- First Quarter Total Revenue Growth of 8 Percent
- Reported Earnings Per Share of $1.44 and Adjusted Earnings Per Share of
$1.45
- Expanded First Quarter Net Income Margin 110 Basis Points and
Adjusted EBITDA Margin 120 Basis Points
- Generated Cash Flow from Operations of $812 Million and Adjusted Free Cash Flow of
$535 Million
- Named to Barron's 2024 100 Most Sustainable Companies List
PHOENIX, April 30,
2024 /PRNewswire/ -- Republic Services, Inc. (NYSE:
RSG) today reported net income of $453.8
million, or $1.44 per diluted
share, for the three months ended March 31,
2024, versus $383.9 million,
or $1.21 per diluted share, for the
comparable 2023 period. Excluding certain expenses and other items,
on an adjusted basis, net income for the three months ended
March 31, 2024 was $458.1 million, or $1.45 per diluted share, versus $393.7 million, or $1.24 per diluted share, for the comparable 2023
period.
"We are off to a strong start to the year and well-positioned to
achieve our full-year goals," said Jon Vander Ark, president and
chief executive officer. "Continued pricing in excess of cost
inflation generated double-digit growth in EBITDA and EPS, and
expanded EBITDA margin by more than 100 basis points. Solid
execution by our 42,000 team members and investments in our
differentiating capabilities — Customer Zeal, Digital and
Sustainability — continue to produce positive results, and support
our ability to deliver ongoing profitable growth."
First-Quarter 2024 Highlights:
- Total revenue growth of 7.8 percent includes 4.1 percent
organic growth and 3.7 percent growth from acquisitions.
- Core price on total revenue increased revenue by 7.0 percent.
Core price on related business revenue increased revenue by 8.5
percent, which consisted of 10.2 percent in the open market and 5.7
percent in the restricted portion of the business.
- Revenue growth from average yield on total revenue was 6.0
percent, and volume decreased revenue by 0.9 percent. Revenue
growth from average yield on related business revenue was 7.3
percent, and volume decreased related business revenue by 1.1
percent.
- Net income was $453.8 million, or
a margin of 11.8 percent.
- EPS was $1.44 per share, an
increase of 19.0 percent over the prior year.
- Adjusted EPS, a non-GAAP measure, was $1.45 per share, an increase of 16.9 percent over
the prior year.
- Adjusted EBITDA, a non-GAAP measure, was $1,164.5 million, and adjusted EBITDA margin, a
non-GAAP measure, was 30.2 percent of revenue, an increase of 120
basis points over the prior year.
- Cash invested in acquisitions was $41.0
million.
- Cash returned to shareholders through dividends was
$168.3 million.
- The Company's average recycled commodity price per ton sold at
our recycling centers during the first quarter was $153. This represents an increase of $48 per ton over the prior year.
- The Company completed and commenced operations on one renewable
natural gas project.
- Republic was recognized by several leading organizations during
the quarter, including:
- Barron's 2024 100 Most Sustainable Companies List
- Ethisphere's 2024 World's Most Ethical Companies®
List
- Fortune's 2024 Most Innovative Companies List
Company Declared Quarterly Dividend
Republic previously announced that its Board of Directors
declared a regular quarterly dividend of $0.535 per share for shareholders of record on
July 2, 2024. The dividend will be
paid on July 15, 2024.
Presentation of Certain Performance Metrics
and Non-GAAP Measures
Adjusted diluted earnings per share, adjusted net income -
Republic, EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted
EBITDA by business type, adjusted EBITDA margin by business type
and adjusted free cash flow are described in the Performance
Metrics and Reconciliations of Certain Non-GAAP Measures section of
this document.
About Republic Services
Republic Services, Inc. is a leader in the environmental
services industry. Through its subsidiaries, the Company provides
customers with the most complete set of products and services,
including recycling, solid waste, special waste, hazardous waste
and field services. Republic's industry-leading commitments to
advance circularity and support decarbonization are helping deliver
on its vision to partner with customers to create a more
sustainable world. For more information, please
visit RepublicServices.com.
