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Republic executives discuss Q1 earnings, changes in business due to COVID-19

Republic executives discuss Q1 earnings, changes in business due to COVID-19
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Republic Services Inc., Phoenix, reported net income of $ 246.3 million, or 77 cents per diluted share, for the first quarter. This compares with $ 234.2 million, or 72 cents per diluted share, for the first quarter of 2019 . Excluding certain gains and expenses, on an adjusted basis, net income for Q1 was $ 246.3 million, or 77 cents per diluted share, versus $ 237.2 million, or 73 cents per diluted share, for the comparable 2019 period.

"In all my time at Republic Services, I’ve never been more proud to be a part of the Republic team. Our 36,000 employees remain committed to operating safely and efficiently while continuing to provide consistent, reliable service to our customers during these unprecedented times," Republic Services CEO Donald Slager says. "Over the years, we’ve made several key investments, including developing standardized processes and procedures, implementing innovative technology to enhance employee safety and efficiency, consolidating our customer service operations and building world-class procurement and business continuity functions. These investments are yielding strong returns and enabling us to quickly adapt and adjust our business to align with today’s dynamic market conditions. We have built a strong foundation and resilient business, which positions us well to manage through this crisis and come out of it stronger than ever."

"The safety and well-being of our people is our top priority and at the forefront of every decision we make. We have taken several steps to keep our employees safe, including providing masks, implementing enhanced cleaning procedures and expanding employee benefits," Republic Services President Jon Vander Ark says. "We also launched our $ 20 million ‘Committed to Serve’ initiative to recognize our frontline employees who are serving our customers every day, while also helping support our small-business customers across the nation. Our goal is to support the economy at the local level, benefiting our small-business customers and communities as well as our employees."

Republic Services Q1 highlights:

  • Earnings per share (EPS) were 77 cents. Adjusted EPS, a non-GAAP (Generally Accepted Accounting Principles) measure, were 77 cents, an increase of 5 percent over the prior year.
  • Cash provided by operating activities was $ 570 million, an increase of 3 percent versus the prior year. Adjusted free cash flow, a non-GAAP measure, was $ 267 million, which decreased versus the prior year primarily because of the timing of capital expenditures and cash taxes.
  • Cash flow invested in acquisitions was $ 63 million. The annual revenue acquired was approximately $ 30 million.
  • Total cash returned to shareholders through dividends and share repurchases was $ 228 million.
  • As of March 31, Republic had $ 1.9 billion of available liquidity, including $ 1.6 billion of available borrowing capacity under its credit facilities and $ 282 million of cash.
  • Core price increased revenue by 5.2 percent and average yield was 2.9 percent.
  • Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), a non-GAAP measure, was $ 723 million, and adjusted EBITDA margin was 28.3 percent of revenue, consistent with the prior year. Adjusted EBITDA margin was impacted by the following: a 20 basis point headwind from lower recycled commodity prices, a 50 basis point headwind from an additional workday in the quarter relative to the prior year, and a 40 basis point benefit from lower fuel prices and CNG tax credits. Normalizing for these items, adjusted EBITDA margin increased 30 basis points.
  • Republic says it continued to convert CPI-based contracts to more favorable pricing mechanisms for the annual price adjustment. The company now has approximately $ 815 million in annual revenue, or 33 percent of its approximately $ 2.5 billion CPI-based book of business, tied to either a waste-related index or a fixed-rate increase of 3 percent or greater.
  • The company’s average recycled commodity price per ton sold in the first quarter was $ 76. This represents a sequential increase from the fourth quarter of $ 10 per ton and a decrease versus the prior year of $ 17 per ton.
  • The company launched its $ 20 million Committed to Serve initiative designed to help frontline employees, customers and local communities.

Republic announced it is suspending its full-year 2020 detailed financial guidance because of the COVID-19 pandemic and the uncertainties present in the U.S. economy. The company announced it has limited visibility into the timing and sequencing of increases in economic activity in the markets where it operates.

"We had a strong start to the year. Despite the impact of the pandemic in March, we delivered solid first-quarter results. We increased both revenue and adjusted EBITDA by 3.4 percent and expanded underlying adjusted EBITDA margin by 30 basis points," Slager says. "While the future remains uncertain, we are beginning to see signs of increasing economic activity. We remain confident in our ability to quickly adjust our costs and capital expenditures to align with changes in demand. Assuming the economy continues to recover, and GDP (gross domestic product) sequentially improves in the third and fourth quarter as currently predicted by economists, we expect to generate over $ 1 billion of adjusted free cash flow in 2020."

