Exhibit 99.1
April ??, 2003
STERICYCLE, INC. REPORTS RECORD RESULTS
FOR FIRST QUARTER OF 2003
- STERICYCLE, INC. REPORTS 49.7% INCREASE IN NET INCOME TO $12.1 MILLION AFTER PRO FORMA ADOPTION OF FAS 142 FOR 2001 RESULTS (91.6% INCREASE IN NET INCOME AS REPORTED)
- STERICYCLE, INC. REPORTS 40.0% INCREASE IN EARNINGS PER SHARE TO $0.27 AFTER PRO FORMA ADOPTION OF FAS 142 FOR 2001 RESULTS (79.1% INCREASE IN EARNINGS PER SHARE AS REPORTED))
- NET CASH PROVIDED BY OPERATIONS WAS $23.5 MILLION FOR THE QUARTER AND $72.9 MILLION FOR YEAR TO DATE
- REVENUES EXCLUDING INTERNATIONAL EQUIPMENT SALES UP 12.1% IN QUARTER TO $98.2 MILLION
Lake Forest, Illinois, October 31, 2002 -Stericycle, Inc. (NASDAQ:SRCL), the United States' leading provider of medical waste management services, today reported record quarterly financial results for the third quarter of 2002. "The third quarter was another record breaking quarter for our company, with across-the-board growth and record results," said Mark Miller, Stericycle president and chief executive officer. "The solid growth in revenues, operating income, and net income all reflect our disciplined focus on strategically growing and managing our business."
THIRD QUARTER AND YEAR-TO-DATE RESULTS
Revenues for the third quarter ended September 30, 2002 were $102.0 million, up 11.7% from $91.3 million in the same quarter last year. International equipment sales contributed $2.2 million in revenues for the quarter. Gross profit was $42.0 million, up 15.3% from $36.5 million in the same quarter last year. Gross profit as a percent of revenues increased to 41.2% from 40.0% in the third quarter of 2001.
Net income for third quarter of 2002 rose 49.7% to $12.1 million, up from net income of $8.1 million in the same quarter last year after the pro forma adoption of Financial Accounting Standards (FAS) 142, Goodwill and Other Intangible Assets, for the 2001 results. As reported, net income before adoption of FAS 142 was $6.3 million in the third quarter of 2001. FAS142 is effective for our fiscal year that began January 1, 2002.
Earnings per diluted share for the third quarter of 2002 rose to $0.27, up 40.0% from $0.19 in the same quarter last year after the pro forma adoption of FAS 142 for 2001 results. As reported, earnings per diluted share before adoption of FAS 142 were $0.15 in the third quarter of 2001. Weighted shares outstanding used to determine earnings per diluted share were 45,124,354 for the third quarter of 2002 and 42,196,372 for the third quarter of 2001.
For the nine months ended September 30, 2002, revenues increased to $298.3 million, an increase of 12.3% from the same period a year ago. Gross profit as a percent of revenue increased from 39.8% for the nine months ended September 30, 2001 to 40.6% for the same period in 2002. Net income increased 55.0% to $34.3 million, up from $22.1 million for the nine months ending September 30, 2001 after pro forma adoption of FAS 142. As reported, net income was $16.9 million for the nine months ending September 30, 2001. Earnings per diluted share increased 42.7% to $0.76 from $0.53 in the same period a year ago after pro forma adoption of FAS 142. As reported, earnings per diluted share were $0.41 in the same period a year ago.
During the third quarter of 2002, we continued to improve our balance sheet position. Cash generated during the quarter was used to repurchase $8.9 million of our 12-3/8% senior subordinated debt. In addition, we decreased the balances of the term loans under our senior secured credit facility, the amount of our capital leases and other loans by $13.1 million in the quarter. The redemption premium to repurchase the senior subordinated debt was a one-time pre-tax charge of $1.22 million, or tax adjusted $0.016 per diluted share, which was included in interest expense for the quarter. Our total debt to capitalization percentage ratio improved from 50.2% at December 31, 2001 to 40.5% at September 30, 2002.
