Earnings call transcript Q1 2023

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Operator

Hello, and welcome to the Q1 2023 Stericycle Earnings Conference Call. My name is Elliot, and I’ll be coordinating your call today. [Operator Instructions]

I’ll now like to hand over to Andrew Ellis, Vice President of Investor Relations. The floor is yours. ahead. go Please

Andrew Ellis

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

call Cindy Officer On Executive will today the be Jan Officer. our Information Officer; Miller, Zelenka, Chief Chief Financial and and Chief our

The discussion involve uncertainties. plan, expects, we statements. When are will, believes, statements goal words as similar estimates, risks making expressions, such we and use anticipates, includes today forward-looking that may, or other forward-looking

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

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

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

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

Relations most at information earnings the Investor measures, schedules found investors.stericycle.com. additional press be comparable in release, reconciliation For website to please and Stericycle’s the on our GAAP US refer to which can

prohibited. of a call also which the replay call, May accurate and call, prepared call of on is XXXX. be available conference approximately is at correspond Events we The in may Replay presentation, from the form without is today’s specific an the Investor is the reference replay. Any or hour slides on Time-sensitive after website. information available call be rebroadcast of time until this the express presentation. retransmission written information redistribution, being available call no Relations comments a for end one occurring April provided is longer during Throughout may today’s at the XXXX, Stericycle’s of will consent Stericycle’s investor XX, Investor XX, today which section This website. recorded, the Stericycle Relations to any in

turn now Cindy. to over the I’ll call

Cindy Miller

welcome I with Andrew. quarter line call. our Good with performance morning, am which today's expectations year. a to priorities. pleased is Overall, performance, and our We across everyone, solid Thank and our progress first for the key business saw you, in

Turning to our quarter first results.

commercial X.X% organic pricing XX.X% delivered actions Our leveraging Services the with XXXX, X%. growing our Waste We started which and revenue Information revenue actions. growth, Destruction Secure performance increasing overall Compliance of quarter benefited included Regulated increasing from in another and

partnerships are customer quality commitment showing our revenue deepening progress discussed customer to last initiatives implementation enhanced by which customer solutions. improving velocity good developing of our and quarter, expanding on includes penetration, I service that We

In expanded the points. gross profit quarter, XXX margin basis

Our largely to and actions other have reduced growth staffing gross revenue helped on to operational fleet allowing us in facilities as overtime efficiencies, particularly and increases areas such flow in the cost areas profit. through offset of

market with the encouraged staffing return return elective and we hospital of in surgeries trends. We see office being continue shoring be to levels what reported by up, to

a we support, take trends core compliance to solutions advantage leader our well-positioned they of as offering As market businesses, are and evolve. these in

are in balance positions flow strengthened and cash Further, existing placed including areas efforts, modernization to we geographic infrastructure well key base. future pleased us our Our and our customer with strategically capacity growth additional in treatment sheet. support generation

schedule Nevada to remains incinerator under operational live on construction XXXX. modernization our in With regards efforts, in go to early new our

We conveyance new also XX and have include projects additional autoclaves underway, which systems.

late received summer. of vehicles the have and mid schedule, date, anticipate by although we initiative, our remaining modernization outstanding deliveries Regarding receiving behind vehicle to our to remain orders almost XX% fleet

deployment, currently anticipate the second deploying ERP Looking ahead of immersed readiness and Compliance continue testing XXXX. and in to the the team half US in preparation to and is it Services Regulated we Waste

reduction. remain three in on debt debt since leverage of to our to our ratio improvement debt the track achieve to XX we turning ratio We times leverage lowest Now improved first leverage This debt since XXXX. ratio X.XX our and a half XXXX. year-end, is times, point

business represents Finishing investing with million. Latin was portfolio our divestiture outflow last divested cash in $XX XXth we our optimization, our operations remaining XXXX. This in approximately April, Brazil, since which America an of for

financial to over our I'll Janet to now turn results. the call review

Jan Zelenka

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

first $XXX.X X, As to of the slide on in last $XXX.X the quarter year. compared million, million noted revenues in were first quarter

rates impact Information and Of Secure Destruction and $XX.X of the revenues organic million organic million, net $XX.X divestitures of million growth increased of organic was Waste growth this and revenue was revenue Services increase, exchange Excluding $XX million. unfavorable $XX.X Compliance foreign Regulated million. $XX.X

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

foreign first and divestitures revenues the of increased impact in X% quarter. rates, organic the exchange Excluding

