Financial Data and Key Metrics Changes - Rollins reported revenue growth of over 11% in Q1 2023, with earnings per share (EPS) increasing by 20% to $0.18 [2][22][34] - The company achieved a 15% improvement in operating cash flow and a 17% increase in free cash flow [22][49] - Gross profit margins were reported at 50.3%, reflecting a 30 basis point improvement [47] - EBITDA margin improved by 130 basis points to 21.2% [48] Business Line Data and Key Metrics Changes - Organic growth exceeded 9% for the quarter, with strong performance across all major service lines [29][31] - Acquisitions contributed approximately 2% to total revenue growth, with expectations for meaningful improvement from the recent Fox acquisition [31][35] Market Data and Key Metrics Changes - The company noted that currency fluctuations reduced quarterly revenue growth by 60 basis points due to a stronger dollar [32] - Rollins is well-positioned for strong demand in the spring and summer months, benefiting from recent wet weather patterns [12] Company Strategy and Development Direction - The acquisition of Fox Pest Control is seen as a strategic growth opportunity, expected to add between $90 million and $100 million in revenue for 2023 [35][90] - The company emphasizes the importance of integrating Fox while maintaining customer-facing operations [56][90] - Rollins aims to continue its focus on acquisitions as a key part of its growth strategy, with a healthy acquisition pipeline [51][68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive strong operating results and maintain a balanced capital allocation strategy [3][12] - The company anticipates that the Fox acquisition will be accretive to earnings in the first full year, with more significant contributions expected in the latter part of the year [50][51] - Management highlighted the importance of customer retention and the integration of Fox into the existing business model [90] Other Important Information - Rollins has engaged Deloitte as its new external auditor, replacing Grant Thornton [36] - The company is focused on improving its insurance and claims experience, which has been a headwind to margins [77] Q&A Session Summary Question: What contributed to the unexpected strength in the commercial pest business? - Management attributed the strength to investments in hiring and staffing on the commercial side, leading to increased new business [54] Question: How is marketing spend tracking for Q2 2023? - The company plans to ramp up investment in customer acquisition-related costs as it enters the busy season [58] Question: What is the outlook for customer acquisition through digital channels post-Fox integration? - Management indicated that it is premature to provide long-term insights but emphasized the potential to leverage Fox's marketing efforts [74] Question: How should the $90 million to $100 million in sales from Fox be allocated across business lines? - The majority of the revenue is expected to come from the residential segment, with a ramp-up in Q2 and Q3 due to seasonality [86] Question: What are the expectations for incremental margins for the remainder of the year? - Management expects to maintain incremental margins around 30%, with potential fluctuations based on customer acquisition investments [87]

| --- | --- | --- | --- | |----------------------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------| | Transaction Overview | • | Closed on $350 million, inclusive of $32 million of contingent consideration acquisition of Fox Pest Control | Attractive financial profile | | | | | | | Financial I ...

