Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-37556 | |
Entity Registrant Name | STERICYCLE INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 36-3640402 | |
Entity Address, Address Line One | 2355 Waukegan Road | |
Entity Address, City or Town | Bannockburn | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60015 | |
City Area Code | 847 | |
Local Phone Number | 367-5910 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | SRCL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 92,184,219 | |
Entity Central Index Key | 0000861878 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenues | $ 690.3 | $ 648.9 | $ 2,034.4 | $ 1,989.6 |
Cost of revenues | 424.1 | 409.2 | 1,263.3 | 1,219.4 |
Gross profit | 266.2 | 239.7 | 771.1 | 770.2 |
Selling, general and administrative expenses | 215.6 | 279.4 | 676.5 | 695.2 |
Divestiture losses, net | 0 | 10.9 | 0 | 10.9 |
Income (loss) from operations | 50.6 | (50.6) | 94.6 | 64.1 |
Interest expense, net | (19.8) | (18.8) | (54.6) | (55.1) |
Other income, net | 2.3 | 0.5 | 0.8 | 0.5 |
Income (loss) before income taxes | 33.1 | (68.9) | 40.8 | 9.5 |
Income tax (expense) benefit | (5.1) | 3 | (16.4) | (19.9) |
Net income (loss) | 28 | (65.9) | 24.4 | (10.4) |
Net income attributable to noncontrolling interests | 0 | (0.1) | (0.2) | (0.2) |
Net income (loss) attributable to Stericycle, Inc. common shareholders | $ 28 | $ (66) | $ 24.2 | $ (10.6) |
Earnings (loss) per common share attributable to Stericycle, Inc. common shareholders | ||||
Basic (in dollars per share) | $ 0.30 | $ (0.72) | $ 0.26 | $ (0.11) |
Diluted (in dollars per share) | $ 0.30 | $ (0.72) | $ 0.26 | $ (0.11) |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 92.2 | 91.9 | 92.1 | 91.8 |
Diluted (in shares) | 92.4 | 91.9 | 92.4 | 91.8 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 28 | $ (65.9) | $ 24.4 | $ (10.4) |
Other comprehensive (loss) income: | ||||
Currency translation adjustments | (65.4) | (18.2) | (120.3) | (24.6) |
Cumulative currency translation adjustment realized through disposition of Japan operations | 0 | 3.8 | 0 | 3.8 |
Total other comprehensive loss | (65.4) | (14.4) | (120.3) | (20.8) |
Comprehensive loss | (37.4) | (80.3) | (95.9) | (31.2) |
Less: comprehensive loss (income) attributable to noncontrolling interests | (0.3) | 0.1 | (0.6) | 0.2 |
Comprehensive loss attributable to Stericycle, Inc. common shareholders | $ (37.1) | $ (80.4) | $ (95.3) | $ (31.4) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 44 | $ 55.6 |
Accounts receivable, less allowance for doubtful accounts of $58.6 in 2022 and $43.3 in 2021 | 463.4 | 420.4 |
Prepaid expenses | 39.4 | 45.6 |
Other current assets | 50.9 | 53.9 |
Total Current Assets | 597.7 | 575.5 |
Property, plant and equipment, less accumulated depreciation of $664.3 in 2022 and $658.5 in 2021 | 711.7 | 711 |
Operating lease right-of-use assets | 378.8 | 344.8 |
Goodwill | 2,748.9 | 2,815.7 |
Intangible assets, less accumulated amortization of $802.1 in 2022 and $736.6 in 2021 | 839.6 | 964.5 |
Other assets | 63.9 | 61.6 |
Total Assets | 5,340.6 | 5,473.1 |
Current Liabilities: | ||
Current portion of long-term debt | 17.2 | 19.9 |
Bank overdrafts | 2.6 | 1.6 |
Accounts payable | 200.4 | 218.9 |
Accrued liabilities | 230.5 | 359.6 |
Operating lease liabilities | 87.4 | 85.5 |
Other current liabilities | 48.7 | 46.2 |
Total Current Liabilities | 586.8 | 731.7 |
Long-term debt, net | 1,651.7 | 1,589.8 |
Long-term operating lease liabilities | 313.2 | 279.8 |
Deferred income taxes | 417.2 | 411 |
Long-term taxes payable | 12.9 | 19.1 |
Other liabilities | 33.1 | 38.9 |
Total Liabilities | 3,014.9 | 3,070.3 |
Commitments and contingencies | ||
EQUITY | ||
Common stock (par value $0.01 per share, 120.0 shares authorized, 92.2 and 91.9 issued and outstanding in 2022 and 2021, respectively) | 0.9 | 0.9 |
Additional paid-in capital | 1,280.8 | 1,261.8 |
Retained earnings | 1,379 | 1,354.8 |
Accumulated other comprehensive loss | (338.3) | (218.8) |
Total Stericycle, Inc.’s Equity | 2,322.4 | 2,398.7 |
Noncontrolling interests | 3.3 | 4.1 |
Total Equity | 2,325.7 | 2,402.8 |
Total Liabilities and Equity | $ 5,340.6 | $ 5,473.1 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 58.6 | $ 43.3 |
Property, plant and equipment, accumulated depreciation | 664.3 | 658.5 |
Intangible assets, accumulated amortization | $ 802.1 | $ 736.6 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 120,000,000 | 120,000,000 |
Common stock, issued (in shares) | 92,200,000 | 91,900,000 |
Common stock, outstanding (in shares) | 92,200,000 | 91,900,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
OPERATING ACTIVITIES: | ||
Net income (loss) | $ 24.4 | $ (10.4) |
Adjustments to reconcile net income (loss) to net cash from operating activities: | ||
Depreciation | 81.5 | 77.9 |
Intangible amortization | 94.7 | 89.1 |
Stock-based compensation expense | 20.1 | 18.8 |
Deferred income taxes | 12 | 11.5 |
Divestiture losses, net | 0 | 10.9 |
Asset impairments, loss on disposal of property plant and equipment and other charges | 2.2 | 0 |
Other, net | 3.9 | 3.9 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (60.3) | (52.3) |
Prepaid expenses | 5.4 | 4.3 |
Accounts payable | (9.4) | 26.8 |
Accrued liabilities | (101.5) | 45.6 |
Other assets and liabilities | (29.9) | (23.9) |
Net cash from operating activities | 43.1 | 202.2 |
INVESTING ACTIVITIES: | ||
Capital expenditures | (106) | (85.8) |
Proceeds from divestiture of businesses, net | 1.6 | 10.6 |
Other, net | 0.9 | 2.2 |
Net cash from investing activities | (103.5) | (73) |
FINANCING ACTIVITIES: | ||
Repayments of long-term debt and other obligations | (9.8) | (14.8) |
Proceeds from foreign bank debt | 1.6 | 0 |
Repayments of foreign bank debt | (1.7) | (28.1) |
Repayments of term loan | 0 | (222.5) |
Proceeds from credit facility | 1,018.8 | 1,158.6 |
Repayments of credit facility | (945.3) | (1,029.4) |
Proceeds from bank overdrafts, net | 1.1 | 3.6 |
Payments of finance lease obligations | (2.4) | (3) |
Payments of debt issuance costs | (0.4) | (3.9) |
Proceeds from issuance of common stock, net of (payments of) taxes from withheld shares | (5) | (3.1) |
Payments to noncontrolling interest | (0.2) | (0.6) |
Net cash from financing activities | 56.7 | (143.2) |
Effect of exchange rate changes on cash and cash equivalents | (7.9) | (1.8) |
Net change in cash and cash equivalents | (11.6) | (15.8) |
Cash and cash equivalents at beginning of period | 55.6 | 53.3 |
Cash and cash equivalents at end of period | 44 | 37.5 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Interest paid, net of capitalized interest | 64.3 | 55 |
Income taxes paid, net | 3 | 11.3 |
Capital expenditures in Accounts payable | $ 25.6 | $ 16.8 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests |
Beginning Balance (in shares) at Dec. 31, 2020 | 91.6 | |||||
Beginning Balance at Dec. 31, 2020 | $ 2,434.4 | $ 0.9 | $ 1,234 | $ 1,382.6 | $ (187.4) | $ 4.3 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (10.4) | (10.6) | 0.2 | |||
Currency translation adjustments | (24.6) | (24.4) | (0.2) | |||
Cumulative currency translation loss realized through disposition of Japan operations | 3.8 | 3.8 | ||||
Issuance of common stock for incentive stock programs, net of (payments of) taxes from withheld shares (in shares) | 0.2 | |||||
Issuance of common stock for incentive stock programs, net of (payments of) taxes from withheld shares | 0.8 | 0.8 | ||||
Stock-based compensation expense | 18.8 | 18.8 | ||||
Changes in noncontrolling interest | (0.6) | (0.6) | ||||
Ending Balance (in shares) at Sep. 30, 2021 | 91.8 | |||||
Ending Balance at Sep. 30, 2021 | 2,422.2 | $ 0.9 | 1,253.6 | 1,372 | (208) | 3.7 |
Beginning Balance (in shares) at Jun. 30, 2021 | 91.8 | |||||
