Stericycle, Inc.

Good morning and welcome to the Stericycle, Inc. Second Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw from the question queue, please press star then two. We ask that you limit yourself to one question and one follow-up. Please note this event is being recorded. I would now like to turn the conference over to Andrew Ellis, Vice President, Investor Relations. Please go ahead.

Good morning, and thank you for joining StairCycle's 2021 Second Quarter Earnings Call. On the call today will be Cindy Miller, our Chief Executive Officer, and Janet Zelenka, our Chief Financial Officer and Chief Information Officer. The discussion today includes forward-looking statements that involve risks and uncertainties. When we use words such as believes, expects, anticipates, estimates, may, plan, will, goal, or similar expressions, we are making forward-looking statements. Forward-looking statements are perspective in nature and are not based on historical facts, but rather on current expectations and projections of our management about future events and are therefore subject to risks and uncertainties. Our actual results could differ significantly from those described in such forward-looking statements. Factors that could cause our actual results to differ are discussed in a safe harbor statement in our earnings press release and in greater detail within the risk factors in our filings with the U.S. Securities and Exchange Commission. Our past financial performance should not be considered a reliable indicator of our future performance, and investors should not use historical results to anticipate future results or trends. We disclaim any obligation to update or revise any forward-looking statements other than in accordance with legal and regulatory obligations. On the call, we will discuss non-GAAP financial measures. For additional information and reconciliation to the most applicable U.S. GAAP measures, please refer to the schedules in our earnings press release, which can be found on Stericycle's Investor Relations website at investors.stericycle.com. The prepared comments for today's call correspond to an earnings presentation, which is also available at Stericycle's Investor Relations website. Throughout the call, we may reference specific slides from the presentation. This call is being recorded and a replay will be available approximately one hour after the end of the conference call today until September 3rd, 2021. To access a replay of the call, dial 877-344-7529 and enter the replay access code 6722399. A replay of the webcast will also be available on StairCycle's Investor Relations website. Time-sensitive information provided during today's call, which is occurring on August 6, 2021, may no longer be accurate at the time of a replay. Any redistribution, retransmission, or rebroadcast of this call in any form without the express written consent of StairCycle is prohibited. I'll now turn the call over to Cindy Miller.

Thank you, Andrew. Good morning, everyone, and thank you for joining our second quarter earnings call. I'd like to thank our team members for their continued dedication to protecting what matters. Because of our team members' efforts and their focus on serving our customers, we delivered strong and continued revenue growth in regulated waste and compliance services and secure information destruction. We also delivered solid cash flow driven primarily by operational performance. I'm also pleased to announce that we've achieved a significant milestone in our transformation journey. At the beginning of August, we launched our North American ERP for financial and procurement processes and began the phase deployment of the ERP for secure information destruction. On today's call, I will start by providing an update on a few of our five key business priorities. As a reminder, they remain quality of revenue, operational efficiency, modernization and innovation, ERP implementation, debt reduction and debt leverage improvement, and portfolio optimization. I'll then turn the call over to Janet, who will discuss our second quarter financial results. Following our remarks, we will take your questions. We delivered a strong second quarter with total revenue growth of 12.5%, which continues a trend of four consecutive quarters of total revenue growth. In the quarter, we had organic revenue growth of 14.4%, primarily driven by our quality of revenue initiatives and ongoing recovery from the pandemic. Regulated waste and compliance services had organic revenue growth of 7.6%, comprised of 6.4% growth in North America and 12.2% growth in international. Secure information destruction had organic revenue growth of 34.2%, comprised of 30.1% growth in North America and 72.2% growth in international. As a reminder, secure information destruction was significantly impacted by the pandemic in the second quarter of 2020, experiencing significant reductions in customer stops. Since then, this business has continued to recover as we increase customer stops. Like many organizations, we too have been impacted by labor shortages, particularly driver and operational team members. To date, we are addressing our internal needs through three main areas. One, recruitment. Two, market competitive compensation and benefits. And three, employee engagement and retention efforts. In the first half of 2021, we expanded our internal recruiting organization to target, attract, and hire new team members. Over the past two years, we've been focused on ensuring that all of our team members are competitively compensated for the value they provide Stericycle through ongoing market-based wage adjustments. I will now turn to our North American ERP deployment. At the beginning of August, we went live in North America with ERP capabilities for financial and procurement processes and began our phased commercial and operational deployment for secure information destruction programs. This ERP will combine our core businesses onto one state-of-the-art North American IT platform that will provide us with powerful digital data and operational capabilities to fuel our continuing transformation. With the launch in August, we've established a streamlined and modernized foundation for finance, procurement, and analytics capabilities, including implementation of enhanced budgeting, and forecasting capabilities. We also began deploying commercial, operational, and order to cash technology for secure information destruction that we will leverage to drive our quality of revenue and operational modernization and innovation key business priorities. For our deployment, we have a customer first business continuity mindset. The commercial and operational components are being launched in a phased approach which allows us to minimize customer impacts while continually improving the systems. To further minimize risk from customer or system disruptions, team members that normally support operational efficiency, modernization, and innovation initiatives are now assisting with the ERP launch, and we added a temporary hypercare team comprised of several hundred team members. We believe these measures support our customers' transition to the new Stericycle platform. And I couldn't be more proud of all of our team members' efforts in achieving this important milestone in our transformation journey. We continue to execute on our fourth priority by reducing our debt and debt leverage ratio by generating $149.8 million in operating cash flow through the first half of 2021 and further paying down debt. We lowered our debt leverage ratio to 3.06 times compared to 3.89 times at the end of the second quarter of 2020. This significant improvement continues our progress towards achieving our long-term debt leverage goal below three times. This week, we signed an agreement to divest our operations in Japan for approximately $10 million, which will be reflected in our third quarter results. I'm proud of the progress the team continues to make and executing on our portfolio optimization initiative, as this marks our ninth divestiture since 2019. Proceeds from this divestiture will be applied toward debt reduction. I'll now turn the call over to Janet to review our financial results.