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SRCL Earnings In Line, Revs Miss

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Stericycle Inc. (SRCL - Free Report) , a leading waste management company, reported strong first quarter 2013 results with both revenues and net income witnessing healthy year-over-year increase, primarily aided by accretive acquisitions. The company reported a net income of $74.6 million or 85 cents per share in first quarter 2013 compared to $64.9 million or 75 cents per share in the year-earlier quarter.

Excluding one-time items, adjusted earnings for the reported quarter were 88 cents per share vis-à-vis 79 cents in the year-ago quarter. The adjusted earnings were in line with the Zacks Consensus Estimate.

Total revenue for the reported quarter increased 11.7% year over year to $513.8 million, missing the Zacks Consensus Estimate of $519 million. Domestic revenue in the quarter increased 10.5% year over year to $363.6 million. International revenues in the quarter increased 14.7% year over year to $150.2 million.
Non- GAAP revenues in the reported quarter increased 8.1% year over year to $457.8 million.

Gross profit was $232.1 million versus $205.3 million in the year-ago quarter. Gross margin was 45.2% compared with 44.6% in prior year period.

Financial Position

At Mar, 31, 2013, cash and cash equivalents totalled $12.7 million compared to $31.3 million as of Dec 31, 2012. Cash from operations was $98.2 million in the reported quarter versus $99.6 million in the year-ago period. Long-term debt stood at $1.2 billion versus $1.3 billion at year-end 2012. Capital expenditure stood at $16.5 million in the reported quarter.


In the reported quarter, Strericycle closed 12 transactions, which included 11 international and 1 domestic. The international acquisitions consisted of one in Spain, two in Japan, four in the UK, one in Canada, one in Romania, one in Portugal, and one in Chile

Moving Forward    

Stericycle expects EPS to be in the range of $3.66 to $3.69 in 2013.   Revenues for 2013 are expected to be in the range of $2.11 billion to $2.14 billion. Capital expenditure is expected to be in the range of $65 million to $70 million in 2013.

Stericycle is witnessing strong growth worldwide, driven by new account acquisition and expansion of its portfolio of service offerings. We remain encouraged by the company’s solid performance in the reported quarter and expect growth momentum in the coming quarters as well.

Stericycle currently has a Zacks Rank #3 (Hold). Other stocks that look promising and are worth considering now are Total System Services Inc (TSS - Free Report) , Fiserv, Inc (FISV - Free Report) and Green Dot Corporation (GDOT - Free Report) , each carrying a Zacks Rank #2 (Buy).


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