Prospectus Supplement (To Prospectus dated January 31, 2000)
$150,000,000
[LOGO]
ROLLINS TRUCK LEASING CORP.
8.250% Collateral Trust Debentures, Series X, Due 2002
Maturity Redemption
o The Series X Debentures will o We may not redeem the Series X Debentures
mature on May 1, 2002. before maturity.
o The Series X Debentures do not have the
benefit of any sinking fund.
Interest
o The Series X Debentures bear
interest at the rate of 8.250%
per year.
Listing
o We will pay interest on the o We do not intend to list the Series X
Series X Debentures on May 1 Debentures on any securities exchange.
and November 1 of each year,
beginning November 1, 2000.
--------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus supplement or the attached prospectus is accurate and
complete. Any representation to the contrary is a criminal offense.
--------------------------
<TABLE>
<CAPTION>
Per Debenture Total
<S> <C> <C>
Public Offering Price (1)............................................... 100.000% $ 150,000,000
Underwriting Discount................................................... .350% $ 525,000
Proceeds, before expenses, to Rollins Truck Leasing Corp................ 99.650% $ 149,475,000
- ------------------------------------------------------------------------ --------------------- ---------------------
</TABLE>
(1) Plus accrued interest from May 3, 2000 if settlement occurs after that
date.
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The Underwriter listed below will purchase the Series X Debentures from us on
a firm commitment basis and offer them to you, subject to certain conditions.
The Series X Debentures will be ready for delivery in book-entry form only
through The Depository Trust Company, on or about May 3, 2000.
Chase Securities Inc.
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The date of this prospectus supplement is April 26, 2000.
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TABLE OF CONTENTS
Page
Prospectus Supplement:
Summary Financial Data ............................................. S-3
Use of Proceeds .................................................... S-4
Description of the Series X Debentures ............................. S-4
Underwriting ....................................................... S-7
Experts ............................................................ S-7
Legal Matters ...................................................... S-7
Prospectus:
About This Prospectus .............................................. 3
Where You Can Find More Information ................................ 3
Rollins Truck Leasing Corp. ........................................ 4
Summary Financial Data ............................................. 5
Use of Proceeds .................................................... 6
Description of Debentures .......................................... 6
General ....................................................... 6
Terms of a Particular Series .................................. 7
Our Covenants ................................................. 7
Security Provisions ........................................... 8
Modification of Indenture and Waiver of Certain Covenants ..... 8
Defaults and Certain Rights on Default ........................ 9
Plan of Distribution ............................................... 10
Legal Matters ...................................................... 10
Experts ............................................................ 10
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You should read this prospectus supplement along with the prospectus
that follows. Both documents contain information you should consider when
making your investment decision. You should rely only on the information
contained or incorporated by reference in this prospectus supplement and the
prospectus. We have not, and the underwriter has not, authorized any other
person to provide you with different information. If anyone provides you with
different or inconsistent information, you should not rely on it. We are not,
and the underwriter is not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus supplement and the prospectus is
accurate as of the date on the front cover of this prospectus supplement only.
Our business, financial condition, results of operations and prospects may
have changed since that date.
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SUMMARY FINANCIAL DATA
($ In Thousands)
The following summary is qualified in its entirety by the detailed
information and financial statements available as described under "Where You
Can Find More Information" in the accompanying prospectus.
