STERCYCLE : Stericycle, Inc. Reports Results for Second Quarter 2011
07/27/2011| 04:10pm US/Eastern
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Stericycle, Inc. (NASDAQ:SRCL), today reported financial results
for the second quarter of 2011.
Revenues for the quarter ended June 30, 2011 were $410.4 million, up
18.0% from $347.7 million from the same quarter last year. Acquisitions
less than 12 months old contributed approximately $34.9 million to the
growth in revenues. The impact on revenues from foreign exchange in the
quarter was $7.4 million favorable. Gross profit was $186.7 million, up
15.6% from $161.5 million in the second quarter last year. Gross profit
as a percent of revenue was 45.5% compared with 46.5% in the second
quarter of 2010.
Net income attributable to Stericycle for the second quarter of 2011 was
$55.5 million or $0.63 per diluted share compared with $53.1 million or
$0.61 per diluted share for the second quarter of 2010. Net income
attributable to Stericycle for the second quarter of 2011 reflected
various non-operational items, which taken together, resulted in
non-GAAP earnings per diluted share of $0.69 (see table below). Our
non-GAAP earnings per diluted share increased 11.9% from our non-GAAP
earnings per share of $0.62 in the second quarter of 2010.
FIRST SIX MONTHS' RESULTS
For the six months ending June 30, 2011, revenues were $808.6 million,
up 18.4% from $682.9 million in the same period last year. Revenues
increased 17.0% compared with the prior period when adjusted for
favorable foreign exchange impacts of $9.7 million. Gross profit was
$369.2 million, up 16.5% from $316.9 million in the same period last
year. Gross profit as a percent of revenue was 45.7% compared with 46.4%
in 2010. Earnings per diluted share increased to $1.27 from $1.17 per
diluted share in the same period last year. Non-GAAP earnings per
diluted share, when adjusted for various non-operational items,
increased from $1.18 to $1.37, or 15.7% (see table below):
Table to reconcile non-GAAP EPS to GAAP EPS:
Three months ended June 30,
Six months ended June 30,
2011
2010
Change $
Change %
2011
2010
Change $
Change %
GAAP EPS
$0.63
$0.61
$0.02
3.1%
$1.27
$1.17
$0.10
8.5%
Acquisition expenses/Restructuring costs
0.05
0.01
0.09
0.02
Acceleration of
0.01
-
0.01
-
Term Loan Fees
Non-GAAP EPS (adjusted)
$0.69
$0.62
$0.07
11.9%
$1.37
$1.18
$0.19
15.7%
* In accordance with U.S. generally accepted accounting principles
(GAAP), reported earnings per share 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 $119.7 million for the six months ended
June 30, 2011.
For more information about Stericycle, 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 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.
Conference call to be held July 27, 2011 at 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
August 27th by dialing 855-859-2056, access code 79538389. 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 at www.stericycle.com.
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
June 30,
December 31,
2011
2010
(unaudited)
(audited)
ASSETS
Current Assets:
Cash and cash equivalents
$
38,199
$
77,053
Short-term investments
19,063
18,471
Accounts receivable, less allowance for doubtful
accounts of $10,376 in 2011 and $10,845 in 2010
252,462
215,420
Deferred income taxes
15,352
16,824
Prepaid expenses
19,853
16,038
Other current assets
26,718
24,882
Total Current Assets
371,647
368,688
Property, plant and equipment, net
276,770
267,971
Other assets:
Goodwill
1,839,599
1,595,764
Intangible assets, less accumulated amortization of
$35,630 in 2011 and $28,394 in 2010
446,377
375,174
Other
31,203
31,426
Total other assets
2,317,179
2,002,364
Total Assets
$
2,965,596
$
2,639,023
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt
$
67,879
$
88,899
Accounts payable
58,346
54,777
Accrued liabilities
114,221
134,712
Deferred revenues
14,171
14,455
Other current liabilities
13,718
15,646
Total Current Liabilities
268,335
308,489
Long-term debt, net of current portion
1,165,395
1,014,222
Deferred income taxes
269,218
222,647
Other liabilities - long-term
11,616
13,315
Shareholders' Equity:
Common stock (par value $0.01 per share, 120,000,000 shares
authorized, 86,047,759 issued and outstanding in 2011,
and 85,242,387 issued and outstanding in 2010)
860
852
Additional paid-in capital
94,365
46,945
Accumulated other comprehensive loss
(287
)
(16,869
)
Retained earnings
1,128,713
1,017,497
Total Stericycle, Inc. Shareholders' Equity