North and compared Services driven Regulated declined of or XXXX. organic Services $X.X to revenues International and the mainly contracts, levers, X.X% include in Compliance organic fees. million decline quarter. $XX.X due our lower first pricing in million pricing X.X%, In revenues to or new and Waste waste first was America, This the increased Waste volumes quarter which existing pricing customer Regulated three surcharges Compliance by and

revenues million first delivered the $XXX.X to of compared in Destruction Information million XXXX. Secure of quarter $XXX

organic exchange paper due increased and mainly Excluding the recycled pricing impact of higher Destruction XX.X% revenues to foreign Secure revenues. for Information rates,

recycling levers, contributed growth, including The X.X%. our fuel and organic due million compared three pricing revenues recycling XX.X% XXXX. service growth In surcharges. to the Secure recovery of and and Destruction to XX.X% environmental North revenue was or mainly contributed service this first revenues quarter Information increased America, revenues paper $XX.X Of XX.X%

mainly reduced than quarter due was SOP change pricing. million Recycled levers paper X.X% first Information million or the of XXXX. compared revenues pricing in organic In to XXXX, Destruction offsetting increased contributed approximately more mainly $X.X reflecting higher International, of first quarter to This Secure the $X.X volume.

general million primarily driven $XX $X.X quarter XXXX. was to improvement the mainly XX.X first of million, operations through and $XX.X flow mainly due offset of administrative lower bad revenue profit adjusted first divesture selling, to items and of $XX.X $X in by increase and partially growth million. from were Income due a by $The These to of million the million, loss debt was expense. in million, compared expenses quarter lower

partially first net of $XX.X $X.X million loss of expense higher million of interest per operations higher or $X.XX by diluted was or income previously million US to and million. was share a GAAP due expense XXXX. quarter tax $XX.X million to income increase in I as compared from of $XX.X diluted net of The $X.XX share, explained, offset income mainly $XX.X loss million, $X.X per the earnings

million million due accounts of three Cash flow payments by increase working $XX.X of days annual $XX.X $XX.X million for XXXX, incentive other from the and capital outstanding, of the million operations ended of compared receivable outflow million was in an an to mainly same period to sales income The improvements million, in of operating an compensation driven was higher March inflow $XX.X XX, of improvement of million. net $XX.X $XX.X year-over-year of lower $X.X months XXXX.

bad revenues $XX XX.X% income percentage million from basis in quarter percentage as increased XXX points XXX a lower of from against expense. $XX.X was the due of and year. pricing; Adjusted up the of debt revenues revenues, or income points of million as due a selling, gross of first from administrative flow-through following; last basis to lower expenses approximately general or one, a Adjusted basis mainly percentage improved revenues to operations and XXX approximately X.X% due as higher leverage mainly operations profit to and two, points, operating of

earnings noted slide As first $X.XX share X, on $X.XX per the compared adjusted in was XXXX. of quarter diluted to

from the $X.XX $X.XX and year-over-year from $X.XX expense. increase and $X.XX impact of other. These rates general lower income expense were profit offset tax and from $X.XX, administrative the from lower Excluding gross higher was by remaining exchange and partially divestitures expenses, selling, interest by flow-through, from foreign driven $X.XX

Capital months $XX.X period XX, the ended an the were $XX.X cash of to of $XX.X XX, million of $XX.X outflow XXXX. was March Free an flow compared same year. million ended period XXXX, for compared March million, XXXX, three expenditures to for three the million, for the same last inflow months in

on million was from of mainly operations slide million. $XX.X the due cash higher flow of improvement $XX.X As to noted year-over-year X,

as quarter of DSO first XX in days The North was quarter America XXXX. customer reported first was to Our compared driven the days XX by a destruction secure mainly billing of timing collections. difference of DSO and information year prior

agreement of first debt the XX, shown credit X.XX our was debt $X.XX quarter, our on net times As leverage defined billion. and was ratio the approximately at end slide

due will cash of to be second approximately balance consideration in As loss approximately Cindy April of for in debt-like exchange non-cash cash long-term is liabilities, from related quarter divestiture The we $XX which million. sheet million, in adjustments quarter. a operations consideration transaction $XX our second Brazil coverage expected included The divested removed mainly paid accumulated million. of in to pre-tax foreign the of result $XXX noted,

consolidated totaled In we unprofitable margin payments, favorably substantially settlement in approximately million. EBITDA impacting by about made XX Brazil XXXX, adjusted remaining on $X Also points the the in FCPA basis. business was all basis which a April, of

results ranges slide on quarter and guidance, aligned the XX, with year were same. Our guidance full shown as our first our remain XXXX

