Q2 2019 Earnings Call

July 24, 2019

If you're a speaker all presenter. Please notify the event specialist you may be asked to provide the confirmation code.

Because name all the title of your event. Please be prepared to provide that information. Once you have provided that information you will be placed on hold with music all placed into your events.

Hello and welcome to the event center. An event specialist will join you shortly.If you're a speaker or presenter, please notify the event specialist. You may be asked to provide a confirmation code, speaker's name, or the title of your event. Please be prepared to provide that information. Once you have provided that information, you'll be placed on hold with music or placed into your event. Hello and welcome to the event center. An event.

Operator: If you're a speaker or presenter, please notify the event specialist. You may be asked to provide a confirmation code, speaker's name, or the title of your event. Please be prepared to provide that information. Once you have provided that information, you'll be placed on hold with music or placed into your event. Hello and welcome to the event center. An event.

If you're a speaker or presenter. Please notify the event specialist you may be asked to provide a confirmation code speakers name or the title of your event. Please be prepared to provide that information. Once you have provided that information you will be placed on hold with music or placed into your event Oh.

Operator: Thank you for calling. May I have your conference code or call you as you join?

[Company Representative] (Rollins, Inc.): Thank you for calling. May I have your conference code or call you as you join?

Thank you for calling me have your conference protocol you wish to join.

Bryan Healey: the Rollins earnings call.

The Rollins earnings call.

Operator: Sure. Your first and last name with spelling.

[Company Representative] (Rollins, Inc.): Sure. Your first and last name with spelling.

Your first and last name of spelling.

Bryan Healey: Bryan Healey, B-R-Y-A-N H-E-A-L-E-Y.

Ryan Healy B R y and H.D.A. Eli.

Operator: Bryan phone number, area code first.

[Company Representative] (Rollins, Inc.): Bryan phone number, area code first.

In front of the area first.

Bryan Healey: 978-790-1138.

97879 01138.

Operator: What company are you with?

[Company Representative] (Rollins, Inc.): What company are you with?

What company are you with.

Bryan Healey: Aira, A-I-E-R-A.

Era eight IDR eight.

Operator: A-I-E-R-A.

[Company Representative] (Rollins, Inc.): A-I-E-R-A.

I eat or a.

Bryan Healey: Yep.

Operator: Beautiful. We'll get you on hold, and they'll be underway in just a moment, okay?

[Company Representative] (Rollins, Inc.): Beautiful. We'll get you on hold, and they'll be underway in just a moment, okay?

You want to hold they'll be underway in just a moment until Craig.

Bryan Healey: Thank you.

Thank you.

Operator: You're welcome. Good day and welcome to the Rollins, Inc. Q2 2019 Earnings Conference Call. Today's conference is being recorded. At this time, all participants are in a listen-only mode. Later, we'll be conducting a question-and-answer session, and instructions will be given at that time. If you should require assistance at any time, please press star followed by the 0 on your touch-tone phone, and an operator will assist you. I would now like to introduce your host for today's call, Marilyn Meek. Ms. Meek, you may begin.

[Company Representative] (Rollins, Inc.): You're welcome.

[Company Representative] (Rollins, Inc.): Good day and welcome to the Rollins, Inc. Q2 2019 Earnings Conference Call. Today's conference is being recorded. At this time, all participants are in a listen-only mode. Later, we'll be conducting a question-and-answer session, and instructions will be given at that time. If you should require assistance at any time, please press star followed by the 0 on your touch-tone phone, and an operator will assist you. I would now like to introduce your host for today's call, Marilyn Meek. Ms. Meek, you may begin.

Welcome.

Welcome to the Rollins Inc. second quarter 2018 earnings conference call.

Today's conference is being recorded at this time all participants are in listen only mode later, well be conducting a question answer session and instructions will be given at that time.

If you should require assistance at any time. Please press star followed by the zero on your Touchtone phone.

And operator will assist you.

I would now like to introduce your host for today's call Marilynn Meek Ms. Meek you may begin.

Marilyn Meek: Thank you. By now, you should have all received a copy of the press release. However, if anyone is missing a copy and would like to receive one, please contact our office at 212-827-3746, and we will send you a release and make sure you are on the company's distribution list. There will be a replay of the call, which will begin 1 hour after the call and run for 1 week. The replay can be accessed by dialing 1-888-203-1112 with the passcode 959-9376. Additionally, the call is being webcast at www.viavid.com, and a replay will be available for 90 days. On the line with me today and presenting are Gary Rollins, Rollins Vice Chairman, and Chief Executive Officer; John Wilson, Rollins President and Chief Operating Officer; and Eddie Norton, Senior Vice President, Chief Financial Officer, and Treasurer.

Thank you by now you should have all received a copy of the press release. However, if anyone is missing a copy and would like to receive one please contact our office at two one to <unk> to 70 374, six and we will send you a relief and make sure you are on the company's distribution list there will be a replay of the call, which will begin one hour after the call and run for one week. The replay can be accessed by dialing one a 231112 with a pass code nine fivenine.

9376. Additionally, the call is being webcast at www dot fiber fed dotcom and a replay will be available for 90 days on the line with me today and presenting our Gary Rollins Rollins, Vice Chairman and Chief Executive Officer, John Wilson, Rollins, President and Chief operating Officer, and Eddie Northen Senior Vice President Chief Financial Officer, and Treasurer management will make some opening remarks and then we'll open the line for your questions Gary would you like to begin.

Marilyn Meek: Management will make some opening remarks, and then we'll open the line for your questions. Gary, would you like to begin?

Management will make some opening remarks, and then we'll open the line for your questions. Gary, would you like to begin?

Gary Rollins: Yes, Marilyn. Thank you and good morning. We appreciate all of you joining us for our Q2 2019 Conference Call. Eddie will read our forward-looking statement and disclaimer, and then we'll begin.

Yes, Marilyn Thank you and good morning.

I appreciate all of you joining us for our second quarter 2019 conference call.

Eddie will read our forward looking statement disclaimer and then well begin.

Eddie Norton: Our earnings release discusses our business outlook and contains certain forward-looking statements. These particular forward-looking statements and all other statements that have been made on the call, excluding historical facts, are subject to a number of risks and uncertainties, and actual risks may differ materially from any statement we make today. Please refer to today's press release and our SEC filings, including the risk factors section of our Form 10-K for the year ended 31 December 2018, for more information and the risk factors that could cause actual results to differ.

Eddie Northen: Our earnings release discusses our business outlook and contains certain forward-looking statements. These particular forward-looking statements and all other statements that have been made on the call, excluding historical facts, are subject to a number of risks and uncertainties, and actual risks may differ materially from any statement we make today. Please refer to today's press release and our SEC filings, including the risk factors section of our Form 10-K for the year ended 31 December 2018, for more information and the risk factors that could cause actual results to differ.

Our earnings release discusses our business outlook and contains certain forward looking statements. These particular forward looking statements and all other statements that have been made on the call. Excluding historical facts are subject to a number of risks and uncertainties and actual risks may differ materially from any statement. We make today. Please refer to today's press release, and our SEC filings, including the risk factor section of our Form 10-K for the year ended December 31, 2018 for more information and the risk factors that could cause actual results to differ.

Thank you Andy.

Gary Rollins: Thank you, Eddie. As you would expect, we're disappointed with our performance for the quarter. We, like most other pest control companies, have both strong and weaker growth periods, with some seasonal timing uncertainty. Unfortunately, our situation is not like retail, where everyone knows when Christmas comes. Historically, we have handled these weaker periods by adjusting our cost or headcount after the season to the more appropriate levels. This year was unique because of the fact that the season was very late. Thankfully, July looks strong, so we have a makeup opportunity. For the second quarter, revenues rose 9.1% to $524.2 million compared to revenues of $480.5 million in the second quarter of last year. Net income declined 3.3% to $63.4 million, or $0.20 per diluted share compared to $65 million, or $0.20 per diluted share for the same period last year.

As you would expect we're disappointed with our performance for the quarter.

We like most other pest control companies have both strong and weaker growth periods with some seasonal timing of certainty.

Unfortunately, our situation is not like retail where everyone knows when Christmas columns.

Historically, we have a handle these weaker periods by adjusting our cost.

Our headcount after the season to the more appropriate levels.

This year was unique because of the fact that the season was very late.

Thankfully July looks strong so we have a makeup opportunity.

For the second quarter revenues rose, 9.1% to 524.2 million compared to revenues of 480.5 million.

In the second quarter of last year.

Net income declined 3.3% to 63.4 million or 20 cents per diluted share compared to 65 million.

Or 20 cents per diluted share for the same period last year.

Gary Rollins: When adjusted for the one-time Clark acquisition expense and foreign currency exchange, it would be $0.21 per share. Eddie will provide greater detail on this and other financial results in a few minutes. Revenues for the first six months rose 7.2% to $953.2 million compared to $889.2 million for the same period last year. Net income decreased 5.6% to approximately $107.7 million, or $0.33 per diluted share compared to $114.1 million, with earnings per diluted share, or $0.35, for the first six months of last year. We have a number of initiatives that will enhance Rollins' future growth and margin improvement. I'd like to talk more specifically about these business improvements and how they will impact Rollins. As we approach becoming a multibillion-dollar company, the timing is right to make strategic investments that will prepare us for the future.

When adjusted for the one-time Clark acquisition expense and foreign currency exchange, it would be $0.21 per share. Eddie will provide greater detail on this and other financial results in a few minutes. Revenues for the first six months rose 7.2% to $953.2 million compared to $889.2 million for the same period last year. Net income decreased 5.6% to approximately $107.7 million, or $0.33 per diluted share compared to $114.1 million, with earnings per diluted share, or $0.35, for the first six months of last year. We have a number of initiatives that will enhance Rollins' future growth and margin improvement. I'd like to talk more specifically about these business improvements and how they will impact Rollins. As we approach becoming a multibillion-dollar company, the timing is right to make strategic investments that will prepare us for the future.

When adjusted for the onetime Clarke acquisition expense and the foreign currency exchange it would be 21 cents per share.

Eddie will provide greater detail on this and other financial results in a few minutes.

Revenues for the first six months rose, 7.2% to 953.2 million compared to $889.2 million for the same period last year.

Net income decreased 5.6% to approximately 107.7 million or 33 cents per diluted share.

Compared to 114.1 million with earnings per diluted share of 35 cents for the first six months of last year.

We have a number of initiatives that will enhance rollins future growth and margin improvement.

I'd like to talk more specifically about these business improvements and how they were impact Roberts.

As we approach, becoming a multibillion dollar company the timing is right to make strategic investments that will prepare us for the future.

Gary Rollins: Some of these business investments and innovations are: as you recall, we improved our 401(k) and broadened stock grants at 2018 year-end. We estimate that this is an additional expense of $6 million for 2019, but we believe that there's not a better use of our resources. As a people business, our ability to recruit and retain excellent employees is paramount. This investment has helped generate a strong improvement in employee retention for our first two quarters. Next, we've increased and expanded our investment in customer routing and scheduling. This technology directly benefits our employees and customers. We now guide our technician to the customer's address with a service day that's planned from start to finish. The technicians have better organized days, and our customers receive better communication and appointment reliability.

Some of these business investments and innovations are: as you recall, we improved our 401(k) and broadened stock grants at 2018 year-end. We estimate that this is an additional expense of $6 million for 2019, but we believe that there's not a better use of our resources. As a people business, our ability to recruit and retain excellent employees is paramount. This investment has helped generate a strong improvement in employee retention for our first two quarters. Next, we've increased and expanded our investment in customer routing and scheduling. This technology directly benefits our employees and customers. We now guide our technician to the customer's address with a service day that's planned from start to finish. The technicians have better organized days, and our customers receive better communication and appointment reliability.

Some of these business investments and innovations are.

As you recall, we improved our four one k. and broaden stock grants at 2018 year end.

We estimate that this an additional expense of $6 million for 2019.

But we believe that there is not a better use of our resources.

As a people business, our ability to recruit and retain excellent employees is paramount.

This investment has helped generate a strong improvement in employee retention for our first two quarters.

Next we have increased an expanded our investment in customer routing and scheduling.

This technology directly benefits our employees and customers. We now guide our technician to the customers address with the service day its plan from start to finish.

The technicians have better organize days and our customers receive better communication.

In an appointment reliability.

Our most recent technical innovation in this area is the adoption of glimpse a software that enables us to communicate with the customer via text or email as to their upcoming service date and time of service.

Gary Rollins: Our most recent technical innovation in this area is the adoption of Glympse, a software that enables us to communicate with a customer via text or email as to their upcoming service date and time of service. Our customers now even have the ability to see where their technician is when en route to their account. As a result of these tools, we have created a better relationship with our customers and a better job for our technicians. The customer is better served and has the capability to change their service day and time as their circumstances dictate. This investment has also contributed to our employees' and customers' retention improvements and reduction of miles driven. As you recall from our earlier calls, we are transitioning our pension to an insurance provider. When complete, this will create a significant administrative expense savings.

