SRCL - Earnings call transcript Q4 2021

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Operator

Good day and welcome to the Stericycle Fourth Quarter 2021 Earnings Conference Call and Webcast. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Andrew Ellis, Vice President of Investor Relations. Mr. yours is floor the sir. Ellis,

Andrew Ellis

thank Good fourth joining XXXX for earnings morning call. and quarter Stericycle’s you

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

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

February investors.stericycle.com. most For being be today can found will is of be after the replay approximately the replay refer available presentation. the information end prepared access in the additional webcast replay we an XXX-XXX-XXXX code the and hour To also measures, Stericycle’s for recorded, press reconciliation until presentation, call, a is provided Relations will a of earnings Relations Stericycle retransmission Time-sensitive XXth, during which comments from turn call form correspond reference on release, rebroadcast Investor website. may which the in be conference prohibited. expressed also specific Investor Throughout of no Relations to on XXth, over call of at consent at website. March A replay I'll one slides comparable please call accurate be our redistribution, call, XXXXXXX. call of a Any any now website time XXXX. this information and of GAAP may the dial US occurring call, The written which or is at available on access longer without to to today’s available XXXX, is to the Investor Stericycle’s and This earnings Cindy. enter the replay. the the today’s call schedules Stericycle’s

Cindy Miller

Andrew, team faced quarter today's like Thank and In Omicron to fourth welcome our fourth customers all you, and the our earnings variant. members impact of thanking were organizations, many with like quarter, off by we what workers frontline COVID-related our the for the supporting our I'd to to and of protecting especially tied call. matters. discussion start illnesses

As a result and variant driver quarantine exacerbating experienced absences, unprecedented associated protocols, the shortages. we of worker and

had another on shared free our closed over the our helping Expanding We growth three call. XXth in on completed million. and $XX.X quarter on flow last organic earnings since Waste priorities, acquisition years increased single-digit business mid care these with start quality came I'll positive times, through of Services our X.X% our divestitures organic cash and to revenue. members guidance, and However, customers, quarter's network line team since which to with was together of XXXX, Janet growth, key strong first keep health We in Compliance support of the our the Regulated running. generated extraordinary

X.X%. Information which X.X%, grew led increased Secure Destruction, primarily As I previously mentioned, organic revenues by

Information that after the year-over-year X.X% of the in organic Destruction pleased had ERP America are growth implementation. We North quarter Secure revenue

Compliance believe Services by we was primarily and container, elective the our and organic see industry due trends to at led which surgeries. Regulated mainly North encouraging America by revenue of in of the continued per cruise return X.X%, to in driven which weight we increased X.X%, Additionally, partial average growth customers Waste was the higher

to the value provide. demonstrate of customers continue our the We we to services

in However, we see in inflationary quarter, fourth the serve. our to continued cost pressures to

the our One to model a to revenue of challenges. flexible inflationary quality working the more strengths adjust initiatives of has pricing these been of to cost create levers with necessary

all surcharges may Currently, fee. and and cost protection surcharges service paper a commodity new our of that of for and these supply with standardizing they include building following us the one, recovery pricing pricing pricing pressures, for flexibility, lag levers: in fees which price when ways the been to offset utilizing pricing. onetime through rates contractual have at our we new we contracts, sale. all have on the are customers, inflationary inflationary many for other of we offsetting our fuel, contract opportunity recycled And provide also adjust have of the and though levers have cost cost costs of a our volatility. ability Two, environmental between multi-year to we and ability these purchasers customers in for existing and and services, are anniversary at We several and point focused be there Examples labor when adjust affords the intention we adjust the chain of experience higher language and renewal. pricing to three,

on to efficiency, Moving modernization and operational innovation.

operations complex further shortages. Our that been challenged focused a chain managing teams and labor inflationary disruptions have has through engineering and been environment incredibly supply by on

have associated not cost accelerating were along years, seen gains initiatives, quality offset fourth the our modernization we productivity quarter. our revenue of to experienced couple in the of pressures staffing results, rapidly sufficient process with past and standardization with and Although efforts these these

you investments. comprehensive our with process of in XXXX. some capital me Let focused a completed share planning We on strategic efforts long-range

