Exhibit 99.1
April 26, 2006
STERICYCLE, INC. REPORTS RESULTS
FOR FIRST QUARTER 2006
Lake Forest, Illinois, April 26, 2006 -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 first quarter of 2006.
FIRST QUARTER RESULTS
Revenues for the first quarter of 2006 were $179.2 million, up 27.5% from $140.6 million in the same quarter last year. Acquisitions less than 12 months old contributed approximately $25.0 million in revenues for the quarter. Gross profit was $78.8 million, up 29.2% from $60.9 million in the same quarter last year. Gross profit as a percent of revenues was 43.9% versus 43.3% in the first quarter of 2005.
Net income for the first quarter of 2006 was $23.5 million or $0.52 per diluted share compared with net income of $21.8 million or $0.48 per diluted share for the same quarter last year.
Net income in the first quarter of 2006 included $1.6 million of stock compensation expense ($2.6 million pre-tax) or $0.04 per diluted share recorded as a result of the adoption of FASB Statement No. 123R on January 1, 2006.
Debt increased in the quarter due to acquisitions resulting in our total debt to capitalization percentage ratio at March 31, 2006 increasing to 47.3% from 40.9% at December 31, 2005.
Cash flow from operations was $31.2 million for the first three months of 2006. Cash flow and increased loan balances were used to strenghten our business and funded $120.8 million in acquisitions and international investments, $11.2 million in stock repurchases and $7.5 million in capital spending.
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 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)
March 31, December 31,
2006 2005
------------ ------------
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents.............................. $ 7,761 $ 7,825
Short-term investments................................. 2,995 720
Accounts receivable, less allowance for doubtful
accounts of $4,134 in 2006 and $4,810 in 2005........ 119,435 103,703
Parts and supplies..................................... 6,273 5,263
Prepaid expenses....................................... 8,225 6,523
Notes receivable....................................... 2,995 3,164
Deferred tax asset..................................... 11,378 13,452
Other current assets................................... 12,308 3,392
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Total current assets............................ 171,370 144,042
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Property, plant and equipment, net....................... 147,244 136,220
Other assets:
Goodwill,net........................................... 811,416 685,169
Intangible assets, less accumulated amortization of
$9,499 in 2006 and $8,965 in 2005.................... 61,258 61,641
Notes receivable....................................... 11,568 10,672
Other.................................................. 9,555 9,916
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Total other assets.............................. 893,797 767,398
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Total assets.......................................... $ 1,212,411 $ 1,047,660
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt...................... $ 14,687 $ 12,044
Accounts payable....................................... 28,902 27,872
Accrued liabilities.................................... 54,278 48,450
Deferred revenue....................................... 13,697 10,394
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Total current liabilities....................... 111,564 98,760
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Long-term debt, net of current portion................... 473,930 348,841
Deferred income taxes.................................... 75,283 71,549
Other liabilities........................................ 7,816 6,876
Common shareholders' equity:
Common stock (par value $.01 per share, 80,000,000
shares authorized, 44,232,647 issued and outstanding
in 2006, 44,149,722 issued and outstanding in 2005).... 443 442
Additional paid-in capital............................... 258,232 259,075
Accumulated other comprehensive income................... 47 54
Retained earnings........................................ 285,096 261,571
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Total shareholders' equity...................... 543,818 521,634
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Total liabilities and shareholders' equity............. $ 1,212,411 $ 1,047,660
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Total debt to capitalization percentage ratio............ 47.3 % 40.9 %
Calculation of total debt to capitalization percentage ratio:
Total debt............................................... $ 488,617 $ 360,885
Shareholders' equity..................................... 543,818 521,634
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Capitalization........................................... $ 1,032,435 $ 882,519
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
Three Months Ended March 31,
--------------------------------------------
(unaudited)
2006 2005
-------------------- ---------------------
$ % of Rev $ % of Rev
----------- -------- ----------- ---------
Revenues.................................. $ 179,249 100.0 % $ 140,578 100.0 %
