Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________________________ FORM 10-Q [Mark One] ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-37556 _________________________________________________ ...

Company Participants Sean Dodge - RBC Capital Markets David Manthey - Baird Michael Hoffman - Stifel Scott Schneeberger - Oppenheimer Kevin Steinke - Barrington Research IÂ'll now hand you over to Andrew Ellis, Vice President of Investor Relations to begin. Andrew, please go ahead when you are ready. Our past financial performance should not be considered a reliable indicator of our future performance, and investors should not use historical results to anticipate future results or trends. We disclaim any ob ...

Financial Performance - Total revenues for Stericycle in 2022 were $2,704.7 million, an increase from $2,646.9 million in 2021, representing a growth of approximately 2.2%[26] - North America segment revenues reached $2,263.1 million in 2022, up from $2,136.5 million in 2021, indicating a growth of about 5.9%[26] - International segment revenues decreased to $441.6 million in 2022 from $510.4 million in 2021, a decline of about 13.5%[26] - Net income attributable to Stericycle, Inc. common shareholders for 2022 was $56.0 million, compared to a net loss of $27.8 million in 2021[276] - The gross profit for 2022 was $1,025.6 million, slightly up from $1,017.2 million in 2021[276] - The total assets decreased to $5,334.1 million in 2022 from $5,473.1 million in 2021, reflecting a decline of approximately 2.5%[281] - Total liabilities decreased to $2,909.6 million in 2022 from $3,070.3 million in 2021, a reduction of about 5.2%[281] - The total equity of Stericycle, Inc. increased to $2,424.5 million in 2022 from $2,402.8 million in 2021, reflecting a growth of approximately 0.9%[282] - The company recorded capital expenditures of $132.2 million in 2022, compared to $116.9 million in 2021, indicating an increase of approximately 13.5%[284] - Net cash from operating activities decreased to $200.2 million in 2022 from $303.1 million in 2021, a decline of approximately 33.9%[284] Revenue Sources - Stericycle's revenue is primarily derived from Regulated Waste and Compliance Services and Secure Information Destruction Services, with revenue recognized upon waste collection[298] - Secure Information Destruction Services in North America generated revenues of $794.3 million in 2022, compared to $679.0 million in 2021, reflecting a growth of approximately 16.9%[26] - Stericycle's international RWCS operations primarily generate revenue from large account customers, such as hospitals and publicly funded healthcare organizations[32] Customer and Market Dynamics - Stericycle's estimated revenue retention rate is approximately 90%, based on internal customer attrition analysis[29] - No single customer accounted for more than 1.6% of total revenues, with the top ten customers collectively representing about 8.5% of total revenues[29] - The company operates in 17 countries, providing services to a diverse range of industries including healthcare, education, and government[22] - The average volume of waste managed per customer site is relatively small, despite handling large volumes overall[28] Operational Efficiency and Investments - The implementation of the North America ERP is expected to enhance operational efficiencies and improve operating margins through real-time information insights[35] - The company has opened four new greenfield autoclave facilities in New Jersey, California, Ireland, and the United Kingdom, and completed over 20 upgrade projects in the past two years[49] - Stericycle's transportation network optimization has resulted in an average reduction of 20,000 miles driven per month in the Western United States[50] Workforce and Diversity - As of December 31, 2022, Stericycle's workforce consists of over 15,000 team members, with 97% employed full-time and a voluntary turnover rate of approximately 28%, an increase of 