Stericycle, Inc. Reports Results for First Quarter 2007
Stericycle, Inc. (Nasdaq: SRCL), today reported financial results for the first
quarter of 2007.
First Quarter Results
Revenues for the quarter ended March 31, 2007 were $211.0 million, up 17.7%
from $179.2 million in the first quarter of 2006. Acquisitions less than 12
months old contributed $13.9 million to the $31.8 million revenue growth in
the first quarter of 2007. Gross profit was $94.2 million, up 19.7% from $78.8
million in the first quarter last year. Gross profit as a percent of revenues
was 44.7% versus 43.9% in the first quarter of 2006.
Net income for the first quarter of 2007 was $29.4 million or $0.65 per diluted
share compared with net income of $23.5 million or $0.52 per diluted share for
the first quarter of 2006.
Cash flow from operations was $52.9 million for the first quarter of 2007.
Cash flow and increased loan balances funded $46.1 million in stock repurchases,
$14.6 million in acquisitions and international investments and $10.3 million
in capital spending.
For more information about Stericycle, please visit our website at www.stericycle.com.
Conference call to be held April 26, 2007 at 4:00 p.m. Central time –
Dial 866-793-1343 at least 5 minutes before start time. If you are unable to
participate on the call, a replay will be available through May 3rd by dialing
888-266-2081, access code 1066094. To hear a simulcast of the call over the
internet, or to access an audio archive of the call, go to the Investor Relations
page on Stericycle’s website at www.stericycle.com.
| STERICYCLE, INC. AND SUBSIDIARIES |
| CONSOLIDATED BALANCE SHEETS |
| (IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE
DATA) |
| |
|
|
March 31, |
|
|
December 31, |
|
|
2007 |
|
|
2006 |
|
|
(unaudited) |
|
|
(audited) |
| ASSETS |
|
|
|
|
|
| Current assets: |
|
|
|
|
|
| Cash and cash equivalents |
$ |
18,094 |
|
$ |
13,492 |
| Short-term investments |
|
1,859 |
|
|
2,548 |
Accounts receivable, less allowance for doubtful |
|
|
|
|
|
| accounts of $5,349 in 2007 and $5,411 in 2006 |
|
125,428 |
|
|
130,354 |
| Deferred tax asset |
|
13,579 |
|
|
16,072 |
| Asset group held for sale |
|
- |
|
|
33,674 |
| Other current assets |
|
22,975 |
|
|
22,462 |
| Total current assets |
|
181,935 |
|
|
218,602 |
| Property, plant and equipment, net |
|
166,783 |
|
|
156,953 |
| Other assets: |
|
|
|
|
|
| Goodwill |
|
828,599 |
|
|
813,973 |
| Intangible assets, less accumulated amortization of |
|
|
|
|
|
| $12,203 in 2007 and $11,454 in 2006 |
|
124,665 |
|
|
115,879 |
| Other |
|
23,327 |
|
|
22,499 |
| Total other assets |
|
976,591 |
|
|
952,351 |
| Total assets |
$ |
1,325,309 |
|
$ |
1,327,906 |
|
|
|
|
|
|
| LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
| Current portion of long-term debt |
$ |
23,477 |
|
$ |
22,681 |
| Accounts payable |
|
24,793 |
|
|
25,033 |
| Accrued liabilities |
|
75,404 |
|
|
75,434 |
| Deferred revenue |
|
15,294 |
|
|
11,662 |
