News Releases

• Reported Earnings Per Share of $1.52 and Adjusted Earnings Per Share of $1.54
• Expanded Net Income Margin 100 Basis Points and Adjusted EBITDA Margin 70 Basis Points
• Generated Cash Flow from Operations of $2,719 Million and Adjusted Free Cash Flow of $1,827 Million
• Invested More Than $900 Million in Value-Creating Acquisitions
• Board Authorized $3 Billion For Share Repurchases
• Certified as a Great Place to Work^® for the Seventh Consecutive Year

PHOENIX, Oct. 26, 2023 /PRNewswire/ -- Republic Services, Inc. (NYSE: RSG) today reported net income of $480.2 million, or $1.52 per diluted share, for the three months ended September 30, 2023, versus $416.9 million, or $1.32 per diluted share, for the comparable 2022 period. Excluding certain expenses and other items, on an adjusted basis, net income for the three months ended September 30, 2023, was $488.3 million, or $1.54 per diluted share, versus $425.4 million, or $1.34 per diluted share, for the comparable 2022 period.

"During the third quarter, we delivered strong results as we continue to execute on our strategy designed to profitably grow the business," said Jon Vander Ark, president and chief executive officer. "Our revenue growth was broad-based, including healthy pricing, positive organic volume growth and above-average contribution from acquisitions, which resulted in adjusted EBITDA growth of nine percent and 70 basis points of margin expansion. The investments we are making in sustainability growth initiatives remain on track, with expected financial contribution beginning in 2024."

Third-Quarter and Year-to-Date 2023 Highlights:

• Third quarter total revenue growth of 6.3 percent includes 4.6 percent organic growth and 1.7 percent growth from acquisitions.
• Third quarter core price on total revenue increased revenue by 7.0 percent. Core price on related business revenue increased revenue by 8.6 percent, which consisted of 10.4 percent in the open market and 5.7 percent in the restricted portion of the business.
• Third quarter revenue growth from average yield on total revenue was 5.8 percent, and volume increased revenue by 0.1 percent. Revenue growth from average yield on related business revenue was 7.2 percent, and volume increased related business revenue by 0.1 percent.
• Third quarter net income was $480.2 million, or a margin of 12.6 percent.
• Third quarter EPS was $1.52 per share, an increase of 15.2 percent over the prior year.
• Third quarter adjusted EPS, a non-GAAP measure, was $1.54 per share, an increase of 14.9 percent over the prior year.
• Third quarter adjusted EBITDA, a non-GAAP measure, was $1,145.7 million and adjusted EBITDA margin, a non-GAAP measure, was 29.9 percent of revenue.
• Year-to-date cash invested in acquisitions was $947.4 million, all in the recycling and solid waste business.
• Year-to-date cash returned to shareholders was $670.6 million, which included $201.1 million of share repurchases and $469.5 million of dividends paid.
• The Company's average recycled commodity price per ton sold during the third quarter was $112. This represents a decrease of $7 per ton from the second quarter of 2023 and a decrease of $50 per ton over the prior year.

Raised Full-Year 2023 Adjusted EPS Guidance

The Company now expects full-year 2023 diluted earnings per share to be in the range of $5.30 to $5.33 and adjusted diluted earnings per share to be in the range of $5.46 to $5.49. The increase is primarily due to a lower than expected tax rate. The Company reiterates the full-year 2023 guidance ranges for adjusted EBITDA and adjusted free cash flow provided in July. Please refer to the Reconciliation of 2023 Financial Guidance section of this document for detail relating to the computation of non-GAAP measures as well as the Information Regarding Forward-Looking Statements section of this document.

Board Authorized $3 Billion For Share Repurchases

Republic announced today that its Board of Directors approved a $3 billion share repurchase authorization effective starting January 1, 2024, and extending through December 31, 2026. As of September 30, 2023, the remaining purchase capacity under the prior authorization was $1.4 billion, which continues through December 31, 2023.

Company Declared Quarterly Dividend

Republic announced that its Board of Directors declared a regular quarterly dividend of $0.535 per share for shareholders of record on January 2, 2024. The dividend will be paid on January 16, 2024.

Presentation of Certain Performance Metrics and Non-GAAP Measures

Adjusted diluted earnings per share, adjusted net income, 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, container rental and field services. Republic's industry-leading commitments to advance circularity, reduce emissions and decarbonize operations are helping deliver on its vision to partner with customers to create a more sustainable world. For more information, please visit RepublicServices.com. 

 

 

 

 

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, 2022. 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 and nine months ended September 30, 2023 and 2022:

 

The following table reflects changes in components of our revenue, as a percentage of total revenue, for the three and nine months ended September 30, 2023 and 2022:

 

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 and nine months ended September 30, 2023 and 2022:

 

The following table reflects changes in average yield and volume, as a percentage of related business revenue by line of business, for the three and nine months ended September 30, 2023 and 2022:

 

COST OF OPERATIONS

The following table summarizes the major components of our cost of operations for the three and nine months ended September 30, 2023 and 2022 (in millions of dollars and as a percentage of revenue):

 

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 and nine months ended September 30, 2023 and 2022 (in millions of dollars and as a percentage of revenue):

 

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 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 and nine months ended September 30, 2023 and 2022. 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 and nine months ended September 30, 2023 and 2022.

