Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Rollins Inc. Q2 2010 Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. (Operator instructions) This conference is being recorded today, Wednesday, July 28, 2010. I would now like to turn the conference over to Marilyn Meek. Please go ahead, ma’am.

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. We will send you a release and make sure you’re 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 1800-406-7325 with the pass code of 4329321. Additionally, the call is being webcast over at www.viavid.com and a replay will be available for 90 days. On the line with me today are Gary Rollins, President and Chief Executive Officer; and Harry Cynkus, Senior Vice President, Chief Financial Officer and Treasurer. Management will make some opening remarks and then we’ll open up the line to your questions. Gary, would you like to begin?

Yes, thank you, Marilyn. Good morning and thanks to all of you for joining us on our second quarter 2010 conference call. Harry will read our forward-looking statement and disclaimer and then we’ll begin.

Thanks, Gary. Our earnings release discusses our business outlook and contains certain forward-looking statements. These particular forward-looking statements and all other statements that may be made on this call excluding historical facts are subject to a number of risks and uncertainties and actual results may differ materially from any statements we make today. Please refer to today’s press release and our SEC filings, including the risk factor section on our Form 10-K for the year ended December 31, 2009, for more information on the risk factors that could cause actual results to differ.

Thank you, Harry. We’re very pleased to report that all business lines contributed positively to the second quarter financial results where revenues for the quarter rose 5% and net income was up 8.7%. This marks the 17th consecutive quarter of earnings improvement. We continue to experience solid performance in residential pest control revenue which were up 4.7%, the highest increase that we’ve seen in this service since the fourth quarter of 2006. This is particularly gratifying coming off of last year’s second quarter on residential pest control was down 1.8%. Commercial pest control reported an increase in revenues of 5.4% while our termite business grew 4.2%. Additionally, we’re seeing a strong growth in our ancillary services. Our mosquito season is now in full force and at the end of January, we saw an almost 20% increase in this business over last year. And as discussed last quarter, we continue to see a lot of that bug activity with a lot of press coverage. As net bugs remain a major concern the country, this business is rapidly growing as well. We believe that our positive financial performance is an indication that our strategy to steal shamelessly throughout all of our brands is paying off. The sharing of best practices concerning price increases, new customer pricing and new customer acquisition is benefiting all concerned. In the end, however, it all comes down to the many positive contributions our employees make every day. We take pride in our strong emphasis on recruiting high-quality individuals when needed and more importantly, pride in retaining our base of excellent employees. At the same time, we foster an environment in which all of our employees have the opportunity for career advancement. We were therefore pleased to announce earlier this month that Steve Levitt (ph) rejoined Orkin in…

Thank you, Gary. Good morning, appreciate your all joining us on the call. The second quarter was one of solid growth positioning us well now halfway through the year. Today we reported revenue of $298.8 million representing 5% revenue growth. Net income increased 8.7% to $27.7 million or $0.28 per diluted share compared to $25.5 million or $0.26 per diluted share for the same period in 2009. Last quarter, we reported that the trends we have seen over the last six months as to the strong fundamentals to drive our revenues lead pricing and retention was a trend and not an aberration. I’m happy to report today that this trend is strong and continuing. Clearly, we have positive momentum. Let’s look deeper into the results. This quarter, as we enjoyed our strongest organic growth in some time with revenue growth of 5%. With foreign operations, primarily Canada, accounted for nearly 8% of our revenue. It’s important at times to look at the impact of foreign currency exchange. We continue to benefit from the stronger Canadian dollar though the impact has less meaning. If we look just at our domestic revenue, revenue was up 4.2% versus 3.1% last quarter. Let’s talk about our residential pest control service which represents almost 40% of our business where our momentum continues to build. A lot is written in the press release about weakening consumer confidence and demand. However, you couldn’t tell that looking at our business was really an element of surprise, which really isn’t surprising as we have stated and demonstrated for some time. Pest control is just not a consumer discretionary purchase. As Gary says, rats and roaches don’t read the Wall Street Journal. A greater quarter with strong fundamentals leads pricing retention. Retention is a great parameter into our customers’ frame…

Thank you, Harry. Well, we’re now ready to open the call for any questions that you might have.

Thank you, sir. We will now begin the question and answer session. (Operator Instructions) And our first question comes from the line Clint Fendley with Davenport. Please go ahead. Clinton Fendley – Davenport: I’d like to talk, first about the termite segment. As the revenue growth that you guys have had there is far better than what we saw during, even the 2006, 2007 time period. I know you’ve never been a big participant in the home inspection market. Can you tell us maybe what’s happening to some of the smaller regional competitors that were big players in that market? Just trying to understand the acceleration here that we’ve seen in the growth in that segment.

