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12.2.2003: Meldung: Stericycle Inc. Reports Record Results
Stericycle, Inc. Reports Record Results for Fourth Quarter 2002 and Full Year 2002
BEFORE EXCLUDED CHARGES FROM PREVIOUSLY ANNOUNCED TRANSACTIONS
-- 54.3% INCREASE IN NET INCOME AND $0.30 IN EARNINGS PER
SHARE FOR THE FOURTH QUARTER OF 2002
-- 57.3% INCREASE IN NET INCOME AND $1.09 IN EARNINGS PER
SHARE FOR THE YEAR 2002
-- CASH PROVIDED BY OPERATIONS WAS $24.0 MILLION FOR THE QUARTER
AND $96.9 MILLION FOR THE YEAR
-- 2002 ANNUAL REVENUES WERE $401.5 MILLION; UP 11.8% VERSUS 2001
-- REVENUES EXCLUDING INTERNATIONAL EQUIPMENT SALES WERE UP 12.9%
IN QUARTER TO $102.9 MILLION; UP 12.5% FOR FULL YEAR TO $395.2
MILLION
Stericycle, Inc. (NASDAQ:SRCL - News), the United States" leading provider of medical waste management and compliance services, today reported record quarterly financial results for the fourth quarter of 2002 before excluded charges from previously announced transactions. "The fourth quarter was another record breaking quarter for our company, with across-the-board growth and record results," said Mark Miller, Stericycle president and chief executive officer. "The solid growth in revenues, operating income, and net income all reflect our disciplined focus on strategically growing and managing our business."
FOURTH QUARTER 2002 RESULTS
Revenues for the fourth quarter ended December 31, 2002 were $103.2 million, up 10.5% from $93.4 million in the same quarter last year. International equipment sales contributed $0.3 million in revenues for the quarter as compared to $2.3 million in the fourth quarter of 2001. Revenues without international equipment sales increased 12.9% over the period in 2001. Gross profit was $43.3 million, up 16.1% from $37.3 million in the same quarter last year. Gross profit as a percent of revenues increased to 42.0% from 40.0% in the fourth quarter of 2001.
Net income for fourth quarter of 2002 before excluded charges rose 54.3% to $13.7 million, up from $8.9 million in the fourth quarter of 2001 before excluded charges and after the pro forma impact for the adoption of FAS 142. As reported, our net income for the fourth quarter of 2002 was $11.4 million versus a $2.2 million net loss for the fourth quarter of 2001.
Earnings per diluted share for the fourth quarter of 2002 before excluded charges rose to $0.30, up 50% from $0.20 in the fourth quarter of 2001 before excluded charges and after the pro forma impact for the adoption of FAS 142. As reported, earnings per diluted share were $0.25 in the fourth quarter of 2002 versus a loss per share of $0.05 in the fourth quarter of 2001. Weighted shares outstanding used to determine earnings per diluted share were 45,392,538 for the fourth quarter of 2002 and 43,484,420 for the fourth quarter of 2001.
During the fourth quarters of 2002 and 2001 we incurred charges that are not operational recurring expenses and have excluded these charges from the as- reported net income and EPS numbers discussed above in order to reflect the results of business operations more accurately. These excluded charges are detailed in the table below.
The following table is in millions except for share and per share
information.
Excluded Cash Charges Fourth Fourth
---------------------- Quarter Quarter
2002 2001
--------- ---------
Acquisition-related costs $ 0.139 $ .009
Premium paid for repurchases of
subordinated debt $ 0.311 $ 5.416
Senior credit facility refinancing fees - $ 0.957
Subtotal excluded cash charges $ 0.450 $ 6.382
Excluded Non-cash Charges
-------------------------
Write-down of idled treatment fixed assets $ 2.503 $ 3.329
Write-down of associated treatment
asset spare parts $ 0.410 -
Amortization of finance fees associated
with subordinated debt repurchases $ 0.367 $ 1.451
Amortization of finance fees associated
with senior credit facility - $ 4.408
Subtotal excluded non-cash charges $ 3.280 $ 9.188
Total excluded charges $ 3.730 $ 15.570
Total excluded charges after tax $ 2.257 $ 9.344
Shares 45,392,538 43,484,420
Per share cash excluded items $0.006 $0.088
Per share non-cash excluded items $0.044 $0.126
YEAR-END 2002 RESULTS
For the year ended December 31, 2002, revenues increased to $401.5 million, an increase of 11.8% from the prior year. International equipment sales totaled approximately $6.4 million in 2002 compared to $7.7 million in 2001. Revenues excluding international equipment sales were $395.2 million, up 12.5% from 2001. Gross profit increased 15.0% to $164.5 million from $143.1 million in the prior year. Gross profit as a percent of revenue increased from 39.8% for 2001 to 41.0% for 2002. Operating income, before excluded charges and the pro forma impact of the adoption of FAS 142 on 2001, rose 35.2% to $104.1 million from $77.0 million for 2001.
