Exhibit 99.1
REPUBLIC CONTACTS
Media Inquiries: Will Flower (954) 769-6392
Investor Inquiries: Tod Holmes (954) 769-2387
Ed Lang (954) 769-3591
REPUBLIC SERVICES, INC. REPORTS
THIRD QUARTER EARNINGS OF $0.33 PER SHARE
FORT LAUDERDALE, FLA., OCT. 29, 2001...Republic Services, Inc. (NYSE: RSG) today
reported net income of $56.8 million, or $0.33 per share for the three months
ended September 30, 2001, versus pro forma net income of $59.2 million, or $0.34
per share, for the comparable period last year. Revenue increased 8 percent to
$582.6 million from $539.1 million for the same period in 2000. Internal growth
from core operations was 2.1% consisting of 1.6% price and .5% volume. Operating
income for the three months ended September 30, 2001 was $110.4 million,
compared to pro forma operating income of $114.2 million for the same quarter
last year. EBITDA increased to $167.0 million versus pro forma EBITDA of $164.8
million for the comparable period last year.
For the nine months ended September 30, 2001, net income was $164.5 million, or
$0.96 per share, compared to pro forma net income of $168.6 million, or $0.96
per share, for the comparable period last year. Revenue increased 8 percent to
$1,694.0 million from $1,574.2 million for the same period in 2000. Operating
income for the nine months ended September 30, 2001, was $321.1 million compared
to pro forma operating income of $331.8 million for the same period last year.
EBITDA increased to $481.9 million versus pro forma EBITDA of $477.9 million for
the comparable period last year.
Operating margins continued to be negatively impacted by lower commodity prices,
higher labor costs and the economic slowdown. Waste volumes from the
manufacturing sector weakened in the third quarter. The Company also began to
see a slowdown in commercial construction and special waste activity which has
resulted in volume decreases and price sensitivity for these services.
"Despite the slowing economy, we believe that the Company's disciplined approach
to capital spending will allow us to achieve our free cash flow goal of $145
million in fiscal 2001," said James E. O'Connor, President and Chief Executive
Officer of Republic Services, Inc.
Republic Services, Inc. is a leading provider of solid waste collection,
transfer and disposal services in the United States. The Company's operating
units are focused on providing solid waste services for commercial, industrial,
municipal and residential customers.
Certain statements and information included herein constitute "forward-looking
statements" within the meaning of the Federal Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance, or achievements of the Company to be materially different from any
future results, performance, or achievements expressed or implied, in or by such
forward-looking statements. Such factors include, among other things, whether
the Company's estimates and assumptions concerning its selected balance sheet
accounts, closure and post-closure costs, available airspace, and projected
costs and expenses related to the Company's landfills and property, plant and
equipment, and labor, fuel rates and economic and inflationary trends, turn out
to be correct or appropriate, and various factors that will impact the actual
business and financial performance of the Company such as competition and demand
for services in the solid waste industry; dependence on acquisitions for growth;
the Company's ability to manage growth; compliance with, and future changes in,
environmental regulations; the Company's ability to obtain approval from
regulatory agencies in connection with expansions at the Company's landfills;
the ability to obtain financing on acceptable terms to finance the Company's
operations and growth strategy and for the Company to operate within the
limitations imposed by financing arrangements; the ability of the Company to
repurchase common stock at prices that are accretive to earnings per share; the
Company's dependence on key personnel; general economic and market conditions
including, but not limited to, inflation and changes in commodity pricing, fuel,
labor and other variable costs that are generally not within the control of the
Company; dependence on large, long-term collection contracts; risks associated
with undisclosed liabilities of acquired businesses; risks associated with
pending legal proceedings; and other factors contained in the Company's filings
with the Securities and Exchange Commission.
###
REPUBLIC SERVICES, INC.
PRO FORMA UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- -----------------------------
2001 2000 2001 2000
--------- --------- ----------- -----------
Revenue $ 582.6 $ 539.1 $ 1,694.0 $ 1,574.2
Expenses:
Cost of operations 358.2 324.9 1,042.4 951.6
Depreciation, amortization and depletion 56.6 50.6 160.8 146.1
Selling, general and administrative 57.4 49.4 169.7 144.7
--------- --------- ----------- -----------
Operating income 110.4 114.2 321.1 331.8
Interest expense, net (18.8) (19.0) (57.8) (59.1)
Other income (expense), net 0.1 1.0 2.1 1.5
--------- --------- ----------- -----------
Income before income taxes 91.7 96.2 265.4 274.2
Provision for income taxes 34.9 37.0 100.9 105.6
--------- --------- ----------- -----------
Net income $ 56.8 $ 59.2 $ 164.5 $ 168.6
========= ========= =========== ===========
Basic and diluted earnings per share $ 0.33 $ 0.34 $ 0.96 $ 0.96
========= ========= =========== ===========
Weighted average common shares 171.1 175.7 171.4 175.7
========= ========= =========== ===========
Amortization of goodwill and other intangibles $ 12.3 $ 10.4 $ 34.7 $ 29.8
EBITDA $ 167.0 $ 164.8 $ 481.9 $ 477.9
Note: The Pro Forma Unaudited Condensed Consolidated Statements of Operations
for the three and nine months ended September 30, 2000, exclude a $6.7
million pre-tax charge related primarily to the early closure of a
landfill in south Texas.
