UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission file number 1-4422
----------------------------
ROLLINS, INC.
(Exact name of registrant as specified in its charter)
Delaware 51-0068479
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2170 Piedmont Road, N.E., Atlanta, Georgia
(Address of principal executive offices)
30324
(Zip Code)
(404) 888-2000
(Registrant's telephone number, including area code)
----------------------------
Indicate by check mark whether the registrant (1) 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 [ ]
Rollins, Inc. had 30,075,542 shares of its $1 Par Value Common
Stock outstanding as of October 29, 1999.
<PAGE>
ROLLINS, INC. AND SUBSIDIARIES
INDEX
PART I FINANCIAL INFORMATION Page No.
Item 1. Financial Statements.
Consolidated Statements of Financial Position as
of September 30, 1999 and December 31, 1998 ........ 2
Consolidated Statements of Income and Earnings
Retained for the Three and Nine Months Ended
September 30, 1999 and 1998 ........................ 3
Consolidated Statements of Cash Flows for the Nine
Months Ended September 30, 1999 and 1998 ........... 4
Notes to Consolidated Financial Statements ......... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................. 7
Item 3. Quantitative and Qualitative Disclosures About
Market Risk......................................... 9
PART II OTHER INFORMATION
Item 1. Legal Proceedings................................... 10
Item 6. Exhibits and Reports on Form 8-K.................... 10
SIGNATURES .............................................................. 11
<PAGE>
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
ROLLINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In thousands except share data)
<TABLE>
<CAPTION>
(Unaudited)
September 30, December 31,
1999 1998
------------- -------------
<S> <C> <C> <C>
ASSETS
Cash and Short-Term Investments .................... $ 3,950 $ 1,244
Marketable Securities .............................. 66,006 110,229
Trade Receivables, Net ............................. 45,604 42,353
Materials and Supplies ............................. 12,460 13,335
Deferred Income Taxes .............................. 18,281 20,083
Other Current Assets ............................... 17,251 11,864
------------- -------------
Current Assets .................................. 163,552 199,108
Equipment and Property, Net ........................ 41,439 35,466
Intangible Assets .................................. 55,849 40,602
Deferred Income Taxes .............................. 40,788 44,369
Other Assets ....................................... 19,601 7,720
------------- -------------
Total Assets .................................... $ 321,229 $ 327,265
============= =============
LIABILITIES
Capital Lease Obligations .......................... $ 3,697 $ 3,419
Accounts Payable ................................... 15,777 10,890
Accrued Insurance .................................. 9,611 18,348
Accrued Payroll .................................... 21,451 18,400
Unearned Revenue ................................... 19,821 15,210
Other Expenses ..................................... 49,522 48,826
------------- -------------
Current Liabilities.............................. 119,879 115,093
Capital Lease Obligations .......................... 3,588 6,090
Accrued Insurance .................................. 44,924 38,975
Accrual for Termite Contracts ...................... 49,763 66,350
Long-Term Accrued Liabilities ...................... 23,504 20,522
------------- -------------
Total Liabilities ............................... 241,658 247,030
------------- -------------
Commitments and Contingencies
STOCKHOLDERS' EQUITY
Common Stock, par value $1 per share; 99,500,000
shares authorized; 30,158,896 and 30,488,741
shares issued at September 30, 1999 and
December 31, 1998, respectively.................. 30,159 30,489
Earnings Retained .................................. 49,412 49,746
------------- -------------
Total Stockholders' Equity ...................... 79,571 80,235
------------- -------------
Total Liabilities and Stockholders' Equity....... $ 321,229 $ 327,265
============= =============
<FN>
The accompanying notes are an integral part of these consolidated
financial statements.
