Rollins Inc.

10/23/2024 | Press release | Archived content

ROLLINS, INC. REPORTS THIRD QUARTER 2024 FINANCIAL RESULTS

ROLLINS, INC. REPORTS THIRD QUARTER 2024 FINANCIAL RESULTS

October 23, 2024 4:05pm EDT Download as PDF

Investing in Growth to Capitalize on Healthy Market

ATLANTA, Oct. 23, 2024/PRNewswire/ -- Rollins, Inc. (NYSE:ROL) ("Rollins" or the "Company"), a premier global consumer and commercial services company, reported unaudited financial results for the third quarter of 2024.

Key Highlights

  • Third quarter revenues were $916 million, an increase of 9.0% over the third quarter of 2023 with organic revenues* increasing 7.7%.

  • Quarterly operating income was $192 million, an increase of 8.3% over the third quarter of 2023. Quarterly operating margin was 20.9%, a decrease of 20 basis points versus the third quarter of 2023. Adjusted operating income* was $196 million, an increase of 4.5% over the prior year. Adjusted operating income margin* was 21.4%, a decrease of 90 basis points compared to the prior year.

  • Adjusted EBITDA* was $219 million, an increase of 5.5% over the prior year. Adjusted EBITDA margin* was 24.0%, a decrease of 80 basis points versus the third quarter of 2023.

  • Quarterly net income was $137 million, an increase of 7.1% over the prior year. Adjusted net income* was $140 million, an increase of 3.3% over the prior year.

  • Quarterly EPS was $0.28 per diluted share, a 7.7% increase over the prior year EPS of $0.26. Adjusted EPS* was $0.29 per diluted share, an increase of 3.6% over the prior year.

  • Operating cash flow was $147 million for the quarter, an increase of 15.4% compared to the prior year. The Company invested $24 million in acquisitions, $8 million in capital expenditures, and paid dividends totaling $73 million.

*Amounts are non-GAAP financial measures. See the schedules below for a discussion of non-GAAP financial metrics including a reconciliation of the most directly comparable GAAP measure.

Management Commentary

"Our team delivered a strong third quarter with organic revenue growth of 7.7 percent, at the high end of the 7 percent to 8 percent range that we have discussed for the year, despite some disruption to operations from Hurricane Helene that occurred during the last week of the quarter," said Jerry Gahlhoff, Jr., President and CEO. "Our thoughts are with all of those that have been impacted by recent hurricanes. Our teams have worked together to support our teammates and communities in the aftermath of these natural disasters, and our efforts will continue in the days, weeks, and months ahead. I would like to thank our team for their ongoing commitment to our customers and to each other," Mr. Gahlhoff added.

"We continue to invest in our team and other resources aimed at capitalizing on a healthy market environment to drive further growth in our business," said Kenneth Krause, Executive Vice President and CFO. "The 20 basis points of leverage in our gross margin was offset by growth investments that tempered our overall margin performance in the quarter but will support our long-term objectives. We are on track to deliver healthy margin improvement and double-digit earnings growth for the year," Mr. Krause concluded.

Board Leadership Transition

Additionally, today the Company announces that effective January 1, 2025, Gary W. Rollins, 80, will transition from Executive Chairman of the Board to Executive Chairman Emeritus in accordance with its long-planned leadership succession goals. Gary will be succeeded by John F. Wilson, the current Vice Chairman, as Executive Chairman of the Board.

"I have had the pleasure of working closely with John since he joined our Company in 1996. I look forward to supporting him as he transitions to this important leadership role, as I will remain an active and engaged member of our exceptional Board of Directors," said Gary W. Rollins, Executive Chairman of the Board.

"On behalf of the Board of Directors, we congratulate John on his new role and look forward to working with him, Gary, and the entire management team as we guide the business into its next phase of growth," said Louise S. Sams, the Company's Lead Independent Director.

