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Proc-Type: 2001,MIC-CLEAR
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UNITED STATES FORM 8-K/A
Current Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 1, 2003
Stericycle, Inc.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Exact name of registrant as specified in its charter)
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28161 North Keith Drive
Lake Forest, Illinois 60045
(847) 367-5910
Not Applicable
Item 7. Financial Statements and Exhibits.
Exhibit |
Description |
Exhibit 99.1 |
Press Release dated May 1, 2003. |
Item 9. Regulation FD Disclosure.
The information included in the Item is intended to be included under Item 12-- Disclosure of Results of Operations and Financial Condition, and is included in this Item pursuant to SEC Release No. 33-8216.On May 1, 2003 Stericycle, Inc. issued a press release announcing its financial results for the quarter ended March 31, 2003. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated by reference.
The press release and accompanying balance sheet refer to Stericycle's total debt to capitalizaton percentage ratio. The total debt to capitalization percentage ratio is calculated by dividing total debt (numerator) by the sum of total debt, preferred stock, and shareholders' equity (denominator). We consider this leverage ratio to be a good indicator of the strength of a company's balance sheet and its ability to service its debt. Total debt to capitalization percentage is not a measure in accordance with accounting principles generally accepted in the United States. The ratio should not be considered as an alternative to net income, as an indicator of operating performance or as an alternative to cash flow as a measure of liquidity.
The income statement accompanying the press release shows EBITDA for the first quarter. EBITDA is calculated as the sum of net income, plus net interest expense, income tax expense, depreciation expense and amortization expense. We consider EBITDA to be a widely accepted financial indicator of a company's ability to service debt, fund capital expenditures and expand its business. EBITDA is not calculated in the same way by all companies and therefore may not be comparable to similarly titled measures reported by other companies. EBITDA is not a measure in accordance with accounting principles generally accepted in the United States. EBITDA should not be considered as an alternative to net income, as an indicator of operating performance or as an alternative to cash flow as a measure of liquidity. The funds depicted by this measure may not be available for management's discretionary use due to legal or functional requirements, debt service, other commitments and uncertainties.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned therunto duly authorized.
Stericycle, Inc. |
By: | /s/ Frank J.M. ten Brink |
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Frank J.M. ten Brink | |
Executive Vice President and Chief Financial Officer |
Dated: May 1, 2003
EXHIBIT INDEX
Exhibit |
Description |
Exhibit 99.1 |
Press Release dated May 1, 2003. |
Exhibit 99.1
May 1, 2003
STERICYCLE, INC. REPORTS RECORD RESULTS
FOR FIRST QUARTER 2003
Lake Forest, Illinois, May 1, 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 first quarter of 2003. "The first 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 reflected our disciplined focus on strategically growing and managing our business."
FIRST QUARTER 2003 RESULTS
Net income for the first quarter of 2003 rose 38.1% to $14.7 million, up from $10.6 million in the first quarter of 2002.
Earnings per diluted share for the first quarter of 2003 were $0.32, up 33.3% from $0.24 in the first quarter of 2002. Weighted shares outstanding used to determine earnings per diluted share were 45,843,228 for the first quarter of 2003 and 44,771,952 for the first quarter of 2002.
As previously reported, during the first quarter of 2003 we repurchased $9.1 million of our 12-3/8% senior subordinated bonds. The redemption premium to repurchase the 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 first 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 38.7% at March 31, 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 $28.3 million generated from operations was used to strengthen the business by acquiring Scherer Health, Inc. on January 9, 2003, repurchase senior subordinated bonds 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 the Company's control (for example, general economic conditions). The Company's 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 the Company's 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 First Quarter 2003
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
March 31, December 31 2003 2002 ------------ ------------ (unaudited) ASSETS Current assets: Cash and cash equivalents.............................. $ 9,188 $ 8,375 Short-term investments................................. 1,141 512 Accounts receivable, less allowance for doubtful accounts of $4,366 in 2003 and $3,779 in 2002........ 68,540 62,013 Parts and supplies..................................... 5,279 4,494 Prepaid expenses....................................... 5,109 7,170 Notes receivable....................................... 823 823 Deferred tax asset..................................... 6,579 6,720 Other current assets................................... 3,442 4,249 ------------ ------------ Total current assets............................ 100,101 94,356 Property, plant and equipment, net....................... 93,552 88,501 Other assets: Goodwill, less accumulated amortization of $32,374 in 2003 and 2002..................................... 469,389 447,272 Intangible assets, less accumulated amortization of $6,800 in 2003 and $3,609 in 2002.................... 21,042 20,110 Notes receivable....................................... 7,717 7,717 Other.................................................. 8,385 9,139 ------------ ------------ Total other assets.............................. 506,533 484,238 ------------ ------------ Total assets.......................................... $ 700,186 $ 667,095 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long term debt...................... $ 25,156 $ 3,933 Accounts payable....................................... 12,637 14,330 Accrued liabilities.................................... 36,111 31,810 Deferred revenue....................................... 4,401 3,681 ------------ ------------ Total current liabilities....................... 78,305 53,754 ------------ ------------ Long-term debt, net of current portion................... 