Rollins, Inc.

Good day, ladies and gentlemen. Thank you for standing by. Welcome to Rollins, Inc. Fourth Quarter and Full Year 2023 Earnings Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. If you have a question, please press star followed by the one on your touchtone phone. If you'd like to withdraw your question, please press star followed by the two. And if you are using speaker equipment, please lift the handset before making your selection. This conference is being recorded today, Thursday, February 15th, 2024. I'd now like to hand the call over to Lindsay Burton, Vice President of Investor Relations. Please go ahead.

Thank you, and good morning, everyone. In addition to the earnings release that we issued yesterday, the company has also prepared a supporting slide presentation. The earnings release and presentation are available on our website at www.rollins.com. We have included certain non-GAAP financial measures as part of our discussion this morning. The non-GAAP reconciliations are available in the appendix of today's presentation, as well as in our earnings release. The company's earnings release discusses the business outlook and contains certain forward-looking statements. These particular forward-looking statements and all other statements that have been made on this call, excluding historical facts, are subject to a number of risks and uncertainties, and actual results may differ materially from any statement we make today. Please refer to yesterday's press release and the company's SEC filing, including the risk factor section of our Form 10-K for the year ended December 31st, 2023, which will be filed later today. On the line with me today and speaking are Jerry Galoff, President and Chief Executive Officer, and Ken Krause, Executive Vice President, Chief Financial Officer, and Treasurer. Management will make some opening remarks, and then we'll open the line for your questions. Jerry, would you like to begin?

Thank you, Lindsay. Good morning, everyone. Fiscal 2023 was an outstanding year for Rollins as we achieved the milestone of $3.1 billion in revenue. Demand from our customers remained strong throughout the year across all major service offerings. While full-year revenue increased 14% versus last year, we grew earnings per share by over 18% and adjusted earnings per share by 20%, reflecting consistent execution of our operating strategies and a commitment to continuous improvement in our business. We finished the year with a strong fourth quarter and observed sustained strength in the pest control markets we serve. We also continue to drive share gains in our markets by leveraging a multi-brand, multi-channel approach at scale to differentiate ourselves competitively. Digital marketing, cross-selling, service bundling, and door-to-door sales methods help us reach new customers and enhance engagement with existing customers to support organic growth. We have also strategically allocated resources to the commercial side of our business to capitalize on opportunities within Key Verticals. Most notably, we have grown our sales force and invested in training and tools to enable their success. Our service quality is high and our offerings are customized, which helps new sales professionals gain confidence and become successful quickly. Additionally, we are leveraging the scale of our Orkin brand across North America to effectively serve commercial customers coast to coast in both the US and Canada. While we're still early with respect to our efforts in this area, we see good results as demonstrated by approximately 11% commercial revenue growth for the year. Investments to drive organic growth are complemented by strategic M&A, And in 2023, we welcomed 24 new businesses into our company through acquisition. This includes the addition of Fox Pest Control, which was the second largest acquisition in our company's history. Our synergistic approach to integration has gone well, with the Fox team exceeding the financial targets we outlined last April. Additionally, during the fourth quarter, we divested certain non-core businesses, most notably our lawn care business, which includes insect fertilization and weed control for turfgrass. We recognized a pre-tax gain on sale of that transaction of approximately $15 million. The decision to divest this asset aligns with our strategy to focus on profitable growth in core pest control operations. Operationally, we remain committed to developing exceptional talent and investing in our teams. The hiring environment improved in 2023 as we put a lot of energy into onboarding the right people in both support functions as well as the customer-facing side of our business. Effective sales and service staffing levels help us capitalize on continued demand and deliver solid results for the year. 2023 was also an important year with respect to continuous improvement, and safety was a key area of focus for us. During the year, we implemented an app that monitors driving behaviors once our vehicle is in motion. The app detects unsafe driving maneuvers associated with acceleration, braking, and speed, then converts data collected into a driver safety score. I'm pleased to report that by year end, our average driver safety score for drivers that we monitor increased over 30% from the beginning of the year. But we aren't stopping there. Improving a safety culture isn't something that is done overnight, but we are proud of the progress we have made and have set ambitious goals for ourselves to encourage safe behaviors throughout our organization. We believe these efforts will improve our ability to serve customers, help mitigate potentially negative financial impacts on our business, and most importantly, ensure our people return home safe every day. Our continuous improvement efforts also center on initiatives to modernize our back office and support functions. This is a work in progress, but we took some important steps to upgrade talent and systems during the year. These efforts are aimed at further enabling our growth priorities and increasing productivity as we work to become a better, more effective provider of shared services for our brands. In closing, our performance in 2023 demonstrates the strength of our business model. and the engagement level of our team. Our family of pest control brands are driving profitable growth and we're focused on continuous improvement throughout the business. We remain committed to providing our customers with the best customer experience and investing meaningfully in our team to drive growth, both organically as well as through disciplined acquisitions. We're pleased with where our business stands today and the momentum we carry into 2024. And I want to thank each of our 19,000 plus associates around the world for their efforts and contribution to our success in 2023. I'll now turn the call over to Ken.