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FORM 10-K
Annual Report to the
Securities and
Exchange Commission
(Rollins logo) ROLLINS, INC.
For the Year Ended
December 31, 1993
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT
(Mark One)
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
[FEE REQUIRED]
For the fiscal year ended December 31, 1993
[] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
[NO FEE REQUIRED]
For the transition period from to
COMMISSION FILE NO. 1-4422
ROLLINS, INC.
<TABLE>
<S> <C>
INCORPORATED I.R.S. EMPLOYER
IN IDENTIFICATION NUMBER
DELAWARE 51-0068479
</TABLE>
2170 PIEDMONT ROAD, N.E., ATLANTA, GEORGIA 30324
TELEPHONE NUMBER -- (404) 888-2000
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<CAPTION>
Name of Each
Title of Each Class Exchange on Which Registered
<S> <C>
Common Stock, $1 Par Value The New York Stock Exchange
The Pacific Stock Exchange
</TABLE>
Indicate by check mark whether the Registrant (l) has filed all reports
required to be filed by Section 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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of Rollins, Inc. common stock, held by
non-affiliates on February 28, 1994 was $608,492,697, based on the closing price
on the New York Stock Exchange on such date of $29 3/8 per share.
Rollins, Inc. had 35,684,459 shares of common stock outstanding (excluding
5,747,355 Treasury shares) as of February 28, 1994.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Rollins, Inc.'s Annual Report to Stockholders for the calendar
year ended December 31, 1993 are incorporated by reference into Part I, Item
l(b) and l(c), Item 3, and Part II, Items 5-8.
Portions of the Proxy Statement for the 1994 Annual Meeting of Stockholders of
Rollins, Inc. are incorporated by reference into Part III, Items 10, 11, 12 and
13.
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PART I
ITEM 1. BUSINESS.
(a) GENERAL DEVELOPMENT OF BUSINESS.
Since the beginning of the calendar year, Rollins, Inc. and its
subsidiaries have continued to operate and grow in the same principal services
for homes and businesses.
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS.
The response to Item l.(b) is incorporated by reference from the table
under the caption Business Segment Information, on page 21 of the 1993 Annual
Report to Stockholders.
(c) NARRATIVE DESCRIPTION OF BUSINESS.
(1)(i) The Registrant is a national company with headquarters located in
Atlanta, Georgia, providing services to both residential and commercial
customers. The four primary services provided are termite and pest control,
plantscaping, lawn care, and protective services. Additionally, the revenues by
business segment are incorporated by reference to the table under the caption
Business Segment Information on page 21 of the 1993 Annual Report to
Stockholders.
Orkin Exterminating Company, Inc., a wholly owned subsidiary (Orkin),
founded in 1901, is one of the world's largest termite and pest control
companies. It provides customized services to approximately 1.4 million
customers through a network of 358 company-owned and operated branches serving
customers in 49 states, Mexico, and Puerto Rico. It provides customized pest
control services to homes and businesses, including hotels, food service and
transportation companies. Orkin's continuous regular service provides protection
against household pests, rodents and termites. Orkin's Plantscaping Division
designs, installs and maintains green and flowering plants from ten branches and
one supply outlet, and services customers in 16 states. It provides services to
hotels, shopping malls, restaurants, and office buildings. Orkin's Lawn Care
Division provides fertilization, weed and insect control, seeding, aeration of
lawns, and tree and shrub care from 32 branches serving customers in 15 states.
Rollins Protective Services, a Division of the Registrant, was established
in 1969. Services are provided from 46 branches serving customers in 33 states.
A pioneer in developing customized wired and wireless electronic security
systems, it provides full-service capabilities from system design and
installation to maintenance and monitoring services. Full-service includes
guaranteed maintenance programs, 24-hour emergency repairs, and 24-hour alarm
monitoring services.
(ii) The Registrant has made no announcement of, nor did any information
become public about, a new line of business or product requiring the investment
of a material amount of the Registrant's total assets.
(iii) Sources and availability of raw materials present no particular
problem to the Registrant, since its businesses are primarily in service-related
industries.
(iv) Governmental licenses, patents, trademarks and franchises are of minor
importance to the Registrant's service operations. Local licenses and permits
are required in order for the Registrant to conduct its termite and pest
control, plantscaping, and lawn care and its protective services operations in
certain localities. In view of the widespread operations of the Registrant's
service operations, the failure of a few local governments to license a facility
would not have a material adverse effect on the results of operations of the
Registrant.
(v) The business of the Registrant is affected by the seasonal nature of
the Registrant's termite and pest control, plantscaping and lawn care service
operations (Orkin Exterminating Company, Inc.). The metamorphosis of termites in
the spring and summer (the occurrence of which is determined by the timing of
the change in seasons) has historically resulted in an increase in the revenue
and income of the Registrant's termite and pest control operations during such
period. Plantscaping operations experience seasonal increases in revenues and
operating income generated by the division's Exterior Color and Holiday programs
offered during the spring and late fall. Lawn care services are seasonal and
coincide with the growing seasons of lawns.
(vi) Inapplicable.
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(vii) The Registrant and its subsidiaries do not have a material part of
their business that is dependent upon a single customer or a few customers, the
loss of which would have a material effect on the business of the Registrant.
(viii) The dollar amount of service contracts and backlog orders as of the
end of the Registrant's 1993 and 1992 calendar years was approximately
$12,890,000 and $10,565,000, respectively. Backlog services and orders are
usually provided within the month following the month of receipt, except in the
area of prepaid pest control and lawn care where services are usually provided
within twelve months of receipt.
(ix) Inapplicable.
(x) The Registrant believes that each of its businesses competes favorably
with competitors within its respective area. Orkin Exterminating Company, Inc.
is one of the world's largest termite and pest control companies. Rollins
Protective Services is a pioneer and one of the leaders in residential security.
Orkin Plantscaping is the industry's second largest company with operations in
nine major markets. Orkin Lawn Care is one of the largest lawn care companies.
The principal methods of competition in the Registrant's termite and pest
control business are service and guarantees, including the money-back guarantee
on termite and pest control, and the termite retreatment and damage repair
guarantee to qualified homeowners. Competition in the plantscaping and lawn care
businesses is based on providing customized services together with guarantees,
with Registrant offering the same money-back guarantee for the services. The
principal method of competition in the residential protection business of
Registrant is the provision of customized emergency protection services to meet
the particular needs of each customer.
(xi) Expenditures by the Registrant on research activities relating to the
development of new products or services are not significant. Some of the new and
improved service methods and products are researched, developed and produced by
unaffiliated universities and companies. Also a portion of these methods and
products are produced to the specifications provided by the Registrant.
(xii) The capital expenditures, earnings and competitive position of the
Registrant and its subsidiaries are not materially affected by compliance with
Federal, state and local provisions which have been enacted or adopted
regulating the discharge of materials into the environment, or otherwise
relating to the protection of the environment.
(xiii) The number of persons employed by the Registrant and its
subsidiaries as of the end of 1993 was 8,878.
(d) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT
SALES.
Inapplicable.
ITEM 2. PROPERTIES.
The Registrant's administrative headquarters and central warehouse, both of
which are owned by the Registrant, are located at 2170 Piedmont Road, N.E.,
Atlanta, Georgia 30324. The Registrant owns or leases several hundred branch
offices and operating facilities used in its businesses. None of the branch
offices, individually considered, represents a materially important physical
property of the Registrant. The facilities are suitable and adequate to meet the
current and reasonably anticipated future needs of the Registrant.
ITEM 3. LEGAL PROCEEDINGS.
Legal proceedings are included on page 21 of the 1993 Annual Report to
Stockholders contained in financial statement footnote No. 6 and are
incorporated herein by reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Inapplicable.
ITEM 4.A. EXECUTIVE OFFICERS OF THE REGISTRANT.
Each of the executive officers of the Registrant was elected by the Board
of Directors to serve until the Board of Directors' meeting immediately
following the next annual meeting of stockholders or until his earlier removal
by the Board of Directors or his resignation. The following table lists the
executive officers of the
3
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Registrant and their ages, offices with the Registrant, and the dates from which
they have continually served in their present offices with the Registrant.
<TABLE>
<CAPTION>
DATE FIRST ELECTED TO
NAME AGE OFFICE WITH REGISTRANT PRESENT OFFICE
<S> <C> <C> <C>
R. Randall Rollins (1)........ 62 Chairman of the Board and Chief Executive Officer 10/22/91
Gary W. Rollins (1)........... 49 President and Chief Operating Officer 1/24/84
Gene L. Smith................. 48 Chief Financial Officer, 1/22/91
Secretary, and Treasurer 1/26/93
</TABLE>
(1) R. Randall Rollins and Gary W. Rollins are brothers.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Information containing dividends and stock prices on page 13 and the
principal markets on which common shares are traded on page 25 of the 1993
Annual Report to Stockholders are incorporated herein by reference. The number
of stockholders of record on December 31, 1993 was 4,012.
ITEM 6. SELECTED FINANCIAL DATA.
Selected Financial Data on page 24 of the 1993 Annual Report to
Stockholders is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION.
Management's Discussion and Analysis of Financial Condition and Results of
Operations included on pages 13 through 15 of the 1993 Annual Report to
Stockholders is incorporated herein by reference. The effects of inflation on
operations were not material for the periods being reported.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The following consolidated financial statements and supplementary data of
the Registrant and its consolidated subsidiaries, included in the 1993 Annual
Report to Stockholders, are incorporated herein by reference.
