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Section 1: 8-K (8-K)

srcl-8k_20181101.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): November 1, 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 November 1, 2018 Stericycle, Inc. issued a press release announcing its financial results for the quarter and nine months ended September 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 November 1, 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: November 1, 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_6.htm

EXHIBIT 99.1

FOR FURTHER INFORMATION CONTACT:

Investor Relations 847-607-2012

 

Stericycle, Inc. Reports Results

for the Third Quarter 2018

 

LAKE FOREST, Ill., November 1, 2018 - Stericycle, Inc. (Nasdaq: SRCL) today reported results for the third quarter 2018.

THIRD QUARTER HIGHLIGHTS COMPARED TO PRIOR YEAR:

 

 

Revenues of $854.9 million, a decrease of 3.2%, in line with guidance; strength in Secure Information Destruction and other core services was offset by the expected decline in the small quantity (“SQ”) medical waste business, foreign exchange, divestitures, and a further decline in Communication and Related Services (“CRS”)

 

 

Gross profit of $335.5 million, a decrease of 8.9%, inclusive of certain adjusting items; Adjusted gross profit of $343.3 million, a decrease of 6.7%, given the expected decline in the SQ medical waste business, foreign exchange, divestitures, and the further decline in CRS

 

 

Diluted earnings per share (“EPS”) of $0.20, a decrease of 51.2%, due in part to Business Transformation charges and other adjusting items; Adjusted diluted earnings per share (“Adjusted EPS”) of $1.03, a decrease of 6.4%, in line with guidance

 

 

The Business Transformation remains on track and on budget with the completion of the detailed design phase of the planned enterprise resource planning system (“ERP”); Portfolio Rationalization efforts are ongoing


1

 


THIRD QUARTER RESULTS

Revenues for the quarter ended September 30, 2018 were $854.9 million, a decrease of 3.2% from $882.8 million in the third quarter of last year.  Acquisitions contributed $7.7 million to revenues.  Divestitures reduced revenues by $10.4 million.  The effect of foreign exchange rates reduced revenues by $17.3 million.  Organic revenues decreased 0.9%, or decreased 1.8% when adjusted for Manufacturing and Industrial Services (“M&I”).  The decrease in organic revenues was driven by the expected decline in the SQ medical waste business combined with a further decline in CRS.  This decrease was partially offset by organic growth in Secure Information Destruction and M&I.  See Tables 1-A and 1-C.

“The fundamentals of our Regulated Waste and Compliance Services and Secure Information Destruction businesses remain strong, as both businesses exceeded our expectations,” said Charles A. Alutto, Chief Executive Officer.  “Key trends, including a large aging population and heightened focus on information security, continue to drive growth in our markets.  Additionally, our strong leadership position, the benefits of our Business Transformation and the expected efficiencies from our new ERP system will provide Stericycle with a robust long-term growth platform.”

Gross profit was $335.5 million, a decrease of 8.9% from $368.1 million in the third quarter of last year.  Gross profit as a percentage of revenues was 39.2% compared to 41.7% in the third quarter of last year, given the expected impact of SQ, the further reduction in CRS, the recording of a non-cash impairment charge for software, and site consolidation charges.  See Unaudited Condensed Consolidated Statements of Income (Loss) and Table 2-A.

Diluted EPS decreased 51.2% to $0.20 from $0.41 in the third quarter of last year, due to Business Transformation charges and other adjusting items.  Adjusted EPS decreased 6.4% to $1.03 from $1.10 in the third quarter of last year, in line with guidance.  See Unaudited Condensed Consolidated Statements of Income (Loss) and Table 2-A.

Cash flow from operations for the nine months ended September 30, 2018, inclusive of Business Transformation charges, was $89.9 million, down 77.1% from $392.0 million in the same period last

2

 


year, primarily as a result of the $295.0 million SQ customer class action settlement payment in the third quarter.  The Company’s net borrowings were $53.3 million for the nine months ended September 30, 2018. Net borrowings and cash from operations were primarily allocated as follows: $96.9 million for capital expenditures; $39.6 million for acquisitions; $25.5 million in dividends to preferred shareholders and $17.2 million for preferred share repurchases.

