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ROLLINS, INC.報告2024年第三季度財務業績
投資於增長，以利用健康市場
2024年10月23日，喬治亞州亞特蘭大：rollins公司（紐交所: ROL）（「rollins」或「公司」），一家領先的全球消費和商業服務公司，報告了2024年第三季度未經審計的財務業績。
主要亮點
•第三季度營收爲91600萬美元，較2023年第三季度增長9.0%，有機營收增長7.7%。
•季度營業收入爲19200萬美元，比2023年第三季度增長了8.3%。季度營業利潤率爲20.9%，較2023年第三季度減少了20個點子。調整後的營業收入爲19600萬美元，較去年同期增加了4.5%。調整後的營業利潤率爲21.4%，較去年同期下降了90個點子。
•調整後的EBITDA爲21900萬美元，較去年同比增長5.5%。調整後的EBITDA利潤率爲24.0%，比2023年第三季度下降了80個點子。
•季度淨利潤爲13700萬美元，比上年同期增長了7.1%。調整後的淨利潤*爲14000萬美元，比上年同期增長了3.3%。
•季度每股收益爲0.28美元，較去年同期的每股收益0.26美元增長了7.7%。調整後的每股收益爲0.29美元，較去年同期增長了3.6%。
•本季度經營現金流爲14700萬美元，比去年同期增長了15.4%。公司投資了2400萬美元用於收購，800萬美元用於資本支出，並支付了總額爲7300萬美元的分紅派息。
* 金額爲非GAAP財務指標。請參見下表以了解討論非GAAP財務指標，包括最直接可比的GAAP指標的調整情況。
管理層評論
「我們團隊在第三季度取得了強勁的業績，有機營業收入增長了7.7％，達到了我們在年度7％至8％的區間中討論過的高端，儘管出現了颶風海倫期間在季度最後一週發生的一些業務中斷，」 Jerry Gahlhoff先生，總裁兼首席執行官說。「我們的心與最近受到颶風影響的所有人在一起。我們的團隊一直致力於支援受自然災害影響的同事和社區，我們的工作將繼續進行，持續在未來的日子、周和月中。我想感謝我們的團隊對客戶和彼此的承諾。」Gahlhoff先生補充道。
「我們繼續投資於團隊和其他資源，旨在充分利用健康市場環境，推動業務進一步增長，」首席財務官肯尼斯·克勞斯表示。“毛利率上的20個點子的槓桿被增長投資抵消，在本季度抑制了我們整體利潤表現，但將支撐我們的長期目標。克勞斯先生總結道：「我們正在努力實現健康的邊際改善，並實現年度兩位數盈利增長。」
董事會領導層過渡
此外，公司還宣佈，根據其長期計劃的領導層繼任目標，2025年1月1日起，80歲的Gary W. rollins將從董事會執行主席職務過渡爲董事會名譽執行主席。John F. Wilson，現任副主席，將接替Gary擔任董事會執行主席。
「自1996年加入我們公司以來，我有幸與John密切合作。我期待支持他順利過渡到這一重要的領導角色，因爲我將繼續作爲我們傑出董事會的活躍成員和積極參與者，」董事會執行主席Gary W. Rollins說。
「董事會代表全體董事向約翰就新職務表示祝賀，並期待與他、加里和整個管理團隊合作，引領業務進入下一個增長階段，」公司的領導獨立董事路易斯·S·桑姆斯說。
1
三個月和九個月結束財務亮點
| 截至9月30日的三個月 | 截至9月30日的九個月 | ||||||||||||||||||||||||||||||||||||||||
| 方差 | 方差 | ||||||||||||||||||||||||||||||||||||||||
| （以千計，每股數據除外） | 2024 | 2023 | $ | % | 2024 | 2023 | $ | % | |||||||||||||||||||||||||||||||||
| GAAP 指標 | |||||||||||||||||||||||||||||||||||||||||
| 收入 | $ | 916,270 | $ | 840,427 | $ | 75,843 | 9.0 | % | $ | 2,556,539 | $ | 2,319,192 | $ | 237,347 | 10.2 | % | |||||||||||||||||||||||||
毛利 (1) | $ | 494,378 | $ | 451,894 | $ | 42,484 | 9.4 | % | $ | 1,358,804 | $ | 1,219,626 | $ | 139,178 | 11.4 | % | |||||||||||||||||||||||||
毛利率 (1) | 54.0 | % | 53.8 | % | 20 | bps | 53.2 | % | 52.6 | % | 60 | bps | |||||||||||||||||||||||||||||
| 營業收入 | $ | 191,796 | $ | 177,124 | $ | 14,672 | 8.3 | % | $ | 506,597 | $ | 444,153 | $ | 62,444 | 14.1 | % | |||||||||||||||||||||||||
