Good morning and welcome to the Rollins Incorporated Second Quarter Earnings Conference Call. Please note, today’s conference is being recorded. At this time, all participants are in a listen-only mode. Later we will be conducting a question-and-answer session and instructions will be given at that time. (Operator Instructions) I would now like to introduce your host for today’s call, Marilynn Meek. Ms.Meek, you may begin.

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 212-837-3746 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 one hour after the call and run for one week. The replay can be accessed by dialing 1-888-203-1112 with the passcode 9319923. 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 is Gary Rollins, Vice Chairman 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 for your questions. Gary, would you like to begin?

Yes. Thank you, Marilynn and good morning. We appreciate all of you joining us on our second quarter 2014 conference call. Harry will read our forward-looking statement and the disclaimer and then we’ll begin.

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 in this 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 December 31, 2013 for more information and the risk factors that could cause actual results to differ.

Thank you, Harry. We had another good quarter with revenue growing 5.3% to $369.4 million, compared to $315.8 million in the second quarter last year. Net income increased 13.5% to $40.9 million with EPS of $0.28 per diluted share, compared to $36 million and $0.25 per diluted share for the second quarter of 2013. Revenues for the first six months rose 5% to $682.8 million, compared to $650.5 million for the same period of last year. Net income grew 12.6% to $66.6 million or $0.46 per diluted share compared to net income of $59.2 million or $0.40 per diluted share for the same period, an increase of 15%. While we would like to hit higher revenue growth for the quarter, we’re pleased with a 45% follow through of profit before taxes from each dollar of revenue increased in the quarter and for the first half of this year. We continue to see strong growth in our commercial pest control business with revenues up 8.1%, residential pest control sequential growth due to softer than expected customer demand came in at 3.9%. Our termite service line was up 4.2% which was helped by our Australian acquisition but there is no slowing down in our bed bug business which grew 18% over last year with revenues of over $14 million for the quarter. We are continuing to see solid growth in residential demand which now represents almost 40% of this business, although commercial continues to grow as well. Year-to-date revenue six months for bed bugs is approximately $26 million. As we continue to invest in initiatives to further grow our business it’s important that we keep our marketing expenditures in balance with seasonal demand. The challenge is to maintain a good lead acquisition cost in the pay search channels while continuing to refine…

Thank you, Gary. Good morning, and thank you for joining us on the call. It’s good to have a normal conference call, no snowstorm, no burns [ph], just good numbers. For those here last quarter and are curious, my daughter delivered a healthy baby girl minutes following last quarter’s call, mother and Willa Rose are doing fine. Second quarter revenues were $369.4 million, representing 5.3% revenue growth. We had growth across all service lines but not the sequential quarter-to-quarter growth that we prefer to see this time of the year, more about that in a minute. However, as Gary pointed out, we did a good job in converting that incremental revenue to profit and cash. Net income increased 13.5% to $40.9 million or $0.28 per diluted share, compared to $36 million or $0.25 per diluted share for the same last year. For the first six months of 2014 revenues rose 5% to $682.7 million, compared to $650.5 million last year. Net income for the first six months of 2014 was $66.6 million or $0.46 per diluted share, compared to the same period last year representing a 15% increase in diluted earnings per share year-to-date. Net cash provided by operating activities is strong this year, increasing 23% to nearly $90 million. We ended the quarter with $101.5 million cash in the bank, and no debt. Fundamentally our business remains solid. For the first time since 2008 we saw some softness in leads, partly because of the late spring and some uncertainty in consumer demand as the retail industry confirms. As we move up to income band, intentionally with our rates, we attract less in the lower income category which you often don’t retain long enough to recover your acquisition and start-up costs. The results of this strategy can be seen in…

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

(Operator Instructions) We’ll take our first question from Jamie Clement with Sidoti. Jamie Clement – Sidoti: Gary, Harry, good morning.

Good morning.

Good morning. Jamie Clement – Sidoti: Gary, I have to ask you a question, this is the highest revenue operating income, net income, and EPS quarter you all have ever reported, I sensed however, a slight bit of disappointment in your voice on a couple of things. And – that’s a little unusual, I’m listening to these calls for a while…

I need to practice more, that’s the case. Jamie Clement – Sidoti: Yes, and I was just wondering if it sounds like the lead generation situation was obviously – mother nature obviously has an impact on that and obviously, the marketing strategy.

Mostly you get up for our season and just kind of – like retail, the Christmas season, and we were disappointed that the demand was not more robust, our branch marketing with suppliers and competitors confirmed that this was a real phenomenon, it wasn’t a result of our advertising not working. And we have a couple of ways, if we check our advertising, one is kind of what I call the generic search on the web, how many people search for roaches or ants or termites, and so we kind of compare this year versus last year. And we have other ways that we look at – testing as far as I have mentioned, our suppliers, and our competitors. So – we’re satisfied that this wasn’t a Rollins thing, this was an industry situation. But as Harry said, we did a great job converting, I think that speaks loudly to the programs that we’ve initiated in the past couple of years and we were fortunate that it all came together and the results from our earnings point of view were very good. Jamie Clement – Sidoti: Yes, absolutely. And that’s why I asked the question because on the surface – and obviously, the months of April and May were not particularly warm by recent historical standards, so I just wanted to make sure I wasn’t missing something here. And obviously, I know you are your own harshest critics.

