Republic announces second quarter results

Republic Services Inc., Phoenix, announced its second quarter results July 26. The company reported a net income of $234.9 million, or $0.71 per diluted share, for the three months ended June 30, versus $202.9 million, or $0.60 per diluted share, for the comparable 2017 period. Excluding certain gains and expenses, on an adjusted basis, net income for the three months ended June 30 was $239.6 million, or $0.73 per diluted share, versus $205.9 million, or $0.61 per diluted share, for the comparable 2017 period.

"We continued our strong start to the year in the second quarter, delivering double-digit growth in earnings and free cash flow per share. We've invested over $120 million in value-enhancing acquisitions and returned approximately $700 million of cash to our shareholders since the beginning of the year," Donald Slager, president and CEO, says. "The strength of the solid waste business and the continued successful execution of our strategy enable us to offset recycling headwinds and reaffirm our full-year EPS and free cash flow guidance."

Second-quarter highlights:

• EPS was $0.71 per share. adjusted EPS, a non-GAAP measure, was $0.73 per share, an increase of 20 percent over the prior year.
• Cash provided by operating activities was $610 million, and adjusted free cash flow, a non-GAAP measure, was $323 million, an increase of approximately 173 percent over the prior year. Adjusted free cash flow per share increased 180 percent over the prior year.
• Total cash returned to shareholders through dividends and share repurchases was $328 million.
• Total revenue increased 3.9 percent over the prior year, excluding the impact of the new revenue standard.
• Revenue growth from average yield was 2.1 percent, and volume increased 0.6 percent.
• Core price increased revenue by 3.6 percent, which consisted of 4.4 percent in the open market and 2.3 percent in the restricted portion of the business.
• Adjusted EBITDA was $690 million and adjusted EBITDA margin was 27.4 percent of revenue. The solid waste business contributed 50 basis points of margin expansion, which was more than offset by headwinds from the recycling business and rising fuel costs.
• SG&A expense as a percentage of revenue decreased by 80 basis points over the prior year, excluding the impact of the new revenue standard.
• The company invested $56 million in tuck-in acquisitions and an additional $42 million in early July, bringing the company's total year-to-date investment to $123 million.
• Republic continued to convert CPI-based contracts to more favorable pricing mechanisms for the annual price adjustment. The company now has approximately $590 million in annual revenue tied to either a waste-related index or a fixed-rate increase of 3 percent or greater.
• The company's credit rating was upgraded by Moody's to Baa2 from Baa3. The upgrade speaks to the stability and predictability of the company's cash flows.