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Stericycle, Inc. Reports Results For Fourth Quarter And Full Year Ended 2012

Stocks in this article: SRCL

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 February 6, 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 March 5th by dialing 855-859-2056, access code 86463685. 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 Years Ended
December 31, December 31,
2012 2011 2012 2011
(Unaudited) (Unaudited) (Audited)
$   % of Rev $   % of Rev $   % of Rev   $   % of Rev
 
Revenues $ 503,638 100.0 % $ 446,557 100.0 % $ 1,913,149 100.0 % $ 1,676,048 100.0 %
 
Cost of revenues 264,541 52.5 % 234,342 52.5 % 1,011,081 52.8 % 874,115 52.2 %
Depreciation - cost of revenues 12,009 2.4 % 10,697 2.4 % 44,631 2.3 % 41,135 2.5 %
Restructuring costs 132     0.0 % -     0.0 % 132     0.0 % 54     0.0 %
 
Gross profit 226,956 45.1 % 201,518 45.1 % 857,305 44.8 % 760,744 45.4 %
 
Selling, general and administrative expenses 86,496 17.2 % 76,653 17.2 % 327,131 17.1 % 291,468 17.4 %
Depreciation - SG&A 2,706 0.5 % 2,195 0.5 % 9,598 0.5 % 8,642 0.5 %
Amortization 6,379     1.3 % 5,167     1.2 % 22,054     1.2 % 16,269     1.0 %
 
Total SG&A expense and amortization 95,581     19.0 % 84,015     18.8 % 358,783     18.8 % 316,379     18.9 %
 
Income from operations before
acquisition, integration, and other expenses 131,375 26.1 % 117,503 26.3 % 498,522 26.1 % 444,365 26.5 %
 
Acquisition expenses 1,707 0.3 % 2,310 0.5 % 7,920 0.4 % 16,704 1.0 %
Restructuring costs and plant closure expense 1,801 0.4 % 3,989 0.9 % 5,201 0.3 % 5,021 0.3 %
Litigation settlement 6,050 1.2 % 725 0.2 % 6,050 0.3 % 1,185 0.1 %
Loss/ (gain) on sale of businesses - 0.0 % (304 ) -0.1 % 4,867 0.3 % 19 0.0 %
Change in fair value of contingent consideration 161 0.0 % (5,081 ) -1.1 % 752 0.0 % (7,221 ) -0.4 %
Integration expenses 1,356     0.3 % 480     0.1 % 4,896     0.3 % 4,346     0.3 %
 
Income from operations 120,300 23.9 % 115,384 25.8 % 468,836 24.5 % 424,311 25.3 %
 
Other income (expense):
Interest income 71 0.0 % 315 0.1 % 404 0.0 % 799 0.0 %
Interest expense (13,077 ) -2.6 % (13,018 ) -2.9 % (51,674 ) -2.7 % (49,431 ) -2.9 %
Other expense, net 187     0.0 % (1,696 )   -0.4 % (369 )   0.0 % (3,355 )   -0.2 %
 
Total other income (expense) (12,819 )   -2.5 % (14,399 )   -3.2 % (51,639 )   -2.7 % (51,987 )   -3.1 %
 
Income before income taxes 107,481 21.3 % 100,985 22.6 % 417,197 21.8 % 372,324 22.2 %
 
Income tax expense 36,973     7.3 % 35,862     8.0 % 147,256     7.7 % 134,981     8.1 %
 
Net income 70,508     14.0 % 65,123     14.6 % 269,941     14.1 % 237,343     14.2 %
 
Less: net income attributable to
noncontrolling interests 439     0.1 % 835     0.2 % 1,945     0.1 % 2,592     0.2 %
 
Net income attributable to Stericycle, Inc. $ 70,069     13.9 % $ 64,288     14.4 % $ 267,996     14.0 % $ 234,751     14.0 %
 
Earnings per share-diluted $ 0.80   $ 0.74   $ 3.08   $ 2.69  
 
Weighted average number of
common shares outstanding-diluted 87,281,680   86,635,383   87,018,473   87,367,712  
   
