Dan Ginnetti Frank J. M. Ten Brink - Chief Financial Officer, Chief Administrative Officer, Chief Accounting officer and Executive Vice President of Finance Richard T. Kogler - Chief Operating Officer and Executive Vice President Charles A. Alutto - Chief Executive Officer, President and Director

Ryan Daniels - William Blair & Company L.L.C., Research Division Albert Leo Kaschalk - Wedbush Securities Inc., Research Division David J. Manthey - Robert W. Baird & Co. Incorporated, Research Division Daniel Hultberg - Oppenheimer & Co. Inc., Research Division Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc., Research Division Kevin M. Steinke - Barrington Research Associates, Inc., Research Division Michael E. Hoffman - Wunderlich Securities Inc., Research Division Erin E. Wilson - BofA Merrill Lynch, Research Division David R. Lewis - Morgan Stanley, Research Division Isaac Ro - Goldman Sachs Group Inc., Research Division Sean Dodge - Jefferies LLC, Research Division Richard C. Close - Avondale Partners, LLC, Research Division Barbara Noverini - Morningstar Inc., Research Division Jason Rogers Stewart Scharf - S&P Capital IQ Equity Research

Good afternoon. My name is Mike, and I will be your conference operator today. At this time, I would like to welcome everyone to the Stericycle Third Quarter Earnings Call. [Operator Instructions] Thank you. I will now turn the call over to Dan Ginnetti, Vice President of Finance. You may begin your conference.

Thank you, Mike. Welcome to Stericycle's quarterly conference call. Joining me on today's call will be Frank Ten Brink, CFO; Rich Kogler, COO; and Charlie Alutto, CEO. 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. Factors described in the company's Form 10-K, 10-Qs, as well as its other filings with the SEC, could affect the company's actual results and could cause the company's actual results to differ material from the 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 turn it over to Frank. Frank J. M. Ten Brink: Thanks, Dan. The results for the third quarter are as follows: revenues were $534.6 million, up 11.3% from $480.5 million in Q3 of '12; and internal growth, excluding returns and recall revenues, was up 6.5%. Domestic revenues were $378.1 million of which $353 million was domestic regulated waste and compliance services, and $25.1 million was recalls and returns. Domestic internal growth, excluding recalls and returns revenues, was up 6.4%, consisting of SQ, up 8%, and LQ, up 5%. International revenues were $156.5 million, and internal growth adjusted for unfavorable exchange impact of $5.3 million was up approximately 7%. Acquisitions contributed $34.1 million to the growth in the quarter. Gross profit was $241.4 million or 45.2% of revenues. SG&A expense, including amortization, was $102.3 million or 19.1% of revenues. Net interest expense was $13.3 million, and net income attributable to Stericycle was $80.5 million or $0.92 per share on an as-reported basis and $0.96 adjusted for acquisition and other nonrecurring expenses. Now on the balance sheet. Our covenant debt-to-EBITDA ratio was 2.1 at the end of the quarter. The unused portion of our revolver debt at the end of the quarter was approximately $622 million. In the quarter, we repurchased 421,060 shares of common stock on the open market in an amount of $48.4 million, and we have authorization to purchase an additional 2.8 million shares. Our capital spend was $16.9 million, and our DSO at the end of the quarter was 62 days. Q3 year-to-date as reported cash from operations was $335.3 million. When adjusted for a $41 million customer deposit for recall reimbursement, year-to-date cash from operations was $294 million. I will now turn it over to Rich. Richard T. Kogler: Thanks, Frank. In the quarter, we closed 17 transactions, 7 domestic and 10 international. The international acquisitions were 3 in Argentina, 2 in the United Kingdom, 2 in Romania, 1 in Mexico, 1 in Canada and 1 in Spain. Revenues from the 17 acquisitions were approximately $3.9 million in the quarter in annualized or approximately $60 million. We continue to use our strong free cash flow to drive our growth through acquisitions. Currently, our worldwide acquisition pool remains robust, with well over $100 million in annualized revenues in multiple geographies and lines of business. Looking ahead, we remain excited about our growth opportunities. The record number of acquisitions in this quarter expands our customer base and the geographical reach of our services. This increase in customer base provides a long-term growth platform for selling multiple services, such as Steri-Safe, StrongPak, Sharps Management and Pharma Waste, that can more than triple the customers' revenues. At the end of the quarter, we had approximately 561,000 accounts, of which approximately 542,000 were small, the remainder were large. In closing, we want to thank each member of our worldwide team for their strong performance and continued commitment to our customers, our shareholders and our values. I'll now turn it over to Charlie. Charles A. Alutto: Thank you, Rich. I would now like to provide insight on our current guidance for 2013 and 2014. Please keep in mind that these are forward-looking statements, and our guidance does not include future acquisitions, divestitures, integration, acquisition-related and other nonrecurring expenses. For 2013, we believe analysts' EPS estimates will be in the range of $3.72 to $3.73. We believe analysts' revenue estimates for 2013 will be in the range of $2.13 billion to $2.145 billion, depending on assumptions for growth and foreign exchange rates. We anticipate 2013 internal growth rates to be: SQ, 8% to 10%; LQ, 5% to 8%; international, 5% to 8%; and recall and returns revenues between $95 million to $100 million. We believe analysts will have estimates for 2013 free cash flow between $353 million to $357 million. 2013 CapEx is anticipated to be between $67 million to $70 million. Now I'd like to provide preliminary guidance for 2014. For 2014, we believe analysts' EPS estimates will be in the range of $4.11 to $4.16 and a share count of 87.6 million, which we are comfortable with. We believe analysts' revenue estimates for 2014 will be in the range of $2.32 billion to $2.35 billion, depending on assumptions for growth and foreign exchange rates. We anticipate 2014 internal growth rates to be: SQ, 8% to 10%; LQ, 5% to 8%; international, 5% to 8%; and recall and returns revenues between $100 million to $120 million. We believe analysts will have estimates for free cash flow in 2014 between $392 million to $397 million. 2014 CapEx is anticipated to be between $70 million to $75 million. In closing, we are very pleased with our Q3 results and excited about the multiple growth opportunities for the future. Thank you for your time. And Mike, I'll ask you to open up the Q&A line.