Beginning Balance at Jun. 30, 2021 | 2,493.5 | $ 0.9 | 1,244.6 | 1,438 | (193.7) | 3.7 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (65.9) | (66) | 0.1 | |||
Currency translation adjustments | (18.2) | (18.1) | (0.1) | |||
Cumulative currency translation loss realized through disposition of Japan operations | 3.8 | 3.8 | ||||
Issuance of common stock for incentive stock programs, net of (payments of) taxes from withheld shares | 2.3 | 2.3 | ||||
Stock-based compensation expense | 6.7 | 6.7 | ||||
Ending Balance (in shares) at Sep. 30, 2021 | 91.8 | |||||
Ending Balance at Sep. 30, 2021 | 2,422.2 | $ 0.9 | 1,253.6 | 1,372 | (208) | 3.7 |
Beginning Balance (in shares) at Dec. 31, 2021 | 91.9 | |||||
Beginning Balance at Dec. 31, 2021 | 2,402.8 | $ 0.9 | 1,261.8 | 1,354.8 | (218.8) | 4.1 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 24.4 | 24.2 | 0.2 | |||
Currency translation adjustments | (120.3) | (119.5) | (0.8) | |||
Cumulative currency translation loss realized through disposition of Japan operations | 0 | |||||
Issuance of common stock for incentive stock programs, net of (payments of) taxes from withheld shares (in shares) | 0.3 | |||||
Issuance of common stock for incentive stock programs, net of (payments of) taxes from withheld shares | (1.1) | (1.1) | ||||
Stock-based compensation expense | 20.1 | 20.1 | ||||
Changes in noncontrolling interest | (0.2) | (0.2) | ||||
Ending Balance (in shares) at Sep. 30, 2022 | 92.2 | |||||
Ending Balance at Sep. 30, 2022 | 2,325.7 | $ 0.9 | 1,280.8 | 1,379 | (338.3) | 3.3 |
Beginning Balance (in shares) at Jun. 30, 2022 | 92.1 | |||||
Beginning Balance at Jun. 30, 2022 | 2,353.7 | $ 0.9 | 1,271.2 | 1,351 | (273.2) | 3.8 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 28 | 28 | ||||
Currency translation adjustments | (65.4) | (65.1) | (0.3) | |||
Cumulative currency translation loss realized through disposition of Japan operations | 0 | |||||
Issuance of common stock for incentive stock programs, net of (payments of) taxes from withheld shares (in shares) | 0.1 | |||||
Issuance of common stock for incentive stock programs, net of (payments of) taxes from withheld shares | 2.1 | 2.1 | ||||
Stock-based compensation expense | 7.5 | 7.5 | ||||
Changes in noncontrolling interest | (0.2) | |||||
Ending Balance (in shares) at Sep. 30, 2022 | 92.2 | |||||
Ending Balance at Sep. 30, 2022 | $ 2,325.7 | $ 0.9 | $ 1,280.8 | $ 1,379 | $ (338.3) | $ 3.3 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | STERICYCLE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1 — BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Summary of Significant Accounting Policies Basis of Presentation: The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Stericycle, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company's Condensed Consolidated Financial Statements were prepared in accordance with U.S. GAAP and include the assets, liabilities, revenues, and expenses of all wholly owned subsidiaries and majority-owned subsidiaries over which the Company exercises control. Outside shareholders' interests in subsidiaries are shown on the Condensed Consolidated Financial Statements as “Noncontrolling interests”. The accompanying unaudited Condensed Consolidated Financial Statements as of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021, have been prepared pursuant to the rules and regulations of the SEC for interim reporting and, therefore, do not include all information and footnote disclosures normally included in audited financial statements prepared in conformity with U.S. GAAP. In the opinion of management, however, all adjustments, consisting of normal recurring adjustments necessary to present fairly the results of operations, financial position and cash flows have been made. These Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto included in the 2021 Form 10-K. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the full year or any other period. Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Some areas where the Company makes estimates include allowance for doubtful accounts, credit memo reserves, contingent liabilities, asset retirement obligations, stock compensation expense, income tax assets and liabilities, accrued employee health and welfare benefits, accrued auto and workers’ compensation self-insured claims, leases, acquisition related long-lived assets, goodwill and held for sale impairment valuations. Such estimates are based on historical trends and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates. Accounting Standards Issued But Not Yet Adopted: Recent authoritative guidance issued by the FASB (including technical corrections to the ASC), the AICPA and SEC did not, or are not expected to, have a material impact on our Condensed Consolidated Financial Statements. |
REVENUES FROM CONTRACTS WITH CU
REVENUES FROM CONTRACTS WITH CUSTOMERS | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES FROM CONTRACTS WITH CUSTOMERS | NOTE 2 — REVENUES FROM CONTRACTS WITH CUSTOMERS The Company provides RWCS, which provide collection and processing of regulated and specialized waste, including medical, pharmaceutical and hazardous waste, for disposal and compliance programs and communication solutions, and SID Services, which provide for the collection of personal and confidential information for secure destruction and recycling of shredded paper. The Company’s customers typically enter into a contract for the provision of services on a regular and scheduled basis (e.g. weekly or monthly) or on an as needed basis (e.g. one-time service) over the contract term. Under the contract terms, the Company receives fees based on a monthly, quarterly or annual rate and/or fees based on contractual rates depending upon measures including the volume, weight, and type of waste, number and size of containers collected, weight and type of shredded paper, and number of call minutes. Amounts are invoiced based on the terms of the underlying contract either on a regular basis (e.g. monthly or quarterly) or as services are performed and are generally due within a short period of time after invoicing based upon normal terms and conditions for our business type and the geography of the services performed. Disaggregation of Revenues The following table presents revenues disaggregated by service and reportable segments: In millions Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenue by Service Regulated Waste and Compliance Services $ 447.8 $ 461.7 $ 1,348.9 $ 1,398.3 Secure Information Destruction Services 242.5 187.2 685.5 591.3 Total Revenues $ 690.3 $ 648.9 $ 2,034.4 $ 1,989.6 North America Regulated Waste and Compliance Services $ 369.7 $ 365.4 $ 1,097.5 $ 1,094.4 Secure Information Destruction Services 215.1 158.5 599.7 505.8 Total North America Segment $ 584.8 $ 523.9 $ 1,697.2 $ 1,600.2 International Regulated Waste and Compliance Services $ 78.1 $ 96.3 $ 251.4 $ 303.9 Secure Information Destruction Services 27.4 28.7 85.8 85.5 Total International Segment $ 105.5 $ 125.0 $ 337.2 $ 389.4 Contract Liabilities Contract liabilities at September 30, 2022 and December 31, 2021, were $8.2 million and $9.0 million, respectively. Substantially all of the contract liabilities as of September 30, 2022, are expected to be recognized in Revenues, as the amounts are earned, which will be over the next 12 months. Contract Acquisition Costs The Company’s incremental direct costs of obtaining a contract, which consist primarily of sales incentives, are deferred and amortized to SG&A over a weighted average estimated period of benefit of 6.5 years. During the three months ended September 30, 2022 and 2021, the Company amortized $3.8 million and $3.2 million, respectively, of deferred sales incentives to SG&A. During the nine months ended September 30, 2022 and 2021, the Company amortized $10.8 million and $9.3 million, respectively, of deferred sales incentives to SG&A. Total contract acquisition costs, net of accumulated amortization, were classified as follows: In millions September 30, 2022 December 31, 2021 Other current assets $ 13.8 $ 12.4 Other assets 38.4 34.3 Total contract acquisition costs $ 52.2 $ 46.7 Allowance for Doubtful Accounts The Company estimates its allowance for doubtful accounts based on past collection history and specific risks identified among uncollected amounts, as well as management’s expectation of future economic conditions. If current or expected future economic trends, events, or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly. Past-due receivable balances are generally written off when the Company’s collection efforts have been exhausted. In millions Nine Months Ended September 30, 2022 2021 Beginning Balance $ 43.3 $ 56.2 Bad debt expense, net of recoveries 25.4 2.8 Write-offs (9.8) (13.3) Other changes (0.3) (3.1) Ending Balance $ 58.6 $ 42.6 |
