SRCL - Earnings call transcript Q1 2019

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Operator

Good afternoon. My name is Catherine and I will be your conference operator today. At this time, I would like to welcome everyone to the Stericycle Q1 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions]. [Operator of and mindful to your and two. time be limit participants questions Please today's being call note conference Please that is recorded. Thank you. Ms. Jennifer you Koenig, may Relations, begin your VP conference. of Investor

Jennifer Koenig

joining quarter Thank on everyone good you. for And Stericycle's earnings XXXX first call. afternoon us

statements time uncertainties. Commercial On Stericycle's Officer, today Officer. as Ginnetti, The Chief well and Officer; forward-looking is Chief the discussion as the Financial Miller; that Bill Executive and for Dan call involve first risks Cindy Seward, includes Chief

performance those from to described the such actual be indicator not in U.S. applicable results in significantly Exchange permitted Our Securities within Risk cause forward-looking our results considered investors not results statements. Past differ To Factors and future greater statements. law, of make actual any the anticipate in the commitment use Commission. trends. the extent to could reliable to or and Factors differ in should that press statement to could revisions forward-looking discussed historical and release in disclose earnings performance detail no with subsequent Safe Stericycle's under the Harbor we results are a future filings should

financial call, discuss the will non-GAAP we On measures.

it comparable items which included information provide guidance operational which GAAP our optimization, on an and certain material. reflecting transformation, GAAP amortization, For the matters, not Please non-GAAP settlements, schedule certain we could to compliance that impact is on reported predict because website. other possible and note business be without or please of future a provide litigations, in and to and acquisitions, Stericycle's could divestitures, effort the additional the results found unreasonable earnings events, refer to reconciliation reconciliation intangible be can measures, be unanticipated release, most or in regulatory press Investor basis Relations adjusted

over we our is Investor will also website. Throughout correspond earnings available for call, Finally, first call I'll the Relations slides the now Cindy specific to prepared from the our the Miller. on comments presentation. quarter to call be today's referencing presentation, which turn

Cindy Miller

our conference XXXX earnings you, and to welcome Thank Jennifer, first quarter call.

me during a privilege Let members change company honor by to and this team and an lead great XX,XXX historic is our global transformation. it begin this and saying

this Financial more future for IT, value. on shareholder years very following financial, Essendant experience Stericycle get experience. CIO audit XX join excited At us relationships, CFO continue led to choice, and Stericycle, appointed greater journey, successfully customer we drive and Officer, also enhance pleased who an Zelenka, As our I the breadth served employer Janet Essendant, internal will as corporate we've with a new opportunities brings transformational announce operational finance about She Chief Janet to Xst. become a that and and of and June to through of its both brings own and transformation. company years XX deep at the SBC/Ameritech. I'm she

addition with transformation own our Given to her. ERP valuable we business and forward Janet, look will our a to leadership be working journey, team and

into took performed to to the quarter. maintained in our performance We Turning our well guidance. reaffirm confidence our which and targets our consideration quarter, compared business full-year the historical internal by business

with the the to and future. review of like Bill to I Stericycle's more you on to detail, quarter Before in perspectives I'd over turn Dan my share call some

and the mega of is began week excited we Canada testing eight XXXX end-to-end They the leaders rounds changes the this Stericycle ERP that data. To come. hosted report we Managers in are internal leadership across with responsible our the I'm pleased team deploying the of to met train our of month. the to ERP the front test on lines, ERP. and call and implementation. mentioned the final February, three the complete primary the U.S. close for about phases I to and of with build, embrace support processes I incorporating which and the will the actual include test, representing future phase This to of our Roadshows build X,XXX complete As adoption focus XX% for in seven will testing willing phase to

and impressed with current said continuing year shareholders This begin ERP. will but current most in I to performance the real greater transparency As our as the reporting. spoken forecast for us. drive focus established the early simplify of that will Not making, quality planning. Stericycle easier the upon do implementing data. it my performance only savings customers and this and to in a lack our leadership visibility with development will be of accuracy, implementation, at we on make with many the systems this the our I've improve enable has also aid I'm strategic with But importantly, recently, on risk empowered provide as transformation next time revenue. of of business ERP road driving for position state while operate of enhance not to biggest immediately Stericycle decision about is assessment to accountability, outdated will and daily data and efficiencies to

differentiated oversight continue developing the and and value globe. to grow offerings. a to strategies revenue will command organization to These our U.S. expertise both our Recently, and value. As and the leverage Stericycle and across to our across many of to quantify sales sales structured We're plans rollout customer brand brand, service well-positioned begun organically vast market efforts leader new have contract of differentiated lines, new base, premium realigned commission also the leverage and provide we drive service is tactics to infrastructure and our quality.

and in ERP hands-on if simple capabilities, measurement plans across route skill by oversight. developing developing the is enhancing possible to Leveraging are operations through before Finally, and The efficiencies additional management yes. our shareholders levels drive I've it and operational is been answer network, experience leadership, implemented. asked new standard the of treatment even we our work is operating training

new we finding the monitor focused operational technology, to are performance. and creative of our on improve Additionally, absence in ways

year While the a know moving intensive, Stericycle and for bigger better manually results us these ERP much focus be improve and engineering position this implementation. will will technology forward. Industrial efforts for are we they

engineering we across fleet the competitive Beyond levels, can improvements the look Engineer. many President has forward effort, and implementation He operations. pursue has capabilities. advancements welcome leverage he to engineering best-in-class ERP, our in the technology. record team lead to track newly XX proven and created plant of of measurements, this I'm optimization, To to Vice cost Stericycle the Executive Dominic in oversee improving a to will Stericycle years we has and and additional position operational advantages and asset Chief Culotta, joined excited roles. Dominic experience cost a and achieving service work process standardization, as efficiencies of to Dominic role

