Elizabeth L. Brandel - VP, Finance Frank J.M.

Ten Brink - EVP, CFO, and Chief Administrative Officer Richard T. Kogler - EVP and COO Mark C.

Miller - President and CEO

Scott Schneeberger - CIBC World Markets David Manthey - Robert W. Baird Ryan Daniels - William Blair & Company Jonathan Ellis - Merrill Lynch Unidentified Analyst - Citigroup Scott Levine - JP Morgan Greg Halter - Great Lakes Review Unidentified Analyst - Banc of America Cliff Walsh - Julius Baer

Thank you very much and welcome to Stericycle third quarter conference call. On today’s call will be Frank ten Brink, Chief Financial Officer; Rich Kogler, Chief operating Officer; and Mark Miller, Chief Executive Officer.

I will now read the Safe Harbor statement. Statements by Stericycle in this conference call that are not strictly historical are forward-looking.

Forward-looking statements involve known and unknown risks and should be viewed with caution as just described in the Company’s Form 10-K, 10-Q, as well as other filings with the SEC could affect the Company’s actual results and could cause the Company’s actual result to differ materially from expected results. The Company makes no commitment to disclose any revisions to forward-looking statements or any facts, events, or circumstances after this date that may bear upon forward-looking statements.

I will now pass the call to Frank.

Thanks Liz. The results for the third quarter are as follows.

Revenues grew $34.1 million to $237.3 million, up 16.8% from $203.3 million in Q3 of ’06. Internal growth for the Company was $22.9 million or 11.6%, which is adjusted for the divested to some assets of STG and foreign exchange.

Domestic growth was 11.6% and international growth adjusted for exchange and divestiture was also 11.6%. Domestic growth consisted of SQ up over 10%, LQ up 6% and returns management growth of $5.6 million.

Gross profit was $106.8 million or 45% of revenues, and SG&A expense was $44.6 million or 18.8% of revenues. Operating income was $61.9 million or 26.1% of revenues.

Net interest expense was $8.6 million for $7.3 million in ’06 due to increase borrowings related to acquisitions and repurchases of shares completed in the quarter. Net income was $22.9 million or $0.37 per share.

At the end of the quarter, the revolver borrowings were approximately $456 million and the unused portion of our revolver is approximately $324 million. In August, we increased our revolver facility from $650 million to $850 million, and extended the maturity date to August 2012.

We repurchased approximately 757,000 shares of common stock on the open market in an amount of approximately $36.5 million. Since the beginning of the repurchase program, on a split adjusted basis, we purchased the total over 7.5 million shares.

We still have authorization to purchase an additional 3.7 million shares. Our CapEx in the quarter was $14.5 million.

The DSO in the quarter was 59 days, and the cash provided from operation was 57.7 million. Now, a brief recap of the nine months numbers.

For the nine months ended September 30 ’07, revenues increase to $681.2 million, an increase of 17.3% from the same period a year ago. Gross profit as a percentage of revenue was 44.9% for the nine months ended ’07 versus 44.2% for the same period, the prior year.

Earnings per share increased to $1.5 from $0.84 per diluted share in the same period a year ago, and that’s split adjusted, and the cash flow from operations was $128.1 million for the first nine months of ’07. I will now turn it over to Rich.

Thanks Frank. We want to thank each member of our worldwide team for their solid performance and continued commitment to our customers and shareholders.

We enjoyed strong sales growth in all of our business segments in the quarter. The SQG growth was primarily driven by SteriSafe with two-thirds of new SteriSafe customers choosing select and preferred.

SteriSafe contributed approximately 53% of total small customer revenues. LQG sales growth was driven by the continued option of our Bio Systems offering and new LQG and Med waste contracts.

In summary, we ended Q3 with approximately 384,300 accounts, of which approximately 374,900 were small and the remainder large. I will turn it over to Mark.

Thanks Rich. I would now like to provide insight on our current outlook for the remainder of 2007 and provide a preliminary guidance for 2008.

Please keep in mind that these are forward-looking statements. During the third quarter, we completed two domestic acquisitions, and in addition in early October, we completed one international acquisition.

The incremental revenue impact in 2007 for these latest acquisitions would be approximately $8.6 million, of which $2.2 million was in the third quarter. The annualized revenues of these three acquisitions is approximately $26 million.

