01—Abstract
Summary
Summary of the 10-K filed February 21, 2008. Cited figures are marked; the original filing is the authoritative source.
Republic Services, Inc. reported solid financial performance for the fiscal year 2007, with revenue increasing by 3.4% to $3.18 billiona and operating income rising by 3.2% to $536.0 million.
This growth was primarily driven by successful pricing strategies across all business lines, which helped offset rising operational costs, including fuel. The company highlighted its focus on enhancing shareholder value through its financial and operating strategies, including reinvestment in its fleet and facilities, internal growth initiatives, strategic acquisitions, share repurchases, and dividend payments. Management expressed confidence in its ability to manage growth and operational efficiencies through its decentralized structure and experienced team.
02—Key points
Key Highlights
- Revenue grew 3.4% to $3.18 billion in 2007, with operating income increasing 3.2% to $536.0 million.
- The company attributes growth to successful pricing strategies and operational efficiencies.
- Republic Services continues to focus on shareholder value through share repurchases and dividends.
- Expansion into high-growth Sunbelt markets is a key part of the internal growth strategy.
- The company experienced significant environmental charges related to its Countywide facility in Ohio, impacting operating margins in the Eastern Region.
- Diluted Earnings Per Share (EPS) for 2007 was $1.51, with management providing 2008 guidance of $1.78 to $1.82 per share.
- Free Cash Flow generation exceeded expectations, reaching $374.9 million in 2007.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2007, Republic Services, Inc. kept $0.09.
- Revenue$3.18B100.0%
- Cost of revenue−$2.00B63.1%
- Gross profit$1.17B36.9%
- Operating costs−$636.3M20.0%
- Operating income$536.0M16.9%
- Interest, other & tax−$245.8M7.7%
- Net income$290.2M9.1%
Where FY2007 revenue went
$3.18B- Cost of revenue: $2.00B, 63% of revenue
- Net income: $290.2M, 9.1% of revenue
- SG&A: $313.7M, 9.9% of revenue
- Other operating costs: $322.6M, 10% of revenue
- Interest, other & tax: $245.8M, 7.7% of revenue
Kept 9.1% as net incomeNet income $290.2M · 9.1%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2007filed February 21, 2008Financial Statements
| Revenue | $3.18B |
| Cost of Revenue | $2.00B |
| Gross Profit | $1.17B |
| SG&A Expenses | $313.70M |
| Operating Income | $536.00M |
| Interest Expense | $94.80M |
| Net Income | $290.20M |
| EPS (Basic) | $1.53 |
| EPS (Diluted) | $1.51 |
| Shares Outstanding (Basic) | 190.10M |
| Shares Outstanding (Diluted) | 192.00M |
05—Questions
Frequently Asked Questions
What was the overall financial performance of Republic Services in 2007?
Republic Services reported a revenue of $3,176.2 million, an increase of 3.4% from 2006. Operating income rose to $536.0 million, a 3.2% increase. Net income was $290.2 million, or $1.51 per diluted share.
What are the primary drivers of Republic Services' growth?
The company's growth is driven by its financial, operating, and growth strategies. Key drivers include implementing price increases across all lines of business to offset rising costs, focusing on internal growth in high-growth markets, pursuing strategic acquisitions, managing operating costs through economies of scale and asset utilization, and maintaining high levels of customer satisfaction.
How is the company managing its environmental liabilities, particularly concerning the Ohio facility?
Republic Services recorded significant pre-tax charges totaling $45.3 million in 2007 related to environmental conditions at its Countywide facility in Ohio. The company is undertaking remedial actions as agreed with the Ohio Environmental Protection Agency and is pursuing financial contributions from third parties. Despite these charges, the company believes it is meeting regulatory requirements and is contesting a recommendation to suspend the facility's operating license.
What is the company's outlook for 2008?
For 2008, Republic Services anticipates generating free cash flow of $340-$350 million, diluted earnings per share of $1.78-$1.82, and operating margins of approximately 19.0%. The company expects internal core revenue growth of 2.0%-3.5%, driven by price increases, while anticipating a slight decline in volume.
06—Continue