Stericycle : Annual Report - 2022

2022

ANNUAL REPORT

A Message from

Cindy J. Miller

PRESIDENT AND CEO

Dear Fellow Stockholders:

In 2022, we continued to execute on our five key business priorities while driving year-over-year organic revenue growth of 5.9%¹. We operationalized our flagship East Coast autoclave facility in 2022 while completing upgrades to many facilities throughout our network. Additionally, we broke ground on a new state-of-the-art commercial hospital, medical, and infectious waste incinerator in Nevada. We successfully completed the pilot deployment in Puerto Rico of our Regulated Waste and Compliance Services ("RWCS") business on our ERP system, which gives us the confidence to further roll out this technology to the United States in 2023. With our continued focus on debt reduction and leverage improvement, we reduced our credit agreement defined leverage ratio to 3.28X and our net debt to $1.46 billion. Finally, we continued to optimize our portfolio by completing the divestiture of Communication Solutions, the last remaining business from our legacy Communication and Related Services business.

Over the past four years, we have been focused on building our commercial, operational and technological foundations, supporting Stericycle's continued evolution. With our foundational pillars in place, we plan to advance our quality of revenue initiative into three areas: (1) expanding service penetration, (2) improving customer implementation velocity, and (3) deepening customer partnerships by developing enhanced customer solutions. We will also begin to expand our operational efficiency, modernization and innovation priority to include: (1) infrastructure and system modernization, (2) fleet replacement and route and long-haul network improvements, and (3) SafeShield container rationalization and modernization. We believe these actions, coupled with our foundational initiatives, set Stericycle on the path toward sustainable long-term revenue growth and margin expansion.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE

2022

Financial Highlights

($ millions except for EPS)

Revenue:

Income from Operations: Adjusted Income from Operations2: Adjusted Diluted EPS2:

Diluted EPS:

Cash Flow from Operations: Free Cash Flow3:

At Stericycle, our vision is to shape a healthier and safer world for everyone, everywhere, every day. We are proud that our services protect the

health and well-being of the communities we serve. In 2022, ESG advancements included:

	• Focusing on gender, racial and ethnic diversity,
	equity and inclusion with approximately 22% of our
	global team members self-identifying as women
$2,704.7	and approximately 52% of our U.S. employees
$153.7	self-identifying as being from a racial or ethnic
minority category. We increased hiring
$323.7	and promotion of candidates in federally
$2.04	designated racial or ethnic minority
categories for a second year in a
$0.61	row . In the United States, 65% of
$200.2	new hires and 44% of internal
promotions in 2022 were from
$68.0	federally designated racial or
	ethnic minority categories.

ANNUAL REPORT

2022

• Introducing our SafeShield™ Medical Waste Container, which was named Product of the Year by the Business Intelligence Group (BIG) in 2022. These award-winningcontainers are specifically designed for the storage and transport of regulated medical waste.
• Refreshing our Board of Directors with the skills and experience to

help guide our business by welcoming Naren K. Gursahaney to our Board of Directors, effective January 1, 2023, and have nominated Victoria L. Dolan to join our Board of Directors following our Annual Meeting of Stockholders on May 16, 2023.

• Keeping communities safer, making our oceans and waterways cleaner, reducing demand for landfill space, guarding against identity theft, and reducing the need to harvest trees for virgin pulp through our environmental impact initiatives. In 2022, we

- Treated 1.5 billion pounds of medical waste, helping

to protect the public from potentially infectious material.

• Shredded and recycled 1 billion pounds of paper,
  helping to safeguard our customers' confidential information.
• Helped our customers divert 101 million pounds of plastic from
  landfills through the use of reusable sharps waste and pharmaceutical waste containers as compared to single-use containers.
• Treated 38 million pounds of pharmaceutical waste prior to disposal, helping to ensure that active pharmaceutical ingredients do not end up in waterways.

LOOKING AHEAD

As we wrap up 2022, I am reminded of the tremendous progress we've made transforming this organization. Our dedicated and talented team continues to focus on delivering on our five key priorities and serving our customers while navigating the convergence of macro-economic factors.

Thank you to our customers, team members, the communities we serve, and our shareholders for their continued trust in having Stericycle protect what matters.

Thank you for your interest and continued support of Stericycle.

Sincerely,

Cindy J. Miller

President and Chief Executive Officer

1For a description of the relationship of Organic Revenue to Revenue, please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" included herein.

2Reconciliation of U.S. GAAP to Non-GAAP measures can be found in our February 23, 2023, Form 8-K.3Free Cash Flow is calculated as Net cash from operating activities less Capital expenditures.

ANNUAL REPORT

2022

DIRECTORS AND EXECUTIVE MANAGEMENT

BOARD OF DIRECTORS

Robert S. Murley	J. Joel Hackney, Jr.
Chairman - Audit Committee	Member - Nominating and Governance Committee
	Member - Compensation and Human Capital Committee
Cindy J. Miller
President and Chief Executive Officer	Stephen C. Hooley
	Chair - Compensation and Human Capital Committee
Brian P. Anderson	Member - Operations, Safety and Environmental Committee
Chair - Audit Committee
	Kay G. Priestly
Lynn D. Bleil	Member - Audit Committee
Chair - Nominating and Governance Committee	Member - Nominating and Governance Committee
Member - Compensation and Human Capital Committee
	James L. Welch
Thomas F. Chen	Chair - Operations, Safety and Environmental Committee
Member - Compensation and Human Capital Committee	Member - Audit Committee
Member - Nominating and Governance Committee
Naren K. Gursahaney
Member - Audit Committee
Member - Operations, Safety and Environmental Committee

EXECUTIVE OFFICERS

Cindy J. Miller	Michael S. Weisman
President and Chief Executive Officer	Executive Vice President and Chief Ethics
	and Compliance Officer
Janet H. Zelenka
Executive Vice President, Chief Financial Officer	Richard M. Moore
and Chief Information Officer	Executive Vice President of North American Operations
S. Cory White	Daniel V. Ginnetti
Executive Vice President and Chief Commercial Officer	Executive Vice President, International
Joseph A. Reuter	Kurt M. Rogers
Executive Vice President and Chief People Officer	Executive Vice President and General Counsel
Dominic Culotta
Executive Vice President and Chief Transformation Officer

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________________________

FORM 10-K

________________________________________________________________________

• ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2022

or

• TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from	to
Commission File Number 1-37556

________________________________________________________________________

Stericycle, Inc.

(Exact name of registrant as specified in its charter)

________________________________________________________________________

Delaware	36-3640402
(State or other jurisdiction of incorporation or	(IRS Employer Identification Number)
organization)

2355 Waukegan Road

Bannockburn, Illinois 60015

(Address of principal executive offices, including zip code)

[phone]

(Registrant's telephone number, including area code)

________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	SRCL	Nasdaq Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15-(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definition of "large accelerated filer", "accelerated filer" "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated filer ☐
Smaller reporting company ☐	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1b.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO ☒

The aggregate market value of voting and non-voting common equity held by non-affiliates computed by reference to the price at which common equity was last sold as of the last business day of the registrant's most recently completed second fiscal quarter (June 30, 2022): $4,011,736,033.

On February 17, 2023 there were 92,233,061 shares of the Registrant's Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Information required by Items 10, 11, 12, 13 and 14 of Part III of this Report is incorporated by reference from the Registrant's definitive Proxy Statement for the 2023 Annual Meeting of Stockholders.