Keeping these items in mind, we believe that analysts may fine tune our 2007 models to reflect revenues between $917 million and $923 million, and estimates for EPS of $1.41 to $1.42. Now, I would like to provide a preliminary outlook for 2008, but please keep in mind that a preliminary guidance does not include future acquisitions or divestitures.

We believe that analysts’ EPS estimates will be in the range of $1.64 to $1.68, which we are comfortable with. We believe that analysts’ estimates of revenue for 2007 would be in the range of approximately $995 million to $1.015 billion depending upon assumptions of growth in foreign exchange rates.

We believe analysts will have estimates for net income between $147 million and $150 million, depending on their assumptions of margin improvement and interest expense. And analysts will have estimates for free cash flow between $140 million and $145 million, with our CapEx anticipated between $45 and $55 million.

In closing, we are very excited about the tremendous growth opportunities in 2008 and beyond. We thank you for you time and operator will now switch over to Q&A.

Question and Answer

Hey, good afternoon, guys. How are you?

Good afternoon.

I guess I would like to just start out just talking about recalls. I missed I think, Frank, you had said was that the returns on recalls growth, I had missed the number.

Could you please share that again?

It was $5.6 million over last year from a growth point of view. And in total, it was $22.3 million

Okay. Thank you.

Staying on that topic the… that’s something you had a lot of success within the second quarter and obviously an exciting growth business for you. Could you just speak a little bit, I guess to… is that an industry that’s in rapid growth, I mean, we see headlines frequently about consumer products being recalled.

Is it just what we are seeing in the news that leads to believe that that’s growing rapidly? Or are there two signs we are seeing that you just speak to that I will appreciate it.

Well, Scott, I think from my prospective, not only we had a very solid year from the big recall activity that we are seeing. But our sense that there is a growing awareness of the core issue, because it’s happening beyond just the classic space of pharmaceutical and over the counter products.

You see it happening and in durable products, you see it happening in consumer products of a variety. And so, our sense is that there’s growing awareness and pressure and that’s really for us one of the keys is as we keep building the awareness of our capabilities and also expanding what we can offer to our customers really helping our growth potential.

All right. Thanks.

That’s helpful. The… I guess, shifting gears a little bit, the… actually I will stay on that, for recalls, obviously, a lumpy business and if that grows as part… as one of your segments, do you envision breaking out returns in recalls going forward, just so, we are able… we appreciate the ’08 guidance, but just so we are able to breakout our models and consider the lumpiness factor.

Yes, I think for us it’s though to segment or separate because often we may have an agreement with the customer that may include services enhance and encompass the returns management, we have it now capabilities for coupon and rebate management. So, new additional services or the efficiency checks and affectivity checks and retrieval capabilities, often they get wrapped together.

So, it’s very, very tough to distinguish it because it leverages same structures, similar sales force, execution and like. So, at this point, we don’t have an easy way to break that out.

Okay. Understood, so we shouldn’t anticipate that… and any confusion.

Okay. Now, shifting gears, is, Rich, in Bio Systems, could you talk about how many markets what’s rollout to what… what the plan is for further growth?

Just kind of speaking of the footprint.

Yes, we been rolling out pretty steadily now. And I think we were at in terms of penetration in the U.S., is probably 25%, possibly 30% of our target accounts.

Although, like a lot of our services as the word gets out there, we get interest from labs and other and other people, so that market kind of continues to expand. I think the other thing to consider is we haven’t begun to move into foreign markets.

So, we have basically all the international platform that… this will be applicable to.

Great. Sounds good.

One kind of more the model housekeeping question. Your tax rate was 38% in the quarter, a little bit lower than I had anticipated.

Is that a result of maybe some acquisition, maybe something international, or something else?

No, it’s really kind of little bit of a year-to-date, a just down sort of year-to-date number, which right now is at 38.45 versus 38.5 before. And so, I think, overall, we are going to be right into that bandwidth maybe for the next year guidance, 38.5 is probably good rate to use.

Fair enough. And just as far as fourth quarter, something in the similar range in the 38 to 38.5.

Yes.

Okay. Fair enough.

Thanks for all the help out there.

Thank you.

Hi. Thank you very much.

Could you discuss infection control and/or any new initiatives that might be out there for you? And as it relates to that specific initiative, is that primarily for hospitals, or is it some service that you can offer to small customer as well?

Most of the activities that we have done in the infection control research and pilot phase are targeted towards the large quantity customers at this point. And they would have applicability in other segments, but right now most of our research is focused on the LQ space.