Well, I think one of reasons is we’re growing and some aren’t is because of our investment and adding additional sales people where we have strong demand. I think we’re doing a better job analyzing where we need – the people engaged, we have worked on our sales training which, I think, has kind of fallen a little bit by the wayside in the past. So we really refreshed our training. We refreshed our training of sales managers and trainers so I think we’re doing a better job closing our leads, handling those leads by ensuring that we have the right staffing, where we have high demand. And we’re just focusing on the business better than we’ve had in the past. Clinton Fendley – Davenport: If we were to see the housing market turn up at some point, I mean, have you learned anything from home team with regard to the pre-treat market? I mean, should we look at the segment differently if we were to begin to see strength within new home construction?

I think that we’ve concluded that Home Team needs to be our new home marketing organization. Orkins kind of years ago have been in the pre-treat business and really did not do it particularly well. It’s a very competitive feel and you really have to spend a lot of time cultivating relationships with builders. And Home Team just does that tremendously. I think one of the great things that Home Team have going for them right now is they’re able to sell some of the better builders that would not buy from them before the cross of the relationship that they had with Syntax (ph). So they’re pretty much encouraged. They feel like they see the housing starts improving. Now much of that is because they’ve got new customers coming on the line like total brothers and full team (ph) but one of the wonderful things of that Home Team is they really don’t spend a lot of time relaying some of the bad statistics that you read about home sales out there. They just try to find more creative ways to get additional sales. Clinton Fendley – Davenport: Right. Thank you, that’s helpful and switching gears, Gary, I wondered if you could update us on the DCG study? I mean, any early conclusions from the work that they are doing?

Oh, the year we’ve retentioned (ph), we continue to work hard on that. I think that we’ve gathered some great statistics about what percentage of customers or new sales we start depending on how quickly we get there and there’s definitely correlation. You know, quite often, our branch is busy and it’s human nature sometimes as well. We don’t really need to do anything tomorrow. We can always do it on Friday but our statistics indicate that that’s just a terrible conclusion and we have done a better job educating our branch users to how important it is to get that account started quickly. Steve led its role frankly and I touched on him a little bit earlier. We took one of our very best people from the field, our operators and this is his area. And he is carefully monitoring how we are closing leads in our call center which is really the beginning of the yield process, how few times we hand off that lead. We also know that every time we had a lead off to another party, that our closure goes down and as I touched on a minute ago, we also know that when you don’t start to sell the same day, or when the customer wants you to, has requested it that you really lose a lot of potential sales. So I think it’s a lot of things that we’ve done in the past. We just kind of got a magnifying glass-typed focus on this particular part of our business and we’re seeing improvements. Clinton Fendley – Davenport: Okay, great. And then the last question. This morning on NPR, there was a report on the bed bug epidemic in New York and I guess the city has gone as far as creating a bed bug dog focus on the problem. Are you seeing any notable pickup in bed bug calls?

Our bed bug business is picking up and we’re pretty pleased we have a kind of an inner company multi-brand task force that’s working on refining our bed bug protocols. I mean, I think we’ve been a little bit uncomfortable that we were doing this a lot of different ways and as I mentioned, before, I think we’ve gotten good about stealing shamelessly from ourselves so we’ve got our team together and we are refining our treating protocol. We are refining our pricing and our guarantees. I mean, this selling is continuing to pick up momentum, depressed loves. The subject I read earlier in New York, that they were contemplating legislation where landlords had to advise new tenants as to whether the property had had bed bug problems in the past which is a wonderful thing for our cost control operator. So we are – we’re very much aware that this really has high potential for us.

You’re welcome.

Thank you. And our next question comes from the line of Jamie Clement of Sidoti & Company. Please go ahead. James Clement – Sidoti & Company: This was actually not going to be first question but since Clint brought it up, I’ll follow up with it directly. Obviously, I’m located in New York and you can actually – there are many charitable organizations, high profile, one of would have heard of, that now will not take matters because of this. And from some of the stuff that I read was that really the treatment protocols, thus far have really not been all that successful, like how or do you feel like there’s – first of all, (a) is that an accurate statement and (b), you alluded to this a little bit but do you feel you have the right remediation techniques?

