Stericycle (SRCL) 2 Nov 232023 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Q3 2023 Stericycle Earnings Conference Call. [Operator Instructions] Be advised that today's conference is being recorded. And I would now like to hand the conference over to your speaker today, Mr. Andrew Ellis, Sir, please go ahead.

you Stericycle's thank Earnings Third and Call. morning, for XXXX joining Quarter Good

today Miller, Chief be Officer; the Commercial will On call Cindy Cory our our Financial Officer. and Janet Chief our Officer Officer; and Information White, Chief Zelenka, Executive Chief

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

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

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

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

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

earnings on reconciliation found For to Stericycle's the Relations investors.stericycle.com. schedules from will which please prepared specific refer website. Investor in comparable website additional to information we The to be U.S. Relations call, and the an also presentation, the which release, our most the GAAP can measures, earnings reference available at press presentation. for correspond call Stericycle's Throughout today's is at Investor comments slides

on November available today, Investor a hour Relations and recorded, of the XXXX. the be replay X website. being approximately of until A the available will after conference webcast is replay will Stericycle's end call be call XX, This

is rebroadcast of provided over Any X, in the this at may or information the a redistribution, expressed without longer prohibited. time Stericycle the replay. of I'll which November to is on written any XXXX now form today's occurring be retransmission during call, turn of Cindy. Time-sensitive no accurate call consent call

North in call to deployment. that and midst we I'll in the over has some morning, ERP give system I'm the and update deployment, you hard the X.X% Services Today, team proud services technology. Cory the revenues a the third today's update call. to that waste the portion, successfully grew say perspective dedication welcome Thank members provide I'm of are Compliance work into operations our all I'll ERP then major processes. of you, the turn an quarter commercial deployment. To team through a America in and U.S. few pleased and share and deployed third you the minutes our technology to quarter, ERP the to to partners new regulated organic to greater how and on insights business. from compliance our it Andrew. of improved our Good U.S. almost take Regulated to experience to members . I'd Waste by customer the leveraging of we speak to and everyone, like a

deployment We through the as conversion, customers upgrades. technology. our continued September, quarter data training for servicing the in this began and launched finalize throughout we to we We prepare facility when the new deployment early

to and since infused processes be typical that customers change start-up serve couldn't more continue with members' the our experienced From when pleased an operational ability learning comes to are deployed. the We system new our technology. with team curve perspective, we

our in and workers, resulted reduction For anticipated frontline this temporary in an productivity.

embedded ability are to in improvements, contribute technology our we that to in and outlook. margin this significantly more procedures, become and will has we with As new expansion changes familiar processes the long-term our the expect seeing continued achieve team the

the I'll over It compliance services our U.S. transition Cory, now been regulated engaged will onto helping has who provide in customers waste and turn ERP. the from customers. new our call to deeply insights

you share the of exciting the the commercial was highlight ERP customers' rollout throughout to today's our Cindy, new improve thank journey, will and the call experience on of success. execution. Overall, the ways for technology us opportunity some this a help ERP

created have and We waste for regulated up, both stops and routed, services had waste and properly being are being are compliance system disposed picked and being are secure tracked, issues. and no treated destruction being significant created, Orders is are invoices containers being information customers. processed

are across Along our satisfaction they not contact customers, with customer reporting this been disruptions. our we frequent track major base. in any and We customer journey, have weekly trends

first the some satisfaction of customer disruption. our dropped scores our weeks as of short-term experienced During understandably couple customers of September,

Our scores and levels. improved are have already pre-go-live since above

Following now the for in first deployment time, real-time order have to see the we system. the capability completion

overwhelming of orders that seamlessly. pleased majority an are We are serviced

We in volume. center have expected call seen an our increase customer

is customers a sign in understanding our new assistance, the how and smoothly up the enrolling as the numbers. from deployment new customer favorable setting increase format, invoice Importantly, new portal, or autopay gone our customers. platform with, for majority customers' verifying engagement view of the the adoption of this interactions these vast requesting the majority of account ERP has of We and

which view few a we've redesigned pay sites their customer portals for to including deployment. important have receive like billing experience ways customers and act a for shop now added account the and one-stop One, we enhancements, services information, modernized digital and I'd consolidated for ERP through services. to that the highlight improved in as

create solution compliance training Two, for to their we integrated services our customers, needs. with compliance single to meet portal the a our platform

their automated a serviced. receive our be they better so days, to requested help by customers will plan notifications know they them when service advanced feature now customers Three,

container life of Four, we enhancements through time. also made in now real the secure entire track can service chain level our to the custody, cycle waste at and

