PR Newswire
Strong Revenue Growth Drives Double-Digit Increase to Earnings and Cash Flow in 2024
ATLANTA
, Feb. 12, 2025 /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 2024.
2024 Fourth Quarter Highlights
(All comparisons against the fourth quarter of 2023 unless otherwise noted)
- Revenues were $832 million, an increase of 10.4% over the prior year with organic revenues* increasing 8.5% and acquisition-related revenues* increasing 2.4%.
- Operating income was $151 million, an increase of 8.3% over the prior year. Operating margin was 18.1%, flat compared to the prior year. Adjusted operating income* was $155 million, an increase of 7.3% over the prior year. Adjusted operating income margin* was 18.6%, a decrease of 50 basis points compared to the prior year.
- Adjusted EBITDA* was $181 million, an increase of 9.0% over the prior year. Adjusted EBITDA margin* was 21.8%, a decrease of 20 basis points compared to the prior year.
- Net income was $106 million, a decrease of 2.9% compared to the prior year. Adjusted net income* was $109 million, an increase of 8.0% over the prior year.
- GAAP EPS was $0.22 per diluted share, flat compared to the prior year. Adjusted EPS* was $0.23 per diluted share, an increase of 9.5% over the prior year.
- Operating cash flow was $188 million, an increase of 23.1% over the prior year. The Company invested $52 million in acquisitions, $4 million in capital expenditures, and paid dividends totaling $80 million.
2024 Full Year Highlights
(All comparisons against the full year 2023 unless otherwise noted)
- Revenues were $3.4 billion, an increase of 10.3% over the prior year with organic revenues* increasing 7.9% and acquisition-related revenues* increasing 3.1%.
- Operating income was $657 million, an increase of 12.7% over the prior year. Operating margin was 19.4%, an increase of 40 basis points over the prior year. Adjusted operating income* was $675 million, an increase of 11.7% over the prior year. Adjusted operating income margin* was 19.9%, an increase of 20 basis points over the prior year.
- Adjusted EBITDA* was $771 million, an increase of 11.6% over the prior year. Adjusted EBITDA margin* was 22.8%, an increase of 30 basis points over the prior year.
- Net income was $466 million, an increase of 7.2% over the prior year. Adjusted net income* was $479 million, an increase of 10.4% over the prior year.
- GAAP EPS was $0.96 per diluted share, an increase of 7.9% over the prior year. Adjusted EPS* was $0.99 per diluted share, an increase of 11.2% over the prior year.
- Operating cash flow was $608 million, an increase of 15.0% over the prior year. The Company invested $157 million in acquisitions, $28 million in capital expenditures, and paid dividends totaling $298 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.
2025 Outlook
For 2025, 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 to the year, exceeding our own revenue expectations and delivering healthy earnings growth for the full year,” said Jerry Gahlhoff, Jr., President and CEO. “As we look to 2025, demand for our services is solid and our pipeline for acquisitions is robust. We invested meaningfully in our business throughout 2024 which accelerated organic growth in the second half of the year. We are capitalizing on this momentum as we start 2025, while remaining 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 earnings. We delivered double-digit revenue and cash flow growth, as well as a 40 basis point improvement in operating margins for 2024,” said Kenneth Krause, Executive Vice President and CFO. “While growth investments and pressure from developments on legacy auto claims that materialized in December impacted our incremental margins, our underlying operations continue to deliver incremental margins approximating thirty percent. Additionally, we continued to execute a balanced capital allocation program enabled by compounding cash flow and a strong balance sheet,” Mr. Krause concluded.