BUSINESS TRANSFORMATION

During the third quarter, Stericycle continued to execute its Business Transformation to improve long-term operational and financial performance.  Stericycle has realized Adjusted EBITDA benefits from Business Transformation initiatives of $39.8 million year-to-date.  For the full-year, the Company remains on track to achieve targeted 2018 Adjusted EBITDA benefits of $60-$65 million. Completed initiatives are expected to contribute $57.1 million towards our goal with fourth quarter initiatives expected to deliver an incremental $3-$8 million in Business Transformation benefits.

In the third quarter, the Company recorded $21.0 million in Business Transformation charges, including a $6.8 million non-cash impairment charge for software.  Year-to-date, the Company has recorded $64.9 million in Business Transformation charges against a budget of $95-$105 million for 2018.  Capital expenditure payments for Business Transformation totaled $4.5 million in the quarter and $8.2 million year-to-date.

During the quarter, Stericycle completed the detailed design phase of its planned ERP system and has moved into the build phase.  The ERP system remains on budget and on track for implementation in the U.S. and Canada beginning in 2020 and internationally in 2021.

As part of the Portfolio Rationalization strategy within Business Transformation, the Company completed the previously announced divestiture of the U.S. non-core clean room services business. The Company continues to pursue strategic alternatives for the non-core CRS business and is evaluating other non-core assets and geographies.

3

 


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

$3,440 - $3,520

 

Regulated Waste and Compliance Services

$1,910 - $1,930

 

Secure Information Destruction Services

$900 - $920

 

Communication and Related Services

$310 - $330

 

Manufacturing and Industrial Services

$320 - $340

 

 

 

 

 

Income from operations

$234 - $249

 

Depreciation

$127 - $132

 

Intangible amortization

$125 - $130

 

Adjusted EBITDA (a) (b)

$736 - $756

 

Interest expense

$105 - $108

 

Tax rate

30.0% - 31.0%

 

Adjusted tax rate

25.5% - 26.0%

 

Diluted earnings per share

$0.84 - $1.00

 

Adjusted diluted earnings per share (b)

$4.31 - $4.41

 

Shares outstanding

 

90.5

 

 

 

 

 

Net cash from operating activities

$160 - $195

 

Capital expenditures

$145 - $160

 

Free cash flow (b)

$0 - $50

 

(a) Adjusted Earnings Before Interest, Tax, Depreciation and Amortization (Adjusted EBITDA) is Income from operations excluding certain adjusting 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 using foreign exchange rates as of the end of September 2018.  The guidance also includes acquisitions, divestitures and charges for certain litigation, settlements and regulatory compliance matters through the most recent period presented.  This guidance does not include amounts related to future acquisitions, divestitures, certain litigation, settlements and regulatory compliance matters, or the impact of highly inflationary accounting on operations in Argentina as the Company is not able to forecast these items without unreasonable effort.  See Table 3.

4

 


CONFERENCE CALL INFORMATION

Conference call to be held November 1, 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 8096504.  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).  When we use words such as "believes," "expects," "anticipates," "estimates" or similar expressions, we are making forward-looking statements.  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 collected from customers, the ability to execute on Business Transformation initiatives and achieve the anticipated benefits and cost savings, charges related to the portfolio rationalization strategy or the failure of this strategy to achieve the desired results, 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 desired results, the obligations to service substantial indebtedness and comply with the covenants and restrictions contained in private placement notes and credit agreements, 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, changes in the demand and price for recycled paper, failure to maintain an effective system of internal control over financial reporting, disruptions in or attacks on information technology systems, as well as other factors described in filings with the U.S. Securities and Exchange Commission, including the 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 September 30,

 

 

