July 26, 2018
VIA EDGAR
Terence O’Brien
Accounting Branch Chief
Office of Manufacturing and Construction
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Mail Stop 4631
Re: Stericycle Inc.
Form 10-Q for the period ended March 31, 2018
Filed May 3, 2018
Form 8-K dated May 3, 2018
Filed May 3, 2018
Response Dated May 31, 2018
File No. 1-37556
Dear Mr. O’Brien:
I write in response to your letter of June 27, 2018. For the Staff’s convenience, we have repeated each of the Staff’s comments before our response to the comment.
Form 10-Q for the period ended March 31, 2018
| 1. | We note your response to comment 3 from our letter dated May 2, 2018. SAB Topic 5:P.4 notes that the discussion regarding the expected cost savings resulting from plans should clearly identify the income statement line items to be impacted including whether the costs savings are expected to be offset by anticipated increases in other expenses or reduced revenues. Your expanded disclosures regarding the Business Transformation plan appear to only address the expected benefit to Adjusted EBITDA. In this regard, please further expand your discussion to provide additional clarity regarding the specific income statement line items that are expected to be impacted |
Response
We will identify the specific income statement line items that are expected to be impacted by our Business Transformation plan during 2018 in our Second Quarter 2018 Form 10-Q. Further we will continue to update these disclosures for future years as our Business Transformation plan continues to evolve.
SRCL - 2018
| 2. | On page 3 you provide outlook guidance for free cash flow, which is a non-GAAP financial measure, in addition to outlook guidance for net cash from operating activities and capital expenditures. It does not appear that you calculate free cash flow as is typically calculated as net cash from operating activities less capital expenditures. In this regard, please reconcile this measure to the nearest GAAP financial measure pursuant to Item 10(e)(1)(i)(B) of Regulation S-K as well as revise the title of this non-GAAP financial measure. See Question 102.07 of the Non-GAAP Compliance and Disclosure Interpretations. |
Response
The Company’s free cash flow guidance is provided as a range and is calculated as net cash from operating activities less capital expenditures, based on the high and low end of the range for each of these measures.
We will provide, in our Second Quarter 2018 Earnings release, the following additional reconciliation, updated for the second quarter and year to date amounts, (in millions):
Net Cash from Operating Activities - low end of range | $ 510 |
Capital Expenditures - high end of range | 180 |
Free Cash Flow - low end of range | $ 330 |
|
|
Net Cash from Operating Activities - high end of range | $ 560 |
Capital Expenditures - low end of range | 160 |
Free Cash Flow - high end of range | $ 400 |
We thank the Commission for its attention to this matter and its consideration of this response. If there is any additional information that we can provide to assist the Staff in its review, please let us know.
Respectfully,
/s/ Daniel V. Ginnetti
Daniel V. Ginnetti
Executive Vice President
and Chief Financial Officer
SRCL - 2018
