Exhibit 99.1
July 29, 2003
STERICYCLE, INC. REPORTS RECORD RESULTS
FOR SECOND QUARTER 2003
- NET INCOME OF $15.5 MILLION FOR THE QUARTER, UP 34.7% FROM YEAR-AGO QUARTER
- EARNINGS PER SHARE OF $0.34 FOR THE QUARTER, UP 29.5% FROM YEAR-AG0 QUARTER
- CASH PROVIDED BY OPERATIONS WAS $31.6 MILLION FOR THE QUARTER AND $59.8 MILLION FOR THE FIRST SIX MONTHS OF THE YEAR
- REVENUES WERE $113.1 MILLION, UP 14.0% FROM YEAR-AGO QUARTER
Lake Forest, Illinois, July 29, 2003 -Stericycle, Inc. (NASDAQ:SRCL), the United States' leading provider of medical waste management and compliance services for the healthcare community today reported record quarterly financial results for the second quarter of 2003. "The second 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."
SECOND QUARTER AND YEAR-TO-DATE RESULTS
Revenues for the quarter ended June 30, 2003 were $113.1 million, up 14.0% from $99.3 million in the same quarter last year. International equipment sales contributed $0.4 million in revenues for the quarter as compared to $1.1 million in the second quarter of 2002. Revenues excluding international equipment sales increased 14.8% over the same period in 2002. Gross profit was $48.8 million, up 21.4% from $40.2 million in the same quarter last year. Gross profit as a percent of revenues increased to 43.2% from 40.5% in the second quarter of 2002.
Net income for the second quarter of 2003 rose 34.7% to $15.5 million, up from $11.5 million in the second quarter of 2002.
Earnings per diluted share for the second quarter of 2003 were $0.34, up 29.5% from $0.26 in the second quarter of 2002. Weighted shares outstanding used to determine earnings per diluted share were 46,105,360 for the second quarter of 2003 and 45,146,640 for the second quarter of 2002.
For the six months ended June 30, 2003, revenues increased to $225.4 million, an increase of 14.8% from the same period a year ago. Gross profit as a percent of revenues increased to 42.6% for the six months ended June 30, 2003 from 40.3% for the same period in 2002. Earnings per share increased 34.1% to $0.66 from $0.49 per diluted share in the same period a year ago.
As previously reported on May 27, 2003, we repurchased $6.6 million of our 12-3/8% senior subordinated bonds. We repurchased an additional $2.0 million of our 12-3/8% senior subordinated bonds on June 30, 2003. The total redemption premium to repurchase the $8.6 million senior subordinated bonds was a pre-tax charge of $1.4 million and the write-off of associated deferred financing fees was a pretax charge of $0.2 million. On an after-tax basis, the charges totaled approximately $1.0 million or $0.02 per diluted share.
During the second quarter of 2003, we continued to improve our balance sheet position. Our total debt to capitalization percentage ratio improved from 39.1% at December 31, 2002 to 34.1% at June 30, 2003.
Miller said, "During the quarter we continued to execute our proven business model and reported strong sales growth and record income from operations. The cash flow of $59.8 million generated from operations for the first six months of the year, was used to strengthen the business by repurchasing senior subordinated bonds, paying down the senior bank 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 Stericycle's 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 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 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. The Company makes no commitment to disclose any subsequent revisions to forward-looking statements.