For more
information, contact:
|
|
Media
Inquiries
|
Investor
Inquiries
|
Roman Blahoski (480)
718-0328
|
Aaron Evans (480)
718-0309
|
media@RepublicServices.com
|
investor@RepublicServices.com
|
SUPPLEMENTAL
UNAUDITED FINANCIAL INFORMATION
|
AND OPERATING
DATA
|
|
|
|
|
REPUBLIC SERVICES,
INC.
|
CONSOLIDATED BALANCE
SHEETS
|
(in millions,
except per share amounts)
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
2024
|
|
2023
|
|
(Unaudited)
|
|
|
ASSETS
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
91.6
|
|
$
140.0
|
Accounts receivable,
less allowance for doubtful accounts and other of $82.6 and $83.2,
respectively
|
1,763.0
|
|
1,768.4
|
Prepaid expenses and
other current assets
|
419.0
|
|
472.6
|
Total current
assets
|
2,273.6
|
|
2,381.0
|
Restricted cash and
marketable securities
|
143.3
|
|
163.6
|
Property and equipment,
net
|
11,310.5
|
|
11,350.9
|
Goodwill
|
15,852.3
|
|
15,834.5
|
Other intangible
assets, net
|
482.6
|
|
496.2
|
Other assets
|
1,319.4
|
|
1,183.9
|
Total
assets
|
$
31,381.7
|
|
$
31,410.1
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
1,179.2
|
|
$
1,411.5
|
Notes payable and
current maturities of long-term debt
|
1,431.9
|
|
932.3
|
Deferred
revenue
|
472.2
|
|
467.3
|
Accrued landfill and
environmental costs, current portion
|
141.2
|
|
141.6
|
Accrued
interest
|
106.2
|
|
104.1
|
Other accrued
liabilities
|
995.2
|
|
1,171.5
|
Total current
liabilities
|
4,325.9
|
|
4,228.3
|
Long-term debt, net of
current maturities
|
11,400.1
|
|
11,887.1
|
Accrued landfill and
environmental costs, net of current portion
|
2,306.5
|
|
2,281.0
|
Deferred income taxes
and other long-term tax liabilities, net
|
1,577.6
|
|
1,526.8
|
Insurance reserves, net
of current portion
|
348.4
|
|
348.8
|
Other long-term
liabilities
|
602.6
|
|
594.6
|
Commitments and
contingencies
|
|
|
|
Stockholders'
equity:
|
|
|
|
Preferred stock, par
value $0.01 per share; 50 shares authorized; none issued
|
—
|
|
—
|
Common stock, par value
$0.01 per share; 750 shares authorized; 321.2 and 320.7 issued
including shares held in treasury, respectively
|
3.2
|
|
3.2
|
Additional paid-in
capital
|
2,916.0
|
|
2,900.8
|
Retained
earnings
|
8,717.9
|
|
8,433.9
|
Treasury stock, at
cost; 6.3 and 6.1 shares, respectively
|
(812.0)
|
|
(783.5)
|
Accumulated other
comprehensive loss, net of tax
|
(5.3)
|
|
(12.1)
|
Total Republic
Services, Inc. stockholders' equity
|
10,819.8
|
|
10,542.3
|
Non-controlling
interests in consolidated subsidiary
|
0.8
|
|
1.2
|
Total stockholders'
equity
|
10,820.6
|
|
10,543.5
|
Total liabilities and
stockholders' equity
|
$
31,381.7
|
|
$
31,410.1
|
REPUBLIC SERVICES,
INC.
|
UNAUDITED
CONSOLIDATED STATEMENTS OF INCOME
|
(in millions,
except per share data)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Revenue
|
$
3,861.7
|
|
$
3,581.1
|
Expenses:
|
|
|
|
Cost of
operations
|
2,283.2
|
|
2,169.5
|
Depreciation,
amortization and depletion
|
399.2
|
|
358.7
|
Accretion
|
26.6
|
|
24.1
|
Selling, general and
administrative
|
414.0
|
|
379.2
|
Restructuring
charges
|
5.9
|
|
5.5
|
Operating
income
|
732.8
|
|
644.1
|
Interest
expense
|
(139.3)
|
|
(126.7)
|
Loss on extinguishment
of debt
|
—
|
|
(0.2)
|
(Loss) income from
unconsolidated equity method investments
|
(8.7)
|
|
1.0
|
Interest
income
|
1.5
|
|
1.4
|
Other income,
net
|
12.6
|
|
2.5
|
Income before income
taxes
|
598.9
|
|
522.1
|
Provision for income
taxes
|
145.2
|
|
138.2
|
Net income
|
453.7
|
|
383.9
|
Net loss attributable
to non-controlling interests in consolidated subsidiary
|
0.1
|
|
—
|
Net income
attributable to Republic Services, Inc.