streams to near insights, greater new be and which easily expect customers waste benchmark features sustainability we pursuit allow Five, and of their volume reporting future, weight used the gain access will will can our goals. provide metrics, that enhanced in in portal and optimize and that

during Over lunch has clearly personally been I've have better are elicit They overwhelmingly meetings months, XXX how well of systems, service the and been unlock positive. which over face-to-face to as customers our learn well our feedback, their supportive about excited events to new opportunities move and capabilities past as few met to with them. new will

to stakeholders. from me successful proactive the Recently, one portal. told and the They of managing also customers the said they of enhancements account that is we our internal They their They this like we their key appreciated as made with a the on Golden for were kinds pleased deployment. citing how made did communication changes to changes. any negative Silence of feedback a major these saw get deployment, not they sign

a to using commercial talk take to the I'd become more to now about our like organization efficient. how technology nimble moment is and

system lead of the now key utilizing All performance new pipeline the for salespeople processes: contracting. X are U.S. management, management, reporting and development, in our

our This priorities, partnerships deepening execute includes is key a major penetration, which expanding step customer developing business journey forward improving implementation service on ability solutions. customer our customer our to enhanced revenue and quality by on and of velocity

throughout like proficiency also and digital automation. sales additional businesses, we capabilities on the common operating Waste Regulated accountability the the platform Information platform, guided foundation while and for process. selling consistency effectiveness Destruction and both By are call Secure and improving The future our selling enhancements center lays greater and driving a for

related intelligent expect of insights, and product as will data sales to customers. continue unlocking new Finally, by service voice listen we opportunities decisions, lead to and our development this to enhancement more we the

Cindy. you, turn the back call now to I'll

that update, for Cory. Thank you

Compliance Turning Services to of ERP our to trend, third that third quarter increasing its results. Waste continued growth organic the in deployment. even X.X% a globally Regulated I'm pleased and during report quarter, period

sticky by been in customers This national nationwide our like accounts, Growth providers. which facing. pharmacies These pricing health offset customers they care remained this are come quarter challenges have partially the despite primarily has headwinds retail from economic service and levers. has very includes

our footprint, priority we We provide the a reduce our As service encouraged also customers. that critical remain in remain these channel for stops services this contracted. customers have their

sorted Destruction RISI to paper rates impacting organic environmental including and mainly Secure declined Information lower index revenue lower commodity and lower due surcharges. XX.X%, fuel office revenues,

of of growth on of Although revenue Destructions XXXX. X-year the considering Secure a Information XXXX was significant year-over-year, revenue X.X% this organic grew strength When over rate, third XX.X% it compound annual quarter pricing. growth growth had channel commodity-related since the organic down organic revenues

retaining national waste, Information reduced the these about Secure essential and customers but regulated an a closures decline their to post-COVID we Secure by service site customer by our remain experiencing in X%, footprint. are Destruction year-over-year office relationships, have service service stops customer frequencies. Similar believe business, we and reset Information driven mainly are Across pandemic seen Destruction

and insights to contribute trajectory believe deeper Information growth the In new customer technology, will run, we by Secure service long our leveraging long-term offerings. Destruction

squarely priority, and our were modernization team the on focused of plan. executing ERP modernization deploying efficiency, our engineering Regarding operational most our innovation and facility members

our aspects deployment, opportunities. communication, team engineering the driving all training, as operations, such identifying performance site to designed working technology ensure During and was visits as of supported and field

construction completed McCarran, to we remains be and half the on of our Nevada Additionally, of expect incinerator to XXXX. track, in phase construction continue first the of in project the

the call, the Emirates, third Secure venture earnings Netherlands, Destruction of which the Arab joint our in sale in the business in our United July, X our we dental closed second of recycling during and August. in divestitures quarter, mentioned As closed with completed quarter which the Information sale in

Regulated our divested business Romania, XXXX. divestiture Waste our also since we in October, early In XXth

October, substantially in of $X million that In completed generate expect we million and annual will savings approximately an workforce approximate reduction $X a we resulted charge. targeted

of targeted business. These include our to levers and expansion with to performance infrastructure and host of the enabled look technology long-term initiatives, workforce hiring, and careful strategic investments have we we margin our available. drive and are levers reductions ERP our attrition model align shareholder As our a further value, operating in by

financial I to quarter to in third call will more now the discuss results turn over our Janet detail.

