EX-99.1 2 ex990314.htm EXHIBIT ex990314




EXHIBIT 99.1

FOR FURTHER INFORMATION CONTACT:        

Frank ten Brink 847-607-2012


STERICYCLE, INC. REPORTS RESULTS
FOR THE FIRST QUARTER 2014

Lake Forest, Illinois, April 24, 2014—Stericycle, Inc. (NASDAQ:SRCL), today reported financial results for the first quarter of 2014.

Revenues for the quarter ended March 31, 2014 were $570.0 million, up 10.9% from $513.8 million in the first quarter last year. Acquisitions contributed approximately $32.9 million to the current period’s growth in revenues. Revenues increased 12.5% compared to the prior period when adjusted for unfavorable foreign exchange impacts of $8.1 million. Gross profit was $255.5 million, up 10.1% from $232.1 million in the first quarter last year. Gross profit as a percent of revenue was 44.8% compared with 45.2% in the first quarter of 2013. Earnings per diluted share, reported in accordance with U.S. generally accepted accounting principles (“GAAP”), increased 7.1% to $0.91 from $0.85 in the first quarter of 2013. Non-GAAP earnings per diluted share, when adjusted for various items identified in the second of the following tables, increased 17.6% to $1.04 from $0.88. See tables below.

The following table shows our calculations of organic revenue growth (in millions)(1):
 
Three Months Ended March 31,
 
 
 
Change
 
2014
2013
$
%
Total As Reported Revenues (GAAP)

$570.0


$513.8


$56.2

10.9
%
Adjustment for Foreign Exchange
8.1

-

8.1

 
Subtotal (non-GAAP):
578.0

513.8

64.2

12.5
%
 
 
 
 
 
Adjustment for Acquisitions
(35.2)

(2.3)

(32.9)

 
Adjustment for Recall and Returns Solutions
(23.1)

(22.5)

(0.5)

 
Subtotal (non-GAAP):
519.8

489.0

30.8

6.3
%
 
 
 
 
 
Domestic/ International Breakdown:
 
 
 
 
Domestic Revenues
392.1

363.6

28.4

7.8
%
International Revenues
177.9

150.2

27.7

18.5
%
Total As Reported Revenues (GAAP)

$570.0


$513.8


$56.2

10.9
%

(1) When evaluating organic revenue growth for internal purposes, we exclude (i) the impact of foreign exchange, (ii) revenues attributed to acquisitions closed within the preceding 12 months and (iii) revenues from our recall and returns solutions. This table and the Company’s internal use of non-GAAP adjusted revenues are not intended to imply, and should not be interpreted as implying, that non-GAAP adjusted revenues are a better measure of internal growth or the Company’s performance than GAAP revenues.


1



Table to reconcile GAAP EPS to Non-GAAP EPS(2):
 
Three Months Ended March 31,
 
 
 
Change
 
2014
2013
$
%
GAAP EPS
$
0.91

$
0.85

$
0.06

7.1
%
 
 
 
 
 
Acquisition expenses
0.04

0.02

 
 
Integration expenses
0.02

0.01

 
 
Change in fair value
0.06

-

 
 
Litigation expenses
0.01

0.00

 
 
 
 
 
 
 
Non-GAAP EPS (Adjusted)
$
1.04

$
0.88

$
0.16

17.6
%
 
(2) In accordance with GAAP, reported earnings per share (EPS) include the after-tax impact of the items identified in this table. For internal purposes, including the determination of management compensation, the Company excludes these items from results when evaluating operating performance. This table and the Company’s internal use of non-GAAP earnings per share are not intended to imply, and should not be interpreted as implying, that non-GAAP earnings per share is a better measure of performance than GAAP earnings per share.

Cash flow from operations was $144.5 million and $98.2 million for the three months ended March 31, 2014 and 2013, respectively.

For more information about Stericycle, please visit our website at www.stericycle.com.

CONFERENCE CALL

Conference call to be held April 24, 2014 4:00 p.m. Central time - Dial 866-516-6872 at least 5 minutes before start time. If you are unable to participate on the call, a replay will be available through May 24th by dialing 855-859-2056, access code 13898710. To hear a live simulcast of the call or to access an audio archive of the call, go to the Investors page on Stericycle’s 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 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.

2



STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

 
March 31,
2014
 
December 31,
2013
 
(Unaudited)
ASSETS
 
 
 
Current Assets:
 
 
 
Cash and cash equivalents
$
43,058

 
$
61,991

Short-term investments
353

 
413

Accounts receivable, net
383,304

 
388,996

Deferred income taxes
14,401

 
18,031

Prepaid expenses
25,807

 
28,379

Other current assets
35,963

 
37,279

Total Current Assets
502,886

 
535,089

Property, plant and equipment, net
359,329

 
358,967

Goodwill
2,240,597

 
2,231,582

Intangible assets, net
724,978

 
720,035

Other assets
37,789

 
37,124

Total Assets
$
3,865,579

 
$
3,882,797

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Current portion of long-term debt
$
124,307

 
$
150,380

Accounts payable
94,118

 
89,146

Accrued liabilities
118,606

 
107,445

Deferred revenues
21,998

 
18,826

Other current liabilities
44,152

 
45,211

Total Current Liabilities
403,181

 
411,008

Long-term debt, net of current portion
1,246,071

 
1,280,663

Deferred income taxes
398,909

 
396,119

Other liabilities
31,871

 
27,469

Equity:
 
 
 
