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Stericycle Inc. Reports Strong First Quarter, Net Up by 25%

Date: April 26, 2007

Source: Stericycle, Inc.

Stericycle, Inc. Reports Results for First Quarter 2007

Stericycle, Inc. (Nasdaq: SRCL), today reported financial results for the first quarter of 2007.

First Quarter Results

Revenues for the quarter ended March 31, 2007 were $211.0 million, up 17.7% from $179.2 million in the first quarter of 2006. Acquisitions less than 12 months old contributed $13.9 million to the $31.8 million revenue growth in the first quarter of 2007. Gross profit was $94.2 million, up 19.7% from $78.8 million in the first quarter last year. Gross profit as a percent of revenues was 44.7% versus 43.9% in the first quarter of 2006.

Net income for the first quarter of 2007 was $29.4 million or $0.65 per diluted share compared with net income of $23.5 million or $0.52 per diluted share for the first quarter of 2006.

Cash flow from operations was $52.9 million for the first quarter of 2007. Cash flow and increased loan balances funded $46.1 million in stock repurchases, $14.6 million in acquisitions and international investments and $10.3 million in capital spending.

For more information about Stericycle, please visit our website at www.stericycle.com.

Conference call to be held April 26, 2007 at 4:00 p.m. Central time – Dial 866-793-1343 at least 5 minutes before start time. If you are unable to participate on the call, a replay will be available through May 3rd by dialing 888-266-2081, access code 1066094. To hear a simulcast of the call over the internet, or to access an audio archive of the call, go to the Investor Relations page on Stericycle’s website at www.stericycle.com.

 

STERICYCLE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
   
March 31, December 31,
2007  2006 
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $ 18,094  $ 13,492 
Short-term investments 1,859  2,548 

Accounts receivable, less allowance for doubtful
accounts of $5,349 in 2007 and $5,411 in 2006 125,428  130,354 
Deferred tax asset 13,579  16,072 
Asset group held for sale -  33,674 
Other current assets 22,975  22,462 
Total current assets 181,935  218,602 
Property, plant and equipment, net 166,783  156,953 
Other assets:
Goodwill 828,599  813,973 
Intangible assets, less accumulated amortization of
$12,203 in 2007 and $11,454 in 2006 124,665  115,879 
Other 23,327  22,499 
Total other assets 976,591  952,351 
Total assets $ 1,325,309  $ 1,327,906 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 23,477  $ 22,681 
Accounts payable 24,793  25,033 
Accrued liabilities 75,404  75,434 
Deferred revenue 15,294  11,662 
Liability group held for sale -  7,221 
Total current liabilities 138,968  142,031 
Long-term debt, net of current portion 448,547  443,115 
Deferred income taxes 110,471  105,521 
Other liabilities 13,503  12,158 
Common shareholders' equity:
Common stock (par value $0.01 per share, 80,000,000
shares authorized, 43,764,461 issued and outstanding
in 2007, 44,251,965 issued and outstanding in 2006) 438  443 
Additional paid in capital 212,603  252,568 
Accumulated other comprehensive income 4,552  5,229 
Retained earnings 396,227  366,841 
Total shareholders' equity 613,820  625,081 
Total liabilities and shareholders' equity $ 1,325,309  $ 1,327,906 
 
 
Total debt to capitalization percentage ratio 43.5% 42.7%
Calculation of total debt to capitalization percentage ratio:
Total debt $ 472,024  $ 465,796 
Shareholders' equity 613,820  625,081 
Capitalization $ 1,085,844  $ 1,090,877 

 

STERICYCLE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
   
Three Months Ended March 31,
(unaudited)
2007  2006 
$ % of Rev $ % of Rev
 
Revenues $ 211,049  100.0% $ 179,249  100.0%
 
Cost of revenues 116,813  55.3% 100,496  56.1%
 
Gross profit 94,236  44.7% 78,753  43.9%
 
Selling, general and
administrative expenses 37,779  17.9% 32,865  18.3%
Amortization 868  0.4% 511  0.3%
 
Total SG&A expense and amortization 38,647  18.3% 33,376  18.6%
 

Income from operations before acquisition

integration and other expenses

 55,589  26.4% 45,377  25.3%
 
Gain on sale of assets (823) -0.4% -  0.0%
Impairment of fixed assets 650  0.3% -  0.0%
Acquisition integration expenses 313  0.1% 631  0.3%
 
Income from operations 55,449  26.4% 44,746  25.0%
 
Other income (expense):
Interest Income 401  0.2% 256  0.1%
Interest expense (7,700) -3.7% (5,906) -3.3%
Insurance proceeds 500  0.2% -  0.0%
Other expense, net (553) -0.3% (530) -0.3%
 
Total other income (expense) (7,352) -3.6% (6,180) -3.5%
 
Income before income taxes 48,097  22.8% 38,566  21.5%
 
Income tax expense 18,710  8.9% 15,041  8.4%
 
Net income $ 29,387  13.9% $ 23,525  13.1%
 
Earnings per share-diluted $ 0.65  $ 0.52 
 
Weighted average number of
common shares outstanding-diluted 45,218,346  45,155,925 

 

STERICYCLE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
 
For the three months
ended March 31,
2007  2006 
(unaudited)
Operating Activities:
Net income $ 29,387  $ 23,525 
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on sale of assets (823) - 
Impairment of fixed assets 650  - 
Stock compensation expense 2,450  2,589 
Excess tax benefit of disqualifying dispositions of stock options and

exercise of non-qualified stock options

 (576) (2,256)
Depreciation 6,270  5,784 
Amortization 868  511 
Deferred income taxes 6,176  5,310 
Changes in operating assets and liabilities, net of
effect of acquisitions
Accounts receivable 5,420  (2,014)
Other assets 1,316  (4,738)
Accounts payable (1,635) (4,322)
Accrued liabilities (245) 4,460 
Deferred revenue 3,632  2,333 
 
Net cash provided by operating activities 52,890  31,182 
 
Investing Activities:
Payments for acquisitions and international
investments, net of cash acquired (14,645) (120,825)
Proceeds from maturity/(purchases) of short-term investments 689  (5,700)
Proceeds from sale of business 26,453  - 
Proceeds from sale of property and equipment 49  - 
Capital expenditures (10,300) (7,506)
 
Net cash provided by (used in) investing activities 2,246  (134,031)
 
Financing Activities:
Proceeds from issuance of note payable -  4,582 
Repayment of long-term debt (16,200) (8,730)
Net borrowings on senior credit facility 10,879  110,153 
Principal payments on capital lease obligations (111) (613)
Excess tax benefit of stock options exercised 576  2,256 
Purchase/cancellation of treasury stock (46,071) (11,198)
Proceeds from other issuances of common stock 3,075  5,511 
 
Net cash (used in) provided by financing activities (47,852) 101,961 
Effect of exchange rate changes on cash (2,682) 824 
Net increase (decrease) in cash and cash equivalents 4,602  (64)
Cash and cash equivalents at beginning of period 13,492  7,825 
 
Cash and cash equivalents at end of period $ 18,094  $ 7,761 
Non-cash activities:
Net issuances of notes payable for certain acquisitions $ 11,854  $ 21,263 

 

For more information, contact:
Frank ten Brink
Stericycle, Inc.
847-607-2012
www.stericycle.com.

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