Miller said, "During the third quarter we continued to execute our proven business model and reported strong sales growth and record income from operations. The cash flow of $23.5 million generated from operations was used to strengthen the business through lowering our debt and investing in the company's future."
Stericycle provides medical waste collection, transportation, treatment and disposal services and safety and compliance programs to healthcare companies nationwide, including hospitals, physician and dental offices, laboratories and clinics. Medical waste includes single-use disposables such as needles, syringes, gloves and other supplies that have been in contact with blood or other bodily fluids, as well as blood, blood products and other items that could harbor infectious agents.
Safe Harbor Statement: Statements in this press release may contain forward-looking statements that involve risks and uncertainties, some of which are beyond the Company's control (for example, general economic conditions). The Company's actual results could differ significantly from the results described in the forward-looking statements. Factors that could cause such differences include difficulties in completing the integration of acquired businesses, changes in governmental regulation of medical waste collection and treatment, and increases in transportation and other operating costs, as well as the various other factors identified in the Company's 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. The Company makes no commitment to disclose any subsequent revisions to forward-looking statements.
Stericycle Financial Statements for First Quarter 2003
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
March 31, December 31
2003 2002
------------ ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents.............................. $ 24,016 $ 8,375
Short-term investments................................. 18,000 512
Accounts receivable, less allowance for doubtful
accounts of $3,??? in 2003 and $3,779 in 2002........ 65,000 62,013
Parts and supplies..................................... 4,410 4,494
Prepaid expenses....................................... 2,780 7,170
Notes receivable....................................... 823
Deferred tax asset..................................... 7,630 6,720
Other.................................................. 9,920 4,249
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Total current assets............................ 131,756 94,356
------------ ------------
Property, plant and equipment:
Land................................................... 7,776 7,776
Buildings and improvements............................. 30,396 30,396
Machinery and equipment................................ 86,661 86,661
Office equipment and furniture......................... 11,462 11,462
Construction in progress............................... 4,134 4,134
------------ ------------
140,429 140,429
Less accumulated depreciation.......................... (55,000) (51,928)
------------ ------------
Property, plant and equipment, net................... 85,429 88,501
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Other assets:
Goodwill, less accumulated amortization of $32,374
in 2003 and 2002..................................... 447,272 447,272
Intangible assets, less accumulated amortization of
$?,??? in 2003 and $3,609 in 2002.................... 6,167 20,110
Notes receivable....................................... 4,100 7,717
Other.................................................. 12,276 9,139
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Total other assets.............................. 469,815 484,238
------------ ------------
Total assets.......................................... $ 687,000 $ 667,095
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt...................... $ 14,223 $ 3,933
Accounts payable....................................... 10,826 14,330
Accrued liabilities.................................... 15,677 31,810
Deferred revenue....................................... 2,883 3,681
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Total current liabilities....................... 43,609 53,754
------------ ------------
Long-term debt, net of current portion................... 249,572 224,124
Deferred income taxes.................................... 15,305 30,729
Other liabilities........................................ 3,708 3,710
Redeemable preferred stock:
Series A convertible preferred stock (par value $.01
share, 75,000 shares authorized, ??,??? outstanding
in 2003 and 29,326 in 2002, liquidation preference
of $??,??? in 2003 and $31,919 in 2002).............. 45,276 28,049
Common shareholders' equity:
Common stock (par value $.01 per share, 30,000,000
shares authorized, 18,718,956 issued and outstanding
in 2002, 18,539,950 issued and outstanding in 2001).. 500 404
Additional paid-in capital............................... 278,000 277,531
Treasury stock of 50,000 shares.......................... (1,435) (1,435)
Accumulated other comprehensive loss..................... (2,535) (229)
Retained earnings........................................ 55,000 50,458
------------ ------------
Total shareholders' equity...................... 374,806 354,778