<TABLE>
<CAPTION>
Six Months Ended
March 31, Fiscal Year Ended September 30,
---------------- -------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
------ ------ ------ ------ ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues...................... $ 345,480 $ 306,274 $ 627,397 $ 610,157 $ 556,704 $ 513,779 $ 482,612
Expenses:
Operating.................. 134,657 120,921 239,162 244,260 228,957 211,919 194,073
Depreciation............... 113,882 98,040 199,342 183,465 170,039 158,407 146,777
Gain on sale of property and (8,648) (9,787) (7,950)
equipment................ (18,444) (17,007) (12,230) (12,657)
Selling and administrative. 32,237 27,654 57,805 55,530 50,457 47,995 43,146
----------- ----------- ----------- ----------- ----------- ----------- -----------
262,332 237,967 479,302 473,468 437,223 410,371 371,339
----------- ----------- ----------- ----------- ----------- ----------- -----------
Operating earnings............ 83,148 68,307 148,095 136,689 119,481 103,408 111,273
Interest expense, net......... (35,221) (27,025) (55,364) (51,586) (49,270) (47,481) (44,181)
Gain on sale of business...... 56,213 - - - - - -
----------- ----------- ----------- ----------- ----------- ----------- -----------
Earnings before income
taxes...................... 104,140 41,282 92,731 85,103 70,211 55,927 67,092
Income taxes.................. 40,719 16,059 36,258 33,080 27,417 21,811 25,756
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net earnings.................. $ 63,421 $ 25,223 $ 56,473 $ 52,023 $ 42,794 $ 34,116 $ 41,336
=========== =========== =========== =========== =========== =========== ===========
Earnings per share (1)
Basic...................... $ 1.10 $ .43 $ .98 $ .86 $ .68 $ .52 $ .61
=========== =========== =========== =========== =========== =========== ===========
Diluted.................... $ 1.09 $ .43 $ .97 $ .85 $ .68 $ .52 $ .61
=========== =========== =========== =========== =========== =========== ===========
Average common shares and
equivalents outstanding
(000's) (1)
Basic...................... 57,702 58,296 57,833 60,340 62,681 65,076 67,432
=========== =========== =========== =========== =========== =========== ===========
Diluted.................... 58,060 58,876 58,369 61,130 63,362 65,595 68,048
=========== =========== =========== =========== =========== =========== ===========
Total assets (2).............. $1,904,203 $1,308,957 $1,412,887 $1,297,474 $1,193,935 $1,126,981 $1,030,223
Equipment financing
obligations................ $1,164,169 $ 758,264 $ 802,458 $ 749,876 $ 671,822 $ 641,362 $ 574,186
Shareholders' equity (2)...... $ 388,605 $ 298,367 $ 320,386 $ 292,985 $ 289,982 $ 285,127 $ 277,501
Ratio of earnings to fixed 3.71 2.41 2.55 2.55 2.34 2.10 2.41
charges (3)................
</TABLE>
(1) Information for the fiscal years ended September 30, 1997 and prior have
been adjusted for the three-for-two common stock split distributed on
March 16, 1998.
(2) Information for the fiscal years ended September 30, 1998 and prior have
been reclassified to reflect the effects of adopting the provisions of
SFAS No. 130, "Reporting Comprehensive Income," during 1999.
(3) For purposes of computing the ratio of earnings to fixed charges, fixed
charges consist of interest, the portion of rental expenses identified as
interest and amortization of debt expense. Earnings are computed by
adding the amount of such fixed charges to earnings before income taxes.
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<PAGE>
USE OF PROCEEDS
We will advance the net proceeds from the offering of the Series X
Debentures to our subsidiary Rollins Leasing Corp. together with other funds
of ours for a total of $150,000,000 in exchange for a $150,000,000 note of
Rollins Leasing Corp. Rollins Leasing Corp. will use $50,000,000 of the
proceeds to repay its note in that amount to us, and we will use the note
repayment to repay our 10.35% Series I Collateral Trust Debentures in that
amount that mature on May 15, 2000. Rollins Leasing Corp. will use the balance
of these funds to purchase transportation equipment and repay existing
revolving credit facility indebtedness incurred to acquire transportation
equipment. At March 31, 2000, the indebtedness under our revolving credit
facility was $108,000,000 and carried an interest rate of 6.08%. The facility
is renewable annually.
DESCRIPTION OF THE SERIES X DEBENTURES
The following description of the particular terms of the Series X
Debentures offered hereby supplements, and to the extent inconsistent
therewith replaces, the description of the general terms and provisions of the
Debentures set forth in the accompanying prospectus under the caption
"Description of Debentures".