|
$
453.8
|
|
$
383.9
|
Basic earnings per
share attributable to Republic Services, Inc.
stockholders:
|
|
|
|
Basic earnings per
share
|
$
1.44
|
|
$
1.21
|
Weighted average
common shares outstanding
|
315.3
|
|
316.7
|
Diluted earnings per
share attributable to Republic Services, Inc.
stockholders:
|
|
|
|
Diluted earnings per
share
|
$
1.44
|
|
$
1.21
|
Weighted average
common and common equivalent shares outstanding
|
315.7
|
|
317.1
|
Cash dividends per
common share
|
$
0.535
|
|
$
0.495
|
REPUBLIC SERVICES,
INC.
|
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in
millions)
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Cash provided by
operating activities:
|
|
|
|
Net income
|
$
453.7
|
|
$
383.9
|
Adjustments to
reconcile net income to cash provided by operating
activities:
|
|
|
|
Depreciation,
amortization, depletion and accretion
|
425.8
|
|
382.8
|
Non-cash interest
expense
|
22.0
|
|
24.7
|
Stock-based
compensation
|
11.2
|
|
11.6
|
Deferred tax
provision
|
47.5
|
|
14.5
|
Provision for doubtful
accounts, net of adjustments
|
7.3
|
|
7.8
|
Loss on extinguishment
of debt
|
—
|
|
0.2
|
Gain on disposition of
assets and asset impairments, net
|
(0.1)
|
|
(3.8)
|
(Gain) loss from
unconsolidated equity method investments
|
8.7
|
|
(1.0)
|
Other non-cash
items
|
(0.1)
|
|
(1.6)
|
Change in assets and
liabilities, net of effects from business acquisitions and
divestitures:
|
|
|
|
Accounts
receivable
|
(1.1)
|
|
(3.3)
|
Prepaid expenses and
other assets
|
18.1
|
|
87.2
|
Accounts
payable
|
(1.2)
|
|
(71.1)
|
Capping, closure and
post-closure expenditures
|
(8.9)
|
|
(8.8)
|
Remediation
expenditures
|
(9.8)
|
|
(11.6)
|
Other
liabilities
|
(161.6)
|
|
(126.2)
|
Proceeds for retirement
of certain hedging relationships
|
—
|
|
2.4
|
Cash provided by
operating activities
|
811.5
|
|
687.7
|
Cash used in investing
activities:
|
|
|
|
Purchases of property
and equipment
|
(514.5)
|
|
(378.6)
|
Proceeds from sales of
property and equipment
|
2.4
|
|
6.0
|
Cash used in
acquisitions and investments, net of cash and restricted cash
acquired
|
(166.3)
|
|
(290.9)
|
Cash received from
business divestitures
|
—
|
|
(0.7)
|
Purchases of restricted
marketable securities
|
(12.0)
|
|
(4.5)
|
Sales of restricted
marketable securities
|
11.5
|
|
4.4
|
Other
|
—
|
|
11.0
|
Cash used in investing
activities
|
(678.9)
|
|
(653.3)
|
Cash used in financing
activities:
|
|
|
|
Proceeds from credit
facilities and notes payable, net of fees
|
6,436.8
|
|
6,675.5
|
Proceeds from issuance
of senior notes, net of discount and fees
|
—
|
|
1,183.6
|
Payments of credit
facilities and notes payable
|
(6,440.8)
|
|
(7,729.5)
|
Issuances of common
stock, net
|
(25.3)
|
|
(11.0)
|
Cash dividends
paid
|
(168.3)
|
|
(156.4)
|
Distributions paid to
non-controlling interests in consolidated subsidiary
|
(0.3)
|
|
—
|
Contingent
consideration payments
|
(3.3)
|
|
(4.2)
|
Cash used in financing
activities
|
(201.2)
|
|
(42.0)
|
Effect of foreign
exchange rate changes on cash
|
(0.5)
|
|
—
|
Increase in cash, cash
equivalents, restricted cash and restricted cash
equivalents
|
(69.1)
|
|
(7.6)
|
Cash, cash equivalents,
restricted cash and restricted cash equivalents at beginning of
period
|
227.5
|
|
214.3
|
Cash, cash equivalents,
restricted cash and restricted cash equivalents at end of
period
|
$
158.4
|
|
$
206.7
|
You should read the following information in conjunction with
our audited consolidated financial statements and notes thereto
appearing in our Annual Report on Form 10-K as of and for the year
ended December 31, 2023. All amounts
below are in millions and as a percentage of our revenue, except
per share data.
