Date: April 23, 2008
Source: Stericycle, Inc.
Stericycle, Inc. (NASDAQ: SRCL), today reported financial results for the first quarter 2008.
Revenues for the quarter ended March 31, 2008 were $254.8, up 20.7% from $211.0 million in the same quarter last year. Acquisitions less than 12 months old contributed approximately $19.5 million to the growth in revenues for the quarter. Gross profit was $113.6 million, up 20.5% from $94.2 million in the same quarter last year. Gross profit as a percent of revenues was 44.6% versus 44.7% in the first quarter of 2007.
After the effect of the charge described in the table below, generally accepted accounting principles ("GAAP") net income for the first quarter of 2008 was $31.7 million or $0.35 per diluted share compared with GAAP net income of $29.4 million or $0.32 per diluted share for the same quarter last year. The impact of the charge described was to reduce net income by $3.3 million or $0.04 per diluted share. Adjusted non-GAAP net income for the first quarter of 2008 (GAAP net income without including the charge described) was $35.0 million or $0.39 per diluted share.
Cash flow from operations was $63.6 million for the first three months of 2008. Cash flow and increased loan balances were used to strengthen our business and funded $79.4 million in stock repurchases (1,482,185 shares), $11.3 million in capital spending, and $7.8 million in acquisitions and international investments.
STERICYCLE, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP INFORMATION TO NON-GAAP INFORMATION
(IN THOUSANDS EXCEPT FOR PER SHARE DATA)
Three Months Ended
March 31,
------------------------
(unaudited)
------------------------
2008 2007
----------- -----------
GAAP net income $ 31,664 $ 29,387
Excluded charges, net of tax
Business dispute settlement (1) 3,302 -
Other (2) - (411)
----------- -----------
Non-GAAP net income $ 34,966 $ 28,976
=========== ===========
GAAP earnings per share-diluted $ 0.35 $ 0.32
Non-GAAP earnings per share-diluted $ 0.39 $ 0.32
(1) On April 19, 2008 we and affiliates of Daniels Sharpsmart Pty
Limited elected to settle various business disputes prior to
further arbitration proceedings. Please see our Form 8-K filed on
April 23, 2008 for more information.
(2) In 2007 we recorded a gain on an asset sale, and proceeds from an
insurance settlement that were partially offset by an idled
equipment write down. Please see our Form, 10-Q for the quarter
ended March 31, 2007 for more information.
During the second quarter of 2007 we completed a 2-for-1 stock split. All historical per share numbers have been adjusted for the split.
USE OF NON-GAAP FINANCIAL MEASURES
Stericycle's management believes that non-GAAP measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses that may not be indicative of our core business operating results. We include these non-GAAP financial measures because we believe they are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results.
For more information about Stericycle, please visit our website at www.stericycle.com.
Conference call to be held April 23, 2008 at 4:00 p.m. Central time - Dial 866-238-0637 at least 5 minutes before start time. If you are unable to participate on the call, a replay will be available through May 21st by dialing 888-266-2081, access code 1212336. 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 Investor Relations page on Stericycle's 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
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
March 31, December 31,
2008 2007
------------ ------------
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $ 11,205 $ 17,108
Short-term investments 173 1,256
Accounts receivable, less allowance for
doubtful accounts of $6,400 in 2008 and
$6,157 in 2007 164,046 157,435
Deferred tax asset 12,873 13,510
Other current assets 21,436 20,967
------------ ------------
Total current assets 209,733 210,276
Property, plant and equipment, net 193,560 193,039
Other assets:
Goodwill 1,048,522 1,033,333
Intangible assets, less accumulated
amortization of $12,291 in 2008 and
$12,230 in 2007 155,984 152,689
Other 18,539 18,822
------------ ------------
Total other assets 1,223,045 1,204,844
------------ ------------
Total assets $ 1,626,338 $ 1,608,159
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 22,423 $ 22,003
Accounts payable 27,876 40,049
Accrued liabilities 97,676 75,571
Deferred revenue 16,240 12,095
------------ ------------
Total current liabilities 164,215 149,718
------------ ------------
Long-term debt, net of current portion 649,889 613,781
Deferred income taxes 136,391 125,041
Other liabilities 4,699 5,544
Common shareholders' equity:
Common stock (par value $0.01 per share,
