Republic Services increases year-over-year revenue in Q1 2017

Republic Services increases year-over-year revenue in Q1 2017

CEO says results position company well to achieve its full-year goals.

April 27, 2017
Waste Today Staff
Municipal Recycling Municipal Solid Waste
Republic Services, Phoenix, has reported net income of $187.8 million, or 55 cents per diluted share, for the three months ended March 31, 2017, versus $156.7 million, or 45 cents per diluted share, for the comparable 2016 period. Excluding certain gains and expenses, on an adjusted basis, net income for the three months ended March 31, 2017, was $187.3 million, or 55 cents per diluted share, versus $167.3 million, or 48 cents per diluted share, for the comparable 2016 period.

"Our solid pricing and volume growth continue to demonstrate the benefits from our company strategy of profitable growth through differentiation," says Donald Slager, president and CEO. "We generated strong earnings and free cash flow growth in the quarter and returned $218 million to shareholders through dividends and share repurchases. Our first-quarter results position us well to achieve our full-year goals."

First-quarter financial highlights include:

  • Adjusted diluted earnings per share (EPS) was 55 cents per share, an increase of 15 percent over the prior year.
  • Cash provided by operating activities was $444 million and adjusted free cash flow was $240 million.
  • Revenue growth from average yield was 2.3 percent, and volumes increased 1 percent.
  • Core price increased revenues by 4.1 percent, which consisted of 5.5 percent in the open market and 1.9 percent in the restricted portion of our business.
  • Adjusted EBITDA (earnings before taxes, depreciation and amortization) margin was 27.4 percent of revenue.
  • Total cash returned to shareholders through dividends and share repurchases was $218 million.

First-quarter operational highlights include:

  • The company continued to convert contracts from CPI to a more favorable pricing mechanism for the annual price adjustment. The company now has approximately $425 million in annual revenue that is tied to a waste-related index or a fixed-rate increase of 3 percent or greater.
  • Republic advanced its fleet-based initiatives designed to improve productivity and lower costs. Currently:
    • 18 percent of the fleet operates on compressed natural gas, up from 16 percent in the prior year;
    • 75 percent of the residential fleet is automated, up from 73 percent in the prior year; and
    • 96 percent of the fleet is certified under Republic's standardized maintenance program, up from 81 percent in the prior year. The Company expects its entire fleet to be certified under the program by the end of the second quarter of 2017.
    • Republic invested $55 million in tuck-in acquisitions.
    • The company was named to the elite 2017 World's Most Ethical Companies List by the Ethisphere Institute, a global leader in defining and advancing the standards of ethical business practices.

Republic’s board of directors declared a regular quarterly dividend of 32 cents per share for shareholders of record on July 3, 2017. The dividend will be paid July 14, 2017.

The full earnings news release is available here.