DIVESTITURES AND ASSET IMPAIRME
DIVESTITURES AND ASSET IMPAIRMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DIVESTITURES AND ASSET IMPAIRMENTS | NOTE 3 — DIVESTITURES AND ASSET IMPAIRMENTS Divestitures On September 1, 2021, the Company completed the sale of its operations in Japan for cash proceeds of $11.3 million reported in International. The transaction resulted in a third quarter 2021 divestiture pre-tax loss of $10.9 million reported in our International segment, of which $3.8 million related to the reclassification of accumulated currency translation adjustments to earnings. On December 1, 2021, the Company completed the sale of its Environmental Solutions operations in Canada for cash proceeds of $24.4 million reported in North America. The results of operations of these divested businesses have been excluded from our Condensed Consolidated Financial Statements from the date of the divestitures. Asset Impairments In the three and nine months ended September 30, 2022, the Company recognized $2.0 million related to impairments associated with exiting certain North American office facilities. |
ACQUISITION
ACQUISITION | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITION | NOTE 4 — ACQUISITION The Company acquired a midwest-based regulated waste business in North America on December 31, 2021, which is considered to be complementary to existing operations and aligns with the Company’s portfolio optimization strategy. The purchase price consideration of $42.8 million and the purchase price allocation was finalized in the second quarter of 2022. The final acquisition date fair value of the total consideration transferred included $10.5 million in cash, $21.3 million in promissory notes, and $11.0 million in deferred consideration. The purchase price consideration was allocated to the assets and liabilities based on fair value as of the acquisition date, with the excess of the purchase price consideration over the net assets acquired of $23.7 million recorded as goodwill based on the strategic benefits to be achieved and is deductible for tax purposes. The Company used a third party specialist to determine the fair value of tangible and intangible assets, which primarily consisted of customer relationships of $17.5 million. The Company recorded final fair value measurement adjustments in the second quarter of 2022, which included a decrease of $2.5 million in intangible assets, a $0.2 million increase in fixed assets, and a $1.7 million increase in goodwill. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | NOTE 5 — LONG-TERM DEBT The Company’s long-term debt consisted of the following: In millions September 30, 2022 December 31, 2021 $1.2 billion Credit Facility, due in 2026 $ 317.5 $ 247.0 $200 million Term Loan, due in 2026 200.0 200.0 $600 million Senior Notes, due in 2024 600.0 600.0 $500 million Senior Notes, due in 2029 500.0 500.0 Promissory notes and deferred consideration weighted average maturity of 3.5 years at 2022 and 3.7 years at 2021 44.1 54.6 Foreign bank debt weighted average maturity 5.2 years at 2022 and 6.0 years at 2021 0.4 0.7 Obligations under finance leases 18.8 21.4 Total debt 1,680.8 1,623.7 Less: current portion of total debt 17.2 19.9 Less: unamortized debt issuance costs 11.9 14.0 Long-term portion of total debt $ 1,651.7 $ 1,589.8 The estimated fair value of our debt approximate d $1.54 billion and $1.63 billion as of September 30, 2022 and December 31, 2021, respectively. These fair value amounts were estimated using an income approach by applying market interest rates for comparable instruments and developed based on inputs classified as Level 2. The weighted average interest rates on long-term debt, excluding finance leases were as follows: Nine Months Ended Year Ended December 31, 2021 $1.2 billion Credit Facility, due in 2026 (variable rate) 4.91 % 1.76 % $200 million term loan, due in 2026 (variable rate) 4.62 % 1.40 % $600 million Senior Notes, due in 2024 (fixed rate) 5.38 % 5.38 % $500 million Senior Notes, due in 2029 (fixed rate) 3.88 % 3.88 % Promissory notes and deferred consideration (fixed rate) 3.41 % 3.19 % Foreign bank debt (fixed rate) 9.80 % 9.80 % On April 26, 2022, we entered into a First Amendment which amends, among other provisions, the Credit Agreement to modify the definition of Consolidated EBITDA to add back certain charges in connection with the FCPA Settlement in an aggregate amount not to exceed (i) $61.0 million for the fiscal quarter ended September 30, 2021, (ii) $19.7 million for the fiscal quarter ended December 31, 2021, and (iii) $9.2 million for the fiscal quarter ended March 31, 2022. The Credit Agreement retains, among other covenants, its financial covenant requiring maintenance of a maximum Consolidated Leverage Ratio of 4.00 to 1.00 for any fiscal quarter ending on or after September 30, 2022, which includes, among other provisions, continuation of $100.0 million cash add backs to EBITDA through December 31, 2022, with no further add backs thereafter. In April 2022, the Company incurred deferred issuance costs of $0.4 million relating to the First Amendment. As of September 30, 2022, the Company was in compliance with its financial covenants. The Credit Agreement Defined Debt Leverage Ratio covenant was 3.76 to 1.00, which was below the allowed maximum ratio of 4.00 to 1.00 as set forth in the amended Credit Agreement. Amounts committed to outstanding letters of credit and the unused portion of the Company’s Credit Facility were as follows: In millions September 30, 2022 December 31, 2021 Outstanding letters of credit under Credit Facility $ 59.9 $ 71.4 Unused portion of the Credit Facility 822.6 881.5 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 6 — INCOME TAXES The Company reported an income tax expense of $5.1 million for the three months ended September 30, 2022, compared to an income tax benefit of $3.0 million for the three months ended September 30, 2021. The effective tax rates for the three months ended September 30, 2022 and 2021, were 15.4% and 4.4%, respectively. The effective tax rate for the three months ended September 30, 2022, reflects (i) tax benefit from the release of uncertain tax position reserves and (ii) tax benefit associated with the U.S. federal research and development tax credit, partially offset by (iii) losses in jurisdictions that are not eligible for tax benefits on account of valuation allowances, and (iv) equity-based compensation awards expiring without a tax benefit. The effective tax rate for the three months ended September 30, 2021, reflects (i) a nondeductible FCPA Settlement accrual and (ii) losses in jurisdictions that are not eligible for tax benefits on account of valuation allowances, partially offset by (iii) the net tax benefit from divestitures. The Company reported income tax expense of $16.4 million and $19.9 million for the nine months ended September 30, 2022 and 2021, respectively. The effective tax rates for the nine months ended September 30, 2022 and 2021, were 40.2% and 209.5%, respectively. The effective tax rate for the nine months ended September 30, 2022, reflects (i) losses in jurisdictions that are not eligible for tax benefits on account of valuation allowances, and (ii) equity-based compensation awards expiring without a tax benefit, partially offset by (iii) tax benefit from the release of uncertain tax position reserves. The effective tax rate for the nine months ended September 30, 2021, reflects (i) a nondeductible FCPA Settlement accrual, (ii) losses in jurisdictions that are not eligible for tax benefits on account of valuation allowances, and (iii) equity-based compensation awards expiring without a tax benefit, partially offset by (iv) a tax benefit associated with a tax matter that was subject to a PFA with the IRS and (v) the net tax benefit from divestitures. |
