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Stericycle 4th Quarter Earnings Up 30%

Date: February 2, 2012

Source: Stericycle, Inc.

Stericycle, Inc. Reports Results for Fourth Quarter and Full Year 2011

Stericycle, Inc. (NASDAQ: SRCL), today reported financial results for the fourth quarter and full year of 2011.

Revenues for the quarter ended December 31, 2011 were $446.6 million, up 13.5% from $393.5 million from the fourth quarter last year. Acquisitions less than 12 months old contributed approximately $48.9 million to the growth in revenues. The impact on revenues from foreign exchange in the quarter was $2.5 million unfavorable. Gross profit was $201.5 million, up 10.4% from $182.5 million in the fourth quarter last year. Gross profit as a percent of revenue was 45.1% compared with 46.4% in the fourth quarter of 2010.

Net income attributable to Stericycle for the fourth quarter of 2011 was $64.3 million or $0.74 per diluted share compared with $50.0 million or $0.57 per diluted share for the fourth quarter of 2010. Net income attributable to Stericycle for the fourth quarter of 2011 and fourth quarter of 2010 includes acquisition expenses, restructuring costs, and other items. Excluding the effects of these items, non-GAAP earnings per diluted share were $0.76 for the fourth quarter of 2011 (see table below). Our non-GAAP earnings per diluted share increased 11.0% from our non-GAAP earnings per diluted share of $0.69 in the fourth quarter of 2010.

FULL YEAR RESULTS

For the year ended December 31, 2011, revenues were $1.676 billion, up 16.4% from $1.439 billion last year. Acquisitions less than 12 months old contributed approximately $158.2 million to the growth in revenues. The impact on revenues from foreign exchange for the full year was $11.2 million favorable. Gross profit was $760.7 million, up 14.0% from $667.4 million in 2010. Gross profit as a percent of revenue was 45.4% compared with 46.4% in 2010. Earnings per diluted share increased to $2.69 in 2011 from $2.39 in 2010. Non-GAAP earnings per diluted share, when adjusted for various items, increased to $2.85 in 2011 from $2.52 in 2010, a 13.1% increase (see table below):

 

Table to reconcile GAAP EPS to non-GAAP EPS:
Three months ended December 31, Years ending December 31,
2011 2010 Change
$ 		Change
% 		2011 2010 Change
$ 		Change
%
GAAP EPS $0.74 $0.57 $0.17 29.6 % $2.69 $2.39 $0.30 12.4 %
Acquisition Expenses (0.01 ) 0.07 0.12 0.10
Restructuring costs/Other 0.03 0.04 0.04 0.03
Non-GAAP EPS (adjusted) $0.76 $0.69 $0.08 11.0 % $2.85 $2.52 $0.33 13.1 %

 

* 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 $306.1 million for the full year of 2011.

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 February 2, 2012 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 March 2nd, 2012 by dialing 855-859-2056, access code 40180757. 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 Years Ended
December 31, December 31,
2011 2010 2011 2010
(unaudited) (unaudited) (audited)
$ % of Rev $ % of Rev $ % of Rev $ % of Rev
Revenues $ 446,557 100.0 % $ 393,489 100.0 % $ 1,676,048 100.0 % $ 1,439,388 100.0 %
Cost of revenues 234,342 52.5 % 200,791 51.0 % 874,115 52.2 % 733,416 51.0 %
Depreciation - cost of revenues 10,697 2.4 % 10,042 2.6 % 41,135 2.5 % 37,025 2.6 %
Restructuring costs - 0.0 % 181 0.0 % 54 0.0 % 1,520 0.1 %
Gross profit 201,518 45.1 % 182,475 46.4 % 760,744 45.4 % 667,427 46.4 %
Selling, general and administrative expenses 76,962 17.2 % 70,353 17.9 % 291,777 17.4 % 261,460 18.2 %
Depreciation - SG&A 2,195 0.5 % 2,066 0.5 % 8,642 0.5 % 6,941 0.5 %
Amortization 5,167 1.2 % 3,267 0.8 % 16,269 1.0 % 9,919 0.7 %
Total SG&A expense and amortization 84,324 18.9 % 75,686 19.2 % 316,688 18.9 % 278,320 19.3 %
Income from operations before
acquisition, integration, and other expenses 117,194 26.2 % 106,789 27.1 % 444,056 26.5 % 389,107 27.0 %
Acquisition expenses (2,771 ) -0.6 % 6,272 1.6 % 9,483 0.6 % 9,519 0.7 %
Restructuring costs and plant closure expense 3,680 0.8 % 5,744 1.5 % 4,712 0.3 % 6,851 0.5 %
Litigation settlement 725 0.2 % - 0.0 % 1,185 0.1 % 897 0.1 %
Loss/ (gain) on sale of businesses (304 ) -0.1 % - 0.0 % 19 0.0 % (2,955 ) -0.2 %
Integration expenses 480 0.1 % 859 0.2 % 4,346 0.3 % 4,112 0.3 %
Income from operations 115,384 25.8 % 93,914 23.9 % 424,311 25.3 % 370,683 25.8 %
Other income (expense):
Interest income 315 0.1 % 72 0.0 % 799 0.0 % 266 0.0 %
Interest expense (13,018 ) -2.9 % (10,739 ) -2.7 % (49,431 ) -2.9 % (37,081 ) -2.6 %
Other expense, net (1,696 ) -0.4 % (453 ) -0.1 % (3,355 ) -0.2 % (2,015 ) -0.1 %
Total other income (expense) (14,399 ) -3.2 % (11,120 ) -2.8 % (51,987 ) -3.1 % (38,830 ) -2.7 %
Income before income taxes 100,985 22.6 % 82,794 21.0 % 372,324 22.2 % 331,853 23.1 %
Income tax expense 35,862 8.0 % 32,037 8.1 % 134,981 8.1 % 121,396 8.4 %
Net income 65,123 14.6 % 50,757 12.9 % 237,343 14.2 % 210,457 14.6 %
Less: net income attributable to
noncontrolling interests 835 0.2 % 777 0.2 % 2,592 0.2 % 2,578 0.2 %
Net income attributable to Stericycle, Inc. $ 64,288 14.4 % $ 49,980 12.7 % $ 234,751 14.0 % $ 207,879 14.4 %
Earnings per share-diluted $ 0.74 $ 0.57 $ 2.69 $ 2.39
Weighted average number of
common shares outstanding-diluted 86,635,383 87,279,853 87,367,712 86,962,651