I back to will Cindy. turn call the now

Cindy Miller

advancing our This host and this a by which we leaders over opportunity transforming in Summit, team Earlier few Janet. our business aspects past to organization. the journey. opportunity made the month, XXX attended energized the celebrate on was over of engaged an and to amazing progress you, Thank across this had next an Senior was Leadership we've the years

for open to continued Operator, our members, having I'd team like their shareholders our communities line As please serve protect always, in matters. Stericycle the what for we thank customers, and trust Q&A. the

Operator

Thank Dodge Capital Our from [Operator RBC from comes Instructions] you. question Sean Markets. today first

is open. Your line

Sean Dodge

have trucks are Cindy, Thanks. to I this, some normalizing the needs the sufficient, there done you been enough structure great supplies. quarter. and and are think, with on maybe six been just you out? like still the decline guess, and start you of continue around congrats Yeah. be an a all What's on where for steady trending starting update morning or now, labor think how some work for if the or to of and guess, fast place backdrop. in those could diesel incrementing months. I not cost in pretty those progress offsetting maybe we Good inflation surcharges these again in been cost's the has --

Cindy Miller

great still and That's thanks we but Sean, Yeah. I'll you example. question. equal across that. are everything, give seeing an is we -- Actually, a inflation, see in not it what for it's

of While we in. are starting our to had we see vehicles orders that some come

elevated. the supply costs look rental we look of when bit little they is inflation still continued are that one a pretty at at seeing chain ease, we are thing So maintenance we and costs,

really us, that that something will that's we hasn't changed us, of fleet stead we behooves once for to better be and vehicles we've and rental going so out in that newer order vehicle as or So vehicle required. much get of business maintenance that it the we're get have much kind in, not then got full

inflation are when If lot our that at in facilities a times leases you came lot rates high. for the of we for exceptionally things that take a signed and during a inflation that was look of up renewal other

If high. QX year of broke record say you want to a it even when last XX-year

still sign you a those pricings there we had you with going of are to And have So mentioned obviously certain period. year because wages. some leases continue that for them in

has efficiencies always drive you and staffing good for our I've with workforce, think some as to stable is And make things. start I the good on really some stabilized. news said can wages a us

run -- the not that rate are. obviously, run see pleased a we've getting kind those those that worse. seen. than with don't higher we we're where We're However, of But, saying in rate to the business. be stability a at come that's any wage getting of continue -- has I very rate

think overall, some still see of that So, some continues we're there the we'll pockets pressure. seeing pretty are throughout where year. how inflationary But rest strong I the

Sean Dodge

quarter. the put early Janet, just contribution about you $X I on surcharges, Is year. a on said math margins would in that XXX little from lift clarifying the bit think basis last just just that then be the million million. there down from two My the And captured fourth was because gross $XX point at in you some That quarter. the would in pickup Okay.

sequentially? $X decline And incremental, why would million so that the be also or

then you year, shifted up the schedule SOP And we if this think again.

that went think I into mid-February.

now, how place QX over those with that surcharges in incrementally the So year? about remainder we in the maybe think and should of contribute

Jan Zelenka

Yeah.

first which and RWCS the So in of we quarter than didn't year in speak put we as just ability, of to are RWCS floors you tune QX in have surcharge then modify paper to think pricing three any some and and other about had, all and the our levers surcharges to that last through we continue for on in later year existing our the FID year. that are legacy, the existing continue we last

levers existing So what were have year. in didn't in of QX all you're -- hitting where and benefit seeing QX, place we very those not even is the or some as solidly last of many

of forward that going some the market year. and the based scheme what's to you're noise that of and really the just of will in half the particularly put the year, the we're to get sequentially, But pleased you that in as So of on things. in the that in happening lap we go we we're sustainability see second surcharges, pricing going

strong in surcharge range. the why that that first that's looking quarter is So

Sean Dodge

Okay, great. again. Thanks

Cindy Miller

Thanks, Sean.

Operator

from from David Baird. question Our next Manthey comes

now line Your is open.

David Manthey

here, Along good about approximate pricing. the Hi, you morning. same contract when think lines

think two some that assume other how higher. year, the think I of move think remain that related beyond -- year, the additional we about does when organic you levers to of down? And you that RWCS, the or when is actions through do that contracts two the have much through in So growth probably you surcharges, are constant priced or those X% pricing, up about levers new approximately those carries

Jan Zelenka

YeAH.

of and look you for pricing -- to X% if reiterating going if to just So our that's I'll start year, start because actions. rate some with the X% we are look, you're you that, the growth at

continue to the at renewals the pricing we in surcharges that according which in leverage and those to of pricing we continue to is beginning also in put and CPI of levers, inflation. the However, what both year, renewal, we see contract higher

she any I'll Cindy other turn thought? has to it over if

Cindy Miller

Yeah.