EARNINGS (LOSS) PER COMMON SHAR
EARNINGS (LOSS) PER COMMON SHARE | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER COMMON SHARE | NOTE 7 — EARNINGS (LOSS) PER COMMON SHARE Basic earnings (loss) per share is computed by dividing Net income (loss) by the number of weighted average common shares outstanding during the reporting period. Diluted earnings per share is calculated to give effect to all potentially dilutive common shares that were outstanding during the reporting period, in the periods in which such effect is dilutive. The following table shows the effect of stock-based awards on the weighted average number of shares outstanding used in calculating diluted earnings per share: In millions of shares Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Weighted average common shares outstanding - basic 92.2 91.9 92.1 91.8 Incremental shares outstanding related to stock-based awards (1) 0.2 — 0.3 — Weighted average common shares outstanding - diluted 92.4 91.9 92.4 91.8 (1) In periods of net loss, stock-based awards are anti-dilutive and therefore excluded from the earnings (loss) per share cal culation. Anti-dilutive stock-based awards excluded from the computation of diluted earnings (loss) per share using the treasury stock method includes the following: In thousands of shares Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Option awards 1,153 1,741 1,297 2,042 RSU awards 397 318 115 307 PSUs are offered to key employees and are subject to achievement of specified performance conditions . Contingently issuable shares are excluded from the computation of diluted earnings per share based on current period results. The shares would not be issuable if the end of the reporting period were the end of the contingency period. If such goals are not met, no compensation expense is recognized, and any previously recognized compensation expense is reversed. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 8 — SEGMENT REPORTING The Company evaluates, oversees, and manages the financial performance of two operating and reportable segments – North America and International. The following tables show financial information for the Company's reportable segments: In millions Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues North America $ 584.8 $ 523.9 $ 1,697.2 $ 1,600.2 International 105.5 125.0 337.2 389.4 Total $ 690.3 $ 648.9 $ 2,034.4 $ 1,989.6 Adjusted Income from Operations North America $ 160.4 $ 132.7 $ 443.9 $ 449.9 International 7.4 15.1 27.2 43.3 Other Costs (75.8) (75.3) (238.1) (205.0) Total $ 92.0 $ 72.5 $ 233.0 $ 288.2 The following table reconciles the Company's primary measure of segment profitability, Adjusted Income from Operations, to Income from operations: In millions Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Total Reportable Segment Adjusted Income from Operations $ 92.0 $ 72.5 $ 233.0 $ 288.2 Adjusting Items: ERP Implementation (3.9) (14.6) (13.0) (49.8) Intangible Amortization (31.5) (29.2) (94.7) (89.1) Portfolio Optimization (1.4) (12.2) (2.7) (13.8) Litigation, Settlements and Regulatory Compliance (2.6) (67.1) (26.0) (71.4) Asset Impairments (2.0) — (2.0) — Income (loss) from operations $ 50.6 $ (50.6) $ 94.6 $ 64.1 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 9 — COMMITMENTS AND CONTINGENCIES Legal Proceedings The Company operates in highly regulated industries and responds to regulatory inquiries or investigations from time to time that may be initiated for a variety of reasons. At any given time, the Company has matters at various stages of resolution with the applicable government authorities. The Company is also routinely involved in actual or threatened legal actions, including those involving alleged personal injuries and commercial, employment, environmental, tax, and other issues. The outcomes of these matters are not within the Company’s complete control and may not be known for prolonged periods of time. In some actions, claimants seek damages, as well as other relief, including injunctive relief, that could require significant expenditures or result in lost revenue. In accordance with applicable accounting standards, the Company establishes an accrued liability for loss contingencies related to legal and regulatory matters when the loss is both probable and reasonably estimable. If the reasonable estimate of a probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is not probable or a probable loss is not reasonably estimable, no liability is recorded. When determining the estimated loss or range of loss, significant judgment is required to estimate the amount and timing of a loss to be recorded. These accruals represent management’s best estimate of probable losses and, in such cases, there may be an exposure to loss in excess of the amounts accrued. Estimates of probable losses resulting from litigation and regulatory proceedings are difficult to predict. Legal and regulatory matters inherently involve significant uncertainties based on, among other factors, the jurisdiction and stage of the proceedings, developments in the applicable facts or law, and the unpredictability of the ultimate determination of the merits of any claim, any defenses the Company may assert against that claim, and the amount of any damages that may be awarded. The Company’s accrued liabilities for loss contingencies related to legal and regulatory matters may change in the future as a result of new developments, including, but not limited to, the occurrence of new legal matters, changes in the law or regulatory environment, adverse or favorable rulings, newly discovered facts relevant to the matter, or changes in the strategy for the matter. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. Contract Class Action and Opt Out Lawsuits. Beginning on March 12, 2013, the Company was served with several class action complaints filed in federal and state courts in several jurisdictions. These complaints asserted, among other things, that the Company had imposed unauthorized or excessive price increases and other charges on its customers in breach of its contracts and in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. The complaints sought certification of the lawsuit as a class action and the award to class members of appropriate damages and injunctive relief. These related actions were ultimately transferred to the United States District Court for the Northern District of Illinois for centralized pretrial proceedings. The parties engaged in discussions through and overseen by a mediator regarding a potential resolution of the matter and reached a settlement agreement, as previously disclosed, which settlement agreement obtained court approval on March 8, 2018. Under the terms of the SQ Settlement, the Company admitted no fault or wrongdoing whatsoever, and it entered into the SQ Settlement to avoid