Rollins, Inc. (NYSE:ROL) Q3 2022 Earnings Conference Call October 26, 2022 10:00 AM ET Company Participants Joe Calabrese - IR Gary Rollins - Chairman and CEO Julie Bimmerman - Group VP, Finance and IR John Wilson - Vice Chairman Jerry Gahlhoff - President and COO Kenneth Krause - EVP, CFO and Treasurer Conference Call Participants Tim Mulrooney - William Blair Ashish Sabadra - RBC Capital Markets Seth Weber - Wells Fargo Securities Hans Hoffman - Jefferies Operator Greetings. Welcome to Rollins' Third Quar ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 Commission File Number 1-4422 ROLLINS, INC. (Exact name of registrant as specified in its charter) Delaware 51-0068479 Securities registered pursuant to Section 12(b) of the Act: | | | Name of each exchange on which | | --- | --- | --- | | Title of each class | Trading Symbol(s) | registered | | ...

Financial Data and Key Metrics Changes - Rollins reported revenue of $714 million for Q2 2022, an increase of 11.9% compared to $638 million in Q2 2021 [16][24] - Net income for the quarter was $100.3 million, or $0.20 per diluted share, compared to $98.9 million, or $0.20 per diluted share in the same period last year [16][24] - Adjusted EBITDA for Q2 2022 was $159.2 million, a 1.2% increase from $157.3 million in Q2 2021 [40] Business Line Data and Key Metrics Changes - Residential pest control revenue increased by 11%, commercial pest control was up 11.2%, and termite services grew by 15% [25][39] - All service lines experienced double-digit growth, continuing from the previous year's strong performance [25][39] Market Data and Key Metrics Changes - The company faced inflationary pressures, particularly from fleet-related costs such as fuel and vehicle repairs, which impacted gross margins [41][41] - Fuel costs increased by over 50% compared to Q2 2021, contributing significantly to the overall cost structure [41] Company Strategy and Development Direction - Rollins is focused on enhancing operational efficiency and reducing carbon emissions, with plans to increase the hybrid truck fleet by 2024 [29][30] - The company has a strong acquisition pipeline, having completed 22 strategic acquisitions in 2022, including significant expansions in the UK [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate inflationary pressures and maintain customer satisfaction despite rising costs [26][34] - The leadership transition plan was highlighted, with Jerry Gahlhoff set to become CEO in January 2023, ensuring continuity in strategic direction [10][12] Other Important Information - Rollins has partnered with Everside Health to provide on-site health services for employees, enhancing employee benefits [17][19] - The Board of Directors approved a regular cash dividend of $0.10 per share, reflecting strong performance and confidence in future growth [44] Q&A Session Summary Question: EBITDA margins were down more than expected; what were the main headwinds? - Management identified advertising expenses and fuel costs as the primary factors impacting EBITDA margins, with advertising increasing by 2% of revenues [49][52] Question: Can you elaborate on revenue growth drivers? - Management noted that aggressive price increases and improved customer retention contributed to revenue growth, alongside effective advertising campaigns [57][59] Question: What is the capacity of the sales force and hiring plans? - Management indicated that the sales force is well-staffed but always looking for opportunities to improve capacity and drive incremental growth [62] Question: Should gross margins improve for the rest of the year? - Management stated that gross margins depend on fuel prices and supply chain stability, with potential for improvement if conditions stabilize [67][70] Question: Will there be another price increase due to inflation? - Management indicated that while they are monitoring inflation, they prefer to avoid frequent price increases and will assess the situation carefully [73]

Financial Performance - Revenues for Q1 2022 increased by 10.3% to $590.7 million compared to $535.6 million in Q1 2021[86] - Net income decreased by 21.8% to $72.4 million, with earnings per diluted share of $0.15 compared to $0.19 in the prior year[91] - Residential pest control revenue grew by 10%, commercial pest control revenue increased by 9%, and termite and ancillary services rose by 13%[92] - Cost of services provided rose by 12.9% to $295.4 million, driven by increased personnel and material costs[94] - Sales, general and administrative expenses increased by 10.2% to $178.8 million, primarily due to higher personnel costs[96] - Other income decreased by $31.0 million due to a prior year gain from sale-leaseback transactions[98] Cash Flow and Investments - Net cash provided by operating activities was $87.5 million, down 26.7% from $119.5 million in Q1 2021[102] - Cash used in investing activities was $19.9 million, compared to cash provided of $40.1 million in the prior year[106] - Total cash at March 31, 2022, was $258.3 million, with $86.1 million held in international accounts[109] Debt and Financial Position - The company maintained a leverage ratio compliant with debt covenants at 3.00:1.00 as of March 31, 2022[111] - The company believes that its current cash and cash equivalents, along with future cash flows and available borrowings of $175.0 million from its revolving credit facility and $300.0 million from its term loan facility, will be sufficient to finance operations and fund business expansion for the foreseeable future[122] Legal and Regulatory Matters - The company reached a settlement with the SEC, paying an $8.0 million civil penalty related to the investigation of accruals and reserves for the periods from January 1, 2016, to December 31, 2018[116] - The company does not expect any pending claims or investigations to have a material adverse effect on its financial position or results of operations[117] Accounting and Estimates - The company has no changes to its critical accounting estimates since the last Form 10-K filing for the year ended December 31, 2021[118] - The company anticipates that total unrecognized compensation costs related to time-lapse restricted shares will be recognized over a weighted average period of approximately 4.1 years[122] - The company expects that acquisition-related goodwill recognized during the quarter will be deductible for tax purposes[122] - The company has established loss contingency reserves based on outcomes it currently believes to be probable and reasonably estimable[122] - The company has not identified any impairments of its goodwill or other intangible assets[122] Market Risks - The company maintains an investment portfolio subject to short-term interest rate risk exposure and is also exposed to market risks from changes in foreign exchange rates[125] - The company believes that foreign exchange rate risk will not have a material effect on its results of operations going forward[122]