Financial Statements:
Statements of Income for each of the three years in the period ended
December 31, 1993, page 17.
Statements of Earnings Retained for each of the three years in the
period ended December 31, 1993, page 17.
Statements of Financial Position as of December 31, 1993 and 1992,
page 16.
Statements of Cash Flows for each of the three years in the period
ended December 31, 1993, page 18.
Notes to Financial Statements, pages 19 through 23.
Report of Independent Public Accountants, page 23.
Supplementary Data:
Quarterly Information, page 13.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Inapplicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The response to Item 10, applicable to the Directors of the Registrant, is
incorporated herein by reference to the information set forth under the caption
Election of Directors in the Proxy Statement for the Annual Meeting of
Stockholders to be held April 26, 1994. Information concerning executive
officers is included in Part I, Item 4.A of this Form 10-K.
4
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Based solely on its review of copies of forms received by it pursuant to
Section 16(a) of the Securities Exchange Act of 1934, as amended, or written
representations from certain reporting persons, Registrant believes that during
the fiscal year ended December 31, 1993 all filing requirements applicable to
its officers, directors, and greater than 10% stockholders were complied with.
ITEM 11. EXECUTIVE COMPENSATION.
The response to Item 11 is incorporated herein by reference to the
information set forth under the caption Executive Compensation in the Proxy
Statement for the Annual Meeting of Stockholders to be held April 26, 1994.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The response to Item 12 is incorporated herein by reference to the
information set forth under the captions Capital Stock and Election of Directors
in the Proxy Statement for the Annual Meeting of Stockholders to be held April
26, 1994.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The section entitled Compensation Committee Interlocks and Insider
Participation and Executive Compensation in the Proxy Statement for the Annual
Meeting of Stockholders to be held April 26, 1994, and related footnotes and
information are incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
The following are filed as part of this report:
(a) 1. Financial Statements
The following financial statements are incorporated herein by reference to
portions of the 1993 Annual Report to Stockholders included with this
Form 10-K:
Statements of Income for each of the three years in the period ended
December 31, 1993, page 17.
Statements of Earnings Retained for each of the three years in the
period ended December 31, 1993, page 17.
Statements of Financial Position as of December 31, 1993 and 1992,
page 16.
Statements of Cash Flows for each of the three years in the period
ended December 31, 1993, page 18.
Notes to Financial Statements, pages 19 through 23.
Report of Independent Public Accountants, page 23.
(a) 2. Financial Statement Schedules
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<C> <S>
I Marketable Securities -- Other Investments
VIII Valuation and Qualifying Accounts
X Supplementary Income Statement Information
</TABLE>
Schedules not listed above have been omitted as either not applicable,
immaterial or disclosed in the financial statements or notes thereto.
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(a) 3. Exhibits
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(3)(a) The Company's Certificate of Incorporation is incorporated herein by reference to Exhibit
(3)(a) as filed with its Form 10-K for the year ended December 31, 1992.
(b) By-laws of Rollins, Inc.
(10) Rollins, Inc. Employee Incentive Stock Option Plan is incorporated herein by reference to
Exhibit (10) filed with the Company's Form 10-K for the year ended December 31, 1991.
(13) Portions of the Annual Report to Stockholders for the year ended December 31, 1993 which are
specifically incorporated herein by reference.
(21) Subsidiaries of Registrant.
(23) Consent of Independent Public Accountants.
(24) Powers of Attorney for Directors.
</TABLE>
(b) No reports on Form 8-K were required to be filed by the Company for the
quarter ended December 31, 1993.
6
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SIGNATURES
Pursuant to the requirements of Section 13 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.
ROLLINS, INC.
By: /s/ R. RANDALL ROLLINS
R. Randall Rollins
Chairman of the Board of Directors
(Principal Executive Officer)
March 28, 1994
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND
IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<S> <C>
/s/ R. RANDALL ROLLINS /s/ GENE L. SMITH
R. Randall Rollins Gene L. Smith
Chairman of the Board of Directors Chief Financial Officer, Secretary, and Treasurer
(Principal Executive Officer) (Principal Financial and Accounting Officer)
March 28, 1994 March 28, 1994
</TABLE>
The Directors of Rollins, Inc. (listed below) executed a power of attorney
appointing Gary W. Rollins their attorney-in-fact, empowering him to sign this
report on their behalf.
Wilton Looney, Director
John W. Rollins, Director
Henry B. Tippie, Director
James B. Williams, Director
Bill J. Dismuke, Director
<TABLE>
<S> <C>
/s/ GARY W. ROLLINS
Gary W. Rollins, As Attorney-in-Fact & Director,
President and Chief Operating Officer
</TABLE>
March 28, 1994
7
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ROLLINS, INC. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
CONSOLIDATED FINANCIAL STATEMENTS OF ROLLINS, INC. AND SUBSIDIARIES:
The Registrant's 1993 Annual Report to Stockholders, portions of which are
filed with this Form 10-K, contains on pages 16 through 23 the consolidated
financial statements for the years ended December 31, 1993, 1992 and 1991 and
the report of Arthur Andersen & Co. on the financial statements for the years
then ended. These financial statements and the report of Arthur Andersen & Co.
are incorporated herein by reference. The financial statements include the
following:
Statements of Income for each of the three years in the period ended
December 31, 1993.
Statements of Earnings Retained for each of the three years in the
period ended December 31, 1993.
Statements of Financial Position as of December 31, 1993 and 1992.
Statements of Cash Flows for each of the three years in the period
ended December 31, 1993.
Notes to Financial Statements.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULES, Page 9.
SCHEDULES
<TABLE>
<CAPTION>
SCHEDULE
NUMBER
<C> <S>
I Marketable Securities -- Other Investments, Page 10.
VIII Valuation and Qualifying Accounts, Page 10.
X Supplementary Income Statement Information, Page 10.
</TABLE>
Schedules not listed above have been omitted as either not applicable,
immaterial or disclosed in the financial statements or notes thereto.
8
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULES
To the Directors and the Stockholders of Rollins, Inc.:
We have audited, in accordance with generally accepted auditing standards,
the financial statements included in Rollins, Inc.'s annual report to
stockholders incorporated by reference in this Form 10-K, and have issued our
report thereon dated February 14, 1994. Our audits were made for the purpose of
forming an opinion on those statements taken as a whole. The schedules listed in
the index to financial statements and schedules are the responsibility of the
Company's management and are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of the basic
financial statements. These schedules have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly state in all material respects the financial data required to be
set forth therein in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN & CO.
Atlanta, Georgia
February 14, 1994
9
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ROLLINS, INC. AND SUBSIDIARIES
SCHEDULE I -- MARKETABLE SECURITIES -- OTHER INVESTMENTS
FOR THE YEAR ENDED DECEMBER 31, 1993
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
AMOUNT
PRINCIPAL MARKET VALUE AT CARRIED IN
NAME OF ISSUER OR TITLE OF ISSUE AMOUNT COST DECEMBER 31, 1993 BALANCE SHEET
<S> <C> <C> <C> <C>
U.S. Government Securities................................ $ 23,225 $24,195 $24,182 $24,195
U.S. Government Agency-Related Mortgage Debt
Obligations............................................. 1,139 1,144 1,136 1,144
Corporate Bonds........................................... 14,290 14,623 14,703 14,623
Corporate Notes (1)....................................... 11,131 11,029 11,029 11,029
Total Marketable Securities.......................... $ 49,785 $50,991 $51,050 $50,991
</TABLE>
(1) No single issuer exceeds 2% of total assets.
ROLLINS, INC. AND SUBSIDIARIES
SCHEDULE VIII-VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
ADDITIONS
BALANCE AT CHARGED TO CHARGED TO BALANCE AT
BEGINNING COSTS AND OTHER END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS (1) PERIOD
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993 --
Allowance for doubtful accounts................ $2,948 $6,734 $ -- $5,134 $4,548
Year ended December 31, 1992 --
Allowance for doubtful accounts................ $1,809 $5,850 $ -- $4,711 $2,948
Year ended December 31, 1991 --
Allowance for doubtful accounts................ $1,244 $4,580 $ -- $4,015 $1,809
</TABLE>
NOTE: (1) Deductions represent the write-off of uncollectible receivables, net
of recoveries.
ROLLINS, INC. AND SUBSIDIARIES
SCHEDULE X-SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER
31,
1993 1992 1991
<S> <C> <C> <C>
Charged to expenses --
Maintenance and repairs........................................................ $ 5,971 $ 6,484 $ 5,947
Advertising costs.............................................................. $23,517 $20,826 $19,079
Taxes, other than income taxes and payroll taxes............................... $ 5,984 $ 5,558 $ 4,899
</TABLE>
10
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(Rollins logo)
Rollins, Inc.
2170 Piedmont Road, NE
Atlanta, Georgia 30324
(404) 888-2000
<PAGE>
EXHIBIT INDEX
Exhibit Number
(3)(a) The Certificate of Incorporation of Rollins, Inc.
as incorporated herein by reference to Exhibit
(3)(a) as filed with its Form 10-K for the year
ended December 31, 1992.
(b) By-laws of Rollins, Inc.
(10) Rollins, Inc. Employee Incentive Stock Option Plan
is incorporated herein by reference to Exhibit (10)
filed with the Company's Form 10-K for the year
ended December 31, 1991.