Our most recent technical innovation in this area is the adoption of Glympse, a software that enables us to communicate with a customer via text or email as to their upcoming service date and time of service. Our customers now even have the ability to see where their technician is when en route to their account. As a result of these tools, we have created a better relationship with our customers and a better job for our technicians. The customer is better served and has the capability to change their service day and time as their circumstances dictate. This investment has also contributed to our employees' and customers' retention improvements and reduction of miles driven. As you recall from our earlier calls, we are transitioning our pension to an insurance provider. When complete, this will create a significant administrative expense savings.

Our customers now even have the ability to see whether technician is when in route to their account.

As a result of these tools, we have created a better relationship with our customers and a better job for our technicians.

The customer is better served and has the capability to change their service day and time as their circumstances dictate.

This investment has also contributed to our employees and customers retention improvements and reduction of miles driven.

As you recall from our earlier calls that we are transitioning our pension to an insurance provider.

When complete this will create a significant administrative expense savings.

Gary Rollins: Eddie will discuss this with more details about this initiative in a few minutes. As I mentioned, we've made and are making these improvements and innovations to better prepare for the company's future and to help mitigate some of the challenges we experience due to the seasonality of our business. Expanding our recurring revenue accomplishes this. As you would expect, there's been a significant amount of expenditures and effort that are associated with these initiatives that have and will have a positive effect on the company. I would add that our company's track record has shown that we don't have a spend-yourself-rich culture at Rollins, and we expect a favorable return on our new and improved programs. With a Clark acquisition complete, we will continue to evaluate other acquisition prospects, as adding great companies and brands will remain one of our primary objectives.

Eddie will discuss this with more details about this initiative in a few minutes. As I mentioned, we've made and are making these improvements and innovations to better prepare for the company's future and to help mitigate some of the challenges we experience due to the seasonality of our business. Expanding our recurring revenue accomplishes this. As you would expect, there's been a significant amount of expenditures and effort that are associated with these initiatives that have and will have a positive effect on the company. I would add that our company's track record has shown that we don't have a spend-yourself-rich culture at Rollins, and we expect a favorable return on our new and improved programs. With a Clark acquisition complete, we will continue to evaluate other acquisition prospects, as adding great companies and brands will remain one of our primary objectives.

Eddie will discuss this more details about this initiative in the few minutes.

As I mentioned, we've made and are making these improvements and innovations to better prepare for the companys future.

And to help mitigate some of the challenges we experienced due to the seasonality of our business.

Expanding our recurring revenue accomplishes this.

As you would expect there has been a significant amount of expenditures and effort that are associated with these initiatives that have and will have a positive effect on the company.

I would add that our Companys track record has shown that we don't have a spend your silver rich culture at Rollins.

And we expect a favorable return on our new and improved programs.

With a Clarke acquisition complete we will continue to evaluate other acquisition prospects as adding great companies and brands will remain one of our primary objectives.

Gary Rollins: John will now update you on the Clark acquisition and our other plans.

John will now update you on the Clark acquisition and our other plans.

John will now update you on the Clarke acquisition and our other plants.

John Wilson: Thank you, Gary. We believe our track record with our acquired companies speaks to the success we've had in integrating and growing acquisitions made over the past 19 years, all of which have contributed in many ways to our profitable growth. Historically, the larger acquisitions require a bit longer to integrate, as you might expect, and that will apply to Clark as well. Once fully incorporated, though, the long-term benefits of these acquisitions provide excellent top- and bottom-line growth expansion of our company and the ability to provide customers with additional pest control-related services. These acquired companies benefit from our internet experience, greater purchasing power, and transferable technology. Clark is on track with our business plan, and we expect them to be a highly successful addition to our family of brands.

Thank you Gary we believe our track record with our acquired companies speaks to the success, we've had in integrating and growing acquisitions made over the past 19 years.

All of which have contributed in many ways to our profitable growth.

Historically, the larger acquisitions require a bit longer to integrate as you might expect and that will apply to Clark as well.

[noise] once fully incorporate as though the long term benefits of these acquisitions provide excellent top and bottom line growth expansion of our company and the ability to provide customers with additional pest control related services.

These acquired companies benefit from our Internet experience greater purchasing power and transferable technology.

Clark is on track with our business plan and we expect them to be a highly successful addition to our family of brands.

John Wilson: Gary and I are heading out there next week where we will meet with their team and check in on their progress. We are excited about Clark as the majority of their branches are in Northern California, and their addition dramatically strengthens our company's presence in this area. As you may recall, we ended 2018 with the best employee retention we'd experienced in our recent history, and the first two quarters of 2019 continued on that trajectory. Further, as you would expect, employee retention directly correlates with customer retention. Improving and enhancing the benefit package for our team members obviously helps retain our people. However, investments in technology and process helps greatly here too, as we have simply improved team member job satisfaction with these various tools.

Gary and I are heading out there next week where we will meet with their team and check in on their progress. We are excited about Clark as the majority of their branches are in Northern California, and their addition dramatically strengthens our company's presence in this area. As you may recall, we ended 2018 with the best employee retention we'd experienced in our recent history, and the first two quarters of 2019 continued on that trajectory. Further, as you would expect, employee retention directly correlates with customer retention. Improving and enhancing the benefit package for our team members obviously helps retain our people. However, investments in technology and process helps greatly here too, as we have simply improved team member job satisfaction with these various tools.

Gary and I are heading out there next week, where we will meet with their team and check in on their progress.

We are excited about Clarke as the majority of their branches are in northern California, and their addition dramatically strengthens our company's presence in this area.

As you May recall, we ended 2018 with the best employee retention, we'd experienced in our recent history and the first two quarters of 2019 continued on that trajectory.

Further as you would expect employee retention directly correlates with customer retention.

Improving and enhancing the benefit package for our team members, obviously helps retain our people.

However investments in technology and process helps greatly here too.

As we have slightly EBITDA I'm, sorry, as we have simply improved team member job satisfaction with these various tools.

John Wilson: A service technician's relationship with their customers is extremely important to ensuring customer loyalty and expanding our customer base. As Gary has shared, our customer routing and scheduling capabilities are a large contributor to improvement in this area, as it enables technicians to expand their service time. This enables them to better fulfill their customers' needs and, in some cases, add additional customers to their route. For our field personnel, this technology provides additional benefits in the form of reducing the amount of time spent behind the wheel. For Q2, we again had nice improvements in driving efficiency as measured by miles per stop. Average miles driven per stop in our Orkin fleet were down 4% year-over-year, and we have had 17 consecutive months of miles per stop reductions.

A service technician's relationship with their customers is extremely important to ensuring customer loyalty and expanding our customer base. As Gary has shared, our customer routing and scheduling capabilities are a large contributor to improvement in this area, as it enables technicians to expand their service time. This enables them to better fulfill their customers' needs and, in some cases, add additional customers to their route. For our field personnel, this technology provides additional benefits in the form of reducing the amount of time spent behind the wheel. For Q2, we again had nice improvements in driving efficiency as measured by miles per stop. Average miles driven per stop in our Orkin fleet were down 4% year-over-year, and we have had 17 consecutive months of miles per stop reductions.

Hey service technicians relationship with their customers is extremely important to ensuring customer loyalty and expanding our customer base.

As Gary has shared our customer routing and scheduling capabilities are a large contributor to improvement in this area as it enables technicians to expand their service time.

This enables them to better fulfill their customers' needs and in some cases add additional customers to their route.

For our field personnel. This technology provides additional benefits in the form of reducing the amount of time spent behind the wheel.

For the second quarter, we again had nice improvements and driving efficiency as measured by partner by miles per stop.

Average miles driven per stop and are working fleet were down 4% year over year, and we have had 17 consecutive months of miles per stop reductions.

One last item related to technology, we gained full implementation of our human resource information system. During the first half of the year and this system when fully utilize solves a number of pain points for our field employees.

John Wilson: One last item related to technology: we gained full implementation of our human resource information system during the first half of the year, and this system, when fully utilized, solves a number of pain points for our field employees. We expect to see continued benefits through 2019 and beyond from these various technology initiatives mentioned. On another note, this time of year, we get a lot of questions about how our mosquito business is doing. Although a relatively small part of our overall business at this point, their service line continues to grow and is in part driven by increased concern and public awareness around disease-borne issues, including Zika, West Nile, and other diseases. Year-over-year, our mosquito service has grown over 35%, and we expect continued growth in the future as we gain greater cross-sell penetration of our large pest control customer base.

One last item related to technology: we gained full implementation of our human resource information system during the first half of the year, and this system, when fully utilized, solves a number of pain points for our field employees. We expect to see continued benefits through 2019 and beyond from these various technology initiatives mentioned. On another note, this time of year, we get a lot of questions about how our mosquito business is doing. Although a relatively small part of our overall business at this point, their service line continues to grow and is in part driven by increased concern and public awareness around disease-borne issues, including Zika, West Nile, and other diseases. Year-over-year, our mosquito service has grown over 35%, and we expect continued growth in the future as we gain greater cross-sell penetration of our large pest control customer base.

We expect to see continued benefits through 2019 and beyond from these various technology technology initiatives mentioned.

On another note this time of year, we get a lot of questions about how our mosquito business is doing.

Although a relatively small part of our overall business at this point the service lines continues to grow and is in part driven by increased concern and public awareness around disease born in issues, including Zika West Nile and other diseases.

Year over year, our Mosquito service has grown over 35% and we expect continued growth in the future as we gain greater cross sell penetration of our large pest control customer base.

John Wilson: Now, let me turn the call over to Eddie to discuss our financials.

Now, let me turn the call over to Eddie to discuss our financials.

Now, let me turn the call over to Andy to discuss our financials.

Eddie Norton: Thank you, John. I began our Q1 call discussing the strength of April, only to have May and June demand look significantly different. We come to you again sharing what we know at this point with some pent-up demand from previous quarters coming through so far in July. Our second quarter results can be defined by looking at the past, the present, and the future. Each of these time periods has a significant piece of the results that we are reporting to you today and will continue to build on results for quarters and years to come. For the quarter, all of our service lines showed growth, and keys to the quarter included significant negative currency exchange through a stronger US dollar and our growing international business, continued year-to-date improvements in both employee and customer retention, and uneven pest demands that Gary mentioned in the opening.

Eddie Northen: Thank you, John. I began our Q1 call discussing the strength of April, only to have May and June demand look significantly different. We come to you again sharing what we know at this point with some pent-up demand from previous quarters coming through so far in July. Our second quarter results can be defined by looking at the past, the present, and the future. Each of these time periods has a significant piece of the results that we are reporting to you today and will continue to build on results for quarters and years to come. For the quarter, all of our service lines showed growth, and keys to the quarter included significant negative currency exchange through a stronger US dollar and our growing international business, continued year-to-date improvements in both employee and customer retention, and uneven pest demands that Gary mentioned in the opening.

Thank you John .

I begin our Q1 call discussing the strength of April only to have May and June demand look significantly different.

We come to you again sharing what we know at this point with some pent up demand from previous quarters coming through so far in July .

Our second quarter results can be defined by looking at the past present and the future.

Each of these time periods have a significant piece of the results that we're reporting to you today and we'll continue to build on results for quarters and years to come.

For the quarter all of our service lines showed growth and keys to the quarter included significant negative currency exchange through a stronger us dollar and our growing international business.

Continued year to date improvements in both employee and customer retention.

And uneven pest demands that carry that Gary mentioned in the opening.

Eddie Norton: To be more specific, the past events of our investment in enhanced benefits for our employees will impact this quarter by about $1.9 million, $1.5 million for the 401(k) and $400,000 for the special restricted stock, and about $1.75 million for the remaining quarters of 2019 as we add Clark to our 401(k) plan. While the vesting of the special stock grants was a one-time event this year, the 401(k) will be impacted moving forward by employees joining and leaving the plan or increasing or reducing their contribution as we move forward. John just spoke about the lasting outcome that this investment has made on our employee retention, which is a key driver to our long-term success. Again, as a reminder, these items impact both CSP and SG&A, which I will discuss in more detail in a moment.

To be more specific, the past events of our investment in enhanced benefits for our employees will impact this quarter by about $1.9 million, $1.5 million for the 401(k) and $400,000 for the special restricted stock, and about $1.75 million for the remaining quarters of 2019 as we add Clark to our 401(k) plan. While the vesting of the special stock grants was a one-time event this year, the 401(k) will be impacted moving forward by employees joining and leaving the plan or increasing or reducing their contribution as we move forward. John just spoke about the lasting outcome that this investment has made on our employee retention, which is a key driver to our long-term success. Again, as a reminder, these items impact both CSP and SG&A, which I will discuss in more detail in a moment.