2% year over year[53] - 12% of Stericycle's total global workforce is covered by collective bargaining agreements, with approximately 650 team members in North America and 1,200 outside North America under such agreements[54] - In 2022, 65% of new hires and 44% of internal promotions in the U.S. were from federally designated racial or ethnic minority categories, and approximately 200 new hires identified as U.S. veterans[57] - Stericycle's commitment to diversity and inclusion is reflected in its employee resource groups, which support various minority communities and promote engagement[58] Regulatory and Compliance Issues - Stericycle is subject to extensive environmental regulations, including the federal Clean Air Act and Clean Water Act in the U.S., and various international laws governing waste management[66] - The company actively engages with regulatory bodies such as the CDC, DEA, and EPA to ensure compliance with evolving regulations affecting its services[63] - Regulatory compliance is critical, as noncompliance could adversely affect operations and growth efforts, with extensive governmental regulations governing waste management[102] Financial Risks and Challenges - The company has accumulated net operating losses (NOLs) of approximately $223.6 million as of December 31, 2022, which may impact future tax expenses if not utilized against taxable income[122] - The company faces aggressive pricing competition from existing competitors and new entrants, which may require price reductions and affect profitability[97] - The company may incur significant charges from portfolio optimization, which may not achieve the desired results[128] - The company is monitoring the geopolitical situation arising from Russia's invasion of Ukraine, assessing its potential impact on operations[153] - The company is experiencing delays in completing certain capital projects due to macroeconomic supply chain disruptions[152] Environmental and Sustainability Initiatives - The company is engaged in ongoing discussions with customers regarding their sustainability goals, which may require operational adjustments and investments[125] - The company may need to invest in higher-cost technologies to meet customer demands for sustainability and carbon neutrality, which could impact future revenues and operational costs[126] - The average age of the population in the countries where Stericycle operates is rising, increasing healthcare demand and the quantity of regulated wastes generated[51] Technology and Cybersecurity - The company relies heavily on information technology systems, and any significant disruptions could adversely affect business operations and financial results[109] - The company is exposed to various cybersecurity risks that could lead to data breaches, resulting in reputational damage and potential litigation[107] Debt and Financial Obligations - As of December 31, 2022, the company had a total outstanding indebtedness of $1.52 billion, including both long-term and short-term debt[135] - The company has a $1.2 billion credit facility due in September 2026, which supports its financial flexibility[26] - Rising interest rates could increase the overall interest expense for the company, particularly affecting variable rate debt[134] - The company reported a potential additional interest expense of approximately $3.5 million over one year from a hypothetical 100 basis points increase in interest rates on variable rate obligations[258]

Stericycle, Inc. (NASDAQ:SRCL) Q3 2022 Results Conference Call November 3, 2022 9:00 AM ET Company Participants Andrew Ellis - Vice President of Investor Relations and Enterprise Finance Cindy Miller - Chief Executive Officer Jan Zelenka - Chief Financial Officer and Chief Information Officer Conference Call Participants Sean Dodge - RBC Capital Markets David Manthey - Baird Scott Schneeberger - Oppenheimer Michael Hoffman - Stifel Operator Hello all, and a warm welcome to the Third Quarter 2022 Stericycle' ...