We modernization upgraded XXXX, autoclaves replace upgrade five new strong United several next new build in safety we assets. made facilities, new to facilities the in plan drive improved continue regulated and end-of-life Ireland the ourselves in our and invest efficiencies, waste to and Over including in growth, years, Kingdom, sustainability to and progress to and California. and efforts

disruptions have complete our spoke has delayed in some to America to evolved since due like that provide this that few we months have perspective North to chain to I'd supply been we several how on ERP Transitioning XXXX. a system, expect facility Additionally, we ago. projects

deployment, Regarding quarter. impacts as hone August the Information our business team to in is revenue of seen ERP the and with and America our performance implementation operating August, system. September, the Secure North the stable, have technology improve skills in our evidenced and from members fourth The continue by higher ERP in waned as associated Destruction their

mitigate ERP plan technology our learned and to disciplined to Waste subset on allows the our us Regulated targeted Services, with from of data Compliance for before deployment start and we of phased rollout and a look all and deployment. deployment Information are America is keenly to North Secure and In we focused This customers a Regulated North approach we to the across As Destruction XXXX, America deploying leveraging functionality consistent test and Waste Compliance risk facilities. Services. it lessons

to debt reduction. Now turning

$XX.X we DOJ X.XX in net XXXX. we FCPA business in divestiture for the SEC principle. which with fourth our finished with Our million did debt divested reached in debt strong ratio XXXX the ratio an times. settlement with is Canada have we $XX.X and which this times. divestiture proceeds our generation we agreement year divestiture whom Proceeds X, of XXXX, a not in since Solutions have Reflected Environmental We at would in toward we million, quarter. accrued calculation debt helped were expense $XX.X X.XX marks this the debt December half by second If settlement in tenth million, a reduction. this the cash applied finished with have free of leverage the leverage reduce flow from and XXXX On for

building past our where and of optimization operations density consider over part be business transportation and treatment are to We that region. On in have business our overall first our processes, operations, our afford our been are analyze build December us the strong integration over strong. an focus our efforts, synergies core half regulated the priority, which XX, customer acquisitions we sheet, we allows the scale operations. base, Janet portfolio and efficient service years, XXXX, integrated leveraging when strengthened to XXXX, I'll for reducing controls tuck-in now believed density route expertise while a Acquisitions, assess opportunity with to technology balance disciplined to our in Midwest-based and adds financial completed and As business to now increase core businesses turn certain appropriately markets, have an strategic waste to in two critical into and way which acquisition anticipate review markets thoughtful, divesting our integration non-core us expand debt. results. These of been playbook. to our in to offerings call this of our accretive of assets we the new the completing independent operations the a market and scale to customer have on

Janet Zelenka

results. Cindy. will summarizing you, I our Thank start by quarter fourth

growth slide were divestitures of $XX.X to and organic of Destruction and was million. unfavorable Of Compliance compared impact As the Regulated growth million million, million. revenues million of million, $XXX.X foreign increased rates noted was and X, Waste increase, organic revenue Information $XX.X organic $X.X revenues of revenue $XX.X Secure Services quarter $X.X exchange the excluding on million XXXX, in $XXX.X fourth the

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

X.X%. impact Services This due and this believe fourth waste. Waste which in divestitures by International Regulated increase pandemic lower an in XXXX, Compliance the Waste average experienced the increased revenues was elective majority Regulated Services driven increase increased surgery Compliance which rates, the weight Waste per was declined container, growth, of volumes an fourth of organic North Excluding the waste we compared waste revenues and grew revenues waste. in for revenues decline classification of Services Compliance to services maritime America Regulated due quarter. quarter and was X.X%. exchange the Of and pandemic X.X% over to an organic X.X% organic and foreign to

Secure slide revenues As million million XXXX. Destruction on of fourth Services $XXX.X $XXX.X quarter X, the of delivered compared to in noted Information

Excluding mainly revenues, volumes. service stops the impact and increased lower organic X.X%, due Destruction SOP of offset Secure pricing rates, recycled revenues to exchange by SOP increased Information for reflecting higher higher foreign paper

paper X.X% the XXXX. organic was to than recycled Destruction global $XX.X fourth million our North volume XXXX, year approximately revenues full XXXX. quarter In Information increased lower of X% America, the Secure compared For or

start-up experienced challenges mentioned, system the Cindy quarter we've tune to third have new as impacts continued ERP processes. that we technology As and and the customer the improved in