it's I RWCS Dave, important side, think too, note. the to on

there us. quarter had ERP supply a major And tremendous said, XXXX for getting Shred. really, sea difficult chain disruption. still is we mentioned in the legs QX were from we of If staffing As I had a take look, very issues We inflation. the were we just our deployment

So that's on the while side. that's Shred --

of through. a move think RWCS, the On we the the throughout think, return elective note, is move I as positive I as surgeries year, we

out simply of and levers pricing So our have have is be this price -- But we which as to didn't by purely very the story, elective it to year. Q-over-Q be encouraged purely won't be such, a we're plan not year's because see turns QX return last those this of we in surgeries.

at Now exact all the same hospitals time. don't rebound

that However, we thought built surgeries into plan, would come this year's back. the

us, a So for RWCS of to continue think is to sign that we're I the for was year. well-positioned end plan And it positive seeing hit that.

David Manthey

have long-term And into about was the you. Thank most cash to then free across flow still would when hold that headed. that higher on just mid-XXs. Janet, Does back EBITDA targets trying EBITDA well we a that to as second, cash for get margins targets, quarter? profitability to the happened moved P&L. you margin adjusted math can as the see ask business Just last read flow where of the low ultimately Okay. free we're we to tell And expected improvement to of you changes us you due that

Jan Zelenka

Our your in So February. long-term I answer is... outlook question? it issued same the Does as stays that that

David Manthey

I believe

Jan Zelenka

revenue and rates flow the the growth XXXX with in through rate Yes, then annual of to higher XX% rate, -- an conversion to of XX% those X% and free EBITDA drives XX% growth. margin then CAGR adjusted to and which XX% cash X% following

all are So those

Cindy Miller

Dave directionally, you're definitely track on Yes, you're

Jan Zelenka

Yes.

David Manthey

sounds the like in it's ballpark. it Yes, same

very you Okay. Thank much.

Cindy Miller

you. Thank

Operator

Schneeberger comes from Our next question Scott Oppenheimer. from

open is line Your

Scott Schneeberger

morning. Good you. Thank

looked surcharges that. theme. the prices? kind want expectations? some what expecting that First guess, separately used did going good. seeing percent are question, that commentary What I Jan, internal what add-on are paper cover to an on a compare were maybe then the trend, on that organic What you your on out of and you. forward, growth on How of acceleration regulated Just Thank drivers on waste you now focus to I as of

Cindy Miller

this question. the take part is Scott, first Yes. your Cindy. of I'll

with pleased So I we're think RWCS.

again, just with if be language, what's down sitting woke implement whether to you're where XXXX, out able machinery any for best our to Stericycle, exactly how if company going a of takes to bit contractual over to up and to changes, track figure bit on strategy to -- takes we expectations. year look whether internal QX it's is want -- QX a make coming are moving it it going time, anybody's forward. from, inflation little -- everybody the versus the X% say of to We this of cost is at it's But not a I if little pricing everybody,

year-over-year price QX QX heavily skewed versus and on side. our certainly RWCS So both the comparison, is the towards shred

this However, for year. in we that built

delivering, reiterated terms we're Our going EPS, down and X% which in is we through flow, plan cetera. right is to plan cash free X% et we why with adjusted on our guidance grow of to on what

for in us, to solid made we've it at year's making I comparison, on overall, us compared looking of of goals. -- key So weaker it good the a quarter towards this internally, was progress but driving at priorities believe it looking a for think, and some certainly we're execution we pleased good not terms

Jan Zelenka

see paper terms of the And rates start paper with surcharge paper where the in Yes. of going, coverage and we rate. the I'll

to say, our same, guidance we and updated versus manage revenue to the rates, manage forward, in up as that of that. guidance shows recent paper seeing revenue reason what to we able is the at that the able the basis shows on a the And still is goes at SOP looked we're decline service revenue, down, look that would is range from price trends the the original paper ability kept paper surcharge XX% we whereas footnote where and our on it we're to means the we So as up. which a least recent cover our of we're

Cindy Miller

the And about service were from the the XX% the search I one you things, asking. Scott, out say, other from about what works to is It rate RISI I'm be revenue this is -- and of not RISI or XX%, itself. also sure think, XX% fee-based stream was rate a if quite still let's from

Jan Zelenka

paper. the times And of volume the Yes.

