01—Abstract
Summary
Summary of the 10-Q filed October 29, 2021. Cited figures are marked; the original filing is the authoritative source.
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 billiona.
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 millionb, 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.
02—Key points
Key Highlights
- Revenue increased 10.0% year-over-year to $8.34 billion for the nine months ended September 30, 2021.
- Net income attributable to Republic Services, Inc. rose by 33.6% to $977.3 million.
- Diluted earnings per share grew to $3.06 from $2.29 in the prior year's comparable period.
- Operating income increased by 23.4% to $1.57 billion for the nine months ended September 30, 2021.
- The company executed significant share repurchases totaling $179.0 million for the nine months ended September 30, 2021.
- Republic Services provided an updated full-year 2021 adjusted earnings per share guidance of $4.10 to $4.13.
- Acquisitions, net of divestitures, contributed 2.1% to revenue growth, reflecting ongoing strategic expansion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2021, Republic Services, Inc. kept $0.12.
- Revenue$2.93B100.0%
- Cost of revenue−$1.74B59.4%
- Gross profit$1.19B40.6%
- Operating costs−$625.7M21.3%
- Operating income$564.2M19.2%
- Interest, other & tax−$213.4M7.3%
- Net income$350.8M12.0%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2021filed October 29, 2021Financial Statements
Q3 FY2021 against Q3 FY2020
| Line item | Q3 FY2021Q3 FY2020 | Change |
|---|---|---|
| Revenue | $2.93B$2.57B | +14.1% |
| Cost of Revenue | $1.74B$1.54B | +13.6% |
| Gross Profit | $1.19B$1.04B | +14.8% |
| SG&A Expenses | $299.00M$256.10M | +16.8% |
| Operating Income | $564.20M$447.90M | +26.0% |
| Interest Expense | $78.10M$88.90M | −12.1% |
| Net Income | $350.80M$260.20M | +34.8% |
| EPS (Basic) | $1.10$0.81 | +35.8% |
| EPS (Diluted) | $1.10$0.81 | +35.8% |
| Shares Outstanding (Basic) | 318.64M319.20M | −0.2% |
| Shares Outstanding (Diluted) | 319.37M319.73M | −0.1% |
05—Questions
Frequently Asked Questions
What were the main drivers of revenue growth in the first nine months of 2021?
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.
How has the company managed its costs and operational expenses?
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.
What is the company's approach to returning capital to shareholders?
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.
How is the company positioned regarding debt and liquidity?
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.
06—Continue