Stericycle, Inc. Reports Results for the Second Quarter and Year to Date 2013

Stericycle, Inc. Reports Results for the Second Quarter and Year to Date 2013

LAKE FOREST, Ill.--(BUSINESS WIRE)-- Stericycle, Inc. (Nasdaq: SRCL) , today reported financial results for the second quarter of 2013.

SECOND QUARTER RESULTS


Revenues for the quarter ended June 30, 2013 were $526.5 million, up $57.6 million or 12.3% from $468.9 million in the second quarter last year. Acquisitions contributed approximately $34.1 million to the current period's growth in revenues. Revenues increased 13.1% compared to the prior period when adjusted for unfavorable foreign exchange impact of $4.1 million. Gross profit was $237.9 million, up 13.5% from $209.5 million in the second quarter last year. Gross profit as a percent of revenue was 45.2% compared with 44.7% in the second quarter of 2012. Earnings per diluted share, reported in accordance with U.S. generally accepted accounting principles ("GAAP"), increased 14.4% to $0.89 from $0.78 in the second quarter last year. Non-GAAP earnings per diluted share, when adjusted for various items identified in the second of the following tables, increased 14.2% to $0.93 from $0.81. See tables below.

FIRST SIX MONTHS' RESULTS

Revenues for the six months ending June 30, 2013 were $1,040.3 million, up $111.3 million or 12.0% from $929.0 million in the same period last year. Revenues increased 12.9% compared with the prior period when adjusted for unfavorable foreign exchange impact of $8.3 million. Gross profit was $469.9 million, up 13.3% from $414.8 million in the same period last year. Gross profit as a percent of revenue was 45.2% compared with 44.6% in 2012. GAAP earnings per diluted share increased 14.2% to $1.74 from $1.53 in the same period last year. Non-GAAP earnings per diluted share, when adjusted for various items identified in the second of the following tables, increased 12.8% to $1.81 from $1.60. See tables below.

The following table shows our calculations of organic revenue growth (in millions)(1):

Three Months Ended June 30,

Six Months Ended June 30,

Change

Change

2013

2012

$

%

2013

2012

$

%

Total As Reported Revenues (GAAP)

$

526.5

$

468.9

$

57.6

12.3

%

$

1,040.3

$

929.0

$

111.3

12.0

%

Adjustment for Foreign Exchange

4.1

-

4.1

8.3

-

8.3

Subtotal (non-GAAP):

530.6

468.9

61.7

13.1

%

1,048.6

929.0

119.6

12.9

%

Adjustment for Acquisitions

(37.7

)

(3.6

)

(34.1

)

(75.3

)

(4.2

)

(71.1

)

Adjustment for Regulated Returns and

Recall Management Services

(23.7

)

(29.0

)

5.3

(46.3

)

(64.7

)

18.4

Subtotal (non-GAAP):

$

469.2

$

436.3

$

32.9

7.5

%

$

927.0

$

860.1

$

66.9

7.8

%

Domestic/ International Breakdown:

Domestic Revenues

$

370.2

$

337.8

$

32.4

9.6

%

$

733.8

$

667.0

$

66.8

10.0

%

International Revenues

156.3

131.1

25.2

19.2

%

306.5

262.0

44.5

17.0

%

Total As Reported Revenues (GAAP)

$

526.5

$

468.9

$

57.6

12.3

%

$

1,040.3

$

929.0

$

111.3

12.0

%

(1) For internal purposes, we exclude the impact of foreign exchange and revenues attributed to acquisitions closed within the preceding 12 months and 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 EPS to Non-GAAP EPS(2):

Three Months Ended June 30,

Six Months Ended June 30,

Change

Change

2013

2012

$

%

2013

2012

$

%

GAAP EPS

$

0.89

$

0.78

$

0.11

14.4

%

$

1.74

$

1.53

$

0.22

14.2

%

Acquisition Expenses

0.03

0.03

0.05

0.04

Integration Expenses

0.01

0.01

0.02

0.02

Change in Fair Value

(0.00

)

(0.01

)

(0.00

)

0.01

Restructuring and Plant Closure

0.00

0.01

0.00

0.01

Litigation Settlement

(0.00

)

-

0.00

-

Non-GAAP EPS (Adjusted)

$

0.93

$

0.81

$

0.11

14.2

%

$

1.81

$

1.60

$

0.21

12.8

%

(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 $176.5 million and $188.8 million for the six months ended June 30, 2013 and 2012, 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 July 24, 2013 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 24th by dialing 855-859-2056, access code 86466843. 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)

(UNAUDITED)

June 30,

December 31,

2013

2012

ASSETS

Current Assets:

Cash and cash equivalents

$

18,001

$

31,324

Short-term investments

460

503

Accounts receivable, net

361,894

322,246

Deferred income taxes

19,998

22,995

Prepaid expenses

27,691

27,042

Other current assets

39,721

37,176

Total Current Assets

467,765

441,286

Property, plant and equipment, net

345,743

335,870

Goodwill

2,094,459

2,065,103

Intangible assets, net

673,222

667,471

Other assets

37,236

37,008

Total Assets

$

3,618,425

$

3,546,738

LIABILITIES AND EQUITY

Current Liabilities:

Current portion of long-term debt

$

72,430

$

87,781

Accounts payable

88,420

74,225

Accrued liabilities

122,430

135,321

Deferred revenues

18,183

18,095

Other current liabilities

12,497

15,638

Total Current Liabilities

313,960

331,060

Long-term debt, net of current portion

1,246,203

1,268,303

Deferred income taxes

371,467

359,780

Other liabilities

37,352

30,272

Equity:

Common stock

859

860

Additional paid-in capital

159,961

116,720

Accumulated other comprehensive loss

(78,564

)

(39,064

)

Retained earnings

1,549,769

1,463,277

Total Stericycle, Inc. Equity

1,632,025

1,541,793

Noncontrolling interests

17,418

15,530

Total Equity

1,649,443

1,557,323

Total Liabilities and Equity

$

3,618,425

$

3,546,738

STERICYCLE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS EXCEPT SHARES AND PER SHARE DATA)

(UNAUDITED)

Three Months Ended

Six Months Ended

June 30,

June 30,

2013

2012

2013

2012

$

% of Rev

$

% of Rev

$

% of Rev

$

% of Rev

Revenues

$

526,525

100.0

%

$

468,950

100.0

%

$

1,040,329

100.0

%

$

929,027

100.0

%

Cost of revenues (exclusive of depreciation shown below)

276,385

52.5

%

248,832

53.1

%

546,058

52.5

%

493,014

53.1

%

Depreciation - cost of revenues

12,288

2.3

%

10,630

2.3

%

24,325

2.3

%

21,218

2.3

%

Gross profit

237,852

45.2

%

209,488

44.7

%

469,946

45.2

%

414,795

44.6

%

Selling, general and administrative expenses

(exclusive of depreciation and amortization below)

91,158

17.3

%

80,652