Scott Schneeberger

inorganic Thanks. Okay. to on I Appreciate kind the of just touch divestitures that. want briefly profile. and

Latin last What we summer, So Brazil What acquisitions on on this but you be in consideration what in, being the anything going on going the on you the into are there? at in? inning inorganic just side. would should realize divestitures forward? commentary, lot expect America, I going thoughts tucking have a curious just Thanks. juncture left of Any

Cindy Miller

question. Scott, Yes, great

think core is as us, business RWCS. well we've as I said obviously, for shred the

continue but company and take to us for We at opportunity profitably real market good to plans. the as all grow our to just where markets drive expectations look really long-range forward a the our hit of terms in to not to grow to is analysis the

since We've had divestitures XXXX. XX right. You're

we've things with had it divestitures. And one morphed it that as to stronger started of -- came rationalization, portfolio we balance of then we to engine originally had and However, to it because we changed a get had happen. couple why That's portfolio. it we changed out sheet. also a optimization We started But realize acquisition. we the

greater you more once get control Once have financing, get of balance flexibility. the sheet, a stronger you you

continue evaluate So for to of all our we us, opportunities.

terms the certainly record I divestitures, even has nicely. the in been shown pretty contributing but strong track a of acquisition, we've which think

for of think as five reason. business to key one a priorities I portfolio our us, continue for have optimization So we

everything. to So and are we looking evaluating point, your

think point for I important business great into to hard. ERP a on this will portion already are training, means larger one of working now You which second the did is our on start jobs. looking as bring flip come They deploy up as our good to getting very to QX, half Scott, things of take two start the of starting we in note that switch, who very year, QX, we though, start that into as you we are before rhythm people many doing you

I Paul a job look IT the at look -- at a now lot I at If a folks on they're borrow and means responsibilities. applying have to folks, operators, the additional in resources I at But those ERP working if of to if deployment great hard. lot the hand. terms to And right they start take of engineering QX, to the from department, our if look very -- start of we immediate that Peter I pay

acquisitions will it's the said, to So like busy continue move quite the for be whether we through or as year. you us, divestitures, group

Scott Schneeberger

down Congrats on Great Appreciate getting that turn Thanks. it over. job that. leverage on to. it. I'll

Cindy Miller

Thanks. Thanks Scott. much, We that. appreciate

Operator

Our Scott Intelligence. next from question comes from Bloomberg Levine

open. is line Your

Scott Levine

good morning, everybody. Hey,

Cindy Miller

Good morning.

Jan Zelenka

Good morning.

Scott Levine

how see of abate bit quarters? drill adjusted to So just over can you I more. much think know little temporary pricing downward, is sticky down on pricing for that a inflation to have if don't if the versus wanted in might way next this you I be we meaningful the few estimate us, a

Cindy Miller

that's the and surcharges put good a in into or at very looking increases it always whether you're base -- look to price question, Scott, terms forward. have we it's rates in your you of Yes. time certainly, whether and any been market, fees, have you

to we? with market? are be have hey, the in happening customers? What's say, what's able happening You to Where

this so what start to adjustment with that and at looking the needs rate year, many what take companies us, surcharges that do for base just is your where into come and fees. you're base rate the a what's as figure be starting out to not we're is we made necessarily and you at look So do to

in of You've and there the have what's the got what gives enough off market to you that based your what to you, sticky be point, isn't. flexibility year hey, throughout reasonable

fold? customers customers? measure volume it's ton we're volume winning win or and the terms new new of we of to it's waste, the growing sites, in continue we we a look into is the think actual, measure paper also portion a of What volume new is pound new whether business that at terms business in in we of are bringing volume I of as the we remember, of

can to So in looking combine you're rates what have -- got starting base that you're complex or on see it's outside on based you've on a it's or it's your and whether based paper will market for based strategy start something inflation. moving you a of of a a us, index the also that what bear terms to what at forward we're that's so helps selling price at fuel

I to bring we for key I you right at you I tell can't it, think science now, looking can tell the to So up, I exact point can and give you while you that day. are it's every something

Jan Zelenka

And with I'd penetrating Secure keep two -- those those add and flex we and in market based the based -- the are commodity I on for can was the Information paper prices, keep Destruction fuel that those we tuning but we mentioned that well. early, have just on surcharges, as one that

Scott Levine

between customers. regarding that of helpful. was more you maybe would was difference bit a Thank side Great. you either say was customer And those side can more I any be versus really if guys side I you're customer don't hospital maybe wondering like know were color it. focus But Got meaningful whether seeing can you. pressure, you much. down any where in segmentation you more. My little sense there that smaller on customer that's But of improving the larger provide trends breaking categories is the seeing

Cindy Miller

Yes.

