LAKE FOREST, Ill., April 24, 2014 (GLOBE NEWSWIRE) -- Stericycle, Inc. (Nasdaq:SRCL), today reported financial results for the first quarter of 2014.
Revenues for the quarter ended March 31, 2014 were $570.0 million, up 10.9% from $513.8 million in the first quarter last year. Acquisitions contributed approximately $32.9 million to the current period's growth in revenues. Revenues increased 12.5% compared to the prior period when adjusted for unfavorable foreign exchange impacts of $8.1 million. Gross profit was $255.5 million, up 10.1% from $232.1 million in the first quarter last year. Gross profit as a percent of revenue was 44.8% compared with 45.2% in the first quarter of 2013. Earnings per diluted share, reported in accordance with U.S. generally accepted accounting principles ("GAAP"), increased 7.1% to $0.91 from $0.85 in the first quarter of 2013. Non-GAAP earnings per diluted share, when adjusted for various items identified in the second of the following tables, increased 17.6% to $1.04 from $0.88. See tables below.
The following table shows our calculations of organic revenue growth (in millions)(1):
| Three Months Ended March 31, | ||||
| Change | ||||
| 2014 | 2013 | $ | % | |
| Total As Reported Revenues (GAAP) | $570.0 | $513.8 | $56.2 | 10.9% |
| Adjustment for Foreign Exchange | 8.1 | -- | 8.1 | |
| Subtotal (non-GAAP): | 578.0 | 513.8 | 64.2 | 12.5% |
| Adjustment for Acquisitions | (35.2) | (2.3) | (32.9) | |
| Adjustment for Recall and | ||||
| Returns Solutions | (23.1) | (22.5) | (0.5) | |
| Subtotal (non-GAAP): | 519.8 | 489.0 | 30.8 | 6.3% |
| Domestic/ International Breakdown: | ||||
| Domestic Revenues | 392.1 | 363.6 | 28.4 | 7.8% |
| International Revenues | 177.9 | 150.2 | 27.7 | 18.5% |
| Total As Reported Revenues (GAAP) | $570.0 | $513.8 | $56.2 | 10.9% |
(1) When evaluating organic revenue growth for internal purposes, we exclude (i) the impact of foreign exchange, (ii) revenues attributed to acquisitions closed within the preceding 12 months and (iii) revenues from our recall and returns solutions. 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 than GAAP revenues.
Table to reconcile GAAP EPS to Non-GAAP EPS(2):
| Three Months Ended March 31, | ||||
| Change | ||||
| 2014 | 2013 | $ | % | |
| GAAP EPS | $ 0.91 | $ 0.85 | $ 0.06 | 7.1% |
| Acquisition expenses | 0.04 | 0.02 | ||
| Integration expenses | 0.02 | 0.01 | ||
| Change in fair value | 0.06 | -- | ||
| Litigation expenses | 0.01 | 0.00 | ||
| Non-GAAP EPS (Adjusted) | $ 1.04 | $ 0.88 | $ 0.16 | 17.6% |
(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 $144.5 million and $98.2 million for the three months ended March 31, 2014 and 2013, respectively.
For more information about Stericycle, please visit our website at www.stericycle.com.
CONFERENCE CALL
Conference call to be held April 24, 2014 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 May 24th by dialing 855-859-2056, access code 13898710. To hear a live simulcast of the call or to access an audio archive of the call, go to the Investors page on Stericycle's 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.
| STERICYCLE, INC. AND SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (IN THOUSANDS) | ||
| March 31, | December 31, | |
| 2014 | 2013 | |
| (Unaudited) | ||
| ASSETS | ||
| Current Assets: | ||
| Cash and cash equivalents | $ 43,058 | $ 61,991 |
| Short-term investments | 353 | 413 |
| Accounts receivable, net | 383,304 | 388,996 |
| Deferred income taxes | 14,401 | 18,031 |
| Prepaid expenses | 25,807 | 28,379 |
| Other current assets | 35,963 | 37,279 |
| Total Current Assets | 502,886 | 535,089 |
| Property, plant and equipment, net | 359,329 | 358,967 |
| Goodwill | 2,240,597 | 2,231,582 |
| Intangible assets, net | 724,978 | 720,035 |
| Other assets | 37,789 | 37,124 |
| Total Assets | $ 3,865,579 | $ 3,882,797 |
| LIABILITIES AND EQUITY | ||
| Current Liabilities: | ||
| Current portion of long-term debt | $ 124,307 | $ 150,380 |
| Accounts payable | 94,118 | 89,146 |
| Accrued liabilities | 118,606 | 107,445 |
| Deferred revenues | 21,998 | 18,826 |
| Other current liabilities | 44,152 | 45,211 |
| Total Current Liabilities | 403,181 | 411,008 |
| Long-term debt, net of current portion | 1,246,071 | 1,280,663 |
| Deferred income taxes | 398,909 | 396,119 |
| Other liabilities | 31,871 | 27,469 |
| Equity: | ||
| Common stock | 850 | 855 |
| Additional paid-in capital | 212,847 | 195,110 |
| Accumulated other comprehensive loss | (57,128) | (56,468) |
| Retained earnings | 1,611,780 | 1,610,964 |
| Total Stericycle, Inc. Equity | 1,768,349 | 1,750,461 |