------------ ------------
Total liabilities and shareholders' equity............. $ 687,000 $ 667,095
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STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
Three Months Ended March 31,
-------------------------------------------
2003 2002
-------------------- --------------------
$ % of Rev $ % of Rev
----------- -------- ----------- --------
Revenues.................................. $ 105,000 100.0 % $ 97,064 100.0 %
Costs and expenses:
Cost of revenues........................ 60,000 57.1 58,175 59.9
----------- -------- ----------- --------
Gross margin 45,000 42.9 38,889 40.1
----------- -------- ----------- --------
Selling, general and
administrative expenses............... 15,000 14.3 14,187 14.6
Amortization............................ 508 0.5 508 0.6
----------- -------- ----------- --------
Total SG&A expenses and amortization. 15,508 14.8 14,695 15.2
----------- -------- ----------- --------
Income from operations before
acquisition-related costs............... 29,492 28.1 24,194 24.9
Acquisition-related costs............... 153 0.2 153 0.1
----------- -------- ----------- --------
Income from operations.................... 29,339 27.9 24,041 24.8
----------- -------- ----------- --------
Other income (expense):
Interest income......................... 125 0.1 163 0.2
Interest expense........................ (6,600) (6.3) (5,809) (6.0)
Other expense........................... (275) (0.2) (671) (0.7)
----------- -------- ----------- --------
Total other income (expense)......... (6,750) (6.4) (6,317) (6.5)
----------- -------- ----------- --------
Income before income taxes................ 22,589 21.5 17,724 18.3
Income tax expense........................ 9,000 8.6 7,093 7.3
----------- -------- ----------- --------
Net income................................ $ 13,589 12.9 % $ 10,631 11.0 %
=========== ======== =========== ========
Earnings per share - diluted.............. $ 0.30 $ 0.24
=========== ===========
Fully taxed net income before
acquisition-related costs............... $ 10,723 10.2 % $ 10,723 11.0 %
Earnings per share - diluted
before acquisition-related costs........ $ 0.24 $ 0.24
Weighted average number of common
shares outstanding - diluted............ 44,771,952 44,771,952
=========== ===========
Depreciation and amortization............. $ 3,563 3.4 % $ 3,563 3.7 %
EBITDA before acquisition-related costs... $ 27,086 25.8 % $ 27,086 27.9 %
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
For the Three
Months Ended March 31,
----------------------
2003 2002
---------- ----------
OPERATING ACTIVITIES:
Net income............................................. $ 10,631 $ 10,631
Adjustments to reconcile net income to net cash
provided by operating activities:
Ineffective portion of cash flow hedges............ (381) (381)
Deferred tax liability............................. (728) (728)
Tax benefit of disqualifying dispositions of stock. 1,168 1,168
Loss on sale of fixed assets....................... 36 36
Depreciation....................................... 3,055 3,055
Amortization....................................... 508 508
Changes in operating assets and liabilities, net of
effect of acquisitions:
Accounts receivable................................ 4,279 4,279
Parts and supplies................................. 1,653 1,653
Prepaid expenses and other assets.................. (2,184) (2,184)
Accounts payable................................... (3,035) (3,035)
Accrued liabilities................................ 8,106 8,106
Deferred revenue................................... (2,037) (2,037)
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Net cash provided by operating activities.............. 21,071 21,071
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INVESTING ACTIVITIES:
Payments for acquisitions and international
investments, net of cash acquired.................. (3,975) (3,975)
Short-term investments............................... (243) (243)
Proceeds from sale of equipment...................... 31 31
Capital expenditures................................. (3,867) (3,867)
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Net cash used in investing activities.................. (8,054) (8,054)
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FINANCING ACTIVITIES:
Proceeds from issuance of notes payable.............. 1,181 1,181
Repayment of long term debt.......................... (2,687) (2,687)
Net proceeds and repayments on line of credit........ (15,000) (15,000)
Principal payments on capital lease obligations...... (76) (76)
Proceeds from issuance of common stock............... 2,028 2,028
---------- ----------
Net cash used in financing activities.................. (14,554) (14,554)
---------- ----------
Effect of exchange rate changes on cash................ 70 70
---------- ----------
Net increase (decrease) in cash and cash equivalents... (1,467) (1,467)
Cash and cash equivalents at beginning of period....... 12,737 12,737
---------- ----------
Cash and cash equivalents at end of period............. $ 11,270 $ 11,270
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Non-cash activities:
Net issuances of common stock for certain acquisitions. $ 1,900 $ 1,900