We're at accounts. looking I that's pretty at of hospital insightful, look Scott, in -- how think that's great things. a terms we

big the big So networks. IDNs, really the hospitals, the

a the in dentists, different -- for that rural downtown, but lot types they a we Those that have company the then at we cities, accounts but would be independents. And need the ones more certainly us looking in offices big at in not see of also then may of are those the We doctors, places. really are national look a the parts.

the So this is of are regions -- and I all not things, seeing what not said earlier, not are country I and I all all think equal. think we areas

I say where satellites, And We're getting of seeing kind some of and have stronger. to will. want shut some if the smaller areas hospitals down, you of some their

We with are things independents. of some similar some the seeing

are However, at the in we terms are what and with winning commercial very We're price pleased of we organization. what winning?

now, we pricing that to business, have the And strategic regional technology terms information and from the decisions getting going making able for profitably. into driving really right currently metrics really have they on market us more win really more in the to the rhythm that that driving some of based be better we're

that few So over across these think of process attributable now. going RWCS, that to in the And think revenue we have three winning I maturity I would we we're maturing of in the are I the right that's in board and specifically quality say, years. really rhythm those segments, last

Scott Levine

One can in. Understood. I last one, if sneak it

On the…

Jan Zelenka

Sure. Go ahead.

Scott Levine

down of … so those where had end year, obviously, target by you remember come a the the I to the by leverage anything don't if has the -- meaningfully. leverage you expected hit along but lines, leverage the

guessing to offing this is if there I'm maybe, and -- not, whether the for next year? year if thoughts maybe there the your on nothing for XXXX, the can capital you can elaboration provide return returns this any on capital there's but that Just side, for happen year, capital program wondering whether in

Jan Zelenka

question. the for Thanks Yeah.

were a with target first So first chance achieve the by it to X.XX. the close. quarter and of have year did times a three of with pleased We we in we the came the awfully half

that our So was target.

of -- anticipate three that still second or year. quarter below this by getting the by So the to we

After be going in rest deployment. focused of that, the investing the to through we're ERP the in year ourselves on

be to pay debt our continue cash that will free we capital program or internally. down to have flow the generation So used

to of opportunities XXXX, we may As for have use capital. get other we

As you mentioned, we haven't really refined that menu. to a discrete

on menu. However, the what would be

to portfolio we optimization. portfolio said, changed So as rationalization Cindy

there's acquisitions. opportunity for So potentially tuck-in

as will we to And of said explore. menu going our future options. of we're And then, get down those this and the we in year have that to with the the yes, you what delivering options have on rest are mature we deliver, on head through

Scott Levine

Got Great, Thank it. you.

Jan Zelenka

Thank you, Scott.

Scott Levine

Thank you.

Operator

next comes Sommer from Tobey question Securities. Our from Truist

is line Your open.

Jack Wilson

Good morning. This is for Jack Tobey. Wilson on

with of the the surgeries guidance we XXXX, for cadence X% return organic for remainder how and in? of growth be thinking XQ the the terms should built electric In X% the year to the about revenue of growth

Cindy Miller

Yeah.

to It's portion that think, Tobey. look you. welcome. RWCS have a looking We're I technology for the deployment nice engaging in But for of forward major got take really a I this Jack, our temper going to have a of at. couple to year. we and half things in system, with second a ERP think We've

this one we've growth, we equal. shows year's Remember, built a revenue into XXXX. aren't shows faced all of may difficult think, QX really that probably but quarters, numbers in most I the of things believe this we lot terms -- it's but So big of have of things to in quarter compared plan,

are what's what think getting signs important terms It for shoring see to positive terms Remembering XXXX. their in for it flipped for -- at the elective is I back. see every positive that, of in hospitals So signs we staffing. surgeries. hospital. We and now looking up more We is people switch go everybody same if isn't isn't back of their starting as a

this are advantage got going be we customers QX So while as soon and to are the in as positioned QX, we hospitals really continue that the get things as few half to we've then take with well a into knowing year, service that -- going deployment recover, to but second that that of on the other we in we of have. preparation

the balance drive lot to a to X% number to So I a X% is for growth in think target a towards. terms here, good us of but

Jack Wilson

sense. of getting New thinking the facilities lot completed in then of about online How should and these coming a on sort be Jersey maybe sort makes And online? That environment Nevada. to the regulatory one new facilities we just Okay. and of

Cindy Miller

But think we I This complexity this again, our news anybody arenas get passed we live. is anytime Stericycle providing trying where good there our is in do and of service the a very communities the for about there. we something where regulatory vital all and is is where facilities to That's, talks live, work. which to

very McCarran be incinerators McCarran, progress, to foot as two I have us, for Nevada going with is there. square the specifically, So facility, if could we're just about we're a to just mention going pleased XXX,XXX

to used going the where of one all the waste-to-energy a to recycle process waste. It's We're those is that's it water plant.

a cleanest -- just us public waste water public sure to facility. will we're exciting think now got -- incinerator. see working And it certainly operators important with It's be process and the med advance, So make not it's relations to that be affairs strong zero things I for expected right we've have it's very to team and that are a to a our discharge.

and You've have are got permitting, well sometime can open that of in got to we that McCarran the happen to we year. make all have first our next you've so that half on way sure

Jack Wilson

I'll Excellent. so over. turn Thank you it much.

