EX 99.1
FOR FURTHER INFORMATION CONTACT:
FOR IMMEDIATE RELEASE
Frank ten Brink 847-607-2012
Conference call to be held October 23, 2008 at 4:00 p.m. Central time – Dial 888-511-3669 at least 5 minutes before start time. If you are unable to participate on the call, a replay will be available through November 23rd by dialing 800-642-1687, access code 66107496. To hear a live simulcast of the call over the internet on www.earnings.com, or to access an audio archive of the call, go to the Investors page on Stericycle’s website atwww.stericycle.com.
STERICYCLE, INC. REPORTS RESULTS
FOR THIRD QUARTER 2008
Lake Forest, Illinois, October 23, 2008—Stericycle, Inc. (NASDAQ:SRCL), today reported financial results for the third quarter of 2008.
Revenues for the quarter ended September 30, 2008 were $277.1 million, up 16.8% from $237.3 million in the same quarter last year. Acquisitions less than 12 months old contributed approximately $18.0 million to the growth in revenues for the quarter. Gross profit was $123.0 million, up 15.2% from $106.8 million in the same quarter last year. Gross profit as a percent of revenue was 44.4% versus 45.0% in the third quarter of 2007.
Net income for the third quarter of 2008 was $39.2 million or $0.45 per diluted share compared with net income of $32.9 million or $0.37 per diluted share for the third quarter of 2007.
For the nine months ended September 30, 2008, revenues were $809.7 million, up 18.9% from $681.2 million in the same period last year. Gross profit was $359.8 million, up 17.7% from $305.6 million in the same period last year. Gross profit as a percent of revenues was 44.4% versus 44.9% in the same period in 2007. Earnings per diluted share increased 18.2% to $1.24 from $1.05 per diluted share in the same period last year. Earnings per diluted share for the nine months ended 2008 were negatively impacted by $0.04 per diluted share related to the arbitration settlement recorded in the first quarter of 2008.
Cash flow from operations was $156.3 million for the first nine months of 2008. Cash flow and increased loan balances were used to strengthen our business and funded share repurchases, acquisitions, international investments and capital expenditures.
For more information about Stericycle, please visit our website atwww.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 changes in governmental regulation of medical waste collection and treatment and increases in transportation and other operating costs, as well as the other factors described 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 FOR SHARE AND PER SHARE DATA) |
|
| | | |
| September 30, | | December 31, |
| 2008 | | 2007 |
| (unaudited) | | (audited) |
ASSETS | | | |
Current assets: | | | |
Cash and cash equivalents | $ 7,043 | | $ 17,108 |
Short-term investments | 1,205 | | 1,256 |
Accounts receivable, less allowance for doubtful | | | |
accounts of $6,365 in 2008 and $6,157 in 2007 | 174,871 | | 157,435 |
Deferred income taxes | 17,694 | | 13,510 |
Other current assets | 23,028 | | 20,967 |
Total current assets | 223,841 | | 210,276 |
Property, plant and equipment, net | 208,807 | | 193,039 |
Other assets: | | | |
Goodwill | 1,105,016 | | 1,033,333 |
Intangible assets, less accumulated amortization of | | | |
$13,942 in 2008 and $12,230 in 2007 | 163,390 | | 152,689 |
Other | 20,574 | | 18,822 |
Total other assets | 1,288,980 | | 1,204,844 |
Total assets | $ 1,721,628 | | $ 1,608,159 |
| | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | |
Current liabilities: | | | |
Current portion of long-term debt | $ 34,282 | | $ 22,003 |
Accounts payable | 31,597 | | 40,049 |
Accrued liabilities | 91,424 | | 75,571 |
Deferred revenues | 14,136 | | 12,095 |
Total current liabilities | 171,439 | | 149,718 |
Long-term debt, net of current portion | 701,679 | | 613,781 |
Deferred income taxes | 151,604 | | 125,041 |
Other liabilities | 3,417 | | 5,544 |
Shareholders' equity: | | | |
Common stock (par value $0.01 per share, 120,000,000 shares | | | |
authorized, 85,559,658 issued and outstanding in 2008, | | | |
87,410,653 issued and outstanding in 2007) | 856 | | 874 |
Additional paid-in capital | 88,128 | | 197,462 |
Accumulated other comprehensive income | 9,710 | | 30,520 |
Retained earnings | 594,795 | | 485,219 |
Total shareholders' equity | 693,489 | | 714,075 |
Total liabilities and shareholders' equity | $ 1,721,628 | | $ 1,608,159 |
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STERICYCLE, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA) |
| | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| | | |
| 2008 | | 2007 | | 2008 | | 2007 |
| $ | % of Rev | | $ | % of Rev | | $ | % of Rev | | $ | % of Rev |
| | | | | | | | | | | |
Revenues | $ 277,098 | 100.0% | | $ 237,323 | 100.0% | | $ 809,668 | 100.0% | | $ 681,217 | 100.0% |
| | | | | | | | | | | |
Cost of revenues | 154,069 | 55.6% | | 130,509 | 55.0% | | 449,895 | 55.6% | | 375,650 | 55.1% |
| | | | | | | | | | | |