Yes. I need to work harder because I was – and the Board was pleased. So my bosses are pleased, they are generally Harry and I are pleased but… Jamie Clement – Sidoti: Okay, alright, very good. Thank you very much for your time.

Okay.

Thank you, Jamie.

And we’ll take our next question from Sean Egan with KeyBanc Capital Markets. Sean Egan – KeyBanc Capital Markets: Hey, good morning gentlemen.

Good morning.

Good morning. Sean Egan – KeyBanc Capital Markets: I just had a quick question on your affix to shift your customer mix to a higher income demographic. Can you please help us explain any potential impacts that might have on the P&L, possibly a higher margin through higher average ticket realized, are there any offsets to that such as fewer customers? Can you just kind of walk us through any of those potential impacts?

Yes, certainly. Everyone gets their fair share of some of these leads. We priced – we’re proud of our pricing. And so – if you mismatch premium pricing with customers who aren’t willing to pay the price, we see it often in retention, and the customers might only take two or three services and be gone in three or four months as opposed to a year. Your customer acquisition costs, you’re not going to recover the additional cost and time put in until the initial services. It just makes for a unprofitable customer for you. So what we want to do is, make sure we are appealing to the customers who value the service will stay longer. If you’re successful with the strategy and we certainly saw it in the first quarter because while our leads were down our total sales were up. And what you do is, you spend more time on the phone with customers who will be appealing to you and appreciate your service, so you’ll get higher closure percent and better price realization. In both of those we saw, our leads were down, our total sales were up, so the strategy is working. I think we’ll see in six months to a year we should see better retention because we will be bringing less of the customers who turnover more rapidly through the – into the mix. It’s just – you have a limited amount of marketing dollars and we are through the data analytics that work that we’re doing, we’re getting a lot smarter in spending the money in the right channels, appealing to the right customers. So we’re kind of happy that that has worked out.

Let me just add one thing to that. Most of our pest control technicians, further pay is based on productivity. And when you give them a better mix of customers at higher rates, basically they get a raise and when you have customers churning, it’s very disruptive as far as you’re arriving in a scheduling. So, as you stabilize the customers you’ve got a better priced customer, everybody wins. And I think to Gary’s point about retention, I mean, I think he would expect the retention to improve, and I think that’s basically what we saw this past quarter. Sean Egan – KeyBanc Capital Markets: Great, thank you. And then just one more, is there any update that you can give us on how Australia is going. Is it ramping better than expected in line? Any color on that would be appreciated.

We’re obviously – Australia, it’s a long-term play for us. We’ve done – we’ve closed now on two acquisitions in Australia. The first one out of the cage is performing below our expectations, some of the contracts are in the hopper [ph] haven’t come on board as fast as we had hoped or projected. So, that’s been a little disappointing but we’ve got a great team there, great prospects, and we’re really excited about them long-term. The second acquisition we closed on Statewide has come out of the gates as game busters, I think their revenues are running 13%, 15% of the big ran this time a year ago. So we’re excited with the team we’re building down there, we’re continuing to evaluate other opportunities. And we think Australia be a great market long-term. Sean Egan – KeyBanc Capital Markets: Great, thanks a lot. That’s all for me.

Thank you. (Operator Instructions). We’ll take our next question from Dan Dolev with Jefferies. Dan Dolev – Jefferies: Hey Harry and Gary, good morning.

Good morning, Dan. Dan Dolev – Jefferies: Thanks for taking my question. There has been some changes recently in the market, what are you seeing, let’s say in the last three months in terms of the competitive landscape, especially vis-à-vis your largest competitor, both on the commercial and residential side.

I don’t know if we really are seeing any particular difference in the marketplace. I think in ServiceMaster, Terminix, Rentokil, with their brands, Stereotek [ph], Ecolab; we’ve been competing head-to-head with them for a number of years and really I don’t – our sales team hasn’t reported anything particularly different. I think the one thing we’ve seen maybe a little different – I think that maybe a little more competition on the acquisition side, some of the prices that are being paid for some of the deals, I scratched my head and questioned how they are modeling to get reasonable returns on the investment but I sorted that. Harry, you’ve got any more to talk?

Well, the only thing I would comment is – I think ServiceMaster and Terminix is reorganization certainly. We had to create a little bit of distraction and we didn’t have that but as Harry said we certainly benchmark and we do research but we’re really not seeing any phenomenon out there in the marketplace that somebody has got a silver bullet or has come up with something really unique that’s going to change our market share. Dan Dolev – Jefferies: Got it, that’s very helpful. And then one last question, Harry, you mentioned that you’re looking something like – we’re looking for to the next acquisition soon, is there something eminent or was that more of an aspirational comment?

They are always aspirational until signature is on the paper.

Yes, they have a place for people that speculate or the deal they call it jail. Dan Dolev – Jefferies: Oh, we don’t want to be there. Alright, thank you very much.

Thank you.

(Operator Instructions) At this time there are no further questions. I would like to turn the conference back over to our speakers for any additional or closing remarks.

Well, we’d like to thank you for joining us today. We’re certainly flattered by your interest and support and we look forward to the next quarter. And we’ll be working hard to improve our business. So, thank you again.

And as a reminder, the replay for this call, which will begin two hours after this call concludes will run for one week. The replay can be heard by dialing 1-888-203-1112 with the passcode of 9319923. Again, that phone number is 1-888-203-1112 and the passcode is 9319923. This will conclude today’s conference. We appreciate your participation.