Company declares quarterly dividend

Republic previously announced that its board of directors declared a regular quarterly dividend of 40.5 cents per share for stockholders of record on July 1. The dividend will be paid July 15.

Earnings call highlights

Republic Services held its Q1 earnings call May 5. During the call, Slager and Vander Ark discussed changes in service, anticipated M&A activity and more.

Slager on how the company is managing through the COVID-19 pandemic:

“As you know, Republic Services provides an essential service. Our team is working tirelessly to serve our customers and communities. And I want to sincerely thank them for all their efforts. As always, the safety and well-being of our people is our top priority. And we are supporting them by continuing to provide all field employees with role-specific PPE (personal protective equipment) and masks, implementing enhanced cleaning protocols, adjusting processes, procedures and physical spaces to enable proper social distancing, rebalancing the workload to keep all people working by reducing overtime, providing supplemental paid time off and enhancing medical benefits to cover all COVID-related out-of-pocket costs; and finally, finding new and creative ways to keep our 36,000 employees engaged, motivated and connected.

Slager on how the company’s technology investments have paid dividends:

“Through [our] investments, we’ve built a solid foundation and an even more resilient business. These investments were the driving force behind our superior results in 2019, and our strong start to 2020. Importantly, these foundational improvements have enabled us to be more agile as we navigate the current environment. For example, through our investment in innovative routing and workforce planning tools, we’ve been able to quickly adjust our routes for changes in demand. And our investment in technology and collaboration tools allowed us to successfully transition approximately 6,000 of our people to work from home in a matter of days. And we did so without disruption to our customers or productivity.”

Slager on recent service changes:

“We started the year strong in January and February. In mid-March, some customers in our large container and small container businesses began adjusting their service by decreasing the frequency of pickup or temporarily pausing service. Service decreases continued in late March through mid-April and have moderated since then. In the last couple of weeks, we’ve begun to see customers re-engage with us as they plan to reopen their businesses. Assuming these trends continue, we believe the worst is behind us and volumes will sequentially improve from here. This perspective is consistent with current GDP consensus estimates, which call for a decline in the second quarter, and sequential improvement in the third and fourth quarters.”

Vander Ark on changes in service:

“Looking first at our small container business. In March, as shelter-in-place orders were implemented across the country, service decreases began to outpace service increases. Additionally, container weights started to decline. In April, total yards collected decreased by approximately 11 percent and container weight decreased by approximately 20 percent. It’s important to note that in the last two weeks, trends have become more favorable. Container waste has started to increase and customers are beginning to resume service as they plan for reopening. In fact, last week, services increases fully offset services decreases.

“… Turning to our large container collection business. In April, recurring large container hauls decreased 19 percent versus the prior year. And temporary large container hauls decreased 14 percent versus the prior year. Given the decrease in demand, our teams effectively rebalanced the routes and reduced overtime by approximately 50 percent.

“Next, turning to our residential collection business. In this line of business, we bill customers based on the container size and frequency of pickup rather than on the weight of the container. As a result, given we are continuing to operate as normal, the pandemic has had minimal impact on our revenue. However, as residents consume more at-home and create more recycling and solid waste, our processing and disposal costs will increase. For the month of April, average container waste increased approximately 15 percent versus the prior year.

“Regarding our disposal business. In April, third-party tons decreased by approximately 20 percent and included a decrease in special waste of 34 percent, a decrease in C&D (construction and demolition) of 11 percent and a decrease in MSW of only 7 percent. Importantly, the rate of decline has begun to moderate, and last week, total landfill tons were only down 15 percent versus the prior year.”

Vander Ark on the company’s recycling business:

“During this crisis, we remain steadfast in our commitment to the environment. Thanks to the hard work and resourcefulness of our procurement and operations teams, I’m proud to report that we’ve been able to continue to operate our recycling processing centers across the country without any disruption. In a time like this, when e-commerce activity is increasing and the demand for fiber is increasing, it is more important than ever to keep our operations up and running safely. We’ve implemented social distancing and are providing necessary PPE to keep our people safe and our facilities operational.”

