Thank you, John, and thank you all for joining our call today. Operationally, we have strong momentum in our markets. Okay. Thank you. We finished off another strong year with free cash flow growing over 16%. Stay tuned on this front, because it's an area that Jerry and I are spending a lot of our time. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. First one, just on the organic growth. We're happy to take any questions at this time. Additionally, people costs, most notably, medical costs were up about $7 million for the year. If you go back to 2020 and 2021, we spent almost $150 million each of those years on acquisitions. Please proceed with your question, Seth. I appreciate the question. GAAP operating income was $120 million or 18.1% of revenue. SG&A expense in the quarter was $191 million or just under 29% of revenues, up $3 million from the prior year, but improving 230 basis points when stated as a percentage of revenue. Looking closer at the financial results and the growth we delivered. On the line with me today and speaking are Jerry Gahlhoff Jr., President, and Chief Executive Officer; John Wilson, Vice Chairman; Ken Krause, Executive Vice President, Chief Financial Officer, and Treasurer. Enjoying a strong reputation in the marketplace, we have long respected Fox's history of success. Hi, guys. John Wilson. Gross profit was 50.5% of revenue in the quarter, up 10 basis points from the same quarter a year ago. We continue to be very active in pursuing additional acquisition opportunities. And would it be fair to assume we could kind of see an acceleration from these levels, or are you thinking more of a kind of steady-state, high single-digit on an organic basis? So, Q2, you'll see a ramping from Q1, and then Q3 you'll see a further ramping. Hi, Ken. Turning to cash flow and the balance sheet. Do you expect it to be more in line with the historical average, or still above that historical average level? Ashish Sabadra -- RBC Capital Markets -- Analyst. Gross profit margins were 50.3% of revenue in the quarter. We saw higher costs in this area throughout the year. Rollins, Inc. (NYSE: ROL) Q1 2023 Earnings Call Transcript April 27, 2023 Operator: Greetings, and welcome to the Rollins Inc. First Quarter 2023 Earnings Call. The company's earnings release discusses the business outlook and contains certain forward-looking statements. These particular forward-looking statements and all other statements that have been made on this call, excluding historical facts are subject to a number of risks and uncertainties and actual results may differ materially from any statement we make today. So you could see that the rollover may not be at or above 3% like it has been the last couple of years, it might be slightly lower than that. ET ROL earnings call for the period ending December 31, 2021. It's got very high customer retention and we try to make sure we bundle that with all our service offerings. So, that means that we were spending at just about the rate of growth of revenue in the first quarter. Additionally, all our brands are increasing their rate cards. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. So, their efforts feed on the Street every single day. This is Ken. So we're pretty bullish, we're pretty optimistic and we feel like we've got a great growth plan that spans the globe. And so without a staff out there to do it, it just doesn't happen. So on the -- really on the Orkin side, we are looking to very similar levels to what we did in prior year, where we've actually gotten more aggressive in our other brands than we were at prior year. Thank you for your participation. And in fact, last year, we made significant acquisitions in the U.K. market. Acquisitions drove approximately 2% of the total revenue growth in the quarter. And so as we look into '23, but also with the midterm, not looking from a guidance perspective, but just as we think about the organic growth trajectory, should we think about it more being in line with the recent history, particularly the organic growth being more in line with the recent history? Our partnership with Fox was an 18-month process. We have included certain non-GAAP financial measures as part of our discussion this morning. You may disconnect your lines at this time, and thank you very much for your participation. So does that continue to drive those incremental margins of 30% through 2023, or is it even better than that? The company remains well-positioned to achieve our long-term objectives, and we're seeing solid levels of growth in the business. HomeTeam should complete their implementation and be at full utilization by the end of the second quarter. If you look at the last nine months, the last three quarters, if you will, going back to the second half of last year, we've consistently delivered an incremental margin that's approaching 30%. That's why we believe that cross-selling will continue to increase. We discussed these charges with you back in October and continue to focus on implementing a number of key programs that Jerry mentioned previously that are aimed at improving in this area. Looking at four major buckets of costs, people, fleet, materials and supplies, and insurance and claims. However, if anyone is missing a copy, and would like to receive one, please contact our office at 212-827-3746, and we'll send you a release and make sure you're on the company's distribution list. Organic growth was more than 9% for the quarter, with strong growth across all major service lines. Theres always puts, and there's takes, and there might be one quarter where you might be below that, but