Exhibit 99.1
February 9, 2005
STERICYCLE, INC. REPORTS RESULTS
FOR FOURTH QUARTER AND FULL YEAR 2004
NET INCOME AND EPS INCLUDE $2.6 MILLION, OR $0.06 PER SHARE, IN CHARGES RELATED TO THE REDEMPTION OF SENIOR SUBORDINATED NOTES.- REVENUES OF $138.9 MILLION FOR THE QUARTER, UP 21.2% FROM YEAR-AGO QUARTER AND UP 13.9% FOR THE FULL YEAR TO $516.2 MILLION
- NET INCOME OF $19.1 MILLION FOR THE QUARTER, UP 3.5% FROM YEAR-AGO QUARTER AND UP 18.8% FOR FULL YEAR TO $78.2 MILLION
- EARNINGS PER SHARE OF $0.42 FOR THE QUARTER, UP 5.0% FROM THE YEAR-AGO QUARTER AND UP 18.3% FOR THE FULL YEAR TO $1.69
Lake Forest, Illinois, February 9, 2005 -Stericycle, Inc. (NASDAQ:SRCL), the United States' leading provider of medical waste management and compliance services for the healthcare community, today reported financial results for the fourth quarter and full year of 2004.
FOURTH QUARTER AND FULL YEAR RESULTS
Revenues for the quarter ended December 31, 2004 were $138.9 million, up 21.2% from $114.6 million in the same quarter last year. Acquisitions less than 12 months old contributed approximately $18 million in revenues for the quarter. Gross profit was $60.5 million, up 18.4% from $51.1 million in the same quarter last year. Gross profit as a percent of revenues was 43.6% versus 44.6% in the fourth quarter of 2003.
Net income for the fourth quarter of 2004, including the charges related to the redemption of our senior subordinated notes, rose 3.5% to $19.1 million, up from $18.4 million in the fourth quarter of 2003. As we had previously announced we redeemed the remaining $50.1 million of our 12-3/8% senior subordinated notes in November 2004. The redemption premium was a cash pretax charge of $3.1 million, and the accelerated amortization of financing fees associated with the notes was a non-cash pretax charge of $1.1 million. On an after-tax basis, these charges totaled approximately $2.6 million, or $0.06 per diluted share.
Earnings per diluted share, including this charge, for the fourth quarter of 2004 were $0.42, up 5.0% from $0.40 in the fourth quarter of 2003. Weighted shares outstanding used to determine earnings per diluted share were 45,858,482 for the fourth quarter of 2004 and 46,311,916 for the fourth quarter of 2003.
For the year ended December 31, 2004, revenues increased to $516.2 million, up 13.9% from $453.2 million in the same period a year ago. Gross profit was $228.2 million, up 16.1% from $196.6 million in the same period a year ago. Gross profit as a percent of revenues increased to 44.2% for the year ended December 31, 2004 from 43.4% for the same period in 2003. Earnings per diluted share, including $0.06 in charges related to the redemption of our senior subordinated notes, increased 18.2% to $1.69 from $1.43 per diluted share in the same period a year ago.
Our total debt to capitalization percentage ratio at December 31, 2004 was 29.1% versus 28.1% at December 31, 2003.
Miller said, "During the year, we continued to execute our proven business model, generating strong sales growth and record income from operations. With a strong balance sheet, the cash flow from operations of $114.6 million for the year was used to strengthen the business and funded $72.4 million in acquistions, $33.2 million in capital spending, and $34.8 million ($24.7 million in the fourth quarter of 2004) in stock repurchases."
