The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from Business Wire

Stericycle, Inc. Reports Results for the First Quarter 2013

Wednesday, April 24, 2013

Stericycle, Inc. Reports Results for the First Quarter 2013

16:02 EDT Wednesday, April 24, 2013

LAKE FOREST, Ill. (Business Wire) -- 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 Returns Management Services (22.5 )   (35.8 ) 13.3  
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 depreciation below) 269,673 52.5 % 244,182 53.1 %
Depreciation - cost of revenues 12,037     2.3 % 10,588     2.3 %
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 amortization below) 88,241 17.2 % 77,807 16.9 %
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 amortization 97,692 19.0 % 84,937 18.5 %
 
Income from operations before
acquisition, integration, and other expenses 134,402 26.2 % 120,370 26.2 %
 
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 consideration - 0.0 % 1,204 0.3 %
Litigation Settlement 106 0.0 % - 0.0 %
Restructuring and plant closure costs -     0.0 % 86     0.0 %
 
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 taxes 117,205 22.8 % 103,030 22.4 %
 
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 interests 605     0.1 % 458     0.1 %
 
Net income attributable to Stericycle, Inc. $ 74,617     14.5 % $ 64,857     14.1 %
 
Earnings per share-diluted $ 0.85   $ 0.75  
 
Weighted average number of
common shares outstanding-diluted 87,459,497   86,587,944  
   
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 2012 342,434 322,246
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 2012) 862 860
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 consideration - 1,204
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 acquired (18,899 ) (28,182 )
Proceeds from/ (purchases of) short-term investments 20 (2 )
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 obligations (44,372 ) (8,571 )
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 cash equivalents (611 ) 880  
Net (decrease)/ increase in cash and cash equivalents (18,602 ) 7,751
Cash and cash equivalents at beginning of period 31,324   22,511  
 
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
 

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

Products
  • Globe Unlimited

    Digital all access pass across devices. subscribe

  • The Globe and Mail Newspaper

    Newspaper delivered to your doorstep. subscribe

  • Globe2Go

    The digital replica of our newspaper. subscribe

  • Globe eBooks

    A collection of articles by the Globe. subscribe

See all Globe Products

Advertise with us

GlobeLink.ca

Your number one partner for reaching Canada's Influential Achievers. learn more

The Globe at your Workplace
Our Company
Customer Service
Globe Recognition
Mobile Apps
NEWS APP
INVESTING APP
Other Sections