Date: November 23, 2007
Source: Stericycle, Inc.
Stericycle Announces Final Australia Arbitration Award
Stericycle, Inc. (NASDAQ: SRCL) today announced that it has received the arbitrator's final award in the dispute previously disclosed between Stericycle Inc. and SteriCorp Limited of Melbourne, Australia.
The arbitrator awarded Stericycle U.S. $8.2 million on its claim against SteriCorp for payments due under certain convertible notes and awarded SteriCorp U.S. $14.5 million on its claim that Stericycle failed to supply SteriCorp with equipment conforming to specifications under an equipment supply agreement. The final award also required Stericycle to pay 2/3 of SteriCorp's arbitration costs. The amount due for arbitration costs may not be determined for up to nine months.
The net effect of the two awards, before arbitration costs, will result in Stericycle recognizing a one-time after-tax expense of U.S. $6.2 million, or U.S. $0.07 per share in the fourth quarter of 2007 which was not included in the company's prior guidance on operating results for 2007. The net effect of the two awards on Stericycle's cash flow for the quarter will be a reduction of cash in the amount U.S. $6.3 million. The difference between the income statement and the cash flow net effect of the two awards results from a portion of the award in favor of Stericycle representing a repayment of debt and the tax effect of the one-time charges.
Stericycle believes that the final award contained errors in the calculation of amounts awarded to SteriCorp and has applied to the arbitrator for correction of the award. Stericycle cannot predict the outcome of its application for correction. The decision by the arbitrator may be appealed by either party within 28 days.
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Frank ten Brink, 847-607-2012