Part of that as we think, over the coming years, the awareness factor and also coming on [ph] infection will increase as hospitals have to do more reporting and there is more visibility as to what’s happening in terms of hospital acquired infections.

Okay. Thank you.

And should we be concerned all about fuel cost or labor or any other cost that are impacting you at this time?

Fuel has been a challenged this year, but it’s been challenged in prior years. And although, our guidance right now that we gave you assumes that we are sort of that current fuel prices and energy prices.

The good news is our team has been very good at seeking out efficiencies to offset cost, and more importantly, our contracts allow us to do fuel pass-throughs. So, we have done that I think pretty effectively to counter the higher energy cost.

And finally maybe you could talk about pricing just in your core services, how does the competitive landscape look to you today? Is it… are the pricing pressures getting greater or last sort of the same?

I think more of the same. I mean it is competitive business and there are many competitors out there that we compete with in all of the markets that were in.

And I guess, that being said, that we have obvious competed effectively and we haven’t seen our change in pricing.

Thank you very much.

Yes, good afternoon, guys. Couple of quick housekeeping questions upfront.

Do you have on hand the number of new large quantity generator accounts and Bio Systems account during the quarter?

Yes, for the new Med waste contracts the large quantity was 57, and we have captured 75 new Bio Systems accounts.

Okay. And the how about SteriSafe editions during the quarter, do you have that number?

SteriSafe right now stands at about 114,000 total accounts.

Okay. And what percentage of those given the continued strength of signing up initially towards the more premium services, do you have of those 114 on premium?

Right now, we have… in the quarter, we had over two-thirds taking select and preferred. And year-to-date, we are over 21% on select and preferred.

So, it’s new height for us.

Okay. Great.

And then, Frank, in the years guidance for 2008 or Mark, whoever wants to address this. Can you give us a feel for what's implicit in there from the returns and recall business I know this year you got it that towards $70 million number, where do you see that going, is part of your ’08 guidance?

I think from our perspective when we gave the ranges on revenues, we take the underlying growth of that business is not 10% per annum. It’s hard to judge and peel out what the base line is.

And the ranges we gave you was a $70 million to $85 million number for 2008.

Okay.

And there through process is there. So, we have had some pretty big recalls, which have been favorable effects in Q2 and Q3, not sure whether we will capture those same levels next year, and if we get bigger recalls, then the momentum continues.

It could be better, but we wanted to build something in and we thought was at least in our current knowledge and ability to look forward the something that was in a reasonable bandwidth.

Okay. Great.

That’s helpful color. Two more quick ones and I will hop off.

Just another one back on the fuel cost, I know the cost have been elevated for a couple of quarters now. I am just curious how quickly you can pass those through, I know it written in the contract, but is that something where… it’s fairly immediate or you are going back one month to two months in a year, just any explanation on how that works?

We can react fairly quickly, but I think if you just think about it from the standpoint of lag, there will be a some lag and that’s why in the past, we said that we are able to counter, but there could be as these fuel surcharges build into the revenue, there could be some margin impact… minimal, but you might see it.

Okay. Great.

And the last one, it looks like decent CapEx quarter kind of a run rate of $60 million, given the just under 15 you did this quarter. Was anything significant there on the returns or recall business or anything international that drove that to a little bit of an uptick in the quarter.

Yes, I think I am not sure about the comment of $60 million… that maybe the run rate, but remember the CapEx is kind of lumpy. We are still holding to our guidance around 5% of revenues based on the new revenues and mid 40’s will be our spend this year, because of acquisitions and because of strength of recall business, we make decisions to pull some projects forward because they had strong IR’s.

Okay. Perfect.

Thanks for the color. Thanks guys.

Thanks good evening guys.

Good evening.

Wanted to just… in terms the ’08 guidance, I wanted to… try to get some clarification what assumptions you are making in terms of SQ or LQ growth?

The SQ is about 8% to 10%. LQ internal growth about 5% to 7%, and you are looking at an international somewhere in 7% to 9%.

Okay. And it seems like the LQ growth is down just modestly from the range you provided previously.

A little bit, I mean you also get with Bio as a percent of the total, but overall, I mean it’s still good revenues coming in.

Okay. And then on the international business, I am wondering could you talk a little bit about the organic growth in that business this quarter versus international or versus acquired?

