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Stericycle Posts Another Quarter of Double-Digit Growth

Date: April 25, 2012

Source: Stericycle, Inc.

Stericycle, Inc. Reports Results for First Quarter 2012

Stericycle, Inc. (NASDAQ: SRCL), today reported financial results for the first quarter of 2012.

Revenues for the quarter ended March 31, 2012 were $460.1 million, up 15.6% from $398.1 million from the first quarter last year. Acquisitions contributed approximately $41.0 million to the current period growth in revenues compared with last year in the period. The impact on revenues from foreign exchange in the quarter was $3.3 million unfavorable. Gross profit was $205.3 million, up 12.5% from $182.4 million in the first quarter last year. Gross profit as a percent of revenue was 44.6% compared with 45.8% in the first quarter of 2011.

Net income attributable to Stericycle for the first quarter of 2012 was $64.9 million or $0.75 per diluted share compared with $55.7 million or $0.64 per diluted share for the first quarter of 2011. Net income attributable to Stericycle for the first quarter of 2012 and first quarter of 2011 includes acquisition expenses, adjustments of contingent consideration to fair value, and other items. Excluding the effects of these items, non-GAAP earnings per diluted share were $0.78 for the quarter (see table below). Our non-GAAP earnings per diluted share increased 12.9% from our non-GAAP earnings per diluted share of $0.69 in the first quarter of 2011.

 

Table to reconcile GAAP EPS to non-GAAP EPS:
Three months ended March 31,
  2012 2011 Change $ Change %
GAAP EPS $ 0.75 $ 0.64 $ 0.11 17.8 %
Acquisition Expenses 0.02 0.07
Change in Fair Value/Other 0.01 (0.02 )
Non-GAAP EPS (adjusted) $ 0.78 $ 0.69 $ 0.09 12.9 %

 

* In accordance with U.S. generally accepted accounting principles (GAAP), reported earnings per share include the after-tax impact of the items identified in this table. For internal purposes, including the determination of management compensation, the Company excludes these items from results when evaluating operating performance. This table and the Company's internal use of non-GAAP earnings per share are not intended to imply, and should not be interpreted as implying, that non-GAAP earnings per share is a better measure of performance than GAAP earnings per share.

Cash flow from operations was $99.6 million and $65.6 million for the three months ended March 31, 2012 and 2011, respectively.

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 April 25, 2012 4:00 p.m. Central time - Dial 866-516-6872 at least 5 minutes before start time. If you are unable to participate on the call, a replay will be available through May 25th, 2012 by dialing 855-859-2056, access code 69060742. 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 STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
Three Months Ended
March 31,
2012 2011
(unaudited)
$ % of Rev $ % of Rev
Revenues $ 460,077 100.0 % $ 398,126 100.0 %
Cost of revenues 244,182 53.1 % 205,816 51.7 %
Depreciation - cost of revenues 10,588 2.3 % 9,818 2.5 %
Restructuring costs - 0.0 % 62 0.0 %
Gross profit 205,307 44.6 % 182,430 45.8 %
Selling, general and administrative expenses 77,807 16.9 % 69,972 17.6 %
Depreciation - SG&A 2,151 0.5 % 1,938 0.5 %
Amortization 4,979 1.1 % 3,347 0.8 %
Total SG&A expense and amortization 84,937 18.5 % 75,257 18.9 %
Income from operations before
acquisition, integration, and other expenses 120,370 26.2 % 107,173 26.9 %
Acquisition expenses 1,539 0.3 % 5,938 1.5 %
Change in fair value of contingent consideration 1,204 0.3 % (2,140 ) -0.5 %
Restructuring costs and plant closure expense 86 0.0 % 196 0.0 %
Integration expenses 1,279 0.3 % 766 0.2 %
Income from operations 116,262 25.3 % 102,413 25.7 %
Other income (expense):
Interest income 92 0.0 % 184 0.0 %
Interest expense (12,766 ) -2.8 % (11,372 ) -2.9 %
Other expense, net (558 ) -0.1 % (263 ) -0.1 %
Total other income (expense) (13,232 ) -2.9 % (11,451 ) -2.9 %
Income before income taxes 103,030 22.4 % 90,962 22.8 %
Income tax expense 37,715 8.2 % 34,376 8.6 %
Net income 65,315 14.2 % 56,586 14.2 %
Less: net income attributable to
noncontrolling interests 458 0.1 % 912 0.2 %
Net income attributable to Stericycle, Inc. $ 64,857 14.1 % $ 55,674 14.0 %
Earnings per share-diluted $ 0.75 $ 0.64
Weighted average number of
common shares outstanding-diluted 86,587,944 87,526,683

