0001564590-17-008764.txt : 20170504 0001564590-17-008764.hdr.sgml : 20170504 20170504160809 ACCESSION NUMBER: 0001564590-17-008764 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20170504 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20170504 DATE AS OF CHANGE: 20170504 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STERICYCLE INC CENTRAL INDEX KEY: 0000861878 STANDARD INDUSTRIAL CLASSIFICATION: HAZARDOUS WASTE MANAGEMENT [4955] IRS NUMBER: 363640402 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-37556 FILM NUMBER: 17813964 BUSINESS ADDRESS: STREET 1: 28161 NORTH KEITH DRIVE STREET 2: - CITY: LAKE FOREST STATE: IL ZIP: 60045 BUSINESS PHONE: 8473675910 MAIL ADDRESS: STREET 1: 28161 NORTH KEITH DRIVE STREET 2: - CITY: LAKE FOREST STATE: IL ZIP: 60045 8-K 1 srcl-8k_20170504.htm 8-K srcl-8k_20170504.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 4, 2017

 

Stericycle, Inc.

 

(Exact name of registrant as specified in its charter)

 

 

 

 

 

 

Delaware

 

1-37556

 

36-3640402

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification Number)

28161 North Keith Drive

Lake Forest, Illinois 60045

(Address of principal executive offices including zip code)

(847) 367-5910

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

    Written communications pursuant to Rule 425 under the Securities Act (17 CR 230.425)

    Soliciting material pursuant to Rule 425 under the Securities Act (17 CFR 240.14a-12)

    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 



Item 2.02    Results of Operations and Financial Condition

On May 4, 2017 Stericycle, Inc. issued a press release announcing its financial results for the quarter ended March 31, 2017. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated by reference.

Item 9.01    Financial Statements and Exhibits

(d)

Exhibits

99.1

Press release issued by Stericycle, Inc. dated May 4, 2017.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

 

 

 

 Dated: May 4, 2017

 

Stericycle, Inc.

 

 

 

 

By:

/s/ DANIEL V. GINNETTI

 

 

 

 

 

Daniel V. Ginnetti

 

 

Executive Vice President and Chief Financial Officer

 

 

 

 


EXHIBIT INDEX

Exhibit Number

Description

99.1

Press Release issued by Stericycle, Inc. dated May 4, 2017.

 

 

EX-99.1 2 srcl-ex991_8.htm EX-99.1 srcl-ex991_8.htm

EXHIBIT 99.1

FOR FURTHER INFORMATION CONTACT:

Investor Relations 847-607-2012

STERICYCLE, INC. REPORTS RESULTS

FOR THE FIRST QUARTER OF 2017

 

Lake Forest, Illinois, May 4, 2017—Stericycle, Inc. (NASDAQ:SRCL) today reported financial results for the first quarter of 2017.

FIRST QUARTER HIGHLIGHTS COMPARED TO PRIOR YEAR:

 

Revenues of $892.4 million, an increase of 2.1%, including a 1.1% unfavorable impact from foreign exchange

 

Gross profit of $368.7 million, an increase of 0.6%

 

Earnings per diluted share (“EPS”) decreased 19.7% to $0.62 and Adjusted earnings per diluted share (“Adjusted EPS”) decreased 1.2% to $1.09.

FIRST QUARTER RESULTS

Revenues for the quarter ended March 31, 2017 were $892.4 million, an increase of 2.1% from $874.2 million in the first quarter of last year. Acquisitions contributed approximately $10.0 million to the current period’s increase in revenues. Divestitures reduced current period revenues by $0.7 million. Revenues increased 3.2% compared to the first quarter of last year when adjusted for unfavorable foreign exchange impacts of $9.7 million. Organic revenues grew 2.1%, or 3.6% when adjusted for Manufacturing and Industrial Services. See Tables 1-A and 1-B.

“We are off to a great start for 2017,” said Charlie Alutto, President and Chief Executive Officer.  “Our Secure Information Destruction business grew 8% organically from an increase in sales of ongoing and one-time services combined with higher revenues for recycled paper.  Additionally, the market-leading position and unique capabilities of our Communication and Related Services business enabled the team to deliver solid year-over-year organic growth of greater than 6%.”