Financial Data and Key Metrics Changes - Revenues in Q2 2022 were $679.8 million, up from $672.7 million in Q2 2021, with organic revenues increasing by $33.8 million after adjusting for divestitures and foreign exchange impacts [16][25] - U.S. GAAP net income was $10.5 million or $0.11 diluted earnings per share, down from $29.3 million or $0.32 diluted earnings per share in Q2 2021, primarily due to lower income from operations [24][26] - Adjusted income from operations was $82 million, representing 12.1% of revenues, down from 15.7% in the same quarter last year [26] Business Line Data and Key Metrics Changes - Secure Information Destruction organic revenue grew 12.2%, contributing $25.7 million to the overall organic revenue increase, while Regulated Waste and Compliance Services saw a 1.8% increase, contributing $8.1 million [16][21] - Regulated Waste and Compliance Services revenues were $448.4 million, down from $463 million in Q2 2021, with organic revenues in North America increasing by 2.8% [17][18] Market Data and Key Metrics Changes - In North America, organic revenue growth was 6.2%, with Secure Information Destruction increasing by 12.9% and Regulated Waste and Compliance Services increasing by 2.8% [8] - International Regulated Waste and Compliance Services organic revenues declined 2.3% due to decreased pandemic-related waste volumes [20] Company Strategy and Development Direction - The company is focused on executing a pricing strategy to offset inflationary cost pressures, with expectations for continued benefits from surcharge and fee pricing initiatives in the second half of 2022 [9][10] - The company is modernizing its facilities and investing in new technologies, such as the SMS revolution for sharps processing, to improve operational efficiency and competitive positioning [11][12] Management's Comments on Operating Environment and Future Outlook - Management noted improvements in workforce shortages, with frontline workforce shortages decreasing to approximately 10% from 12% in the previous quarter [7] - The company updated its guidance for 2022, raising organic revenue growth expectations to 4% to 6% and tightening adjusted EPS guidance to $2 to $2.15 [29][30] Other Important Information - Cash flow from operations for the first half of 2022 was an outflow of $18.4 million, compared to an inflow of $149.8 million in the same period of 2021, primarily due to expected FCPA settlement payments [25][28] - The company is committed to sustainability, having filed its 2022 CDP climate change survey and launched a partnership with the National Park Foundation [33] Q&A Session Summary Question: Free cash flow guidance and remaining differences - Management explained that the remaining difference in free cash flow guidance is attributed to higher cash expenses and interest rates [38][40] Question: Growth and quality of revenue - Management indicated that they are seeing sequential growth and winning new business, particularly in the regulated side and larger hospital accounts [41][42] Question: Normalization of absenteeism costs - Management noted that operational expenses related to absenteeism peaked in Q1 but are expected to normalize as staffing levels improve [48][50] Question: Positioning against inflationary pressures - Management expressed confidence in achieving long-term free cash flow guidance despite inflationary pressures, emphasizing proactive management [52][53] Question: Accounts receivable and pricing actions - Management clarified that higher accounts receivable are largely due to catch-up efforts in Secure Information Destruction and normal working capital timing [55][60] Question: Volume drivers and operational efficiencies - Management highlighted ongoing positive growth trajectory and improvements in operational efficiencies through automation and modernization initiatives [62][65]

Financial Performance - Revenues for Q2 2022 were $679.8 million, a slight increase from $672.7 million in Q2 2021, while revenues for the first half of 2022 totaled $1,344.0 million compared to $1,340.7 million in the same period of 2021[10]. - Net income for Q2 2022 was $10.5 million, down from $29.3 million in Q2 2021, and the net loss for the first half of 2022 was $3.6 million compared to a net income of $55.5 million in the first half of 2021[10]. - The company reported a comprehensive loss of $35.5 million for Q2 2022, compared to a comprehensive income of $36.0 million in Q2 2021, primarily due to currency translation adjustments[12]. - For the six months ended June 30, 2022, total revenues were $1,344.0 million, compared to $1,340.7 million in the same period of 2021, showing a marginal increase of about 0.3%[36]. - The company reported a net loss of $3.8 million for the six months ended June 30, 2022, compared to a net income of $55.4 million