Attached files
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| 8-K - 8-K PRESS RELEASE - STERICYCLE INC | bo8k0913.htm |
EXHIBIT 99.1
FOR FURTHER INFORMATION CONTACT:
FOR IMMEDIATE RELEASE
Frank ten Brink 847-607-2012
Conference call to be held October 23, 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 November 23rd by dialing 855-859-2056, access code 86467200. 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. REPORTS RESULTS
FOR THE THIRD QUARTER AND YEAR TO DATE 2013
Lake Forest, Illinois, October 23, 2013—Stericycle, Inc. (NASDAQ:SRCL), today reported financial results for the third quarter of 2013.
THIRD QUARTER RESULT
Revenues for the quarter ended September 30, 2013 were $534.6 million, up $54.1 million or 11.3% from $480.5 million in the third quarter last year. Acquisitions contributed approximately $34.1 million to the current period’s growth in revenues. Revenues increased 12.4% compared to the prior period when adjusted for unfavorable foreign exchange impact of $5.3 million. Gross profit was $241.4 million, up 12.0% from $215.6 million in the third quarter last year. Gross profit as a percent of revenue was 45.2% compared with 44.9% in the third quarter of 2012. Earnings per diluted share, reported in accordance with U.S. generally accepted accounting principles (“GAAP”), increased 22.9% to $0.92 from $0.75 in the same period last year. Non-GAAP earnings per diluted share, when adjusted for various items identified in the second of the following tables, increased 13.2% to $0.96 from $0.84. See tables below.
FIRST NINE MONTHS’ RESULTS
Revenues for the nine months ending September 30, 2013 were $1,574.9 million, up $165.4 million or 11.7% from $1,409.5 million in the same period last year. Revenues increased 12.7% compared with the prior period when adjusted for unfavorable foreign exchange impact of $13.5 million. Gross profit was $711.3 million, up 12.9% from $630.3 million in the same period last year. Gross profit as a percent of revenue was 45.2% compared with 44.7% in 2012. GAAP earnings per diluted share increased 17.0% to $2.67 from $2.28 in the same period last year. Non-GAAP earnings per diluted share, when adjusted for various items identified in the second of the following tables, increased 12.9% to $2.76 from $2.45. See tables below.
The following table shows our calculations of organic revenue growth (in millions)(1):
| Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||
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|
| Change |
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| Change | ||
| 2013 | 2012 | $ | % |
| 2013 | 2012 | $ | % |
Total As Reported Revenues (GAAP) | $ 534.6 | $ 480.5 | $ 54.1 | 11.3% |
| $ 1,574.9 | $ 1,409.5 | $ 165.4 | 11.7% |
Adjustment for Foreign Exchange | 5.3 | - | 5.3 |
|
| 13.5 | - | 13.5 |
|
Subtotal (non-GAAP): | 539.9 | 480.5 | 59.4 | 12.4% |
| 1,588.4 | 1,409.5 | 178.9 | 12.7% |
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Adjustment for Acquisitions | (38.1) | (4.0) | (34.1) |
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| (113.4) | (8.2) | (105.2) |
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Adjustment for Regulated Returns and Recall Management Services | (25.1) | (28.8) | 3.7 |
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| (71.3) | (93.5) | 22.2 |
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Subtotal (non-GAAP): | $ 476.7 | $ 447.7 | $ 29.0 | 6.5% |
| $ 1,403.7 | $ 1,307.8 | $ 95.9 | 7.3% |
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Domestic/ International Breakdown: |
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Domestic Revenues | $ 378.1 | $ 348.2 | $ 29.9 | 8.6% |
| $ 1,112.0 | $ 1,015.3 | $ 96.7 | 9.5% |
International Revenues | 156.5 | 132.3 | 24.2 | 18.3% |
| 462.9 | 394.2 | 68.7 | 17.4% |
Total As Reported Revenues (GAAP) | $ 534.6 | $ 480.5 | $ 54.1 | 11.3% |
| $ 1,574.9 | $ 1,409.5 | $ 165.4 | 11.7% |
(1) When evaluating organic revenue growth for internal purposes, we exclude (i) the impact of foreign exchange, (ii) revenues attributed to acquisitions closed within the preceding 12 months and (iii) revenues from our regulated returns and recall management services. 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 than GAAP revenues.