Three and Twelve Months Ended Financial Highlights
|
|
|
||||||||||||
|
Variance |
Variance |
||||||||||||
|
(unaudited, in thousands, except per share data and margins) |
|
2023 |
$ |
% |
|
2023 |
$ |
% |
|||||
|
|
|||||||||||||
|
Revenues |
|
$ 754,086 |
$ 78,083 |
10.4 % |
|
$ 3,073,278 |
$ 315,430 |
10.3 % |
|||||
|
Gross profit (1) |
|
$ 383,781 |
$ 42,926 |
11.2 % |
|
$ 1,603,407 |
$ 182,104 |
11.4 % |
|||||
|
Gross profit margin (1) |
|
50.9 % |
40 bps |
|
52.2 % |
50 bps |
|||||||
|
Operating income |
|
$ 139,073 |
$ 11,554 |
8.3 % |
|
$ 583,226 |
$ 73,998 |
12.7 % |
|||||
|
Operating income margin |
|
18.4 % |
-30 bps |
|
19.0 % |
40 bps |
|||||||
|
Net income |
|
$ 108,803 |
$ (3,128) |
(2.9) % |
|
$ 434,957 |
$ 31,422 |
7.2 % |
|||||
|
EPS |
|
$ 0.22 |
$ — |
— % |
|
$ 0.89 |
$ 0.07 |
7.9 % |
|||||
|
Net cash provided by operating activities |
|
$ 152,825 |
$ 35,333 |
23.1 % |
|
$ 528,366 |
$ 79,287 |
15.0 % |
|||||
|
|
|||||||||||||
|
Adjusted operating income (2) |
|
$ 144,339 |
$ 10,500 |
7.3 % |
|
$ 604,217 |
$ 70,909 |
11.7 % |
|||||
|
Adjusted operating margin (2) |
|
19.1 % |
-50 bps |
|
19.7 % |
20 bps |
|||||||
|
Adjusted net income (2) |
|
$ 100,921 |
$ 8,074 |
8.0 % |
|
$ 434,142 |
$ 45,048 |
10.4 % |
|||||
|
Adjusted EPS (2) |
|
$ 0.21 |
$ 0.02 |
9.5 % |
|
$ 0.89 |
$ 0.10 |
11.2 % |
|||||
|
Adjusted EBITDA (2) |
|
$ 166,266 |
$ 14,896 |
9.0 % |
|
$ 691,322 |
$ 80,171 |
11.6 % |
|||||
|
Adjusted EBITDA margin (2) |
|
22.0 % |
-20 bps |
|
22.5 % |
30 bps |
|||||||
|
Free cash flow (2) |
|
$ 141,639 |
$ 42,336 |
29.9 % |
|
$ 495,901 |
$ 84,180 |
17.0 % |
|||||
|
|
|
|
The following table presents financial information, including our significant expense categories, for the three and twelve months ended December 31, 2024 and 2023:
|
|
|
|||||||
|
(unaudited, in thousands) |
2024 |
2023 |
2024 |
2023 |
||||
|
$ |
% of |
$ |
% of |
$ |
% of |
$ |
% of |
|
|
Revenue |
|
|
$ 754,086 |
100.0 % |
|
|
$ 3,073,278 |
100.0 % |
|
Less: |
||||||||
|
Cost of services provided (exclusive of depreciation and amortization below): |
||||||||
|
Employee expenses |
|
|
240,782 |
31.9 % |
|
|
953,600 |
31.0 % |
|
Materials and supplies |
|
|
49,946 |
6.6 % |
|
|
197,825 |
6.4 % |
|
Insurance and claims |
|
|
15,469 |
2.1 % |
|
|
60,390 |
2.0 % |
|
Fleet expenses |
|
|
30,050 |
4.0 % |
|
|
127,390 |
4.1 % |
|
Other cost of services provided (1) |
|
|
34,058 |
4.5 % |
|
|
130,666 |
4.3 % |
|
Total cost of services provided (exclusive of depreciation and amortization below) |
|
|
370,305 |
49.1 % |
|
|
1,469,871 |
47.8 % |
|
Sales, general and administrative: |
||||||||
|
Selling and marketing expenses |
|
|
80,590 |
10.7 % |
|
|
375,805 |
12.2 % |
|
Administrative employee expenses |
|
|
73,247 |
9.7 % |
|
|
291,772 |
9.5 % |
|
Insurance and claims |
|
|
9,023 |
1.2 % |
|
|
37,946 |
1.2 % |
|
Fleet expenses |
|
|
7,606 |
1.0 % |
|
|
31,415 |
1.0 % |
|
Other sales, general and administrative (2) |
|
|
48,099 |
6.4 % |
|
|
178,295 |
5.8 % |
|
Total sales, general and administrative |
|
|
218,565 |
29.0 % |
|
|
915,233 |
29.8 % |
|
Restructuring costs |
|
|
— |
— % |
|
|
5,196 |
0.2 % |
|
Depreciation and amortization |
|
|
26,143 |
3.5 % |
|
|
99,752 |
3.2 % |
|
Interest expense, net |
|
|
8,258 |
1.1 % |
|
|
19,055 |
0.6 % |
|
Other expense (income), net |
|
|
(15,860) |
(2.1) % |
|
|
(22,086) |
(0.7) % |
|
Income tax expense |
|
|
37,872 |
5.0 % |
|
|
151,300 |
4.9 % |
|
|
|
|
$ 108,803 |
14.4 % |
|
|
$ 434,957 |
14.2 % |
|
|
|
|
