Date: July 28, 2010
Source: Stericycle, Inc.
Stericycle, Inc. (NASDAQ: SRCL), today reported financial results for the second quarter of 2010.
Revenues for the quarter ended June 30, 2010 were $347.7 million, up 20.2% from $289.3 million from the same quarter last year. Acquisitions less than 12 months old contributed approximately $29.2 million to the growth in revenues. Impact from foreign exchange in the quarter was immaterial. Gross profit was $161.5 million, up 18.3% from $136.5 million in the second quarter last year. Gross profit as a percent of revenue was 46.5% compared with 47.2% in the second quarter of 2009. Gross profit for the second quarter of 2010 was unfavorably impacted by $0.7 million of restructuring costs for our regulated returns management services business, or 0.2% of revenue.
Net income attributable to Stericycle for the second quarter of 2010 was $53.1 million or $0.61 per diluted share compared with $43.9 million or $0.51 per diluted share for the second quarter of 2009, up 21.1%. Net income attributable to Stericycle for the second quarter of 2010 reflected various non-operational items, which taken together, resulted in non-GAAP earnings per diluted share of $0.62 (see table below). Our non-GAAP earnings per diluted share increased 18.6% from our non-GAAP earnings per share of $0.52 in the second quarter of 2009.
FIRST SIX MONTHS' RESULTS
For the six months ending June 30, 2010, revenues were $682.9 million, up 20.6% from $566.4 million in the same period last year. Revenues increased 19.7% compared with the prior period when adjusted for favorable foreign exchange impacts of $5.1 million. Gross profit was $316.9 million, up 19.9% from $264.3 million in the same period last year. Gross profit as a percent of revenue was 46.4% compared with 46.7% in 2009. Earnings per diluted share increased 20.0% to $1.17 from $0.97 per diluted share in the same period last year. Non-GAAP earnings per diluted share, when adjusted for various non-operational items, increased from $0.99 to $1.18, or 19.3% (see table below):
| Table to reconcile non-GAAP EPS to GAAP EPS | ||||||||||||||||
|
Three months ended June 30, |
Six months ended June 30, | |||||||||||||||
| 2010 | 2009 |
Change |
Change |
2010 | 2009 |
Change |
Change | |||||||||
| GAAP EPS | $0.61 | $0.51 | $0.11 | 21.1% | $1.17 | $0.97 | $0.19 | 20.0% | ||||||||
| Transactional expenses | ||||||||||||||||
| related to acquisitions | 0.01 | 0.01 | 0.01 | 0.02 | ||||||||||||
| Restructuring Costs/Plant | ||||||||||||||||
| Closure Expense | 0.01 | - | 0.02 | - | ||||||||||||
| Litigation Settlement | 0.01 | - | 0.01 | - | ||||||||||||
| Gain on Sale of Assets | (0.02) | - | (0.02) | - | ||||||||||||
| Non-GAAP EPS (adjusted) | $0.62 | $0.52 | $0.10 | 18.6% | $1.18 | $0.99 | $0.19 | 19.3% | ||||||||
* 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 $129.3 million for the six months ended June 30, 2010.
For more information about Stericycle, please visit our website at www.stericycle.com.
Conference call to be held July 28, 2010 at 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 August 28th by dialing 800-642-1687, access code 84295630. 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.