(13) Portions of the Annual Report to Stockholders for
the year ended December 31, 1993 which are
specifically incorporated herein by reference.
(21) Subsidiaries of Registrant.
(23) Consent of Independent Public Accountants
(24) Powers of Attorney for Directors.
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APPENDIX
On the Cover of Form 10-K the Rollins logo appears where noted.
On the Back Cover of Form 10-K the Rollins logo appears where noted.
On Page 25 of Exhibit 13 the recycled logo appears where noted.
REVISED BY-LAWS
OF
ROLLINS, INC.
(JULY 26, 1988)
OFFICES
FIRST: The registered office of the corporation shall be
located at 2170 Piedmont Road, N.E., in the City of Atlanta, Georgia,
and the registered agent in charge of said office shall be C T
Corporation.
CORPORATE SEAL
SECOND: The corporate seal shall have inscribed thereon the
name of the corporation, the year of its incorporation and the words
"Incorporated Delaware."
MEETINGS OF STOCKHOLDERS
THIRD: The annual meeting of stockholders for the election of
directors shall be held on the fourth Tuesday of April at such
office of the corporation as may be designated by the Board of
Directors and included in the notice of such meeting, in each year, or
if that day be a legal holiday, on the next succeeding day not a legal
holiday, at which meeting they shall elect by ballot, by plurality
vote, a board of directors and may transact such other business as may
come before the meeting.
Special meetings of the stockholders may be called at any time
by the chairman and shall be called by the chairman or secretary on
the request in writing or by vote of a majority of the directors or at
the request in writing of stockholders of record owning a majority in
amount of the capital stock outstanding and entitled to vote.
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All such meetings of the stockholders shall be held at such
place or places, within or without the State of Delaware, as may from
time to time be fixed by the board of directors or as shall be
specified and fixed by the respective notices or waivers of notice
thereof.
Each stockholder entitled to vote shall, at every meeting of
the stockholders, be entitled to one vote in person or by proxy,
signed by him, for each share of voting stock held by him, but no
proxy shall be voted on after the meeting of stockholders for which
such proxy was solicited and which has been adjourned sine die.
Such right to vote shall be subject to the right of the board of
directors to close the transfer books or to fix a record date for
voting stockholders as hereinafter provided and if the directors
shall not have exercised such right, no share of stock shall be voted
on at any election for directors which shall have been transferred on
the books of the corporation within twenty days next preceding such
election.
Notice of all meetings shall be mailed by the secretary to
each stockholder of record entitled to vote, at his or her last
known post office address, not less than ten days before any annual or
special meeting.
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The holders of a majority of the stock outstanding and
entitled to vote shall constitute a quorum, but the holders of a
smaller amount may adjourn from time to time without further notice
until a quorum is secured.
DIRECTORS
FOURTH: The property and business of this Corporation shall
be managed by a Board of up to nine Directors. The Directors shall be
divided into three classes. The first class (Class I) shall consist
of two (2) Directors and the term of office of such class shall expire
at the next Annual Meeting of Stockholders in 1978. The second class
(Class II) shall consist of two (2) Directors and the term of office
of such class shall expire at the Annual Meeting of Stockholders in
1979. The third class (Class III) shall consist of two (2) Directors
and the term of office of such third class shall expire at the Annual
Meeting of Stockholders in 1980. Should the number of Directors be
increased or decreased in the future, no class of Directors shall have
more than one Director more than any other class of Directors. At
each annual election commencing at the Annual Meeting of Stockholders
in 1978, the successors to the class of Directors whose term expires
at that time shall be elected to hold office for the term of three
years to succeed those whose term expires, so that the term of office
of one class of Directors shall expire in each year. Each Director
shall hold office for the term for which he is elected or appointed or
until his successor shall be elected and qualified, or until his death
or until he shall resign.
POWERS OF DIRECTORS
FIFTH: The board of directors shall have, in addition to such
powers as are hereinafter expressly conferred on it, all such powers
as may be exercised by the corporation, subject to the provisions of
the statute, the certificate of incorporation and the by-laws.
The board of directors shall have power:
To purchase or otherwise acquire property, rights or
privileges for the corporation, which the corporation has power to
take, at such prices and on such terms as the board of directors may
deem proper.
To pay for such property, rights or privileges in whole or in
part with money, stock, bonds,
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debentures or other securities of the
corporation, or by the delivery of other property to the corporation.
To create, make and issue mortgages, bonds, deeds of trust,
trust agreements and negotiable or transferable instruments and
securities, secured by mortgages or otherwise, and to do every other
act and thing necessary to effectuate the same.
To appoint agents, clerks, assistants, factors, employees and
trustees, and to dismiss them at its discretion, to fix their duties
and emoluments and to change them from time to time and to require
security as it may deem proper. Any employee appointed by the board
may be given such designation or title as the board shall determine;
however, any such designation or title given any such employee shall
not be deemed to constitute such employee a corporate officer under
Article EIGHTH of these by-laws.
4
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To confer on any officer of the corporation the power of
selecting, discharging or suspending such employees.
To determine by whom and in what manner the corporation's
bills, notes, receipts, acceptances, endorsements, checks, releases,
contracts or other documents shall be signed.
MEETING OF DIRECTORS
SIXTH: After such annual election of directors, the newly
elected directors may meet for the purpose of organization, the
election of officers and the transaction of other business, at such
place and time as shall be fixed by the stockholders at the annual
meeting, and, if a majority of the directors be present at such place
and time as shall be fixed by the stockholders at the annual meeting,
and, if a majority of the directors be present at such place an time,
no prior notice of such meeting shall be required to be given to the
directors. The place and time of such meeting may also be fixed by
written consent of the directors.
Regular meetings of the directors shall be held annually
following the stockholders meeting on the fourth Tuesday of April and
quarterly on the fourth Tuesdays of July, October and January of each
year at the executive office of the corporation in Atlanta, Georgia,
or elsewhere and at other times as may be fixed by resolution of the
board.
Special meetings of the directors may be called by the
chairman on two days' notice in writing or on one day's notice by
telegraph to each director and shall be called by the chairman in like
manner on the written request of two directors.
5
<PAGE>
Special meetings of the directors may be held within or without the
State of Delaware at such places as is indicated in the notice or
waiver of notice thereof.
A majority of the directors shall constitute a quorum, but a
smaller number may adjourn from time to time, without further notice,
until a quorum is secured.
COMPENSATION OF DIRECTORS
AND MEMBERS OF COMMITTEES
SEVENTH: Directors and members of standing committees shall
receive such compensation for attendance at each regular or special
meeting as the board shall from time to time prescribe.
OFFICERS OF THE CORPORATION
EIGHTH: The officers of the corporation shall be a chairman,
a president, a secretary, a treasurer and such other officers as may
from time to time be chosen by the board of directors. The chairman
and the president shall be chosen from among the directors.
One person may hold more than one office.
The officers of the corporation shall hold office
until their successors are chosen and qualify in their stead. Any
officer chosen or appointed by the board of directors may be removed
either with or without cause at any time by the affirmative vote of a
majority of the whole board of directors. If the office of any
officer or officers becomes vacant for any reason, the vacancy shall
be filled by the affirmative vote of a majority of the whole board of
directors.
6
<PAGE>
DUTIES OF THE CHAIRMAN
NINTH: The chairman shall be the chief executive officer of
the corporation. It shall be his duty to preside at all meetings of
stockholders and directors; to have general and active management of
the business of the corporation; and to see that all orders and
resolutions of the board of directors are carried into effect. The
chairman shall be vested with all the powers and be required to
perform all the duties of the president in his absence or disability.
DUTIES OF THE PRESIDENT
TENTH: The president shall be the chief operating officer of
the corporation. It shall be his duty to execute all contracts,
agreements, deeds, bonds, mortgages and other obligations and
instruments, in the name of the corporation, and to affix the
corporate seal thereto when authorized by the board.
He shall have the general supervision and direction of the
other officers of the corporation and shall see that their duties are
properly performed.
The president shall be vested with all the powers and be
required to perform all the duties of the chairman in his absence or
disability.
CHAIRMAN PRO TEM
ELEVENTH: In the absence or disability of the chairman
and the president, the board may appoint from their own number a
chairman.
SECRETARY
TWELFTH: The secretary shall attend all meetings of the
corporation, the board of directors, the executive committee and
standing committees. He shall act as clerk thereof and shall record
all of the proceedings of such meetings in a book kept for that
purpose. He shall give proper notice of meetings of stockholders and
directors and shall perform such other duties as shall be assigned to
him by the president or the chairman of the board of directors.
TREASURER
THIRTEENTH: The treasurer shall have custody of the funds and
securities of the corporation and
7
<PAGE>
shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all moneys and other valuable effects in
the name and to the credit of the corporation in such depositories as
may be designated by the board of directors.
8
<PAGE>
He shall keep an account of stock registered and transferred
in such manner and subject to such
regulations as the board of directors may prescribe.
He shall give the corporation a bond, if required by the board
of directors, in such sum and in form and with security satisfactory
to the board of directors for the faithful performance of the duties
of his office and the restoration to the corporation, in case of his
death, resignation or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession,
belonging to the corporation. He shall perform such other duties as
the board of directors may from time to time prescribe or require.