To be more specific the past events of our investment in enhanced benefits for our employees will impact this quarter by about $1.9 million.

One and a half million dollars for the four one k. and $400000 for the special restricted stock.

And about $1.75 million for the remaining quarters of 2019, as we add Clark to our four one k. plan.

While the vesting of the special stock grants was a onetime event. This year. The four one k. will be impacted moving forward by employees, joining and leaving the plan or increasing or reducing their contribution as we move forward.

John just spoke about the lasting outcome that this investment has made on our employee retention, which is the key driver to our long term success.

Again as a reminder, these items impact both CST and SDMA, which I will discuss in more detail in a moment.

Eddie Norton: In addition to the items that Gary and John mentioned a few minutes ago, our present and future is and will be significantly impacted by our acquisition of Clark. We're on pace with our integration and have already made positive changes related to vehicles, procurement, and benefits plans. Clark will go live on our fleet systems the second week of August, which will be a step to getting their fleet operating margins more in line with Rollins' levels. Based on past acquisitions, we have the opportunity to improve the fleet margins over 20%. Our Rollins support staff have visited with Clark in Lodi, California, and we are learning so much. On my recent visit, I had a chance to listen to customer calls, and I was truly impressed with their call center function, the interaction with the customers, and its efficiency.

In addition to the items that Gary and John mentioned a few minutes ago, our present and future is and will be significantly impacted by our acquisition of Clark. We're on pace with our integration and have already made positive changes related to vehicles, procurement, and benefits plans. Clark will go live on our fleet systems the second week of August, which will be a step to getting their fleet operating margins more in line with Rollins' levels. Based on past acquisitions, we have the opportunity to improve the fleet margins over 20%. Our Rollins support staff have visited with Clark in Lodi, California, and we are learning so much. On my recent visit, I had a chance to listen to customer calls, and I was truly impressed with their call center function, the interaction with the customers, and its efficiency.

In addition to the items that Gary and John mentioned, a few minutes ago, our present and future is and will be significantly impacted by our acquisition of Clark.

We're on pace with our integration and have already made positive changes related to vehicles procurement and benefits plans.

Park will go live on our fleet systems. The second week of August , which will be a step to getting their fleet operating margins more in line with Rollins levels.

Based on past acquisitions, we have the opportunity to improve the fleet margins over 20%.

Our role in support staff have visited with Clark in Lodi, California, and we're learning so much.

On my recent visit I had a chance to listen to customer calls and I was truly impressed with their call center function the interaction with the customers and its efficiency.

Eddie Norton: When I visited the Stockton branch, I gained a deeper understanding of how they run their operations at such an impressively high level. Since that time, several Clark employees have visited Atlanta to learn more about Rollins and how they can support our integration efforts. In addition to the reduced fleet expense, other items that will impact the P&L in Q3 and Q4 related to Clark are: depreciation will be up $1.9 million per quarter for buildings and vehicles added. We have received a draft of the valuation of Clark, and including Clark as well as the other 40-plus acquisitions that we've made over the last 18 months, amortization has increased $8.8 million. We're in a position to share more details related to the purchase interest expense now that we have worked through some of the specifics.

When I visited the Stockton branch, I gained a deeper understanding of how they run their operations at such an impressively high level. Since that time, several Clark employees have visited Atlanta to learn more about Rollins and how they can support our integration efforts. In addition to the reduced fleet expense, other items that will impact the P&L in Q3 and Q4 related to Clark are: depreciation will be up $1.9 million per quarter for buildings and vehicles added. We have received a draft of the valuation of Clark, and including Clark as well as the other 40-plus acquisitions that we've made over the last 18 months, amortization has increased $8.8 million. We're in a position to share more details related to the purchase interest expense now that we have worked through some of the specifics.

When I visited the Stockton branch I gained a deeper understanding of how they run their operations as such an impressively high level.

Since that time, several Clark employees have visited Atlanta to learn more about Rollins and how they can support our integration efforts.

In addition to the river to the reduced fleet expense other items that will impact the PML in Q3, and Q4 related to Clark our.

Depreciation will be up 1.9 million per quarter for buildings and vehicles added.

We have received a draft of the valuation of Clark and including Clark as well as the other 40 plus acquisitions that we made over the last 18 months amortization has increased $8.8 million.

We're in a position to share more details related to the purchase interest expense now that we have worked through some of the specifics.

Eddie Norton: For Q2, we had $1.9 million of interest for the partial quarter of borrowing. For Q3, we estimate $2.7 million as we have already started paying down the loans and have added an interest rate swap to fix a portion of the loan at a rate of roughly 45 basis points below LIBOR. We will continue to pay down the loans and estimate a reduction of interest expense to $2.5 million for Q4. Again, we've already started to pay off the outstanding loans, and our plans are to be debt-free by early 2022. Finally, professional services were up $1.9 million for Q2, significantly higher than originally anticipated at the time of our Q1 call due to an in-depth regulatory review and the need for economic experts to support our case for acquisition, as well as expertise related to the real estate transactions.

For Q2, we had $1.9 million of interest for the partial quarter of borrowing. For Q3, we estimate $2.7 million as we have already started paying down the loans and have added an interest rate swap to fix a portion of the loan at a rate of roughly 45 basis points below LIBOR. We will continue to pay down the loans and estimate a reduction of interest expense to $2.5 million for Q4. Again, we've already started to pay off the outstanding loans, and our plans are to be debt-free by early 2022. Finally, professional services were up $1.9 million for Q2, significantly higher than originally anticipated at the time of our Q1 call due to an in-depth regulatory review and the need for economic experts to support our case for acquisition, as well as expertise related to the real estate transactions.

For Q2, we had $1.9 million of interest for the partial quarter of borrowing.

For Q3, we estimate 2.7 million as we have already started paying down the loans and have added an interest rate swap to fix a portion of the loan at a rate of roughly 45 bips below LIBOR.

We will continue to pay down the loans and estimate a reduction of interest expense to 2.5 million for Q4.

Again, we've already started to pay off the outstanding loans and our plans are to be debt free by early 2022.

Finally professional services were up $1.9 million for Q2 significantly higher than originally anticipated at the time of our Q1 call due to it due to an Indepth regulatory review and the need for economic experts to support our case for acquisition as well as expertise related to the real estate transactions.

Eddie Norton: There will be an additional $400,000 of expense related to this in Q3, and we anticipate nothing in Q4. For those of you that had a chance to review the release of our 8K related to the Clark audited 2018 financials, I wanted to share some additional details. From the bottom-line results that were shared, there are approximately $11 million, which will be excluded as we move forward in time. $5.7 million of that is for rents that are no longer paid since we now own the properties, an additional $2.4 million on elimination of vehicles and transportation, and then other expenses in addition. These expenses were normal private company expenses, and there was agreement to make these changes prior to the finalizing of the acquisition.

There will be an additional $400,000 of expense related to this in Q3, and we anticipate nothing in Q4. For those of you that had a chance to review the release of our 8K related to the Clark audited 2018 financials, I wanted to share some additional details. From the bottom-line results that were shared, there are approximately $11 million, which will be excluded as we move forward in time. $5.7 million of that is for rents that are no longer paid since we now own the properties, an additional $2.4 million on elimination of vehicles and transportation, and then other expenses in addition. These expenses were normal private company expenses, and there was agreement to make these changes prior to the finalizing of the acquisition.

There will be an additional $400000 of expense related to this in Q3, and we anticipate nothing in Q4.

For those of you that had a chance to review the release of our 8-K related to the Clark audited 2018 financials I wanted to share some additional details.

From the bottom line results that were shared there are approximately $11 million, which will be excluded as we move forward in time.

$5.7 million of that is for rents that are no longer paid since we now own the properties.

An additional $2.4 million on elimination of vehicles and transportation and other expenses. In addition.

These expenses were normal private company expenses and there was agreement to make these changes prior to the final finalizing of the acquisition.

Eddie Norton: There will be several margin points of gains from these changes that will be added to the additional changes that we add from our integration of the business previously mentioned. One additional item where the Clark deal will have benefits will be in our free cash flow. Including the acquisition and the benefits of Clark, we will have approximately a $40 million increase in free cash flow for 2019. Even with lower-than-average net income in Q1 and Q2, this increase is in line with the previous few years. For 2019, as we've shared on prior calls, the earnings per share will be flat, but we believe the deal will be accretive by half a penny for the full year 2020. Looking at the numbers, the second quarter revenues of $524 million was an increase of 9.1% over the prior year's second quarter revenue of $480.5 million.

There will be several margin points of gains from these changes that will be added to the additional changes that we add from our integration of the business previously mentioned. One additional item where the Clark deal will have benefits will be in our free cash flow. Including the acquisition and the benefits of Clark, we will have approximately a $40 million increase in free cash flow for 2019. Even with lower-than-average net income in Q1 and Q2, this increase is in line with the previous few years. For 2019, as we've shared on prior calls, the earnings per share will be flat, but we believe the deal will be accretive by half a penny for the full year 2020. Looking at the numbers, the second quarter revenues of $524 million was an increase of 9.1% over the prior year's second quarter revenue of $480.5 million.

There will be several margin points of gains from these changes that will be added to the additional changes that we add from our integration of the business previously mentioned.

One additional item, where the Clark deal will have benefits will be in our free cash flow.

Including the acquisition and the benefits of Clark, we will have approximately a $40 million increase in free cash flow for 2019.

Even with lower than average net income in Q1 and Q2. This increase is in line with the previous few years.

For 2019 as Weve shared on prior calls the earnings per share will be flat, but we believe the deal will be accretive by half a penny for the full year 2020.

Looking at the numbers the second quarter revenues of $524 million was an increase of 9.1% over the prior year's second quarter revenue of $480.5 million.

Eddie Norton: There was an accounting change that increased our franchise revenue recognition last year by approximately $1.5 million, that did not occur in 2019. Income before income taxes improved from Q1 but decreased 3.6% to $87 million from $90.2 million in 2018. Favorable expense adjustments were made, but demand still lagged in several areas during the quarter. This impacted all of our subsequent financial metrics as well. Net income fell 1.9% to $64.3 million. Earnings per share was $0.20 per diluted share in line with $0.20 per diluted share in the first quarter of 2018. EBITDA was $109 million, up 2.2% over Q2 2018. EBITDA is the best measure for the near term with the addition of Clark. Revenue for the six months ended 30 June 2019 was $953 million, an increase of 7.2% over the prior year's second quarter revenues of $889.2 million.

There was an accounting change that increased our franchise revenue recognition last year by approximately $1.5 million, that did not occur in 2019. Income before income taxes improved from Q1 but decreased 3.6% to $87 million from $90.2 million in 2018. Favorable expense adjustments were made, but demand still lagged in several areas during the quarter. This impacted all of our subsequent financial metrics as well. Net income fell 1.9% to $64.3 million. Earnings per share was $0.20 per diluted share in line with $0.20 per diluted share in the first quarter of 2018. EBITDA was $109 million, up 2.2% over Q2 2018. EBITDA is the best measure for the near term with the addition of Clark. Revenue for the six months ended 30 June 2019 was $953 million, an increase of 7.2% over the prior year's second quarter revenues of $889.2 million.

There was an accounting change that increased our franchise revenue recognition last year by approximately $1.5 million that did not occur in 2019.

Income before income taxes improved from Q1, but decreased 3.6% to $87 million from $90.2 million in 2018.

Favorable expense adjustments were made but demand still lag in several areas during the quarter.

This impacted all of our subsequent financial metrics as well net income fell 1.9% to $64.3 million.

Earnings per share was 20 cents per diluted share in line with 20 cents per diluted share in the first quarter of 2018.

EBITDA was $109 million up 2.2% over Q2 2018.

EBITDA is the best measure for the near term with the addition of Clark.

Revenue for the six months ended June Thirtyth 2019 showed was $953 million an increase of 7.2% over the prior year's second quarter revenues of $889.2 million.

Eddie Norton: Income before income taxes decreased 4.3% to $143 million from $149.4 million in 2018. Net income fell 4.9% to $108.5 million, and earnings per share was $0.33, down 5.7% from the 2018 number of $0.35. EBITDA was $181.5 million, down 0.7% compared to 2018. I've detailed out some of the past and the present. Now let's turn our discussion to the future. As first mentioned several quarters ago, we are in the final stages of transitioning our fully funded pension plan off of our books. There are so many positive impacts from this step, which include managing the volatility of the assets, the elimination of that, the elimination of the annual $5 million payment to fund the plan, and the elimination of the daily administrative management of the plan.