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

to revenues lower environmental Services Waste sorted lower $XX.X on revenues $X.X rates million, mainly RISI divestitures due Secure partially $XX.X revenues grew commodity of rates, revenues were including and the million. $XX.X million, was was compared impacting noted quarter index in third Secure Slide mainly organic quarter was million foreign Regulated decrease Information $XXX.X by surcharges. and The million, $XX.X of paper X, of Information impacted $XXX.X in declined million million. Organic and favorable while fuel by in the office which Compliance to XXXX. of offset lower Destruction Destruction third As exchange

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

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

the Services actions. pricing ERP the In North during America, Regulated organic Waste million $XX.X by deployment, and revenues or our driven increased of quarter Compliance X.X% mainly

waste lower Compliance and by by driven International third $X.X organic revenues XXXX. volumes Waste our care continue to mainly impacted increased the Regulated compared pricing of volumes intermittent X.X%, strikes. health shortages International waste Services to partially staffing levers, quarter be or by million and offset

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

the pricing sorted office foreign to due reflecting Excluding rates, impact revenues reduction more of $XXX than in ton organic decreased commodity a revenues, index XX.X%, exchange mainly lower paper year-over-year. per

America, tonnage. recycling approximately paper revenues $XX.X or In Information of pricing affecting North million paper third RISI lower the organic the $XX.X office revenues quarter and declined were compared sorted million lower down or Destruction quarter, XXXX. Secure In X.X% due XX.X% to rates to third

quarter, million, service lower or by Cindy as and service $X.X stops, lower approximately driven X.X% fuel and environmental the mentioned. surcharges was In down revenue mainly

million. $X Excluding surcharges, up these was revenue service

recycling recovery are more normal the a Approximately X/X of below circumstances, in in XX% the we was recycling able paper revenue. sorted when approximately offset Under service reduction offset office rate of $XXX ton, paper office are reflected paper RISI sorted by to lower prices. surcharge prices revenue our

for our were was X/X the is Given when reflected expect a the and last approximately in to surcharge third SOP the in revenue paper ton, of that of surcharge, volatility quarter. for comparing nature index year rest the the it offset XX% recycling This year-over-year we lower the revenue to the due XXXX. to in this of decline recycling about through of able service offset we to prices recovery over $XXX

surcharges. decreased international Our mainly $X.X Destruction million X.X% or to due organic the Information recycling revenues quarter environmental of revenues lower to third and and Secure XXXX, compared fuel

expense to operations revenues decrease index due mainly $XX.X stock-based XXXX. $X.X a of cost from third $XX.X of of the also The compensation debt decrease compared commodity to million was lower million were million. was flow-through $X.X partially of incentive and to $XX.X quarter million. and and $X.X settlement anticipated million self-insurance the offset bad higher corresponding These margin savings in impact the quarter Income million $XX.X third was million. of and $X.X lower by The in of due million

was or share the explained. per $X third diluted share I of Net $X.XX or million, XXXX. $XX.X due per decrease quarter $XX The million to earnings diluted earnings $X.XX of compared operations to from income as $XX mainly income million was in million lower just

was payments operations was accounts in flow Cash for million. of settlement of XXXX, $XX.X of and from compared The annual of FCPA $XXX.X of same million revenues deferred $XXX.X mainly year-over-year the payments X million, driven the million period million net XX, $XX.X million ended to increase lower improved September lower $XX.X incentive compensation by XXXX. of $XX receivable collections months

million revenues from or XX.X% operations from in was income Adjusted a XXXX. third of of down XX.X% as million percentage the quarter revenues, $XX of $XX.X percentage a or as

compensation of sorted lower were stock-based of a and cost due and paper self-insurance debt basis expense as basis and incentive points, corresponding and their margin a bad XX points basis points. lower Adjusted to XXX XX savings offset XXX of fuel surcharges and XXX partially income basis impact environmental points basis by of points flow-through and and points. settlement from of of These higher following: basis operations margin office decreased percentage the XXX revenues flow-through

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

remaining divestitures of margin by from $X.XX. $X.XX, flow-through self-insurance $X.XX, interest lower offset These $X.XX $X.XX exchange taxes, compensation of of $X.XX. the index impact of other of stock-based incentive decline $X.XX, cost debt bad and and and the of driven expense by and higher and was Excluding lower higher rates foreign savings and commodity revenues of partially a were $X.XX settlement year-over-year

to the same ended last million for compared XX, the $XXX expenditures Capital X September months were XXXX, period for million year. $XXX.X

an Free XXXX. was for compared in of XX, September $XX.X X million $XX.X the cash period outflow an flow inflow to of the months of XXXX, same million ended