related to revenues servicing America which fourth were North in the compared of stops in of compared from Secure North stops, the the the starting which organic quarter million; our to comprise claim $XX.X for In revenues quarter the as following: increased to additional of utility quarter paper in COVID-XX. million; we vehicle with increase labor approximately rent million; stops quarter; approximately to was reflected higher higher in quarter from system volumes. year. reached operating remainder. XXXX. other agreement the $XX.X million renewed International, When properties due pricing $XX North chain recycled revenues in comprise approximately recycled from SEC in and of and recycled we of higher of expenditures Secure $X.X leases, million supply Destruction, evaluating costs FCPA million, with expenses, or service against XX.X%, our with $XX.X $XX.X was self-insurance to pre-pandemic America legal X.X% this recycling recover the to XX% inflationary increased XXXX. of supply customers of primarily higher mainly stops through fourth ways: an revenues of continues fourth ERP to revenues chain generate and with lower million. higher quarter Income associated the of due fourth paper, The gains business other costs $X XXXX we lower This that For SOP by The divestitures and costs economic expenses two approximately Information the million and principle; $X from inflationary up service lower associated fourth higher higher are due to higher coming results impact paper primarily containers members change of maintaining operations service an was America, the the to and costs wages and are by and X% Destruction expenses mainly X%. existing fourth SOP compared with In fourth quarter quarter fourth were million estimate increased and revenues whom compared XXXX, and revenues increased about Higher higher IT the paper expenses operating competitive The liners. offset in DOJ, the about XXXX. from settlement new disposable for $XX hires. maintenance associated on million with team decline wages labor last for and primarily facility $XX expenses ongoing Information

percentage quarter $X.XX fourth diluted from In December for XXX income a million. quarter ongoing diluted shortages, of new operations higher points XXX labor Adjusted decline $XX.X absences US partially of percentage was with spend as addition, year. we compared as legal system from of which year. in $XX result increased from declined supply approximately expenses GAAP fourth per $XXX.X expenditures basis offset previously the overtime compared the of million, net Cash I with or million driven $XXX.X loss fourth increased higher net XX, compared our operating nonrecurring of XXXX. higher ERP million. to earnings $X.XX million deployment, $XX.X expense revenues ended to lower million $XX.X self-insurance XXXX, of income income million curve basis as overall was lower in quarter operations The basis IT last of shared. of $XXX.X XXX basis the and with $XXX.X associated Adjusted $XX.X million XXXX, of $XXX.X from to the estimated in capital which aligns in XX% quarter was share of from and diluted the Adjusted or other and The and was $XX.X points, spent difference to income In of learning last share mainly expenditures revenues million members. was XX.X% lower compared to of have points. per $X.XX by costs for or costs mainly share operating of XXX the labor productivity million operations was XXXX. X.X% expenditures, related from differences million of earnings by the a ERP and of XXX of XX% about a points, annual income year claim related operations costs flow in chain of $X.XX team points, the to fourth loss per tax basis year-over-year inflationary was or

X, As and associated from due IT unfavorability legal impact and higher and $X.XX excluding illustrated of year-over-year claim lower $X.XX higher rate other inflationary the on and from remaining go-live; higher the decline bridge $X.XX divestitures favorability operating expenditures partially interest on unfavorability $X.XX by Slide associated driven favorability impacts the was ongoing from $X.XX, offset unfavorability our with These tax were with expenses. labor, self-insurance $X.XX ERP system a from by; supply costs; income to expense others. and chain, $X.XX

with flow for the I million. XXXX for XXXX Destruction guidance to million Capital the million deployment $XXX.X XXXX. XX-month increased $XXX XX million schedule collections of When to as to and December $XXX XXXX XXst, to compared to Our quarter of to from for fourth $XXX.X in in difference XXXX, was was prior Secure trailing year. line the days to in fourth as compared quarter of DSO the divestitures, million days compared of of fourth excluding calculation, the compared delay XX compared were expenditures as due Free XXXX, Information in DSO well to XX reported shared America the for previously in subsequent million days revenue days is This was cash XXXX. a the $XXX.X ERP mainly XXXX. customer quarter quarter XX fourth due North the invoicing DSO $XXX.X as

on $XXX.X and by of changes non-recurring million. nine, capital of tax noted The decline deferrals mainly associated These refunds $XXX.X mentioned capital million, the $X.X As compensation slide loss received in differences driven $XX.X of and non-recurring lower of refunds as service subsequent was include; of annual million customer related differences by $XX.X agreement pandemic-related versus XXXX. on million XXXX; divestiture XXXX partially offset expenditures of year-over-year in Act Domestic XXXX million CARES the aggregate of in and XXXX; were Solutions million; $XXX net million relief of of payout with incentive payment collections earlier. primarily XXXX working operating in $XX payments government-related US from the I decreases of payout advances nominal $XX.X in million to carryback in and a $XX.X Environmental net million

was credit debt on shown XX, for the million ratio fourth times. fourth million by leverage December and year As was XXXX defined quarter $XX.X our approximately slide debt end the XXst, Net $XXX.X in reduced the billion. at the of to $X.XX ended quarter, X.XX agreement