for Executive Communication to team leader We of years Stericycle have with and team for we is comes Cory growth. ability to Stericycle to new execute our in and position Related C&R President thrilled long-term Janet, the and and With transformation on better I'm of assembled Executive the the the are Dominic, Cory, to alternatives transformation business future outsourced the caliber including and also in of XX of complete. healthcare the expertise business He White Cory confident We're C&RS of services. profitability Services. strategic to leadership Management technology pleased returns. as company enabled Vice to area have refocus processes enable a companies Cory's improved to welcome Stericycle business. growth board, the plan and pursuit successfully of join both on in experience Stericycle's for the has shareholder

turn earnings to our to call. Officer service Commercial to welcome Seward, let's performance Now quarterly lines. for very I'm Stericycle's the of Bill our Chief first time the pleased

Bill Seward

on the facilities from In visiting and customers. at team I've been and plans. Stericycle's during help the Roadshows, the I bring of commercial They X, with internal I've of experience and of I'm feedback looking supervisors. our excited on excited strength favorably saw our company the members the position, found strong market of operating I'm tremendous join I team their managers transformation. to team from call deliver to impressed a Cindy. on leadership In culture. our and company our at here the frontline my knowingly arriving, part here meeting and solid speak our Stericycle. employees in talent company been change. is and to of work the the midst I February Having impressed today to business environment foundation our for Since and a and Thanks, the multi-year also and here started be turnaround joined potential to our by strong open feedback

to bring customer reviewing they experience what either indicates with we their in customers or Additionally, value my businesses. early experience Stericycle data directly

are ahead. Our I've customers the whose comparing excited serve. transformation communities with path extremely competition. future. our the the the joined customers see That to provides a to business important we I'm to that roadmap value successful differentiation conceived clear the foundation a combined confirmations strong brand company well and when company's provides clear significant These about opportunities

like to the focus quarter. Now results shift financial to I'd and for turn the first

were operating extreme were million in on rates, one conditions. compared comparables, divestitures. revenues to day the include As revenue the profits exchange from the first X, quarter million and effect for resulting drivers weather and Revenues XXXX. $XXX.X declines of quarter of $XXX reflected Slide by less foreign QX total C&RS the Primary and impacted

During largest to sales sales facilities service February's U.S. key experienced new outbound ability our closure center, our to extreme parts across the cold, and we limiting including of efforts, customers.

texting remain Strength Waste Regulated EMEA. reduced by and portfolio implementation in expectations. increasing growth revenues to we pursue on million medical discounting our for and our reduce trends organic We of and in to based non-core including alternatives $X the and in expected encouraging earnings International volumes million committed Compliance the closed new lower new was for revenue revenues $XX.X the In across the of continue noted by call, in which the waste last revenues by business strategies to is see line and in year. driven to rationalization Services of $XXX.X the with As we assets. sales. UK were U.S., market approximately divestiture continue quarter million

Our driven work. Hazardous Waste project down XXXX by results business higher was slightly Hurricane-related RWCS in comparable given within

or X% delivered Destruction growth its Information $XXX quarter million when growth recycled adjusted was paper the steady Services X.X% Secure Organic of trend. for revenue Next pricing. in continuing revenues

strong well monitoring quarter compared less Also the see in a in reflects and million California and offset events revenues Fires a as fewer QX in This XXXX. since were including pricing while have by significantly Federal million Hazardous did see Continued Organic quarter the events Communication the to to declines impact the foreign weather one October, shutdown. Services year. revenues in the down prices high of XXXX. in European declined during operating Government were recall last Industrial as recent exchange paper mandated by and day work revenues slight from of as the March. did We divestiture and Related project smaller SOP given QX recall same benefit recalls prices. a from $XX.X paper Services We're the impact month million the Waste recent the $XX.X last of $XX.X increase result growth business. of markets Manufacturing we in U.S. was new year impacted were compared in of UK favorability of

$XX.X as XX. of compared million operations quarter quarter the was to of of the from million for presented first financial to performance $X.X quarter Loss turning in on from income Slide the operations XXXX. Now

adjusted Our was compared of million first $XXX.X year. quarter last million the to in $XXX.X EBITDA

given quarter of lower revenues, and quarter severe to Federal in compared ongoing a that in repeat comparables We XX.X% XX.X% and Results little pricing C&RS margin in compared expected costs first are the the impact XXXX year. given percentage we anticipated was future a in on weather, not first higher than softer RWCS. of Government to shutdown adjusted expected periods. of last year last EBITDA than operating expected C&RS, came As impacts to the in the

cost fleet changes in company currently call, on earlier improve implementing teams operations our plant the highlighted structure. to Cindy and focused the across our As are

align current with infrastructure more the evaluating team Additionally, and flexibility, strategies provide profitability. C&RS to operational improve its leadership is revenues,

the in EPS the the While changes moving flow results. are with I'll now are direction discuss turn not to we call to these are both over a focus lower cash that costs. Dan on instantaneous, confident service and right and improved our operations

Dan Ginnetti

Thanks, Bill.