Net income before excluded charges grew 57.3% to $49.1 million, or $1.09 per diluted share, in 2002 compared to $31.2 million, or $0.74 per diluted share, in 2001 also reported before excluded charges and after the pro forma impact of the adoption of FAS 142. As reported, our net income for 2002 was $45.7 million, or $1.01 per diluted share, compared to net income of $14.7 million, or $0.35 per diluted share, for 2001. Weighted shares outstanding used to determine earnings per diluted share were 45,113,171 for 2002 and 42,200,762 for 2001.
During the year ended December 31, 2002 and 2001 we incurred charges that are not operational recurring expenses and have excluded these charges from the as-reported net income and EPS numbers discussed above to more accurately reflect the results of business operations. These excluded charges are detailed in the table below.
The following table is in millions except for share and per share
information.
Excluded Cash Charges Year Year
---------------------- Ended Ended
2002 2001
--------- ---------
Acquisition-related costs $ 0.362 $ 0.356
Premium paid for repurchases of
subordinated debt $ 2.006 $ 5.416
Senior credit facility refinancing fees - $ 0.957
Subtotal excluded cash charges $ 2.368 $ 6.729
Excluded Non-cash Charges
-------------------------
Write-down of idled treatment fixed assets $ 2.503 $ 3.329
Write-down of associated treatment
asset spare parts $ 0.410 -
Amortization of finance fees associated
with subordinated debt repurchases $ 0.367 $ 1.451
Amortization of finance fees associated
with senior credit facility $ 4.408
Subtotal excluded non-cash charges $ 3.280 $ 9.188
Total excluded charges $ 5.648 $ 15.917
Total excluded charges after tax $ 3.417 $ 9.550
Shares 45,113,171 42,200,762
Per share cash excluded items $ 0.032 $ 0.096
Per share non-cash excluded items $ 0.044 $ 0.130
During the fourth quarter of 2002, we continued to improve our balance sheet position. We used a portion of the cash generated during the quarter to repurchase $2.1 million of our 12-3/8% senior subordinated debt. The redemption premium to repurchase the senior subordinated debt was a pre-tax charge of $0.3 million. During 2002 we repurchased a total of $12.6 million of our 12-3/8% senior subordinated debt and paid a total redemption premium of $2.0 million. Our total debt to capitalization percentage ratio improved from 50.2% at December 31, 2001 to 39.1% at December 31, 2002.
Miller said, "During the year we continued to execute our proven business model and reported strong sales growth and record income from operations. The cash flow of $96.9 million generated from operations was used to strengthen the business through lowering our debt and investing in the company"s future."
Stericycle provides medical waste collection, transportation, treatment and disposal services and safety and compliance programs to healthcare companies nationwide, including hospitals, physician and dental offices, laboratories and clinics. Medical waste includes single-use disposables such as needles, syringes, gloves and other supplies that have been in contact with blood or other bodily fluids, as well as blood, blood products and other items that could harbor infectious agents.
Safe Harbor Statement: Statements in this press release may contain forward-looking statements that involve risks and uncertainties, some of which are beyond the Company"s control (for example, general economic conditions). The Company"s actual results could differ significantly from the results described in the forward-looking statements. Factors that could cause such differences include difficulties in completing the integration of acquired businesses, changes in governmental regulation of medical waste collection and treatment, and increases in transportation and other operating costs, as well as the various other factors identified in the Company"s 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. The Company makes no commitment to disclose any subsequent revisions to forward-looking statements.
Conference call to be held February 11, 2003 at 4:00 p.m. Central time - dial in number is 800-482-5519. Replay available after the call through February 18th at 888-211-2648 pass code 2858953. To hear a simulcast of the call over the internet, access www.ccbn.com or Stericycle"s website at www.stericycle.com.
