Yahoo Finance Stericycle Inc (SRCL) (Q1 2024) Earnings Call Transcript Highlights: Mixed Financial ...
Adjusted Earnings Per Share (EPS): $0.57, up $0.08 from Q1 2023.
Adjusted EBITDA: $116.2 million, increased by $4.9 million from Q1 2023.
Revenue: $664.9 million, down from $684.3 million in Q1 2023.
Net Income: $13.1 million, up from $11.2 million in Q1 2023.
Free Cash Flow: Outflow of $97.6 million, compared to an inflow of $13.1 million in Q1 2023.
Regulated Waste and Compliance Services Revenue: $447.8 million, slightly down from $451.3 million in Q1 2023.
Secure Information Destruction Revenue: $217.1 million, down from $233 million in Q1 2023.
Capital Expenditures: $43.1 million, up from $36.4 million in Q1 2023.
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: On the full year EBITDA guidance, Cindy, you said you completed the headcount reduction towards the $40 million to $45 million of in-year cost savings you targeted. The other cost actions you need to take to get the rest of the way to that guidance, the other $15 million to $20 million, give or take, are those the facility and transportation enhancements? I think you mentioned some routing and fleet reduction. Are those part of that $40 million to $45 million or separate? A: (Cindy J. Miller - President, CEO & Director) Yes, the savings include last year's and this year's reductions in force. We are focusing on route rebalancing, productivity gains from upgraded facilities, and careful hiring and attrition management. These combined actions contribute to our confidence in achieving the planned cost savings.
Q: On the free cash flow, Janet, I know you mentioned some impact from accounts receivable in the ERP. Can you just unpack that a little bit more for us? What's happening there? And then you said it looks like it's starting to stabilize as of April. Are we at the point now where we should start to see that begin to reverse? A: (Janet H. Zelenka - Executive VP, CFO & Chief Information Officer) The cash flow issues were mainly due to delays in billing and collections from the ERP launch, affecting our largest customers. We're seeing improvements and expect positive cash flow as the year progresses, aligning with our guidance.
Q: Could you outline some of the business problems or processes that you've been able to either solve or improve with the new ERP system so far? And what key projects are next on the timeline? A: (Cindy J. Miller - President, CEO & Director) The ERP has enhanced routing and operational efficiency, reducing fleet size and improving service flexibility. It also supports new offerings like ProtectPLUS by enabling subscription-based billing and service customization.
Q: ProtectPLUS sounds very interesting as a new offering. Will the collections on the subscription base be at the top of the month as opposed to after the fact, which I believe is the way you do Steri-Safe? A: (Janet H. Zelenka - Executive VP, CFO & Chief Information Officer) Yes, ProtectPLUS will also bill in advance and aims for cash flow improvements by accepting payments via credit card or ACH, enhancing financial stability.
Q: How is the pricing environment across both major segments, and are you able to cover more than inflationary pressure? A: (Cindy J. Miller - President, CEO & Director) The pricing environment is stable, and we are effectively managing adjustments to cover inflationary pressures without significant pushback from customers.
Q: For the U.S. regulated waste business, can you stratify the growth trends you're seeing between the large and small quantity generators, as well as what competitive behavior looks like on price from some of the smaller players in the market? A: (Cindy J. Miller - President, CEO & Director) Growth in the large quantity generator segment, particularly hospitals, is encouraging. We are seeing a recovery in volumes and are optimistic about growth opportunities, despite mixed recovery across different regions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