Rollins, Inc. (NYSE:ROL) Q1 2022 Earnings Conference Call April 27, 2022 10:00 AM ET Company Participants Joe Calabrese - IR Gary Rollins - Chairman and Chief Executive Officer Julie Bimmerman - Vice President, Interim Chief Financial Officer and Treasurer John Wilson - Vice Chairman Jerry Gahlhoff - President and Chief Operating Officer Conference Call Participants Tim Mulrooney - William Blair Ashish Sabadra - RBC Capital Markets Mario Cortellacci - Jefferies Michael Hoffman - Stifel Operator Greetings, a ...

ROLLINS ® First Quarter 2022 Earnings Webcast April 27, 2022 J Forward Looking Statement Our earnings release discusses our business outlook and contains certain forward- looking statements. These particular forward-looking statements and all other statements that have been made on this call, excluding historical facts, are subject to a number of risks and uncertainties, and actual results may differ materially from any statement we make today. Please refer to today's press release and our SEC filings, incl ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2021 Commission file No. 1-4422 ROLLINS, INC. (Exact name of registrant as specified in its charter) incorporation or organization) Delaware 51-0068479 (State or other jurisdiction of (I.R.S. Employer Identification No.) 2170 Piedmont Road, N.E., Atlanta, Georgia 30324 (Address of princi ...

Rollins, Inc. (NYSE:ROL) Q4 2021 Earnings Conference Call January 26, 2021 10:00 AM ET Company Participants Joe Calabrese - IR Gary Rollins - Chairman and CEO John Wilson - Vice Chairman Julie Bimmerman - Interim CFO, Vice President and Treasurer Jerry Gahlhoff - President and COO Conference Call Participants Tim Mulrooney - William Blair Mario Cortellacci - Jefferies Ashish Sabra - RBC Capital Markets Michael Hoffman - Stifel Operator Greetings, and welcome to Rollins Inc. Fourth Quarter 2021 Earnings Conf ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 Commission File Number 1-4422 ROLLINS, INC. (Exact name of registrant as specified in its charter) Delaware 51-0068479 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 2170 Piedmont Road, N.E., Atlanta, Georgia (Address of principal executiv ...

Financial Data and Key Metrics Changes - Revenue increased by 11.4% to $650.2 million compared to $583.7 million in Q3 2020 [14] - Net income totaled $93.9 million or $0.19 per diluted share, up from $79.6 million or $0.16 per diluted share in the same period last year [14] - Year-to-date revenues for the first nine months of 2021 were $1.824 billion, a 12.2% increase compared to $1.625 billion for the same period last year [15] - Net income for the first nine months increased by 44% to $285.3 million or $0.58 per diluted share compared to $198.2 million or $0.40 per diluted share for the comparable period last year [15] - Adjusted EBITDA for Q3 2021 was $150.9 million, an 8.7% increase over Q3 2020 [29] - Gross margin increased to 53%, a 0.4% improvement over last year [30] - Free cash flow for Q3 2021 was $72.9 million, a decrease of 27.5% compared to the same quarter last year [34] Business Line Data and Key Metrics Changes - Residential services increased by 11.7%, termite services grew by 15%, and commercial services (excluding fumigation) delivered 10.1% growth over Q3 2020 [16] - Wildlife revenues grew by 24.1% in Q3 2021 and 27.6% year-to-date, following a strong growth of 20.4% last year [28] Market Data and Key Metrics Changes - The company experienced solid growth across all business lines, with wildlife services expanding significantly [17] - The wildlife division has grown 800% since 2010, indicating strong market demand and expansion [17] Company Strategy and Development Direction - The company is focused on enhancing its environmental, social, and governance commitments, including significant donations of PPE during the pandemic [10] - Rollins is committed to expanding its wildlife services and franchise system, with plans to add 12 new franchises by year-end [18][19] - The company is also focused on improving operational efficiencies through technology adoption and routing optimization [60][61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for the remainder of the year and into 2022, citing strong customer attraction across services [17] - The impact of Hurricane Ida was managed effectively, with a focus on employee support and community assistance [20][21] - Management noted that labor costs were managed well, with fuel prices being the primary headwind affecting margins [45][46] Other Important Information - The company announced a 25% increase in its quarterly dividend, reflecting strong performance and financial strength [36] - A reserve has been established related to an ongoing SEC investigation, which the company considers immaterial [12] Q&A Session Summary Question: Did you give organic growth by segments in the prepared remarks? - Management confirmed that organic growth by segments was not provided in the prepared remarks [39] Question: Can you talk about the primary factors that caused the EBITDA margin contraction? - Management indicated that the primary headwind was significantly increased fuel prices, while labor costs were managed effectively [45][46] Question: How is pricing running right now? - Management stated that no extraordinary pricing actions have been taken, but annual price increases were implemented to help offset costs [52] Question: Can you provide context on residential and commercial trends within the quarter? - Management noted that residential services remain strong, while commercial services have rebounded and are performing well [55] Question: How is the technology rollout progressing? - Management indicated that there is still significant upside for technology adoption and continuous improvement in operations [60][61]