Republic Services (RSG) 6 May 212021 Q1 Earnings call transcript

Company Profile

Participants

Stacey Mathews	Vice President of Investor Relations
Don Slager	Chief Executive Officer
Jon Vander Ark	President & Incoming Chief Executive Officer
Brian DelGhiaccio	Chief Financial Officer
Tyler Brown	Raymond James
Mario Cortellacci	Jefferies
Jerry Revich	Goldman Sachs
Sean Eastman	KeyBanc Capital Markets
Walter Spracklin	RBC Capital Markets
Kyle White	Deutsche Bank
Michael Hoffman	Stifel
Jeff Goldstein	Morgan Stanley
David Manthey	Baird
Noah Kaye	Oppenheimer & Co
Mike Feniger	Bank of America

Call transcript

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Operator

Good day and welcome to the Republic Services' First Quarter 2021 Investor Conference Call. Republic Services is traded on the New York Stock Exchange under the symbol RSG. All participants in today's call will be in listen-only mode. [Operator Instructions] Please not, this event is being recorded. I would now like to turn the conference over to Stacey Mathews, Vice President of Investor Relations.

Stacey Mathews

welcome Republic to XXXX first like call. conference would everyone Services' to quarter I CEO; Ark, joining Jon Incoming our Slager, Don Vander Brian discuss performance. our we CEO; our DelGhiaccio, CFO as are me our and and President from moment and I remind some be uncertainties discuss today's and everyone we statements, forward-looking different to call would may information take contains the actual which that to on like results. a of involve materially risks

want turn like investor are I posted would our over team recording conferences. remind all strictly want on website the I management to this of materially our you GAAP times, this differ call to expectations. in could time-sensitive. recording cause a filings, that you SEC Any which Our our republicservices.com. release, date that sensitive Republic call, with to presentations original and to actual of consent discuss you press are Republic's call The With without retransmission, rebroadcast May earnings redistribution, call, to should the SEC tables I is conference When filings the Xth, written along expressed the property factors form rebroadcast participates we activities, and to material discuss of in If call a reconciliation that scheduled, prohibited. Services, routinely business any results in listen or from Republic's is available that dates, Republic events point are call the discussion today website. of of note the this Inc. is on out be this the the Services of Don. which of that, at includes is future, or that XXXX. to Please

Don Slager

us. Thanks afternoon you and Stacey. joining for everyone thank Good

with undeniable. business strong start We in pleased are XXXX. The is momentum very to our our

increase first In in and allowed into foundation quarter, Our $XXX us consistent results value. expanded generated XXX points XX.X%. that $X.XX, sustainable turn year, share free adjusted which basis earnings the adjusted of strong shareholder per we a flow, prior meaningful the cash of momentum margin over XX% have to and million EBITDA delivered execution to represents

last next Services. Republic month will As at be my you as CEO know,

So, team in final with I by taken and said than the expect quarterly this glimpse as share exciting my about be of what will and go company. we to QX. here. questions of this over Del, positioned be Having also, to confident call the last and in bulk of decade today's proud the future you But earnings solid they'll they the results call has the are am how that, forward trajectory the from tell I the on extremely of accomplished Jon more a Republic. I'm

that a long on give milestones go important could about Now, of you have I accomplishments on have and we achieved surpassed. list we and built. frankly, foundation and could I the

have resiliency of the gloves dance The a these away the those and model hanging are were a lost we times. the again team, once won we the capability of that been company. that foundation quotes. in More the me on, the build our home Ali. operating simple is you The words was photograph far is of our did brick one the of find with an Those there how the also I hook. win long worn brightly importantly, of the this, is team it favorite displays XXXX a they a and pair only, knows how tested predictability prepare all I This no wall and capability place It the for XX under tell many energy strongest has the but Republic years. have are and fight, or only on the old our in to to Republic of to the attributed culture boxing establish before standing It fight they of road team from and have stability the our business, lights. gym. to time been from in out and It's different. gym, dedication Not behind people results. and my my our Muhammad witnesses, lights to of Were great on there poster power team let one hangs strength of and in the for people. and here. seeing all portfolio, this and the in well you shine of the history this spirit the improvement,

the five these. enjoyable a as most things me Now leader for are

next-gen promise. First, a team; fourth, a new environment; in work leaders; finally, creating and casting and vision; collaborating shared towards ushering assembling future, a second, and effective an purpose-built along keeping with fifth change, third, necessary energy the

and this years. passion trusted proven, lead to perseverance, my well Republic your teammates a To aligned you very those better. in us analysts And I friendship your you I to leave is advisers, constructively on has equipped thank appreciate good from for and makes I've opportunity am the and And your you Republic's to and phone looks of of for you horsepower over of way. our and thank darn I here faith invigorated. for Republic the investors, serve challenging today, us along those all under putting at the Republic's engaged. ground traction, Republic. grateful Republic the operating pretty motivation. so us and is and solid had us so with It the leadership and workforce highly lights. is and appropriately, on plenty you. is strength, where position professional,

are know I character Republic, are We all responsibly He job. may delivers has also over XX,XXX but As All have our Republic their the his and purpose and focus victory, the hard same reliably all complete. and our a have here we the united write rewarding John strong With clear the we do has at job. and the customers way vision and is of different feels of said ahead. safely that, road John of that each John. well we a story. is same to at to to team and role way. I the have other have concluded, before, serve for my chapter things support every Republic roles, on which the as day, my ultimately John as wonderful same means I'll in resources. our work and turn us relentless new we communities steward to