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

XX, DSO was days for deferred September was of reported revenues. XX or days XX XXXX, net

regulated or services for third quarter, which XXXX. recorded invoice certain the DSO subscription-based days waste the During and deferred revenue. as XX, reported of for we to XXXX, higher contributed DSO advance, September September was to was days began XX customers XX, in compliance net XX

same by The period billing improved to and timing deferred in XXXX of net September of XX, was revenues XXXX, mainly compared driven customer DSO, lower as the the FID collections.

our XX, end Slide leverage the As quarter, agreement ratio shown of ratio credit achieving on maintained defined below debt third at we a the Xx, of X.XXx.

divestitures we approximately Romania recently X divestitures total XXXX. X As Netherlands the contributed Cindy X% completed business noted, EBITDA. for collectively of a and recycling breakeven than business waste less XXXX, of the revenues had dental medical In in and adjusted

these and of joint have XX, venture Collectively, was On UAE as divested interest. from sold removed businesses we were XXXX revenues proceeds. the Slide nominal accounted in equity our baseline. The investment for amount an net a in the for noncontrolling included

are we consideration taking the for in fourth our expectations our quarter. XX, updated on Slide noted providing guidance, As XXXX

growth our X% rate We mainly index from due X%, revenue range X% X% impact commodity revenues. to organic to of the to have to lowered

to have I $X.XX. guidance quarter reflects in per We narrowed impact of earnings that from share the volatility $X.XX $X.XX to This commodity updated to adjusted third mentioned our range a $X.XX potential and self-insurance the earlier. settlement range

million $XXX to the from with on million. associated our cash project. capital million reflects of incinerated $XXX our This expectation the expenditure $XXX narrowed guidance $XXX McCarran to have outlays to We million timing

be settlement mentioned the million guidance high million associated This self-insurance could range, our our our by workforce and million. $XX planned. to with at we We expectation by will capital million end mainly These flow to is targeted incremental than that previously $XXX quarter, our result potentially Cindy. in higher of reduction in an to the items $XX the approximately cash X of severance range $XXX have free expenditure $XXX from $XXX cash to fourth modified million we million driven outflow

$XX free cash approximately flow the of the quarter we in fourth payments approximately paid million which $XX and from in million adjusted pay as expect to quarter. Excluded litigation our $X million to guidance third

I will call now Cindy. turn to back the

Thank you, Janet.

companies for. as of on work to and Trucking in for Women is This of core this team positive one our recognized Stericycle's third by core that and the highlights we earlier were women diversity members. share Aligning excited consecutive for for the inclusion. of to our work focus top a One embrace values environment that I'm this week, with value, rewarding award year creating all we

as to I'd we our what And always, protect Stericycle shareholders like our their for and in customers, team matters. serve trust communities the having continued thank members,

the line open Q&A. please for Operator,

come [Operator Capital Instructions] Markets. from of will Our RBC question Sean Dodge first

Yes. know a that's start by I'll ERP congratulations lift. been the big asking on successful And my deployment. I

So have got now. it's that done to nice feel to really

Sean. Thanks,

there I It you month as all the a going now lie any can are pretty having all And far, figuring woods And being On out declare where at or if here? it, like we bugs now so clear -- or full update the think of glitches then we as do so still sounds shared you point there. used into or not? out forward? the the left good, risks much are dangers what guess, far more that, than

have very up happy We're gone the has, of And lessons to. we really continues had really thanks unit more as can are Yes, it. ago, and learned the very, which for It far thanks it a had. quite have folks about question, support with tell on technology no us, you well putting and members for congratulations. for as company to and proud business our team for was onto journey years a platform a tremendously the putting overall learning that the leading this Sean, I a of of couple amount to -- complexities. it that and

are. that there the seamlessly. still news I for from ghosts And I everything think bed. are -- major his put that fixing are But in think moving where know customer in I enhancements, you towards, would and do intuitive, system off thing that Most the testimony problems the to morphing had think things even is, the they the sooner And those We're faster from to we've suggestions as time system, we're the field, point the about the we've certainly than pretty that worrying is the that news. gotten can make where few really now almost correcting a Cory get good we anticipated, to have there of has gone where still think the which are you bit right, to isn't more any do said And much something any remarks, issues? of disruption. now us us, little we've next We really, in forgot, all enhancements? you a good things. I to the identified, is your the I back think

