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Republic Services sees growth in Q2

The company saw a net income of $371.9 million and 21.4 percent revenue growth.

August 5, 2022

Republic Services Inc., Phoenix, has released its financial results for the second quarter of 2022, which ended June 30. The company reports revenue growth and plans to expand with acquisitions in the second half of the year.  

Republic realized net income of $371.9 million, or $1.17 per diluted share, for the second quarter compared with $331.1 million, or $1.03 per diluted share, for Q2 2021. Excluding certain benefits and expenses, on an adjusted basis, net income for the three months was $418.4 million, or $1.32 per diluted share, compared with $349.9 million, or $1.09 per diluted share, for 2021.  

"We are very pleased with our second quarter results, which demonstrate our ability to dynamically adjust the price to offset higher levels of cost inflation and drive margin expansion in the underlying business," Republic President and CEO Jon Vander Ark says.

The company reports total revenue growth of 21.4 percent, which includes 11.1 percent organic growth and 10.3 percent growth from acquisitions. Revenue growth from acquisitions includes US Ecology, which closed May 2. Second-quarter revenue growth from average yield was 5 percent, and volume increased revenue by 2.4 percent.  

Republic's core price for the second quarter increased revenue by 6.2 percent. The core price consisted of 7.8 percent in the open market and 3.5 percent in the restricted portion of the business. Earnings per share, or EPS, were $1.17, and adjusted EPS, a nongenerally accepted accounting principle (GAAP) measure, were $1.32 per share. Adjusted EPS increased 21.1 percent over the prior year.  

Year-to-date cash provided by operating activities was $1.56 million. Adjusted free cash flow, a non-GAAP measure, was $1.152 million, an increase of 14.1 percent compared with the prior year. Second-quarter adjusted earnings before interest, taxation, depreciation and amortization (EBITDA), a non-GAAP measure, was $1 billion, and the adjusted EBITDA margin was 29.6 percent of revenue compared with 30.6 percent in the prior year.  

Year-to-date cash invested in acquisitions was $2.5 billion, $2.2 billion of which related to the acquisition of US Ecology. Vander Ark says the integration of US Ecology is well underway and progressing as planned.  

“We now expect to invest over $600 million in acquisitions apart from US Ecology for the year,” he adds. “Substantially all of these deals are in the recycling and solid waste space.”  

Year-to-date cash returned to shareholders was $494.7 million, which included $203.5 million of share repurchases and $291.2 million of dividends paid.  

The company's average recycled commodity price per ton sold during the second quarter was $218. This is an increase from the first quarter of 2022 of $17 per ton and an increase of $48 per ton compared with the prior year.  

As a result of Republic’s strong performance and outlook for the balance of the year, Vander Ark says the company is raising its full-year financial guidance. 

“We're experiencing higher than expected inflationary pressures that continue to persist,” he says. “That said, we expect to continue to price more than our internal cost inflation, ultimately leading to full-year results that are projected to exceed original expectations.”  

Republic says it expects adjusted EPS in the range of $4.77 to $4.80 and adjusted free cash flow in the range of $1.7 billion to $1.725 billion. This represents an increase of about 4 percent from the midpoint of the prior guidance.  

The company says it also expects the full year 2022 adjusted EBITDA margin to be about 29.3 percent. The change in margin from our initial expectations relates to the impact of US Ecology and fuel.