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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT (AMENDED)
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): October 20, 1998
STERICYCLE, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-21229 36-3640402
(State or other juris- (Commission file (IRS employer
diction of incorporation) number) identification number)
1419 Lake Cook Road, Suite 410
Deerfield, Illinois 60015
(Address of principal executive offices)
Registrant's telephone number, including area code: (847) 945-6550
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ITEM 7. Financial Statements and Exhibits
2
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(b) Pro Forma Financial Information
Amended pro forma financial information is filed with this Report.
(c) Exhibits
Amended pro forma financial information is filed as Exhibit 99.2 to
this Report.
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SIGNATURE
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 hereunto duly authorized.
Date: January 7, 1999.
STERICYCLE, INC.
By /s/ Frank J.M. ten Brink
-------------------------------
Frank J.M. ten Brink
Vice President, Finance
and Chief Financial Officer
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EXHIBIT INDEX
Exhibit Description
- ------- -----------
99.2 Stericycle, Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Financial Statements
Unaudited Pro Forma Consolidated Statement of Operations
for the Year Ended December 31, 1997 (Amended)
Unaudited Pro Forma Consolidated Statement of Operations
for the Nine Months Ended September 30, 1998 (Amended)
Unaudited Pro Forma Consolidated Balance Sheet
at September 30, 1998 (Amended)
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EXHIBIT 99.2
STERICYCLE, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated financial statements of
the Company present the unaudited pro forma consolidated statements of
operations for the year ended December 31, 1997 and the nine months ended
September 30, 1998 and the unaudited pro forma consolidated balance sheet
at September 30, 1998. The unaudited pro forma consolidated statement of
operations for the year ended December 31, 1997 gives pro forma effect to
the Company's acquisition of the outstanding common stock and junior
secured indebtedness of Med-Tech Environmental Limited ("Med-Tech") as if
such transactions had occurred on January 1, 1997. The unaudited pro forma
consolidated statement of operations for the nine months ended September
30, 1998 gives pro forma effect to the acquisition of the outstanding
common stock and junior secured indebtedness of Med-Tech as if such
transactions occurred on January 1, 1998. The unaudited pro forma
consolidated balance sheet gives pro forma effect to the acquisition of
the outstanding common stock and junior secured indebtedness of Med-Tech
as if such transactions occurred on September 30, 1998. The unaudited pro
forma consolidated financial statements presented herein are based on the
assumptions and adjustments described herein and in the accompanying
notes. The unaudited pro forma consolidated statements of operations do
not purport to represent what the Company's results of operations would
have been if the events described above had occurred as of the dates
indicated or what such results will be for any future periods. The
unaudited pro forma consolidated financial statements are based on
assumptions and adjustments that the Company believes are reasonable. The
unaudited pro forma consolidated financial statements and the accompanying
notes should be read in conjunction with the Company's historical
financial statements, including the notes thereto, included in its Annual
Report on Form 10-K for the year ended December 31, 1997 and in its
Current Report on Form 10-Q for the quarter ended September 30, 1998, as
filed with the Securities and Exchange Commission, and Med-Tech's
historical financial statements, including the notes thereto, for the
years ended March 31, 1998 and 1997, which are included elsewhere in this
Report.
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STERICYCLE, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997 (AMENDED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
--------------------------- ADJUST-
COMPANY MED-TECH (1) MENTS PRO FORMA
---------- --------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues.................................................. $ 46,166 $ 7,835 - $ 54,001
Costs and expenses:
Costs of revenues........................................ 34,109 4,937 - 39,046
Selling, general and administrative
expenses................................................ 10,671 2,511 121 (2) 13,303
Write-off of financing and related
costs................................................... - 1,853 (820) (3) 1,033
Loss from shut-down of operations........................ - 869 - 869
-------- --------- -------- ---------
Total costs and expenses................................ 44,780 10,170 (699) 54,251
-------- --------- -------- ---------
Income (loss) from operations ............................ 1,386 (2,335) 699 (250)
Other income (expense):
Interest income.......................................... 618 - - 618
Interest expense......................................... (428) (1,047) 412 (4) (1,062)
Other income (expense)................................... - 16 - 16
-------- --------- -------- ---------
Total other income (expense)............................ 190 (1,031) 412 (428)
-------- --------- -------- ---------
Income (loss) before income taxes......................... 1,576 (3,366) 1,111 (679)
Income tax expense........................................ 146 - 146
-------- --------- -------- ---------
Net income (loss)......................................... $ 1,430 $ (3,366) $ 1,111 $ (825)
======== ========= ======== =========
Weighted average shares
outstanding-basic........................................ 10,580 45 (5) 10,625
======== ======== =========
Basic net income (loss) per share......................... $ 0.14 $ (0.08)
======== =========
Weighted average number of
common shares and common stock equivalent shares
outstanding.............................................. 11,234 45 (5) 11,279
======== ======== =========
Diluted net income (loss) per share....................... $ 0.13 $ (0.07)
======== =========
</TABLE>
- --------------------
(1) The statement of operations data for Med-Tech for the year ended December
31, 1997 represent the historical results of operations of Med-Tech for its
fiscal year ended March 31, 1998 and have been converted to U.S. dollars
using the average exchange rate of Canadian $1.4018 for U.S. $1.00 for the
fiscal year ended March 31, 1998. The acquisition of Med-Tech has been
accounted for as a purchase. Accordingly, the results of operations of
Med-Tech will be included in the Company's results of operations from the
date of acquisition. See the financial statements of Med-Tech appearing
elsewhere in this Report.