Financial Performance - The company achieved record revenue of $2.7 billion in 2022, reflecting an 11.2% increase from $2.4 billion in 2021[116] - Net income for 2022 was $368.6 million, a 3.4% increase compared to $356.6 million in 2021, with earnings per diluted share rising to $0.75 from $0.72[116] - The gross profit for 2022 was $1.4 billion, a 10.0% increase from $1.3 billion in 2021, with a gross margin of 51.5%[128] - Total revenues for the year ended December 31, 2022, were $2,695,823, an increase from $2,424,300 in 2021, representing a growth of approximately 11.2%[183] - Net income for 2022 was $368,599, compared to $356,565 in 2021, reflecting a year-over-year increase of about 3.3%[183] - The company reported an operating income of $493,388 for 2022, up from $447,636 in 2021, indicating a growth of approximately 10.2%[183] Cash Flow and Investments - Operating cash flow increased to $465.9 million in 2022, up from $401.8 million in 2021, marking a 16.0% growth[144] - Cash generated from operating activities increased to $465.9 million in 2022 from $401.8 million in 2021, representing a $64.1 million increase driven by strong operating results[145] - The company used $134.1 million in investing activities in 2022, up from $99.0 million in 2021, with $30.6 million allocated to capital expenditures compared to $27.2 million in 2021[146] - Cash paid for acquisitions totaled $119.2 million in 2022, down from $146.1 million in 2021, with expectations for additional acquisitions in 2023[146] - Cash used in financing activities increased to $336.0 million in 2022 from $290.2 million in 2021, including net debt repayments of $100.0 million compared to $48.0 million in 2021[147][149] Debt and Liquidity - The company repaid $100 million in debt during 2022 and made $119 million in payments for 31 acquisitions[116] - The effective interest rate on outstanding debt as of December 31, 2022, was 5.123%[141] - The company maintains a $175 million revolving credit facility and a $300 million term loan facility, with adequate liquidity to finance operations and expansion[151] - Total contractual obligations as of December 31, 2022, amounted to $383.7 million, with $119.8 million due within one year[153] - The company had outstanding borrowings of $54.9 million under the term loan as of December 31, 2022, with no borrowings under the revolving credit facility[158] Revenue Breakdown - Residential service revenue increased by 10%, commercial revenue also grew by 10%, and termite and ancillary revenue rose by 15% in 2022[116] - Residential revenue increased to $1.2 billion in 2022, a rise of 9.9% from $1.1 billion in 2021, and $977.5 million in 2020[251] - Deferred revenue recognized in 2022 was $205.3 million, compared to $187.3 million in 2021, indicating a growth of 9.0%[251] - Franchise revenues for 2022 were $15.7 million, slightly down from $15.8 million in 2021[243] - The company reported a total of 137 domestic franchise agreements as of December 31, 2022, an increase from 135 in 2021[242] Expenses and Liabilities - Sales, general and administrative expenses rose by 10.3% to $802.7 million, but as a percentage of revenue, they decreased to 29.8% from 30.0%[129] - The accrued insurance liability increased to $39,534 in the current year from $36,414 in the previous year, showing a rise of about 5.8%[182] - The total current liabilities slightly increased to $493,784 in 2022 from $491,162 in 2021, indicating a marginal rise of about 0.5%[182] - The company’s long-term accrued liabilities include deferred compensation, acquisition holdback, and earnout liabilities, reflecting ongoing financial commitments[232] Acquisitions and Growth Strategy - The company made 31 acquisitions in 2022 for a total cash purchase price of $116.0 million, compared to 39 acquisitions for $146.1 million in 2021[249] - Goodwill from acquisitions in 2022 amounted to $65.0 million, reflecting strategic benefits expected from the acquisitions[250] - The company is well-positioned for growth in 2023, with a strong acquisition pipeline and plans to renegotiate its credit facility expiring in April 2024[117] Shareholder Returns - The company paid cash dividends of $211.6 million in 2022, or $0.43 per share, compared to $208.7 million, or $0.42 per share, in 2021[149] - The company paid dividends of $0.43 per share in 2022, up from $0.42 per share in 2021, reflecting a growth of approximately 2.4%[183] Operational Efficiency - The company engaged an actuarial specialist to evaluate the methods and assumptions used in determining the accrued insurance reserve, highlighting the complexity and estimation uncertainty involved[179] - The independent auditor confirmed the effectiveness of the company's internal control over financial reporting as of December 31, 2022[165] - The company recognizes compensation expense for unvested restricted shares over the service period, based on the stock price at the grant date[311] Market and Economic Factors - The company believes that foreign exchange rate risks will not materially impact its results of operations going forward[158] - The company plans to raise prices for services in the first quarter of 2023 to offset inflationary pressures[128]