Income before income taxes decreased 4.3% to $143 million from $149.4 million in 2018. Net income fell 4.9% to $108.5 million, and earnings per share was $0.33, down 5.7% from the 2018 number of $0.35. EBITDA was $181.5 million, down 0.7% compared to 2018. I've detailed out some of the past and the present. Now let's turn our discussion to the future. As first mentioned several quarters ago, we are in the final stages of transitioning our fully funded pension plan off of our books. There are so many positive impacts from this step, which include managing the volatility of the assets, the elimination of that, the elimination of the annual $5 million payment to fund the plan, and the elimination of the daily administrative management of the plan.

Income before income taxes decreased 4.3% to $143 million from $149.4 million in 2018.

Net income fell 4.9% to 108.5 million and earnings per share was 33 cents down 5.7% from the 2018 number of 35 cents.

EBITDA was 181.5 million down seven tenths of a percent compared to 2018.

I've detailed out some of the past and the present now lets turn our discussion to the future.

As first mentioned several quarters ago, we are in the final stages of transitioning our fully funded pension plan off of our books.

There are so many positive impacts from this step which include managing the volatility of the assets the elimination of that.

The elimination of the annual 5 million dollar payment to fund the plan and the elimination of the daily administrative management of the plan.

Eddie Norton: In addition, since our plan is approximately 104% funded, which equates to roughly $6 million, these assets will be deployed in other areas of our business that will be discussed on our Q3 earnings call. Most of the financial impact from the pension transition will occur in Q3. First, we will have a significant non-cash charge of approximately $76 million pre-tax, which will be pension expense in Q3, which will equate to approximately $0.20 per share after taxes. This $76 million expense is the accounting treatment of the accumulated sum of unrealized losses associated with our plan. Net of tax, the loss will be approximately $64 million. The tax treatment is consistent with the method other companies would apply. The tax effect from the transition of the pension plan will be a reduction in the effective tax rate for the third quarter and for the year.

In addition, since our plan is approximately 104% funded, which equates to roughly $6 million, these assets will be deployed in other areas of our business that will be discussed on our Q3 earnings call. Most of the financial impact from the pension transition will occur in Q3. First, we will have a significant non-cash charge of approximately $76 million pre-tax, which will be pension expense in Q3, which will equate to approximately $0.20 per share after taxes. This $76 million expense is the accounting treatment of the accumulated sum of unrealized losses associated with our plan. Net of tax, the loss will be approximately $64 million. The tax treatment is consistent with the method other companies would apply. The tax effect from the transition of the pension plan will be a reduction in the effective tax rate for the third quarter and for the year.

In addition, since our plan is approximately 104% funded which equates to roughly $6 million.

These assets will be deployed in other areas of our business that will be discussed on our Q3 earnings call.

Most of the financial impact from the pension transition will occur in Q3.

First we will have a significant non cash charge of approximately $76 million pretax which will be pension expense in Q3.

Which will equate to approximately 20 cents per share after taxes.

This 76 million dollar expense is the accounting treatment of the accumulated some of unrealized losses associated with our plan.

Net of tax loss will be approximately 64 million.

The tax treatment is consistent with the method other companies would apply.

The tax effect from the transition of the pension plan will be a reduction in the effective tax rate for the third quarter and for the year.

Let's take a look through the Rollins revenue by service line for the second quarter.

Eddie Norton: Let's take a look through the Rollins revenue by service line for Q2. As discussed earlier, our total revenue increase of 9.1% included 5.5% from Clark and other acquisitions, and the remaining 3.6% was from pricing and organic growth. In total, residential pest control, which made up 43% of our revenue, was up 11.1%. Commercial pest control, which made up 37% of our revenue, was up 7.7%. Termite and ancillary services, which made up approximately 20% of our revenue, was up 9.2%. Again, total revenue less acquisitions was up 3.6%. From that, residential was up 4.6%. Commercial increased 2.8%. Termite and ancillary grew 4.6%. In total, gross margin was down slightly to 51.7% from 52% prior year's quarter.

Let's take a look through the Rollins revenue by service line for Q2. As discussed earlier, our total revenue increase of 9.1% included 5.5% from Clark and other acquisitions, and the remaining 3.6% was from pricing and organic growth. In total, residential pest control, which made up 43% of our revenue, was up 11.1%. Commercial pest control, which made up 37% of our revenue, was up 7.7%. Termite and ancillary services, which made up approximately 20% of our revenue, was up 9.2%. Again, total revenue less acquisitions was up 3.6%. From that, residential was up 4.6%. Commercial increased 2.8%. Termite and ancillary grew 4.6%. In total, gross margin was down slightly to 51.7% from 52% prior year's quarter.

As discussed earlier, our total revenue increase of 9.1% included 5.5% from Clark and other acquisitions and the remaining 3.6% was from pricing and organic growth.

In total residential pest control, which made up 43% of our revenue was up 11.1%.

Commercial pest control, which made up 37% of our revenue was up 7.7%.

And termite and ancillary services, which made up approximately 20% of our revenue was up 9.2%.

Again total revenue less acquisitions was up 3.6% and from that residential was up 4.6%.

Commercial increased 2.8% and termite and ancillary grew 4.6%.

In total gross margin was down slightly to 51.7% from 52% prior year's quarter.

Eddie Norton: The quarter experienced increases in most expenses due to acquisitions as well as in administrative salaries due to amortization of the employee special restricted share grants from the prior year and increased salaries. Service salaries, materials and supplies, and fleet increased with production for the period. Taking out these one-time items, gross margin would have been 51.8%. Depreciation and amortization expense for the quarter increased $3.8 million to $20.1 million, an increase of 12.9%. Depreciation increased $1.5 million due to acquisitions and equipment purchases, as mentioned earlier, while amortization of intangible assets increased $2.2 million due to the amortization of customer contracts from several acquisitions. Sales, general, and administrative expenses for the second quarter increased $18.5 million or 12.9% to $161.9 million or 30.9% of revenues, up 1.1 percentage point from $143.4 million or 29.8% of revenues for the second quarter of 2019.

The quarter experienced increases in most expenses due to acquisitions as well as in administrative salaries due to amortization of the employee special restricted share grants from the prior year and increased salaries. Service salaries, materials and supplies, and fleet increased with production for the period. Taking out these one-time items, gross margin would have been 51.8%. Depreciation and amortization expense for the quarter increased $3.8 million to $20.1 million, an increase of 12.9%. Depreciation increased $1.5 million due to acquisitions and equipment purchases, as mentioned earlier, while amortization of intangible assets increased $2.2 million due to the amortization of customer contracts from several acquisitions. Sales, general, and administrative expenses for the second quarter increased $18.5 million or 12.9% to $161.9 million or 30.9% of revenues, up 1.1 percentage point from $143.4 million or 29.8% of revenues for the second quarter of 2019.

The quarter experienced increases in most expenses due to acquisitions as well as an administrative salaries due to amortization of the employee special restricted share grants from the prior year and increased salaries.

Service salaries materials and supplies and fleet increased with production for the period.

Taking out these onetime items gross gross margin would have been 51.8%.

Depreciation and amortization expense for the quarter increased 3.8 million to $20.1 million an increase of 12.9%.

Depreciation increased $1.5 million due to acquisitions and equipment purchases as mentioned earlier, while amortization of intangible assets increased $2.2 million due to the amortization of customer contracts from several acquisitions.

Sales general and administrative expenses for the second quarter increased $18.5 million or 12.9% to $161.9 million or 30.9% of revenues up 1.1 percentage point from $143.4 million or 29.8% of revenues for the second quarter of 2019.

Eddie Norton: The increase in the percent of revenues, as I discussed, is primarily due to acquisitions, the amortization of restricted shares from the 2018 special grant distribution, and increases in the 401(k) expense. Taking out these one-time items, SG&A would have been 30.3%. As for our cash position for the period ended 30 June 2019, we spent $414.8 million on acquisitions compared to $54.6 million the same period last year. We paid $68.7 million on dividends and had $13.4 million of CapEx, which was up 5.7% from 2018 primarily from planned IT upgrades such as our BOSS Canada rollout and building improvements. We ended the period with $98.5 million in cash, of which $67.8 million is held by our foreign subsidiaries.

The increase in the percent of revenues, as I discussed, is primarily due to acquisitions, the amortization of restricted shares from the 2018 special grant distribution, and increases in the 401(k) expense. Taking out these one-time items, SG&A would have been 30.3%. As for our cash position for the period ended 30 June 2019, we spent $414.8 million on acquisitions compared to $54.6 million the same period last year. We paid $68.7 million on dividends and had $13.4 million of CapEx, which was up 5.7% from 2018 primarily from planned IT upgrades such as our BOSS Canada rollout and building improvements. We ended the period with $98.5 million in cash, of which $67.8 million is held by our foreign subsidiaries.

The increase in the percentage of revenues as I discussed is primarily due to acquisitions and the amortization of restricted shares from the 2018 special grant distribution and increases in the four one k. expense.

Taking out these onetime items SGN, a would have been 30.3%.

As for our cash position for the period ended June Thirtyth 2019, we spent $414.8 million on acquisitions compared to $54.6 million the same period last year.

We paid $68.7 million on dividends and had 13.4 million of Capex, which was up 5.7% from 2018, primarily from planned it upgrades such as our boss, Canada rollout and building improvements.

We ended the period with $98.5 million in cash of which $67.8 million is held by our foreign subsidiaries.

Eddie Norton: Yesterday, the board of directors declared a regular cash dividend of $0.15 per share that will be paid on 10 September 2019, to stockholders of record at the close of business August 9, 2019. The cash dividend is a 12.5% increase over the prior year. This marks the 17th consecutive year the board has increased our dividend by a minimum of 12%. Gary, I'll turn the call back over to you. Thank you, Eddie. We're happy to take your questions at this time. Thank you. And if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. As a reminder, management will be taking calls only from its covering analysts.

Yesterday, the board of directors declared a regular cash dividend of $0.15 per share that will be paid on 10 September 2019, to stockholders of record at the close of business August 9, 2019. The cash dividend is a 12.5% increase over the prior year. This marks the 17th consecutive year the board has increased our dividend by a minimum of 12%. Gary, I'll turn the call back over to you.

Yesterday, the board of directors declared a regular cash dividend of 10, and a half cents per share that will be paid on September 10, 2019 to stockholders of record at the close of business August nine 2019.

The cash dividend is a 12.5% increase over the prior year.

This marks the 17th consecutive year. The board has increased our dividend by a minimum of 12%.

Gary I will turn the call back over to you. Thank you Andy.

Gary Rollins: Thank you, Eddie. We're happy to take your questions at this time.

We're happy to take your questions at this time.

[Company Representative] (Rollins, Inc.): Thank you. And if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. As a reminder, management will be taking calls only from its covering analysts. Also, in the interest of time, please ask one initial question with a follow-up question. Then go back into the queue for any additional questions. Again, that is star one if you would like to ask a question. We'll now take our first question from Michael Hoffman with Stifel.

Yeah, and if you like Okay question, you said now by pressing star one on your telephone keypad, if you're using a speaker phone. Please make sure. Your mute function is turned out to allow your signal to reach our equipment.

As a reminder, management will be taking calls only from its hovering in line.

Eddie Norton: Also, in the interest of time, please ask one initial question with a follow-up question. Then go back into the queue for any additional questions. Again, that is star one if you would like to ask a question. We'll now take our first question from Michael Hoffman with Stifel. Thank you very much for taking the questions. I have a big macro question that is about the pest control market broadly. Do you believe that you're beginning to see a secular decline in the overall underlying growth rate, organic growth rate, and that it will be part of a cycle? We've had an improvement tied to an improving economic cycle, cycle starting to slow. Is the overall market growing slower? Yeah, Michael. This is Eddie.

Also in the interest of time. Please ask one additional question with a follow up question then go back into the queue for any additional questions.

Again that is star one if you would like to take a question.

Well now take our first question from Michael Hoffman with Stifel.

Michael Hoffman: Thank you very much for taking the questions. I have a big macro question that is about the pest control market broadly. Do you believe that you're beginning to see a secular decline in the overall underlying growth rate, organic growth rate, and that it will be part of a cycle? We've had an improvement tied to an improving economic cycle, cycle starting to slow. Is the overall market growing slower?

Thank you very much for taking the questions.

I have a big macro question that would then it is about the pest control market broadly.

Do you believe that you're beginning to see a secular decline in the overall underlying growth rate organic growth rate.

And then it will be part of a cycle, we've had an improvement.

Tied to an improving business economic cycle cycle, starting to slow as the overall market growing slower.

Eddie Northen: Yeah, Michael. This is Eddie. I don't know that we have any insight that would change what we believe will continue to be a growth market as we move forward in time. I think current weather patterns have moved things on one side and the other. Over the previous few years, current weather patterns warmer during the warmer seasons, and I think we've seen growth occur during those times. I think that you actually highlighted some of the weather patterns that we've seen over the first part of this year in certain areas, at least in the US. I think we've seen adjustments with that. I don't know that we know anything or see anything secular in nature or different in nature other than what we've seen.

