Date: October 23, 2008
Source: Stericycle Inc.
Stericycle, Inc. (NASDAQ: SRCL), today reported financial results for the third quarter of 2008.
Revenues for the quarter ended September 30, 2008 were $277.1 million, up 16.8% from $237.3 million in the same quarter last year. Acquisitions less than 12 months old contributed approximately $18.0 million to the growth in revenues for the quarter. Gross profit was $123.0 million, up 15.2% from $106.8 million in the same quarter last year. Gross profit as a percent of revenue was 44.4% versus 45.0% in the third quarter of 2007.
Net income for the third quarter of 2008 was $39.2 million or $0.45 per diluted share compared with net income of $32.9 million or $0.37 per diluted share for the third quarter of 2007.
For the nine months ended September 30, 2008, revenues were $809.7 million, up 18.9% from $681.2 million in the same period last year. Gross profit was $359.8 million, up 17.7% from $305.6 million in the same period last year. Gross profit as a percent of revenues was 44.4% versus 44.9% in the same period in 2007. Earnings per diluted share increased 18.2% to $1.24 from $1.05 per diluted share in the same period last year. Earnings per diluted share for the nine months ended 2008 were negatively impacted by $0.04 per diluted share related to the arbitration settlement recorded in the first quarter of 2008.
Cash flow from operations was $156.3 million for the first nine months of 2008. Cash flow and increased loan balances were used to strengthen our business and funded share repurchases, acquisitions, international investments and capital expenditures.
For more information about Stericycle, please visit our website at www.stericycle.com.
Safe Harbor Statement: Statements in this press release may contain forward-looking statements that involve risks and uncertainties, some of which are beyond our control (for example, general economic conditions). Our actual results could differ significantly from the results described in the forward-looking statements. Factors that could cause such differences include changes in governmental regulation of medical waste collection and treatment and increases in transportation and other operating costs, as well as the other factors described in our filings with the U.S. Securities and Exchange Commission. As a result, past financial performance should not be considered a reliable indicator of future performance, and investors should not use historical trends to anticipate future results or trends. We make no commitment to disclose any subsequent revisions to forward-looking statements.
Conference call to be held October 23, 2008 at 4:00 p.m. Central time - Dial 888-511-3669 at least 5 minutes before start time. If you are unable to participate on the call, a replay will be available through November 23rd by dialing 800-642-1687, access code 66107496. To hear a live simulcast of the call over the internet on www.earnings.com, or to access an audio archive of the call, go to the Investors page on Stericycle's website at www.stericycle.com.
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
September 30, December 31,
2008 2007
------------- ------------
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $ 7,043 $ 17,108
Short-term investments 1,205 1,256
Accounts receivable, less allowance for
doubtful
accounts of $6,365 in 2008 and $6,157
in 2007 174,871 157,435
Deferred income taxes 17,694 13,510
Other current assets 23,028 20,967
------------- ------------
Total current assets 223,841 210,276
Property, plant and equipment, net 208,807 193,039
Other assets:
Goodwill 1,105,016 1,033,333
Intangible assets, less accumulated
amortization of
$13,942 in 2008 and $12,230 in 2007 163,390 152,689
Other 20,574 18,822
------------- ------------
Total other assets 1,288,980 1,204,844
------------- ------------
Total assets $ 1,721,628 $ 1,608,159
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 34,282 $ 22,003
Accounts payable 31,597 40,049
Accrued liabilities 91,424 75,571
Deferred revenues 14,136 12,095
------------- ------------
Total current liabilities 171,439 149,718
------------- ------------
Long-term debt, net of current portion 701,679 613,781
Deferred income taxes 151,604 125,041
Other liabilities 3,417 5,544
Shareholders' equity:
Common stock (par value $0.01 per share,
120,000,000 shares
authorized, 85,559,658 issued and
outstanding in 2008,
87,410,653 issued and outstanding in
2007) 856 874
Additional paid-in capital 88,128 197,462
Accumulated other comprehensive income 9,710 30,520
Retained earnings 594,795 485,219
------------- ------------
Total shareholders' equity 693,489 714,075
------------- ------------
Total liabilities and
shareholders' equity $ 1,721,628 $ 1,608,159
============= ============
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
Three Months Ended
September 30,
---------------------------------------
(unaudited)
---------------------------------------
2008 2007
% of % of
$ Rev $ Rev
------------------ ------------------
Revenues $ 277,098 100.0% $ 237,323 100.0%
Cost of revenues 154,069 55.6% 130,509 55.0%
------------------ ------------------
Gross profit 123,029 44.4% 106,814 45.0%
Selling, general and
administrative expenses 50,115 18.1% 43,665 18.4%
Amortization 1,100 0.4% 929 0.4%
------------------ ------------------
Total SG&A expense and
amortization 51,215 18.5% 44,594 18.8%