Cindy Miller

Thanks, Jan.

Operator

Kevin Steinke from Research. Our next Barrington from comes question

is line open. Your

Kevin Steinke

Good morning.

also to of ERP And of you're new terms your guess, the office maybe information customer ability the seeing customer that deployment out In wondering in business insights destruction, how I growth. months ERP? trends And growth based XX on in into just outlook are gaining you're from about, terms potential drive return in the secure volume you're from to what just playing new and that business.

Cindy Miller

XX months. the good with reference really a question Kevin, to that's

also there about. are So one that to happy I big very and too is time back that's layoffs. things of a some noticed, many another coming pretty have everybody sign. think I'm that we that's back the have announcing that's the -- work, to come sure people we're of office, good you company Any I for

is if like it So XXXX looking isn't as anything the world yet.

I said, back, think folks time, that's as any great. However, come I

everybody, proud issue. hey, are here's where XX I an was in months, the -- with the we that what deployment? question In here's ERP of. from, we've think I'm And Your most gone

in the that walk, in we scenario. system, we're run we of is that want crawl, to can kind be to let's you technology, make, at now it which looking with the enhancements really where Here's bug all are now a fix the

figure bugs You the are okay, start then running. out, fixing system, and you in off what is this

to can now. I things And think the route operations everything really we're get side. what You then Everybody further all becomes had would on something more fixing the it, comfortable be from this see it I'd with right, see, upstream looking if running that data. from at rebalancing, And this I data, than you the to I smoothly. enhancement, leverage we've into things, start get enhancing right able understand I much and starting granular certainly to data, fix you with morphed

rhythm. of other the bit question asked improve you think now that leveraging technology sales I then good a But is, we are to the the rhythm, also commercial

service. intense. have we time One speed velocity to Well, that manual, to and of to quality I time to as velocity. there that with improving cumbersome out can us actually an reduce of should is noticed signs you very on technology, somebody affording improve now Right that example the things first the When the the labor I a very of up, from customer that customer. can is quickly revenue, would the servicing about opportunity up red, be sale that from talked time you're or means make say, the get customer, we're very implementation really that in how a

So, us cylinders there's that we to still I runway are to ERP, improve. I that leveraging that And on continue hitting the had outlined. think some for we think

Kevin Steinke

it you. Thank all back That's Okay. had. turn I over. I'll

Cindy Miller

Kevin. it, Appreciate

Operator

comes Brian question from next Our Butler Stifel. from

open. Your line is

Brian Butler

question. Good morning. taking for my Thanks

Cindy Miller

Hi Brian.

Brian Butler

of broken I Just of think SIB they them saw see the on how kind really the know waste are you can still out moving between the we very you two are about trending? on segments. one, medical first margins in regulated that or color close? aren't the the quarter, apart, Are kind when any they But or improvement in first

Cindy Miller

Yes.

same are aligned both So range. the are they in both in margins, range and staying of that

modernize is consider it cash And them margin seeing good on core. not it. The model a a we than bit why RWCS, that's as a are we there. investment because little divergence and cash more both difference businesses, So is lighter you're

cash businesses a both investment that contributor core both and for is is across nice we're So thesis cash -- it doing generate our

Brian Butler

in. Okay. XXXX? elective was then built stands you fits and improving any that that kind the how half, of maritime about Do back the where the kind and of guidance into And in surgeries and on for activity that talked you color have

Cindy Miller

Yeah.