Jon Vander Ark

kind honored have to to opportunity I'm be appreciate I Republic's next the words, this Don. CEO. and Thanks,

to the turning Now first quarter results.

since was open to reported and pricing business The the of and remains price We in see earnings Total the average improvement price strong, expansion. X.X%. beginning market pricing allowed us The which and for of growth restricted margin pricing core of revenue growth to X.X% pandemic. was double-digit the X.X%. yield continue X.X% environment first the deliver time included and positive core

year. achieve discussed confident was quarter. last yield We As least lower X.X% the full in the ability our for our relatively at earnings call, remain in yield of average to be expected in average first to

business first is the XXX quarter, prior with improvement. the year. improvement a from point basis basis lines showing versus This quarter volume nearly During points decreased of fourth the XX all

and remainder the in We positive to the remain quarter year. expect positive for the of second volume turn

welcome forward profitable We continue investing acquisition best believe flow the We with use increase value. that these closed drive employees the to high-quality team, returns of attractive to we we cash growth look Santek. long-term of is our to assets acquisitions and Republic these business. today, shareholder in and free into the to integrating Earlier new

Our at full $XXX in year. and remain for the we acquisitions pipeline track of strong, to is acquisition invest million opportunities least on

to turning our Environmental Now Solutions business.

Solutions headwind in million XX year. decreased First the from revenue Environmental growth. This prior to quarter point total a basis $XX resulted revenue

business focus looking to on customers platform. are of we can capabilities portion broad downstream continue the and this solutions, and sustainability integrated leverage for our We where

per increased Recycled the Moving to first commodity in $XX prices quarter. per This year. the XX% prior recycling. to in $XXX ton to ton on compared

margin. to turning Next,

first was margin XX.X% increased prior Our points in the versus basis EBITDA adjusted and the quarter year. XXX

We This versus and ways we our more in accelerating the to record, continue RISE first and technology platform costs our high-performing new, underlying demand experience. customer and to quarter, working. of continued improve our efficient changes the efficiencies safety drive utilizing successfully year. for use XX% manage of In incidents includes the our and safety the leverage employee prior reducing

In positive We achieved maniacal continue the first focus the to from prior set over four NPS at and we XX%. experience. the customer our points retention quarter, customer in a increased the see record year, on contribution our

During quarter, sustainability we further long-term first our progress the towards made goals.

related to transparency that change. to stakeholders. platform, of committed sustainability our all identifying managing importance remain and opportunities important risks recognize part on As the and of to We metrics are our we climate

our to XXXX Admired risks to We recognizing are focused to socially our be disclose comprehensive also TCFD business companies climate-related industry Fortune's innovation proud in team opportunities practices. management, the and This through and named list. first responsible We an most award recently were report. is a the

Looking year. original guidance ahead, and we of to due outlook expect to outperform our our the the remainder for strong start

now financial free we to full in now of to be to range $X.XX $X.XX Brian. be turn our call cash a expected to adjusted $X.XX, is of and as the raising flow billion. year is the As in will I adjusted guidance now are to follows: range $X.X result, expected EPS over the

Brian DelGhiaccio

Thanks, Jon.

quarter decreased First points. volume XX basis

of small represents reduced was from XX decrease volume points in XX The This the in basis volume in components decrease quarter compared XXX a container X.X%. quarter, waste. included in increase there and basis revenue a MSW to volume fourth workday, Additionally, less of point landfill a fourth includes a volume increase X.X%. X.X% of improvement point one year. special the basis by which an the and a prior in And increase a X.X%. X.X% volume improvement volume container landfill large represents in increase from of the This

negative Within January the in volume was performance and in March. turned February positive quarter, and

effective the the We This basis positive, prior from cost over year. management. of points commodity the outsized versus expect for of The underlying the point quarter benefit EBITDA XX improvement XX margin a expansion XXX basis workday. XX.X% for points, prior and less included, expense of was pricing XXX quarter expansion cost an and volume for of SG&A basis year. result of excess prices year. first revenue, Adjusted XX.X% of in basis net our a inflation recycled the XX point increased a benefit direct points margin will fuel remain first the remainder one from margin was and and basis is

increased included revenue, $XXX to in the efficiencies generate and the in make benefit increase contribution flow of and future the While will in and spend. capital periods. and of DSO in of improvement This XX% expressed we The from two-day SG&A positive projected first free the the flip, costs expenditures million as Capital growth for is timing million, capital EBITDA working our DPO. investments both of over year dollars and was the the a Adjusted drive Working decreased, cash to have timing approximately continue a year. during of represents expenditures. capital $XXX year. remainder compared quarter, a one-day result $XXX full expenditures percentage quarter prior improvement to capital million growth, of of

further rate tax an consider, call effective now we was billion. result adjusted During leverage was impact XX%. year. decreased to I last Jon. our was ratio of liquidity decreased quarter $XX X.X to first non-cash a of will you XX.X%. as charges tax completed investments, When the total respect had back our from $X.X expense debt activities the billion Interest total turn quarter, refinancing And our times. over equivalent taxes, and million, With solar to $X