Three and Nine Months Ended Financial Highlights

Three Months Ended September 30,

Nine Months Ended September 30,

Variance

Variance

(in thousands, except per share data)

2024

2023

$

%

2024

2023

$

%

GAAP Metrics

Revenues

$ 916,270

$ 840,427

$ 75,843

9.0 %

$ 2,556,539

$ 2,319,192

$ 237,347

10.2 %

Gross profit (1)

$ 494,378

$ 451,894

$ 42,484

9.4 %

$ 1,358,804

$ 1,219,626

$ 139,178

11.4 %

Gross profit margin (1)

54.0 %

53.8 %

20 bps

53.2 %

52.6 %

60 bps

Operating income

$ 191,796

$ 177,124

$ 14,672

8.3 %

$ 506,597

$ 444,153

$ 62,444

14.1 %

Operating income margin

20.9 %

21.1 %

(20) bps

19.8 %

19.2 %

60 bps

Net income

$ 136,913

$ 127,777

$ 9,136

7.1 %

$ 360,704

$ 326,154

$ 34,550

10.6 %

EPS

$ 0.28

$ 0.26

$ 0.02

7.7 %

$ 0.74

$ 0.66

$ 0.08

12.1 %

Operating cash flow

$ 146,947

$ 127,355

$ 19,592

15.4 %

$ 419,495

$ 375,541

$ 43,954

11.7 %

Non-GAAP Metrics

Adjusted operating income (2)

$ 196,012

$ 187,582

$ 8,430

4.5 %

$ 520,286

$ 459,872

$ 60,414

13.1 %

Adjusted operating margin (2)

21.4 %

22.3 %

(90) bps

20.4 %

19.8 %

60 bps

Adjusted net income (2)

$ 139,617

$ 135,191

$ 4,426

3.3 %

$ 370,194

$ 333,217

$ 36,977

11.1 %

Adjusted EPS (2)

$ 0.29

$ 0.28

$ 0.01

3.6 %

$ 0.76

$ 0.68

$ 0.08

11.8 %

Adjusted EBITDA (2)

$ 219,460

$ 208,038

$ 11,422

5.5 %

$ 590,331

$ 525,055

$ 65,276

12.4 %

Adjusted EBITDA margin (2)

24.0 %

24.8 %

(80) bps

23.1 %

22.6 %

50 bps

Free cash flow (2)

$ 139,425

$ 120,487

$ 18,938

15.7 %

$ 396,106

$ 354,262

$ 41,844

11.8 %

(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 directly comparable 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 20,000 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.

Cautionary Statement Regarding Forward-Looking Statements
This press release as well as other written or oral statements by the Company may contain "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current opinions, expectations, intentions, beliefs, plans, objectives, assumptions and projections about future events and financial trends affecting the operating results and financial condition of our business. Although we believe that these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions, or expectations. Generally, statements that do not relate to historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. The words "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "possible," "potential," "predict," "should," "will," "would," and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this press release include, but are not limited to, statements regarding: expectations with respect to our financial and business performance; demand for our services; expected growth; continuing to invest in our team and other resources aimed at capitalizing on a healthy market environment; and the Board leadership transition.

These forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts, and assumptions, and involve a number of judgments, risks and uncertainties. Important factors could cause actual results to differ materially from those indicated or implied by forward-looking statements including, but not limited to, those set forth in the sections entitled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and may also be described from time to time in our future reports filed with the SEC.

Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required by law.

Conference Call
Rollins will host a conference call on Thursday, October 24, 2024 at 8:30 a.m. Eastern Time to discuss the third quarter 2024 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 13749018. 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)