Financial Data and Key Metrics Changes - In Q4 2022, the company reported revenue growth of 10.2% to $661 million and net income increased by 26.1% to $84 million [19][40] - For the full year 2022, revenue growth was over 11% with net income also improving [24][21] - Adjusted EBITDA margins for the quarter were 22.1%, up approximately 180 basis points year-over-year [41][49] - Quarterly free cash flow grew over 20% compared to the same period last year, with a total of $116 million generated in Q4 [52][41] Business Line Data and Key Metrics Changes - Organic growth was reported at 6.9% for Q4, down from 7.8% for the full year, with slower growth noted in the residential sector [29][40] - The termite and ancillary service lines grew by 15.4% year-over-year, indicating strong performance in these areas [30] - The commercial line also showed robust growth at 10.3% over the prior year, driven by strong sales efforts [31] Market Data and Key Metrics Changes - The company noted a 15% decline in category searches for pest control across the industry, indicating a broader market trend [76] - Despite challenges in the residential housing market, demand for termite services remains strong, with good performance in baiting programs [90] Company Strategy and Development Direction - The company is focused on driving revenue growth through cross-selling activities and strategic acquisitions, having completed 31 acquisitions in 2022 totaling $119 million [35][40] - Technology investments are being made to improve operational efficiency, with routing and scheduling technology being rolled out across various brands [36][38] - The company plans to implement earlier price increases in 2023 to manage inflationary pressures [33][41] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue driving growth and improving profitability, with a focus on maintaining or exceeding historical growth rates [72][73] - The operating environment is viewed positively, with expectations for mid to high single-digit growth in the long term [72][73] - Management acknowledged ongoing inflationary pressures but emphasized their strategy to stay ahead through pricing adjustments [81][82] Other Important Information - The company corrected immaterial misstatements in financial statements, resulting in a minor increase in historical earnings [55] - The company remains in a net cash position with negligible debt, positioning itself well for future investments [53][54] Q&A Session Summary Question: SG&A as a percentage of sales - Management acknowledged strong performance in cost control and indicated ongoing evaluations for further improvements in SG&A [60][61] Question: Pricing strategy for 2023 - Management plans to implement pricing increases similar to previous years, with expectations for better performance in 2023 [64][65] Question: Residential growth drivers - Management attributed January's improvement in residential growth to better marketing efforts and a favorable business environment compared to the previous year [68][71] Question: Industry trends affecting residential growth - Management noted a consistent decline in category searches across the industry, impacting growth [76] Question: Cost inflation and pricing power - Management discussed managing inflationary pressures across various cost categories and the importance of pricing strategies to maintain margins [78][81] Question: International market performance - Management expressed optimism about growth in international markets, particularly in the UK, while emphasizing the US as the largest and fastest-growing market [85] Question: Termite business performance - Management indicated continued demand for termite services despite concerns about the residential housing market [90] Question: Organic growth components - Management estimated that underlying real growth rate, excluding price increases, is around 4% to 5% [94][96]

LONG TERM ANNUAL HIGHLIGHTS SAFE HARBOR Ken Krause EVP, CFO and Treasurer 1Key metricsfor latest 12-month period ended December 31, 2022 2These amounts are non-GAAP measures(see Appendix) $570 $593 23.5% 22.0% 5 QUARTERLY REVENUE GROWTH Q4 2021 Q4 2022 $M ¹These amounts are non-GAAP measures (see Appendix) Acquisitions • 31 acquisitions in 2023; 4 made in fourth quarter • Pipeline is robust and expect to be acquisitive in 2023 Reconciliation of GAAP and non-GAAP Financial Measures Set forth on the following ...

Rollins, Inc. Baird 2022 Global Industrial Conference Kenneth Krause, EVP and CFO November 9, 2022 Safe Harbor Except for historical information, certain statements in this presentation may contain forward-looking statements that involve risks and uncertainties concerning the business and financial results of Rollins, Inc. Forward-looking statements include, without limitation, all projections and anticipated levels of future performance. These forward-looking statements involve risks, uncertainties and oth ...

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q 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 ...

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 | | ...

Rollins Inc. (NYSE:ROL) Q2 2022 Results Conference Call July 27, 2022 10:00 AM ET Company Participants Joe Calabrese - IR Gary Rollins - Chairman and Chief Executive Officer John Wilson - Vice Chairman Jerry Gahlhoff - President and Chief Operating Officer Julie Bimmerman - Vice President, Interim Chief Financial Officer and Treasurer Conference Call Participants Tim Mulrooney - William Blair Ashish Sabadra - RBC Capital Markets Hans Hoffman - Jefferies Seth Weber - Wells Fargo Securities Brian Butler - Sti ...