two tax, exchange $X.XX due was Looking in at was share much $X.XX from loss The compared well variance EPS XX, expected GAAP we higher less from higher and day pricing extreme closure Slide C&RS; process. following: weakness Adjusted per from of foreign the year-on-year higher operating impact; which quarter as XXXX. the non-recurring and one and $X.XX material the facilities; our expected and to revenue of temporary adjusted $X.XX repurchase the weather in temporary costs to as interest, $X.XX. $X.XX as lower quarter from from share was RWCS EPS in remediation comparable, first is $X.XX key advanced from

As to cash current the year. operations reported, of $XX.X result annual for operational cash performance, payments for flow a This was cash was compared incentives, prepaid and quarter the from last million and $XXX.X million performance software. primarily

the expectations Our XX negative investments. CapEx accrued transformation and was cash operating of and Free DSO in our CapEx investments of days. inclusive from expenditures, $XX.X million expected XXXX. capital business and reflecting million performance of payment and flow, was $XX.X planned the timing line was with of inclusive

spending evaluating unused our controls debt of at agreement To the the quarter. our the was restructuring end portion This X.XX options debt, of the of of of and revolver leverage including but number Our are level divestitures, was seeking the than within a amended debt-to-adjusted implementing address of anticipated million covenants. covenants. leverage level leverage, at The relief ratio of we're is end EBITDA from $XXX quarter. the this temporary under higher and

to have capacity We adequate will call now I the to flow our Cindy. manage business. back cash and turn borrowing ongoing

Cindy Miller

Thanks, Dan.

shareholders. XXXX customers So we as on on our our in remain business issued fully and to transformation team February. our our in The and is our in XXXX summary, guidance and our focused delivering confident commitments reaffirm

line please the open for Catherine, up Q&A. So

Operator

you. Instructions]. [Operator Thank

Your first of from Jefferies. the Sean question Dodge comes line with

Sean Dodge

my the annualize $X.XX If what guess EPS at achieve the in expectations. that the the for call, you over Cindy, did it Good what of drive changing short the will the questions. first beginning of we full-year of made year ramp you you quarter an ranges to afternoon. you see target. puts of I taking you own Thanks annual need think said I the quarter you the EPS your in reaffirmed? the do course internal just your see

Cindy Miller

believe to for So that that wanted Sean all sure the to point the the we time make we same. we thanks every understand in no things question. try one quarter And going of be that is to was

of got both our revenue more ramp we of within lot efforts had board the realized that the effect with focused net effect So more was through be as QX. a and that internal brought revenue on more own that we and of from of and some quarters going guidance, executives our to QX cost a that more

So things to our let a of me confident just highlight I as remain guidance. why couple in

So revenue. first I'll terms in of talk

we're targets. the now, revenue our internal right to So trending seeing

So I that's strong. think

to controls and strategy. completed really changes more strict be to terms management Chief revenue to sales implementing thought in commercial been addition making is strong able Officer he more we're to. some putting to Commercial some going plans. that, we're we that adherence of we our then reorganization has before have the some X of well In -- plan of And focus the ahead our and He internal incentive Phase

he's some Committee Review we've in address taken sure centralized we decentralized with certainly example, that make that in He's our a see perspective to control. line in the some we some of make that we see in a some commercial in that of to from For market. But that costs strategy, evaluating that to things surcharges control got what where we're covering are Deal sure gaps more a the revenue.

but we to weather wasn't items a it's we a I to have going what we to certainly when they're some tell see and Rich Moore exchange I give pushing our foreign Qs if non-recurring Sean, see that knew that unfortunate all really effect of of very perspective. just So collection briefly cost vehicles I ramping accelerating terms was got comfortable ground necessarily also of put And we're where have terms have X us is and Executive in and what I look also, be I And internal gain deficits, efforts on -- on what planned. divestitures QX. those look to -- revenue opportunity let we example. close see we to also things me We're terms mobile the side. I planned But it's on just behind would see thought may to compared also the we in of feel President, that equal accelerating of you would take in from on that's if I'll with those in be. are to our some some targets, at Sean, upside, the Vice for you QX, comfortable couple and Street. because QX feel the an you for were on pretty of controls. our I've really an X the through America, the a Then North we I

example in efficiency. bring For our a XX% they improvement

savings. labor are accelerating are we're things day be we and very metric manual. going to for he's to replace just on numbers. I every Street drivers, to thing get fuel that's knew going XXX those the But couple a a XXX got the us. us about also XX% And per quarter off aren't we'll going I'm driver current see that vehicles, result per our that. shredded Street. to that think the we're first for of those that here's vehicles it's I'm for alone take Those for wouldn't just I put improved drive have of those pushing and out stops they albeit as seven to in savings productivity. in that of So the big be that in big some going And We're a dashboard of meant

we think last facilities now. is planned drove costs Those we key and then what some have first have -- right thought up some thing transportation the quarter. So and network are what of in the our and running facilities we that and beyond I

we that in it's guidance. we of all back So And our believe all remain year-end comfortable are based costs those able on attain and in line. that -- haul being to those things confident very long very

question. So the for thanks

Sean Dodge

gone year? then very of back we're headwind, expectation it, of will you're cycle pricing contract that's a full we on Yes, pretty through look that to anything see the That's point than a hopefully Is And that during really else while thank out. and you SQ helpful. much or other the headwind a I that it's be this behind as the flushed sometime the that tapered most bulk can the of to for you. at the we've now closer there it bit we confidence signs guess that you begin Now to give seeing been half XXXX?