General
The Series X Debentures will mature on May 1, 2002 and will be
limited to $150,000,00 aggregate principal amount.
Interest at the annual rate set forth on the cover page of this
Prospectus Supplement will accrue from May 3, 2000 and is payable semiannually
on May 1 and November 1 of each year, commencing November 1, 2000, to the
persons in whose names the Series X Debentures are registered on the Debenture
registry books on the preceding April 15 and October 15, respectively.
We will issue the Series X Debentures only in registered form in
denominations of $1,000 and integral multiples thereof.
Redemption
The Series X Debentures may not be redeemed prior to maturity and
will not have the benefit of any sinking fund.
Security
At the time of the issuance of the Series X Debentures, the Trustee
will receive a pledge of a $150,000,000 unsecured promissory note of our
subsidiary, Rollins Leasing Corp. After the issuance of the Series X
Debentures, and repayment of the Series I Debentures, there will be
$1,050,000,000 principal amount of Debentures outstanding. All of our
Debentures will be secured by pledges of an aggregate of $1,050,000,000
principal amount of unsecured promissory notes of Rollins Leasing Corp. Under
certain circumstances set forth under "Description of Debentures--Security
Provisions" in the accompanying Prospectus, the promissory notes may be
required to be secured by Rollins Leasing Corp. by liens on their vehicles and
vehicles leases.
Concerning the Trustee
The Series X Debentures will be issued under a Collateral Trust
Indenture dated as of March 21, 1983, as supplemented and amended by a Third
Supplemental Indenture thereto dated as of February 20, 1986, an Eighth
Supplemental Indenture dated as of May 15, 1990, a Seventeenth Supplemental
Indenture dated as of March 10, 1997, and as supplemented by the Twenty-third
Supplemental Indenture dated as of May 3, 2000 between us and First Union
National Bank, as Trustee. In the event that notes issued to the Trustee by
Participating Subsidiaries (as defined in the Eighth Supplemental Indenture)
become secured under the circumstances set forth under "Description of
Debentures--Security Provisions" in the accompanying Prospectus, First Union
will act as security trustee for the security interest of the Trustee, as
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holder of the Participating Subsidiary notes, and the security interest of
such other creditors of the Participating Subsidiaries as may be entitled to
share therein.
Book-Entry, Delivery and Form
The Depository Trust Company, or DTC, New York, NY, will act as
securities depository for the Series X Debentures. The Series X Debentures
will be issued as fully registered securities registered in the name of Cede &
Co. (DTC's partnership nominee). One fully registered global Debenture
certificate will be issued for the Series X Debentures in the aggregate
principal amount of $150,000,000, and will be deposited with, or on behalf of,
DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
and Exchange Act of 1934. DTC holds securities that its participants ("Direct
Participants") deposit with DTC. DTC also facilitates the settlement among
Direct Participants of securities transactions, such as transfers and pledges,
in deposited securities through electronic computerized book-entry changes in
Direct Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations, and
certain other organizations. DTC is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly
("Indirect Participants" and together with Direct Participants,
"Participants"). The Rules applicable to DTC and its Participants are on file
with the Securities and Exchange Commission.
Purchases of Series X Debentures under the DTC system must be made
by or through Direct Participants, which will receive a credit for the Series
X Debentures on DTC's records. The ownership interest of each actual purchaser
of the Series X Debentures ("Beneficial Owner") is in turn to be recorded on
the Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Participant through which the
Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Series X Debentures are to be accomplished by entries made on
the books of Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership interests in
the Series X Debentures, except in the event that use of the book-entry system
for the Series X Debentures is discontinued.