Well, we think that we’re getting there so to speak. I use the analogy, there’s more than one way to Chattanooga. There’s not a single, at this point, there’s not a single best way to eliminate bed bugs. We think that one of the best ways is with heat. We have been using heat on the West Coast probably for 18 months now with good results. I have some drawbacks. One of the drawbacks is if you overdo it, you can get the elimination of the furniture and some things with the wallpaper and so forth. So it’s not a silver bullet. But we think that it really has a lot potential. You’re right about the mattress steel. I mean, if you’ve got a severe bed bug infestation in a hotel, we would strongly recommend that they change the mattress. It’s just because of eliminating one of the big sources of hard-to-reach (ph) we’re using and don’t laugh but we’re using dogs in Canada. Dogs in the Midwest, dogs in the Northeast – very effective, the same capabilities that they have of locating drugs on airline passengers, et cetera. They have the same ability when trained to locate bed bugs. One of the big challenges with bed bugs and I know this sounds a little bit far-fetched but the industry is even considering into some way that they can use DNA because you can go into a hotel and just do a wonderful job eliminating bed bugs. And within a month, they can have bed bugs again. And then, you got a customer that’s kind of unhappy that says, “Hey, why didn’t you kill all my bed bugs?” And you start debating of how did these new bed bugs or old bed bugs that didn’t die. It’s pretty complicated thing because they’re not going to stop their business. I mean, they’re not going to, when they have inquiries from foreign countries, they’re not going to restrict the company from checking in and quite often, that’s where the bed bugs come from to begin with. James Clement – Sidoti & Company: Sure. And I mean, it sounds to me like we might be actually on the brink of some municipality legislation on all of this stuff when people finally figure out what the story is. I don’t know, that’s my impression and obviously maybe I’ve in ground zero so to speak in the bed bug world.

I don’t think you’re far off because I have read in the paper about Abercrombie closing their store in New York and because of having a bed bug problem. So this is not a causal situation like carpet beetles or something. James Clement – Sidoti & Company: Sure, sure. Can you just give us a little bit, Gary, you all – last year and towards the end of ‘08, you never made excuses on the residential side of the business? You never referenced the related recession. Obviously your residential growth numbers were not what they have been. Now they’re looking great. I know you spent a lot of time, a lot of effort, and a lot of money on refining your lead generation techniques, refine where your marketing dollar is spent, all that sort of thing, do you think that getting a little bit of a lift from the fact that we kind of maybe today isn’t as bad as it was a year ago or do you really think it’s more that a lot of those initiatives that started three, four, five years ago, the investment you made in the call, dependent on the sales or was it there all kind of coming together also or a little more?

Well, I hope this isn’t a conceited answer and I guess the most truthful answer is there’s no way to know precisely. But typically, when you spend a lot of energy and you invest a lot in a particular area and really work hard on it, you can move it and we think that we’ve had a lot to do in moving it with our marketing decisions. We’ve had a lot to do in moving it with our attention to our call centers. I mean, we used our moving closure percentages in our call center on these leads and then you start moving or reducing the cancellations after the sale is made. And I touched on starting the customer quickly. Those are all pressure points that add up and we think we’ve really worked on that. We think, Harry touched on it – don’t ever underestimate mother nature. And mother nature has really been good for us generally. And she does make a difference. I wouldn’t say the autonomy – my sense of all the things that I just mentioned, the economy would have the least to do with the success that we had. James Clement – Sidoti & Company: And I think I’d agree with that. I don’t know what industry data you look at but in terms of, I mean, you mentioned mother nature but mother nature, should that spend (ph) the rest of your industry, too? And I haven’t seen a number of working at residential pest control and there are a bunch of different numbers out there. But I have not seen a growth number getting higher than a number that has a two in front of it, three in your industry and what was it this quarter, $4.7 for you guys?

Right. James Clement – Sidoti & Company: So that’s impressive work.

There are some things that we can do that they can’t do and that’s the benefit of the scale that we have, certainly Terminex (ph) can do the things that we do because of their network but when you look at advertising leverage and call center management, many of these people don’t have a call center.

Thank you. (Operator Instructions).

Okay, well no more questions. In closing, thank you for joining us today. We appreciate your interest. And as I mentioned, we’re looking forward to the balance of the year and we’ll continue to work hard to grow and improve our business during that time. So we look forward to joining you next quarter. Thank you.

Thank you. Ladies and gentlemen, this concludes the Rollins Q2 2010 conference call. If you would like to listen to a replay of today’s conference, as a reminder, the phone numbers are 303-590-3000 or 1800-406-7325 followed by a passcode of 4329321. ACT would like to thank you for your participation. You may now disconnect.

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