15% growth in revenue drives an 18% improvement in GAAP EPS and 27% improvement in Adjusted EPS
ATLANTA, Oct. 25, 2023 /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 2023.
Key Highlights
Third quarter revenues were $840 million, an increase of 15.2% over the third quarter 2022 with organic revenues* increasing 8.4%. The stronger dollar versus foreign currencies in countries where we operate reduced revenues by 10 basis points during the quarter.
Quarterly operating income was $177 million, an increase of 21.8% over the third quarter of 2022. Quarterly operating margin was 21.1% of revenue, an increase of 120 basis points over the third quarter of 2022. Adjusted operating income* was $188 million, an increase of 29.0% over the prior year. Adjusted operating income margin* was 22.3%, an increase of 240 basis points over the prior year.
Quarterly net income was $128 million, an increase of 17.3% over the prior year net income. Adjusted net income* was $136 million, an increase of 24.4% over the prior year.
Quarterly EPS was $0.26 per diluted share, an 18.2% increase over the prior year EPS of $0.22. Adjusted EPS* was $0.28 per diluted share, an increase of 27.3% over the prior year.
Adjusted EBITDA* was $209 million for the quarter, an increase of 22.7%. Adjusted EBITDA margin* was 24.8% of revenue, an increase of 150 basis points over the third quarter of 2022.
Operating cash flow was $127 million for the quarter and was $376 million for the first nine months of the year. The slower growth in operating cash flow in Q3 was due to the timing of payments related to certain payables. The Company invested $21 million in acquisitions, $7 million in capital expenditures, paid dividends totaling $64 million, and repurchased $300 million of its stock during the quarter. Year to date, the Company has invested $349 million in acquisitions, $21 million in capital expenditures, paid dividends totaling $192 million and repurchased $315 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.
Management Commentary
“The team delivered a strong third quarter with record revenue and an improving margin profile,” said Jerry Gahlhoff, Jr., President and CEO. “Organic growth remains healthy while we continue to be active on the acquisition front. The demand for our services is solid and our pipeline for acquisitions is robust. As we look to close out 2023, we are well positioned for continued growth, both organically, as well as through acquisitions, and remain focused on continuous improvement initiatives to enhance profitability across our business” Mr. Gahlhoff added.
“It was encouraging to see the strong growth in revenue and profitability in the quarter, as the team delivered double-digit revenue growth and 150 basis points of improvement in adjusted EBITDA margins” said Kenneth Krause, Executive Vice President, CFO and Treasurer. Additionally, we continued to execute a very balanced capital allocation program with a focus on investing for growth while returning cash to shareholders through a growing dividend and a share repurchase program,” Mr. Krause concluded.