Yeah Michael.

Eddie Norton: I don't know that we have any insight that would change what we believe will continue to be a growth market as we move forward in time. I think current weather patterns have moved things on one side and the other. Over the previous few years, current weather patterns warmer during the warmer seasons, and I think we've seen growth occur during those times. I think that you actually highlighted some of the weather patterns that we've seen over the first part of this year in certain areas, at least in the US. I think we've seen adjustments with that. I don't know that we know anything or see anything secular in nature or different in nature other than what we've seen. I think one advantage that we have is what we now have like 400 branches in North America.

That I don't know that we have any insight that would change what we believe will continue to be a growth market as we move forward in time I think current weather patterns have moved things.

On one side and the other over the previous few years current weather patterns.

Warmer during the warmer seasons and I think we've seen growth occurred during those times.

I think that you.

Actually highlighted some of the weather patterns that we've seen over the first part of this year in certain certain areas at least in the us and I think we've seen adjustments with that so I don't know that we know anything or see anything secular in nature or are different in nature.

Other than other than what we've seen.

Gary Rollins: I think one advantage that we have is what we now have like 400 branches in North America. So we really do see from coast to coast. And certainly, as Eddie said, the weather has a lot to do with how the season starts, and we're just not seeing an overall decrease as far as demand is concerned.

And I think having one advantage we have is.

Is what we now have like 400 branches in North America.

Eddie Norton: So we really do see from coast to coast. And certainly, as Eddie said, the weather has a lot to do with how the season starts, and we're just not seeing an overall decrease as far as demand is concerned. Okay. That's helpful. And then switching gears to Clark, and I'll come back into the queue. I just want to be clear on the comment you shared with us, Eddie. So in the 8-K, I'm rounding. There's approximately $9 million of reported income by Clark. And you're suggesting that you have $11 million that you can add back to that because of underlying it was vehicles and forgetting the other item you pulled out here as I'm looking through my notes. Vehicles and rents were $8 million of that, but there's $11 million. So I'm looking at a $20 million as a starting number.

So we really do see from coast to coast.

And certainly the.

Is any.

Said that weather has a lot to do with how the season starts and we're just not seeing.

On an overall decrease as far as demand is concerned.

Okay Thats helpful. And then switching gears to card and I will come back into the queue I just want to be clear on the comment you shared with us any.

Michael Hoffman: Okay. That's helpful. And then switching gears to Clark, and I'll come back into the queue. I just want to be clear on the comment you shared with us, Eddie. So in the 8-K, I'm rounding. There's approximately $9 million of reported income by Clark. And you're suggesting that you have $11 million that you can add back to that because of underlying it was vehicles and forgetting the other item you pulled out here as I'm looking through my notes. Vehicles and rents were $8 million of that, but there's $11 million. So I'm looking at a $20 million as a starting number. Is that the right way to think about it on the way you'd run the business before any other adjustments?

So there is in the 8-K, there's I'm rounding there is approximately $9 million of reported income.

By Clark.

And you're suggesting that.

You have 11 million that you can add back to that because of.

Underlying it was vehicles and and.

We're getting the other item you pulled out here as I'm looking through my notes.

Vehicles, and rents versus $8 million of that but theres 11, So I'm looking at a 20 as a starting number is that the right way to think about it.

Eddie Norton: Is that the right way to think about it on the way you'd run the business before any other adjustments? I think that's a fair way of thinking about it. Yes. Okay. I'll come back into the queue. Thank you. We'll now take our next question from Dan Dolev with Nomura. Hey, guys. Thank you for taking my question. Morning, Dan. Good morning. I was a little bit. Hey, good morning. I was a little bit surprised on the commercial side that I think the comp was a little bit easier. If I'm not wrong, you did about 2.8% organic growth in that subsegment. That's quite a bit lower than if I look historically, you're averaging 4, 3. Is there anything we should be concerned about regarding competitive pressure from your larger competitor that's being more aggressive on that side? I can't help. Is the weather impacting commercial?

On the way you would run the business before any other adjustments.

Eddie Northen: I think that's a fair way of thinking about it. Yes.

I think that's a fair way of thinking about it yes.

Michael Hoffman: Okay. I'll come back into the queue. Thank you.

Okay I'll come back into queue.

[Company Representative] (Rollins, Inc.): We'll now take our next question from Dan Dolev with Nomura.

Thank you.

Well now take our next question from Dan Dolev with Nomura.

Dan Dolev: Hey, guys. Thank you for taking my question.

Hey, guys. Thank you for taking my question.

Eddie Northen: Morning, Dan.

Gary Rollins: Good morning.

Thank you Dan Good morning, I was little bit.

Dan Dolev: I was a little bit. Hey, good morning. I was a little bit surprised on the commercial side that I think the comp was a little bit easier. If I'm not wrong, you did about 2.8% organic growth in that subsegment. That's quite a bit lower than if I look historically, you're averaging 4, 3. Is there anything we should be concerned about regarding competitive pressure from your larger competitor that's being more aggressive on that side? I can't help. Is the weather impacting commercial? It impacts residential. Thank you.

Hey, good morning.

A little bit surprised on the commercial side that.

I think the comp was a little bit easier I'm not wrong, you did about 2.8% organic growth.

And in that.

Sub segment.

That's quite a bit lower than if I look historically, you're you're averaging four three is there is there any anything we should be concerned about regarding competitive pressure from your larger competitor that that's being more aggressive on that side.

I cant help is that is the weather impact in commercial like it.

Eddie Norton: It impacts residential. Thank you. Yeah. So, Dan, so I would say looking at a year ago, we grew 4.2%. That's a pretty hefty number on the commercial side. And I would say that one of the things that we saw in the quarter was fumigation, and that was just from some individual jobs and customers that just didn't come through. And fumigation is a piece of what we do on the commercial side. It's not tariff-related. It's not anything else like that. It's just actual jobs that didn't come through that we have historically seen. So it wasn't competitive in nature at all. And when we went through and looked at what those impacts were over that time period, it was rounding to 1% for us on the commercial side.

Feedback to residential.

Eddie Northen: Yeah. So, Dan, so I would say looking at a year ago, we grew 4.2%. That's a pretty hefty number on the commercial side. And I would say that one of the things that we saw in the quarter was fumigation, and that was just from some individual jobs and customers that just didn't come through. And fumigation is a piece of what we do on the commercial side. It's not tariff-related. It's not anything else like that. It's just actual jobs that didn't come through that we have historically seen. So it wasn't competitive in nature at all. And when we went through and looked at what those impacts were over that time period, it was rounding to 1% for us on the commercial side.

Thank you.

Yes, the dance so I would say looking at a year ago. We grew 4.2% that's a that's a pretty hefty number on the on the commercial side.

And I would say that.

One of the things that we saw in the in the quarter was.

Was fumigation and that was just from some individual jobs and customers. It just didnt come through and Fumigation is a is a piece of what we do on the commercial side.

It's it's not tariff related its not anything else like that it's just it's just actual jobs that didn't come through that we that we have historically seen so it wasn't competitive in nature at all and.

When we went through and looked at what those impacts were over that time period. It was.

It was rounding to a percent for us on the commercial side. So.

Eddie Norton: So we've made adjustments where we can in the operations with that, but that's something that historically, we've not seen kind of move like that. So no competitive concerns at this point. A little bit of a higher comp from a year ago and the fumigation piece. Got it. And just a separate question. We've done some survey work here that showed that, obviously, the customer satisfaction is very good, and people that like the Orkin service really like the customer satisfaction. But on the other hand, it felt like pricing matters more than what I had expected. I know this industry has been known for almost infinite price inelasticity. Have you noticed any changes? Have you seen anything pushed back from customers on the price increases? Thank you. Yeah. Thanks for that. We've not seen issues with that.

So we've made adjustments where we can in the operations with that, but that's something that historically, we've not seen kind of move like that. So no competitive concerns at this point. A little bit of a higher comp from a year ago and the fumigation piece.

Weve made adjustments, where we can and the operations with that but that's a.

That's something that historically, we've not seen kind of move like that.

So no no competitive concerns at this point, a little bit of a of a higher comp from a year ago and the fumigation apiece.

Dan Dolev: Got it. And just a separate question. We've done some survey work here that showed that, obviously, the customer satisfaction is very good, and people that like the Orkin service really like the customer satisfaction. But on the other hand, it felt like pricing matters more than what I had expected. I know this industry has been known for almost infinite price inelasticity. Have you noticed any changes? Have you seen anything pushed back from customers on the price increases? Thank you.

Got it and just a separate question we've done some survey work here.

That showed that.

Obviously, the customer satisfaction is very good and people that like the Orkin service really like the customer satisfaction, but on the other hand, it felt like pricing matters.

More than what I expected it.

The industry has been known for.

In almost infinite price.

The city have you noticed any changes that you've seen any anything push back from customers on the price increases.

Eddie Northen: Yeah. Thanks for that. We've not seen issues with that. I think, as you know, we've talked about, I mean, our marketing group is very robust in their testing so that we want to know and understand what sort of temperature we'll have when it comes to rolling out our price in individual markets and in individual areas, because we do not want to lose customer for price, because the lifetime value of the customer is the most important thing to us. So I think we feel comfortable with the testing that's going on.

Thank you.

Yeah. Thanks for that we've not seen issues with that I think as you know we've talked about I mean, our marketing group is very robust in their testing.

Eddie Norton: I think, as you know, we've talked about, I mean, our marketing group is very robust in their testing so that we want to know and understand what sort of temperature we'll have when it comes to rolling out our price in individual markets and in individual areas, because we do not want to lose customer for price, because the lifetime value of the customer is the most important thing to us. So I think we feel comfortable with the testing that's going on. I don't know of any material pushback that we've had. Our pricing is relatively in line with what we've seen in previous years. And again, as we mentioned on the call, our customer retention numbers continue to improve. So I don't think that we're seeing issues, concerns, or problems at this point in time in that area. Eddie, if I could.

So that we want to know and understand what's sort of temperature will have when it comes to rolling out our price in individual markets and in individual areas because.

We do not want to lose customer for price because the lifetime value of the customer is the most important thing to us.

So I think we feel comfortable with the testing that's going on I don't know of any material pushback that we've had our pricing is relatively in line with what we've seen in previous years.

I don't know of any material pushback that we've had. Our pricing is relatively in line with what we've seen in previous years. And again, as we mentioned on the call, our customer retention numbers continue to improve. So I don't think that we're seeing issues, concerns, or problems at this point in time in that area.

And and again as we mentioned on the call our customer retention numbers continue to improve so I don't think that we're seeing issues or concerns or problems at this point in time in that area.

Gary Rollins: Eddie, if I could. We're very fortunate in our call center that we can verify, really, if there's any pricing issues with our closure. So we kind of have a laboratory, if you will, that you have the same people kind of handling these calls from the Northeast and the Midwest and so forth and so on. So we're able to track closure literally by region and division.

And if I could here, we're very fortunate in our call center.

Eddie Norton: We're very fortunate in our call center that we can verify, really, if there's any pricing issues with our closure. So we kind of have a laboratory, if you will, that you have the same people kind of handling these calls from the Northeast and the Midwest and so forth and so on. So we're able to track closure literally by region and division. Got it. Thank you, Gary. Appreciate it. Thanks, Eddie. Thanks, Dan. We'll now take a question from Jamie Clement with Buckingham. Hey, good morning, gentlemen. Good morning. Good morning. Great. I was just curious if I could get your thoughts. I think this has been an unusual year in the sense that, from our perspective, the industry has faced some unusual weather in both the first and the second quarters.

That we have.

That we can verify really if theres any pricing issues with our closure. So we kind of have a laboratory if you will.

You have the same people were kind of handling these calls from the northeast and the Midwest and so forth and so on so we're able to track closure.

Literally Bob on region and Division.

Dan Dolev: Got it. Thank you, Gary. Appreciate it. Thanks, Eddie.

Got it thank you Gary I appreciate it thanks Eddie.

Eddie Northen: Thanks, Dan.

[Company Representative] (Rollins, Inc.): We'll now take a question from Jamie Clement with Buckingham.

Thanks, Dan.

Well now take a question from Jamie Clement with Buckingham.

Jamie Clement: Hey, good morning, gentlemen.

Hey, good morning, gentlemen.

Eddie Northen: Good morning.

Gary Rollins: Good morning.

Jamie Clement: Great. I was just curious if I could get your thoughts. I think this has been an unusual year in the sense that, from our perspective, the industry has faced some unusual weather in both the first and the second quarters. What I was curious about was if, in local markets, some of your competitors and everybody was finding it hard to generate leads in Q1, do they tend to spend more trying to generate leads in Q2? Did you notice any of that? And how do you all strategically respond? Do you try to match them, or do you just kind of stick with the blueprint?