</FN>
</TABLE>
2
<PAGE>
ROLLINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND EARNINGS RETAINED
(In thousands except share and per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
1999 1998 1999 1998
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
REVENUES
Customer Services ..................... $ 154,102 $ 144,493 $ 446,330 $ 422,508
----------- ----------- ----------- ----------
COSTS AND EXPENSES
Cost of Services Provided ............. 89,206 85,430 255,742 249,036
Depreciation and Amortization ......... 3,384 2,872 9,562 8,371
Sales, General and Administrative ..... 60,124 57,017 168,766 162,670
Interest Income ....................... (923) (2,246) (3,098) (7,293)
----------- ----------- ----------- ----------
151,791 143,073 430,972 412,784
----------- ----------- ----------- ----------
INCOME BEFORE INCOME TAXES .................... 2,311 1,420 15,358 9,724
----------- ----------- ----------- ----------
PROVISION (BENEFIT) FOR INCOME TAXES
Current ............................... (801) 219 799 (1,086)
Deferred .............................. 1,680 321 5,037 4,781
----------- ----------- ----------- ----------
879 540 5,836 3,695
----------- ----------- ----------- ----------
NET INCOME .................................... $ 1,432 $ 880 $ 9,522 $ 6,029
=========== =========== =========== ==========
EARNINGS RETAINED
Balance at Beginning of Period ....... 52,588 94,728 49,746 112,365
Cash Dividends ....................... (1,518) (4,583) (4,572) (14,540)
Common Stock Purchased and Retired ... (4,485) (40,553) (7,141) (53,429)
Other ................................ 1,395 699 1,857 746
----------- ----------- ----------- ----------
BALANCE AT END OF PERIOD ...................... $ 49,412 $ 51,171 $ 49,412 $ 51,171
=========== =========== =========== ==========
EARNINGS PER SHARE - BASIC AND DILUTED ........ $ 0.05 $ 0.03 $ 0.31 $ 0.19
=========== =========== =========== ==========
WEIGHTED SHARES OUTSTANDING - BASIC ........... 30,287,947 31,065,305 30,429,842 32,463,179
WEIGHTED SHARES OUTSTANDING - DILUTED ......... 30,295,492 31,087,924 30,437,641 32,486,127
<FN>
The accompanying notes are an integral part of these consolidated
financial statements.
</FN>
</TABLE>
3
<PAGE>
ROLLINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------------------
1999 1998
------------ ------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net Income ....................................... $ 9,522 $ 6,029
Adjustments to Reconcile Net Income to Net Cash
Provided by (Used in) Operating Activities:
Depreciation and Amortization .............. 9,562 8,371
Provision for Deferred Income Taxes ........ 5,037 4,781
Other, Net ................................. 1,297 788
(Increase) Decrease in Assets:
Trade Receivables ............................. (126) 4,040
Materials and Supplies ........................ 1,173 983
Other Current Assets .......................... (1,867) 1,341
Other Non-Current Assets ...................... (299) (343)
Increase (Decrease) in Liabilities:
Accounts Payable and Accrued Expenses ......... 1,809 (4,519)
Unearned Revenue .............................. 4,517 1,550
Accrued Insurance ............................. (2,788) 1,189
Accrual for Termite Contracts ................. (16,587) (22,945)
Long-Term Accrued Liabilities ................. 2,982 (5,604)
------------ ------------
Net Cash Provided by (Used in) Operating
Activities .................................... 14,232 (4,339)
------------ ------------
INVESTING ACTIVITIES
Purchases of Equipment and Property .............. (12,483) (8,090)
Net Cash Used for Acquisition of Companies ....... (28,527) (924)
Marketable Securities, Net ....................... 43,519 (34,189)
------------ ------------
Net Cash Provided by (Used in) Investing
Activities .................................... 2,509 (43,203)
------------ ------------
FINANCING ACTIVITIES
Dividends Paid ................................... (4,572) (14,540)
Common Stock Purchased and Retired ............... (7,587) (56,195)
Payments on Capital Leases ....................... (2,224) (2,372)
Other ............................................ 348 104
------------ ------------
Net Cash Used in Financing Activities ............ (14,035) (73,003)
------------ ------------
Net Increase (Decrease) in Cash and Short-Term
Investments ................................... 2,706 (120,545)
Cash and Short-Term Investments at Beginning
of Period ..................................... 1,244 125,842
------------ ------------
Cash and Short-Investments at End of Period ...... $ 3,950 $ 5,297
============ ============
<FN>
The accompanying notes are an integral part of these
consolidated financial statements.
</FN>
</TABLE>
4
<PAGE>
ROLLINS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. BASIS OF PREPARATION
The consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Footnote
disclosures normally included in the financial statements prepared
in accordance with generally accepted accounting principles have
been condensed or omitted pursuant to such rules and regulations.