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: the underlying health of core pest control markets; the Company’s commitment to operational execution; our expected growth; our strategic and disciplined approach to acquisitions; the Company’s focus on pricing, ongoing modernization efforts, and a culture of continuous improvement, supporting healthy incremental margins; our balanced capital allocation strategy; expectations with respect to our financial and business performance; demand for our services; and a robust pipeline for acquisitions.
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, February 13, 2025, at 8:30 a.m. Eastern Time to discuss the fourth quarter and full year 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 13751106. For interested individuals unable to join the call, a replay will be available on the website for 180 days.
|
|
|||
|
|
December 31, |
||
|
|
|||
|
Cash and cash equivalents |
|
$ 103,825 |
|
|
Trade receivables, net |
|
178,214 |
|
|
Financed receivables, short-term, net |
|
37,025 |
|
|
Materials and supplies |
|
33,383 |
|
|
Other current assets |
|
54,192 |
|
|
Total current assets |
|
406,639 |
|
|
Equipment and property, net |
|
126,661 |
|
|
Goodwill |
|
1,070,310 |
|
|
Intangibles, net |
|
545,734 |
|
|
Operating lease right-of-use assets |
|
323,390 |
|
|
Financed receivables, long-term, net |
|
75,909 |
|
|
Other assets |
|
46,817 |
|
|
|
|
$ 2,595,460 |
|
|
|
|||
|
Accounts payable |
|
49,200 |
|
|
Accrued insurance – current |
|
46,807 |
|
|
Accrued compensation and related liabilities |
|
114,355 |
|
|
Unearned revenues |
|
172,380 |
|
|
Operating lease liabilities – current |
|
92,203 |
|
|
Other current liabilities |
|
101,744 |
|
|
Total current liabilities |
|
576,689 |
|
|
Accrued insurance, less current portion |
|
48,060 |
|
|
Operating lease liabilities, less current portion |
|
233,369 |
|
|
Long-term debt |
|
490,776 |
|
|
Other long-term accrued liabilities |
|
90,999 |
|
|
|
|
1,439,893 |
|
|
|
|||
|
Common stock |
|
484,080 |
|
|
Retained earnings and other equity |
|
671,487 |
|
|
Total stockholders’ equity |
|
1,155,567 |
|
|
|
|
$ 2,595,460 |
|
|
|
|||||||
|
|
|
||||||
|
|
2023 |
|
2023 |
||||
|
|
|||||||
|
Customer services |
|
$ 754,086 |
|
$ 3,073,278 |
|||
|
|
|||||||
|
Cost of services provided (exclusive of depreciation and amortization below) |
|
370,305 |
|
1,469,871 |
|||
|
Sales, general and administrative |
|
218,565 |
|
915,233 |
|||
|
Restructuring costs |
|
— |
|
5,196 |
|||
|
Depreciation and amortization |
|
26,143 |
|
99,752 |
|||
|
Total operating expenses |
|
615,013 |
|
2,490,052 |
|||
|
|
|
139,073 |
|
583,226 |
|||
|
Interest expense, net |
|
8,258 |
|
19,055 |
|||
|
Other expense (income), net |
|
(15,860) |
|
(22,086) |
|||
|
|
|
146,675 |
|
586,257 |
|||
|
|
|
37,872 |
|
151,300 |
|||
|
|
|
$ 108,803 |
|
$ 434,957 |
|||
|
|
|
$ 0.22 |
|
$ 0.89 |
|||
|
Weighted average shares outstanding – basic |
|
483,922 |
|
489,949 |
|||
|
Weighted average shares outstanding – diluted |
|
484,112 |
|
490,130 |
|||
|
DIVIDENDS PAID PER SHARE |
|
$ 0.150 |
|
$ 0.540 |
|||
|
|
|||||||
|
|
|
||||||
|
|
2023 |
|
2023 |
||||
|
|
|||||||
|
Net income |
|
$ 108,803 |
|
$ 434,957 |
|||
|
Depreciation and amortization |
|
26,143 |
|
99,752 |
|||
|
Change in working capital and other operating activities |
|
17,879 |
|
(6,343) |
|||
|
Net cash provided by operating activities |
|
152,825 |
|
528,366 |
|||
|
|
|||||||
|
Acquisitions, net of cash acquired |
|
(17,542) |
|
(366,854) |
|||
|
Capital expenditures |
|
(11,186) |
|
(32,465) |
|||
|
Other investing activities, net |
|
18,167 |
|
26,424 |
|||
|
Net cash used in investing activities |