Gross profit was $368.7 million, an increase of 0.6% from $366.6 million in the first quarter of last year. Gross profit as a percentage of revenues was 41.3% compared to 41.9% in the first quarter of last year. Adjusted gross profit was $368.7 million, an increase of 0.5% from $366.8 million in the first quarter of last year. Adjusted gross profit as a percentage of revenues was 41.3% compared to 42.0% in the first quarter of last year. See Table 2.

EPS decreased 19.7% to $0.62 from $0.78 in the first quarter of last year. Adjusted EPS decreased 1.2% to $1.09 from $1.11 in the first quarter of last year. See Tables 3 and 4.

Cash flow from operations for the three months ended March 31, 2017 was $175.3 million, an increase of 11.7% from $156.9 million in the same period last year.

CONFERENCE CALL INFORMATION

Conference call to be held May 4, 2017 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 for 30 days by dialing 855-859-2056 or 404-537-3406, access code 92841381. To hear a live simulcast of the call or access the audio archive, visit the investor relations page on www.stericycle.com.

PRESENTATION AND DISCUSSION OF NON-GAAP INFORMATION

The Company reports its financial results in compliance with U.S. Generally Accepted Accounting Principles (“GAAP”), but believes that also discussing non-GAAP financial measures allows for a better period over period comparison by removing the impact of items that, in management’s view, do not reflect the Company’s underlying operating performance. This press release includes certain non-GAAP financial measures, as defined in the SEC’s Regulation G. These non-

1

 


GAAP measures are also used to evaluate senior management and are a factor in determining their performance-based compensation.

Adjusted EPS, Adjusted net income attributable to Stericycle common shareholders, Adjusted gross profit, and Adjusted revenues are described in the Reconciliation of Certain Non-GAAP Measures section of this document.

We present our change in revenues separately to show the impact of foreign currency, acquisitions, and divestitures because we believe that exclusion of these items better represents the Company’s underlying business trends, including organic revenue growth. We also present revenues excluding Manufacturing and Industrial Services (“M&I”) which allow for visibility to a revenue stream that has shown greater volatility than our other service lines.

For the purpose of evaluating operating performance, we present our financials to show the impact of certain acquisition-related items in our adjusted earnings. These adjustments include acquisition and integration expenses, intangible amortization expense, and the change in fair value of contingent consideration. This allows for comparison of period over period results without the impact of acquisition-related items. Further, we show the impact of certain other items in our adjusted earnings to allow for period over period comparison of results without the impact of items that may not occur each year and, if so, are due to different factors. For the periods presented, these adjustments include litigation and professional services and restructuring, contract exit and plant conversion related items.

For the purpose of calculating the ultimate impact of our mandatory convertible preferred stock, we show the impact by excluding the mandatory convertible preferred stock dividend and using the “if-converted” method of share dilution. This provides the reader insight to how our diluted share count will be affected after these preferred shares are converted to common shares.

These non-GAAP financial measures should not be considered in isolation or as a substitute for GAAP financial results, but should be read in conjunction with the unaudited condensed consolidated statement of income and other information presented herein. The non-GAAP financial measures in the press release may differ from similar measures used by other companies. A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP measure is included in the accompanying tables.

RECONCILIATION OF CERTAIN NON-GAAP MEASURES

Table 1 – A: RECONCILIATION OF REVENUES TO ADJUSTED REVENUES

 

 

 

Three Months Ended March 31,

 

 

 

In millions

 

 

Percentage Change (%)

 

Global Revenues Details by Service

 

2017

 

 

 

 

2016

 

 

Change

 

 

Organic

 

Acquisitions, Net of Divestiture

 

Foreign Exchange

 

Total

 

Regulated Waste and Compliance Services

 

$

511.2

 

 

 

 

$

506.6

 

 

$

4.6

 

 

 

1.5

%

 

0.4

%

 

(1.0

%)

 

0.9

%

Secure Information Destruction Services

 

 

204.1

 

 

 

 

 

184.6

 

 

 

19.4

 

 

 

8.0

%

 

3.8

%

 