[Operator Instructions] Your first question is from the line of Ryan Daniels with William Blair & Company. Ryan Daniels - William Blair & Company L.L.C., Research Division: Frank, let me start with a few, for you, housekeeping items. The tax rate was a little bit lower this quarter than we anticipated. So can you give us a little color on how that might shake on Q4? And then what are your tax rate assumptions for the EPS projection you provided for the forward year? Frank J. M. Ten Brink: Yes. So for the year of 2013, it's about 35%, and then for next year, it's about 36%. Ryan Daniels - William Blair & Company L.L.C., Research Division: Okay. And then in regards to the $41 million deposit you mentioned for returns and recalls, that actually for you to go out and buy inventory. And second question related to that, how quickly will that flow through the income statement? It sounds like that will be pushed out given that you really didn't change the guidance for this year on returns and recalls. Frank J. M. Ten Brink: Now so this is what this is. A customer may at times put money with us that we use to reimburse for incoming product. This is not a revenue for us. This is just money that we are asked to use to reimburse for recalled products. So this is not an issue on an income statement for us. This is just the deposit with us that would then get outbound to their customers. So in this case, we've had this in 2011, if people remember, kind of a larger deposit made. In this case, it also was a larger deposit on a recall that we're working on. Ryan Daniels - William Blair & Company L.L.C., Research Division: Okay, perfect. And then maybe just a couple of big-picture questions. One on patient communications, if we could get an update there. I know you were through the integration of Beryl, and just want to get a feel for if you're focusing more on M&A there or what you're seeing on the organic growth front? Frank J. M. Ten Brink: Yes, I think in the M&A front, there were 2 deals in the U.S. that were communication solution deals. So we certainly are focused on M&A. Sales efforts continue to evolve. The communication solution team has started to work very closely with our SQ and our LQ sales team, leveraging our relationships. The opportunity is out there right now in the marketplace, especially with the consolidation that's going on in health care, Ryan, where folks want to deal with one vendor for like services and communication solutions certainly falls within that. We are seeing evidence that there are more RFPs in this area, and we've won some nice contracts with some leading IDNs in the U.S. Ryan Daniels - William Blair & Company L.L.C., Research Division: Okay. So is that mostly replacement opportunities out of existing vendors? Are you seeing greenfield, too, where people don't utilize some of these communication services? Is there a heavier weighting towards one in the organic growth outlook? Charles A. Alutto: It's a combination. It is taking some market share from other folks in the industry. It's also where folks are doing an in-house, so hospital or doctors doing some of these functions in-house, and they're now outsourcing it to outside providers.