Well, in the quarter, we had 11.6% in growth and that is adjusted for the divestiture that we did and for foreign exchange. Foreign exchange in the quarter aided, if you compare to last year, about $3 million to the revenues.

Okay. And is that figure also adjusted though for acquisitions?

Yes, it is.

Okay, so that’s a near organic number.

Yes.

And then also in terms of the company that you bought abroad, would you really tell us what country that was in?

That was in Canada.

Okay.

That’s the one, that again, closed early October. It was kind of in the Canadian press.

Yes.

And we acquired from Brands and Brick [ph].

Great. I appreciate that.

And then in terms of the STG integration, how far along are you at this point and when do you think you will be done, where the integration of that company?

Again, STG is… because of the size of it, takes longer and as we said before it would probably definitely still run into the first half of next year, both from a waste flow point of view and just the integration between the two.

Okay. And then just finally, on the topic of U.K.

Can you talk about mix of SQ versus LQ right now?

I think if you look, it’s about little over 20% that right now is in the SQ in Europe. And then when we talk U.K., we have always talked about Ireland and U.K.

together.

Yes. Okay.

And then just one final question relates to share repurchase. It looks like this year, repurchase is up there quite a bit.

Could you talk a little bit what your assumptions are going into next year in terms of repurchases?

Again in our guidance we don’t presume repurchases. So, again, from a guidance, we don’t make those predictions.

Again, we are opportunistic in our repurchases and if we see opportunities we will take advantage of them.

Okay. Great.

Thanks, guys.

Thank you.

Hi, it’s actually Elena Cellura [ph] for Leon. Just getting back to the acquisitions.

In the quarter there were two domestic acquisitions you made. Were they in the Med waste?

Yes, they were.

Okay. And how was the pipeline now?

Has there been any change?

No, we are still… despite doing all the deals, we are still over $50 million in the North America marketplace.

Okay. And also margins, gross margin in the quarter was a little bit shy versus what we had expected and also sort of versus what you guys have said in the past for 30 basis points to 40 basis points of improvement quarter-over-quarter.

Are you still expecting that kind of growth--?

If you look in the quarter, there’s really three factors. We obviously from a revenue point of view were ahead of the expectations and that was both through due to acquisitions, International, there was a half opening growth as a result of foreign exchange.

Those are normally come in at lower margins. Returns was also had a little bit rather the recall related, which is lower margins, if you blend all that, you really are going to come again to round to 45% gross margin.

And if you really look ahead, I mean anywhere 15 to 20 basis points quarter-over-quarter from the next year point of view, but on the base, if you take all that kind of mix factors out, we were probably about 35 basis points up versus the prior quarter

Okay. Great.

Thank you.

Good Afternoon.

Good afternoon.

Regarding the SG&A you don’t give this final level of detail yet for 2008 but you guys have been stepping up the strategic spend this years. Any thought in terms of what the bias might be on the SG&A kind of going forward beyond this period is elevated strategic spend?

I think the current outlook in our preliminary guidance would be a key. Our SG&A levels comparable the kind of where we are running right now throughout Q4 and 2008.

there is sill several programs that are under review that. I think they have great IR’s that will maybe pull forward, but as we have seen in the past those who paid off nicely for us.

We really accelerated the sales and marketing efforts and gotten the returns for. So, I think the most of the models depending on how you treat amortization and acquisition related costs, you are going to come in mid to high 18s.

Got it. And then turning to acquisitions one follow-up.

Any change in multiples you seeing out there and/or do you see any limit potentially in the domestic marketplace and what you can do with traditional rollout type opportunities?

No, again, on the deals that we closed and the one right after quarter multiples again, they are sixth and seventh on a synergized basis. So, very much in a range and on deals that are in the pipeline, no.

we are, again, anticipating similar kind of picture.

One last one on recalls. Are you guys contemplating or thinking there's any real additional investment necessary for you guys to grow the business beyond the warehouses you have, the technology infrastructure or are we pretty much done the heavy lifting there?

I think we will continue to support the businesses with whatever CapEx mates they have. Again, it’s not huge CapEx, but I think for us really the drive on awareness on expansion and capabilities is why we are putting a lot of our SG&A and things right now.

So, we are excited about the space, it will continues to be one that we believe we can get over time to north of 20% EBITDA margins and have a very unique set of tools for helping our customers, to help their customers.