|
(10,561) |
|
(372,895) |
|||
|
|
|||||||
|
Net debt (repayments) borrowings |
|
(106,000) |
|
438,000 |
|||
|
Payment of dividends |
|
(72,543) |
|
(264,348) |
|||
|
Other financing activities, net |
|
(4,620) |
|
(323,072) |
|||
|
Net cash used in financing activities |
|
(183,163) |
|
(149,420) |
|||
|
Effect of exchange rate changes on cash and cash equivalents |
|
2,477 |
|
2,428 |
|||
|
Net (decrease) increase in cash and cash equivalents |
|
$ (38,422) |
|
$ 8,479 |
|||
APPENDIX
Reconciliation of GAAP and non-GAAP Financial Measures
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.
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 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.
The Company has used the following non-GAAP financial measures in this earnings release:
Organic revenues
Organic revenues are calculated as revenues less the revenues from acquisitions completed within the prior 12 months and excluding the revenues from divested businesses. Acquisition revenues are based on the trailing 12-month revenue of our acquired entities. Management uses organic revenues, and organic revenues by type to compare revenues over various periods excluding the impact of acquisitions and divestitures.
Adjusted operating income and adjusted operating margin
Adjusted operating income and adjusted operating margin are calculated by adding back to net income those expenses resulting from the amortization of certain intangible assets, 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 operating margin is calculated as adjusted operating income divided by revenues. Management uses adjusted operating income and adjusted operating margin as measures of operating performance because these measures allow the Company to compare performance consistently over various periods.
Adjusted net income and adjusted EPS
Adjusted net income and adjusted EPS are calculated by adding back to the GAAP measures 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 gains on the sale of businesses, and by further subtracting the tax impact of those expenses, gains, or losses. Management uses adjusted net income and adjusted EPS as measures of operating performance because these measures allow the Company to compare performance consistently over various periods.
EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, incremental EBITDA margin and adjusted incremental EBITDA margin
EBITDA is calculated by adding back to net income depreciation and amortization, interest expense, net, and provision for income taxes. EBITDA margin is calculated as EBITDA divided by revenues. Adjusted EBITDA and adjusted EBITDA margin are calculated by further adding back 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 and gains on the sale of businesses. Management uses EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA margin as measures of operating performance because these measures allow the Company to compare performance consistently over various periods. Incremental EBITDA margin is calculated as the change in EBITDA divided by the change in revenue. Management uses incremental EBITDA margin as a measure of operating performance because this measure allows the Company to compare performance consistently over various periods. Adjusted incremental EBITDA margin is calculated as the change in adjusted EBITDA divided by the change in revenue. Management uses adjusted incremental EBITDA margin as a measure of operating performance because this measure allows the Company to compare performance consistently over various periods.
