SRCL - Earnings call transcript Q3 2020

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Operator

Good morning and welcome to Stericycle's Third Quarter Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded.

Now I'd like to turn the conference over to Mr. of President Vice Ellis, Investor Relations. Andrew ahead. go Please

Andrew Ellis

third Hello call. earnings Stericycle's and you for thank quarter XXXX joining

On forward-looking today Officer plan, estimates, and statements use Janet expressions, Officer. the words Executive similar discussion will, that Zelenka, statements. Chief call The are believes, uncertainties. we our goal will involve be such risks or Chief When includes as may, Financial today and and Information Miller, Chief making forward-looking Cindy we Officer; anticipates, expects,

nature and but uncertainties. in therefore, not based expectations Forward-looking projections facts prospective statements risks management are, are on historical events rather and and are subject to and current on about of our future

actual in detail within statements. with and discussed release differ Our in are the greater significantly could our described and the Securities in results those such Factors Harbor Safe our earnings to could in forward-looking in filings US press Commission. statement results cause differ the from that our factors risk Exchange actual

not and reliable performance results past considered investors results accordance statement anticipate not or other use any any to revise indicator performance, legal future than update or be and future obligation Our with of to We historical our regulatory forward-looking disclaim obligations. should financial should trends. in a

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

prepared turn over on Cindy Investor call, may from we correspond most I'll For be can found the refer the slides information for in to presentation the additional the and measures, press reconciliation Throughout Relations to today's release which on call The Relations reference comparable please our website. GAAP US website. also call comments earnings is to now our to Investor earnings the schedules Stericycle's an Miller. which specific available presentation.

Cindy Jayne Miller

welcome, call. everyone, you, to today's Thank Andrew, and

strong by leverage. to proactively with During the through in cash driven net the improved debt We our manage uncertain operating flow COVID-XX and reduction quarter, the additional pandemic. delivered quarter conditions results free generation, economic Stericycle solid the business third continued

Regulated revenues the and our organic reinforcing growth healthcare around essential for other organic third year, second Waste revenues quarter compared our fact the Compliance quarter provides XXXX, showed team improved the over Our businesses and global providers Destruction and world. services to last to Information that Services Secure of

progress accident update the give reduced quarter compared of our culture I'd transformation. by global XX%. our priorities, third am year, recordable like period incident report vehicle the our the reviewing rate to five rate team the you Before that by key to total in XXXX, XX% on on I same pleased to an through this the safety and

member no increased to disciplined has included how well or potential awareness actual approach Our in matter as safety investment as safety small. incidents, reporting team and increased training of

and driver leveraging across North providing on more the meaningful based American we're coaching cameras driver video are our footage. We fleet,

the of organization. including the program the markets To end by our we XXXX. leadership feedback training quarter, executive this third proprietary we team, the the across importance shared to fully throughout deploy defensive which rollout the emphasize we began of of quarter program, driver me, the During expect new a and our took global first

business to progress of Next, key let's shift our a five review on priorities.

commercial lines XX past leadership committee, initiatives commercial channels. team to and foundational our These reorganization formal cross-functional key a revenue. of I've months, our the Over customer of quality deal drive discussed that of we've realignment launched included the around the plans service several review and incentive

is forecasting; Information Services and and implementation quality create improve expected demand process pursue weekly growth. initiative, pipeline as Secure activity help down of next a adjust our management the both new on marketing is Regulated customer daily, across signals. provide Waste and management we The of and greater level revenue adding to provide organization and management data daily now the us drive indicators; to investment organic to performance process metrics to pipeline continue visibility rep commercial Compliance based performance monthly tool are key Destruction. tool the to and for This accountability We and global revenue standardized sales global pipeline designed

results, we again the at the from quarter revenue experienced the favorable third during quarter. services new introduced trends we Looking second that

Our non-healthcare base wanting by service our are disposal PPE while channels is to customer pickup. our services being express document well-received expanding priority and waste customers new destruction time-sensitive

these the built generate While ability proud incremental pandemic. with of encouraged still days we year their we've customers, to of never during the this more and operating revenue. brought on so with are early by I'm by our services, than relationships complexities

us the bring, evidenced Services are and of organic waste giving Regulated value America quarter and Compliance commitment realizing our satisfaction we the quality of Services in efforts Waste that by by Information revenue the X.X% all Destruction pandemic. customer excluding benefits and from scores highest of Our this growth apparent channels. across we acknowledged Waste is Regulated customers appreciate as It Secure some impact maritime the of our our on Compliance services our customers in and North when

to Moving on operational efficiency.