you might have one quarter where you exceed that. In 2023, we are bringing this forward even earlier. And so we are optimistic about our ability to continue to drive margins. Thank you. Cost basis and return based on previous market day close. We discussed our intent to do this on our year-end call, and it was good to see the impact of the steps we took on revenue and profitability. With that, I look forward to answering your questions in a few moments. Quarterly free cash flow was very strong to finish the year. So for example, the number of people searching for the category or words like pest control. We'll continue to look for tuck-in acquisitions, bolt-on acquisitions. Additionally, as Ken will cover in more detail later, we believe the financial benefits are very compelling. Fox Pest Control was formally established in 2012, initially marketing through the door-to-door sales effort in historically underserved pest control markets. Year to date, we have made acquisitions totaling just over $119 million and paid dividends of approximately $212 million. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Rollins, Inc. (NYSE:ROL) Q1 2023 Earnings Call Transcript Published on May 3, 2023 at 4:45 am by Insider Monkey Transcripts in News, Transcripts Next >> Unidentified Analyst: Hi. However, if anyone is missing a copy and would like to receive one, please contact our office at 212-827-3746 and we'll send you a release and make sure you're on the company's distribution list. *Stock Advisor returns as of February 8, 2023. I'm pleased to report that Rollins closed out last year with continued strong revenue growth and solid financial performance. And I'll let Ken address the question about capital. Let me repeat, we understated historical reported earnings by $0.01 per share per year. Management will make some opening remarks, and then we'll open the line for your questions. Okay. Rollins ( ROL -0.17%) Q1. We had a strong quarter and finish to the year. Organic demand remains robust, and we are very well positioned to continue to use our strong balance sheet to grow our business. We like to ensure that what we've - the most recent deal is handled well and our time and attention and focus is put on that to make sure that goes smoothly, that transition goes smoothly. In 2023, we are bringing this forward even earlier. Thank you. ET ROL earnings call for the period ending March 31, 2022. However, we certainly continue to look at a number of opportunities to continue to improve our cost structure going forward. And so we continue to go after and court opportunities across the country across the world. We had really good performance in the fourth quarter with respect to our cost control programs and SG&A. Joe Calabrese. Apr. Or are there perhaps further synergies we should be expecting in 2024 or later? Please proceed with your question. Management will make some opening remarks, and then we'll open the line for your questions. During the quarter, we refinanced our credit facilities that were set to expire in April of 2024. As we discussed on the last call, I like to look at the business using incremental margins or meaning what percent of every additional dollar of revenue growth is converted to EBITDA. And as you know, we're always looking to get better. That'll carry through for the remainder of the year. Rollins, Inc. (NYSE: ROL) Q4 2022 Earnings Call Transcript February 16, 2023 Operator: Greetings, and welcome to the Rollins Inc. Fourth Quarter 2022 Earnings Call. We ended the current period with $221 million in cash, of which, $62.9 million was held by our foreign subsidiaries. [Operator Instructions]. We expect the Fox acquisition to be accretive to earnings in the first full year, with more meaningful contributions to EPS during the latter part of this year and into the first quarter of next year. GAAP earnings per share were $0.17, up from $0.14 in the same period a year ago. What was especially encouraging was our organic growth. And so, that's the focus. It was just an overall better environment that helped with demand. Through its family of leading brands, Orkin, HomeTeam Pest Defense, Clark Pest Control, Orkin Canada, Western Pest Services, Northwest Exterminating, Critter Control, The Industrial Fumigant Company, Trutech, Orkin Australia, Waltham Services, OPC Services, PermaTreat, Rollins UK, Aardwolf Pestkare, and Crane Pest . Bringing new business in at the volume they're bringing in, that's what's making the difference. It's got very high customer retention, and we try to make sure we bundle that with all our service offerings. But what I what we've reiterated in our prepared comments is we are incredibly active with respect to acquisitions. Transcripts Rollins, Inc. (ROL) Q3 2022 Earnings Call Transcript Oct. 26, 2022 3:54 PM ET Rollins, Inc. (ROL) SA Transcripts 137.17K Follower s Q3: 2022-10-26 Earnings Summary EPS. Share . Acquisitions drove 3% of revenue growth in the quarter and for the year. Free cash flow increased by over 20% in the quarter and was up a very healthy 16% for the entire year. Services Rollins, Inc. (ROL) CEO Gary Rollins on Q1 2021 Results - Earnings Call Transcript Apr. Thanks. I'm pleased to report, Rollins delivered solid first quarter results, highlighted by revenue growth of over 11%, and earnings per share growth of 20%. SG&A expense in the quarter was $191 million or just under 29% of revenues, up $3 million from the prior year, but improving 230 basis points when stated as a percentage of revenue. Since Ken's been here it's one of the hot topics on his radar screen is our SG&A and how can we get better and how can