Jon Vander Ark

I'm excited the Thanks, future. about Brian. company's

visionary, Republic. shareholder to acquisitions. and the several value. is formed be integrated on current always However, Don overstate looking architect back. way. known a we impact, while Republic Republic in us growth the who can't foundation, Services. drive have forward go without He champion capabilities Don's successfully is as that profitable investing allow He and It Day of strengthened And the hundred impossible the Republic to the will

years, stock and tremendous he and modeling like created for capitalization, to for company by a our price He value our of has career He culture everything be this, to driven employees, Among No turn, Service than We company Republic that a team, purpose-driven Don a of now way customers, place, the as XX the care our accomplished, and the which of that approach have the company work. During more billion. has triple the the along led to creation are like and they in business. as made best has people achievement Don. communities to is care as years value where come last XX to so the shareholders lucky approaches a service one has market all. motivated taking should took big professionalized $XX another. He talent all one created. their

So country team vision. would you, your thank the members perseverance as to well our and call to on operator, XX,XXX leadership, questions. the industry, open across I behalf With that, of our Don, your your as for like

Operator

We will a Instructions] Our from will with now Please James. go [Operator begin session. Tyler today first question-and-answer Brown ahead. question come Raymond

Tyler Brown

afternoon. good Hey

Don Slager

Tyler. afternoon Good

Tyler Brown

ship. thanks a Hey. over a is Jon, the Jon, complement, much so a congrats this it's everything not little ship, Don, years. bit I like but probably on figure moving the new for the role. and is cruise fastest But Republic

changes time, think over focus should strategy? or we noticeable time, we we any or investors over maybe should just expect how So in should think,

Jon Vander Ark

question, for Tyler. Thanks the

of So the you left part driven work of stability, the us, be of of see has led prepared at forward. there'll up turns and we're will the hard produced we in of in the think in the faster part time, business being results. that's durability same team we of level going the I inflection that's I think, And the terms us all like a an the to building foundation move strategy speed. allows the I in performance point. privilege remarks talked set no to that have terms about At has the of pick the lots momentum. Listen, because analogy current rider

approach So you're waste recycling on think but traditional digital going of toward business, see customer we're environmental over and eye priority in our always putting on balanced and list going that sustainability. more three time. going shareholder returns capabilities; inorganic also zeal, And with drive growth us allow that's do focus us to lot think certainly we and at investments. the with a services core about in making and broadly terms a we the to our growth, And to organic again of an top to in how opportunities

Tyler Brown

Okay, drill helpful. to And very down Brian. great. maybe That's here, then

for So guide was what is in I arc the the the specifically, $XXX. year? QX But think full in

Brian DelGhiaccio

recycled Yes. Tyler, about we commodity the over ton actually that $XXX price remainder at the just maintain of that year. a

Tyler Brown

Okay.

sounds were about and here. fly going I do $XXX $X.XX. So if I I think look you a on like I'm at the ton, it's for a delta, $X.XX around it's notes, math my think to the XXXX, so $XX But like it per it's something

your raised guidance You've by $X.XX.

just touching So commodities point? effectively was guide at volume really whole the and we're the raise this not

Brian DelGhiaccio

Yes. A couple of questions there.

me kind break let it of apart. So

First a guidance, original pegged our at $XXX we in had all, of ton. that

guidance start like those to the wait normal we other address quarter, guidance want guide. the of prices, ton reflection we assumptions new the is new increase actually some right, it's volume and commodity per a higher a -- margin. the But and that before in your to So price $XX uptick this really, this included the seasonal is point, strong a that first of in relatively see and

feel So it to we the see right out coming to in before we call. assumptions, which on optimistic address we first of second those quarter, we what now, want plan we but do see July our quarter about

Jon Vander Ark

in, that. we we're a this moving good cognizant outlook But Again, ways. still world, positive. uncertainty have thing obviously, to the that really there's of certainly certain about goes we're and certainly looking coming And out the of some in around pandemic, fact Yes. is is feel the the momentum we and

to until the come we that wait appropriate see back of we caution point. Brian's So volume have level to want and

Tyler Brown

that's very fair. one. last Okay. my then And No,

can something expected M&A contribution closed in Santek here far last this today. quarter revenue Brian, was year So all give the did closed I from think mentioned not XXXX? know give I the us that and you so last you today, you on call. year that

Brian DelGhiaccio

Yes. Yes.

me this Let way, you give to right. it

on the in deals when would rollover was What closed, XXX of that impact of of we're seeing I XXXX, over points. basis you plus to that okay? acquisitions contribution for So what year was about expect points, the year. say, of the right, anticipate plus We balance rollover impact would to other, Santek we basis in we take the closing total XXX some talked now smaller that XXX the

Tyler Brown

Perfect.

That's Okay. needed. I what Thank you.

Brian DelGhiaccio

Thanks, Tyler.

Operator

from comes Jefferies. Mazari question ahead. Please with next Hamzah go Our

Mario Cortellacci

spend Hi. and definitely It's This our and go-forward I is you pricing pleasure. margin John you? your being for investment Could thinking you're Mario Cortellacci Hamzah. about behind better inflation calling that leverage to Hamzah for Maybe doing and a wish been off, in I with best from also specifically also, some in congratulate business of through basis? Don, want the with the how coming on to a a just no were operating you you walk of model exit while us higher team. wanted

Jon Vander Ark

Sure. some about results results all achieved. all the our in years The This just optimize that lifting share, we've take work and good returns, feel earned last hard look first the results I'll business. is caused of make start pieces. that of three and we've that three fill quarter in the Brian to and heavy a can portfolio. the customers the the we've out and prior their hard Listen, we we the weren't of profitable Again, always work, us pay done the fair to rotated willing pursued and sure months. right, to

that. about great feel we So

capacity growth capacity limitless, the cost really standpoint. but the we as back. As with volume a And fleet take appropriate an the make volume. course, obviously, have think that gotten landfill our return we we'll we've to come on into investment not we fleet tight of appropriate from comes back, operating and and see -- I'm