September 30,
2024

December 31,
2023

ASSETS

Cash and cash equivalents

$ 95,282

$ 103,825

Trade receivables, net

226,452

178,214

Financed receivables, short-term, net

39,289

37,025

Materials and supplies

39,283

33,383

Other current assets

86,196

54,192

Total current assets

486,502

406,639

Equipment and property, net

129,168

126,661

Goodwill

1,135,122

1,070,310

Intangibles, net

540,721

545,734

Operating lease right-of-use assets

391,626

323,390

Financed receivables, long-term, net

87,880

75,909

Other assets

45,179

46,817

Total assets

$ 2,816,198

$ 2,595,460

LIABILITIES

Accounts payable

$ 58,217

$ 49,200

Accrued insurance - current

50,106

46,807

Accrued compensation and related liabilities

108,227

114,355

Unearned revenues

201,909

172,380

Operating lease liabilities - current

113,727

92,203

Other current liabilities

89,882

101,744

Total current liabilities

622,068

576,689

Accrued insurance, less current portion

57,510

48,060

Operating lease liabilities, less current portion

280,555

233,369

Long-term debt

445,176

490,776

Other long-term accrued liabilities

93,112

90,999

Total liabilities

1,498,421

1,439,893

STOCKHOLDERS' EQUITY

Common stock

484,306

484,080

Retained earnings and other equity

833,471

671,487

Total stockholders' equity

1,317,777

1,155,567

Total liabilities and stockholders' equity

$ 2,816,198

$ 2,595,460

ROLLINS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands except per share data)

(unaudited)

Three Months Ended September
30,

Nine Months Ended September
30,

2024

2023

2024

2023

REVENUES

Customer services

$ 916,270

$ 840,427

$ 2,556,539

$ 2,319,192

COSTS AND EXPENSES

Cost of services provided (exclusive of depreciation and amortization below)

421,892

388,533

1,197,735

1,099,566

Sales, general and administrative

274,918

244,906

769,522

696,668

Restructuring costs

-

5,196

-

5,196

Depreciation and amortization

27,664

24,668

82,685

73,609

Total operating expenses

724,474

663,303

2,049,942

1,875,039

OPERATING INCOME

191,796

177,124

506,597

444,153

Interest expense, net

7,150

5,547

22,650

10,797

Other income, net

(582)

(493)

(933)

(6,226)

CONSOLIDATED INCOME BEFORE INCOME TAXES

185,228

172,070

484,880

439,582

PROVISION FOR INCOME TAXES

48,315

44,293

124,176

113,428

NET INCOME

$ 136,913

$ 127,777

$ 360,704

$ 326,154

NET INCOME PER SHARE - BASIC AND DILUTED

$ 0.28

$ 0.26

$ 0.74

$ 0.66

Weighted average shares outstanding - basic

484,317

490,775

484,231

491,980

Weighted average shares outstanding - diluted

484,359

490,965

484,270

492,158

DIVIDENDS PAID PER SHARE

$ 0.15

$ 0.13

$ 0.45

$ 0.39

ROLLINS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED CASH FLOW INFORMATION

(in thousands)

(unaudited)

Three Months Ended September
30,

Nine Months Ended September
30,

2024

2023

2024

2023

OPERATING ACTIVITIES

Net income

$ 136,913

$ 127,777

$ 360,704

$ 326,154

Depreciation and amortization

27,664

24,668

82,685

73,609

Change in working capital and other operating activities

(17,630)

(25,090)

(23,894)

(24,222)

Net cash provided by operating activities

146,947

127,355

419,495

375,541

INVESTING ACTIVITIES

Acquisitions, net of cash acquired

(23,875)

(21,420)

(105,529)

(349,312)

Capital expenditures

(7,522)

(6,868)

(23,389)

(21,279)

Other investing activities, net

1,458

(2,424)

5,358

8,257

Net cash used in investing activities

(29,939)

(30,712)

(123,560)

(362,334)

FINANCING ACTIVITIES

Net (repayments) borrowings

(57,000)

259,000

(46,000)

544,000

Payment of dividends

(72,797)

(63,809)

(217,964)

(191,805)

Other financing activities, net

(1,823)

(301,643)

(41,542)

(318,452)

Net cash (used in) provided by financing activities

(131,620)

(106,452)

(305,506)

33,743

Effect of exchange rate changes on cash and cash equivalents

3,197

(2,691)

1,028

(49)

Net (decrease) increase in cash and cash equivalents

$ (11,415)

$ (12,500)

$ (8,543)