REVENUE
The following table reflects our total revenue by line of
business for the three months ended March
31, 2024 and 2023:
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Collection:
|
|
|
|
|
|
|
|
Residential
|
$
723.3
|
|
18.7 %
|
|
$
685.1
|
|
19.1 %
|
Small-container
|
1,189.0
|
|
30.8
|
|
1,056.3
|
|
29.5
|
Large-container
|
732.8
|
|
19.0
|
|
701.9
|
|
19.6
|
Other
|
17.7
|
|
0.5
|
|
15.1
|
|
0.4
|
Total
collection
|
2,662.8
|
|
69.0
|
|
2,458.4
|
|
68.6
|
Transfer
|
419.3
|
|
|
|
401.0
|
|
|
Less:
intercompany
|
(236.5)
|
|
|
|
(227.3)
|
|
|
Transfer,
net
|
182.8
|
|
4.7
|
|
173.7
|
|
4.8
|
Landfill
|
704.8
|
|
|
|
688.7
|
|
|
Less:
intercompany
|
(300.4)
|
|
|
|
(296.1)
|
|
|
Landfill,
net
|
404.4
|
|
10.4
|
|
392.6
|
|
11.0
|
Environmental
solutions
|
439.2
|
|
|
|
430.3
|
|
|
Less:
intercompany
|
(15.9)
|
|
|
|
(22.0)
|
|
|
Environmental
solutions, net
|
423.3
|
|
11.0
|
|
408.3
|
|
11.4
|
Other:
|
|
|
|
|
|
|
|
Recycling processing
and commodity sales
|
95.5
|
|
2.5
|
|
70.7
|
|
2.0
|
Other
non-core
|
92.9
|
|
2.4
|
|
77.4
|
|
2.2
|
Total other
|
188.4
|
|
4.9
|
|
148.1
|
|
4.2
|
Total
revenue
|
$ 3,861.7
|
|
100.0 %
|
|
$ 3,581.1
|
|
100.0 %
|
The following table reflects changes in components of our
revenue, as a percentage of total revenue, for the three months
ended March 31, 2024 and 2023:
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Average
yield
|
6.0 %
|
|
6.5 %
|
Fuel recovery
fees
|
(0.4)
|
|
1.5
|
Total price
|
5.6
|
|
8.0
|
Volume
|
(0.9)
|
|
1.6
|
Change in
workdays
|
0.1
|
|
0.4
|
Recycling processing
and commodity sales
|
0.4
|
|
(0.9)
|
Environmental
solutions
|
(1.1)
|
|
0.5
|
Total internal
growth
|
4.1
|
|
9.6
|
Acquisitions /
divestitures, net
|
3.7
|
|
11.0
|
Total
|
7.8 %
|
|
20.6 %
|
|
|
|
|
Core price
|
7.0 %
|
|
8.2 %
|
Average yield is defined as revenue growth from the change in
average price per unit of service, expressed as a percentage. Core
price is defined as price increases to our customers and fees,
excluding fuel recovery fees, net of price decreases to retain
customers. We also measure changes in core price, average yield and
volume as a percentage of related-business revenue, defined as
total revenue excluding recycled commodities, fuel recovery fees
and environmental solutions revenue, to determine the effectiveness
of our pricing and organic growth strategies. The following table
reflects core price, average yield and volume as a percentage of
related-business revenue for the three months ended March 31, 2024 and 2023:
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
|
As a % of Related
Business
|
Core price
|
8.5 %
|
|
9.3 %
|
Average
yield
|
7.3 %
|
|
7.4 %
|
Volume
|
(1.1) %
|
|
1.8 %
|
The following table reflects changes in average yield and
volume, as a percentage of related business revenue by line of
business, for the three months ended March
31, 2024 and 2023:
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
|
Yield
|
|
Volume
|
|
Yield
|
|
Volume
|
Collection:
|
|
|
|
|
|
|
|
Residential
|
6.7 %
|
|
(2.6) %
|
|
4.6 %
|
|
1.4 %
|
Small-container
|
