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Stericycle, Inc. Reports Results For The Third Quarter Of 2012

Stocks in this article: SRCL

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     7.7 % 110,283     7.8 % 99,119     8.1 %
 
Net income 65,746     13.7 % 59,744     14.2 % 199,433     14.1 % 172,220     14.0 %
 
Net income attributable to
noncontrolling interests 269     0.1 % 497     0.1 % 1,506     0.1 % 1,757     0.1 %
 
Net income attributable to Stericycle, Inc. $ 65,477     13.6 % $ 59,247     14.1 % $ 197,927     14.0 % $ 170,463     13.9 %
 
Earnings per share - diluted $ 0.75   $ 0.68   $ 2.28   $ 1.95  
 
Weighted average number of
common shares outstanding - diluted 87,305,779   87,385,121   86,911,229   87,620,867  
 
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
 
    September 30,     December 31,
2012 2011
(unaudited) (audited)
ASSETS
Current Assets:
Cash and cash equivalents $ 16,205 $ 22,511
Short-term investments 466 416
Accounts receivable, less allowance for doubtful
accounts of $18,711 in 2012 and $18,905 in 2011 314,577 290,854
Deferred income taxes 19,712 19,314
Prepaid expenses 26,092 22,466
Other current assets 40,333   35,035  
Total Current Assets 417,385 390,596
Property, plant and equipment, net 328,222 293,912
Goodwill 2,005,698 1,913,703
Intangible assets, less accumulated amortization of
$57,855 in 2012 and $42,050 in 2011 623,418 546,618
Other assets 36,873   32,261  
Total Assets $ 3,411,596   $ 3,177,090  
 
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt $ 286,636 $ 100,526
Accounts payable 80,213 66,635
Accrued liabilities 122,010 140,521
Deferred revenues 15,248 12,855
Other current liabilities 17,216   6,377  
Total Current Liabilities 521,323 326,914
Long-term debt, net of current portion 1,010,514 1,284,113
Deferred income taxes 356,196 313,733
Other liabilities 30,705 25,079
Equity:
Common stock (par value $0.01 per share, 120,000,000 shares
authorized, 85,924,721 issued and outstanding in 2012,
and 84,696,227 issued and outstanding in 2011) 859 847
Additional paid-in capital 84,046 -
Accumulated other comprehensive loss (41,602 ) (45,984 )
Retained earnings 1,434,373   1,243,303  
Total Stericycle, Inc.'s Equity 1,477,676 1,198,166
Noncontrolling interest 15,182   29,085  
Total Equity 1,492,858   1,227,251  
Total Liabilities and Equity $ 3,411,596   $ 3,177,090  
 
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
 
    Nine Months Ended
September 30,
2012     2011
(unaudited) (unaudited)
Operating Activities:
Net income $ 199,433 $ 172,220
Adjustments to reconcile net income to net cash
provided by operating activities:
Loss on sale of business 4,867 323
Change in fair value of contingent consideration 591 (2,140 )
Accelerated amortization of term loan financing fees - 1,241
Stock compensation expense 12,346 11,563
Excess tax benefit of stock options exercised (20,994 ) (16,614 )
Depreciation 39,514 36,885
Amortization 15,675 11,102
Deferred income taxes 25,462 27,685
Changes in operating assets and liabilities, net of
effect of acquisitions and divestitures:
Accounts receivable (4,657 ) (20,288 )
Accounts payable 7,246 (11,239 )
Accrued liabilities (972 ) 16,694
Deferred revenues 615 (1,241 )
Other assets and liabilities (1,979 ) (11,015 )
 
Net cash provided by operating activities 277,147   215,176  
 
Investing Activities:
Payments for acquisitions, net of cash acquired (153,390 ) (467,430 )
(Purchases of)/ proceeds from short-term investments (49 ) 15,941
Proceeds from sale of business and other assets 764 2,371
Capital expenditures (51,658 ) (36,981 )
 
Net cash used in investing activities (204,333 ) (486,099 )
 
Financing Activities:
Net repayment of long-term debt (43,916 ) (17,294 )
Net (repayments)/ borrowings on senior credit facility (96,601 ) 269,792
Payments of deferred financing costs (148 ) (3,740 )
Payments on capital lease obligations (2,559 ) (2,703 )
Purchase and cancellation of treasury stock (2,945 ) (81,201 )
Proceeds from other issuances of common stock 44,879 30,487
Excess tax benefit of stock options exercised 20,994 16,614
Payments to noncontrolling interests (398 ) -  
 
Net cash (used in)/ provided by financing activities (80,694 ) 211,955
Effect of exchange rate changes on cash 1,574   3,087  
Net decrease in cash and cash equivalents (6,306 ) (55,881 )
Cash and cash equivalents at beginning of period 22,511   79,276  
 
Cash and cash equivalents at end of period $ 16,205   $ 23,395  
 
Non-cash activities:
Net issuances of obligations for acquisitions $ 62,262 $ 41,847
 




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