Summary
Republic Services, Inc. (RSG) filed its 2008 10-K on March 2, 2009, detailing a transformative year primarily driven by its significant merger with Allied Waste Industries, Inc. (Allied) completed on December 5, 2008. This merger created the second-largest domestic non-hazardous solid waste provider. The company reported a substantial increase in revenue due to the acquisition, but also faced challenges including integration costs, a weakening economy impacting volumes, and significant charges related to environmental matters at specific facilities. Despite a 16% revenue increase driven largely by the Allied merger, net income declined significantly in 2008 compared to 2007, impacted by nearly $200 million in asset impairments and restructuring charges, particularly related to the Countywide facility and merger integration. The company emphasized its strategy of driving cost synergies from the merger, expecting $150 million in annual run-rate synergies by the end of 2010, with $100 million targeted for realization in 2009. Management expressed confidence in achieving these synergies despite economic headwinds. The company's financial position was significantly impacted by the increased debt load from the merger, with total debt rising to approximately $7.7 billion.
Financial Highlights
53 data points| Revenue | $3.69B |
| Cost of Revenue | $2.42B |
| Gross Profit | $1.27B |
| SG&A Expenses | $434.70M |
| Operating Income | $283.20M |
| Interest Expense | $131.90M |
| Net Income | $73.80M |
| EPS (Basic) | $0.38 |
| EPS (Diluted) | $0.37 |
| Shares Outstanding (Basic) | 196.70M |
| Shares Outstanding (Diluted) | 198.40M |
Key Highlights
- 1Completed a significant merger with Allied Waste Industries, Inc. on December 5, 2008, becoming the second-largest solid waste company in the U.S.
- 2Reported a 16.0% increase in revenue to $3.7 billion, largely driven by the acquisition of Allied, which contributed $463.7 million.
- 3Net income for 2008 decreased to $73.8 million ($0.37 per diluted share) from $290.2 million ($1.51 per diluted share) in 2007, heavily impacted by merger-related charges.
- 4Incurred significant charges in 2008, including $89.8 million in asset impairments and $82.7 million in restructuring charges, primarily related to the Allied integration and environmental issues at the Countywide facility.
- 5Total debt increased significantly to $7.7 billion as of December 31, 2008, largely due to the debt acquired in the Allied merger.
- 6Anticipates achieving approximately $150 million in annual run-rate synergies from the Allied merger by the end of 2010, with $100 million targeted for 2009.
- 7Experienced a 3.9% decrease in core volumes across all lines of business due to the economic slowdown, partially offset by a 4.0% increase in core pricing.