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(2) The adjustment to selling, general and administrative expenses
consists of an increase in amortization of goodwill of $113,000 from
the acquisition of Med-Tech over a 25-year period, as if Med-Tech had
been acquired on January 1, 1997, and includes the effects of
increased amortization of goodwill of $8,000 resulting from
differences in accounting principles generally accepted in Canada and
the United States, as discussed in Note (3).
(3) The historical statement of operations of Med-Tech for the year ended
March 31, 1998 include certain legal and financing costs incurred to
complete and obtain financing for its acquisition on April 4, 1997 of
Laidlaw Medical Services, Ltd. and Laidlaw Medical Services, Inc.
(together, "Laidlaw"). Under accounting principles generally accepted
in Canada, these costs have been expensed as incurred in the statement
of operations for the year ended March 31, 1998. For accounting
principles generally accepted in the United States and for purposes of
this pro forma consolidated statement of operations, these costs have
been deferred and are being amortized on a straight-line basis over 25
years for the legal fees and over the life of the related loan
agreement for the financing costs.
(4) The adjustment to interest expense reflects the following: (a)
additional interest, net of reduced commitment fees, of $442,000 that
would have been incurred had the Company borrowed the $5,530,000
required to fund the acquisition of the common stock and junior
secured indebtedness of Med-Tech under its credit agreement with
LaSalle National Bank, N.A. on January 1, 1997 at an interest rate of
8.25% in effect on the related credit facility; (b) reduced interest
expense of $894,000 that would not have been incurred had the Company
purchased on January 1, 1997 the junior secured indebtedness of
Med-Tech with a face value of $3,576,000 and interest rate of 25%; and
(c) increased amortization of deferred financing costs of $39,000 from
January 1, 1997 resulting from differences in accounting principles
generally accepted in Canada and the United States, as discussed in
Note (3).
(5) Shares used in the computation of pro forma basic net income (loss) per
share and pro forma diluted net income (loss) per share give effect to
the issuance of 45,440 shares of Common Stock by the Company as
consideration for the purchase of the common stock and the junior
secured indebtedness of Med-Tech, assuming that such shares were issued
on January 1, 1997.
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STERICYCLE, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1998 (AMENDED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
--------------------------- ADJUST-
COMPANY MED-TECH (1) MENTS PRO FORMA
---------- --------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues ............................................. $ 44,759 $ 5,985 -- $ 50,744
Costs and expenses:
Costs of revenues ................................... 30,492 4,283 -- 34,775
Selling, general and administrative
expenses ........................................... 10,151 1,779 91 (2) 12,021
--------- ------- ------- --------
Total costs and expenses ........................... 40,643 6,062 91 46,796
--------- ------- ------- --------
Income (loss) from operations ........................ 4,116 (78) (91) 3,947
Other income (expense):
Interest income ..................................... 308 -- -- 308
Interest expense .................................... (242) (834) 309 (3) (767)
Other income (expense) .............................. 20 (53) -- (33)
--------- ------- ------- --------
Total other income (expense) ....................... 86 (888) 309 (492)
--------- ------- ------- --------
Income (loss) before income taxes .................... 4,202 (965) 218 3,455
Income tax expense ................................... 781 -- -- 781
--------- ------- ------- --------
Net income ........................................... $ 3,421 $ (965) $ 218 $ 2,674
========= ======= ======= ========
Weighted average shares
outstanding--basic .................................. 10,580 45 (4) 10,625
========= ======= ========
Basic net income per share ........................... $ 0.32 $ 0.25
========= ========
Weighted average number of
common shares and common stock equivalent
shares outstanding .................................. 11,234 45 (4) 11,279
========= ======= ========
Diluted net income per share ......................... $ 0.30 $ 0.24
========= ========
</TABLE>
- ---------------------
(1) The statement of operations data for Med-Tech for the nine months ended
September 30, 1998 represent the historical results of operations of
Med-Tech from January 1, 1998 through September 30, 1998 and have been
converted to U.S. dollars using the average exchange rate of Canadian
$1.4692 for U.S. $1.00 for the period from January 1, 1998 to September 30,
1998. The acquisition of Med-Tech has been accounted for as a purchase.
Accordingly, the results of operations of Med-Tech will be included in the
Company's results of operations from the date of acquisition.