the cost and uncertainty of litigation. Certain class members who have opted out of the SQ Settlement have filed lawsuits against the Company, and the Company is defending and intends to resolve those actions. The Company has made an accrual in respect of these collective matters consistent with its accrual policies described above, which is not material. Government Investigations. On June 12, 2017, the SEC issued a subpoena to the Company, requesting documents and information relating to the Company’s compliance with the FCPA or other foreign or domestic anti-corruption laws with respect to certain of the Company’s operations in Latin America. In addition, the DOJ notified the Company that it was investigating this matter in parallel with the SEC. The Company is cooperating with these agencies and certain foreign authorities. The Company also conducted an internal investigation of these and other matters, including outside of Latin America, under the oversight of the Audit Committee of the Board of Directors and with the assistance of outside counsel. As previously disclosed, the Company has engaged in settlement discussions in connection with the foregoing government investigations. On April 20, 2022, the Company announced that it has settled these matters with the DOJ and the SEC. Under the Company's settlement with the DOJ, the Company entered into a deferred prosecution agreement (“DPA”) with the DOJ, under which the DOJ agreed to defer criminal prosecution of the Company for a period of three years for charges of conspiring to violate the anti-bribery and books and records provisions of the FCPA. If the Company remains in compliance with the DPA during its three-year term, the deferred charge against the Company would be dismissed with prejudice. The Company agreed to pay $52.5 million in criminal fines to the DOJ, subject to offsetting up to $17.5 million of that amount based upon fines paid to Brazilian authorities (as described below). Under the Company’s settlement with the SEC, the Company entered into an administrative resolution with the SEC with respect to violations of the anti-bribery, books and records and internal controls provisions of the FCPA, and agreed to disgorge $22.2 million and pay pre-judgment interest of $6.0 million to the SEC. $4.2 million of the amount to be disgorged is subject to offset based upon amounts paid in disgorgement to Brazilian authorities (as described below). In addition, under the settlements with the DOJ and with the SEC, the Company will engage an independent compliance monitor for two years and undertake compliance with self-reporting obligations for an additional year. Also as announced on April 20, 2022, the Company reached a settlement agreement with the Brazilian Controladora-General da Uniao (CGU) and Advocacia-General da Uniao (Attorney General Office) in the amount of $23.1 million, $13.5 million of which will offset amounts that would otherwise be paid to the DOJ and the SEC. Based on the foregoing settlements and as provided by U.S. GAAP, in addition to the $80.7 million previously accrued in 2021, the Company accrued an additional $9.6 million in the first half of 2022 for the FCPA Settlement. In the second and third quarters of 2022, the Company paid $81.0 million of the agreed settlement to the DOJ, the SEC and the Brazilian authorities. The Company is also discussing potential settlement of a related investigation with an additional Brazilian authority. Because this negotiation is ongoing, the Company cannot predict with certainty its outcome, including whether a settlement will be reached, the amount of any potential monetary payments, or injunctive or other relief. In the event the Company negotiates a settlement with this Brazilian authority, certain monetary portions of the agreement with the DOJ may be offset by payments made thereto. At the present time, the Company is unable to reasonably estimate nor provide any assurance regarding the amount of any potential loss in excess of the amount accrued relating to these matters. In addition, the Company has been informed that the office of the United States Attorney for the Southern District of New York is conducting an investigation into compliance with the False Claims Act and other federal statutes in connection with the collection, transportation and disposal of hazardous waste by the Company’s former Domestic Environmental Solutions business unit. The Company has also been informed that the State of California Department of Justice is conducting an investigation related to the Company’s collection, transportation, and disposal of waste generated by government customers in California. The Company is cooperating with these investigations. The Company has made an accrual in respect of this matter consistent with its accrual policies described above, which is not material. Environmental and Regulatory Matters. The Company is subject to various federal, state and local laws and regulations. In the ordinary course of business, we are routinely involved in government enforcement proceedings, private lawsuits, and other matters alleging non-compliance by the Company with applicable law. The issues involved in these proceedings generally relate to alleged violations of existing permits or other requirements, or alleged liability due to our current operations, pre-existing conditions at the locations where we operate, and/or successor or predecessor liability associated with our portfolio optimization strategy. From time to time, the Company may be subject to fines or penalties in regulatory proceedings relating primarily to waste treatment, storage or disposal facilities. Effective April 6, 2020, the Company completed the divestiture of its Domestic Environmental Solutions business, including the facility in Rancho Cordova, California, to Harsco Corporation. Pursuant to the Purchase Agreement, the Company may have liability under certain indemnification claims for matters relating to those Domestic Environmental Solutions facilities, including potentially with respect to the investigations by the Southern District of New York and California Department of Justice described above and the Rancho Cordova, California, and DEA Investigation matters discussed below. Rancho Cordova, California, NOVs. On June 25 and 26, 2018, the California DTSC conducted a Compliance Enforcement Inspection of the Company’s former Domestic Environmental Solutions facility in Rancho Cordova, California. On February 14, 2020, DTSC filed an action in the Superior Court for the State of California, Sacramento County Division, alleging violations of California’s Hazardous Waste Control Law and the facility’s hazardous waste permit arising from the inspection. That action is ongoing. The Company has not accrued any amounts in respect of this matter and cannot estimate the reasonably possible loss or the range of reasonably possible losses that it may incur. The Company is unable to make such an estimate because (i) litigation is by its nature uncertain and unpredictable and (ii) in the Company’s judgment, the factual and legal allegations asserted by DTSC are sufficiently unique that it is unable to identify other proceedings with circumstances sufficiently comparable to provide guidance in making estimates. Rancho Cordova, California, Permit Revocation . Separately, on August 15, 2019, the Company received from DTSC a written Intent to Deny Hazardous Waste Facility Permit Application for the Rancho Cordova facility. Following legal challenges, that DTSC action became final as of April 8, 2022, triggering an obligation to execute the closure plan set forth in the facility's permit. Consistent with its accrual policies described previously, the Company has made an accrual in the amount of its estimate of closure costs reasonably likely to be