Vander Ark on how the slowdown has impacted how the company is managing its assets:

“As volumes decrease, the replacement cycle of our assets naturally extends. Therefore, we are intelligently scaling back our replacement capital to align with changes in demand, including the construction of landfill airspace and the purchase of replacement trucks, containers and equipment. Overall, we have been quickly adapting our operations based on changes in customer demand. As always, we will continue to manage the business for the long-term. We’ve been very nimble during this rapidly evolving period, and we’ll be equally ready as the economy begins to grow again.”

Slager on how the company is approaching M&A activity:

“I don’t think [there has been] a material change. Diligence for deals we had near closing … has been more difficult because we’re not traveling, right? So, we’ve had to maybe slow some of those things down and do some things remotely. That just requires a little bit of innovation. But as far as new opportunity goes, I think frankly, as we’ve said, there are a lot of really good companies out there that we’d like to look at and talk to, some we already have in the pipeline, there may be some more that come to market. I think, for the most part, companies have just been busy getting their businesses stabilized, trying to figure this thing out, and as the market starts to come back, people will start to decide whether they’re still in this for the long-term or not. We know that we are, and we know we’ve got the balance sheet and the know-how to get it done. So, we’ll be here to have conversations if there are people who want to otherwise. So, we think it’ll still be a good year for us in the M&A (mergers and acquisitions) department.”

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Source: Recycling Today
Republic executives discuss Q1 earnings, changes in business due to COVID-19
<![CDATA[Republic Services Inc., Phoenix, reported net income of $ 246.3 million, or 77 cents per diluted share, for the first quarter. This compares with $ 234.2 million, or 72 cents per diluted share, for the first quarter of 2019 . Excluding certain gains and expenses, on an adjusted basis, net income for Q1 was $ 246.3 million, or 77 cents per diluted share, versus $ 237.2 million, or 73 cents per diluted share, for the comparable 2019 period."In all my time at Republic Services, I’ve never been more proud to be a part of the Republic team. Our 36,000 employees remain committed to operating safely and efficiently while continuing to provide consistent, reliable service to our customers during these unprecedented times," Republic Services CEO Donald Slager says. "Over the years, we’ve made several key investments, including developing standardized processes and procedures, implementing innovative technology to enhance employee safety and efficiency, consolidating our customer service operations and building world-class procurement and business continuity functions. These investments are yielding strong returns and enabling us to quickly adapt and adjust our business to align with today’s dynamic market conditions. We have built a strong foundation and resilient business, which positions us well to manage through this crisis and come out…

Carolina Recycling Association

Connecticut scrap yard celebrates 125 years in business

Connecticut scrap yard celebrates 125 years in business
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Albert Bros Inc., a metal recycling company based in Waterbury, Connecticut, has announced that it is celebrating 125 years of being in business this year. According to a news release from Albert Bros., Nathan and Lewis Albert started the scrap metal yard business in 1895 in Waterbury. 

“Albert Bros. is a family owned business, built on tradition, and has been for generations,” says Eric Albert, president of Albert Bros. “Nathan’s oldest son, Sidney, joined the business in 1919. He became president of Albert Bros. in 1929. Sidney’s oldest son Burt, my father, entered the business in 1958. The company expanded and moved to its present location on East Aurora Street in 1971. It was in the 1980s when I began working at Albert Bros. along with my brother Jonathan under our father’s leadership. I joined the company in 1985 and Jonathan, joined the business five years later.”

Burt’s grandson Jake also joined the family business one month before he passed away in May 2019, and Jake marks the fifth generation of the Albert family to work for the business.

“For 125 years, Albert Bros. has continued to build on and maintain a significant local, regional and international reputation. The manner in which we conduct business has remained constant. Our core values haven’t changed—honesty, integrity, safety, respect, financial stability, professionalism, environmental stewardship and community involvement have always been the cornerstones of our success,” Eric adds.  “We are committed to servicing the community we live in, and we will continue to do so by volunteering and supporting the local and national organizations that improve the quality of our region. Particularly now, as we are all facing challenges with COVID-19, we are proud to be part of the local community standing strong together supporting our first responders and medical teams, and all those on the front lines.”

Today, Albert Bros. has 65 full-time employees, some of whom have been with the company for decades. Also, the company is renovating an additional 10-acre, 130,000-square-foot facility located across the street from its main facility to accommodate its growth and efficiency initiatives. 