Cindy of Environmental Solutions our on our Environmental successfully XXth, of XXXX and Compliance As mentioned, December we with X% in $XX.X XXXX, were XXth Waste approximately business our total divestiture adjusted sale Revenues September Solutions in which and of business consolidated the in our Xst, through Canada of EBITDA Services. Canada reported completed proceeds were for million. Regulated

XXst, Midwest-based December regulated than expected million in we to in acquired for on acquisition revenues $XX is business a accretive $XX.X waste million. add XXXX, tuck-in Additionally, XXXX. This less

year full compared slide total to in were XXXX. the revenues $X.XX billion results $X.XX to Turning billion on XX,

offset operations $XX.X When Secure Services million, of divestitures Regulated Information and revenues and million. Excluding XX, organic million to from in $X.XX XXXX million in $XX.X to ended income lower mainly $XX.X XXXX. $XXX.X approximately mainly benefits to normalized to revenue approximately Adjusted Income XXXX. approximately diluted of was EBITDA $XXX.X share EBITDA $XXX In offset $XX.X or compared businesses partially by or to in million, difference an earnings million. from from $XX are exclude divestiture million Waste favorable per million. $X.XX compared $XX.X mentioned. operations and a exclude million FCPA $XXX.X XXXX the net was was lower The million organic growth XXXX. foreign billion loss December loss loss the XXXX divested higher billion When $XX.X rates Destruction was $XX.X income losses to was in settlement million. compared diluted would share growth XXXX increase been million. XXXX. was revenues per mainly $XX.X of and were in due Adjusted businesses, million. accrual divested related revenue expense of the $X.XX the $XXX.X compared adjusted impact $XX.X $X.XX million The revenues have was diluted compared $XX.X EBITDA. XXXX, million loss in million normalized This XXXX $XXX.X from interest was for XXXX, for These $X.XX with results of expense million estimated by million of in in exchange XXXX net previously organic Net in tax were Compliance to of as to XXXX. results increase, results generated the XXXX share and adjusted divested year businesses, $X $X.XX $XXX.X Of per are XXXX higher increased was million, of

exchange system. unfavorability, IT driven the ongoing from These our expenditures year-over-year were favorability interest the new on from by $X.XX and expense following: $X.XX on and $X.XX, lower the impact by of was rate. and favorable foreign from mainly favorability bridge a offset divestitures operating excluding rates illustrated As lower partially from $X.XX tax $X.XX ERP of other $X.XX from increase the XX, of Slide

million was shared. estimated noted the million, the at I range ERP XXXX XXXX the our of ERP spend As $XXX in was end $XXX previously Slide of $XXX.X lower to million which spending on for overall XX,

to call. our in we see related provision to free pandemic per some would referenced operate following and this organic flow, includes with like as our insights long-term we share, capital to pressures earnings what adjusted harbor at deployment-related trajectory, into the and forward-looking inflationary XXXX as expenditures, XXXX The emerging contemplated in safe growth, Although cash continued expenditures opening ERP guidance statements the uncertainty provide of outlook. due still I revenue

one, guidance to revenues Slide on of X% XXXX, noted we a a XX, as per follows: $X.X in to we base share Our organic expect two, earnings adjusted on billion; $X grow is generate to to range $X.XX. for of as X% expect

increased to recycling adjusted we will $X.XX revenue rates at to million an ongoing We of depreciation. XX% we EPS interest sorted and million effective $XX for For adjusted tax impact EPS, total XX%. ERP IT in paper approximately million be million, for new with exchange assumed anticipate rates per of expected system expenses XXXX year-end the which projection, expected rate this foreign operating range the in to of costs, assumed ton our we office running are and $XX adjusted $XX XXXX. system assumed regarding be of Three, approximately $XX to annualized

