Stericycle announces Q4, full-year 2020 earnings

Stericycle Inc., Bannockburn, Illinois, reported results for the fourth quarter and the full-year period of 2020 on Feb. 25.

Revenues for the fourth quarter were $655.9 million, a decrease of 18.0 percent compared to $799.9 million in the fourth quarter of the prior year period due to the impact of divestitures and the COVID-19 pandemic-related business disruption. Organic revenues declined 1.8 percent in the quarter when excluding the impact of divestitures, foreign exchange rates and changes in sorted office paper (SOP) pricing, primarily reflecting the impact of the pandemic-related business disruption. Income from operations was $93.2 million, compared to a loss from operations of $198.5 million in the fourth quarter of the prior year period. Net income was $48.5 million, or $0.53 diluted earnings per share, compared to a net loss of $219.3 million, or $2.41 diluted loss per share, in the fourth quarter of 2019. Adjusted income from operations was $108.6 million, compared to $122.6 million in the fourth quarter of 2019. Adjusted diluted earnings per share was $0.59, compared to $0.72 in the fourth quarter of 2019. Cash flow from operations for 2020 was $530.2 million, compared to $248 million in 2019. Free cash flow for 2020 was $410.7 million, compared to $53.8 million in 2019. Adjusted EBITDA was $133.6 million in the fourth quarter compared to 152.8 million in the prior year period. Adjusted EBITDA was $495.2 million in 2020 compared to $577.8 million in 2019.

Key earnings highlights

• Cash flow from operations increased to $530.2 million and free cash flow increased to $410.7 million for 2020, compared to $248 million and $53.8 million, respectively, in 2019.
• Regulated Waste and Compliance Services (RWCS) organic revenues grew 3.2 percent in the fourth quarter compared to the fourth quarter of 2019. Excluding the impact on maritime waste services from the pandemic, RWCS organic revenues grew 4.9 percent.
• Gross profit margin as a percent of revenues was 41.1 percent, an increase of 620 basis points in the fourth quarter compared to the fourth quarter of 2019, primarily due to divestitures of lower margin businesses and quality of revenue and operating efficiency initiatives.
• The divestiture of the global product recall business, Expert Solutions, was completed in the fourth quarter for proceeds of $78 million, the eighth divestiture since January 2019 as the company continued to rationalize its portfolio.
• Net debt was reduced by $207.2 million in the fourth quarter as a result of net proceeds from portfolio rationalization efforts and cash from operations, decreasing total net debt to approximately $1.74 billion. Since the beginning of 2020, the company says it has paid down net debt of $900 million, reducing the credit agreement defined debt leverage ratio to 3.54 times as of Dec. 31, 2020, compared to 4.45 times as of Dec. 31, 2019.

“Stericycle delivered a strong fourth quarter performance and continued to build on the momentum of our key business priorities in uncertain times,” Stericycle CEO Cindy Miller says. “We benefited from expanding margins through our quality of revenue initiatives, operating efficiency initiatives and portfolio rationalization, along with significant operating cash flow generation and disciplined capital expenditure deployment. Also, we achieved an effective internal control environment as of Dec. 31, 2020, having successfully remediated material weaknesses.”