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 STATEMENTS OF INCOME
(Unaudited)
In thousands, except share and per share data
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
|
Revenues
|
$ | 347,734 | $ | 289,268 | $ | 682,911 | $ | 566,358 | ||||||||
|
Costs and Expenses:
|
||||||||||||||||
|
Cost of revenues
|
176,540 | 145,618 | 347,110 | 288,212 | ||||||||||||
|
Selling, general and
administrative expenses
|
63,564 | 53,047 | 126,034 | 103,778 | ||||||||||||
|
Depreciation and amortization
|
12,617 | 9,660 | 25,006 | 18,504 | ||||||||||||
|
Acquisition related
transaction expenses
|
556 | 1,330 | 1,356 | 1,940 | ||||||||||||
|
Acquisition integration
expenses
|
1,314 | 73 | 2,463 | 184 | ||||||||||||
|
Restructuring costs
and plant closure expense
|
1,563 | — | 2,230 | — | ||||||||||||
|
Litigation settlement
|
937 | — | 937 | — | ||||||||||||
|
Gain on sale of assets
|
(2,955 | ) | — | (2,955 | ) | — | ||||||||||
|
Total Costs and
Expenses
|
254,136 | 209,728 | 502,181 | 412,618 | ||||||||||||
|
Income from Operations
|
93,598 | 79,540 | 180,730 | 153,740 | ||||||||||||
|
Other Income (Expense):
|
||||||||||||||||
|
Interest income
|
32 | 49 | 112 | 223 | ||||||||||||
|
Interest expense
|
(8,870 | ) | (8,200 | ) | (17,833 | ) | (16,299 | ) | ||||||||
|
Other expense, net
|
(892 | ) | (828 | ) | (1,895 | ) | (1,618 | ) | ||||||||
|
Total Other Expense
|
(9,730 | ) | (8,979 | ) | (19,616 | ) | (17,694 | ) | ||||||||
|
Income Before Income
Taxes
|
83,868 | 70,561 | 161,114 | 136,046 | ||||||||||||
|
Income Tax Expense
|
30,102 | 26,567 | 58,714 | 51,378 | ||||||||||||
|
Net Income
|
$ | 53,766 | $ | 43,994 | $ | 102,400 | $ | 84,668 | ||||||||
|
Net Income attributable
to noncontrolling interests
|
672 | 92 | 1,187 | 111 | ||||||||||||
|
Net Income attributable
to Stericycle, Inc.
|
$ | 53,094 | $ | 43,902 | $ | 101,213 | $ | 84,557 | ||||||||
|
Earnings Per Common
Share:
|
||||||||||||||||
|
Basic
|
$ | 0.63 | $ | 0.52 | $ | 1.19 | $ | 1.00 | ||||||||
|
Diluted
|
$ | 0.61 | $ | 0.51 | $ | 1.17 | $ | 0.97 | ||||||||
|
Weighted Average
Number of Common Shares Outstanding:
|
||||||||||||||||
|
Basic
|
84,890,285 | 84,919,498 | 84,828,844 | 84,914,145 | ||||||||||||
|
Diluted
|
86,694,239 | 86,843,260 | 86,646,109 | 86,843,043 | ||||||||||||
The accompanying notes are an integral part of these financial statements.
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands, except share and per share data
| June 30, 2010 |
December 31, 2009 |
|||||||
| (Unaudited) | (Audited) | |||||||
|
ASSETS
|
||||||||
|
Current Assets:
|
||||||||
|
Cash and cash equivalents
|
$ | 8,251 | $ | 15,767 | ||||
|
Short-term investments
|
2,234 | 1,131 | ||||||
|
Accounts receivable,
less allowance for doubtful accounts of $9,592 in 2010 and $8,709 in 2009
|
194,306 | 179,770 | ||||||
|
Deferred income taxes
|
16,458 | 14,087 | ||||||
|
Prepaid expenses
|
13,836 | 12,421 | ||||||
|
Other current assets
|
25,975 | 23,364 | ||||||
|
Total Current Assets
|
261,060 | 246,540 | ||||||
|
Property, Plant
and Equipment, net
|
252,391 | 246,154 | ||||||
|
Other Assets:
|
||||||||
|
Goodwill
|
1,452,051 | 1,394,091 | ||||||
|
Intangible assets,
less accumulated amortization of $22,322 in 2010 and $18,546 in 2009
|
309,562 | 269,454 | ||||||
|
Other
|
25,924 | 26,564 | ||||||
|
Total Other Assets
|
1,787,537 | 1,690,109 | ||||||
|
Total Assets
|
$ | 2,300,988 | $ | 2,182,803 | ||||
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY
|
||||||||
|
Current liabilities:
|
||||||||
|
Current portion of
long-term debt
|
$ | 92,490 | $ | 78,026 | ||||
|
Accounts payable
|
44,051 | 47,608 | ||||||
|
Accrued liabilities
|
99,209 | 92,226 | ||||||
|
Deferred revenues
|
16,568 | 14,954 | ||||||
|
Total Current Liabilities
|
252,318 | 232,814 | ||||||
|
Long-term debt, net
of current portion
|
859,429 | 910,825 | ||||||
|
Deferred income taxes
|
196,061 | 171,744 | ||||||
|
Other liabilities
|
13,777 | 10,247 | ||||||
|
Shareholders’
Equity:
|
||||||||
|
Common stock (par value
$.01 per share, 120,000,000 shares authorized, 85,380,255 issued and outstanding
in 2010 and 84,715,005 issued and outstanding in 2009)
|
854 | 847 | ||||||
|
Additional paid-in
capital
|
69,410 | 47,522 | ||||||
|
Accumulated other comprehensive
income
|
(31,892 | ) | (12,292 | ) | ||||
|
Retained earnings
|
910,831 | 809,618 | ||||||
|
Total Stericycle,
Inc. Shareholders’ Equity
|
949,203 | 845,695 | ||||||
|
Noncontrolling interest
|
30,200 | 11,478 | ||||||
|
Total Shareholders’
Equity
|
979,403 | 857,173 | ||||||
|
Total Liabilities
and Shareholders’ Equity
|
$ | 2,300,988 | $ | 2,182,803 | ||||
The accompanying notes are an integral part of these financial statements.
