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Section 1: 8-K (8-K)

srcl-8k_20180802.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 2, 2018

 

Stericycle, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

 

Delaware

 

1-37556

 

36-3640402

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification Number)

28161 North Keith Drive

Lake Forest, Illinois 60045

(Address of principal executive offices including zip code)

(847) 367-5910

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

    Written communications pursuant to Rule 425 under the Securities Act (17 CR 230.425)

    Soliciting material pursuant to Rule 425 under the Securities Act (17 CFR 240.14a-12)

    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

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.

 


Item 2.02    Results of Operations and Financial Condition

On August 2, 2018 Stericycle, Inc. issued a press release announcing its financial results for the quarter and six months ended June 30, 2018.  A copy of this press release is attached hereto as Exhibit 99.1 and incorporated by reference.

This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Stericycle is making reference to non-GAAP financial measures in both the press release and the conference call.  A reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is contained in the attached press release.

Item 9.01    Financial Statements and Exhibits

(d)

Exhibits

99.1

Press release issued by Stericycle, Inc. dated August 2, 2018


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: August 2, 2018

 

Stericycle, Inc.

 

 

 

 

By:

/s/ DANIEL V. GINNETTI

 

 

 

 

 

Daniel V. Ginnetti

 

 

Executive Vice President and Chief Financial Officer

 

 

 

 

 

 

 

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

srcl-ex991_8.htm

EXHIBIT 99.1

FOR FURTHER INFORMATION CONTACT:

Investor Relations 847-607-2012

 

Stericycle, Inc. Reports Results

for the Second Quarter 2018

 

Announces On-going Process to Pursue Strategic Alternatives for Communication and Related Services

 

LAKE FOREST, Ill., August 2, 2018 - Stericycle, Inc. (Nasdaq: SRCL) today reported results for the second quarter 2018.

SECOND-QUARTER HIGHLIGHTS COMPARED TO PRIOR YEAR:

 

 

Revenues of $883.3 million, a decrease of 3.7%, driven by the expected decline in the small quantity (“SQ”) medical waste business combined with softness in Communication and Related Services (“CRS”) and divestitures, partially offset by growth in Secure Information Destruction and other core service offerings

 

 

Gross profit of $353.3 million, a decrease of 7.4%, given the expected impact of pricing of SQ medical waste customers and the softness in CRS

 

 

Diluted earnings per share (“EPS”) of $0.31, an increase of 117.8%, primarily due to the SQ customer class action settlement recorded in the prior year; adjusted diluted earnings per share (“Adjusted EPS”) of $1.17, an increase of 1.7%, which includes the favorable impact of a lower tax rate under U.S. tax reform

 

 

Business Transformation initiatives remain on track and resulted in an additional $7.9 million in Adjusted EBITDA benefit in the quarter; Portfolio Rationalization efforts are ongoing, resulting in the divestiture of two non-core assets and a process to pursue strategic alternatives for the non-core Communication and Related Services


1

 


SECOND-QUARTER RESULTS

Revenues for the quarter ended June 30, 2018 were $883.3 million, a decrease of 3.7% from $917.7 million in the second quarter of last year. Acquisitions contributed $8.1 million to revenues.  Divestitures reduced revenues by $13.4 million.  Foreign currency had nominal impact in comparison to the prior year quarter.  Organic revenues decreased 3.2%, or decreased 4.0% when adjusted for Manufacturing and Industrial Services.  The decline in organic revenues was driven by the expected decline in the SQ medical waste business combined with softness in CRS.  These were partially offset by growth in Secure Information Destruction.  See Tables 1-A and 1-C.

“Our second quarter results demonstrate the underlying strength of our core businesses and reflect the early benefits of our Business Transformation and its overall value to the Company,” said Charles A. Alutto, President and Chief Executive Officer. Our core businesses performed well with Regulated Waste and Compliance Services meeting expectations and higher paper prices contributing to the performance of Secure Information Destruction.  We delivered Adjusted EBITDA and Adjusted EPS within guidance by effectively controlling our expenses, offsetting weaker CRS results.  Our team remains focused on the Business Transformation, and we are on track to achieve our goals for the year.”