Stericycle Financial Statements for Second Quarter 2003
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
June 30, December 31
2003 2002
------------ ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents.............................. $ 6,099 $ 8,375
Short-term investments................................. 700 512
Accounts receivable, less allowance for doubtful
accounts of $4,556 in 2003 and $3,779 in 2002........ 64,730 62,013
Parts and supplies..................................... 4,820 4,494
Prepaid expenses....................................... 4,011 7,170
Notes receivable....................................... 823 823
Deferred tax asset..................................... 7,363 6,720
Other.................................................. 3,820 4,249
------------ ------------
Total current assets............................ 92,366 94,356
------------ ------------
Property, plant and equipment, net....................... 92,938 88,501
Other assets:
Goodwill............................................... 466,159 447,272
Intangible assets, less accumulated amortization of
$7,496 in 2003 and $3,609 in 2002.................... 29,368 20,110
Notes receivable....................................... 7,717 7,717
Other.................................................. 7,302 9,139
------------ ------------
Total other assets.............................. 510,546 484,238
------------ ------------
Total assets.......................................... $ 695,850 $ 667,095
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt...................... $ 18,576 $ 3,933
Accounts payable....................................... 11,281 14,330
Accrued liabilities.................................... 39,164 31,810
Deferred revenue....................................... 4,783 3,681
------------ ------------
Total current liabilities....................... 73,804 53,754
------------ ------------
Long-term debt, net of current portion................... 185,822 224,124
Deferred income taxes.................................... 37,386 30,729
Other liabilities........................................ 4,435 3,710
Redeemable preferred stock:
Series A convertible preferred stock (par value $.01
share, 75,000 shares authorized, 22,799 outstanding in
2003 and 29,326 in 2002, liquidation preference of $24,814
at June 30, 2003 and $31,919 at December 31, 2002)..... 21,032 28,049
Common shareholders' equity:
Common stock (par value $.01 per share, 80,000,000
shares authorized, 41,752,873 issued and outstanding
in 2003, 40,437,023 issued and outstanding in 2002).... 418 404
Additional paid-in capital............................... 293,808 277,531
Treasury stock of 50,000 shares.......................... (1,435) (1,435)
Accumulated other comprehensive loss..................... (81) (229)
Retained earnings........................................ 80,661 50,458
------------ ------------
Total shareholders' equity...................... 373,371 326,729
------------ ------------
Total liabilities and shareholders' equity............. $ 695,850 $ 667,095
============ ============
Total debt to capitalization percentage ratio............ 34.1 % 39.1 %
Calculation of total debt to capitalization percentage ratio:
Total debt............................................... $ 204,398 $ 228,057
Redeemable preferred stock............................... 21,032 28,049
Shareholders' equity..................................... 373,371 326,729
------------ ------------
Capitalization........................................... $ 598,801 $ 582,835
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
Three Months Ended June 30, Six Months Ended June 30,
------------------------------------------- ---------------------------------------------
2003 2002 2003 2002
-------------------- -------------------- --------------------- ---------------------
$ % of Rev $ % of Rev $ % of Rev $ % of Rev
----------- -------- ----------- -------- ----------- --------- ----------- ---------
Revenues.................................. $ 113,135 100.0 % $ 99,269 100.0 % $ 225,446 100.0 % $ 196,333 100.0 %
Cost of revenues........................ 64,293 56.8 59,042 59.5 129,460 57.4 117,217 59.7
----------- -------- ----------- -------- ----------- --------- ----------- ---------
Gross profit 48,842 43.2 40,227 40.5 95,986 42.6 79,116 40.3
----------- -------- ----------- -------- ----------- --------- ----------- ---------
Selling, general and
administrative expenses............... 17,098 15.1 14,360 14.5 33,472 14.8 28,547 14.5
Amortization............................ 365 0.3 508 0.5 686 0.3 1016 0.5
----------- -------- ----------- -------- ----------- --------- ----------- ---------
Total SG&A expenses and amortization. 17,463 15.4 14,868 15.0 34,158 15.2 29,563 15.1
----------- -------- ----------- -------- ----------- --------- ----------- ---------
Acquisition-related costs............... 123 0.1 22 -- 214 0.1 175 0.1
----------- -------- ----------- -------- ----------- --------- ----------- ---------
