Date: October 27, 2010
Source: Stericycle, Inc.
Stericycle, Inc. (SRCL), today reported financial results for the third quarter of 2010.
Revenues for the quarter ended September 30, 2010 were $363.0 million, up 21.9% from $297.8 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 unfavorable foreign exchange in the quarter was $1.6 million. Gross profit was $168.1 million, up 19.3% from $140.9 million in the third quarter last year. Gross profit as a percent of revenue was 46.3% compared with 47.3% in the third quarter of 2009.
Net income attributable to Stericycle for the third quarter of 2010 was $56.7 million or $0.65 per diluted share compared with $46.5 million or $0.54 per diluted share for the third quarter of 2009, up 21.8%. GAAP net income attributable to Stericycle for the third quarter of 2010 reflected various non-operational items which, taken together, resulted in non-GAAP earnings per diluted share of $0.65 (see table below). This was a 17.0% increase from our non-GAAP earnings per share of $0.55 in the third quarter of 2009.
FIRST NINE MONTHS' RESULTS
For the nine months ending September 30, 2010, revenues were $1.05 billion, up 21.0% from $864.2 million in the same period last year. Impact from favorable foreign exchange compared with the same period last year was $3.5 million. Gross profit was $485.0 million, up 19.7% from $405.3 million in the same period last year. Gross profit as a percent of revenue was 46.4% compared with 46.9% in 2009. GAAP earnings per diluted share increased 20.5% to $1.82 from $1.51 per diluted share in the same period last year. Non-GAAP earnings per diluted share, when adjusted for various non-operational items, increased from $1.54 to $1.83, or 18.7% (see table below):
Table to reconcile non-GAAP EPS to GAAP EPS
Three months ended September 30, Nine months ended September 30,
----------------------------------- -----------------------------------
2010 2009 Change $ Change % 2010 2009 Change $ Change %
------ ------ ------ ------
GAAP EPS $0.65 $0.54 $0.11 21.3% $1.82 $1.51 $0.31 20.5%
Expenses Related to Acquisitions 0.02 0.04 0.03 0.06
Restructuring Costs/Gain on
Sale of Assets/Other (0.01) - - -
Release of Prior Years' (0.01) (0.02) (0.01) (0.02)
Tax Reserves
Non-GAAP EPS (adjusted) $0.65 $0.55 $0.09 17.0% $1.83 $1.54 $0.29 18.7%
* 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 $205.4 million for the nine months ended September 30, 2010.
For more information about Stericycle, please visit our website at www.stericycle.com.
Conference call to be held October 27, 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 November 27th by dialing 800-642-1687, access code 12947262. 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 BALANCE SHEETS
In thousands, except share and per share data
|
September 30,
|
December 31,
|
||||
|
2010
|
2009
|
||||
|
(Unaudited)
|
(Audited)
|
||||
|
ASSETS
|
|||||
|
Current Assets:
|
|||||
|
Cash and cash equivalents
|
$
|
20,627
|
$
|
15,767
|
|
|
Short-term investments
|
18,632
|
1,131
|
|||
|
Accounts receivable,
less allowance for doubtful
accounts
of $11,432 in 2010 and $8,709 in 2009
|
216,508
|
179,770
|
|||
|
Deferred income taxes
|
14,935
|
14,087
|
|||
|
Prepaid expenses
|
13,490
|
12,421
|
|||
|
Other current assets
|
28,949
|
23,364
|
|||
|
Total
Current Assets
|
313,141
|
246,540
|
|||
|
Property, Plant and Equipment, net
|
262,650
|
246,154
|
|||
|
Other Assets:
|
|||||
|
Goodwill
|
1,476,156
|
1,394,091
|
|||
|
Intangible assets,
less accumulated amortization of
$25,179
in 2010 and $18,546 in 2009
|
349,375
|
269,454
|
|||
|
Other
|
32,964
|
26,564
|
|||
|
Total
Other Assets
|
1,858,495
|
1,690,109