for the same period in 2021[25]. Cost and Expenses - The gross profit margin decreased to 38.3% in Q2 2022 from 39.9% in Q2 2021, reflecting an increase in the cost of revenues which rose to $419.3 million from $403.6 million year-over-year[10]. - Selling, general and administrative expenses increased to $222.4 million in Q2 2022 from $213.5 million in Q2 2021, indicating a rise of approximately 5.5%[10]. - The company's Adjusted Income from Operations for the three months ended June 30, 2022, was $82.0 million, down from $105.7 million in the same period of 2021, a decrease of 22.4%[55]. - Adjusted Income from Operations for North America decreased by $10.7 million, or 6.7%, to $148.9 million in Q2 2022[9]. Assets and Liabilities - Cash and cash equivalents decreased to $45.9 million as of June 30, 2022, down from $55.6 million at the end of 2021[15]. - Total assets decreased to $5,408.0 million as of June 30, 2022, compared to $5,473.1 million at the end of 2021[15]. - Total liabilities decreased slightly to $3,054.3 million as of June 30, 2022, from $3,070.3 million at the end of 2021[15]. - As of June 30, 2022, the company's total debt was $1.7056 billion, an increase from $1.6237 billion as of December 31, 2021[46]. Revenue Segmentation - Regulated Waste and Compliance Services generated revenues of $448.4 million in Q2 2022, down from $463.0 million in Q2 2021, indicating a decline of about 3.0%[36]. - Secure Information Destruction Services saw an increase in revenues to $231.4 million in Q2 2022, up from $209.7 million in Q2 2021, reflecting a growth of approximately 10.0%[36]. - The North America segment reported total revenues of $568.6 million in Q2 2022, compared to $542.6 million in Q2 2021, marking an increase of approximately 4.8%[36]. - International segment revenues decreased to $111.2 million in Q2 2022 from $130.1 million in Q2 2021, representing a decline of about 14.5%[36]. Cash Flow - The company reported net cash used in operating activities of $18.4 million for the first half of 2022, a significant decline from $149.8 million in the same period of 2021[18]. - Net cash from operating activities increased to $20.4 million in Q2 2022, compared to a use of funds of $38.8 million in Q1 2022[93]. - Net cash used from investing activities increased by $9.2 million in the first six months of 2022, totaling $67.6 million compared to $58.4 million in the same period of 2021[143]. - Net cash provided from financing activities increased by $161.6 million in the first six months of 2022, resulting in a source of funds of $79.0 million compared to a use of funds of $82.6 million in 2021[144]. Strategic Initiatives - The company completed the acquisition of a midwest-based regulated waste business on December 31, 2021, as part of its portfolio optimization strategy[43]. - The total purchase price consideration for the acquisition was $42.8 million, including $10.5 million in cash, $21.3 million in promissory notes, and $11.0 million in deferred consideration[44]. - The company plans to continue evaluating opportunities for portfolio optimization through asset rationalizations and strategic acquisitions[97]. - New RWCS facilities were opened in the Northeast U.S. and Romania, and a new incineration facility is under construction on the U.S. west coast[97]. Compliance and Legal Matters - The Company agreed to pay $52.5 million in criminal fines to the DOJ, with potential offsets of up to $17.5 million based on fines paid to Brazilian authorities[63]. - Under the settlement with the SEC, the Company will disgorge $22.2 million and pay pre-judgment interest of $6.0 million[63]. - The Company accrued an additional $9.6 million in the first half of 2022 for the FCPA Settlement, in addition to the $80.7 million accrued in 2021[66]. - The Company is cooperating with ongoing investigations by the SEC and DOJ regarding compliance with anti-corruption laws[62]. Market and Economic Conditions - The strengthening U.S. Dollar negatively impacted revenues by $13.7 million in Q2 2022 due to foreign exchange rate changes[90]. - The Company is experiencing inflationary cost increases in labor, supply chain, and other expenses, affecting operational costs[89]. - The impact of unfavorable foreign exchange rates reduced revenues by $19.6 million, or 1.5%, for the six months ended June 30, 2022[10]. Workforce and Operations - The Company has implemented a global return-to-office hybrid work schedule for office workers to promote team collaboration while maintaining health standards[87]. - The Company is addressing workforce shortages through recruitment, competitive compensation, and employee engagement initiatives[88]. - Research and development investments increased by 20% year-over-year, totaling $10 million, aimed at improving operational efficiency and service delivery[159].