210,473 224,124 Deferred income taxes.................................... 34,143 30,729 Other liabilities........................................ 4,446 3,710 Redeemable preferred stock: Series A convertible preferred stock (par value $0.01 share, 75,000 shares authorized, 29,326 outstanding in 2003 and 2002, liquidation preference of $31,319 at March 31,2003 and December 31, 2002)............... 28,049 28,049 Common shareholders' equity: Common stock (par value $0.01 per share, 30,000,000 shares authorized, 40,656,919 issued and outstanding in 2003, 40,437,023 issued and outstanding in 2002).. 407 404 Additional paid-in capital)............................... 280,680 277,531 Treasury stock of 50,000 shares.......................... (1,435) (1,435) Accumulated other comprehensive loss..................... (21) (229) Retained earnings........................................ 65,139 50,458 ------------ ------------ Total shareholders' equity...................... 344,770 354,778 ------------ ------------ Total liabilities and shareholders' equity............. $ 700,186 $ 667,095 ============ ============ Total debt to capitalization percentage ratio Calculation of total debt to capitalization percentage ratio: Total debt $ 235,629 $ 228,057 Redeemable preferred stock 28,049 28,049 Shareholders' equity 344,770 326,729 ------------ ------------ Capitalization $ 608,448 $ 582,835
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
Three Months Ended March 31, ------------------------------------------- 2003 2002 -------------------- -------------------- $ % of Rev $ % of Rev ----------- -------- ----------- -------- Revenues.................................. $ 112,311 100.0 % $ 97,064 100.0 % Cost of revenues........................ 65,167 58.0 58,175 59.9 ----------- -------- ----------- -------- Gross margin 47,144 42.0 38,889 40.1 ----------- -------- ----------- -------- Selling, general and administrative expenses............... 16,374 14.3 14,187 14.6 Amortization............................ 321 0.3 508 0.6 ----------- -------- ----------- -------- Total SG&A expenses and amortization. 16,695 14.6 14,695 15.2 ----------- -------- ----------- -------- Acquisition-related costs............... 91 0.1 153 0.1 ----------- -------- ----------- -------- Income from operations.................... 30,358 27.0 24,041 24.8 ----------- -------- ----------- -------- Other income (expense): Interest income......................... 189 0.2 163 0.2 Interest expense........................ (3,927) (3.5) (5,809) (6.0) Debt extinguishments.................... (1,628) (1.4) - (0.0) Other expense........................... (645) (0.6) (671) (0.7) ----------- -------- ----------- -------- Total other income (expense)......... (6,011) (5.4) (6,317) (6.5) ----------- -------- ----------- -------- Income before income taxes................ 24,347 21.9 17,724 18.3 Income tax expense........................ 9,666 8.6 7,093 7.3 ----------- -------- ----------- -------- Net income................................ $ 14,681 13.1 % $ 10,631 11.0 % =========== ======== =========== ======== Earnings per share - diluted.............. $ 0.32 $ 0.24 =========== =========== Weighted average number of common shares outstanding - diluted............ 44,843,228 44,771,952 =========== =========== Calculation of EBITDA: Income from operations.................... $ 30,358 $ 24,041 Other income (expense).................... (645) (671) Depreciation and amortization............. 4,264 3,563 ----------- ----------- EBITDA before acquisition-related costs... $ 33,977 30.3 % $ 26,933 27.7 % =========== ===========
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
For the Three Months Ended March 31, ---------------------- 2003 2002 ---------- ---------- OPERATING ACTIVITIES: Net income..................................................... $ 14,681 $ 10,631 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...................... 247 - Stock compensation expense................................. 76 - Tax benefit of disqualifying dispositions of stock options. 1,343 1,168 Loss on sale of property and equipment..................... 72 36 Depreciation............................................... 3,943 3,055 Amortization............................................... 321 508 Deferred income taxes...................................... 3,555 (728) Changes in operating assets and liabilities, net of effect of acquisitions: Accounts receivable........................................ (2,200) 4,279 Parts and supplies......................................... (279) 1,653 Prepaid expenses and other assets.......................... 5,626 (2,184) Accounts payable........................................... (2,643) (3,035) Accrued liabilities........................................ 3,368 8,106 Deferred revenue........................................... 165 (2,037) ---------- ---------- Net cash provided by operating activities...................... 28,275 21,071 ---------- ---------- INVESTING ACTIVITIES: Payments for acquisitions and international investments, net of cash acquired.......................... (31,301) (3,975) Purchases of short-term investments.......................... (629) (243) Proceeds from sale of property and equipment................. 132 31 Capital expenditures......................................... (3,788) (3,867) ---------- ---------- Net cash used in investing activities.......................... (33,586) (8,054) ---------- ---------- FINANCING ACTIVITIES: Proceeds from issuance of notes payable...................... 1,132 1,181 Repayment of senior subordinated debt........................ (9,129)) - Payments of deferred financing costs......................... (395) - Repayment of long term debt.................................. (732) - Net proceeds from (repayments of) senior credit facility..... 15,814 (17,687) Principal payments on capital lease obligations.............. (252) (76) Proceeds from other issuances of common stock................ 1,733 2,028 ---------- ---------- Net cash provided by (used in) financing activities............ 8,151 (14,554) ---------- ---------- Effect of exchange rate changes on cash........................ (27) 70 ---------- ---------- Net increase (decrease) in cash and cash equivalents........... 813 (1,467) Cash and cash equivalents at beginning of period............... 8,375 12,737 ---------- ---------- Cash and cash equivalents at end of period..................... $ 9,188 $ 11,270 ========== ========== Non-cash activities: Net issuances of common stock for certain acquisitions......... $ 70 $ 1,900