| NOTE 2 — REVENUES FROM CONTRACTS WITH CUSTOMERS The Company provides RWCS, which provide collection and processing of regulated and specialized waste, including medical, pharmaceutical and hazardous waste, for disposal and compliance programs and communication solutions, and SID Services,services, which provide for the collection of personal and confidential information for secure destruction and recycling of shredded paper. The Company’s customers typically enter into a contract for the provision of services on a regular and scheduled basis, (e.g.e.g., weekly, or monthly)monthly or on an as needed basis (e.g. one-time service) over the contract term.term, e.g. one-time service. Under the contract terms, the Company receives fees based on a monthly, quarterly or annual rate and/or fees based on contractual rates depending upon measures including the volume, weight, and type of waste, number and size of containers collected, and weight and type of shredded paper, and number of call minutes.paper. Amounts are invoiced based on the terms of the underlying contract either on a regular basis, (e.g.e.g., monthly or quarterly)quarterly, or as services are performed and are generally due within a short period of time after invoicing based upon normal terms and conditions for our business type and the geography of the services performed. | | | | | | | | | 2022 Q32023 Q1 10-Q Report | Stericycle, Inc. ● | 1110 |
Disaggregation of RevenuesRevenue The following table presents revenues disaggregated by service and reportable segments: | | In millions | In millions | | | | | In millions | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | | Three Months Ended March 31, | | | 2022 | | 2021 | | 2022 | | 2021 | | | 2023 | | 2022 | | Revenue by Service | Revenue by Service | | | | | | | | Revenue by Service | | | | | | Regulated Waste and Compliance Services | Regulated Waste and Compliance Services | $ | 447.8 | | | $ | 461.7 | | | $ | 1,348.9 | | | $ | 1,398.3 | | Regulated Waste and Compliance Services | | $ | 451.3 | | | $ | 452.6 | | | Secure Information Destruction Services | Secure Information Destruction Services | 242.5 | | | 187.2 | | | 685.5 | | | 591.3 | | Secure Information Destruction Services | | 233.0 | | | 211.6 | | | Total Revenues | Total Revenues | $ | 690.3 | | | $ | 648.9 | | | $ | 2,034.4 | | | $ | 1,989.6 | | Total Revenues | | $ | 684.3 | | | $ | 664.2 | | | North America | North America | | | | | | | | North America | | | | | | Regulated Waste and Compliance Services | Regulated Waste and Compliance Services | $ | 369.7 | | | $ | 365.4 | | | $ | 1,097.5 | | | $ | 1,094.4 | | Regulated Waste and Compliance Services | | $ | 368.7 | | | $ | 362.1 | | | Secure Information Destruction Services | Secure Information Destruction Services | 215.1 | | | 158.5 | | | 599.7 | | | 505.8 | | Secure Information Destruction Services | | 204.7 | | | 181.6 | | | Total North America Segment | Total North America Segment | $ | 584.8 | | | $ | 523.9 | | | $ | 1,697.2 | | | $ | 1,600.2 | | Total North America Segment | | $ | 573.4 | | | $ | 543.7 | | | International | International | | | | | | | | International | | | | | | Regulated Waste and Compliance Services | Regulated Waste and Compliance Services | $ | 78.1 | | | $ | 96.3 | | | $ | 251.4 | | | $ | 303.9 | | Regulated Waste and Compliance Services | | $ | 82.6 | | | $ | 90.5 | | | Secure Information Destruction Services | Secure Information Destruction Services | 27.4 | | | 28.7 | | | 85.8 | | | 85.5 | | Secure Information Destruction Services | | 28.3 | | | 30.0 | | | Total International Segment | Total International Segment | $ | 105.5 | | | $ | 125.0 | | | $ | 337.2 | | | $ | 389.4 | | Total International Segment | | $ | 110.9 | | | $ | 120.5 | |
Contract Liabilities Contract liabilities at September 30, 2022March 31, 2023 and December 31, 2021,2022, were $8.2$8.7 million and $9.0$7.9 million, respectively. Substantially all of the contract liabilities as of September 30, 2022,March 31, 2023, are expected to be recognized in Revenues, as the amounts are earned, which will beis anticipated over the next 12 months. Contract Acquisition Costs The Company’s incremental direct costs of obtaining a contract, which consist primarily of sales incentives, are deferred and amortized to SG&A over a weighted average estimated period of benefit of 6.5 years. During the three months ended September 30,March 31, 2023 and 2022, and 2021, the Company amortized $3.8$4.0 million and $3.2 million, respectively, of deferred sales incentives to SG&A. During the nine months ended September 30, 2022 and 2021, the Company amortized $10.8 million and $9.3$3.4 million, respectively, of deferred sales incentives to SG&A. Total contract acquisition costs, net of accumulated amortization, were classified as follows: | | In millions | In millions | In millions | | | | September 30, 2022 | | December 31, 2021 | | March 31, 2023 | | December 31, 2022 | | Other current assets | Other current assets | $ | 13.8 | | | $ | 12.4 | | Other current assets | $ | 15.0 | | | $ | 14.2 | | | Other assets | Other assets | 38.4 | | | 34.3 | | Other assets | 43.4 | | | 40.5 | | | Total contract acquisition costs | Total contract acquisition costs | $ | 52.2 | | | $ | 46.7 | | Total contract acquisition costs | $ | 58.4 | | | $ | 54.7 | |
Allowance for Doubtful Accounts The Company estimates its allowance for doubtful accounts based on past collection history and specific risks identified among uncollected amounts, as well as management’s expectation of future economic conditions. If current or expected future economic trends, events, or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly. Past-due receivable balances are generally written off when the Company’s internal collection efforts have been exhausted. The changes in allowance for doubtful accounts were reported as follows: | | | | | | | | | | | | | In millions | | | | | Three Months Ended March 31, | | 2023 | | 2022 | | Beginning Balance | $ | 53.3 | | | $ | 43.3 | | | Bad debt expense, net of recoveries | 2.2 | | | 5.4 | | | Write-offs | (5.8) | | | (2.5) | | Other changes (1) | 0.5 | | | 2.0 | | | Ending Balance | $ | 50.2 | | | $ | 48.2 | |
(1)Amounts consist primarily of currency translation adjustments. | | | | | | | | | 2022 Q32023 Q1 10-Q Report | Stericycle, Inc. ● | 12 |
The changes in allowance for doubtful accounts were reported as follows:
| | | | | | | | | | | | | In millions | | | | | Nine Months Ended September 30, | | 2022 | | 2021 | | Beginning Balance | $ | 43.3 | | | $ | 56.2 | | | Bad debt expense, net of recoveries | 25.4 | | | 2.8 | | | Write-offs | (9.8) | | | (13.3) | | | Other changes | (0.3) | | | (3.1) | | | Ending Balance | $ | 58.6 | | | $ | 42.6 | |
| | | NOTE 3 — DIVESTITURES AND ASSET IMPAIRMENTS |
Divestitures
On September 1, 2021, the Company completed the sale of its operations in Japan for cash proceeds of $11.3 million reported in International. The transaction resulted in a third quarter 2021 divestiture pre-tax loss of $10.9 million reported in our International segment, of which $3.8 million related to the reclassification of accumulated currency translation adjustments to earnings. On December 1, 2021, the Company completed the sale of its Environmental Solutions operations in Canada for cash proceeds of $24.4 million reported in North America. The results of operations of these divested businesses have been excluded from our Condensed Consolidated Financial Statements from the date of the divestitures.
Asset Impairments
In the three and nine months ended September 30, 2022, the Company recognized $2.0 million related to impairments associated with exiting certain North American office facilities.
The Company acquired a midwest-based regulated waste business in North America on December 31, 2021, which is considered to be complementary to existing operations and aligns with the Company’s portfolio optimization strategy.
The purchase price consideration of $42.8 million and the purchase price allocation was finalized in the second quarter of 2022. The final acquisition date fair value of the total consideration transferred included $10.5 million in cash, $21.3 million in promissory notes, and $11.0 million in deferred consideration. The purchase price consideration was allocated to the assets and liabilities based on fair value as of the acquisition date, with the excess of the purchase price consideration over the net assets acquired of $23.7 million recorded as goodwill based on the strategic benefits to be achieved and is deductible for tax purposes. The Company used a third party specialist to determine the fair value of tangible and intangible assets, which primarily consisted of customer relationships of $17.5 million. The Company recorded final fair value measurement adjustments in the second quarter of 2022, which included a decrease of $2.5 million in intangible assets, a $0.2 million increase in fixed assets, and a $1.7 million increase in goodwill.