| 營業收入利潤率 | 20.9 | % | 21.1 | % | (20) | bps | 19.8 | % | 19.2 | % | 60 | bps | |||||||||||||||||||||||||||||
| 淨收入 | $ | 136,913 | $ | 127,777 | $ | 9,136 | 7.1 | % | $ | 360,704 | $ | 326,154 | $ | 34,550 | 10.6 | % | |||||||||||||||||||||||||
| EPS | $ | 0.28 | $ | 0.26 | $ | 0.02 | 7.7 | % | $ | 0.74 | $ | 0.66 | $ | 0.08 | 12.1 | % | |||||||||||||||||||||||||
| 運營現金流 | $ | 146,947 | $ | 127,355 | $ | 19,592 | 15.4 | % | $ | 419,495 | $ | 375,541 | $ | 43,954 | 11.7 | % | |||||||||||||||||||||||||
| 非公認會計准則指標 | |||||||||||||||||||||||||||||||||||||||||
調整後的營業收入 (2) | $ | 196,012 | $ | 187,582 | $ | 8,430 | 4.5 | % | $ | 520,286 | $ | 459,872 | $ | 60,414 | 13.1 | % | |||||||||||||||||||||||||
調整後的營業利潤率 (2) | 21.4 | % | 22.3 | % | (90) | bps | 20.4 | % | 19.8 | % | 60 | bps | |||||||||||||||||||||||||||||
調整後淨收益 (2) | $ | 139,617 | $ | 135,191 | $ | 4,426 | 3.3 | % | $ | 370,194 | $ | 333,217 | $ | 36,977 | 11.1 | % | |||||||||||||||||||||||||
調整後的EPS (2) | $ | 0.29 | $ | 0.28 | $ | 0.01 | 3.6 | % | $ | 0.76 | $ | 0.68 | $ | 0.08 | 11.8 | % | |||||||||||||||||||||||||
調整後 EBITDA (2) | $ | 219,460 | $ | 208,038 | $ | 11,422 | 5.5 | % | $ | 590,331 | $ | 525,055 | $ | 65,276 | 12.4 | % | |||||||||||||||||||||||||
調整後的息稅折舊攤銷前利潤率 (2) | 24.0 | % | 24.8 | % | (80) | bps | 23.1 | % | 22.6 | % | 50 | bps | |||||||||||||||||||||||||||||
自由現金流 (2) | $ | 139,425 | $ | 120,487 | $ | 18,938 | 15.7 | % | $ | 396,106 | $ | 354,262 | $ | 41,844 | 11.8 | % | |||||||||||||||||||||||||
（1）不包括折舊和攤銷
(2) 金額爲非普通會計準則財務指標。請參閱本公告附錄，了解非普通會計準則財務指標的討論，包括最直接可比的普通會計準則指標之間的調解。
關於Rollins, Inc.:
rollins公司是一家頂尖的全球消費者和商業服務公司。通過其旗下領先品牌，公司及其特許經營提供基本的害蟲控制服務，防止白蟻、老鼠和昆蟲損害，服務超過280萬客戶，遍佈北美、南美、歐洲、亞洲、非洲和澳洲，在800多個地點擁有超過2萬名員工。Rollins旗下擁有Orkin、HomeTeam Pest Defense、Clark Pest Control、Northwest Exterminating、McCall Service、Trutech、Critter Control、Western Pest Services、Waltham Services、OPC Pest Services、The Industrial Fumigant Company、PermaTreat、Crane Pest Control、MissQuito、Fox Pest Control、Orkin Canada、Orkin Australia、Safeguard（英國）、Aardwolf Pestkare（新加坡）等公司子品牌。您可以通過訪問網站了解更多關於rollins及其子公司的信息。g www.rollins.com.