So other Janet, insights? any

well. I think, Cindy, you it very said

have subscription-based. billed. about as reminder, of And billing a also XX% the actually We is

we actually out ] at month the the and that [ through. billed of start So bill [ gotten have those ] to continue

at, If volume the where to expected be as left, it to that of don't would being to the the thoughtful very than there's have that's is Cindy's have are time. lower this to we rather we billing few for where -- in sure issue. going a do accurate, big we it's at than point We we're And you point, down can broken. incidents system the enhance expect, into a make but moving anything looking it's transactional anticipate

developed it all routine now, of up. Sean, wrap at how hasn't and just And how their faster own. that we We it, use to things. least how through to the last make everybody but develop nuance we or to I work think, know the understands click one really thing, Right everybody

we're developing that think right now. I

recognition become think change part, most with so on. And and or us. major has at learning, behind of proficient else potential types But revenue those as those well there's management still issues everybody the adopted with Not still go the as has major, some for some customers, there's I same are time. I everybody it think things, to

I in of And the ready, was went point, think that September. but spent actually rolling beginning trucks you mentioned your beginning running of September. The getting as in the quarter started we at to the truck live the

the talk and So do we under month more as more our a and we than quarter a have good in that today. belt, month

QX. Janet, have the productivity? And that, the cash Can Anything both what's QX, walk of and just of there? the drive you kind workforce implies expected else? through anything to free Great. about a Is Okay. this of then, guidance EPS bit of from visibility on a benefits the improving for kind us you reduction step-up

Yes.

is quarter. stock key real ends some One help comp, benefits drive that a I had items due to in acceleration that there. have will underneath retirement us That earlier. that we've the we was So mentioned comp incentive is basically fourth which that

So of cents a uplift. few that's

We had it helping will and We an [indiscernible] we bit be see looking that see price, that debt from continued quarter-to-quarter. fuel mitigated bad onetime been self-insurance you're claim the and if see that won't can quarter-to-quarter. quarter then the you uplift, as us as in has repeat, and that a

the even the system learning mentioned. we the from those not to more some curve improve confident and as are the I'm Cindy and that So talking about key [indiscernible] continued on get of

see a of of So follow the similar cash and suit. EPS good line then to we the flow, sort of sight some that

Okay. Great. again. then And congratulations

it. Thanks, Sean. Appreciate .

& from please Company. And our One our question. for next will Schneeberger Oppenheimer moment question Scott of come next

know my for to whole share hard preparation much the like I'd worked organization congratulations. in I how has this.

parallel consider line Is and about this you upward. international off process. Could you're you've us update lot switch. should follow-up onward parallel we And followed to on -- I'm running the of curious, very a dependent a still that updates is how getting the time you [indiscernible] the in there U.S.? and are thinking believe systems an this, running well. systems? I now give on covered you So throughout you were on that the and great

on portion And in I'll then we is I'll that. duplicative international fronts. handle Janet systems I'll let one, legacy the that have, question take do the terms what of the that of the and X new Yes. Scott,

XX In it's our of We've the terms to thing has ability an from divestitures other done things. one, XXXX. that's things, us. had that And manage since of things. Number international, overall a portfolio, now a certainly But few helped couple certainly, you answer done, and how tying is, can give out is and going into to the to is we've Janet less we imagine, new as platform. and that geographies to on you put business places XX this countries have figure got units

going So debt, has to this has this to platform. of to going to afforded to be balance that's manage to go afforded not proceeds shrink oversight, required opportunity to down footprint just business us not just also on to an continue opportunity to have the this sheet, us the not the to not what's better, improve use new to improve just just pay

about there, I terms acquisition. because So divestitures, did that key then the I on of -- but an priorities, had optimization, talk and still in we've think we actual which one of leave also portfolio XX is

also Then balance focused So sheet Scott, it since been stable a divestiture, morphed optimization divestitures. you've we acquisitions. we point and just on but -- about in tuck-in figuring enough some journey us beginning. time, to We the might get where talked that options on would to at portfolio potential be with focused have on become originally not we the

have we understand great Now where a about we strengths, where that are footprint. more business, do the our

on perspective. then think but acquisition it an divestiture, I leaving also things, from potentially there both we're for So

how to what back Janet, duplicative on? with Janet. it morph go to And I'll more now to much see? So do you systems, reference the

Yes.

put waste U.S. we put on. the core we our Meaning, So revenue the and put all all processing. we on

it. a everything the running on stations, incinerator that is all waste [indiscernible] So is

edge hybrid have need model to of We they're but put system, call that there. still using long on, actually where areas have but not putt a the unique partially few, should we get that what small a to be cases I'll some

the and exciting. have Now would which a ERP I call North U.S. in smaller is journey we But the much what that to we're is do in done, very looking on America part move. our largely Canada, is which for

they In terms I right of are applications, the but used in internationally. as also mentioned, legacy Canada, now still

is the start is on, active So team starting working cleanup data around the and that next with off requirements next start international the very a journey XXXX goal of on that time and to to the moving year, we're frame.

