Stericycle Inc. (SRCL, Financial) filed Quarterly Report for the period ended 2009-09-30.
Stericycle Inc. is a multi-regional integrated company employing proprietary technology to provide environmentally-responsiblemanagement of regulated medical waste for the health care industry. The Company is the second-largest provider of regulated medical waste management services in the United States. Stericycle Inc. has a market cap of $4.58 billion; its shares were traded at around $53.87 with a P/E ratio of 27.1 and P/S ratio of 4.2. Stericycle Inc. had an annual average earning growth of 41.8% over the past 10 years. GuruFocus rated Stericycle Inc. the business predictability rank of 2.5-star.
Cost of Revenues: Our cost of revenues increased $2.8 million, or 1.8%, to $156.9 million during 2009 from $154.1 million during 2008. Our domestic cost of revenues increased $3.6 million, or 3.2%, to $114.6 million from $111.0 million in 2008 as a result of costs related to a proportional increase in revenues from acquisitions and internal growth. Our international cost of revenues slightly decreased $0.8 million, or 1.7%, to $42.3 million from $43.1 million in 2008 primarily driven by the impact of exchange rates and favorable impact from integration of acquisitions. Our gross margin percentage increased to 47.3% during 2009 from 44.4% during 2008 primarily due to a decrease in fuel and energy costs in 2009.
Revenues: Our revenues increased $54.5 million, or 6.7%, to $864.2 million in 2009 from $809.7 million in 2008. Domestic revenues increased $60.6 million, or 9.8%, to $676.1 million from $615.5 million in 2008 as internal revenue growth for domestic small account customers increased by $30.3 million, or approximately 9%, and internal revenue growth for large quantity customers increased by $10.1 million, or approximately 5%. Internal revenue, which excludes acquisitions less than one year old, for returns management decreased by $19.0 million. Total regulated waste and returns management domestic acquisitions less than one year old contributed approximately $39.2 million to the increase in domestic revenues.
Cost of Revenues: Our cost of revenues increased $9.0 million, or 2.0%, to $458.9 million during 2009 from $449.9 million during 2008. Our domestic cost of revenues increased $16.3 million, or 5.0%, to $339.9 million from $323.6 million in 2008 as a result of costs related to a proportional increase in revenues from acquisitions and internal growth. Our international cost of revenues decreased $7.3 million, or 5.7% to $119.0 million from $126.3 million in 2008 as a result of costs related to proportional increase in revenues from acquisitions and internal revenue growth. Our gross margin percentage increased to 46.9% during 2009 from 44.4% during 2008 due to a decrease in fuel and energy costs.
Income from Operations: Income from operations increased to $233.3 million for the nine months ended September 30, 2009 from $201.9 million for the comparable period in 2008, an increase of 15.5%. During the nine months ended September 30, 2009, we recognized $5.4 million in transactional expenses as result of adopting changes issued by the FASB to accounting rules related to business combinations that unfavorably impacted diluted earnings per share by $0.06. During 2008, we recognized a business dispute settlement and related costs of $5.6 million, which unfavorably impacted diluted earnings per share by $0.04.
Working Capital: At September 30, 2009, our working capital decreased $26.5 million to $18.3 million compared to $44.8 million at December 31, 2008. Of the decrease in working capital, $6.3 million decrease in deferred tax assets due to utilization of acquired foreign net operating losses, as well as $18.3 million increase in current debt relates to financing of foreign acquisitions, an increase in our accrued miscellaneous tax liability of $7.2 million, and an increase of $3.0 million in accrued interest due to increased borrowings. Offsetting these working capital decreases was a reduction of accrued liabilities related to a $12.0 million payment of an acquisition purchase accrual.
Read the The complete ReportSRCL is in the portfolios of Ron Baron of Baron Funds, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc.
Stericycle Inc. is a multi-regional integrated company employing proprietary technology to provide environmentally-responsiblemanagement of regulated medical waste for the health care industry. The Company is the second-largest provider of regulated medical waste management services in the United States. Stericycle Inc. has a market cap of $4.58 billion; its shares were traded at around $53.87 with a P/E ratio of 27.1 and P/S ratio of 4.2. Stericycle Inc. had an annual average earning growth of 41.8% over the past 10 years. GuruFocus rated Stericycle Inc. the business predictability rank of 2.5-star.