REPUBLIC SERVICES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- -----------------------------
2001 2000 2001 2000
--------- --------- ----------- -----------
Revenue $ 582.6 $ 539.1 $ 1,694.0 $ 1,574.2
Expenses:
Cost of operations 358.2 324.9 1,042.4 951.6
Depreciation, amortization and depletion 56.6 50.6 160.8 146.1
Selling, general and administrative 57.4 49.4 169.7 144.7
Other charges -- 6.7 -- 6.7
--------- --------- ----------- -----------
Operating income 110.4 107.5 321.1 325.1
Interest expense, net (18.8) (19.0) (57.8) (59.1)
Other income (expense), net 0.1 1.0 2.1 1.5
--------- --------- ----------- -----------
Income before income taxes 91.7 89.5 265.4 267.5
Provision for income taxes 34.9 34.5 100.9 103.0
--------- --------- ----------- -----------
Net income $ 56.8 $ 55.0 $ 164.5 $ 164.5
========= ========= =========== ===========
Basic and diluted earnings per share $ 0.33 $ 0.31 $ 0.96 $ 0.94
========= ========= =========== ===========
Weighted average common shares 171.1 175.7 171.4 175.7
========= ========= =========== ===========
REPUBLIC SERVICES, INC.
SUPPLEMENTAL UNAUDITED FINANCIAL INFORMATION
The following information should be read in conjunction with the
Company's audited Consolidated Financial Statements and notes thereto appearing
in the Company's Form 10-K as of and for the year ended December 31, 2000. It
should also be read in conjunction with the Company's Unaudited Condensed
Consolidated Financial Statements and notes thereto appearing in the Company's
Form 10-Q as of and for the three and six months ended June 30, 2001.
CASH FLOW
The following table reflects certain components of the Company's
unaudited consolidated statements of cash flows for the three and nine months
ended September 30, 2001 and 2000 (in millions):
Three months ended Nine months ended
September 30, September 30,
------------------------ -------------------------
2001 2000 2001 2000
------- -------- -------- --------
Depreciation, amortization and
depletion of property and equipment $ 44.3 $ 40.2 $ 126.1 $ 116.3
Amortization of intangible assets $ 12.3 $ 10.4 $ 34.7 $ 29.8
Capital expenditures $ (63.3) $ (50.0) $ (179.0) $ (147.8)
</Table>
The Company defines free cash flow as net income plus depreciation,
amortization and depletion less capital expenditures plus net changes in assets
and liabilities resulting from operating activities.
Capital expenditures include $1.1 million and $.9 million of
capitalized interest for the three months ended September 30, 2001 and 2000,
respectively, and $2.2 million and $2.4 million for the nine months ended
September 30, 2001 and 2000, respectively.
As of September 30, 2001, accounts receivable were $271.5 million, net
of allowance for doubtful accounts of $15.2 million, resulting in days sales
outstanding of approximately 42 (or 30 days net of deferred revenue).
STOCK REPURCHASE PROGRAM
During 2000, the Company announced that its Board of Directors
authorized the repurchase of up to $150.0 million of its common stock. As of
December 31, 2000, the Company paid $50.9 million to repurchase 3,644,000 shares
of its stock. During the three months ended September 30, 2001, the Company paid
$45.9 million to repurchase 2,454,200 shares of its stock. During the nine
months ended September 30, 2001, the Company paid $93.2 million to repurchase
5,253,000 shares of its stock. As of September 30, 2001, the Company had $5.9
million remaining under its repurchase programs to fund stock repurchases.
REVENUE
The following table reflects total revenue of the Company by revenue
source for the three and nine months ended September 30, 2001 and 2000 (in
millions):
Three months ended Nine months ended
September 30, September 30,
------------------------- -----------------------------
2001 2002 2001 2000
-------- -------- ---------- ----------
Collection:
Residential $ 124.9 $ 110.3 $ 355.8 $ 319.6
Commercial 173.0 160.1 513.8 464.6
Industrial 131.5 127.2 385.9 365.6
Other 12.0 11.9 35.0 37.2
-------- -------- ---------- ----------
Total collection 441.4 409.5 1,290.5 1,187.0
-------- -------- ---------- ----------
Transfer and disposal 206.3 186.8 582.2 537.5
Less: Intercompany (104.0) (95.3) (302.2) (270.2)
-------- -------- ---------- ----------
Transfer and
disposal, net 102.3 91.5 280.0 267.3
Other 38.9 38.1 123.5 119.9
-------- -------- ---------- ----------
Total revenue $ 582.6 $ 539.1 $ 1,694.0 $ 1,574.2
======== ======== ========== ==========
The following table reflects the Company's revenue growth for the three
and nine months ended September 30, 2001 and 2000:
Three months ended Nine months ended
September 30, September 30,
---------------------- -----------------------
2001 2000 2001 2000
---- ---- ---- -----
Price .4% 2.5% .7% 2.5%
Volume 1.5 3.3 2.5 4.7
--- --- --- ----
Total internal growth 1.9 5.8 3.2 7.2
Acquisitions 6.2 2.0 4.4 7.6
--- --- --- ----
Total revenue growth 8.1% 7.8% 7.6% 14.8%
=== === === ====
Price growth for the three and nine months ended September 30, 2001 was
impacted by commodity prices. Excluding the effect of commodity prices, price
growth was 1.6% and 1.9% for the three and nine months ended September 30, 2001,
respectively. In addition, non-core operations increased volume growth by 1.0%
and .7% during the three and nine months ended September 30, 2001, respectively.
As such, adjusted internal growth for the three and nine months ended September
30, 2001 was 2.1% and 3.7%, respectively.
INCOME TAXES
Income taxes are provided based upon the Company's anticipated annual
effective income tax rate. During the three months ended December 31, 2000, the
Company lowered its anticipated annual effective tax rate for fiscal 2000 from
38.5% to 38.0%.