incurred and indemnified to Harsco under the Purchase Agreement, which is not material. DEA Investigation. On February 11, 2020, the Company received an administrative subpoena from the DEA, which executed a search warrant at the Company’s former Domestic Environmental Solutions facility at Rancho Cordova, California and an administrative inspection warrant at the Company’s former facility in Indianapolis, Indiana for materials related to the former Domestic Environmental Solutions business of collecting, transporting, and destroying controlled substances from retail customers (the “ESOL Retail Controlled Substances Business”). On that same day, agents from the DTSC executed a separate search warrant at the Rancho Cordova facility. Since that time, the U.S. Attorney’s Office for the Eastern District of California (“USAO EDCA”) has been overseeing criminal and civil investigations of the ESOL Retail Controlled Substances Business. The USAO EDCA has informed the Company that it may have civil liability under the Controlled Substances Act related to the Domestic Environmental Solutions Retail Controlled Substances Business. The Company is cooperating with the civil and criminal investigations, which are ongoing. The Company has not accrued any amounts in respect of these investigations and cannot estimate the reasonably possible loss or any range of reasonably possible losses that the Company may incur. The Company is unable to make such an estimate because, based on what the Company knows now, in the Company’s judgment, the factual and legal issues presented in this matter are sufficiently unique that the Company is unable to identify other circumstances sufficiently comparable to provide guidance in making estimates. European Retrovirus Investigations. In conjunction with Europol, governmental authorities of Spain, Portugal, and Romania have conducted coordinated inspections of a large number of medical waste management facilities, including Stericycle facilities, relating to the transportation, management and disposal of waste that may be infected with the COVID-19 virus, and related matters. The inspections have resulted in proceedings in Spain and Portugal. The Company intends to vigorously defend itself in these proceedings. The Company has not accrued any amounts in respect of these investigations, as it cannot estimate the reasonably possible loss or any range of reasonably possible losses that the Company may incur. The Company is unable to make such an estimate because, based on what the Company knows now, in the Company’s judgment, the factual and legal issues presented in this matter are sufficiently unique that the Company is unable to identify other circumstances sufficiently comparable to provide guidance in making estimates. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation: The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Stericycle, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company's Condensed Consolidated Financial Statements were prepared in accordance with U.S. GAAP and include the assets, liabilities, revenues, and expenses of all wholly owned subsidiaries and majority-owned subsidiaries over which the Company exercises control. Outside shareholders' interests in subsidiaries are shown on the Condensed Consolidated Financial Statements as “Noncontrolling interests”. The accompanying unaudited Condensed Consolidated Financial Statements as of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021, have been prepared pursuant to the rules and regulations of the SEC for interim reporting and, therefore, do not include all information and footnote disclosures normally included in audited financial statements prepared in conformity with U.S. GAAP. In the opinion of management, however, all adjustments, consisting of normal recurring adjustments necessary to present fairly the results of operations, financial position and cash flows have been made. These Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto included in the 2021 Form 10-K. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the full year or any other period. |
Use of Estimates | Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Some areas where the Company makes estimates include allowance for doubtful accounts, credit memo reserves, contingent liabilities, asset retirement obligations, stock compensation expense, income tax assets and liabilities, accrued employee health and welfare benefits, accrued auto and workers’ compensation self-insured claims, leases, acquisition related long-lived assets, goodwill and held for sale impairment valuations. Such estimates are based on historical trends and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates. |
Accounting Standards Issued But Not Yet Adopted | Accounting Standards Issued But Not Yet Adopted: Recent authoritative guidance issued by the FASB (including technical corrections to the ASC), the AICPA and SEC did not, or are not expected to, have a material impact on our Condensed Consolidated Financial Statements |
REVENUES FROM CONTRACTS WITH _2
REVENUES FROM CONTRACTS WITH CUSTOMERS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenues Disaggregated by Service, Primary Geographical Regions and Timing of Revenue Recognition | The following table presents revenues disaggregated by service and reportable segments: In millions Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenue by Service Regulated Waste and Compliance Services $ 447.8 $ 461.7 $ 1,348.9 $ 1,398.3 Secure Information Destruction Services 242.5 187.2 685.5 591.3 Total Revenues $ 690.3 $ 648.9 $ 2,034.4 $ 1,989.6 North America Regulated Waste and Compliance Services $ 369.7 $ 365.4 $ 1,097.5 $ 1,094.4 Secure Information Destruction Services 215.1 158.5 599.7 505.8 Total North America Segment $ 584.8 $ 523.9 $ 1,697.2 $ 1,600.2 International Regulated Waste and Compliance Services $ 78.1 $ 96.3 $ 251.4 $ 303.9 Secure Information Destruction Services 27.4 28.7 85.8 85.5 Total International Segment $ 105.5 $ 125.0 $ 337.2 $ 389.4 |
Schedule of Total Contract Acquisition Costs | Total contract acquisition costs, net of accumulated amortization, were classified as follows: In millions September 30, 2022 December 31, 2021 Other current assets $ 13.8 $ 12.4 Other assets 38.4 34.3 Total contract acquisition costs $ 52.2 $ 46.7 |
Schedule of Allowance for Credit Loss Activity | The changes in allowance for doubtful accounts were reported as follows: In millions Nine Months Ended September 30, 2022 2021 Beginning Balance $ 43.3 $ 56.2 Bad debt expense, net of recoveries 25.4 2.8 Write-offs (9.8) (13.3) Other changes (0.3) (3.1) Ending Balance $ 58.6 $ 42.6 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | The Company’s long-term debt consisted of the following: In millions September 30, 2022 December 31, 2021 $1.2 billion Credit Facility, due in 2026 $ 317.5 $ 247.0 $200 million Term Loan, due in 2026 200.0 200.0 $600 million Senior Notes, due in 2024 600.0 600.0 $500 million Senior Notes, due in 2029 500.0 500.0 Promissory notes and deferred consideration weighted average maturity of 3.5 years at 2022 and 3.7 years at 2021 44.1 54.6 Foreign bank debt weighted average maturity 5.2 years at 2022 and 6.0 years at 2021 0.4 0.7 Obligations under finance leases 18.8 21.4 Total debt 1,680.8 1,623.7 Less: current portion of total debt 17.2 19.9 Less: unamortized debt issuance costs 11.9 14.0 Long-term portion of total debt $ 1,651.7 $ 1,589.8 |
Schedule of Weighted Average Interest Rates on Long Term Debt Excluding Capital Leases | The weighted average interest rates on long-term debt, excluding finance leases were as follows: Nine Months Ended Year Ended December 31, 2021 $1.2 billion Credit Facility, due in 2026 (variable rate) 4.91 % 1.76 % $200 million term loan, due in 2026 (variable rate) 4.62 % 1.40 % $600 million Senior Notes, due in 2024 (fixed rate) 5.38 % 5.38 % $500 million Senior Notes, due in 2029 (fixed rate) 3.88 % 3.88 % Promissory notes and deferred consideration (fixed rate) 3.41 % 3.19 % Foreign bank debt (fixed rate) 9.80 % 9.80 % |