10.7 %
|
|
0.3 %
|
|
10.2 %
|
|
1.6 %
|
Large-container
|
7.0 %
|
|
(4.4) %
|
|
9.4 %
|
|
0.8 %
|
Landfill:
|
|
|
|
|
|
|
|
Municipal solid
waste
|
5.7 %
|
|
1.6 %
|
|
5.6 %
|
|
1.2 %
|
Construction and
demolition waste
|
6.2 %
|
|
(2.9) %
|
|
5.2 %
|
|
0.6 %
|
Special
waste
|
— %
|
|
(2.5) %
|
|
— %
|
|
21.7 %
|
COST OF OPERATIONS
The following table summarizes the major components of our cost
of operations for the three months ended March 31, 2024 and 2023 (in millions of dollars
and as a percentage of revenue):
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Labor and related
benefits
|
$ 789.4
|
|
20.4 %
|
|
$
738.1
|
|
20.6 %
|
Transfer and disposal
costs
|
263.7
|
|
6.8
|
|
249.6
|
|
7.0
|
Maintenance and
repairs
|
356.1
|
|
9.2
|
|
326.6
|
|
9.1
|
Transportation and
subcontract costs
|
279.8
|
|
7.3
|
|
285.2
|
|
8.0
|
Fuel
|
125.6
|
|
3.3
|
|
144.4
|
|
4.0
|
Disposal fees and
taxes
|
84.2
|
|
2.2
|
|
83.7
|
|
2.3
|
Landfill operating
costs
|
90.7
|
|
2.3
|
|
81.6
|
|
2.3
|
Risk
management
|
95.9
|
|
2.5
|
|
93.1
|
|
2.6
|
Other
|
197.8
|
|
5.1
|
|
167.2
|
|
4.7
|
Total cost of
operations
|
$
2,283.2
|
|
59.1 %
|
|
$
2,169.5
|
|
60.6 %
|
These cost categories may change from time to time and may not
be comparable to similarly titled categories used by other
companies. As such, you should take care when comparing our cost of
operations by cost component to that of other companies and of ours
for prior periods.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
The following table summarizes our selling, general and
administrative expenses for the three months ended March 31, 2024 and 2023 (in millions of dollars
and as a percentage of revenue):
|
|
Three Months Ended
March 31,
|
|
|
2024
|
|
2023
|
Salaries
|
|
$
279.6
|
|
7.2 %
|
|
$
252.5
|
|
7.1 %
|
Provision for doubtful
accounts
|
|
7.3
|
|
0.2
|
|
7.8
|
|
0.2
|
Other
|
|
127.1
|
|
3.3
|
|
111.3
|
|
3.1
|
Subtotal
|
|
414.0
|
|
10.7
|
|
371.6
|
|
10.4
|
US Ecology acquisition
integration and deal costs
|
|
—
|
|
—
|
|
7.6
|
|
0.2
|
Total selling, general
and administrative expenses
|
|
$
414.0
|
|
10.7 %
|
|
$
379.2
|
|
10.6 %
|
These cost categories may change from time to time and may not
be comparable to similarly titled categories used by other
companies. As such, you should take care when comparing our
selling, general and administrative expenses by cost component to
those of other companies and of ours for prior periods.
PERFORMANCE METRICS AND RECONCILIATIONS OF CERTAIN NON-GAAP
MEASURES
The following tables calculate EBITDA, EBITDA margin, adjusted
EBITDA, adjusted EBITDA margin, adjusted EBITDA margin by business
type, adjusted pre-tax income, adjusted tax impact, adjusted net
income - Republic, adjusted diluted earnings per share, and
adjusted free cash flow, which are not measures determined in
accordance with U.S. generally accepted accounting principles (U.S.
GAAP), for the three months ended March 31,
2024 and 2023. Our definitions of the foregoing non-GAAP
financial measures may not be comparable to similarly titled
measures presented by other companies.