| | | | | | | | | 2022 Q3 10-Q Report | Stericycle, Inc. ● | 1311 |
North America Divestiture On December 1, 2022, the Company completed the sale of our Communication Solutions business for cash proceeds of approximately $45.0 million. The transaction resulted in a divestiture gain of $15.6 million. In connection with the transaction, the Company entered into certain additional ancillary agreements including a TSA, for up to 12 months. The Company allocated and deferred $1.4 million of the proceeds, which will be recognized over the duration of the TSA period offsetting the expenses incurred to deliver TSA services not reimbursed by the buyer. International Divestiture On April 20, 2023, the Company entered into an agreement for the sale of its operations in Brazil for cash consideration to the acquirer of approximately $28 million. Revenues of operations in Brazil were approximately 1% of our consolidated annual revenues for 2022. The transaction is expected to result in a second quarter divestiture pre-tax loss of approximately $100 million, of which $72 million relates to the reclassification of non-cash accumulated currency translation adjustments to earnings. As of March 31, 2023, the operations in Brazil did not meet the assets held for sale criteria. In connection with the agreement, the Company entered into a TSA with the acquirer for a period of up to six months. The agreement provides for indemnifications to the acquirer against certain liabilities. On January 19, 2023, the Company exited its International container manufacturing operations, for cash proceeds of approximately $2.2 million. The transaction resulted in a divestiture loss of $5.0 million. In connection with the transaction, the Company entered into certain additional ancillary agreements, including an exclusive two-year supply agreement for containers. The Company’s long-term debt consisted of the following: | | In millions | In millions | In millions | | | September 30, 2022 | | December 31, 2021 | | March 31, 2023 | | December 31, 2022 | | $1.2 billion Credit Facility, due in 2026 | $1.2 billion Credit Facility, due in 2026 | $ | 317.5 | | | $ | 247.0 | | $1.2 billion Credit Facility, due in 2026 | $ | 158.4 | | | $ | 154.1 | | | $200 million Term Loan, due in 2026 | $200 million Term Loan, due in 2026 | 200.0 | | | 200.0 | | $200 million Term Loan, due in 2026 | 200.0 | | | 200.0 | | | $600 million Senior Notes, due in 2024 | $600 million Senior Notes, due in 2024 | 600.0 | | | 600.0 | | $600 million Senior Notes, due in 2024 | 600.0 | | | 600.0 | | | $500 million Senior Notes, due in 2029 | $500 million Senior Notes, due in 2029 | 500.0 | | | 500.0 | | $500 million Senior Notes, due in 2029 | 500.0 | | | 500.0 | | | Promissory notes and deferred consideration weighted average maturity of 3.5 years at 2022 and 3.7 years at 2021 | 44.1 | | | 54.6 | | | | Foreign bank debt weighted average maturity 5.2 years at 2022 and 6.0 years at 2021 | 0.4 | | | 0.7 | | | | Promissory notes and deferred consideration weighted average maturity of 3.3 years at 2023 and 3.4 years at 2022 | | Promissory notes and deferred consideration weighted average maturity of 3.3 years at 2023 and 3.4 years at 2022 | 36.8 | | | 44.7 | | | Foreign bank debt weighted average maturity 4.7 years at 2023 and 5.0 years at 2022 | | Foreign bank debt weighted average maturity 4.7 years at 2023 and 5.0 years at 2022 | 0.3 | | | 0.4 | | | Obligations under finance leases | Obligations under finance leases | 18.8 | | | 21.4 | | Obligations under finance leases | 17.5 | | | 18.2 | | | Total debt | Total debt | 1,680.8 | | | 1,623.7 | | Total debt | 1,513.0 | | | 1,517.4 | | | Less: current portion of total debt | Less: current portion of total debt | 17.2 | | | 19.9 | | Less: current portion of total debt | 16.2 | | | 22.3 | | | Less: unamortized debt issuance costs | Less: unamortized debt issuance costs | 11.9 | | | 14.0 | | Less: unamortized debt issuance costs | 10.3 | | | 11.1 | | | Long-term portion of total debt | Long-term portion of total debt | $ | 1,651.7 | | | $ | 1,589.8 | | Long-term portion of total debt | $ | 1,486.5 | | | $ | 1,484.0 | |
The estimated fair value of our debt approximated $1.54$1.4 billion and $1.63$1.4 billion as of September 30, 2022March 31, 2023 and December 31, 2021,2022, respectively. These fair value amounts were estimated using an income approach by applying market interest rates for comparable instruments and developed based on inputs classified as Level 2. The weighted average interest rates on long-term debt, excluding finance leases were as follows: | | | Nine Months Ended
September 30, 2022 | | Year Ended December 31, 2021 | | Three Months Ended
March 31, 2023 | | Year Ended December 31, 2022 | | $1.2 billion Credit Facility, due in 2026 (variable rate) | $1.2 billion Credit Facility, due in 2026 (variable rate) | 4.91 | % | | 1.76 | % | $1.2 billion Credit Facility, due in 2026 (variable rate) | 6.24 | % | | 5.92 | % | | $200 million term loan, due in 2026 (variable rate) | 4.62 | % | | 1.40 | % | | | $200 million Term Loan, due in 2026 (variable rate) | | $200 million Term Loan, due in 2026 (variable rate) | 5.93 | % | | 5.88 | % | | $600 million Senior Notes, due in 2024 (fixed rate) | $600 million Senior Notes, due in 2024 (fixed rate) | 5.38 | % | | 5.38 | % | $600 million Senior Notes, due in 2024 (fixed rate) | 5.38 | % | | 5.38 | % | | $500 million Senior Notes, due in 2029 (fixed rate) | $500 million Senior Notes, due in 2029 (fixed rate) | 3.88 | % | | 3.88 | % | $500 million Senior Notes, due in 2029 (fixed rate) | 3.88 | % | | 3.88 | % | | Promissory notes and deferred consideration (fixed rate) | Promissory notes and deferred consideration (fixed rate) | 3.41 | % | | 3.19 | % | Promissory notes and deferred consideration (fixed rate) | 3.48 | % | | 3.49 | % | | Foreign bank debt (fixed rate) | Foreign bank debt (fixed rate) | 9.80 | % | | 9.80 | % | Foreign bank debt (fixed rate) | 9.80 | % | | 9.80 | % |
On April 26, 2022, we entered into a First Amendment which amends, among other provisions, the Credit Agreement to modify the definition
| | | | | | | | | | 2023 Q1 10-Q Report | Stericycle, Inc. ● | 12 |
The Credit Agreement retains,contains, among other covenants, itsa financial covenant requiring maintenance of a maximum ConsolidatedCredit Agreement Defined Debt Leverage Ratio of 4.00 to 1.00 for any fiscal quarter ending on or after September 30, 2022, which includes, among other provisions, continuation of $100.0$50.0 million cash add backs to EBITDA throughand with respect to any four fiscal quarter period ending on or before December 31, 2022, with no further add backs thereafter. In April 2022, the Company incurred deferred issuance costs of $0.4 million relating to the First Amendment. 2023. As of September 30, 2022,March 31, 2023, the Company was in compliance with its financial covenants. The Credit Agreement Defined Debt Leverage Ratio covenant was 3.763.05 to 1.00, which was below the allowed maximum ratio of 4.00 to 1.00 as set forth in the amended Credit Agreement. If the Company's 2024 Senior Notes are still outstanding 91 days prior to their respective maturity date (the “Springing Maturity Date”), then the Credit Agreement maturity date will be the Springing Maturity Date. Amounts committed to outstanding letters of credit and the unused portion of the Company’sCompany's Senior Credit Facility were as follows: | | | | | | | | | | | | | In millions | | September 30, 2022 | | December 31, 2021 | | Outstanding letters of credit under Credit Facility | $ | 59.9 | | | $ | 71.4 | | | Unused portion of the Credit Facility | 822.6 | | | 881.5 | |
| | | | | | | | | 2022 Q3 10-Q Report | Stericycle, Inc. ● | 14 |
| | | | | | | | | | | | | In millions | | March 31, 2023 | | December 31, 2022 | | Outstanding letters of credit under Credit Facility | $ | 60.2 | | | $ | 60.1 | | | Unused portion of the Credit Facility | 981.4 | | | 985.7 | |
The Company reported an income tax expense of $5.1$8.5 million and $2.9 million for the three months ended September 30,March 31, 2023 and 2022, compared to an income tax benefit of $3.0 million for the three months ended September 30, 2021.respectively. The effective tax rates for the three months ended September 30,March 31, 2023 and 2022, were 42.9% and 2021, were 15.4% and 4.4%(25.9)%, respectively. The effective tax rate for the three months ended September 30, 2022,March 31, 2023, reflects (i) tax benefit from the release of uncertain tax position reserves and (ii) tax benefit associated with the U.S. federal research and development tax credit, partially offset by (iii) losses in jurisdictions that are not eligible for tax benefits on account of valuation allowances, and (iv) equity-based compensation awards expiring without a tax benefit. The effective tax rate for the three months ended September 30, 2021, reflects (i) a nondeductible FCPA Settlement accrualbenefit and (ii) losses in jurisdictions that are not eligible for tax benefits on account of valuation allowances, partially offset by (iii) the net tax benefit from divestitures. The Company reported income tax expense of $16.4 million and $19.9 million for the nine months ended September 30, 2022 and 2021, respectively. The effective tax rates for the nine months ended September 30, 2022 and 2021, were 40.2% and 209.5%, respectively.allowances. The effective tax rate for the ninethree months ended September 30,March 31, 2022, reflects (i) losses in jurisdictions that are not eligible for tax benefits on account of valuation allowances, and (ii) equity-based compensation awards expiring without a tax benefit, partially offset by (iii) tax benefit from the release of uncertain tax position reserves. The effective tax rate for the nine months ended September 30, 2021, reflects (i) a nondeductible FCPA Settlement accrual,expense increase, (ii) losses in jurisdictions that are not eligible for tax benefits on account of valuation allowances, and (iii) equity-based compensation awards expiring without a tax benefit, partially offset by (iv) a tax benefit associated with a tax matter that was subject to a PFA with the IRS and (v) the net tax benefit from divestitures.
NOTE 6 — EARNINGS (LOSS) PER COMMON SHARE | | | NOTE 7 — EARNINGS (LOSS) PER COMMON SHARE |
Basic earnings (loss) per share is computed by dividing Net income (loss) by the number of weighted average common shares outstanding during the reporting period. Diluted earnings per share is calculated to give effect to all potentially dilutive common shares that were outstanding during the reporting period, only in the periods in which such effect is dilutive. The following table shows the effect of stock-based awards on the weighted average number of shares outstanding used in calculating diluted earnings per share: | | In millions of shares | In millions of shares | In millions of shares | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | | Three Months Ended March 31, | | | 2022 | | 2021 | | 2022 | | 2021 | | | 2023 | | 2022 | | Weighted average common shares outstanding - basic | Weighted average common shares outstanding - basic | 92.2 | | | 91.9 | | | 92.1 | | | 91.8 | | Weighted average common shares outstanding - basic | | 92.3 | | | 92.0 | | Incremental shares outstanding related to stock-based awards (1) | Incremental shares outstanding related to stock-based awards (1) | 0.2 | | | — | | | 0.3 | | | — | | Incremental shares outstanding related to stock-based awards (1) | | 0.4 | | | — | | | Weighted average common shares outstanding - diluted | Weighted average common shares outstanding - diluted | 92.4 | | | 91.9 | | | 92.4 | | | 91.8 | | Weighted average common shares outstanding - diluted | | 92.7 | | | 92.0 | |
(1)In periods of net loss, stock-based awards are anti-dilutive and therefore excluded from the earnings (loss)loss per share calculation. calculation. Anti-dilutive stock-based awards excluded from the computation of diluted earnings (loss) per share using the treasury stock method includes the following: | | In thousands of shares | In thousands of shares | In thousands of shares | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | | Three Months Ended March 31, | | | 2022 | | 2021 | | 2022 | | 2021 | | | 2023 | | 2022 | | Option awards | Option awards | 1,153 | | | 1,741 | | | 1,297 | | | 2,042 | | Option awards | | 815 | | | 1,456 | | | RSU awards | RSU awards | 397 | | | 318 | | | 115 | | | 307 | | RSU awards | | 1 | | | 122 | |
| | | | | | | | | 2022 Q3 10-Q Report | Stericycle, Inc. ● | 15 |
PSUs are offered to key employees and are subject to achievement of specified performance conditions. conditions. Contingently issuable shares are excluded from the computation of diluted earnings per share based on current period results. The shares would not be issuable if the end of the reporting periodquarter were the end of the contingency period. If such goals are not met, no compensation expense is recognized, and any previously recognized compensation expense is reversed. | | | | | | | | | | 2023 Q1 10-Q Report | Stericycle, Inc. ● | 13 |
| | | NOTE 8 — SEGMENT REPORTING |
The Company evaluates, oversees, and manages the financial performance of two operating and reportable segments – North America and International. The following tables show financial information for the Company's reportable segments:segments (see Note 2 – Revenue from Contracts with Customers for segment revenues): | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | Three Months Ended September 30, | | Nine Months Ended September 30, | | 2022 | | 2021 | | 2022 | | 2021 | | Revenues | | | | | | | | | North America | $ | 584.8 | | | $ | 523.9 | | | $ | 1,697.2 | | | $ | 1,600.2 | | | International | 105.5 | | | 125.0 | | | 337.2 | | | 389.4 | | | Total | $ | 690.3 | | | $ | 648.9 | | | $ | 2,034.4 | | | $ | 1,989.6 | | | Adjusted Income from Operations | | | | | | | | | North America | $ | 160.4 | | | $ | 132.7 | | | $ | 443.9 | | | $ | 449.9 | | | International | 7.4 | | | 15.1 | | | 27.2 | | | 43.3 | | | Other Costs | (75.8) | | | (75.3) | | | (238.1) | | | (205.0) | | | Total | $ | 92.0 | | | $ | 72.5 | | | $ | 233.0 | | | $ | 288.2 | |
| | | | | | | | | | | | | | | | | In millions | | | | Three Months Ended March 31, | | | | | | 2023 | | 2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Adjusted Income from Operations | | | | | | | | | North America | | | | | $ | 160.3 | | | $ | 134.6 | | | International | | | | | 10.3 | | | 11.4 | | | Other Costs | | | | | (85.9) | | | (87.0) | | | Total Adjusted Income from Operations | | | | | $ | 84.7 | | | $ | 59.0 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The following table reconciles the Company's primary measure of segment profitability, Adjusted Income from Operations, to Income from operations: | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | Three Months Ended September 30, | | Nine Months Ended September 30, | | 2022 | | 2021 | | 2022 | | 2021 | | Total Reportable Segment Adjusted Income from Operations | $ | 92.0 | | | $ | 72.5 | | | $ | 233.0 | | | $ | 288.2 | | | Adjusting Items: | | | | | | | | | ERP Implementation | (3.9) | | | (14.6) | | | (13.0) | | | (49.8) | | | Intangible Amortization | (31.5) | | | (29.2) | | | (94.7) | | | (89.1) | | | | | | | | | | | | | | | | | | | Portfolio Optimization | (1.4) | | | (12.2) | | | (2.7) | | | (13.8) | | | Litigation, Settlements and Regulatory Compliance | (2.6) | | | (67.1) | | | (26.0) | | | (71.4) | | | | | | | | | | | Asset Impairments | (2.0) | | | — | | | (2.0) | | | — | | | | | | | | | | | Income (loss) from operations | $ | 50.6 | | | $ | (50.6) | | | $ | 94.6 | | | $ | 64.1 | |