Free cash flow and free cash flow conversion
Free cash flow is calculated by subtracting capital expenditures from cash provided by operating activities. Management uses free cash flow to demonstrate the Company’s ability to maintain its asset base and generate future cash flows from operations. Free cash flow conversion is calculated as free cash flow divided by net income. Management uses free cash flow conversion to demonstrate how much net income is converted into cash. Management believes that free cash flow is an important financial measure for use in evaluating the Company’s liquidity. Free cash flow should be considered in addition to, rather than as a substitute for, net cash provided by operating activities as a measure of our liquidity. Additionally, the Company’s definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, management believes it is important to view free cash flow as a measure that provides supplemental information to our consolidated statements of cash flows.
Adjusted sales, general and administrative (“SG&A”)
Adjusted SG&A is calculated by removing the adjustments to the fair value of contingent consideration resulting from the acquisition of Fox. Management uses adjusted SG&A to compare SG&A expenses consistently over various periods.
Leverage ratio
Leverage ratio, a financial valuation measure, is calculated by dividing adjusted net debt by adjusted EBITDAR. Adjusted net debt is calculated by adding operating lease liabilities to total long-term debt less a cash adjustment of 90% of cash and cash equivalents. Adjusted EBITDAR is calculated by adding back to net income depreciation and amortization, interest expense, net, provision for income taxes, operating lease cost, and stock-based compensation expense. Management uses leverage ratio as an assessment of overall liquidity, financial flexibility, and leverage.
Set forth below is a reconciliation of the non-GAAP financial measures contained in this release with their most directly comparable GAAP measures.
(unaudited, in thousands, except per share data and margins)
|
|
|
||||||||||||||
|
Variance |
Variance |
||||||||||||||
|
|
2023 |
$ |
% |
|
2023 |
$ |
% |
||||||||
|
|
|||||||||||||||
|
Revenues |
|
$ 754,086 |
78,083 |
10.4 |
|
$ 3,073,278 |
315,430 |
10.3 |
|||||||
|
Revenues from acquisitions |
|
— |
(18,223) |
2.4 |
|
— |
(95,517) |
3.1 |
|||||||
|
Revenues of divestitures |
|
(4,060) |
4,060 |
(0.5) |
|
(20,559) |
20,559 |
(0.7) |
|||||||
|
Organic revenues |
|
$ 750,026 |
63,920 |
8.5 |
|
$ 3,052,719 |
240,472 |
7.9 |
|||||||
|
|
|||||||||||||||
|
Residential revenues |
|
$ 340,469 |
28,593 |
8.4 |
|
$ 1,409,872 |
125,232 |
8.9 |
|||||||
|
Residential revenues from acquisitions |
|
— |
(8,728) |
2.6 |
|
— |
(62,799) |
4.5 |
|||||||
|
Residential revenues of divestitures |
|
(2,245) |
2,245 |
(0.7) |
|
(11,913) |
11,913 |
(0.8) |
|||||||
|
Residential organic revenues |
|
$ 338,224 |
22,110 |
6.5 |
|
$ 1,397,959 |
74,346 |
5.2 |
|||||||
|
|
|||||||||||||||
|
Commercial revenues |
|
$ 256,704 |
23,742 |
9.2 |
|
$ 1,024,176 |
101,788 |
9.9 |
|||||||
|