Schedule of Outstanding Letters of Credit and the Unused Portion of Senior Credit Facility | Amounts committed to outstanding letters of credit and the unused portion of the Company’s Credit Facility were as follows: In millions September 30, 2022 December 31, 2021 Outstanding letters of credit under Credit Facility $ 59.9 $ 71.4 Unused portion of the Credit Facility 822.6 881.5 |
EARNINGS (LOSS) PER COMMON SH_2
EARNINGS (LOSS) PER COMMON SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings (Loss) Per Share | The following table shows the effect of stock-based awards on the weighted average number of shares outstanding used in calculating diluted earnings per share: In millions of shares Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Weighted average common shares outstanding - basic 92.2 91.9 92.1 91.8 Incremental shares outstanding related to stock-based awards (1) 0.2 — 0.3 — Weighted average common shares outstanding - diluted 92.4 91.9 92.4 91.8 (1) In periods of net loss, stock-based awards are anti-dilutive and therefore excluded from the earnings (loss) per share cal culation. |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Anti-dilutive stock-based awards excluded from the computation of diluted earnings (loss) per share using the treasury stock method includes the following: In thousands of shares Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Option awards 1,153 1,741 1,297 2,042 RSU awards 397 318 115 307 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Financial Information Concerning Company's Reportable Segments | The following tables show financial information for the Company's reportable segments: In millions Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues North America $ 584.8 $ 523.9 $ 1,697.2 $ 1,600.2 International 105.5 125.0 337.2 389.4 Total $ 690.3 $ 648.9 $ 2,034.4 $ 1,989.6 Adjusted Income from Operations North America $ 160.4 $ 132.7 $ 443.9 $ 449.9 International 7.4 15.1 27.2 43.3 Other Costs (75.8) (75.3) (238.1) (205.0) Total $ 92.0 $ 72.5 $ 233.0 $ 288.2 |
Reconciliation of Company's Primary Measure of Segment Profitability Adjusted Income from Operations to Income (loss) from Operations | The following table reconciles the Company's primary measure of segment profitability, Adjusted Income from Operations, to Income from operations: In millions Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Total Reportable Segment Adjusted Income from Operations $ 92.0 $ 72.5 $ 233.0 $ 288.2 Adjusting Items: ERP Implementation (3.9) (14.6) (13.0) (49.8) Intangible Amortization (31.5) (29.2) (94.7) (89.1) Portfolio Optimization (1.4) (12.2) (2.7) (13.8) Litigation, Settlements and Regulatory Compliance (2.6) (67.1) (26.0) (71.4) Asset Impairments (2.0) — (2.0) — Income (loss) from operations $ 50.6 $ (50.6) $ 94.6 $ 64.1 |
REVENUES FROM CONTRACTS WITH _3
REVENUES FROM CONTRACTS WITH CUSTOMERS - Schedule of Revenues Disaggregated by Service, Primary Geographical Regions and Timing of Revenue Recognition (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 690.3 | $ 648.9 | $ 2,034.4 | $ 1,989.6 |
Regulated Waste and Compliance Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 447.8 | 461.7 | 1,348.9 | 1,398.3 |
Secure Information Destruction Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 242.5 | 187.2 | 685.5 | 591.3 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 584.8 | 523.9 | 1,697.2 | 1,600.2 |
North America | Regulated Waste and Compliance Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 369.7 | 365.4 | 1,097.5 | 1,094.4 |
North America | Secure Information Destruction Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 215.1 | 158.5 | 599.7 | 505.8 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 105.5 | 125 | 337.2 | 389.4 |
International | Regulated Waste and Compliance Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 78.1 | 96.3 | 251.4 | 303.9 |
International | Secure Information Destruction Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 27.4 | $ 28.7 | $ 85.8 | $ 85.5 |
REVENUES FROM CONTRACTS WITH _4
REVENUES FROM CONTRACTS WITH CUSTOMERS - Narrative (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |||||
Contract liability | $ 8.2 | $ 8.2 | $ 9 | ||
Contract acquisition costs weighted average estimated period (in years) | 6 years 6 months | ||||
Amortized deferred sales incentive cost | $ 3.8 | $ 3.2 | $ 10.8 | $ 9.3 |
REVENUES FROM CONTRACTS WITH _5
REVENUES FROM CONTRACTS WITH CUSTOMERS - Schedule of Total Contract Acquisition Costs (Detail) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Disaggregation of Revenue [Line Items] | ||
Total contract acquisition costs | $ 52.2 | $ 46.7 |
Other current assets | ||
Disaggregation of Revenue [Line Items] | ||
Total contract acquisition costs | 13.8 | 12.4 |
Other assets | ||
Disaggregation of Revenue [Line Items] | ||
Total contract acquisition costs | $ 38.4 | $ 34.3 |
REVENUES FROM CONTRACTS WITH _6
REVENUES FROM CONTRACTS WITH CUSTOMERS - Allowance for Credit Loss (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 43.3 | $ 56.2 |
Bad debt expense, net of recoveries | 25.4 | 2.8 |
Write-offs | (9.8) | (13.3) |
Other charges | (0.3) | (3.1) |
Ending balance | $ 58.6 | $ 42.6 |
DIVESTITURES AND ASSET IMPAIR_2
DIVESTITURES AND ASSET IMPAIRMENTS - Narrative (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 01, 2021 | Sep. 01, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Loss on sale of business | $ 0 | $ 10.9 | $ 0 | $ 10.9 | ||
Cumulative currency translation loss realized through disposition of Japan operations | 0 | 3.8 | 0 | 3.8 | ||
Asset impairment charges | 2 | 0 | 2 | $ 0 | ||
North America | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Asset impairment charges | $ 2 | $ 2 | ||||
Disposed of by sale | Japan Operating Unit | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Cumulative currency translation loss realized through disposition of Japan operations | 3.8 | |||||
Disposed of by sale | Japan Operating Unit | International | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Sale price for transaction | $ 11.3 | |||||
Loss on sale of business | $ 10.9 | |||||
Disposed of by sale | Canada Environmental Solutions Operations | North America | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Sale price for transaction | $ 24.4 |
ACQUISITION (Details)
ACQUISITION (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||
Goodwill | $ 2,748.9 | $ 2,815.7 |
Midwest- Based Regulated Waste Business | ||
Business Acquisition [Line Items] | ||
Purchase price consideration | 42.8 | |
Cash acquired | 10.5 | |
Promissory notes | 21.3 | |
Deferred compensation | 11 | |
Goodwill | 23.7 | |
Decrease in intangible assets | 2.5 | |
Increase in fixed assets | 0.2 | |
Increase in Goodwill | 1.7 | |
Midwest- Based Regulated Waste Business | Customer relationships | ||
Business Acquisition [Line Items] | ||
Finite-lived intangibles acquired | $ 17.5 |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long-Term Debt (Detail) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Obligations under finance leases | $ 18,800,000 | $ 21,400,000 |
Total debt | 1,680,800,000 | 1,623,700,000 |
Less: current portion of total debt | 17,200,000 | 19,900,000 |
Less: unamortized debt issuance costs | 11,900,000 | 14,000,000 |
Long-term portion of total debt | 1,651,700,000 | 1,589,800,000 |
Line of credit | $1.2 billion Credit Facility, due in 2026 | Credit Agreement Amended Sept 2021 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 317,500,000 | 247,000,000 |
Maximum borrowing capacity of line of credit facility | 1,200,000,000 | |