Adjusted EBITDA and Adjusted EBITDA Margin

The following table calculates adjusted EBITDA and adjusted EBITDA margin for the three and nine months ended September 30, 2023 and 2022 (in millions of dollars and as a percentage of revenue):

 

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 and nine months ended September 30, 2023 (in millions of dollars and adjusted EBITDA margin as a percentage of revenue):

 

 

The amounts shown for Recycling & Solid 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 and nine months ended September 30, 2023 and 2022:

 

 

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 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.

Restructuring charges. During the three and nine months ended September 30, 2023 we incurred $6.3 million and $27.3 million, respectively, of restructuring charges primarily related to the redesign of our asset management, and customer and order management software systems as well as costs associated with the early termination of certain leases. During the three and nine months ended September 30, 2022, we incurred $6.8 million and $18.8 million, respectively, of restructuring charges primarily related to the redesign of our general ledger, budgeting, and procurement enterprise resource planning systems, which was completed with the systems being placed into production in the fourth quarter of 2022.

Gain on business divestitures and impairments, net. During the three months ended September 30, 2023, we recorded a net gain on business divestitures and impairments of $1.5 million.

Adjustment to withdrawal liability for multiemployer pension funds. During the nine months ended September 30, 2022, we recorded $2.2 million of withdrawal costs from a multiemployer pension plan.

US Ecology acquisition integration and deal costs. During the three and nine months ended September 30, 2023, we incurred $6.2 million and $24.3 million, respectively, and during the three and nine months ended September 30, 2022, we incurred acquisition integration and deal costs of $8.7 million and $65.4 million, respectively, in connection with the acquisition of US Ecology. The acquisition closed on May 2, 2022. The 2023 costs primarily related to the integration of certain software systems as well as rebranding the business, and the 2022 costs included certain costs to close the acquisition and integrate the US Ecology business.

Loss on extinguishment of debt and other related costs. During the nine months ended September 30, 2023, we incurred a loss on the early extinguishment of debt of $0.2 million 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.

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 nine months ended September 30, 2023 and 2022:

 

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 nine months ended September 30, 2023 and 2022:

 

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 September 30, 2023 and December 31, 2022, accounts receivable were $1,829.7 million and $1,677.2 million, net of allowance for doubtful accounts of $83.5 million and $51.9 million, respectively, resulting in days sales outstanding of 43.5, or 32.0 days net of deferred revenue, compared to 43.3, or 31.8 days net of deferred revenue, respectively.

CASH DIVIDENDS

In July 2023, we paid a cash dividend of $156.6 million to shareholders of record as of July 3, 2023. As of September 30, 2023, we recorded a quarterly dividend payable of $168.5 million to shareholders of record at the close of business on October 2, 2023, which was paid on October 13, 2023.

SHARE REPURCHASE PROGRAM

During the three months ended September 30, 2023, we repurchased 1.4 million shares of our stock for $201.1 million at a weighted average cost per share of $146.69. As of September 30, 2023, the remaining authorized purchase capacity under our October 2020 repurchase program was $1.4 billion.

RECONCILIATION OF 2023 FINANCIAL GUIDANCE

The Company reiterates the full-year 2023 guidance ranges for adjusted EBITDA and adjusted free cash flow provided in July. The Company now expects full-year 2023 diluted earnings per share to be in the range of $5.30 to $5.33 and adjusted diluted earnings per share to be in the range of $5.46 to $5.49.

Adjusted EBITDA

The following is a summary of our anticipated adjusted EBITDA for the year ending December 31, 2023, which is not a measure determined in accordance with U.S. GAAP:

 

We believe that presenting adjusted EBITDA provides an understanding of operational activities before the financial impact of certain items. We use this measure, and believe investors will find it 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.

Adjusted Diluted Earnings per Share

The following is a summary of anticipated adjusted diluted earnings per share for the year ending December 31, 2023, which is not a measure determined in accordance with U.S. GAAP:

 

We believe that presenting adjusted diluted earnings per share provides an understanding of operational activities before the financial impact of certain items. We use this measure, and believe investors will find it 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. Our definition of adjusted diluted earnings per share may not be comparable to similarly titled measures presented by other companies.

Adjusted Free Cash Flow

Our anticipated adjusted free cash flow for the year ending December 31, 2023, which is not a measure determined in accordance with U.S. GAAP, is calculated as follows:

 

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. Our definition of adjusted free cash flow may not be comparable to similarly titled measures presented by other companies.

Our financial guidance is based on current economic conditions.

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, including US Ecology, 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, 2022, 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.

SOURCE Republic Services, Inc.