------------------ ------------------
Income from operations before
acquisition integration and
other expenses 71,814 25.9% 62,220 26.2%
Gain on sale of assets - 0.0% - 0.0%
Impairment of fixed assets - 0.0% - 0.0%
Impairment of permit - 0.0% - 0.0%
Arbitration settlement and
related costs 96 0.0% - 0.0%
Acquisition integration
expenses 210 0.1% 360 0.2%
------------------ ------------------
Income from operations 71,508 25.8% 61,860 26.1%
Other income (expense):
Interest Income 185 0.1% 307 0.1%
Interest expense (8,618) -3.1% (8,864) -3.7%
Insurance proceeds - 0.0% - 0.0%
Other expense, net (611) -0.2% (247) -0.1%
------------------ ------------------
Total other income
(expense) (9,044) -3.3% (8,804) -3.7%
------------------ ------------------
Income before income taxes 62,464 22.5% 53,056 22.4%
Income tax expense 23,237 8.4% 20,161 8.5%
------------------ ------------------
Net income $ 39,227 14.2% $ 32,895 13.9%
================== ==================
Earnings per share-diluted $ 0.45 $ 0.37
=========== ===========
Weighted average number of
common shares outstanding-
diluted 87,864,210 89,794,892
=========== ===========
Nine Months Ended
September 30,
------------------------------------------
(unaudited)
------------------------------------------
2008 2007
% of % of
$ Rev $ Rev
------------------- -------------------
Revenues $ 809,668 100.0% $ 681,217 100.0%
Cost of revenues 449,895 55.6% 375,650 55.1%
------------------- -------------------
Gross profit 359,773 44.4% 305,567 44.9%
Selling, general and
administrative expenses 148,073 18.3% 124,711 18.3%
Amortization 2,944 0.4% 2,679 0.4%
------------------- -------------------
Total SG&A expense and
amortization 151,017 18.7% 127,390 18.7%
------------------- -------------------
Income from operations
before
acquisition integration and
other expenses 208,756 25.8% 178,177 26.2%
Gain on sale of assets - 0.0% (1,898) -0.3%
Impairment of fixed assets - 0.0% 1,261 0.2%
Impairment of permit - 0.0% 228 0.0%
Arbitration settlement and
related costs 5,595 0.7% - 0.0%
Acquisition integration
expenses 1,239 0.2% 1,279 0.2%
------------------- -------------------
Income from operations 201,922 24.9% 177,307 26.0%
Other income (expense):
Interest Income 744 0.1% 1,245 0.2%
Interest expense (24,885) -3.1% (24,840) -3.6%
Insurance proceeds - 0.0% 500 0.1%
Other expense, net (1,572) -0.2% (1,030) -0.2%
------------------- -------------------
Total other income
(expense) (25,713) -3.2% (24,125) -3.5%
------------------- -------------------
Income before income taxes 176,209 21.8% 153,182 22.5%
Income tax expense 66,633 8.2% 58,902 8.6%
------------------- -------------------
Net income $ 109,576 13.5% $ 94,280 13.8%
=================== ===================
Earnings per share-diluted $ 1.24 $ 1.05
=========== ===========
Weighted average number of
common shares outstanding-
diluted 88,578,506 90,068,563
=========== ===========
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
For the nine months ended
September 30,
2008 2007
------------ ------------
(unaudited) (unaudited)
Operating Activities:
Net income $ 109,576 $ 94,280
Adjustments to reconcile net income to net
cash
provided by operating activities:
Gain on sale of assets - (1,898)
Impairment of fixed assets - 1,261
Impairment of permit intangible - 228
Write-off of note receivable related to
joint venture 798 -
Stock compensation expense 8,880 7,855
Excess tax benefit of stock options
exercised (6,165) (3,414)
Depreciation 22,344 19,975
Amortization 2,944 2,679
Deferred income taxes 18,729 11,958
Changes in operating assets and
liabilities, net of
effect of acquisitions and divestitures:
Accounts receivable (13,976) (13,931)
Other assets (3,398) 1,845
Accounts payable (10,205) 6,044
Accrued liabilities 24,451 (445)
Deferred revenues 2,299 1,706
------------ ------------
Net cash provided by operating activities 156,277 128,143
------------ ------------
Investing Activities:
Payments for acquisitions and
international
investments, net of cash acquired (46,564) (78,966)
Proceeds from maturity of short-term
investments 37 1,763
Proceeds from sale of assets - 26,453
Proceeds from sale of property and
equipment - -
Capital expenditures (35,729) (37,602)
------------ ------------
Net cash used in investing activities (82,256) (88,352)
------------ ------------
Financing Activities:
Repayment of long-term debt (7,868) (32,374)
Net (payments)/proceeds on senior
credit facility (52,184) 68,623
Proceeds from private placement of
long-term note 100,000 -
Payments of deferred financing costs (236) -
Net payments on capital lease
obligations (130) (49)
Excess tax benefit of stock options
exercised 6,165 3,414
Purchase/cancellation of treasury stock (140,306) (95,174)
Proceeds from other issuances of common
stock 14,688 11,441
------------ ------------
Net cash used in financing activities (79,871) (44,119)
Effect of exchange rate changes on cash (4,215) (1,461)
------------ ------------
Net decrease in cash and cash equivalents (10,065) (5,789)
Cash and cash equivalents at beginning of
period 17,108 13,492
------------ ------------
Cash and cash equivalents at end of period $ 7,043 $ 7,703
============ ============
Non-cash activities:
Net issuances of notes payable for certain
acquisitions $ 58,977 $ 54,108
Net issuances of common stock for certain
acquisitions 0 365
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