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Stericycle, Inc. Reports Results for Fourth Quarter and Full Year Ended 2012

  Stericycle, Inc. Reports Results for Fourth Quarter and Full Year Ended 2012

Business Wire

LAKE FOREST, Ill. -- February 6, 2013

Stericycle, Inc. (NASDAQ:SRCL), today reported financial results for the
fourth quarter and full year of 2012.

Revenues for the quarter ended December 31, 2012 were $503.6 million, up 12.8%
from $446.6 million in the fourth quarter last year. Acquisitions contributed
approximately $31.1 million to the current period’s growth in revenues.
Revenues increased 13.3% compared to the prior period when adjusted for
unfavorable foreign exchange impacts of $2.3 million. Gross profit was $227.0
million, up 12.6% from $201.5 million in the fourth quarter last year. Gross
profit as a percent of revenue was 45.1% compared with 45.1% in the fourth
quarter of 2011.

Net income attributable to Stericycle for the fourth quarter of 2012 was $70.1
million or $0.80 per diluted share compared with $64.3 million or $0.74 per
diluted share for the fourth quarter of 2011. Net income attributable to
Stericycle for the fourth quarters of 2012 and 2011 includes acquisition
expenses, adjustments of contingent consideration to fair value, restructuring
and plant closure costs, loss on the sale of business, litigation settlement
expense, and other items. Excluding the effect of these items, non-GAAP
earnings per diluted share were $0.88 for the current quarter (see table
below). Non-GAAP earnings per diluted share increased 15.1% from non-GAAP
earnings per diluted share of $0.76 in the fourth quarter of 2011.

FULL-YEAR RESULTS

Revenues for the full year 2012 were $1.91 billion, up 14.1% from $1.68
billion in 2011. Acquisitions contributed approximately $140.3 million to the
current year’s growth in revenues. Revenues increased 15.4% compared to the
prior year when adjusted for unfavorable foreign exchange impacts of $21.8
million. Gross profit was $857.3 million, up 12.7% from $760.7 million in
2011. Gross profit as a percent of revenue was 44.8% compared with 45.4% in
2011. Earnings per diluted share increased 14.6% to $3.08 in 2012 from $2.69
in 2011. Non-GAAP earnings per diluted share, when adjusted for various items,
increased 15.4% to $3.30 from $2.86 (see table below).


Table to reconcile non-GAAP EPS to GAAP EPS:
                                                                               
                      Three months ended December 31,     Year ended December 31,
                                      Change  Change                 Change   Change
                    2012   2011     $       %       2012   2011   $       %
GAAP EPS              $0.80   $0.74     $0.06    8.2  %   $3.08   $2.69   $0.39    14.6 %
                                                                                   
Acquisition           0.02    (0.01 )                     0.10    0.12
expenses/Fair Value
                                                                                   
Restructuring/Plant   0.01    0.03                        0.04    0.04
Closure
                                                                                   
Loss/(Gain) on Sale                                       0.04    0.00
                                                                                   
Litigation Expense    0.04    0.01                        0.04    0.01
                                                                                   
Acceleration of                                           0.00    0.01
Term Loan Fees
                                                                                   
Non-GAAP EPS          $0.88   $0.76     $0.12    15.1 %   $3.30   $2.86   $0.44    15.4 %
(adjusted)

* 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 $387.4 million for the full year of 2012.

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 February 6, 2013 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 March 5th by
dialing 855-859-2056, access code 86463685. 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                                      Years Ended
                        December 31,                                            December 31,
                        2012                       2011                         2012                       2011
                        (Unaudited)                                             (Unaudited)                (Audited)
                        $             % of        $             % of          $             % of       $             % of
                                       Rev                        Rev                          Rev                        Rev
                                                                                                                          
Revenues              $ 503,638        100.0 %   $ 446,557        100.0 %     $ 1,913,149      100.0 %   $ 1,676,048      100.0 %
                                                                                                                          
Cost of revenues        264,541        52.5  %     234,342        52.5  %       1,011,081      52.8  %     874,115        52.2  %
Depreciation - cost     12,009         2.4   %     10,697         2.4   %       44,631         2.3   %     41,135         2.5   %
of revenues
Restructuring costs     132          0.0   %     -            0.0   %       132          0.0   %     54           0.0   %
                                                                                                                          
