Rollins(US:ROL)2021-04-30 18:01Financial Performance - The Company reported first quarter revenues of $535.6 million, a 9.8% increase from $487.9 million in the same quarter of 2020[78]. - Net income for the first quarter increased 114.1% to $92.6 million, or $0.19 per diluted share, compared to $43.3 million, or $0.09 per diluted share in Q1 2020[78]. - Gross margin improved to 51.2%, up 2.7 percentage points from 48.5% in the prior year[84]. - The Company generated net cash of $119.5 million from operating activities for the three months ended March 31, 2021, compared to $92.0 million in the same period of 2020[89]. Revenue Breakdown - Commercial pest control revenue grew 2.9%, while residential pest control revenue increased by 14.9% and termite and ancillary services revenue grew by 12.2%[81]. - Approximately 1.9 percentage points of the revenue increase came from acquisitions, with the remaining 7.9 percentage points attributed to customer growth and pricing[79]. Capital Expenditures and Dividends - Capital expenditures for Q1 2021 were approximately $7.8 million, up from $6.7 million in Q1 2020, primarily for operating equipment and technology projects[90]. - The Company declared a quarterly cash dividend of $0.08 per share, payable on June 10, 2021, to stockholders of record as of May 10, 2021[91]. - The company intends to continue paying cash dividends to common stockholders, subject to earnings and financial conditions[101]. Cash and Liquidity - The Company's total cash and cash equivalents were $117.3 million as of March 31, 2021, with approximately $71.3 million held in foreign bank accounts[93]. - The company believes its current cash and cash equivalent balances, along with future cash flows and available borrowings under its $175.0 million revolving credit facility and $250.0 million term loan facility, will be sufficient to finance operations and fund business expansion for the foreseeable future[101]. - The company expects to remain in compliance with applicable debt covenants under the Credit Facility throughout 2021[101]. Risk Management - The company maintains an investment portfolio subject to short-term interest rate risk exposure, particularly through borrowings on its $175.0 million revolving credit facility and $250.0 million term loan facility[103]. - The company believes that interest and foreign exchange rate risks will not have a material impact on its results of operations going forward[103]. Future Plans and Investigations - The company plans to forego non-essential capital expenditures for the remainder of 2021[101]. - The company plans to grow its business in foreign markets through reinvestment of foreign deposits and future earnings, as well as acquisitions of unrelated companies[101]. - The company expects total unrecognized compensation costs related to time-lapse restricted shares to be recognized over a weighted average period of approximately 4.5 years[101]. - The company believes that the ongoing SEC investigation is primarily focused on how it established accruals and reserves at period-ends[101]. - The company is unable to predict the outcome of the SEC investigation but believes its financial statements fairly present its financial condition and results of operations[101].