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) |
2023 |
2022 |
$ |
% |
2023 |
2022 |
$ |
% |
|||||
|
GAAP Metrics |
|||||||||||||
|
Revenues |
$ 840,427 |
$ 729,704 |
$ 110,723 |
15.2 % |
$ 2,319,192 |
$ 2,034,433 |
$ 284,759 |
14.0 % |
|||||
|
Gross profit (1) |
$ 451,894 |
$ 381,546 |
$ 70,348 |
18.4 % |
$ 1,219,626 |
$ 1,054,117 |
$ 165,509 |
15.7 % |
|||||
|
Gross profit margin (1) |
53.8 % |
52.3 % |
150 bps |
52.6 % |
51.8 % |
80 bps |
|||||||
|
Operating income |
$ 177,124 |
$ 145,404 |
$ 31,720 |
21.8 % |
$ 444,153 |
$ 373,471 |
$ 70,682 |
18.9 % |
|||||
|
Operating income margin |
21.1 % |
19.9 % |
120 bps |
19.2 % |
18.4 % |
80 bps |
|||||||
|
Net income |
$ 127,777 |
$ 108,943 |
$ 18,834 |
17.3 % |
$ 326,154 |
$ 284,329 |
$ 41,825 |
14.7 % |
|||||
|
EPS |
$ 0.26 |
$ 0.22 |
$ 0.04 |
18.2 % |
$ 0.66 |
$ 0.58 |
$ 0.08 |
13.8 % |
|||||
|
Operating cash flow |
$ 127,355 |
$ 127,285 |
70 |
0.1 % |
$ 375,541 |
$ 342,537 |
$ 33,004 |
9.6 % |
|||||
|
Non-GAAP Metrics |
|||||||||||||
|
Adjusted operating income (2) |
$ 187,582 |
$ 145,404 |
$ 42,178 |
29.0 % |
$ 459,872 |
$ 373,471 |
$ 86,401 |
23.1 % |
|||||
|
Adjusted operating margin (2) |
22.3 % |
19.9 % |
240 bps |
19.8 % |
18.4 % |
140 bps |
|||||||
|
Adjusted net income (2) |
$ 135,558 |
$ 108,943 |
$ 26,615 |
24.4 % |
$ 337,849 |
$ 284,329 |
$ 53,520 |
18.8 % |
|||||
|
Adjusted EPS (2) |
$ 0.28 |
$ 0.22 |
$ 0.06 |
27.3 % |
$ 0.69 |
$ 0.58 |
$ 0.11 |
19.0 % |
|||||
|
Adjusted EBITDA (2) |
$ 208,531 |
$ 169,945 |
$ 38,586 |
22.7 % |
$ 531,281 |
$ 446,934 |
$ 84,347 |
18.9 % |
|||||
|
Adjusted EBITDA margin (2) |
24.8 % |
23.3 % |
150 bps |
22.9 % |
22.0 % |
90 bps |
|||||||
|
Free cash flow (2) |
$ 120,487 |
$ 119,399 |
$ 1,088 |
0.9 % |
$ 354,262 |
$ 319,616 |
$ 34,646 |
10.8 % |
|||||
|
(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 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 STATEMENTSStatements 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, the Company’s pipeline for acquisitions remains robust to start the fourth quarter, the Company remains 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, the Company is focused on executing additional programs that it believes will improve the efficiency of its business model, and the Company’s improvement in gross margin and current demand environment provides a sense of optimism.
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, October 26, 2023 at 8:30 a.m. Eastern Time to discuss the third 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 13741391. 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, |
December 31, |
||
|
ASSETS |
|||
|
Cash and cash equivalents |
$ 142,247 |
$ 95,346 |
|
|
Trade receivables, net |
198,540 |
155,759 |
|
|
Financed receivables, short-term, net |
38,104 |
33,618 |
|
|
Materials and supplies |
33,223 |
29,745 |
|
|
Other current assets |
64,676 |
34,151 |
|
|
Total current assets |
476,790 |
348,619 |
|
|
Operating lease right-of-use assets |
301,774 |
277,355 |
|
|
Financed receivables, long-term, net |
73,925 |
63,523 |
|
|
Other assets |
1,787,468 |
1,432,531 |
|
|
Total assets |