關於前瞻性聲明的警示聲明
本新聞稿以及公司通過書面或口頭方式發佈的其他聲明可能包含《1995年私人證券訴訟改革法》中定義的「前瞻性聲明」。我們根據目前的意見、期望、意圖、信念、計劃、目標、假設和對未來事件和影響我們業務經營業績和財務狀況的財務趨勢的預測做出這些前瞻性聲明。儘管我們認爲這些前瞻性聲明是合理的，但我們不能保證我們會實現或實現這些計劃、意圖或期望。一般來說，不涉及歷史事實的陳述，包括關於可能或假定未來行動、業務策略、事件或運營結果的陳述，都屬於前瞻性聲明。諸如「認爲」、「繼續」、「可能」、「估計」、「期望」、「打算」、「可能」、「計劃」、「潛在」、「預測」、「應當」、「將會」等類似表達可能識別出前瞻性聲明，但缺少這些詞語並不意味着陳述不是前瞻性的。本新聞稿中的前瞻性聲明包括但不限於對以下內容的聲明：關於我們的財務和業務表現的期望；對我們服務的需求；預期增長；繼續投資於我們的團隊和其他資源，以便利用良好市場環境的板塊領導權的過渡。
這些前瞻性聲明是基於截至本新聞稿發布日的信息，以及當前的預期、預測和假設，並涉及多項判斷、風險和不確定性。重要因素可能導致實際結果與前瞻性聲明所指示或暗示的結果存在重大差異，包括但不限於我們截至2023年12月31日的財政年度的10-K表格年報中標題為「風險因素」的部分所列的因素，並可能在我們未來向美國證券交易委員會（SEC）提交的報告中不時描述。
因此，不應依賴前瞻性陳述作為代表我們觀點的依據，我們不承擔更新前瞻性陳述以反映其製作日期後的事件或情況的任何義務，不論是因為新信息、未來事件或其他情況，除非法律規定。
看漲會議通話
rollins將於2024年10月24日（星期四）上午8:30（美東時間）舉行電話會議，討論2024年第三季度的結果。此次電話會議還將通過rollins, inc.的網站提供的鏈接在互聯網上進行實時播放，位於 www.rollins.com有興趣的各方也可以撥打1-877-869-3839（國內）或+1-201-689-8265（國際）參加電話會議，會議ID為13749018。對於無法參加會議的感興趣人員，網站上將提供180天的重播。
2
ROLLINS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands)
(unaudited)
| September 30, 2024 | December 31, 2023 | ||||||||||
| ASSETS | |||||||||||
| Cash and cash equivalents | $ | 95,282 | $ | 103,825 | |||||||
| Trade receivables, net | 226,452 | 178,214 | |||||||||
| Financed receivables, short-term, net | 39,289 | 37,025 | |||||||||
| Materials and supplies | 39,283 | 33,383 | |||||||||
| Other current assets | 86,196 | 54,192 | |||||||||
| Total current assets | 486,502 | 406,639 | |||||||||
| Equipment and property, net | 129,168 | 126,661 | |||||||||
| Goodwill | 1,135,122 | 1,070,310 | |||||||||
| Intangibles, net | 540,721 | 545,734 | |||||||||
| Operating lease right-of-use assets | 391,626 | 323,390 | |||||||||
| Financed receivables, long-term, net | 87,880 | 75,909 | |||||||||
| Other assets | 45,179 | 46,817 | |||||||||
| Total assets | $ | 2,816,198 | $ | 2,595,460 | |||||||
| LIABILITIES | |||||||||||
| Accounts payable | $ | 58,217 | $ | 49,200 | |||||||
| Accrued insurance – current | 50,106 | 46,807 | |||||||||
| Accrued compensation and related liabilities | 108,227 | 114,355 | |||||||||
| Unearned revenues | 201,909 | 172,380 | |||||||||
| Operating lease liabilities – current | 113,727 | 92,203 | |||||||||
| Other current liabilities | 89,882 | 101,744 | |||||||||
| Total current liabilities | 622,068 | 576,689 | |||||||||
| Accrued insurance, less current portion | 57,510 | 48,060 | |||||||||
| Operating lease liabilities, less current portion | 280,555 | 233,369 | |||||||||
| Long-term debt | 445,176 | 490,776 | |||||||||
| Other long-term accrued liabilities | 93,112 | 90,999 | |||||||||
| Total liabilities | 1,498,421 | 1,439,893 | |||||||||
| STOCKHOLDERS’ EQUITY | |||||||||||
| Common stock | 484,306 | 484,080 | |||||||||
| Retained earnings and other equity | 833,471 | 671,487 | |||||||||
| Total stockholders’ equity | 1,317,777 | 1,155,567 | |||||||||
| Total liabilities and stockholders’ equity | $ | 2,816,198 | $ | 2,595,460 | |||||||
3
ROLLINS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share data)
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| REVENUES | |||||||||||||||||||||||
| Customer services | $ | 916,270 | $ | 840,427 | $ | 2,556,539 | $ | 2,319,192 | |||||||||||||||
| COSTS AND EXPENSES | |||||||||||||||||||||||
| Cost of services provided (exclusive of depreciation and amortization below) | 421,892 | 388,533 | 1,197,735 | 1,099,566 | |||||||||||||||||||
| Sales, general and administrative | 274,918 | 244,906 | 769,522 | 696,668 | |||||||||||||||||||
| Restructuring costs | — | 5,196 | — | 5,196 | |||||||||||||||||||
| Depreciation and amortization | 27,664 | 24,668 | 82,685 | 73,609 | |||||||||||||||||||
| Total operating expenses | 724,474 | 663,303 | 2,049,942 | 1,875,039 | |||||||||||||||||||
| OPERATING INCOME | 191,796 | 177,124 | 506,597 | 444,153 | |||||||||||||||||||
| Interest expense, net | 7,150 | 5,547 | 22,650 | 10,797 | |||||||||||||||||||
| Other income, net | (582) | (493) | (933) | (6,226) | |||||||||||||||||||
| CONSOLIDATED INCOME BEFORE INCOME TAXES | 185,228 | 172,070 | 484,880 | 439,582 | |||||||||||||||||||
| PROVISION FOR INCOME TAXES | 48,315 | 44,293 | 124,176 | 113,428 | |||||||||||||||||||