To facilitate subsequent transfers, all Series X Debentures
deposited by Direct Participants with DTC are registered in the name of DTC's
partnership nominee, Cede & Co. The deposit of Series X Debentures with DTC
and their registration in the name of Cede & Co. effect no change in
beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of
the Series X Debentures; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Series X Debentures are credited, which
may or may not be the Beneficial Owners. The Participants will remain
responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the
Series X Debentures. Under its usual procedures, DTC would mail an Omnibus
Proxy to us as soon as possible after the record date. The Omnibus Proxy would
assign Cede & Co's consent or voting rights to those Direct Participants to
whose accounts the Series X Debentures are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
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Principal and interest payments on the Series X Debentures will be
made to DTC. DTC's practice is to credit Direct Participants' accounts on the
payable date in accordance with their respective holdings shown on DTC's
records unless DTC has reason to believe that it will not receive payment on
the payable date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in
"street name", and will be the responsibility of such Participant and not of
DTC, us or the Trustee, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of principal and interest to DTC
is the responsibility of us or the Trustee, disbursement of such payments to
Direct Participants is the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners is the responsibility of Participants.
DTC may discontinue providing its services as securities depository
with respect to the Series X Debentures at any time by giving reasonable
notice to us or the Trustee. Under such circumstances, in the event that a
successor securities depository is not obtained, definitive certificates are
required to be printed and delivered.
We may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
definitive certificates will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that we believe to be reliable
(including DTC), but we take no responsibility for the accuracy thereof.
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<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement dated April 26, 2000, we have agreed to sell to Chase Securities
Inc. (the "Underwriter") and the Underwriter has agreed to purchase the entire
principal amount of the Series X Debentures offered hereby.
Under the terms and conditions of the Underwriting Agreement, the
Underwriter is committed to take and pay for all of the Series X Debentures,
if any are taken.
The Underwriter has advised us that it proposes initially to offer
the Series X Debentures to the public at the public offering price set forth
on the cover page of this prospectus supplement and to certain dealers at such
price less a concession not in excess of 0.250% of the principal amount of the
Series X Debentures. The Underwriter may allow, and such dealers may reallow,
a discount not in excess of 0.150% of the principal amount of the Series X
Debentures. After the initial public offering, the public offering price,
concession and discount may be changed.
We have agreed to indemnify the Underwriter against certain
liabilities including liabilities under the Securities Act of 1933.
The Series X Debentures are a new issue of securities, and there is
currently no established trading market for the Series X Debentures. In
addition, we do not intend to apply for the Series X Debentures to be listed
on any securities exchange or to arrange for the Series X Debentures to be
quoted on any quotation system. Accordingly, there can be no assurance that a
liquid trading market will develop for the Series X Debentures, that you will
be able to sell your Series X Debentures at a particular time or that the
prices that you receive when you sell will be favorable.
In connection with the offering of the Series X Debentures, the
Underwriter may engage in overallotment, stabilizing transactions and
syndicate covering transactions in accordance with Regulation M under the
Securities Exchange Act of 1934. Overallotment involves sales in excess of the
offering size, which creates a short position for the Underwriter. Stabilizing
transactions involve bids to purchase the Series X Debentures in the open
market for the purpose of pegging, fixing or maintaining the price of those
Debentures. Syndicate covering transactions involve purchases of the Series X
Debentures in the open market after the distribution has been completed in
order to cover short positions. Stabilizing transactions and syndicate
covering transactions may cause the price of the Series X Debentures to be
higher than it would otherwise be in the absence of those transactions. If the
Underwriter engages in stabilizing or syndicate covering transactions, it may
discontinue them at any time.
The Underwriter and its affiliates engage in various general
financing and banking transactions with us and our affiliates.
EXPERTS
The financial statements incorporated in this prospectus supplement
and the accompanying prospectus by reference to our Annual Report on Form 10-K
for the fiscal year ended September 30, 1999 have been so incorporated in
reliance on the report of KPMG LLP, independent certified public accountants,
given on the authority of said firm as experts in auditing and accounting.
LEGAL MATTERS
Certain legal matters relating to the Series X Debentures will be
passed upon for us by J. Carlisle Peet, III, Esq., Assistant General Counsel
and Assistant Secretary of the Company, and for the Underwriter by Cravath,
Swaine & Moore, 825 Eighth Avenue, New York, New York 10019. Mr. Peet owns
beneficially 37,973 shares of our Common Stock.
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