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
December December
31, 31,
2002 2001
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 8,375 $ 12,737
Short-term investments 512 280
Accounts receivable, less allowance for doubtful
accounts of $3,779 in 2002 and $3,106 in 2001 62,013 65,300
Parts and supplies 4,494 6,044
Prepaid expenses 7,170 2,457
Deferred tax asset 6,720 -
Other current assets 10,397 11,175
-------- --------
Total current assets 99,681 97,993
-------- --------
Property, plant and equipment:
Land 7,776 7,596
Buildings and improvements 30,396 28,075
Machinery and equipment 86,661 65,409
Office equipment and furniture 11,462 10,458
Construction in progress 4,134 5,193
-------- --------
140,429 116,731
Less accumulated depreciation (51,928) (33,995)
-------- --------
Property, plant and equipment 88,501 82,736
-------- --------
Other assets:
Goodwill, less accumulated amortization of $32,374
in 2002 and 2001 447,272 411,877
Intangible assets, less accumulated amortization of
$6,479 in 2002 and $4,510 in 2001 10,910 6,675
Indefinite lived intangible assets 9,200 4,100
Other 11,531 11,149
-------- --------
Total other assets 478,913 433,801
-------- --------
Total assets $667,095 $614,530
======== ========
LIABILITIES AND SHAREHOLDERS" EQUITY
Current liabilities:
Current portion of long-term debt $ 1,486 $ 12,633
Accounts payable 14,330 13,317
Accrued compensation 7,337 6,127
Accrued interest 2,322 3,995
Accrued insurance 9,240 5,440
Accrued income tax 2,026 3
Accrued liabilities 10,885 16,944
Deferred revenue 3,681 4,920
-------- --------
Total current liabilities 51,307 63,379
-------- --------
Long-term debt, net of current portion 226,571 267,365
-------- --------
Deferred income taxes 30,729 3,194
Other liabilities 3,710 3,210
Redeemable preferred stock
Series A convertible preferred stock
(par value $0.1 share, 75,000 shares authorized,
45,405 outstanding in 2001 and 29,327
outstanding in 2002, liquidation preference
of $48,735 at December 31, 2001 and
$31,919 at December 31, 2002 28,049 44,872
Common shareholders" equity
Common stock (par value $0.1 per share, 80,000,000
shares authorized , 37,079,900 issued and
outstanding in 2001, 40,437,023 issued
and outstanding in 2002. 404 370
Additional paid in capital 277,531 230,724
Treasury Stock (1,435) -
Accumulated other comprehensive loss (229) (3,996)
Retained earnings 50,458 5,412
-------- --------
Total shareholders" equity 326,729 232,510
-------- --------
Total liabilities and shareholders" equity $667,095 $614,530
======== ========
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
Three Months Ended
December 31,
---------------------------------------
2002 2001
$ % of Rev $ % of Rev
------------------- ------------------
Revenues $ 103,207 100.0% $ 93,379 100.0%
Costs and expenses:
Cost of revenues 59,861 58.0% 56,046 60.0%
------------------- ------------------
Gross profit 43,346 42.0% 37,333 40.0%
Selling, general and
administrative expenses 15,031 14.6% 13,772 14.7%
Amortization 414 0.4% 3,519 3.8%
------------------- ------------------
Total SG&A expense and
amortization 15,445 15.0% 17,291 18.5%
Income from operations before
excluded charges(a) 27,901 27.0% 20,042 21.5%
Write-down of treatment
related fixed assets(a) 2,913 19.4% 3,329 24.2%
Acquisition-related costs(a) 139 0.1% 9 0.0%
------------------- ------------------
Income from operations 24,849 24.1% 16,704 17.9%
Other Income (expense):
Interest income 57 0.1% 101 0.1%
Interest expense (4,832) -4.7% (8,019) -8.6%
Write off deferred
finance charges(a) (367) -0.4% (5,859) -6.3%
Senior loan
refinancing charges(a) - 0.0% (957) -1.0%
Prepayment finance charges
on subordinated debt (311) -0.3% (5,416) -5.8%
Other expense (496) -0.5% (456) -0.5%
------------------- ------------------
Total other income (expense) (5,949) -5.8% (20,606 ) -22.1%
------------------- ------------------
Income (loss) before
income taxes $ 18,900 18.3% $ (3,902) -4.2%
Income tax expense 7,466 7.2% (1,666) -1.8%
------------------- ------------------
Net Income (loss) $ 11,434 11.1% $ (2,236) -2.4%
=================== ==================
Earnings per share-diluted $ 0.25 $ -0.05
========== =========
Add back impact of
excluded charges(a) $ 2,257 $ 9,344
Add back impact of
FAS 142 adoption on 2001 - 1,763
Fully taxed net income before
excluded charges(a) 13,691 11.1% $ 8,871 6.1%
Earnings-per-share-diluted
before excluded charges(a) $ 0.30 $ 0.20
Weighted average number of
common shares
outstanding-diluted 45,392,538 43,484,420
========== ==========
Depreciation and amortization $ 3,870 3.7% $ 6,497 7.0%
EBITDA before
excluded charges(a) $ 31,275 30.3% $ 26,083 27.9%
FAS 142 Adoption impact on 2001
Reported net income $ (2,236) -2.4%
Add back: goodwill amortization 2,938
Subtract: tax effect
of amortization (1,175)
---------
Adjusted net income $ (473) -0.5%
=========
Reported diluted
earnings-per-share $ (0.05)
Add back: goodwill amortization 0.07
Subtract: tax effect
of GW amortization (0.03)
---------
Reported diluted
earnings per share $ (0.01)
=========
Year Ended
December 31,
---------------------------------------
2002 2001
$ % of Rev $ % of Rev
------------------- ------------------
Revenues $ 401,519 100.0% $ 359,024 100.0%
Costs and expenses:
Cost of revenues 237,010 59.0% 215,959 60.2%
------------------- ------------------
Gross profit 164,509 41.0% 143,065 39.8%
Selling, general and
administrative expenses 58,432 14.6% 52,209 14.5%
Amortization 1,970 0.5% 13,877 3.9%
------------------- ------------------
Total SG&A expense and
amortization 60,402 15.0% 66,086 18.4%
Income from operations before
excluded charges(a) 104,107 25.9% 76,979 21.4%
Write-down of treatment
related fixed assets(a) 2,913 5.0% 3,329 6.4%