we improve and Ken has challenged us and brought that equation to the table. In many of the markets they serve, Fox is a market leader with a great service reputation. The main data point that we look at is we can get information from for example, search engines like Google, where they can report they report to us the volume of category searches. Well, thanks, everyone, for joining our call today. John, would you like to begin? What are you actually building in? I just wondered if you could talk about some of those trends in the industry more broadly? Let me start with a few highlights. We had a pretty good business environment. Kenneth Krause -- Executive Vice President, Chief Financial Officer. We did not have any non-GAAP adjustments to operating income or EBITDA this year. Please go ahead. And then I guess on the termite side, I'm assuming a decent amount of that grows from ancillary sales. Part of that's related to COVID. When you take out the lower advertising spend I mentioned previously, incremental adjusted EBITDA margins were approximately 30% for the quarter. Thank you, Julie. Quarterly revenues were strong and it was good to see healthy growth across all of our service lines. Greetings and welcome . It was good to see the strong growth in earnings on the healthy revenue growth. Operationally, we have strong momentum in our markets. Hi, good morning. And then just switching gears from organic growth to capital allocation, I mean, now that you've already spent more than $300 million already in 2023, should we expect a slowdown in M&A spend for the remainder of the year? Looking closer at profitability. Thank you.Our next question comes from the line of Ashish Sabadra with RBC Capital Markets. Thank you, Julie. And we've just got no relief there. So, my first question is just really the Fox Pest acquisition. Rollins, Inc. is a premier global consumer and commercial services company. As I said in my prepared comments, the second quarter, you're going to see a little bit more investment in customer acquisition costs. So, is there anything you can highlight here? Its still premature. Thank you. And so without a staff out there to do it, it just doesn't happen. For example, building off our successes with routing and scheduling technology at Orkin and Western Pest Services, we're rolling out routing and scheduling technology initiatives at Clark and HomeTeam. Thank you. Furthermore, our non-Orkin brands are ramping up their focus on pricing the value of our services. We generated $116 million of free cash flow on $84 million of earnings in the quarter. However, we do -- when we do look at our business I think we all know that this is a very attractive market with attractive growth opportunities. And that's part of the reason why Jerry spoke about our intent and desire to pull forward the pricing. Pricing is only one of them. Unfortunately, we do feel the negative impact of a tighter insurance market, however. The replay can be accessed by dialing 201-612-7415 with the passcode 13735127. I was just wondering if you can talk about what's really driving it. The acquisition pipeline is healthy, and our strong cash flow and balance sheet positions us well to invest in our business. So you could see that our underlying real growth rate is in that 4% to 5% is what we estimate. While a month is not a long-term trend it was good to see solid demand to start the year. We, quite frankly, don't need to. Large customer wins, new programs you've established, a pick-up in cross-selling, anything you can highlight as what contributed to that unexpected strength in that commercial piece? We've taken on the responsibility to educate homeowners on termite prevention and treatment, along with other ancillary offerings. And so, it's important for us to go after and get those new customers into the fold. And so, we want to make sure that we integrate these businesses as much as we can, while not disrupting the customer-facing aspect of these businesses, which are so strong. Thank you. Please. We will be following that slide presentation on our call this morning and encourage you to view that with us. Thank you. Debt remains negligible and debt-to-EBITDA is well below 1x on a gross level. In addition to enabling us to reach our customers in a more efficient and productive manner, we found these initiatives can meaningfully reduce both our overall mileage between service visits and drive time for the technician. These comprise approximately 90% of cost of services in the quarter. Jerry, John, Ken, good morning. Greetings, and welcome to the Rollins Inc. First Quarter 2023 Earnings Conference Call. I know it was higher than historical levels last year, which makes sense. You may begin. That's a good point, John. Most of these price increases will be initiated beginning in early March and some were already implemented in January. Management of SG&A represents a key focus area of ours as we start 2023. The only thing, I would say, there is 2022, as you know is a little bit of a light year for us with respect to acquisitions. We also believe the complementary nature of their brand creates opportunities for enhancing Rollins's strategic platform for growth in the residential space. But the fourth quarter, below 29%, that was below what most folks were anticipating and what we'd typically see from you guys. It was good to see the improvements in SG&A as a percentage of revenue to finish the year. Debt remains negligible, and debt to EBITDA is well below 1x on a gross level. And so, we feel like it's very realistic in achieving that $90 million to $100 million this year as we think