| NET INCOME | $ | 136,913 | $ | 127,777 | $ | 360,704 | $ | 326,154 | |||||||||||||||
| NET INCOME PER SHARE - BASIC AND DILUTED | $ | 0.28 | $ | 0.26 | $ | 0.74 | $ | 0.66 | |||||||||||||||
| Weighted average shares outstanding - basic | 484,317 | 490,775 | 484,231 | 491,980 | |||||||||||||||||||
| Weighted average shares outstanding - diluted | 484,359 | 490,965 | 484,270 | 492,158 | |||||||||||||||||||
| DIVIDENDS PAID PER SHARE | $ | 0.15 | $ | 0.13 | $ | 0.45 | $ | 0.39 | |||||||||||||||
4
ROLLINS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED CASH FLOW INFORMATION
(in thousands)
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| OPERATING ACTIVITIES | |||||||||||||||||||||||
| Net income | $ | 136,913 | $ | 127,777 | $ | 360,704 | $ | 326,154 | |||||||||||||||
| Depreciation and amortization | 27,664 | 24,668 | 82,685 | 73,609 | |||||||||||||||||||
| Change in working capital and other operating activities | (17,630) | (25,090) | (23,894) | (24,222) | |||||||||||||||||||
| Net cash provided by operating activities | 146,947 | 127,355 | 419,495 | 375,541 | |||||||||||||||||||
| INVESTING ACTIVITIES | |||||||||||||||||||||||
| Acquisitions, net of cash acquired | (23,875) | (21,420) | (105,529) | (349,312) | |||||||||||||||||||
| Capital expenditures | (7,522) | (6,868) | (23,389) | (21,279) | |||||||||||||||||||
| Other investing activities, net | 1,458 | (2,424) | 5,358 | 8,257 | |||||||||||||||||||
| Net cash used in investing activities | (29,939) | (30,712) | (123,560) | (362,334) | |||||||||||||||||||
| FINANCING ACTIVITIES | |||||||||||||||||||||||
| Net (repayments) borrowings | (57,000) | 259,000 | (46,000) | 544,000 | |||||||||||||||||||
| Payment of dividends | (72,797) | (63,809) | (217,964) | (191,805) | |||||||||||||||||||
| Other financing activities, net | (1,823) | (301,643) | (41,542) | (318,452) | |||||||||||||||||||
| Net cash (used in) provided by financing activities | (131,620) | (106,452) | (305,506) | 33,743 | |||||||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 3,197 | (2,691) | 1,028 | (49) | |||||||||||||||||||
| Net (decrease) increase in cash and cash equivalents | $ | (11,415) | $ | (12,500) | $ | (8,543) | $ | 46,901 | |||||||||||||||
5
APPENDIX
Reconciliation of GAAP and non-GAAP Financial Measures
The Company has used the non-GAAP financial measures of organic revenues, organic revenues by type, adjusted operating income, adjusted operating margin, adjusted net income, adjusted earnings per share (“EPS”), earnings before interest, taxes, depreciation and amortization (“EBITDA”), EBITDA margin, Adjusted EBITDA, adjusted EBITDA margin, incremental EBITDA margin, adjusted incremental EBITDA margin, free cash flow, free cash flow conversion, net debt, net leverage ratio, and adjusted sales, general and administrative expenses ("SG&A") in this earnings release. Organic revenue is calculated as revenue less the revenue from acquisitions completed within the prior 12 months and excluding the revenue from divested businesses. Acquisition revenue is based on the trailing 12-month revenue of our acquired entities. Adjusted operating income and adjusted operating income margin are calculated by adding back to the GAAP measures those expenses resulting from the amortization of certain intangible assets, adjustments to the fair value of contingent consideration resulting from the acquisition of Fox, and restructuring costs related to restructuring and workforce reduction plans. Adjusted net income and adjusted EPS are calculated by adding back to the GAAP measure amortization of certain intangible assets, adjustments to the fair value of contingent consideration resulting from the acquisition of Fox, and restructuring costs related to restructuring and workforce reduction plans, and excluding gains and losses on the sale of non-operational assets and by further subtracting the tax impact of those expenses, gains, or losses. Adjusted EBITDA and adjusted EBITDA margin are calculated by adding back to the GAAP measures those expenses resulting from the adjustments to the fair value of contingent consideration resulting from the acquisition of Fox, restructuring costs related to restructuring