Bill Seward

Hey Bill couple things. A Seward. the Sean, it's question. for Thanks of

that things all, talked focused, that of call that multibillion of want pricing the SQ we dollar is First on Cindy lines also again hyper-focused space emphasize in service of to outside about last one are growing. and today the there's we that,

to of alluded got there. of those moment lot we've a her ago. some emphasis So a Cindy things comments in

Regarding customers the are onboarding all new lost to new rest as for sales discounting our line to the pursue are will track that as drive revenue rest enterprise our churn on strategies well we're able the that SQ just seeing plans. specifically, the previously will of the spoke are communicated the be or plans, across that year of results. those in we communicated Cindy with customers, confidence previously of to And we that we confident our

Operator

of from Blair. Ryan comes question Daniels next line the with Your William

Ryan Daniels

Mine taking Mr. I the emphasis discussing Yes, business. the for one that that CRS growing other will particular relates and your pursuit you the the alternatives. enable was to thanks alternatives in release to noticed of my mentioned the be in White of Executives improving questions. the profitability strategic for press for strategic

profitability the of a sell little there internally stronger you valuation to or thought and drive it? pause taking than due that to in a to is a happening company prove is So as bit you slower interest try predictability order to lack

Cindy Miller

to no of And whole last rationalization take first ability of question. all great this. a I portfolio with year. realized quarter pause quarter quickly will a That's let this to terms this numbers Cindy. in and divestitures. is We is in transact share C&RS the have in you. this of very There look me quarter you do comparison terms to some But at of our and in our is Ryan, say first the

in We the marks have the They tomorrow accountable we numbers. need a still unit we overall goals should or they're that's contribute held unit to sometime that hitting. and that something is whether guidance or hit stretched be divested a whether business marks business is overall they're divested to the revenue future,

not in for in and of So that we're it very just terms in type and of also somebody Cory, it facilities it of of value but is sure portfolio one experience that ability in thrilled divestiture preparing this order us, his any his these improving that running rationalization to skill plan. and in make and of

the So for would sure we tomorrow terms twofold. an to total up take of end certainly C&RS make in If us there's still opportunity we meantime, bargain holds the corporate the but in the of need goals. tomorrow its opportunity that it's

Ryan Daniels

a and in the Can is may that's bit other box markets Special organic noticed across you new color. deck more but little bit that is growth growth? emerging then about Okay, markets. helpful in Regulated I the a to little slide you're And -- and hit reaccelerate Thanks. new to point, Compliance about very thing a this data try strategies Waste revenue what highlight those for you doing

Bill Seward

Hey Bill is this Seward. Ryan,

So thanks the for again question.

of First a there. about couple things talk I'll

last the was Roadshow, our exciting. met a a on as middle and well of frontline of as feel with connect management First had I've really many they teams of about and team result leaderships to show all we the a I've the love the I chance impressive met obviously the good that that and commercial I side high-level I've of but couple senior months. would team. of over the say it's also expertise

customers of much. think us reason value so why the I part

our out structure training international there'll in and good got marketing second and business opportunity units. really process, going the to like look review our some that operations. with the and to of the quarter we've on Well, that overall. leaders returns of impressed as the thing as hit talent other receptive of things changing forward. alluded reallocate in I've found the team with we've we'll areas most of receptive us taking teams life sales throughout the We've and couple give first got we the the of rolling commercial change. idea naturally. quarter contract be And Street to our of the a and to resistance our some certain been to about. sales that some a things governance that ideas to has this marketing of of some of our give year, come a confidence, our we've the seen got signs are early in instituted Number peer comments talked And been there. there's very and is business, it, we've We've rest I'll committee all new obviously to at change the We've We taken and we're impact. this also be it that in in contract the instituted the some team you U.S. Cindy The we've and think just we've of be more part going governance. got one, part business bottom-line of to fact our

moved to in the thinking combining costs, our We've are in leadership. about across leadership. and things been sales or appropriate at been now so our off spend leveraging into the where like is on that to the into reporting only. that reporting some sales focused focused at of appropriate. with outcomes. administrative responsibilities excited sales more diffused We're some sales it sales surcharges. things is looking planning leadership businesses past like we're sales had our our been that leadership instances leaders like our looking the get also lever where on Where certainly or leveraging office cover that So sometimes done we sales sales growth potential We've compensation the spend our pricing the which past also right team of optimal sales growth There's

a are for of things the those thanks and question. couple So

Operator

from of next the America line Gary with comes of Lynch. Merrill Your question Bisbee Bank

Gary Bisbee

the and important prior but savings Hi, under guess targets you think we future yourself savings? is your good how the evening. achieve should at to you've the those of prior Are those of -- the transformation and that you, point timeline and set in commit those level to are to are that for the expressed targets for both may put review for that terms some you target willing first fine-tune those ERP that or predecessors in I question is business on in you've specifically long-term understand believe the by I support don't the we obviously the Cindy, team the commented place?

Cindy Miller

Yes, mind no my Xst, predecessors to those today. And I'm here as targets simply I consider -- not honest, from because quite Gary. of was be October I

all the numbers I'm -- I've are of so And trained where my been numbers.

at share I'd I think look question I your to it. and is but fair So how like

now, divestitures about well right years or several these -- portfolio plans were any the thoughts ago maybe before business of So and certainly rationalization. made the any

more real you or will confident there confident actually some I this. what like second tell us numbers. So I at the the have confident we numbers that remain from the there to in through you, changes ERP. that that to implement value. brought successfully are another I meaningful -- it's the to up is importantly, implemented until our value, those of look think that I remain in any the rest take if obviously in remain something in But trigger quarter were. to total once capabilities And year our draw ability value, now of would Gary, fair, built happens I

shareholders call, changes Gary, good certainly can bit what to have think again targets. believe that. owe more we portfolio I information be. to can discussion is any changes I it find changes question. I do then specific them. point in this to for need stand we more a a we talk then if we about and big or if time, whatever or at maybe if little any given owe everybody can So we Right And but But those now, me, we to our to it might more We think on that it we share that have will we by obviously that