 

STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
December 31, December 31,
2011 2010
(unaudited) (audited)
ASSETS
Current Assets:
Cash and cash equivalents $ 22,511 $ 79,276
Short-term investments 416 16,248
Accounts receivable, less allowance for doubtful
accounts of $18,905 in 2011 and $10,845 in 2010 290,854 214,899
Deferred income taxes 19,314 16,824
Prepaid expenses 22,466 16,038
Other current assets 35,035 25,403
Total Current Assets 390,596 368,688
Property, plant and equipment, net 293,912 267,971
Other assets:
Goodwill 1,913,703 1,595,764
Intangible assets, less accumulated amortization of
$42,050 in 2011 and $28,394 in 2010 546,618 375,174
Other 32,261 31,426
Total other assets 2,492,582 2,002,364
Total Assets $ 3,177,090 $ 2,639,023
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt $ 100,526 $ 91,406
Accounts payable 66,635 54,777
Accrued liabilities 150,619 134,355
Deferred revenues 12,855 14,455
Other current liabilities 6,377 13,496
Total Current Liabilities 337,012 308,489
Long-term debt, net of current portion 1,284,113 1,014,222
Deferred income taxes 313,733 222,647
Other liabilities 14,981 13,315
Equity:
Common stock (par value $0.01 per share, 120,000,000 shares
authorized, 84,696,227 issued and outstanding in 2011,
and 85,242,387 issued and outstanding in 2010) 847 852
Additional paid-in capital - 46,945
Accumulated other comprehensive loss (45,984 ) (16,869 )
Retained earnings 1,243,303 1,017,497
Total Stericycle, Inc. Equity 1,198,166 1,048,425
Noncontrolling interest 29,085 31,925
Total Equity 1,227,251 1,080,350
Total Liabilities and Equity $ 3,177,090 $ 2,639,023

 

STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
Years Ended December 31,
2011 2010
(unaudited) (audited)
Operating Activities:
Net income $ 237,343 $ 210,457
Adjustments to reconcile net income to net cash
provided by operating activities:
Loss/ (gain) on sale of business 19 (2,955 )
Restructuring and plant closure costs 2,756 5,571
Write down of other assets 1,256 -
Change in fair value of contingent consideration (7,221 ) -
Accelerated amortization of term loan financing fees 1,241 -
Stock compensation expense 15,367 15,298
Excess tax benefit of stock options exercised (17,410 ) (24,687 )
Depreciation 49,777 43,966
Amortization 16,269 9,919
Deferred income taxes 31,837 26,312
Changes in operating assets and liabilities, net of
effect of acquisitions and divestitures:
Accounts receivable (31,821 ) (20,270 )
Accounts payable (12,539 ) (165 )
Accrued liabilities 31,754 56,578
Deferred revenue (1,997 ) (878 )
Other assets and liabilities (10,527 ) 6,524
Net cash provided by operating activities 306,104 325,670
Investing Activities:
Payments for acquisitions and international
investments, net of cash acquired (479,661 ) (190,430 )
Proceeds from/ (purchases of) short-term investments 15,942 (14,732 )
Proceeds from sale of businesses and other assets 2,371 8,000
Capital expenditures (53,301 ) (48,320 )
Net cash used by investing activities (514,649 ) (245,482 )
Financing Activities:
Repayments of long-term debt and other obligations (39,536 ) (42,377 )
Net borrowings / (repayments) on senior credit facility 270,827 (342,796 )
Proceeds from private placement of long-term note - 400,000
Payments of deferred financing costs (3,740 ) (5,757 )
Payments on capital lease obligations (3,333 ) (2,894 )
Purchase and cancellation of treasury stock (124,056 ) (94,335 )
Payments to noncontrolling interests (534 ) -
Proceeds from other issuances of common stock 31,286 49,907
Excess tax benefit of stock options exercised 17,410 24,687
Net cash provided by/ (used in) financing activities 148,324 (13,565 )
Effect of exchange rate changes on cash 3,456 (3,114 )
Net (decrease) / increase in cash and cash equivalents (56,765 ) 63,509
Cash and cash equivalents at beginning of period 79,276 15,767
Cash and cash equivalents at end of period $ 22,511 $ 79,276
Non-cash activities:
Net issuances of obligations for certain acquisitions $ 58,338 $ 96,295

 

For more information, contact:
Stericycle, Inc.
Frank ten Brink
847-607-2012

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