$ 2,639,957 |
$ 2,122,028 |
|
|
LIABILITIES |
|||
|
Accounts payable |
44,421 |
42,796 |
|
|
Accrued insurance – current |
46,631 |
39,534 |
|
|
Accrued compensation and related liabilities |
99,228 |
99,251 |
|
|
Unearned revenues |
183,389 |
158,092 |
|
|
Operating lease liabilities – current |
88,668 |
84,543 |
|
|
Current portion of long-term debt |
— |
15,000 |
|
|
Other current liabilities |
119,359 |
54,568 |
|
|
Total current liabilities |
581,696 |
493,784 |
|
|
Accrued insurance, less current portion |
43,912 |
38,350 |
|
|
Operating lease liabilities, less current portion |
217,861 |
196,888 |
|
|
Long-term debt |
596,642 |
39,898 |
|
|
Other long-term accrued liabilities |
97,003 |
85,911 |
|
|
Total liabilities |
1,537,114 |
854,831 |
|
|
STOCKHOLDERS’ EQUITY |
|||
|
Common stock |
484,038 |
492,448 |
|
|
Retained earnings and other equity |
618,805 |
774,749 |
|
|
Total stockholders’ equity |
1,102,843 |
1,267,197 |
|
|
Total liabilities and stockholders’ equity |
$ 2,639,957 |
$ 2,122,028 |
|
|
ROLLINS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands except per share data) (unaudited) |
|||||||
|
Three Months Ended September |
Nine Months Ended September |
||||||
|
2023 |
2022 |
2023 |
2022 |
||||
|
REVENUES |
|||||||
|
Customer services |
$ 840,427 |
$ 729,704 |
$ 2,319,192 |
$ 2,034,433 |
|||
|
COSTS AND EXPENSES |
|||||||
|
Cost of services provided (exclusive of depreciation and amortization below) |
388,533 |
348,158 |
1,099,566 |
980,316 |
|||
|
Sales, general and administrative |
244,906 |
213,581 |
696,668 |
612,353 |
|||
|
Restructuring costs |
5,196 |
— |
5,196 |
— |
|||
|
Depreciation and amortization |
24,668 |
22,561 |
73,609 |
68,293 |
|||
|
Total operating expenses |
663,303 |
584,300 |
1,875,039 |
1,660,962 |
|||
|
OPERATING INCOME |
177,124 |
145,404 |
444,153 |
373,471 |
|||
|
Interest expense, net |
5,547 |
846 |
10,797 |
2,294 |
|||
|
Other (income), net |
(493) |
(1,980) |
(6,226) |
(5,170) |
|||
|
CONSOLIDATED INCOME BEFORE INCOME TAXES |
172,070 |
146,538 |
439,582 |
376,347 |
|||
|
PROVISION FOR INCOME TAXES |
44,293 |
37,595 |
113,428 |
92,018 |
|||
|
NET INCOME |
$ 127,777 |
$ 108,943 |
$ 326,154 |
$ 284,329 |
|||
|
NET INCOME PER SHARE – BASIC AND DILUTED |
$ 0.26 |
$ 0.22 |
$ 0.66 |
$ 0.58 |
|||
|
Weighted average shares outstanding – basic |
490,775 |
492,316 |
491,980 |
492,285 |
|||
|
Weighted average shares outstanding – diluted |
490,965 |
492,430 |
492,158 |
492,398 |
|||
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 September |
Nine Months Ended September |
||||||
|
2023 |
2022 |
2023 |
2022 |
||||
|
OPERATING ACTIVITIES |
|||||||
|
Net income |
$ 127,777 |
$ 108,943 |
$ 326,154 |
$ 284,329 |
|||
|
Depreciation and amortization |
24,668 |
22,561 |
73,609 |
68,293 |
|||
|
Change in working capital and other operating activities |
(25,090) |
(3,784) |
(24,222) |
(10,085) |
|||
|
Net cash provided by operating activities |
127,355 |
127,720 |
375,541 |
342,537 |
|||
|
INVESTING ACTIVITIES |
|||||||
|
Acquisitions, net of cash acquired |
(21,420) |
(60,838) |
(349,312) |
(110,418) |
|||