and As controlling remain focused discretionary we variable times, we through manage costs. on volatile

of in travel. continue With team we our mind, the safety manage to tightly

operations. closely We operational we spend, and are are our consulting and improve commitment and in our steadfast daily efficiencies also our performance to in monitoring field

during to have to operations margin performance our previous I partnering operational contributed and teams third profit which shared and implement have significantly improvements are calls, gross the expansion on quarter. As process engineering our

and on our route driving planning in are We optimizing long-haul sizing making and equipment, assets. efficiencies balancing and and further fleet network our and progress

work. have our team normalized this year. returned experienced our have following earlier to furloughs Today, the small a we Additionally, but global all of workforce members fraction

and and We training necessary our of to are and engagement development demands the team. as invest hiring in meet continuing to service

efforts, we repeat million operating have per operational reported quarter productivity Last to which the those associated $X driven million efforts, efficiency quarter. quarter, did As benefits with we $X cost we improvements. advance of this sustainable reductions generating

with to additional encouraged unlock are and We progress opportunities. our seek cost-saving

Turning and debt rationalization to portfolio reduction.

seventh successfully of January remain divestiture to focus XXXX. businesses. we portfolio the which in completed earnings of divestiture Argentina call, represented since million $X.X We streamlining our last our committed As announced core for on to on our August,

below quarter billion, level debt to we five the addition, lowest in $X In years. reduced third the net in

review Finally, the on progress ERP system. let's

As our we previously North of deployment until system XXXX. of planned American ERP the shifted the have communicated, rest

we are data interim, making In progress are the systems However, sitting our we insights, tools and scorecards mining not business build legacy from performance. idle. gain and to improve

employee over Janet we North to and expense with Additionally, our over system. accelerated deployment a and review system months system call turn associated global financial our travel including I'll tax American several to the past certain of technologies our new the the management ERP now results.

Janet H. Zelenka

divestitures were $XX.X third for million $XXX.X Total quarter the accounted $XXX.X start compared revenues Of SOP reflecting will the to revenues $XXX you, accounted million, the for our sorted pandemic-related million $XXX.X Thank Information and million pricing Secure quarter Cindy. results. impact I office excluding or summarizing in third million decline, Destruction XXXX. by business paper year-over-year of of disruption.

Waste million on revenues in third slide X, were the Services noted XXXX. As and quarter compared to Regulated Compliance $XXX.X of $XXX.X million

Excluding maritime waste cruise which divestitures rates, Services industry. Secure increased for America organic in and Waste million Almost of exchange of excluding maritime the foreign revenues compared of excluding maritime, included the Information largely Waste Compliance of X.X% from impact of growth the Services revenues impact $XXX.X North million on pandemic support X.X% the when Services services quarter the impact the Regulated in or all are and $XXX.X and America, XXXX. revenues North the Destruction Regulated to so positive revenue was organic third when delivered X.X%. a Compliance

third In revenues disruption. XX.X%, America, North service of a $X.X Destruction pricing, reflecting XXXX quarter Information a pandemic-related SOP stops business were compared organic same reflected Excluding percentage. to million decrease declined approximately from organic the which revenues positive XX.X% impact Secure in down

expense five, compensation US legal by difference XXXX flow rates or of in which Services diluted loss from of accounts was the offset three, of year. includes, million and Communication driven was the million third were to million million payments $XX.X advances to of four, decline half payment million sequentially $XX.X prepaid included, software US compared reductions cost received XXXX primarily expected $XX.X of quarter per $X.X operations million divestitures and to receivable The and a Destruction service by loss $XX $XXX.X of million in XX, efficiencies million of per investments million was $XX.X While million lower million. in $XXX capital million impact loss year. in as million of divestiture. a Adjusted payable loss the collection lower roughly fees, government the executed cash compared non-deductible collections by improvements; primarily attributable divestiture the that to last loss disciplined totaling compared operations tax carryback the million year. related to million due the operational XXXX operations timing of exceeding to reduced million tax $XX.X agreements $X.X third $XXX.X mentioned lower of $XX.X and and of of same a by higher revenues divestiture-related XXXX. million one, The for Loss partially $XX.X $XX.X million; expenditures first of was was Related offset as of the of quarter last quarter the The between million decline. of of the compared divestitures ERP revenues increased just last primarily of rates $XX.X of revenues million September operations refund annual XXXX. two, the management. of the million lower for net nine loss foreign still This million, quarter quarter, income second ended the which change of international; related million. operating was improvement third from Secure the US to balances. million. loss primarily below difference last on professional comparable million year-over-year losses of Domestic was revenues quarter million; from or roughly $X.XX from and and two, quarter share GAAP loss compared decreased and in share and for represents months primarily and net declined of the I debt US driven relief year-over-year Capital lower and reduction received a accounted interest the $XXX.X levels, interest of the in pre-pandemic to split was during accounts were $XX.X $XX.X process of $X.XX The was $XX.X by incentive operating in $XX.X Organic in Information GAAP increased due to of approximately diluted XXXX costs; higher period Act $XX.X $X.X from compared $XXX months The CARES driven for net deferrals third a improved $XX.X Solutions refunds; the million expenses quarter-over-quarter. exchange charges. result $XX.X Environmental of to $XXX.X for year. to for six, $XX.X and operations $XXX million period nine one, income The in divestitures

