United States
                          Securities and Exchange Commission
                                Washington, D.C. 20549
                                           
                                      FORM 10-Q
                                           
[x] Quarterly Report pursuant to Section 13 or 15(d) of the Securities 
    Exchange Act of 1934 for the quarterly period ended September 30, 1996.

[ ] Transition Report pursuant to Section B or 15(d) of the Securities 
    Exchange Act of 1934 for the transition period from _____________ to
    ___________.           

Commission file number 0-21229

                                   STERICYCLE, INC.
                (exact name of registrant as specified in its charter)
                                           
                      DELAWARE                                  36-3640402
            (State or other jurisdiction of                   (I.R.S. Employer
            incorporation or organization)                  Identification No.)
                              1419 LAKE COOK ROAD, SUITE 410
                                DEERFIELD, ILLINOIS 60015
                        (Address of principal executive offices)  
                                     (847) 945-6550
                      (Registrant's telephone number, including area code)

   Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter periods that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days. Yes _X_  No __

Indicate the number of shares outstanding of each of the issuer's classes of 
common stock, as of the latest practical date.

Common Stock, $.01 par value --- 9,998,328 shares as of  September 30, 1996

                                           

                          STERICYCLE, INC. AND SUBSIDIARIES
                                           
                                  INDEX TO FORM 10-Q
                                           
Part I.  Financial Information                                              Page

           Item 1.   Condensed Consolidated Financial Statements              3

                     Condensed Consolidated Balance Sheets                    3
                     September 30, 1996 and December 31, 1995

                     Condensed Consolidated Statements of Operations          4
                     Three months ended September 30, 1995 and 1996
                     Nine months ended September 30, 1995 and 1996

                     Condensed Consolidated Statements of Cash Flows          5
                     Nine months ended September 30, 1995 and 1996

                     Notes to Condensed Consolidated Financial Statements     6

           Item 2.   Management's Discussion and Analysis of Financial        9
                     Condition and Results of Operations 

Part II. Other Information                                                   13

           Item 6.   Exhibits and Reports on Form 8-K                        13

Signature                                                                    14

PART I. FINANCIAL INFORMATION              

                    STERICYCLE, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS

                                                         December 31,   September 30,
                                                             1995           1996
                                                                         (unaudited)
                                                         ------------   ------------
                                                                (in thousands)
                                                                  
ASSETS
Current Assets:
  Cash and cash equivalents                                     $138        $24,265
  Accounts receivable, less allowance for doubtful 
   accounts of $138 in 1995 and $168 in 1996                   3,731          4,634
  Parts and supplies                                             468            458
  Prepaid expenses                                               431            276
  Other                                                          424            448
                                                         ------------  ------------
    Total current assets                                       5,192         30,081
                                                         ------------  ------------

Property, Plant and Equipment:
  Land                                                            90             90
  Buildings and improvements                                   5,394          5,475
  Machinery and equipment                                      7,644          8,712
  Office equipment and furniture                                 406            442
  Construction in progress                                       281            325
                                                         ------------  ------------
                                                              13,815         15,044
  Less accumulated depreciation                               (3,587)        (4,765)
                                                         ------------  ------------
    Property, plant and equipment, net                        10,228         10,279
                                                         ------------  ------------

Other Assets:
  Goodwill, less accumulated amortization of 
   $417 in 1995 and $695 in 1996                               7,517          8,923
  Other                                                          554            532
                                                         ------------  ------------
    Total other assets                                         8,071          9,455
                                                         ------------  ------------

Total assets                                                 $23,491        $49,815
                                                         ===========   ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Current portion of long term debt                             $297         $1,815
  Accounts payable                                             1,868          1,110
  Accrued liabilities                                          1,956          2,570
  Deferred revenue                                               632            681
                                                         ------------  ------------
    Total current liabilities                                  4,753          6,176
                                                         ------------  ------------

Long Term Debt:
  Industrial development revenue bonds and other               2,284          2,137
  Note payable to bank                                           858              -
  Note payable                                                 2,480              -
                                                         ------------  ------------
    Total long term debt                                       5,622          2,137
                                                         ------------  ------------

Other Liablilities                                               542            543

Shareholders' Equity:
  Common stock (par value $.01 per share, 30,000,000 shares
    authorized, 5,582,385 issued and outstanding in 1995,
    9,998,328 issued and outstanding in 1996)                       55          100
  Additional paid-in-capital                                    49,621       79,551
  Notes receivable for common stock                                  -          (10)
  Accumulated deficit                                          (37,102)     (38,682)
                                                         -------------  ------------
    Total shareholders' equity                                  12,574       40,959
                                                         -------------  ------------

Total  Liabilities and Shareholders' Equity                    $23,491      $49,815
                                                         =============  ===========

Note:  The condensed consolidated balance sheet at December 31, 1995 has been 
derived from the audited financial statements at that date but does not 
include all of the information and footnotes required by generally accepted 
accounting principles for complete financial statements.