$ 46,901

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, free cash flow, free cash flow conversion, net debt, net leverage ratio, and adjusted sales, general and administrative expenses ("SG&A") 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. Acquisition revenue is based on the trailing 12-month revenue of our acquired entities. 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, adjustments to the fair value of contingent consideration resulting from the acquisition of Fox, and restructuring costs related to restructuring and workforce reduction plans. Adjusted net income and adjusted EPS are calculated by adding back to the GAAP measure amortization of certain intangible assets, adjustments to the fair value of contingent consideration resulting from the acquisition of Fox, and restructuring costs related to restructuring and workforce reduction plans, and excluding gains and losses on the sale of non-operational assets and by further subtracting the tax impact of those expenses, gains, or losses. Adjusted EBITDA and adjusted EBITDA margin are calculated by adding back to the GAAP measures those expenses resulting from the adjustments to the fair value of contingent consideration resulting from the acquisition of Fox, restructuring costs related to restructuring and workforce reduction plans, and excluding gains and losses on the sale of non-operational assets. 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. Free cash flow is calculated by subtracting capital expenditures from cash provided by operating activities. Free cash flow conversion is calculated as free cash flow divided by net income. Net debt is calculated as total long-term debt less cash and cash equivalents. Net leverage ratio is calculated by dividing net debt by trailing twelve-month EBITDA. Adjusted SG&A is calculated by removing the adjustments to the fair value of contingent consideration resulting from the acquisition of Fox. 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, adjusted incremental EBITDA margin, and adjusted SG&A 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 uses free cash flow conversion to demonstrate how much net income is converted into cash. Management uses net debt as an assessment of overall liquidity, financial flexibility, and leverage. Net leverage ratio is useful to investors because it is an indicator of our ability to meet our future financial obligations. 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 directly comparable GAAP measures.

(unaudited, in thousands, except per share data and margins)

Three Months Ended September 30,

Nine Months Ended September 30,

Variance

Variance

2024

2023

$

%

2024

2023

$

%

Reconciliation of Operating Income to Adjusted Operating Income and Adjusted Operating Income Margin

Operating income

$ 191,796

$ 177,124

$ 506,597

$ 444,153

Fox acquisition-related expenses (1)

4,216

5,262

13,689

10,523

Restructuring costs (2)

-

5,196

-

5,196

Adjusted operating income

$ 196,012

$ 187,582

8,430

4.5

$ 520,286

$ 459,872

60,414

13.1

Revenues

$ 916,270

$ 840,427

$ 2,556,539

$ 2,319,192

Operating income margin

20.9 %

21.1 %

19.8 %

19.2 %

Adjusted operating margin

21.4 %

22.3 %

20.4 %

19.8 %

Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS (6)

Net income

$ 136,913

$ 127,777

$ 360,704

$ 326,154

Fox acquisition-related expenses (1)

4,216

5,262

13,689

10,523

Restructuring costs (2)

-

5,196

-

5,196

Gain on sale of assets, net (3)

(582)

(493)

(933)

(6,226)

Tax impact of adjustments (4)

(930)

(2,551)

(3,266)

(2,430)

Adjusted net income

$ 139,617

$ 135,191

4,426

3.3

$ 370,194

$ 333,217

36,978

11.1

EPS - basic and diluted

$ 0.28

$ 0.26

$ 0.74

$ 0.66

Fox acquisition-related expenses (1)

0.01

0.01

0.03

0.02

Restructuring costs (2)

-

0.01

-

0.01

Gain on sale of assets, net (3)

-

-

-

(0.01)

Tax impact of adjustments (4)

-

(0.01)

(0.01)

-

Adjusted EPS - basic and diluted (5)

$ 0.29

$ 0.28

0.01

3.6

$ 0.76

$ 0.68

0.08

11.8

Weighted average shares outstanding - basic

484,317

490,775

484,231

491,980

Weighted average shares outstanding - diluted

484,359

490,965

484,270

492,158

Reconciliation of Net Income to EBITDA, Adjusted EBITDA, EBITDA Margin, Incremental EBITDA Margin, Adjusted EBITDA Margin, and Adjusted Incremental EBITDA Margin (6)

