Exhibit 99.1
October 25, 2005
STERICYCLE, INC. REPORTS RESULTS
FOR THIRD QUARTER 2005
- REVENUES FOR THE QUARTER UP 12.6% FROM YEAR-AGO QUARTER TO $153.2 MILLION
- NET INCOME FOR THE QUARTER UP 10.7% FROM YEAR-AGO QUARTER TO $23.4 MILLION
- EARNINGS PER SHARE FOR THE QUARTER UP 13.0% FROM YEAR-AGO QUARTER TO $0.52 (WITHOUT A NON-CASH IMPAIRMENT CHARGE BY 3CI, EPS FOR THE QUARTER WOULD HAVE BEEN $0.53)
Lake Forest, Illinois, October 25, 2005 -Stericycle, Inc. (NASDAQ:SRCL), the leading provider in North America of medical waste management and compliance services for the healthcare community, today reported financial results for the third quarter of 2005.
THIRD QUARTER AND YEAR-TO-DATE RESULTS
Revenues for the quarter ended September 30, 2005 were $153.2 million, up 12.6% from $136.0 million in the same quarter last year. Acquisitions less than 12 months old contributed approximately $7.4 million in revenues for the quarter. Gross profit was $67.6 million, up 14.2% from $59.2 million in the same quarter last year. Gross profit as a percent of revenues was 44.1% versus 43.5% in the third quarter of 2004.
Net income for the third quarter of 2005 rose 10.7% to $23.4 million, up from $21.1 million in the third quarter of 2004.
Earnings per diluted share for the third quarter of 2005 were $0.52, up 13.0% from $0.46 in the third quarter of 2004. Weighted shares outstanding used to determine earnings per diluted share were 45,401,778 for the third quarter of 2005 and 46,299,925 for the third quarter of 2004.
For the nine months ended September 30, 2005, revenues increased to $442.9 million, up 17.4% from $377.3 million in the same period a year ago. Gross profit was $193.8, up 15.6% from $167.7 million in the same period a year ago. Gross profit as a percent of revenues was 43.8% versus 44.4% in the same period in 2004. Earnings per diluted share increased 17.2% to $1.50 from $1.28 per diluted share in the same period a year ago.
In September 2005, 3CI Complete Compliance Corporation, of which we are the majority shareholder, recorded a non-cash impairment charge of $0.5 million (after-tax) on its Springhill, Louisiana building and property. Without this charge, our earnings per diluted share for the third quarter would have been $0.53 and our earnings per diluted share for the nine months ended September 30, 2005 would have been $1.51.
Our total debt to capitalization percentage ratio at September 30, 2005 was 31.7% versus 29.1% at December 31, 2004.
Stericycle's President and CEO, Mark Miller said, "During the quarter, 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 $91.2 million for the first nine months of the year was used to strengthen our business and fund $47.3 million 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. We make 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)
September 30, December 31,
2005 2004
------------ ------------
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents.............................. $ 3,795 $ 7,850
Short-term investments................................. 290 99
Accounts receivable, less allowance for doubtful
accounts of $4,387 in 2005 and $4,188 in 2004........ 89,983 74,888
Parts and supplies..................................... 4,525 4,259
Prepaid expenses....................................... 9,171 6,716
Notes receivable....................................... 2,698 3,423
Deferred tax asset..................................... 11,887 13,296
Other current assets................................... 12,946 4,961
------------ ------------
Total current assets............................ 135,295 115,492
------------ ------------
Property, plant and equipment, net....................... 126,350 135,512
Other assets:
Goodwill,net........................................... 611,057 516,808
Intangible assets, less accumulated amortization of
$8,969, in 2005 and $7,951 in 2004................... 49,629 50,800
Notes receivable....................................... 9,517 9,517
Other.................................................. 2,961 6,012
------------ ------------
Total other assets.............................. 673,164 583,137
------------ ------------
Total assets.......................................... $ 934,809 $ 834,141
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt...................... $ 12,033 $ 13,218
Accounts payable....................................... 24,873 17,998
Accrued liabilities.................................... 46,420 44,411
Deferred revenue....................................... 11,584 7,611
------------ ------------
Total current liabilities....................... 94,910 83,238
------------ ------------
Long-term debt, net of current portion................... 235,282 190,431
Deferred income taxes.................................... 67,240 57,477
Other liabilities........................................ 5,382 7,623
Common shareholders' equity:
Common stock (par value $.01 per share, 80,000,000
shares authorized, 44,280,914 issued and outstanding
in 2005, 44,732,070 issued and outstanding in 2004).... 444 448
Additional paid-in capital............................... 267,937 298,046
Accumulated other comprehensive loss..................... 1,017 2,461
Retained earnings........................................ 262,597 194,417
------------ ------------
Total shareholders' equity...................... 531,995 495,372
------------ ------------
Total liabilities and shareholders' equity............. $ 934,809 $ 834,141
============ ============
Total debt to capitalization percentage ratio............ 31.7 % 29.1 %
Calculation of total debt to capitalization percentage ratio:
Total debt............................................... $ 247,315 $ 203,649
Shareholders' equity..................................... 531,995 495,372
------------ ------------
Capitalization........................................... $ 779,310 $ 699,021
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------------------- ---------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)
2005 2004 2005 2004