Stericycle provides medical waste collection, transportation, treatment and disposal services and safety and compliance programs. For more information, 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 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, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
December 31, December 31,
2004 2003
------------ ------------
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents.............................. $ 7,850 $ 7,240
Short-term investments................................. 99 641
Accounts receivable, less allowance for doubtful
accounts of $4,188 in 2004 and $4,149 in 2003........ 74,888 59,711
Parts and supplies..................................... 4,259 3,244
Prepaid expenses....................................... 6,716 7,339
Notes receivable....................................... 3,423 2,223
Deferred tax asset..................................... 9,948 12,345
Other current assets................................... 4,961 4,994
------------ ------------
Total current assets............................ 112,144 97,737
------------ ------------
Property, plant and equipment, net....................... 135,512 96,562
Other assets:
Goodwill,net........................................... 520,156 464,946
Intangible assets, less accumulated amortization of
$7,951 in 2004 and $5,459 in 2003.................... 50,800 31,642
Notes receivable....................................... 9,517 7,717
Other.................................................. 6,012 8,858
------------ ------------
Total other assets.............................. 586,485 513,163
------------ ------------
Total assets.......................................... $ 834,141 $ 707,462
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt...................... $ 13,218 $ 4,830
Accounts payable....................................... 17,998 15,741
Accrued liabilities.................................... 44,411 43,436
Deferred revenue....................................... 7,611 4,987
------------ ------------
Total current liabilities....................... 83,238 68,994
------------ ------------
Long-term debt, net of current portion................... 190,431 163,016
Deferred income taxes.................................... 57,477 42,277
Other liabilities........................................ 7,623 4,411
Redeemable preferred stock:
Series A convertible preferred stock (par value $.01
share, 75,000 shares authorized, 22,799 outstanding
2003, liquidation preference of $24,814 at
December 31, 2003)..................................... -- 20,944
Common shareholders' equity:
Common stock (par value $.01 per share, 80,000,000
shares authorized, 44,732,070 issued and outstanding
in 2003, 41,868,515 issued and outstanding in 2003).... 448 420
Additional paid-in capital............................... 298,046 290,631
Accumulated other comprehensive loss..................... 2,461 530
Retained earnings........................................ 194,417 116,239
------------ ------------
Total shareholders' equity...................... 495,372 407,820
------------ ------------
Total liabilities and shareholders' equity............. $ 834,141 $ 707,462
============ ============
Total debt to capitalization percentage ratio............ 29.1 % 28.1 %
Calculation of total debt to capitalization percentage ratio:
Total debt............................................... $ 203,649 $ 167,846
Redeemable preferred stock............................... -- 20,944
Shareholders' equity..................................... 495,372 407,820
------------ ------------
Capitalization........................................... $ 699,021 $ 596,610
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
Three Months Ended December 31, Year Ended December 31,
-------------------------------------------- ---------------------------------------------
(unaudited) (audited) (unaudited) (audited)
2004 2003 2004 2003
-------------------- --------------------- --------------------- ---------------------
$ % of Rev $ % of Rev $ % of Rev $ % of Rev
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Revenues.................................. $ 138,890 100.0 % $ 114,551 100.0 % $ 516,228 100.0 % $ 453,225 100.0
Cost of revenues........................ 78,341 56.4 63,412 55.4 288,022 55.8 256,600 56.6
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Gross profit 60,549 43.6 51,139 44.6 228,206 44.2 196,625 43.4
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Selling, general and
administrative expenses............... 21,587 15.5 16,960 14.8 78,193 15.1 67,708 14.9
Amortization............................ 631 0.5 775 0.7 2,430 0.5 1,850 0.4
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Total SG&A expenses and amortization. 22,218 16.0 17,735 15.5 80,623 15.6 69,558 15.3
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Income from operations before
excluded charges...................... 38,331 27.6 33,404 29.2 147,583 28.6 127,067 28.0
Write-down of treatment related
fixed assets........................... -- -- -- -- 1,155 0.2 -- --
Acquisition-related costs............... 187 0.1 240 0.2 773 0.1 670 0.1
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Income from operations.................... 38,144 27.5 33,164 29.0 145,655 28.2 126,397 27.9