| | | | | | | | | | | | | | | | | In millions | | | | Three Months Ended March 31, | | | | | | 2023 | | 2022 | | Total Reportable Segment Adjusted Income from Operations | | | | | $ | 84.7 | | | $ | 59.0 | | | Adjusting Items: | | | | | | | | | ERP and System Modernization | | | | | (2.7) | | | (5.6) | | | Intangible Amortization | | | | | (28.2) | | | (32.4) | | | | | | | | | | | Portfolio Optimization | | | | | (5.6) | | | (1.3) | | | | | | | | | | | Litigation, Settlements and Regulatory Compliance | | | | | (8.2) | | | (13.8) | | | | | | | | | | | | | | | | | | | | | | | | | | | Income from operations | | | | | $ | 40.0 | | | $ | 5.9 | |
NOTE 8 — COMMITMENTS AND CONTINGENCIES | | | NOTE 9 — COMMITMENTS AND CONTINGENCIES |
Legal Proceedings The Company operates in highly regulated industries and responds to regulatory inquiries or investigations from time to time that may be initiated for a variety of reasons. At any given time, the Company has matters at various stages of resolution with the applicable government authorities. The Company is also routinely involved in actual or threatened legal actions, including those involving alleged personal injuries and commercial, employment, | | | | | | | | | 2022 Q3 10-Q Report | Stericycle, Inc. ● | 16 |
environmental, tax, and other issues. The outcomes of these matters are not within the Company’s complete control and may not be known for prolonged periods of time. In some actions, claimants seek damages, as well as other relief, including injunctive relief, that could require significant expenditures or result in lost revenue. In accordance with applicable accounting standards, the Company establishes an accrued liability for loss contingencies related to legal and regulatory matters when the loss is both probable and reasonably estimable. If the reasonable estimate of a probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is not probable or a probable loss is not reasonably estimable, no liability is recorded. When determining the estimated loss or range of loss, significant judgment is required to estimate the amount and timing of a loss to be recorded. These accruals represent management’s best estimate of probable losses and, in such cases, there may be an exposure to loss in excess of the amounts accrued. Estimates of probable losses resulting from litigation and regulatory proceedings are difficult to predict. Legal and regulatory matters inherently involve significant uncertainties based on, among other factors, the jurisdiction and stage of the proceedings, developments in the applicable facts or law, and the unpredictability of the ultimate determination of the merits of any claim, any defenses the Company may assert against that claim, and the amount of any damages that may be awarded. The Company’s accrued liabilities for loss contingencies related to legal and regulatory matters may change in the future as a result of new developments, including, but not limited to, the occurrence of new legal matters, changes in the law or regulatory environment, adverse or favorable rulings, newly discovered facts relevant to the matter, or changes in the strategy for the matter. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. | | | | | | | | | | 2023 Q1 10-Q Report | Stericycle, Inc. ● | 14 |
Contract Class Action and Opt Out Lawsuits. Beginning on March 12, 2013, the Company was served with several class action complaints filed in federal and state courts in several jurisdictions. These complaints asserted, among other things, that the Company had imposed unauthorized or excessive price increases and other charges on its customers in breach of its contracts and in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. The complaints sought certification of the lawsuit as a class action and the award to class members of appropriate damages and injunctive relief. These related actions were ultimately transferred to the United States District Court for the Northern District of Illinois for centralized pretrial proceedings. The parties engaged in discussions through and overseen by a mediator regarding a potential resolution of the matter and reached a settlement agreement, as previously disclosed, which settlement agreement obtained court approval on March 8, 2018. Under the terms of the SQ Settlement, the Company admitted no fault or wrongdoing whatsoever, and it entered into the SQ Settlement to avoid the cost and uncertainty of litigation. Certain class members who have opted out of the SQ Settlement have filed lawsuits against the Company, and the Company is defending and intendshas reached a settlement in principle with the plaintiffs in the remaining opt out actions, subject to resolve those actions.documentation. The Company has made an accrual in respect of these collective matters consistent with its accrual policies described above, which is not material. Government Investigations. On June 12, 2017, the SEC issued a subpoena to the Company, requesting documents and information relating to the Company’s compliance with the FCPA or other foreign or domestic anti-corruption laws with respect to certain of the Company’s operations in Latin America. In addition, the DOJ notified the Company that it was investigating this matter in parallel with the SEC. The Company is cooperatinghas cooperated with these agencies and certain foreign authorities. The Company also conducted an internal investigationhas concluded settlements of these and other matters, including outside of Latin America, under the oversight of the Audit Committee of the Board of Directors and with the assistance of outside counsel. As previously disclosed, the Company has engaged in settlement discussions in connection with the foregoing government investigations. On April 20, 2022, the Company announced that it has settled these mattersinvestigations with the DOJ, SEC, and the SEC. Under the Company's settlementvarious authorities in Brazil. In connection with the DOJ,these settlements, the Company entered into a deferred prosecution agreement (“DPA”) with the DOJ, under which the DOJ agreed to defer criminal prosecution of the Company for a period of three years for charges of conspiring to violate the anti-bribery and books and records provisions of the FCPA. If the Company remains in compliance with the DPA during its three-yearthree-year term, the deferred charge against the Company wouldwill be dismissed with prejudice. The Company agreed to pay $52.5 million in criminal fines to the DOJ, subject to offsetting up to $17.5 million of that amount based upon fines paid to Brazilian authorities (as described below). Under the Company’sCompany's settlement with the SEC, the Company entered into an administrative resolution with the SEC with respect to violations of the anti-bribery, books and records and internal controls provisions of the FCPA, andFCPA. The Company also agreed to disgorge $22.2 millionpay fines, penalties and pay pre-judgment interest of $6.0 milliondisgorgement to the SEC.$4.2DOJ, SEC and various Brazil authorities in a total amount of approximately $90 million. In April 2023, the last settlement with a foreign authority obtained final approval. In the second and third quarters of 2022, the Company paid $81 million of the amountsettlement amounts to be disgorged is subjectthe DOJ, the SEC and the Brazil authorities. In the second quarter of 2023, the Company paid substantially all of the remaining settlement amounts due to offset based upon amounts paid in
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disgorgement to Brazilian authorities (as described below).the DOJ and Brazil authorities. In addition, under the settlements with the DOJ and with the SEC, the Company will engagehas engaged an independent compliance monitor for two years and will undertake compliance with self-reporting obligations for an additional year.
Also as announced on April 20, 2022, the Company reached a settlement agreement with the Brazilian Controladora-General da Uniao (CGU) and Advocacia-General da Uniao (Attorney General Office) in the amount of $23.1 million, $13.5 million of which will offset amounts that would otherwise be paid to the DOJ and the SEC.
Based on the foregoing settlements and as provided by U.S. GAAP, in addition to the $80.7 million previously accrued in 2021, the Company accrued an additional $9.6 million in the first half of 2022 for the FCPA Settlement. In the second and third quarters of 2022, the Company paid $81.0 million of the agreed settlement to the DOJ, the SEC and the Brazilian authorities.
The Company is also discussing potential settlement of a related investigation with an additional Brazilian authority. Because this negotiation is ongoing, the Company cannot predict with certainty its outcome, including whether a settlement will be reached, the amount of any potential monetary payments, or injunctive or other relief. In the event the Company negotiates a settlement with this Brazilian authority, certain monetary portions of the agreement with the DOJ may be offset by payments made thereto.At the present time, the Company is unable to reasonably estimate nor provide any assurance regarding the amount of any potential loss in excess of the amount accrued relating to these matters.
In addition, theThe Company has been informed thatby the office of the United States Attorney for the Southern District of New York is conducting an(“SDNY”) that it has concluded its investigation into compliance with the False Claims Act (“FCA”) and otheris taking no action against the Company in connection with the FCA. The SDNY is continuing its investigation into the Company’s historical compliance with federal environmental statutes, including the Resource Conservation and Recovery Act, in connection with the collection, transportation and disposal of hazardous waste by the Company’s former Domestic Environmental Solutions business unit. The Company has also been informed that the State of California Department of Justice is conducting anhas concluded its investigation related to the Company’s collection, transportation, and disposal of waste generated by government customers in California.California and is taking no action against the Company. The Company is cooperatingcontinuing to cooperate with these investigations.the SDNY investigation. The Company has made an accrual in respect of this matter consistent with its accrual policies described above, which is not material.
The Company understands that the SDNY and California DOJ investigations described above related to a qui tam action alleging violations of the FCA, which had been filed under seal in the United States District Court for the Southern District of New York, purportedly on behalf of the United States, California and several other states. The Company has not been served with the Complaint, but the Company understands that the United States, California, and the other states named in the qui tam action have declined to participate. The Company intends to defend itself vigorously if the qui tam relator pursues its action. The Company has not accrued any amounts in respect of this action and cannot estimate the reasonably possible loss or any range of reasonably possible losses that the Company may incur. The Company is unable to make such an estimate because, based on what the Company knows now, in the Company’s judgment, the factual and legal issues presented in this matter are sufficiently unique that the Company is unable to identify other circumstances sufficiently comparable to provide guidance in making estimates. | | | | | | | | | | 2023 Q1 10-Q Report | Stericycle, Inc. ● | 15 |
Environmental, Regulatory and RegulatoryIndemnity Matters. The Company is subject to various federal, state and local laws and regulations. In the ordinary course of business, we are routinely involved in government enforcement proceedings, private lawsuits, and other matters alleging non-compliance by the Company with applicable law. The issues involved in these proceedings generally relate to alleged violations of existing permits or other requirements, or alleged liability due to our current operations, pre-existing conditions at the locations where we operate, and/or successor or predecessor liability associated with our portfolio optimization strategy. From time to time, the Company may be subject to fines or penalties in regulatory proceedings relating primarily to waste treatment, storage or disposal facilities. Harsco Indemnification. Effective April 6, 2020, the Company completed the divestiture of its Domestic Environmental Solutions business including the facility in Rancho Cordova, California, to Harsco Corporation. Pursuant to the Purchase Agreement, the Company may have liability under certain indemnification claims for matters relating to thosethe Domestic Environmental Solutions facilities,business, including potentially with respect to the investigationsinvestigation by the Southern District of New York and California Department of JusticeSDNY described above, and the Rancho Cordova, California, and DEA Investigation matters discussed below.below, and other matters. Consistent with its accrual policies described previously, the Company has made accruals on various of these matters, which are neither individually nor collectively material. Rancho Cordova, California, NOVs. On June 25 and 26, 2018, the California DTSC conducted a Compliance Enforcement Inspection of the Company’s former Domestic Environmental Solutions facility in Rancho Cordova, California. On February 14, 2020, DTSC filed an action in the Superior Court for the State of California, Sacramento County Division, alleging violations of California’s Hazardous Waste Control Law and the facility’s hazardous waste permit arising from the inspection. That action is ongoing. The Company has not accrued any amountsmade an accrual in respect of this matter and cannot estimate the reasonably possible loss or the range of reasonably possible losses that it may incur. The Companyconsistent with its accrual policies described above, which is unable to make such an estimate because (i) litigation is by its nature uncertain and unpredictable and (ii) in the Company’s judgment, the factual and legal allegations asserted by DTSC are sufficiently unique that it is unable to identify other proceedings with circumstances sufficiently comparable to provide guidance in making estimates.not material. Rancho Cordova, California, Permit Revocation. Separately, on August 15, 2019, the Company received from DTSC a written Intent to Deny Hazardous Waste Facility Permit Application for the Rancho Cordova facility. Following legal | | | | | | | | | 2022 Q3 10-Q Report | Stericycle, Inc. ● | 18 |