and workforce reduction plans, and excluding gains and losses on the sale of non-operational assets. Incremental EBITDA margin is calculated as the change in EBITDA divided by the change in revenue. Adjusted incremental EBITDA margin is calculated as the change in adjusted EBITDA divided by the change in revenue. Free cash flow is calculated by subtracting capital expenditures from cash provided by operating activities. Free cash flow conversion is calculated as free cash flow divided by net income. Net debt is calculated as total long-term debt less cash and cash equivalents. Net leverage ratio is calculated by dividing net debt by trailing twelve-month EBITDA. Adjusted SG&A is calculated by removing the adjustments to the fair value of contingent consideration resulting from the acquisition of Fox. These measures should not be considered in isolation or as a substitute for revenues, net income, earnings per share or other performance measures prepared in accordance with GAAP.
Management uses adjusted operating income, adjusted operating income margin, adjusted net income, adjusted EPS, EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, incremental EBITDA margin, adjusted incremental EBITDA margin, and adjusted SG&A as measures of operating performance because these measures allow the Company to compare performance consistently over various periods. Management also uses organic revenues, and organic revenues by type to compare revenues over various periods excluding the impact of acquisitions and divestitures. Management uses free cash flow to demonstrate the Company’s ability to maintain its asset base and generate future cash flows from operations. Management uses free cash flow conversion to demonstrate how much net income is converted into cash. Management uses net debt as an assessment of overall liquidity, financial flexibility, and leverage. Net leverage ratio is useful to investors because it is an indicator of our ability to meet our future financial obligations. Management believes all of these non-GAAP financial measures are useful to provide investors with information about current trends in, and period-over-period comparisons of, the Company's results of operations. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.
A non-GAAP financial measure is a numerical measure of financial performance, financial position, or cash flows that either 1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of operations, balance sheet or statement of cash flows, or 2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.
Set forth below is a reconciliation of the non-GAAP financial measures used in this earnings release with their most directly comparable GAAP measures.
(unaudited, in thousands, except per share data and margins)
6
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| Variance | Variance | ||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | $ | % | 2024 | 2023 | $ | % | ||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Operating Income to Adjusted Operating Income and Adjusted Operating Income Margin | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating income | $ | 191,796 | $ | 177,124 | $ | 506,597 | $ | 444,153 | |||||||||||||||||||||||||||||||||||||||
Fox acquisition-related expenses (1) | 4,216 | 5,262 | 13,689 | 10,523 | |||||||||||||||||||||||||||||||||||||||||||
Restructuring costs (2) | — | 5,196 | — | 5,196 | |||||||||||||||||||||||||||||||||||||||||||
| Adjusted operating income | $ | 196,012 | $ | 187,582 | 8,430 | 4.5 | $ | 520,286 | $ | 459,872 | 60,414 | 13.1 | |||||||||||||||||||||||||||||||||||
| Revenues | $ | 916,270 | $ | 840,427 | $ | 2,556,539 | $ | 2,319,192 | |||||||||||||||||||||||||||||||||||||||
| Operating income margin | 20.9 | % | 21.1 | % | 19.8 | % | 19.2 | % | |||||||||||||||||||||||||||||||||||||||
| Adjusted operating margin | 21.4 | % | 22.3 | % | 20.4 | % | 19.8 | % | |||||||||||||||||||||||||||||||||||||||
Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS (6) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income | $ | 136,913 | $ | 127,777 | $ | 360,704 | $ | 326,154 | |||||||||||||||||||||||||||||||||||||||