Gary Bisbee

sense Great, to this, the if impact And of quick weather I may in just provided us follow-up. the big think quarter? revenue was you can have But then give thanks. a you any missed it. how you

Cindy Miller

I'll and any in then comments speak first for it. Bill has Yes. case other

happens one I'd weather from it's every first to not and to I do a industry on and it, year-on-year So day. want about happens is don't you -- weather, weather need come do comparison be and talk to always history my day the you every an

are the the that our in them a of down telesales on where of people. when However over weather record shut bulk we and different our degree this. them largest business relies days and But There I not, run were actually group our little we just only was the closed telesales sits it temperatures. circumstances negative the of had daily portion it. here that thing headlines that some unfortunately facilities for XX to makes are a facing few we that it fewer we saw there's think in XXX, as here for on And February that had reliant Chicago, Vortex that's the was those is not portions we with business a of day transactional and in every Polar

and -- numbers. that you have Gary turnaround exact I So an did effect. the Can I give can

to was sophisticated be it that I enough it able some from as we're we estimates, was that got think internally you but that to significant our numbers, something internal enough internally exact noticed. not give we've

So Bill any color? do other you have

Bill Seward

that chance Yes. side missing around the we of Hi Gary, would revenues the our be and were comment; recovering operation to Obviously, to ability those were impacted country. billing it's our able customers our about our it hit because some in pockets But the and Bill. service we add the get run well it just growth side. services on the impact not out there. pretty, to of there's also weather pretty due business one the I and to the and Cindy sales

the So question. for thanks

Operator

question next with the Michael line Hoffman comes of from Stifel. Your

Michael Hoffman

you Cindy your thank congratulations taking players first all new congratulations and the day. questions for the on Hi, and

Cindy Miller

you Thank very Michael. you, Thank much.

Michael Hoffman

you the if the a quarter the at $XXX in mid-point you million EBITDA the in and high while, you million had did be. to last of revenues you year. do, of looking that XXXs been take you what do or the and it this analysts at if and you haven't it take start got guidance So mean and thing a you $XXX quarter you one and I first in look evenly revenues of cadence It in we says would this quarter first do half

up make data rest about understand the you across think ranges can of where how help the those that cadence we talk are flows these points year? So us if the and the and and guidance mid-point about it, the think your we of three should about through ebbs

Dan Ginnetti

Hey least our historically C&RS and anticipated Secure like going that We think we've Business. share inside business kind the got years, you've our historically sometimes in back is it specifically for I to Environmental gets seen hasn't then start of our seasonality to have that about strong in overshadowed last Dan. we've at that bit a the really I the and even of will Medical talk see one couple Information some in Bill you Destruction is in Waste Michael, with and seasonality looked we shared Solutions that business little this of revenue. with this occur QX. would pass to is you of we the I'm But I things and

all right. so, And

at foreign Environmental also going impact as we beginning that Solutions be year as the was We to we heaviest the as exchange anticipated work. our from saw cleanup some benefit the well of business

largely plan going ratably had QX that and then anticipated our with QX our So and up are line plan in a from thereafter. ramp-up we to

that time. at it choose you point to do in However

to Bill about had far things over I profitability it want as that those really that that the discussing. mentioned few talk the thing within of I've to and he were costs. did been as from ahead profitability some disruptions be plan didn't our slightly the certain the not revenue the with of standpoint, that plants some that cause some quarter for sees at you that along entries So then it we did the actually plan. we accounting happen to revenues there And pass Outside not expected some to were -- was have as did some been in able have kind beginning. would of what opportunity to up only higher ramp to that

Bill Seward

Yes.

I Dan and appreciate Michael, question. thanks the So

FX little Dan a reorg. think weather anticipated. we would I those also about comments questions I hit things talked some with But two are to with I about one being think our But previous and done the of adjustments other I the good there the earlier than of higher add for we've pretty comments.

I'd has emphasis and on it we're So do said don't previously. the reiterate One placing revenue, I what to quality, is with pricing.

but have be rolling commercial structure. We not out soon a we rolled will yet out reorganized QX, in

going thing, we talk sales service going be One one year, plans. should pricing that based March, our is do some some to really not think there about of of discipline. the other thing see be and we've we on and think revenue February rather of for but that's this that us. provide. where to be or we take appropriately revenue will is for didn't the on opportunity reallocating the building impacts quickly testing there a happening management was good price we got great value in in allocating the we management things to we evaluation addition comp functionality talent the the did an And us we're rest we price just to and charging throughout That's for And on I

sales our We compensation have we revised plans as in go-forward. QX

made some year. the lead pay most immediate is Thanks So idea the their optimal reward there and to less. better received found to The company. been made well help plans room our us adjustments for had outcomes for plans be static And and some to we've our QX not where we there It's future. teams was QX adjustments. is change also the there. there looking at that idea divisions throughout will The people but was the outcomes the other certain have people for that we think improvement question. of we've in for those for will the the by We've

Michael Hoffman

Okay.

every and far and So revenues, improving the back quality is what as each hearing weighted with take these try very end just that all you if the I repeat all that added then of single for of shared I'm as in It's what Dan quarter items line improves. incrementals year? some based XQ, it on of of at the unusual what not of