  The accompanying notes are an integral part of these financial statements.

                        STERICYCLE, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
                                  (UNAUDITED)

                                       For the three months ended    For the nine months ended
                                             September 30,                  September 30,
                                       --------------------------    -------------------------
                                           1995           1996          1995           1996
                                       -----------    ------------   -----------    ----------
                                            (in thousands, except share and per share data)
                                                                        
Revenues                                     $5,339         $6,313       $16,095       $17,930
 
Costs and expenses:
  Cost of revenues                            4,413          5,011        13,285        14,200
  Selling, general & administrative           1,733          1,802         6,396         5,118
                                       ------------   ------------   -----------    ----------
    Total costs and expenses                  6,146          6,813        19,681        19,318
                                       ------------   ------------   -----------    ----------

Loss from Operations                           (807)          (500)       (3,586)       (1,388)
 
Other income (expense):    
  Interest income                                 1            116             7           116
  Interest expense                              (68)          (102)         (171)         (308)
                                       ------------   ------------   -----------    ----------
    Total other income (expense)                (67)            14          (164)         (192)
                                       ------------   ------------   -----------    ----------
 
Net loss                                      ($874)         ($486)      ($3,750)      ($1,580)
                                       ------------   ------------   -----------    ----------

Net loss per common share                    ($0.13)        ($0.06)       ($0.54)       ($0.21)
                                       ------------   ------------   -----------    ----------
 
Weighted average number of
  common shares outstanding               6,974,820      8,202,555     6,974,820     7,401,916
                                       ============   ============  ============   ===========

      The accompanying notes are an integral part of these financial statements.

                           STERICYCLE, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (UNAUDITED)

                                                               For the nine months 
                                                               ended September 30,
                                                             ------------------------
                                                              1995            1996
                                                           ----------     -----------
                                                                (in thousands)
                                                                    
OPERATING ACTIVITIES:
Net Loss                                                      ($3,750)       ($1,580)
Adjustments to reconcile net loss to net cash used in
  operating activities:
  Depreciation and amortization                                 1,403          1,500
  Asset write down                                                503               -
  Settlement with regulatory agency                               273               -
  Gain on divestitures                                           (458)              -
Changes in operating assets & liabilities:
  Accounts receivable                                             823            (432)
  Parts and supplies                                              112              46
  Prepaid expenses and other                                      127             132
  Other assets                                                   (160)              7
  Accounts payable                                                166            (828)
  Accrued liabilities                                            (535)            623
  Deferred revenue                                                232              47
                                                           ----------     -----------
Net cash used in operating activities                          (1,264)           (485)
                                                           ----------     -----------

INVESTING ACTIVITIES:
Acquisitions, net of cash acquired                               (459)         (1,068)
Proceeds from divestitures                                        792               -
Capital expenditures                                             (282)           (626)
                                                           ----------     -----------
Net cash provided by (used in) investing activities                51          (1,694)
                                                           ----------     -----------

FINANCING ACTIVITIES:
Net payment of note payable to bank                                 -            (858)
Repayment of long term debt                                      (105)         (2,088)
Principal payments on capital lease obligations                  (393)           (227)
Proceeds from bridge loans                                        830           1,000
Proceeds from issuance of common stock                              3          28,479
Other                                                             (25)              -
                                                           ----------     -----------
Net cash provided by financing activities                         310          26,306
                                                           ----------     -----------

(Decrease) increase in cash and cash equivalents                 (903)         24,127
Cash and cash equivalents at beginning of period                1,206             138
                                                           ----------     -----------
Cash and cash equivalents at end of period                       $303         $24,265
                                                           ==========     ===========

Supplementary disclosure of cash flow information:
 Acquisition of machinery and equipment financed with a
  capital lease                                                  $  -            $364
                                                           ==========     ===========

 Issuance of common stock in payment of Safeway note             $  -          $1,488
                                                           ==========     ===========

      The accompanying notes are an integral part of these financial statements.