in ability may continue the to are for continue take longer to looking term, look we million legacy to out give rightsize while which at opportunity it. year the some to $XX we that as us million platform, Meanwhile, we $XX next

And volume runs platform point, just of I XX% think more our one through of as thing, a bit a Scott, currently. little than all the just too,

I things too, So some hope that puts of size. into perspective, in terms

Yes. And piece Secure platform, on Information only RWCS about for only Canada. the I'm fit the just is talking left Canada for is so Destruction,

question. That's Yes. Got it. -- very I helpful, very as second my comprehensive. another X parter

going trends mostly What paper the as are implicit that's what first you anticipating I the forward? in ahead look fourth for you that you're Just sort Janet, for guess seeing? office are what's part do The you what of expect is, you. quarter? here,

few more mentioned you A few new? I a Or customers. pickup back how in that construction. consistent? -- to bit just This frequency. that heard information just this that. few in to to a I and -- about on to post-pandemic a -- had Cindy, me you the sites, a I closures notes. that period The for wanted is to lesser site will think something let go turn is that I all want delve trend? something hear that little from seen you you've want what second. just -- before. that on feel Is don't I've

both help of Scott, of can I them. you you. Got And with kind

said we now coming think a First I I we've of I rate, in out, of all, And -- were lot. learned. terms what learn few of a going years the what RISI to here's pandemic, out think

specifically that out average an That year. of really year, QX $XXX what's figuring all a a of averaged last It around of in last lot a these the itself essential demand in people this think the it's going in travel, who's the who's and immediate put anomaly. this somewhere is year September used to that's commodities, on versus of pressure things on paper, from I out use, back paper year, year what's coming the in on XXXX the down to it work, think and XXX. That October QX anomaly. things? price But of is with eat, the difference I $XXX demand at we year, looking to we're an -- lot

seems pretty a now you of to the a society. demand. outlier, prior more is XXXX about reasonable and of trend And It's that the out sign news. been today, -- right that, $XXX. good good ton. if prior the now, that think, news good a good in rhythm you into I has we're terms is which But gotten The for average That seeing, to it's complete XX-year now I we've normalized, $XXX a a being just here's, about take think it's where look of if sign there, is XXXX

So set I need level think we that. to

the X, swings now, isn't several as I is that much X over the we seeing are in terms months, it showing the number, last Right $XXX QX? say, wild quarters. a around good, think, into it maintained showing had going over which last, What let's it's as stable of

more to I frankly, the surcharge like there. volatility below for a the So $XXX know once that. mitigate RISI XX% help That's normal And is. rate gets good our news how really about And whatever quite the will we that's ton, think of at manage more business.

all think I good. that's So

national national question portion If channel And the regulated that go of over seeing have, channel, seen the the those that accounts for both accounts, second base been similar as to pharmacies, the about well we read headlines. as nuance side, things quarters, of course we're those what in that account the I shred. large headlines, I and is that on the regulated is, it's read last it you national couple what national retail we've of

a of And not lot them, of that space. requires use to stores potential regulated, we There's don't still choose and definitively frankly, town going They facility in shred. you have There's store close also is have -- space for an of us X,XXX on just are means awful a in thousands but that things that anymore. quite they footprint a only a they uses There's of when lot service bankruptcies. that use particular you that us. for And closures. down that us which

on seeing So regulated. that -- and we're

they take the now at And looking This we most at customer work. side, can to as base are is to themselves our now grow. their to how that when figure new shred right they at to we're back that going hey, cut a future rhythm how to now so shred, costs, then be -- look position out, out our right people their on reset continue that is of figuring to for how

they our to some may is. sites, requiring down but So used normal reduced service, they their getting frequencies, still have some may closed have whatever new

that's as those that's to any see anything great don't a I So degree. themes going lingering, of continue anything to

tell And larger you, I account and think we've team base, seen positioned are our to this change Cory shift now to can for through see an this I opportunity just and stabilize. grow. his channel and that national I now

that's So we and the trend sit we see. that that's where

question. moment, our And please one for next

Dave able Manthey [indiscernible], on next using headset. Hello, you Baird. Mr. put your Are line's Mr. if Dave us? your move Sir. Manthey? Speaker's your will of a If Our from come person. line. Manthey, mute, on to please I'll please hear to headset, next question the unmute

from of next E. Stifel. Michael Our Hoffman question will come

doubt. never I Cindy, Janet, in was

done. So well

Thanks, Michael.

out the tested you it. Well, bejesus of

of knew tugged we're you beginning billing it. But was and a pushed I that [indiscernible] So the it billing, lot. and right pulled had on end, it it again, to and a in challenged

