Page 1 of 7
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1994
OR
/___/ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-8368
ROLLINS ENVIRONMENTAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 51-0228924
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Rollins Plaza, Wilmington, Delaware 19803
(Address of principal executive offices) (Zip Code)
(302) 426-3314
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No _____
The number of shares of the registrant's common stock outstanding as
of December 31, 1994 was 60,375,811.
FORM 10-Q Page 2 of 7
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with the instructions to Form 10-Q and do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three months ended December 31, 1994 are not
necessarily indicative of the results that may be expected for the year
ending September 30, 1995. These statements should be read in conjunction
with the financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended September 30, 1994.
ROLLINS ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
($000 Omitted Except for Per Share Amounts)
Three Months Ended
December 31,
1994 1993
Revenues $49,907 $47,515
Operating expenses 35,603 34,601
Depreciation 5,621 5,530
Selling and administrative expenses 6,729 7,015
Interest expense 78 142
48,031 47,288
Earnings before income taxes and
cumulative effect of change in
accounting principle 1,876 227
Income taxes 656 121
Earnings before cumulative effect of
change in accounting principle 1,220 106
Cumulative effect (to September 30, 1993)
of adoption of SFAS No. 109 - 543
Net earnings $ 1,220 $ 649
Earnings per share:
Earnings before cumulative effect of
change in accounting principle $ .02 $ -
Cumulative effect of adoption of
SFAS No. 109 - .01
$ .02 $ .01
Average common shares and equivalents
outstanding (000) 60,381 60,376
Dividends paid per common share None None
<PAGE>
FORM 10-Q Page 3 of 7
ROLLINS ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED BALANCE SHEET
($000 Omitted)
December 31, September 30,
ASSETS 1994 1994
Current assets
Cash and cash equivalents (includes
short-term investments of:
$45,753-December; $45,437-September) $ 49,615 $ 54,772
Accounts receivable, net 35,572 28,727
Deferred income taxes 6,283 6,170
Income taxes recoverable 2,727 3,827
Other current assets 10,108 6,538
Total current assets 104,305 100,034
Property and equipment, at cost
Land 29,121 28,790
Buildings 32,329 32,360
Equipment and vehicles 194,538 190,785
Site improvements 28,395 29,072
Construction in progress 13,965 13,063
Accumulated depreciation (132,896) (127,687)
165,452 166,383
Other assets 6,744 6,969
$276,501 $273,386
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 12,124 $ 9,591
Accrued liabilities 17,696 17,556
Accrued remediation and other costs 6,829 5,895
Current maturities of long-term debt 623 623
Total current liabilities 37,272 33,665
Long-term debt 3,970 3,970
Accrued remediation and other costs 12,171 13,516
Other liabilities 5,054 5,331
Deferred income taxes 13,853 13,943
Commitments and contingent liabilities
See Part II, Item 1 Legal Proceedings
Shareholders' equity
Preferred stock, $1 par value,
1,000,000 shares authorized; issued and
outstanding - None
Common stock, $1 par value, 120,000,000 shares
authorized; issued and outstanding:
December-60,375,811; September-60,375,811 60,376 60,376
Capital in excess of par value 4,650 4,650
Retained earnings 139,155 137,935
Total shareholders' equity 204,181 202,961
$276,501 $273,386
<PAGE>
<PAGE>
FORM 10-Q Page 4 of 7
ROLLINS ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
($000 Omitted)
Three Months Ended
December 31,
1994 1993
Cash flows from operating activities:
Net earnings $ 1,220 $ 649
Reconciliation of net earnings to net cash
flows from operating activities:
Expenditures charged to accrued remediation
and other costs (619) (691)
Depreciation 5,621 5,530
Current and deferred income taxes 898 (305)
(Increase) in accounts receivable (6,845) (2,503)
Increase (decrease) in accounts payable
and accrued liabilities 2,673 (1,005)
Other, net (3,488) (1,116)
Net cash flows from operating activities (540) 559
Cash flows from investing activities:
Purchase of property and equipment (4,744) (3,571)
Proceeds from sale of equipment 127 15
Net cash flows used in investing activities (4,617) (3,556)
Cash flows from financing activities:
Exercise of stock options - 88
Net cash flows from financing activities - 88
Net (decrease) in cash and cash equivalents (5,157) (2,909)
Cash and cash equivalents:
Beginning of period 54,772 47,487
End of period $49,615 $44,578
Supplemental information:
Interest paid $ 71 $ 172
Income taxes (recovered) $ (242) $ (983)
<PAGE>
FORM 10-Q Page 5 of 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations: Three Months Ended December 31, 1994 vs. Three
Months Ended December 31, 1993
Revenues increased by $2,392,000 (5.0%) due mainly to higher
incineration volume as well as the acquisition of Highway 36 Land
Development Company in July 1994. While selling prices are depressed when
compared with the first quarter of 1994, the Company noted improved
conditions in the commercial hazardous waste treatment market which has
contributed to improved selling prices over the fourth quarter of fiscal
1994.