| Liability group held for sale |
|
- |
|
|
7,221 |
| Total current liabilities |
|
138,968 |
|
|
142,031 |
| Long-term debt, net of current portion |
|
448,547 |
|
|
443,115 |
| Deferred income taxes |
|
110,471 |
|
|
105,521 |
| Other liabilities |
|
13,503 |
|
|
12,158 |
| Common shareholders' equity: |
|
|
|
|
|
| Common stock (par value $0.01 per share, 80,000,000 |
|
|
|
|
|
| shares authorized, 43,764,461 issued and outstanding |
|
|
|
|
|
| in 2007, 44,251,965 issued and outstanding in 2006) |
|
438 |
|
|
443 |
| Additional paid in capital |
|
212,603 |
|
|
252,568 |
| Accumulated other comprehensive income |
|
4,552 |
|
|
5,229 |
| Retained earnings |
|
396,227 |
|
|
366,841 |
| Total shareholders' equity |
|
613,820 |
|
|
625,081 |
| Total liabilities and shareholders' equity |
$ |
1,325,309 |
|
$ |
1,327,906 |
|
|
|
|
|
|
|
|
|
|
|
|
| Total debt to capitalization percentage ratio |
|
43.5% |
|
|
42.7% |
| Calculation of total debt to capitalization percentage ratio: |
|
|
|
|
|
| Total debt |
$ |
472,024 |
|
$ |
465,796 |
| Shareholders' equity |
|
613,820 |
|
|
625,081 |
| Capitalization |
$ |
1,085,844 |
|
$ |
1,090,877 |
| STERICYCLE, INC. AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF INCOME |
| (IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE
DATA) |
| |
|
Three Months Ended March
31, |
|
(unaudited) |
|
|
2007 |
|
|
2006 |
|
|
$ |
% of Rev |
|
|
$ |
% of Rev |
|
|
|
|
|
|
|
|
| Revenues |
$ |
211,049 |
100.0% |
|
$ |
179,249 |
100.0% |
|
|
|
|
|
|
|
|
| Cost of revenues |
|
116,813 |
55.3% |
|
|
100,496 |
56.1% |
|
|
|
|
|
|
|
|
| Gross profit |
|
94,236 |
44.7% |
|
|
78,753 |
43.9% |
|
|
|
|
|
|
|
|
| Selling, general and |
|
|
|
|
|
|
|
| administrative expenses |
|
37,779 |
17.9% |
|
|
32,865 |
18.3% |
| Amortization |
|
868 |
0.4% |
|
|
511 |
0.3% |
|
|
|
|
|
|
|
|
| Total SG&A expense and amortization |
|
38,647 |
18.3% |
|
|
33,376 |
18.6% |
|
|
|
|
|
|
|
|
|
Income from operations before acquisition
|
|
|
|
|
|
|
|
integration and other expenses |
|
55,589 |
26.4% |
|
|
45,377 |
25.3% |
|
|
|
|
|
|
|
|
| Gain on sale of assets |
|
(823) |
-0.4% |
|
|
- |
0.0% |
| Impairment of fixed assets |
|
650 |
0.3% |
|
|
- |
0.0% |
| Acquisition integration expenses |
|
313 |
0.1% |
|
|
631 |
0.3% |
|
|
|
|
|
|
|
|
| Income from operations |
|
55,449 |
26.4% |
|
|
44,746 |
25.0% |
|
|
|
|
|
|
|
|
| Other income (expense): |
|
|
|
|
|
|
|
| Interest Income |
|
401 |
0.2% |
|
|
256 |
0.1% |
| Interest expense |
|
(7,700) |
-3.7% |
|
|
(5,906) |
-3.3% |
| Insurance proceeds |
|
500 |
0.2% |
|
|
- |
0.0% |
| Other expense, net |
|
(553) |
-0.3% |
|
|
(530) |
-0.3% |
|
|
|
|
|
|
|
|
| Total other income (expense) |
|
(7,352) |
-3.6% |
|
|
(6,180) |
-3.5% |
|
|
|
|
|
|
|
|
| Income before income taxes |
|
48,097 |
22.8% |
|
|
38,566 |
21.5% |
|
|
|
|
|
|
|
|
| Income tax expense |
|
18,710 |
8.9% |
|
|
15,041 |
8.4% |
|
|
|
|
|
|
|
|
| Net income |
$ |
29,387 |
13.9% |
|
$ |
23,525 |
13.1% |
|
|
|
|
|