Gross profit was $353.3 million, a decrease of 7.4% from $381.7 million in the second quarter of last year.  Gross profit as a percentage of revenues was 40.0% compared to 41.6% in the second quarter of last year, given the expected impact of pricing of SQ medical waste customers and softness in CRS.  See Unaudited Condensed Consolidated Statements of Income (Loss).

Diluted EPS increased 117.8% to $0.31 from a loss per share of $1.74 in the second quarter of last year, due primarily to the SQ customer class action settlement recorded in the prior year.  Adjusted EPS increased 1.7% to $1.17 from $1.15 in the second quarter of last year, as a result of the favorable impact of a lower tax rate under U.S. tax reform.  See Unaudited Condensed Consolidated Statements of Income (Loss) and Table 2-A.

2

 


Cash flow from operations for the six months ended June 30, 2018, inclusive of Business Transformation charges, was $231.0 million, down 3.3% from $238.9 million in the same period last year. The Company primarily allocated cash from operations as follows: $120.3 million for reduction in debt; $64.0 million for capital expenditures; $29.0 million for acquisitions; $17.1 million in dividends to preferred shareholders and $14.8 million for preferred share repurchases.

BUSINESS TRANSFORMATION

During the second quarter, Stericycle continued to execute its Business Transformation to improve long-term operational and financial performance.  The Company realized an additional $7.9 million in Adjusted EBITDA benefit from second quarter Business Transformation initiatives, the majority of which are expected to recur.  Year-to-date, Stericycle has realized Adjusted EBITDA benefits from Business Transformation initiatives of $23.9 million with an anticipated 2018 benefit of $50.0 million. The Company remains on track to achieve targeted annual Adjusted EBITDA benefit of $60-$65 million.

The Company incurred $21.8 million in Business Transformation operational expenses during the second quarter.  Operational expenses year-to-date totaled $43.9 million against anticipated expenses of $95-$105 million for 2018.  Capital expenditures for the Business Transformation totaled $3.3 million in the quarter and $3.7 million year-to-date.

As part of the Portfolio Rationalization strategy within Business Transformation, Stericycle announced today that it is pursuing strategic alternatives for the non-core Communication and Related Services, demonstrating the Company’s commitment to streamline the portfolio.  The process, which is being conducted with the assistance of financial and legal advisers, is considering a range of strategic alternatives for CRS, including a divestiture, with a focus on pursuing the outcome that will drive the most value for Stericycle shareholders.  There can be no assurances as to the form or timing of any transaction or if any transaction will be consummated.

Executing on its Portfolio Rationalization strategy, Stericycle completed the divestiture of its remaining hazardous waste business in the United Kingdom during the second quarter and signed

3

 


an agreement to divest its non-core clean room services in the United States, which closed on August 1, 2018.

FINANCIAL GUIDANCE

Stericycle today updated its financial guidance for the full-year 2018, as summarized in the following table:

 

(In millions, except per share data)

 

Revenues

$3,450 - $3,540

 

Regulated Waste and Compliance Services

$1,910 - $1,935

 

Secure Information Destruction Services

$890 - $915

 

Communication and Related Services

$330 - $345

 

Manufacturing and Industrial Services

$320 - $345

 

 

 

 

 

Income from Operations

$269 - $279

 

Adjusted EBITDA (a)

$750 - $775

 

Interest Expense

$103 - $108

 

Tax Rate

25.5% - 26.0%

 

Depreciation

$130 - $135

 

Intangible Amortization

$125 - $130

 

Diluted Earnings Per Share

$1.27 - $1.32

 

Adjusted Diluted Earnings Per Share (b)

$4.35 - $4.55

 

Shares Outstanding

 

90.5

 

 

 

 

 

Net Cash from Operating Activities

$185 - $225

 

Capital Expenditures

$155 - $170

 

Free Cash Flow (b)

$15 - $70

 

(a) Adjusted Earnings Before Interest, Tax, Depreciation and Amortization (Adjusted EBITDA) is Income from operations excluding certain specified items, Depreciation and Intangible Amortization.