Nine Months Ended September 30,

 

 

2018

 

2017

 

% Change

 

 

2018

 

2017

 

% Change

 

Revenues

$

854.9

 

$

882.8

 

 

(3.2

%)

 

$

2,633.2

 

$

2,692.9

 

 

(2.2

%)

Cost of revenues

 

519.4

 

 

514.7

 

 

0.9

%

 

 

1,585.9

 

 

1,574.4

 

 

0.7

%

Gross profit

 

335.5

 

 

368.1

 

 

(8.9

%)

 

 

1,047.3

 

 

1,118.5

 

 

(6.4

%)

Selling, general and administrative expenses

 

267.2

 

 

274.5

 

 

(2.7

%)

 

 

862.5

 

 

1,102.7

 

 

(21.8

%)

Income from operations

 

68.3

 

 

93.6

 

 

(27.0

%)

 

 

184.8

 

 

15.8

 

nm

 

Interest expense, net

 

(27.7

)

 

(24.5

)

 

13.1

%

 

 

(77.3

)

 

(71.5

)

 

8.1

%

Other expense, net

 

(6.2

)

 

(2.3

)

 

169.6

%

 

 

(6.8

)

 

(5.5

)

 

23.6

%

Income (loss) before income taxes

 

34.4

 

 

66.8

 

 

(48.5

%)

 

 

100.7

 

 

(61.2

)

 

(264.5

%)

Income tax (expense) benefit

 

(10.9

)

 

(27.8

)

 

(60.8

%)

 

 

(27.1

)

 

14.6

 

 

(285.6

%)

Net income (loss)

 

23.5

 

 

39.0

 

 

(39.7

%)

 

 

73.6

 

 

(46.6

)

 

(257.9

%)

Net loss (income) attributable to noncontrolling interests

 

-

 

 

-

 

 

-

 

 

 

0.1

 

 

(0.2

)

 

(150.0

%)

Net income (loss) attributable to Stericycle, Inc.

 

23.5

 

 

39.0

 

 

(39.7

%)

 

 

73.7

 

 

(46.8

)

 

(257.5

%)

Mandatory convertible preferred stock dividend

 

(8.4

)

 

(8.9

)

 

(5.6

%)

 

 

(25.5

)

 

(27.5

)

 

(7.3

%)

Gain on repurchase of preferred stock

 

2.4

 

 

5.4

 

 

(55.6

%)

 

 

16.9

 

 

14.4

 

 

17.4

%

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

$

17.5

 

$

35.5

 

 

(50.7

%)

 

$

65.1

 

$

(59.9

)

 

(208.7

%)

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.20

 

$

0.42

 

 

(52.4

%)

 

$

0.76

 

$

(0.70

)

 

(208.6

%)

Diluted

$

0.20

 

$

0.41

 

 

(51.2

%)

 

$

0.76

 

$

(0.70

)

 

(208.6

%)

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

86.7

 

 

85.3

 

 

 

 

 

 

85.9

 

 

85.3

 

 

 

 

Diluted

 

86.8

 

 

85.6

 

 

 

 

 

 

86.1

 

 

85.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

39.2

%

 

41.7

%

 

 

 

 

 

39.8

%

 

41.5

%

 

 

 

Selling, general and administrative expenses

 

31.3

%

 

31.1

%

 

 

 

 

 

32.8

%

 

40.9

%

 

 

 

Income from operations

 

8.0

%

 

10.6

%

 

 

 

 

 

7.0

%

 

0.6

%

 

 

 

Effective tax rate

 

31.7

%

 

41.6

%

 

 

 

 

 

26.9

%

 

23.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted gross profit

 

40.2

%

 

41.7

%

 

 

 

 

 

40.1

%

 

41.5

%

 

 

 

Adjusted selling, general and administrative expenses

 

22.4

%

 

21.8

%

 

 

 

 

 

22.3

%

 

21.9

%

 

 

 

Adjusted income from operations

 