challenges, that DTSC action became final as of April 8, 2022, triggering an obligation to execute the closure plan set forth in the facility's permit. Consistent with its accrual policies described previously, the Company has made an accrual in the amount of its estimate of closure costs reasonably likely to be incurred and indemnified to Harsco under the Purchase Agreement, which is not material. DEA Investigation. On February 11, 2020, the Company received an administrative subpoena from the DEA, which executed a search warrant at the Company’s former Domestic Environmental Solutions facility at Rancho Cordova, California and an administrative inspection warrant at the Company’s former facility in Indianapolis, Indiana for materials related to the former Domestic Environmental Solutions business of collecting, transporting, and destroying controlled substances from retail customers (the “ESOL Retail Controlled Substances Business”). On that same day, agents from the DTSC executed a separate search warrant at the Rancho Cordova facility. Since that time, the U.S. Attorney’s Office for the Eastern District of California (“USAO EDCA”) has been overseeing criminal and civil investigations of the ESOL Retail Controlled Substances Business. The USAO EDCA has informed the Company that it may have civil liability under the Controlled Substances Act related to the Domestic Environmental SolutionsESOL Retail Controlled Substances Business. The Company is cooperating with the civil and criminal investigations, which are ongoing. The Company has not accrued any amounts in respect of these investigations and cannot estimate the reasonably possible loss or any range of reasonably possible losses that the Company may incur. The Company is unable to make such an estimate because, based on what the Company knows now, in the Company’s judgment, the factual and legal issues presented in this matter are sufficiently unique that the Company is unable to identify other circumstances sufficiently comparable to provide guidance in making estimates. European Retrovirus Investigations. In conjunction with Europol, governmental authorities of Spain, Portugal, and Romania have conducted coordinated inspections of a large number of medical waste management facilities, including Stericycle facilities, relating to the transportation, management and disposal of waste that may be infected with the COVID-19 virus, and related matters. The inspections have resulted in proceedings in Spain, and Portugal. Thein which the Company intends tois vigorously defend itself in these proceedings.defending itself. The Company has not accrued any amounts in respect of these investigations, as it cannot estimate the reasonably possible loss or any range of reasonably possible losses that the Company may incur. The Company is unable to make such an estimate because, based on what the Company knows now, in the Company’s judgment, the factual and legal issues presented in this matter are sufficiently unique that the Company is unable to identify other circumstances sufficiently comparable to provide guidance in making estimates. | | | | | | | | | 2022 Q32023 Q1 10-Q Report | Stericycle, Inc. ● | 1916 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Safe Harbor Statement This document may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. When we use words such as “believes”, “expects”, “anticipates”, “estimates”, “may”, “plan”, “will”, “goal”, or similar expressions, we are making forward-looking statements. Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of our management about future events and are therefore subject to risks and uncertainties, which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Factors that could cause such differences include, among others, inflationary cost pressure in labor, supply chain, energy, and other expenses, decreases in the volume of regulated wastes or personal and confidential information collected from customers, the ability to implement the remaining phases of our ERP system, and disruptions resulting from deployment of our ERP system, disruptions in our supply chain, disruptions in or attacks on information technology systems, labor shortages, a recession or economic disruption in the U.S. and other countries, SOP pricing volatility or pricing volatility in other commodities, rising interest rates or a downgrade in our credit rating resulting from the COVID-19 virus or otherwise,in an increase in interest expense, changing market conditions in the healthcare industry, competition and demand for services in the regulated waste and secure information destruction industries, SOP pricing volatility, foreign exchange rate volatility in the jurisdictions in which we operate, changes in governmental regulation of the collection, transportation, treatment and disposal of regulated waste or the proper handling and protection of personal and confidential information, the level of government enforcement of regulations governing regulated waste collection and treatment or the proper handling and protection of personal and confidential information, charges related to portfolio optimization or the failure of acquisitions or divestitures to achieve the desired results, failure to consummate transactions with respect to non-core businesses, the obligations to service substantial indebtedness and comply with the covenants and restrictions contained in our credit agreements and notes, rising interest rates or a downgrade in our credit rating resulting in an increase in interest expense, political, economic, inflationary and other risks related to our foreign operations, developments in the COVID-19 pandemicpandemics and the resulting impact on the results of operations, long-term remote work arrangements which may adversely affect our business, measures taken by governmental authorities to prevent the spread of the COVID-19 virus which could disrupt our supply chain result indisruptions, disruptions in transportation services, and restrictions on the ability of our team members to travel, result in temporary closureclosures of our facilities or the facilities of our customers and suppliers, affectchanges in the volume of paper processed by our secure information destruction business and the revenue generated from the sale of SOP, weather and environmental changes related to climate change, requirements of customers and investors for net carbon zero emissions strategies, and the introduction of regulations for greenhouse gases, which could negatively affect our costs to operate, the outcome of pending, future or settled litigation or investigations including with respect to the U.S. Foreign Corrupt Practices Act and foreign anti-corruption laws, failure to maintain an effective system of internal control over financial reporting, as well as other factors described in our filings with the U.S. Securities and Exchange Commission,SEC, including our Annual Report on Form 10-K and subsequent Quarterly Reports on FormsForm 10-Q. As a result, past financial performance should not be considered a reliable indicator of future performance, and investors should not use historical trends to anticipate future results or trends. We disclaim any obligation to update or revise any forward-looking or other statements contained herein other than in accordance with legal and regulatory obligations. | | | | | | | | | | 2023 Q1 10-Q Report | Stericycle, Inc. ● | 17 |
Overview Stericycle is a global U.S. based business-to-business services company. We provide an array of highly specialized compliance-based solutions that protect thepeople and brands, promote health and well-being, ofand safeguard the people and places around us in a safe, responsible, and sustainable way.environment. Since our founding in 1989, we have grown from a small start-up in medical waste management into a leader across a range of increasingly complex and highly regulated arenas, serving healthcare organizations and commercial businesses of every size through RWCS and SID.
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Key business highlights include: •OrganicGrew revenues by 3.0% in the first quarter of 2023. Grew organic revenues(1) grew 10.9%7.2% compared to the thirdfirst quarter of 2021.2022 with increases in SID organic revenue grew 32.3%, mainly driven by higher serviceof 11.8% and recycling revenues and the impactRWCS of non-recurring typical ERP start-up challenges experienced in the third quarter of 2021. RWCS organic revenue grew 2.2%5.0%. •Pricing levers helped offset labor and other supply chain inflationary cost pressuresImproved income from operations to $40.0 million in the thirdfirst quarter of 2023 compared to $5.9 million in the first quarter of 2022. •NetReduced our Credit Agreement Defined Debt Leverage ratio to 3.05X, down 0.23X since December 31, 2022. •Divested our Brazil operations in April 2023, which was our last remaining Latin America business, for an investing cash from operating activities was $61.5 million in the third quarteroutflow of 2022, an increase of $8.7 million compared to the third quarter of 2021, and an increase of $41.1 million compared to the second quarter of 2022.approximately $28 million. (1)See Results of Operations, Revenues for a reconciliation between total U.S. GAAP Revenues and Organic Revenues. COVID-19 Update and Other Developments
Our COVID-19 pandemic response has included efforts to protect the health and well-being of our workforce and our customers. We have worked proactively with the CDC, OSHA, DOT and other regulatory agencies around the world in an attempt to ensure readiness for proper regulated waste management. Our team has demonstrated leadership and commitment to protecting what matters by working with pharmaceutical companies and government agencies to align on standards for secure and compliant COVID-19 vaccination treatment protocols. Additionally, Stericycle supports the front end of vaccination programs through our Communications Solutions service line. We provide scalable patient hotlines, scheduling, and appointment reminders for vaccinations. In March 2022, the Company implemented its global RTO hybrid work schedule applicable to office workers that promotes our value of in person team collaboration while still maintaining our health standards. The Company is continuing to monitor the future implications of COVID-19 and variants and is taking proactive steps to continue to manage the health and safety of team members as they RTO.
Like many organizations, we have been impacted by higher absences related to COVID-variants that surged towards the end of the fourth quarter of 2021 and intoDuring the first quarter of 2022, particularly driver and operational team members. Our work force stabilized throughout the first and second quarters of 2022, as the effects of the Delta and Omicron variants on employee absences subsided, but still remains highly susceptible2023, we continued to fluctuations due to various variants that impact sites and regions periodically. Additionally, we have been impacted by driver and operational team member shortages. To date, we are addressing our internal needs through three main areas: (i) recruitment, (ii) market competitive compensation and benefits, and (iii) employee engagement and retention.
Beginning in third quarter of 2021 and continuing throughout the third quarter of 2022, we experiencedexperience inflationary cost increases in our underlying expenses, including labor, supply-chainfleet and other costs. We also have been experiencing delays in completing certain capital projects and face additional challenges due to macroeconomic supply chain disruptions. The higher operating labor costs were mainly associated with maintaining competitive wages for existing team members and increased starting wages for new hires. Higher supply chain and other inflationary costs were mainly from higher vehicle rental and maintenance expenses as wefacilities. Our quality of revenue initiative has continued to experience delays in replacement vehicle deliveries, higher energy expenses, and higher costs associatedwork to create a more flexible pricing model with supplies and disposable containers and liners. While fuel costs have increased, they have been offset through our existing fuel surcharges.
the necessary levers to adjust to inflationary cost challenges. We have continuedthe following pricing levers: (i) we continue to seeaddress the impactstandardization of contractual language to build in pricing flexibility, affording us the strengthening U.S. Dollar on our foreign currency translation. In the third quarter of 2022, changes in foreign exchange rates unfavorably impacted revenues by $18.0 million.
Key Business Priorities
In 2022, our five key business priorities remain the following:
•Quality of revenue –We have been executing against our foundational initiativesopportunity to drive revenue quality. These included a formal cross-functional deal review committee, realignment of sales incentive plans, re-organization of our commercial leadership team around our service lines, key customer channels, and implementation of global customer pipeline management processes for both RWCS and SID. As a reminder, our three main pricing levers are as follows: (i) for all multi-year contracts, we adjust pricing at contract anniversary and renewal, (ii) for all new customers and purchasers of our one-time services, we have the ability to adjust our
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rates at point of sale,contracting, and (iii) for many of our customers, we also havethe ability to adjust surcharges and fees that provide inflationary cost protection for commodity and other price volatility. Our pricing actions have gained momentum since the first quarter, including our adjustment ofvolatility (e.g. fuel, SOP, environmental surcharges and fees, which provideservice cost recovery fee). As our customers return to office, we are monitoring SID customer service frequency, number of locations serviced, and resulting paper tonnage. Key Business Priorities In 2023, our five key business priorities remain the most flexible mechanismfollowing: •Quality of revenue –We have been executing against our foundational initiatives we launched to help offset inflationary costsdrive revenue quality and are executing against our next phase: (i) expanding service penetration, (ii) improving customer implementation velocity, and (iii) deepening customer partnerships by adjusting these surcharges and fees.developing enhanced customer solutions. •Operational efficiency, modernization, and innovation – We remain focused onhave been executing against our foundational initiatives we launched to drive operational efficiency, modernization and innovation to control variable and discretionary costsare executing against our next phase: (i) infrastructure and improve performancesystem modernization, (ii) fleet replacement and efficiencies in our field operations. Our goal is to optimize our facilities with a strategicroute and standardized operating model. We are analyzing processing capabilities, plantlong-haul network improvements and transportation equipment needs, team member requirements,(iii) SafeShield container rationalization and potential customer implications or benefits.modernization. •ERP implementation – In the third quarter,second half of 2022, we successfully moved the technical code functionality for RWCS into our North America ERP production environment. Following the completion of this milestone, we launched aenvironment and completed our pilot at the end of Octoberdeployment for RWCS customers in Puerto Rico. This disciplined and consistent deployment approach allows us to mitigate risk and test data and functionality before deploying the ERP across all RWCS North America customers and facilities. This followsStericycle is currently immersed in testing and readiness preparation and we continue to anticipate deploying in the deployment U.S. in the second half of our ERP2023. We commenced activities for the international system for North America’s finance and procurement processes and for North America’s SID business that was completedmodernization in 2021.2022. •Debt reduction and leverage improvement – We expect to reduce our debt and improve our debt leverage ratio through continued focus on operating margin expansion, free cash flow generation, and leveraging divestiture proceeds, if applicable. Our amended Credit Facility defined debt leverage ratio was 3.76 times as of September 30, 2022, compared to 3.61 times as of December 31, 2021. NetWe have reduced total net debt, as defined in the Credit Agreement (total debt, adding back unamortized debt issuance costs, less cash and cash equivalents), increased $68.7 million in 2022, increasing total net debt to approximately $1.6$1.45 billion at March 31, 2023. As of March 31, 2023, our amended Credit Facility defined Debt Leverage Ratio was 3.05 times compared to 3.28 times as of September 30, 2022.December 31, 2022. | | | | | | | | | | 2023 Q1 10-Q Report | Stericycle, Inc. ● | 18 |
•Portfolio optimization – - We expect to continue evaluating opportunities to further optimize our portfolio through a combination of asset rationalizations and strategic accretive tuck-in acquisitions, which streamlines our portfolio of businesses and allows us to focus more deeply on our core businesses.
