Conference call to be held February 5, 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 March 5th by dialing 855-859-2056, access code 39404156. To hear a live simulcast of the call or access the audio archive, visit the investor relations page on www.stericycle.com.

LAKE FOREST, Ill., Feb. 5, 2015 (GLOBE NEWSWIRE) -- Stericycle, Inc. (Nasdaq:SRCL), today reported financial results for the fourth quarter and full year of 2014.

FOURTH QUARTER RESULTS

Revenues for the quarter ended December 31, 2014 were $676.9 million, up $109.0 million or 19.2% from $567.9 million in the fourth quarter last year. Acquisitions contributed approximately $93.1 million to the current period's growth in revenues. Revenues increased 22.2% compared to the prior period when adjusted for unfavorable foreign exchange impact of $17.0 million. Gross profit, reported in accordance with U.S. generally accepted accounting principles ("GAAP"), was $285.0 million, up 12.5% from $253.3 million in the fourth quarter last year. GAAP gross profit as a percent of revenues was 42.1% compared to 44.6% in the fourth quarter of 2013. Non-GAAP gross profit, when adjusted for various items identified in the second of the following tables, was $285.4 million, up 11.7% from $255.4 million in the fourth quarter last year. Non-GAAP gross profit as a percent of revenues was 42.2% compared to 45.0% in the fourth quarter of 2013. GAAP earnings per diluted share increased 6.7% to $0.96 from $0.90 in the fourth quarter last year. Non-GAAP earnings per diluted share, when adjusted for various items identified in the third of the following tables, increased 13.2% to $1.12 from $0.99. See tables below.

FULL-YEAR RESULTS

Revenues for the full year 2014 were $2.56 billion, up 19.3% from $2.14 billion in 2013. Acquisitions contributed approximately $301.6 million to the current year's growth in revenues. Revenues increased 20.8% compared with the prior period when adjusted for unfavorable foreign exchange impact of $33.6 million. GAAP gross profit was $1.09 billion, up 13.5% from $964.6 million in 2013. GAAP gross profit as a percent of revenues was 42.8% compared to 45.0% in 2013. Non-GAAP gross profit, when adjusted for various items identified in the second of the following tables, was $1.10 billion, up 13.5% from $967.2 million in 2013. Non-GAAP gross profit as a percent of revenues was 42.9% compared to 45.1% in 2013. GAAP earnings per diluted share increased 6.3% to $3.79 from $3.56 in 2013. Non-GAAP earnings per diluted share, when adjusted for various items identified in the third of the following tables, increased 13.8% to $4.27 from $3.75. See tables below.

The following table shows our calculations of organic revenue growth (in millions)(1)    
     
 Three Months Ended December 31,Years Ended December 31,
     Change    Change
 20142013$% 20142013$% 
Total As Reported Revenues (GAAP)$676.9 $567.9 $109.0 19.2%$2,555.6 $2,142.8 $412.8 19.3%
Adjustment for Foreign Exchange 17.0   17.0   33.6   33.6  
Subtotal (non-GAAP):693.9567.9126.022.2%2,589.22,142.8446.420.8%
                 
Adjustment for Acquisitions (93.7) (0.6) (93.1)   (311.5) (9.9) (301.6)  
Adjustment for Regulated Returns and  (16.1) (26.5) (10.4)   (80.5) (97.8) 17.3  
Recall Management Services                
Subtotal (non-GAAP):$584.1 $540.8 $43.3 8.0%$2,197.2 $2,035.1 $162.1 8.0%
                 
Domestic/ International Breakdown:                
Domestic Revenues $479.7 $394.6 $85.1 21.6% $1,796.8 $1,506.6 $290.2 19.3%
International Revenues 197.2 173.3 23.9 13.8% 758.8 636.2 122.6 19.3%
Total As Reported Revenues (GAAP)$676.9 $567.9 $109.0 19.2%$2,555.6 $2,142.8 $412.8 19.3%
                 
(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 December 31,Years Ended December 31,
 2014201320142013
 $% of
Rev		$% of
Rev		$% of
Rev		$% of
Rev
GAAP Gross Profit$284,969 42.1%$253,285 44.6%$1,094,411 42.8%$964,634 45.0%
Plant Conversion Expenses 381 0.1% -- -- 2,915 0.1% 423 0.0%
Litigation Expenses -- -- 2,120 0.4% -- -- 2,120 0.1%
Non-GAAP Gross Profit$285,350 42.2%$255,405 45.0%$1,097,326 42.9%$967,177 45.1%
                 