17.8

%

 

19.9

%

 

 

 

 

 

17.8

%

 

19.7

%

 

 

 

Adjusted EBITDA

 

21.5

%

 

23.4

%

 

 

 

 

 

21.4

%

 

22.9

%

 

 

 

Adjusted effective tax rate

 

26.0

%

 

36.9

%

 

 

 

 

 

25.4

%

 

36.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Adjusted and Financial Measures (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted gross profit

$

343.3

 

$

368.1

 

 

(6.7

%)

 

$

1,055.1

 

$

1,118.5

 

 

(5.7

%)

Adjusted selling, general and administrative expenses

$

191.5

 

$

192.3

 

 

(0.4

%)

 

$

586.6

 

$

589.2

 

 

(0.4

%)

Adjusted income from operations

$

151.8

 

$

175.8

 

 

(13.7

%)

 

$

468.5

 

$

529.3

 

 

(11.5

%)

Adjusted EBITDA

$

183.9

 

$

206.2

 

 

(10.8

%)

 

$

564.1

 

$

618.0

 

 

(8.7

%)

Adjusted net income attributable to common shareholders

$

93.5

 

$

99.5

 

 

(6.0

%)

 

$

309.7

 

$

302.5

 

 

2.4

%

Adjusted diluted earnings per share

$

1.03

 

$

1.10

 

 

(6.4

%)

 

$

3.42

 

$

3.33

 

 

2.7

%

Diluted shares outstanding, under if-converted method

 

90.7

 

 

90.7

 

 

 

 

 

90.6

 

 

90.8

 

 

(0.2

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation - cost of revenues

$

24.8

 

$

23.7

 

 

4.6

%

 

$

75.0

 

$

69.3

 

 

8.2

%

Depreciation - selling, general and administrative expenses

$

7.3

 

$

6.7

 

 

9.0

%

 

$

20.6

 

$

19.4

 

 

6.2

%

Intangible amortization

$

31.8

 

$

29.9

 

 

6.4

%

 

$

96.6

 

$

88.5

 

 

9.2

%

 

(1) Adjusted financial measures are Non-GAAP measures and exclude adjusting 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)

 

 

 

 

 

 

 

 

 

 

September 30, 2018

 

 

December 31, 2017

 

ASSETS

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

52.0

 

 

$

42.2

 

Accounts receivable, net

 

607.4

 

 

 

624.1

 

Prepaid expenses

 

94.5

 

 

 

80.0

 

Other current assets

 

49.2

 

 

 

46.3

 

Assets held for sale

 

-

 

 

 

20.8

 

Total Current Assets

 

803.1

 

 

 

813.4

 

Property, plant and equipment, net

 

755.1

 

 

 

741.0

 

Goodwill

 

3,613.8

 

 

 

3,604.0

 

Intangible assets, net

 

1,670.6

 

 

 

1,791.5

 

Other assets

 

60.3

 

 

 

38.4

 

Total Assets

$

6,902.9

 

 

$

6,988.3

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

Current portion of long-term debt

$

109.3

 

 

$

119.5

 

Bank overdrafts

 

7.9

 

 

 

7.0

 

Accounts payable

 

222.8

 

 

 

195.2

 

Accrued liabilities

 

358.5

 

 

 

588.1

 

Other current liabilities

 

50.8

 

 

 

54.5

 

Liabilities held for sale

 

-

 

 

 

5.1

 

Total Current Liabilities

 

749.3

 

 

 

969.4

 

 

 

 

 

 

 

 

 

Long-term debt, net

 

2,720.8

 

 

 

2,615.3

 

Deferred income taxes

 

380.6

 

 

 

371.1

 

Long-term taxes payable

 

54.4

 

 

 

55.8

 

Other liabilities

 

65.2

 

 

 

68.1

 

Total Liabilities

 

3,970.3

 

 

 

4,079.7

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

Preferred stock

 

-

 

 

 

-

 

Common stock

 