Net income

$ 136,913

$ 127,777

$ 360,704

$ 326,154

Depreciation and amortization

27,664

24,668

82,685

73,609

Interest expense, net

7,150

5,547

22,650

10,797

Provision for income taxes

48,315

44,293

124,176

113,428

EBITDA

$ 220,042

$ 202,285

17,757

8.8

$ 590,215

$ 523,988

66,227

12.6

Fox acquisition-related expenses (1)

-

1,050

1,049

2,097

Restructuring costs (2)

-

5,196

-

5,196

Gain on sale of assets, net (3)

(582)

(493)

(933)

(6,226)

Adjusted EBITDA

$ 219,460

$ 208,038

11,422

5.5

$ 590,331

$ 525,055

65,276

12.4

Revenues

$ 916,270

$ 840,427

75,843

$ 2,556,539

$ 2,319,192

237,347

EBITDA margin

24.0 %

24.1 %

23.1 %

22.6 %

Incremental EBITDA margin

23.4 %

27.9 %

Adjusted EBITDA margin

24.0 %

24.8 %

23.1 %

22.6 %

Adjusted incremental EBITDA margin

15.1 %

27.5 %

Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow and Free Cash Flow Conversion

Net cash provided by operating activities

$ 146,947

$ 127,355

$ 419,495

$ 375,541

Capital expenditures

(7,522)

(6,868)

(23,389)

(21,279)

Free cash flow

$ 139,425

$ 120,487

18,938

15.7

$ 396,106

$ 354,262

41,844

11.8

Free cash flow conversion

101.8 %

94.3 %

109.8 %

108.6 %

(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. 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) Consists of the gain or loss on the sale of non-operational assets.

(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.

(6) In the first quarter of 2024, we revised the non-GAAP metrics adjusted net income, adjusted EPS, and adjusted EBITDA to exclude gains and losses related to non-operational asset sales. These measures are of operating performance and we believe excluding the gains and losses on non-operational assets allows us to better compare our operating performance consistently over various periods. Refer to our first quarter 2024 press release for fully revised quarterly metrics.

Three Months Ended September 30,

Nine Months Ended September 30,

Variance

Variance

2024

2023 (7)

$

%

2024

2023 (7)

$

%

Reconciliation of Revenues to Organic Revenues

Revenues

$ 916,270

$ 840,427

75,843

9.0

$ 2,556,539

$ 2,319,192

237,347

10.2

Revenues from acquisitions

(17,339)

-

(17,339)

2.1

(77,479)

-

(77,479)

3.3

Revenues of divestitures

-

(5,823)

5,823

(0.8)

-

(16,500)

16,500

(0.8)

Organic revenues

$ 898,931

$ 834,604

64,327

7.7

$ 2,479,060

$ 2,302,692

176,368

7.7

Reconciliation of Residential Revenues to Organic Residential Revenues

Residential revenues

$ 428,290

$ 402,559

25,731

6.4

$ 1,166,042

$ 1,069,403

96,639

9.0

Residential revenues from acquisitions

(9,571)

-

(9,571)

2.4

(54,257)

-

(54,257)

5.1

Residential revenues of divestitures

-

(3,263)

3,263

(0.9)

-

(9,668)

9,668

(1.0)

Residential organic revenues

$ 418,719

$ 399,296

19,423

4.9

$ 1,111,785

$ 1,059,735

52,050

4.9

Reconciliation of Commercial Revenues to Organic Commercial Revenues

Commercial revenues

$ 299,633

$ 273,865

25,768

9.4

$ 845,517

$ 767,472

78,045

10.2

Commercial revenues from acquisitions

(6,434)

-

(6,434)

2.3

(17,456)

-

(17,456)

2.3

Commercial revenues of divestitures

-

(2,560)

2,560

(1.0)

-

(6,832)

6,832

(1.0)

Commercial organic revenues

$ 293,199

$ 271,305

21,894

8.1

$ 828,061

$ 760,640

67,421

8.9

Reconciliation of Termite and Ancillary Revenues to Organic Termite and Ancillary Revenues

Termite and ancillary revenues

$ 177,674

$ 155,135

22,539

14.5

$ 515,758

$ 457,664

58,094

12.7

Termite and ancillary revenues from acquisitions

(1,334)

