EX-99.1 2 ex990315.htm PRESS RELEASE ex990315


EXHIBIT 99.1

FOR FURTHER INFORMATION CONTACT:        

Dan Ginnetti 847-607-2069
 
Conference call to be held April 23, 2015 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 23rd by dialing 855-859-2056, access code 39406157. To hear a live simulcast of the call or access the audio archive, visit the investor relations page on www.stericycle.com.

STERICYCLE, INC. REPORTS RESULTS
FOR THE FIRST QUARTER IN 2015

Lake Forest, Illinois, April 23, 2015-Stericycle, Inc. (NASDAQ:SRCL), today reported financial results for the first quarter of 2015.

Revenues for the quarter ended March 31, 2015 were $663.3 million, up 16.4% from $570.0 million in the first quarter last year. Acquisitions contributed approximately $86.3 million to the current period’s growth in revenues. Revenues increased 20.4% compared to the prior period when adjusted for unfavorable foreign exchange impacts of $23.1 million.
Gross profit, reported in accordance with U.S. generally accepted accounting principles (“GAAP”), was $281.3 million, up 10.1% from $255.5 million in the first quarter last year. GAAP gross profit as a percent of revenue was 42.4% compared with 44.8% in the first quarter of 2014. Non-GAAP gross profit, when adjusted as identified in the second of the following tables, was $281.3 million, up 9.9% from $256.0 million in the first quarter last year. Non-GAAP gross profit as a percent of revenues was 42.4% compared to 44.9% in the first quarter of 2014.
GAAP earnings per diluted share decreased 4.4% to $0.87 from $0.91 in the first quarter of 2014. Non-GAAP earnings per diluted share, when adjusted for various items identified in the third of the following tables, increased 3.7% to $1.08 from $1.04. See tables below.

The following table shows our calculations of organic revenue growth (in millions)(1) 
 
Three Months Ended March 31,
 
 
 
Change
 
2015
2014
$
%
Total As Reported Revenues (GAAP)
$
663.3

$
570.0

$
93.4

16.4
%
Adjustment for Foreign Exchange
23.1

 
23.1

 
Subtotal (non-GAAP):
686.4

570.0

116.4

20.4
%
 
 
 
 
 
Adjustment for Acquisitions
(86.30)

—

(86.30)

 
Adjustment for Regulated Returns and
Recall Management Services
(16.10)

(23.10)

(6.9)

 
Subtotal (non-GAAP):
$
584.0

$
546.9

$
37.1

6.8
%
 
 
 
 
 
Domestic/ International Breakdown:
 
 
 
 
Domestic Revenues
$
472.2

$
389.8

$
82.5

21.2
%
International Revenues
191.1

180.2

10.9

6.0
%
Total As Reported Revenues (GAAP)
$
663.3

$
570.0

$
93.4

16.4
%

(1) For internal purposes, we exclude the impact of foreign exchange, revenues attributed to acquisitions closed within the preceding 12 months, and revenue from our regulated returns and recall management services when we evaluate organic revenue growth. 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, as compared to GAAP revenues.

Table to reconcile GAAP Gross Profit to Non-GAAP Gross Profit (in thousands)(2) 
 
Three Months Ended March 31,
 
2015
 
2014
 
$
% of Rev
 
$
% of Rev
GAAP Gross Profit
$
281,331

42.4
%
 
$
255,469

44.8
%
Plant Conversion Expenses
—

—
%
 
574

0.1
%
Non-GAAP Gross Profit
$
281,331

42.4
%
 
$
256,043

44.9
%

(2) In accordance with GAAP, reported Gross Profit includes the 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 Gross Profit are not intended to imply, and should not be interpreted as implying, that non-GAAP Gross Profit is a better measure of performance than GAAP Gross Profit.

Table to reconcile GAAP EPS to Non-GAAP EPS(3) 
 
Three Months Ended March 31,
 
 
 
Change
 
2015
2014
$
%
GAAP EPS
$
0.87

$
0.91

$
(0.04
)
-4.4
 %
Acquisition Expenses
0.04

0.04

 
 
Integration Expenses
0.07

0.02

 
 
Change in Fair Value of Contingent
  Consideration
(0.01
)
0.06

 
 
Litigation Expenses
0.01

0.01

 
 
Plant Conversion and Restructuring
  Expenses
0.10

0.00

 
 
Non-GAAP EPS (Adjusted)
$
1.08

$
1.04

$
0.04

3.7
 %

(3) 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 $132.6 million and $145.8 million for the three months ended March 31, 2015 and 2014, respectively.

