August 30, 2016
VIA EDGAR
Mr. Terence O’Brien
Accounting Branch Chief
Division of Corporation Finance
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Re:Stericycle Inc.
Form 10-K for Fiscal Year Ended December 31, 2015 Filed March 15, 2016
Form 8-K filed on February 4, 2016
Form 10-Q for the period ended June 30, 2016 Filed on August 9, 2016
Response dated July 29, 2016
File No. 001-37556
Dear Mr. O’Brien:
I am writing in response to your letter of August 16, 2016. For the convenience of the Staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”), I have repeated the Staff’s comment before our response to the comment.
Form 10-Q for the period ended June 30, 2016
Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 23
| line had on your revenues, cost of revenues and income from operations for the periods presented. See Item 303(a)(3) of Regulation S-K. See also Section 501.02, 501.07 and 501.12 of the Financial Reporting Codification. |
|
Response:
The Manufacturing and Industrial (M&I) service line comprised approximately 11% of our consolidated revenues for the six months ended June 30, 2016. As noted by the Staff, we disclosed the following information related to M&I revenues in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Form 10-Q for the period ended June 30, 2016: “Services related to Manufacturing and Industrial (“M&I”) waste experienced a reduction of $13.1 million in the second quarter of 2016 as compared to the same period in 2015, negatively impacting overall organic growth by 2.5%. This reduction was due to fewer on call services (project work) and the impact the slowdown in the oil and energy sector had on related businesses, such as M&I.” In future filings, we will expand our disclosures to highlight the factors that are impacting and expected to continue to impact our Manufacturing and Industrial Services line within our Domestic Regulated Waste and Compliance Services operating segment in fiscal year 2016.
Our M&I services share the same infrastructure and back office support as our other specialty waste services. For this reason, it is difficult to quantify the impact of reduced M&I revenues to our overall cost structure. At best, we could only make broad estimates of the impact to costs, which we believe would have limited benefit to the readers of our 10-Q and 10-K filings. As a result, we intend to focus on expanding our disclosures around the impact this service line specifically had on our revenues.
In future filings, we will also include a discussion of the M&I services in Item 3. Quantitative and Qualitative Disclosures about Market Risk.
As requested, I wish to acknowledge on Stericycle’s behalf that:
| · | Stericycle is responsible for the adequacy and accuracy of the disclosures in the filing; |
| · | staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and |
| · | Stericycle may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |
If there is any additional information that we can provide to assist the Staff in its review, please advise me.
Very truly yours,
/s/ Daniel V. Ginnetti
Daniel V. Ginnetti
Executive Vice President
and Chief Financial Officer