and Divestitures included Operating $X.XX of annual that XX third $XX.X $X.XX operating million. compared an This basis the accrual. diluted basis of million, the one-time Adjusted efficiencies contributed income was the Excluding despite XXX percent earnings exchange adjusted XXX share improved as to quarter These operations $X.X only this adjusted XX revenue as revenues declined million basis XXXX. $XX.X reflects of compensation discretionary rates and improvement. per offset divestitures were of of in by points. continued impact incentive points. improvements in of of an operations increase leverage organic income contributed foreign approximately from points a partially expenses almost from decline basis points

bridge exchange As foreign an earnings divestitures from and the interest benefit $X.XX reduction from to revenues, rates, on adjusted of variance from the on reduced lower illustrated due on lower the impact, related expense. on share the favorability $X.XX slide to $X.XX operations adjusted in primarily a X, higher impact from from was following: favorability $X.XX per rate tax and income

XX days in from excluding businesses XX the the was days the DSO third XX quarter DSO for second to DSO quarter days XX revenues quarter Our calculation, was When reported second the trailing of of XXXX. days to compared as compared XXXX. XX-month from divested

in of As from the onset a three the cash normalizing as mentioned call, exceeding Free increased DSO at the is collections prior benefited the quarter trend I earnings second revenue pandemic, which and quarter. to days the flow in third XXXX lower from third capital compared months higher was $XXX.X million XXXX. $XXX.X for significant flow operations cash of for was year-over-year the due $XX quarter to nine million the improvement expenditures. of of The million revenues

our quarter, capital ratio end of was to for was as the maximum third in levels. below our ratio times, debt-to-EBITDA We return the agreement which At defined the expenditures times. in expect X.XX of XXXX adjusted to our leverage pre-pandemic credit X.XX quarter

third range lowest lower ERP in net and our net now approximately have $XX we third in for initiative. the million between million million down anticipate us of the five of million. XXXX. paid decreasing spending the fourth the the quarter, of our the We debt $X line the the $XX will down Since $XX $XX.X available I credit in we half million update debt net million total related of shared beginning currently the During business. last provide we $XXX of billion, system This to quarter. at debt paid years. second to approximately In previously to support on net $XXX.X of approximately quarter, debt, the ERP $XXX the revolving our year, below an to places end million million $XX to spent in

maintenance unlock and continued third and XX% out be roughly environment the enhancement value expenditures of services development estimated of We to spend for capital and of risk. launch which licensing, fourth reduce ERP and capabilities overall sooner of commenced adjusted The operations. quarter some and will the implementation operating phased data to be XX% shared expenditures the is

the are capability we expense employee of and mentioned, and North overall global travel Cindy part As recently American ERP management deployed systems suite. our tax which both management

ERP our we and data million XXXX, $XX to to costs conversion $XX ERP for be ongoing we will operations. million estimate outlook of turn which training, of spending testing, As out deployment adjusted

planned new fully expected $XX reviewed, to As is previously the In to $XX XXXX. and million of the deployed to out running maintaining is be adjusted and this starting be costs the year, environment total $XX America October about which cost two, quarter a the now for at into XXXX, million development revenues between based earnings; the Within of October actual fourth between, in go million. Waste costs we the ongoing in The will running million spend for organic these annually two October be system deployment split $XX live Regulated to is preliminary of when is anticipated to million ongoing insights Services, categories flat on at IT one, which revenue the system's until to will estimated be which the and estimated to provide performance. split deployment few of I'll Compliance are North turn million $XX $XX system preliminary and were compared XXXX. date.

impact growth North services would've from of pandemic, approximately in the shown X% October. we the maritime in on waste America revenue Excluding

October approximately Secure Looking business, revenues Destruction at the to North preliminary Information our results down were our October American XX% compared of for XXXX.

in decline provide had In economic guidance. stop Destruction that commenced pandemic, second the the year. plan assess and we operate call, I process preliminary mid-XX% Services note includes we of our in following that markets to a pandemic. the Outside international to our opening Compliance of our the the Regulated forward-looking our to range provision service On the our Information X% to organic of continue trend. as the call. evolving uncertainty Services given noted in at Our Harbor contemplated first, compared growth. quarter moment, of updating economic because is in and Waste we presently this our long-range statements last impacts earnings revenue results Safe annual will like we outlook an similar slightly update to North But long-range than I'd more show Secure America, declined

five-year operating rates at of we we annual flow revenues and year. outlook. estimates achieve times base including pricing. will a organic to to we back divestitures. This result One, on and process, of generate XXXX XXXX. driven by a compounded debt X% below are excludes $XXX known turn with primarily at a Cindy. based and SOP acquisitions Three, XXXX, this ratio currently foreign as million to expect call items Two, providing free for now assumptions expansion. I we cash grow is rate certain exchange expect X% to and our updated future outlook between As annual also in planning leverage XXXX least margin and the This to expect current outlook XXXX between business covenant the X

