Welcome to the Rollin's Incorporated Fourth Quarter Earnings Conference Call. [Operator Instructions]. I’d now like to introduce to your host for today's call Ms. 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 212-827-3746 and we will send you a release and make sure that 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 8203851. 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 for our fourth quarter and year-end 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 on 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 indicating 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’re very pleased to have achieved record revenues and profit for both our fourth quarter and the full year 2014. This marks our 17th consecutive year of increasing revenues and operating profit. For the quarter revenue grew 5.9% to approximately 344 million compared to almost 325 million in the last year's fourth quarter. Net income increased 7% to approximately 30 million with EPS of $0.21 per diluted share compared to 28 million or $0.19 per diluted share for the fourth quarter of 2013. All of our business lines experienced good growth during the quarter with residential pest control up 5.5%, commercial pest control grew 6.5% and termite grew 7.4%. We’re also pleased to have achieved margin improvement across our U.S. family of brands which include Orkin, HomeTeam, Western Pest Control, IFC, Trutech, Waltham and Crane. Revenues for the full year rose 5.5% over 1.4 billion compared to revenues of approximately 1.3 billion for 2013 and income grew at 11.9% to a 136.7 million compared to net income of a 123.3 million for the same period last year. Our bed bug business ended the year at a record high having grown 18% to nearly 64 million for the full year. Even as national bed bug media attention has lessen this pest continues to be a growing threat wherever people congregate, theaters, hotels, airplanes, schools, hospitals, retirements, apartment complexes, residents and so on. Bed bugs are quite [inaudible]. We believe that this ancillary service will continue to contribute to our growth for some time. We also increased demand for our mosquito service which continues to be an important contributor to our ancillary service segment. As we have discussed in the past, ancillary business is very important to us as it provides us the opportunity to introduce our other residential…

Thank you, Gary. Good day mates and thank you all for joining us on the call. I'm still reminded of your 2014 Australian acquisition that we’re most proud of. One never gets tired of putting another record year in the books and it now makes it to 35th consecutive quarter of improved earnings results. I don’t think Oscar Wilde was thinking of us when he said, consistency is the hallmark of the unimaginative. It's more like what Roger Staubach said, in any team sport the best teams have consistency and chemistry. It's through the combined efforts of all our team members that have pulled together, working together that has allowed us to consistently perform, growing our business and improving profitability. Let's talk about the quarter's performance. Today we reported revenues of 344 million representing 5.9% revenue growth, income before income taxes rose 13% but due to a less favorable income tax rate in 2014 net income increased 7% to 29.9 million or $0.21 per diluted share compared to 28 million or $0.19 per diluted share for the same period in 2013. If Congress ever passes corporate tax reform reducing the effective tax rate by closing loop-holes there will be winners and losers, Rollins will be on the winning side of that ledger, there being very few tax breaks that we get to take advantage of. One can only dream. Year-to-date revenues 1.412 billion, a 5.5% increase. Net income for the full year has increased 11.6% another year of growing of net income at 10% or better to a 137.7 million or $0.94 per diluted share with EBITDA coming in at 263 million. I'm sure many of you saw the headlines, 2014 breaks heat record challenging global warming skeptics. I read that and my heart sank. I always thought global warming…

Thank you, Harry. I will now open up our call to your questions.

[Operator Instructions]. And we will take our first question from Joe Box with KeyBanc Capital Markets.

I know just gaining [ph] at one of the service suite roll-out but is there anything that you guys can share with us kind of early on in terms of productivity gains or maybe even what some of your branches are saying about what they like most about the system, or what they like least about the system?

In terms of what they like I think most about the system and we get great reviews and people sending, when am I going to get it? Is that the technicians have iPhones as supposed to heavy bulky handheld computers with a secondary phone and what not. So the iPhone has been a huge hit, I would rather carry an iPhone, I don’t know what was it 3-4 pound handheld. So, that clearly for the technicians -- lately [ph] it's a big win. You know the administrative people in the office. I'm surprised that they have seem to miss or don’t miss those green streams, you know the Cayman two tone green and they seem to be adapting real well to the multi-color window based screens that we’re now dealing with.

They also like the flexibility, it's lot easier to move a customer to change their service time which is necessary because the customers are not always there on their pre-determined service stage, so they can move around and it doesn’t take a lot of effort to do that. I think the thing is just a lot quicker, they don’t have to wait so long for the screen changes. We have really gotten grades from the very beginning even when -- there were many features that wouldn’t work exactly well. So the field has been very positive as far as this conversion is concerned. Productivity wise it's just too soon to tell, as Harry said we have got some branches that have improved immediately and I think those have the later branches. We learned something through these conversions, the best way to do it, the best way to do the training, the best way to do the pre-preparation. But we’re optimistic about improving the number of accounts that we can service each day.

Though I do want to point out while we have seen productivity gains in some of the branches they are modest coming out of the box and there is a lot of best practices and we have talked about having, besides having an implementation team whether we don’t follow and we don’t know what's the best timeframe but to have productivity teams follow up and come back and share best practice and what not. We’re in the real early -- you know one thing we see, we see productivity gains with the technicians, administrative office, we’re seeing higher overtime in the first month or two. We’re seeing some drop-off in AR Collection so we’re seeing some degradation in the AR region.

