Attached files
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|---|---|
| 8-K - FORM 8-K - STERICYCLE INC | bo8k0912.htm |
EXHIBIT 99.1
FOR FURTHER INFORMATION CONTACT:
FOR IMMEDIATE RELEASE
Frank ten Brink 847-607-2012
Conference call to be held October 24, 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 November 24th, 2012 by dialing 855-859-2056, access code 94523356. 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. REPORTS RESULTS
FOR THIRD QUARTER 2012
Lake Forest, Illinois, October 24, 2012—Stericycle, Inc. (NASDAQ:SRCL), today reported financial results for the third quarter of 2012.
Revenues for the quarter ended September 30, 2012 were $480.5 million, up 14.2% from $420.9 million from the third quarter last year. Acquisitions less than 12 months old contributed approximately $31.5 million to the current period’s growth in revenues. Revenues increased 16.0% compared with the prior period when adjusted for an unfavorable foreign exchange impact of $8.0 million. Gross profit was $215.6 million, up 13.4% from $190.1 million in the third quarter last year. Gross profit as a percent of revenue was 44.9% compared with 45.2% in the third quarter of 2011.
Net income attributable to Stericycle for the third quarter of 2012 was $65.5 million or $0.75 per diluted share compared with $59.2 million or $0.68 per diluted share for the third quarter of 2011. Net income attributable to Stericycle for the third quarter of 2012 and third quarter of 2011 includes acquisition expenses, restructuring costs, loss on sale of business, and other items. Excluding the effect of these items, non-GAAP earnings per diluted share were $0.84 for the current quarter (see table below). Non-GAAP earnings per diluted share increased 15.3% from non-GAAP earnings per diluted share of $0.72 in the third quarter of 2011.
FIRST NINE MONTHS’ RESULTS
Revenues for the nine months ending September 30, 2012 were $1.41 billion, up 14.6% from $1.23 billion in the same period last year. Revenues increased 16.2% compared with the prior period when adjusted for an unfavorable foreign exchange impact of $19.5 million. Gross profit was $630.3 million, up 12.7% from $559.2 million in the same period last year. Gross profit as a percent of revenue was 44.7% compared with 45.5% in 2011. Non-GAAP earnings per diluted share, when adjusted for various items, increased 15.5% to $2.42 in 2012 from $2.10 in 2011 (see table below).
Table to reconcile non-GAAP EPS to GAAP EPS: | |||||||||||
| Three months ended September 30, |
| Nine months ended September 30, | ||||||||
|
|
|
| Change |
|
|
|
| Change | ||
| 2012 | 2011 |
| $ | % |
| 2012 | 2011 |
| $ | % |
GAAP EPS | $0.75 | $0.68 |
| $0.07 | 10.6% |
| $2.28 | $1.95 |
| $0.33 | 17.1% |
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition expenses/ Adjustment to Fair Value | 0.03 | 0.04 |
|
|
|
| 0.08 | 0.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring/ Plant Closure | 0.02 | 0.00 |
|
|
|
| 0.02 | 0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on Sale of Business | 0.04 | 0.00 |
|
|
|
| 0.04 | 0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other | 0.00 | 0.00 |
|
|
|
| 0.00 | 0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP EPS (adjusted) | $0.84 | $0.72 |
| $0.11 | 15.3% |
| $2.42 | $2.10 |
| $0.32 | 15.5% |
* 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 $277.1 million and $215.2 million for the nine months ended September 30, 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.
