Interest expense,
net
|
8,258
|
|
344
|
|
|
|
|
|
19,055
|
|
2,638
|
|
|
|
|
|
Provision for income
taxes
|
37,872
|
|
38,300
|
|
|
|
|
|
151,300
|
|
130,318
|
|
|
|
|
|
EBITDA
|
$
181,076
|
|
$
145,946
|
|
35,130
|
|
24.1
|
|
$
705,064
|
|
$
592,881
|
|
112,183
|
|
18.9
|
|
Fox acquisition-related
expenses (1)
|
1,050
|
|
—
|
|
|
|
|
|
3,148
|
|
—
|
|
|
|
|
|
Restructuring costs
(2)
|
—
|
|
—
|
|
|
|
|
|
5,196
|
|
—
|
|
|
|
|
|
Gain on sale of
businesses (3)
|
(15,450)
|
|
—
|
|
|
|
|
|
(15,450)
|
|
—
|
|
|
|
|
|
Adjusted
EBITDA
|
$
166,676
|
|
$
145,946
|
|
20,730
|
|
14.2
|
|
$
697,958
|
|
$
592,881
|
|
105,077
|
|
17.7
|
|
Revenues
|
$
754,086
|
|
$
661,390
|
|
92,696
|
|
|
|
$
3,073,278
|
|
$
2,695,823
|
|
377,455
|
|
|
|
EBITDA
margin
|
24.0 %
|
|
22.1 %
|
|
|
|
|
|
22.9 %
|
|
22.0 %
|
|
|
|
|
|
Incremental EBITDA
margin
|
|
|
|
|
37.9 %
|
|
|
|
|
|
|
|
29.7 %
|
|
|
|
Adjusted EBITDA
margin
|
22.1 %
|
|
22.1 %
|
|
|
|
|
|
22.7 %
|
|
22.0 %
|
|
|
|
|
|
Adjusted incremental
EBITDA margin
|
|
|
|
|
22.4 %
|
|
|
|
|
|
|
|
27.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Cash Provided by Operating Activities to Free Cash
Flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
152,825
|
|
$
123,392
|
|
|
|
|
|
$
528,366
|
|
$
465,930
|
|
|
|
|
|
Capital
expenditures
|
(11,186)
|
|
(7,707)
|
|
|
|
|
|
(32,465)
|
|
(30,628)
|
|
|
|
|
|
Free cash
flow
|
$
141,639
|
|
$
115,685
|
|
25,954
|
|
22.4
|
|
$
495,901
|
|
$
435,302
|
|
60,599
|
|
13.9
|
|
|
(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.
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) Restructuring
costs consist of costs primarily related to severance and benefits
paid to employees pursuant to restructuring and workforce reduction
plans.
|
|
|
(3) Represents the gain
on the sale of certain non-core businesses.
|
|
|
(4) The tax effect of
the adjustments is calculated using the applicable statutory tax
rates for the respective periods.
|
|
|
(5) In some cases, the
sum of the individual EPS amounts may not equal total non-GAAP EPS
calculations due to rounding.
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
|
|
|
|
Variance
|
|
|
|
|
|
Variance
|
|
2023
|
|
2022
(6)
|
|
$
|
|
%
|
|
2023
|
|
2022
(6)
|
|
$
|
|
%
|
|
Reconciliation of
Revenues to Organic Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
754,086
|
|
$ 661,390
|
|
92,696
|
|
14.0
|
|
$
3,073,278
|
|
$
2,695,823
|
|
377,455
|
|
14.0
|
|
Revenues from
acquisitions
|
(45,646)
|
|
—
|
|
(45,646)
|
|
—
|
|
(159,919)
|
|
—
|
|
(159,919)
|
|
—
|
|
Revenues of
divestitures
|
—
|
|
(1,474)
|
|
1,474
|
|
—
|
|
—
|
|
(1,474)
|
|
1,474
|
|
—
|
|
Organic
revenues
|
$
708,440
|
|
$ 659,916
|
|
48,524
|
|
7.3
|
|
$
2,913,359
|
|
$
2,694,349
|
|
219,010
|
|
8.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Residential Revenues to Organic Residential Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
revenues
|
$
340,469
|
|
$ 289,299
|
|
51,170
|
|
17.7
|
|
$
1,409,872
|
|
$
1,207,089
|
|
202,783
|
|
16.8
|
|
Residential revenues
from acquisitions
|
(38,410)
|
|
—
|
|
(38,410)
|
|
—
|
|
(129,476)
|
|
—
|
|
(129,476)
|
|
—
|
|
Residential revenues of
divestitures
|
—
|
|
(958)
|
|
958
|
|
—
|
|
—
|
|
(958)
|
|
958
|
|
—
|
|
Residential organic
revenues
|
$
302,059
|
|
$ 288,341
|
|
13,718
|
|
4.7
|
|
$
1,280,396
|
|
$
1,206,131
|
|
74,265
|
|
6.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Commercial Revenues to Organic Commercial Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
revenues
|
$
256,704
|
|
$ 232,101
|
|
24,603
|
|
10.6
|
|
$
1,024,176
|
|
$
920,625
|
|
103,551
|
|
11.2
|
|
Commercial revenues
from acquisitions
|
(4,417)
|
|
—
|
|
(4,417)
|
|
—
|
|
(15,105)
|
|
—
|
|
(15,105)
|
|
—
|
|