(b) See reconciliation on Table 3.

The Company’s guidance is based on currently known items and certain business assumptions including EPS of $0.17 from the repurchase of preferred shares and using foreign exchange rates as of the end of June 2018.  The guidance also includes acquisitions, divestitures and charges for non-recurring litigation matters through the most recent period presented, but does not include amounts related to future acquisitions, divestitures or non-recurring litigation matters as the Company is not able to forecast these items without unreasonable effort.  The guidance presented includes the

4

 


$295.0 million payment made on July 6, 2018 related to the previously disclosed settlement of the SQ medical waste customer class action lawsuit. See Table 3.

CONFERENCE CALL INFORMATION

Conference call to be held August 2, 2018, 4:00 p.m. Central time – Dial 866-516-6872 at least 5 minutes before start time.  Presentation materials will be posted prior to the conference call at http://investors.stericycle.com.  If you are unable to participate on the call, a replay will be available for 30 days by dialing 855-859-2056 or 404-537-3406, access code 6944326.  To hear a live simulcast of the call or access the audio archive, visit the Company’s investor relations page on http://investors.stericycle.com.

SAFE HARBOR STATEMENT

This document may contain forward-looking statements that involve risks and uncertainties, some of which are beyond our control (for example, general economic and market conditions).  Our actual results could differ significantly from the results described here.  Factors that could cause such differences include 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, decreases in the volume of regulated wastes or personal and confidential information we collect from customers, our ability to execute on our Business Transformation initiatives and achieve the anticipated benefits and cost savings, our failure to consummate a strategic alternative transaction with respect to Communication and Related Services, potential charges related to a strategic alternative transaction with respect to Communication and Related Services, or the failure of any such transaction to achieve our desired results, our obligations to service our substantial indebtedness and comply with the covenants and restrictions contained in our private placement notes and our credit agreement, political, economic, inflationary, currency and other risks related to our foreign operations, the outcome of pending or future litigation including litigation with respect to the U.S. Foreign Corrupt Practices Act, changing market conditions in the healthcare industry, competition and demand for services in the regulated waste and secure information destruction industries, our failure to maintain an effective system of internal control over financial reporting, disruptions in or attacks on our information technology systems, changes in the demand and price for recycled paper, charges related to our portfolio rationalization strategy or the failure of our portfolio optimization strategy to achieve the desired results, as well as other factors described in our filings with the U.S. Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K and subsequent Forms 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.  To the extent permitted under applicable law, we make no commitment to disclose any subsequent revisions to forward-looking statements.

 

 

5

 


STERICYCLE, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

 

(In millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended

June 30,

 

 

2018

 

 

2017

 

% Change

 

 

2018

 

 

2017

 

% Change

 

Revenues

$

883.3

 

 

$

917.7

 

 

(3.7

%)

 

$

1,778.3

 

 

$

1,810.1

 

 

(1.8

%)

Cost of revenues

 

530.0

 

 

 

536.0

 

 

(1.1

%)

 

 

1,066.5

 

 

 

1,059.7

 

 

0.6

%

Gross profit

 

353.3

 

 

 

381.7

 

 

(7.4

%)

 

 

711.8

 

 

 

750.4

 

 

(5.1

%)

Selling, general and administrative expenses

 

290.9

 

 

 

574.0

 

 

(49.3

%)

 

 

595.3

 

 

 

828.2

 

 

(28.1

%)

Income (loss) from operations

 

62.4

 

 

 

(192.3

)

 

(132.4

%)

 

 

116.5

 

 

 

(77.8

)

 