Cindy Jayne Miller

economic to our the in towards Janet. you, challenging our team. of Thank quarters evolution and have but business results transformation. face. most closures a the uncertainty among The has past also half around This two made meaningful have businesses and in progress temporary progress the had globe, is and been demonstrated financial cultural our Stericycle's team that time unusual Despite

learning We that continuous be are is building improvement. and seeks to a team constructively dissatisfied

of gain organic As our our and confidence push teams further. commercial revenue quality initiatives deliver growth,

are to benefit decisions, see And are processes, data more next dashboards. use enthusiastic field for implementation. details we the our As for leaders even asking drive leaders our of the and more operations as standardized we

the contagious. proud our shareholders. what for excited progress our open line Our I'm successes lies of made ahead and we've Q&A. please are the for Operator, very team customers and members, our about

Operator

We'll now question-and-answer begin the session.

question ahead. of Baird. comes go David Please from First Manthey

David John Manthey

you. Hi. Good Thank morning, everyone.

First, on implementation the costs. ERP

you'll million not million $XX old $XX you're $XX expenditures, million run obviously clear, $XX $XX that be to to and expenses should to $XX million million out experience million Is to adjusted system the being adjusted to run the in $XX new and say that of I the million to to out. $XX system Just XXXX million saying with correct? the

Janet H. Zelenka

Dave. morning, Good

on little that. a So change

the going system. to out deployment that the to system; not the is adjusted be is to finish So of what's cost legacy run

put production, now the the into time a it earnings flip continue and the maintaining turns system into have it'll production. and as out go to At is will maintain because it what going we switch into well you development and cost have normal so full right actually a that So up operations a in. we we turn system kicking the deployment till at on and – switch higher production of will depreciation be adjusted then we're as

also the beyond will And in cost support them because maintaining international interim keep the keep that a be that transition of to So we of to system legacy the running running we to we the state. need XXXX underneath through portion the businesses. need

David John Manthey

and remind expenditures capital to there? Okay. All as right. in then contemplating XXXX, you're what us it you you company for ERP And can Thank that. the the the for total relates for

Janet H. Zelenka

So deployment – we're finalizing operations. XX% be the will expense for expense. be – that capital When will deployment that the plans will around rest the prorated costs switch estimating and the we costs portion that's all still we're adjusted of and of those be we turn and expense out running, those have

David John Manthey

Okay. on your then right. planning efforts. question second is All route And

service flagged you just routes? into opportunity and you at looking You I you're trying today better get long-haul as you ultimately once could second right And and into XXXX Are smaller where to tools half XXXX. targeting better you think you guess where now. gauge the also are visibility be I'm versus

Cindy Jayne Miller

Thanks is the Yeah. Dave, Cindy. question. for this

So, yeah, we're – it's it's both or I should all. say

right getting us efficient it drive can as if as areas. benefit operations. imagine, making we're volume to we improvements we're those more or – in certain So changes, equipment of would going areas And some into more certain into now, any you

strategy really our dynamic. would optimization call I very So

to we imagine, down and efficient. new would can same. if as incinerator we But do up to opportunity to we go something have be the – coming have the you an online, we that's most reroute if we have as So were take

as potential in But changing what are level month-by-month to overall facility really and on. macro given master making to optimizing the we're we're The focused have change that of really by point certainly things then the efficiency on possible operate. very, a a plans as very the the us, at on day-by-day, efficient for time. sure it that and team and is we thing, overall decisions dynamic So operating any level, quite make way is all those talking about operational and week-by-week on being

David John Manthey

Okay. you Thank so much.

Operator

you. Thank

go ahead. Butler comes Stifel. Brian question Next of Please from

Brian Joseph Butler

Thank Good taking my much for very morning. you question.

Cindy Jayne Miller

Good morning, Brian.

Brian Joseph Butler

bit waste, medical that you Just on A the color of would price? could the the volume give be a little detail when bit great. that X.X% on there little growth you Is of or maritime? exclude regulated is

Cindy Jayne Miller

Yeah.

and I then think to I'll anything. Janet wants add if start

for thanks question. Brian, that So

I ways. X.X% can so terms we is think couple get in – the different growth, that at we're looking of that a it organic

I a committee, initiatives take it's revenue the there helping at far, put think drive look review growth. if to of that so you out quality whether we've deal the that's

take our a at we If based done realignment we've the have commercial customer resources. on that you better – engagement with look that's

for and segments figuring more And think of that taking learning We're things we're hospitals of all we that – to scalable in win. how we I customer certain that to how size where we're learned look worked make then have those learning expand or are look, solutions broadly. we're out areas, our to sure that certain certain base.

will, So this for normal pleased if and it anymore. don't that's last at we're us – what looking even and with remember, we're when we're – was. doing you But what But is everything normal, I was number. year know year that and – versus

for of to kind the continue are show growth year-over-year by of So in today, team. very times the the that pleased we're still efforts positive uncertain, to us

Brian Joseph Butler

then that. follow-up Great. the Okay. on And

seeing of waste while about on think SID? pre-COVID kind getting you regulated medical regulated both it to pre-COVID you getting maybe to ex continues update of if like that on be sounds gave, for waste medical or the impacted. and levels back October that SID maritime you're the levels close Any through the when trends not kind above Just to color again, the is the the

Cindy Jayne Miller

Yeah.

