RESTRUCTURING, DIVESTITURES, AND ASSET IMPAIRMENTS

9 Months Ended

Sep. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

RESTRUCTURING, DIVESTITURES, AND ASSET IMPAIRMENTS

RESTRUCTURING, DIVESTITURES, AND ASSET IMPAIRMENTS

Restructuring – Operational Optimization:

In October 2023, the Company recognized Operational Optimization charges of approximately $3.0 million, split between its North America and International segments, related to headcount reduction.

North America Divestiture

On December 1, 2022, the Company completed the sale of its Communication Solutions business for cash proceeds of approximately $45.0 million. The transaction resulted in a pre-tax gain of $15.6 million in the fourth quarter of 2022. In connection with the transaction, the Company entered into certain additional ancillary agreements including a TSA, for up to 12 months. The Company allocated and deferred $1.4 million of the proceeds, which will be recognized over the duration of the TSA period offsetting the expenses incurred to deliver TSA services not reimbursed by the buyer.

International Divestitures

On October 6, 2023, the Company exited its operations in Romania for nominal consideration which resulted in a third-quarter assets-held-for-sale impairment charges of $4.2 million, of which $1.0 million relates to the reclassification of non-cash accumulated currency translation adjustments to earnings. The impairment charge is included in Divestiture losses, net in the Condensed Consolidated Statements of Income (Loss).

On July 25, 2023 and August 10, 2023, respectively, the Company exited its dental recycling business in the Netherlands and its SID joint venture in the UAE for nominal consideration which resulted in second quarter pre-tax charges of $1.5 million.

On June 1, 2023, the Company exited its operations in the Republic of Korea, for cash proceeds of approximately $109.3 million. The transaction resulted in a second quarter divestiture pre-tax gain of $50.8 million, of which $2.7 million of gain related to the reclassification of non-cash accumulated currency translation adjustments to earnings.

On May 24, 2023, the Company exited its operations in Australia and Singapore, for cash proceeds of approximately $2.9 million. The transaction resulted in a second quarter divestiture pre-tax loss of $7.3 million, of which $2.2 million of loss related to the reclassification of non-cash accumulated currency translation adjustments to earnings.

On April 20, 2023, the Company exited its operations in Brazil for cash consideration to the acquirer of approximately $28 million. The transaction resulted in a second quarter divestiture pre-tax loss of $96.2 million, of which $70.1 million of loss related to the reclassification of non-cash accumulated currency translation adjustments to earnings. In connection with the agreement, the Company entered into a TSA with the acquirer for a period of up to six months. The agreement provides for indemnifications to the acquirer against certain liabilities.

On January 19, 2023, the Company exited its International container manufacturing operations, for cash proceeds of approximately $2.2 million. The transaction resulted in a first quarter divestiture pre-tax loss of $5.0 million. In connection with the transaction, the Company entered into certain additional ancillary agreements, including an exclusive two-year supply agreement for containers.

Stericycle recognized the following International pre-tax Divestiture losses (gains), net in the Condensed Consolidated Statements of Income (Loss):

In millions
	Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
	Loss - pre-cumulative currency translation		Cumulative currency translation loss realized		Total loss		Loss (gain) - pre-cumulative currency translation		Cumulative currency translation loss (gain) realized		Total loss (gain)
Divestitures
International Segment
Romania Operations	$	3.2	$	1.0	$	4.2	$	3.2	$	1.0	$	4.2
UAE Joint Venture	—		—		—		0.5		—		0.5
Netherlands Dental Operations	—		—		—		1.0		—		1.0
Republic of Korea Operations	—		—		—		(48.1)		(2.7)		(50.8)
Australia and Singapore Operations	—		—		—		5.1		2.2		7.3
Brazil Operations	—		—		—		26.1		70.1		96.2
International Container Manufacturing Operations	—		—		—		5.0		—		5.0
Divestiture losses (gains), net	$	3.2	$	1.0	$	4.2	$	(7.2)	$	70.6	$	63.4

Revenues of the completed divestiture transactions in 2023, each individually contributed less than 1% or in aggregate approximately 3.5% of consolidated revenues in the year ended December 31, 2022.

Asset Impairments

In the three and nine months ended September 30, 2023, the Company recognized an impairment in SG&A of $3.1 million in International associated with certain intangible assets in Spain.

In the nine months ended September 30, 2023, the Company recognized an impairment in COR of $3.4 million in International associated with certain long-lived assets, primarily property, plant and equipment in Romania.

In the three and nine months ended September 30, 2022, the Company recognized an impairment in SG&A of $2.0 million associated with exiting certain North American office facilities.