Stericycle, Inc. Reports Results for the First Quarter 2013

  Stericycle, Inc. Reports Results for the First Quarter 2013

Business Wire

LAKE FOREST, Ill. -- April 24, 2013

Stericycle, Inc. (NASDAQ:SRCL), today reported financial results for the first
quarter of 2013.

Revenues for the quarter ended March 31, 2013 were $513.8 million, up 11.7%
from $460.1 million in the first quarter last year. Acquisitions contributed
approximately $37.1 million to the current period’s growth in revenues.
Revenues increased 12.6% compared to the prior period when adjusted for
unfavorable foreign exchange impacts of $4.2 million. Gross profit was $232.1
million, up 13.0% from $205.3 million in the first quarter last year. Gross
profit as a percent of revenue was 45.2% compared with 44.6% in the first
quarter of 2012.

The following table shows our revenues reported in accordance with U.S.
generally accepted accounting principles (GAAP) after adjustments for
unfavorable foreign exchange and to exclude revenues in the period from
acquisitions that closed within the preceding 12 months and our regulated
recall and returns management services:


Organic Revenue Growth* (in millions)
                                       Three months ended March 31,
                                                            Change
                                        2013      2012       $        %
Domestic Revenues                       $363.6     $329.2     $34.4    10.5 %
International Revenues                  150.2    130.9     19.3     14.7 %
Total Revenues (GAAP)                   $513.8     $460.1     $53.7     11.7 %
Adjustment for Foreign Exchange         4.2      0.0       4.2   
Subtotal (non-GAAP)                     $518.0     $460.1     $58.0     12.6 %
Adjustment for Acquisitions             (37.7  )   (0.6   )   (37.1 )
Adjustment for Regulated Recall and     (22.5  )  (35.8  )   13.3  
Returns Management Services
Adjusted Revenues (non-GAAP)            $457.8   $423.7    $34.2    8.1  %

* For internal purposes, we exclude the impact of foreign exchange and
revenues attributed to acquisitions closed within the preceding 12 months and
from our regulated recall and returns management services when we evaluate
organic revenue growth. This table and the Company’s internal use of non-GAAP
adjusted revenues are not intended to imply, and should not be interpreted as
implying, that non-GAAP adjusted revenues are a better measure of internal
growth or the Company’s performance, as compared to GAAP revenues.

Net income attributable to Stericycle for the first quarter of 2013 was $74.6
million or $0.85 per diluted share compared with $64.9 million or $0.75 per
diluted share for the first quarter of 2012. Net income attributable to
Stericycle for the first quarter of 2013 and 2012 includes acquisition
expenses, integration costs, adjustments of contingent consideration to fair
value, 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 11.5% from non-GAAP earnings per
diluted share of $0.79 in the first quarter of 2012.


Table to reconcile GAAP EPS to non-GAAP EPS*
                            Three months ended March 31,
                                           Change
                             2013   2012    $      %
GAAP EPS                     $0.85   $0.75   $0.10  13.9%
Adjustments for:
Acquisition Expenses         0.02    0.02
Integration Expenses         0.01    0.01
Change in Fair Value/Other   0.00   0.01
Non-GAAP EPS (adjusted)      $0.88   $0.79   $0.09   11.5%

* In accordance with GAAP, reported earnings per share (EPS) includes 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 $98.2 million for the three months ended March
31, 2013.

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 24, 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 May 24th by
dialing 855-859-2056, access code 86466151. 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,
                           2013                        2012
                           (unaudited)
                           $             % of Rev     $             % of Rev
                                                                      
Revenues                 $ 513,804        100.0  %   $ 460,077        100.0  %
Cost of revenues
(exclusive of              269,673        52.5   %     244,182        53.1   %
depreciation below)
Depreciation - cost of     12,037       2.3    %     10,588       2.3    %
revenues
Total cost of revenues     281,710        54.8   %     254,770        55.4   %
Gross profit               232,094        45.2   %     205,307        44.6   %
                                                                      
Selling, general and
administrative
expenses
(exclusive of
depreciation and           88,241         17.2   %     77,807         16.9   %
amortization below)
Depreciation - SG&A        2,809          0.5    %     2,151          0.5    %
Amortization               6,642        1.3    %     4,979        1.1    %
Total SG&A expense and     97,692         19.0   %     84,937         18.5   %
amortization
                                                                      
Income from operations
before
acquisition,
integration, and other     134,402        26.2   %     120,370        26.2   %
expenses
                                                                      
Acquisition expenses       1,803          0.4    %     1,539          0.3    %
Integration expenses       896            0.2    %     1,279          0.3    %
Change in fair value
of contingent              -              0.0    %     1,204          0.3    %
consideration
Litigation Settlement      106            0.0    %     -              0.0    %
Restructuring and          -            0.0    %     86           0.0    %
plant closure costs
                                                                      
Income from operations     131,597        25.6   %     116,262        25.3   %
                                                                      
Other income
(expense):
Interest income            167            0.0    %     92             0.0    %
Interest expense           (13,546    )   -2.6   %     (12,766    )   -2.8   %
Other expense, net         (1,013     )  -0.2   %     (558       )  -0.1   %
                                                                      