about the remainder of the year. But at this point, I wouldn't give you any insight in terms of long-term what that may look like a year from now or two years from now. We'll continue that path, and of course, continue to evaluate even larger acquisitions if they're there for us to get and the timing is right. Our commercial line has also presented a strong year for us with 10.3% growth over the prior year. Rollins, Inc. (NYSE:ROL) Q4 2022 Earnings Conference Call February 16, 2023 8:30 AM ET, Julie Bimmerman - Group Vice President, Finance & Investor Relations, Jerry Gahlhoff - President & Chief Executive Officer, Kenneth Krause - Executive Vice President, Chief Financial Officer & Treasurer. A brief question-and-answer session will follow the formal presentation. And from the customer perspective these service offerings are from a trusted partner. Thank you. How should the annual $90 million to $ 100 million in sales, how should that be allocated across the lines of businesses? We're hopeful that I mean, we've got a number of levers that we're pulling to continue to maintain our margin profile. As you know, approximately 80% of our business is recurring. Thank you. Through consistent growth and expansion, Fox now provides general pest control services for homeowners from 32 locations in 13 States. This wasn't necessarily as impactful in the quarter but was something that gradually got worse throughout the year. And well help them and continue to support their efforts to do that, give them some of our expertise and knowledge along the way to help them mature in that area and convert leads to sales and starts and those types of things that we feel like we can help them with over time. The non-GAAP reconciliations are available in the appendix of today's presentation, as well as in our press release. We continue to grow our business. While we successfully completed four acquisitions during the fourth quarter, we proactively remain on the sidelines during the last few months of 2022 and turned our attention to 2023 deals in our pipeline. There are multiple benefits to tying Fox closely with HomeTeam, who have also been utilizing door-to-door campaigns to activate Taexx customers in their predominantly residential business for over 20 years. Let's dive into the major categories of SG&A a bit more. Acquisitions drove 3% of revenue growth in the quarter and for the year. Those have seemed to have come back to normalized levels. Got it. So that seems it appears to be across the board. Okay. We expect the inflationary environment to persist into 2023 and are focused on managing the price/cost equation. And in terms of the opportunity to continue to drive cross-sell through the business at this point the upside looks endless. With that, I'll turn the call back over to Jerry for closing remarks. This is actually John filling in for Seth. We expect to see meaningful improvement in growth from acquisitions for the remainder of the year, stemming from the acquisition of Fox we announced earlier this month. So that's good news for us. With that said, as we enter the second quarter, we are continuing to ramp up our investment in customer acquisition-related cost. I want to emphasize how pleased we are with Rollinss strong first quarter performance. In the fourth quarter, we report revenue improved 10.2% to $661 million, and net income improvement of 26.1% to $84 million. The pressures that we felt earlier in the year when oil was much higher than where it is currently started to abate as we went throughout the year. Fox has a passionate sense of community and a values-driven approach that consistently delivers quality service, coupled with the resilient track record of strong customer growth and solid employee retention. Since Ken's been here, it's one of the hot topics on his radar screen is our SG&A and how can we get better and how can we improve, and Ken has challenged us and brought that equation to the table. As we worked on executing this transaction and learned more about the Fox business, we became increasingly impressed with their culture, their consistent and strong growth rates, and their unique operating model. We had a pretty good business environment. And so the second category of costs that I spoke about materials and supplies was certainly it was helpful to see some improvement as a percentage of sales to close the year out in that area. And so we continue to go after and court opportunities across the country, across the world. And last, but not least, we reported strong growth and cash flow for the quarter. Across the board, I think we had pretty good weather. Greetings, and welcome to the Rollins, Inc. fourth quarter 2022 earnings call. One more, just a question on pricing. Thank you. During 2022, we successfully completed 31 acquisitions, representing a total of $119 million invested. Could you talk a bit about what you're seeing -- where you're seeing cost inflation a bit more sticky in your business, and then maybe where it's moderating a bit? Rollins Q3 2022 Earnings Call Transcript Wed., October 26, 2022 | AlphaStreet View Latest SEC 10-Q Filing Participants Corporate Executives Joe Calabrese Investor Relations Gary W. Rollins Chairman of the Board and Chief Executive Officer, Chairperson of the Executive Committee Julie Bimmerman Group Vice President, Finance and Investor Relations Thank you for taking my call. Over the years, we've built a very successful playbook for their smooth transitions into our company, and we are extremely excited about our path ahead with Fox. First training remains crucial for keeping our customers out of harm's