(1.2

%)

 

10.5

%

Communication and Related Services

 

 

93.5

 

 

 

 

 

87.9

 

 

 

5.6

 

 

 

6.3

%

 

1.0

%

 

(1.0

%)

 

6.3

%

Manufacturing and Industrial Services

 

 

83.6

 

 

 

 

 

95.0

 

 

 

(11.4

)

 

 

(9.6

%)

 

(0.8

%)

 

(1.6

%)

 

(12.0

%)

Total Revenues, as Reported

 

 

892.4

 

 

 

 

 

874.2

 

 

 

18.2

 

 

 

2.1

%

 

1.1

%

 

(1.1

%)

 

2.1

%

Less: Manufacturing and Industrial Services

 

 

(83.6

)

 

 

 

 

(95.0

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenues, as Adjusted

 

$

808.8

 

 

 

 

$

779.2

 

 

$

29.6

 

 

 

3.6

%

 

1.3

%

 

(1.1

%)

 

3.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic and Canada Revenues

 

$

710.8

 

 

 

 

$

686.2

 

 

$

24.6

 

 

 

2.2

%

 

1.2

%

 

0.2

%

 

3.6

%

International Revenues

 

 

181.6

 

 

 

 

 

188.0

 

 

 

(6.4

)

 

 

1.8

%

 

0.7

%

 

(5.9

%)

 

(3.4

%)

Total Revenues, as Reported

 

$

892.4

 

 

 

 

$

874.2

 

 

$

18.2

 

 

 

2.1

%

 

1.1

%

 

(1.1

%)

 

2.1

%

 


2

 


Table 1 – B: DISAGGREGATED REVENUES CHANGE – 2017

 

In millions

 

 

Three Months Ended

March 31, 2017

 

Organic

$

18.7

 

Acquisitions

 

10.0

 

Divestiture

 

(0.7

)

Foreign Exchange

 

(9.7

)

Total Change

$

18.2

 

 

Table 2: RECONCILIATION OF GROSS PROFIT TO ADJUSTED GROSS PROFIT

 

In millions

 

 

Three Months Ended

March 31,

 

 

2017

 

 

2016

 

 

$

 

% of Revenues

 

 

$

 

% of Revenues

 

Gross Profit, as Reported

$

368.7

 

 

41.3

%

 

$

366.6

 

 

41.9

%

Plant Conversion Expenses

 

-

 

 

0.0

%

 

 

0.2

 

 

0.0

%

Gross Profit, as Adjusted

$

368.7

 

 

41.3

%

 

$

366.8

 

 

42.0

%

 

Table 3: RECONCILIATION OF NET INCOME ATTRIBUTABLE TO STERICYCLE COMMON SHAREHOLDERS TO ADJUSTED NET INCOME ATTRIBUTABLE TO STERICYCLE COMMON SHAREHOLDERS

 

In millions, except share and per share data

 

 

Three Months Ended

March 31,

 

 

2017

 

 

2016

 

Net Income Attributable to Stericycle, Inc. Common Shareholders,

as Reported

$

53.4

 

 

$

66.7

 

Adjustments:

 

 

 

 

 

 

 

Intangible Amortization Expense

 

29.1

 

 

 

18.3

 

Acquisition and Integration Expenses

 

19.8

 

 

 

22.3

 

Litigation and Professional Service Expenses

 

3.6

 

 

 

1.3

 

Restructuring, Contract Exit and Plant Conversion Expenses

 

2.9

 

 

 

0.2

 

Changes in Fair Value of Contingent Consideration

 

0.4

 

 

 

(2.6

)

Add Back Convertible Preferred Stock Dividend

 

9.4

 

 

 

10.1

 

Total Adjustments

 

65.2

 

 

 

49.5

 

Tax Effect of above adjustments (a)

 

(19.2

)

 

 

(14.9

)

Net Income Attributable to Stericycle, Inc. Common Shareholders,

as Adjusted

$

99.4

 

 

$

101.3

 

EPS, as Reported

$

0.62

 

 

$

0.78

 

EPS, as Adjusted

$

1.09

 

 

$

1.11

 

Weighted average number of common shares outstanding - diluted

 

85,572,409

 

 

 

85,845,501

 

Additional Dilution Under If-Converted Method

 

5,264,188

 

 

 

5,651,376

 

Diluted Weighted Average Number of Common Shares Outstanding

Under If-Converted Method

 

90,836,597

 

 

 

91,496,877

 

 

 

(a)

The tax effect of the adjustments is calculated based on applying the tax rate for the jurisdictions in which the adjustment occurred for the respective periods.