Table to reconcile GAAP EPS to Non-GAAP EPS(2):
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| Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||
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| Change |
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| Change | ||
| 2013 | 2012 | $ | % |
| 2013 | 2012 | $ | % |
GAAP EPS | $ 0.92 | $ 0.75 | $ 0.17 | 22.9% |
| $ 2.67 | $ 2.28 | $ 0.39 | 17.0% |
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Acquisition Expenses | 0.02 | 0.03 |
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| 0.07 | 0.07 |
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Integration Expenses | 0.01 | 0.01 |
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| 0.03 | 0.03 |
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Change in Fair Value | (0.00) | (0.00) |
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| (0.00) | 0.01 |
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Restructuring and Plant Closure | 0.00 | 0.02 |
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| 0.00 | 0.02 |
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Loss on Sale of Business | - | 0.04 |
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| - | 0.04 |
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Litigation Settlement | 0.00 | - |
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| 0.00 | - |
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Non-GAAP EPS (Adjusted) | $ 0.96 | $ 0.84 | $ 0.11 | 13.2% |
| $ 2.76 | $ 2.45 | $ 0.32 | 12.9% |
(2) In accordance with GAAP, reported earnings per share (EPS) 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 $335.3 million and $277.1 million for the nine months ended September 30, 2013 and 2012, respectively.
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.
STERICYCLE, INC. AND SUBSIDIARIES | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
(IN THOUSANDS) | ||
(UNAUDITED) | ||
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|
| September 30, | December 31, |
| 2013 | 2012 |
ASSETS |
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Current Assets: |
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Cash and cash equivalents | $ 63,580 | $ 31,324 |
Short-term investments | 447 | 503 |
Accounts receivable, net | 370,077 | 322,246 |
Deferred income taxes | 22,181 | 22,995 |
Prepaid expenses | 30,909 | 27,042 |
Other current assets | 40,778 | 37,176 |
Total Current Assets | 527,972 | 441,286 |
Property, plant and equipment, net | 352,368 | 335,870 |
Goodwill | 2,207,845 | 2,065,103 |
Intangible assets, net | 720,811 | 667,471 |
Other assets | 36,133 | 37,008 |
Total Assets | $ 3,845,129 | $ 3,546,738 |
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LIABILITIES AND EQUITY |
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Current Liabilities: |
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Current portion of long-term debt | $ 107,577 | $ 87,781 |
Accounts payable | 82,552 | 74,225 |
Accrued liabilities | 135,472 | 125,096 |
Deferred revenues | 19,491 | 18,095 |
Other current liabilities | 66,512 | 25,863 |
Total Current Liabilities | 411,604 | 331,060 |
Long-term debt, net of current portion | 1,295,592 | 1,268,303 |
Deferred income taxes | 384,110 | 359,780 |
Other liabilities | 31,090 | 30,272 |
Equity: |
|
|
Common stock | 857 | 860 |
Additional paid-in capital | 177,706 | 116,720 |
Accumulated other comprehensive loss | (54,998) | (39,064) |
Retained earnings | 1,581,964 | 1,463,277 |
Total Stericycle, Inc. Equity | 1,705,529 | 1,541,793 |
Noncontrolling interests | 17,204 | 15,530 |
Total Equity | 1,722,733 | 1,557,323 |
Total Liabilities and Equity | $ 3,845,129 | $ 3,546,738 |
STERICYCLE, INC. AND SUBSIDIARIES | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
(IN THOUSANDS EXCEPT SHARES AND PER SHARE DATA) | ||||||||||||||||
(UNAUDITED) | ||||||||||||||||
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| Three Months Ended |
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| Nine Months Ended | ||||||||||
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| September 30, |
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| September 30, | ||||||||||
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| 2013 |
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| 2012 |
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| 2013 |
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| 2012 | ||||
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| $ | % of Rev |
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| $ | % of Rev |
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| $ | % of Rev |
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| $ | % of Rev |
Revenues | $ | 534,579 | 100.0 |
| $ | 480,484 | 100.0 |
|
| $ | 1,574,908 | 100.0 |
| $ | 1,409,511 | 100.0 |
Cost of revenues (exclusive of depreciation shown below) |
| 280,645 | 52.5 |
|
| 253,526 | 52.8 |
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| 826,703 | 52.5 |
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| 746,540 | 53.0 |
Depreciation - cost of revenues |
| 12,531 | 2.3 |
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| 11,404 | 2.4 |
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| 36,856 | 2.3 |
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| 32,622 | 2.3 |
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Gross profit |
| 241,403 | 45.2 |
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| 215,554 | 44.9 |
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| 711,349 | 45.2 |