Also presented below is adjusted EBITDA and adjusted EBITDA
margin by business type for the three months ended March 31, 2024 and 2023.
Adjusted EBITDA and Adjusted EBITDA Margin
The following table calculates adjusted EBITDA and adjusted
EBITDA margin for the three months ended March 31, 2024 and 2023 (in millions of dollars
and as a percentage of revenue):
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Net income attributable
to Republic Services, Inc. and net income margin
|
$ 453.8
|
|
11.8 %
|
|
$ 383.9
|
|
10.7 %
|
Net loss attributable
to noncontrolling interests
|
(0.1)
|
|
|
|
—
|
|
|
Provision for income
taxes
|
145.2
|
|
|
|
138.2
|
|
|
Other income,
net
|
(12.6)
|
|
|
|
(2.5)
|
|
|
Interest
income
|
(1.5)
|
|
|
|
(1.4)
|
|
|
Interest
expense
|
139.3
|
|
|
|
126.7
|
|
|
Depreciation,
amortization and depletion
|
399.2
|
|
|
|
358.7
|
|
|
Accretion
|
26.6
|
|
|
|
24.1
|
|
|
EBITDA and EBITDA
margin
|
$
1,149.9
|
|
29.8 %
|
|
$ 1,027.7
|
|
28.7 %
|
Loss (gain) from
unconsolidated equity method investment
|
8.7
|
|
|
|
(1.0)
|
|
|
Loss on extinguishment
of debt and other related costs
|
—
|
|
|
|
0.2
|
|
|
Restructuring
charges
|
5.9
|
|
|
|
5.5
|
|
|
US Ecology acquisition
integration and deal costs
|
—
|
|
|
|
7.6
|
|
|
Total
adjustments
|
$ 14.6
|
|
|
|
$ 12.3
|
|
|
Adjusted EBITDA and
adjusted EBITDA margin
|
$
1,164.5
|
|
30.2 %
|
|
$ 1,040.0
|
|
29.0 %
|
Adjusted EBITDA and Adjusted EBITDA Margin by Business
Type
The following table summarizes revenue, adjusted EBITDA and
adjusted EBITDA margin by business type for the three months ended
March 31, 2024 and 2023 (in millions
of dollars and adjusted EBITDA margin as a percentage of
revenue):
|
|
Three Months Ended
March 31, 2024
|
|
Three Months Ended
March 31, 2023
|
|
|
Recycling &
Waste
|
|
Environmental
Solutions
|
|
Total
|
|
Recycling &
Waste
|
|
Environmental
Solutions
|
|
Total
|
Revenue
|
|
$ 3,438.4
|
|
$
423.3
|
|
$
3,861.7
|
|
$ 3,172.8
|
|
$
408.3
|
|
$
3,581.1
|
Adjusted
EBITDA(a)
|
|
$ 1,077.8
|
|
$
86.7
|
|
$
1,164.5
|
|
$
954.3
|
|
$
85.7
|
|
$
1,040.0
|
Adjusted EBITDA
Margin
|
|
31.3 %
|
|
20.5 %
|
|
30.2 %
|
|
30.1 %
|
|
21.0 %
|
|
29.0 %
|
|
|
(a)
|
Certain corporate
expenses, including selling, general and administrative expenses,
and National Accounts revenue are allocated to the two business
types.
|
The amounts shown for Recycling & Waste represent the sum of
our Group 1 and Group 2 reportable segments, and Environmental
Solutions represents our Group 3 reportable segment.