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands, except share and per share data | |||||
|
| September 30, |
|
| December 31, |
|
| 2012 |
|
| 2011 |
|
| (Unaudited) |
|
| (Audited) |
ASSETS |
|
|
|
|
|
Current Assets: |
|
|
|
|
|
Cash and cash equivalents | $ | 16,205 |
| $ | 22,511 |
Short-term investments |
| 466 |
|
| 416 |
Accounts receivable, less allowance for doubtful accounts of $18,711 in 2012 and $18,905 in 2011 |
| 314,577 |
|
| 290,854 |
Deferred income taxes |
| 19,712 |
|
| 19,314 |
Prepaid expenses |
| 26,092 |
|
| 22,466 |
Other current assets |
| 40,333 |
|
| 35,035 |
Total Current Assets |
| 417,385 |
|
| 390,596 |
Property, Plant and Equipment, net |
| 328,222 |
|
| 293,912 |
Goodwill |
| 2,005,698 |
|
| 1,913,703 |
Intangible assets, less accumulated amortization of $57,855 in 2012 and $42,050 in 2011 |
| 623,418 |
|
| 546,618 |
Other assets |
| 36,873 |
|
| 32,261 |
Total Assets | $ | 3,411,596 |
| $ | 3,177,090 |
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
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Current liabilities: |
|
|
|
|
|
Current portion of long-term debt | $ | 286,636 |
| $ | 100,526 |
Accounts payable |
| 80,213 |
|
| 66,635 |
Accrued liabilities |
| 122,010 |
|
| 140,521 |
Deferred revenues |
| 15,248 |
|
| 12,855 |
Other current liabilities |
| 17,216 |
|
| 6,377 |
Total Current Liabilities |
| 521,323 |
|
| 326,914 |
Long-term debt, net of current portion |
| 1,010,514 |
|
| 1,284,113 |
Deferred income taxes |
| 356,196 |
|
| 313,733 |
Other liabilities |
| 30,705 |
|
| 25,079 |
Equity: |
|
|
|
|
|
Common stock (par value $.01 per share, 120,000,000 shares authorized, 85,924,721 issued and outstanding in 2012 and 84,696,227 issued and outstanding in 2011) |
| 859 |
|
| 847 |
Additional paid-in capital |
| 84,046 |
|
| -- |
Accumulated other comprehensive loss |
| (41,602) |
|
| (45,984) |
Retained earnings |
| 1,434,373 |
|
| 1,243,303 |
Total Stericycle, Inc.’s Equity |
| 1,477,676 |
|
| 1,198,166 |
Noncontrolling interest |
| 15,182 |
|
| 29,085 |
Total Equity |
| 1,492,858 |
|
| 1,227,251 |
Total Liabilities and Equity | $ | 3,411,596 |
| $ | 3,177,090 |
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
In thousands, except share and per share data | |||||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||||
| 2012 |
| 2011 |
| 2012 |
| 2011 | ||||
| $ | % of Rev |
| $ | % of Rev |
| $ | % of Rev |
| $ | % of Rev |
Revenues | 480,484 | 100.0 |
| 420,924 | 100.0 |
| 1,409,511 | 100.0 |
| 1,229,491 | 100.0 |
Cost of revenues | 253,526 | 52.8 |
| 220,419 | 52.4 |
| 746,540 | 53.0 |
| 639,773 | 52.0 |
Depreciation – cost of revenues | 11,404 | 2.4 |
| 10,450 | 2.5 |
| 32,622 | 2.3 |
| 30,438 | 2.5 |
Restructuring costs | -- | 0.0 |
| -- | 0.0 |
| -- | 0.0 |
| 54 | 0.0 |
Gross profit | 215,554 | 44.9 |
| 190,055 | 45.2 |
| 630,349 | 44.7 |
| 559,226 | 45.5 |
Selling, general and administrative expenses | 82,176 | 17.1 |
| 72,582 | 17.2 |
| 240,635 | 17.1 |
| 214,815 | 17.5 |
Depreciation – SG&A | 2,480 | 0.5 |
| 2,274 | 0.5 |
| 6,892 | 0.5 |
| 6,447 | 0.5 |
Amortization | 5,561 | 1.2 |
| 4,209 | 1.0 |
| 15,675 | 1.1 |
| 11,102 | 0.9 |
Total SG&A expense and amortization | 90,217 | 18.8 |
| 79,065 | 18.8 |
| 263,202 | 18.7 |
| 232,364 | 18.9 |
Income from operations before acquisition, integration, and other expenses | 125,337 | 26.1 |
| 110,990 | 26.4 |
| 367,147 | 26.0 |
| 326,862 | 26.6 |
Acquisition expenses | 2,467 | 0.5 |
| 3,195 | 0.8 |
| 6,213 | 0.4 |
| 14,394 | 1.2 |
Restructuring costs and plant closure expense | 2,250 | 0.5 |
| 633 | 0.2 |
| 3,400 | 0.2 |
| 1,032 | 0.1 |
Litigation settlement | -- | 0.0 |
| 460 | 0.1 |
| -- | 0.0 |
| 460 | 0.0 |
Loss on sale of business | 4,867 | 1.0 |
| 323 | 0.1 |
| 4,867 | 0.3 |
| 323 | 0.0 |
Change in fair value of contingent consideration | (11) | 0.0 |
| -- | 0.0 |
| 591 | 0.0 |
| (2,140) | -0.2 |
Integration expenses | 1,217 | 0.3 |
| 1,813 | 0.4 |