These consolidated financial statements should be read in
conjunction with the financial statements and related notes
contained in the Company's annual report on Form 10-K for the year
ended December 31, 1998.
In the opinion of management, the consolidated financial statements
included herein contain all normal recurring adjustments necessary
to present fairly the financial position of the Company as of
September 30, 1999 and December 31, 1998, and the results of
operations for the three and nine months ended September 30, 1999
and 1998 and cash flows for the nine months ended September 30, 1999
and 1998. Operating results for the three and nine months ended
September 30, 1999 are not necessarily indicative of the results
that may be expected for the year ended December 31, 1999.
In 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 130 (SFAS 130), "Reporting
Comprehensive Income," effective for fiscal years beginning after
December 15, 1997. For the nine months ended September 30, 1999 and
1998, comprehensive income is not materially different from net
income and, as a result, the impact of SFAS 130 is not reflected in
the Company's consolidated financial statements included herein.
Certain amounts for prior periods have been reclassified to conform
with the current period consolidated financial statement
presentation. Such reclassifications had no effect on previously
reported net income.
NOTE 2. PROVISION FOR INCOME TAXES
The book provision for income taxes includes the liability for state
income taxes, net of the federal income tax benefit. The deferred
provision for income taxes arises from the changes during the year
in the Company's net deferred tax asset or liability.
NOTE 3. EARNINGS PER SHARE
Pursuant to the provisions of Statement of Financial Accounting
Standards No. 128, "Earnings Per Share," the number of weighted
average shares used in computing basic and diluted earnings per
share (EPS) are as follows (in thousands):
<TABLE>
<CAPTION>
Third Quarter Ended Nine Months Ended
September 30 September 30
----------------------------- ------------------------------
1999 1998 1999 1998
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Basic EPS .......... 30,288 31,065 30,430 32,463
Effect of Dilutive
Stock Options ...... 7 23 8 23
------------- -------------- -------------- --------------
Diluted EPS ........ 30,295 31,088 30,438 32,486
============= ============== ============== ==============
</TABLE>
5
<PAGE>
NOTE 4. ACQUISITION AND JOINT VENTURE
On April 30, 1999, the Company and SC Johnson Professional entered
into a joint venture, Acurid Retail Services, L.L.C. (Acurid
Retail), created to provide pest elimination services to customers
in the retail market and jointly contributed existing customers to
the joint venture. The Company owns 50% of the joint venture. In
addition, on April 30, 1999, the Company's wholly-owned subsidiary,
Orkin Exterminating Company, Inc. (Orkin), acquired the remaining
pest elimination business operations of PRISM, a subsidiary of SC
Johnson Professional for approximately twenty-four million dollars.
The acquisition was accounted for as a purchase and resulted in
excess costs over net assets acquired of approximately sixteen
million dollars which are being amortized over a life of twenty
years using the straight-line method.
NOTE 5. LEGAL PROCEEDINGS
The Company is aggressively defending a lawsuit filed in Dothan,
Alabama, in which the plaintiffs seek compensatory damages for
alleged breach of contract arising out of alleged missed or
inadequate reinspections. The attorneys for the plaintiffs contend
that the case is suitable for a class action and the court has ruled
that the plaintiffs would be permitted to pursue a class action
lawsuit against Orkin. The Company believes this case to be without
merit and intends to defend itself vigorously at trial. At this
time, the final outcome of the litigation cannot be determined.
However, it is the opinion of management that the ultimate
resolution of this action will not have a material adverse effect on
the Company's financial position, results of operations, or
liquidity.
The Company is involved in other litigation matters incidental to
its business. With respect to such other suits, management does not
believe the litigation in which it is involved will have a material
effect upon its results of operations or financial condition.
NOTE 6. SUBSEQUENT EVENTS
On October 29, 1999, the Company's wholly-owned subsidiary, Orkin
Exterminating Company, Inc. (Orkin), acquired PCO Services, Inc.
(PCO), a subsidiary of Johnson Wax Professional. Orkin acquired all
the shares of capital stock of PCO. PCO recorded revenues of
approximately $25 million (US$) in its latest fiscal year and is the
leading pest control provider in Canada. The acquisition will be
accounted for as a purchase.