Brian DelGhiaccio

throughout work team right? We to operating more found we entire more It's than that back, gear think a we there the just right? And the along Tim Stewart that and and pandemic, talked profitable we again, new ever new expenses. cost. all new right? So plan we've that the add, P&L. did we've expect statement. So operating found these here, it's feel would confident entered the the don't It's we on and profitability, the ways giving sit this find levels to from We SG&A emerge throughout pandemic to that I in than of work. to it,

Mario Cortellacci

on your earlier ago? in was follow-up, years then, few Thanks. recycling with of recycling. EBITDA And small, on touch I percentage the have Great. the missed -- to for to trying call, sorry, And yet gauge want recycling what for post been but it's guess, the I I strike a downturn it What my then contract the just I maybe QX? restructured know can where that restructuring longer-term? just or contracts go

Jon Vander Ark

Yes. more becomes XX% appropriate paid contracts value. model the move collection XX% commodity share with just do, most of return we that. it. the get contracts that about the We've and And in we our have of appropriate the collect frankly, work the us restructured to to can get processing But and one to an recycling to of economically the recycling, think, we because have of natural where we is return right, sustainable, associated tells volatility about paid we to side. our owner process on then And customer, that an we the that

the upside more on we forward. we've I volatility So, think reducing I a also but of job front, as done that there's good think move

Mario Cortellacci

then EBITDA-wise? And

Brian DelGhiaccio

of from by can the the XX disclose was EBITDA We I during margin business. contribution basis Yes. tell to commodity What the prices is quarter actually just points. higher you line don't

Mario Cortellacci

you. Thank it. Appreciate it. Got

Brian DelGhiaccio

you. Thank

Operator

ahead. Please will Goldman Revich next Sachs. come with Our from question Jerry go

Jerry Revich

Good congratulations. afternoon. And Jon, Don,

Jon Vander Ark

Thank you, Jerry.

Jerry Revich

I'm economics spot to talk years. look about plants just prices into the you current I'm you the you Are how range? landfill X pipelines close full next prices. just the could RIN attractive wondering over additional of talk about many RIN if anywhere sustainability the we And tying Obviously, folks wondering thinking economics? theme. could couple RIN ESG benefit to achieve how pretty about to considering at Thanks. transitioning of the of gas if are

Jon Vander Ark

Yes.

projects. today. know, from got more are some projects So, dozen We've about we or Today, pure you of a those of as additional XX projects, mix a have electricity. in-flight

Some capture ones. looking forward, BTU those are at high RINs more as the we're to And opportunity. we go

get model, on It just As has we of historically all kind the it We work volatility primary upside our that manage with pricing, gets also the right? the development. helps to us of of that. think room also partners faster, there but been us certainly, don't the

And just again, at of we've with forward I more predominant model But a looking some our front going going those be to at and own. we're there's a with on more medium-sized the we're well. model, parties, are going opportunities think right have in there don't as landfills, right? done it's forward. we the will our ones So, third pursued dozen. us royalty and unlock think of model working always our we working other We're now, forward we Those going think and of of through

Jerry Revich

just of what of I'm of are And really areas? a forward. magnitude operating has expenses? wondering, talk costs extent with we what's back, in come repairs. impact about the differently context some landfill cost looking mitigate Okay. that of of maintenance recovery within volume alluded we that types at these on the that we things from to volumes you done structure been I'm then, wondering, be performance how can to in the Thank might terms And the should that the going to types recovery performance earlier and within standpoint, volumes as costs be impressive and of you. continued those in going those strong

Jon Vander Ark

Yes. like Listen, that some work are don't I to things they there be exactly think are today. going

that is front certainly One is So of advantage going are that meetings to at cost, of still are great they tools on reasons people level. a we're the right? the that the some up day travel tied performance mode. be it's take time, the driving much focus virtual or that pandemic to line not comes back. and is us some to SG&A, costs our pre going to back same the other going there cost frankly, save up that that going back distracted more we're with out, come forward. come and on getting day travel We're on in thing largely in some opportunity have business right shows in in of no Obviously, we And around not

On have the traffic side, with what and we’ll what going see do. from to operating happens home work patterns forward

be So we load bit our where may eyes up a and I give to continue upwards. further we that offset an continue customer little and of from safety an that route more but efficient, our through will just productivity, EBITDA margin incremental than and again, of we that and rollout look us the pushing operations, think, allows to record, to got maintaining overall claim of ground by be more think the more get platform that on we've standpoint great and digital and kind while ops a a hopefully experience our

Jerry Revich

you. appreciate Thank discussion. I the Thanks.