Your next question is from Al Kaschalk with Wedbush Securities. Albert Leo Kaschalk - Wedbush Securities Inc., Research Division: Charlie, just a follow-up on the patient communication question. Is this something where, I guess, that you're focused more on an LQ at the moment? Or given the platform of Beryl that the margin of customer coming in right now is on the SQ side? Charles A. Alutto: Yes, I think, it's both right now. We don't have one focus than the other. We're looking at the bigger picture. Obviously, when we first got into this space with the NotifyMD acquisition, that was more SQ-focused. Beryl gave us a nice platform to now add the LQ into the mix. And there was some crossover there or some services like after hour answering services that we sold on the SQ side, but now there's consolidation in the industry and large IDNs wanting to have one service provider that handle all their after-hour calls. So there is a lot of crossover, some SQ-like services that are now going into the LQ space. So it's really both that we're going after, both the LQ and the SQ. Albert Leo Kaschalk - Wedbush Securities Inc., Research Division: And what are the concerns or areas of touch points that your potential customer base may be expressing at this time for this service line? Charles A. Alutto: Yes, I think if you look at it, there are many different touch points. On the LQ side, like I said, if they're looking at all the locations they have, they might be looking for after-hour services of one vendor to provide a consistent after-hour service for all their locations. Post-discharge calls are getting a lot of attention now because of the reimbursement rates changing. Doctor's offices need to becomes more efficient, so products like appointment reminder certainly are a hot topic. So it's really across the board we're seeing different touch points in different facilities that we're servicing. Albert Leo Kaschalk - Wedbush Securities Inc., Research Division: But are they -- do you feel like or may you've expressed the words, "There's a lot of work to do in this area," and that's both an opportunistic phrase, as well as challenges. Are there any conversion issues that you're coming across now that you can share or anything of that nature? Charles A. Alutto: I mean it's the same that we said before. I mean, we're still working on building our common platform internally, which will help us better service our customers. And that's really the main player right now is the platform, software. So we can do a better job of consolidating some of the business that we've acquired. Albert Leo Kaschalk - Wedbush Securities Inc., Research Division: And just a clarification, 17 transactions, it sounded like 2 in-patient communication or communication services. What were the balance of the M&A service line? Charles A. Alutto: Yes, the other 15 were all in regulated waste, then the compliance services. Albert Leo Kaschalk - Wedbush Securities Inc., Research Division: Okay. And then finally, I mean, I hate to sound like I've been asleep for a while here. But obviously, the Affordable Care Act has had some impact on the business. Maybe it hasn't, but could you share sort of your thoughts on what this is doing and perhaps not doing to the end market, and maybe constructively, what the opportunistic -- opportunity is, say, in '14 and '15? Charles A. Alutto: Yes, I don't think our view has changed on the Affordable Care Act. I mean, certainly, there's been a lot in the news right now we think as it all plays out, there will be more people that are covered by insurance that creates for more volume, more volume potentially at SQ sites, which we think is a good thing for Stericycle. I think we're seeing some evidence of -- with this consolidation that larger IDNs we want to consolidate and go with one service provider. So certainly, we've seen some evidence of that. I think it is creating some uncertainty in the health care market. So it could potentially slow up the sales cycle and make the sales cycle longer on some of these. But I think those are the views that we've had for the last couple of quarters, and that really hasn't changed at all. And I think that goes forward into how we feel 2014 will play out.

The next question is from David Manthey with Robert Baird. David J. Manthey - Robert W. Baird & Co. Incorporated, Research Division: First off, on the tax rate, Frank, can you talk about why it was lower this quarter specifically? I think your guidance you had said it would be in the high 35s. I think it came in at 32. Could you talk about that? Charles A. Alutto: Yes. Q3 is obviously a timing, where there potentially could be some release of all the reserves with respect to the statute of limitation. And that's what benefited the rate in the quarter. David J. Manthey - Robert W. Baird & Co. Incorporated, Research Division: Okay. And second, throughout all of 2012, those domestic LQ and SQ growth was at the high end of your targeted internal ranges. And I'm wondering, were there anything specific in terms of what moved the needle there. Did you ramp some major projects or something? And, I guess, more broadly, I know you're talking a lot more about StrongPak and some of the retail opportunity you had there, could you talk about how you charge for the StrongPak service? And is there sort of a channel fill situation there or not? Frank J. M. Ten Brink: Yes, I think just to address StrongPak, as we've talked before, it's a service that we're now offering nationwide. And the way that we charge it basically is, it's on a per-stop basis, in some cases. In some cases, it's a flat rate. So it's sort of tailored to the customer's need, right? We still look at 750,000 retail locations in the U.S. and a market opportunity of $1 billion revenue. So the good thing is we know route business and know how to service customers who need compliance and waste disposal services. So we still think StrongPak is a very critical part of our growth. David J. Manthey - Robert W. Baird & Co. Incorporated, Research Division: Okay, but there was nothing specific. No specific major programs or anything that ramped up during 2012 that moved the needle higher than normal? Charles A. Alutto: I think the thing to kind of keep in mind, and we've said this, I think, in prior conference calls, as growth rates vary quarter to quarter, that's why we give you a range of growth rates for LQ, SQ and the like. And I think that StrongPak did contribute in 2012, and it will continue to contribute, but the StrongPak customers do come in, in large, large amount. I mean, it's a major contract with a major chain. So you will see some impact on growth rate comparability. David J. Manthey - Robert W. Baird & Co. Incorporated, Research Division: Okay, all right. And then finally, along the same lines, if you could address patient communications. And is that an activity-based or subscription-based type service? Just to be -- and help us understand how you are billing for that. Charles A. Alutto: Yes, it is a good question, David. It is a recurring revenue, so it behaves a lot like a core mid-waste business in StrongPak, and these are longer-term contracts with predictable revenue that comes along with them. David J. Manthey - Robert W. Baird & Co. Incorporated, Research Division: Okay. So it sounds like it's subscription-based then, not based on sort of number of calls taken or anything like that. Charles A. Alutto: It's a combination depending on the service line.