Financial Data and Key Metrics Changes - Revenues in Q1 2022 were $664.2 million, a slight decrease from $668 million in Q1 2021, with organic revenues increasing by $13.7 million [30] - Income from operations fell to $5.9 million from $59.1 million in the same quarter last year, primarily due to increased costs [35] - U.S. GAAP net loss was $14.2 million or $0.15 diluted loss per share, compared to net income of $26.1 million or $0.28 diluted earnings per share in Q1 2021 [37] - Cash flow from operations was an outflow of $38.8 million, a decline of $101.4 million year-over-year [38] - Adjusted diluted earnings per share decreased to $0.32 from $0.71 in Q1 2021 [40] Business Line Data and Key Metrics Changes - Regulated Waste and Compliance Services revenues were $452.6 million, down from $473.6 million in Q1 2021, with organic revenues declining by 1% [31] - Secure Information Destruction revenues increased to $211.6 million from $194.4 million in Q1 2021, with organic revenue growth of 9.5% [32] - North America Secure Information Destruction organic revenues increased by $14.7 million or 8.8% compared to Q1 2021, driven by a 73.5% increase in recycled paper revenues [33] Market Data and Key Metrics Changes - International Regulated Waste and Compliance Services organic revenues declined by 4.7% in Q1 2022 due to decreased pandemic-related waste volumes [34] - The company experienced a 21% shortfall in driver staffing in North America at the beginning of Q1, which improved to 12% by March [15][16] Company Strategy and Development Direction - The company is focused on quality of revenue initiatives and pricing strategies to mitigate inflationary pressures [17][19] - Plans to expand capacity with a new Medical Waste Facility in New Jersey to enhance operational efficiency and sustainability [21][22] - Introduction of SafeShield Medical Waste Containers, aimed at improving safety and reducing plastic demand [23][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in reaffirming 2022 guidance despite challenges from COVID-19, labor shortages, and inflation [14][45] - The company anticipates that pricing actions will have a larger impact in the second half of 2022 [20][46] - Management acknowledged the ongoing challenges but highlighted improvements in staffing and operational efficiency [48] Other Important Information - The company reached agreements to resolve FCPA investigations, marking a significant milestone in its business transformation [27][28] - Capital expenditures for Q1 2022 were $37.5 million, up from $24.7 million in the same period last year [42] Q&A Session Summary Question: Can you provide insight into the organic growth trends in your Medical Waste business? - Management indicated that excluding COVID impacts, the Medical Waste business is trending slightly over 4% organic growth [52][53] Question: What is the expected headwind from COVID in Q2? - Management noted that while there is some headwind from COVID, they are encouraged by core underlying growth [55][61] Question: How much of the pricing levers have been implemented? - Management confirmed that they have made significant adjustments to pricing and surcharges, which are expected to take effect in Q2 [80][86] Question: Can you elaborate on the driver shortfall and its impact on costs? - Management reported a significant improvement in driver staffing from 21% to 12%, which is expected to ease travel and overtime expenses [87][90] Question: What is the confidence behind the reaffirmed guidance? - Management highlighted three key aspects: pricing levers, easing acute labor challenges, and year-over-year comparisons improving in the second half of the year [106][108]

Stericycle" We protect what matters. | --- | --- | --- | --- | |-----------------------------------------------------------------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | Investor Presentation First Quarter 2022 Results April 28, 2022 | | | | | | | | | Safe Harbor Statement 2 This document may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. When we use words such as "believes", "expects", "anticipates", "estimates", "may", "pla ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________________________ FORM 10-Q [Mark One] ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-37556 _________________________________________________ ...

Stericycle, Inc. (NASDAQ:SRCL) Q4 2021 Earnings Conference Call February 24, 2022 10:00 AM ET Company Participants Andrew Ellis - Vice President, Investor Relations Cindy Miller - Chief Executive Officer Janet Zelenka - Chief Financial Officer & Chief Information Officer Conference Call Participants Scott Schneeberger - Oppenheimer Sean Dodge - RBC Capital Markets David Manthey - Baird Operator Good day and welcome to the Stericycle Fourth Quarter 2021 Earnings Conference Call and Webcast. All participants ...