You it. fixed

you Rico. What really of are You that you relative the seeing Puerto tested of sort at baseline seeing are What to knowledge? that hard moment? in

from and a track contracts astute because impact to think to that in everything billing place reporting and for. X. knew big of complexity the we a pricing. and in have and contracts I and understanding seeing in look lot pricing more billing we its see much day that terms what RWCS that's difference We're we There's And of

actually for be to time get side our piece, we easier. you heard also me most of the So the that there's is a that -- did And you is -- as but a but we -- ahead of there's that transactional customers. service month that revenue moved to subscription base also mention, actually when

switch So did. we that was a

long but far flow needs a that we're that's That to change So benefit a in the be for so has so cash watching, little management term that -- customer good. us. potential the

transactional out putting it we've before billing, thoughtful out. the been sending sure make or blocks auditing we're And then all and goes it's through very call payer been and revenue that what on they other right blocks to

the there's So on team. of lot been a thought

a wash think We and the a We'll of may a I well. transaction have be later. little little good. be very some out so subscription earlier, have far, we'll So

revised XX% the start All When on When to seeing XX% and year, cash. around that that free accountable beginning of platform right. benefit happen, volume of the those this of of reaffirmed that and do one document parameters you can your is I today, XX% that we conversion? of outlook, seeing XX% people start do in good be the and a way. now Cool. EBITDA, lot to XX% you've in And then some held XX% XX% the cash a

Yes.

we've is then based as build process the I XXXX timing we there. is think this put year-end maturing more from And can what into that that as talked focus off the well and several about that ERP, others. of of then of taking

little and that smoother, of have. couple -- get customers a the that really through and we talk -- easier. help out back enhancements better, is in as get and to things plants flowing ERP put working we things about get the and So being going facilitate Right few folks that a levers as now this with we a in mature our we

point you to needing attrition, manual a things as some one we intervention. removal move manualness. swivel then from a to opposed time, that to of to in should it been into be needing chair technology next, the system there us. opportunity said, you can when leaning system data often an removing move talk for We've and for a get that I've the at There's about that lot needing of paper statistics or move or to

think a attrition additional said, reduction with into continue got So we've like for will hiring. develop we us, to targeted maybe controlled or I things. continued lean still workforce we -- these And an I as

productivity, customers, we think fine-tune will enact with for improvements, operational continue the I better any improvements the of of with in for combination ERP to with get can in I all our things that think infrastructure, those that forward. engagement scheduling, XXXX as for for we efficiency, we moving things are

Those targets pretty comes And continue, the some hit that make think we the our EBITDA levers time, at legacy put McCarran we've -- At I long-range order out are that big that then know, margin in time, are at you there. in retire some Michael, we in some then point point to adjusted on. system. are disposal as that

to add base growth XX% we to is annual that. the that And XX% see. for rate adjusted just year Yes. EBITDA to that expect XXXX to

growth So the and XXXX, a you'll X% in it X% see to is CAGR rate.

XXXX So directly it you question. when should seeing Michael, is that to start

you of QX, have In headwinds the look if that commodity now. at you continue But QX. we the in will on paper, see some system

variable cost great We model. a have

to begin looking in for XXXX. that So we're

year, compound you [indiscernible] was not I what is on multiyear that for. the That's all looking iterative Okay. This every back-ended

Correct.

Okay.

'XX. the market I is all going of is of think see to that pay is a this to is in beginning effort this this evidence big off part

year. Cindy mentioned, executed already [indiscernible] will in put we that have a fourth reduction generate $X that we And quarter the as workforce targeted in million next

as the that we we So layers of those efficiencies. have are some drive

attrition. hiring, careful mentioned also She

improvements, initiatives hold. modernization We have starting efficiencies to strategic efforts facilities then that and are take and in our our drive

the with on you being that able get combine a compounding just of efficiency systems, to sort effect be You driven.