Good morning morning, right I was just curious if I could get your thoughts you know I think this was you know this has been an unusual year you know in the sense that you know from our perspective, you know the industry has faced some unusual weather in both the first and the second quarters and what I was curious about was.

Eddie Norton: What I was curious about was if, in local markets, some of your competitors and everybody was finding it hard to generate leads in Q1, do they tend to spend more trying to generate leads in Q2? Did you notice any of that? And how do you all strategically respond? Do you try to match them, or do you just kind of stick with the blueprint? I think we'll stick with the blueprint. The marketing really has to go through and figure out ways to be innovative when it comes to that acquisition cost per lead. And then it's on us to be able to make sure that we're doing what we can to close the lead from there. I don't think we've seen anything different having to do with either the price necessarily for that in total.

If you know if in local markets.

You know some of your competitors and everybody was find it hard to generate leads in the first quarter.

Do they tend to spend more trying to generate leads in the second quarter did you notice any of that and and how do you all strategically respond to you try to match them or you just kind of stick with the blueprint.

Eddie Northen: I think we'll stick with the blueprint. The marketing really has to go through and figure out ways to be innovative when it comes to that acquisition cost per lead. And then it's on us to be able to make sure that we're doing what we can to close the lead from there. I don't think we've seen anything different having to do with either the price necessarily for that in total. Now, there's some channels, obviously, that are more expensive. But our marketing group, I think, again, is doing a great job by going and finding other channels to be able to create some of those leads.

I I think we you know we'll stick with the blueprint into the marketing really has to go through and figure out ways to be innovative when it comes to that the acquisition cost per lead.

You know and then it's on us to be able to make sure that we're doing what we tend to close the lead from there.

I don't think we've seen anything different having to do with either either the price necessarily for that in total now there's some channels, obviously that are more expensive, but our marketing group I think again, it's doing a great job by going and finding other channels to be able to create some of those leads and and it's just a matter is there enough demand there for the lead and I don't think its necessarily that.

Eddie Norton: Now, there's some channels, obviously, that are more expensive. But our marketing group, I think, again, is doing a great job by going and finding other channels to be able to create some of those leads. And it's just a matter of, is there enough demand there for the lead? And I don't think it's necessarily that we're not winning leads. I think it's just been the demand that is there and the leads not being available to us. Okay. Thank you. And Eddie, I'm not sure I caught this. Were you saying that depreciation as a result of Clark would be up about $1.9 million sequentially from Q2 to Q3? Is that what you were saying? I don't think I said that about depreciation. Basically, I was trying to get it as sort of like, what's the current all-in quarterly EBITDA number post-Clark? Yeah.

And it's just a matter of, is there enough demand there for the lead? And I don't think it's necessarily that we're not winning leads. I think it's just been the demand that is there and the leads not being available to us.

No. We're not winning leads I think I think its just been the demand is there and the leads not being available to us.

Jamie Clement: Okay. Thank you. And Eddie, I'm not sure I caught this. Were you saying that depreciation as a result of Clark would be up about $1.9 million sequentially from Q2 to Q3? Is that what you were saying?

Okay. Thank you and Eddie I'm not sure I caught this you were you saying that.

Depreciation as a result, the Clarke would be up about $1.9 million sequentially from Q2 to Q3.

Eddie Northen: I don't think I said that about depreciation.

Very good.

I don't think I've said that about depreciation.

Jamie Clement: Basically, I was trying to get it as sort of like, what's the current all-in quarterly EBITDA number post-Clark?

Okay.

Basically I was trying to get a sort of like what's the current you know all in quarterly DNA number.

Jamie Clement: Yeah. We did say it was up $1.5 million year-over-year.

Post Clark.

Yeah. We did we did say it was up 1.5 million year over year I thought that was a different number you gave about Q3 and I didn't know if that was cumulative I was just was just because it's you know it's non cash and I just wanted to make sure that downturn there no agreed just modeling errors.

Eddie Norton: We did say it was up $1.5 million year-over-year. I thought there was a different number you gave about Q3. I didn't know if that was cumulative. I just was just because it's non-cash, and I just wanted to make sure that there are no egregious modeling errors. We'll go back, and we'll look at the transcript, and we'll share that with you. How about that? Okay. All right. Great. Yeah, and just a general comment, Gary: how are the international businesses performing? They're performing well. We're very pleased. We've had some challenges in Australia, but we seem to have turned the corner there. Their economy has not been as robust as we have here in North America. But we're very pleased with the UK. We're very pleased with our operation in Singapore. And so I would think, all in all, we're pleased with our international performance.

Jamie Clement: I thought there was a different number you gave about Q3. I didn't know if that was cumulative. I just was just because it's non-cash, and I just wanted to make sure that there are no egregious modeling errors.

Eddie Northen: We'll go back, and we'll look at the transcript, and we'll share that with you. How about that?

Well go back and we'll look at the transcript and we'll share that with you how about that okay, alright, great and yeah, I'd just be general comment Gary how the international businesses are performing.

Jamie Clement: Okay. All right. Great. Yeah, and just a general comment, Gary: how are the international businesses performing?

Gary Rollins: They're performing well. We're very pleased. We've had some challenges in Australia, but we seem to have turned the corner there. Their economy has not been as robust as we have here in North America. But we're very pleased with the UK. We're very pleased with our operation in Singapore. And so I would think, all in all, we're pleased with our international performance.

They are performing well.

We're very pleased you know we've had some challenges in Australia, but we seem to have turned the corner there their economy has not been as robust as.

As we have here in North America.

Oh for sure I plead UK, we're very pleased with.

Our.

Operation in Singapore, and so I would think all in all we're pleased with our international perform or more international Op acquisition is very much on the table.

Eddie Norton: Are more international acquisitions very much on the table? I think so. We continue to have candidates. And I think our track record has helped us understand what we can expect and when we can expect it. So I think we're a little bit more robust than we were before. But we're really pleased. And one of the great things is that these people that have built these businesses have stayed. So we don't have to learn the culture and all of the things that a local individual is already extremely familiar with. And I think that that's been a blessing. And we also have a position that we can refer a candidate to our other acquired companies.

Jamie Clement: Are more international acquisitions very much on the table?

Gary Rollins: I think so. We continue to have candidates. And I think our track record has helped us understand what we can expect and when we can expect it. So I think we're a little bit more robust than we were before. But we're really pleased. And one of the great things is that these people that have built these businesses have stayed. So we don't have to learn the culture and all of the things that a local individual is already extremely familiar with. And I think that that's been a blessing. And we also have a position that we can refer a candidate to our other acquired companies.

I think so we continue to you know.

I have candidates in and I think our track record is.

He has helped us understand what we can expect and when we can expect it. So I think we're a little bit more robust than than we were before but.

We're really pleased and one of the great things is it is these are people that have built these businesses of state.

So you know we don't have to learn the culture and all the things that.

Then on local individual is already you know extremely familiar with and I think that that's a that's been.

A blessing and when you know we also have a position that we can refer a candidate or other.

Acquired companies and like and that's that's helped us along ways because.

Eddie Norton: I think that's helped us a long ways because I think we get good results or good feedback that we don't go in and try to change everything or change everybody, that we're patient, and we try to share things that we think would benefit them. But we're not taking a heavy hand. And I think that goes a long way when you're trying to acquire a company. Okay. Thank you all very much for your time. I appreciate it. Hey, Jamie, to close the loop, I did mention I just want to make sure the total depreciation versus what we called out for Clark, we did say up $1.9 million per quarter for buildings and vehicles having to do with Clark. And so that was Q2 year-over-year? That's correct. Oh, okay. Okay. All right. Thank you very much. You're welcome.

I think that's helped us a long ways because I think we get good results or good feedback that we don't go in and try to change everything or change everybody, that we're patient, and we try to share things that we think would benefit them. But we're not taking a heavy hand. And I think that goes a long way when you're trying to acquire a company.

You know I think we get good.

Good results are good feedback that you know we don't go in and try to change everything or change every body that Uh huh.

Patient and we tried to share things that we think would benefit them, but we're not taking a heavy hand, and I think that goes a long way when you're trying to acquire a company.

Jamie Clement: Okay. Thank you all very much for your time. I appreciate it.

Okay. Thank you all very much for your time I appreciate it.

Eddie Northen: Hey, Jamie, to close the loop, I did mention I just want to make sure the total depreciation versus what we called out for Clark, we did say up $1.9 million per quarter for buildings and vehicles having to do with Clark.

Hey, Jamie to close the loop I've no idea I did mentioned I was just wanted to make sure. The total depreciation versus what we called out for Clark, We did say a up 1.9 million per quarter for buildings that vehicles are having to do with Clark.

Jamie Clement: And so that was Q2 year-over-year?

And then that should that was second quarter year over year.

Eddie Northen: That's correct.

Jamie Clement: Oh, okay. Okay. All right. Thank you very much.

That's correct.

Okay. Okay, all right. Thank you very much.

Eddie Northen: You're welcome.

You're welcome.

As a reminder that is star one if you might ask your question.

Eddie Norton: And as a reminder, that is Star One. If you would like to ask a question, we'll now move to Tim Mulroney with William Blair. Good morning. Morning, Tim. Eddie, you and Gary and John, you guys thrown a lot of numbers at us this morning. On the margins, if you could exclude Clark for a second, just stepping back here, I kind of thought margins would have been heading up higher this year with the roll-off of some of your IT expenditures, maybe a more normalized growth of recurring revenue customers. But it appears like maybe there are more headwinds here, other things to consider offsetting some of these benefits.

[Company Representative] (Rollins, Inc.): And as a reminder, that is Star One. If you would like to ask a question, we'll now move to Tim Mulroney with William Blair.

Well now move to Tim Mulrooney with William Blair.

Tim Mulrooney: Good morning.

Good morning.

Eddie Northen: Morning, Tim.

Tim Mulrooney: Eddie, you and Gary and John, you guys thrown a lot of numbers at us this morning. On the margins, if you could exclude Clark for a second, just stepping back here, I kind of thought margins would have been heading up higher this year with the roll-off of some of your IT expenditures, maybe a more normalized growth of recurring revenue customers. But it appears like maybe there are more headwinds here, other things to consider offsetting some of these benefits. Could you just step back for us and kind of give us the major puts and takes on margin in 2019 and how we should think about how we should think about the major puts and takes overall, I guess? Thank you.

Oh yeah.

And he you and Gary and John are you guys doing a lot of numbers add up. This morning, you know on the margins.

If if if you can exclude Clark for a second just stepping back here.

I kind of thought margins would have been heading up higher this year, but the roll off of some of your I T expenditures, maybe a more normalized growth of recurring revenue customers.

But it appears like baby there more headwinds here other things to consider offsetting some of these benefits could you just step back for us and kind of give us the major puts and takes on on margin in 2019, and how we should think about how we should think about the major puts and takes over all I got thank you.

Eddie Norton: Could you just step back for us and kind of give us the major puts and takes on margin in 2019 and how we should think about how we should think about the major puts and takes overall, I guess? Thank you. Tim, I think if you take Clark out, the benefits piece is going to be one of the larger pieces that we're going to have that'll be out there. That, as you know, wasn't something we thought was going to be a headwind expense-wise. We thought we would be flat to the previous year. But with our improved usage of the plan, more people joining the plan, more people increasing their match in the plan, that has been an additional expense for us. But the other piece of it is going to be staffing for a season that hasn't come as normal or as expected.

Eddie Northen: Tim, I think if you take Clark out, the benefits piece is going to be one of the larger pieces that we're going to have that'll be out there. That, as you know, wasn't something we thought was going to be a headwind expense-wise. We thought we would be flat to the previous year. But with our improved usage of the plan, more people joining the plan, more people increasing their match in the plan, that has been an additional expense for us. But the other piece of it is going to be staffing for a season that hasn't come as normal or as expected. We don't have a dollar amount for that. We don't have a dollar amount to give you a put and take having to do with that. But the solid numbers that we have talked about do have to do with the benefits.

Tim I think if you take if you take Clark out you know the benefits piece is going to be a one of the larger pieces that we're going to have that that will be out there.

That is as you know wasn't something we thought was going to be a headwind expense wise, we thought we would be flat to the previous year, but with our improved a usage of the plan a more people joining the plan more people increasing.

There are other matching the plant that has been an additional expense for us.

But the other piece of it is going to be you know staffing for a a season that a that that hasn't come as normal or as expected.

Eddie Norton: We don't have a dollar amount for that. We don't have a dollar amount to give you a put and take having to do with that. But the solid numbers that we have talked about do have to do with the benefits. All right. No, that's helpful. That's helpful. How do you think about margin on a go-forward or a long-term basis? Do you think this business tops out in the 20%, 21% EBITDA margin range? Or is there more room to run through stronger density and tech investments and stuff like that? I think coming from a density background, that's before Gary convinced me to make the best decision in my life after marrying my wife, was to learning and understanding the importance of density.