(249.7

%)

Interest expense, net

 

(24.6

)

 

 

(23.7

)

 

3.8

%

 

 

(49.6

)

 

 

(47.0

)

 

5.5

%

Other expense, net

 

(0.6

)

 

 

(1.7

)

 

(64.7

%)

 

 

(0.6

)

 

 

(3.2

)

 

(81.3

%)

Income (loss) before income taxes

 

37.2

 

 

 

(217.7

)

 

(117.1

%)

 

 

66.3

 

 

 

(128.0

)

 

(151.8

%)

Income tax (expense) benefit

 

(9.6

)

 

 

73.5

 

 

(113.1

%)

 

 

(16.2

)

 

 

42.4

 

 

(138.2

%)

Net income (loss)

 

27.6

 

 

 

(144.2

)

 

(119.1

%)

 

 

50.1

 

 

 

(85.6

)

 

(158.5

%)

Net loss (income) attributable to noncontrolling interests

 

0.1

 

 

 

0.2

 

 

(50.0

%)

 

 

0.1

 

 

 

(0.2

)

 

(150.0

%)

Net income (loss) attributable to Stericycle, Inc.

 

27.7

 

 

 

(144.0

)

 

(119.2

%)

 

 

50.2

 

 

 

(85.8

)

 

(158.5

%)

Mandatory convertible preferred stock dividend

 

(8.3

)

 

 

(9.2

)

 

(9.8

%)

 

 

(17.1

)

 

 

(18.6

)

 

(8.1

%)

Gain on repurchase of preferred stock

 

7.2

 

 

 

4.4

 

 

63.6

%

 

 

14.5

 

 

 

9.0

 

 

61.1

%

Net income (loss) attributable to Stericycle, Inc. common shareholders

$

26.6

 

 

$

(148.8

)

 

(117.9

%)

 

$

47.6

 

 

$

(95.4

)

 

(149.9

%)

Earnings (loss) per common share attributable to Stericycle, Inc. common shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.31

 

 

$

(1.74

)

 

(117.8

%)

 

$

0.56

 

 

$

(1.12

)

 

(150.0

%)

Diluted

$

0.31

 

 

$

(1.74

)

 

(117.8

%)

 

$

0.55

 

 

$

(1.12

)

 

(149.1

%)

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

85.6

 

 

 

85.3

 

 

 

 

 

 

85.6

 

 

 

85.2

 

 

 

 

Diluted

 

85.8

 

 

 

85.3

 

 

 

 

 

 

85.8

 

 

 

85.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statistics (as a % of Revenues) - U.S. GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

40.0

%

 

 

41.6

%

 

 

 

 

 

40.0

%

 

 

41.5

%

 

 

 

Selling, general and administrative expenses

 

32.9

%

 

 

62.5

%

 

 

 

 

 

33.5

%

 

 

45.8

%

 

 

 

Income (loss) from operations

 

7.1

%

 

 

(21.0

%)

 

 

 

 

 

6.6

%

 

 

(4.3

%)

 

 

 

Effective tax rate

 

25.8

%

 

 

33.8

%

 

 

 

 

 

24.4

%

 

 

33.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statistics (as a % of Revenues) - Adjusted (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted gross profit

 

40.0

%

 

 

41.6

%

 

 

 

 

 

40.0

%

 

 

41.5

%

 

 

 

Adjusted selling, general and administrative expenses

 

22.1

%

 

 

21.6

%

 

 

 

 

 

22.2

%

 

 

21.9

%

 

 

 

Adjusted income from operations

 

17.9

%

 

 

20.0

%

 

 

 

 

 

17.8

%

 

 

19.5

%

 

 

 

Adjusted EBITDA

 

21.6

%

 

 

23.1

%

 

 

 

 

 

21.4

%

 

 

22.8

%

 

 

 

Adjusted effective tax rate

 

25.7

%

 

 

37.1

%

 

 

 

 

 