Total other expense        (14,392    )  -2.8   %     (13,232    )  -2.9   %
                                                                      
Income before income       117,205        22.8   %     103,030        22.4   %
taxes
                                                                      
Income tax expense         41,983       8.2    %     37,715       8.2    %
                                                                      
Net income                 75,222       14.6   %     65,315       14.2   %
                                                                      
Less: net income
attributable to
noncontrolling             605          0.1    %     458          0.1    %
interests
                                                                      
Net income
attributable to          $ 74,617       14.5   %   $ 64,857       14.1   %
Stericycle, Inc.
                                                                      
Earnings per             $ 0.85                     $ 0.75       
share-diluted
                                                                      
Weighted average
number of
common shares              87,459,497                 86,587,944 
outstanding-diluted

                                                             
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
                                                                  
                                                                  
                                                  March 31,       December 31,
                                                  2013            2012
                                                  (unaudited)     (audited)
ASSETS
Current Assets:
Cash and cash equivalents                       $ 12,722        $ 31,324
Short-term investments                            479             503
Accounts receivable, less allowance for
doubtful
accounts of $20,204 in 2013 and $19,443 in        342,434         322,246
2012
Deferred income taxes                             17,801          22,995
Prepaid expenses                                  27,033          27,042
Other current assets                              37,486         37,176     
Total Current Assets                              437,955         441,286
Property, plant and equipment, net                336,687         335,870
Goodwill                                          2,065,845       2,065,103
Intangible assets, less accumulated
amortization of
$68,932 in 2013 and $64,215 in 2012               664,682         667,471
Other assets                                      37,042         37,008     
Total Assets                                    $ 3,542,211    $ 3,546,738  
                                                                  
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt               $ 79,589        $ 87,781
Accounts payable                                  75,894          74,225
Accrued liabilities                               137,511         135,321
Deferred revenues                                 16,754          18,095
Other current liabilities                         10,550         15,638     
Total Current Liabilities                         320,298         331,060
Long-term debt, net of current portion            1,193,111       1,268,303
Deferred income taxes                             365,228         359,780
Other liabilities                                 38,106          30,272
Equity:
Common stock (par value $0.01 per share,
120,000,000 shares
authorized, 86,218,005 issued and outstanding
in 2013,
and 85,987,883 issued and outstanding in          862             860
2012)
Additional paid-in capital                        140,139         116,720
Accumulated other comprehensive loss              (62,069   )     (39,064    )
Retained earnings                                 1,530,272      1,463,277  
Total Stericycle, Inc. Equity                     1,609,204       1,541,793
Noncontrolling interest                           16,264         15,530     
Total Equity                                      1,625,468      1,557,323  
Total Liabilities and Equity                    $ 3,542,211    $ 3,546,738  

                                                             
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
                                                                    
                                                                    
                                                  Three Months Ended March 31,
                                                  2013              2012
                                                  (unaudited)
Operating Activities:
Net income                                      $ 75,222         $  65,315
Adjustments to reconcile net income to net
cash
provided by operating activities:
Change in fair value of contingent                -                 1,204
consideration
Stock compensation expense                        4,047             4,085
Excess tax benefit of stock options exercised     (4,203   )        (5,061   )
Depreciation                                      14,846            12,739
Amortization                                      6,642             4,979
Deferred income taxes                             10,407            11,921
Changes in operating assets and liabilities,
net of
effect of acquisitions and divestitures:
Accounts receivable                               (19,769  )        (14,493  )
Accounts payable                                  1,012             2,101
Accrued liabilities                               6,618             12,623
Deferred revenue                                  (1,345   )        1,029
Other assets and liabilities                      4,693            3,119    
                                                                    
Net cash provided by operating activities         98,170           99,561   
                                                                    
Investing Activities:
Payments for acquisitions, net of cash            (18,899  )        (28,182  )
acquired
Proceeds from/ (purchases of) short-term          20                (2       )
investments
Capital expenditures                              (16,480  )        (17,049  )
                                                                    
Net cash used in investing activities             (35,359  )        (45,233  )
                                                                    
Financing Activities:
Net repayments of long-term debt and other        (44,372  )        (8,571   )
obligations
Net repayments on senior credit facility          (46,551  )        (52,856  )
Payments on capital lease obligations             (837     )        (640     )
Purchase and cancellation of treasury stock       (7,623   )        (2,945   )
Proceeds from other issuances of common stock     14,378            12,494
Excess tax benefit of stock options exercised     4,203            5,061    
                                                                    
Net cash used in financing activities             (80,802  )        (47,457  )
Effect of exchange rate changes on cash and       (611     )        880      
cash equivalents
Net (decrease)/ increase in cash and cash         (18,602  )        7,751
equivalents
Cash and cash equivalents at beginning of         31,324           22,511   
period
                                                                    
Cash and cash equivalents at end of period      $ 12,722        $  30,262   
                                                                    
Non-cash activities:
Net issuances of obligations for acquisitions   $ 10,454         $  14,883
                                                                             

Contact:

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