Manthey again, [Operator And of we have Dave Baird. Instructions]

line. Dave? Mr. Mr. Manthey? Manthey? your Please unmute

me Do now? you hear

[indiscernible]

hear can We you.

to the talk being going paper. ERP. user about over I'm time while? be and about XXX range XX%? and and thought you number like And additional number and sign to Cindy, that ] get a to lose in and the formula talked paper on magical range. customers absorption. as talk All in lower up error. changed you that set percentage that XXX hasn't cycle about some around, in XXX of going able would point new My a earlier long that right. Can would move lower question, the you'd the you contracts that to pricing congrats What's I'm Well, I that, the why have talk [ about move

Yes. great Dave, question.

flat think going of numbers this in we data ranges, I to in the take an on putting is. the set purely set understanding can recycling on it anybody what's side we terms That surcharge unlike do was and XX%, what and market was while scale, if marketplace. business. in it's the it's fee, XX%, actually tried out that, recycling So And took a onto of whole a else whatever that anybody put and a surcharge revenue marketplace whether that of

think this of service win? came. and of believe designed, provide, can we develop looked the paid where is We to one, the in general the opportunities where see through scale market felt can do that that still that sliding for we value pretty we We we've can much still that the for the we where at we what scale that we scale to all competitive, the is -- be get us

covered. but the number, correct. we of is volatility general XX% There as a about are And you -- being talk that's do

this with of of go we that type as all As continue adoption acceptance surcharge, new also there customers legacy we continue new continue or have customers, we out to some win negotiate. out contracts to but

combination want do So in are who we and all of be, a be across I want combination play. you think how markets it's do where where to competitors it's competitive the And be you it U.S. want not whom a the just on depends of to against to you

that national a you in independents bit the some a a national the account larger lower think customers. some versus if perspective, adoption the little potentially terms of of at of account has look or of I So a take

of we volatility. just So the where here's that's, being, I think, could opposed came think to from pretty where XXX% as much that mitigate we

in the year But the RWCS. expect that Okay. still what the switch we the And on can book if key second, not standing the X before wins understand based on system. we SID, you the changes, what ERP early ERP. that I are then experience with system? should of your you get out on So you look were to

these And up you, margins tick those shouldn't can like there behind with higher reason there any from it here? that. reason see it seems folding Is steadily more is done start legacy relates we already just risk, systems, related, we some see I why mean to all from you the to sort and and any right margins here? maybe up you've the as there's shouldn't behind of of

least and outside of whether great me, been now at And and had maybe, quite war for turbulent Ukraine X-year I control, Stericycle, -- breakout. and Russia things that think issues Dave, chain in time journey pandemics focus we we've in period, it's are on at have our and unfortunately, another this let's of and question. that been what during it's a supply bit hyperinflation a been say, terms

utilization. wants putting a better we We with routing, a staffing. get engagement at affords So a I or we put away. an side get better better to We with get cost an additional that get pickup, think the an on faster get customer We that better at the we with on do system effort service you to the to ERP from and better some and that those to can when add a things things, overtime. better on look get those correct. I we schedule us get the faster. get because We control, perspective. get with match nimble energy the revenue here's we get or opportunity with opportunity right we things it things we're to customers. affords We any with are container And more with scheduling. When We quicker us plant time get better better operations get

and expectation what do our So what have and seen. we see we

Gap] [Audio

moment. One

that. see will You

handle correctly. better every very are we thinking of and So is day. the proud this culture get caveat very development in we we things the can control, again, things that about confident And who I'm to for you're and Dave, how and it

about excited I'm So that.

a of Janet, couple things?

Yes.

Cindy mentioned expect sitting year. to rate was seeing me, adjusted and commercial start Cory, and EBITDA margin to due Dave, next we year right that expansion we So things base levers levers, all as And XX%, next with a our said has which the of -- that who, XX% the XXXX which to as to just mentioned. growth significant long-term well to outlook, reiterate, the includes of

that On number. through come we see in adjusting then we in legacy 'XX, confidence systems go this. give some the out international And the us as start up opportunity to in IT that costs call for

So we still on. to be need [indiscernible]

model, RISI line bit on I a be in from paper, next perspective, headwinds rate a will have quarter. can that. point quarter. choppiness cost a little in great out the there'll timing as There year, drive But we will some first mentioned, be the some continued but that variable top and you year-over-year from still through first the I see we may

Yes. -- or very And Dave I think Janet I brings -- know RISI rate. tune you're the in to

probably comparisons XQ was XXX. for average, XXX, year would year. QX, there, obviously both those XQ about the next somewhere When of QX kind average of let's XXX. around in on say, -- was be QX Just this close, QX, to

year-over-year about from I time some commodity comparison still at you you say, line. And with It's But down. the QX. it QX, top a comes a comps, to to respect I decent stiff QX, get finally think for get and then perspective, that's where would it So XXX. by RISI least obviously the

session. back to will This turn to like the conference Miller the end Cindy would Q&A I now closing remarks. for

our We'd continued in customers, employees, like investors. as like Stericycle. And that serve community our the always, for we'd you. thank their Thank to to we interest thank

you much. all thank very So

Thank call. all conference today's for you concludes participating. This

may have disconnect, a now pleasant You and day.