Acquisition-related costs(a) 362 0.1% 356 0.1%
------------------- ------------------
Income from operations 100,832 25.1% 73,294 20.4%
Other Income (expense):
Interest income 431 0.1% 366 0.1%
Interest expense (21,539) -5.4% (35,417) -9.9%
Write off deferred
finance charges(a) (367) -0.1% (5,859) -1.6%
Senior loan
refinancing charges(a) - 0.0% (957) -0.3%
Prepayment finance charges
on subordinated debt (2,006) -0.5% (5,416) -1.5%
Other expense (1,774) -0.4% (1,495) -0.4%
------------------- ------------------
Total other income (expense) (25,255) -6.3% (48,778) -13.6%
------------------- ------------------
Income (loss) before
income taxes $ 75,577 18.8% $ 24,516 6.8%
Income tax expense 29,853 7.4% 9,806 2.7%
------------------- ------------------
Net Income (loss) $ 45,724 11.4% $ 14,710 4.1%
=================== ==================
Earnings per share-diluted $ 1.01 $ 0.35
========== ==========
Add back impact of
excluded charges(a) $ 3,417 $ 9,550
Add back impact of
FAS 142 adoption on 2001 - 6,976
Fully taxed net income before
excluded charges(a) $ 49,141 11.1% $ 31,236 6.1%
Earnings-per-share-diluted
before excluded charges(a) $ 1.09 $ 0.74
Weighted average number of
common shares
outstanding-diluted 45,113,171 42,200,762
========== ==========
Depreciation and amortization $ 14,981 3.7% $ 25,234 7.0%
EBITDA before
excluded charges(a) $ 117,314 29.2% $ 101,080 28.2%
FAS 142 Adoption impact on 2001
Reported net income $ 14,710 4.1%
Add back: goodwill amortization 11,626
Subtract: tax effect
of amortization (4,650)
---------
Adjusted net income $ 21,686 6.0%
=========
Reported diluted
earnings-per-share $ 0.35
Add back: goodwill amortization 0.28
Subtract: tax effect
of GW amortization (0.11)
---------
Reported diluted
earnings per share $ 0.52
=========
(a) Excluded charges include write-down of treatment related fixed
assets and associated spare parts, acquisition-related costs,
write-off of deferred finance charges related to subordinated debt
repurchases, senior loan refinancing charges and premiums paid to
repurchase subordinated debt net of the associated tax impact.
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(IN THOUSANDS)
For the
Year Ended
December 31,
2002 2001
-------- --------
Operating Activities:
Net Income $ 45,724 $ 14,710
Adjustments to reconcile net income to net cash
provided by operating activities:
Ineffective portion of cash flow hedges (384) 384
Write off of deferred financing costs 367 5,859
Write-down of treatment related assets 2,913 3,329
Stock compensation expense - 95
Tax benefit of disqualifying dispositions of
stock options 4,983 1,697
Gain/loss on fixed assets 341 -
Depreciation 13,011 11,357
Amortization 1,970 13,877
Deferred income taxes 16,199 9,085
Changes in operating assets and liabilities, net
of effect of acuisitions
Accounts receivable 7,177 6,741
Parts and supplies 1,845 (2,743)
Prepaid expenses and other assets (3,445) (4,776)
Accounts payable (68) (1,127)
Accrued liabilities 7,553 1,647
Deferred revenue (1,239) 4,415
-------- --------
Net cash provided by operating activities 96,947 64,550
-------- --------
Investing Activities:
Payments for acquisitions and international
investments, net of cash acquired (34,591) (21,262)
Short-term investments (232) 1
Retirement of property and equipment 184 979
Capital expenditures (14,831) (16,391)
-------- --------
Net cash used in investing activities (49,470) (36,673)
-------- --------
Financing Activities:
Proceeds from issuance of note payable 1,361 -
Repayment of senior subordinated debt (12,610) (43,750)
Payments of deferred financing costs - (173)
Repayment of long-term debt (68,416) (37,099)
Proceeds from/repayments on line of credit, net 23,000 12,171
Principal payments on capital lease obligations (879) (1,525)
Purchase of Treasury stock (1,435) -
Net proceeds from public offering of common stock - 49,005
Proceeds from other issuances of common stock 7,058 3,565
-------- --------
Net cash used in financing activities (51,921) (17,806)
-------- --------
Effect of exchange rate changes on cash 82 -
Net increase (decrease) in cash and cash
equivalents (4,362) 10,071
Cash and cash equivalents at beginning of period 12,737 2,666
-------- --------
Cash and cash equivalents at end of period $ 8,375 $ 12,737
======== ========
Non-cash activities:
Net issuances of common stock for certain
acquisitions 17,286 6,250
Net issuances of notes payable for certain
acquisitions 5,530 -
Contact:
FRB/Weber Shandwick
Cindy Martin, 312/640-6741 (media)
Leslie Loyet, 312/640-6672 (investors)
BEFORE EXCLUDED CHARGES FROM PREVIOUSLY ANNOUNCED TRANSACTIONS
-- 54.3% INCREASE IN NET INCOME AND $0.30 IN EARNINGS PER
SHARE FOR THE FOURTH QUARTER OF 2002
-- 57.3% INCREASE IN NET INCOME AND $1.09 IN EARNINGS PER
SHARE FOR THE YEAR 2002
-- CASH PROVIDED BY OPERATIONS WAS $24.0 MILLION FOR THE QUARTER
AND $96.9 MILLION FOR THE YEAR
-- 2002 ANNUAL REVENUES WERE $401.5 MILLION; UP 11.8% VERSUS 2001
-- REVENUES EXCLUDING INTERNATIONAL EQUIPMENT SALES WERE UP 12.9%
IN QUARTER TO $102.9 MILLION; UP 12.5% FOR FULL YEAR TO $395.2
MILLION
Stericycle, Inc. (NASDAQ:SRCL - News), the United States" leading provider of medical waste management and compliance services, today reported record quarterly financial results for the fourth quarter of 2002 before excluded charges from previously announced transactions. "The fourth quarter was another record breaking quarter for our company, with across-the-board growth and record results," said Mark Miller, Stericycle president and chief executive officer. "The solid growth in revenues, operating income, and net income all reflect our disciplined focus on strategically growing and managing our business."