The company reports that the metal-recycling sector as a whole is facing headwinds driven by the impact of tariffs and volatility in global markets, but the company remains bullish about its future. “Metal recycling is here to stay, and we are passionate about its role in helping to conserve resources for future generations while making its communities better places to live and work in,” Eric says. “And we are confident the company will continue to evolve to meet any new developments.”

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Source: Recycling Today
Connecticut scrap yard celebrates 125 years in business
<![CDATA[Albert Bros Inc., a metal recycling company based in Waterbury, Connecticut, has announced that it is celebrating 125 years of being in business this year. According to a news release from Albert Bros., Nathan and Lewis Albert started the scrap metal yard business in 1895 in Waterbury. “Albert Bros. is a family owned business, built on tradition, and has been for generations,” says Eric Albert, president of Albert Bros. “Nathan’s oldest son, Sidney, joined the business in 1919. He became president of Albert Bros. in 1929. Sidney’s oldest son Burt, my father, entered the business in 1958. The company expanded and moved to its present location on East Aurora Street in 1971. It was in the 1980s when I began working at Albert Bros. along with my brother Jonathan under our father’s leadership. I joined the company in 1985 and Jonathan, joined the business five years later.”Burt’s grandson Jake also joined the family business one month before he passed away in May 2019, and Jake marks the fifth generation of the Albert family to work for the business.“For 125 years, Albert Bros. has continued to build on and maintain a significant local, regional and international reputation. The manner in which we…

Carolina Recycling Association

Tissue production reaches record-high levels

Tissue production reaches record-high levels
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The American Forest & Paper Association (AF&PA), Washington, reports that the U.S. tissue and wood products industry set record-high levels of tissue production in February and March. 

According to a news release from AF&PA, U.S. tissue mills manufactured about 700,000 tons of tissue in March. Heidi Brock, president and CEO of AF&PA, says more tissue was produced in March than any other month since 2007, which is when AF&PA began collecting this historical data. 

Additionally, AF&PA states that its members safely delivered more than 22,000 tons of tissue per day in February and March. 

Brock says record-high levels of tissue production are tied to demand from the COVID-19 pandemic.

“The men and women who work in the paper and wood products industry continue to do their part to respond to demand for products like bathroom tissue and paper towels during the coronavirus (COVID-19) pandemic,” she says. “As daily production reached new thresholds, AF&PA member companies stayed the course, delivering sustainable tissue products to meet everyday, essential needs. I am heartened by the industry’s commitment to safety, and its ability to move products to the global market—just as we do 52 weeks each year.”

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Source: Recycling Today
Tissue production reaches record-high levels
<![CDATA[The American Forest & Paper Association (AF&PA), Washington, reports that the U.S. tissue and wood products industry set record-high levels of tissue production in February and March. According to a news release from AF&PA, U.S. tissue mills manufactured about 700,000 tons of tissue in March. Heidi Brock, president and CEO of AF&PA, says more tissue was produced in March than any other month since 2007, which is when AF&PA began collecting this historical data. Additionally, AF&PA states that its members safely delivered more than 22,000 tons of tissue per day in February and March. Brock says record-high levels of tissue production are tied to demand from the COVID-19 pandemic.“The men and women who work in the paper and wood products industry continue to do their part to respond to demand for products like bathroom tissue and paper towels during the coronavirus (COVID-19) pandemic,” she says. “As daily production reached new thresholds, AF&PA member companies stayed the course, delivering sustainable tissue products to meet everyday, essential needs. I am heartened by the industry’s commitment to safety, and its ability to move products to the global market—just as we do 52 weeks each year.”]]>

Carolina Recycling Association

Attention Recyclers: Do you have respirators in your recycling streams?

With the shortage of ventilators and other crucial medical equipment in the world right now, we remind recyclers to look for ventilators, CPAP / BiPAP machines, pulse oximeters, thermometers, etc. in your recycling streams that could be repaired and put back into service? What may have been recycled in the past, may be needed in this pandemic. Preparing medical equipment for reuse requires special knowledge, test equipment and safety certifications.