Commercial revenues of
divestitures
|
—
|
|
(516)
|
|
516
|
|
—
|
|
—
|
|
(516)
|
|
516
|
|
—
|
|
Commercial organic
revenues
|
$
252,287
|
|
$ 231,585
|
|
20,702
|
|
8.9
|
|
$
1,009,071
|
|
$
920,109
|
|
88,962
|
|
9.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Termite and Ancillary Revenues to Organic Termite and Ancillary
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termite and ancillary
revenues
|
$
147,868
|
|
$ 130,404
|
|
17,464
|
|
13.4
|
|
$
605,533
|
|
$
535,494
|
|
70,039
|
|
13.1
|
|
Termite and ancillary
revenues from acquisitions
|
(2,819)
|
|
—
|
|
(2,819)
|
|
—
|
|
(15,338)
|
|
—
|
|
(15,338)
|
|
—
|
|
Termite and ancillary
organic revenues
|
$
145,049
|
|
$ 130,404
|
|
14,645
|
|
11.2
|
|
$
590,195
|
|
$
535,494
|
|
54,701
|
|
10.2
|
|
|
(6) Subsequent to the
issuance of the Company's 2022 financial statements, management
determined that certain immaterial reclassifications within the
product and service offerings were required for the years ended
December 31, 2022 and 2021. Revenues classified by significant
product and service offerings for the years ended December 31, 2022
and 2021 have been restated from the amounts previously reported to
correct the classification of such revenues. There was no impact on
our consolidated statements of income, financial position, or cash
flows.
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
|
|
|
|
Variance
|
|
|
|
|
|
Variance
|
|
2022
(6)
|
|
2021
(6)
|
|
$
|
|
%
|
|
2022
(6)
|
|
2021
(6)
|
|
$
|
|
%
|
|
Reconciliation of
Revenues to Organic Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
661,390
|
|
$ 600,343
|
|
61,047
|
|
10.2
|
|
$
2,695,823
|
|
$
2,424,300
|
|
271,523
|
|
11.2
|
|
Revenues from
acquisitions
|
(19,743)
|
|
—
|
|
(19,743)
|
|
—
|
|
(81,490)
|
|
—
|
|
(81,490)
|
|
—
|
|
Organic
revenues
|
$
641,647
|
|
$ 600,343
|
|
41,304
|
|
6.9
|
|
$
2,614,333
|
|
$
2,424,300
|
|
190,033
|
|
7.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Residential Revenues to Organic Residential Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
revenues
|
$
289,299
|
|
$ 267,112
|
|
22,187
|
|
8.3
|
|
$
1,207,089
|
|
$
1,099,360
|
|
107,729
|
|
9.8
|
|
Residential revenues
from acquisitions
|
(11,057)
|
|
—
|
|
(11,057)
|
|
—
|
|
(46,873)
|
|
—
|
|
(46,873)
|
|
—
|
|
Residential organic
revenues
|
$
278,242
|
|
$ 267,112
|
|
11,130
|
|
4.2
|
|
$
1,160,216
|
|
$
1,099,360
|
|
60,856
|
|
5.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Commercial Revenues to Organic Commercial Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
revenues
|
$
232,101
|
|
$ 212,146
|
|
19,955
|
|
9.4
|
|
$
920,625
|
|
$
834,624
|
|
86,001
|
|
10.3
|
|
Commercial revenues
from acquisitions
|
(3,855)
|
|
—
|
|
(3,855)
|
|
—
|
|
(13,713)
|
|
—
|
|
(13,713)
|
|
—
|
|
Commercial organic
revenues
|
$
228,246
|
|
$ 212,146
|
|
16,100
|
|
7.6
|
|
$
906,912
|
|
$
834,624
|
|
72,288
|
|
8.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Termite and Ancillary Revenues to Organic Termite and Ancillary
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termite and ancillary
revenues
|
$
130,404
|
|
$ 114,014
|
|
16,390
|
|
14.4
|
|
$
535,494
|
|
$
464,043
|
|
71,451
|
|
15.4
|
|
Termite and ancillary
revenues from acquisitions
|
(4,831)
|
|
—
|
|
(4,831)
|
|
—
|
|
(20,904)
|
|
—
|
|
(20,904)
|
|
—
|
|
Termite and ancillary
organic revenues
|
$
125,573
|
|
$ 114,014
|
|
11,559
|
|
10.2
|
|
$
514,590
|
|
$
464,043
|
|
50,547
|
|
10.9
|
For Further Information Contact
Lyndsey Burton (404) 888-2348
View original content to download
multimedia:https://www.prnewswire.com/news-releases/rollins-inc-reports-fourth-quarter-and-full-year-2023-financial-results-302062269.html
SOURCE ROLLINS, INC.