The next question is from Scott Schneeberger of Oppenheimer. Daniel Hultberg - Oppenheimer & Co. Inc., Research Division: This is Daniel Hultberg filling in for Scott. Going back to StrongPak, can you guys give us an update how that contributed in the quarter and also how we should think about the contribution when it comes to 2014 guidance? Charles A. Alutto: Yes, we don't break StrongPak out specifically. You'll see it obviously contributed to the growth rates in SQ and LQ, but we don't break it out specifically. Daniel Hultberg - Oppenheimer & Co. Inc., Research Division: Okay, fair enough. Also, as far as guidance goes, what kind of gross margin expectations should we think about? Frank J. M. Ten Brink: I think, again, if you look at the gross margin for next year, again, you take Q3, you probably have your normal 10- to 15-basis-point improvement. There'll be a slight lift from the mix impact on the acquisitions. But that's a little bit offset by also a higher SG&A expense. And then for next year, again, our normal trend, about 10 to 15 basis points quarter-over-quarter is what we would guide for. Daniel Hultberg - Oppenheimer & Co. Inc., Research Division: Great. One final for me, please. As far as the international growth in the quarter, can you take us a little deeper on the contributors there in terms of RMS and the Sharps Management and clinical service, please? Charles A. Alutto: Yes, on the breakdown for international growth, we did talk about a larger recall project that we had in Q2 that it was about a 1% to 1.5% increase. We did not see that again in Q3. We did have a 7% growth, so a good quarter in Q3. On international growth, we see the European escalators slowly improving. We are starting to get traction on clinical services certainly, and now it's Sharps Management. And then now we are offering more of a recall-type business in Europe. We might see the growth rate fluctuate quarter-to-quarter, depending on how large the recall that we handle on that particular quarter.

The next question is from Shlomo Rosenbaum with Stifel. Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc., Research Division: I just want to go back to a question that was just asked before just in terms of the movement of the organic growth rates. And I appreciate your comments that the organic growth rates kind of move around quarter-to-quarter. But did you guys sense that there was any change in the momentum of your business on an underlying basis at all? Or is it just seem to be like exact to that, that there's anomaly -- I won't even say an anomaly, but just sometimes, it's higher. Sometimes, it's lower. I guess, the question is that should we think about the growth rates going forward being towards the lower end of the range because of tougher comps versus what we saw over the last year? Charles A. Alutto: No. I think, I mean, to answer your question directly, there's really no change in underlying business, and we see always some are still hitting. And like we said, we're within our guidance. We've given indications of where we're going to be next year. The growth rates do vary, and the comparability can be a number of factors, influx of larger contracts or StrongPak or, as Charlie alluded to, other things that maybe going on. But frankly, we see very much steady state going forward. Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And then just on the domestic front, can you give at least qualitatively more detail in terms of the growth coming from areas like Sharps, Pharma, Steri-Safe, StrongPak. Is there one area that was doing particularly better or doing particularly worse in the quarter? Richard T. Kogler: Actually, I think that they're all doing pretty much online. I mean, I can give you an anecdote. This quarter, we signed our largest Pharma customer ever, a dramatically large customer. The team did a great job working on that for 6 months. So those are indications to me that, that multiple service, as well as others, are gaining traction. StrongPak has been a good contributor. So I don't really see any change in what we've discussed in prior quarters. Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And then Frank, tax rate for 4Q specifically, can you just tell us what to expect? Frank J. M. Ten Brink: Say it again? Tax rate for which year? Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc., Research Division: For 4Q this year, '13, net quarter. Frank J. M. Ten Brink: For the year, so it will be roughly 35% for the year. That's the rate I would use for the year. Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc., Research Division: So I should use the roughly 33% this quarter and kind of average them out for... Frank J. M. Ten Brink: Yes, and then average out, so you get roughly 35%. Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And then in terms of the organic growth in the international basis, Charlie, I've talked to you for a while about that eventually accelerating. The 7% growth we saw in this quarter, I mean is that something that we should think about over time that we should over the next, say, year or 2 that we should expect better organic growth out of international? Charles A. Alutto: Yes. I think it's safe. I mean, we gave guidance. It's going to be 5% to 8%. Obviously, we're coming off 2 very good quarters, but obviously, there's a lot of different markets that we're in. Things change on the pricing front, but we're very confident we'll be in the guidance range next year of 5% to 8%. Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And again, my last one, then I'll jump off. Can you just go over the geographic breakdown of those acquisitions? Again, I missed a bunch of that. Charles A. Alutto: There were 2 in the U.K., 2 in Romania, 1 in Mexico, 3 in Argentina, 1 in Spain and 1 in Canada. That's a total of 10 international, and there were 7 domestic.