25.1

%

 

 

36.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted gross profit

$

353.3

 

 

$

381.7

 

 

(7.4

%)

 

$

711.8

 

 

$

750.4

 

 

(5.1

%)

Adjusted selling, general and administrative expenses

$

195.1

 

 

$

198.6

 

 

(1.8

%)

 

$

395.1

 

 

$

396.9

 

 

(0.5

%)

Adjusted income from operations

$

158.2

 

 

$

183.1

 

 

(13.6

%)

 

$

316.7

 

 

$

353.5

 

 

(10.4

%)

Adjusted EBITDA

$

190.9

 

 

$

212.3

 

 

(10.1

%)

 

$

380.2

 

 

$

411.8

 

 

(7.7

%)

Adjusted net income attributable to common shareholders

$

106.1

 

 

$

103.6

 

 

2.4

%

 

$

216.2

 

 

$

203.0

 

 

6.5

%

Adjusted diluted earnings per share

$

1.17

 

 

$

1.15

 

 

1.7

%

 

$

2.39

 

 

$

2.25

 

 

6.2

%

Diluted shares outstanding, under if-converted method

 

90.5

 

 

 

90.4

 

 

0.1

%

 

 

90.6

 

 

 

90.5

 

 

0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation - cost of revenues

$

26.0

 

 

$

22.7

 

 

14.5

%

 

$

50.2

 

 

$

45.6

 

 

10.1

%

Depreciation - selling, general and administrative expenses

$

6.7

 

 

$

6.5

 

 

3.1

%

 

$

13.3

 

 

$

12.7

 

 

4.7

%

Intangible amortization

$

32.9

 

 

$

29.5

 

 

11.5

%

 

$

64.8

 

 

$

58.6

 

 

10.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Adjusted financial measures are Non-GAAP measures and exclude specific items as described and reconciled to comparable U.S. GAAP financial measures in the Reconciliation of U.S. GAAP to Non-GAAP Financial Measures contained in this Press Release.

6

 


STERICYCLE, INC.

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

(In millions)

 

 

 

 

 

 

 

 

 

 

June 30, 2018

 

 

December 31, 2017

 

ASSETS

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

45.0

 

 

$

42.2

 

Accounts receivable, net

 

629.6

 

 

 

624.1

 

Prepaid expenses

 

74.8

 

 

 

80.0

 

Other current assets

 

46.4

 

 

 

46.3

 

Assets held for sale

 

17.5

 

 

 

20.8

 

Total Current Assets

 

813.3

 

 

 

813.4

 

Property, plant and equipment, net

 

744.4

 

 

 

741.0

 

Goodwill

 

3,598.4

 

 

 

3,604.0

 

Intangible assets, net

 

1,698.7

 

 

 

1,791.5

 

Other assets

 

59.8

 

 

 

38.4

 

Total Assets

$

6,914.6

 

 

$

6,988.3

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

Current portion of long-term debt

$

112.1

 

 

$

119.5

 

Bank overdrafts

 

6.7

 

 

 

7.0

 

Accounts payable

 

205.9

 

 

 

195.2

 

Accrued liabilities

 

621.2

 

 

 

588.1

 

Other current liabilities

 

55.0

 

 

 

54.5

 

Liabilities held for sale

 

0.5

 

 

 

5.1

 

Total Current Liabilities

 

1,001.4

 

 

 

969.4

 

 

 

 

 

 

 

 

 

Long-term debt, net

 

2,535.7

 

 

 

2,615.3

 

Deferred income taxes

 

357.4

 

 

 

371.1

 

Long-term taxes payable

 

56.8

 

 

 

55.8

 

Other liabilities

 

61.7

 

 

 

68.1

 

Total Liabilities

 

4,013.0

 

 

 

4,079.7

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

Preferred stock

 

-

 

 

 

-

 

Common stock

 

0.9

 

 

 

0.9

 

Additional paid-in capital

 

1,145.1

 