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


Safe Harbor Statement: This press release may contain forward-looking statements that involve risks and uncertainties, some of which are beyond our control (for example, general economic and market 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 the collection, transportation, treatment and disposal of regulated waste, increases in transportation and other operating costs, the level of governmental enforcement of regulations governing regulated waste collection and treatment, our ability to execute our acquisition strategy and to integrate acquired businesses, competition and demand for services in the regulated waste industry, political, economic and currency risks related to our foreign operations, impairments of goodwill or other indefinite-lived intangibles, exposure to environmental liabilities, compliance with existing and future legal and regulatory requirements, as well as other factors described in our filings with the U.S. Securities and Exchange Commission, including our most recently filed Annual





Report on Form 10-K. 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)
(UNAUDITED)

 
March 31,
 
December 31,
 
2015
 
2014
ASSETS
 
 
 
Current Assets:
 
 
 
Cash and cash equivalents
$
38,283

 
$
22,236

Short-term investments
116

 
380

Accounts receivable, net
467,094

 
465,473

Deferred income taxes
27,331

 
28,322

Prepaid expenses
29,847

 
30,632

Other current assets
33,392

 
33,173

Total Current Assets
596,063

 
580,216

Property, plant and equipment, net
446,831

 
460,408

Goodwill
2,419,284

 
2,418,832

Intangible assets, net
889,360

 
909,645

Other assets
31,976

 
32,621

Total Assets
$
4,383,514

 
$
4,401,722

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Current portion of long-term debt
$
113,212

 
$
131,969

Accounts payable
120,198

 
114,596

Accrued liabilities
157,047

 
131,743

Deferred revenues
20,313

 
21,624

Other current liabilities
71,630

 
61,599

Total Current Liabilities
482,400

 
461,531

Long-term debt, net of current portion
1,462,177

 
1,527,246

Deferred income taxes
422,971

 
431,643

Other liabilities
65,959

 
64,117

Equity:
 
 
 
Common stock
852

 
849

Additional paid-in capital
331,428

 
289,211

Accumulated other comprehensive loss
(206,434
)
 
(138,419
)
Retained earnings
1,805,059

 
1,743,371

Total Stericycle, Inc. Equity
1,930,905

 
1,895,012

Noncontrolling interest
19,102

 
22,173

Total Equity
1,950,007

 
1,917,185

Total Liabilities and Equity
$
4,383,514

 
$
4,401,722






STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
 
Three Months Ended March 31,
 
2015
 
2014
 
$
 
% of Rev
 
$
 
% of Rev
Revenues
$
663,319

 
100.0
 %
 
$
569,955

 
100.0
 %
Cost of revenues ("COR") - exclusive of depreciation, and adjusting items shown below
367,340

 
55.4
 %
 
301,186

 
52.8
 %
Depreciation
14,648

 
2.2
 %
 
12,726

 
2.2
 %
Total cost of revenues
381,988

 
57.6
 %
 
313,912

 
55.1
 %
Gross profit (non-GAAP)
281,331

 
42.4
 %
 
256,043

 
44.9
 %
Selling, general and administrative expenses ("SG&A") - exclusive of depreciation, amortization, and adjusting items shown below
115,431

 
17.4
 %
 
100,180

 
17.6
 %
Depreciation
4,118

 
0.6
 %
 
3,315

 
0.6
 %
Amortization
8,797

 
1.3
 %
 
7,315

 
1.3
 %
Total SG&A expense
128,346

 
19.3
 %
 
110,810

 
19.4
 %
Income from operations (non-GAAP) - exclusive of adjusting items shown below
152,985

 
23.1
 %
 
145,233

 
25.5
 %
Adjusting items:
 
 
 
 
 
 
 