Services settlement-related $XX Additionally, America assumes any of to payment million Four, we million FCPA the for $XX.X operating adjusted incremental million, million expenditures potential we any to Five, Waste free costs. million of deployment-related of XXXX, capital associated deployment. generate and the $XXX $XXX expenditures settlement ERP ERP Regulated which we $XXX with to million, FCPA North ERP Compliance flow $XXX capital expect which includes of expenditures. to $XX expect estimated cash and million finally, expect excludes

to is pressure to long-term associated as have half the level with or first expenditures expected did our the August ERP remain at committed IT We outlook, slide look higher operating lower As XXXX XX. inflationary of first on adjusted deployment. not summarized of our than we ongoing be EPS the half XXXX, same as XXXX, XXXX

to turn with back will now So I Cindy. that, the call

Cindy Miller

we our change to of I'd values and data climate environment CDP is formally transparency many focus with we you, protect efforts way, increasing of well-being the on Thank highlighting to like element in and impact, our stakeholders. Janet. a day. minimizing through the responsible on which disclosed climate every and change core With our mission and health focus close key something enhance our a sustainable safe, to

to a B efforts. look For our our forward proud first received have and advancing are minus score submission, ESG to we

our of the partnership with sustainability announced commitment recently five-year Foundation. National Park is example our Another

are connect Operator, This with responsible protect mission a please on the National in safe, people line parks to Q&A. of Stericycle's The with we open course and mission wonder relationship, sustainable the health national focus and of to the well Over the aligns protect restoration. nature. and to supporting landscape to wildlife a well-being wetland way. is committed and conservation Park for Foundation's

Operator

ma’am. Yes,

will we We begin Instructions] first from Schneeberger ahead, the now come question-and-answer of And session. the Please question will sir. have [Operator Oppenheimer. Scott go

Scott Schneeberger

Cindy this Thank and you you. Good question very much. first Janet, I morning. guess is for both of

And The to should the first is I And few the actually direction a debt that. Corrupt Foreign acquisition nicely right in that behind the we with in paydown. years. the more by trending little impetus expect leverage a Act just Practices understand is payout of and really come? distorted curious the ratio

your Thanks. this period going hit in and Are Cindy, going what current to type contribution if paid see could a multiple Janet, turn? part. And of in you is that's on forward? So we then more? kind of maybe

Cindy Miller

Scott, great you Yes. much. Thank question. Appreciate it.

and we since we're make we had needed needed been them to the with sheet. principles we So get it grow that the take same the several We to the deploy the that out we could and resources balance to and as and to the had for where to one Stericycle. one clean needed focused improve that I up sure that opportunity of realized we on We core. portfolio years rationalization, the started of things past business -- And key have together. initiatives because Janet them, still five

And And just smarter. in regionally in our order or disciplined markets, for year, we're strengths we it portfolio last importantly, the think are us, we're we strategic. to us, America getting think for it's changed globally. I where I more optimization. North We're more understand getting of here getting whether to So more

tuck-in of us, well-run I being, customers. strong a strategic for similar us it in focus for So similar think, this made service a sense independent on a great culture, offering, company, terms

we have think going operations that's us area the in didn't opportunity service really I of an an the expand scale strongest to where footprint. offerings to some and So afford

going a we So our think in where conditions, look improve always, we all I that hope of to that market and could footprint helps. I the grow. future, take weaknesses, our we're strengths conditions, what's terms as at And to in order think

as So are I think ahead, the all Go on table. states, things optimization Janet.

Janet Zelenka

Thank noting you. the leverage thank for debt you Yes, improvement.

right, for we're quite without a there payment accrual large the You're and trending we or that nicely. we have do FCPA, put in that,

-- terms multiple what revenue will acquisition, pleased were viewed stated, we In And accretive. we less we both happy generate $XX I was think year, in with. of. as as a of which achieved parties than million that It we're we the

Scott Schneeberger

like that repair? XXXX, And of payments do in is into Thank the the tying we for a of for Thanks. my you that guidance the working in sense flow headwind. just year? I settlement, a curious Act cash coming capital follow-up, years? free was how in quick Great. headwind And Janet, ERP timing upcoming the can guess, sounds to the you. that destruction on that, Practices factored of have kind How Foreign Corrupt see

Janet Zelenka

Yes.

keep settlement So in you know. will you're indicated, yes, posted I'm terms we'll free this flow we sure when year. quite not cash we the FCPA that of as so right, the exactly be

accurate the lot billings In the get make complicated so we delay wouldn't on capital rebills terms an we the did conscious a billing. opportunity, work for of working of some yes, as to decision we platform very of credit have customers to a and

So that an opportunity. is

are However, or it. the we in that tax terms saw we're we income not anticipating benefits of refunds at not least also going see this year to

didn't also opportunity And the operations if there. free cash built FCPA. is pay flow $XX-some There's from higher a been to cash have million So capital flow. yes, that into opportunity working a have there the for we it would

Scott Schneeberger

over. it I’ll Got Thanks. turn it.

