scl-20240930

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-Q

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[Mark One]

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-37556

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Delaware			36-3640402
(State or other jurisdiction of incorporation or organization)			(IRS Employer Identification Number)

2355 Waukegan Road

Bannockburn, Illinois 60015

(Address of principal executive offices, including zip code)

(847) 367-5910

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	SRCL	Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒

Smaller reporting company ☐

Accelerated filer ☐

Emerging growth company ☐

Non-accelerated filer ☐

Table of Contents

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

On October 28, 2024, there were 92,837,446 shares of the Registrant’s Common Stock outstanding.

Table of Contents


		Page No.
PART I. FINANCIAL INFORMATION

	Item 1. Financial Statements (Unaudited)	5

	Condensed Consolidated Statements of (Loss) Income	5

	Condensed Consolidated Statements of Comprehensive Income (Loss)	6

	Condensed Consolidated Balance Sheets	7

	Condensed Consolidated Statements of Cash Flows	8

	Condensed Consolidated Statements of Changes in Equity	9

	Notes to Condensed Consolidated Financial Statements	11

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

	Item 3. Quantitative and Qualitative Disclosures About Market Risk	33

	Item 4. Controls and Procedures	33

PART II. OTHER INFORMATION

	Item 1. Legal Proceedings	34

	Item 1A. Risk Factors	34

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	36

	Item 5. Other Information	36



	Item 6. Exhibits	37

	SIGNATURES	38


2024 Q3 10-Q Report			Stericycle, Inc. ●			3

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Glossary of Defined Terms

Unless the context requires otherwise, the “Company”, “Stericycle”, “we”, “us”, or “our” refers to Stericycle, Inc. on a consolidated basis. The Company also uses several other terms in this Quarterly Report on Form 10-Q, most of which are explained or defined below:


Abbreviation			Description
2023 Form 10-K			Annual report on Form 10-K for the year ended December 31, 2023
Adjusted Income from Operations			Income from Operations adjusted for certain items discussed in Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations


ASU			Accounting Standards Update





AI			Artificial intelligence
Credit Agreement			Credit Agreement dated September 30, 2021, First Amendment dated April 26, 2022, and Second Amendment dated June 15, 2023, among the Company and certain subsidiaries as borrowers, Bank of America, N.A., as administrative agent, swing line lender, a lender and a letter of credit issuer and the other lenders party thereto, as amended
Credit Agreement Defined Debt Leverage Ratio			As of any date of determination, the ratio of (a) (i) Consolidated Funded Indebtedness as of such date minus (ii) Unrestricted Cash as of such date to (b) Consolidated EBITDA (each as defined in the Credit Agreement) for the period of four fiscal quarters most recently ended on or prior to such date
Credit Facility			The Company's $1.2 billion credit facility due in September of 2026 granted under the terms of the Credit Agreement
DEA			U.S. Drug Enforcement Administration. The DEA is a division of the DOJ. It is the federal agency which regulates the manufacture, dispensing, storage, and shipment of controlled substances including medications with human abuse potential
DOJ			U.S. Department of Justice
Domestic Environmental Solutions			Hazardous Waste Solutions and Manufacturing and Industrial Services (Divested April 2020)

DSO			Days Sales Outstanding as reported, defined as the average number of days that it takes a company to collect payment after revenue has been recorded, computed as the trailing twelve months of Revenues for the period ended, divided by the Accounts Receivable balance at the end of the period. Days Sales Outstanding, net of Deferred Revenues is similarly computed except Accounts Receivable balance is netted with Deferred Revenues.
DTSC			U.S. Department of Toxic Substances Control
EBITDA			Earnings Before Interest, Taxes, Depreciation & Amortization. Another common financial term utilized by Stericycle to analyze the core profitability of the business before interest, tax, depreciation and amortization

Enviri			Enviri Corporation, a Delaware corporation, formerly known as Harsco Corporation
ERP			Enterprise Resource Planning
Exchange Act			U.S. Securities Exchange Act of 1934
FASB			Financial Accounting Standards Board
FCPA			U.S. Foreign Corrupt Practices Act

International			Operating segment including Belgium, France, Germany, Ireland, Luxembourg, Portugal, Spain, and U.K. The following countries were divested in 2023: Australia, Brazil, Republic of Korea, Romania, Singapore, and the United Arab Emirates
IRS			U.S. Internal Revenue Service
LIBOR			London Interbank Offered Rate - benchmark interest rate that was replaced by SOFR
Merger			The merger of Merger Sub (a wholly owned subsidiary of WM), with and into Stericycle, as contemplated by and subject to the terms and conditions of the Merger Agreement
Merger Agreement			Agreement and Plan of Merger, dated June 3, 2024, among WM, Merger Sub, and Stericycle
Merger Sub			Stag Merger Sub Inc., a wholly owned subsidiary of WM
Net Debt			As defined in the Credit Agreement, adding back unamortized debt issuance costs, less cash and cash equivalents
North America			Operating segment including U.S., Canada and Puerto Rico
NOV			Notice of Violation

Other Costs			Represents corporate enabling and shared services costs, annual incentive and stock-based compensation
PSU			Performance-based Restricted Stock Unit
Purchase Agreement			Stock Purchase Agreement, dated as of February 6, 2020, by and between Stericycle, Inc., and the Harsco Corporation (now known as Enviri) and CEI Holding LLC, a Delaware limited liability company and subsidiary of Harsco Corporation (now known as Enviri)
RSU			Restricted Stock Unit
RWCS			Regulated Waste and Compliance Services, a business unit that provides regulated medical waste services
SEC			U.S. Securities and Exchange Commission
Senior Notes			5.375% ($600.0 million) Senior Notes due July 2024 and 3.875% ($500.0 million) Senior Notes due January 2029. The July 2024 Senior Notes were redeemed in March 2024.
SG&A			Selling, general and administrative expenses
SID			Secure Information Destruction Services, a business unit that provides confidential customer material shredding services and recycling of shredded paper
SOFR			Secured Overnight Financing Rate - benchmark interest rate that replaced LIBOR
SOP			Sorted Office Paper

Term Facility			Aggregate amount of commitments made by any lender under the terms of the Credit Agreement
Term Loans			Advances made by any lender under the Term Facility


U.S.			United States of America
U.S. GAAP			U.S. Generally Accepted Accounting Principles
WM			Waste Management, Inc.


2024 Q3 10-Q Report			Stericycle, Inc. ●			4

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

STERICYCLE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME

(Unaudited)


In millions, except per share data
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenues	$	648.4	$	653.5	$	1,974.9	$	2,007.3
Cost of revenues	404.3		407.8		1,217.9		1,249.5
Gross profit	244.1		245.7		757.0		757.8
Selling, general and administrative expenses	224.6		217.3		668.1		654.2
Divestiture losses, net and impairments (Note 4)	10.5		4.2		10.5		63.4

Income from operations	9.0		24.2		78.4		40.2
Interest expense, net	(20.4)		(17.4)		(59.3)		(56.9)

Other income (expense), net	—		0.1		(0.1)		(0.3)
(Loss) income before income taxes	(11.4)		6.9		19.0		(17.0)
Income tax expense	(2.3)		(4.8)		(13.6)		(19.1)
Net (loss) income	(13.7)		2.1

SEC Form 10-Q filed by Stericycle Inc.