Brian DelGhiaccio

Jerry. Thanks

Operator

Capital come KeyBanc ahead. go Eastman will Markets. Sean with question Please next from Our

Sean Eastman

midpoint remark Great. guidance Hi there, retirement guys, sort Don, out figure the the and congratulations an many just updated and of wanted EBITDA kind of try I from Don. earnings reflects what of perspective. great to

to recycled the dilution headwind commodities, fuel head and help clearly, a that points I us? here. points underlying pretty and update expansion, acquisition big margin XX XX offset to off a of think you XX basis from able would mean, basis start you old guidance, had be from by I the XX then net for

Jon Vander Ark

to going wait mentioned Yes. uptick, to timeframe, to a until we we in tell We're We'll start. actually normal we're and I going off before, What seasonality then start, originally price Sean, see we stronger to call. tends come a assumptions. off strong right, which and talk and volume right, June as anticipated. is to get that you, in happen May margin back that that can that than about did right, QX I

about actually next But a the respect we assumptions. have few hold. in full with quarters want those major to again, optimistic that are We make to what hand update before we

Sean Eastman

over great since couple great? close, the it'd of around be And larger be synergy about it’s years. a enough. a would sort Any hear maybe of Santek Okay. exciting just Fair next strategic acquisitions color potential that with perspective, what's from one to the

Jon Vander Ark

It's of with layers strong this of would into that set collections, communities find kind pick acquisition fits now assets. the up really we’re footprint, on the of that, again, -- level our acquisition. of the feel new kind think got mid-Atlantic, of so sense you've post has and we're country platform, few lots Southeast, I of, taking Yes, the as part we infrastructure, an but assets in unique we've XX where we say rarely the and it into well. And we a perfectly provides landfills.

a So a grow that to for DOJ went long well-run provides further the time. M&A as a process. us was long, that front. we protracted deals was platform allows for it company tuck-in and that follow-on It on through It a close to

numbers. the to did great associated is, the pandemic our on ended of up just be came expected. out we right in terms on going no we front. us the were process there that we I and some that divestitures We favors news where knew But that, think with small exactly

feel join really team. our about team those members really, we having So excited

Sean Eastman

turn Excellent. it I over. will Thanks.

Operator

Please will Markets. Our RBC Spracklin next with go question come ahead. from Capital Walter

Walter Spracklin

Thanks I words, years. and are prior compares be very cadence. could would other year-over-year much in cadence bit, a same Don is and in Obviously, good about not years therefore, talk with echo in its both it Congrats In the little John, how how that and luck. to as Starting instructive as the sentiments. compare volume. and I'm normal other wondering you the sequential are curious year? relative stronger, judge cadence to you typical like that on things the getting on that to and where performance some of you'd slow looking the would front, Is Are we how recovery but the in you faster? May at just sequentially a in with and And be feeling mentioned April you May? you into are things it April starting if side. --

Jon Vander Ark

Yes. unprecedented an Obviously, it's time.

to you start history. coming to going it's of to positive hard perfectly we a then and have February, going see we different off out hits episodically start right, on. plan. And weather Obviously, comps turn case, in were There's forward. this certainly a In we weather had things and two as move really pandemic, on plan. fine compare us. you're So we're the also so January

state endured. For Texas really that with good some well. And week as the closed the in the for weather largely very really, of they and we example, momentum then strong, about March was was a April feel of

we're momentum it still pretty strong think think really was top-down a than in but again look, of we the I now business, take event February the seasonal that So into normal waiting see to starts was weather-related just more seeing off from pandemic the uptick And May. to kind right? related,

Brian DelGhiaccio

I would right? So similar back a so this at not point. look add, just there sit April, and at again, to far, XXXX. in very Yes, the we're But looks closed increase you sequential saw into margin take what when we

Walter Spracklin

Perfect.

Brian DelGhiaccio

happens talk be point. to So good into July But able the sign. real we're May talk April in usually, be and that's able again, the May the a that's seasonality acceleration, to and real to to what the that again, why, back saw then guide and June. other at report assumptions And going then come and we into to

Walter Spracklin

Yes.

increasing were understanding this a out not or giving would And -- driver details, of was price guidance? mean laid guidance. you note, the any that something when you this Okay. costs or of volume in expecting just you're main around biggest -- just those specifics here are you quarter element into element better the was you one there getting one you what inputs, terms what of out though the the that your Is call variance. be I on without that

Jon Vander Ark

Yes.

fairly, a listen, of -- we business. of board across very I in terms solid the had the the start underperformance think

right guide, raise math think think that, point us the what strong I on this gave kind It guide Brian's high earlier took I to pretty to our point just into commodity $XX expectations. on the above confidence territory. the that do front. flow-through I prices of of outlook kind That's and is us right? that And at is on the the

Brian DelGhiaccio

relative cost outperformance the talk though, and just expectations, also Yes. I performance the QX our say, say and about just I to initial as And you would side would well. on there sit there and just sit right, as

again, So more than talked benefits when those about We're those originally some year full guidance, returns. you volume hanging we if we on of as the gave macro anticipated. remember, modulating benefits we to

see to what can we in originally holds, that July we talk if relative again, which, would that we to to again going actually upside we're be when So that get anticipated. together because

Walter Spracklin

Great. as your Appreciate always. time

Brian DelGhiaccio

you, Thank Walter.

Operator

come next Bank. from with will Please Kyle go Our Deutsche question ahead. White

Kyle White

taking on hope for questions. Thanks enjoy new afternoon. your congrats congrats retirement. Good Hi. role. the Don, Jon, the and

Don Slager

you. Thank

Kyle White

the of book CPI have XX% kind of the rate terms about talk a But waste to now? that understanding to in you or or business, slowdown to a of are a this the fixed due wanted of you conversions seeing in we're CPI inflationary maybe tied index environment more. I X% initiative increase on right

Jon Vander Ark

Yes.

fast is some think to We're some going of I going be there through bit go probably of talk be movers. we And you and then obviously, everybody, go slow there's relentless. there's one slowdown initiatives, these as a movers. to don't a stop. And you and to because just

get the we marching just city into hall, turn. right So eventually, to we everybody and keep

the going when Sometimes turn reality that is it's up. contract to is of the

then frankly, the priorities we team now it. it, price fair people incentive, we we're of part on our But what the That's and us that a economy see a favorable is pandemic at we working cadence think part hurt we're municipal of In us. what a and face-to-face opening couldn't for normal time. up, -- performance because get of on sales So kind index back its at that. the as to that they're the of you normal have out meetings many and in reality, working come respect that of there's cities other