| Noncontrolling interests | 17,198 | 17,077 |
| Total Equity | 1,785,547 | 1,767,538 |
| Total Liabilities and Equity | $ 3,865,579 | $ 3,882,797 |
| STERICYCLE, INC. AND SUBSIDIARIES | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
| (IN THOUSANDS, EXCEPT SHARES AND PER SHARE DATA) | ||||
| Three Months Ended | ||||
| March 31, | ||||
| 2014 | 2013 | |||
| (Unaudited) | ||||
| $ | % of Rev | $ | % of Rev | |
| Revenues | $ 569,955 | 100.0% | $ 513,804 | 100.0% |
| Cost of revenues (exclusive of depreciation shown below) | 301,760 | 52.9% | 269,673 | 52.5% |
| Depreciation - cost of revenues | 12,726 | 2.2% | 12,037 | 2.3% |
| Total cost of revenues | 314,486 | 55.2% | 281,710 | 54.8% |
| Gross profit | 255,469 | 44.8% | 232,094 | 45.2% |
| Selling, general and administrative expenses | ||||
| (exclusive of depreciation and amortization below) | 100,180 | 17.6% | 88,241 | 17.2% |
| Depreciation - SG&A | 3,315 | 0.6% | 2,809 | 0.5% |
| Amortization | 7,315 | 1.3% | 6,642 | 1.3% |
| Total SG&A expense | 110,810 | 19.4% | 97,692 | 19.0% |
| Income from operations before | ||||
| acquisition, integration, and other expenses | 144,659 | 25.4% | 134,402 | 26.2% |
| Acquisition expenses | 3,221 | 0.6% | 1,803 | 0.4% |
| Integration expenses | 2,485 | 0.4% | 896 | 0.2% |
| Change in fair value of contingent consideration | 4,789 | 0.8% | -- | 0.0% |
| Litigation expenses | 1,505 | 0.3% | 106 | 0.0% |
| Income from operations | 132,659 | 23.3% | 131,597 | 25.6% |
| Other income (expense): | ||||
| Interest expense, net | (14,898) | -2.6% | (13,379) | -2.6% |
| Other expense, net | (700) | -0.1% | (1,013) | -0.2% |
| Total other expense | (15,598) | -2.7% | (14,392) | -2.8% |
| Income before income taxes | 117,061 | 20.5% | 117,205 | 22.8% |
| Income tax expense | 37,291 | 6.5% | 41,983 | 8.2% |
| Net income | 79,770 | 14.0% | 75,222 | 14.6% |
| Less: net income attributable to noncontrolling interests | 621 | 0.1% | 605 | 0.1% |
| Net income attributable to Stericycle, Inc. | $ 79,149 | 13.9% | $ 74,617 | 14.5% |
| Earnings per share - diluted | $ 0.91 | $ 0.85 | ||
| Weighted average number of | ||||
| common shares outstanding - diluted | 86,613,843 | 87,459,497 | ||
| STERICYCLE, INC. AND SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (IN THOUSANDS) | ||
| Three Months Ended | ||
| March 31, | ||
| 2014 | 2013 | |
| (Unaudited) | ||
| Operating Activities: | ||
| Net income | $ 79,770 | $ 75,222 |
| Adjustments to reconcile net income to net cash | ||
| provided by operating activities: | ||
| Stock compensation expense | 4,672 | 4,047 |
| Excess tax benefit of stock options exercised | (3,734) | (4,203) |
| Depreciation | 16,041 | 14,846 |
| Amortization | 7,315 | 6,642 |
| Deferred income taxes | 6,175 | 10,407 |
| Change in fair value of contingent consideration | 4,789 | -- |
| Changes in operating assets and liabilities, net of | ||
| effect of acquisitions and divestitures: | ||
| Accounts receivable | 4,529 | (19,769) |
| Accounts payable | 5,279 | 1,169 |
| Accrued liabilities | 14,189 | 7,412 |
| Deferred revenue | 2,642 | (1,345) |
| Other assets and liabilities | 2,808 | 3,742 |
| Net cash provided by operating activities | 144,475 | 98,170 |
| Investing Activities: | ||
| Payments for acquisitions, net of cash acquired | (12,262) | (18,899) |
| (Purchases of)/ proceeds from investments | (1,947) | 20 |
| Capital expenditures | (16,420) | (16,480) |
| Net cash used in investing activities | (30,629) | (35,359) |
| Financing Activities: | ||
| Repayments of long-term debt and other obligations | (12,430) | (9,996) |
| Borrowings on foreign bank debt | 36,640 | 27,651 |
| Repayments on foreign bank debt | (37,157) | (62,027) |
| Borrowings on senior credit facility | 149,000 | 291,132 |
| Repayments on senior credit facility | (203,377) | (337,683) |
| Payments on capital lease obligations | (876) | (837) |
| Purchases and cancellations of treasury stock | (76,914) | (7,160) |
| Proceeds from issuances of common stock | 8,655 | 13,915 |
| Excess tax benefit of stock options exercised | 3,734 | 4,203 |
| Payments to noncontrolling interests | (97) | -- |
| Net cash used in financing activities | (132,822) | (80,802) |
| Effect of exchange rate changes on cash | 43 | (611) |
| Net decrease in cash and cash equivalents | (18,933) | (18,602) |
| Cash and cash equivalents at beginning of period | 61,991 | 31,324 |
| Cash and cash equivalents at end of period | $ 43,058 | $ 12,722 |
| Non-cash activities: | ||
| Issuances of obligations for acquisitions | $ 13,095 | $ 10,454 |