Commercial revenues from acquisitions |
|
— |
(7,004) |
2.7 |
|
— |
(24,460) |
2.4 |
|||||||
|
Commercial revenues of divestitures |
|
(1,815) |
1,815 |
(0.7) |
|
(8,646) |
8,646 |
(0.8) |
|||||||
|
Commercial organic revenues |
|
$ 254,889 |
18,553 |
7.2 |
|
$ 1,015,530 |
85,974 |
8.3 |
|||||||
|
|
|||||||||||||||
|
Termite and ancillary revenues |
|
$ 147,868 |
24,560 |
16.6 |
|
$ 605,533 |
82,653 |
13.6 |
|||||||
|
Termite and ancillary revenues from acquisitions |
|
— |
(2,491) |
1.7 |
|
— |
(8,258) |
1.4 |
|||||||
|
Termite and ancillary organic revenues |
|
$ 147,868 |
22,069 |
14.9 |
|
$ 605,533 |
74,395 |
12.2 |
|||||||
|
|
|
||||||||||||||
|
Variance |
Variance |
||||||||||||||
|
|
2023 |
$ |
% |
|
2023 |
$ |
% |
||||||||
|
|
|||||||||||||||
|
Operating income |
|
$ 139,073 |
|
$ 583,226 |
|||||||||||
|
Fox acquisition-related expenses (1) |
|
5,266 |
|
15,795 |
|||||||||||
|
Restructuring costs (2) |
|
— |
|
5,196 |
|||||||||||
|
Adjusted operating income |
|
$ 144,339 |
10,500 |
7.3 |
|
$ 604,217 |
70,909 |
11.7 |
|||||||
|
Revenues |
|
$ 754,086 |
|
$ 3,073,278 |
|||||||||||
|
Operating income margin |
|
18.4 % |
|
19.0 % |
|||||||||||
|
Adjusted operating margin |
|
19.1 % |
|
19.7 % |
|||||||||||
|
|
|||||||||||||||
|
Net income |
|
$ 108,803 |
|
$ 434,957 |
|||||||||||
|
Fox acquisition-related expenses (1) |
|
5,266 |
|
15,795 |
|||||||||||
|
Restructuring costs (2) |
|
— |
|
5,196 |
|||||||||||
|
Loss (gain) on sale of assets, net (3) |
|
(410) |
|
(6,636) |
|||||||||||
|
Gain on sale of businesses (4) |
|
(15,450) |
|
(15,450) |
|||||||||||
|
Tax impact of adjustments (5) |
|
2,712 |
|
280 |
|||||||||||
|
Adjusted net income |
|
$ 100,921 |
8,074 |
8.0 |
|
$ 434,142 |
45,048 |
10.4 |
|||||||
|
EPS – basic and diluted |
|
$ 0.22 |
|
$ 0.89 |
|||||||||||
|
Fox acquisition-related expenses (1) |
|
0.01 |
|
0.03 |
|||||||||||
|
Restructuring costs (2) |
|
— |
|
0.01 |
|||||||||||
|
Loss (gain) on sale of assets, net (3) |
|
— |
|
(0.01) |
|||||||||||
|
Gain on sale of businesses (4) |
|
(0.03) |
|
(0.03) |
|||||||||||
|
Tax impact of adjustments (5) |
|
0.01 |
|
— |
|||||||||||
|
Adjusted EPS – basic and diluted (6) |
|
$ 0.21 |
0.02 |
9.5 |
|
$ 0.89 |
0.10 |
11.2 |
|||||||
|
Weighted average shares outstanding – basic |
|
483,922 |
|
489,949 |
|||||||||||
|
Weighted average shares outstanding – diluted |
|
484,112 |
|
490,130 |
|||||||||||
|
|
|||||||||||||||
|
Net income |
|
$ 108,803 |
|
$ 434,957 |
|||||||||||
|
Depreciation and amortization |
|
26,143 |
|
99,752 |
|||||||||||
|
Interest expense, net |
|
8,258 |
|
19,055 |
|||||||||||
|
Provision for income taxes |
|
37,872 |
|
151,300 |
|||||||||||
|
EBITDA |
|
$ 181,076 |
(164) |
(0.1) |
|
$ 705,064 |
66,063 |
9.4 |
|||||||
|
Fox acquisition-related expenses (1) |
|
1,050 |
|
3,148 |
|||||||||||
|
Restructuring costs (2) |
|
— |
|
5,196 |
|||||||||||
|
Loss (gain) on sale of assets, net (3) |
|
(410) |
|
(6,636) |
|||||||||||
|
Gain on sale of businesses (4) |
|
(15,450) |
|
(15,450) |
|||||||||||
|
Adjusted EBITDA |
|
$ 166,266 |
14,896 |
9.0 |
|
$ 691,322 |
80,171 |
11.6 |
|||||||
|
Revenues |