Your next question is from Kevin Steinke with Barrington Research Associates. Kevin M. Steinke - Barrington Research Associates, Inc., Research Division: Just wondering if you could speak to the mix of SQ versus LQ business on the regulated waste acquisitions that were made, both domestically and internationally, please? Frank J. M. Ten Brink: Yes, the mix was about 30% SQ, 70% LQ. Kevin M. Steinke - Barrington Research Associates, Inc., Research Division: Was there any big variance international versus domestic or. . . Frank J. M. Ten Brink: International is slightly higher than LQ, but not a lot. Kevin M. Steinke - Barrington Research Associates, Inc., Research Division: Okay. Anything unique about the Communication Solutions acquisitions that you made this quarter? Frank J. M. Ten Brink: Nope. I mean, just the ones that we had done before and over time, really good synergized to be in our business. Kevin M. Steinke - Barrington Research Associates, Inc., Research Division: Okay. Then lastly, what sort of expectations do you have baked in to 2014 for SG&A as a percent of revenue? Frank J. M. Ten Brink: Yes, I think if you look for the year with the acquisitions that now came in, for the year, you're looking roughly at 19.3%. Roughly, that's an approximation of a percent to revenue. And again, that's SG&A, including amortization and stock option expense.

Next question is from Michael Hoffman with Wunderlich Securities. Michael E. Hoffman - Wunderlich Securities Inc., Research Division: Charlie, on the international growth, historically, there's been an uptick in the fourth quarter. There's a seasonal aspect to that. Should we be expecting that same trend or as the mix changed enough that maybe that doesn't happen? Charles A. Alutto: And you're referring to internal growth, Michael? Michael E. Hoffman - Wunderlich Securities Inc., Research Division: Yes. Yes, I mean, just when you look at sequentially, you have a much stronger fourth quarter sequentially than you do through the course of the year. And I'm -- it's just a pattern of that going back several years. Charles A. Alutto: Q3 tends be a little slower in some markets like Europe, from an overall business standpoint. So you can say that internal growth has an impact, but we're giving our internal growth number. It's quarter -- it's prior year guidance. It's prior year compared to this year, so that's really the comparable for internal growth. In general though, I will tell you that international business Q3 in Europe is slower. Michael E. Hoffman - Wunderlich Securities Inc., Research Division: Okay. And then on the SQ domestic organic growth when we look at -- and I think I got the number written down, it was coming quickly. I think 8%, is that right? Charles A. Alutto: That's correct. Michael E. Hoffman - Wunderlich Securities Inc., Research Division: Right. So how would you break it up between the price and volume component of that 8 versus the ancillary services part? Charles A. Alutto: It's a little bit over the CPI on the price side and then volume in the industry is, obviously, a little better on the SQ than the LQ. So that's a couple of percentage points, and then the rest is the additional services. Michael E. Hoffman - Wunderlich Securities Inc., Research Division: Okay. So if I sort of work that math, CPI is running around 2%. So on SQ, it splits pretty evenly between price and volume and ancillary services. Charles A. Alutto: Yes, that's a good approximation. Michael E. Hoffman - Wunderlich Securities Inc., Research Division: For the quarter, okay. And then if I think about that 4%, how would I divvy that up just proportionally between Steri-Safe up-selling or StrongPak or patient comps? Who's making the contribution in the quarter? Charles A. Alutto: It's even very difficult for us to split that out because here's a customer that went from transactional maybe to Steri-Safe, but we don't really equate volume necessarily after, it's very difficult for us to measure that ourselves. And so we do it as a combo in total. Michael E. Hoffman - Wunderlich Securities Inc., Research Division: Okay. Give me one of the thesis from the story is there's this great opportunity to continue to up-sell, so you have to have some data point that says, "Well we went from X number that didn't -- that was at the base level, but now they're in the middle level or they are the upper level," versus we have so many StrongPak customers or we don't, right? I mean, even at that level, you should be able to sort of figure out... Charles A. Alutto: Yes. So what happens is the revenue per account, for instance, for a 3-doc practice, maybe somewhere in the 1,200 thousand -- 1,200 per year for medical waste, so now we can more than double that if they sign up for the whole suite of Steri-Safe. So that gives you a flavor what the opportunity is. But again, we don't break it out afterwards how much was volume afterwards because that's not what's being tracked. Michael E. Hoffman - Wunderlich Securities Inc., Research Division: So then I guess from a management standpoint, how do you know whether you're being successful at improving in the up-sell? Just looking at the total dollar per customer? Charles A. Alutto: Yes, again, like I said, you have a customer that you have roughly a revenue on. And then in total, you see that, that revenue per customer is going up because they're signing up for those additional services. Michael E. Hoffman - Wunderlich Securities Inc., Research Division: Right. And I get that, but what point -- when do you realize that I should stop pressing so hard on the Steri-Safe and focus more on the other ones if you're not actually tracking the individual contribution? Charles A. Alutto: Again, they all contribute, Michael. And so it is part and you need to look at the growth rate. So an 8% includes that. And so that's a very important part of the picture. That will tell you that things are on track.