3

 


Table 4: RECONCILIATION OF EPS TO ADJUSTED EPS

 

 

Three Months Ended

March 31,

 

 

 

 

 

 

 

 

 

 

Change

 

 

2017

 

 

2016

 

 

$

 

%

 

EPS, as Reported

$

0.62

 

 

$

0.78

 

 

 

(0.15

)

 

-19.7

%

Intangible Amortization Expense

 

0.22

 

 

 

0.14

 

 

 

 

 

 

 

 

Acquisition and Integration Expenses

 

0.15

 

 

 

0.16

 

 

 

 

 

 

 

 

Litigation and Professional Service Expenses

 

0.03

 

 

 

0.01

 

 

 

 

 

 

 

 

Restructuring, Contract Exit and Plant Conversion Expenses

 

0.03

 

 

 

0.00

 

 

 

 

 

 

 

 

Changes in Fair Value of Contingent Consideration

 

0.00

 

 

 

(0.03

)

 

 

 

 

 

 

 

Add Back Convertible Preferred Stock Dividend

 

0.11

 

 

 

0.12

 

 

 

 

 

 

 

 

Total Impact of All Adjustments Including Convertible Preferred Stock Dividend

 

(0.07

)

 

 

(0.07

)

 

 

 

 

 

 

 

EPS, as Adjusted

$

1.09

 

 

$

1.11

 

 

 

(0.01

)

 

-1.2

%

Diluted Weighted Average Number of Common Shares Outstanding Under If-Converted Method

 

90,836,597

 

 

 

91,496,877

 

 

 

 

 

 

 

 

 

For more information about Stericycle, please visit our website at www.stericycle.com.

Safe Harbor Statement: This press release may contain forward-looking statements that involve risks and uncertainties, some of which are beyond our control (for example, general economic and market 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 the collection, transportation, treatment and disposal of regulated waste or the proper handling and protection of personal and confidential information, increases in transportation and other operating costs, the level of governmental enforcement of regulations governing regulated waste collection and treatment or the proper handling and protection of personal and confidential information, our obligations to service our substantial indebtedness and to comply with the covenants and restrictions contained in our private placement notes, term loan credit facility and revolving credit facility, our ability to execute our acquisition strategy and to integrate acquired businesses, competition and demand for services in the regulated waste and secure information destruction industries, political, economic and currency risks related to our foreign operations, impairments of goodwill or other indefinite-lived intangibles, variability in the demand for services we provide on a project or non-recurring basis, exposure to environmental liabilities, fluctuations in the price we receive for the sale of paper, the outcome of pending or future litigation, disruptions in or attacks on our information technology systems, compliance with existing and future legal and regulatory requirements, as well as other factors described in our filings with the U.S. Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K. 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.


4

 


STERICYCLE, INC. AND SUBSIDIARIES

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

In thousands

 

 

March 31, 2017

 

 

December 31, 2016

 

ASSETS

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

47,023

 

 

$

44,189

 

Accounts receivable, net

 

615,348

 

 

 

634,902

 

Prepaid expenses

 

51,926

 

 

 

46,214

 

Assets held for sale

 

9,628

 

 

 

9,134

 

Other current assets

 

35,999

 

 

 

39,179

 

Total Current Assets

 

759,924

 

 

 

773,618

 

Property, plant and equipment, net

 

725,420

 

 

 

723,894

 

Goodwill

 

3,622,793

 

 

 

3,591,020

 

Intangible assets, net

 

1,857,209

 

 

 

1,861,973

 

Other assets

 

31,510

 

 

 

29,556

 

Total Assets

$

6,996,856

 

 

$

6,980,061

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

Current portion of long-term debt

$

96,301

 