DUTIES OF OFFICERS MAY BE DELEGATED
FOURTEENTH: In case of the absence of disability of any
officer of the corporation or for any other reason deemed sufficient
by a majority of the board, the board of directors may delegate his
powers or duties to any other officer or to any director for the time
being.
CERTIFICATES OF STOCK
FIFTEENTH: Certificates of stock shall be sign by the
chairman or the president and either the treasurer, assistant
treasurer, secretary or assistant secretary. If a certificate of
stock be lost or destroyed,
9
<PAGE>
another may be issued in its stead upon
proof of such loss or destruction and the giving of a satisfactory
bond of indemnity , in an amount sufficient to indemnify the
corporation against any claim. A new certificate may be issued
without requiring bond when, in the judgment of the directors, it is
proper to do so. Certificates may be signed by facsimile signature if
so ordered by the board of directors.
TRANSFER OF STOCK
SIXTEENTH: All transfers of stock of the corporation shall be
made upon its books by the holder of the shares in person or by his
lawfully constituted representative, upon surrender of certificates of
stock for cancellation.
The corporation shall have authority to appoint
transfer agents and registrars by resolution of the board of
directors.
CLOSING OF TRANSFER BOOKS
SEVENTEENTH: The board of directors shall have power to close
the stock transfer books of the corporation for a period not exceeding
sixty days preceding the date of any meeting of stockholders or the
date for payment of any dividend or the date for the allotment of
rights or the date when any change or conversion or exchange of
capital stock shall go into effect or for a period of not exceeding
sixty days in connection with obtaining the consent of stockholders
for any purpose; provided, however, that in lieu of closing
10
<PAGE>
the stock transfer books as aforesaid, the by-laws may fix or authorize
the board of directors to fix in advance a date, not exceeding sixty
days preceding the date of any meeting of stockholders or the date for
the payment of any dividend, or the date for the allotment of rights
or the date when any change or conversion or exchange of capital stock
shall go into effect, or a date in connection with obtaining such
consent, and in such case such stockholders and only such stockholders
as shall be stockholders of record on the date so fixed shall be
entitled to such notice of , and to vote at such meeting and any
adjournment thereof, or to receive payment of such dividend, or to
receive such allotment of rights, or to exercise such rights, or to
give such consent, as the case may be, notwithstanding any transfer of
any stock on the books of the corporation after any such record date
fixed as aforesaid.
STOCKHOLDERS OF RECORD
EIGHTEENTH: The corporation shall be entitled to treat the
holder of record of any share or shares of stock as the holder in fact
thereof and accordingly shall not be bound to recognize any equitable
or other claim to
11
<PAGE>
or interest in such share on the part of any other
person whether or not is shall have express or other notice thereof,
save as expressly provided by the laws of Delaware.
FISCAL YEAR
NINETEENTH: The fiscal year of the corporation shall begin on
the first day of January in each year.
DIVIDENDS
TWENTIETH: Dividends upon the capital stock may be declared
by the board of directors at any regular or special meeting and may be
paid in cash or in property or in shares of the capital stock. Before
paying any dividend or making any distribution of profits, the
directors may set apart out of any of the funds of the corporation
available for dividends a reserve or reserves for any proper purpose
and may alter or abolish any such reserve or reserves.
CHECKS FOR MONEY
TWENTY-FIRST: All checks, drafts or orders for the payment of
money shall be signed by the treasurer or by such other officer or
officers as the board of directors may from time to time designate.
No check shall be signed in blank. The board of directors also from
time to time may authorize specified employees to sign checks on the
corporation's accounts.
12
<PAGE>
BOOKS AND RECORDS
TWENTY-SECOND: The books, accounts and records of the
corporation except as otherwise required by the laws of the State of
Delaware, may be kept within or without the State of Delaware, at such
place or places as may from time to time be designated by the by-laws
or by resolution of the directors.
NOTICES
TWENTY-THIRD: Notice required to be given under the
provisions of these by-laws to any director, officer or stockholder
shall not be construed to mean personal notice, but may be given in
writing be depositing the same in a post office or letter-box, in a
postpaid sealed wrapper, addressed to such stockholder, officer or
director at such address as appears on the books of the corporation,
and such notice shall be deemed to be given at the time when the same
shall be thus mailed. Any stockholder, officer or director may waive,
in writing, any notice, required to be given under these by-laws
whether before or after the time stated therein.
AMENDMENTS OF BY-LAWS
TWENTY-FOURTH: These by-laws may be amended, altered,
repealed, or added to at any regular meeting of the stockholders or
board of directors or at any special meeting called for that purpose,
by affirmative vote of a majority of the stock issued and outstanding
and entitled to vote or of a majority of the directors in office, as
the case may be.
13
<PAGE>
INDEMNIFICATION OF DIRECTORS,
OFFICERS AND EMPLOYEES
TWENTY-FIFTH: Indemnification. The Corporation shall
indemnify, in the manner and to the fullest extent now or hereafter
permitted by the General Corporation Law of the State of Delaware, any
person ( or the estate of any person) who was or is a party to, or is
threatened to be made a party to, any threatened, pending or completed
action, suit or proceeding, whether or not by or in the right of the
Corporation, and whether civil, criminal, administrative,
investigative or otherwise, by reason of the fact that such person is
or was a director, officer or General Counsel of the Corporation, or
is or was serving at the request of the Corporation as a director,
officer of General Counsel of another corporation, partnership, joint
venture, trust or other enterprise. The indemnification provided
herein shall be made if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interest of
the Corporation, and, with respect to any criminal action or
proceeding, has not reasonable cause to believe his conduct was
unlawful; except that no indemnification shall be made in respect of
any claim, issue
14
<PAGE>
or matter as to which such person shall have been determined to be
liable for gross negligence or willful misconduct in the performance
of his duty to the Corporation. Such determination may be made by a
majority of a committee composed of the directors not involved in the
matter in controversy (whether or not a quorum). To the full extent
permitted by law , the indemnification provided herein shall include
expenses (including attorneys' fees), judgements, fines and amounts
paid in settlement, and, in the manner provided by law, any such
expenses may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding. The indemnification
provided herein shall not be deemed to limit the right of the
Corporation to indemnify any other employee for any such expenses to
the full extent provided by the law, nor shall it be deemed exclusive
of any other rights to which any person seeking indemnification from
the Corporation may be entitled under any agreement, vote of
stockholders or disinterested directors or otherwise, both as to
action in his official capacity and as to act in another capacity
while holding such office. The Corporation may, to the full extent
permitted by law, purchase and maintain insurance on behalf of any
such person against any liability which may be asserted against him.
15
<PAGE>
RESTRICTIONS ON STOCK OWNERSHIP
TWENTY-SIXTH: Not more than one-fifth of the shares of stock
of this corporation outstanding at any time shall be owned (of record)
or voted by or for the account of aliens or their representatives or
by or for the account of a foreign government or representatives
thereof or by or for the account of any corporation organized under
the laws of a foreign country. The company or its transfer agent
reserves the right to require any person or corporation tendering
shares for transfer on its books to exhibit evidence of citizenship
and no shares of the corporation will be transferred should the
recording of such transfer result in more than twenty percent (20%) of
the outstanding and issued stock of the corporation being registered
in the name of an alien or representative of an alien.
No person shall be elected an officer or director of the
company who is not at the time of his election a citizen of the
United States of America.
At the discretion of the board of directors or its officers to
whom the board delegates authority in connection with the printing of
stock certificates to be issued by the corporation, a legend may be
placed on such certificates, reading as follows:
"Federal law restricts the ownership of shares in the issuing
corporation to aliens within certain limits. No certificate will be
received and transferred if the result thereof will be to cause more
than twenty percent (20%) of the issued and outstanding stock of the
corporation to be registered in the name or for the account of aliens
(including foreign governments or subdivisions thereof) or their
representative."
16
QUARTERLY INFORMATION
STOCK PRICES
AND DIVIDENDS
(Rounded to the nearest 1/8)
<TABLE>
<CAPTION>
Stock Prices Dividends Stock Prices Dividends
1993 High Low Paid 1992 High Low Paid
<S> <C> <C> <C> <C> <C> <C> <C>
First Quarter $26-7/8 $23-5/8 $.11 First Quarter $20-1/2 $17-5/8 $.10
Second Quarter 25-7/8 21-1/2 .11 Second Quarter 20-1/8 17-3/8 .10
Third Quarter 26 22-1/2 .11 Third Quarter 22-1/8 18-1/8 .10
Fourth Quarter 27-3/4 21-3/4 .11 Fourth Quarter 23-5/8 21-1/8 .10
</TABLE>
The number of stockholders of record as of December 31, 1993
was 4,012.