I think I'm very, very not I'm – cautious.

think I'm bring forward today, to out of And show Destruction, be prior we back be seeing will to still know look prior asking think in because COVID? we're was? in what different continue where life very quarters will say bringing in what go trying to COVID – the I improvement we if is take incremental be out prior even essence, direction, I to when Secure of February will think to that will months. and And do you're be economies am we've cautious that that it is the value. was not sure US services take I And really, we lifted can't we will. I be at kind as Will to we the – we in still from mode, certainly enough talk perspective some the We states, are we take What with we from if I to I accretive shutdown I are a the good economy. a based pandemic go then Regulated look globally, need look year-on-year. geographies Waste you just a you the different if trajectory don't is into but continue you trending. monitor and right constantly if Information back in trend encouraged on like a economies, global numbers the by to when the when crystal from or here of a ball seen make

Brian Joseph Butler

could I one one last if And Okay. slip in.

Cindy Jayne Miller

Sure.

Brian Joseph Butler

of Any the items update the I know could look... but out what and pipeline timing? just kind we some on still there, divestiture, there's

Cindy Jayne Miller

Sure.

Brian Joseph Butler

XXXX? ...for quarter of fourth

Cindy Jayne Miller

Yeah.

do We and priorities remains since very priority. it think busy still so. over on of make it's I in leave one are last frankly a the that then things. portfolio them, or We're seven, been running key current Having TSAs completed the seven the have year rationalization and because as we XXXX going sure they those balance the of handling should. to early the in side-by-side of had been year the as bulk of couple a January one divestitures XXXX, and quite

continue when our cultural now, are on business right units could We they to and value But transformation the growth. will right customers execute on think time organic when our as we best is focused that all and things focus think be. delivering I I and to on believe

we So focused, give the results. that I and just it's think been anything stay specific; you I I evidenced in continue to can't know

to as businesses, proud get put team we results deliver. resources a can very the As the of tighter continues I'm towards little and we core

Brian Joseph Butler

much very you Thank questions. my for Great. Okay. taking

Cindy Jayne Miller

Brian. Thanks, you. Thank

Operator

Thank you.

Next Capital RBC question ahead. Please comes from Dodge, Markets. go Sean

Sean Dodge

Janet, Thanks. somewhat generated again paper were Good maybe you morning on prices. and year-on-year congratulations progress Those you there a level or since the to sequentially sense depressed and strong SID a up gross activity the give XXXX, quarter. can margins. help and Is both the drag lower considerably SID from the and should this a of any that's way activity having us is despite you about percent. margins, to pretty there the your back activity amount then the now? Cindy, trajectory everybody be gross know, said and end work into as still things frame much And I right the the how down lower normalizing, thinking is drag we but XX-ish route XXXX? year continue of is the on

Janet H. Zelenka

– morning, for you the the So thank and good question Sean.

largely that seeing are margin margin well the gross in performance at we're So line. is the level mirroring largely improvements that trends driven we're which the gross the hitting sustainable EBITDA as which is by seeing and divestitures

due half to of just about to low-margin So that, recap business. is divesting

type revenue a good driven because And million that's our last portion we've in we activities of we're So improvement. that $X million mentioned, to also some discretionary improvements. about a point as of margin line. had of cost the hit happen by But quarter. the largely seeing gross sustainable they're quarter, Those improvements; basis then $X

we're not as This seeing because quarter, much targets. hitting are our we internal

have plans. – from So for our last incentive compared to we our year upped accrual

Sean Dodge

Okay.

quarter, a about this guess kind So off the of or we think point for that's XX% XQ? starting how jumping fair I in point

Janet H. Zelenka

of a we're operating Yeah. divestitures improvements because sustainable amount sustainable of and a the – good seeing. It's that is good

Sean Dodge

it. Got

little in of then a now? the from contribution business RWCS, a size that sense What bit the of the that a think Okay. in focused maritime And of activity that about maritime? cleaning was then so any more cruise on business there drag is And was the tied guess across ships, or as that give very us in a potential closely the bit quarter? just revenue there, quarter. I any you to broad Can is we recovery

Janet H. Zelenka

Yeah.

Brian Joseph Butler

at any should try so or what we recovery? when stabilization to gauge or we tracking be And to looking

Janet H. Zelenka

Sure, Sean.