Certain Key Priorities and Other Significant Matters The following table identifies certain key priorities and other significant matters impacting our business and how they are classified in the Condensed Consolidated Statements of Income (Loss): | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | Three Months Ended September 30, | | Nine Months Ended September 30, | | 2022 | | 2021 | | 2022 | | 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Included in SG&A | | | | | | | | | ERP Implementation | $ | 3.9 | | | $ | 14.6 | | | $ | 13.0 | | | $ | 49.8 | | | Intangible Amortization | 31.5 | | | 29.2 | | | 94.7 | | | 89.1 | | | | | | | | | | | | | | | | | | | Portfolio Optimization | 1.4 | | | 1.3 | | | 2.7 | | | 2.9 | | | Litigation, Settlements and Regulatory Compliance | 2.6 | | | 67.1 | | | 26.0 | | | 71.4 | | | | | | | | | | | Asset Impairments | 2.0 | | | — | | | 2.0 | | | — | | | | | | | | | | | Total included in SG&A | 41.4 | | | 112.2 | | | 138.4 | | | 213.2 | | | | | | | | | | | Divestiture losses, net | — | | | 10.9 | | | — | | | 10.9 | | | | | | | | | | | Total included in income from operations | $ | 41.4 | | | $ | 123.1 | | | $ | 138.4 | | | $ | 224.1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | After tax items: | | | | | | | | | Other Tax Matter | $ | — | | | $ | — | | | $ | — | | | $ | (5.5) | | | Total after-tax | $ | — | | | $ | — | | | $ | — | | | $ | (5.5) | |
| | | | | | | | | | | | | | | | | In millions | | | | Three Months Ended March 31, | | | | | | 2023 | | 2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Included in SG&A | | | | | | | | | ERP and System Modernization | | | | | $ | 2.7 | | | $ | 5.6 | | | Intangible Amortization | | | | | 28.2 | | | 32.4 | | | | | | | | | | | Portfolio Optimization | | | | | 0.6 | | | 1.3 | | | Litigation, Settlements and Regulatory Compliance | | | | | 8.2 | | | 13.8 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total included in SG&A | | | | | 39.7 | | | 53.1 | | | | | | | | | | | Divestiture losses, net | | | | | 5.0 | | | — | | | | | | | | | | | Total included in Income from operations | | | | | $ | 44.7 | | | $ | 53.1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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ERP Implementationand System Modernization For the periods presented and for the cumulative period since the inception of the ERP Implementation,and System Modernization, we have recognized the following, principally reported in Other Costs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | Three Months Ended September 30, | | Nine Months Ended September 30, | | Cumulative Since Inception | | 2022 | | 2021 | | 2022 | | 2021 | | | ERP Implementation | | | | | | | | | | | Consulting and professional fees | $ | 3.9 | | | $ | 11.2 | | | $ | 13.0 | | | $ | 33.5 | | | $ | 119.8 | | | Internal labor | — | | | 1.7 | | | — | | | 7.2 | | | 39.1 | | | Software usage/maintenance fees | — | | | 1.1 | | | — | | | 7.5 | | | 42.3 | | | Other related expenses | — | | | 0.6 | | | — | | | 1.6 | | | 11.5 | | | Operating expenditures | 3.9 | | | 14.6 | | | 13.0 | | | 49.8 | | | 212.7 | | | Capital expenditures | 5.0 | | | 5.6 | | | 9.1 | | | 17.4 | | | 189.8 | | | Total operating and capital expenditures | $ | 8.9 | | | $ | 20.2 | | | $ | 22.1 | | | $ | 67.2 | | | $ | 402.5 | |
| | | | | | | | | | | | | | | | | In millions | | | | Three Months Ended March 31, | | | | | | 2023 | | 2022 | | North America | | | | | | | | | Operating expenditures | | | | | $ | 2.6 | | | $ | 5.6 | | | Capital expenditures | | | | | 2.9 | | | 0.6 | | | Total North America operating and capital expenditures | | | | | $ | 5.5 | | | $ | 6.2 | | | | | | | | | | | International | | | | | | | | | Operating expenditures | | | | | $ | 0.1 | | | $ | — | | | Capital expenditures | | | | | — | | | — | | | Total International operating and capital expenditures | | | | | $ | 0.1 | | | $ | — | | | | | | | | | | | Total operating expenditures | | | | | $ | 2.7 | | | $ | 5.6 | | | | | | | | | | | Total capital expenditures | | | | | 2.9 | | | 0.6 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total ERP and System Modernization operating and capital expenditures | | | | | $ | 5.6 | | | $ | 6.2 | |
As we continue to implement and deploy the North America ERP system in our RWCS business, we will incur costs to develop and deploy the system, which includes additional capital expenditures as well as operating expenditures. Upon the substantial implementation of North America's financeOur international ERP system modernization commenced in 2022, which includes enhancements and procurement processesupgrades associated with European based RWCS and for North America's SID business in the third quarter of 2021, certain costs became incremental information technology ongoing costs for running the new system, including maintenance, licensing, and depreciation expenses. Additionally, weoperations. We will continue to incur the current level of costs to maintain the legacy suite of applications that are also used by our international businesses until theirduring the system portfolio is modernized. Certain readiness activities, related to our international system modernization and ERP deployment, commenced in the third quarter of 2022.modernization. Intangible Amortization See table above forof certain key priorities and other significant matters for intangible amortization expenseexpenses from acquisitions for the periods presented and how they are classified in the Condensed Consolidated Statements of Income (Loss). The increase in amortization expense is primarily due to a decrease in the useful life of certain customer relationship intangibles effective on January 1, 2022. Portfolio Optimization
See table above for certain key priorities and other significant matters for portfolio optimization for the periods presented and how they are classified in the Condensed Consolidated Statements of Income (Loss). ProfessionalThe decrease in amortization expense is a result of the divestiture and certain intangible assets that have reached the end of useful lives.
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Portfolio Optimization See table above of key priorities and other significant matters for portfolio optimization (including Divestiture losses, net) for the periods presented, and how they are classified in the Condensed Consolidated Statements of Income (Loss). Consulting and professional fees are reported in Other Costs.Costs, while divestiture losses, net are included in their respective segment. Divestitures We evaluate our portfolio of services on an ongoing basis with a country-by-country and service line-by-service line approach to assess long-term potential and identify potential business candidates for divestiture. Divestitures resulting from this evaluation may cause us to record significant charges, including those related to goodwill, other intangible assets, long-lived assets, and cumulative translation adjustments. In addition, divestitures we complete may not yield the targeted improvements in our business. Any charges that we are required to record or the failure to achieve the intended financial results associated with the portfolio optimization evaluation could have a material adverse effect on our business, financial condition, or results of operations. SeeFor additional information see Part I, Item I. Financial Statements; Note 3 — Divestitures and Asset Impairments.in the Condensed Consolidated Financial Statements. Acquisitions
We regularly evaluate the competitive environment and consider opportunistic acquisitions that strengthen our core businesses. We believe acquisitions, when appropriately valued and constructively integrated, may be an efficient way to gain customers, scale treatment operations, and build customer density for transportation. We expect to focus on smaller accretive tuck-in acquisitions. See Part I, Item I. Financial Statements; Note 4 — Acquisition for additional details.
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Litigation, Settlements and Regulatory Compliance We operate in highly regulated industries and must address regulatory inquiries or respond to investigations from time to time. We arehave also been involved in a variety of civil litigation matters from time to time. Certain of these matters are detailed in Part I, Item I. Financial Statements; Note 98 — Commitments and Contingencies. in the Condensed Consolidated Financial Statements. Our financial results may also include considerations of non-recurring matters including settlements, environmental remediation, and legal related consulting and professional fees. See table above forof certain key priorities and other significant matters for litigation, settlement and regulatory compliance charges. Among other things, the table reflects consulting and professional fees, contingent liability provisions and settlements, net of insurance recoveries, impacting our business for the periods presented, primarily in Other Costs. The three months ended March 31, 2023 includes a value-added tax reclaim credit of $6.0 million. In the ninethree months ended September 30,March 31, 2022, we accrued an additional $9.6$9.2 million for the FCPA Settlement, bringing the total cumulative charge to $90.3 million. For the nine months ended September 30, 2021, we had accrued $61.0approximately $90 million. In the nine months ended September 30,second and third quarters of 2022 we, the Company had paid $81.0a total of $81.0 million relateddue to the DOJ, SEC, and Brazil authorities in accordance with the FCPA settlement.Settlement. In the second quarter of 2023, the Company paid substantially all of the remaining settlement amounts due to the DOJ and Brazil authorities. See Part I, Item I. Financial Statements; Note 98 — Commitments and Contingenciesin the Condensed Consolidated Financial Statements for additional details. Asset Impairments
In the three and nine months ended September 30, 2022, the Company recognized $2.0 million related to impairments associated with exiting certain North American office facilities.
Other Tax Matter
The Other Tax Matter relates to a tax benefit associated with resolution of a matter that was subject to a PFA with the IRS.
