Stericycle, Inc. SRCL reported mixed fourth-quarter 2020 results, with earnings missing the Zacks Consensus Estimate and revenues surpassing the same. In line with discouraging bottom-line results, shares of the company have plunged marginally since the earnings release.
Adjusted earnings (excluding 6 cents from non-recurring items) per share of 59 cents missed the Zacks Consensus Estimate by 7.8% and declined 18.1% year over year. Earnings fell due to an unfavorable impact of 5 cents from divestitures and foreign-exchange rates, 6 cents from lower income from operations and 8 cents from higher adjusted tax rate. These were partially offset by a benefit of 6 cents from lower interest expenses.
However, revenues of $655.9 million surpassed the consensus mark by 1.5% and declined 18% year over year. The downfall was due to divestitures that hurt revenues by $133.7 million and lower Secure Information Destruction that impacted revenues by $30.9 million. Revenues dropped 1.8% on an organic basis due to the COVID-19 pandemic.
Notably, Stericycle’s shares have inched up 1% in the past year against 17.5% decline of the
industry it belongs to. Revenues by Service
Regulated Waste and Compliance Services revenues fell 19.5% year over year on a reported basis but increased 3.2% on an organic basis to $439.8 million. The segment contributed 67.1% to total revenues.
Secure Information Destruction revenues declined 14% year over year on a reported basis and 14.2% organically to $187.4 million. The segment contributed 28.6% to total revenues.
Communication and Related Services revenues fell 20.1% year over year on a reported basis and 1.7% organically to $28.7 million. The segment contributed 4.4% to total revenues.
Revenues by Geography
Revenues from North America were $526.2 million, down 20.7% year over year on a reported basis and 3% organically. The region contributed 80.2% to total revenues.
International revenues of $129.7 million fell 4.8% year over year on a reported basis and increased 4.3% organically. The region contributed 19.7% to total revenues.
Adjusted gross profit in the reported quarter amounted to $269.5 million compared with $285.2 million in the year-ago quarter. Adjusted gross profit margin was 41%, up from 35.7% in the prior-year quarter.
Adjusted operating income was $108.6 million compared with $122.6 million in the year-ago quarter. Adjusted operating income margin was 16.6%, up from 15.3% in the prior-year quarter.
Adjusted EBITDA was $133.6 million compared with $152.8 million in the year-ago quarter. Adjusted EBITDA margin was 20.4%, up from 19.1% in the prior-year quarter.
Balance Sheet & Cash Flow
Stericycle exited the quarter with cash and cash equivalents of $53.3 million compared with $59.5 million at the end of the prior quarter. Long-term debt was $1.69 billion compared with $1.88 billion at the end of the prior quarter.
The company generated $165 million of net cash from operating activities and capex was $24.8 million in the quarter. Free cash flow of $140.2 million was generated in the quarter.
Currently, Stericycle carries a Zacks Rank #4 (Sell). You can see
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