REVENUES, NET INCOME, AND EARNINGS PER SHARE
(In thousands except
per share data) First Second Third Fourth
1993
Revenues $127,295 $163,248 $151,808 $133,451
Net Income 5,867 19,071 11,688 7,843
Earnings per Share .16 .54 .33 .22
1992
Revenues $117,449 $150,204 $137,732 $122,281
Net Income 5,087 16,382 10,295 6,238
Earnings per Share .14 .47 .28 .18
1991
Revenues $104,631 $135,610 $124,516 $110,798
Net Income 4,022 13,612 8,632 5,233
Earnings per Share .11 .39 .24 .15
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS % CHANGE FROM PRIOR YEAR
SELECTED INDUSTRY SEGMENT DATA increase/(decrease)
(In thousands) 1993 1992 1991 1993 1992
REVENUES
Orkin $506,399 $461,971 $415,363 9.6% 11.2%
Rollins Protective 57,698 55,942 53,326 3.1 4.9
Other 11,705 9,753 6,866 20.0 42.0
$575,802 $527,666 $475,555 9.1 11.0
Operating Income
Orkin $70,720 $61,687 $51,389 14.6 20.0
Rollins Protective 5,896 5,398 4,956 9.2 8.9
Other 4,504 3,617 2,350 24.5 53.9
$81,120 $70,702 $58,695 14.7% 20.5%
GENERAL OPERATING COMMENTS
Rollins, Inc.'s consolidated revenues of $575.8 million were 9.1%
higher than in 1992. Operating income increased $10.4 million or
14.7% over the prior year. Operating margins improved 5.2% over
1992 compared to 1992's improvement over 1991 of 8.9%.
Both the cost of services provided and sales, general and
administrative expenses improved as a percentage of revenues in
each of the past two years. This strong financial performance was a
result of our continued emphasis on
13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
customer service, improved
productivity, employee training, efficient sales and marketing
programs, and improved cost control.
Effective January 1, 1993, the Company adopted Statement of
Financial Accounting Standards No. 109 (SFAS 109), "Accounting for
Income Taxes". The cumulative effect of the change in the method of
accounting for income taxes attributable to years prior to 1993 was
not material. Prior years' financial statements have not been
restated to reflect the provisions of SFAS 109.
The Omnibus Budget Reconciliation Act of 1993, which
retroactively raised the 1993 statutory federal tax rate from 34% to
35% for the Company, reduced earnings approximately $.01 per share
for the year. Including the 1% federal statutory tax rate increase,
the estimated effective income tax rate was 39.0% for 1993 versus
39.5% for both 1992 and 1991. The reduction in our overall effective
tax rate was attributable to our active pursuit of current tax
strategies.
Operating profit margins for the Orkin business segment
increased 4.5% over the prior year, compared to a 8.1% margin
improvement from 1992 over 1991. Rollins Protective Services'
operating margins increased 6.3% over 1992. This compares to a
3.2% margin improvement from 1992 over 1991. Detailed segment
information follows.
ORKIN 1993 VERSUS 1992
The Orkin business segment had 1993 revenues and operating
income increases of 9.6% and 14.6%, respectively, over the results
achieved in 1992. Orkin Pest Control's revenue increases were the
result of our continued emphasis on providing premium services,
improved customer service, opening new branches, an increased
number of customers, and the successful introduction of new
services. Marketing programs included an effective, highly focused
national advertising campaign, the money-back guarantee expanded
to termite control, and our new agribusiness service. Operating
income benefited from increased employee productivity, further
improvements in the control of operating costs, and revenue growth
resulting from new customers and new services. We expect the 1994
operating results of the termite and pest control business to exceed
those of 1993 by continuing the growth of our customer base in both
new and existing markets through acquisitions and cross-marketing
efforts between divisions.
Orkin Plantscaping's operating results continued to be impacted
by slowdowns in commercial real estate construction. Revenues
increased primarily due to expanded Holiday, Exterior Color, and
National Accounts Programs. Cross-marketing efforts by Orkin Pest
Control and Orkin Plantscaping have enabled Plantscaping to
increase its national corporate customer list. During 1993,
Plantscaping continued to improve operational efficiencies, enhance
service delivery, and provide internal standardization among its nine
major markets. We expect the 1994 operating results to benefit
from the continued emphasis on operational improvements, enhanced
service delivery, expense control and employee training.
Orkin Lawn Care has sustained its turnaround trend with improved
sales, customer retention, better cost controls, and employee
productivity. Lawn Care introduced new services during 1993 which
increased revenues and operating income. Lawn Care has planned
additional enhancements in 1994, benefiting from a more seasoned
management staff, new marketing programs, further increased
employee productivity and more efficient execution of operational
programs.
ORKIN 1992 VERSUS 1991
The Orkin business segment had 1992 revenues and operating
income increases of 11.2% and 20.0%, respectively, over the results
achieved in 1991. Orkin Pest Control's revenue increases were the
result of opening new branches and the continued expansion through
acquisitions in key markets. Also, revenue gains related to an
increased number of customers, improved customer retention, higher
prices, and more effective marketing programs. Marketing programs
included more efficient advertising and the offering of convenient
financing available from our in-house finance company. Operating
income improvements were attained through cost containment,
productivity gains, and lower employee turnover.
Orkin Plantscaping entered three new growth markets in 1992,
expanding its operations to nine major markets and becoming the
industry's second largest company. During 1992, the financial
results of our Orkin Lawn Care Operation had significant
improvement over the prior year. Some branch operations, primarily
in the Northeast, were either closed, sold, or merged during the
fourth quarter of 1992 in a consolidation program in order to
concentrate our resources on maximizing revenue and profit
opportunities in growth locations. The downsizing did not have a
material impact on the financial statements.
ROLLINS PROTECTIVE SERVICES (RPS) 1993 VERSUS 1992
RPS had 1993 revenues and operating income increases of 3.1%
and 9.2%, respectively, over the results achieved in 1992.
Operational improvements were reported by the
14
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
RPS division in 1993
primarily due to improvements made in the third and fourth quarters
with more effective sales programs and a concentration of service
delivery resulting in improved customer retention. Revenue
increases were also attributed to the opening of two new branches
and marketing new credit plans offered by our in-house finance
company in the second and third quarters. RPS's operating income
benefited from better trained employees, increased sales and
service productivity, and management's efforts to reduce cost and
control inventory levels. RPS is positioned for a successful 1994
with the continued focus on its residential business and commercial
security markets and our expansion plans to add two new branches in
existing geographical markets.
RPS 1992 VERSUS 1991
RPS had 1992 revenues and operating income increases of 4.9%
and 8.9%, respectively over the results achieved in 1991. During
1992, residential customer sales were affected somewhat by the
continued economic recession; however, revenues from new
commercial customers increased, making this the fastest growing
part of the Company's security business. Operating income benefited
from improved productivity in both sales and service. This was
attributable to increased training, lower employee turnover, and
cost controls, in addition to our revenue increase. During 1992, RPS
entered a new market with the opening of a branch in Phoenix,
Arizona. To accommodate the growing commercial business, RPS
opened several commercial operating units at current branch
locations in 1992.
FINANCIAL CONDITION % CHANGE FORM PRIOR YEAR
increase/(decrease)
(Dollars in thousands) 1993 1992 1991 1993 1992
Cash and Short-Term Investments $18,102 $20,061 $41,230
Marketable Securities 50,991 30,657 --
$ 69,093 $50,718 $41,230 36.2% 23.0%
Working Capital $117,528 $89,944 $64,741 30.7 38.9
Current Ratio 2.8 2.4 2.1 16.7 14.3
Cash Provided From Operations $40,034 $33,319 $31,987 20.2% 4.2%
Rollins, Inc.'s financial position at December 31, 1993 remained
solid. The Company's operations have historically provided a strong
positive cash flow which represents the Company's principal source
of funds. Current assets are stated at cost which approximates fair
value.
During 1993, the Company invested $8.1 million in capital
expenditures and acquisitions. Also, $15.7 million were paid out in
cash dividends. The Company has been able and continues to expect
to fund these cash requirements out of operations. The Company had
no long-term debt during the three year period ended December 31,
1993.
Net trade receivables increased $20.5 million or 30.7% at
December 31, 1993 compared with the prior year. Trade receivables
include installment receivables amounts which are due subsequent
to one year from the balance sheet date. These amounts were
approximately $28.7 million and $21.5 million at the end of 1993 and
1992, respectively. (Delinquency statistics, as a percentage of total
receivables, have improved over the prior year). The increase in
receivables, was attributed to the expansion of Orkin's financed
termite marketing program and the increased average contract
length. These factors, combined with improved revenues and market
share, created substantial growth in our receivables compared to
1992.
The weighted-average discount rate used in determining the
projected benefit obligation of the Company's pension plan was
decreased from 8.5% in 1991 and 1992 to 8.0% in 1993 to more
closely approximate rates on high-quality, long-term obligations.
The change in the weighted-average discount rate will have no
material effect on the Company's financial position or results of
operations.
In May 1993, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 115 (SFAS 115),
"Accounting for Certain Investments in Debt and Equity Securities."
The Company will adopt the new method of accounting for
marketable securities in the first quarter of 1994. The adoption of
SFAS 115 will not have a material impact on the Company's
financial position or results of operations.