Cindy Jayne Miller

Yes.

of some the APHIS, to things in be has international I'll and describe So, or a a considered all in potential States, give bring it, once is example got But you bring we've land you like cruise that. the aren't – got specifics. a off Sean, so United in meaning that the at waters the something able – an border travel you you're describing at in in that as it business. can you ships port if wouldn't your plane waste country to to that Janet the

good take because international, have into that take be that to regulated we bit shouldn't is handle us, with it and and country, the that waste. those a it potentially of we it and drive really we drive things other accordingly lines carrying if coming waste, business it as that then So for treated – they

either it's autoclaved or incinerated. So

that's for So us, business that is. what

as imagine, being essentially business – docked can you has aren't people shut and isn't there's on that waste cruise ships been them and are as So generated, down. really

other into I me? revenue about maritime. to of Janet, waste total, can the think it's hazardous if I wrong. that overall, part the correct regulated total about different that's or X% that correct half And X% want you think of give categories any About got falls of we've some total I'm the – of of revenue; of Janet me do are there, maritime. in X% color whether or is of that

Janet H. Zelenka

Yeah.

thank Cindy. you, So

is $XX top of million maritime in line. about is Regulated roughly area Services, the call our Compliance is and impacting So other around Medical category, and revenue what in that this we that and is about in Waste half X%

Sean Dodge

Okay.

down? quarter million and $XX think about revenue being the should we in of So that

Janet H. Zelenka

that's annual, That's annual. No.

So...

Sean Dodge

Okay. down? is how And A lot? much that

Janet H. Zelenka

cruise mean, ships down It's I down it's a lot no significantly. because sailing. are

Cindy Jayne Miller

Yeah.

Janet H. Zelenka

no to unload be back ships have you coming waste. to port to So able

X that announcement see and there'll I because be It's sailing allowed cruise a an that their But delay I only it's stream. think revenue monitoring November to with ships probably start driving the So on news. again, we're were but staff be did in they're that initially. something will the going

Sean Dodge

again. Okay, great. Thanks

Cindy Jayne Miller

Sean. Thanks,

Operator

you. Thank

Next from question Schneeberger, Please Scott is go Oppenheimer. ahead.

Scott Schneeberger

I basis us you on thanks at improvement? I saw people inning were you're quarter, much. the for as that's forward. and guess progressing having as seeing update pandemic-related healthcare through first curious. – in I type the of and you in thought some and Waste, what Good on to just coming was demand look at business Thanks. take monthly you perhaps very get contrast back providers to was Thanks perform just remarks. the segment back think kind tricky what you October those progression in and of and the services Maybe Could prepared through on do. overall sense far Regulated in know a that morning. discretionary what compare of what trend what or a the

Cindy Jayne Miller

Scott. It's one, you. I'll with to talk Yeah. great that to start

and had have some I think picking do that continue waste. are, customers other see new We're where We is we're service the non-traditional Waste. encouraged by a seeing we very which to regulated from we what are that taking that are improvement PPE even launched year-over-year and it. we Regulated healthcare accordingly generating that and all within processing seeing it we're is up in the with we

that geographies open. macro particular level at, with what with that view days a certainly looking aligns – in that's service. more geographically we're it is early still in But of are almost I it Now think

We the too, of whether hospital think as customers discretionary cancer of that healthcare groups some their I progress, terms seeing screenings on other the hip can I and it, the online. discretionary many back also it's are different report replacements. kind coming and they other in things, services see of And of think

of the back are that reflection certainly we are to core levels do. still and general as some I are what others lagging, and And that's think we pre-pandemic then of a

think So will think I – that. vaccine potential affect a as I

I based to our certainly and vigilant in opening up it, on manage what degree will seeing pretty a for per cautious to to continuing geographies economies back affect remain and we're but greater costs continue geography we demand. think

Scott Schneeberger

to I'm question the Cindy, going Information. follow-up with basically on same Secure

Just but back curious you where quarter. have And business? we a your that's sense of it's work, think kind how are – with the of through how trending we affecting do directly to

Cindy Jayne Miller

Yeah.

we couple a things that monitor take to look I question. to think that's at – continue no, the in There's business. great a a order

are quarter-on-quarter. fact First, seeing with the we very sequential pleased that improvement

a now, QX at they they know, right at and of from revenue back then look like just course opening retail, are of to had XXXX. are let of of of terms And it growth, the again again just being in base that where of professional state-to-state. looking in But QX kind being up retail. it We're throttled the at alone we education world services, see in county-to-county, you terms as We where XXXX, growth things in good in shutdown have over all organic force. and we full and the open. where academia, saw QX in customer we're XXXX, and back opportunity. know, As of board you organic saw that's We monitoring started business

think a signs what fact from are in by positive in I we us, sequential October, that as evidenced where improvement. QX. that's sequential for So improvement finished seeing we over And then we said the

I in So the still and signs opening are we how backwards. – take some think little it with isn't I steps commensurate always I looking forward one it's is are directly in say economy think – you maybe open two step places

look So overall – to variable that's if you associated our proud the a those flip efforts. then, I job continues do of terrific very managing I'm and team on but the stops, in side, costs their with think

about going. where I us, and we're it we're improve for continues So to think excited

Scott Schneeberger

care. Excellent. Thanks, it turn Cindy. over. Take I'll

Cindy Jayne Miller

Scott. Thanks,

Operator

Thank you.