-

(1,334)

0.8

(5,766)

-

(5,766)

1.3

Termite and ancillary organic revenues

$ 176,340

$ 155,135

21,205

13.7

$ 509,992

$ 457,664

52,328

11.4

Three Months Ended September 30,

Nine Months Ended September 30,

Variance

Variance

2023 (7)

2022 (7)

$

%

2023 (7)

2022 (7)

$

%

Reconciliation of Revenues to Organic Revenues

Revenues

$ 840,427

$ 729,704

110,723

15.2

$ 2,319,192

$ 2,034,433

284,759

14.0

Revenues from acquisitions

(49,971)

-

(49,971)

6.8

(114,273)

-

(114,273)

5.6

Organic revenues

$ 790,456

$ 729,704

60,752

8.4

$ 2,204,919

$ 2,034,433

170,486

8.4

Reconciliation of Residential Revenues to Organic Residential Revenues

Residential revenues

$ 402,559

$ 336,626

65,933

19.6

$ 1,069,403

$ 917,790

151,613

16.5

Residential revenues from acquisitions

(42,974)

-

(42,974)

12.8

(91,067)

-

(91,067)

9.9

Residential organic revenues

$ 359,585

$ 336,626

22,959

6.8

$ 978,336

$ 917,790

60,546

6.6

Reconciliation of Commercial Revenues to Organic Commercial Revenues

Commercial revenues

$ 273,865

$ 245,009

28,856

11.8

$ 767,472

$ 688,523

78,949

11.5

Commercial revenues from acquisitions

(3,456)

-

(3,456)

1.4

(10,688)

-

(10,688)

1.6

Commercial organic revenues

$ 270,409

$ 245,009

25,400

10.4

$ 756,784

$ 688,523

68,261

9.9

Reconciliation of Termite and Ancillary Revenues to Organic Termite and Ancillary Revenues

Termite and ancillary revenues

$ 155,135

$ 139,359

15,776

11.3

$ 457,664

$ 405,089

52,575

13.0

Termite and ancillary revenues from acquisitions

(3,541)

-

(3,541)

2.5

(12,518)

-

(12,518)

3.1

Termite and ancillary organic revenues

$ 151,594

$ 139,359

12,235

8.8

$ 445,146

$ 405,089

40,057

9.9

(7) Revenues classified by significant product and service offerings for the three and nine months ended September 30, 2023 and 2022 were misstated by an immaterial amount and have been restated from the amounts previously reported to correct the classification of such revenues. There was no impact on our condensed consolidated statements of income, financial position, or cash flows.

Three Months Ended September 30,

Nine Months Ended September 30,

2024

2023

2024

2023

Reconciliation of SG&A to Adjusted SG&A

SG&A

$ 274,918

$ 244,906

$ 769,522

$ 696,668

Fox acquisition-related expenses (1)

-

1,050

1,049

2,097

Adjusted SG&A

$ 274,918

$ 243,856

$ 768,473

$ 694,571

Revenues

$ 916,270

$ 840,427

$ 2,556,539

$ 2,319,192

Adjusted SG&A as a % of revenues

30.0 %

29.0 %

30.1 %

29.9 %

Period Ended

September 30, 2024

Period Ended

December 31, 2023

Reconciliation of Long-term Debt to Net Debt and Net Leverage Ratio

Long-term debt (8)

$ 447,000

$ 493,000

Less: cash

95,282

103,825

Net debt

$ 351,718

$ 389,175

Trailing twelve-month EBITDA

$ 771,291

$ 705,064

Net leverage ratio

0.5x

0.6x

(8) As of September 30, 2024, the Company had outstanding borrowings of $447.0 million under the Credit Facility. Borrowings under the Credit Facility are presented under the long-term debt caption of our condensed consolidated balance sheet, net of $1.8 million in unamortized debt issuance costs as of September 30, 2024.

For Further Information Contact
Lyndsey Burton (404) 888-2348

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SOURCE Rollins, Inc.

Released October 23, 2024