 

 

1,153.2

 

Retained earnings

 

2,090.1

 

 

 

2,029.5

 

Accumulated other comprehensive loss

 

(345.8

)

 

 

(287.0

)

Total Stericycle, Inc.’s Equity

 

2,890.3

 

 

 

2,896.6

 

Noncontrolling interests

 

11.3

 

 

 

12.0

 

Total Equity

 

2,901.6

 

 

 

2,908.6

 

Total Liabilities and Equity

$

6,914.6

 

 

$

6,988.3

 

 

7

 


STERICYCLE, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(In millions)

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

2018

 

 

2017

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Net income (loss)

$

50.1

 

 

$

(85.6

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation

 

63.5

 

 

 

58.3

 

Intangible amortization

 

64.8

 

 

 

58.6

 

Stock-based compensation expense

 

12.8

 

 

 

11.9

 

Deferred income taxes

 

(13.6

)

 

 

(137.9

)

Asset impairment charges and loss on disposal of assets held for sale

 

18.9

 

 

 

13.2

 

Other, net

 

(1.5

)

 

 

0.5

 

Changes in operating assets and liabilities, net of the effect of acquisitions and divestitures:

 

 

 

 

 

 

 

Accounts receivable

 

(23.5

)

 

 

5.2

 

Prepaid expenses

 

(2.6

)

 

 

(20.2

)

Accounts payable

 

13.8

 

 

 

(1.7

)

Accrued liabilities

 

39.2

 

 

 

333.8

 

Other assets and liabilities

 

9.1

 

 

 

2.8

 

Net cash provided by operating activities

 

231.0

 

 

 

238.9

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

 

Capital expenditures

 

(64.0

)

 

 

(63.1

)

Payments for acquisitions, net of cash acquired

 

(29.0

)

 

 

(21.1

)

Proceeds from divestitures of businesses and sale of other assets

 

8.2

 

 

 

-

 

Other, net

 

1.4

 

 

 

0.4

 

Net cash used in investing activities

 

(83.4

)

 

 

(83.8

)

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

Repayments of long-term debt and other obligations

 

(29.8

)

 

 

(33.3

)

Repayments of foreign bank debt, net

 

(4.7

)

 

 

(9.1

)

Repayments of term loan, net

 

(23.8

)

 

 

(50.0

)

Repayments of senior credit facility, net

 

(59.3

)

 

 

(26.0

)

Proceeds from (repayments of) bank overdrafts, net

 

0.2

 

 

 

(1.8

)

Payments of capital lease obligations

 

(2.7

)

 

 

(1.8

)

Proceeds from issuance of common stock, net of shares withheld for taxes

 

8.8

 

 

 

4.4

 

Payments for repurchase of mandatory convertible preferred stock

 

(14.8

)

 

 

(22.1

)

Dividends paid on mandatory convertible preferred stock

 

(17.1

)

 

 

(18.6

)

Payments to noncontrolling interest

 

-

 

 

 

(0.7

)

Net cash used in financing activities

 

(143.2

)

 

 

(159.0

)

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(1.6

)

 

 

3.9

 

Net change in cash and cash equivalents

 

2.8

 

 

 

-

 

Cash and cash equivalents at beginning of period

 

42.2

 

 

 

44.2

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

$

45.0

 

 

$

44.2

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

 

 

 

 

 

Net issuances of obligations for acquisitions

$

21.7

 

 

$

15.2

 

Capital expenditures in accounts payable

$

5.5

 

 

$

4.0

 

Interest paid during the period, net of capitalized interest

$

42.5

 

 

$

42.4

 

Income taxes paid during the period, net of refunds

$

18.4

 

 

$

97.2

 

 

8

 


RECONCILIATION OF U.S. GAAP TO NON-GAAP FINANCIAL MEASURES (UNAUDITED)

Table 1 – A: RECONCILIATION OF REVENUES TO ADJUSTED REVENUES –

THREE MONTHS ENDED JUNE 30, 2018

 

