10-QPeriod: Q3 FY2019

REPUBLIC SERVICES, INC. Quarterly Report for Q3 Ended Sep 30, 2019

Filed October 31, 2019For Securities:RSG

Summary

Republic Services, Inc. (RSG) reported strong financial results for the nine months ended September 30, 2019. Revenue increased by 2.8% to $7.72 billion, driven by a 2.8% increase in average yield and contributions from acquisitions. Net income attributable to Republic Services, Inc. rose by 6.5% to $784.0 million, leading to diluted earnings per share of $2.43, up from $2.23 in the prior year period. The company demonstrated effective cost management, with operating income growing by 6.0% to $1.33 billion. Key operational highlights include a continued focus on integrating acquisitions and managing operational efficiencies. Republic Services maintained a healthy balance sheet, with total assets growing to $22.33 billion and a solid credit rating, indicating financial stability and capacity for future growth initiatives. The company also provided a preliminary financial outlook for 2020, projecting adjusted diluted earnings per share in the range of $3.46 to $3.51.

Financial Highlights

55 data points
Beta

Revenue

$2.65B

38.4% Gross Margin

Net Income

$298.00M

11.3% Net Margin

EPS (Diluted)

$0.93

Total Assets

$22.33B

Cash & Equivalents

$55.60M

Free Cash Flow

$331.70M

Financial Statements
Beta
Revenue$2.65B
Cost of Revenue$1.63B
Gross Profit$1.02B
SG&A Expenses$275.40M
Operating Income$467.80M
Interest Expense$98.00M
Net Income$298.00M
EPS (Basic)$0.93
EPS (Diluted)$0.93
Shares Outstanding (Basic)320.63M
Shares Outstanding (Diluted)321.71M

Key Highlights

  • 1Revenue for the nine months ended September 30, 2019, increased 2.8% year-over-year to $7.72 billion.
  • 2Net income attributable to Republic Services, Inc. increased by 6.5% to $784.0 million for the first nine months of 2019.
  • 3Diluted earnings per share for the nine months ended September 30, 2019, were $2.43, an increase from $2.23 in the prior year.
  • 4Operating income grew by 6.0% to $1.33 billion for the nine months ended September 30, 2019.
  • 5The company's preliminary financial outlook for 2020 projects adjusted diluted earnings per share between $3.46 and $3.51.
  • 6Total assets grew to $22.33 billion as of September 30, 2019, up from $21.62 billion at the end of 2018.
  • 7Republic Services continued its acquisition strategy, contributing 0.7% to revenue growth in the first nine months of 2019.

Frequently Asked Questions

Revenue growth was primarily driven by an increase in average yield of 2.8%, a fuel recovery fee contribution of 0.1%, and acquisitions which contributed 0.7%. These were partially offset by a decrease in volumes and environmental services revenue.

Republic Services demonstrated effective cost management. While cost of operations increased in aggregate dollars due to factors like labor and maintenance, it remained stable as a percentage of revenue (61.6%). Selling, general, and administrative expenses also remained relatively stable at 10.4% of revenue. The company also benefited from a gain on disposition of assets.

Republic Services provided a preliminary financial outlook for 2020, projecting adjusted diluted earnings per share in the range of $3.46 to $3.51. This outlook is based on current projections and early budget indicators.

The company is involved in ongoing legal proceedings and environmental remediation matters. Notably, the Bridgeton Landfill and West Lake Landfill Superfund site in Missouri are significant environmental matters. While the company believes it is adequately reserved, future adjustments to liabilities could occur. Additionally, a recent fire-related event in October 2019 is being assessed for its financial impact.