Daniels of Next Blair. ahead. question is from Please William Ryan go

Nicholas Spiekhout

and a the breakdown kind the of in SID. growth of questions. of it what's similar the October Kind number QX? that Spiekhout from Nick I of bit kind is tracking close better? month growth rate of there? a Was guys. in or line, RWCS Hey, Thanks last taking then little Ryan. for year-over-year Like, the my for going guess off I appreciate for

Janet H. Zelenka

Yeah.

morning. Janet. So good is This

how still of intra-quarter. first into the month quarter, There's show the it in market. look right but and you the of the we're So do that, and does the optimistic of trending lot the you and we're if going I at just look turbulence month a now. not in think lot get that markets to quarter before a turbulence we've there's improvement been about for

a And stable very set so we of customers. are managing

largely. good revenue what the businesses this other or here that market, be see the achieve internationally But on also and there to a change our been continuing maintaining business are based happens are portion on we've could depending that with for particular in You pandemic. they open economic to able conditions of

Nicholas Spiekhout

of be saw lagged a similar little performing Okay. Do more quarter last sequential we with should of it where bit we quarter? growth it with to kind like kind line think this SID kind RWCS was how in of whereas

Janet H. Zelenka

Regulated business are the by of that. So Waste growth, we for at But by and continued encouraged into that. our strength look that we're I would Medical and maritime, October encouraged

Nicholas Spiekhout

Okay.

Janet H. Zelenka

not say RWCS I'm or wouldn't that So saying – in lagging shape is form. I any way,

Nicholas Spiekhout

just And for know with finish any have Has any Thanks. at it's need contracts Any quarter, that last worth been there up all I asking this to coming given clients pushback I you. I or service then off. but that time? guess again. of at re-assessed maybe this asked maybe kind their SID? Got

Cindy Jayne Miller

larger just and I it – think with national the But owners. some I some Destruction a lot certainly, good got smaller, our engagements we of business medium-size but awful question. that's just imagine, – we've have really an contracts, what and customers is local, small Information think contracts, do Secure

take. us, It for it them. and give constant with a a discussion is is So

change, or allowed be to We to are conditions they're open them whether open closed closed. very even as their staying or or close they're

that of are the that. I we're any potential or seeing don't major not contracts, like we to just that's So clients volatility But see we of anything become we our that's every within can manage continuing day. we part that are see terms service say – line. But no, in any

Nicholas Spiekhout

I appreciate it. Thanks. Awesome.

Cindy Jayne Miller

Thanks, Nick.

Operator

of next The you. ahead. go from BMO. Thank Please Jeff question Silber is

Jeffrey M. Silber

Thank you so much.

Can October trends in you looking segmenting happened curious where remind this us the are so you why and America? from North kind between internationally? different mentioned at are just trends America what I'm of the international North You and even last quarter.

Cindy Jayne Miller

Yeah.

an Spain, regulated, international the think UK, being and and also regulated in the I large for the the from core what Romania, you're So that's operation position then asking, South perspective, in And Brazil. medical then that in strong for Portugal. – Korea

So being our the for the spots service outside core US. of those

I'm North outside but assuming said sorry. the I America, US. So – also Canada, just just

open countries different what it's yet we So but seeing are as strength up. everywhere, is

then You'll Regulated turbulence the see take surge, Waste you backwards discretionary there in step about some and the close of the the as as areas up, that growth then side. the services a potential back drive for they certain think a once there's

visibility then next quality moment, So to streams the seeing the about at even is bases. us happening revenue across what's excited it what and forecasting into market we're very to pipeline the really which piece being this for and of is initiative very by global be a greater able get revenue management but the volatile And we're October. encouraged customer for institute able into us to the into

to – through we're help are a manage better things to volatility. So lot us certainly get continue of us for going the to

Jeffrey M. Silber

appreciate curious That's your us you just you'll when enough And Okay. providing comfortable you helpful. be giving I'm guidance. nearer-term I think long-term outlook.

to your do quarter fourth you when guidance expect XXXX you example, numbers? For report provide

Janet H. Zelenka

Thank reached that you on yet. Not a question. for decision the

and turbulence uncertainties economic the on the introduce we depends annual again. guidance really it think I on in market and whether

Jeffrey M. Silber

Okay. Appreciate Thank you. that.

