10-QPeriod: Q2 FY2019

REPUBLIC SERVICES, INC. Quarterly Report for Q2 Ended Jun 30, 2019

Filed July 26, 2019For Securities:RSG

Summary

Republic Services, Inc. (RSG) reported its second quarter 2019 financial results, demonstrating continued revenue growth and operational execution. For the six months ended June 30, 2019, revenue increased by 2.6% to $5.1 billion compared to the same period in 2018. This growth was driven by a 2.9% increase in average yield, reflecting effective pricing strategies across its service lines, and was further supported by acquisitions contributing 0.5% to revenue. Operating income also saw an increase, rising to $860.2 million for the six-month period, indicating strong operational leverage. Key financial strengths include a solid operating cash flow of $1.14 billion for the first six months of 2019, providing ample resources for capital expenditures, acquisitions, and shareholder returns. The company maintained a healthy debt-to-EBITDA ratio of 2.96, well within its credit facility covenants, highlighting its robust financial position. Management also announced an 8% increase in its quarterly dividend to $0.405 per share, signaling confidence in future performance and a commitment to returning value to shareholders.

Financial Highlights

55 data points
Beta

Revenue

$2.61B

37.9% Gross Margin

Net Income

$250.90M

9.6% Net Margin

EPS (Diluted)

$0.78

Total Assets

$22.00B

Cash & Equivalents

$72.50M

Free Cash Flow

$292.50M

Financial Statements
Beta
Revenue$2.61B
Cost of Revenue$1.62B
Gross Profit$988.30M
SG&A Expenses$264.50M
Operating Income$437.40M
Interest Expense$98.50M
Net Income$250.90M
EPS (Basic)$0.78
EPS (Diluted)$0.78
Shares Outstanding (Basic)321.72M
Shares Outstanding (Diluted)322.76M

Key Highlights

  • 1Revenue for the six months ended June 30, 2019, increased by 2.6% to $5.1 billion, driven by average yield increases and acquisitions.
  • 2Operating income for the six months ended June 30, 2019, increased to $860.2 million, up from $812.4 million in the prior year period.
  • 3The company generated $1.14 billion in cash flow from operations for the first six months of 2019, demonstrating strong cash generation.
  • 4Total debt as a percentage of EBITDA was 2.96 as of June 30, 2019, indicating a healthy leverage position and compliance with debt covenants.
  • 5Republic Services announced an 8% increase in its quarterly dividend to $0.405 per share, payable in October 2019.
  • 6The company's effective tax rate for the period was 24.3%, a slight decrease from the prior year's comparable period.
  • 7Acquisition activity contributed positively to revenue growth, with acquisitions (net of divestitures) increasing revenue by 0.5% for the six-month period.

Frequently Asked Questions

For the six months ended June 30, 2019, Republic Services' revenue increased by 2.6% to $5,075.9 million, up from $4,945.2 million in the same period of 2018. This growth was primarily driven by an increase in average yield (pricing) and contributions from acquisitions.

Republic Services maintains a solid financial position. As of June 30, 2019, the company's total debt to EBITDA ratio was 2.96, which is well within the covenants of its credit facilities (maximum allowed 3.50). The company was also in compliance with its EBITDA to interest ratio covenant (7.43, minimum required 3.00).

Yes, Republic Services announced a significant commitment to shareholders by increasing its quarterly dividend by 8% to $0.405 per share. This dividend was scheduled to be paid on October 15, 2019.

Operating income for the first six months of 2019 increased to $860.2 million from $812.4 million in the prior year. This improvement was supported by revenue growth from higher average yields and acquisitions, along with effective management of operating expenses. Cost of operations as a percentage of revenue decreased slightly.