Stericycle Inc (SRCL) Reports Q3 2023 Earnings: Net Income Drops to $2.0 Million
Stericycle Inc (NASDAQ:SRCL) reported Q3 2023 revenues of $653.5 million, a decrease of 5.3% compared to $690.3 million in Q3 2022.
Net income was $2.0 million, or $0.02 diluted earnings per share, compared to $28.0 million, or $0.30 in Q3 2022.
Cash flow from operations for the nine months ended September 30, 2023 was $193.3 million compared to $43.1 million in the same period of 2022.
Free cash flow was an inflow of $91.1 million for the nine months ended September 30, 2023, compared to an outflow of $62.9 million in the same period of 2022.
Stericycle Inc (NASDAQ:SRCL) released its Q3 2023 earnings report on November 2, 2023. The company reported a decrease in revenues and net income compared to the same period last year. Despite the challenges, the company successfully deployed the ERP to U.S. Regulated Waste and Compliance Services and improved its free cash flow.
Financial Performance
Revenues for the third quarter were $653.5 million, a decrease of 5.3% compared to $690.3 million in the third quarter of 2022. Income from operations was $24.2 million compared to $50.6 million in the third quarter of 2022. Net income was $2.0 million, or $0.02 diluted earnings per share, compared to $28.0 million, or $0.30 in the third quarter of 2022.
Key Business Highlights
Stericycle successfully deployed the ERP in the U.S. Regulated Waste and Compliance Services (RWCS) business in the third quarter. The company also grew RWCS organic revenues by 4.1% during a period of the ERP deployment compared to the third quarter of 2022. Furthermore, Stericycle improved free cash flow for the nine months ended September 30, 2023 by $154.0 million compared to 2022.
Company's Outlook
Cindy J. Miller, President and Chief Executive Officer, commented on the company's performance,
In the quarter, our team members successfully deployed the ERP to the U.S. regulated waste business and RWCS revenue grew in a period of the ERP deployment. Additionally, we drove cost efficiencies that helped mitigate headwinds of about $30 million in commodity indexed revenues impacting the business. The success of both our ERP implementation and our on-going continuous improvement efforts supports our longer-term outlook."
Financial Tables
The company's GAAP results showed that revenues in the third quarter were $653.5 million compared to $690.3 million in the third quarter of 2022. The decrease was primarily due to divestitures of $32.4 million, which was partially offset by favorable foreign exchange rates of $6.1 million. Organic revenues in RWCS grew $17.4 million, while SID organic revenues were lower by $27.9 million.
Net income in the third quarter was $2.0 million, or $0.02 diluted earnings per share, compared to $28.0 million, or $0.30 in the third quarter of 2022. The $26.0 million decrease was primarily attributable to lower Income from operations of $26.4 million.
Free cash flow for the nine months ended September 30, 2023 was an inflow of $91.1 million compared to an outflow of $62.9 million in the same period of 2022. The $154.0 million increase was primarily due to higher cash flow from operations of $150.2 million, and lower cash paid for capital expenditures of $3.8 million.
Explore the complete 8-K earnings release (here) from Stericycle Inc for further details.
This article first appeared on GuruFocus.