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| 630,349 | 44.7 |
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Selling, general and administrative expenses (exclusive of depreciation and amortization below) |
| 92,964 | 17.4 |
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| 82,176 | 17.1 |
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| 272,363 | 17.3 |
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| 240,635 | 17.1 |
Depreciation - SG&A |
| 2,610 | 0.5 |
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| 2,480 | 0.5 |
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| 8,373 | 0.5 |
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| 6,892 | 0.5 |
Amortization |
| 6,709 | 1.3 |
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| 5,561 | 1.2 |
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| 19,884 | 1.3 |
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| 15,675 | 1.1 |
Total SG&A expense and amortization |
| 102,283 | 19.1 |
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| 90,217 | 18.8 |
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| 300,620 | 19.1 |
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| 263,202 | 18.7 |
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Income from operations before acquisition, integration, and other expenses |
| 139,120 | 26.0 |
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| 125,337 | 26.1 |
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| 410,729 | 26.1 |
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| 367,147 | 26.0 |
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Acquisition expenses |
| 2,111 | 0.4 |
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| 2,467 | 0.5 |
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| 6,238 | 0.4 |
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| 6,213 | 0.4 |
Integration expenses |
| 1,423 | 0.3 |
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| 1,217 | 0.3 |
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| 3,702 | 0.2 |
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| 3,540 | 0.3 |
Change in fair value of contingent consideration |
| (185) | 0.0 |
|
| (11) | 0.0 |
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| (307) | 0.0 |
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| 591 | 0.0 |
Litigation settlement |
| 12 | 0.0 |
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| - | 0.0 |
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| 116 | 0.0 |
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| - | 0.0 |
Loss on sale of business |
| -- | 0.0 |
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| 4,867 | 1.0 |
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| -- | 0.0 |
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| 4,867 | 0.3 |
Restructuring and plant closure costs |
| 364 | 0.1 |
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| 2,250 | 0.5 |
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| 468 | 0.0 |
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| 3,400 | 0.2 |
Income from operations |
| 135,395 | 25.3 |
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| 114,547 | 23.8 |
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| 400,512 | 25.4 |
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| 348,536 | 24.7 |
Other income (expense): |
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Interest income |
| 151 | 0.0 |
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| 117 | 0.0 |
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| 420 | 0.0 |
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| 333 | 0.0 |
Interest expense |
| (13,467) | -2.5 |
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| (13,048) | -2.7 |
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| (40,028) | -2.5 |
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| (38,597) | -2.7 |
Other expense, net |
| (1,341) | -0.3 |
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| (488) | -0.1 |
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| (2,899) | -0.2 |
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| (556) | 0.0 |
Total other expense |
| (14,657) | -2.7 |
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| (13,419) | -2.8 |
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| (42,507) | -2.7 |
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| (38,820) | -2.8 |
Income before income taxes |
| 120,738 | 22.6 |
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| 101,128 | 21.0 |
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| 358,005 | 22.7 |
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| 309,716 | 22.0 |
Income tax expense |
| 39,906 | 7.5 |
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| 35,382 | 7.4 |
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| 123,508 | 7.8 |
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| 110,283 | 7.8 |
Net income |
| 80,832 | 15.1 |
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| 65,746 | 13.7 |
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| 234,497 | 14.9 |
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| 199,433 | 14.1 |
Less: net income attributable to noncontrolling interests |
| 285 | 0.1 |
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| 269 | 0.1 |
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| 1,289 | 0.1 |
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| 1,506 | 0.1 |
Net income attributable to Stericycle, Inc. | $ | 80,547 | 15.1 |
| $ | 65,477 | 13.6 |
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| $ | 233,208 | 14.8 |