 

Three Months Ended June 30,

 

 

 

In millions

 

 

Percentage Change (%)

 

 

 

2018

 

2017

 

Change

 

 

Organic

 

Acquisitions, Net of Divestitures

 

Foreign Exchange(a)

 

Change

 

Revenues by Service

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulated Waste and Compliance Services

 

$

483.8

 

$

512.2

 

$

(28.4

)

 

 

(4.0

%)

 

(1.4

%)

 

(0.1

%)

 

(5.5

%)

Secure Information Destruction Services

 

 

230.0

 

 

212.4

 

 

17.6

 

 

 

4.8

%

 

2.2

%

 

1.3

%

 

8.3

%

Communication and Related Services

 

 

81.3

 

 

102.9

 

 

(21.6

)

 

 

(21.7

%)

 

0.0

%

 

0.7

%

 

(21.0

%)

Manufacturing and Industrial Services

 

 

88.2

 

 

90.2

 

 

(2.0

)

 

 

3.8

%

 

(3.3

%)

 

(2.6

%)

 

(2.2

%)

Total Revenues, as Reported

 

 

883.3

 

 

917.7

 

 

(34.4

)

 

 

(3.2

%)

 

(0.6

%)

 

0.0

%

 

(3.7

%)

Less: Manufacturing and Industrial Services (b)

 

 

(88.2

)

 

(90.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenues, as Adjusted

 

$

795.1

 

$

827.5

 

$

(32.4

)

 

 

(4.0

%)

 

(0.3

%)

 

0.3

%

 

(3.9

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues by Geography

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic and Canada

 

$

711.7

 

$

737.7

 

$

(26.0

)

 

 

(4.7

%)

 

1.0

%

 

0.2

%

 

(3.5

%)

International

 

 

171.6

 

 

180.0

 

 

(8.4

)

 

 

2.9

%

 

(6.9

%)

 

(0.7

%)

 

(4.7

%)

Total Revenues

 

$

883.3

 

$

917.7

 

$

(34.4

)

 

 

(3.2

%)

 

(0.6

%)

 

0.0

%

 

(3.7

%)

 

Table 1 – B: RECONCILIATION OF REVENUES TO ADJUSTED REVENUES –

SIX MONTHS ENDED JUNE 30, 2018

 

 

Six Months Ended June 30,

 

 

 

In millions

 

 

Percentage Change (%)

 

 

 

2018

 

2017

 

Change

 

 

Organic

 

Acquisitions, Net of Divestitures

 

Foreign Exchange(a)

 

Change

 

Revenues by Service

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulated Waste and Compliance Services

 

$

981.2

 

$

1,023.4

 

$

(42.2

)

 

 

(3.3

%)

 

(1.5

%)

 

0.7

%

 

(4.1

%)

Secure Information Destruction Services

 

 

449.9

 

 

416.5

 

 

33.4

 

 

 

4.3

%

 

2.0

%

 

1.7

%

 

8.0

%

Communication and Related Services

 

 

173.2

 

 

196.4

 

 

(23.2

)

 

 

(12.3

%)

 

0.2

%

 

0.3

%

 

(11.8

%)

Manufacturing and Industrial Services

 

 

174.0

 

 

173.8

 

 

0.2

 

 

 

3.0

%

 

(1.3

%)

 

(1.6

%)

 

0.1

%

Total Revenues, as Reported

 

 

1,778.3

 

 

1,810.1

 

 

(31.8

)

 

 

(1.9

%)

 

(0.5

%)

 

0.7

%

 

(1.8

%)

Less: Manufacturing and Industrial Services(b)

 

 

(174.0

)

 

(173.8

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenues, as Adjusted

 

$

1,604.3

 

$

1,636.3

 

$

(32.0

)

 

 

(2.4

%)

 

(0.4

%)

 

0.9

%

 

(2.0

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues by Geography