Summary
Republic Services, Inc.'s (RSG) Q3 2009 filing indicates a significant transformation post-merger with Allied Waste Industries. The company reported a substantial increase in revenue due to the acquisition, reaching $2.07 billion for the quarter and $6.20 billion year-to-date, a stark contrast to the prior year's figures. Despite the top-line growth driven by the merger, underlying "core" revenue (excluding the Allied acquisition impact) showed a decline, reflecting the challenging economic environment with lower volumes across most service lines, partially offset by price increases. The company has been actively managing its debt, issuing new senior notes and using proceeds to retire existing debt, incurring a loss on extinguishment of debt in the process. Republic Services also reported progress on restructuring and integration plans related to the Allied merger, with associated charges expected to be largely complete by year-end. The balance sheet reflects a substantial increase in assets and liabilities due to the merger, including a significant amount of goodwill. Management highlighted efforts to control costs and maintain operational efficiencies amidst the economic downturn. Overall, investors can view this report as a snapshot of a company in transition, integrating a major acquisition while navigating a difficult economic climate. The focus is on managing the combined entity, realizing merger synergies, controlling costs, and maintaining a healthy balance sheet and cash flow.
Financial Highlights
53 data points| Revenue | $2.07B |
| Cost of Revenue | $1.21B |
| Gross Profit | $866.00M |
| SG&A Expenses | $225.40M |
| Operating Income | $386.90M |
| Interest Expense | $144.80M |
| Net Income | $120.50M |
| EPS (Basic) | $0.32 |
| EPS (Diluted) | $0.32 |
| Shares Outstanding (Basic) | 379.73M |
| Shares Outstanding (Diluted) | 381.13M |
Key Highlights
- 1Revenue increased significantly to $2.07 billion for the third quarter and $6.20 billion year-to-date, primarily driven by the acquisition of Allied Waste Industries, Inc.
- 2Despite the reported revenue increase, 'core' revenue (adjusted for the merger) saw a decline of 11.4% year-to-date, attributed to reduced volumes caused by the economic downturn, though price increases partially offset this.
- 3The company incurred a $31.8 million loss on extinguishment of debt related to the early retirement of senior notes using proceeds from a new $650 million senior notes issuance.
- 4Restructuring and integration charges amounted to $55.9 million year-to-date for the Allied merger, with expectations of substantially completing the plan by the fourth quarter of 2009.
- 5Total assets grew to $19.53 billion and total liabilities to $12.00 billion, reflecting the scale of the Allied acquisition.
- 6Diluted earnings per share were $0.32 for the quarter and $1.21 year-to-date, compared to $0.48 and $1.11 for the prior year periods, respectively. Adjusted diluted EPS also shows growth year-over-year.
- 7The company maintained compliance with its debt covenants, with an EBITDA to interest coverage ratio of 3.85:1 and a total debt to EBITDA ratio of 2.91:1 at quarter-end.