|
Capital expenditures |
(6,868) |
(7,040) |
(21,279) |
(22,921) |
|||
|
Other investing activities, net |
(2,424) |
6,532 |
8,257 |
9,961 |
|||
|
Net cash (used in) investing activities |
(30,712) |
(61,346) |
(362,334) |
(123,378) |
|||
|
FINANCING ACTIVITIES |
|||||||
|
Net borrowings (repayments) |
259,000 |
(110,000) |
544,000 |
(30,000) |
|||
|
Payment of dividends |
(63,809) |
(49,201) |
(191,805) |
(147,635) |
|||
|
Other financing activities, net |
(301,643) |
(6,444) |
(318,452) |
(18,650) |
|||
|
Net cash (used in) provided by financing activities |
(106,452) |
(165,645) |
33,743 |
(196,285) |
|||
|
Effect of exchange rate changes on cash and cash equivalents |
(2,691) |
183 |
(49) |
(6,299) |
|||
|
Net (decrease) increase in cash and cash equivalents |
$ (12,500) |
$ (99,088) |
$ 46,901 |
$ 16,575 |
|||
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. 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 the GAAP measures those expenses resulting from the 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 net income and adjusted EPS are calculated by adding back those acquisition-related expenses and restructuring costs to the GAAP measures and by further subtracting the tax impact of those expenses. 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. 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. 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 September 30, |
Nine Months Ended September 30, |
||||||||||||||
|
Variance |
Variance |
||||||||||||||
|
2023 |
2022 (5) |
$ |
% |
2023 |
2022 (5) |
$ |
% |
||||||||
|
Reconciliation of Operating Income to Adjusted Operating Income and Adjusted Operating Income Margin |
|||||||||||||||
|
Operating income |
$ 177,124 |
$ 145,404 |
$ 444,153 |
$ 373,471 |
|||||||||||
|
Fox acquisition-related expenses (1) |
5,262 |
— |
10,523 |
— |
|||||||||||
|
Restructuring costs (2) |
5,196 |
— |
5,196 |
— |
|||||||||||
|
Adjusted operating income |
$ 187,582 |
$ 145,404 |
42,178 |
29.0 |
$ 459,872 |
$ 373,471 |
86,401 |
23.1 |
|||||||
|
Revenues |
$ 840,427 |
$ 729,704 |
$ 2,319,192 |
$ 2,034,433 |
|||||||||||
|
Operating income margin |
21.1 % |
19.9 % |
19.2 % |
18.4 % |
|||||||||||
|
Adjusted operating income margin |
22.3 % |
19.9 % |
19.8 % |
18.4 % |
|||||||||||
|
Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS |
|||||||||||||||
|
Net income |
$ 127,777 |
$ 108,943 |
$ 326,154 |
$ 284,329 |
|||||||||||
|
Fox acquisition-related expenses (1) |
5,262 |
— |
10,523 |
— |
|||||||||||
|
Restructuring costs (2) |
5,196 |
— |
5,196 |
— |
|||||||||||
|
Tax impact of adjustments (3) |
(2,677) |
— |
(4,024) |
— |
|||||||||||
|
Adjusted net income |
$ 135,558 |
$ 108,943 |
26,615 |
24.4 |
$ 337,849 |
$ 284,329 |
53,520 |
18.8 |
|||||||
|
EPS – basic and diluted |
$ 0.26 |
$ 0.22 |
$ 0.66 |
$ 0.58 |
|||||||||||
|
Fox acquisition-related expenses (1) |
0.01 |
$ — |
0.02 |
$ — |
|||||||||||
|
Restructuring costs (2) |
0.01 |
$ — |
0.01 |
$ — |
|||||||||||
|
Tax impact of adjustments (3) |
(0.01) |
$ — |
(0.01) |
$ — |
|||||||||||
|
Adjusted EPS – basic and diluted (4) |
$ 0.28 |
$ 0.22 |
0.06 |
