Republic Services reports revenue growth in 2015, Q1 results

By Katie Fletcher | April 24, 2015

On April 23, Republic Services Inc. released financial results for the first quarter of 2015, reporting earnings of 49 cents per share, and revenue growth of 4.4 percent to $2.169 billion in revenue, which included average yield of 2.1 percent.

In addition to the increases in average yield, the growth in revenue was made up of increases in volume of 1.9 percent—with positive contribution from all of the collection and disposal lines of business—and acquisitions, net of divestitures of 2.1 percent, partially offset by decreases in fuel recovery fees of 0.7 percent and recycled commodities of 1 percent.

According to Chuck Serianni, chief financial officer of the company, average yields in the collection business were 2.5 percent, which includes 4.1 percent yield in the industrial business, 3.2 percent yield in the commercial business and 70 basis points in the residential business. “Average yield in the post-collection business was 1 percent, which includes landfill municipal solid waste (MSW) of 2 percent,” Serianni said.

On the earnings call, Serianni also said the post-collection business was up 3.9 percent, which is comprised of 4.2 percent in landfill growth and transfer volume growth of 3.3 percent. “Within landfill, MSW was up 5 percent, construction and demolition (C&D) increased 10 percent and special waste grew 3 percent,” he said.

Earnings before interest, taxes, depreciation, depletion, amortization and accretion (EBITDA) during the first quarter increased approximately 9 percent to $625.9 million, or 28.9 percent of revenue, compared to adjusted EBITDA of $574.8 million, or 27.7 percent of revenue, for the first quarter of 2014.

At 49 cents per diluted share, Republic Services reported net income of $172.4 million for the three months ended March 31. Net income of $132.5 million, or 37 cents per diluted share, was reported for the comparable period in 2014.

The company returned $194 million in total cash to shareholders during the first quarter, including 2.3 million repurchased shares for $95 million. Don Slager, chief executive officer of Republic, said the company has $265 million remaining on the existing share repurchased authorization, which they intend to complete in 2015. “We continue to make progress on our multi-year initiatives that enable us to execute our strategy,” he said.

Slager also said that at the end of the quarter 15 percent of Republic Services’ fleet was operating on natural gas, 69 percent of the residential fleet was automated and 64 percent was certified under the company’s One Fleet maintenance program. “Our first quarter results, put us right where we thought we would be, I am proud of how the Republic team continued to execute our strategy and our strong performance reflects their hard work,” Slager said.

Republic also announced its board of directors declared a regular quarterly dividend of 28 cents per share for shareholders of record on July 1—the dividend will be paid on July 15.

These financial results follow news that Republic Services is opening a new landfill-gas-to-energy (LFGTE) project at the Upstate Regional Landfill in Union County, South Carolina. Two reciprocating combustion engines are being installed for the project to generate 3,200 kW of energy. This project joins 73 other LFGTE projects Republic Services and its subsidiaries operate across the U.S.