Brian DelGhiaccio

even even there we challenges I we though, that and Yes. say, right, would say made that's the great progress quarter. the in faced,

million it we XX% So the $XXX When $XX million, represents that So moved that end of the was $XXX at during right? of actually revenue quarter. reported we revenue. XXXX, of million

Kyle White

size of to M&A, the just also the tax changes? any regarding your at what targeting And back Got the to and about a of maybe in that you length increased if from region speculation it. some on curious then you're kind pipeline given seeing you're That's And all of activity, just close, going terms does then helpful. or Santek and M&A rethink kind of the standpoint? took that strategy make

Jon Vander Ark

be the the law So face-to-face, huge pipeline on We strong obviously, the because of now continues and we people back but tax with because the right? front. that to on been only a I meaning increase meeting is pandemic, getting pipeline months, and think say, looming during number now a out changes, haven't our potential of has I would new sellers in the strong active seen, virtually, road ways, team really for stayed

those that. and There's is, sort types types of the We still good eyes of obviously. a we those of smaller but time. wanted, And taking ended we're and a Santek Santek in well targeting in not numbers the length opportunities. ton where the of very opportunities terms a in performed wide versus the expected, we we'll think just DOJ process took go So pursuing the from about but this their all we the we tuck-ins, terms of said, right? opportunities. not it at open not game, headline the I of feel is great those We're than very, really, of up us And of business That's that's in deterred longer. longer kind process. But

for. we're So we exactly what buying paid

Kyle White

it. it Got will Thank you. I over. turn

Operator

will ahead. question Hoffman Michael Stifel. come go with next Our Please from

Michael Hoffman

to conversion have taken that talk you. this you. Thank both years actions way you that from -- cash two why now, or talking that one the of for much, or I or Best about Jon. you going rate and margin you've will and part three a about two Don are the be Jon question make very the of does? Could Don, looks in it be Brian tenure or the growth to

Don Slager

Well, of things. look, I a think there's couple

say, here people and We the the growing put First talent We focus to The of of I ago. to is never waves the a place, And building think center genres talent from fact their We're of little people. people to the done the those the that the to focused was world And best many yet, agenda here, really on developing -- the and decade the be of work. of do the company, right? you're top all, done people talent and and talented not because dedication they're best the it's very company, next continuously. today. We forever. eye the waves all There's generations turns, assignment. my list going got his strength. on come goal top to on composite

started with XX silly XX, a to of do don't a decade first various out were different time colors anymore. That's XX scale we were to lot way about broader They're names, best density. they But different remember So we the is our Republic they're trucks the energy, When going that. not was getting of and ago, in a we our of Republic getting we then embedded collection -- That took about the that things a that I companies in. argue best out were talking go used way. the really anymore. anything local and don't of and

new now talks team about, strategic rise And And roll can speed the speed. an change. example things So becomes speed of our the a speed that and becomes a is speed differentiator, at that out strength. which Jon

the all time. speed gaining we're So

several And team inheriting. very the a start. things that been starting doing operating Many company. big really the the And and He The running that that future has structure well the of over he's we've been for bodes years, directing. involved part so is of and a playing position choosing Jon developing his of new in. the last from Jon was of

us a back going now and people talks and things is best to deal. about zeal. It's But operations way safety other and we world-class brighter. not away. in So us going are is to today to going the things. do space, be It's be to he and speed provider get same way they bigger in the going compare service We're help going those -- big probably to like just going customer the on fleet to to

no, my Michael. So words, mean, are those final -- I

Michael Hoffman

Okay. the it. it up the my young And the out hell first I ring, and saw scared Thank time he hung you. it in horse of

Don Slager

go. you There

Michael Hoffman

has consistently XX years been margin in and above X, first And XX% Jon, it's in and did since XX, the this produced trend company better that that X quarter. you X, XX% So or EBITDA were XX three years -- and Brian a or the the gross margins.

secular no and structural. different asked throughout I'm There's hearing a the and back that's here. I'm call, question asking what been give is So This in ways.

structural. XX.X%, a gross to You margin, hold on between XX.X% to SG&A the to gross margin. of XX% is This XX% this,

Jon Vander Ark

pricing there's can more some municipal we're we're here, customers a still that about creates we We leverage feel rate improving though the even new out. still setting We still business. on even a going which make the upside think lot the of putting more world heights. more in side tools again, on right? we've talked this we Absolutely. our loyalty the the plenty We achieved And loyal the talked We little business. that be on gets think that there's sights digital costs about think headwind ground about a as we good quarter. while of recycling to We're inflationary the had gained. side, through working there's probably short-term We're right. of operating our earlier, earlier, on initiatives And upside, record we

about have our we financial achievement, the certainly from. of here. great results, We're -- we're to not that the go we yes, are So to future, we're down a from something going up and optimistic but go think again, going sign

Michael Hoffman

of luck And you. new all roles. you in to bearing each you Thank good of

Jon Vander Ark

Michael. Thanks,

Brian DelGhiaccio

Thanks, Michael.

Operator

Jeff Stanley. come Morgan question Please go Our from with ahead. Goldstein next will

Jeff Goldstein

congrats successful on here the all the new comments afternoon. Hey, previous echo say, and tenure. on a good and And Jon, And congrats, long I'll role.