                          STERICYCLE, INC. AND SUBSIDIARIES
                           NOTES TO CONDENSED CONSOLIDATED
                               FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                SEPTEMBER 30, 1996

NOTE 1 _ BASIS OF PRESENTATION

      The accompanying 1995 and 1996 unaudited interim condensed consolidated 
financial statements have been prepared pursuant to the rules and regulations 
of the Securities and Exchange Commission. Certain information and footnote 
disclosures normally included in annual consolidated financial statements 
prepared in accordance with generally accepted accounting principles have 
been condensed or omitted pursuant to such rules and regulations, although 
the Company believes these disclosures are adequate to make the information 
presented not misleading. During the nine months ended September 30, 1995, 
the Company recorded a write-down in the carrying value of a project to 
utilize treated regulated medical waste as an alternative fuel in the 
production of cement. The Company realized that the viability and completion 
of the project were doubtful and that, if the project were completed, the 
economic cost would not permit the Company to recover its investment. In the 
opinion of management, all adjustments necessary for a fair presentation for 
the periods presented have been reflected and, with the exception of the 
asset write-down during the nine months ended September 30, 1995, are of a 
normal recurring nature. These interim condensed consolidated financial 
statements should be read in conjunction with the consolidated financial 
statements and notes thereto for the three years ended December 31, 1995. The 
results of operations for the nine-month period ended September 30, 1996 are 
not necessarily indicative of the results that may be achieved for the entire 
year ending December 31, 1996. 

NOTE 2 _ ACQUISITIONS

      In April 1996, the Company purchased the customer list and certain other 
assets, totaling approximately $200,000, of Sharps Incinerator of Fort, Inc. 
for $757,000 in cash of which $562,000 was payable at closing and the balance 
plus interest (prime plus 1%) is due on November 1, 1996. This transaction 
was accounted for using the purchase method of accounting. 

      In May 1996, the Company purchased the customer list and certain other 
assets of Doctors Environmental Control, Inc. for $400,000 in cash and notes 
payable issued for $600,000, which were payable on May 1, 1998 with an 
interest rate of 6% per annum. In addition, the Company assumed two vehicle 
leases totaling $77,000, which were paid off in full in May 1996, and 
delivered four option agreements to shareholders of the seller giving them an 
option to purchase up to a total of 53,816 shares of the Company's common 
stock. The price for the purchase of the common stock upon exercise of each 
option was the surrender and cancellation of the note payable. The four 
options were exercised in August 1996. The transaction was accounted for 
using the purchase method of accounting.

      These acquisitions are not significant to results of operations for the 
nine months ended September 30, 1996. 

NOTE 3 _ BRIDGE LOAN

      In May 1996, the Company obtained a $1,000,000 bridge loan from certain 
shareholders, directors and officers to provide working capital and to 
finance additional acquisitions. The notes were subordinated to bank debt and 
bear interest at the rate of 7% per annum unless repaid prior to January 
1997. The notes were due in May 1997 or within 30 days after completion of an 
initial public offering in which the Company raised at least $20,000,000. In 
connection with this loan, the Company issued warrants to members of the 
lending group to purchase an aggregate of 226,036 shares of common stock at 
$7.96 per share. The warrants expire in May 2001. The bridge loan was repaid 
in  August 1996.

                          STERICYCLE, INC. AND SUBSIDIARIES
                  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                SEPTEMBER 30, 1996

NOTE 4 _ STOCK OPTIONS

       During the quarter ended March 31, 1996 the Board of Directors granted 
options to purchase 49,073 shares of common stock to key employees. The 
options will vest over 12 to 36 months at an exercise price of $0.53 per 
share. 

       Additionally, during the first quarter the Board approved the options 
to purchase 30,826 shares of common stock by various consultants to the 
Company. The options carry an exercise price of $2.12 per share. 

       In April 1996, the Board of Directors granted options to purchase 
149,984 shares of common stock to employees. The options will vest over 12 to 
48 months and carry an exercise price of $1.99 per share. 