On October 20, 1999, Orkin reached an agreement in principle with
Redd Pest Control Company, Inc. (Redd) on the acquisition of its
pest control business operations. Under the terms of the agreement,
Orkin would acquire all the pest control customers of Redd, together
with certain assets. The operations to be acquired under this
agreement recorded revenues of approximately $14 million in Redd
Pest Control Company, Inc.'s latest fiscal year. The acquisition
would be accounted for as a purchase.
The Company does not expect the above-mentioned transactions to have
a material impact on the Company's financial statements.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The Company reported net income of $1.4 million or $0.05 per share for the
quarter compared to $880,000 or $0.03 per share for the same quarter in 1998.
Net income for the nine months ended September 30, 1999 increased to $9.5
million or $0.31 per share from $6.0 million or $0.19 per share for the same
period in 1998.
Earnings for the year-to-date and quarter were favorably impacted by increases
in both pest and termite control revenue. Revenues increased 6.7% to $154.1
million compared to $144.5 million for the same quarterly period last year. For
the first nine months of 1999, revenues increased 5.6% to $446.3 million.
Third quarter 1999 represents the Company's sixth consecutive quarter of
improvements in revenues and earnings. The Company attributes these improvements
to its strategic programs initiated in 1998 and 1997 to build recurring revenue,
expand the Company's commercial pest control business and contain termite claims
costs. The Company sees continued opportunity for improvement in both its
revenues and bottom line as a result of its new programs and acquisition
activity.
Results of Operations
Revenues increased to $154.1 million in third quarter 1999 from $144.5 million
in the same quarter of 1998, and increased to $446.3 million in the first nine
months of 1999 from $422.5 million in the same period of 1998. These increases
were primarily the result of increases in customer base and in average sales
prices in both residential and commercial pest control, as well as increases in
average termite completion and annual renewal prices.
Cost of Services Provided was approximately $3.8 million higher than the prior
year quarter but improved to represent 57.9% of revenues compared to 59.1% for
the same quarter of the prior year. Year-to-date Cost of Services Provided
improved to represent 57.3% of revenues compared to 58.9% for the prior year
period. These improvements as a percentage of revenues were primarily due to
lower termite claim provisions, operating insurance costs and improved inventory
management.
Selling, General and Administrative increased $3.1 million but decreased as a
percentage of revenues to 39.0% compared to 39.5% for the same quarter of the
prior year. For the first nine months of 1999, Selling, General and
Administrative decreased as a percentage of revenues to 37.8% compared with
38.5% for the prior year period. The improvements as a percentage of revenues
resulted primarily from improved efficiencies in sales, fleet and telephone
costs. These cost savings were partially offset by additional costs related to
various new service and marketing programs throughout the Company.
Interest Income decreased $1.3 million or 58.9% compared to the same quarter of
the prior year, and decreased $4.2 million or 57.5% for the nine months ended
September 30, 1999 compared to the same period of the prior year. The decreases
were primarily due to lower invested funds over the prior year periods.
The Company's net tax provisions of $879,000 for the quarter and $5.8 million
for the first nine months reflect increased taxable income over the prior year
periods.
7
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Financial Condition
September 30, December 31,
(In thousands) 1999 1998
- --------------------------------------------------------------------------------
<S> <C> <C>
Cash and Short-Term Investments ........ $ 3,950 $ 1,244
Marketable Securities .................. 66,006 110,229
------------- -------------
69,956 111,473
Working Capital ........................ 43,673 84,015
Current Ratio .......................... 1.4 1.7
- --------------------------------------------------------------------------------
</TABLE>
The Company believes its current cash balances and future cash flows from
operating activities will be sufficient to finance its current operations and
obligations, and fund expansion of the business for the foreseeable future. The
Company's cash flow provided by operating activities was $14.2 million for the
first nine months of 1999 compared with cash used in operating activities of
$4.3 million in the same period of 1998. This increase resulted primarily from
favorable changes in working capital related primarily to differences in the
timing of accrued expenses and higher net income from operations in 1999,
adjusted for non-cash items.