Cindy Miller

correct, That's now. can it Michael, be and

realized at knew year. end One going a to of it's announcement complete. the quarter Dominic all and be say is is and means every that stick a that a there's that get the of And did we is with Cory of just thing that team this the is -- the ramp, that expectation team hockey the this Janet we the ramp-up great something it I year happens the things was we believe part it -- we of not today,

you in combine of has a revenue. some anticipated. that you advancements was on of that then than had take to the Bill internally some shorter that side the And combine things Bill then of line. because a some So the But again, your of of SG&A and cost doing cost with about help that to things that we question made Moore And and revenue that we the time period if really a at Rich from believe I obviously and he's is if back turnaround revenue doing look we operations. the on of

recover, to But and a fourth I'm below targets have that, no by the that the not believe in on weighted we that us put I'm but conjunction that -- were we don't be mean based that we leaders that happy I forward. things encouraged quarter. things over of I couple seeing think a certainly we're items remember, and that of from internal all in Michael those should happen that little absolutely momentum that certainly team, means a able recover bit the fact the had to that non-recurring on we move based everything's

Operator

line David of with question Manthey next comes Your from the Baird.

David Manthey

Hi, thank you.

First you what I don't cents? Cindy, you discuss the if just maybe thinking have EBITDA, and but second for to something know an maybe then bridge we in mean dollars and And there give quarter, EPS idea you could of so about about? gets you're off, revenues, us the not I just that could think qualitatively

Cindy Miller

for And the Dan. over us I it will David, thanks thanks questions turn today. and to for joining

the different bit like getting we traditionally have call first earnings you're most quarterly some a the at kind of practice, a And overall opposed evaluations we're terms guidance where think take for that's been different important on with to a guidance. terms as in cadence and looking trends. little always going can is metrics what this in and of quarterly rhythm and it's all leaders, year-on-year we new to the that and a difficult. really focused We terms it's the we some get. and our think it's that year-end. very meaningful I question and think of longer-term to insight it's give all realize the is looking be quarter we that it of back as be of of little changes, guidance while comparison the we're executive why rhythm to transformation, I of in everybody, to color able some give where strategy to more maybe terms it's to far This compared that in as different we and And went guess through needs the bit are

to if have Dan, numbers, we be know, that But comment. don't this as I providing specific So at as far anything else you time. won't

Dan Ginnetti

least from best then we a maybe as of foreign an to think we the QX, moving there. maybe is our exchange up and in and I some it. last that David, of of and given And things indicator noise C&RS it. at trend to stepping can that there back use of kind thing I look some from the bit take what had it, year see then appreciate like do little seasonality Dave can and Historically, volatility QX, in in is out you'll had typically from

the of capture to I guidance; quarterly best best to absent cadence. breaking probably I way way own our kind think code of the that's that's trying the guess get

David Manthey

right. back your based really But asking. $X of to to going eventually guidance. what I say on at have guidance, EPS I wasn't That's you're All level get yes, earnings some of point. Well to annual for asking was specific quarterly a not

there? get Can just What $X.XX you here. you that to can factors us theoretically are talk the from bridge Let's $X?

Dan Ginnetti

little Yes. start to and When going I I bit. a be ourselves think we're repeating

talked little bit some of think I Bill opportunities. sales about the a

impact the way waste. where closed, we said about looked basis just was the driven that's some then not are that expected that some operations facilities Those had items there to that not year-over-year reoccurring. we of probably XXX that results that items at I you of to were kind repeat. of the also saw that redirect current some plant were comparables, causing accrual the within points And If go were us

not we of think in a from disposal hauling. incur we some third-party in were the So we cost that incur standpoint, the will rates that to having the

project the happen the And weather and think that that there are -- in will America than things. will about and where rainy And hazardous Bill you revenue. are range of those as not we of QX kind typically highlighting about we margin seasonality to standpoint Like job good experienced more we've of of repeating due Latin the those talked QX paper then also see anticipated. we I expected recall you in see the get business. unexpected where more in of into very our to From issues that work items. some tends tend down even also will would said, in a focus landfill I did were QX for type give events some and in related Also QX, that to that us. step-up you purge absent a kind are to -- more that beyond remember similar behind We the had a

Cindy Miller

putting taking make to obviously that it yes, And controls granted in one some that I we've might internally, be be in got sure thing, we're needs David, there's monitoring. for that We we're but make question. And a think to to room great spending mentioned. sure this

tell I looking straight revenue, The So that's and to but just revenue along of big is right goes spoke you and hand-in-hand our to on and changes of everything earlier table operations. make for of can changes in and of and at I time on else types we've We spend. back. us up, We're in We've travel with of costs about any have got the spending, that going in We're and of make sure, that outside the of terms make discretionary spend. on looking to terms over so fleet then list at at things revenue. labor including place those tackle we looking of got improving some in of haul to terms and of then terms the cost that things. some some that in about the of quality is operational growth, plans spoke again our consultant and plan. some staffing that rain now everything part But rain hand-in-hand sure the expenses. and we the in everything We're long disposal

the provide those I think hand-in-hand bridge that us of gap. to opportunity share things all earnings per

Operator

Oppenheimer. with the comes question Scott next Schneeberger from Your line of

Scott Schneeberger

your But want is infer second would our that's been to could here won't those very Thanks other there's unease commentary month you've sizable arise. think seen some from quarter jump that back takeaway absolutely but unforeseen things much. think and I that on I non-recurring that I is Good I of $X.XX repeat smooth. items and these a because afternoon. that

us are long So sounds way, more on that I I bit in unique some little that guess unforeseen mentioned facility to to and haul that related the how unforeseen? truly you some is, you are a ask recur touched give Dan, then on you of just want confidence won't color and but rain you comfortable that that these mean some the I was Could Latin question shutdown. some, that America? more