Plant conversion expenses (COR)
—

 
0.0
 %
 
574

 
0.1
 %
Acquisition expenses (SG&A)
3,296

 
0.5
 %
 
3,221

 
0.6
 %
Integration expenses (SG&A)
8,886

 
1.3
 %
 
2,485

 
0.4
 %
Change in fair value of contingent consideration (SG&A)
(675
)
 
-0.1
 %
 
4,789

 
0.8
 %
Litigation expenses (SG&A)
2,123

 
0.3
 %
 
1,505

 
0.3
 %
Plant conversion and restructuring expenses (SG&A)
12,302

 
1.9
 %
 
—

 
0.0
 %
Income from operations (GAAP)
127,053

 
19.2
 %
 
132,659

 
23.3
 %
Other income (expense):
 
 
 
 
 
 
 
Interest expense, net
(18,598
)
 
-2.8
 %
 
(14,898
)
 
-2.6
 %
Other expense, net
(598
)
 
-0.1
 %
 
(700
)
 
-0.1
 %
Total other expense
(19,196
)
 
-2.9
 %
 
(15,598
)
 
-2.7
 %
Income before income taxes
107,857

 
16.3
 %
 
117,061

 
20.5
 %
Income tax expense
32,047

 
4.8
 %
 
37,291

 
6.5
 %
Net income
75,810

 
11.4
 %
 
79,770

 
14.0
 %
Less: net income attributable to noncontrolling interests
352

 
0.1
 %
 
621

 
0.1
 %
Net income attributable to Stericycle, Inc.
$
75,458

 
11.4
 %
 
$
79,149

 
13.9
 %
 
 
 
 
 
 
 
 
Earnings per share- diluted
$
0.87

 
 
 
$
0.91

 
 
Weighted average number of common shares outstanding - diluted
86,357,006

 
 
 
86,613,843

 
 





STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
  
Three Months Ended March 31,
 
2015
 
2014
OPERATING ACTIVITIES:
 
 
 
Net income
$
75,810

 
$
79,770

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Stock compensation expense
5,487

 
4,672

Excess tax benefit of stock options exercised
(8,222
)
 
(3,734
)
Depreciation
18,766

 
16,041

Amortization
8,797

 
7,315

Deferred income taxes
(2,957
)
 
6,175

Change in fair value of contingent consideration
(675
)
 
4,789

Plant conversion and restructuring
5,988

 
—

Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
 
 
 
Accounts receivable
(14,491
)
 
4,529

Accounts payable
5,443

 
5,279

Accrued liabilities
35,924

 
14,189

Deferred revenues
(628
)
 
2,642

Other assets and liabilities
3,312

 
4,182

Net cash provided by operating activities
132,554

 
145,849

INVESTING ACTIVITIES:
 
 
 
Payments for acquisitions, net of cash acquired
(34,210
)
 
(12,262
)
Proceeds from/ (purchases of) investments
257

 
(1,947
)
Capital expenditures
(21,356
)
 
(16,420
)
Net cash used in investing activities
(55,309
)
 
(30,629
)
FINANCING ACTIVITIES:
 
 
 
Repayments of long-term debt and other obligations
(9,780
)
 
(12,430
)
Borrowings on foreign bank debt
4,851

 
36,640

Repayments on foreign bank debt
(38,252
)
 
(37,157
)
Borrowings on term loan
250,000

 
—

Borrowings on senior credit facility
394,097

 
149,000

Repayments on senior credit facility
(670,254
)
 
(203,377
)
Payments on capital lease obligations
(988
)
 
(876
)
Purchases and cancellations of treasury stock
(11,516
)
 
(76,914
)
Payment for cash flow hedge
(8,833
)
 
—

Proceeds from issuances of common stock
27,452

 
8,655

Excess tax benefit of stock options exercised
8,222

 
3,734

Payments to noncontrolling interests
(2,603
)
 
(97
)
Net cash used in financing activities
(57,604
)
 
(132,822
)
Effect of exchange rate changes on cash and cash equivalents
(3,594
)
 
43

Net increase/ (decrease) in cash and cash equivalents
16,047

 
(17,559
)
Cash and cash equivalents at beginning of period
22,236

 
67,167

Cash and cash equivalents at end of period
$
38,283

 
$
49,608

 
 
 
 
NON-CASH ACTIVITIES:
 
 
 
Issuances of obligations for acquisitions
$
21,543

 
$
13,095