Results of Operations
Three and Nine Months Ended September 30, 2022 Compared to Three and Nine Months Ended September 30, 2021:
Revenues:
We analyze revenues by revenue service category and reportable segment which were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | In millions | | | | Components of Change (%)(1) | | 2022 | | 2021 | | Change ($) | | Change (%) | | Organic Growth (2) | | Acquisition | | Divestitures | Foreign Exchange (3) | | Revenue by Service | | | | | | | | | | | | | | | | Regulated Waste and Compliance Services | $ | 447.8 | | | $ | 461.7 | | | $ | (13.9) | | | (3.0) | % | | 2.2 | % | | 0.4 | % | | (2.9) | % | (2.8) | % | | Secure Information Destruction Services | 242.5 | | | 187.2 | | | 55.3 | | | 29.5 | % | | 32.3 | % | | — | % | | — | % | (2.8) | % | | Total Revenues | $ | 690.3 | | | $ | 648.9 | | | $ | 41.4 | | | 6.4 | % | | 10.9 | % | | 0.3 | % | | (2.0) | % | (2.8) | % | | North America | | | | | | | | | | | | | | | | Regulated Waste and Compliance Services | $ | 369.7 | | | $ | 365.4 | | | $ | 4.3 | | | 1.2 | % | | 3.2 | % | | 0.6 | % | | (2.4) | % | (0.2) | % | | Secure Information Destruction Services | 215.1 | | | 158.5 | | | 56.6 | | | 35.7 | % | | 36.1 | % | | — | % | | — | % | (0.5) | % | | Total North America Segment | $ | 584.8 | | | $ | 523.9 | | | $ | 60.9 | | | 11.6 | % | | 13.2 | % | | 0.4 | % | | (1.7) | % | (0.2) | % | | International | | | | | | | | | | | | | | | | Regulated Waste and Compliance Services | $ | 78.1 | | | $ | 96.3 | | | $ | (18.2) | | | (18.9) | % | | (1.5) | % | | — | % | | (4.5) | % | (12.8) | % | | Secure Information Destruction Services | 27.4 | | | 28.7 | | | (1.3) | | | (4.5) | % | | 11.0 | % | | — | % | | — | % | (15.5) | % | | Total International Segment | $ | 105.5 | | | $ | 125.0 | | | $ | (19.5) | | | (15.6) | % | | 1.3 | % | | — | % | | (3.5) | % | (13.3) | % |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nine Months Ended September 30, | | In millions | | | | Components of Change (%) (1) | | 2022 | | 2021 | | Change ($) | | Change (%) | | Organic Growth (2) | | Acquisition | | Divestitures | | Foreign Exchange(3) | | Revenue by Service | | | | | | | | | | | | | | | | Regulated Waste and Compliance Services | $ | 1,348.9 | | | $ | 1,398.3 | | | $ | (49.4) | | | (3.5) | % | | 1.0 | % | | 0.4 | % | | (3.0) | % | | (1.9) | % | | Secure Information Destruction Services | 685.5 | | | 591.3 | | | 94.2 | | | 15.9 | % | | 17.7 | % | | — | % | | — | % | | (1.8) | % | | Total Revenues | $ | 2,034.4 | | | $ | 1,989.6 | | | $ | 44.8 | | | 2.3 | % | | 5.9 | % | | 0.3 | % | | (2.1 | %) | | (1.9 | %) | | North America | | | | | | | | | | | | | | | | Regulated Waste and Compliance Services | $ | 1,097.5 | | | $ | 1,094.4 | | | $ | 3.1 | | | 0.3 | % | | 2.1 | % | | 0.5 | % | | (2.2) | % | | (0.1) | % | | Secure Information Destruction Services | 599.7 | | | 505.8 | | | 93.9 | | | 18.6 | % | | 18.8 | % | | — | % | | — | % | | (0.3) | % | | Total North America Segment | $ | 1,697.2 | | | $ | 1,600.2 | | | $ | 97.0 | | | 6.1 | % | | 7.4 | % | | 0.4 | % | | (1.5) | % | | (0.1) | % | | International | | | | | | | | | | | | | | | | Regulated Waste and Compliance Services | $ | 251.4 | | | $ | 303.9 | | | $ | (52.5) | | | (17.3) | % | | (2.9) | % | | — | % | | (5.7) | % | | (8.6) | % | | Secure Information Destruction Services | 85.8 | | | 85.5 | | | 0.3 | | | 0.3 | % | | 10.8 | % | | — | % | | — | % | | (10.5) | % | | Total International Segment | $ | 337.2 | | | $ | 389.4 | | | $ | (52.2) | | | (13.4) | % | | 0.1 | % | | — | % | | (4.5) | % | | (9.1) | % |
Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022: Revenues (including Segment Revenues) We analyze revenues by revenue service category and reportable segment which were as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended March 31, | | In millions | | | | Components of Change (%) (1) | | 2023 | | 2022 | | Change ($) | | Change (%) | | Organic Growth (2) | | | | Divestitures | | Foreign Exchange(3) | | Revenue by Service | | | | | | | | | | | | | | | | | Regulated Waste and Compliance Services | $ | 451.3 | | | $ | 452.6 | | | $ | (1.3) | | | (0.3) | % | | 5.0 | % | | | | (3.7) | % | | (1.4) | % | | Secure Information Destruction Services | 233.0 | | | 211.6 | | | 21.4 | | | 10.1 | % | | 11.8 | % | | | | — | % | | (1.7) | % | | Total Revenues | $ | 684.3 | | | $ | 664.2 | | | $ | 20.1 | | | 3.0 | % | | 7.2 | % | | | | (2.5) | % | | (1.5) | % | | North America | | | | | | | | | | | | | | | | | Regulated Waste and Compliance Services | $ | 368.7 | | | $ | 362.1 | | | $ | 6.6 | | | 1.8 | % | | 6.5 | % | | | | (4.1) | % | | (0.3) | % | | Secure Information Destruction Services | 204.7 | | | 181.6 | | | 23.1 | | | 12.7 | % | | 13.4 | % | | | | — | % | | (0.7) | % | | Total North America Segment | $ | 573.4 | | | $ | 543.7 | | | $ | 29.7 | | | 5.5 | % | | 8.8 | % | | | | (2.7) | % | | (0.4) | % | | International | | | | | | | | | | | | | | | | | Regulated Waste and Compliance Services | $ | 82.6 | | | $ | 90.5 | | | $ | (7.9) | | | (8.8) | % | | (0.7) | % | | | | (1.9) | % | | (6.2) | % | | Secure Information Destruction Services | 28.3 | | | 30.0 | | | (1.7) | | | (5.6) | % | | 2.1 | % | | | | — | % | | (7.7) | % | | Total International Segment | $ | 110.9 | | | $ | 120.5 | | | $ | (9.6) | | | (8.0) | % | | — | % | | | | (1.5) | % | | (6.5) | % |
(1)Components of Change % in summation may not crossfoot to the total Change % due to rounding. (2)Organic growth is change in Revenues which includes SOP pricing and volume and excludes the impact of divestitures an acquisition, and foreign exchange. (3)The comparisons at constant currency rates (foreign exchange) reflect comparative local currency balances at the prior period’s foreign exchange rates. StericycleWe calculated these percentages by taking current period reported Revenues less the respective prior period reported Revenues, divided by the prior period reported Revenues, all at the respective prior period’s foreign exchange rates. This measure provides information on the change in Revenues assuming that foreign currency exchange rates have not changed between the prior and the current period. Management believes the use of this measure aids in the understanding of changes in Revenues without the impact of foreign currency.
Revenues for the thirdfirst quarter of 2022,2023, were $690.3$684.3 million, an increase of $41.4$20.1 million, or 6.4%3.0%, compared to $648.9$664.2 million for the thirdfirst quarter of 2021.2022. Organic revenues grew $46.7 million, or 7.2%. SID organic revenue growth was $24.9 million, or 11.8%, which was mainly due to pricing and higher recycled paper revenues and RWCS organic revenues growth was $21.8 million, or 5.0%, mainly driven by our three pricing levers, which include pricing in existing contracts, new customer pricing and surcharges and fees. The impact of divestitures was $16.6 million, or 2.5%, which includes the divestiture of CRS in the fourth quarter of 2022, and unfavorable foreign exchange rates were $10.0 million, or 1.5%. North America revenues increased $29.7 million, or 5.5%, for the three months ended March 31, 2023, to $573.4 million from $543.7 million for the three months ended March 31, 2022. Organic revenues grew $70.7increased $46.7 million, or 10.9%8.8%, primarily due to SID organic revenue growth of $60.5 million, or 32.3%, which was mainly driven byincreases due to our pricing levers, including fuel and environmental and recycling recovery surcharges; and higher recycled paper revenues, reflectingdriven by higher SOP prices, quality ofpricing. The RWCS organic revenue initiatives, including fuelincreases were mainly driven by our three pricing levers, which include pricing in existing contracts, new customer pricing and other surcharges continued recovery fromand fees. Additionally, the impact of COVID-19 and non-recurring typical ERP start-up challenges experienced in the third quarter 2021. RWCS organic revenues grew $10.2divestitures was $14.9 million, or 2.2%2.7% and unfavorable foreign exchange rates were $2.1 million, or 0.4%. International revenues decreased $9.6 million, or 8.0%, for the three months ended March 31, 2023, to $110.9 million from $120.5 million for the three months ended March 31, 2022. The decrease was due to year-over-year improvement in quality of revenue and maritime recovery. An acquisition contributed $2.0 million, or 0.3%, during the quarter. Partially offsetting these revenue increases was a reduction in COVID-19 related transactional volume revenue, such as vaccine and testing waste, international waste over-classification and patient engagement related call volumes. In addition, revenues declined as a result of the impact of foreign exchange rates of $18.0$7.9 million, or 2.8%6.5%, and the impact of divestitures of $13.3$1.8 million, or 2.0%1.5%, which include divestitures of the Japanand lower organic RWCS business in the third quarter of 2021 and the Canada Environmental Solutions business in the fourth quarter of 2021. Revenues for the nine months ended September 30, 2022, were $2,034.4 million, an increase of $44.8 million, or 2.3%, compared to $1,989.6 million for the nine months ended September 30, 2021. Revenues increasedrevenues due to growth inlower waste volumes. SID organic revenues of $118.2 million, or 5.9%, and acquisition revenues of $6.0 million, or 0.3%,were higher mainly due to our pricing levers, partially offset by divestitures in 2021, which reduced revenues by $41.8 million, or 2.1%, and the impact of foreign exchange rates of $37.5 million, or 1.9%volume.
North America revenues increased $60.9 million, or 11.6%, in the third quarter of 2022, to $584.8 million from $523.9 million in the third quarter of 2021. Organic revenues increased $69.0 million, or 13.2%, primarily due to higher recycled paper revenues, reflecting higher SOP prices, fuel and other surcharges, continued recovery from the impact of COVID-19 and non-recurring typical ERP start-up challenges experienced in the third quarter 2021. In addition, higher RWCS organic revenues were due to quality of revenue initiatives, recovery of maritime waste services, and an acquisition. These revenue increases were partially offset by a reduction in RWCS COVID-19 related transactional volume revenue, such as vaccine and testing waste and patient engagement related call volumes, the impact of divestitures of $9.0 million, or 1.7%, and the impact of foreign exchange rates of $1.2 million, or 0.2%.
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International revenues decreased $19.5 million, or 15.6%, in the third quarter of 2022, to $105.5 million from $125.0 million in the third quarter of 2021. The decrease was due to the impact of foreign exchange rates of $16.8 million, or 13.3%, the impact of divestitures of $4.3 million, or 3.5%, and a reduction in COVID-19 related transactional volume revenue of $1.5 million, or 1.5%, including waste over-classification in our RWCS business. The decrease was partially offset by an increase of $3.2 million, or 11.0%, in SID organic revenues.
North America revenues increased $97.0 million, or 6.1%, for the nine months ended September 30, 2022, to $1,697.2 million from $1,600.2 million for the nine months ended September 30, 2021. Organic revenue increased $117.7 million, or 7.4%, primarily due to higher recycled paper revenues, reflecting higher SOP prices, fuel and other surcharges, continued recovery from the impact of COVID-19 and non-recurring typical ERP start-up challenges experienced in the third quarter of 2021, and an acquisition contributed $6.0 million, or 0.4%, partially offset by divestitures reducing revenues by $24.4 million, or 1.5% and foreign exchange rates of $2.3 million, or 0.1%.
International revenues decreased $52.2 million, or 13.4%, for the nine months ended September 30, 2022, to $337.2 million from $389.4 million for the nine months ended September 30, 2021. The decrease was primarily due to the impact of foreign exchange rates of $35.2 million, or 9.1%, a decrease in revenue from divestitures of $17.5 million, or 4.5% and a reduction in COVID-19 related transactional volume revenue of $8.8 million, or 2.9%. Partially offsetting these decreases was an increase of $9.3 million, or 10.8% in SID organic revenues.
Gross profit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | | | | | Three Months Ended September 30, | | 2022 | | 2021 | | Change | | $ | | % Revenues | | $ | | % Revenues | | $ | | % | | Gross profit | 266.2 | | | 38.6 | % | | 239.7 | | | 36.9 | % | | 26.5 | | | 11.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | | | | | Nine Months Ended September 30, | | 2022 | | 2021 | | Change | | $ | | % Revenues | | $ | | % Revenues | | $ | | % | | Gross profit | 771.1 | | | 37.9 | % | | 770.2 | | | 38.7 | % | | 0.9 | | | 0.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | | | | | Three Months Ended March 31, | | 2023 | | 2022 | | Change | | $ | | % Revenues | | $ | | % Revenues | | $ | | % | | Gross profit | 261.0 | | | 38.1 | % | | 244.5 | | | 36.8 | % | | 16.5 | | | 6.7 | % |
The increase in the three and ninemonths ended September 30, 2022,March 31, 2023, compared to the 20212022 comparable periods,period, was primarily due to quality of revenue initiatives, including results from our pricing levers which resulted in revenue flow through, which helpedwas partially offset by higher supply chainfleet and facility costs, wage adjustments, and other inflationary costs. The third quarterthe impacts of 2021, included the impact of non-recurring typical ERP start-up challenges. Additionally, the threedivestiture and ninemonths ended September 30, 2022, included higher headcount, onboarding, and overtime costs.