Adjusted Earnings Per Share
The following table calculates adjusted pre-tax income, adjusted
tax impact, adjusted net income - Republic, and adjusted diluted
earnings per share for the three months ended March 31, 2024 and 2023:
|
|
Three Months Ended
March 31, 2024
|
|
Three Months Ended
March 31, 2023
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
Net
|
|
Earnings
|
|
|
|
|
|
Net
|
|
Earnings
|
|
|
Pre-tax
|
|
Tax
|
|
Income -
|
|
per
|
|
Pre-tax
|
|
Tax
|
|
Income -
|
|
per
|
|
|
Income
|
|
Impact(1)
|
|
Republic
|
|
Share
|
|
Income
|
|
Impact(1)
|
|
Republic
|
|
Share
|
As reported
|
|
$
598.9
|
|
145.1
|
|
$
453.8
|
|
$ 1.44
|
|
$
522.1
|
|
138.2
|
|
$
383.9
|
|
$ 1.21
|
Loss on extinguishment
of debt and other related costs (2)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
0.2
|
|
—
|
|
0.2
|
|
—
|
Restructuring
charges
|
|
5.9
|
|
1.6
|
|
4.3
|
|
0.01
|
|
5.5
|
|
1.5
|
|
4.0
|
|
0.01
|
US Ecology acquisition
integration and deal costs
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7.6
|
|
2.0
|
|
5.6
|
|
0.02
|
Total
adjustments
|
|
5.9
|
|
1.6
|
|
4.3
|
|
0.01
|
|
13.3
|
|
3.5
|
|
9.8
|
|
0.03
|
As adjusted
|
|
$
604.8
|
|
$ 146.7
|
|
$
458.1
|
|
$ 1.45
|
|
$
535.4
|
|
$ 141.7
|
|
$
393.7
|
|
$ 1.24
|
|
|
(1)
|
The income tax effect
related to our adjustments includes both the current and deferred
income tax impact and is individually calculated based on the
statutory rates applicable to each adjustment.
|
(2)
|
The aggregate impact to
adjusted diluted earnings per share totals to less than $0.01 for
the three months ended March 31, 2023.
|
We believe that presenting EBITDA and EBITDA margin is useful to
investors because they provide important information concerning our
operating performance exclusive of certain non-cash and other
costs. EBITDA and EBITDA margin demonstrate our ability to execute
our financial strategy, which includes reinvesting in existing
capital assets to ensure a high level of customer service,
investing in capital assets to facilitate growth in our customer
base and services provided, maintaining our investment grade credit
ratings and minimizing debt, paying cash dividends, repurchasing
our common stock, and maintaining and improving our market position
through business optimization. Although depreciation, depletion,
amortization and accretion are considered operating costs in
accordance with U.S. GAAP, they represent the allocation of
non-cash costs generally associated with long-lived assets acquired
or constructed in prior years.
We believe that presenting adjusted EBITDA and adjusted EBITDA
margin, adjusted EBITDA margin by business type, adjusted pre-tax
income, adjusted tax impact, adjusted net income - Republic, and
adjusted diluted earnings per share provide an understanding of
operational activities before the financial impact of certain
items. We use these measures, and believe investors will find them
helpful, in understanding the ongoing performance of our operations
separate from items that have a disproportionate impact on our
results for a particular period. We have incurred comparable
charges, costs and recoveries in prior periods, and similar types
of adjustments can reasonably be expected to be recorded in future
periods.
Loss on extinguishment of debt and other related costs.
During the three months ended March 31,
2023, we incurred a loss on the early extinguishment of debt
related to the early repayment of a portion of our term loan
facility. We incurred non-cash charges related to the proportional
share of unamortized deferred issuance costs.
Restructuring charges. During the three months ended
March 31, 2024 and 2023, we incurred
$5.9 million and $5.5 million, respectively, of restructuring
charges primarily related to the redesign of our asset management,
and customer and order management software systems.
US Ecology acquisition integration and deal costs. During
the three months ended March 31,
2023, we incurred $7.6 million
of acquisition integration and deal costs in connection with the
acquisition of US Ecology, Inc. (US Ecology). The acquisition
closed on May 2, 2022. The costs are primarily related to the
integration of certain software systems as well as rebranding the
business.
Adjusted Free Cash Flow
The following table calculates our adjusted free cash flow,
which is not a measure determined in accordance with U.S. GAAP, for
the three months ended March 31, 2024
and 2023:
|
|
Three Months Ended
March 31,
|
|
|
2024
|
|
2023
|
Cash provided by
operating activities
|
|
$
811.5
|
|
$
687.7
|
Property and equipment
received
|
|
(283.6)
|
|
(206.8)
|
Proceeds from sales of
property and equipment
|
|
2.4
|
|
6.0
|
Cash paid related to
adjustments to withdrawal liabilities for a multiemployer pension
fund, net of tax
|
|
0.1
|
|
—
|
Restructuring payments,
net of tax
|
|
4.2
|
|
3.7
|
US Ecology acquisition
integration and deal costs, net of tax
|
|
—
|
|
4.9
|
Adjusted free cash
flow
|
|
$
534.6
|
|
$
495.5
|
We believe that presenting adjusted free cash flow provides
useful information regarding our recurring cash provided by
operating activities after certain expenditures or recoveries. It
also demonstrates our ability to execute our financial strategy and
is a key metric we use to determine compensation. The presentation
of adjusted free cash flow has material limitations. Adjusted free
cash flow does not represent our cash flow available for
discretionary payments because it excludes certain payments that
are required or to which we have committed, such as debt service
requirements and dividend payments.
