Stericycle, Inc. Reports Results for the Third Quarter of 2012

Stericycle, Inc. Reports Results for the Third Quarter of 2012

LAKE FOREST, Ill.--(BUSINESS WIRE)-- Stericycle, Inc. (Nasdaq: SRCL) , today reported financial results for the third quarter of 2012.

Revenues for the quarter ended September 30, 2012 were $480.5 million, up 14.2% from $420.9 million from the third quarter last year. Acquisitions less than 12 months old contributed approximately $31.5 million to the current period's growth in revenues. Revenues increased 16.0% compared with the prior period when adjusted for an unfavorable foreign exchange impact of $8.0 million. Gross profit was $215.6 million, up 13.4% from $190.1 million in the third quarter last year. Gross profit as a percent of revenue was 44.9% compared with 45.2% in the third quarter of 2011.


Net income attributable to Stericycle for the third quarter of 2012 was $65.5 million or $0.75 per diluted share compared with $59.2 million or $0.68 per diluted share for the third quarter of 2011. Net income attributable to Stericycle for the third quarter of 2012 and third quarter of 2011 includes acquisition expenses, restructuring costs, loss on sale of business, and other items. Excluding the effect of these items, non-GAAP earnings per diluted share were $0.84 for the current quarter (see table below). Non-GAAP earnings per diluted share increased 15.3% from non-GAAP earnings per diluted share of $0.72 in the third quarter of 2011.

FIRST NINE MONTHS' RESULTS

Revenues for the nine months ending September 30, 2012 were $1.41 billion, up 14.6% from $1.23 billion in the same period last year. Revenues increased 16.2% compared with the prior period when adjusted for an unfavorable foreign exchange impact of $19.5 million. Gross profit was $630.3 million, up 12.7% from $559.2 million in the same period last year. Gross profit as a percent of revenue was 44.7% compared with 45.5% in 2011. Non-GAAP earnings per diluted share, when adjusted for various items, increased 15.5% to $2.42 in 2012 from $2.10 in 2011 (see table below).

Table to reconcile non-GAAP EPS to GAAP EPS:

Three months ended September 30,

Nine months ended September 30,

Change

Change

2012

2011

$

%

2012

2011

$

%

GAAP EPS

$

0.75

$

0.68

$

0.07

10.6

%

$

2.28

$

1.95

$

0.33

17.1

%

Acquisition expenses/

Adjustment to Fair Value

0.03

0.04

0.08

0.13

Restructuring/ Plant Closure

0.02

0.00

0.02

0.01

Loss on Sale of Business

0.04

0.00

0.04

0.00

Other

0.00

0.00

0.00

0.01

Non-GAAP EPS (adjusted)

$

0.84

$

0.72

$

0.11

15.3

%

$

2.42

$

2.10

$

0.32

15.5

%

* 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 $277.1 million and $215.2 million for the nine months ended September 30, 2012 and 2011, respectively.

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 October 24, 2012 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 November 24th, 2012 by dialing 855-859-2056, access code 94523356. 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 STATEMENTS OF INCOME

(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2012

2011

2012

2011

(unaudited)

(unaudited)

$

% of Rev

$

% of Rev

$

% of Rev

$

% of Rev

Revenues

$

480,484

100.0

%

$

420,924

100.0

%

$

1,409,511

100.0

%

$

1,229,491

100.0

%

Cost of revenues

253,526

52.8

%

220,419

52.4

%

746,540

53.0

%

639,773

52.0

%

Depreciation - cost of revenues

11,404

2.4

%

10,450

2.5

%

32,622

2.3

%

30,438

2.5

%

Restructuring costs

-

0.0

%

-

0.0

%

-

0.0

%

54

0.0

%

Gross profit

215,554

44.9

%

190,055

45.2

%

630,349

44.7

%

559,226

45.5

%

Selling, general and administrative expenses

82,176

17.1

%

72,582

17.2

%

240,635

17.1

%

214,815

17.5

%

Depreciation - SG&A

2,480

0.5

%

2,274

0.5

%

6,892

0.5

%

6,447

0.5

%

Amortization

5,561

1.2

%

4,209

1.0

%

15,675

1.1

%

11,102

0.9

%

Total SG&A expense and amortization

90,217

18.8

%

79,065

18.8

%

263,202

18.7

%

232,364

18.9

%

Income from operations before

acquisition, integration, and other expenses

125,337

26.1

%

110,990

26.4

%

367,147

26.0

%

326,862

26.6

%

Acquisition expenses

2,467

0.5

%

3,195

0.8

%

6,213

0.4

%

14,394

1.2

%

Restructuring costs and plant closure expense

2,250

0.5

%

633

0.2

%

3,400

0.2

%

1,032

0.1

%

Litigation settlement

-

0.0

%

460

0.1

%

-

0.0

%

460

0.0

%

Loss on sale of business

4,867

1.0

%

323

0.1

%

4,867

0.3

%

323

0.0

%

Change in fair value of contingent consideration

(11

)

0.0

%

-

0.0

%

591

0.0

%

(2,140

)

-0.2

%

Integration expenses

1,217

0.3

%

1,813

0.4

%

3,540

0.3

%

3,866

0.3

%

Income from operations

114,547

23.8

%

104,566

24.8

%

348,536

24.7

%

308,927

25.1

%

Other income (expense):

Interest income

117

0.0

%

237

0.1

%

333

0.0

%

484

0.0

%

Interest expense

(13,048

)

-2.7

%

(12,034

)

-2.9

%

(38,597

)

-2.7

%

(36,413

)

-3.0

%

Other expense, net

(488

)

-0.1

%

(577

)

-0.1

%

(556

)

0.0

%

(1,659

)

-0.1

%

Total other income (expense)

(13,419

)

-2.8

%

(12,374

)

-2.9

%

(38,820

)

-2.8

%

(37,588

)

-3.1

%

Income before income taxes

101,128

21.0

%

92,192

21.9

%

309,716

22.0

%

271,339

22.1

%

Income tax expense

35,382

7.4

%

32,448