Stericycle Earnings Call Insights: Deals Analysis and Geographies
Ryan Daniels – William Blair: Let me start on the M&A front. Obviously, a very strong quarter given the number of transactions, but the diversity also surprised me. Are you seeing more opportunities over in Europe and OUS markets given some of the financial struggles or is that just timing that a lot of these deals in different markets hit during the first quarter?
Frank J.M. ten Brink – EVP, CFO and Chief Administrative Officer: Again, we do deals opportunistically. And I would say that maybe the tax law changes in the U.S. maybe accelerated some deals into Q4 of 2012. The pipeline continues to be very robust and that’s both in the U.S. and international.
Ryan Daniels – William Blair: Then any color on I guess overall the deal portion of that was regulated medical waste and then within that the SQ versus LQ mix?
Frank J.M. ten Brink – EVP, CFO and Chief Administrative Officer: Yeah, so they were all in the regulated waste side and it was about 60% SQ and 40% LQ.
Ryan Daniels – William Blair: Then a couple of other questions. On the patient communications business, I know you did a fairly sizable inpatient acquisition in the space last quarter and I’m curious, one, how the integration has gone and then number two, have you begun to see any cross-selling opportunities where you’re able to go to systems that own larger physician practices and can offer a bundled service across the continuum of care?
Charles A. Alutto – President and CEO: Yeah, just to educate everybody, Ryan, that large acquisition was BerylHealthcare in the fourth quarter of 2012. It expanded our capabilities in the patient communication space, for instance, physician referrals, enhanced our scheduling ability, and post discharge calls. They were the market leader in the LQ space. We’re still integrating that as we are integrating the Beryl piece with that platform acquisition that we had done about two years ago of NotifyMD. We do think we’ve got a unique position in the marketplace; not only in offering services to the physicians that are affiliated or owned by hospitals, but in the hospitals themselves, especially in the lines of the businesses we added with the Beryl deal.
Ryan Daniels – William Blair: And then one quick one and I’ll hop off. Just I saw a recent news release about a relationship with Premier and the GPO. I’m curious if that’s something that’s been longstanding. I think you had some exclusive relationships with them in the past, at least with their ASCEND members. So, any color there would be helpful just to provide a little clarity.
Charles A. Alutto – President and CEO: Yeah, the Premier deal is nothing new. There was a renewal of the opportunity. They usually have multiple vendors on their contract. I think you probably saw that in the same press release. That really is a hunting license now that we’ve always had. So there’s really no change to the business with that recent re-award with Premier.
Scott Schneeberger – Oppenheimer: Could we speak a little bit to the geographies? I believe you said two in Japan and I think we’ve been quite there for a while. Can you just talk to what you’re seeing? The last question hit on Europe, but Japan specifically?
Frank J.M. ten Brink – EVP, CFO and Chief Administrative Officer: We did three deals in Japan in ’11, we did one deal in Japan in ’12, and so there is a continuation. Really in ’12, they did a lot of work on integrating both the transportation and the treatment sites that we acquired there and that allowed them to now continue to do acquisitions on top of that.
Scott Schneeberger – Oppenheimer: The recall guidance, I think now for the year is adjusted a little bit lower than what you had been saying on the fourth quarter call. Could you just kind of frame that for us and confirm that’s accurate, and then I have a follow-up?
Frank J.M. ten Brink – EVP, CFO and Chief Administrative Officer: Yeah. So, the guidance last time was $105 million to $120 million; now $95 million to $110 million, with the shortfall in Q1 being about $7 million to $8 million. Yes, that’s exactly the difference roughly and to total that we took the guidance down $5 million…
Scott Schneeberger – Oppenheimer: I know that one is tough to predict. Is there anything that you see building, or I mean I guess the guidance implies that kind of status quo from here? So, moving on from that one, the last thing I wanted to touch upon is, the organic growth was quite solid. Could you touch on premium offerings. How are things going on the premium area?
Charles A. Alutto – President and CEO: Yeah, I think as Rich said, Scott, the premium offerings are StrongPak. We continue to be on track on that. The customer have taken that; continues to be strong. Rx Waste and Sharps Management continue to be drivers on the LQ side of the business, and then Steri-Safe on the SQ side of the business with a little bit of StrongPak as well moving that forward and we continue to see good growth rates there. So, it’s a good start to the year.
Scott Schneeberger – Oppenheimer: I’m sorry, Charlie, if you guys might have said it, I might have missed it, I know you mentioned last time what the contribution was of StrongPak specifically to the quarter. Have you touched upon that and would you?
Charles A. Alutto – President and CEO: No, we did not break that out last time.
A Closer Look: Stericycle Earnings Cheat Sheet>>