FOURTH QUARTER 2002 RESULTS
Revenues for the fourth quarter ended December 31, 2002 were $103.2 million, up 10.5% from $93.4 million in the same quarter last year. International equipment sales contributed $0.3 million in revenues for the quarter as compared to $2.3 million in the fourth quarter of 2001. Revenues without international equipment sales increased 12.9% over the period in 2001. Gross profit was $43.3 million, up 16.1% from $37.3 million in the same quarter last year. Gross profit as a percent of revenues increased to 42.0% from 40.0% in the fourth quarter of 2001.
Net income for fourth quarter of 2002 before excluded charges rose 54.3% to $13.7 million, up from $8.9 million in the fourth quarter of 2001 before excluded charges and after the pro forma impact for the adoption of FAS 142. As reported, our net income for the fourth quarter of 2002 was $11.4 million versus a $2.2 million net loss for the fourth quarter of 2001.
Earnings per diluted share for the fourth quarter of 2002 before excluded charges rose to $0.30, up 50% from $0.20 in the fourth quarter of 2001 before excluded charges and after the pro forma impact for the adoption of FAS 142. As reported, earnings per diluted share were $0.25 in the fourth quarter of 2002 versus a loss per share of $0.05 in the fourth quarter of 2001. Weighted shares outstanding used to determine earnings per diluted share were 45,392,538 for the fourth quarter of 2002 and 43,484,420 for the fourth quarter of 2001.
During the fourth quarters of 2002 and 2001 we incurred charges that are not operational recurring expenses and have excluded these charges from the as- reported net income and EPS numbers discussed above in order to reflect the results of business operations more accurately. These excluded charges are detailed in the table below.
The following table is in millions except for share and per share
information.
Excluded Cash Charges Fourth Fourth
---------------------- Quarter Quarter
2002 2001
--------- ---------
Acquisition-related costs $ 0.139 $ .009
Premium paid for repurchases of
subordinated debt $ 0.311 $ 5.416
Senior credit facility refinancing fees - $ 0.957
Subtotal excluded cash charges $ 0.450 $ 6.382
Excluded Non-cash Charges
-------------------------
Write-down of idled treatment fixed assets $ 2.503 $ 3.329
Write-down of associated treatment
asset spare parts $ 0.410 -
Amortization of finance fees associated
with subordinated debt repurchases $ 0.367 $ 1.451
Amortization of finance fees associated
with senior credit facility - $ 4.408
Subtotal excluded non-cash charges $ 3.280 $ 9.188
Total excluded charges $ 3.730 $ 15.570
Total excluded charges after tax $ 2.257 $ 9.344
Shares 45,392,538 43,484,420
Per share cash excluded items $0.006 $0.088
Per share non-cash excluded items $0.044 $0.126
YEAR-END 2002 RESULTS
For the year ended December 31, 2002, revenues increased to $401.5 million, an increase of 11.8% from the prior year. International equipment sales totaled approximately $6.4 million in 2002 compared to $7.7 million in 2001. Revenues excluding international equipment sales were $395.2 million, up 12.5% from 2001. Gross profit increased 15.0% to $164.5 million from $143.1 million in the prior year. Gross profit as a percent of revenue increased from 39.8% for 2001 to 41.0% for 2002. Operating income, before excluded charges and the pro forma impact of the adoption of FAS 142 on 2001, rose 35.2% to $104.1 million from $77.0 million for 2001.