Gross profit            226,956        45.1  %     201,518        45.1  %       857,305        44.8  %     760,744        45.4  %
                                                                                                                          
Selling, general
and administrative      86,496         17.2  %     76,653         17.2  %       327,131        17.1  %     291,468        17.4  %
expenses
Depreciation - SG&A     2,706          0.5   %     2,195          0.5   %       9,598          0.5   %     8,642          0.5   %
Amortization            6,379        1.3   %     5,167        1.2   %       22,054       1.2   %     16,269       1.0   %
                                                                                                                          
Total SG&A expense      95,581       19.0  %     84,015       18.8  %       358,783      18.8  %     316,379      18.9  %
and amortization
                                                                                                                          
Income from
operations before
acquisition,
integration, and        131,375        26.1  %     117,503        26.3  %       498,522        26.1  %     444,365        26.5  %
other expenses
                                                                                                                          
Acquisition             1,707          0.3   %     2,310          0.5   %       7,920          0.4   %     16,704         1.0   %
expenses
Restructuring costs
and plant closure       1,801          0.4   %     3,989          0.9   %       5,201          0.3   %     5,021          0.3   %
expense
Litigation              6,050          1.2   %     725            0.2   %       6,050          0.3   %     1,185          0.1   %
settlement
Loss/ (gain) on         -              0.0   %     (304       )   -0.1  %       4,867          0.3   %     19             0.0   %
sale of businesses
Change in fair
value of contingent     161            0.0   %     (5,081     )   -1.1  %       752            0.0   %     (7,221     )   -0.4  %
consideration
Integration             1,356        0.3   %     480          0.1   %       4,896        0.3   %     4,346        0.3   %
expenses
                                                                                                                          
Income from             120,300        23.9  %     115,384        25.8  %       468,836        24.5  %     424,311        25.3  %
operations
                                                                                                                          
Other income
(expense):
Interest income         71             0.0   %     315            0.1   %       404            0.0   %     799            0.0   %
Interest expense        (13,077    )   -2.6  %     (13,018    )   -2.9  %       (51,674    )   -2.7  %     (49,431    )   -2.9  %
Other expense, net      187          0.0   %     (1,696     )  -0.4  %       (369       )  0.0   %     (3,355     )  -0.2  %
                                                                                                                          
Total other income      (12,819    )  -2.5  %     (14,399    )  -3.2  %       (51,639    )  -2.7  %     (51,987    )  -3.1  %
(expense)
                                                                                                                          
Income before           107,481        21.3  %     100,985        22.6  %       417,197        21.8  %     372,324        22.2  %
income taxes
                                                                                                                          
Income tax expense      36,973       7.3   %     35,862       8.0   %       147,256      7.7   %     134,981      8.1   %
                                                                                                                          
Net income              70,508       14.0  %     65,123       14.6  %       269,941      14.1  %     237,343      14.2  %
                                                                                                                          
Less: net income
attributable to
noncontrolling          439          0.1   %     835          0.2   %       1,945        0.1   %     2,592        0.2   %
interests
                                                                                                                          
Net income
attributable to       $ 70,069       13.9  %   $ 64,288       14.4  %     $ 267,996      14.0  %   $ 234,751      14.0  %
Stericycle, Inc.
                                                                                                                          
Earnings per          $ 0.80                    $ 0.74                      $ 3.08                    $ 2.69       
share-diluted
                                                                                                                          
Weighted average
number of
common shares           87,281,680                86,635,383                  87,018,473                87,367,712 
outstanding-diluted

                                                              
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
                                                                   
                                                   December 31,
                                                   2012            2011
                                                   (Unaudited)     (Audited)
ASSETS
Current Assets:
Cash and cash equivalents                        $ 31,324        $ 22,511
Short-term investments                             503             416
Accounts receivable, less allowance for
doubtful
accounts of $19,443 in 2012 and $18,905 in         322,246         290,854
2011
Deferred income taxes                              22,995          19,314
Prepaid expenses                                   27,042          22,466
Other current assets                               37,176         35,035    
Total Current Assets                               441,286         390,596
Property, plant and equipment, net                 335,870         293,912
Other assets:
Goodwill                                           2,065,103       1,913,703
Intangible assets, less accumulated
amortization of
$64,215 in 2012 and $42,050 in 2011                667,471         546,618
Other                                              37,008         32,261    
Total other assets                                 2,769,582      2,492,582 
Total Assets                                     $ 3,546,738    $ 3,177,090 
                                                                   
