On
Results of Operations:
THREE MONTHS ENDED
COVID-19 Pandemic Impact
Going into the quarter ended
Customer retention during the pandemic is less predictable, and of greater
immediate concern. Our residential pest control business has remained consistent
with seasonal trends, especially as temperatures rise across the
While we have a substantial amount of intangible assets on our balance sheet, based on our second quarter revenues, we do not anticipate any significant long-term loss in revenues or cash flows that would approach a level for impairment of intangible assets.
All of our critical supply-chain vendors have remained operational, and we have engaged additional new sources to supplement our existing suppliers, especially for critical PPE and other COVID-19 related items. Fleet suppliers and support vendors continue to serve our needs.
Revenue
Revenues for the second quarter ended
The Company has three primary service offerings: commercial pest control,
residential pest control and termite, including ancillary services. During the
second quarter ended
18ROLLINS, INC. AND SUBSIDIARIES
Our commercial customers' operations were most heavily impacted by the various governmental shelter-in-place mandates and their negative effect on small to medium size businesses. As a result, when comparing the second quarter of 2020 to the second quarter of 2019, the Company's commercial pest control revenue decreased 6.0%. However, the Company's believes the launch of its new VitalClean sanitation services helped some of its commercial customers reopen and protect their employees and customers. By contrast, demand for our residential pest control service offerings grew significantly during the second quarter of 2020. For example, mosquito sales grew more than 30% compared to the second quarter of 2019. The Company believes with many people working from or confined to their homes, the awareness of unwanted pests has helped contribute to our growth in residential service revenues. Comparing the second quarter of 2020 to the second quarter of 2019, residential pest control revenue grew 14.8%. Termite and ancillary services revenue grew 7.3%. Foreign operations accounted for approximately 6% and 7% of total revenues during the second quarter of 2020 and 2019, respectively.
Revenues are impacted by the seasonal nature of the Company's pest and termite control services. The increase in pest activity, as well as the metamorphosis of termites in the spring and summer (the occurrence of which is determined by the change in seasons), has historically resulted in an increase in the Company's revenues as evidenced by the following chart:
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