-- us. for think it's cruises, I good time news back any customers coming seeing taking that and are we're we're

and believe -- of out remember, terms terms and our are amount of I and process to where think pleased are the ships that the maritime, But to So I hint running of cruise with continue seasonality in sometimes it. to that ability growth in we reference of revenue we're that to a it. internally very has

story. So it maritime, news a good

Brian Butler

you maybe then Any about Is there you anything left last know the just kind follow-up. I -- what talked down the but one now And as core? remain the they're that to optimization outstanding? big you I wanted of Okay. pared all there of see looking obviously, the portfolio, I my fits to sure items or at is But any best. understood. really make really what time,

Cindy Miller

want would terms a Yeah, we're to on but be unfortunately, able that or is Brian, Stericycle at good something you last thing going that The question, prematurely. answer do to there not looking certainly that ever put out specifics. of to in giving potentially I'm an to divestiture one either acquisition be that would

us, for just the look we at continue market. So to

We continue revenue. to drive accretive

continue well the they drive and to as possibly as efficiently work portion We as commercial as operations organization the to can.

to I record, pretty a going track think So got good within continue that and path. parameters, we're those we've down

can't quite you than done really I So frankly, that. more we've never apologies tell that but that, anything

Brian Butler

questions. taking Okay. the you for Thank

Cindy Miller

you. Thank

Operator

comes Hoffman from question next Stifel. from Michael Our

line open. Your is

Michael Hoffman

to apologize double Yeah. team. I

we're We this overlapping. morning, have calls had so

done. answer, do. Following a the Is on I guess Brian's There's -- to fair not you're more question, though.

is. a tell more but it bit won't little to do. fine, what us You there's That's

Cindy Miller

by appreciate It remains a good And key business priority, that. the Michael, so highlighting morning, you way. I

Michael Hoffman

morning. drinking out I'm earnings a quarterly Good morning. firehouse of

Sorry.

Cindy Miller

So heard -- I you I a on, figured were. that's as Brian and fact, you matter -- of come we where when are

-- we to it's time up you with appreciate catch taking us. So

Michael Hoffman

move. moving I'm cost that The to the to you're Because your country credit, relation, come incremental volume it. closed other you going What's that? around bearing to but spring, moving assuming for community the next question, Nevada because online but been you've waste is Utah manage to had

Cindy Miller

tell we well, now I it -- Coast describe Well, the costs, you, around Yeah. Number on right terms that won't for all one, are in give West you. can facilities the specifics I'll all of overburdened. are the

our able with got to people equipment taxing whether service. involved be that's that business. that it's Number really provide two, type right disposal third-party to parties long-haul be capabilities. We've out So to of continue reference we of capabilities, capabilities, the to third to we've the taxing got incineration it's want order in

that So of there's through that lot as we costs last A so. frankly, awful difficult. been this take have look which, bit an third-party good been -- quite have last quite been or year of a at the has expensive flowing

from West is than parts runs would Certainly, -- the And we Coast own then the to far our than just long haul. long more different of US haul optimum.

everything the start to facility, comes capability. McCarran and opens, and when the you and remember, and sure So you up capacity to you up of yourself get make facility then running, rhythm works, build

But what set I like very the -- moving of going to this it's the what going do in I -- really being about, for standard to for really going model where positioned. we're industry. this to the we're this and excited type is us the building, just very, forward not that is certainly, do internally. it's facility

So that's exciting.

the because run on the can get as facilities either. sometimes -- then sigh they them big of this hard all I too where push going efficient surround West that they're And relief beyond area to you a other Coast, they're well think not

get we facility this online. So

operators we're to But most happy. I very the to to are think I going to customers be terrific happy and fact – our to think we're continue able service. provide going importantly, in going think are be be see going that to I grow them the

Michael Hoffman

that for for the So operating just you that alone. therefore, a be the clear and of XXXX, a rebalance up to facility of new having to that, that do just lot model and of goes away everybody leverage open half ERPs first with and nothing listening in all

Cindy Miller

Yes.

taken in looked consideration terms of that the about guidance long-range one and when have at I types things, to that's do plans everybody think those that we opportunity. we into spoke we had things of of and

work it I switch -- a the open goes everybody isn't, of got some remember, think goes away, things. it a flip for door we've hey, all doesn't through isn't it all everything sudden, and Just to listening,

it's Again, walk, a crawl, run.

third with long-term have making outlook That's do the rebalance conversion We and a other the free we to that for that we we way party. our make rates that's we we've work some pretty with facility, all get sure running, all And that we contracts to that However, got do our that routes, process. good when get we did up sure long-term point, of your rid us, EBITDA and outlook that's the going. with on we Michael, flow rates. there, internal cash the network once adjusted some how providing see growth it

Michael Hoffman

for Thanks Okay. question. the taking extra

call. your I waiting So for was

Cindy Miller

Thanks your for Appreciate it. time.

Operator

remarks. our now any to Cindy concludes CEO, for Miller, hand I'll final This Q&A. back

Cindy Miller

Elliott. you, Thank

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

very So you thank much.

Operator

your concluded. thank you Ladies is now to like We for and participation. today's gentlemen, call

You may disconnect your now lines.

Stericycle (SRCL) 27 Apr 232023 Q1 Earnings call transcript