(2) The adjustment to selling, general and administrative expenses consists of
an increase in amortization of goodwill of $85,000 from the acquisition of
Med-Tech over a 25-year period, as if Med-Tech had been acquired on January
1, 1998, and includes the effects of increased amortization of goodwill of
$6,000 resulting from differences in accounting principles generally
accepted in Canada and the United States, as discussed in Note (3) to the
unaudited pro forma consolidated statement of operations for the
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year ended December 31, 1997.
(3) The adjustment to interest expense reflects the following: (a) additional
interest, net of reduced commitment fees, of $332,000 that would have been
incurred had the Company borrowed the $5,530,000 required to fund the
acquisition of the common stock and junior secured indebtedness of
Med-Tech under its credit agreement with LaSalle National Bank, N.A. on
January 1, 1998 at an interest rate of 8.25% on the related credit
facility; (b) reduced interest expense of $671,000 that would not have
been incurred had the Company purchased on January 1, 1998 the junior
secured indebtedness of Med-Tech with a face value of $3,576,000 and
interest rate of 25%; and (c) increased amortization of deferred financing
costs of $29,000 from January 1, 1997 resulting from differences in
accounting principles generally accepted in Canada and the United States,
as discussed in Note (3) to the unaudited pro forma consolidated statement
of operations for the year ended December 31, 1997.
(4) Shares used in the computation of pro forma basic net income per share and
pro forma diluted net income per share give effect to the issuance of
45,440 shares of Common Stock by the Company as consideration for the
purchase of the common stock and the junior secured indebtedness of
Med-Tech, assuming that such shares were issued on January 1, 1998.
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STERICYCLE, INC. AND SUBSIDIARIES
UNAUDITED PROFORMA CONSOLIDATED BALANCE SHEET (AMENDED)
September 30, 1998
(in thousands)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
-------------------- ADJUST-
COMPANY MED-TECH (1) MENTS (2) PRO FORMA
------- ------------ ---------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ......... $ 775 $ -- $ (160) $ 615
Short-term investments ............ 2,335 -- -- 2,335
Accounts receivable, net .......... 10,902 1,542 -- 12,444
Parts and supplies ................ 1,037 109 -- 1,146
Prepaid expenses .................. 528 180 -- 708
Other ............................. 2,087 -- -- 2,087
------- ------ ------ -------
Total current assets ............. 17,664 1,831 (160) 19,335
Property, plant and equipment, net . 12,043 971 -- 13,014
Goodwill, net ...................... 36,796 5,515 2,836 45,147
Other .............................. 1,680 341 -- 2,021
------- ------ ------ -------
Total assets ................... $68,183 $8,659 $2,676 $79,518
======= ====== ====== =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt . $ 6,281 $7,167 $1,954 $15,402
Accounts payable and accrued
liabilities ...................... 7,422 1,491 -- 8,913
Deferred revenue .................. 663 -- -- 663
------- ------ ------ -------
Total current liabilities ........ $14,366 $8,659 $1,954 $24,979
Long-term debt ..................... 3,246 -- -- 3,246
Other liabilities .................. 21 -- -- 21
Shareholders' equity:
Common stock ...................... 107 4,043 (4,043) 107
Additional paid-in capital ........ 85,087 -- 722 85,809
Notes receivable .................. (4) -- -- (4)
Accumulated deficit ............... (34,640) (4,043) 4,043 (34,640)
------- ------ ------ -------
Total shareholders' equity ....... 50,550 -- 722 51,272
------- ------ ------ -------
Total liabilities and
shareholders' equity ........... $68,183 $8,659 $2,676 $79,518
======= ====== ====== =======
</TABLE>
(1) The historical balance sheet data for Med-Tech has been converted to U.S.
dollars using an exchange rate of Canadian $1.5262 for U.S. $1.00
effective as of September 30, 1998.
(2) Reflects the allocation of the purchase price of the acquisition of the
common stock and junior secured indebtedness of Med-Tech to the underlying
fair value of the net assets acquired and the issuance of 45,440 shares of
the Company's Common Stock, and incremental borrowings of $5,530,000 under
the Company's credit facility with LaSalle National Bank, N.A., to fund the
purchase price. The allocation of the purchase price is preliminary. The
Company is in the process of determining the fair value of the acquired
property, plant and equipment, but does not expect the final adjustments to
the purchase price allocation to be material.