1,223,651
1,048,425
Noncontrolling interest
27,381
31,925
Total Shareholders' Equity
1,251,032
1,080,350
Total Liabilities and Shareholders' Equity
$
2,965,596
$
2,639,023
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
Three Months Ended
Six Months Ended
June 30,
June 30,
2011
2010
2011
2010
(unaudited)
(unaudited)
$
% of Rev
$
% of Rev
$
% of Rev
$
% of Rev
Revenues
$
410,441
100.0
%
$
347,734
100.0
%
$
808,567
100.0
%
$
682,911
100.0
%
Cost of revenues
223,708
54.5
%
185,471
53.3
%
439,342
54.3
%
364,903
53.4
%
Restructuring Costs
(8
)
0.0
%
726
0.2
%
54
0.0
%
1,154
0.2
%
Gross profit
186,741
45.5
%
161,537
46.5
%
369,171
45.7
%
316,854
46.4
%
Selling, general and administrative expenses
74,496
18.2
%
65,091
18.7
%
146,406
18.1
%
129,113
18.9
%
Amortization
3,546
0.9
%
2,159
0.6
%
6,893
0.9
%
4,134
0.6
%
Total SG&A expense and amortization
78,042
19.0
%
67,250
19.3
%
153,299
19.0
%
133,247
19.5
%
Income from operations before
acquisition, integration, and other expenses
108,699
26.5
%
94,287
27.1
%
215,872
26.7
%
183,607
26.9
%
Acquisition expenses
5,261
1.3
%
556
0.2
%
9,059
1.1
%
1,356
0.2
%
Restructuring costs and
plant closure expense
203
0.0
%
837
0.2
%
399
0.0
%
1,076
0.2
%
Litigation settlement
-
0.0
%
937
0.3
%
-
0.0
%
937
0.1
%
Gain on sale of assets
-
0.0
%
(2,955
)
-0.8
%
-
0.0
%
(2,955
)
-0.4
%
Integration expenses
1,287
0.3
%
1,314
0.4
%
2,053
0.3
%
2,463
0.4
%
Income from operations
101,948
24.8
%
93,598
26.9
%
204,361
25.3
%
180,730
26.5
%
Other income (expense):
Interest income
63
0.0
%
32
0.0
%
247
0.0
%
112
0.0
%
Interest expense
(13,007
)
-3.2
%
(8,870
)
-2.6
%
(24,379
)
-3.0
%
(17,833
)
-2.6
%
Other expense, net
(819
)
-0.2
%
(892
)
-0.3
%
(1,082
)
-0.1
%
(1,895
)
-0.3
%
Total other income (expense)
(13,763
)
-3.4
%
(9,730
)
-2.8
%
(25,214
)
-3.1
%
(19,616
)
-2.9
%
Income before income taxes
88,185
21.5
%
83,868
24.1
%
179,147
22.2
%
161,114
23.6
%
Income tax expense
32,295
7.9
%
30,102
8.7
%
66,671
8.2
%
58,714
8.6
%
Net income
55,890
13.6
%
53,766
15.5
%
112,476
13.9
%
102,400
15.0
%
Net income attributable to
noncontrolling interests
348
0.1
%
672
0.2
%
1,260
0.2
%
1,187
0.2
%
Net income attributable to Stericycle, Inc.
$
55,542
13.5
%
$
53,094
15.3
%
$
111,216
13.8
%
$
101,213
14.8
%
Earnings per share-diluted
$
0.63
$
0.61
$
1.27
$
1.17
Weighted average number of
common shares outstanding-diluted
87,935,310
86,694,239
87,738,638
86,646,109
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
For the six months ended
June 30,
2011
2010
(unaudited)
(unaudited)
Operating Activities:
Net income
$
112,476
$
102,400
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on sale of assets
-
(2,955
)
Change in fair value of contingent consideration
(2,140
)
-
Accelerated amortization of term loan financing fees
1,241
-
Stock compensation expense
7,718
7,741
Excess tax benefit of stock options exercised
(14,549
)
(13,430
)
Depreciation
24,161
20,872
Amortization
6,893
4,134
Deferred income taxes
18,734
12,110
Changes in operating assets and liabilities, net of
effect of acquisitions and divestitures:
Accounts receivable
(22,584
)
(11,688
)
Accounts payable
(5,531
)
(5,436
)
Accrued liabilities
(4,987
)
9,042
Deferred revenue
(566
)
1,826
Other assets and liabilities
(1,172
)
4,689
Net cash provided by operating activities
119,694
129,305
Investing Activities:
Payments for acquisitions and international
investments, net of cash acquired
(280,823
)
(67,826
)
Purchases of short-term investments
(403
)
(911
)
Proceeds from sale of assets
389
8,000
Capital expenditures
(23,652
)
(25,017
)
Net cash used by investing activities
(304,489
)
(85,754
)
Financing Activities:
Repayment of long-term debt
(5,260
)
(44,126
)
Net borrowings/ (repayments) on senior credit facility
126,600
(18,249
)
Payments of deferred consideration
(12,834
)
-
Payments on capital lease obligations
(1,456
)
(1,829
)
Purchase/cancellation of treasury stock
(4,302
)
(24,260
)
Proceeds from other issuances of common stock
27,069
25,334
Excess tax benefit of stock options exercised
14,549
13,430
Net cash provided by/ (used in) financing activities
144,366
(49,700
)
Effect of exchange rate changes on cash
1,575
(1,367
)
Net decrease in cash and cash equivalents
(38,854
)
(7,516
)
Cash and cash equivalents at beginning of period
77,053
15,767
Cash and cash equivalents at end of period
$
38,199
$
8,251
Non-cash activities:
Net issuances of notes payable for certain acquisitions
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