The Company invested approximately $41.0 million in capital expenditures and
acquisitions during the first nine months of 1999, and expects to invest between
$80 and $85 million in 1999, inclusive of improvements to its management
information systems. Capital expenditures during the first nine months of 1999
consisted primarily of equipment replacements and upgrades. Acquisitions
consisted primarily of the acquisition of the commercial pest elimination
business operations of PRISM, a subsidiary of SC Johnson Professional. See Note
4 to the accompanying consolidated financial statements for further discussion.
During the nine months ended September 30, 1999, $4.6 million was paid in cash
dividends and $7.6 million was paid for repurchases of 445,700 shares of the
Company's Common Stock. These repurchased shares were retired during the nine
months. The capital expenditures, acquisitions, cash dividends and stock
repurchases were primarily funded through existing cash and marketable
securities balances and operating activities. The Company maintains a $40.0
million unused line of credit, which is available for future acquisitions and
growth, if needed.
In 1997 and 1998, Orkin and other pest control industry companies received
letters from the Federal Trade Commission (FTC) advising of its investigation of
the pest control industry - more specifically, the termite and moisture control
practices of the industry - and requesting certain information voluntarily from
the Company. Orkin has voluntarily provided the information requested and has
advised of the Company's intention to continue to cooperate fully with this
investigation. At this point in time, it is too early to determine the impact,
if any, of this investigation. In addition, the Company is aggressively
defending a class action lawsuit filed in Dothan, Alabama. For further
discussion, see Note 5 to the accompanying consolidated financial statements.
Year 2000 Issues
Aware that the Year 2000 (Y2K) information technology programming issue could
have a significant potential impact on its future operations and financial
reporting, the Company began its assessment and remediation processes in 1997
regarding its primary financial and operating systems. The Company's assessment
activities have included (1) identifying all software and operating systems -
both information technology (IT) systems and non-IT systems with embedded
technology - which are critical to operations and/or financial reporting, (2)
testing of such software and systems for Y2K compliance, (3) obtaining
assurances from the vendors whom the Company believes to be critical to its
operations and/or financial reporting, and (4) assigning a manager for Y2K
compliance and establishing a monthly readiness reporting process to ensure that
top management will be aware of each area and step remaining to be done in order
for the Company to become fully Y2K compliant. The Company's remediation
activities have included replacing certain software and operating systems,
followed by testing to ensure the Y2K compliance of the replacements.
Based on its assessment and remediation activities to date, the Company believes
that its critical internal software and operating systems are Y2K compliant. The
total cost of Y2K expenditures to date as of September 30, 1999
8
<PAGE>
was approximately $19.3 million. Remaining Y2K remediation costs to address
secondary issues and contingency plans are anticipated to be approximately
$100,000 to $500,000.
The Company is taking all reasonable steps (including obtaining written Y2K
compliance assurances from the majority of vendors the Company believes to be
critical to its operations and/or financial reporting) to mitigate the risk of
major interruptions in day-to-day operations due to Y2K issues. Nevertheless,
due to the uncertainty inherent in Y2K issues generally and those that are
beyond the Company's control in particular (e.g. the final Y2K readiness of the
Company's large commercial customers and its vendors, including banks and other
financial institutions; the U.S. Postal Service; common freight, parcel and
communications carriers; and electric, gas, water and other public utilities),
there can be no assurance that a failure of the Company and/or its major
suppliers or customers to adequately address the Y2K issue would not have a
material impact on the Company's results of operations, liquidity or financial
condition. The Company believes the worst case scenario will be the widespread
failure of electrical, gas, water and similar supplies by utilities serving the
Company, its suppliers and customers; widespread disruption of the services of
banks and other financial institutions, the U.S. Postal Service, and common
freight, parcel and communications carriers; widespread disruption in the
operations of the Company's commercial customers; widespread disruption to the
means and modes of transportation used by the Company's and its suppliers' and
commercial customers' ability to gain access to, and remain working in, office
buildings and other facilities; the failure of a substantial number of the
Company's critical information hardware and software systems; and the failure of
outside systems, the effects of which would have a cumulative material adverse
impact on the Company's critical systems. The Company believes that the scenario
described above is unlikely in some or many respects and that the most
reasonably likely worst case scenario will be some minor inconveniences
experienced by a small number of its branches in January 2000.