We don't have a dollar amount for that we don't we don't have a dollar amount to give you a put and take you know having to do with a with that.

But you know the solid numbers that we have talked about do had to do with the benefits.

Tim Mulrooney: All right. No, that's helpful. That's helpful. How do you think about margin on a go-forward or a long-term basis? Do you think this business tops out in the 20%, 21% EBITDA margin range? Or is there more room to run through stronger density and tech investments and stuff like that?

All right no. That's helpful. That's helpful. How do you think about margin on a go forward or a long term basis do you think this business tops out the 20%, 21% EBITDA margin range or is there more room to run through stronger density and tech investments and stuff like that.

Eddie Northen: I think coming from a density background, that's before Gary convinced me to make the best decision in my life after marrying my wife, was to learning and understanding the importance of density. And every single time John and group find and acquire a mom-and-pop company, they find and acquire a regional company that we end up rolling into another existing brand or organization, we get a little bit more dense, we get a little bit more efficient, and we become better every single time that happens. So to me, in an extremely fragmented industry like we have, I think the upside opportunities continue to be out there for years to come.

I think you know coming from a density background. That's before you know Gary convince me to make the best decision in my life. After after American away [laughter].

[laughter] was Wow [laughter] was [laughter] learning and understanding the importance of density and every single time, John and group find and acquire a mom and pop company. They find acquire a regional company that we end up rolling into another another existing brand organization, we get a little bit more deaths, we get a little bit more efficient and we began and we become better every single time that happens so to me in an extremely fragmented industry like we have.

Eddie Norton: And every single time John and group find and acquire a mom-and-pop company, they find and acquire a regional company that we end up rolling into another existing brand or organization, we get a little bit more dense, we get a little bit more efficient, and we become better every single time that happens. So to me, in an extremely fragmented industry like we have, I think the upside opportunities continue to be out there for years to come. And I think when you double down on that with the technology investments that we have made and the fact on how we are executing on those technology investments at this point in time with a lot of runway to go, I still think, personally, that there's a lot of upside potential that has to go with that. So a lot of runway left.

I think the upside opportunities continue to be out there for years to come and I think when you double down on that with the technology investments that we have made and the fact on on how we are executing on those technology investments at this point in time with a lot of runway to go I still think personally it theres a lot of upside potential that has to go with that.

And I think when you double down on that with the technology investments that we have made and the fact on how we are executing on those technology investments at this point in time with a lot of runway to go, I still think, personally, that there's a lot of upside potential that has to go with that.

Tim Mulrooney: So a lot of runway left. No reason structurally why Rollins EBITDA margin tops out at 20%, 21%.

So.

A lot of runway left no reason structurally why Rollins EBITDA margin tops out at 2020, 1%.

Eddie Norton: No reason structurally why Rollins EBITDA margin tops out at 20%, 21%. I don't believe so. I think there's more room I think there's more room potentially to go as we move forward in time. Thank you. I just want to squeeze in one more here because it's kind of related to that. Just on the Clark acquisition, if I add back that $11 million to the reported how we calculated EBITDA of $16 million, we get more to a run rate EBITDA for Clark that's closer to 20% already, excluding those $11 million one-time items or items that won't repeat. Am I doing that math right? Are you getting to a go-forward Clark EBITDA margin in the high teens range? And where do you think you can get that to in a couple of years? Am I doing the math right?

Eddie Northen: I don't believe so. I think there's more room I think there's more room potentially to go as we move forward in time.

I don't believe so I think there's more room I think there's more room potentially to go as you move forward in time.

Tim Mulrooney: Thank you. I just want to squeeze in one more here because it's kind of related to that. Just on the Clark acquisition, if I add back that $11 million to the reported how we calculated EBITDA of $16 million, we get more to a run rate EBITDA for Clark that's closer to 20% already, excluding those $11 million one-time items or items that won't repeat. Am I doing that math right? Are you getting to a go-forward Clark EBITDA margin in the high teens range? And where do you think you can get that to in a couple of years? Am I doing the math right? And how do you think about it long-term? Thank you.

Thank you I I just want to squeeze in one more here, because it's kind of related to that.

And then just on <unk> Clarke acquisition, you know if I add back down 11 million to the reported.

You know, how we calculated EBITDA of 16 million yeah, we get more to a run rate EBITDA for Clark, that's closer to 20% already excluding none of those 11 million.

No one time items or items that won't repeat it am I doing that math right are you getting to a go forward core EBITDA margin in the high teens range and where do you think you can get that to win a couple of your am I doing the math right and how do you think about it long term. Thank you.

Eddie Norton: And how do you think about it long-term? Thank you. Yeah. I think your math is right. And we started calling out some of the things that we are already moving on having to do with improving our vehicle margin. We're going to be moving those folks over to the Clark folks over to some of our benefits plans, which is going to be a savings. We've already started with some of our procurement spend items. So we know there are going to be multiple margin points that are going to be in addition to those other items that I called out having to do with the $11 million. And the good news is, like I had mentioned, we've had our support staff out there. We understand what we can move on and the priority of how quickly their needs are. They've been here to work through those integration steps.

Eddie Northen: Yeah. I think your math is right. And we started calling out some of the things that we are already moving on having to do with improving our vehicle margin. We're going to be moving those folks over to the Clark folks over to some of our benefits plans, which is going to be a savings. We've already started with some of our procurement spend items. So we know there are going to be multiple margin points that are going to be in addition to those other items that I called out having to do with the $11 million. And the good news is, like I had mentioned, we've had our support staff out there. We understand what we can move on and the priority of how quickly their needs are. They've been here to work through those integration steps.

Yeah, I think you're I think you're Mad your math is right and you know we started calling out some of the things that we are already moving on having to do with improving our vehicle or a margin Oh, we're going to be moving.

Those folks over to the court folks over to some of our benefits plans, which is going to be a savings.

Oh, we've already started with some of our procurement spend items. So we know they're going to be multiple large imports that are going to be in addition to those other items that I that I called out 10 to 11 million and you know the good news is like I had mentioned you know we we've had our support staff out there we understand what we can move on in the priority of how quickly their needs are they've been here to work through those integration steps and like I said, so even even in two weeks, we're starting with the fleet, we're going to start to move into play piece of it. The four one k. plant is going to be moving over in August to the Rollins four one k. plan, which would be a saving so there's a there are multiple opportunities that we believe from a margin perspective will help in addition to what you what you wind down.

Eddie Norton: And like I said, so even in two weeks, we're starting with the fleet. We're going to start moving the fleet piece of it. The 401(k) plan is going to be moving over in August to the Rollins 401(k) plan, which will be a savings. So there are multiple opportunities that we believe, from a margin perspective, will help in addition to what you lined out. I understand. Thank you. Good luck in the back half of the year. Yep. Thank you. And as a final reminder, that is Star One. If you would like to ask a question, we'll now take a follow-up from Michael Hoffman with C4. So there's two pieces here. One, you gave us an adjusted gross margin of 51.8, which pulled out all the noise. So that's still down year-over-year, and yet retention's better. I'm still struggling with why margins aren't improving.

Eddie Northen: And like I said, so even in two weeks, we're starting with the fleet. We're going to start moving the fleet piece of it. The 401(k) plan is going to be moving over in August to the Rollins 401(k) plan, which will be a savings. So there are multiple opportunities that we believe, from a margin perspective, will help in addition to what you lined out.

Tim Mulrooney: I understand. Thank you. Good luck in the back half of the year.

I understand thank you good luck in the back half of the year.

Eddie Northen: Yep. Thank you.

[Company Representative] (Rollins, Inc.): And as a final reminder, that is Star One. If you would like to ask a question, we'll now take a follow-up from Michael Hoffman with C4.

Yep. Thank you.

No nothing final reminder, that F star why didn't they might asking a question.

Well now take a follow up from Michael Hoffman with Stifel.

Michael Hoffman: So there's two pieces here. One, you gave us an adjusted gross margin of 51.8, which pulled out all the noise. So that's still down year-over-year, and yet retention's better. I'm still struggling with why margins aren't improving. Then the second part, you gave us an $8 million amortization number, but you didn't tell us whether that was quarterly or how does that flow through? So when I look at EBITDA in total, I got 1.9 for Clark plus what for amortization per quarter?

So there's two pieces here one on the <unk> you gave us an adjusted gross margin of 51.8, which pulled out.

All the noise, so that's still down year over year, and yet retentions better I'm still struggling with why margins are improving and then the second part you gave US an 8 million dollar amortization number, but you didn't tell us whether that was like quarterly.

Eddie Norton: Then the second part, you gave us an $8 million amortization number, but you didn't tell us whether that was quarterly or how does that flow through? So when I look at EBITDA in total, I got 1.9 for Clark plus what for amortization per quarter? Yeah. So, Michael, I'll go back to the first question that you had there. I think that's a little bit of what we responded back to Tim with. We've staffed for a season that has not come through as we've seen from a normal demand perspective. As Gary opened up the call, we're not as our efficiency isn't as good as we would normally have it, and we're making adjustments for that. It's just the abnormality of kind of the way this has fallen.

Or how does that flow through so when I look at DNA in total I got one nine for Clark plus what for amortization per quarter.

Eddie Northen: Yeah. So, Michael, I'll go back to the first question that you had there. I think that's a little bit of what we responded back to Tim with. We've staffed for a season that has not come through as we've seen from a normal demand perspective. As Gary opened up the call, we're not as our efficiency isn't as good as we would normally have it, and we're making adjustments for that. It's just the abnormality of kind of the way this has fallen. We don't want to be in a position where we're not staffed accordingly for a season, have the season come, and then not be able to take care of things from a customer perspective and a long-term customer value perspective.

Yes, so Michael that I'll go back to the first question that you have there and I think it's a little bit of what we what we responded back to Tim with you know we've staffed for a season.

That has not come through as we've seen from a normal to bank demand perspective, and as Gary open up the call. You know we're not as you know our efficiency isn't as good as we would normally habit.

And we're making adjustments for that it's just the abnormality of of kind of the way. This is falling you know we don't want to be in a position where were not staffed accordingly for a season have the season come in then and then not be able to to take care of things from a customer perspective, and a long term customer value perspective. So you know so we had we had an abnormality there and I think that's what we're seeing as part of that margin piece, we're moving forward with making adjustments to that and like I said July has been off to a good start.

Eddie Norton: We don't want to be in a position where we're not staffed accordingly for a season, have the season come, and then not be able to take care of things from a customer perspective and a long-term customer value perspective. So we had an abnormality there, and I think that's what we're seeing as part of that margin piece. We're moving forward with making adjustments to that. And like I said, July has been off to a good start. Yeah. I'd like to add that because if we'd cut our vehicles and our headcount a month ago, we'd really be in bad shape right now. So whether you like it or not, you've just got to hold them. And fortunately, I guess July now is showing that that strategy or those actions were really the right things to do.

So we had an abnormality there, and I think that's what we're seeing as part of that margin piece. We're moving forward with making adjustments to that. And like I said, July has been off to a good start.

Gary Rollins: Yeah. I'd like to add that because if we'd cut our vehicles and our headcount a month ago, we'd really be in bad shape right now. So whether you like it or not, you've just got to hold them. And fortunately, I guess July now is showing that that strategy or those actions were really the right things to do. But it's very painful when you have that period that you're not getting your revenue as you're expecting, but you've got that incremental expense built up in the form of headcount and vehicles. So that's really what put more pressure on the margin than any of these other things.

I'd like to add that somebody else, if we cut our vehicles in our head count.

You know a month ago.

You know, we really be in bad shape right now.

Ah So you know whether you like it or not you've just got to hold on.

Oh, and Unfortunately, I guess July now is showing that that strategy or are those actions.

Well really the right thing to do but its very painful when you have that period that you're not getting your revenue as you were expecting but you've got that incremental expense builds up in the form of head count in India. So that that's really would put more pressure on the margin in any of these other.

Eddie Norton: But it's very painful when you have that period that you're not getting your revenue as you're expecting, but you've got that incremental expense built up in the form of headcount and vehicles. So that's really what put more pressure on the margin than any of these other things. And, Michael, we're not going to manage to a quarter. I mean, that's the bottom line of what our company is about, and it's the way that Rollins has been successful for a lot of years. And we're not going to make a short-term decision that might help a margin of percent or two or whatever else like that and then damage the long-term business. We're not going to do that. And that's, unfortunately, what we've gone through in this first two quarters.