 

$

72,822

 

Accounts payable

 

133,119

 

 

 

152,881

 

Accrued liabilities

 

243,871

 

 

 

228,526

 

Deferred revenues

 

17,974

 

 

 

17,902

 

Liabilities held for sale

 

3,172

 

 

 

2,858

 

Other current liabilities

 

85,124

 

 

 

67,864

 

Total Current Liabilities

 

579,561

 

 

 

542,853

 

 

 

 

 

 

 

 

 

Long-term debt, net

 

2,767,035

 

 

 

2,877,315

 

Deferred income taxes

 

657,865

 

 

 

645,371

 

Other liabilities

 

99,914

 

 

 

98,136

 

Equity:

 

 

 

 

 

 

 

Preferred stock

 

7

 

 

 

7

 

Common stock

 

853

 

 

 

852

 

Additional paid-in capital

 

1,161,983

 

 

 

1,166,457

 

Accumulated other comprehensive loss

 

(341,119

)

 

 

(367,643

)

Retained earnings

 

2,059,452

 

 

 

2,006,064

 

Total Stericycle, Inc.'s Equity

 

2,881,176

 

 

 

2,805,737

 

Noncontrolling interests

 

11,305

 

 

 

10,649

 

Total Equity

 

2,892,481

 

 

 

2,816,386

 

Total Liabilities and Equity

$

6,996,856

 

 

$

6,980,061

 

 

 

 

5

 


STERICYCLE, INC. AND SUBSIDIARIES

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In thousands, except share and per share data

 

 

Three Months Ended March 31,

 

 

2017

 

 

2016

 

 

$

 

% of Revenues

 

 

$

 

% of Revenues

 

Revenues

$

892,399

 

 

100.0

%

 

$

874,181

 

 

100.0

%

Cost of revenues ("COR") exclusive of depreciation

 

500,830

 

 

56.1

%

 

 

483,751

 

 

55.3

%

Depreciation

 

22,907

 

 

2.6

%

 

 

23,850

 

 

2.7

%

Total cost of revenues

 

523,737

 

 

58.7

%

 

 

507,601

 

 

58.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit, as reported

 

368,662

 

 

41.3

%

 

 

366,580

 

 

41.9

%

Gross profit, as adjusted

 

368,662

 

 

41.3

%

 

 

366,816

 

 

42.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses ("SG&A") exclusive of depreciation

 

247,930

 

 

27.8

%

 

 

219,367

 

 

25.1

%

Depreciation

 

6,183

 

 

0.7

%

 

 

6,290

 

 

0.7

%

Total SG&A expense, as reported

 

254,113

 

 

28.5

%

 

 

225,657

 

 

25.8

%

Total SG&A expense, as adjusted

 

198,292

 

 

22.2

%

 

 

186,464

 

 

21.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations, as reported

 

114,549

 

 

12.8

%

 

 

140,923

 

 

16.1

%

Income from operations, as adjusted exclusive of adjusting items shown below

 

170,370

 

 

19.1

%

 

 

180,352

 

 

20.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusting items:

 

 

 

 

 

 

 

 

 

 

 

 

 

Plant conversion expenses (COR)

 

-

 

 

0.0

%

 

 

236

 

 

0.0

%

Intangible amortization expense (SG&A)

 

29,089

 

 

3.3

%

 

 

18,274

 

 

2.1

%

Acquisition and integration expenses (SG&A)

 

19,820

 

 

2.2

%

 

 

22,258

 

 

2.5

%

Litigation and professional services expenses (SG&A)

 

3,620

 

 

0.4

%

 

 

1,300

 

 

0.1

%

Change in fair value of contingent consideration (SG&A)

 

401

 

 

0.0

%

 

 

(2,644

)

 

-0.3

%

Restructuring, contract exit and plant conversion expenses (SG&A)

 

2,891

 

 

0.3

%

 

 

5

 

 

0.0

%

Total adjustments

 

55,821

 

 

6.3

%

 

 

39,429

 

 

4.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(23,300

)

 

-2.6

%

 

 

(24,041

)

 

-2.8

%

Other expense, net

 

(1,544

)

 

-0.2

%

 

 

(1,251

)

 

-0.1

%

Total other expense

 

(24,844

)

 

-2.8

%

 

 

(25,292

)

 

-2.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

89,705

 

 

10.1

%

 

 

115,631

 

 

13.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

31,148

 

 

3.5

%

 

 

38,036

 

 

4.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

58,557

 

 

6.6

%

 

 

77,595

 

 

8.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: net income attributable to noncontrolling interests

 

368

 

 

0.0

%

 

 

809

 

 

0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Stericycle, Inc.