Purchases of property and equipment as reflected on our
consolidated statements of cash flows represent amounts paid during
the period for such expenditures. A reconciliation of property and
equipment expenditures reflected on our consolidated statements of
cash flows to property and equipment received during the period
follows for the three months ended March 31,
2024 and 2023:
|
Three Months Ended
March 31,
|
|
2024
|
2023
|
Purchases of property
and equipment per the unaudited consolidated statements of cash
flows
|
$
514.5
|
$
378.6
|
Adjustments for
property and equipment received in a different period
|
(230.9)
|
(171.8)
|
Property and equipment
received during the period
|
$
283.6
|
$
206.8
|
The adjustments noted above do not affect our net change in
cash, cash equivalents, restricted cash and restricted cash
equivalents as reflected in our consolidated statements of cash
flows.
ACCOUNTS RECEIVABLE
As of March 31, 2024 and
December 31, 2023, accounts
receivable were $1,763.0 million and
$1,768.4 million, net of allowance
for doubtful accounts of $82.6
million and $83.2 million,
respectively, resulting in days sales outstanding of 41.5, or 30.4
days net of deferred revenue, compared to 42.0, or 30.9 days net of
deferred revenue, respectively.
CASH DIVIDENDS
In January 2024, we paid a cash
dividend of $168.3 million to
shareholders of record as of January 3,
2024. As of March 31, 2024, we
recorded a quarterly dividend payable of $168.5 million to shareholders of record at the
close of business on April 2, 2024, which was paid on
April 15, 2024.
SHARE REPURCHASE PROGRAM
During the three months ended March 31,
2024, there were no shares of common stock repurchased. As
of March 31, 2024, the remaining
authorized purchase capacity under our October 2023 repurchase program was $3.0 billion.
INFORMATION REGARDING FORWARD-LOOKING
STATEMENTS
This press release contains certain forward-looking information
about us that is intended to be covered by the safe harbor for
"forward-looking statements" provided by the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are
statements that are not historical facts. Words such as "guidance,"
"expect," "will," "may," "anticipate," "plan," "estimate,"
"project," "intend," "should," "can," "likely," "could," "outlook"
and similar expressions are intended to identify forward-looking
statements. These statements include information about our plans,
strategies and prospects. Forward-looking statements are not
guarantees of performance. These statements are based upon the
current beliefs and expectations of our management and are subject
to risk and uncertainties that could cause actual results to differ
materially from those expressed in, or implied or projected by, the
forward-looking information and statements. Although we believe
that the expectations reflected in the forward-looking statements
are reasonable, we cannot assure you that the expectations will
prove to be correct. Among the factors that could cause actual
results to differ materially from the expectations expressed in the
forward-looking statements are the impacts of the overall global
economy and increasing interest rates, our ability to effectively
integrate and manage companies we acquire, and to realize the
anticipated benefits of any such acquisitions, the amount of the
financial contribution of our sustainability initiatives, acts of
war, riots or terrorism, and the impact of these acts on economic,
financial and social conditions in the
United States, as well as our dependence on large, long-term
collection, transfer and disposal contracts. More information on
factors that could cause actual results or events to differ
materially from those anticipated is included from time to time in
our reports filed with the Securities and Exchange Commission,
including our Annual Report on Form 10-K for the year ended
December 31, 2023, particularly under
Part I, Item 1A – Risk Factors. Additionally, new risk factors
emerge from time to time and it is not possible for us to predict
all such risk factors, or to assess the impact such risk factors
might have on our business. We undertake no obligation to update
publicly any forward-looking statements whether as a result of new
information, future events or otherwise, except as required by
law.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/republic-services-inc-reports-first-quarter-2024-results-302132197.html
SOURCE Republic Services, Inc.