way. Yes, Tim, this is Jerry. The business is so strong, but what we will do is use our balance sheet in a strategic manner to grow this business. Please refer to yesterday's press release, and our SEC filings, including the Risk Factors section of our Form 10-K for the year ended December 31, 2021 for more information and the risk factors that could cause actual results to differ. First, training remains crucial for keeping our customers out of harm's way. So, I think I'm going to skip that and just jump to the strong organic growth. Thanks. Thank you. We'll continue to deploy capital internationally, but I have to remind you also that the US is our largest market it's our fastest growing market and it's highly fragmented. Thanks again. GAAP earnings per share increased 20% to $0.18 per share. And so we're -- and Ken's finding some ways to help us do that. These particular forward-looking statements, and all other statements that have been made on this call, excluding historical facts, are subject to a number of risk and strategies and actual results made differ materially from any statement we make today. We are excited about the strategic growth opportunities this acquisition will provide us. Our next question comes from the line of Stephanie Moore with Jefferies. Turning to profitability. Jerry? And congrats on a solid quarter. We remain focused on providing our customers with the best customer experience and driving growth through acquisition. And even with incurring the higher casualty charges in the second half, incremental adjusted EBITDA margins for the second half were approaching 30%. I'd like to provide my comments on our 2022 fourth quarter performance. And Jerry if I may add as it relates to cross-selling, a critical aspect of that is being well-staffed in both your sales management arena and your sales team. On our year-end call, we discussed our intention to initiate an earlier price increase this year, and that certainly helped us, particularly in March. As part of this we continue to leverage technology by adding a number of new applications to our portfolio of brands. They do a really good job, and we certainly want to leverage all the work that they do across their business to benefit us through this combination. Gross profit was 50.5% of revenue in the quarter, up 10 basis points from the same quarter a year ago. EBITDA margin was 21.2%, up a strong 130 basis points over the prior year EBITDA margin. HomeTeam should complete their implementation and be at full utilization by the end of the second quarter. Rollins Inc (ROL-1.27%) Q2 2020 Earnings Call Jul 29, 2020, 10:00 a.m. Please proceed with your question. Please proceed with your question. A brief question-and-answer session will follow the formal presentation. And when we look at the business, we started to see gradual improvement in fleet as we move throughout the year. And so, as we go into the second quarter, it's important for us to procure those new customers, which have an incredibly valuable long-term relationship with our business. We're going to keep going. We're not committing to necessarily a specific margin target, but we do see an opportunity to continue to improve our margin profile over the long term. The team delivered a strong start to the year. Listen to Conference Call View Latest SEC 10-K Filing Participants. Year-to-date we have made acquisitions totaling just over $119 million and paid dividends of approximately $212 million. He serves as a Director of Genuine Parts Company, as well as a trustee of the Northwestern Mutual Company. Complementing our existing guidelines and protocols, we continue to implement new initiatives designed to empower our employees and enable an accountable, safety-driven culture. 04/27/2023 | 08:30am EDT Greetings, and welcome to the Rollins Inc. First Quarter 2023 Earnings Conference Call. But with the consumer outlook may be a little bit murkier as we turn the corner into '23, I'm curious how you're thinking about the level of pricing this year. Without the staff, you can't -- you're having to offer those services proactively. Thank you. The second part of it is, we continue to see just some unfavorable experience in that area. We are in the process of finalizing our purchase accounting, and we'll provide an update on this on our Q2 call in July after we complete that process. Thank you. A branch manager's bonus plan will now have stronger ties to safety metrics for their operation. The replay can be accessed by dialing 201-612-7415 with the passcode 13735127. Image source: The. As I indicated previously, we did not have any adjustments this year to EBITDA margin. There are no further questions at this time. The presentation and press release are available on our Investor Relations website. What I'm trying to get at is there was a surprise here at the level of cost savings that you had and you had a nice EBITDA beat primarily because of it. On the M&A kind of rollover into 2023, any color on what's already embedded in there from deals that you closed in 2022? Do you have an outlook for the customer acquisition through digital channels post fully integrated Fox and maybe at HomeTeam, and then overall Rollins? The next question comes from Seth Weber from Wells Fargo. And so, that's why with these acquisitions, we don't go into looking to rock their world and go so carefully on the integration and/or assimilation. Cash flow conversion, the percent of income that was turned into cash, was well above 100% for the quarter and the full year. Or still above that historical average level?
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