0.9

 

 

 

0.9

 

Additional paid-in capital

 

1,155.5

 

 

 

1,153.2

 

Retained earnings

 

2,107.6

 

 

 

2,029.5

 

Accumulated other comprehensive loss

 

(342.5

)

 

 

(287.0

)

Total Stericycle, Inc.’s Equity

 

2,921.5

 

 

 

2,896.6

 

Noncontrolling interests

 

11.1

 

 

 

12.0

 

Total Equity

 

2,932.6

 

 

 

2,908.6

 

Total Liabilities and Equity

$

6,902.9

 

 

$

6,988.3

 

 

7

 


STERICYCLE, INC.

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(In millions)

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

2018

 

 

2017

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Net income (loss)

$

73.6

 

 

$

(46.6

)

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

 

 

 

 

 

 

 

Depreciation

 

95.6

 

 

 

88.7

 

Intangible amortization

 

96.6

 

 

 

88.5

 

Stock-based compensation expense

 

19.5

 

 

 

17.3

 

Deferred income taxes

 

9.5

 

 

 

(156.2

)

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

 

26.8

 

 

 

28.1

 

Other, net

 

(2.9

)

 

 

1.2

 

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

 

 

 

 

 

 

 

Accounts receivable

 

(1.8

)

 

 

17.1

 

Prepaid expenses

 

(22.5

)

 

 

(6.7

)

Accounts payable

 

17.8

 

 

 

(3.3

)

Accrued liabilities

 

(226.2

)

 

 

364.1

 

Other assets and liabilities

 

3.9

 

 

 

(0.2

)

Net cash from operating activities

 

89.9

 

 

 

392.0

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

 

Capital expenditures

 

(96.9

)

 

 

(91.7

)

Payments for acquisitions, net of cash acquired

 

(39.6

)

 

 

(23.8

)

Proceeds from divestitures of businesses

 

25.2

 

 

 

1.2

 

Other, net

 

1.9

 

 

 

0.6

 

Net cash from investing activities

 

(109.4

)

 

 

(113.7

)

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

Repayments of long-term debt and other obligations

 

(44.9

)

 

 

(46.4

)

Proceeds from foreign bank debt

 

8.7

 

 

 

2.5

 

Repayments of foreign bank debt

 

(14.9

)

 

 

(19.0

)

Repayments of term loan

 

(35.6

)

 

 

(100.0

)

Proceeds from senior credit facility

 

1,334.2

 

 

 

1,269.3

 

Repayments of senior credit facility

 

(1,189.1

)

 

 

(1,336.5

)

Proceeds from bank overdrafts, net

 

0.9

 

 

 

18.2

 

Payments of capital lease obligations

 

(5.1

)

 

 

(2.7

)

Payments of deferred financing costs

 

-

 

 

 

(2.7

)

Proceeds from issuance of common stock, net

 

20.1

 

 

 

5.0

 

Payments for repurchase of mandatory convertible preferred stock

 

(17.2

)

 

 

(30.8

)

Dividends paid on mandatory convertible preferred stock

 

(25.5

)

 

 

(27.5

)

Payments to noncontrolling interest

 

(0.2

)

 

 

(0.7

)

Net cash from financing activities

 

31.4

 

 

 

(271.3

)

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(2.1

)

 

 

1.0

 

Net change in cash and cash equivalents

 

9.8

 

 

 

8.0

 

Cash and cash equivalents at beginning of period

 

42.2

 

 

 

44.2

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

$

52.0

 

 

$

52.2

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

 

 

 

 

 

Net issuances of obligations for acquisitions

$

27.7

 

 

$

7.8

 

Capital expenditures in accounts payable

$

18.2

 

 

$

4.5

 

Interest paid during the period, net of capitalized interest

$

62.2

 

 

$

58.9

 

Income taxes paid during the period, net of refunds

$

21.5

 

 

$

123.2

 

8

 


