Stericycle, Inc. Reports Results for Fourth Quarter and Full Year 2011

Published on Thursday, 02 February 2012 16:09 Written by TradersHuddle Staff

LAKE FOREST, Ill.-( Business Wire )-

Stericycle, Inc. (NASDAQ:SRCL), today reported financial results for the fourth quarter and full year of 2011.

Revenues for the quarter ended December 31, 2011 were $446.6 million, up 13.5% from $393.5 million from the fourth quarter last year. Acquisitions less than 12 months old contributed approximately $48.9 million to the growth in revenues. The impact on revenues from foreign exchange in the quarter was $2.5 million unfavorable. Gross profit was $201.5 million, up 10.4% from $182.5 million in the fourth quarter last year. Gross profit as a percent of revenue was 45.1% compared with 46.4% in the fourth quarter of 2010.

Net income attributable to Stericycle for the fourth quarter of 2011 was $64.3 million or $0.74 per diluted share compared with $50.0 million or $0.57 per diluted share for the fourth quarter of 2010. Net income attributable to Stericycle for the fourth quarter of 2011 and fourth quarter of 2010 includes acquisition expenses, restructuring costs, and other items. Excluding the effects of these items, non-GAAP earnings per diluted share were $0.76 for the fourth quarter of 2011 (see table below). Our non-GAAP earnings per diluted share increased 11.0% from our non-GAAP earnings per diluted share of $0.69 in the fourth quarter of 2010.

FULL YEAR RESULTS

For the year ended December 31, 2011, revenues were $1.676 billion, up 16.4% from $1.439 billion last year. Acquisitions less than 12 months old contributed approximately $158.2 million to the growth in revenues. The impact on revenues from foreign exchange for the full year was $11.2 million favorable. Gross profit was $760.7 million, up 14.0% from $667.4 million in 2010. Gross profit as a percent of revenue was 45.4% compared with 46.4% in 2010. Earnings per diluted share increased to $2.69 in 2011 from $2.39 in 2010. Non-GAAP earnings per diluted share, when adjusted for various items, increased to $2.85 in 2011 from $2.52 in 2010, a 13.1% increase (see table below):

Table to reconcile GAAP EPS to non-GAAP EPS:
		Three months ended December 31,										Years ending December 31,
		2011			2010		Change $		Change %			2011		2010		Change $		Change %
GAAP EPS		$0.74			$0.57		$0.17		29.6	%		$2.69		$2.39		$0.30		12.4	%
Acquisition Expenses		(0.01	)		0.07							0.12		0.10
Restructuring costs/Other		0.03			0.04							0.04		0.03
Non-GAAP EPS (adjusted)		$0.76			$0.69		$0.08		11.0	%		$2.85		$2.52		$0.33		13.1	%

* 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 $306.1 million for the full year of 2011.

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 2, 2012 at 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 2^nd, 2012 by dialing 855-859-2056, access code 40180757. 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,
			2011							2010								2011							2010
			(unaudited)															(unaudited)							(audited)
			$			% of Rev				$			% of Rev					$			% of Rev				$			% of Rev
Revenues		$	446,557			100.0	%		$	393,489			100.0	%			$	1,676,048			100.0	%		$	1,439,388			100.0	%
Cost of revenues			234,342			52.5	%			200,791			51.0	%				874,115			52.2	%			733,416			51.0	%
Depreciation - cost of revenues			10,697			2.4	%			10,042			2.6	%				41,135			2.5	%			37,025			2.6	%
Restructuring costs			-			0.0	%			181			0.0	%				54			0.0	%			1,520			0.1	%
Gross profit			201,518			45.1	%			182,475			46.4	%				760,744			45.4	%			667,427			46.4	%
Selling, general and administrative expenses			76,962			17.2	%			70,353			17.9	%				291,777			17.4	%			261,460			18.2	%
Depreciation - SG&A			2,195			0.5	%			2,066			0.5	%				8,642			0.5	%			6,941			0.5	%
Amortization			5,167			1.2	%			3,267			0.8	%				16,269			1.0	%			9,919			0.7	%
Total SG&A expense and amortization			84,324			18.9	%			75,686			19.2	%				316,688			18.9	%			278,320			19.3	%
Income from operations before
acquisition, integration, and other expenses			117,194			26.2	%			106,789			27.1	%				444,056			26.5	%			389,107			27.0	%
Acquisition expenses			(2,771	)		-0.6	%			6,272			1.6	%				9,483			0.6	%			9,519			0.7	%
Restructuring costs and plant closure expense			3,680			0.8	%			5,744			1.5	%				4,712			0.3	%			6,851			0.5	%
Litigation settlement			725			0.2	%			-			0.0	%				1,185			0.1	%			897			0.1	%
Loss/ (gain) on sale of businesses			(304	)		-0.1	%			-			0.0	%				19			0.0	%			(2,955	)		-0.2	%
Integration expenses			480			0.1	%			859			0.2	%				4,346			0.3	%			4,112			0.3	%
Income from operations			115,384			25.8	%			93,914			23.9	%				424,311			25.3	%			370,683			25.8	%
Other income (expense):
Interest income			315			0.1	%			72			0.0	%				799			0.0	%			266			0.0	%
Interest expense			(13,018	)		-2.9	%			(10,739	)		-2.7	%				(49,431	)		-2.9	%			(37,081	)		-2.6	%
Other expense, net			(1,696	)		-0.4	%			(453	)		-0.1	%				(3,355	)		-0.2	%			(2,015	)		-0.1	%
Total other income (expense)			(14,399	)		-3.2	%			(11,120	)		-2.8	%				(51,987	)		-3.1	%			(38,830	)		-2.7	%
Income before income taxes			100,985			22.6	%			82,794			21.0	%				372,324			22.2	%			331,853			23.1	%
Income tax expense			35,862			8.0	%			32,037			8.1	%				134,981			8.1	%			121,396			8.4	%
Net income			65,123			14.6	%			50,757			12.9	%				237,343			14.2	%			210,457			14.6	%
Less: net income attributable to
noncontrolling interests			835			0.2	%			777			0.2	%				2,592			0.2	%			2,578			0.2	%
Net income attributable to Stericycle, Inc.		$	64,288			14.4	%		$	49,980			12.7	%			$	234,751			14.0	%		$	207,879			14.4	%
Earnings per share-diluted		$	0.74						$	0.57							$	2.69						$	2.39
Weighted average number of
common shares outstanding-diluted			86,635,383							87,279,853								87,367,712							86,962,651

STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
			December 31,				December 31,
			2011				2010
			(unaudited)				(audited)
ASSETS
Current Assets:
Cash and cash equivalents		$	22,511			$	79,276
Short-term investments			416				16,248
Accounts receivable, less allowance for doubtful
accounts of $18,905 in 2011 and $10,845 in 2010			290,854				214,899
Deferred income taxes			19,314				16,824
Prepaid expenses			22,466				16,038
Other current assets			35,035				25,403
Total Current Assets			390,596				368,688
Property, plant and equipment, net			293,912				267,971
Other assets:
Goodwill			1,913,703				1,595,764
Intangible assets, less accumulated amortization of
$42,050 in 2011 and $28,394 in 2010			546,618				375,174
Other			32,261				31,426
Total other assets			2,492,582				2,002,364
Total Assets		$	3,177,090			$	2,639,023
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt		$	100,526			$	91,406
Accounts payable			66,635				54,777
Accrued liabilities			150,619				134,355
Deferred revenues			12,855				14,455
Other current liabilities			6,377				13,496
Total Current Liabilities			337,012				308,489
Long-term debt, net of current portion			1,284,113				1,014,222
Deferred income taxes			313,733				222,647
Other liabilities			14,981				13,315
Equity:
Common stock (par value $0.01 per share, 120,000,000 shares
authorized, 84,696,227 issued and outstanding in 2011,
and 85,242,387 issued and outstanding in 2010)			847				852
Additional paid-in capital			-				46,945
Accumulated other comprehensive loss			(45,984	)			(16,869	)
Retained earnings			1,243,303				1,017,497
Total Stericycle, Inc. Equity			1,198,166				1,048,425
Noncontrolling interest			29,085				31,925
Total Equity			1,227,251				1,080,350
Total Liabilities and Equity		$	3,177,090			$	2,639,023

STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
			Years Ended December 31,
			2011				2010
			(unaudited)				(audited)
Operating Activities:
Net income		$	237,343			$	210,457
Adjustments to reconcile net income to net cash
provided by operating activities:
Loss/ (gain) on sale of business			19				(2,955	)
Restructuring and plant closure costs			2,756				5,571
Write down of other assets			1,256				-
Change in fair value of contingent consideration			(7,221	)			-
Accelerated amortization of term loan financing fees			1,241				-
Stock compensation expense			15,367				15,298
Excess tax benefit of stock options exercised			(17,410	)			(24,687	)
Depreciation			49,777				43,966
Amortization			16,269				9,919
Deferred income taxes			31,837				26,312
Changes in operating assets and liabilities, net of
effect of acquisitions and divestitures:
Accounts receivable			(31,821	)			(20,270	)
Accounts payable			(12,539	)			(165	)
Accrued liabilities			31,754				56,578
Deferred revenue			(1,997	)			(878	)
Other assets and liabilities			(10,527	)			6,524
Net cash provided by operating activities			306,104				325,670
Investing Activities:
Payments for acquisitions and international
investments, net of cash acquired			(479,661	)			(190,430	)
Proceeds from/ (purchases of) short-term investments			15,942				(14,732	)
Proceeds from sale of businesses and other assets			2,371				8,000
Capital expenditures			(53,301	)			(48,320	)
Net cash used by investing activities			(514,649	)			(245,482	)
Financing Activities:
Repayments of long-term debt and other obligations			(39,536	)			(42,377	)
Net borrowings / (repayments) on senior credit facility			270,827				(342,796	)
Proceeds from private placement of long-term note			-				400,000
Payments of deferred financing costs			(3,740	)			(5,757	)
Payments on capital lease obligations			(3,333	)			(2,894	)
Purchase and cancellation of treasury stock			(124,056	)			(94,335	)
Payments to noncontrolling interests			(534	)			-
Proceeds from other issuances of common stock			31,286				49,907
Excess tax benefit of stock options exercised			17,410				24,687
Net cash provided by/ (used in) financing activities			148,324				(13,565	)
Effect of exchange rate changes on cash			3,456				(3,114	)
Net (decrease) / increase in cash and cash equivalents			(56,765	)			63,509
Cash and cash equivalents at beginning of period			79,276				15,767
Cash and cash equivalents at end of period		$	22,511			$	79,276
Non-cash activities:
Net issuances of obligations for certain acquisitions		$	58,338			$	96,295

Stericycle, Inc.Frank ten Brink, 847-607-2012