| 3,540 | 0.3 |
| 3,866 | 0.3 |
Income from operations | 114,547 | 23.8 |
| 104,566 | 24.8 |
| 348,536 | 24.7 |
| 308,927 | 25.1 |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
Interest income | 117 | 0.0 |
| 237 | 0.1 |
| 333 | 0.0 |
| 484 | 0.0 |
Interest expense | (13,048) | -2.7 |
| (12,034) | -2.9 |
| (38,597) | -2.7 |
| (36,413) | -3.0 |
Other expense, net | (488) | -0.1 |
| (577) | -0.1 |
| (556) | 0.0 |
| (1,659) | -0.1 |
Total other income (expense) | (13,419) | -2.8 |
| (12,374) | -2.9 |
| (38,820) | -2.8 |
| (37,588) | -3.1 |
Income before income taxes | 101,128 | 21.0 |
| 92,192 | 21.9 |
| 309,716 | 22.0 |
| 271,339 | 22.1 |
Income tax expense | 35,382 | 7.4 |
| 32,448 | 7.7 |
| 110,283 | 7.8 |
| 99,119 | 8.1 |
Net income | 65,746 | 13.7 |
| 59,744 | 14.2 |
| 199,433 | 14.1 |
| 172,220 | 14.0 |
Net income attributable to noncontrolling interests | 269 | 0.1 |
| 497 | 0.1 |
| 1,506 | 0.1 |
| 1,757 | 0.1 |
Net income attributable to Stericycle, Inc. | 65,477 | 13.6 |
| 59,247 | 14.1 |
| 197,927 | 14.0 |
| 170,463 | 13.9 |
|
|
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|
|
|
|
|
|
|
|
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Earnings per share-diluted | 0.75 |
|
| 0.68 |
|
| 2.28 |
|
| 1.95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding-diluted | 87,305,779 |
|
| 87,385,121 |
|
| 86,911,229 |
|
| 87,620,867 |
|
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
In thousands | |||||
|
| Nine Months Ended September 30, | |||
|
| 2012 |
|
| 2011 |
OPERATING ACTIVITIES: |
|
|
|
|
|
Net income | $ | 199,433 |
| $ | 172,220 |
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
Loss on sale of business |
| 4,867 |
|
| 323 |
Change in fair value of contingent consideration |
| 591 |
|
| (2,140) |
Accelerated amortization of term loan financing fees |
| -- |
|
| 1,241 |
Stock compensation expense |
| 12,346 |
|
| 11,563 |
Excess tax benefit of stock options exercised |
| (20,994) |
|
| (16,614) |
Depreciation |
| 39,514 |
|
| 36,885 |
Amortization |
| 15,675 |
|
| 11,102 |
Deferred income taxes |
| 25,462 |
|
| 27,685 |
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures: |
|
|
|
|
|
Accounts receivable |
| (4,657) |
|
| (20,288) |
Accounts payable |
| 7,246 |
|
| (11,239) |
Accrued liabilities |
| (972) |
|
| 16,694 |
Deferred revenues |
| 615 |
|
| (1,241) |
Other assets and liabilities |
| (1,979) |
|
| (11,015) |
Net cash provided by operating activities |
| 277,147 |
|
| 215,176 |
|
|
|
|
|
|
INVESTING ACTIVITIES: |
|
|
|
|
|
Payments for acquisitions, net of cash acquired |
| (153,390) |
|
| (467,430) |
(Purchase of)/ proceeds from short-term investments |
| (49) |
|
| 15,941 |
Proceeds from sale of business and other assets |
| 764 |
|
| 2,371 |
Capital expenditures |
| (51,658) |
|
| (36,981) |
Net cash used in investing activities |
| (204,333) |
|
| (486,099) |
|
|
|
|
|
|
FINANCING ACTIVITIES: |
|
|
|
|
|
Net repayment of long-term debt |
| (43,916) |
|
| (17,294) |
Net (repayments)/ borrowings on senior credit facility |
| (96,601) |
|
| 269,792 |
Payments of deferred financing costs |
| (148) |
|
| (3,740) |
Payments on capital lease obligations |
| (2,559) |
|
| (2,703) |
Purchase and cancellation of treasury stock |
| (2,945) |
|
| (81,201) |
Proceeds from other issuance of common stock |
| 44,879 |
|
| 30,487 |
Excess tax benefit of stock options exercised |
| 20,994 |
|
| 16,614 |
Payments to noncontrolling interests |
| (398) |
|
| -- |
Net cash (used in)/ provided by financing activities |
| (80,694) |
|
| 211,955 |
Effect of exchange rate changes on cash |
| 1,574 |
|
| 3,087 |
Net decrease in cash and cash equivalents |
| (6,306) |
|
| (55,881) |
Cash and cash equivalents at beginning of period |
| 22,511 |
|
| 79,276 |
Cash and cash equivalents at end of period | $ | 16,205 |
| $ | 23,395 |
|
|
|
|
|
|
NON-CASH ACTIVITIES: |
|
|
|
|
|
Net issuance of obligations for acquisitions | $ | 62,262 |
| $ | 41,847 |