Common stock
850

 
855

Additional paid-in capital
212,847

 
195,110

Accumulated other comprehensive loss
(57,128
)
 
(56,468
)
Retained earnings
1,611,780

 
1,610,964

Total Stericycle, Inc.’s Equity
1,768,349

 
1,750,461

Noncontrolling interest
17,198

 
17,077

Total Equity
1,785,547

 
1,767,538

Total Liabilities and Equity
$
3,865,579

 
$
3,882,797




3



STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

 
Three Months Ended March 31,
 
2014
 
2013
 
(Unaudited)
 
$
 
% of Rev
 
$
 
% of Rev
Revenues
$
569,955

 
100.0
 %
 
$
513,804

 
100.0
 %
Cost of revenues (exclusive of depreciation shown below)
301,760

 
52.9
 %
 
269,673

 
52.5
 %
Depreciation - cost of revenues
12,726

 
2.2
 %
 
12,037

 
2.3
 %
Total cost of revenues
314,486

 
55.2
 %
 
281,710

 
54.8
 %
Gross profit
255,469

 
44.8
 %
 
232,094

 
45.2
 %
Selling, general and administrative expenses (exclusive of depreciation and amortization below)
100,180

 
17.6
 %
 
88,241

 
17.2
 %
Depreciation - SG&A
3,315

 
0.6
 %
 
2,809

 
0.5
 %
Amortization
7,315

 
1.3
 %
 
6,642

 
1.3
 %
Total SG&A expense
110,810

 
19.4
 %
 
97,692

 
19.0
 %
Income from operations before acquisition, integration, and other expenses
144,659

 
25.4
 %
 
134,402

 
26.2
 %
Acquisition expenses
3,221

 
0.6
 %
 
1,803

 
0.4
 %
Integration expenses
2,485

 
0.4
 %
 
896

 
0.2
 %
Change in fair value of contingent consideration
4,789

 
0.8
 %
 
—

 
—
 %
Litigation expenses
1,505

 
0.3
 %
 
106

 
—
 %
Income from operations
132,659

 
23.3
 %
 
131,597

 
25.6
 %
Other income (expense):
 
 
 
 
 
 
 
Interest expense, net
(14,898
)
 
(2.6
)%
 
(13,379
)
 
(2.6
)%
Other expense, net
(700
)
 
(0.1
)%
 
(1,013
)
 
(0.2
)%
Total other expense
(15,598
)
 
(2.7
)%
 
(14,392
)
 
(2.8
)%
Income before income taxes
117,061

 
20.5
 %
 
117,205

 
22.8
 %
Income tax expense
37,291

 
6.5
 %
 
41,983

 
8.2
 %
Net income
79,770

 
14.0
 %
 
75,222

 
14.6
 %
Less: net income attributable to noncontrolling interests
621

 
0.1
 %
 
605

 
0.1
 %
Net income attributable to Stericycle, Inc.
$
79,149

 
13.9
 %
 
$
74,617

 
14.5
 %
 
 
 
 
 
 
 
 
Earnings per share- diluted
$
0.91

 
 
 
$
0.85

 
 
Weighted average number of common shares outstanding - diluted
86,613,843

 
 
 
87,459,497

 
 

4



STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
  
Three Months Ended March 31,
 
2014
 
2013
 
(Unaudited)
OPERATING ACTIVITIES:
 
 
 
Net income
$
79,770

 
$
75,222

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Stock compensation expense
4,672

 
4,047

Excess tax benefit of stock options exercised
(3,734
)
 
(4,203
)
Depreciation
16,041

 
14,846

Amortization
7,315

 
6,642

Deferred income taxes
6,175

 
10,407

Change in fair value of contingent consideration
4,789

 
—

Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
 
 
 
Accounts receivable
4,529

 
(19,769
)
Accounts payable
5,279

 
1,169

Accrued liabilities
14,189

 
7,412

Deferred revenues
2,642

 
(1,345
)
Other assets and liabilities
2,808

 
3,742

Net cash provided by operating activities
144,475

 
98,170

INVESTING ACTIVITIES:
 
 
 
Payments for acquisitions, net of cash acquired
(12,262
)
 
(18,899
)
(Purchases of)/ proceeds from investments
(1,947
)
 
20

Capital expenditures
(16,420
)
 
(16,480
)
Net cash used in investing activities
(30,629
)
 
(35,359
)
FINANCING ACTIVITIES:
 
 
 
Repayments of long-term debt and other obligations
(12,430
)
 
(9,996
)
Borrowings on foreign bank debt
36,640

 
27,651

Repayments on foreign bank debt
(37,157
)
 
(62,027
)
Borrowings on senior credit facility
149,000

 
291,132

Repayments on senior credit facility
(203,377
)
 
(337,683
)
Payments on capital lease obligations
(876
)
 
(837
)
Purchases and cancellations of treasury stock
(76,914
)
 
(7,160
)
Proceeds from issuance of common stock
8,655

 
13,915

Excess tax benefit of stock options exercised
3,734

 
4,203

Payments to noncontrolling interests
(97
)
 
—

Net cash used in financing activities
(132,822
)
 
(80,802
)
Effect of exchange rate changes on cash
43

 
(611
)
Net decrease in cash and cash equivalents
(18,933
)
 
(18,602
)
Cash and cash equivalents at beginning of period
61,991

 
31,324

Cash and cash equivalents at end of period
$
43,058

 
$
12,722

 
 
 
 
NON-CASH ACTIVITIES:
 
 
 
Issuances of obligations for acquisitions
$
13,095

 
$
10,454



5