| $ | 197,927 | 14.0 |
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Earnings per share - diluted | $ | 0.92 |
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| $ | 0.75 |
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| $ | 2.67 |
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| $ | 2.28 |
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Weighted average number of common shares outstanding - diluted |
| 87,401,565 |
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| 87,305,779 |
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| 87,497,276 |
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| 86,911,229 |
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STERICYCLE, INC. AND SUBSIDIARIES | |||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
(IN THOUSANDS) | |||||
(UNAUDITED) | |||||
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| Nine Months Ended | |||
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| September 30, | |||
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| 2013 |
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| 2012 |
Operating Activities: |
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Net income | $ | 234,497 |
| $ | 199,433 |
Adjustments to reconcile net income to net cash provided by operating activities: |
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Loss on sale of business |
| -- |
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| 4,867 |
Change in fair value of contingent consideration |
| (307) |
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| 591 |
Stock compensation expense |
| 12,088 |
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| 12,346 |
Excess tax benefit of stock options exercised |
| (12,354) |
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| (20,994) |
Depreciation |
| 45,229 |
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| 39,514 |
Amortization |
| 19,884 |
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| 15,675 |
Deferred income taxes |
| 15,623 |
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| 25,462 |
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures: |
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Accounts receivable |
| (43,816) |
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| (4,657) |
Accounts payable |
| 2,647 |
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| 7,246 |
Accrued liabilities |
| 20,486 |
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| (14,995) |
Deferred revenue |
| (614) |
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| 615 |
Other assets and liabilities |
| 41,920 |
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| 12,044 |
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Net cash provided by operating activities |
| 335,283 |
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| 277,147 |
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Investing Activities: |
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Payments for acquisitions, net of cash acquired |
| (132,920) |
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| (153,390) |
Proceeds from/ (purchases of) short-term investments |
| 45 |
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| (49) |
Proceeds from sale of business and other assets |
| -- |
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| 764 |
Capital expenditures |
| (54,329) |
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| (51,658) |
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Net cash used in investing activities |
| (187,204) |
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| (204,333) |
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Financing Activities: |
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Net repayment of long-term debt |
| (48,130) |
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| (43,916) |
Net borrowings/ (repayments) on senior credit facility |
| 5,075 |
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| (96,601) |
Payments of deferred financing costs |
| -- |
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| (148) |
Payments on capital lease obligations |
| (2,623) |
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| (2,559) |
Purchase and cancellation of treasury stock |
| (114,532) |
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| (2,945) |
Payments to noncontrolling interests |
| -- |
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| (398) |
Proceeds from issuances of common stock |
| 33,828 |
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| 44,879 |
Excess tax benefit of stock options exercised |
| 12,354 |
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| 20,994 |
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Net cash used in financing activities |
| (114,028) |
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| (80,694) |
Effect of exchange rate changes on cash |
| (1,795) |
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| 1,574 |
Net increase/ (decrease) in cash and cash equivalents |
| 32,256 |
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| (6,306) |
Cash and cash equivalents at beginning of period |
| 31,324 |
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| 22,511 |
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Cash and cash equivalents at end of period | $ | 63,580 |
| $ | 16,205 |
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Non-cash activities: |
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Net issuances of obligations for acquisitions | $ | 90,643 |
| $ | 62,262 |