Forward - Looking Statements

Transcription

1 Q2 2008

2 Forward - Looking Statements This presentation may contain forward-looking statements that involve a number of risks and uncertainties and our actual results could differ significantly from expected results. Potential risks and uncertainties include difficulties in completing the integration of acquired businesses, changes in governmental regulation of medical waste collection and treatment, and increases in transportation and other operating costs, as well as various other factors described in our public filings with the U.S. Securities and Exchange Commission. Accordingly, past financial performance should not be considered a reliable indicator of future performance, and historical trends should not be used to anticipate future trends or results. For a definition of terms used throughout this presentation please see page 21 on our website presentation. 1

3 Competitive Strengths Broad range of high quality services Regulated Medical Waste Services Steri-Safe SM OSHA Safety & Compliance Program Bio Systems Integrated Sharps Safety Solution Regulated Returns Management Services 2

4 Protecting People, Reducing Risk We work with our customers to Protect People and Reduce Risk by combining integrated solutions with superior customer service to promote safety, compliance and risk management for our customers 3

5 Investment Highlights Attractive niche services Emerging global market Low cost provider Diverse customer base Strong financial performance Demonstrated growth strategy Proven ability to integrate acquisitions and improve margins Proven, experienced management team 4

6 Market Leadership Total Estimated Global Market Size: $10.0 billion* Note: * Frost & Sullivan Industry Study and Management Estimates (including ancillary services & products) 5

7 Regulated Medical Waste Services Compliant management of potentially infectious material to reduce cross contamination risk and spread of infection Necessary Regulated Service Large Diverse Customer Base Int l Network Premier Assets Low Cost Operator Attractive Margins International Expansion 6

8 Loyal Customer Base Highly regulated industry (e.g. U.S. Market: EPA, DEA, FDA, OSHA, DOT, State/Local) Insulated from economic cycles 402,900 accounts (granularity). Revenue retention exceeds 95% Hospitals, Blood banks, Pharmaceutical manufacturers, Medical and Dental offices, Offsite and alternate care providers, Biomedical/Biotech companies, Laboratories/Pharmacies, Corporate America, Veterinary offices, Pharmacies Largest customer less than 2% of revenues Predictable revenues: over 95% of revenues are under long term contracts with automatic renewal Contracts generally include pass through price increase provisions 7

9 Network of Premier Assets Emerging Global Presence North America Network 8

10 Growth Strategy Focus on small account customers Leverage Steri-Safe SM OSHA Safety & Compliance Program Expand Bio Systems Integrated Sharps Safety Solution Grow Regulated Return Management Services Target tuck-in strategic acquisitions International growth and geographic expansion 9

11 Focus on Small Customers Small account customers generate gross margins higher than large account customers Small account customers are more likely to outsource and easier to up-sell Q % Revenue Mix* Q % Gross Margin 44.3% Gross Margin * Note: Domestic SQ and LQ Revenue Mix 10

12 Steri-Safe SM OSHA Safety & Compliance Program Promotes a safe, compliant workplace for healthcare employees Subscription Safety Tools Attractive Margins Significant Penetration and Up-sell Opportunities International Expansion Compliance Manual SteriSafe.com Consulting Services Safety Products 11 & Supplies

13 Bio Systems Integrated Sharps Safety Solution Promotes a safer workplace by reducing the infection risk from inadvertent needle sticks Turnkey Integrated Sharps Safety Solution Synergy with Existing Transportation & Plant Infrastructure Use of Product in Hospital 12 Manage & Collect at Point of Use

14 Returns Management Services Remove expired or unsafe products from supply chain to reduce risk Data-driven notification, recall and returns solutions for pharmaceuticals, medical devices & durable goods Serving manufacturers, hospitals & retail pharmacies, distributors 13

15 Acquisitions Proven integrator having successfully completed 140 acquisitions since 1993 Current North American acquisition pool represents more than $50 million in revenues Deal structures are predominantly asset purchases Purchase price is based on multiples of EBITDA and depend on the quality of the asset base purchased 14

16 Strong Financial Performance Revenues Fiscal Year Ended December 31 ($ in millions) Stericycle continues to exhibit steady top-line revenue growth 15

17 Strong Financial Performance Income from Operations (EBIT*) Fiscal Year Ended December 31 ($ in millions) Margin: 9.6% 9.3% 23.2% 23.6% 25.1% 27.9% 28.2% 27.3% 25.6% Stericycle has effectively leveraged its infrastructure to improve margins * Adjusted for pro-forma adoption of FAS 142. Includes acquisition related costs, write-off of fixed assets and other non- GAAP adjustments and onward includes FAS123R expensing of stock compensation 2008 includes $5.5 million legal settlement expense % 26.0% 24.5%

18 Strong Financial Performance EPS** Fiscal Year Ended December 31 Stericycle has met or exceeded EPS estimates since 1996 IPO **Note: Adjusted for 2-for-1 stock split in May 2002 and again in May Adjustments to GAAP EPS: Acquisition related costs ( ); Bond buyback premium & bank loan financing fees ( ); Tax adjustment to fully taxed (1999); Non cash fixed assets write-offs ( & ); FAS142 ( ); Licensing legal settlement refund (2005); Non-cash write-down of investments (2005 & 2007); 3CI legal settlement & insurance proceeds ( ); South African joint venture note receivable writedown (2005); Australian arbitration settlement & related costs ( ); Gain on divestiture of assets (2007); Impairment of intangible assets (2007). FAS 123R expensing of stock compensation is NOT part of the adjustments.

19 Capitalization ($ in millions) Dec. 31, 2000 Dec. 31, 2007 June 30, 2008 Current Portion of Long Term Debt $5.1 $22.0 $29.1 Revolver (Used/Total Available) $5.0/$50.0 $465.4/$850.0 $436.1/$850.0 Term Loan A Term Loan B Other Debt Senior Subordinated Notes Total Long Term Debt, Less Current Portion $345.1 $613.8 $706.9 Convertible PIK Preferred Stock Common Equity Total Capitalization $556.3 $1,349.9 $1,

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21 Definition of Terms This presentation uses certain abbreviations: CAGR means compound annual growth rate (see, for example, page 15) EBIT means earnings before interest expense and income taxes (see page 16) EPS means earnings per share diluted (see page 17) FAS 142 means Financial Accounting Standard 142, Goodwill and Other Intangible Assets, of the Financial Accounting Standards Board (effective for 2003 and later years) (see page 17) FAS 123R means Financial Accounting Standard 123R, accounting for share based payments (see page 17) GAAP means United States generally accepted accounting principles (see page 17) SQG means small quantity generators (sometimes called small account customers ) (see page 9) 21