120,000,000 shares authorized,
6,139,868 issued and outstanding in
2008, 87,410,653 issued and outstanding
in 2007) 861 874
Additional paid in capital 124,750 197,462
Accumulated other comprehensive income 28,650 30,520
Retained earnings 516,883 485,219
------------ ------------
Total shareholders' equity 671,144 714,075
------------ ------------
Total liabilities and shareholders'
equity $ 1,626,338 $ 1,608,159
============ ============
STERICYCLE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
Three Months Ended
March 31,
----------------------------------------------
(unaudited)
----------------------------------------------
2008 2007
$ % of Rev $ % of Rev
---------------------- ----------------------
Revenues $ 254,784 100.0% $ 211,049 100.0%
Cost of revenues 141,194 55.4% 116,813 55.3%
---------------------- ----------------------
Gross profit 113,590 44.6% 94,236 44.7%
Selling, general and
administrative
expenses 46,985 18.4% 37,779 17.9%
Amortization 1,052 0.4% 868 0.4%
---------------------- ----------------------
Total SG&A expense and
amortization 48,037 18.9% 38,647 18.3%
---------------------- ----------------------
Income from
operations before
acquisition
integration and
other expenses 65,553 25.7% 55,589 26.3%
Gain on sale of assets - 0.0% (823) -0.4%
Impairment of fixed
assets - - 650 0.3%
Arbitration settlement
and related costs 5,352 2.1% - 0.0%
Acquisition integration
expenses 713 0.3% 313 0.1%
---------------------- ----------------------
Income from operations 59,488 23.3% 55,449 26.3%
Other income (expense):
Interest Income 402 0.2% 401 0.2%
Interest expense (8,128) -3.2% (7,700) -3.6%
Insurance proceeds - 0.0% 500 0.2%
Other expense, net (443) -0.2% (553) -0.3%
---------------------- ----------------------
Total other income
(expense) (8,169) -3.2% (7,352) -3.5%
---------------------- ----------------------
Income before income
taxes 51,319 20.1% 48,097 22.8%
Income tax expense 19,655 7.7% 18,710 8.9%
---------------------- ----------------------
Net income $ 31,664 12.4% $ 29,387 13.9%
====================== ======================
Earnings per share-
diluted $ 0.35 $ 0.32
============ ===========
Weighted average
number of common shares
outstanding-diluted 89,393,242 90,436,694
============ ===========
STERICYCLE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
For the three months ended
March 31,
2008 2007
------------- -------------
(unaudited) (unaudited)
Operating Activities:
Net income $ 31,664 $ 29,387
Adjustments to reconcile net income to
net cash provided by operating
activities:
Gain on sale of assets - (823)
Impairment of fixed assets - 650
Write-off of note receivable related to
joint venture 798 -
Stock compensation expense 3,064 2,450
Excess tax benefit of disqualifying
dispositions of stock options and
exercise of non-qualified stock options 23 (576)
Depreciation 7,293 6,270
Amortization 1,052 868
Deferred income taxes 8,916 6,176
Changes in operating assets and
liabilities, net of effect of
acquisitions
Accounts receivable (2,347) 5,420
Other assets 551 1,316
Accounts payable (14,309) (1,635)
Accrued liabilities 22,793 (245)
Deferred revenue 4,104 3,632
------------- -------------
Net cash provided by operating activities 63,602 52,890
------------- -------------
Investing Activities:
Payments for acquisitions and
international
investments, net of cash acquired (7,776) (14,645)
Proceeds from maturity of short-term
investments 1,078 689
Proceeds from sale of assets - 26,453
Proceeds from sale of property and
equipment - 49
Capital expenditures (11,299) (10,300)
------------- -------------
Net cash (used in) provided by investing
activities (17,997) 2,246
------------- -------------
Financing Activities:
Repayment of long-term debt (255) (16,200)
Net borrowings on senior credit facility 29,326 10,879
Principal payments on capital lease
obligations (85) (111)
Excess tax benefit of stock options
exercised (23) 576
Purchase/cancellation of treasury stock (79,384) (46,071)
Proceeds from other issuances of common
stock 2,397 3,075
------------- -------------
Net cash used in financing activities (48,024) (47,852)
Effect of exchange rate changes on cash (3,484) (2,682)
------------- -------------
Net (decrease)/ increase in cash and cash
equivalents (5,903) 4,602
Cash and cash equivalents at beginning of
period 17,108 13,492
------------- -------------
Cash and cash equivalents at end of
period $ 11,205 $ 18,094
============= =============
Non-cash activities:
Net issuances of notes payable for
certain acquisitions $ 7,044 $ 11,854
For more information, contact:
Frank ten Brink
Stericycle, Inc.
847-607-2012
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