|
|||
|
Total Assets
|
$
|
2,434,286
|
$
|
2,182,803
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|||||
|
Current liabilities:
|
|||||
|
Current portion of
long-term debt
|
$
|
96,932
|
$
|
78,026
|
|
|
Accounts payable
|
49,354
|
47,608
|
|||
|
Accrued liabilities
|
106,778
|
92,226
|
|||
|
Deferred revenues
|
16,925
|
14,954
|
|||
|
Total
Current Liabilities
|
269,989
|
232,814
|
|||
|
Long-term debt, net of current
portion
|
880,452
|
910,825
|
|||
|
Deferred income taxes
|
214,050
|
171,744
|
|||
|
Other liabilities
|
12,811
|
10,247
|
|||
|
Shareholders' Equity:
|
|||||
|
Common stock (par value $.01
per share, 120,000,000
shares authorized, 85,467,697
issued and outstanding
in 2010, 84,715,005 issued
and outstanding in 2009)
|
855
|
847
|
|||
|
Additional paid-in capital
|
70,659
|
47,522
|
|||
|
Accumulated other comprehensive
loss
|
(14,448)
|
(12,292)
|
|||
|
Retained earnings
|
967,517
|
809,618
|
|||
|
Total
Stericycle, Inc. Shareholders’ Equity
|
1,024,583
|
845,695
|
|||
|
Noncontrolling interest
|
32,401
|
11,478
|
|||
|
Total
Shareholders' Equity
|
1,056,984
|
857,173
|
|||
|
Total Liabilities
and Shareholders' Equity
|
$
|
2,434,286
|
$
|
2,182,803
|
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
In thousands, except share and per share data
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||||||
|
2010
|
2009
|
2010
|
2009
|
||||||||
|
$
|
% of Rev
|
$
|
% of Rev
|
$
|
% of Rev
|
$
|
% of Rev
|
||||
|
Revenues
|
362,988
|
100.0
|
297,836
|
100.0
|
1,045,899
|
100.0
|
864,194
|
100.0
|
|||
|
Cost of revenues
|
194,705
|
53.6
|
156,919
|
52.7
|
559,608
|
53.5
|
458,940
|
53.1
|
|||
|
Restructuring costs
|
185
|
0.1
|
--
|
0.0
|
1,339
|
0.1
|
--
|
0.0
|
|||
|
Gross profit
|
168,098
|
46.3
|
140,917
|
47.3
|
484,952
|
46.4
|
405,254
|
46.9
|
|||
|
Selling, general and administrative expenses
|
66,869
|
18.4
|
56,190
|
18.9
|
195,982
|
18.7
|
162,277
|
18.8
|
|||
|
Amortization
|
2,518
|
0.7
|
1,434
|
0.5
|
6,652
|
0.6
|
3,820
|
0.4
|
|||
|
Total SG&A expense and amortization
|
69,387
|
19.1
|
57,624
|
19.3
|
202,634
|
19.4
|
166,097
|
19.2
|
|||
|
Income from operations before acquisition, integration,
and other expenses
|
98,711
|
27.2
|
83,293
|
28.0
|
282,318
|
27.0
|
239,157
|
27.7
|
|||
|
Transactional expenses related to acquisitions
|
1,891
|
0.5
|
3,478
|
1.2
|
3,247
|
0.3
|
5,418
|
0.6
|
|||
|
Restructuring costs and plant closure expense
|
31
|
0.0
|
--
|
0.0
|
1,107
|
0.1
|
--
|
0.0
|
|||
|
Litigation settlement
|
(40)
|
0.0
|
--
|
0.0
|
897
|
0.1
|
--
|
0.0
|
|||
|
Gain on sale of assets
|
--
|
0.0
|
--
|
0.0
|
(2,955)
|
-0.3
|
--
|
0.0
|
|||
|
Acquisition integration expenses
|
790
|
0.2
|
282
|
0.1
|
3,253
|
0.3
|
466
|
0.1
|
|||
|
Income from operations
|
96,039
|
26.5
|
79,533
|
26.7
|
276,769
|
26.5
|
233,273
|
27.0
|
|||
|
Other income (expense):
|
|||||||||||
|
Interest income
|
82
|
0.0
|
48
|
0.0
|
194
|
0.0
|
271
|
0.0
|
|||
|
Interest expense
|
(8,509)
|
-2.3
|
(9,262)
|
-3.1
|
(26,342)
|
-2.5
|
(25,561)
|
-3.0
|
|||
|
Other income (expense), net
|
333
|
0.1
|
(646)
|
-0.2
|
(1,562)
|
-0.1
|
(2,264)
|
-0.3
|
|||
|
Total other income (expense)
|
(8,094)
|
-2.2
|
(9,860)
|
-3.3
|
(27,710)
|
-2.6
|
(27,554)
|
-3.2
|
|||
|
Income before income taxes
|
87,945
|
24.2
|
69,673
|
23.4
|
249,059
|
23.8
|
205,719
|
23.8
|
|||
|
Income tax expense
|
30,645
|
8.4
|
23,110
|
7.8
|
89,359
|
8.5
|
74,488
|
8.6
|
|||
|
Net income
|
57,300
|
15.8
|
46,563
|
15.6
|
159,700
|
15.3
|
131,231
|
15.2
|
|||
|
Net income attributable to noncontrolling interests
|
614
|
0.2
|
37
|
0.0
|
1,801
|
0.2
|
148
|
0.0
|
|||
|
Net income attributable to Stericycle, Inc.