Fox acquisition-related expenses (1) | 4,216 | 5,262 | 13,689 | 10,523 | |||||||||||||||||||||||||||||||||||||||||||
Restructuring costs (2) | — | 5,196 | — | 5,196 | |||||||||||||||||||||||||||||||||||||||||||
Gain on sale of assets, net (3) | (582) | (493) | (933) | (6,226) | |||||||||||||||||||||||||||||||||||||||||||
Tax impact of adjustments (4) | (930) | (2,551) | (3,266) | (2,430) | |||||||||||||||||||||||||||||||||||||||||||
| Adjusted net income | $ | 139,617 | $ | 135,191 | 4,426 | 3.3 | $ | 370,194 | $ | 333,217 | 36,978 | 11.1 | |||||||||||||||||||||||||||||||||||
| EPS - basic and diluted | $ | 0.28 | $ | 0.26 | $ | 0.74 | $ | 0.66 | |||||||||||||||||||||||||||||||||||||||
Fox acquisition-related expenses (1) | 0.01 | 0.01 | 0.03 | 0.02 | |||||||||||||||||||||||||||||||||||||||||||
Restructuring costs (2) | — | 0.01 | — | 0.01 | |||||||||||||||||||||||||||||||||||||||||||
Gain on sale of assets, net (3) | — | — | — | (0.01) | |||||||||||||||||||||||||||||||||||||||||||
Tax impact of adjustments (4) | — | (0.01) | (0.01) | — | |||||||||||||||||||||||||||||||||||||||||||
Adjusted EPS - basic and diluted (5) | $ | 0.29 | $ | 0.28 | 0.01 | 3.6 | $ | 0.76 | $ | 0.68 | 0.08 | 11.8 | |||||||||||||||||||||||||||||||||||
| Weighted average shares outstanding – basic | 484,317 | 490,775 | 484,231 | 491,980 | |||||||||||||||||||||||||||||||||||||||||||
| Weighted average shares outstanding – diluted | 484,359 | 490,965 | 484,270 | 492,158 | |||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Net Income to EBITDA, Adjusted EBITDA, EBITDA Margin, Incremental EBITDA Margin, Adjusted EBITDA Margin, and Adjusted Incremental EBITDA Margin (6) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income | $ | 136,913 | $ | 127,777 | $ | 360,704 | $ | 326,154 | |||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 27,664 | 24,668 | 82,685 | 73,609 | |||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 7,150 | 5,547 | 22,650 | 10,797 | |||||||||||||||||||||||||||||||||||||||||||
| Provision for income taxes | 48,315 | 44,293 | 124,176 | 113,428 | |||||||||||||||||||||||||||||||||||||||||||
| EBITDA | $ | 220,042 | $ | 202,285 | 17,757 | 8.8 | $ | 590,215 | $ | 523,988 | 66,227 | 12.6 | |||||||||||||||||||||||||||||||||||
Fox acquisition-related expenses (1) | — | 1,050 | 1,049 | 2,097 | |||||||||||||||||||||||||||||||||||||||||||
Restructuring costs (2) | — | 5,196 | — | 5,196 | |||||||||||||||||||||||||||||||||||||||||||
Gain on sale of assets, net (3) | (582) | (493) | (933) | (6,226) | |||||||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 219,460 | $ | 208,038 | 11,422 | 5.5 | $ | 590,331 | $ | 525,055 | 65,276 | 12.4 | |||||||||||||||||||||||||||||||||||
| Revenues | $ | 916,270 | $ | 840,427 | 75,843 | $ | 2,556,539 | $ | 2,319,192 | 237,347 | |||||||||||||||||||||||||||||||||||||
| EBITDA margin | 24.0 | % | 24.1 | % | 23.1 | % | 22.6 | % | |||||||||||||||||||||||||||||||||||||||
| Incremental EBITDA margin | 23.4 | % | 27.9 | % | |||||||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA margin | 24.0 | % | 24.8 | % | 23.1 | % | 22.6 | % | |||||||||||||||||||||||||||||||||||||||
| Adjusted incremental EBITDA margin | 15.1 | % | 27.5 | % | |||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow and Free Cash Flow Conversion | |||||||||||||||||||||||||||||||||||||||||||||||
| Net cash provided by operating activities | $ | 146,947 | $ | 127,355 | $ | 419,495 | $ | 375,541 | |||||||||||||||||||||||||||||||||||||||
| Capital expenditures | (7,522) | (6,868) | (23,389) | (21,279) | |||||||||||||||||||||||||||||||||||||||||||
| Free cash flow | $ | 139,425 | $ | 120,487 | 18,938 | 15.7 | $ | 396,106 | $ | 354,262 | 41,844 | 11.8 | |||||||||||||||||||||||||||||||||||
| Free cash flow conversion | 101.8 | % | 94.3 | % | 109.8 | % | 108.6 | % | |||||||||||||||||||||||||||||||||||||||
7
(1) Consists of expenses resulting from the amortization of certain intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisition of Fox. While we exclude such expenses in this non-GAAP measure, the revenue from the acquired company is reflected in this non-GAAP measure and the acquired assets contribute to revenue generation.