15
<PAGE>
STATEMENTS OF FINANCIAL POSITION
Rollins, Inc. and Subsidiaries
<TABLE>
<CAPTION>
At December 31, (In thousands except share data) 1993 1992
<S> <C> <C> <C>
ASSETS Cash and Short-Term Investments $ 18,102 $ 20,061
Marketable Securities 50,991 30,657
Trade Receivables, Net 87,518 66,980
Materials and Supplies 15,829 18,253
Deferred Income Taxes 4,980 9,310
Other Current Assets 7,112 6,808
Current Assets 184,532 152,069
Equipment and Property, Net 28,890 28,838
Intangible Assets 42,171 42,283
Other Assets 11,601 13,101
Total Assets $267,194 $236,291
LIABILITIES Accounts Payable $ 12,279 $ 12,028
Accrued Insurance Expenses 13,600 14,022
Accrued Payroll 15,519 15,043
Unearned Revenue 12,854 9,507
Other Expenses 12,752 11,525
Current Liabilities 67,004 62,125
Deferred Income Taxes 12,983 21,211
Long-Term Accrued Liabilities 26,699 23,056
Total Liabilities 106,686 106,392
Commitments and Contingencies
STOCKHOLDERS' EQUITY Common Stock, par value $1 per share; authorized
99,500,000 shares; 41,431,814 shares issued 41,432 41,432
Earnings Retained 171,862 141,999
213,294 183,431
Less -- Common Stock In Treasury, At Cost,
5,758,619 shares in 1993; 5,840,109 shares in 1992 52,786 53,532
Total Stockholders' Equity 160,508 129,899
Total Liabilities and Stockholders' Equity $267,194 $236,291
</TABLE>
The accompanying notes are an integral part of these statements.
16
<PAGE>
STATEMENTS OF Income
Rollins, Inc. and Subsidiaries
<TABLE>
<CAPTION>
Years Ended December 31,
(In thousands except per share data) 1993 1992 1991
<S> <C> <C> <C>
REVENUES
Customer Services $575,802 $527,666 $475,555
COSTS AND EXPENSES
Cost of Services Provided 293,499 271,518 247,994
Sales, General and Administrative Expenses 203,483 187,238 169,825
Depreciation and Amortization 8,310 7,966 7,806
Interest Income (2,390) (1,870) (2,134)
502,902 464,852 423,491
INCOME BEFORE INCOME TAXES 72,900 62,814 52,064
PROVISION (CREDIT) FOR INCOME TAXES:
Current 30,339 25,317 21,431
Deferred (1,908) (505) (866)
28,431 24,812 20,565
NET INCOME $ 44,469 $38,002 $ 31,499
EARNINGS PER SHARE $ 1.25 $ 1.07 $ .89
AVERAGE SHARES OUTSTANDING 35,638 35,569 35,510
STATEMENTS OF EARNINGS RETAINED
Rollins, Inc. and Subsidiaries
Years Ended December 31,
(In thousands except per share data) 1993 1992 1991
Balance at Beginning of Year $141,999 $131,602 $113,678
Net Income 44,469 38,002 31,499
Cash Dividends (15,680) (14,226) (13,731)
Employee Benefit Plans 1,074 445 156
Adjustment for Three-for-Two Stock Split -- (13,824) --
Balance at End of Year $171,862 $141,999 $131,602
DIVIDENDS PER SHARE $ .44 $ .40 $ .39
</TABLE>
The accompanying notes are an integral part of these statements.
17
<PAGE>
STATEMENTS OF CASH FLOWS
Rollins, Inc. and Subsidiaries
<TABLE>
<CAPTION>
Years Ended December 31, (In thousands) 1993 1992 1991
<S> <C> <C> <C> <C>
OPERATING Net Income $ 44,469 $38,002 $ 31,499
ACTIVITIES Noncash Charges (Credits) to Earnings:
Depreciation and Amortization 8,310 7,966 7,806
Deferred Income Taxes (1,908) (505) (866)
Other, Net 3,152 3,292 2,705
(Increase) Decrease in:
Trade Receivables (20,474) (13,966) (14,731)
Materials and Supplies 1,477 (2,643) (2,086)
Other Current Assets 3,473 (3,821) (174)
Increase (Decrease) in:
Accounts Payable and Accrued Expenses 924 3,597 3,582
Unearned Revenue 3,347 1,009 2,621
Non-Current Deferred Income Taxes (5,767) 753 4,078
Long-Term Accrued Liabilities 3,643 837 (1,660)
Other Non-Current Assets (612) (1,202) (787)
Net Cash Provided by Operating Activities 40,034 33,319 31,987
INVESTING Purchases of Equipment and Property (7,690) (6,645) (8,366)
ACTIVITIES Net Cash Used for Acquisition of Companies (397) (4,299) (1,500)
Purchases of Marketable Securities (20,334) (30,657) --
Proceeds from Sale of
Equipment and Property 288 339 357
Net Cash Used in Investing Activities (28,133) (41,262) (9,509)
FINANCING Dividends Paid (15,680) (14,226) (13,731)
ACTIVITIES Treasury Stock Issued to Benefit Plans 1,820 1,000 651
Net Cash Used in Financing Activities (13,860) (13,226) (13,080)
Net Increase (Decrease) in Cash and
Short-Term Investments (1,959) (21,169) 9,398
Cash and Short-Term Investments
at Beginning of Year 20,061 41,230 31,832
Cash and Short-Term Investments
at End of Year $18,102 $ 20,061 $41,230
</TABLE>
The accompanying notes are an integral part of these statements.
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Years ended December 31, 1993, 1992, and 1991, Rollins, Inc. and Subsidiaries
1. SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation - The consolidated financial
statements include the accounts of Rollins, Inc. (the Company) and
its subsidiaries. All significant intercompany transactions and
balances have been eliminated.
Revenues - Revenue is recognized at the time services are
performed. Unearned time charges are recognized under methods
which will result in the Company realizing a constant rate of return
on the related outstanding installment receivables.
Cash and Short-Term Investments - The Company considers all
investments with a maturity of three months or less to be cash
equivalents. Short-term investments are stated at cost which
approximates fair value.
Marketable Securities - Marketable securities, which are all fixed
income securities, are carried at cost which approximates fair
value. The fair value of marketable securities are based on quoted
market prices.
Materials and Supplies - Materials and supplies are recorded at
the lower of cost (first-in, first-out basis) or market.
Equipment and Property - Depreciation and amortization are
provided principally on a straight-line basis over the estimated
useful lives of the related assets. Annual provisions for depreciation
are computed using the following asset lives: buildings, 10 to 40
years; and furniture, fixtures, and operating equipment, 3 to 10
years. The cost of assets retired or otherwise disposed of and the
related accumulated depreciation and amortization are eliminated
from the accounts in the year of disposal with the resulting gain or
loss credited or charged to income. Expenditures for additions,
major renewals and betterments are capitalized and expenditures
for maintenance and repairs are expensed as incurred.
Insurance - The Company self-insures up to specified limits
certain risks related to general liability, workers' compensation and
vehicle liability. The estimated costs of existing and future claims
under the self-insurance program are accrued based upon historical
trends as incidents occur, whether reported or unreported (although
actual settlement of the claims may not be made until future
periods) and may be subsequently revised based on developments
relating to such claims. The noncurrent portion of these estimated
outstanding claims
comprises most of the long-term accrued liabilities balance shown
on the Statements of Financial Position.
Income Taxes - Effective January 1, 1993, the Company
adopted Statement of Financial Accounting Standards No. 109 (SFAS
109), "Accounting for Income Taxes". SFAS 109 requires recognition
of deferred tax liabilities and assets for the expected future tax
consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred tax
liabilities and assets are determined based on the difference
between the financial and tax basis using enacted tax rates in effect
for the year in which the differences are expected to reverse. These
differences are more inclusive in nature than
differences determined under previously applicable accounting
principles.
Common Stock - Earnings per share is computed on the basis of
weighted-average shares outstanding. Stock options outstanding do
not have a significant dilutive effect.
Reclassifications - Certain prior year amounts have been
reclassified to conform with the 1993 presentation.
2. TRADE RECEIVABLES
Trade receivables, net, at December 31, 1993, totalling
$87,518,000 and at December 31, 1992, totalling $66,980,000 are
net of allowances for doubtful accounts of $4,548,000 and
$2,948,000, respectively, and unearned time charges of $172,000
and $1,165,000, respectively. Trade receivables include installment
receivables amounts which are due subsequent to one year from the
balance sheet dates. These amounts were approximately
$28,737,000 and $21,496,000 at the end of 1993 and 1992,
respectively. The carrying amount of installment receivables
approximates fair value because the interest rates approximate
market rates.
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
Years ended December 31, 1993, 1992, and 1991, Rollins, Inc. and Subsidiaries
3. EQUIPMENT AND PROPERTY
Equipment and property are presented at cost less accumulated
depreciation and are detailed as follows:
(In thousands) 1993 1992
Buildings $ 8,666 $ 8,547
Operating equipment 55,932 53,844
Furniture and fixtures 11,078 10,569
75,676 72,960
Less - accumulated depreciation 49,881 47,217
25,795 25,743
Land 3,095 3,095
$ 28,890 $ 28,838
4. INTANGIBLE ASSETS
Intangible assets represent goodwill arising from acquisitions
and are stated at cost less accumulated amortization. Intangibles
which arose from acquisitions prior to November, 1970 are not being
amortized for financial statement purposes, since, in the opinion of
management, there has been no decrease in the value of the acquired
businesses. Intangibles arising from acquisitions since November,
1970 are being amortized over forty years.
5. INCOME TAXES
A reconciliation between taxes computed at the statutory rate on
the income before income taxes and the provision for income taxes
is as follows:
(In thousands) 1993 1992 1991
Federal income taxes
at statutory rate $25,515 $21,357 $17,702
State income taxes
(net of federal benefit) 3,137 3,148 2,683
Other (221) 307 180
$28,431 $24,812 $20,565
The provision for income taxes was based on a 39.0%, 39.5%, and
39.5% estimated effective income tax rate on income before income
taxes for the years ended December 31, 1993, 1992, and 1991,
respectively. The effective income tax rate differs from the annual
federal statutory tax rate primarily because of state income taxes.