Net income before excluded charges grew 57.3% to $49.1 million, or $1.09 per diluted share, in 2002 compared to $31.2 million, or $0.74 per diluted share, in 2001 also reported before excluded charges and after the pro forma impact of the adoption of FAS 142. As reported, our net income for 2002 was $45.7 million, or $1.01 per diluted share, compared to net income of $14.7 million, or $0.35 per diluted share, for 2001. Weighted shares outstanding used to determine earnings per diluted share were 45,113,171 for 2002 and 42,200,762 for 2001.
During the year ended December 31, 2002 and 2001 we incurred charges that are not operational recurring expenses and have excluded these charges from the as-reported net income and EPS numbers discussed above to more accurately reflect the results of business operations. These excluded charges are detailed in the table below.
The following table is in millions except for share and per share
information.
Excluded Cash Charges Year Year
---------------------- Ended Ended
2002 2001
--------- ---------
Acquisition-related costs $ 0.362 $ 0.356
Premium paid for repurchases of
subordinated debt $ 2.006 $ 5.416
Senior credit facility refinancing fees - $ 0.957
Subtotal excluded cash charges $ 2.368 $ 6.729
Excluded Non-cash Charges
-------------------------
Write-down of idled treatment fixed assets $ 2.503 $ 3.329
Write-down of associated treatment
asset spare parts $ 0.410 -
Amortization of finance fees associated
with subordinated debt repurchases $ 0.367 $ 1.451
Amortization of finance fees associated
with senior credit facility $ 4.408
Subtotal excluded non-cash charges $ 3.280 $ 9.188
Total excluded charges $ 5.648 $ 15.917
Total excluded charges after tax $ 3.417 $ 9.550
Shares 45,113,171 42,200,762
Per share cash excluded items $ 0.032 $ 0.096
Per share non-cash excluded items $ 0.044 $ 0.130
During the fourth quarter of 2002, we continued to improve our balance sheet position. We used a portion of the cash generated during the quarter to repurchase $2.1 million of our 12-3/8% senior subordinated debt. The redemption premium to repurchase the senior subordinated debt was a pre-tax charge of $0.3 million. During 2002 we repurchased a total of $12.6 million of our 12-3/8% senior subordinated debt and paid a total redemption premium of $2.0 million. Our total debt to capitalization percentage ratio improved from 50.2% at December 31, 2001 to 39.1% at December 31, 2002.
Miller said, "During the year we continued to execute our proven business model and reported strong sales growth and record income from operations. The cash flow of $96.9 million generated from operations was used to strengthen the business through lowering our debt and investing in the company"s future."
Stericycle provides medical waste collection, transportation, treatment and disposal services and safety and compliance programs to healthcare companies nationwide, including hospitals, physician and dental offices, laboratories and clinics. Medical waste includes single-use disposables such as needles, syringes, gloves and other supplies that have been in contact with blood or other bodily fluids, as well as blood, blood products and other items that could harbor infectious agents.
Safe Harbor Statement: Statements in this press release may contain forward-looking statements that involve risks and uncertainties, some of which are beyond the Company"s control (for example, general economic conditions). The Company"s actual results could differ significantly from the results described in the forward-looking statements. Factors that could cause such differences include difficulties in completing the integration of acquired businesses, changes in governmental regulation of medical waste collection and treatment, and increases in transportation and other operating costs, as well as the various other factors identified in the Company"s 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. The Company makes no commitment to disclose any subsequent revisions to forward-looking statements.
Conference call to be held February 11, 2003 at 4:00 p.m. Central time - dial in number is 800-482-5519. Replay available after the call through February 18th at 888-211-2648 pass code 2858953. To hear a simulcast of the call over the internet, access www.ccbn.com or Stericycle"s website at www.stericycle.com.