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt                $ 87,781        $ 100,526
Accounts payable                                   74,225          66,635
Accrued liabilities                                135,321         140,521
Deferred revenues                                  18,095          12,855
Other current liabilities                          15,638         6,377     
Total Current Liabilities                          331,060         326,914
Long-term debt, net of current portion             1,268,303       1,284,113
Deferred income taxes                              362,643         313,733
Other liabilities                                  27,409          25,079
Equity:
Common stock (par value $0.01 per share,
120,000,000 shares
authorized, 85,987,883 issued and outstanding
in 2012,
and 84,696,227 issued and outstanding in 2011)     860             847
Additional paid-in capital                         116,720         -
Accumulated other comprehensive loss               (39,064   )     (45,984   )
Retained earnings                                  1,463,277      1,243,303 
Total Stericycle, Inc. Equity                      1,541,793       1,198,166
Noncontrolling interest                            15,530         29,085    
Total Equity                                       1,557,323      1,227,251 
Total Liabilities and Equity                     $ 3,546,738    $ 3,177,090 

                                                               
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
                                                                    
                                                    Years Ended December 31,
                                                    2012            2011
                                                    (Unaudited)     (Audited)
Operating Activities:
Net income                                        $ 269,941       $ 237,343
Adjustments to reconcile net income to net cash
provided by operating activities:
Loss on sale of business                            4,867           19
Restructuring and plant closure costs               1,677           2,756
Write down of other assets                                          1,256
Change in fair value of contingent                  752             (7,221   )
consideration
Accelerated amortization of term loan financing     -               1,241
fees
Stock compensation expense                          16,339          15,367
Excess tax benefit of stock options exercised       (30,161   )     (17,410  )
Depreciation                                        54,229          49,777
Amortization                                        22,054          16,269
Deferred income taxes                               25,541          31,837
Changes in operating assets and liabilities,
net of
effect of acquisitions and divestitures:
Accounts receivable                                 (4,329    )     (31,821  )
Accounts payable                                    (107      )     (12,539  )
Accrued liabilities                                 26,201          21,656
Deferred revenue                                    931             (1,997   )
Other assets and liabilities                        (487      )     (429     )
                                                                    
Net cash provided by operating activities           387,448        306,104  
                                                                    
Investing Activities:
Payments for acquisitions, net of cash acquired     (229,684  )     (479,661 )
(Purchases of) / proceeds from short-term           (89       )     15,942
investments
Proceeds from sale of businesses and other          764             2,371
assets
Capital expenditures                                (65,236   )     (53,301  )
                                                                    
Net cash used by investing activities               (294,245  )     (514,649 )
                                                                    
Financing Activities:
Repayments of long-term debt and other              (73,766   )     (39,536  )
obligations
Net (repayments)/ borrowings on senior credit       (304,309  )     270,827
facility
Proceeds from private placement of long-term        250,000         -
note
Payments of deferred financing costs                (956      )     (3,740   )
Payments on capital lease obligations               (3,192    )     (3,333   )
Purchase and cancellation of treasury stock         (48,028   )     (124,056 )
Payments to noncontrolling interests                (580      )     (534     )
Proceeds from other issuances of common stock       64,461          31,286
Excess tax benefit of stock options exercised       30,161         17,410   
                                                                    
Net cash (used in)/ provided by financing           (86,209   )     148,324
activities
Effect of exchange rate changes on cash             1,819          3,456    
Net increase/ (decrease) in cash and cash           8,813           (56,765  )
equivalents
Cash and cash equivalents at beginning of           22,511         79,276   
period
                                                                    
Cash and cash equivalents at end of period        $ 31,324       $ 22,511   
                                                                    
Non-cash activities:
Net issuances of obligations for certain          $ 105,738       $ 58,338
acquisitions
                                                                             

Contact:

Stericycle, Inc.
Frank ten Brink, 847-607-2012
 
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