SG&A: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | | | | | Three Months Ended September 30, | | 2022 | | 2021 | | Change | | $ | | % Revenues | | $ | | % Revenues | | $ | | % | | SG&A | 215.6 | | | 31.2 | % | | 279.4 | | | 43.1 | % | | (63.8) | | | (22.8) | % |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | | | | | Nine Months Ended September 30, | | 2022 | | 2021 | | Change | | $ | | % Revenues | | $ | | % Revenues | | $ | | % | | SG&A | 676.5 | | | 33.3 | % | | 695.2 | | | 34.9 | % | | (18.7) | | | (2.7) | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | | | | | Three Months Ended March 31, | | 2023 | | 2022 | | Change | | $ | | % Revenues | | $ | | % Revenues | | $ | | % | | SG&A | 216.0 | | | 31.6 | % | | 238.6 | | | 35.9 | % | | (22.6) | | | (9.5) | % |
For the three and nine months ended September 30, 2022,March 31, 2023, compared to the 20212022 comparable periods,period, we incurred lower SG&A charges associated with certain key priorities and other significant matters discussed above, primarily due to Litigation, Settlement and Regulatory Compliance matters. Further, as part of the ERP deployment in August 2021, certain costs became incremental, information technology ongoing costs for running the new system, including maintenance, licensing, and depreciation expenses. Additionally, the remaining change in SG&A was due to impacts of the divestiture, lower bad debt expense, foreign exchange rates, and lower annual incentive compensation expense, partially offset by increased bad debt expense, primarily due to historically lower 2021 bad debt expense level and continued elevated past-due accounts receivable balances in 2022 due to North America SID billing and collection efforts primarily related to the ERP deployment.stock based compensation expense. Stericycle continues to identify and remediate North America billing and collections process matters, certain of which are associated with the ERP implementation. Through the nine months ended September 30, 2022, past-due accounts receivable increased, resulting in bad debt expense being higher than historical levels. To the extent billing and subsequent collections timing does not improve, higher levels of bad debt expense may continue.
Divestiture losses, net: | | In millions | | | | | Three Months Ended September 30, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2022 | | 2021 | | Change | | | | $ | | % Revenues | | $ | | % Revenues | | $ | | % | | | Divestiture losses, net | — | | | — | % | | 10.9 | | | 1.7 | % | | (10.9) | | | (100.0) | % | | | | | | In millions | In millions | | In millions | | | | Nine Months Ended September 30, | | Three Months Ended March 31, | | | 2022 | | 2021 | | Change | | 2023 | | 2022 | | Change | | | $ | | % Revenues | | $ | | % Revenues | | $ | | % | | $ | | % Revenues | | $ | | % Revenues | | $ | | % | | Divestiture losses, net | Divestiture losses, net | — | | | — | % | | 10.9 | | | 0.5 | % | | (10.9) | | | (100.0) | % | Divestiture losses, net | 5.0 | | | 0.7 | % | | — | | | — | % | | 5.0 | | | nm |
For additional information see Part I, Item I. Financial Statements; Note 3 — Divestitures and Asset Impairments in the Condensed Consolidated Financial Statements and our certain key priorities and other significant matters discussed above.Statements. Segment Profitability: Segment profitability and a reconciliation of the total for segment profitability to income from operations was as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | | | Three Months Ended March 31, | | | | | | | | 2023 | | 2022 | | Change 2023 versus 2022 | | | | | | | | | | | | | | $ | | % Segment Revenues | | $ | | % Segment Revenues | | $ | | % | | Adjusted Income from Operations | | | | | | | | | | | | | | | | | | | | | | | | | North America | | | | | | | | | | | | | $ | 160.3 | | | 28.0 | % | | $ | 134.6 | | | 24.8 | % | | $ | 25.7 | | | 19.1 | % | | International | | | | | | | | | | | | | 10.3 | | | 9.3 | % | | 11.4 | | | 9.5 | % | | (1.1) | | | (9.6) | % | | Other Costs | | | | | | | | | | | | | (85.9) | | | nm | | (87.0) | | | nm | | 1.1 | | | 1.3 | % | | Total | | | | | | | | | | | | | $ | 84.7 | | | 12.4 | % | | $ | 59.0 | | | 8.9 | % | | $ | 25.7 | | | 43.6 | % | | | | | | | | | | | | | | | | | | | | | | | | | | Reconciliation to Income from operations: | | | | | | | | | | | | | | | | | | | | | | | | | Adjusted Income from Operations | | | | | | | | | | | | | $ | 84.7 | | | | | $ | 59.0 | | | | | | | | Adjusting Items Total (1) | | | | | | | | | | | | | (44.7) | | | | | (53.1) | | | | | | | | | Income from operations | | | | | | | | | | | | | $ | 40.0 | | | | | $ | 5.9 | | | | | | | |
nm - percentage change not meaningful
| | | | | | | | | 2022 Q32023 Q1 10-Q Report | Stericycle, Inc. ● | 2722 |
Segment Profitability:
Segment profitability was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | 2022 | | 2021 | | Change 2022 versus 2021 | | 2022 | | 2021 | | Change 2022 versus 2021 | | $ | | % Segment Revenues | | $ | | % Segment Revenues | | $ | | % | | $ | | % Segment Revenues | | $ | | % Segment Revenues | | $ | | % | | Adjusted Income from Operations | | | | | | | | | | | | | | | | | | | | | | | | | North America | 160.4 | | | 27.4 | % | | 132.7 | | | 25.3 | % | | 27.7 | | | 20.9 | % | | 443.9 | | | 26.2 | % | | 449.9 | | | 28.1 | % | | (6.0) | | | (1.3) | % | | International | 7.4 | | | 7.0 | % | | 15.1 | | | 12.1 | % | | (7.7) | | | (51.0) | % | | 27.2 | | | 8.1 | % | | 43.3 | | | 11.1 | % | | (16.1) | | | (37.2) | % | | Other Costs | (75.8) | | | nm | | (75.3) | | | nm | | (0.5) | | | (0.7) | % | | (238.1) | | | nm | | (205.0) | | | nm | | (33.1) | | | (16.1) | % | | Total | 92.0 | | | 13.3 | % | | 72.5 | | | 11.2 | % | | 19.5 | | | 26.9 | % | | 233.0 | | | 11.5 | % | | 288.2 | | | 14.5 | % | | (55.2) | | | (19.2) | % | | | | | | | | | | | | | | | | | | | | | | | | | | Reconciliation to Income from operations: | | | | | | | | | | | | | | | | | | | | | | | | | Adjusted Income from Operations | 92.0 | | | | | 72.5 | | | | | | | | | 233.0 | | | | | 288.2 | | | | | | | | Adjusting Items Total (1) | (41.4) | | | | | (123.1) | | | | | | | | | (138.4) | | | | | (224.1) | | | | | | | | | Income from operations | 50.6 | | | | | (50.6) | | | | | | | | | 94.6 | | | | | 64.1 | | | | | | | |
nm - percentage of segment revenue, and/or change not meaningful
(1)See Part I, Item 1. Financial Statements; Note 8 — Segment Reporting in the Condensed Consolidated Financial Statements for more detail.
Adjusted Income from Operations for North America increased $27.7 million, or 20.9%, for the three months ended September 30,March 31, 2023, compared to the 2022 to $160.4 million from $132.7 million for the three months ended September 30, 2021.comparable period. Adjusted Income from Operations increased due to the impact of commercialgross profit improvement, primarily driven by pricing actions implemented during 2022, resulting in revenue flow through, non-recurring typical ERP start-up challenges in the third quarter of 2021 and lower annual incentive compensationbad debt expense. These increases were partially offset by higher supply chain, wage adjustments,fleet and other inflationaryfacility costs, higher bad debt expense, and headcount, onboarding, and overtime costs. Adjusted Income from Operations for North America decreased $6.0 million, or 1.3%, for the nine months ended September 30, 2022, to $443.9 million from $449.9 million for the nine months ended September 30, 2021. Adjusted Income from Operations decreased due to higher supply chain, wage adjustments, and other inflationary costs; higher headcount, onboarding, and overtime costs; and bad debt expense. These declines were partially offset by the impact of commercial pricing actions implemented during 2022, resulting in revenue flow through, which includes higher recycled paper revenues in our SID business; non-recurring typical ERP start-up challenges in the third quarter of 2021; and lower self-insurance expense and annual incentive expense.divestiture.
Adjusted Income from Operations for International decreased $7.7 million, or 51.0%, for the three months ended September 30,March 31, 2023, compared to the 2022 to $7.4 million from $15.1 million for the three months ended September 30, 2021.comparable period. The decrease was primarily driven by decreased COVID-related transactionallower RWCS revenues including waste over classification in RWCS, the impact of divestitures and foreign exchange, higher labor costs, andcorresponding flow through; higher supply chain and other inflationary costscosts; and the impact of foreign exchange; these were partially offset by higher recycled paper revenues in our SID business. Adjusted Income from Operations for International decreased $16.1 million, or 37.2%, for the nine months ended September 30, 2022, to $27.2 million from $43.3 million for the nine months ended September 30, 2021. The decrease was primarily driven by decreased COVID-related transactional revenues, including waste over classification in RWCS, the impact of divestitures and foreign exchange, higher labor costs, and higher supply chain and other inflationary costs, partially offset by higher recycled paper revenues in our SID business.
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Adjusted Loss from Operations for Other Costs increased $0.5 milliondecreased for the three months ended September 30, 2022,March 31, 2023, compared to the 2022 comparable 2021 period,period. The decrease was primarily as certain costs became incremental information technology ongoing costs for running the new ERP system, including maintenance, licensing, and depreciation expenses, as well as higher labor costs, partially offsetdriven by lower annual incentive compensation expense. Adjusted Loss from Operations for Other Costs increased $33.1 million for the nine months ended September 30, 2022, compared to the 2021 comparable period, as certain costs became incremental information technology ongoing costs for running the new ERP system, including maintenance, licensing, and depreciation expenses, as well as higher labor costs,expense, partially offset by lower annual incentiveincreased stock based compensation expense.
Interest expense, net: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | | | | | Three Months Ended September 30, | | 2022 | | 2021 | | Change | | $ | | % Revenues | | $ | | % Revenues | | $ | | % | | Interest expense, net | 19.8 | | | 2.9 | % | | 18.8 | | | 2.9 | % | | 1.0 | | | 5.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | | | | | Nine Months Ended September 30, | | 2022 | | 2021 | | Change | | $ | | % Revenues | | $ | | % Revenues | | $ | | % | | Interest expense, net | 54.6 | | | 2.7 | % | | 55.1 | | | 2.8 | % | | (0.5) | | | (0.9) | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | | | | | Three Months Ended March 31, | | 2023 | | 2022 | | Change | | $ | | % Revenues | | $ | | % Revenues | | $ | | % | | Interest expense, net | 20.4 | | | 3.0 | % | | 16.3 | | | 2.5 | % | | 4.1 | | | 25.2 | % |
Thethree and nine months ended September 30, 2021, include $0.9 million in costs associated with the amended and renewed Credit Agreement. The nine months ended September 30, 2022, includes $1.1 million in interest income associated with income tax refunds. The remaining increase for the three and nine months ended September 30, 2022,March 31, 2023, as compared to 2021,2022, was due to higher weighted-average interest rates on the variable portion of our debt. The three months ended March 31, 2022, also includes $0.7 million in interest income associated with an IRS refund. For further information see Part I, Item I. Financial Statements; Note 4 — Debt in the Condensed Consolidated Financial Statements. Other income (expense), net: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | | | | | Three Months Ended March 31, | | 2023 | | 2022 | | Change | | $ | | % Revenues | | $ | | % Revenues | | $ | | % | | Other income (expense), net | 0.2 | | | — | % | | (0.8) | | | (0.1) | % | | 1.0 | | | 125.0 | % |
Other income (expense), net is primarily comprised of foreign exchange gains (losses). Income tax expense: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | | | | | Three Months Ended March 31, | | 2023 | | 2022 | | Change | | $ | | Effective Rate | | $ | | Effective Rate | | $ | | % | | Income tax expense | 8.5 | | | 42.9 | % | | 2.9 | | | (25.9) | % | | 5.6 | | | 193.1 | % |
For further information, see Part I, Item I. Financial Statements; Note 5 — Long-Term DebtIncome Taxes in the Condensed Consolidated Financial Statements. Other income, net:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | | | | | Three Months Ended September 30, | | 2022 | | 2021 | | Change | | $ | | % Revenues | | $ | | % Revenues | | $ | | % | | Other income, net | (2.3) | | | (0.3) | % | | (0.5) | | | (0.1) | % | | (1.8) | | | (360.0) | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | | | | | Nine Months Ended September 30, | | 2022 | | 2021 | | Change | | $ | | % Revenues | | $ | | % Revenues | | $ | | % | | Other income, net | (0.8) | | | 0.0 | % | | (0.5) | | | — | % | | (0.3) | | | (60.0 | %) |
Other income, net is primarily comprised of foreign exchange (gains) losses.