The Company expects to have contingency plans in place by the end of 1999 that
address potential short-term business disruptions resulting from losses of
electricity and system malfunctions related to the ordering and delivering of
operating supplies and the printing of sales orders.
Impact of Recent Accounting Pronouncements
In 1998, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities." In second quarter 1999, the Financial Accounting Standards Board
voted to delay the effective date of this standard to fiscal years beginning
after June 15, 2000. The adoption of this standard, effective for the Company as
of January 1, 2001, is not expected to materially impact the results of
operations or financial condition of the Company.
Forward-Looking Statements
This Form 10-Q contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. The actual results of the
Company could differ materially from those indicated by the forward-looking
statements because of various risks and uncertainties, including without
limitation, general economic conditions; market risk; changes in industry
practices or technologies; the degree of success of the Company's termite
process reforms; the Company's ability to identify potential acquisitions;
climate and weather trends; competitive factors and pricing practices; the
failure of the Company or its major suppliers or customers to adequately address
the Year 2000 programming issue; potential increases in labor costs;
uncertainties of litigation; and changes in various government laws and
regulations, including environmental regulations. All of the foregoing risks and
uncertainties are beyond the ability of the Company to control, and in many
cases the Company cannot predict the risks and uncertainties that could cause
its actual results to differ materially from those indicated by the
forward-looking statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Company maintains an investment portfolio, comprised of U.S. Government and
corporate debt securities, which is subject to interest rate risk exposure. This
risk is managed through conservative policies to invest in high-quality
obligations. The Company has performed an interest rate sensitivity analysis
using a duration model over the near term with a 10% change in interest rates.
The Company's portfolio is not subject to material interest rate risk exposure
based on this analysis, and no material changes in market risk exposures or how
those risks are managed is expected.
9
<PAGE>
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
See Note 5 to Part I, Item 1 for discussion of certain litigation.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
(3)(i) Restated Certificate of Incorporation of
Rollins, Inc. is incorporated herein by reference to
Exhibit (3)(i) as filed with its Form 10-K for the
year ended December 31, 1997.
(ii) By-laws of Rollins, Inc. is incorporated herein
by reference to Exhibit (3) (ii) as filed with its
Form 10-Q for the quarterly period ended March 31,
1999.
(4) Form of Common Stock Certificate of Rollins, Inc. is
incorporated herein by reference to Exhibit (4) as
filed with its Form 10-K for the year ended December
31, 1998.
(27) Financial Data Schedule (For Commission Use Only).
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during third quarter 1999.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ROLLINS, INC.
(Registrant)
Date: November 11, 1999 By: /s/ Gary W. Rollins
-------------------------------------
Gary W. Rollins
President and Chief Operating Officer
(Member of the Board of Directors)
Date: November 11, 1999 By: /s/ Harry J. Cynkus
-------------------------------------
Harry J. Cynkus
Chief Financial Officer and Treasurer
(Principal Financial and Accounting
Officer)
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Registrant's unaudited financial statements contained in its report on
Form 10-Q for the quarterly period ended September 30, 1999 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000084839
<NAME> ROLLINS, INC.
<MULTIPLIER> 1,000
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1.0
<CASH> 3,950
<SECURITIES> 66,006
<RECEIVABLES> 51,481
<ALLOWANCES> 5,877
<INVENTORY> 12,460
<CURRENT-ASSETS> 163,552
<PP&E> 81,333
<DEPRECIATION> 39,894
<TOTAL-ASSETS> 321,229
<CURRENT-LIABILITIES> 119,879
<BONDS> 0
0
0
<COMMON> 30,159
<OTHER-SE> 49,412
<TOTAL-LIABILITY-AND-EQUITY> 321,229
<SALES> 0
<TOTAL-REVENUES> 446,330
<CGS> 0
<TOTAL-COSTS> 255,742
<OTHER-EXPENSES> 175,230
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 15,358
<INCOME-TAX> 5,836
<INCOME-CONTINUING> 9,522
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,522
<EPS-BASIC> 0.31
<EPS-DILUTED> 0.31
</TABLE>
