Republic sees volume and price growth in first quarter

Republic Services Inc., Phoenix, has reported net income of $237.7 million, or 72 cents per diluted share, for the three months ended March 31, versus $187.8 million, or 55 cents per diluted share, for the comparable 2017 period. Excluding certain gains and expenses, on an adjusted basis, net income for the three months ended March 31 was $246.3 million, or 74 cents per diluted share, versus $187.3 million, or 55 cents per diluted share, for the comparable 2017 period.

"We are pleased with our strong start to the year,” Donald Slager, president of Republic, says. “Through the execution of our strategy we delivered solid growth in both price and volume, expanded EBITDA [earnings before interest, taxes, depreciation and amortization] margins and produced double-digit growth in earnings and free cash flow per share independent of the benefit from tax reform. Our first quarter results position us well to achieve our full-year goals."

First quarter highlights include:

• Earnings per share (EPS) was 72 cents per share. Adjusted EPS was 74 cents per share, an increase of 35 percent over the prior year.
• Cash provided by operating activities was $581.4 million and adjusted free cash flow was $355.7 million, an increase of approximately 48 percent over the prior year. Adjusted free cash flow per share increased 52 percent over the prior year.
• Total cash returned to shareholders through dividends and share repurchases was $350 million.
• Total revenue increased 5.6 percent over the prior year, excluding the impact of the new revenue standard.
• Revenue growth from average yield was 2.2 percent and volume increased 2 percent.
• Core price increased revenues by 3.8 percent, which consisted of 4.6 percent in the open market and 2.5 percent in the restricted portion of the business.
• Adjusted EBITDA was $699.4 million, an increase of approximately 7 percent over the prior year. Adjusted EBITDA margin was 28.8 percent of revenue, an increase of 140 basis points over the prior year. Excluding the impact of the new revenue standard, adjusted EBITDA margin increased 30 basis points over the prior year.
• Selling, general and administrative expenses as a percentage of revenue decreased by 20 basis points over the prior year, excluding the impact of the new revenue standard.
• The company invested $26 million in tuck-in acquisitions during the first quarter.
• Republic continued to convert consumer price index (CPI)-based contracts to more favorable pricing mechanisms for the annual price adjustment. The company now has approximately $570 million in annual revenue tied to either a waste-related index or a fixed-rate increase of 3 percent or greater.