 

STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
March 31, December 31,
2012 2011
(unaudited) (audited)
ASSETS
Current Assets:
Cash and cash equivalents $ 30,262 $ 22,511
Short-term investments 420 416
Accounts receivable, less allowance for doubtful
accounts of $19,395 in 2012 and $18,905 in 2011 315,144 290,854
Deferred income taxes 19,055 19,314
Prepaid expenses 23,151 22,466
Other current assets 39,046 35,035
Total Current Assets 427,078 390,596
Property, plant and equipment, net 301,274 293,912
Goodwill 1,924,240 1,913,703
Intangible assets, less accumulated amortization of
$47,582 in 2012 and $42,050 in 2011 582,467 546,618
Other 40,175 32,261
Total Assets $ 3,275,234 $ 3,177,090
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt $ 91,038 $ 100,526
Accounts payable 71,806 66,635
Accrued liabilities 146,333 140,521
Deferred revenues 13,941 12,855
Other current liabilities 10,699 6,377
Total Current Liabilities 333,817 326,914
Long-term debt, net of current portion 1,250,769 1,284,113
Deferred income taxes 335,913 313,733
Other liabilities 26,997 25,079
Equity:
Common stock (par value $0.01 per share, 120,000,000 shares
authorized, 84,994,111 issued and outstanding in 2012,
and 84,696,227 issued and outstanding in 2011) 850 847
Additional paid-in capital 22,798 -
Accumulated other comprehensive loss (29,538 ) (45,984 )
Retained earnings 1,305,215 1,243,303
Total Stericycle, Inc. Equity 1,299,325 1,198,166
Noncontrolling interest 28,413 29,085
Total Equity 1,327,738 1,227,251
Total Liabilities and Equity $ 3,275,234 $ 3,177,090

 

STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
Three Months Ended March 31,
2012 2011
(unaudited) (unaudited)
Operating Activities:
Net income $ 65,315 $ 56,586
Adjustments to reconcile net income to net cash
provided by operating activities:
Change in fair value of contingent consideration 1,204 (2,140 )
Stock compensation expense 4,085 3,863
Excess tax benefit of stock options exercised (5,061 ) (8,092 )
Depreciation 12,739 11,756
Amortization 4,979 3,347
Deferred income taxes 11,921 16,051
Changes in operating assets and liabilities, net of
effect of acquisitions and divestitures:
Accounts receivable (14,493 ) (11,615 )
Accounts payable 2,101 (433 )
Accrued liabilities 12,623 799
Deferred revenue 1,029 (34 )
Other assets and liabilities 3,119 (4,503 )
Net cash provided by operating activities 99,561 65,585
Investing Activities:
Payments for acquisitions, net of cash acquired (28,182 ) (19,543 )
Purchases of short-term investments (2 ) (1,240 )
Proceeds from sale of businesses and other assets - 389
Capital expenditures (17,049 ) (11,692 )
Net cash used in investing activities (45,233 ) (32,086 )
Financing Activities:
Net repayments of long-term debt and other obligations (8,571 ) (24,100 )
Net repayments on senior credit facility (52,856 ) (86,044 )
Payments on capital lease obligations (640 ) (463 )
Purchase and cancellation of treasury stock (2,945 ) -
Proceeds from other issuances of common stock 12,494 14,811
Excess tax benefit of stock options exercised 5,061 8,092
Net cash used in financing activities (47,457 ) (87,704 )
Effect of exchange rate changes on cash 880 1,808
Net increase / (decrease) in cash and cash equivalents 7,751 (52,397 )
Cash and cash equivalents at beginning of period 22,511 77,053
Cash and cash equivalents at end of period $ 30,262 $ 24,656
Non-cash activities:
Net issuances of obligations for acquisitions $ 14,883 $ 730

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

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