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Proc-Type: 2001,MIC-CLEAR
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UNITED STATES FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
July 28, 2004
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 12. Results of Operations and Financial Condition
On July 28, 2004 Stericycle, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2004. 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.
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: July 28, 2004
EXHIBIT INDEX
Exhibit |
Description |
Exhibit 99.1 |
Press Release dated July 28, 2004. |
Exhibit 99.1
July 28, 2004
STERICYCLE, INC. REPORTS RESULTS
FOR SECOND QUARTER 2004
Lake Forest, Illinois, JULY 28, 2004 - 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 second quarter of 2004. "The second quarter was the another strong quarter for our company," said Mark Miller, Stericycle president and chief executive officer. "Our continued focus on strategically managing our business has resulted in continued increases in revenues, operating income, and net income."
SECOND QUARTER AND YEAR-TO-DATE RESULTS
Net income for the second quarter of 2004 rose 21.6% to $18.9 million, up from $15.5 million in the second quarter of 2003.
Earnings per diluted share for the second quarter of 2004 were $0.41, up 20.1% from $0.34 in the second quarter of 2003. Without approximately $1.5 million or $0.02 per share in charges related to the write off of select U.S. incineration equipment and to loan amendment fees related to the increase in our senior secured credit facility in connection with our acquisition in June 2004 of White Rose Environmental Limited, earnings per diluted share for the second quarter of 2004 would have been $0.43.
Weighted shares outstanding used to determine earnings per diluted share were 46,216,242 for the second quarter of 2004 and 46,105,360 for the second quarter of 2003.
For the six months ended
June 30, 2004, revenues increased to $241.3 million, up 7.1% from $225.4 million
in the same period a year ago. Gross profit was $108.5 million, up 13.0% from
$96.0 million in the same period a year ago. Gross profit as a percent of
revenues increased to 45.0% for the six months ended June 30, 2004 from 42.6%
for the same period in 2003. Earnings per share increased 24.3% to $0.82 from
$0.66 per diluted share in the same period a year ago.
Effective June 1, 2004,
we acquired White Rose Environmental Limited, a leading provider of medical
waste management services in the United Kingdom, for approximately $52.3
million in cash and $11.5 million in notes. The White Rose Environmental
acquisition has been reflected in our financial statements for the second
quarter of 2004. In connection with this acquisition, we amended our senior
secured credit facility, increasing the revolving credit facility from $105
million to $187 million with the option to increase the facility by a further
$18 million. Our total debt to capitalization percentage ratio increased
from 28.1% at December 31, 2003 to 31.0% at June 30, 2004.
Miller said, "During the quarter we continued to execute our proven business model, generating strong sales growth and record income from operations. The cash flow from operations of $46.9 million generated from operations for the first months of the year was used to strenghten the business."
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 Stericycle's 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 Financial Statements for Second Quarter 2004
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
June 30, December 31, 2004 2003 ------------ ------------ (unaudited) ASSETS Current assets: Cash and cash equivalents.............................. $ 15,066 $ 7,240 Short-term investments................................. 102 641 Accounts receivable, less allowance for doubtful accounts of $3,859 in 2004 and $4,149 in 2003........ 70,278 59,711 Parts and supplies..................................... 3,757 3,244 Prepaid expenses....................................... 6,605 7,339 Notes receivable....................................... 3,423 2,223 Deferred tax asset..................................... 11,224 12,345 Other.................................................. 2,410 4,994 ------------ ------------ Total current assets............................ 112,865 97,737 ------------ ------------ Property, plant and equipment, net....................... 125,879 96,562 Other assets: Goodwill............................................... 515,176 464,946 Intangible assets, less accumulated amortization of $6,685 in 2004 and $5,459 in 2003.................... 31,532 31,642 Notes receivable....................................... 9,517 7,717 Other.................................................. 7,699 8,858 ------------ ------------ Total other assets.............................. 563,924 513,163 ------------ ------------ Total assets.......................................... $ 802,668 $ 707,462 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt...................... $ 4,508 $ 4,830 Accounts payable....................................... 15,905 15,741 Accrued liabilities.................................... 35,282 43,436 Deferred revenue....................................... 10,011 4,987 ------------ ------------ Total current liabilities....................... 65,706 68,994 ------------ ------------ Long-term debt, net of current portion................... 208,142 163,016 Deferred income taxes.................................... 51,548 42,277 Other liabilities........................................ 4,294 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, 45,116,428 issued and outstanding in 2004, 41,868,515 issued and outstanding in 2003).... 452 420 Additional paid-in capital............................... 318,349 290,631 Accumulated other comprehensive loss..................... (53) 530 Retained earnings........................................ 154,230 116,239 ------------ ------------ Total shareholders' equity...................... 472,978 407,820 ------------ ------------ Total liabilities and shareholders' equity............. $ 802,668 $ 707,462 ============ ============ Total debt to capitalization percentage ratio............ 31.0 % 28.1 % Calculation of total debt to capitalization percentage ratio: Total debt............................................... $ 212,650 $ 167,846 Redeemable preferred stock............................... -- 20,944 Shareholders' equity..................................... 472,978 407,820 ------------ ------------ Capitalization........................................... $ 685,628 $ 596,610