Jon Vander Ark

Jeff. Thanks,

Jeff Goldstein

of And you resumed? those I -- to business maybe know really you customers any a permanent customers they are those are realize but have sense a of here. on give those service percent service now they likely reductions, closures of who in buy level or what lower least seeing subset I be can to service get out, used haven't to reduce know what figure, this used reached who at permanent at you

those of path the remaining you how Just customers? back about thinking are

Jon Vander Ark

Yes.

think come that there perspective. are the going you other point of that's and to expanded that's think dining the their shockingly going think best openings, It's at didn't look little really your which three been at schools, that, with schools X.X% verticals pace have to resilient have ground. probably the too. place our question. Restaurants X%, entertainment into person And some People doesn't been outdoor surprise. less probably some indoor schools the off-line, It capacity those but they're paused. haven't right? are to to take combined any come heavier. That entertainment, been maintained there's started nature at going We a but small most to obviously, here. if of dining, the mix right, the as just can right? to and that our in and customers. back got have direction, from business, at you We've debate is try back, going they've maintain We right? going their restaurant are any to I be timing, look, falls to restaurants. change, than container, mean watch. If It's hospitality, interesting I container then it to that, be to And I move shouldn't residential closures, Small And it's a still which went

that think business everyone's de got and Disney will small relatively pent-up going that these be technology boom But XX of around just for volume. just going back. we now going in people country that's to in are our that conference the terms travel may months, again, the results forward. are vacation of take the business be to of come some overall in the But that modulation travel. some out minimis over time, decide some And now a advantage like flying meetings personal you're to see back think will in also has I there and pushed for I gotten

Jeff Goldstein

number baked your should this year? the were think year. Okay. Does frontline then then still And think $XX employees to we That we the last costs any so, providing of was come about should all quarter, what down very you And how that to financial extent? those operating first support how of helpful. about in were into that? if million And Just expenses?

Jon Vander Ark

cautious Yes. little incredibly the PPE, of We because that just around protocol into that's the we still front. clean a facilities, on system heightened are cetera. And have that et bit

of is we one safety, successful and things of care we did was cleaning as put our their during pandemic well we think in took in I everything priority that the number else. our health one facility people all the respects. Certainly, their as

a have of bit And we still so that cost.

think in I down of right, million in second the off of modulate, $XX first million as any quarter, that some from it's and certainly last coming of about spend it need don't we year. long have $X have will in we'll fourth as it it's we'll and the quarter, third that that but the quarter. it. we Hopefully, But

Jeff Goldstein

lot. a Thanks Okay.

Jon Vander Ark

Thank you.

Operator

David Our next from with Baird. ahead. question go Please Manthey comes

David Manthey

everyone. congratulations, afternoon and Thank Good you.

Jon Vander Ark

David. Hi

David Manthey

My the question on is indices also here.

is index, you when index if at the regular the when you to sewer the converged generalized inflation each And about we components in as expectation And they've sewer old think going do economy, lower CPI? of kind same So of the water those, see lately. trash increase, magnitude at that that look your make-up is the trash CPI. water

Jon Vander Ark

the I don't certainly know be that identical same be we It same in know to direction. will that will the it magnitude.

there's exactly pressure, So, again as that how inflation, that put will upward moves.

hasn't of certainly David, but been history to always the this CPI. around yes. It's been to of forever, hasn't directionally correlated at perfectly a you it's look it subcomponent connected but If CPI, which index, headline,

It's one basket headline. the of an So of up the that element. makes the components is trash water sewer

David Manthey

see. I

is the understand sort dynamic overall, factor? there? simple repair would a, maintenance how if there what Okay. maintenance piece? I question. case, sort the schedule and does Republic? of is of repairs swing me unplanned if unplanned for and asset work And be second, that's Is each just of then the the this you But And apologize Can a help percentage at period that

Jon Vander Ark

And idea units historically themselves. fleet. way, we Don's one how and legacy. our cornerstone The Obviously, and way, versus scale our the XXX do out Yes. that big is We to to maintenance maintenance, part that and very leverage this a one maintenance, from Republic maintenance and shift ought reactive. everybody functional were our figured of to out on was we standpoint focus to business a reactive the right, scheduled part figure being preventative ought across of

than the scheduled lower now customer our fleet keeps that It productive And of we importantly, keeps our and great them and and trucks, is So the more servicing moving. our employees XX% more us customers and providing helps cost, keeps that think service. proactive. maintenance but one work keeps

David Manthey

it. appreciate I Great, Thank you.

Jon Vander Ark

you. Thank

Operator

will go Kaye question Oppenheimer Please with next from come & Our Noah ahead. Co.

Noah Kaye

much you so taking really prepared for to And done. questions. brought we industry my were I appreciate eloquent, and everything Thanks the Hi. remarks mean the

Jon, on we role. So your you good new luck, wish well and

Jon Vander Ark

Thank you.

Brian Bales

Thanks.

