01—Abstract
Summary
Summary of the 10-Q filed November 1, 2013. Cited figures are marked; the original filing is the authoritative source.
Republic Services, Inc. (RSG) reported its third-quarter results for the period ending September 30, 2013.
The company demonstrated revenue growth, with net revenue increasing by 5.8% year-over-year for the quarter and 3.1% for the first nine months of the year, driven by improvements in average yield, volume, and pricing. Net income attributable to Republic Services, Inc. for the quarter was $171.4 milliona, or $0.47 per diluted share, compared to $152.7 million, or $0.42 per diluted share, in the prior year. The company highlighted significant remediation charges related to the Bridgeton Landfill, which impacted earnings.
However, adjusted earnings per share for the quarter showed a more robust performance. Republic Services also continued its focus on capital allocation, with substantial share repurchases and dividend payments.
Key operational highlights include progress in converting to compressed natural gas (CNG) vehicles and investments in recycling infrastructure. The company's financial position remains solid, with ample availability under its credit facilities.
02—Key points
Key Highlights
- Revenue for the third quarter of 2013 increased by 5.8% to $2,165.4 million, compared to $2,046.9 million in the prior year's third quarter.
- Net income attributable to Republic Services, Inc. for the third quarter was $171.4 million, or $0.47 per diluted share, an increase from $152.7 million, or $0.42 per diluted share, in the same period last year.
- The company incurred significant charges related to the Bridgeton Landfill remediation, impacting reported net income.
- Republic Services continued its share repurchase program, buying back 2.3 million shares for $78.5 million in the third quarter.
- Operational improvements include progress in fleet conversion to compressed natural gas (CNG) and investments in recycling infrastructure.
- The company maintained strong availability under its credit facilities, with $1,543.3 million available as of September 30, 2013.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2013, Republic Services, Inc. kept $0.08.
- Revenue$2.17B100.0%
- Cost of revenue−$1.32B60.8%
- Gross profit$847.8M39.2%
- Operating costs−$495.5M22.9%
- Operating income$352.3M16.3%
- Interest, other & tax−$180.9M8.4%
- Net income$171.4M7.9%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2013filed November 1, 2013Financial Statements
Q3 FY2013 against Q3 FY2012
| Line item | Q3 FY2013Q3 FY2012 | Change |
|---|---|---|
| Revenue | $2.17B$2.05B | +5.8% |
| Cost of Revenue | $1.32B$1.28B | +2.9% |
| Gross Profit | $847.80M$766.40M | +10.6% |
| SG&A Expenses | $209.60M$193.80M | +8.2% |
| Operating Income | $352.30M$317.90M | +10.8% |
| Interest Expense | $90.00M$93.20M | −3.4% |
| Net Income | $171.40M$152.70M | +12.2% |
| EPS (Basic) | $0.47$0.42 | +11.9% |
| EPS (Diluted) | $0.47$0.42 | +11.9% |
| Shares Outstanding (Basic) | 361.67M365.40M | −1.0% |
| Shares Outstanding (Diluted) | 363.00M366.43M | −0.9% |
05—Questions
Frequently Asked Questions
What was the main driver of revenue growth in the third quarter of 2013?
Revenue growth was primarily driven by increases in average yield (pricing), volume across commercial and industrial segments, and favorable fuel recovery fees. Sale of recyclable materials also contributed positively.
How did the Bridgeton Landfill remediation impact the company's financial results?
The Bridgeton Landfill remediation resulted in significant environmental remediation charges, amounting to $108.7 million recorded in June 2013, which negatively impacted reported net income for the period. The company has recorded a remediation liability of $119.4 million for this site.
What is the company's outlook on its share repurchase program?
In October 2013, the board of directors increased the share repurchase authorization by $650 million, bringing the total authorization to $760.6 million through December 31, 2015. This indicates a continued commitment to returning capital to shareholders.
How is the company managing its debt and liquidity?
Republic Services maintained strong liquidity with $97.3 million in cash and cash equivalents and significant availability under its credit facilities ($1,543.3 million as of September 30, 2013). The company's debt-to-EBITDA ratio was within covenant requirements, and it has access to various financing sources for capital expenditures and general corporate purposes.
06—Continue