Do you have a sense… one last following. Do you have a sense with regard to the mix I know you don’t breakout returns versus recall?

But do you have a rough sense in terms of mix of returns versus recall? You ultimately expect to achiever or you not thinking about that way.

No, we don’t really price it and think about the business in that regard.

Very good. Thanks.

Thank you for taking the time to answer the questions. Relative to share buyback with the stock prices 55 plus, just wondering your appetite I presume is still there to buy given what else you see out there.

What is the highest price you have paid to-date for stock?

We don’t give that specific detail. If you really look and recall of the last quarter, the average in the quarter at that point was about 48.22.

Okay. And fuel costs, fuel and energy costs I should represented what percentage of your sales in the quarter?

It was about 5.7%.

Basically about the same as last couple of quarters.

Correct

Okay And any commentary that you could provide relative to the pending acquisition of MedSolutions would be helpful. I think they are voted November 7, if I have that correct?

I think that’s correct, I know that correct sorry. It's a tuck-in.

It is a good transaction for us. It will have some what we would consider public company add backs.

We have good operating company saving because of the fact that it’s tuck-in. In a range of a normal multiple again from transaction that size, and again, from that point of view, we anticipated to close early November.

And you envision taking any of their own proprietary businesses throughout your whole infrastructure, I think they have sort of onsite device possibly.

Again, everything comes with transaction. It will be evaluated to make money and case-by-case basis, we will look at it.

All right. And I didn’t hear the debt to EBITDA, do you have that figure, I appreciate it.

It’s 1.99.

And you are still comfortable going up to three times.

Yes.

All ready. Thank you very much.

Hello guys, this is Jason Fruechtel [ph] sitting in for Robert Willoughby. I miss your debt to cap picked up a bit.

Should we expect that to continue to increase in the near term or--?

Again because of the repos, you are going to get an environment where debt to cap is probably not as good a indicator, I mean the debt that you picked out for us is a far better indicator for leverage ability and leverage kind of too high or low. 2.0 for us, the 1.99 we feel it’s still on the conservative side.

We are going to keep managing that, most likely we will be anywhere between one and a half, two and a half is a kind of normal bandwidth for us. Could we at times go a little lower to debt.

Yes, depending on the transaction and historic if you look back our lowest has been about 1.2 so, no, we feel comfortable with it, I think debt to cap is probably not as good an indicator to use.

Okay, and just a question on your water management services that you provide. Could you discuss how many customers you had in the quarter and if you target a specific type of health care facility, I mean profit versus non-profit?

Yes, the water treatment program is still on pilot phase so there’s no material impact to the quarter or material numbers don’t enter our remaining ’07 or ’08 guidance so should we wall [ph] that out that would be upside but we are not anticipating anything at this point in time and our target base foe that type of service would be predominantly primary hospital market place or LQ market place so it would be applicable to nursing homes, essentially any place where you are going to have patients that are potentially immune compromised that are going to need cleaner water sources and water borne organisms.

Okay. Great, thanks.

Good afternoon.

Good afternoon.

Frank, you gave us a $50 million pipeline for North America. Is there an international number that you can share with us?

We don’t disclose the international because it would be maybe too obvious as to what kind of transactions we would be looking at.

Okay. And in terms of recent acquisitions can you maybe comment on respective companies in terms of where they fit in terms of pricing, in the market we are talking about some of the lower priced competitors maybe that we can surprise improve over time in those markets?

Again I think, simple thing is it’s post multiple 6 to 7 from a pricing point of view, it’s very much in our bandwidth. They are tuck ins and sort of good transactions for us.

I wasn’t talking about valuations, I was talking more specific pricing, customer pricing in the markets that where you are competing with these companies. Were they 10% below you in terms of price or 20% or maybe just comment on the ability to maybe raise the pricing in those small markets.

No, this market is so close together again that you will not see those kind of differences.

Okay. Great, thank you.

Hey guys, thanks for taking my call. Just a quick one.

In this arbitration case going on in Australia and that has yet to be quantified as far as I am familiar. Can you provide enough date has that been quantified or are you still waiting on that.

Any color on it?

No, it hasn’t been quantified yet. It’s our anticipation that there will probably be a pending Q4 kind of outcome probably in the latter part and… no.

No quantification yet.

Okay. Thanks so much.

Appreciate it.

We thank everybody for your time and attention. 2008 is going to be a great year and we appreciate all your support.

Have a great day.