The deferred income tax credits for the three year
period ended December 31, 1993 are due to differences
between financial and income tax reporting. A summary of those
deferred income tax debits (credits) is as follows:
(In thousands) 1993 1992 1991
Self-insurance $ 1,761 $1,752 $ 629
Safe harbor lease (1,274) (1,085) (959)
Depreciation (593) (544) (472)
Other (1,802) (628) (64)
$ (1,908) $ (505) $(866)
Income taxes remitted were $25,796,000, $24,447,000 and
$17,520,000 for the years ended December 31, 1993, 1992, and
1991, respectively.
Effective January 1, 1993, the Company adopted Statement of
Financial Accounting Standards No. 109 (SFAS 109), "Accounting for
Income Taxes". The cumulative effect of the change in the method of
accounting for income taxes attributable to years prior to 1993 was
not material. Prior years' financial statements have not been
restated to reflect the provisions of SFAS 109.
The tax effect of the temporary differences which comprise the
current and non-current deferred income tax amounts on the balance
sheet at December 31, 1993 is as follows:
(In thousands) Debits (Credits)
Deferred Tax Assets (Liabilities):
Self-insurance $ 13,551
Safe harbor lease (17,268)
Accruals (5,685)
Payroll and related accruals 1,571
Other (172)
$ (8,003)
During 1982, the Company entered into a twenty-year "Safe
Harbor" lease agreement under the Economic Recovery Tax Act (Act)
of 1981 for the purchase of federal income tax benefits. The
Company has invested $29,096,000 in the lease. The investment in
tax benefits from the safe harbor lease agreement has been
allocated
between investment tax credit benefits and tax
deduction timing benefits. Such investment amount has been
reflected as a reduction in non-current deferred income taxes.
Amortization of timing benefits into expense is computed at a
constant rate of return.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
Years ended December 31, 1993, 1992, and 1991, Rollins, Inc. and Subsidiaries
6. COMMITMENTS AND CONTINGENCIES
Minimum annual rentals for non-cancelable leases with terms in
excess of one year, in effect at December 31, 1993, are summarized
as follows:
(In thousands) Real Estate Vehicles Other Total
1994 $ 9,239 $ 8,099 $1,122 $18,460
1995 8,838 4,668 740 14,246
1996 7,524 1,861 383 9,768
1997 6,894 534 68 7,496
1998 4,523 -- 6 4,529
1999-2003 20,624 -- -- 20,624
2004-2008 13,441 -- -- 13,441
2009-2013 8,022 -- -- 8,022
$79,105 $15,162 $2,319 $96,586
Total rental expense charged to operations was $24,274,000,
$23,384,000, and $22,157,000 for the years ended December 31,
1993, 1992, and 1991, respectively.
In the normal course of business, the Company is a defendant in a
number of lawsuits which allege that
plaintiffs have been damaged as a result of the rendering of services
by Company personnel and equipment. The Company is actively
contesting these actions. It is the opinion of Management that the
outcome of these actions will not have a material adverse effect on
the Company's financial position, results of operations, or liquidity.
7. BUSINESS SEGMENT INFORMATION
The Company operates two major business segments. Certain
information with respect to the Company's business segments is as
follows:
(In thousands) 1993 1992 1991
REVENUES
Orkin $ 506,399 $ 461,971 $ 415,363
Rollins Protective 57,698 55,942 53,326
Other businesses 11,705 9,753 6,866
$ 575,802 $ 527,666 $ 475,555
OPERATING INCOME
Orkin $ 70,720 $ 61,687 $ 51,389
Rollins Protective 5,896 5,398 4,956
Other businesses 4,504 3,617 2,350
81,120 70,702 58,695
OTHER
Corporate expenses, net (10,610) (9,758) (8,765)
Interest income 2,390 1,870 2,134
Income before
income taxes $ 72,900 $ 62,814 $ 52,064
IDENTIFIABLE ASSETS
Orkin $ 161,850 $ 145,115 $ 127,533
Rollins Protective 18,420 18,535 16,778
Other 86,924 72,641 60,266
$ 267,194 $ 236,291 $204,577
DEPRECIATION AND AMORTIZATION EXPENSE
Orkin $ 6,992 $ 6,163 $ 5,926
Rollins Protective 433 1,076 1,146
Other 885 727 734
$ 8,310 $ 7,966 $ 7,806
CAPITAL EXPENDITURES
Orkin $ 5,919 $ 5,320 $ 7,607
Rollins Protective 413 349 368
Other 1,395 1,373 561
$ 7,727 $ 7,042 $ 8,536
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
Years ended December 31, 1993, 1992, and 1991, Rollins, Inc. and Subsidiaries
8. EMPLOYEE BENEFIT PLANS
The Company maintains a noncontributory tax-qualified defined
benefit retirement plan covering all employees meeting certain age
and service requirements. The qualified plan provides benefits based
on the average compensation for the highest five years during the
last ten years of credited service (as defined) in which
compensation was received, and the average anticipated Social
Security covered earnings. The Company funds the Plan with at least
the minimum amount required by ERISA.
The Company's net pension expense (benefit) for the past three
years is summarized as follows:
(In thousands) 1993 1992 1991
Service cost - benefits
earned during the period $ 2,345 $ 2,057 $ 1,670
Interest cost on projected
benefit obligation 3,248 2,827 2,385
Actual return on plan assets (4,218) (4,976) (7,878)
Net amortization
of transition asset (1,099) (1,099) (1,099)
Deferral of net
investment gain 227 1,255 4,390
Net pension expense (benefit) $ 503 $ 64 $ (532)
The funded status of the Plan is summarized as follows at
December 31:
(In thousands) 1993 1992
Actuarial present value of benefit obligations:
Accumulated benefit obligation
including vested benefits of
$31,265 in 1993 and
$25,471 in 1992 $ (33,989) $(27,597)
Effect of projected future
compensation levels (8,468) (7,588)
Projected benefit obligation (42,457) (35,185)
Plan assets at fair value 48,153 45,665
Plan assets in excess of projected obligation 5,696 10,480
Unrecognized net (gain) loss 1,574 (1,609)
Unrecognized net asset at transition
being amortized over 10 years (4,026) (5,177)
Unrecognized prior service cost 264 316
Prepaid pension expense
included in other assets $ 3,508 $ 4,010
At December 31, 1993, the Plan's assets were comprised of
listed common stocks and U. S. Government and corporate securities.
Included in the assets of the Plan were shares of Rollins common
stock with a market value of $8,249,000. The expected long-term
rate of return on plan assets was 9.5% in 1993, 1992, and 1991. The
weighted-average discount rate used in determining the projected
benefit obligation was decreased from 8.5% in 1991 and 1992 to
8.0% in 1993 to more closely approximate rates on high-quality,
long-term obligations. The assumed growth rate of compensation
decreased from 6.0% in 1991 and 1992 to 5.5% in 1993.
The Company sponsors a deferred compensation 401(k) plan that
is available to substantially all employees with six months of
service. The charges to expense for the Company match were
$1,379,000 in 1993, $1,320,000 in 1992, and $1,033,000 in 1991.
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
Years ended December 31, 1993, 1992, and 1991, Rollins, Inc. and Subsidiaries
The Company has an employee incentive stock option plan (1984
Plan), adopted in October, 1984, under which 1,200,000 shares of
common stock are subject to options to be granted. The options are
granted at the fair market value of the shares on the date of the
grant and expire ten years from the date of the grant, if not
exercised. On January 25, 1994, the Board of Directors approved a
new long-term compensation program consisting of various stock
incentive programs. The new plan is subject to stockholders'
approval at the annual stockholders' meeting on April 26, 1994.
Option transactions during the last three years for the 1984 Plan
are summarized as follows:
(Number of shares) 1993 1992 1991
Outstanding at
January 1, 117,781 129,915 109,988
Granted 9,900 9,900 36,150
Exercised (9,965) (17,715) (15,323)
Cancelled (3,510) ( 4,319) (900)
Outstanding at
December 31, 114,206 117,781 129,915
Exercisable at
December 31, 70,976 68,671 72,135
Option price ranges per share:
Granted $ 25.50 $ 19.08 $ 13.25
Exercised 5.92-13.25 5.92-13.25 5.92-12.25
Cancelled 12.58-25.50 5.92-13.25 11.75
Outstanding 5.92-25.50 5.92-19.08 5.92-13.25
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Directors and Stockholders of Rollins, Inc.:
We have audited the accompanying statements of financial position
of Rollins, Inc. (a Delaware corporation) and subsidiaries as of
December 31, 1993 and 1992 and the related statements of income,
earnings retained and cash flows for each of the three years in the
period ended December 31, 1993. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on the financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Rollins, Inc.
and subsidiaries as of December 31, 1993 and 1992 and the results
of their operations and their cash flows for each of the three years
in the period ended December 31, 1993 in conformity with generally
accepted accounting principles.
Arthur Andersen & Co.