(2) Restructuring costs consist of costs primarily related to severance and benefits paid to employees pursuant to restructuring and workforce reduction plans.
(3) Consists of the gain or loss on the sale of non-operational assets.
(4) The tax effect of the adjustments is calculated using the applicable statutory tax rates for the respective periods.
(5) In some cases, the sum of the individual EPS amounts may not equal total non-GAAP EPS calculations due to rounding.
(6) In the first quarter of 2024, we revised the non-GAAP metrics adjusted net income, adjusted EPS, and adjusted EBITDA to exclude gains and losses related to non-operational asset sales. These measures are of operating performance and we believe excluding the gains and losses on non-operational assets allows us to better compare our operating performance consistently over various periods. Refer to our first quarter 2024 press release for fully revised quarterly metrics.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| Variance | Variance | ||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 (7) | $ | % | 2024 | 2023 (7) | $ | % | ||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Revenues to Organic Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenues | $ | 916,270 | $ | 840,427 | 75,843 | 9.0 | $ | 2,556,539 | $ | 2,319,192 | 237,347 | 10.2 | |||||||||||||||||||||||||||||||||||
| Revenues from acquisitions | (17,339) | — | (17,339) | 2.1 | (77,479) | — | (77,479) | 3.3 | |||||||||||||||||||||||||||||||||||||||
| Revenues of divestitures | — | (5,823) | 5,823 | (0.8) | — | (16,500) | 16,500 | (0.8) | |||||||||||||||||||||||||||||||||||||||
| Organic revenues | $ | 898,931 | $ | 834,604 | 64,327 | 7.7 | $ | 2,479,060 | $ | 2,302,692 | 176,368 | 7.7 | |||||||||||||||||||||||||||||||||||
| Reconciliation of Residential Revenues to Organic Residential Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
| Residential revenues | $ | 428,290 | $ | 402,559 | 25,731 | 6.4 | $ | 1,166,042 | $ | 1,069,403 | 96,639 | 9.0 | |||||||||||||||||||||||||||||||||||
| Residential revenues from acquisitions | (9,571) | — | (9,571) | 2.4 | (54,257) | — | (54,257) | 5.1 | |||||||||||||||||||||||||||||||||||||||
| Residential revenues of divestitures | — | (3,263) | 3,263 | (0.9) | — | (9,668) | 9,668 | (1.0) | |||||||||||||||||||||||||||||||||||||||
| Residential organic revenues | $ | 418,719 | $ | 399,296 | 19,423 | 4.9 | $ | 1,111,785 | $ | 1,059,735 | 52,050 | 4.9 | |||||||||||||||||||||||||||||||||||
| Reconciliation of Commercial Revenues to Organic Commercial Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial revenues | $ | 299,633 | $ | 273,865 | 25,768 | 9.4 | $ | 845,517 | $ | 767,472 | 78,045 | 10.2 | |||||||||||||||||||||||||||||||||||
| Commercial revenues from acquisitions | (6,434) | — | (6,434) | 2.3 | (17,456) | — | (17,456) | 2.3 | |||||||||||||||||||||||||||||||||||||||
| Commercial revenues of divestitures | — | (2,560) | 2,560 | (1.0) | — | (6,832) | 6,832 | (1.0) | |||||||||||||||||||||||||||||||||||||||
| Commercial organic revenues | $ | 293,199 | $ | 271,305 | 21,894 | 8.1 | $ | 828,061 | $ | 760,640 | 67,421 | 8.9 | |||||||||||||||||||||||||||||||||||
| Reconciliation of Termite and Ancillary Revenues to Organic Termite and Ancillary Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
| Termite and ancillary revenues | $ | 177,674 | $ | 155,135 | 22,539 | 14.5 | $ | 515,758 | $ | 457,664 | 58,094 | 12.7 | |||||||||||||||||||||||||||||||||||
| Termite and ancillary revenues from acquisitions | (1,334) | — | (1,334) | 0.8 | (5,766) | — | (5,766) | 1.3 | |||||||||||||||||||||||||||||||||||||||
| Termite and ancillary organic revenues | $ | 176,340 | $ | 155,135 | 21,205 | 13.7 | $ | 509,992 | $ | 457,664 | 52,328 | 11.4 | |||||||||||||||||||||||||||||||||||
8
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| Variance | Variance | ||||||||||||||||||||||||||||||||||||||||||||||