Operator

Capital next, And Dodge we have Sean RBC Markets. of

Sean Dodge

Thanks. morning. Yes. Good

see underlying year, the can On the levers, the that in do or the to X% Cindy you X% incremental contribution you're how things that Shred-it that I initiatives? there? come X% the revenue of from expected you X% get visibility maybe to then, talked lot about? little ongoing of or pass-through the to some much, And like talk growth from a range? to assumptions revenue rebound to a you Is bit about quality to Is guidance there for guess, an targeting, cost need recovery assumed

Cindy Miller

Thanks, question. Great Yes. Sean.

to talked price. everybody us, looking for specifically, wanted you're we out on with there So share are that -- right. We the we and fact get at

whether looking that or about existing can We are levers with we talked customers, customers it's of the the those, some pull. brand-new We surcharges. at

our to about we've or here's chain offset the or is supply we've we If services a us here's of that unprecedented, very and look, provide chance core businesses learned some of have these of we what and with have terms -- labor is seen. it's and lot just a pandemic. some provide take learned of opportunity inflation since the to still in flow the yet onset Our really We've we're businesses, that But an shortages a happy to intent within ebb what about that things our of some I'm businesses. whether point pleased that to your grow. the

So get and it. but you back had lighter, elective to saw growth pandemic, more growth to COVID, we are But came still, we through if we we think surgeries waste, COVID creative down. the saw as

completely point elective was less, to It's are back. At Now as come in less starting surgeries and maritime shut -- starting one down. COVID is go back. to it's time,

in a the flow. in we've can it's of still growth for where side, more, we that I Shred can they combination side, Shred bit seen be to offerings resilience focus Shred. one of then think us, growth have One So ebb the a for on X%. and the little and we're It's combination. can that the on the a X% less And be good service

and of look had pandemic lot an XXXX January -- February then hits. the Shred, a prior of strong you take extremely in to pandemic, and we momentum were a of XXXX If we

Saw to Okay, And world out we're Shred. out solid as growth, the continue we year, dig the strong last January in started showing then then we growth saw disruptions growth growth have underneath in now ERP, and through for QX And good to business. focus. July we're normal we and growth, we pandemic. incremental showing in to roll recovery the from a

guess a happening in everybody your the as lot things news as I tempers is rebound terms what's during as know I to today think some unfortunate think again, very And world all globally. a continues of about I good indicators So day. given thinks that for us, mine, and there's of

can so things X% positive being we're all to X% for be, contributing normal things growth as And very that opportunity. about as to us, all they

Janet Zelenka

would based the pricing on the you levers, look all it's We do as only value customers. we the came to add thing to note and volume push Cindy And your I the proposition. that on as the also that it's inflationary opportunity, have mentioned, is as yes, that price fast at

customers. first the So, as that our with with that remarks, second is the understand half impressed of the these mentioned collaborative into But we're customers sales is between in market. there doing is timing and we as everyone work team see a a seeing days. our think And the really prepared I the go we that our half pressures lot

Sean Dodge

maybe of number guess, could Could come and Omicron there into in to quantify like of affected too? Okay. of kind with people sounds a then And come this revenue that's having then fourth that impact specific is being to the that quarter, the cost to stops drivers to some had QX? from impact It into not I And you you overtime then this on drivers in. the to mentioned impact some large And you had pay surge? quarter, work. the those Omicron that able going surge were the