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
In thousands
| Six Months Ended June 30, | ||||||||
| 2010 | 2009 | |||||||
|
OPERATING ACTIVITIES:
|
||||||||
|
Net income
|
$ | 102,400 | $ | 84,668 | ||||
|
Adjustments to reconcile
net income to net cash provided by operating activities:
|
||||||||
|
Gain on sale of assets
|
(2,955 | ) | — | |||||
|
Stock compensation
expense
|
7,741 | 7,092 | ||||||
|
Excess tax benefit
of stock options exercised
|
(13,430 | ) | (551 | ) | ||||
|
Depreciation
|
20,872 | 16,118 | ||||||
|
Amortization
|
4,134 | 2,386 | ||||||
|
Deferred income taxes
|
12,110 | 11,976 | ||||||
|
Changes in operating
assets and liabilities, net of effect of acquisitions and divestitures:
|
||||||||
|
Accounts receivable
|
(11,688 | ) | 12,302 | |||||
|
Accounts payable
|
(5,436 | ) | (7,806 | ) | ||||
|
Accrued liabilities
|
9,042 | (1,620 | ) | |||||
|
Deferred revenues
|
1,826 | 181 | ||||||
|
Other assets
|
4,689 | 1,456 | ||||||
|
Net cash provided by
operating activities
|
129,305 | 126,202 | ||||||
|
INVESTING ACTIVITIES:
|
||||||||
|
Payments for acquisitions
and international investments, net of cash acquired
|
(67,826 | ) | (60,519 | ) | ||||
|
(Purchase of)/proceeds
from short-term investments
|
(911 | ) | 513 | |||||
|
Proceeds from sale
of assets
|
8,000 | 448 | ||||||
|
Capital expenditures
|
(25,017 | ) | (17,904 | ) | ||||
|
Net cash used in investing
activities
|
(85,754 | ) | (77,462 | ) | ||||
|
FINANCING ACTIVITIES:
|
||||||||
|
Repayment of long-term
debt
|
(44,126 | ) | (11,383 | ) | ||||
|
Net payments on senior
credit facility
|
(18,249 | ) | (71,762 | ) | ||||
|
Proceeds from term
loan
|
— | 50,000 | ||||||
|
Payments of deferred
financing costs
|
— | (888 | ) | |||||
|
Payments on capital
lease obligations
|
(1,829 | ) | (122 | ) | ||||
|
Purchase/ cancellation
of treasury stock
|
(24,260 | ) | (29,975 | ) | ||||
|
Proceeds from other
issuance of common stock
|
25,334 | 9,163 | ||||||
|
Excess tax benefit
of stock options exercised
|
13,430 | 551 | ||||||
|
Net cash used in financing
activities
|
(49,700 | ) | (54,416 | ) | ||||
|
Effect of exchange
rate changes on cash
|
(1,367 | ) | (737 | ) | ||||
|
Net decrease in cash
and cash equivalents
|
(7,516 | ) | (6,413 | ) | ||||
|
Cash and cash equivalents
at beginning of period
|
15,767 | 9,095 | ||||||
|
Cash and cash equivalents
at end of period
|
$ | 8,251 | $ | 2,682 | ||||
|
NON-CASH ACTIVITIES:
|
||||||||
|
Net issuance of notes
payable for certain acquisitions
|
$ | 31,042 | $ | 20,756 | ||||
The accompanying notes are an integral part of these financial statements.
For more information, contact:
Stericycle, Inc.
Frank ten Brink
847-607-2012
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