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

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

THREE MONTHS ENDED SEPTEMBER 30, 2018

 

 

Three Months Ended September 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

 

$

476.6

 

$

502.5

 

$

(25.9

)

 

(3.0

%)

 

0.0

%

 

(2.2

%)

 

(5.2

%)

Secure Information Destruction Services

 

 

227.6

 

 

204.7

 

 

22.9

 

 

9.1

%

 

2.6

%

 

(0.5

%)

 

11.2

%

Communication and Related Services

 

 

71.6

 

 

89.0

 

 

(17.4

)

 

(19.3

%)

 

 

 

(0.3

%)

 

(19.6

%)

Manufacturing and Industrial Services

 

 

79.1

 

 

86.6

 

 

(7.5

)

 

6.8

%

 

(9.6

%)

 

(5.9

%)

 

(8.7

%)

Total Revenues, as Reported

 

 

854.9

 

 

882.8

 

 

(27.9

)

 

(0.9

%)

 

(0.3

%)

 

(2.0

%)

 

(3.2

%)

Less: Manufacturing and Industrial Services (b)

 

 

(79.1

)

 

(86.6

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenues, as Adjusted

 

$

775.8

 

$

796.2

 

$

(20.4

)

 

(1.8

%)

 

0.7

%

 

(1.5

%)

 

(2.6

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues by Geography

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic and Canada

 

$

703.8

 

$

708.2

 

$

(4.4

)

 

(1.3

%)

 

0.9

%

 

(0.2

%)

 

(0.6

%)

International

 

 

151.1

 

 

174.6

 

 

(23.5

)

 

0.8

%

 

(5.3

%)

 

(9.0

%)

 

(13.5

%)

Total Revenues

 

$

854.9

 

$

882.8

 

$

(27.9

)

 

(0.9

%)

 

(0.3

%)

 

(2.0

%)

 

(3.2

%)

 

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

NINE MONTHS ENDED SEPTEMBER 30, 2018

 

 

Nine Months Ended September 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

 

$

1,457.8

 

$

1,525.9

 

$

(68.1

)

 

(3.2

%)

 

(1.0

%)

 

(0.3

%)

 

(4.5

%)

Secure Information Destruction Services

 

 

677.5

 

 

621.2

 

 

56.3

 

 

5.9

%

 

2.2

%

 

1.0

%

 

9.1

%

Communication and Related Services

 

 

244.8

 

 

285.4

 

 

(40.6

)

 

(14.5

%)

 

0.2

%

 

0.1

%

 

(14.2

%)

Manufacturing and Industrial Services

 

 

253.1

 

 

260.4

 

 

(7.3

)

 

4.3

%

 

(4.0

%)

 

(3.1

%)

 

(2.8

%)

Total Revenues, as Reported

 

 

2,633.2

 

 

2,692.9

 

 

(59.7

)

 

(1.6

%)

 

(0.4

%)

 

(0.2

%)

 

(2.2

%)

Less: Manufacturing and Industrial Services(b)

 

 

(253.1

)

 

(260.4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenues, as Adjusted

 

$

2,380.1

 

$

2,432.5

 

$

(52.4

)

 

(2.2

%)

 

(0.1

%)

 

0.1

%

 

(2.2

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues by Geography

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic and Canada

 

$

2,130.2

 

$

2,156.7

 

$

(26.5

)

 

(2.2

%)

 

0.9

%

 

0.1

%

 

(1.2

%)

International

 

 

503.0

 

 

536.2

 

 

(33.2

)

 

0.8

%

 

(5.7

%)

 

(1.3

%)

 

(6.2

%)

Total Revenues

 

$

2,633.2

 

$

2,692.9

 

$

(59.7

)

 

(1.6

%)

 

(0.4

%)

 

(0.2

%)

 

(2.2

%)

9

 


Table 1 – C: DISAGGREGATED REVENUES CHANGE

(In millions)

 

 

Three Months Ended September 30, 2018