Operating expenses increased by $1,002,000 (2.9%) reflecting the
increased revenues and Highway 36 Land Development Company, partly offset
by continuing cost reduction efforts. Operating costs as a percentage of
revenues decreased to 71.3% in 1994 from 72.8% in 1993.
The increase in depreciation of $91,000 (1.6%) is attributable to
the Company's capital expenditure program to upgrade equipment, improve
operating efficiency and comply with changing regulations.
Selling and administrative expenses decreased $286,000 (4.1%)
primarily as a result of personnel cutbacks made in the prior year. As a
percentage of revenues, selling and administrative expenses were 13.5% in
1994 and 14.8% in 1993.
The effective income tax rate for the first quarter of fiscal year
1995 was 35.0%. The effective income tax rate for the first quarter of
fiscal year 1994 was 53.3% due to the low level of consolidated pretax
income combined with the impact of certain state income taxes.
Net earnings increased by $571,000 (88.0%) to $1,220,000 or $.02 per
share from $649,000 or $.01 per share in the prior year. Net earnings for
the first quarter of fiscal year 1994 included a favorable adjustment of
$543,000 or $.01 per share representing the cumulative effect to September
30, 1993 of the adoption of SFAS No. 109 - Accounting for Income Taxes.
The increase in net earnings was due mainly to the increased revenues and
lower selling and administrative costs.
<PAGE>
FORM 10-Q Page 6 of 7
Liquidity and Capital Resources
The Company's financial condition continues to be strong as
evidenced by its cash position and low level of debt which relates solely
to land acquisitions. The Company financed its property and equipment
additions during the first quarter with its available cash resources.
Otherwise, there have been no material changes in the Company's financial
condition and its liquidity and capital resources since September 30, 1994.
For further details, see page 8 of the Company's 1994 Annual Report on Form
10-K.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There have been no additional significant legal proceedings nor any
material changes in the legal proceedings reported on pages 3 through 5 of
the Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1994.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
On October 13, 1994, a report on Form 8-K was filed disclosing that
effective at the close of business September 30, 1994, John C. Peet, Jr.
resigned his position as Vice President-General Counsel and Secretary and
Director of the Company. Effective on the same date, Michael B. Kinnard
was appointed General Counsel and Secretary of the Company.
<PAGE>
FORM 10-Q Page 7 of 7
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
DATE: January 25, 1995 ROLLINS ENVIRONMENTAL SERVICES, INC.
(Registrant)
______________________________________
Nicholas Pappas
President and Chief Operating Officer
______________________________________
Leo F. Rattigan, Jr.
Vice President-Finance and Treasurer
Chief Financial Officer
Chief Accounting Officer
<PAGE>
FORM 10-Q Page 7 of 7
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
DATE: January 25, 1995 ROLLINS ENVIRONMENTAL SERVICES, INC.
(Registrant)
/s/ Nicholas Pappas
Nicholas Pappas
President and Chief Operating Officer
/s/ Leo F. Rattigan, Jr.
Leo F. Rattigan, Jr.
Vice President-Finance and Treasurer
Chief Financial Officer
Chief Accounting Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<CASH> 49,615,000
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<RECEIVABLES> 36,310,000
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