Cindy Miller

question. and additional didn't great have us about that had it an that we a more Scott, corner thought. When on Coast we been maybe should because running. to have and of everything really, for mentioned we we've might and whole and key back we cost fire. have bit haul of than take Northwest And closed facilities transportation earlier, And in that a you We're that now anticipate No, Tacoma little being bring helped. example, a out, that and on bit result as to closed in talked long give would it West facility up some hurt that the have expense a had now we quite no, we

at that's the that's that that incurred had, another of back repeat. was an some example West online. had we that a So Coast down look When and additional costs. we on going facility closed not we coming to That's take

So it's for the key sure our did thing desire responsibility we had us two customers But waste. a and we and -- of -- how hold strong and we maneuvered compliance add the we we our and facilities make in some to in operations of the that business our cost. how the high running within take maintain our the a we right in standard maneuvered have very did position very care to our terms of levels

into those we see. a any that two now put bit are so that non-recurring other those And issues? right Dan color quite don't examples any on that that

Dan Ginnetti

two that There of there's [ph] revenue specifically was We things. $X were the reversed have did have was that within to out about overhaul And very at that and other feel -- weakness been this some quarter is EPS these point and is in has costs some to efforts. that repeat. costs million end, in And I of want were What material towards The are a XXXX that QX. is again payment key combination while our part confident operating that opportunities order $X.XX. remediation our they $X out estimation we corrected implemented purchase process. that were time, things also This our then integrated ERP of our is were of in of things in Thanks, quarter part of of accrual it the Scott. and million our there related revenue that the provided insufficient to in that listed new Really then part and automating streamlining state year. system future system. the system -- which at same about did the as got process benefits improve of did estimates highlight and end wouldn't substantial we our in will be that the the about an we

we're while on working so those. And addressing

I are had the entries that systems. line do So that it it pleased of pleased to to advanced precision we to we're not made that things in needed did us we highlight those our We're and one gives to think those but and expected repeat. get

Scott Schneeberger

color. Great. Thanks, that I appreciate incremental

before the any see indicated had improvement you overall that from quite one in Just trend and the In the shutdown, that logical. me. And it was but more that's weak. and alternative. the there's pursue trying impact held any little was government a significant are that asked Is CRS, did probably quarterback. the just And it earlier an overall, what is bit trend or there you like still somewhat you're strategic cleanup to in while or was of looks

there is execution -- otherwise Thanks. there issues citing? or worth are any that So are morale there

Dan Ginnetti

beginnings revenue Recall we had trend our pleased new smaller that been events or were communication had but at shutdown that impact in the -- had being an see the over we've in also both then QX in well. in couple with what a the business is decline no we we a of as events you, The component when last to slightly improved. we communicated it of that we launched has it. it saw end the on seen the that shared government not touch point what the time. government much business We're stabilized, we that me quarters, minutes and also year, But as saw business of as the in certainly communication Federal last began of that significantly last export during if business was let really Yes, at year the virtually shutdown in of

March. that coming you, that a based we slight So more we we see in encouraged caused an as off obviously volume return were shared trend had impact the of that with to of

And has get the a sweep view As they're far new and of come have as anytime the don't it glass though industry, proven leadership leadership ideas up organization. that value. and I leadership cleanup as and drive you that ability we from cleanup, new confident to innovation new that in to going the that. this and as bring the amount and think do it's demonstrated especially past I tremendous to brings in I to feel he's be to Cory able very going efficiencies

the run joined need So up. and take we're pretty have This that this we of the this the of isn't most is to out leadership part business kind hey drive company. the great of advantage going of thing it to and

Operator

Your Capital BMO next Jeff with Silber line from question of comes the Markets.

Jeff Silber

try summarize the tone lot I Thanks of a of to so here. the would If much. questions to

on segmented of back that that's If at been the some three numbers base to you guidance sort a But there and around this XX, that looking normalize from side questioning you I other if all XXXX And is we Slide we items the that lot of XQ there, think item slide, one going be fine. to for that that should everybody. for to run back thrown non-recurring page whether on set maybe hit rate the adding year. bar you forward? know out I a kind our go what so there's can that's we're can of highlighted can we

Dan Ginnetti

it. I'll Yes, start on

those In expectations, just talking internal inclusive in $X.XX of year. remember been talked own $X.XX. is -- that repeat. had $X.XX. In about That's And weather our fires. being disruptions that the saw inclusive the would then were this which redirection with adverse from adversely the year-over-year discussing well year-over-year tax pricing the Cindy saw operational able we the the only talked some then, And one items in of quarter, us, be ones precision. are bridge. that and impact; the $X.XX about that and a you we improving to talked about from It fewer the we've So we're specific that you us a of there. the -- quarter, talked giving were about California anticipate wouldn't of came day finally, the numbers I the and so. our the to over benefit that the in of for we some impact also that a a The year-over-year about that from as Cindy, in impact is systems,

and about adjusted analysis quarter. course expect tax that -- valuation valuation of Our to we That's over $X.XX. we That normalize line tax first do with was with had rate in the our to at allowances the took not year. guidance the in rate the

of well whether that don't some know I non-recurring the items items as Jeff tax, were nature, that if closures. I inside few answered that exactly, looking facility due a but it's the saw question in the not to we be you So what at as going we're reoccurring there's the of significant to a amount disruptions

Jeff Silber

I the $XXX Okay, the follow-up just other in to the items the also for in rest $XXX down spending, should of terms some pretty on year million you're you front-loaded to had capital expect we and maintaining a appreciate the guidance first can that. year? still number were item quarter. of that but one the there sizable offline this then that first ramp for Were in million quarter,

Dan Ginnetti

was our Yes, We're confirming definitely handy. XX guidance absolutely, and Jeff.