(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 December 31,Years Ended December 31,
     Change    Change
 20142013$%20142013$%
GAAP EPS$0.96  $ 0.90 $0.06 6.7%$3.79 $3.56 $0.22 6.3%
Acquisition Expenses 0.03 0.05     0.14 0.12    
Integration Expenses 0.08 0.02     0.19 0.05    
Change in Fair Value of Contingent (0.06) (0.2)     (0.02) (0.03)    
 Consideration                
Litigation Expenses 0.02 0.01     0.05 0.02    
Plant Conversion and Restructuring 0.09 0.01     0.12 0.02    
 Expenses                
Impairment of Intangible Assets -- 0.02     -- 0.01    
Non-GAAP EPS (Adjusted)$1.12 $0.99 $0.13 13.2%$4.27 $3.75 $0.52 13.8%
 
(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 $448.5 million and $405.3 million for the full years of 2014 and 2013, 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)
     
 December 31,
 20142013
ASSETS    
Current Assets:    
Cash and cash equivalents  $ 22,236  $ 67,167
Short-term investments  380  413
Accounts receivable, net  465,473  388,996
Deferred income taxes  28,322  18,031
Prepaid expenses  33,498  28,379
Other current assets  31,572  37,279
 Total Current Assets  581,481  540,265
Property, plant and equipment, net  460,408  358,967
Goodwill  2,418,832  2,231,582
Intangible assets, net  909,645  720,035
Other assets  30,840  37,124
 Total Assets  $ 4,401,206  $ 3,887,973
     
LIABILITIES AND EQUITY    
Current Liabilities:    
Current portion of long-term debt  $ 131,969  $ 150,380
Accounts payable  114,596  89,146
Accrued liabilities  131,743  107,445
Deferred revenues  21,624  18,826
Other current liabilities  59,190  50,387
 Total Current Liabilities  459,122  416,184
     
Long-term debt, net of current portion  1,527,246  1,280,663
Deferred income taxes  431,643  396,119
Other liabilities  66,010  27,469
Equity:    
Common stock  849  855
Additional paid-in capital  289,211  195,110
Accumulated other comprehensive loss  (138,419)  (56,468)
Retained earnings   1,743,371  1,610,964
 Total Stericycle, Inc. Equity  1,895,012  1,750,461
Noncontrolling interests  22,173  17,077
 Total Equity  1,917,185  1,767,538
 Total Liabilities and Equity  $ 4,401,206  $ 3,887,973
 
 
STERICYCLE, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARES AND PER SHARE DATA)
(UNAUDITED)
                 
 Three Months EndedYears Ended
 December 31,December 31,
 2014201320142013
  $ % of Rev $ % of Rev $ % of Rev $ % of Rev
                 
Revenues  $ 676,947 100.0%  $ 567,899 100.0%  $2,555,601 100.0%  $2,142,807 100.0%
Cost of revenues ("COR") - exclusive of depreciation, and adjusting items shown below  378,182 55.9%  299,347 52.7%  1,401,797 54.9%  1,125,627 52.5%
Depreciation  13,415 2.0%  13,147 2.3%  56,478 2.2%  50,003 2.3%
Total cost of revenues  391,597 57.8%  312,494 55.0%  1,458,275 57.1%  1,175,630 54.9%
                 
Gross profit (non-GAAP)  285,350 42.2%  255,405 45.0%  1,097,326 42.9%  967,177 45.1%
                 
Selling, general and administrative expenses ("SG&A") - exclusive of depreciation, amortization, and adjusting items shown below  112,563 16.6%  99,728 17.6%  433,865 17.0%  372,091 17.4%
Depreciation  3,121 0.5%  2,965 0.5%  15,446 0.6%  11,338 0.5%
Amortization  8,478 1.3%  7,183 1.3%  32,692 1.3%  27,067 1.3%
Total SG&A expense  124,162 18.3%  109,876 19.3%  482,003 18.9%  410,496 19.2%
                 
Income from operations (non-GAAP) - exclusive of adjusting items shown below  161,188 23.8%  145,529 25.6%  615,323 24.1%  556,681 26.0%
                 
