Pearl Diver Credit Company Inc.

It includes domestic and it includes a whole host of markets across the entire world. So we're in a good spot.

I'm not sure, Tara, whether it was precocious or just luck, but the fact that that's not that long ago, five years ago, all of ROCC was going to China. And now virtually none of it is going to China. You know, whether it's luck or whether it was intentional, we'll take it.

Yeah. And, you know, our brokers, I can't say enough positive things about them. It's a true differentiator for WM.

We'll chalk it up to good foresight. Thank you. Appreciate it.

Thank you. Now, our next question coming from the line of James Shum with TD Cowan, Helene Smelfin.

Hey, thanks and good morning, everyone. Davina, so, you know, it's clear on the SG&A opportunity getting down to 15% after three years, but just is there anything structurally different about Stericycle such that you would not be able to get SG&A down to more of your corporate level of nine or 10% over, you know, maybe several years or if, you know, what's the ultimate destination here and the timing there?

Yeah, it's a great question. And, you know, the nine and a half percent call it for WM total company that we've talked about would definitely be the ultimate goal. Though we've also talked about if you think about Stericycle and the WM Healthcare Solutions business, more like one of our geographic areas where ultimately we should have a corporate back office for WM Healthcare Solutions just the same way that we have a back office that serves our Florida area. That means that the roadway should be to an even lower SG&A as a percentage of revenue. And for context, those businesses operate in sub 5% territory. Structurally, the one thing that is fundamentally going to be different for those two businesses is that they run on their own ERP system and they won't be integrated for some time for the foreseeable future into the WM ERP system. There will be two distinct systems. So that is the one structural difference that I think is important as we've evaluated all other elements. We really do think that total path to realizing an optimized cost structure should exist and we're working hard to get there.

Got it. Thank you. And then so just on the longer term outlook for the Stericycle or healthcare or really, you know, Stericycle businesses, I mean, their outlook was longer term revenue growth of three to five percent on the top line and EBITDA growth of 13 to 17 percent annually. You know, I know those were their targets, but they were in your slides. Like, are those something that that we should look at or how are you guys thinking about that?

We don't think we don't think that there's any anything wrong or different with those targets. Obviously, the first opportunity is that we are taking on is the reduction of the operating expenses in the SGA. So on the cost side, you're beginning to see that show up a lot sooner. We've talked about the fact that we're still framing the cross selling opportunities. We think those are going to be vast. I kind of framed for you a little bit of what the shared wallet looks like today. I think to look at it a little bit differently, if you look at the at the percentage of revenue from our collection and disposal business that comes from the same customer base, it's it's about five percent low single digits. So a lot of opportunity there. I think it's important also to remember that some of what has inhibited sort of the top line growth here has to do with the ERP implementation, what it should be facilitating better delivery of the service. It actually took them backwards. And so now we're kind of unraveling and solving foundationally for that. That's going to unlock a lot of opportunity. I'll give you one interesting example as we kind of develop the contract data mark for the WM Healthcare Solutions business, we've now added every single customer with over fifty thousand dollars in annual revenue. And we're seeing a vast opportunity over a thousand contracts, almost two hundred million dollars in revenue that has lagging PIs or overlooked PIs, for example.

Jim, one thing that I just want to clarify really quickly is in terms of confirming or clarifying what our long range outlooks both for top line and EBITDA growth of the business in the next three to five years, we plan to really outline that at the investor day. So at this point in time, we don't want to confirm or adopt the previous stericycle EBITDA growth. We will instead give you specifics about what we see that being in the next three to five years when we're together in June.

OK, great. Understood. Thank you very much.

Thank you. Now, next question coming from the line of Stephanie Moore with Jeffery. Yolana Smalpin.

Hi,

thank

you. Just one for me. I wanted to touch on this progress you're making on the labor force. I know it's been a multi-year initiative all in the backdrop of what's been a pretty challenging labor force or labor environment. So you talk a little bit about where labor turnover stands today, an update on your journey, kind of optimizing labor, I believe through attrition and other and implementation of technology. So kind of give us an update on the labor journey and then maybe at the same token, you know, what technology or any other technology you've rolled out to help you achieve your targets. Thanks.

Stephanie, this is John. A couple of questions there. One, specifically, to date, we've reduced about 2600 rolls or the need to refill 2600 rolls. And that's important because what we've done is done this, as Jim has said, I've said, Divina said, at different points, we've done this through natural attrition. And for 2025, we look to have the same repeat to the tune of about 940 rolls that we won't replace as we go through 2025. And the other thing that we're doing is we're doing a lot of the work that we're doing in the labor sector. And we're doing a lot of the work that we're doing in the labor sector. And we're doing a lot of the work that we're doing in the labor sector. And we're doing a lot of the work that we're doing in the labor sector. And we're doing a lot of the work that we're doing in the labor sector. And we're doing a lot of the work that we're doing in the labor sector. And we're doing a lot of the work that we're doing in the labor sector. And we're doing a lot of the work that we're doing in the labor sector. And we're doing a lot of the work that we're doing in the labor sector.

And we're doing a lot of the work that we're doing in the labor sector. And we're doing a lot of

the work that we're doing in the labor sector. Thank you. And I'm showing no further questions from the Q&A queue at this time. I'll now turn the call back over to Mr. Jim Fritz, resident and CO, for any closing remarks.

Okay. Thank you all for your questions this morning. The themes we really wanted to convey today, I think we did a good job of getting them across. We wanted to convey that we were consistent with our performance and have been for quite a long time. And that didn't change this quarter. And we're certainly on track for our guidance for the year. We were encouraged by what we saw in terms of volume in March and April after a couple of pretty tough months in January, February. Relatively little impact in 2025. Single digits, John, right? Very lovely. And then definitely on track for our sustainability investments and our WM healthcare solutions. So hopefully that all came across. Thank you all for joining us this morning. We look forward to seeing you in June, hopefully at our New York City Investor Day.

This concludes today's conference call. Thank you for your participation. And you may now disconnect.