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Stericycle, Inc. Reports Results for the First Quarter 2014

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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

CONTACT: Frank ten Brink 847-607-2012

Source:Stericycle, Inc.