Operator

America. The question Bank go next of Please Thank Gary of ahead. Bisbee from you. is

Jay Hanna

Gary on Hey. This is today. Hanna for Jay

that of margin sort going Just discussion to back from earlier.

quarter, you this quoted operational reductions. both cost think efficiencies I and

forward side. going cost see on trending How reduction improve more that sort just of So sales from start to here? you that do as

Janet H. Zelenka

costs team manage engineering the is reductions. one things variable to the the So done we more this our team our of and what timeframe about through activities cost efficient, excited driving all operations and in do we've we're is and to commercial ability day every the and get through

we're believe we As believe operating $X those to leverage last improved that structural are I the in the mentioned, we of saw is cost of which we contributing and those sustainable, are seeing those we've sustainable. to are an sustainable business other quarter, the quarter. what million million in And this the mentioned, efficiencies $X there's And quarter, is about as change business performance. low-margin divestiture

Cindy Jayne Miller

say if thing. one can just I Jay, And

And right now is and folks is It I accepting bring a cultural we that the really those. accepting I accountability, to for things in to of one think we up are management that what all point they're that is accountability everybody an think doing. change, right having great in to change we're of is reductions. reaction cost us. becoming talking in are Janet disciplined, on of are a cultural that is evolution so and we're and you visibility the me, direction change that that greater to that mindset But what is see then more holding cost team mindset we're our really about across and we move in do, the seeing is

we're helped because things are We greater we position quite now be are where And to the all is that I we are right visibility. and those the differently. think improve. we by the And having to frankly pandemic to have looking implemented looking continually us ERP in for once to the achieve operate

that – I we're all great priorities have to results from move the forward. think safety the that's seeing of all the as we quality we key board that the of across –

Jay Hanna

the longer-term breakout between and between Okay. business? Waste your then to willing be that sort And for on you comment expectations long-term would of the organic breakout you growth Regulated gave, shredding on

Janet H. Zelenka

projection. both So point, they at core we to are say this and that our what will businesses of excited both growth is contribute I about that

Jay Hanna

Okay. you. Thank

Cindy Jayne Miller

Jay. Thanks,

Operator

of Capital Markets (sic) is Please go ahead. [Berenberg Leach from Alexander Capital (XX:XX:XX). question Markets] Brenberg Next

Alexander Leach

revenue Hi, for quality initiatives What's of question. RWCS taking my additions of environment you've for guys. like implemented? light been customer the these new particularly Thanks in in that all

Cindy Jayne Miller

really a That's trying heart that gets really question, to to appreciate Alex, out us because to – how figure I of the grow. that Yeah. really

engagement And organic because seeing quarter-over-quarter. year-over-year whether encouraging units seeing is being I what are sales improvement pipeline our this evident, of shred rep in down that I a we're our in encouraging what's sales improve good least putting think grow us, I resource But us we business see signs, across we opportunity and for quarter-over-quarter level. right at by very So ability also are actual demonstrated to we're as the will we it's seeing growth into to seeing management and about strength, to feel with to are think or or bit in positive continue the of we afford regulated all shred.

of to in land they're are So salesperson's think a these days every of early but really initiatives that we're patch come. I'm responsible that effort going more lot broadening sure after I and for,

Alexander Leach

of then Are in the that, CapEx. you your guys CapEx sort at result for CapEx that remarks. again, and capital the But mentioned moment what's elevated of I a pre-pandemic in a know is And at Great. more there? of at as ERP Okay. play normalized XXXX sort at level of levels expenditures? we looking more implementation

Janet H. Zelenka

Yeah. the Janet. our Thanks joining for call today by This way. is

I as year CapEx I of So pre-pandemic call And what to we this in getting would than mentioned what normally lower next actually is levels my capital year we expect. script, anticipate to of capital spend. is also And out operational the deferred But we we which ERP also the this have will pandemic. due deploying trajectory the capital year of spend to on story. an

some assess was or year and in pause of whether capital in in doing of lot everything. business, the it them, quarter was cost-effective through efficient the which process in central make discretionary most there a resulted a budgeting to we process, first So instituted no thought in or them and this – that projects, just management sure manner and maintenance the were be they

set pandemic were the And launch to and in. we getting so then ready those,

and our just those but of maintained sort maintenance suppressed be discretionary, have would two some we spending. So capital quarters what normal

up ramping are We capital our spending.

centralized a also intending so. sustainable some process, are business; not we bring to investment. they our And invest of fleet are see to we all the in into savings think terms our doing need We facilities I on make the be not in where to we and want we sure will based but

this anticipate back to of We bring normal to see year. spend next level lower So it we continuing. levels capital don't

Alexander Leach

guys. Thanks, Great. Okay.

Operator

This concludes our...

Cindy Jayne Miller

Alexander. Thanks,

Operator

Excuse question-and-answer me. our session. concludes This

to Cindy remarks. for the Now closing I'd conference turn like Miller over Ms. back to

Cindy Jayne Miller

Thank you, Nick.

shared by Stericycle the in call. like we'd to excitement So your for just thanks listening continued appreciate everyone close your future. interest telling our We to and for

much, thanks everybody. So

Operator

presentation. has The Thank conference concluded. for today's you now attending

disconnect. now may You

Stericycle (SRCL) 5 Nov 202020 Q3 Earnings call transcript