Cost of revenues........................ 100,496 56.1 79,645 56.7
----------- -------- ----------- ---------
Gross profit 78,753 43.9 60,933 43.3
----------- -------- ----------- ---------
Selling, general and
administrative expenses............... 32,865 18.3 21,452 15.3
Amortization............................ 511 0.3 296 0.2
----------- -------- ----------- ---------
Total SG&A expenses and amortization. 33,376 18.6 21,748 15.5
----------- -------- ----------- ---------
Income from operations before
acquisition-related expenses.......... 45,377 25.3 39,185 27.9
Acquisition-related expenses............ 631 0.4 90 0.1
----------- -------- ----------- ---------
Income from operations.................... 44,746 25.0 39,095 27.8
----------- -------- ----------- ---------
Other income (expense):
Interest income......................... 256 0.1 67 --
Interest expense........................ (5,906) (3.3) (2,343) (1.7)
Other expense........................... (530) (0.3) (898) (0.6)
----------- -------- ----------- ---------
Total other income (expense)......... (6,180) (3.4) (3,174) (2.3)
----------- -------- ----------- ---------
Income before income taxes................ 38,566 21.5 35,921 25.6
Income tax expense........................ 15,041 8.4 14,106 10.0
----------- -------- ----------- ---------
Net income................................ $ 23,525 13.1 % $ 21,815 15.5 %
=========== ======== =========== =========
Earnings per share - diluted.............. $ 0.52 $ 0.48
=========== ===========
Weighted average number of common
shares outstanding - diluted............ 45,155,925 45,510,561
=========== ===========
*Stericycle adopted FAS123R on a modified prospective basis on January 1, 2006 therefore 2006 balances include stock compensation expense.
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
For the three months
Ended March 31,
----------------------
2006 2005
---------- ----------
(unaudited)
OPERATING ACTIVITIES:
Net income..................................................... $ 23,525 $ 21,815
Adjustments to reconcile net income to net cash
provided by operating activities:
Stock compensation expense................................. 2,589 18
Excess tax benefit of stock options exercised*............. -- 1,419
Depreciation............................................... 5,784 4,932
Amortization............................................... 511 296
Deferred income taxes...................................... 5,310 5,651
Changes in operating assets and liabilities, net of
effect of acquisitions:
Accounts receivable........................................ (2,014) 1,405
Parts and supplies......................................... (284) (136)
Prepaid expenses and other assets.......................... (4,454) (3,104)
Accounts payable........................................... (4,322) (474)
Accrued liabilities........................................ 2,204 1,899
Deferred revenue........................................... 2,333 2,493
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Net cash provided by operating activities...................... 31,182 36,214
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INVESTING ACTIVITIES:
Payments for acquisitions and international
investments, net of cash acquired.......................... (120,825) (707)
Purchases of short-term investments.......................... (5,700) (54)
Proceeds from sale of property and equipment................. -- 16
Capital expenditures......................................... (7,506) (6,312)
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Net cash used in investing activities.......................... (134,031) (7,057)
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FINANCING ACTIVITIES:
Proceeds from issuance of note payable....................... 4,582 642
Repayment of long-term debt.................................. (8,730) (831)
Net borrowings on 2001 senior credit facility................ -- 3,000
Net borrowings on 2005 senior credit facility................ 110,153 --
Principal payments on capital lease obligations.............. (613) (210)
Excess tax benefit of stock options exercised*............... 2,256 --
Purchase/cancellation of treasury stock...................... (11,198) (29,544)
Proceeds from other issuances of common stock................ 5,511 2,243
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Net cash provided by (used in) financing activities............ 101,961 (24,700)
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Effect of exchange rate changes on cash........................ 824 851
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Net increase (decrease) in cash and cash equivalents........... (64) 5,308
Cash and cash equivalents at beginning of period............... 7,825 7,850
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Cash and cash equivalents at end of period..................... $ 7,761 $ 13,158
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Non-cash activities:
Net issuances of notes payable for certain acquisitions........ $ 21,263 $ --
*Stericycle adopted FAS123R on a modified prospective basis January 1, 2006 therefore the presentation of the tax benefit of stock options exercised is different in 2006 versus 2005.