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Other income (expense):
Interest income......................... 272 0.2 58 0.1 558 0.1 550 0.1
Interest expense........................ (2,807) (2.0) (2,707) (2.4) (11,186) (2.2) (12,848) (2.8)
Loan amendment fees (2004)/
debt extinguishment (2003).......... (4,241) (3.1) -- -- (4,574) (0.9) (3,268) (0.7)
Other expense........................... (647) (0.5) (255) (0.2) (1,889) (0.4) (2,102) (0.5)
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Total other income (expense)......... (7,423) (5.3) (2,904) (4.8) (17,091) (3.3) (17,668) (3.9)
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Income before income taxes................ 30,721 22.1 30,260 26.4 128,564 24.9 108,729 24.0
Income tax expense........................ 11,662 8.4 11,853 10.3 50,386 9.8 42,948 9.5
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Net income................................ $ 19,059 13.7 % $ 18,407 16.1 % $ 78,178 15.1 % $ 65,781 14.5
=========== ======== =========== ========= =========== ========= =========== =========
Earnings per share - diluted.............. $ 0.42 $ 0.40 $ 1.69 $ 1.43
=========== =========== =========== ===========
Weighted average number of common
shares outstanding - diluted............ 45,858,482 46,311,916 46,195,897 46,097,802
=========== =========== =========== ===========
As reported net income $ 19,059 $ 18,407 $ 78,178 $ 65,781
Plus:
Write off of treatment related fixed
assets-after tax....................... $ -- $ -- $ 698 $ --
Loan amendment fees (2004)/
debt extinguishment (2003)-after tax... $ 2,631 $ -- $ 2,781 $ 1,977
Adjusted net income $ 21,690 $ 18,407 $ 81,657 $ 67,758
Adjusted earnings per share-diluted $ 0.47 $ 0.40 $ 1.77 $ 1.47
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
For the Year
Ended December 31,
----------------------
2004 2003
---------- ----------
(unaudited) (audited)
OPERATING ACTIVITIES:
Net income..................................................... $ 78,178 $ 65,781
Adjustments to reconcile net income to net cash
provided by operating activities:
Write off of deferred financing costs...................... 1,094 484
Fees for extinguishment of senior subordinated notes....... 3,147 2,784
Stock compensation expense................................. 21 76
Tax benefit of disqualifying dispositions
of stock options......................................... 7,719 10,044
Loss on sale of property and equipment..................... 1,515 295
Depreciation............................................... 19,373 15,405
Amortization............................................... 2,430 1,850
Deferred income taxes...................................... 13,849 9,576
Changes in operating assets and liabilities, net of
effect of acquisitions:
Accounts receivable........................................ (4,986) 5,983
Parts and supplies......................................... (494) 1,720
Prepaid expenses and other assets.......................... 6,301 (1,710)
Accounts payable........................................... (5,123) (515)
Accrued liabilities........................................ (5,926) 11,363
Deferred revenue........................................... (2,487) 751
---------- ----------
Net cash provided by operating activities...................... 114,611 123,887
---------- ----------
INVESTING ACTIVITIES:
Payments for acquisitions and international
investments, net of cash acquired.......................... (72,408) (37,222)
Purchases of short-term investments.......................... 542 (129)
Proceeds from sale of property and equipment................. 85 688
Capital expenditures......................................... (33,312) (20,972)
---------- ----------
Net cash used in investing activities.......................... (105,093) (57,635)
---------- ----------
FINANCING ACTIVITIES:
Proceeds from issuance of note payable....................... 12,435 1,132
Repayment of senior subordinated debt........................ (54,012) (20,559)
Payments of deferred financing costs......................... -- (395)
Repayment of long-term debt.................................. (4,402) (6,023)
Net borrowings (repayments of) proceeds
from senior credit facility................................ 61,695 (37,187)
Principal payments on capital lease obligations.............. (996) (1,117)
Purchase of common stock..................................... (34,847) (13,204)
Proceeds from other issuances of common stock................ 13,186 10,533
---------- ----------
Net cash used in financing activities.......................... (6,941) (66,820)
---------- ----------
Effect of exchange rate changes on cash........................ (1,967) (567)
---------- ----------
Net increase (decrease) in cash and cash equivalents........... 610 (1,135)
Cash and cash equivalents at beginning of period............... 7,240 8,375
---------- ----------
Cash and cash equivalents at end of period..................... $ 7,850 $ 7,240
========== ==========
Non-cash activities:
Net issuances of common stock for certain acquisitions......... $ 441 $ 204
Net issuances of notes payable for certain acquisitions........ $ 17,795 $ --