And that’s the reason frankly because we’re working on the conversion. So there are time, application changes and one of the things that we’re also looking at is we have a special collection team that supports that branch for the first two days -- excuse me two months. So we don’t have that kind of deterioration.

I think the biggest thing we’re surprised about is going into this we’re expecting to see some degradation for 2-3 months before a branch snap back and then started seeing gains and we are just not seeing the losses over the -- the problem is coming out of the gate. My biggest concern continues to do it, as I think I’ve listed, talked about on the call, as you add more and more branches to the system what's that do, have we figured out how to keep the response time timely. Have we figured it out all the little wrinkles that we will see going to different parts of the country, but so far so good job.

Harry, earlier you talked about $12 million spend on the roll-out in '15 which I think was an incremental 6 million year-over-year. Should we think about that as being a level load at 3 million per quarter or is there going to be a unique cadence with that spend?

No I think at this point is level, because we’re limited by the number of trainers we have as to how many branches we can do in a given month and quarter. So, we have loaded and trained and brought people to the level where we think we’re going to be at a level throughout the year, I don’t think, unless we find some metric into the third quarter where you know this is going so smooth and if we double the implementers we can double the number of branches being implemented and speed up the getting across all of them. But right now the plan is to go at a pretty steady and it's probably going to average 10 plus branches a month, some months more. We have identified some months to have a break in the schedule to catch our breath and if we have to make some adjustments, there are some changes, you know it's built into the schedule.

And we will take our next question from Dan Dolev with Jefferies.

So question on the residential business, your compares were somewhat easier in the fourth quarter for the residential, I think about 150 basis points and yet if my numbers are correct, the acceleration ex-M&A is only about 10 basis points. Now I think you mentioned you were in that 100%, was that -- can you be a little bit more specific on what you think happened and is there any reason to believe that the implementation of the CRM system had anything to do with that at least on a short term basis. Thank you.

No the CRM, we don’t see it -- that’s a good thing we go back and look at see if our starts I don’t think -- I think I'm missed tracking that numbers, starts in the branches undergoing implementation whether we -- but there is just not enough of them to that should overall impact that. I mean the fourth quarter is always a tough quarter to predict. So October was a great month, and then leads dropped off in November and it's okay we need to hunt it down and turn around and December picked up. So it's certainly gets real variable, January looks like it was doing real well and then the Mid-West in New England area got hit with the little snow which I'm sure slowest down here in January. Of course a year ago, Gary and I were both sitting at home today doing this conference call, we got snowed out here in Atlanta. So there is really nothing I can really specifically point at. I think overall we’re happy with seeing the leads through the first six months of the year, we were seeing decreases, picked up in the third quarter and it continued growing here in the fourth quarter. So, you need the leads to grow the business and overall we feel good about it.

And then two more questions, one on HomeTeam size, see this correctly, there has been an acceleration in the installs in Q4. Can you maybe--

Yes, I think they were up 5% in Q4 where they have been up 4% in Q3. So homebuilders, the pace drops down considerably in the Q4, and they tend not to start too many homes late in the year and carry inventory across. The sentiments are strong, we are modeling that, we think and our markets will see another possibly 4%, 5%, increase installs next year over this year.

We have very good profit improvement at HomeTeam as a result of a reorganization that we initiated mid-year. So we will get some of that this first half but I think HomeTeam had a good year.

And last question if I may ask, what is the rationale for this stock split? Why now?

Sure. Rollins has had a long history of stock split and I think it's really driven by liquidity, having more shares available to trade in the market. Every time we split the shares we see the volume trade and make it easier for people to get in or get out of the market, we’re feeling good about our business and like I said this is I think the fourth split in 15 years.

It seems to be working.

Yes.

[Operator Instructions]. And we do have a follow-up from Joe Box with KeyBanc Capital Markets.

Just one follow-up for you Gary, in the release that came out this morning, you alluded to some strategic initiatives that you think could help with 2015 numbers. I'm just curious if there is anything that’s new or different that maybe you could share with us.

I don’t think that there is anything new so much as we really kind of learned a lot with our home suite and business suite last year and our EDS, our sales management system and we have kind of worked out some of the I guess bumps in a road that we had there. So we really are optimistic that we’re going to get a lot bigger lift and then from a marketing point of view, we have got things that we really can't talk about but we plan to make some changes there. The analytics team I guess is relatively new for us. I think that was mid-year and they have come up with some very interesting plans and programs that we intend to test. So some of our stuff is kind of secret that we can't talk about it at this particular juncture but as always I think that’s one of the traits of the company. I think that we have, every year we have programs that we feel will be very important to help us maintain our growth and our profitability.

And ladies and gentlemen with no further questions in queue I would like to turn the conference back over to management for any closing remarks.

Well this has been an exciting year for our company. We benefited from a great deal of enthusiasm and energy. We have maintained that enthusiasm going into this New Year. We have great teams across all areas of our business who are focused on our goal to always get better and be better and I appreciate you joining us today. We look forward to visiting with you again in 2015. Thank you.

And ladies and gentlemen we do appreciate your participation in today's conference. [Operator Instructions]. Once again we do appreciate your participation. Have a great rest of your day. You may now disconnect.