Atlanta, Georgia
February 14, 1994
23
<PAGE>
<TABLE>
FIVE-YEAR FINANCIAL SUMMARY
Rollins, Inc. and Subsidiaries
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
OPERATIONS SUMMARY
(In thousands except
per share data) Revenues $ 575,802 $ 527,666 $ 475,555 $ 436,398 $ 402,324
Cost of Services Provided 293,499 271,518 247,994 230,107 211,604
Sales, General and Administrative 203,483 187,238 169,825 155,904 146,658
Depreciation and Amortization 8,310 7,966 7,806 7,482 7,509
Interest Income (2,390) (1,870) (2,134) (2,460) (2,215)
Income Before Income Taxes 72,900 62,814 52,064 45,365 38,768
Income Taxes 28,431 24,812 20,565 17,919 15,236
Net Income $ 44,469 $ 38,002 $ 31,499 $ 27,446 $ 23,532
Earnings per Share $ 1.25 $ 1.07 $ .89 $ .77 $ .67
Dividends per Share $ .44 $ .40 $ .39 $ .37 $ .36
Cash Provided from Operations $ 40,034 $ 33,319 $ 31,987 $ 36,350 $ 31,955
Capital Expenditures $ 7,727 $ 7,042 $ 8,536 $ 8,929 $ 9,747
Total Assets $ 267,194 $ 236,291 $ 204,577 $ 177,961 $ 160,121
Long-Term Debt -- -- -- -- --
Stockholders' Equity $ 160,508 $ 129,899 $ 105,137 $ 86,718 $ 72,228
SELECTED RATIO ANALYSIS
(As a % of revenues Cost of Services Provided 51.0% 51.5% 52.1% 52.7% 52.6%
except return on Sales, General and Administrative 35.3 35.5 35.7 35.7 36.5
average equity) Depreciation and Amortization 1.4 1.5 1.6 1.7 1.9
Interest Income (0.4) (0.4) (0.4) (0.6) (0.6)
Income Before Income Taxes 12.7 11.9 11.0 10.5 9.6
Net Income 7.7 7.2 6.6 6.3 5.8
Return on Average Equity 30.6 32.3 32.8 34.5 35.3
SHARES OUTSTANDING
(In thousands) Average 35,638 35,569 35,510 35,465 35,438
At Year End 35,673 35,592 35,532 35,478 35,453
GROWTH RATES
AVERAGE
1993 3 Years 5 Years
Revenues 9.1% 9.7% 8.6%
Net Income 17.0 17.5 12.9
Earnings per Share 16.8 17.5 12.7
</TABLE>
24
<PAGE>
DIRECTORS, OFFICERS AND STOCKHOLDER INFORMATION
DIRECTORS
JOHN W. ROLLINS
Chairman of the Board and Chief Executive Officer of Rollins Truck
Leasing Corp. (vehicle leasing and transportation), Chairman of the
Board and Chief Executive Officer of Rollins Environmental Services,
Inc. (hazardous waste treatment
and disposal)
HENRY B. TIPPIE (Dagger)
Chairman of the Board and Chief Executive Officer of Tippie
Communications, Inc. (radio stations)
R. RANDALL ROLLINS *
Chairman of the Board and Chief Executive Officer of Rollins, Inc.,
Chairman of the Board and Chief Executive Officer of RPC Energy
Services, Inc. (oil and gas field services, and boat manufacturing)
WILTON LOONEY (dagger)
Honorary Chairman of the Board of Genuine Parts Company
(automotive parts distributor)
JAMES B. WILLIAMS (dagger)
Chairman, Chief Executive Officer, and Director of SunTrust Banks,
Inc. (bank holding company)
GARY W. ROLLINS *
President and Chief Operating Officer of Rollins, Inc.
BILL J. DISMUKE
President of Edwards Baking Company
* Member of the Executive Committee
(dagger) Member of the Audit and Compensation Committees
OFFICERS
R. RANDALL ROLLINS
Chairman of the Board and Chief Executive Officer
GARY W. ROLLINS
President and Chief Operating Officer
GENE L. SMITH
Chief Financial Officer, Secretary, and Treasurer
STOCKHOLDER INFORMATION
ANNUAL MEETING:
The Annual Meeting of the Stockholders will be held at 11:30 a.m.
Tuesday, April 26, 1994, at the Company's corporate offices in
Atlanta, Georgia.
TRANSFER AGENT AND REGISTRAR:
For inquiries related to stock certificates, including changes of
address, lost certificates, dividends, and tax forms, please contact:
Trust Company Bank
Corporate Trust Department
P. O. Box 4625
Atlanta, Georgia 30302
Telephone: 1-800-568-3476
STOCK EXCHANGE INFORMATION:
The Common Stock of the Company is listed on the New York and
Pacific Stock Exchanges and traded on the Philadelphia, Chicago and
Boston Exchanges under the symbol ROL.
DIVIDEND REINVESTMENT PLAN:
This Plan provides a simple, convenient, and inexpensive way for
stockholders to invest cash dividends in additional Rollins, Inc.
shares. For further information, contact Trust Company Bank at the
above address or write to the Secretary at the Company's mailing
address.
FORM 10-K:
The Company's annual report on Form 10-K to the Securities and
Exchange Commission provides certain additional information.
Stockholders may obtain a copy by contacting the Secretary at the
Company's mailing address.
CORPORATE OFFICES:
Rollins, Inc.
2170 Piedmont Road, N.E.
Atlanta, Georgia 30324
MAILING ADDRESS:
Rollins, Inc.
P. O. Box 647
Atlanta, Georgia 30301
TELEPHONE:
(404) 888-2000
(Recycled logo) Printed on Recycled paper
25
Exhibit 21
List of Subsidiaries
of
Rollins, Inc.
The following list sets forth subsidiaries of Rollins, Inc.
Each corporation whose name is indented is a wholly-owned
subsidiary of the corporation next above which is not indented.
Name State of Incorporation
Orkin Exterminating Company, Inc. Delaware
Dettlebach Pesticide Corporation Georgia
Kinro Advertising Company Delaware
Orkin Expansion, Inc. Delaware
Orkin S.A. de C.V. Mexico
Rollins Continental, Inc. New York
Rollins Expansion, Inc. Delaware
Rollins Management Services, Inc. Delaware
Rollins Supply, Inc. Delaware
Red Diamond Insurance Co. Vermont
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our reports, included (or incorporated by reference) in this Form 10-K,
into the Company's previously filed Form S-8 Registration Statement
(No. 33-6404), Form S-8 Registration Statement (No. 33-26056),
Form S-8 Registration Statement (No. 33-52355), and Form S-3 Registration
Statement (No. 33-15360).
ARTHUR ANDERSEN & CO.
Atlanta, Georgia
March 28, 1994
POWER OF ATTORNEY
Know All Men by These Presents, that the undersigned constitutes
and appoints R. Randall Rollins and/or Gary W. Rollins, or either of
them as his true and lawful attorney-in-fact and agent in any and all
capacities to sign filings by Rollins, Inc. of Form 10-K Annual
Reports and any and all amendments thereto (including post-effective
amendments) and to file the same, with all exhibits, and any other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing requisite
or necessary to be done in and about the premises, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitutes,
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney, in the capacities indicated, as of this 25th day of Feb., 1994.
Wilton Looney, Director
Witness:
Norma S. Cook
<PAGE>
POWER OF ATTORNEY
Know All Men by These Presents, that the undersigned constitutes
and appoints R. Randall Rollins and/or Gary W. Rollins, or either of
them as his true and lawful attorney-in-fact and agent in any and all
capacities to sign filings by Rollins, Inc. of Form 10-K Annual
Reports and any and all amendments thereto (including post-effective
amendments) and to file the same, with all exhibits, and any other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing requisite
or necessary to be done in and about the premises, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitutes,
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney, in the capacities indicated, as of this 1st day of March, 1994.
Johh W. Rollins, Director
Witness:
Cindy Alfano
<PAGE>
POWER OF ATTORNEY
Know All Men by These Presents, that the undersigned constitutes
and appoints R. Randall Rollins and/or Gary W. Rollins, or either of
them as his true and lawful attorney-in-fact and agent in any and all
capacities to sign filings by Rollins, Inc. of Form 10-K Annual
Reports and any and all amendments thereto (including post-effective
amendments) and to file the same, with all exhibits, and any other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing requisite
or necessary to be done in and about the premises, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitutes,
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney, in the capacities indicated, as of this 1st day of March, 1994.
Henry B. Tippie, Director
Witness:
Sandra Wenker
<PAGE>
POWER OF ATTORNEY
Know All Men by These Presents, that the undersigned constitutes
and appoints R. Randall Rollins and/or Gary W. Rollins, or either of
them as his true and lawful attorney-in-fact and agent in any and all
capacities to sign filings by Rollins, Inc. of Form 10-K Annual
Reports and any and all amendments thereto (including post-effective
amendments) and to file the same, with all exhibits, and any other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing requisite
or necessary to be done in and about the premises, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitutes,
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney, in the capacities indicated, as of this 28th day of Feb., 1994.
James B. Williams, Director
Witness:
Mary H. Walden
<PAGE>
POWER OF ATTORNEY
Know All Men by These Presents, that the undersigned constitutes
and appoints R. Randall Rollins and/or Gary W. Rollins, or either of
them as his true and lawful attorney-in-fact and agent in any and all
capacities to sign filings by Rollins, Inc. of Form 10-K Annual
Reports and any and all amendments thereto (including post-effective
amendments) and to file the same, with all exhibits, and any other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing requisite
or necessary to be done in and about the premises, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitutes,
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney, in the capacities indicated, as of this 28th day of Feb., 1994.
Bill J. Dismuke, Director
Witness:
Janice A. Lee
