10-QPeriod: Q3 FY2021

REPUBLIC SERVICES, INC. Quarterly Report for Q3 Ended Sep 30, 2021

Filed October 29, 2021For Securities:RSG

Summary

Republic Services, Inc. (RSG) reported strong financial performance for the nine months ended September 30, 2021, with total revenue increasing by 10.0% year-over-year to $8.34 billion. This growth was driven by a combination of increased volumes, average yield improvements, and strategic acquisitions, demonstrating the company's ability to grow and integrate new businesses. Net income attributable to Republic Services, Inc. saw a significant increase of 33.6% to $977.3 million, translating to diluted earnings per share of $3.06, up from $2.29 in the prior year. The company also demonstrated robust operational efficiency, with operating income growing by 23.4% to $1.57 billion for the nine-month period. This highlights effective cost management and the benefits of economies of scale within its integrated environmental services model. Republic Services continued to return value to shareholders through share repurchases and dividends, underscoring a commitment to capital discipline and shareholder returns. The company also provided an updated full-year 2021 adjusted earnings per share guidance, indicating confidence in continued positive performance.

Financial Highlights

53 data points
Beta

Revenue

$2.93B

40.6% Gross Margin

Net Income

$350.80M

12.0% Net Margin

EPS (Diluted)

$1.10

Total Assets

$24.43B

Cash & Equivalents

$40.10M

Free Cash Flow

$359.40M

Financial Statements
Beta
Revenue$2.93B
Cost of Revenue$1.74B
Gross Profit$1.19B
SG&A Expenses$299.00M
Operating Income$564.20M
Interest Expense$78.10M
Net Income$350.80M
EPS (Basic)$1.10
EPS (Diluted)$1.10
Shares Outstanding (Basic)318.64M
Shares Outstanding (Diluted)319.37M

Key Highlights

  • 1Revenue increased 10.0% year-over-year to $8.34 billion for the nine months ended September 30, 2021.
  • 2Net income attributable to Republic Services, Inc. rose by 33.6% to $977.3 million.
  • 3Diluted earnings per share grew to $3.06 from $2.29 in the prior year's comparable period.
  • 4Operating income increased by 23.4% to $1.57 billion for the nine months ended September 30, 2021.
  • 5The company executed significant share repurchases totaling $179.0 million for the nine months ended September 30, 2021.
  • 6Republic Services provided an updated full-year 2021 adjusted earnings per share guidance of $4.10 to $4.13.
  • 7Acquisitions, net of divestitures, contributed 2.1% to revenue growth, reflecting ongoing strategic expansion.

Frequently Asked Questions

Revenue growth was driven by a 3.8% increase in volume, a 2.7% increase in average yield, contributions from acquisitions (net of divestitures) accounting for 2.1%, and a 1.2% increase from recycling processing and commodity sales. Fuel recovery fees also contributed positively.

Republic Services has managed its costs effectively, leading to a strong operating income growth of 23.4%. While labor costs and transfer/disposal costs increased due to higher volumes and economic recovery, the company focused on managing these efficiently. Fuel costs increased, but were partially offset by fuel recovery fees. Overall, the company's operating margin improved to 18.8% from 16.8% in the prior year's comparable period.

Republic Services actively returns capital to shareholders through share repurchases and dividends. For the nine months ended September 30, 2021, the company repurchased $179.0 million of its stock under a $2.0 billion authorization and declared cash dividends totaling $417.1 million. The company's updated full-year guidance suggests continued confidence in its ability to generate profits and sustain these returns.

The company maintains a solid financial position with total debt of $9.3 billion as of September 30, 2021, and a total debt to EBITDA ratio of 2.84, well within its covenant limits. Significant availability under its $3.0 billion unsecured revolving credit facility provides ample liquidity for working capital, capital expenditures, and acquisitions.