Eddie Northen: And, Michael, we're not going to manage to a quarter. I mean, that's the bottom line of what our company is about, and it's the way that Rollins has been successful for a lot of years. And we're not going to make a short-term decision that might help a margin of percent or two or whatever else like that and then damage the long-term business. We're not going to do that. And that's, unfortunately, what we've gone through in this first two quarters. And to Gary's point, it's paying off, and we're seeing the demand that's coming through, and we're prepared for that. Second part of your question had to do, I'm sorry.

Yeah, Michael we're not going to manage to a quarter I mean, that's that's the bottom line of what are you know what our company is about and it's the way that Rollins has been successful for for a lot of years and you know we're not going to make a short term decision that might help a margin a percent or two or whatever else like that and then damage. The long term business when it we're not going to do that and that's unfortunately, what we've gone through this first two quarters and to Gary's point is paying off and we're seeing.

Eddie Norton: And to Gary's point, it's paying off, and we're seeing the demand that's coming through, and we're prepared for that. Second part of your question had to do, I'm sorry. Yeah. So can I just ask a clarification just so I make sure I understood everything? I get what you're making, the statements you're making. I get the business management reasons for managing the cost the way you did. If the second-half growth rate is a good growth rate, but it's still organic, is lower year over year, by all rights, the margin should expand because of the way the math of adding new customers, lower margin in the first year, better margin in the second, really good in the third. Is that the right way to think about that, all else being equal? That's exactly the right way to think about it. Yeah.

You know, we're seeing the demand that's a that's coming through and we're prepared for that.

Second part of your question had to do.

Michael Hoffman: Yeah. So can I just ask a clarification just so I make sure I understood everything? I get what you're making, the statements you're making. I get the business management reasons for managing the cost the way you did. If the second-half growth rate is a good growth rate, but it's still organic, is lower year over year, by all rights, the margin should expand because of the way the math of adding new customers, lower margin in the first year, better margin in the second, really good in the third. Is that the right way to think about that, all else being equal?

Yes, well I can I can I just ask a clarification, just so I make sure I understood everything.

Yeah, I get what you're making the statements you're making I get the business management reasons for managing the costs the way that if the second half growth rate is a good growth rate, but it's still organic is lower year over year.

By all rights the margin should expand because of the way the math of adding new customers.

Lower margin in the first year better margin the second really good in the third.

Isn't that though is that the right way to think about that all else being equal.

Eddie Northen: That's exactly the right way to think about it. Yeah. You're exactly right with how you're thinking about it. And that's what our expectations would be as we're moving through the remainder of the year.

Yeah, that's exactly the right way to think about it yeah, you're you're okay exactly right with how you're thinking about it and that's what our expectations would be as we're moving through the remainder of the year.

Eddie Norton: You're exactly right with how you're thinking about it. And that's what our expectations would be as we're moving through the remainder of the year. Okay. Thanks. And then just a clarification on the amortization number you gave us. How do I apply it in the model? That's going to be year-over-year increase is what that's going to be. Full 12 months, so divide by 4. Correct. Correct. Okay. All right. Thanks. Yep. I do want to clarify one other thing. Jamie, you had asked a question earlier about the depreciation. I misstated something, so I just want to clarify that. The $1.9 million for the depreciation for Clark is going to be for Q3 and Q4. For Q2, it was $1.3 million, and that's because we acquired them at the end of April at the end of April. So it was 2 months out of the quarter.

Michael Hoffman: Okay. Thanks. And then just a clarification on the amortization number you gave us. How do I apply it in the model?

Okay. Thanks, and then just a clarification on the amortization number you gave us how do I apply it in the model.

Eddie Northen: That's going to be year-over-year increase is what that's going to be. Full 12 months, so divide by 4. Correct. Correct. Okay. All right. Thanks. Yep. I do want to clarify one other thing. Jamie, you had asked a question earlier about the depreciation. I misstated something, so I just want to clarify that. The $1.9 million for the depreciation for Clark is going to be for Q3 and Q4. For Q2, it was $1.3 million, and that's because we acquired them at the end of April at the end of April. So it was 2 months out of the quarter. So I want to make sure that we clarified that.

That's going to be a that's going to be year over year increase is what that's going to be.

Full 12 months, so divide by four.

Correct.

Okay correct okay.

All right. Thanks.

Yeah.

I do want to clarify one other thing Jamie you would ask a question earlier about the depreciation I misstated, something so I just want to clarify that the 1.9 million for the depreciation for Clark is gonna be for Q3 in Q4.

For Q2, it was 1.3 million and that's because we we acquired them at the end of.

April It then at the end of April so to two months out of out of the quarter. So I want to make sure that we clarified that.

Eddie Norton: So I want to make sure that we clarified that. And we do have a follow-up question from Jamie Clement from Buckingham. All right. Eddie, thank you for that. And then just one follow-up question. Just reading a little bit of the news about California and some of the rodenticide situation with the legislation and that kind of thing, is that an opportunity for somebody like you if the industry has to change protocols? That's a really good question. John's probably the closest to that. Yeah. Jamie, that's a great question. I'm not sure anybody knows right now. I was reading an article on that just last night. So was I. Were you? So we're not real sure just yet. We do obviously, if you take away the second-generation rodenticides, the opportunity for the rodent populations to grow pretty dramatically is there. And so that creates opportunity.

[Company Representative] (Rollins, Inc.): And we do have a follow-up question from Jamie Clement from Buckingham.

And we do have a follow up question from Jamie Clement from Buckingham.

Jamie Clement: All right. Eddie, thank you for that. And then just one follow-up question. Just reading a little bit of the news about California and some of the rodenticide situation with the legislation and that kind of thing, is that an opportunity for somebody like you if the industry has to change protocols?

Hi, Eddie Thank you for that and then just one follow up question.

Just reading a little to the news about California, and some of the like rodenticide situation with the legislation and that kind of thing is there like is that right.

Opportunity for somebody like you with the industry has to change protocols.

Eddie Northen: That's a really good question. John's probably the closest to that.

Oh it [laughter] a really good question, that's probably the closest to that yeah.

John Wilson: Yeah. Jamie, that's a great question. I'm not sure anybody knows right now. I was reading an article on that just last night.

Jamie that's a great question I don't I'm not sure anybody knows right now I was reading an article on that just last night I'm sorry.

Jamie Clement: So was I.

John Wilson: Were you? So we're not real sure just yet. We do obviously, if you take away the second-generation rodenticides, the opportunity for the rodent populations to grow pretty dramatically is there. And so that creates opportunity. It's unfortunate, and we're, as an industry, wrestling with that as we speak. But I think there can be opportunity there. It just may not be it just may not be good for the residents of California.

Well, yeah. So you know we're not real sure just yet we do you know there's obviously if you take away the second generation Rodenticides the opportunity for the Rota populations to grow pretty dramatically is there and so that creates opportunity, but it's a it's unfortunate and and and were as an industry wrestling with that.

Eddie Norton: It's unfortunate, and we're, as an industry, wrestling with that as we speak. But I think there can be opportunity there. It just may not be it just may not be good for the residents of California. Yeah. No, I get it. I think it gets down to how much pressure the public is going to put on these regulators because rats are pretty onerous, and it's just their appearance, if nothing else. So it's going to be interesting to see because I think this is the first legitimate shootout that you have between the environmentalists that think they did the right thing. But apparently, by all indications, this has just really backfired on them. I mean, this is unintended consequences. And we certainly have more rodent leads than we had, I mean, if there's a preponderance of the population.

As we speak but I think I think there there can be opportunity. There just may not be you know it just may not be good for the residents of California, Yeah, No I get it.

Jamie Clement: Yeah. No, I get it.

Gary Rollins: I think it gets down to how much pressure the public is going to put on these regulators because rats are pretty onerous, and it's just their appearance, if nothing else. So it's going to be interesting to see because I think this is the first legitimate shootout that you have between the environmentalists that think they did the right thing. But apparently, by all indications, this has just really backfired on them. I mean, this is unintended consequences. And we certainly have more rodent leads than we had, I mean, if there's a preponderance of the population. But it's going to be really interesting to see how this thing shakes out.

I think it gets down to how much pressure in the public.

It's going to put on these regulators because you know.

Rents are pretty onerous.

And she has her parents if nothing else [laughter]. So it's going to be interested to see because I think this is the first a legitimate shoot out that you have between the environmental is it like they they did the right thing, but apparently but all indications. This is just really backfired on I mean this is unintended consequences.

And you know we certainly have more road leads and then we had I mean, it's the preponderance of the population.

Eddie Norton: But it's going to be really interesting to see how this thing shakes out. All right. Jamie, one other thing too. They haven't taken these products away from use in food processing plants. So they're still going to be out there. And then further to that, while you can't buy them off the shelf in a grocery store in California, you can order them on the internet. And depending on the number that you look at, we maybe take care of 20 to 25% of the population. The rest is unvended, and they're going to various internet sources and buying those same products, and they'll still be using them. And probably using them and using them less responsibly than you'd be using them. Exactly right. And that's been our big issue with the regulation, so. Yeah. Okay. I appreciate all that. Yep. Absolutely. Thanks, Jamie.

But it's going to be really interesting to see how this thing shakes out.

Jamie Clement: All right.

John Wilson: Jamie, one other thing too. They haven't taken these products away from use in food processing plants. So they're still going to be out there. And then further to that, while you can't buy them off the shelf in a grocery store in California, you can order them on the internet. And depending on the number that you look at, we maybe take care of 20 to 25% of the population. The rest is unvended, and they're going to various internet sources and buying those same products, and they'll still be using them.

Jamie one other thing too they they haven't taken these products away from use in food processing plants.

Theres still going to be out there and then further to that while you can't buy them off the shelf in a you know in a grocery store in California, you can order them on the internet and and depending on the number that you look at you know, we we may be take care at 20% to 25% of the population. The rest is unvended and they're going you know to various internet sources in buying those same products and they'll still be using them and probably using them less and using them less responsibly than you'd be using them.

Jamie Clement: And probably using them and using them less responsibly than you'd be using them.

John Wilson: Exactly right. And that's been our big issue with the regulation, so. Yeah.

Exactly right and Thats been our big issue with with the regulation so yeah.

Jamie Clement: Okay. I appreciate all that.

Okay I appreciate all that.

Eddie Northen: Yep. Absolutely. Thanks, Jamie. Michael, one other clarification for you, having to do with the amortization, kind of similar back to the question that Tim had, having to do with the depreciation, and I misstated. So the amortization for the quarter was about $2.2 million, but we only had two months of Clark as part of that. So the amortization, as we move forward per month, year-over-year, will be slightly higher than that. So obviously, we'll have what, three months that'll be in there? But I just want to clarify that.

Yes, absolutely thanks, Jamie Michael one one other clarification for you having to do with the amortization kind of similar to back to the question that Tim had having to do with the depreciation and I misstated.

Eddie Norton: Michael, one other clarification for you, having to do with the amortization, kind of similar back to the question that Tim had, having to do with the depreciation, and I misstated. So the amortization for the quarter was about $2.2 million, but we only had two months of Clark as part of that. So the amortization, as we move forward per month, year-over-year, will be slightly higher than that. So obviously, we'll have what, three months that'll be in there? But I just want to clarify that. And it appears there are no further questions at this time. I'd like to turn the conference back over to management for any additional or closing remarks. Well, thank you for joining us today.

So the amortization for the quarter was about 2.2 million, but we only had two months of Clarke as part of that so the amortization as we move forward per month.

Year over year will be slightly higher than that so just because it's so obviously, we'll have went what three might be in there, but I just want to clarify that.

[Company Representative] (Rollins, Inc.): And it appears there are no further questions at this time. I'd like to turn the conference back over to management for any additional or closing remarks.

And it appears there are no further questions at this time I'd like to turn the conference back over to management for any additional or closing remarks.

Gary Rollins: Well, thank you for joining us today. We appreciate your interest in our company, and we look forward to updating you on our progress in these numerous new programs and initiatives that we're taking and also the fact that the season this quarter certainly is starting strong, and we would hope that that will continue throughout the quarter. Thank you.

Well. Thank you for joining us today, we appreciate your interest in our company and we look forward to updating you on our progress in these numerous.

Eddie Norton: We appreciate your interest in our company, and we look forward to updating you on our progress in these numerous new programs and initiatives that we're taking and also the fact that the season this quarter certainly is starting strong, and we would hope that that will continue throughout the quarter. Thank you. Once again, that does conclude today's conference. We thank you all for your participation. You may now disconnect.

New programs and initiatives that we're taking and also the.

The fact that the season this quarter certainly is starting strong and we would hope that that will continue throughout the quarter. Thank you.

[Company Representative] (Rollins, Inc.): Once again, that does conclude today's conference. We thank you all for your participation. You may now disconnect.

Once again that does conclude today's conference. We thank you all for your participation you may now disconnect.

Q2 2019 Earnings Call

Request a DemoDemo

ROL

Rollins

Earnings