Next question is from Erin Wilson with Bank of America. Erin E. Wilson - BofA Merrill Lynch, Research Division: On patient communications, how penetrated are you in your addressable market in that arena now? And then where do you think that can go over the near term and longer term? Do you hit some sort of meaningful inflection point at some point? And are there any potentially new regulatory issues in that particular arena that can cause -- that you could offer service for as well? Frank J. M. Ten Brink: Yes, I think we've probably got a long way to go on the addressable market. We think it's a market opportunity. It's greater than $2 billion. Obviously, we're new into this space. We don't break it out, but it's one where we've got. We're in the early innings from the rollouts. So from an opportunity and this has got a long run ahead of us. I think your other question is, are there other services that we could add based on changes in regulations? Certainly, we're looking at that. We feel very comfortable where we are on the services we currently have, but over time, we will probably add additional services to that suite of menu that we give out on the whole Communication Solutions business. Erin E. Wilson - BofA Merrill Lynch, Research Division: Okay. And I think before previously, you've said you're about 10% penetrated for the Pharma Waste. Could you give an update on that metric? Richard T. Kogler: Yes, I don't think we've actually broken it out like that. But as we said, we continue to have good success, which is reflected in the LQ growth rates and obviously, it's a 200-plus million market opportunity that we've really just entered in the last couple of years.

Your next question is from David Lewis. David R. Lewis - Morgan Stanley, Research Division: Just one question. Charlie, I know the tone of the call is that metrics or trends really haven't changed in the results. But one thing here though that stands out to us is the LQ business across the last 4 quarters. If you look at the 12 period certainly stepped up from organic growth perspective versus the '10 and '11 -- I'm sorry, the '10-'11 periods. So there was that material step-up a year ago and that trend sort of continued. But in the last 4 quarters, we have seen LQ organic growth sort of go from upper single digits or 9% down to around 5%. That's a 4-quarter trend down. Can you just maybe talk to us through some of the factors that may be explaining why that's gone down 4 quarters in a row and why that's not a trend? Charles A. Alutto: Yes, I think when you look at LQ, you're talking about larger contracts. They are going to vary quarter to quarter depending on the timing of those contracts, whether or not we get a whole IDN that, let's say, takes our Pharmaceutical Waste services on. That's going to be a large influx of Rx Waste. StrongPak plays into LQ growth as well. So when you have StrongPak and Rx Waste over LQ, and it all comes in at one time, you can have that going to the upper end of our range of 9% in a particular quarter. So I think that really is the biggest impact on LQ, David. David R. Lewis - Morgan Stanley, Research Division: Okay. And Charlie, sorry, one more quick question based on something you said earlier. One of the interesting things about ACA may actually be that virtually every hospital CFO we talk to is preparing for actually declining utilization in an in-patient basis and expanding utilization in outpatient and ambulatory care. I mean, that dynamic alone should be a positive mix driver for Stericycle. Have you had any way been to -- I mean, first off, maybe you've seen it in your business this year or last year, do you have any way of sort of quantifying what that could mean to your business on a multiyear basis? Charles A. Alutto: We think -- we agree that the trend is heading in that direction. I think it aids both of our Medical Waste to Compliance business, as well as Communication Solutions business. I don't know if we've seen a meaningful enough yet to quantify, but we've seen some contract, like I've said especially on the Communication Solutions side that as they're growing their base of off-site services to meet Obamacare and these ACOs are being created, as well. They are looking at one service provider for a suite of services. And I think that certainly fits in well for both our Compliance services I've said before, and really now in our Communication Solutions side of the business. So we're seeing it in some RFPs and some wins. Nothing meaningful at this point, but certainly, the trend is heading in that direction.