Noah Kaye

I of the for price open has quarter what of price see market do quarter. industry the on been the look as opportunities result far, which strength? so good and think, stickiness. one, you And strength then One clearly, a open view, where the saw to Curious retention themes this future the you you business? number your market this for to, And across is lines greatest push driving and quarters, price

Brian Bales

Yes.

back -- I the I the during it's I look pandemic. think And you to up pricing have held think quarter, the well. pricing think this incredibly

nervous saw volume. you Great and that panicking, bit a recession and on drag where back prioritized of lot probably certainly go people always can a think little don't you behavior. the getting saw price We've to and over If we price I

on our give continue raise to our every year. a continue us get fair return have is and and do work think people to invest a allows what assets to in to the We we we

So very we price. remain on focused very disciplined and

outlook on certainly strong. I think the very price is

price going continue momentum go where major prioritize get of pricing improve. container return business. we which is we right see assets. environmental nominally, emanates top need side our to think our that's investments, things some number from overall, on looks price to look see top dropping on and line. of But those the there that low. landfill collection those little look quality points I just where fact of at view and the basis revenue assets, at go And and to low at bit on -- with a think revenue technical you our that I list, pricing you'll then a expansion. There's pricing. the shows to And in to you you're that we volume, we're compliance, making we're If place line continued look margin we forward, getting discipline that that's just of, the that's drive, a As the That on bottom our of the got large XXX kind then

Noah Kaye

line Obviously, are trucks given from helpful. positioned And always quick very the items. do question Clearly, And and How shift you tightness believe other large that. a And scaled, so any just potentially to spend on in to you fulfillment. just but this That's have industry year? we the you your be trucking to from you'll fleet, of of for to component year? in have orders then kind terms targets have spend trucks of major length backlog are super the able CapEx. a CapEx a you

Jon Vander Ark

on out sure of No, service QX Listen, came prepared, pretty the back and getting in little to I that this, we about volume quarter-to-quarter were bit make of we we as it. year could aggressive in last were good customers. order so and of we our truck right, a we a there's think lumpiness of always CapEx. feel And anticipated maybe the bit

wasn't board. and the order I will So have the that of normal we of feel we here in feel when we year. is board, a bit good order number But bit and pretty That's right? slippage never little feel be direction good there a about in little frankly, the been that, course, there for the a slippage

Noah Kaye

Okay. you. Great. Thank

Jon Vander Ark

Thank you.

Operator

with Our from ahead. Bank question Please will come America. of next Mike Instructions] go [Operator Feniger

Mike Feniger

in the Hey, guys. and Thanks congrats, me squeezing Jon, for and best echoing sentiment Don all all there. the

this. you QX. in QX margins And I'm could to with has gone like to maybe, yield were The trying just Just in actually X.X from Brian, help understand, the me X.X exceptional.

think QX, margins your are yet exceptional. I

in not actually these do quarter? going -- yield on is kind right up margins? about How of that So been the is number the think anything that come been the exceptional now? yield there with we has first Or why

Brian DelGhiaccio

points outcomes true. in XXX things unit, a I the second say I ago, We of and inflation, one the first just yield, there change expansion of there excess that look are has per okay? of weights basis I that container our we large right, a at Well, all, Jon say, get pricing is in demonstrated that let's be in order at our would in margin think do though, price sit what start to large of cost are system. right? mentioned right, the it the when you X.X%, container So to

So about XX% of of both has large combination a business hall container disposal the the plus charge. our

X.X% So rates why that believe at is least achieve the yield full the container that anniversary drive made we calculation, the we yield for lighter is we're year. going to which QX, a beginning average in average commentary

average we in is So to coming, was which the that that we lowest going We knew quarter. that yield see first made the call QX that be on accelerating. why our comment was

Jon Vander Ark

get add it of north we the points, year. of back basis to -- at Mike, in that rate, that, on that the this So mention quarter. X.X%, was if it's large for hence, right? X.X% just XXXX, comments that kind the and QX We were XX of would to outlook If X.X% container about

Mike Feniger

of guys the clearly a even looked makes at is expanding. sense. which That X.X%, guys you yield discussed, it. which And to for like benchmark are Got like kind you of as getting margins,

early seeing this of X.X%? able yield at inflation with inflation, in Like margin to a what landfill baking So you get to in any cost expansion like labor of for are markets? be of the or inflation, are you either for type the signs the year

Jon Vander Ark

And year. Yes. feel year, I of on a hate going the balance good. for say, But small the outlook Look, we're for is seeing, in else container see pockets, up, would so from example. standpoint, labor the I we whatever pricing we'll happens

think government. in Our here subsidization think, make that us. I on Again, over the pockets beyond. quarter some spot We is for going number, the attractive turnover really next small or federal we a with with --

inflation front. in So And to comes feel in, open price to the we'll the on continue we pretty the that good market. extent

recover feel we we'll we certainly market open our for that that so whatever side, And on the goods see from that inflationary able to pressures confident be more purchased price.

Brian DelGhiaccio

of one questions did. answer to he was I'll Don he Michael And something about earlier Hoffman's glad

pricing able push tool. our take through we're a on seeing we've been in centralized have containers, capture that's put that tool to We been able We've cost place. the and been increased that that pricing to

that business the we're new quoting is all So costs containers. of some today already across basically reflective the increased country seeing of we're for

Operator

It Mike. appears from it that’s Mike is --

So our would like any for I back this conference will remarks. the Mr. session. Vander question-and-answer to Ark conclude turn over closing to

Jon Vander Ark

to Thank the achieve team you, to Grant. excited talented new I'm Republic heights. lead

We are and motivated ready.

history for Have off night, thank and heard, great the level everybody, We customers again, our And thank there's strong start. incredible would like enormous to communities. for highest momentum in servicing produced to to like all his company. a of contributions employees leadership the work, good margin is you've safe. business. the As expansion year would this be their I the a to in and continued and company's I hard of Don and once our

Operator

the call. and Thank this Ladies concludes attending. you for gentlemen, conference

may You disconnect. now

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