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
Three Months Ended June 30, Six Months Ended June 30, -------------------------------------------- --------------------------------------------- 2004 2003 2004 2003 -------------------- --------------------- --------------------- --------------------- $ % of Rev $ % of Rev $ % of Rev $ % of Rev ----------- -------- ----------- --------- ----------- --------- ----------- --------- Revenues.................................. $ 123,793 100.0 % $ 113,135 100.0 % $ 241,349 100.0 % $ 225,446 100.0 Cost of revenues........................ 68,458 55.3 64,293 56.8 132,859 55.0 129,460 57.4 ----------- -------- ----------- --------- ----------- --------- ----------- --------- Gross profit 55,335 44.7 48,842 43.2 108,490 45.0 95,986 42.6 ----------- -------- ----------- --------- ----------- --------- ----------- --------- Selling, general and administrative expenses............... 18,906 15.3 17,098 15.1 36,650 15.2 33,472 14.8 Amortization............................ 590 0.5 365 0.3 1,194 0.5 686 0.3 ----------- -------- ----------- --------- ----------- --------- ----------- --------- Total SG&A expenses and amortization. 19,496 15.7 17,463 15.4 37,844 15.7 34,158 15.2 ----------- -------- ----------- --------- ----------- --------- ----------- --------- Income from operations before excluded charges...................... 35,839 29.0 31,379 27.7 70,646 29.3 61,828 27.4 Write-down of treatment related fixed assets........................... 1,155 0.9 -- -- 1,155 0.5 -- -- Acquisition-related costs............... 78 0.1 123 0.1 194 0.1 214 0.1 ----------- -------- ----------- --------- ----------- --------- ----------- --------- Income from operations.................... 34,606 28.0 31,256 27.6 69,297 28.7 61,614 27.3 ----------- -------- ----------- --------- ----------- --------- ----------- --------- Other income (expense): Interest income......................... 66 0.1 71 0.1 118 -- 260 0.1 Interest expense........................ (2,584) (2.1) (3,385) (3.0) (5,113) (2.1) (7,312) (3.2) Loan amendment fees (2004)/ debt extinguishment (2003).......... (333) (0.3) (1,640) (1.4) (333) (0.1) (3,268) (1.4) Other expense........................... (547) (0.4) (561) (0.5) (967) (0.4) (1,206) (0.5) ----------- -------- ----------- --------- ----------- --------- ----------- --------- Total other income (expense)......... (3,398) (2.7) (5,515) (4.8) (6,295) (2.6) (11,526) (5.1) ----------- -------- ----------- --------- ----------- --------- ----------- --------- Income before income taxes................ 31,208 25.2 25,741 22.8 63,002 26.1 50,088 22.2 Income tax expense........................ 12,341 10.0 10,219 9.0 25,011 10.4 19,885 8.8 ----------- -------- ----------- --------- ----------- --------- ----------- --------- Net income................................ $ 18,867 15.2 % $ 15,522 13.8 % $ 37,991 15.7 % $ 30,203 13.4 =========== ======== =========== ========= =========== ========= =========== ========= Earnings per share - diluted.............. $ 0.41 $ 0.34 $ 0.82 $ 0.66 =========== =========== =========== =========== Weighted average number of common shares outstanding - diluted............ 46,216,242 46,105,360 46,304,672 45,976,560 =========== =========== =========== =========== As reported net income $ 18,867 $ 1,552 $ 37,991 $ 30,203 Plus: Write off of treatment related fixed assets-after tax....................... $ 698 $ -- $ 696 $ -- Loan amendment fees (2004)/ debt extinguishment (2003)-after tax... $ 201 $ 989 $ 201 $ 1,971 Adjusted net income $ 19,766 $ 16,511 $ 38,888 $ 32,174 Adjusted earnings per share-diluted $ 0.43 $ 0.36 $ 0.84 $ 0.70
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
For the Six Months Ended June 30, ---------------------- 2004 2003 ---------- ---------- OPERATING ACTIVITIES: Net income............................................. $ 37,991 $ 30,203 Adjustments to reconcile net income to net cash provided by operating activities: Write off of deferred financing costs.............. -- 484 Stock compensation expense......................... 21 76 Tax benefit of disqualifying dispositions of stock options................................. 4,826 3,537 Loss on sale of property and equipment............. 1,407 72 Depreciation....................................... 8,726 7,613 Amortization....................................... 1,194 686 Deferred income taxes.............................. 9,992 6,014 Changes in operating assets and liabilities, net of effect of acquisitions: Accounts receivable................................ (2,091) 930 Parts and supplies................................. 12 144 Prepaid expenses and other assets.................. 4,828 7,105 Accounts payable................................... (5,848) (3,978) Accrued liabilities................................ (14,223) 6,406 Deferred revenue................................... 47 547 ---------- ---------- Net cash provided by operating activities.............. 46,882 59,839 ---------- ---------- INVESTING ACTIVITIES: Payments for acquisitions and international investments, net of cash acquired.................. (55,941) (33,713) Purchases of short-term investments.................. 539 (188) Proceeds from sale of property and equipment......... 61 183 Capital expenditures................................. (15,013) (9,158) ---------- ---------- Net cash used in investing activities.................. (70,354) (42,876) ---------- ---------- FINANCING ACTIVITIES: Proceeds from issuance of note payable............... 618 1,132 Repayment of senior subordinated debt................ -- (17,775) Payments of deferred financing costs................. -- (395) Repayment of long-term debt.......................... (2,104) (3,093) Net (repayments of) proceeds from senior credit facil 32,000 (4,186) Principal payments on capital lease obligations...... (498) (496) Purchase of common stock............................. (5,660) -- Proceeds from other issuances of common stock........ 7,549 5,661 ---------- ---------- Net cash used in financing activities.................. 31,905 (19,152) ---------- ---------- Effect of exchange rate changes on cash................ (607) (87) ---------- ---------- Net decrease in cash and cash equivalents.............. 7,826 (2,276) Cash and cash equivalents at beginning of period....... 7,240 8,375 ---------- ---------- Cash and cash equivalents at end of period............. $ 15,066 $ 6,099 ========== ========== Non-cash activities: Net issuances of common stock for certain acquisitions. $ 70 $ 70 Net issuances of notes payable for certain acquisitions $ 14,788 $ --
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