Next question is from Isaac Ro with Goldman Sachs. Isaac Ro - Goldman Sachs Group Inc., Research Division: First one I had was on the international business, second one on ACA. On the international businesses, just wondering if you could maybe summarize the year-to-date margin improvement you think you see? And if you have a quantitative way to measure that? And the reason I ask is just trying to figure out what you think that trajectory looks like over the next 6, 12 months as you factor in the most recent range of deals. The international margin expansion piece in the story is obviously an important one. Frank J. M. Ten Brink: I think the international, like the U.S., I mean their goal, too -- and that's obviously what they're trying to achieve is continuously adding that 10 to 15 basis points quarter-over-quarter through internal improvements. What you, however, do have happen in that sector is a larger size of acquisitions relative coming in and that can many times fluctuate the mix for them. So you may have the result of that, you see, if not necessarily all the way come through the EBIT. Q3 normally for them is a fairly flat quarter to sometimes even slightly down because of the volumes in Europe as Charlie talked about and then it picks up again in Q4 a little bit. Isaac Ro - Goldman Sachs Group Inc., Research Division: Okay. And then on the ACA piece, I'm just wondering, Charlie alluded to sort of the increasing cadence of conversations regarding consolidation of services, such as yours. And I'm wondering if you could talk a little bit about the complexions we deal with when you speak with these IDN. Is it typically a CFO? Is there a Chief Procurement Officer that gets involved? I'm just trying to figure out kind of where you had the most success in penetrating sort of senior management levels these networks so that we have a sense of how quickly that sort of dynamic could take hold as ACA becomes a little more transparent of the process. Charles A. Alutto: The good news is when we first started the business, our point of contacts are more just in procurement and maybe in environmental services, which we're selling, just Waste services. I think the sales team is the great job of building relationships higher up in the organization. And certainly, building those relationships at the same time, building the Stericycle brand, have led us an opportunity to start dealing with -- depending on the service though, Isaac, I mean, if it's Communication Solutions, it's going to be more marketing or the support services. If it's Pharmaceutical Waste, there could be Chief Procurement Officers and Pharmacy Directors. It really depends on the service that we're selling in there. But in the end, we are having a better luck because we have higher relationships within the IDNs, within the hospitals. Isaac Ro - Goldman Sachs Group Inc., Research Division: If I could ask one last clarifying question on that item. If I sort of look specifically at the classic SQ-LQ parts of the business, and then try to assess where you guys have had the most success, can you characterize if you, at this point, spoken with maybe the majority of the major IDNs? Or is it still the minority when it comes to sort of the classic businesses and having conversations that are pretty senior level? Charles A. Alutto: I'm looking at the whole suite of services. It's a minority at this point. So we think it's a great opportunity as we forward to talk to more and more. And some IDNs are not at that stage. They're more acquiring right now, not thinking building platform so it really depends on where they're at.

Next question is from Sean Dodge with Jefferies. Sean Dodge - Jefferies LLC, Research Division: Going back to Pharmaceutical Waste, we look across the hospital landscape, where do you think compliance rates stand? Currently, when it comes to properly disposing of that stuff. And secondly there, how big of an inflection in demand of that service did you see after Pharma Waste became part of the JCAHO audit? Charles A. Alutto: Thanks, Sean. I think compliance rates are still relatively low. And the reason for that is there's a lot more state-driven from a regulatory standpoint. Having JCAHO now to look at the program and start to ask hospitals about compliance certainly helps. We've seen some evidence that, that has helped us in some of the sales over the last 12 to 18 months. But this is still more of a state-driven. We have some states that are definitely focused on this, and we see compliance rates a lot higher. In other states, they are lower. Sean Dodge - Jefferies LLC, Research Division: Okay. And how long ago was Pharma Waste added to the JCAHO audits? How long they've been auditing for that now? Charles A. Alutto: A little bit over about 18 months.

The next question is from Richard Close with Avondale Partners. Richard C. Close - Avondale Partners, LLC, Research Division: Question here on, I guess, the internal growth rates and as we think about 2014, and I just want to touch on the Large Quantity being at the low end, at 5% to 10% or 5% to 8%, but most recently 5%. If you think about next year at the 5% to 8%, what gets you, I guess, from the low end to the upper end in terms of 2014 on the Large Quantity? Maybe the puts and takes on that line item, please. Charles A. Alutto: I think if you look at the contributors to growth, it's Sharps Management, Rx Waste and StrongPak. So if all 3 hit at a very good pace, then it gets to the higher end of the range. It's not like we're adding new services to get to the higher end of the range. We're comfortable with the services that we have depending on timing of contracts and larger contracts. We'll depend on what we do in the quarter and obviously, it's going to vary quarter-to-quarter. But those are the 3 contributors to growth that certainly impacted. So if all 3 hit on a higher rate, we're going to be at the higher end. But we're very comfortable with the range. Richard C. Close - Avondale Partners, LLC, Research Division: So when we look at, I guess, the internal growth rates for all of the divisions for next year, are you assuming any additional product lines coming into the business, like patient communications or StrongPak anything like that, that helps assist growth going forward? Or is it just what's in your bag right now? Charles A. Alutto: Yes, certainly, it's what's in the bag right now. But were always enhancing the program offerings which sometimes helps escalate the sales process where we're comfortable with what we have right now are always looking to make improvements to those offerings. Richard C. Close - Avondale Partners, LLC, Research Division: Okay. Have we seen in any of the acquisitions, any additional service lines or offerings that maybe are not in a prime time, ready for prime time mode right now similar to StrongPak, I think, a couple of years ago that you got through an acquisition? Charles A. Alutto: No, not in this last quarter. Richard C. Close - Avondale Partners, LLC, Research Division: In may be the quarter previous? Anytime this year? Anything that you can talk about that you're incubating? Charles A. Alutto: In the previous quarter, did the RMS deal in the U.K. which added to our platform in Europe. Richard C. Close - Avondale Partners, LLC, Research Division: Final question for me as you look at the divisions, the domestic, SQ and LQ, and then you think about international. International seems to be on an uptick over the last couple of quarters, maybe LQ, trending down as was noted earlier. Where do you see the most opportunity in 2014? Where do you think is going to be the area that shows the most strength? Charles A. Alutto: I think the benefit of Stericycle is we've got multiple opportunities in each of the market. So we feel really good about SQ with Steri-Safe and StrongPak and LQ with Pharma Waste, Sharps and StrongPak in the LQ line as well. And the international market, with the expansion of RMS now in recalls and returns, and clinical services and Sharps Management certainly, we feel good about all 3 of our main lines of businesses in those 3 areas. Richard C. Close - Avondale Partners, LLC, Research Division: Okay. And I'll slip one final one in. Frank, just a clarification. On the SG&A expense as a percentage of revenue, the 19.3% number that you threw out there that includes the amortization and stock comp, was that for this year or for 2014? Charles A. Alutto: In fact, it's equal this year to next year, which really would mean that Q4 will be a little bit higher. And that's again a result of the influx of the acquisitions. They were running at a higher rate. So the SG&A in Q4 is probably going to be somewhere around 19.6%. But the margin also got benefited there a little bit to gross margin as I mentioned the acquisition mix was favorable there.