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
December December
31, 31,
2002 2001
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 8,375 $ 12,737
Short-term investments 512 280
Accounts receivable, less allowance for doubtful
accounts of $3,779 in 2002 and $3,106 in 2001 62,013 65,300
Parts and supplies 4,494 6,044
Prepaid expenses 7,170 2,457
Deferred tax asset 6,720 -
Other current assets 10,397 11,175
-------- --------
Total current assets 99,681 97,993
-------- --------
Property, plant and equipment:
Land 7,776 7,596
Buildings and improvements 30,396 28,075
Machinery and equipment 86,661 65,409
Office equipment and furniture 11,462 10,458
Construction in progress 4,134 5,193
-------- --------
140,429 116,731
Less accumulated depreciation (51,928) (33,995)
-------- --------
Property, plant and equipment 88,501 82,736
-------- --------
Other assets:
Goodwill, less accumulated amortization of $32,374
in 2002 and 2001 447,272 411,877
Intangible assets, less accumulated amortization of
$6,479 in 2002 and $4,510 in 2001 10,910 6,675
Indefinite lived intangible assets 9,200 4,100
Other 11,531 11,149
-------- --------
Total other assets 478,913 433,801
-------- --------
Total assets $667,095 $614,530
======== ========
LIABILITIES AND SHAREHOLDERS" EQUITY
Current liabilities:
Current portion of long-term debt $ 1,486 $ 12,633
Accounts payable 14,330 13,317
Accrued compensation 7,337 6,127
Accrued interest 2,322 3,995
Accrued insurance 9,240 5,440
Accrued income tax 2,026 3
Accrued liabilities 10,885 16,944
Deferred revenue 3,681 4,920
-------- --------
Total current liabilities 51,307 63,379
-------- --------
Long-term debt, net of current portion 226,571 267,365
-------- --------
Deferred income taxes 30,729 3,194
Other liabilities 3,710 3,210
Redeemable preferred stock
Series A convertible preferred stock
(par value $0.1 share, 75,000 shares authorized,
45,405 outstanding in 2001 and 29,327
outstanding in 2002, liquidation preference
of $48,735 at December 31, 2001 and
$31,919 at December 31, 2002 28,049 44,872
Common shareholders" equity
Common stock (par value $0.1 per share, 80,000,000
shares authorized , 37,079,900 issued and
outstanding in 2001, 40,437,023 issued
and outstanding in 2002. 404 370
Additional paid in capital 277,531 230,724
Treasury Stock (1,435) -
Accumulated other comprehensive loss (229) (3,996)
Retained earnings 50,458 5,412
-------- --------
Total shareholders" equity 326,729 232,510
-------- --------
Total liabilities and shareholders" equity $667,095 $614,530
======== ========
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
Three Months Ended
December 31,
---------------------------------------
2002 2001
$ % of Rev $ % of Rev
------------------- ------------------
Revenues $ 103,207 100.0% $ 93,379 100.0%
Costs and expenses:
Cost of revenues 59,861 58.0% 56,046 60.0%
------------------- ------------------
Gross profit 43,346 42.0% 37,333 40.0%
Selling, general and
administrative expenses 15,031 14.6% 13,772 14.7%
Amortization 414 0.4% 3,519 3.8%
------------------- ------------------
Total SG&A expense and
amortization 15,445 15.0% 17,291 18.5%
Income from operations before
excluded charges(a) 27,901 27.0% 20,042 21.5%
Write-down of treatment
related fixed assets(a) 2,913 19.4% 3,329 24.2%
Acquisition-related costs(a) 139 0.1% 9 0.0%
------------------- ------------------
Income from operations 24,849 24.1% 16,704 17.9%
Other Income (expense):
Interest income 57 0.1% 101 0.1%
Interest expense (4,832) -4.7% (8,019) -8.6%
Write off deferred
finance charges(a) (367) -0.4% (5,859) -6.3%
Senior loan
refinancing charges(a) - 0.0% (957) -1.0%
Prepayment finance charges
on subordinated debt (311) -0.3% (5,416) -5.8%
Other expense (496) -0.5% (456) -0.5%
------------------- ------------------
Total other income (expense) (5,949) -5.8% (20,606 ) -22.1%
------------------- ------------------
Income (loss) before
income taxes $ 18,900 18.3% $ (3,902) -4.2%
Income tax expense 7,466 7.2% (1,666) -1.8%
------------------- ------------------
Net Income (loss) $ 11,434 11.1% $ (2,236) -2.4%
=================== ==================
Earnings per share-diluted $ 0.25 $ -0.05
========== =========
Add back impact of
excluded charges(a) $ 2,257 $ 9,344
Add back impact of
FAS 142 adoption on 2001 - 1,763
Fully taxed net income before
excluded charges(a) 13,691 11.1% $ 8,871 6.1%
Earnings-per-share-diluted
before excluded charges(a) $ 0.30 $ 0.20
Weighted average number of
common shares
outstanding-diluted 45,392,538 43,484,420
========== ==========
Depreciation and amortization $ 3,870 3.7% $ 6,497 7.0%
EBITDA before
excluded charges(a) $ 31,275 30.3% $ 26,083 27.9%
FAS 142 Adoption impact on 2001
Reported net income $ (2,236) -2.4%
Add back: goodwill amortization 2,938
Subtract: tax effect
of amortization (1,175)
---------
Adjusted net income $ (473) -0.5%
=========
Reported diluted
earnings-per-share $ (0.05)
Add back: goodwill amortization 0.07
Subtract: tax effect
of GW amortization (0.03)
---------
Reported diluted
earnings per share $ (0.01)
=========
Year Ended
December 31,
---------------------------------------
2002 2001
$ % of Rev $ % of Rev