If you have this equipment, please contact a qualified medical equipment refurbisher. If medical equipment testing and repair is your specialty, please let SERI know so we can connect you with recyclers that have this equipment. Info@SustainableElectronics.org

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SERI – Sustainable Electronics Recycling International

Alternative Auditing & Certification Procedures in response to Coronavirus Outbreak

The Coronavirus (COVID-19) pandemic has caused unprecedented actions by governments around the world to reduce the spread of this potentially deadly virus. Businesses are being forced to close and travel has been restricted. In the certification world, certifications depend upon auditors traveling to facilities to perform onsite audits while facilities are in operation. This has created a difficult situation for both R2 auditors and R2 facilities trying to maintain R2 Certification under the normal rules for annual audits.  

To protect R2 facilities, their employees and auditors – and to avoid major disruptions in the R2 Certification process during this challenging time – SERI added alternative audit procedures for the remainder of 2020 that can be found on the SERI website in Advisory 19 to the R2 Code of Practices. This will provide flexibility to auditors and facilities working to maintain R2 Certifications during this period. Questions about individual facility audits should be directed to your Certification Body. The safety of everyone should remain the primary objective in these extraordinary times.

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SERI – Sustainable Electronics Recycling International

R2v3 Transition Timeline

The final timeline for transitioning to R2v3 will be published in conjunction with the final release of the R2v3 Standard. This is the tentative timeline currently under consideration: 

NEW CERTIFICATIONS – first time certifications to the current R2:2013 Standard will only be permitted for six months after the R2v3 release date. After the first 6 months, first time certifications must be to the new R2v3 Standard. 

RECERTIFICATIONS –

  • Certificates that expire on or before the 1-year anniversary of the R2v3 release date: Facilities will have the option to recertify to R2:2013 as long as the recertification audit is completed before the one year anniversary of the R2v3 release.
     
  • Certificates that expire after the 1-year anniversary of the R2v3 release date: Facilities will be required to transition to the new R2v3 Standard.
     
  • All R2:2013 certificates will expire no later than 3 years from the R2v3 release date.
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Report: EU’s Drive for Carbon Neutrality by 2050 Undeterred by Covid-19

Even with the global pandemic that is covid-19, the EU is confident that its climate ambitions will remain intact.

The post Report: EU’s Drive for Carbon Neutrality by 2050 Undeterred by Covid-19 appeared first on Environment + Energy Leader.

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More about the R2 Technical Advisory Committee (TAC)

The R2 TAC has been diligently working since August 2015 to strengthen, clarify and improve the R2 Standard. Their proposed changes reflect an evolving industry, the broadening array of industry sectors that rely on R2 certified facilities and services, and lessons learned since the R2 Standard was first introduced in 2008.  

Some interesting TAC facts…

  • The TAC has devoted more than 5100 volunteer hours on the development of R2v3. This includes 51 conference calls, five multi-day in-person meetings, and 16 small work groups assigned to specific issues or sections of the R2 Standard.

 

  • The makeup of the TAC is balanced with representatives from different sectors including recyclers; customers/users of electronics reuse and recycling services; public interest groups; government regulators; and auditors.

 

  • 48 different stakeholders have served on the TAC since the current review/revision process began in August 2015. 

 

  • Currently 30 members are serving on the TAC:  12 Recyclers; 9 customers; 9 public interest/ regulators/ auditors.

 

  • 60% of current members have served since May 2017.  
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SERI – Sustainable Electronics Recycling International

R2v3 Update

The R2 Technical Advisory Committee (TAC) is nearing the end of its review of the public comments on the second draft of the R2v3 Standard. The 167 comments received addressed 70 different issues or aspects of the proposed Standard.  The TAC has worked through the bulk of the comments and has determined that most of the comments can be addressed with clarification in Guidance, or with a few non-substantive changes made for better clarity.  

One remaining issue in Appendix E is still under consideration and the TAC will be discussing this issue in the next couple of weeks. If the TAC makes any changes, those changes will be posted for another 45-day public comment period. 

If the TAC decides not to make any further changes, the Consensus Body will hold a vote for the formal approval of the draft standard. Once approved by the Consensus Body, the draft standard will be forwarded to the SERI Board of Directors for review. If the standard is adopted by the Board, further information on the release date and implementation timeline will be provided.

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United Nations Says Global Emissions Likely to Increase Post-Pandemic

Carbon dioxide emissions have plunged as covid-19 slows commercial and industrial activity. But that drop is probably just temporary, the United Nations warned this week.

The post United Nations Says Global Emissions Likely to Increase Post-Pandemic appeared first on Environment + Energy Leader.

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