Next question is from Barbara Noverini with MorningStar. Barbara Noverini - Morningstar Inc., Research Division: With customers wishing to consolidate services into one contract, are you gaining better ability to craft longer contracts in exchange for being a one-stop shop? Perhaps, you offer customers smaller price increases year-over-year, as they accept all the larger suite of services and stay with you for a longer period of time? Charles A. Alutto: That hasn't really changed the length of the contract in the LQ space, 3 to 5 years on the SQ space, 5 years. So it really materially hasn't changed the length of the contract, Barbara. Barbara Noverini - Morningstar Inc., Research Division: Okay. Are those contracts lengths similar to internationally as well? Charles A. Alutto: It could be a little bit longer internationally. There's is a variance international where it could be as little as a year but up to 10 years in certain geographies.

Next question comes from Jason Rogers of Great Lakes Review.

Looking at the other expense line, the $1.3 million, could you indicate what that was? Frank J. M. Ten Brink: That can fluctuate based on things like currency. That's probably the biggest swing factor that can happen there. And the rest it's as a whole slew of things that can fluctuate and has so between anywhere like a $0.6 million to $1.5 million. Currency is a big driver there.

Speaking of currency, what's your estimate for the currency impact on sales for the fourth quarter? Charles A. Alutto: Again, that's too early. I mean, it will -- overall still, FX is a little bit of a headwind. We see that the currencies in Latin America are weakening a little bit. So we do anticipate that currency will have an impact, probably a couple of million at least in the foreign exchange in Q4.

And you indicated you have signed up your largest Pharma customer ever in the quarter, what business was that? Charles A. Alutto: We don't disclose any customer information, but it was Rx Waste. Pharma Waste, I'm sorry.

And then finally, accounts receivable up 18%, a little bit higher than the sales increase, is that due to the acquisitions? Charles A. Alutto: Yes. This acquisition, as I mentioned, the DSO count was 1 day down versus the prior quarter. There was obviously only $3.9 million in revenues in the quarter for those acquisitions. So if you think your average daily sales, you'd be too low what the ongoing amounts are on the balance sheet representing that receivable.

Next question is from Stewart Scharf. Stewart Scharf - S&P Capital IQ Equity Research: Could you talk a little about the general market environment? And I mean, your growth rates you're guiding to is generally consistent into '14 and hasn't changed much of the consistent growth. What would change any of those range, the range of 8% to 10%, SQ international, are there any specific markets that would impact those forecast? Frank J. M. Ten Brink: No, I think, Stewart, when we give a pretty wide range. So I think there are material changes -- not material change. Let's say European had a price slowdown in RPI pricing that has an effect on the business. But because of the ranges we give, I think we feel real comfortable that if there is something in the marketplace that we'll still be within that range. It's a steady market for us on all the different fronts on our business lines. So we don't really anticipate anything that would fluctuate greatly from the guidance that we've provided. Stewart Scharf - S&P Capital IQ Equity Research: Okay. And regarding the recalls and returns, you're looking at $100 million to $120 million in '14, how do you arrive at that range? Is it just based on historical recalls? Charles A. Alutto: Yes, I think the historical side, obviously, the recall trend is they've had continuously more recalls in this year versus last year. We have a very good repeat side in that business, so that obviously feeds the funnel over time, and that the difference between the $100 million and $120 million is merely having or not having larger recalls in the year or not. Stewart Scharf - S&P Capital IQ Equity Research: Okay. And as far as acquisition multiples, would you say it's still in the historical range 4 to 8x, or is it closer to the 8x now? Charles A. Alutto: No, it's definitely in the 4 to 8x, and that was also true for the third quarter.

There are no further questions. I will turn the call back over to the presenters.

Thank you, Mike. We appreciate everyone taking time to participate on today's call. Enjoy the cooler temperatures, and we'll see everybody on the road later this quarter. Have a great evening.

That concludes today's conference call. You may now disconnect.