Adjusting items:                
Plant conversion expenses (COR)  381 0.1%  --  0.0%  2,915 0.1%  423 0.0%
Litigation expenses (COR)  --  0.0%  2,120 0.4%  --  0.0%  2,120 0.1%
Acquisition expenses (SG&A)  2,661 0.4%  4,037 0.7%  13,333 0.5%  10,275 0.5%
Integration expenses (SG&A)  11,343 1.7%  2,819 0.5%  25,968 1.0%  6,521 0.3%
Change in fair value of contingent consideration (SG&A)  (5,405) -0.8%  (1,971) -0.3%  (1,452) -0.1%  (2,278) -0.1%
Litigation expenses (SG&A)  3,331 0.5%  --  0.0%  6,574 0.3%  116 0.0%
Plant conversion and restructuring expenses (SG&A)  10,114 1.5%  2,012 0.4%  11,649 0.5%  2,480 0.1%
Impairment of intangible assets (SG&A)  --  0.0%  1,405 0.2%  --  0.0%  1,405 0.1%
                 
Income from operations (GAAP)  138,763 20.5%  135,107 23.8%  556,336 21.8%  535,619 25.0%
                 
Other income (expense):                
Interest expense, net  (18,139) -2.7%  (15,341) -2.7%  (66,022) -2.6%  (54,949) -2.6%
Other expense, net  (1,177) -0.2%  (25) 0.0%  (2,746) -0.1%  (2,924) -0.1%
Total other expense  (19,316) -2.9%  (15,366) -2.7%  (68,768) -2.7%  (57,873) -2.7%
                 
Income before income taxes  119,447 17.6%  119,741 21.1%  487,568 19.1%  477,746 22.3%
Income tax expense  36,789 5.4%  41,154 7.2%  159,422 6.2%  164,662 7.7%
Net income   82,658 12.2%  78,587 13.8%  328,146 12.8%  313,084 14.6%
Less: net income attributable to noncontrolling interests  132 0.0%  423 0.1%  1,690 0.1%  1,712 0.1%
Net income attributable to Stericycle, Inc.  $ 82,526 12.2%  $ 78,164 13.8%  $ 326,456 12.8%  $ 311,372 14.5%
Earnings per share - diluted  $ 0.96    $ 0.90    $ 3.79    $ 3.56  
Weighted average number of common shares outstanding - diluted  86,194,513    87,107,437    86,233,612    87,391,988  
 
 
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
     
 Years Ended December 31,
 20142013
Operating Activities:    
Net income  $ 328,146  $ 313,084
Adjustments to reconcile net income to net cash provided by operating activities:  
Stock compensation expense  17,773  17,457
Excess tax benefit of stock options exercised  (17,906)  (17,153)
Depreciation   71,924  61,341
Amortization  32,692  27,067
Deferred income taxes  16,550  30,930
Change in fair value of contingent consideration  (1,452)  (2,278)
Other  10,384  3,381
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:  
Accounts receivable  (34,116)  (54,767)
Accounts payable  (5,712)  7
Accrued liabilities  21,279  4,547
Deferred revenue  1,017  (1,319)
Other assets and liabilities  7,921  23,010
     
Net cash provided by operating activities  448,500  405,307
     
Investing Activities:    
Payments for acquisitions, net of cash acquired  (374,321)  (161,936)
(Purchases of)/ proceeds from investments  (1,957)  73
Capital expenditures  (86,496)  (73,109)
     
Net cash used in investing activities  (462,774)  (234,972)
     
Financing Activities:    
Repayments of long-term debt and other obligations  (101,231)  (88,507)
Borrowings on foreign bank debt  205,086  218,968
Repayments on foreign bank debt  (193,284)  (201,967)
Borrowings on senior credit facility  1,413,026  1,029,718
Repayments on senior credit facility  (1,216,031)  (984,979)
Payments on capital lease obligations  (5,826)  (4,024)
Payments of deferred financing costs  (2,280)  -- 
Purchases and cancellations of treasury stock  (194,066)  (163,700)
Proceeds from issuances of common stock  51,852  42,345
Excess tax benefit of stock options exercised  17,906  17,153
Payments to noncontrolling interests  (5,201)  (1,026)
     
Net cash used in financing activities  (30,049)  (136,019)
Effect of exchange rate changes on cash and cash equivalents  (608)  (1,809)
Net (decrease)/ increase in cash and cash equivalents  (44,931)  32,507
Cash and cash equivalents at beginning of period  67,167  34,660
     
Cash and cash equivalents at end of period  $ 22,236  $ 67,167
     
Non-cash activities:    
Issuances of obligations for acquisitions  $ 145,938  $ 100,101
Issuance of obligations for noncontrolling interests  --   6,119
CONTACT: Dan Ginnetti 847-607-2069

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