------------------- ------------------
Revenues $ 401,519 100.0% $ 359,024 100.0%
Costs and expenses:
Cost of revenues 237,010 59.0% 215,959 60.2%
------------------- ------------------
Gross profit 164,509 41.0% 143,065 39.8%
Selling, general and
administrative expenses 58,432 14.6% 52,209 14.5%
Amortization 1,970 0.5% 13,877 3.9%
------------------- ------------------
Total SG&A expense and
amortization 60,402 15.0% 66,086 18.4%
Income from operations before
excluded charges(a) 104,107 25.9% 76,979 21.4%
Write-down of treatment
related fixed assets(a) 2,913 5.0% 3,329 6.4%
Acquisition-related costs(a) 362 0.1% 356 0.1%
------------------- ------------------
Income from operations 100,832 25.1% 73,294 20.4%
Other Income (expense):
Interest income 431 0.1% 366 0.1%
Interest expense (21,539) -5.4% (35,417) -9.9%
Write off deferred
finance charges(a) (367) -0.1% (5,859) -1.6%
Senior loan
refinancing charges(a) - 0.0% (957) -0.3%
Prepayment finance charges
on subordinated debt (2,006) -0.5% (5,416) -1.5%
Other expense (1,774) -0.4% (1,495) -0.4%
------------------- ------------------
Total other income (expense) (25,255) -6.3% (48,778) -13.6%
------------------- ------------------
Income (loss) before
income taxes $ 75,577 18.8% $ 24,516 6.8%
Income tax expense 29,853 7.4% 9,806 2.7%
------------------- ------------------
Net Income (loss) $ 45,724 11.4% $ 14,710 4.1%
=================== ==================
Earnings per share-diluted $ 1.01 $ 0.35
========== ==========
Add back impact of
excluded charges(a) $ 3,417 $ 9,550
Add back impact of
FAS 142 adoption on 2001 - 6,976
Fully taxed net income before
excluded charges(a) $ 49,141 11.1% $ 31,236 6.1%
Earnings-per-share-diluted
before excluded charges(a) $ 1.09 $ 0.74
Weighted average number of
common shares
outstanding-diluted 45,113,171 42,200,762
========== ==========
Depreciation and amortization $ 14,981 3.7% $ 25,234 7.0%
EBITDA before
excluded charges(a) $ 117,314 29.2% $ 101,080 28.2%
FAS 142 Adoption impact on 2001
Reported net income $ 14,710 4.1%
Add back: goodwill amortization 11,626
Subtract: tax effect
of amortization (4,650)
---------
Adjusted net income $ 21,686 6.0%
=========
Reported diluted
earnings-per-share $ 0.35
Add back: goodwill amortization 0.28
Subtract: tax effect
of GW amortization (0.11)
---------
Reported diluted
earnings per share $ 0.52
=========
(a) Excluded charges include write-down of treatment related fixed
assets and associated spare parts, acquisition-related costs,
write-off of deferred finance charges related to subordinated debt
repurchases, senior loan refinancing charges and premiums paid to
repurchase subordinated debt net of the associated tax impact.
STERICYCLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(IN THOUSANDS)
For the
Year Ended
December 31,
2002 2001
-------- --------
Operating Activities:
Net Income $ 45,724 $ 14,710
Adjustments to reconcile net income to net cash
provided by operating activities:
Ineffective portion of cash flow hedges (384) 384
Write off of deferred financing costs 367 5,859
Write-down of treatment related assets 2,913 3,329
Stock compensation expense - 95
Tax benefit of disqualifying dispositions of
stock options 4,983 1,697
Gain/loss on fixed assets 341 -
Depreciation 13,011 11,357
Amortization 1,970 13,877
Deferred income taxes 16,199 9,085
Changes in operating assets and liabilities, net
of effect of acuisitions
Accounts receivable 7,177 6,741
Parts and supplies 1,845 (2,743)
Prepaid expenses and other assets (3,445) (4,776)
Accounts payable (68) (1,127)
Accrued liabilities 7,553 1,647
Deferred revenue (1,239) 4,415
-------- --------
Net cash provided by operating activities 96,947 64,550
-------- --------
Investing Activities:
Payments for acquisitions and international
investments, net of cash acquired (34,591) (21,262)
Short-term investments (232) 1
Retirement of property and equipment 184 979
Capital expenditures (14,831) (16,391)
-------- --------
Net cash used in investing activities (49,470) (36,673)
-------- --------
Financing Activities:
Proceeds from issuance of note payable 1,361 -
Repayment of senior subordinated debt (12,610) (43,750)
Payments of deferred financing costs - (173)
Repayment of long-term debt (68,416) (37,099)
Proceeds from/repayments on line of credit, net 23,000 12,171
Principal payments on capital lease obligations (879) (1,525)
Purchase of Treasury stock (1,435) -
Net proceeds from public offering of common stock - 49,005
Proceeds from other issuances of common stock 7,058 3,565
-------- --------
Net cash used in financing activities (51,921) (17,806)
-------- --------
Effect of exchange rate changes on cash 82 -
Net increase (decrease) in cash and cash
equivalents (4,362) 10,071
Cash and cash equivalents at beginning of period 12,737 2,666
-------- --------
Cash and cash equivalents at end of period $ 8,375 $ 12,737
======== ========
Non-cash activities:
Net issuances of common stock for certain
acquisitions 17,286 6,250
Net issuances of notes payable for certain
acquisitions 5,530 -
Contact:
FRB/Weber Shandwick
Cindy Martin, 312/640-6741 (media)
Leslie Loyet, 312/640-6672 (investors)