27.3 |
$ 0.69 |
$ 0.58 |
0.11 |
19.0 |
|||||||
|
Weighted average shares outstanding – basic |
490,775 |
492,316 |
491,980 |
492,285 |
|||||||||||
|
Weighted average shares outstanding – diluted |
490,965 |
492,430 |
492,158 |
492,398 |
|||||||||||
|
Reconciliation of Net Income to EBITDA, Adjusted EBITDA, EBITDA Margin, Incremental EBITDA Margin, Adjusted EBITDA Margin, and Adjusted Incremental EBITDA Margin |
|||||||||||||||
|
Net income |
$ 127,777 |
$ 108,943 |
$ 326,154 |
$ 284,329 |
|||||||||||
|
Depreciation and amortization |
24,668 |
22,561 |
73,609 |
68,293 |
|||||||||||
|
Interest expense, net |
5,547 |
846 |
10,797 |
2,294 |
|||||||||||
|
Provision for income taxes |
44,293 |
37,595 |
113,428 |
92,018 |
|||||||||||
|
EBITDA |
$ 202,285 |
$ 169,945 |
32,340 |
19.0 |
$ 523,988 |
$ 446,934 |
77,054 |
17.2 |
|||||||
|
Fox acquisition-related expenses (1) |
1,050 |
— |
2,097 |
— |
|||||||||||
|
Restructuring costs (2) |
5,196 |
— |
5,196 |
— |
|||||||||||
|
Adjusted EBITDA |
$ 208,531 |
$ 169,945 |
38,586 |
22.7 |
$ 531,281 |
$ 446,934 |
84,347 |
18.9 |
|||||||
|
Revenues |
$ 840,427 |
$ 729,704 |
110,723 |
$ 2,319,192 |
$ 2,034,433 |
284,759 |
|||||||||
|
EBITDA margin |
24.1 % |
23.3 % |
22.6 % |
22.0 % |
|||||||||||
|
Incremental EBITDA margin |
29.2 % |
27.1 % |
|||||||||||||
|
Adjusted EBITDA margin |
24.8 % |
23.3 % |
22.9 % |
22.0 % |
|||||||||||
|
Adjusted incremental EBITDA margin |
34.8 % |
29.6 % |
|||||||||||||
|
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow |
|||||||||||||||
|
Net cash provided by operating activities |
$ 127,355 |
$ 127,285 |
$ 375,541 |
$ 342,537 |
|||||||||||
|
Capital expenditures |
(6,868) |
(7,886) |
(21,279) |
(22,921) |
|||||||||||
|
Free cash flow |
$ 120,487 |
$ 119,399 |
1,088 |
0.9 |
$ 354,262 |
$ 319,616 |
34,646 |
10.8 |
|||||||
|
(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) |
Restructuring costs consist of costs primarily related to severance and benefits paid to employees pursuant to restructuring and workforce reduction plans. |
|
(3) |
The tax effect of the adjustments is calculated using the applicable statutory tax rates for the respective periods. |
|
(4) |
In some cases, the sum of the individual EPS amounts may not equal total non-GAAP EPS calculations due to rounding. |
|
(5) |
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 nine months ended September 30, 2022 includes a decrease to depreciation and amortization expense of $1.7 million and $5.2 million, respectively, and an increase in the provision for income tax expense of $0.4 million and $1.2 million, respectively. This revision affects these specific line items and subtotals within the consolidated statements of income and cash flows. |
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
|
Variance |
Variance |
||||||||||||||
|
2023 |
2022 |
$ |
% |
2023 |
2022 |
$ |
% |
||||||||
|
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) |
— |
(114,273) |
— |
(114,273) |
— |
|||||||
|
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 |
$ 404,305 |
$ 337,878 |
66,427 |
19.7 |
$ 1,073,575 |
$ 922,448 |
151,127 |