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
 
December 31,
2012 2011
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and cash equivalents $ 31,324 $ 22,511
Short-term investments 503 416
Accounts receivable, less allowance for doubtful
accounts of $19,443 in 2012 and $18,905 in 2011 322,246 290,854
Deferred income taxes 22,995 19,314
Prepaid expenses 27,042 22,466
Other current assets 37,176   35,035  
Total Current Assets 441,286 390,596
Property, plant and equipment, net 335,870 293,912
Other assets:
Goodwill 2,065,103 1,913,703
Intangible assets, less accumulated amortization of
$64,215 in 2012 and $42,050 in 2011 667,471 546,618
Other 37,008   32,261  
Total other assets 2,769,582   2,492,582  
Total Assets $ 3,546,738   $ 3,177,090  
 
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt $ 87,781 $ 100,526
Accounts payable 74,225 66,635
Accrued liabilities 135,321 140,521
Deferred revenues 18,095 12,855
Other current liabilities 15,638   6,377  
Total Current Liabilities 331,060 326,914
Long-term debt, net of current portion 1,268,303 1,284,113
Deferred income taxes 362,643 313,733
Other liabilities 27,409 25,079
Equity:
Common stock (par value $0.01 per share, 120,000,000 shares
authorized, 85,987,883 issued and outstanding in 2012,
and 84,696,227 issued and outstanding in 2011) 860 847
Additional paid-in capital 116,720 -
Accumulated other comprehensive loss (39,064 ) (45,984 )
Retained earnings 1,463,277   1,243,303  
Total Stericycle, Inc. Equity 1,541,793 1,198,166
Noncontrolling interest 15,530   29,085  
Total Equity 1,557,323   1,227,251  
Total Liabilities and Equity $ 3,546,738   $ 3,177,090  
   
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
 
Years Ended December 31,
2012 2011
(Unaudited) (Audited)
Operating Activities:
Net income $ 269,941 $ 237,343
Adjustments to reconcile net income to net cash
provided by operating activities:
Loss on sale of business 4,867 19
Restructuring and plant closure costs 1,677 2,756
Write down of other assets 1,256
Change in fair value of contingent consideration 752 (7,221 )
Accelerated amortization of term loan financing fees - 1,241
Stock compensation expense 16,339 15,367
Excess tax benefit of stock options exercised (30,161 ) (17,410 )
Depreciation 54,229 49,777
Amortization 22,054 16,269
Deferred income taxes 25,541 31,837
Changes in operating assets and liabilities, net of
effect of acquisitions and divestitures:
Accounts receivable (4,329 ) (31,821 )
Accounts payable (107 ) (12,539 )
Accrued liabilities 26,201 21,656
Deferred revenue 931 (1,997 )
Other assets and liabilities (487 ) (429 )
 
Net cash provided by operating activities 387,448   306,104  
 
Investing Activities:
Payments for acquisitions, net of cash acquired (229,684 ) (479,661 )
(Purchases of) / proceeds from short-term investments (89 ) 15,942
Proceeds from sale of businesses and other assets 764 2,371
Capital expenditures (65,236 ) (53,301 )
 
Net cash used by investing activities (294,245 ) (514,649 )
 
Financing Activities:
Repayments of long-term debt and other obligations (73,766 ) (39,536 )
Net (repayments)/ borrowings on senior credit facility (304,309 ) 270,827
Proceeds from private placement of long-term note 250,000 -
Payments of deferred financing costs (956 ) (3,740 )
Payments on capital lease obligations (3,192 ) (3,333 )
Purchase and cancellation of treasury stock (48,028 ) (124,056 )
Payments to noncontrolling interests (580 ) (534 )
Proceeds from other issuances of common stock 64,461 31,286
Excess tax benefit of stock options exercised 30,161   17,410  
 
Net cash (used in)/ provided by financing activities (86,209 ) 148,324
Effect of exchange rate changes on cash 1,819   3,456  
Net increase/ (decrease) in cash and cash equivalents 8,813 (56,765 )
Cash and cash equivalents at beginning of period 22,511   79,276  
 
Cash and cash equivalents at end of period $ 31,324   $ 22,511  
 
Non-cash activities:
Net issuances of obligations for certain acquisitions $ 105,738 $ 58,338
 




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