Gross profit | 123,029 | 44.4% | | 106,814 | 45.0% | | 359,773 | 44.4% | | 305,567 | 44.9% |
| | | | | | | | | | | |
Selling, general and administrative expenses | 50,115 | 18.1% | | 43,665 | 18.4% | | 148,073 | 18.3% | | 124,711 | 18.3% |
Amortization | 1,100 | 0.4% | | 929 | 0.4% | | 2,944 | 0.4% | | 2,679 | 0.4% |
| | | | | | | | | | | |
Total SG&A expense and amortization | 51,215 | 18.5% | | 44,594 | 18.8% | | 151,017 | 18.7% | | 127,390 | 18.7% |
| | | | | | | | | | | |
Income from operations before acquisition integration and other expenses | 71,814 | 25.9% | | 62,220 | 26.2% | | 208,756 | 25.8% | | 178,177 | 26.2% |
| | | | | | | | | | | |
Gain on sale of assets | - | 0.0% | | - | 0.0% | | - | 0.0% | | (1,898) | -0.3% |
Impairment of fixed assets | - | 0.0% | | - | 0.0% | | - | 0.0% | | 1,261 | 0.2% |
Impairment of permit | - | 0.0% | | - | 0.0% | | - | 0.0% | | 228 | 0.0% |
Arbitration settlement and related costs | 96 | 0.0% | | - | 0.0% | | 5,595 | 0.7% | | - | 0.0% |
Acquisition integration expenses | 210 | 0.1% | | 360 | 0.2% | | 1,239 | 0.2% | | 1,279 | 0.2% |
| | | | | | | | | | | |
Income from operations | 71,508 | 25.8% | | 61,860 | 26.1% | | 201,922 | 24.9% | | 177,307 | 26.0% |
| | | | | | | | | | | |
Other income (expense): | | | | | | | | | | | |
Interest Income | 185 | 0.1% | | 307 | 0.1% | | 744 | 0.1% | | 1,245 | 0.2% |
Interest expense | (8,618) | -3.1% | | (8,864) | -3.7% | | (24,885) | -3.1% | | (24,840) | -3.6% |
Insurance proceeds | - | 0.0% | | - | 0.0% | | - | 0.0% | | 500 | 0.1% |
Other expense, net | (611) | -0.2% | | (247) | -0.1% | | (1,572) | -0.2% | | (1,030) | -0.2% |
| | | | | | | | | | | |
Total other income (expense) | (9,044) | -3.3% | | (8,804) | -3.7% | | (25,713) | -3.2% | | (24,125) | -3.5% |
| | | | | | | | | | | |
Income before income taxes | 62,464 | 22.5% | | 53,056 | 22.4% | | 176,209 | 21.8% | | 153,182 | 22.5% |
| | | | | | | | | | | |
Income tax expense | 23,237 | 8.4% | | 20,161 | 8.5% | | 66,633 | 8.2% | | 58,902 | 8.6% |
| | | | | | | | | | | |
Net income | $ 39,227 | 14.2% | | $ 32,895 | 13.9% | | $ 109,576 | 13.5% | | $ 94,280 | 13.8% |
| | | | | | | | | | | |
Earnings per share-diluted | $ 0.45 | | | $ 0.37 | | | $ 1.24 | | | $ 1.05 | |
| | | | | | | | | | | |
Weighted average number of common shares outstanding-diluted | 87,864,210 | | | 89,794,892 | | | 88,578,506 | | | 90,068,563 | |
| | | |
STERICYCLE, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
(IN THOUSANDS) |
| | | |
| For the nine months ended |
| September 30, |
| 2008 | | 2007 |
| (unaudited) | | (unaudited) |
Operating Activities: | | | |
Net income | $ 109,576 | | $ 94,280 |
Adjustments to reconcile net income to net cash | | | |
provided by operating activities: | | | |
Gain on sale of assets | - | | (1,898) |
Impairment of fixed assets | - | | 1,261 |
Impairment of permit intangible | - | | 228 |
Write-off of note receivable related to joint venture | 798 | | - |
Stock compensation expense | 8,880 | | 7,855 |
Excess tax benefit of stock options exercised | (6,165) | | (3,414) |
Depreciation | 22,344 | | 19,975 |
Amortization | 2,944 | | 2,679 |
Deferred income taxes | 18,729 | | 11,958 |
Changes in operating assets and liabilities, net of | | | |
effect of acquisitions and divestitures: | | | |
Accounts receivable | (13,976) | | (13,931) |
Other assets | (3,398) | | 1,845 |
Accounts payable | (10,205) | | 6,044 |
Accrued liabilities | 24,451 | | (445) |
Deferred revenues | 2,299 | | 1,706 |
| | | |
Net cash provided by operating activities | 156,277 | | 128,143 |
| | | |
Investing Activities: | | | |
Payments for acquisitions and international | | | |
investments, net of cash acquired | (46,564) | | (78,966) |
Proceeds from maturity of short-term investments | 37 | | 1,763 |
Proceeds from sale of assets | - | | 26,453 |
Proceeds from sale of property and equipment | - | | - |
Capital expenditures | (35,729) | | (37,602) |
| | | |
Net cash used in investing activities | (82,256) | | (88,352) |
| | | |
Financing Activities: | | | |
Repayment of long-term debt | (7,868) | | (32,374) |
Net (payments)/proceeds on senior credit facility | (52,184) | | 68,623 |
Proceeds from private placement of long-term note | 100,000 | | - |
Payments of deferred financing costs | (236) | | - |
Net payments on capital lease obligations | (130) | | (49) |
Excess tax benefit of stock options exercised | 6,165 | | 3,414 |
Purchase/cancellation of treasury stock | (140,306) | | (95,174) |
Proceeds from other issuances of common stock | 14,688 | | 11,441 |
| | | |
Net cash used in financing activities | (79,871) | | (44,119) |
Effect of exchange rate changes on cash | (4,215) | | (1,461) |
Net decrease in cash and cash equivalents | (10,065) | | (5,789) |
Cash and cash equivalents at beginning of period | 17,108 | | 13,492 |
| | | |
Cash and cash equivalents at end of period | $ 7,043 | | $ 7,703 |
Non-cash activities: | | | |
Net issuances of notes payable for certain acquisitions | $ 58,977 | | $ 54,108 |
Net issuances of common stock for certain acquisitions | - | | 365 |