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Income tax expense (benefit):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | | | | | Three Months Ended September 30, | | 2022 | | 2021 | | Change | | $ | | Effective Rate | | $ | | Effective Rate | | $ | | % | | Income tax expense (benefit) | 5.1 | | | 15.4 | % | | (3.0) | | | 4.4 | % | | 8.1 | | | (270.0) | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | In millions | | | | | | Nine Months Ended September 30, | | 2022 | | 2021 | | Change | | $ | | Effective Rate | | $ | | Effective Rate | | $ | | % | | Income tax expense | 16.4 | | | 40.2 | % | | 19.9 | | | 209.5 | % | | (3.5) | | | (17.6) | % |
For further information, see Part I, Item I. Financial Statements; Note 6 — Income Taxes in the Condensed Consolidated Financial Statements.
Liquidity and Capital Resources The Company believes that it has sufficient liquidity to support its ongoing operations and to invest in future growth to create value for its shareholders. Operating cash flows and the Company’s $1.2 billion Credit Facility are the Company’s primary sources of liquidity and are expected to be used for, among other things, payment of interest and principal on the Company’s long-term debt obligations, and capital expenditures necessary to support growth and productivity improvements. As of March 31, 2023, we had approximately $981.4 million of available capacity in the $1.2 billion Credit Facility. If the Company's 2024 Senior Notes are still outstanding 91 days prior to their respective maturity date (the “Springing Maturity Date”), then the Credit Agreement maturity date will be the Springing Maturity Date. To the extent the Company needs to add additional funding options to meet additional liquidity requirements or diversify its funding portfolio, the Company could seek additional financing from alternative sources, includingincluding approaching the capital markets. ForIn the nine months ended September 30,second and third quarters of 2022, the Company had paid a total of $81.081 million of the planned approximately $90 million due to the DOJ, SEC, and Brazil authorities in accordance with the FCPA Settlement. The FCPA Settlement accrual balance was $9.3 million asIn the second quarter of September 30, 2022. The2023, the Company anticipates payingpaid substantially all of the remaining accrued FCPA Settlement insettlement amounts due to the next twelve months (see Part I, Item I. Financial Statements; Note 9 — CommitmentsDOJ and Contingencies). Brazil authorities. For further details concerning these matters see Part I, Item I. Financial Statements; Note 4 — Debt and Note 8 – Commitments and Contingencies Note 5 — Long-TermDebtin the Condensed Consolidated Financial Statements.
Cash Flow Summary:
The following table shows cash flow information for the Company by activity: | | In millions | In millions | In millions | | | Nine Months Ended September 30, | | Three Months Ended March 31, | | | 2022 | | 2021 | | 2023 | | 2022 | | Net cash from operating activities | Net cash from operating activities | $ | 43.1 | | | $ | 202.2 | | Net cash from operating activities | $ | 49.5 | | | $ | (38.8) | | | Net cash from investing activities | Net cash from investing activities | (103.5) | | | (73.0) | | Net cash from investing activities | (34.5) | | | (36.8) | | | Net cash from financing activities | Net cash from financing activities | 56.7 | | | (143.2) | | Net cash from financing activities | (11.6) | | | 79.4 | | | Effect of exchange rate changes on cash and cash equivalents | Effect of exchange rate changes on cash and cash equivalents | (7.9) | | | (1.8) | | Effect of exchange rate changes on cash and cash equivalents | 0.6 | | | 0.2 | | | Net change in cash and cash equivalents | Net change in cash and cash equivalents | $ | (11.6) | | | $ | (15.8) | | Net change in cash and cash equivalents | $ | 4.0 | | | $ | 4.0 | |
Operating Cash Flows: Net cash provided from operating activities decreased $159.1increased $88.3 million in the ninethree months ended September 30, 2022,March 31, 2023, to $43.1an inflow of $49.5 million from $202.2an outflow of $38.8 million in the ninethree months ended September 30, 2021.March 31, 2022. The year-over-year declineincrease of $159.1$88.3 million was primarily driven by the FCPA settlementaccounts receivable of $32.9 million, primarily due to an improvement in DSO; higher operating income of $30.8 million; lower annual incentive compensation payments of $81.0 million in the nine months ended September 30, 2022, timing$22.3 million; and other net working capital improvements of vendor payments of $36.2 million, increase in DSO that equates to $30.3 million, and higher interest payments of $9.3$2.3 million. | | | | | | | | | 2022 Q3 10-Q Report | Stericycle, Inc. ● | 30 |
DSO as of September 30, 2022,March 31, 2023, as reported was 6356 days, compared to 5963 days as of September 30, 2021.March 31, 2022. The difference was mainly driven by theprior year timing of North America SID customer billing and subsequent collections, and higher revenues. DSO as of September 30, 2022 of 63 days, compared to June 30, 2022 of 64 days, improved by one day. Stericycle continues to identify and remediate North America billing and collections process matters certain of which are associated with the ERP implementation.collections. Investing Cash Flows: Net cash used from investing activities increased $30.5outflow decreased $2.3 million in the ninethree months ended September 30, 2022,March 31, 2023, to net cash used of $103.5$34.5 million from $73.0$36.8 million in the ninethree months ended September 30, 2021.March 31, 2022. Our cash paid for capital expenditures increaseddecreased by $20.2$1.1 million to $106.0$36.4 million from $85.8$37.5 million in the ninethree months ended September 30, 2021March 31, 2022. The change in cash paid for capital expenditures was mainly attributable to the timing of cash payments. In the third quarter of 2021, we received $11.3 million from the divestiture of our operations in Japan. Financing Cash Flows: Net cash provided from financing activities increased $199.9decreased $91.0 million in the ninethree months ended September 30, 2022,March 31, 2023, to a sourcean outflow of funds of $56.7$11.6 million from a usean inflow of funds of $143.2$79.4 million in the ninethree months ended September 30, 2021.March 31, 2022. Our net borrowings on our Credit Facility and Term Loan were $73.5$3.9 million in the ninethree months ended September 30, 2022,March 31, 2023, compared to net repaymentsborrowings of $93.3$91.9 million in the ninethree months ended September 30, 2021.March 31, 2022.
Critical Accounting Policies and Estimates As discussed in our 20212022 Form 10-K, the preparation of the Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the amount of reported assets and liabilities and disclosure of contingent liabilities at the date of the Condensed Consolidated Financial Statements and revenues and expenses during the periods reported. There were no material changes from the information provided therein. | | | | | | | | | | 2023 Q1 10-Q Report | Stericycle, Inc. ● | 24 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk In the normal course of business, we are exposed to market risks, including changes in interest rates, certain commodity prices, including SOP, and diesel fuel, utilities and foreign currency rates. We do not specifically hedge our exposure to these risks. We are subject to market risks arising from changes in interest rates which relate primarily to our financing activities. We performed a sensitivity analysis to determine how market rate changes might affect the fair value of our market risk-sensitive debt instruments (variable rate debt) which in aggregate as of September 30, 2022,March 31, 2023, are 30.8%23.7% of total aggregate debt. Our potential additional interest expense over one year that would result from a hypothetical, instantaneous and unfavorable change of 100 basis points in the interest rate on all of our variable rate debt would be approximately $5.2$3.6 million on a pre-tax basis. We are subject to market risks arising from changes in the prices for commodities such as SOP, diesel fuel, and utilities. For example, historically diesel fuel has been approximately five percent of our Cost of Revenues.revenues. As the market prices for these commodities increase or decrease, our revenues, operating costs and margins may also increase or decrease. Variability in commodity prices can also impact the margins of our business as certain components of our revenue are structured as a pass through of costs, including fuel surcharges as changes in diesel costs are generally offset in Revenues through our indexed fuel surcharges. There were no other material changes from the information provided in our 20212022 Form 10-K. Item 4. Controls and Procedures | | | Item 4. Controls and Procedures |
Evaluation of Disclosure Controls and Procedures The Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act, of 1934, as amended (the Exchange Act)) are effective as of September 30, 2022,March 31, 2023, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Exchange Act. | | | | | | | | | 2022 Q3 10-Q Report | Stericycle, Inc. ● | 31 |
Changes in Internal Control Over Financial Reporting During the quarter ended September 30, 2022March 31, 2023, there were no changes that have materially affected or are reasonably likely to materially affect our internal control over financial reporting. | | | | | | | | | 2022 Q32023 Q1 10-Q Report | Stericycle, Inc. ● | 3225 |
| | | | PART II – OTHER INFORMATION |
Item 1. Legal Proceedings | | | Item 1. Legal Proceedings |
Further information pertaining to legal proceedings can be found in Part I, Item I. Financial Statements; Note 98 — Commitments and Contingencies in the Notes to the Condensed Consolidated Financial Statements and is incorporated herein by reference. In addition to the other information included in this report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in the 20212022 Form 10-K and subsequent Quarterly Reports on Form 10-Q and the factors identified under “Safe Harbor Statement” at the beginning of Part I, Item 2 of this Quarterly Report on Form 10-Q, which could materially affect our business, financial condition, cash flows, or results of operations. The risks described in the 20212022 Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently considers immaterial also may materially adversely affect its business, financial condition, and/or operating results. There have been no material changes to the risk factors included in the 20212022 Form 10-K and subsequent Quarterly Reports on Form 10-Q.10-K. | | | | Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no sales of unregistered equity securities during the three months ended September 30, 2022.March 31, 2023. | | | | | | | | | 2022 Q32023 Q1 10-Q Report | Stericycle, Inc. ● | 3326 |
The following exhibits are filed or furnished as part of this report: Exhibit Index | | | | | | | | | | Exhibit Index | | Description | 2.1 | | | | | 3.1 | | | | | 3.2 | | | | | 3.3 | | | | | 3.4 | | | | | 3.5 | | | | | 3.6 | | | | | 3.7 | | | | | 3.8 | | | | | 3.9 | | | | | 3.10 | | | | | 10.1 | | | | | 10.2 | | | | | 31.1 | | | | | 31.2 | | | | | 32 | | | | | 101 | | | The following information from our Quarterly Report on Form 10-Q for the quarter ended September 30, 2022,March 31, 2023, formatted in Inline XBRL: (i) Condensed Consolidated Statements of Income (Loss); (ii) Condensed Consolidated Statements of Comprehensive Loss;Income (Loss); (iii) Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Cash Flows; (v) Condensed Consolidated Statements of Changes in Equity and (vi) Notes to Condensed Consolidated Financial Statements | | 104 | | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* The Company agrees to furnish supplementally a copy of any omitted exhibit or appendix to the Securities and Exchange Commission upon request. | | | | | | | | | 2022 Q32023 Q1 10-Q Report | Stericycle, Inc. ● | 3427 |
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: November 3, 2022 April 27, 2023 | | | | | | | STERICYCLE, INC. | | | (Registrant) | | | By: /s/ JANET H. ZELENKA | | | Janet H. Zelenka | | | Executive Vice President, Chief Financial Officer & Chief Information Officer |
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