|
|
|
| Earnings per share-diluted |
$ |
0.65 |
|
|
$ |
0.52 |
|
|
|
|
|
|
|
|
|
| Weighted average number of |
|
|
|
|
|
|
|
| common shares outstanding-diluted |
|
45,218,346 |
|
|
|
45,155,925 |
|
| STERICYCLE, INC. AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF CASH FLOWS
|
| (IN THOUSANDS) |
| |
|
For the three months
ended March 31, |
|
2007 |
2006 |
|
(unaudited) |
| Operating Activities: |
|
|
|
|
| Net income |
$ |
29,387 |
$ |
23,525 |
| Adjustments to reconcile net income to net cash |
|
|
|
|
| provided by operating activities: |
|
|
|
|
| Gain on sale of assets |
|
(823) |
|
- |
| Impairment of fixed assets |
|
650 |
|
- |
| Stock compensation expense |
|
2,450 |
|
2,589 |
| Excess tax benefit of disqualifying dispositions of stock options and |
|
|
|
|
exercise of non-qualified stock options |
|
(576) |
|
(2,256) |
| Depreciation |
|
6,270 |
|
5,784 |
| Amortization |
|
868 |
|
511 |
| Deferred income taxes |
|
6,176 |
|
5,310 |
| Changes in operating assets and liabilities, net of |
|
|
|
|
| effect of acquisitions |
|
|
|
|
| Accounts receivable |
|
5,420 |
|
(2,014) |
| Other assets |
|
1,316 |
|
(4,738) |
| Accounts payable |
|
(1,635) |
|
(4,322) |
| Accrued liabilities |
|
(245) |
|
4,460 |
| Deferred revenue |
|
3,632 |
|
2,333 |
|
|
|
|
|
| Net cash provided by operating activities |
|
52,890 |
|
31,182 |
|
|
|
|
|
| Investing Activities: |
|
|
|
|
| Payments for acquisitions and international |
|
|
|
|
| investments, net of cash acquired |
|
(14,645) |
|
(120,825) |
| Proceeds from maturity/(purchases) of short-term investments |
|
689 |
|
(5,700) |
| Proceeds from sale of business |
|
26,453 |
|
- |
| Proceeds from sale of property and equipment |
|
49 |
|
- |
| Capital expenditures |
|
(10,300) |
|
(7,506) |
|
|
|
|
|
| Net cash provided by (used in) investing activities |
|
2,246 |
|
(134,031) |
|
|
|
|
|
| Financing Activities: |
|
|
|
|
| Proceeds from issuance of note payable |
|
- |
|
4,582 |
| Repayment of long-term debt |
|
(16,200) |
|
(8,730) |
| Net borrowings on senior credit facility |
|
10,879 |
|
110,153 |
| Principal payments on capital lease obligations
|
|
(111) |
|
(613) |
| Excess tax benefit of stock options exercised
|
|
576 |
|
2,256 |
| Purchase/cancellation of treasury stock |
|
(46,071) |
|
(11,198) |
| Proceeds from other issuances of common stock |
|
3,075 |
|
5,511 |
|
|
|
|
|
| Net cash (used in) provided by financing activities |
|
(47,852) |
|
101,961 |
| Effect of exchange rate changes on cash |
|
(2,682) |
|
824 |
| Net increase (decrease) in cash and cash equivalents |
|
4,602 |
|
(64) |
| Cash and cash equivalents at beginning of period |
|
13,492 |
|
7,825 |
|
|
|
|
|
| Cash and cash equivalents at end of period |
$ |
18,094 |
$ |
7,761 |
| Non-cash activities: |
|
|
|
|
| Net issuances of notes payable for certain acquisitions |
$ |
11,854 |
$ |
21,263 |
For more information, contact:
Frank ten Brink
Stericycle, Inc.
847-607-2012
www.stericycle.com. |