Income from operations.................... 31,256 27.6 25,337 25.5 61,614 27.3 49,378 25.2
----------- -------- ----------- -------- ----------- --------- ----------- ---------
Other income (expense):
Interest income......................... 71 0.1 98 0.1 260 0.1 261 0.1
Interest expense........................ (3,385) (3.0) (5,516) (5.6) (7,312) (3.2) (11,325) (5.8)
Debt extinguishments and restructuring.. (1,640) (475) (3,268) (475)
Other expense........................... (561) (1.9) (350) (0.8) (1,206) (2.0) (1,021) (0.7)
----------- -------- ----------- -------- ----------- --------- ----------- ---------
Total other income (expense)......... (5,515) (4.8) (6,243) (6.3) (11,526) (5.1) (12,560) (6.4)
----------- -------- ----------- -------- ----------- --------- ----------- ---------
Income before income taxes................ 25,741 22.8 19,094 19.2 50,088 22.2 36,818 18.8
Income tax expense........................ 10,219 9.1 7,571 7.6 19,885 8.8 14,664 7.5
----------- -------- ----------- -------- ----------- --------- ----------- ---------
Net income................................ $ 15,522 13.7 % $ 11,523 11.6 % $ 30,203 13.4 % $ 22,154 11.3 %
=========== ======== =========== ======== =========== ========= =========== =========
Earnings per share - diluted.............. $ 0.34 $ 0.26 $ 0.66 $ 0.49
=========== =========== =========== ===========
Weighted average number of common
shares outstanding - diluted............ 46,105,360 45,146,640 45,976,560 44,959,087
=========== =========== =========== ===========
Calculation of EBITDA:
Net Income................................ $ 15,522 $ 11,523 $ 30,203 $ 22,154
Interest Income........................... (71) (98) (260) (261)
Interest Expense.......................... 3,385 5,516 7,312 11,325
Debt extinguishments and restructuring.... 1,640 475 3,268 475
Income tax expense........................ 10,219 7,571 19,885 14,664
Depreciation and amortization............. 4,035 $ 3,648 $ 8,299 $ 7,210
----------- ----------- ----------- -----------
EBITDA.................................... $ 34,730 30.7 % $ 28,635 28.8 % $ 68,707 30.5 % $ 55,567 28.3 %
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
For the Six
Months Ended June 30,
----------------------
2003 2002
---------- ----------
OPERATING ACTIVITIES:
Net income............................................. $ 30,203 $ 22,154
Adjustments to reconcile net income to net cash
provided by operating activities:
Ineffective portion of cash flow hedges............ -- (381)
Write off of deferred financing costs.............. 484 --
Stock compensation expense......................... 76 --
Tax benefit of disqualifying dispositions
of stock options................................. 3,537 1,168
Loss on sale of property and equipment............. 72 201
Depreciation....................................... 7,613 6,194
Amortization....................................... 686 1,016
Deferred income taxes.............................. 6,014 --
Changes in operating assets and liabilities, net of
effect of acquisitions:
Accounts receivable................................ 930 5,381
Parts and supplies................................. 144 1,453
Prepaid expenses and other assets.................. 7,105 2,032
Accounts payable................................... (3,978) (1,931)
Accrued liabilities................................ 6,406 13,956
Deferred revenue................................... 547 (1,805)
---------- ----------
Net cash provided by operating activities.............. 59,839 49,438
---------- ----------
INVESTING ACTIVITIES:
Payments for acquisitions and international
investments, net of cash acquired.................. (33,713) (10,070)
Purchases of short-term investments.................. (188) (358)
Proceeds from sale of property and equipment......... 183 55
Capital expenditures................................. (9,158) (7,413)
---------- ----------
Net cash used in investing activities.................. (42,876) (17,786)
---------- ----------
FINANCING ACTIVITIES:
Proceeds from issuance of note payable............... 1,132 1,181
Repayment of senior subordinated debt................ (17,775) (1,626)
Payments of deferred financing costs................. (395) --
Repayment of long-term debt.......................... (3,093) (894)
Net proceeds from (repayments of) senior credit facil (4,186) (37,687)
Principal payments on capital lease obligations...... (496) (376)
Proceeds from other issuances of common stock........ 5,661 3,817
---------- ----------
Net cash used in financing activities.................. (19,152) (35,585)
---------- ----------
Effect of exchange rate changes on cash................ (87) 106
---------- ----------
Net decrease in cash and cash equivalents.............. (2,276) (3,827)
Cash and cash equivalents at beginning of period....... 8,375 12,737
---------- ----------
Cash and cash equivalents at end of period............. $ 6,099 $ 8,910
========== ==========
Non-cash activities:
Net issuances of common stock for certain acquisitions. $ 70 $ 2,298