I of the If year over of $XX came XXXX you million was talked remember [ph]. in that quarter. That probably CapEx about was call last at the about the into end what some

ever business transformation that. for a to had We we're as also up expenses prepare ramping efforts our

those a is CapEx anticipated to well we million spending $XXX talked as target still year so things and confident first we that to And expectations. $XXX million our we in the the due with about quarter the as line heavy but that feel for

Operator

We have with Stifel. Michael line Hoffman of a the follow-up from question

Michael Hoffman

where Cory, when come people Janet and start? does new two two The she from

Cindy Miller

had Xst take bit dealing little audits CFO search just brings -- and to that about have impressed so that her an And getting know report, compliment that just that the actually terms our If the get financial was current need share opportunity important. the ERP the perform that we're and that, a it and June with was familiar things and a the CIO And honest a the position, we of was very I of were that interviews. gone amount all all probably noticed all for also very types to we But XX excited. systems about Internal is now it that lead we're starts and just is the the had Janet through financial both was really can questions. financial what and minute We to practices. candidates the she we're CIO things those to look, of the applicants with one and accounts Great with I and Janet right very that I piece, trying very Janet. company right we're impressed extremely impressive of about of CFO of are very she the you're going excited that going actually through our had to CFO the a traditional be CIO, and away. that you whole you've she's known some Audit, she was in with tackle own the we Having efforts the to down plan tackling to Michael take it their when manageable to She different amount. transformation. a as

and experience businesses be of with more the So of divestiture around tremendous XX And also He Xerox she in other Convergys, terms experience, in just is has his business. work a ACS going years some was positioning experience turning for and in or at amount Cory, at Cory has has other industry. to he instrumental. he in in businesses been STARTEK, even

the cost we've experience. quite believe time of a we And So to seen we've structure he be things. amount point I a to amount need we types of skill those tremendous C&RS think where where that revenue. decline order in set And to that brings business honest, think we're that to Cory current in able terms brings point I to our of to of in to our be in reflecting a do get got get

Michael Hoffman

Okay.

to that Slide much basically going issues? The guidance. second things I fixing to $X.XX, how revenues average of coming again much XX like $X.XX the and we quality have am talked on XX Page and I to of of that question mid-point the about bridge if from at cost looking strategy is a How Cory take get quarter back to the and Bill

Dan Ginnetti

as add And seasonality that of well, so. is to Mike, some I'll just that,

Michael Hoffman

seasonality Okay. And --

Dan Ginnetti

not page. any in And the of lower then discussed we've Information our along. to into business kind the especially traditionally We nothing typically in you like of quarter-to-quarter we a see of is And quarter give we before. other volume business, would or purge work of a is happened the typically really the return QX Destruction we parts driving reasons level kind I'm typically this QX for -- better that grow and for of expect atypical all remediation on that's Environmental areas But one of see outdoors. it Secure see that quarters. to Solution our higher in ramps that going see kind Business begin into that typically up cadence QX,

as $X.XX significant grow. you $X.XX, So somewhere probably there that's you a not nature. don't want incurred quarter shared just because to are amount repeat then absolutely expenses exact, you, one-time that we have next and were in themselves the we in of $X.XX that have to And they going somewhere didn't with I go

near both of anywhere a quarter it. the and don't XX.X headwind of So the full-year expect adjusted so rate tax then and the we be to and that's it's combination part was a operating in tax

Cindy Miller

of has our there? to get some mistake And We today do And different point referenced, our hit. pull get lot revenue revenue can to got one question I next a to think this. we is the the in And make the we've how got things to in our from other we've we've that. and think question didn't all $X.XX move of sudden need you through, to about to the was say do if we in as of and on to that things enact realignments expectations one plans, thing understand is to for got improvements that leadership this, needs the it. Michael, got -- cost we've no a the is were hit of what operational ramped that I get your a I able in internal targets just The SG&A and together we executive quarter you

understands it to team about realize and the is still plan. executing we However the

I to out needs you conjunction know but percentage what what, in that I can't question, let to So your can hit. break everything is that

Operator

And are questions no further this there time. at

Cindy Miller

right. All

Charlie you, the Catherine. like And thank before Alutto, from to today. call, Stericycle end recognize So I'd of take one who this is things to moment we a retiring

XX responses Waste Medical for many role you in played brought and into vision industry out current the He As the Stericycle. Stericycle which Medical emerging become he's been outbreak in opioid in great work portfolio industry. industry addition of a Ebola that a a college Company direction. events later he shape know, to credit an went of Waste helped led critical like by was and was has spent the he that he's acquired the has recognized It Charlie Fresh has to that its leader crisis. his the well. and as And shaping years

had I Although, I'm good Though of across selecting Charlie, And has Catherine, he it wish of to that this months, we next has a can be a ends that, the Charlie proud put quite to honored we Charlie, his friend. I'm into of me night. a soul success Charlie the much obvious; chapter few you for much life, I've is a hope team thanks call mentor best. honestly from a successor. that with known his role everyone say heart only in this his so very members in and organization. the Stericycle, call. thousands and all your the many and

Operator

conference concludes gentlemen, call. and this Thank you. today's Ladies

You may disconnect. now

Stericycle (SRCL) 2 May 192019 Q1 Earnings call transcript