2023 (7) | 2022 (7) | $ | % | 2023 (7) | 2022 (7) | $ | % | ||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Revenues to Organic Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenues | $ | 840,427 | $ | 729,704 | 110,723 | 15.2 | $ | 2,319,192 | $ | 2,034,433 | 284,759 | 14.0 | |||||||||||||||||||||||||||||||||||
| Revenues from acquisitions | (49,971) | — | (49,971) | 6.8 | (114,273) | — | (114,273) | 5.6 | |||||||||||||||||||||||||||||||||||||||
| Organic revenues | $ | 790,456 | $ | 729,704 | 60,752 | 8.4 | $ | 2,204,919 | $ | 2,034,433 | 170,486 | 8.4 | |||||||||||||||||||||||||||||||||||
| Reconciliation of Residential Revenues to Organic Residential Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
| Residential revenues | $ | 402,559 | $ | 336,626 | 65,933 | 19.6 | $ | 1,069,403 | $ | 917,790 | 151,613 | 16.5 | |||||||||||||||||||||||||||||||||||
| Residential revenues from acquisitions | (42,974) | — | (42,974) | 12.8 | (91,067) | — | (91,067) | 9.9 | |||||||||||||||||||||||||||||||||||||||
| Residential organic revenues | $ | 359,585 | $ | 336,626 | 22,959 | 6.8 | $ | 978,336 | $ | 917,790 | 60,546 | 6.6 | |||||||||||||||||||||||||||||||||||
| Reconciliation of Commercial Revenues to Organic Commercial Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial revenues | $ | 273,865 | $ | 245,009 | 28,856 | 11.8 | $ | 767,472 | $ | 688,523 | 78,949 | 11.5 | |||||||||||||||||||||||||||||||||||
| Commercial revenues from acquisitions | (3,456) | — | (3,456) | 1.4 | (10,688) | — | (10,688) | 1.6 | |||||||||||||||||||||||||||||||||||||||
| Commercial organic revenues | $ | 270,409 | $ | 245,009 | 25,400 | 10.4 | $ | 756,784 | $ | 688,523 | 68,261 | 9.9 | |||||||||||||||||||||||||||||||||||
| Reconciliation of Termite and Ancillary Revenues to Organic Termite and Ancillary Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
| Termite and ancillary revenues | $ | 155,135 | $ | 139,359 | 15,776 | 11.3 | $ | 457,664 | $ | 405,089 | 52,575 | 13.0 | |||||||||||||||||||||||||||||||||||
| Termite and ancillary revenues from acquisitions | (3,541) | — | (3,541) | 2.5 | (12,518) | — | (12,518) | 3.1 | |||||||||||||||||||||||||||||||||||||||
| Termite and ancillary organic revenues | $ | 151,594 | $ | 139,359 | 12,235 | 8.8 | $ | 445,146 | $ | 405,089 | 40,057 | 9.9 | |||||||||||||||||||||||||||||||||||
(7) Revenues classified by significant product and service offerings for the three and nine months ended September 30, 2023 and 2022 were misstated by an immaterial amount and have been restated from the amounts previously reported to correct the classification of such revenues. There was no impact on our condensed consolidated statements of income, financial position, or cash flows.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Reconciliation of SG&A to Adjusted SG&A | |||||||||||||||||||||||
| SG&A | $ | 274,918 | $ | 244,906 | $ | 769,522 | $ | 696,668 | |||||||||||||||
Fox acquisition-related expenses (1) | — | 1,050 | 1,049 | 2,097 | |||||||||||||||||||
| Adjusted SG&A | $ | 274,918 | $ | 243,856 | $ | 768,473 | $ | 694,571 | |||||||||||||||
| Revenues | $ | 916,270 | $ | 840,427 | $ | 2,556,539 | $ | 2,319,192 | |||||||||||||||
| Adjusted SG&A as a % of revenues | 30.0 | % | 29.0 | % | 30.1 | % | 29.9 | % | |||||||||||||||
Period Ended September 30, 2024 | Period Ended December 31, 2023 | ||||||||||
| Reconciliation of Long-term Debt to Net Debt and Net Leverage Ratio | |||||||||||
Long-term debt (8) | $ | 447,000 | $ | 493,000 | |||||||
| Less: cash | 95,282 | 103,825 | |||||||||
| Net debt | $ | 351,718 | $ | 389,175 | |||||||
| Trailing twelve-month EBITDA | $ | 771,291 | $ | 705,064 | |||||||
| Net leverage ratio | 0.5x | 0.6x | |||||||||
(8) As of September 30, 2024, the Company had outstanding borrowings of $447.0 million under the Credit Facility. Borrowings under the Credit Facility are presented under the long-term debt caption of our condensed consolidated balance sheet, net of $1.8 million in unamortized debt issuance costs as of September 30, 2024.
9