16.4 |
|||||||
|
Residential revenues from acquisitions |
(42,974) |
— |
(42,974) |
— |
(91,067) |
— |
(91,067) |
— |
|||||||
|
Residential organic revenues |
$ 361,331 |
$ 337,878 |
23,453 |
7.0 |
$ 982,508 |
$ 922,448 |
60,060 |
6.5 |
|||||||
|
Reconciliation of Commercial Revenues to Organic Commercial Revenues |
|||||||||||||||
|
Commercial revenues |
$ 272,207 |
$ 243,478 |
28,729 |
11.8 |
$ 762,573 |
$ 683,748 |
78,825 |
11.5 |
|||||||
|
Commercial revenues from acquisitions |
(3,456) |
— |
(3,456) |
— |
(10,688) |
— |
(10,688) |
— |
|||||||
|
Commercial organic revenues |
$ 268,751 |
$ 243,478 |
25,273 |
10.4 |
$ 751,885 |
$ 683,748 |
68,137 |
10.1 |
|||||||
|
Reconciliation of Termite and Ancillary Revenues to Organic Termite and Ancillary Revenues |
|||||||||||||||
|
Termite and ancillary revenues |
$ 155,099 |
$ 139,668 |
15,431 |
11.0 |
$ 458,527 |
$ 406,155 |
52,372 |
12.9 |
|||||||
|
Termite and ancillary revenues from acquisitions |
(3,541) |
— |
(3,541) |
— |
(12,518) |
— |
(12,518) |
— |
|||||||
|
Termite and ancillary organic revenues |
$ 151,558 |
$ 139,668 |
11,890 |
8.5 |
$ 446,009 |
$ 406,155 |
39,854 |
9.8 |
|||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
|
Variance |
Variance |
||||||||||||||
|
2022 |
2021 |
$ |
% |
2022 |
2021 |
$ |
% |
||||||||
|
Reconciliation of Revenues to Organic Revenues |
|||||||||||||||
|
Revenues |
$ 729,704 |
$ 650,199 |
79,505 |
12.2 |
$ 2,034,433 |
$ 1,823,957 |
210,476 |
11.5 |
|||||||
|
Revenues from acquisitions |
(23,709) |
— |
(23,709) |
— |
(61,748) |
— |
(61,748) |
— |
|||||||
|
Organic revenues |
$ 705,995 |
$ 650,199 |
55,796 |
8.6 |
$ 1,972,685 |
$ 1,823,957 |
148,728 |
8.2 |
|||||||
|
Reconciliation of Residential Revenues to Organic Residential Revenues |
|||||||||||||||
|
Residential revenues |
$ 337,878 |
$ 307,747 |
30,131 |
9.8 |
$ 922,448 |
$ 835,871 |
86,577 |
10.4 |
|||||||
|
Residential revenues from acquisitions |
(13,909) |
— |
(13,909) |
— |
(35,818) |
— |
(35,818) |
— |
|||||||
|
Residential organic revenues |
$ 323,969 |
$ 307,747 |
16,222 |
5.3 |
$ 886,630 |
$ 835,871 |
50,759 |
6.1 |
|||||||
|
Reconciliation of Commercial Revenues to Organic Commercial Revenues |
|||||||||||||||
|
Commercial revenues |
$ 243,478 |
$ 218,648 |
24,830 |
11.4 |
$ 683,748 |
$ 618,183 |
65,565 |
10.6 |
|||||||
|
Commercial revenues from acquisitions |
(3,693) |
— |
(3,693) |
— |
(9,857) |
— |
(9,857) |
— |
|||||||
|
Commercial organic revenues |
$ 239,785 |
$ 218,648 |
21,137 |
9.7 |
$ 673,891 |
$ 618,183 |
55,708 |
9.0 |
|||||||
|
Reconciliation of Termite and Ancillary Revenues to Organic Termite and Ancillary Revenues |
|||||||||||||||
|
Termite and ancillary revenues |
$ 139,668 |
$ 117,423 |
22,245 |
18.9 |
$ 406,155 |
$ 350,791 |
55,364 |
15.8 |
|||||||
|
Termite and ancillary revenues from acquisitions |
(6,107) |
— |
(6,107) |
— |
(16,073) |
— |
(16,073) |
— |
|||||||
|
Termite and ancillary organic revenues |
$ 133,561 |
$ 117,423 |
16,138 |
13.7 |
$ 390,082 |
$ 350,791 |
39,291 |
11.2 |
|||||||
For Further Information Contact
Lyndsey Burton (404) 888-2348
SOURCE ROLLINS, INC.