$

58,189

 

 

6.5

%

 

$

76,786

 

 

8.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: mandatory convertible preferred stock dividend

 

9,364

 

 

1.0

%

 

 

10,106

 

 

1.2

%

Less: gain on repurchase of preferred stock

 

(4,563

)

 

-0.5

%

 

 

-

 

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Stericycle, Inc. common shareholders

$

53,388

 

 

6.0

%

 

$

66,680

 

 

7.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share - diluted

$

0.62

 

 

 

 

 

$

0.78

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding - diluted

 

85,572,409

 

 

 

 

 

 

85,845,501

 

 

 

 

 

6

 


STERICYCLE, INC. AND SUBSIDIARIES

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

 

 

 

 

In thousands

 

 

Three Months Ended March 31,

 

 

2017

 

 

2016

 

Operating Activities:

 

 

 

 

 

 

 

Net income

$

58,557

 

 

$

77,595

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Stock compensation expense

 

5,999

 

 

 

6,105

 

Depreciation

 

29,090

 

 

 

30,140

 

Intangible amortization

 

29,089

 

 

 

18,274

 

Deferred income taxes

 

8,722

 

 

 

6,932

 

Other, net

 

3,020

 

 

 

(2,644

)

Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:

 

 

 

 

 

 

 

Accounts receivable

 

25,546

 

 

 

(3,918

)

Accounts payable

 

(15,162

)

 

 

(15,203

)

Accrued liabilities

 

14,138

 

 

 

21,151

 

Other assets and liabilities

 

16,321

 

 

 

18,517

 

Net cash provided by operating activities

 

175,320

 

 

 

156,949

 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

 

Payments for acquisitions, net of cash acquired

 

(16,871

)

 

 

(24,884

)

Proceeds from investments

 

-

 

 

 

7

 

Proceeds from sale of property and equipment

 

250

 

 

 

766

 

Capital expenditures

 

(33,136

)

 

 

(34,185

)

Net cash used in investing activities

 

(49,757

)

 

 

(58,296

)

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

 

Repayments of long-term debt and other obligations

 

(12,779

)

 

 

(6,879

)

Proceeds from foreign bank debt

 

301

 

 

 

15,607

 

Repayments of foreign bank debt

 

(2,936

)

 

 

(18,721

)

Repayments of term loan

 

(30,000

)

 

 

(171,000

)

Proceeds from senior credit facility

 

383,929

 

 

 

457,959

 

Repayments of senior credit facility

 

(446,248

)

 

 

(353,520

)

Payments of capital lease obligations

 

(940

)

 

 

(1,381

)

Payments for repurchase of common stock

 

-

 

 

 

(37,693

)

Payments for repurchase of mandatory convertible preferred stock

 

(9,570

)

 

 

-

 

Proceeds from issuances of common stock

 

3,503

 

 

 

22,310

 

Dividends paid on mandatory convertible preferred stock

 

(9,364

)

 

 

(10,106

)

Payments to noncontrolling interests

 

-

 

 

 

(4,997

)

Net cash used in financing activities

 

(124,104

)

 

 

(108,421

)

Effect of exchange rate changes on cash and cash equivalents

 

1,375

 

 

 

(211

)

Net change in cash and cash equivalents

 

2,834

 

 

 

(9,979

)

Cash and cash equivalents at beginning of period

 

44,189

 

 

 

55,634

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

$

47,023

 

 

$

45,655

 

 

 

 

 

 

 

 

 

Non-cash activities:

 

 

 

 

 

 

 

Net issuances of obligations for acquisitions

$

13,945

 

 

$

13,013

 

 

7