Line of credit | $200 million Term Loan, due in 2026 | Credit Agreement Amended Sept 2021 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 200,000,000 | 200,000,000 |
Maximum borrowing capacity of line of credit facility | 200,000,000 | |
Senior Notes | $600 million Senior Notes, due in 2024 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 600,000,000 | 600,000,000 |
Debt instrument, face amount | 600,000,000 | |
Senior Notes | $500 million Senior Notes, due in 2029 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 500,000,000 | 500,000,000 |
Debt instrument, face amount | 500,000,000 | |
Promissory notes and deferred consideration | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 44,100,000 | $ 54,600,000 |
Long-term debt, maturity | 3 years 6 months | 3 years 8 months 12 days |
Foreign bank debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 400,000 | $ 700,000 |
Long-term debt, maturity | 5 years 2 months 12 days | 6 years |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Detail) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Apr. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Mar. 31, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | |||||||
Payments of debt issuance costs | $ 0.4 | $ 3.9 | |||||
Credit Agreement Amended Sept 2021 | Line of credit | |||||||
Debt Instrument [Line Items] | |||||||
EBITDA requirement amount | $ 9.2 | $ 61 | $ 19.7 | ||||
Payments of debt issuance costs | $ 0.4 | ||||||
Leverage ratio | 3.76 | ||||||
Credit Agreement Amended Sept 2021 | Line of credit | Forecast | |||||||
Debt Instrument [Line Items] | |||||||
EBITDA requirement amount | $ 100 | ||||||
Credit Agreement Amended Sept 2021 | Line of credit | Quarters ending after Sept 30, 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Maximum consolidated leverage ratio | 400% | ||||||
Level 2 | |||||||
Debt Instrument [Line Items] | |||||||
Estimated fair value of debt | $ 1,540 | $ 1,630 |
LONG-TERM DEBT - Schedule of We
LONG-TERM DEBT - Schedule of Weighted Average Interest Rates on Long-term Debt Excluding Finance Leases (Detail) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Line of credit | $1.2 billion Credit Facility, due in 2026 | Credit Agreement Amended Sept 2021 | ||
Debt Instrument [Line Items] | ||
Variable rate | 4.91% | 1.76% |
Maximum borrowing capacity of line of credit facility | $ 1,200,000,000 | |
Line of credit | $200 million Term Loan, due in 2026 | Credit Agreement Amended Sept 2021 | ||
Debt Instrument [Line Items] | ||
Variable rate | 4.62% | 1.40% |
Maximum borrowing capacity of line of credit facility | $ 200,000,000 | |
Senior Notes | $600 million Senior Notes, due in 2024 | ||
Debt Instrument [Line Items] | ||
Fixed rate | 5.38% | 5.38% |
Debt instrument, face amount | $ 600,000,000 | |
Senior Notes | $500 million Senior Notes, due in 2029 | ||
Debt Instrument [Line Items] | ||
Fixed rate | 3.88% | 3.88% |
Debt instrument, face amount | $ 500,000,000 | |
Promissory notes and deferred consideration | ||
Debt Instrument [Line Items] | ||
Fixed rate | 3.41% | 3.19% |
Foreign bank debt | ||
Debt Instrument [Line Items] | ||
Fixed rate | 9.80% | 9.80% |
LONG-TERM DEBT - Schedule of Ou
LONG-TERM DEBT - Schedule of Outstanding Letters of Credit and the Unused Portion of Senior Credit Facility (Detail) - Senior credit facility - Line of credit - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Outstanding letters of credit under Credit Facility | $ 59.9 | $ 71.4 |
Unused portion of the Credit Facility | $ 822.6 | $ 881.5 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax (expense) benefit | $ (5.1) | $ 3 | $ (16.4) | $ (19.9) |
Effective tax rate | 15.40% | 4.40% | 40.20% | 209.50% |
EARNINGS (LOSS) PER COMMON SH_3
EARNINGS (LOSS) PER COMMON SHARE - Computation of Basic and Diluted Earnings (Loss) Per Share (Detail) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Weighted average common shares outstanding - basic (in shares) | 92.2 | 91.9 | 92.1 | 91.8 |
Incremental shares outstanding related to stock-based awards (in shares) | 0.2 | 0 | 0.3 | 0 |
Weighted average common shares outstanding - diluted (in shares) | 92.4 | 91.9 | 92.4 | 91.8 |
EARNINGS (LOSS) PER COMMON SH_4
EARNINGS (LOSS) PER COMMON SHARE - Schedule of Antidilutive Securities Excluded from EPS Calculation (Detail) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Option awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from computation of diluted earnings (loss) per share (in shares) | 1,153 | 1,741 | 1,297 | 2,042 |
RSU awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from computation of diluted earnings (loss) per share (in shares) | 397 | 318 | 115 | 307 |
SEGMENT REPORTING - Narrative (
SEGMENT REPORTING - Narrative (Detail) | 9 Months Ended |
Sep. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of operating segments (in segments) | 2 |
Number of reportable segments (in segments) | 2 |
SEGMENT REPORTING - Financial I
SEGMENT REPORTING - Financial Information Concerning Company's Reportable Segments (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 690.3 | $ 648.9 | $ 2,034.4 | $ 1,989.6 |
Adjusted Income from Operations | 92 | 72.5 | 233 | 288.2 |
North America | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 584.8 | 523.9 | 1,697.2 | 1,600.2 |
Adjusted Income from Operations | 160.4 | 132.7 | 443.9 | 449.9 |
International | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 105.5 | 125 | 337.2 | 389.4 |
Adjusted Income from Operations | 7.4 | 15.1 | 27.2 | 43.3 |
Other Costs | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted Income from Operations | $ (75.8) | $ (75.3) | $ (238.1) | $ (205) |
SEGMENT REPORTING - Reconciliat
SEGMENT REPORTING - Reconciliation of Company's Primary Measure of Segment Profitability Adjusted Income from Operations to Income (loss) from Operations (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting [Abstract] | ||||
Total Reportable Segment Adjusted Income from Operations | $ 92 | $ 72.5 | $ 233 | $ 288.2 |
ERP Implementation | (3.9) | (14.6) | (13) | (49.8) |
Intangible Amortization | (31.5) | (29.2) | (94.7) | (89.1) |
Portfolio Optimization | (1.4) | (12.2) | (2.7) | (13.8) |
Litigation, Settlements and Regulatory Compliance | (2.6) | (67.1) | (26) | (71.4) |
Asset Impairments | (2) | 0 | (2) | 0 |
Income (loss) from operations | $ 50.6 | $ (50.6) | $ 94.6 | $ 64.1 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |||
Apr. 20, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Government Investigations | ||||
Loss Contingencies [Line Items] | ||||
Settlement amount | $ 9.6 | |||
Accrued ligation liability | $ 80.7 | |||
Government Investigations | US Securities And Exchange Commission, Department Of Justice, and Brazilian Authorities | ||||
Loss Contingencies [Line Items] | ||||
Settlement payment | $ 81 | |||
Department Of Justice Government Investigations | Department Of Justice | ||||
Loss Contingencies [Line Items] | ||||
Settlement amount | $ 52.5 | |||
Department Of Justice Government Investigations | Brazilian Authorities | ||||
Loss Contingencies [Line Items] | ||||
Settlement amount | 17.5 | |||
Securities And Exchange Commission Government Investigations | US Securities And Exchange Commission | ||||
Loss Contingencies [Line Items] | ||||
Settlement amount | 22.2 | |||
Pre-judgement interest to SEC | 6 | |||
Securities And Exchange Commission Government Investigations | Brazilian Authorities | ||||
Loss Contingencies [Line Items] | ||||
Settlement amount | 4.2 | |||
Brazilian Government Investigations | US Securities And Exchange Commission And Department Of Justice | ||||
Loss Contingencies [Line Items] | ||||
Settlement amount | 13.5 | |||
Brazilian Government Investigations | Brazilian Authorities | ||||
Loss Contingencies [Line Items] | ||||
Settlement amount | $ 23.1 |