|
56,686
|
15.6
|
46,526
|
15.6
|
157,899
|
15.1
|
131,083
|
15.2
|
|||
|
Earnings per share-diluted
|
0.65
|
0.54
|
1.82
|
1.51
|
|||||||
|
Weighted average number of common shares outstanding-diluted
|
87,179,057
|
86,794,118
|
86,830,761
|
86,827,626
|
|||||||
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
In thousands
|
Nine
Months Ended September 30,
|
|||||
|
2010
|
2009
|
||||
|
OPERATING ACTIVITIES:
|
|||||
|
Net income
|
$
|
159,700
|
$
|
131,231
|
|
|
Adjustments to
reconcile net income to net cash provided
by
operating activities:
|
|||||
|
Gain
on sale of assets
|
(2,955)
|
--
|
|||
|
Stock
compensation expense
|
11,441
|
10,861
|
|||
|
Excess
tax benefit of stock options exercised
|
(17,951)
|
(357)
|
|||
|
Depreciation
|
31,858
|
24,643
|
|||
|
Amortization
|
6,652
|
3,820
|
|||
|
Deferred
income taxes
|
20,307
|
20,718
|
|||
|
Changes in operating
assets and liabilities, net of effect of
acquisitions
and divestitures:
|
|||||
|
Accounts
receivable
|
(26,366)
|
8,204
|
|||
|
Accounts
payable
|
(3,477)
|
(4,502)
|
|||
|
Accrued
liabilities
|
19,214
|
20,452
|
|||
|
Deferred
revenues
|
1,942
|
252
|
|||
|
Other
assets
|
5,061
|
(1,395)
|
|||
|
Net cash provided
by operating activities
|
205,426
|
213,927
|
|||
|
INVESTING ACTIVITIES:
|
|||||
|
Payments
for acquisitions and international investments,
net
of cash acquired
|
(95,615)
|
(107,079)
|
|||
|
Purchases
of short-term investments
|
(17,172)
|
(58)
|
|||
|
Proceeds
from sale of assets
|
8,000
|
640
|
|||
|
Capital
expenditures
|
(35,937)
|
(29,644)
|
|||
|
Net cash used in
investing activities
|
(140,724)
|
(136,141)
|
|||
|
FINANCING ACTIVITIES:
|
|||||
|
Repayment
of long-term debt
|
(45,292)
|
(10,443)
|
|||
|
Net
payments on senior credit facility
|
(13,072)
|
(213,027)
|
|||
|
Proceeds
from term loan
|
--
|
215,000
|
|||
|
Payments
of deferred financing costs
|
(5,757)
|
(3,620)
|
|||
|
Payments
on capital lease obligations
|
(2,172)
|
(255)
|
|||
|
Purchase
/ cancellation of treasury stock
|
(43,589)
|
(69,986)
|
|||
|
Proceeds
from other issuance of common stock
|
38,224
|
11,726
|
|||
|
Excess
tax benefit of stock options exercised
|
17,951
|
357
|
|||
|
Net cash used in
financing activities
|
(53,707)
|
(70,248)
|
|||
|
Effect of exchange
rate changes on cash
|
(6,135)
|
(2,347)
|
|||
|
Net increase in
cash and cash equivalents
|
4,860
|
5,191
|
|||
|
Cash and cash equivalents
at beginning of period
|
15,767
|
9,095
|
|||
|
Cash and cash equivalents
at end of period
|
$
|
20,627
|
$
|
14,286
|
|
|
NON-CASH ACTIVITIES:
|
|||||
|
Net issuance of
notes payable for certain acquisitions
|
$
|
31,641
|
$
|
32,116
|
|
For more information, contact:
Stericycle, Inc.
Frank ten Brink
847-607-2012
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