-------------------- --------------------- --------------------- ---------------------
$ % of Rev $ % of Rev $ % of Rev $ % of Rev
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Revenues.................................. $ 153,176 100.0 % $ 135,989 100.0 % $ 442,902 100.0 % $ 377,338 100.0
Cost of revenues........................ 85,588 55.9 76,822 56.5 249,102 56.2 209,681 55.6
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Gross profit 67,588 44.1 59,167 43.5 193,800 43.8 167,657 44.4
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Selling, general and
administrative expenses............... 24,091 15.7 19,956 14.7 68,283 15.4 56,606 15.0
Amortization............................ 499 0.3 605 0.4 1,171 0.3 17 --
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Total SG&A expenses and amortization. 24,590 16.1 20,561 15.1 69,454 15.7 56,623 15.0
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Income from operations before
excluded charges...................... 42,998 28.1 38,606 28.4 124,346 28.1 111,034 29.4
Write off of fixed assets............... 872 0.6 -- -- 872 0.2 1,155 0.3
Acquisition-related costs............... 174 0.1 392 0.3 444 0.1 588 0.2
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Income from operations.................... 41,952 27.4 38,214 28.1 123,030 27.8 109,291 29.0
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Other income (expense):
Interest income......................... 228 0.1 168 0.1 428 0.1 286 0.1
Interest expense........................ (3,251) (2.1) (3,266) (2.4) (8,848) (2.0) (8,379) (2.2)
Write off of deferred finance fees (2005)/
Loan amendment fees (2004) -- -- -- -- (197) -- (333) (0.1)
Other expense........................... (489) (0.3) (275) (0.2) (2,296) (0.5) (1,242) (0.3)
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Total other income (expense)......... (3,512) (2.3) (3,373) (2.5) (10,913) (2.5) (9,668) (2.6)
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Income before income taxes................ 38,440 25.1 34,841 25.6 112,117 25.3 99,623 26.4
Income tax expense........................ 15,057 9.8 13,713 10.1 43,937 9.9 38,724 10.3
----------- -------- ----------- --------- ----------- --------- ----------- ---------
Net income................................ $ 23,383 15.3 % $ 21,128 15.5 % $ 68,180 15.4 % $ 60,899 16.1
=========== ======== =========== ========= =========== ========= =========== =========
Earnings per share - diluted.............. $ 0.52 $ 0.46 $ 1.50 $ 1.32
=========== =========== =========== ===========
Weighted average number of common
shares outstanding - diluted............ 45,401,778 46,299,925 45,332,089 46,304,444
=========== =========== =========== ===========
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
For the Nine Months
Ended September 30,
----------------------
2005 2004
---------- ----------
(unaudited) (unaudited)
OPERATING ACTIVITIES:
Net income..................................................... $ 68,180 $ 59,119
Adjustments to reconcile net income to net cash
provided by operating activities:
Stock compensation expense................................. 18 21
Impairment of property and equipment....................... 872 1,470
Write-off deferred financing fees.......................... 197
Tax benefit of disqualifying dispositions
of stock options......................................... 6,098 6,159
Depreciation............................................... 14,564 14,445
Amortization............................................... 1,171 1,799
Deferred income taxes...................................... 11,172 11,660
Changes in operating assets and liabilities, net of
effect of acquisitions:
Accounts receivable........................................ (12,249) (7,312)
Parts and supplies......................................... (234) (141)
Prepaid expenses and other assets.......................... (7,700) 3,109
Accounts payable........................................... 6,614 (3,904)
Accrued liabilities........................................ (1,066) (2,639)
Deferred revenue........................................... 3,595 (851)
---------- ----------
Net cash provided by operating activities...................... 91,232 82,935
---------- ----------
INVESTING ACTIVITIES:
Payments for acquisitions and international
investments, net of cash acquired.......................... (48,207) (68,227)
Purchases of short-term investments.......................... (191) (1,017)
Proceeds from sale of property and equipment................. 206 61
Capital expenditures......................................... (20,140) (23,343)
---------- ----------
Net cash used in investing activities.......................... (68,332) (92,526)
---------- ----------
FINANCING ACTIVITIES:
Proceeds from issuance of note payable....................... 735 12,097
Repayment of long-term debt.................................. (4,515) (30,822)
Payments of deferred financing fees.......................... (97) --
Net borrowings on 2001 senior credit facility................ 27,500 32,000
Repayment of 2001 senior credit facility..................... (198,853) --
Net Borrowings on 2005 senior credit facility................ 182,000 --
Principal payments on capital lease obligations.............. (608) (734)
Purchase/cancellation of common stock........................ (47,326) (10,188)
Proceeds from other issuances of common stock................ 11,097 10,217
---------- ----------
Net cash (used in) provided by financing activities............ (30,067) 12,570
---------- ----------
Effect of exchange rate changes on cash........................ 3,112 (1,264)
---------- ----------
Net increase (decrease) in cash and cash equivalents........... (4,055) 1,715
Cash and cash equivalents at beginning of period............... 7,850 7,240
---------- ----------
Cash and cash equivalents at end of period..................... $ 3,795 $ 8,955
========== ==========
Non-cash activities:
Net issuances of common stock for certain acquisitions......... $ -- $ 420
Net issuances of notes payable for certain acquisitions........ $ 37,205 $ 17,249