Highlight of Business Operations:
Revenues: Our revenues increased $20.7 million, or 7.5%, to $297.8 million in 2009 from $277.1 million in 2008. Domestic revenues increased $18.2 million, or 8.7%, to $228.5 million from $210.3 million in 2008 as internal revenue growth for domestic small account customers increased by $9.2 million, or approximately 8%, and internal revenue growth for large quantity customers increased by $2.3 million, or approximately 3%. Internal revenue for returns management, which excludes acquisitions less than one year old, decreased by $4.0 million. Total regulated waste and returns management domestic acquisitions less than one year old contributed approximately $10.7 million to the increase in domestic revenues.Cost of Revenues: Our cost of revenues increased $2.8 million, or 1.8%, to $156.9 million during 2009 from $154.1 million during 2008. Our domestic cost of revenues increased $3.6 million, or 3.2%, to $114.6 million from $111.0 million in 2008 as a result of costs related to a proportional increase in revenues from acquisitions and internal growth. Our international cost of revenues slightly decreased $0.8 million, or 1.7%, to $42.3 million from $43.1 million in 2008 primarily driven by the impact of exchange rates and favorable impact from integration of acquisitions. Our gross margin percentage increased to 47.3% during 2009 from 44.4% during 2008 primarily due to a decrease in fuel and energy costs in 2009.
Revenues: Our revenues increased $54.5 million, or 6.7%, to $864.2 million in 2009 from $809.7 million in 2008. Domestic revenues increased $60.6 million, or 9.8%, to $676.1 million from $615.5 million in 2008 as internal revenue growth for domestic small account customers increased by $30.3 million, or approximately 9%, and internal revenue growth for large quantity customers increased by $10.1 million, or approximately 5%. Internal revenue, which excludes acquisitions less than one year old, for returns management decreased by $19.0 million. Total regulated waste and returns management domestic acquisitions less than one year old contributed approximately $39.2 million to the increase in domestic revenues.
Cost of Revenues: Our cost of revenues increased $9.0 million, or 2.0%, to $458.9 million during 2009 from $449.9 million during 2008. Our domestic cost of revenues increased $16.3 million, or 5.0%, to $339.9 million from $323.6 million in 2008 as a result of costs related to a proportional increase in revenues from acquisitions and internal growth. Our international cost of revenues decreased $7.3 million, or 5.7% to $119.0 million from $126.3 million in 2008 as a result of costs related to proportional increase in revenues from acquisitions and internal revenue growth. Our gross margin percentage increased to 46.9% during 2009 from 44.4% during 2008 due to a decrease in fuel and energy costs.
Income from Operations: Income from operations increased to $233.3 million for the nine months ended September 30, 2009 from $201.9 million for the comparable period in 2008, an increase of 15.5%. During the nine months ended September 30, 2009, we recognized $5.4 million in transactional expenses as result of adopting changes issued by the FASB to accounting rules related to business combinations that unfavorably impacted diluted earnings per share by $0.06. During 2008, we recognized a business dispute settlement and related costs of $5.6 million, which unfavorably impacted diluted earnings per share by $0.04.
Working Capital: At September 30, 2009, our working capital decreased $26.5 million to $18.3 million compared to $44.8 million at December 31, 2008. Of the decrease in working capital, $6.3 million decrease in deferred tax assets due to utilization of acquired foreign net operating losses, as well as $18.3 million increase in current debt relates to financing of foreign acquisitions, an increase in our accrued miscellaneous tax liability of $7.2 million, and an increase of $3.0 million in accrued interest due to increased borrowings. Offsetting these working capital decreases was a reduction of accrued liabilities related to a $12.0 million payment of an acquisition purchase accrual.
Read the The complete ReportSRCL is in the portfolios of Ron Baron of Baron Funds, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc.