|
$ 754,086 |
78,083 |
|
$ 3,073,278 |
315,430 |
|||||||||
|
EBITDA margin |
|
24.0 % |
|
22.9 % |
|||||||||||
|
Incremental EBITDA margin |
(0.2) % |
20.9 % |
|||||||||||||
|
Adjusted EBITDA margin |
|
22.0 % |
|
22.5 % |
|||||||||||
|
Adjusted incremental EBITDA margin |
19.1 % |
25.4 % |
|||||||||||||
|
|
|||||||||||||||
|
Net cash provided by operating activities |
|
$ 152,825 |
|
$ 528,366 |
|||||||||||
|
Capital expenditures |
|
(11,186) |
|
(32,465) |
|||||||||||
|
Free cash flow |
|
$ 141,639 |
42,336 |
29.9 |
|
$ 495,901 |
84,180 |
17.0 |
|||||||
|
Free cash flow conversion |
|
130.2 % |
|
114.0 % |
|||||||||||
|
|
|
||||||
|
|
2023 |
|
2023 |
||||
|
|
|||||||
|
SG&A |
|
$ 218,565 |
|
$ 915,233 |
|||
|
Fox acquisition-related expenses (1) |
|
1,050 |
|
3,148 |
|||
|
Adjusted SG&A |
|
$ 217,515 |
|
$ 912,085 |
|||
|
Revenues |
|
$ 754,086 |
|
$ 3,073,278 |
|||
|
Adjusted SG&A as a % of revenues |
|
28.8 % |
|
29.7 % |
|||
|
|
|||
|
|
2023 |
||
|
|
|||
|
Long-term debt (8) |
|
$ 493,000 |
|
|
Operating lease liabilities (9) |
|
325,572 |
|
|
Cash adjustment (10) |
|
(93,443) |
|
|
Adjusted net debt |
|
$ 725,129 |
|
|
Net income |
|
$ 434,957 |
|
|
Depreciation and amortization |
|
99,752 |
|
|
Interest expense, net |
|
19,055 |
|
|
Provision for income taxes |
|
151,300 |
|
|
Operating lease cost (11) |
|
110,627 |
|
|
Stock-based compensation expense |
|
24,605 |
|
|
Adjusted EBITDAR |
|
$ 840,296 |
|
|
Leverage ratio |
|
0.9x |
|
|
(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, such expenses are expected to recur, 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) Represents the gain on the sale of certain non-core businesses. |
|
(5) The tax effect of the adjustments is calculated using the applicable statutory tax rates for the respective periods. |
|
(6) In some cases, the sum of the individual EPS amounts may not equal total non-GAAP EPS calculations due to rounding. |
|
(7) In 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. As a result, these measures may not be comparable to the corresponding measures disclosed in prior years. |
|
(8) As of December 31, 2024 and December 31, 2023, the Company had outstanding borrowings of $397.0 million and $493.0 million, respectively, under the Credit Facility. Borrowings under the Credit Facility are presented under the long-term debt caption of our consolidated balance sheet, net of $1.7 million and $2.2 million in unamortized debt issuance costs as of December 31, 2024 and December 31, 2023, respectively. |
|
(9) Operating lease liabilities are presented under the operating lease liabilities – current and operating lease liabilities, less current portion captions of our consolidated balance sheet. |
|
(10) Represents 90% of cash and cash equivalents per our consolidated balance sheet as of both periods presented. |
|
(11) Operating lease cost excludes short-term lease cost associated with leases that have a duration of 12 months or less. |
For Further Information Contact
Lyndsey Burton (404) 888-2348
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SOURCE Rollins, Inc.