Cindy Miller

we at looking the don't for Omicron some absent amount specifically there. X we I whether the of things. other or Yeah, drivers lot have a one are it's there's tied think And that, or is anything to of in things of

of still labor America. specifically had rate Truckers percentage based shortage, the think of fact the, certain off in just think American the I shortage a there's I Association talks drivers we've XX,XXX a of North short run the about that,

think is a of those But had about But exacerbated overtime of couple So terms your It's drivers. – as we I – companies being to and top having positive short that for talk things did did that Omicron, whatever it. we things. adapted said, still us, we there. on have in have of

a our worked I focused the it. we team really of efforts testimony could. to for and make to attract continuation on retain customers hard as best And sure of it's took we care we're the think to how that talent to everybody

local some in. adjustments mentioned market had You we put that

a us employees becoming a are I think mission lot the the company retain to ours. in And to Stericycle something that working our getting of comparison helping least our then, technology. culture another for at – that there's that would normal new think business, not work values. our our with potential that's fact at disadvantage we're developing and a purpose portion a the we're here is I environment enjoying the fact and be We're candidates said versus people at that have at the now

coming positive So I But those customers. mine. protocol servicing when marketplace, returning when up of shaping it we stop, see variant, employees the just it your for seeing us. will a when guess are think now, I'm as work into the end, right more out good more of is going and pleased we'll all to certainly as things that are of and really folks our Omicron will be to

Janet Zelenka

terms were we bringing then And in, just in And that which the $X a above the – were beyond shortages, have a you recruiting Yeah. on, the in with and of we around and absences, had that being new learning right? the were of the costs which combination that – the overtime, successful we caused people saw labor million, quantification, are you was curve new have we people.

$X all are assessed million as was in that which connected, quarter. we about the So worth of very those, fourth

Sean Dodge

again. Thanks, Okay. Great.

Cindy Miller

Sean. Thanks,

Operator

comes The Manthey we have next from of question David Baird.

David Manthey

for was Yeah. referring quarter just or Good $X were Thank Janet, year? I in is that unclear, to, the million you. the morning. the you

Janet Zelenka

That in quarter. was the

David Manthey

okay. quarter, The

that's So okay. –

Janet Zelenka

Thanks.

David Manthey

then... And

Janet Zelenka

several onset people, the yes. that which Yeah, with due almost happen to everyone was in saw cash quarter, the

David Manthey

Yes.

more Okay. And then here. accounting

divestiture, acquisition What the revs $X for revenues acquisition divestiture. approximately for fill us us related the million then and you the could you the was million gave to the EBITDA in for On and gaps But in what gave $XX and the there? EBITDA -- in the acquisition, you divestiture?

Janet Zelenka

Yes.

So EBITDA with I but haven't -- the we haven't -- I divestiture, it's didn't the accretive. release

above at will least So it normally we what that rate meaning see. the be at or

David Manthey

Okay.

Janet Zelenka

and information to for deck of was what the even K And of the you in lot remarks divestiture's bridges impact versus end help the to my the to there's a framework in set others you. the and and year get in

David Manthey

you. out. Right. that We'll have to Thank sort

Janet Zelenka

You’re welcome.

David Manthey

environment know But of price? some the that I then that as revenue think running in. inflation down to I some maybe And how you thinking in the pretty high seems was X% you X%? to And broadly would mean, beginning get it at breaks that environment. It inflationary said the could I in this organic at end year you is, X% to of start how is about the talk X% either volume low the you that growth, that the hot it way. end, -- take out just and end it versus where time or this year an will low pricing are just wondering, about as seems at low

Janet Zelenka

Yes.

have are we -- timing. place a Cindy And putting that levers we it in as will So the the said. pricing we mentioned, using

have rate cost -- second half. of of last we're to and to it in compared increased IT year. bottom-line, pricing a plus first will due will also half significant drop be but to the -- that the EBITDA will costs as compared half factors, timing and going timing is have we that the we the half see the the costs be in adjusted covering lower going that yes, didn't into that on there you're had seeing, of now our the run -- than normal the we EPS prior And second be that half pricing, terms between to the it the there year the first market will first The adjusted into reflects to two

David Manthey

you much. very Thank Okay.

Janet Zelenka

David. Thanks,

Operator

this At Executive back would now question-and-answer today's further conclude remarks. the any session. and will Ms. This closing conference questions. Ma'am? President be to over for appear Chief there I to turn Instructions] time, no call Miller, Cindy to like [Operator Officer

Cindy Miller

Thank you, it. I appreciate Mike.

we listening to shared Stericycle excitement this So in everyone your in greatly your call, appreciate interest on our and future.

much. you thank Appreciate So it.

Operator

disconnect your we time, And you may your to Thank Again, of and conference call also rest you, time right. care rest you. for thank Thank a of wonderful team this today. now everyone. the the you, the have ma'am day. All and has lines. Take At management concluded. the

Stericycle (SRCL) 24 Feb 222021 Q4 Earnings call transcript