       In June 1996, the Company's Board of Directors adopted the Directors 
Stock Option Plan. The plan authorizes stock options for a total of 285,000 
shares of common stock to be granted to eligible directors of the Company, 
consisting of directors who are neither officers nor employees of the 
Company. Under such plan, each incumbent eligible director automatically 
received an option as of the date of closing of the Company's initial public 
offering for 8,195 shares of common stock, determined by multiplying 7,000 
shares by a fraction, the numerator of which was $12.00 and the denominator 
of which was the average of the closing bid and asked prices of a share of 
common stock (the "closing price") on the date of grant. As of each annual 
meeting of the Company's stockholders after the date of the Company's initial 
public offering, each incumbent eligible director who is re-elected as a 
director at the annual meeting will automatically receive an option for a 
number of shares of common stock determined by multiplying 7,000 shares by a 
fraction, the numerator of which is $12.00 and the denominator of which is 
closing price on the date of the annual meeting, and each eligible director 
who is elected as a director for the first time will automatically receive an 
option for a number of shares of Common Stock determined by multiplying 
21,000 shares by a fraction, the numerator of which is $12.00 and the 
denominator of which is closing price on the date of the annual meeting. 
These option grants are subject to a maximum grant of 9,500 shares and a 
minimum grant of 4,500 shares (or to a maximum grant of 28,500 shares and a 
minimum grant of 13,500 shares in the case an eligible director who is 
elected as a director for the first time at an annual meeting). In addition, 
each eligible director who is elected as a director for the first time other 
than at an annual meeting of the Company's stockholders will automatically 
receive, as of the date of his or her election, an option for a number of 
shares of common stock equal to three times the number of shares of common 
stock for which each incumbent eligible director received an option as of the 
last annual meeting. The exercise price of each option will be the closing 
price on the date of grant. The term of each option will be six years from 
the date of grant and will vest in 16 equal quarterly installments and may be 
exercised only when it is vested and only while the holder of the option 
remains a director of the Company or during the 90-day period following the 
date that he or she ceases to serve as a director. With the approval of the 
Company's Board of Directors, the holder of an option may pay the exercise 
price by delivering other shares of common stock, by surrendering exercisable 
options having a fair market value on the date of exercise equal to the 
exercise price, or by directing the Company to withhold shares of common 
stock otherwise issuable upon exercise of the option having a fair market 
value on the date of exercise equal to the exercise price, or by a 
combination of these methods.

                          STERICYCLE, INC. AND SUBSIDIARIES
                  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                SEPTEMBER 30, 1996

NOTE 5 _ STOCK ISSUANCES

       In May 1996, warrants to purchase 59,128 shares of common stock were 
exercised at a price of $1.59 per share. In May and June 1996, options to 
purchase 24,233 shares and 459,844 shares of common stock, respectively, were 
exercised at prices of $2.12 per share and $0.53 per share, respectively. In 
August options to purchase 186,765 shares of common stock were exercised at a 
price of $.53 per share. In August and September 1996, warrants to purchase 
107,622 shares of common stock were exercised at a price of $1.59 per share.

NOTE 6 _ INCOME TAXES

       The Company incurred a net operating loss for the nine months ended 
September 30, 1995 and 1996. Any tax benefit resulting from these net 
operating losses has been offset by a valuation allowance. 

NOTE 7 _ EMPLOYEE STOCK PURCHASE PLAN

       Under a plan approved by the Board of Directors for 1995, employees of 
Stericycle could purchase shares of common stock at a price of $2.12 per 
share. Under terms of the plan employees were allowed to purchase shares by 
December 31, 1995 and pay for the stock during 1996. Employees elected to 
purchase a total of 30,232 shares of common stock. 

NOTE 8 _ STOCK SPLIT

       All common shares, per share, weighted average shares outstanding, 
stock option and warrant data have been adjusted to reflect a 1-for-5.3089 
reverse stock split effective August 19, 1996. In connection with this 
reverse stock split, each outstanding share of the Company's Class A and 
Class B common stock was redesignated as a share of common stock, and the 
Company's authorized common stock was reduced from 58,000,000 to 30,000,000 
shares, also effective August 19, 1996. 

NOTE 9 _ RELATED PARTIES

       In October 1993, the Company entered into an Alliance Agreement 
("Alliance") with an investor in the Company. The Alliance gives the investor 
the right, under certain limited circumstances which are not within the 
investor's control, to require the Company to redeem the investor's 461,028 
shares of the Company's common stock. The redemption price upon any such 
redemption is currently not defined. This redemption right terminates 180 
days from the date of the Company's initial public offering of common stock. 
Due to the limited circumstances and remote possibility of a redemption of 
these shares, the Company has recorded the investor's investment in 
shareholders' equity in the accompanying balance sheet. 

NOTE 10 _ INITIAL PUBLIC OFFERING

On August 28, 1996 the Company successfully completed an initial public 
offering of three million shares of common stock at $9 per share. On August 
30, 1996 the underwriters exercised their option to purchase an additional 
450,000 shares. The Company received total proceeds from the offering, net of 
offering costs, of $27,726,000.

      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 
OF OPERATIONS

The Company provides regulated medical waste collection, transportation,
treatment, disposal, reduction, reuse and recycling services to its customers,
together with related training and education programs and consulting services.
The Company also sells ancillary supplies and transports pharmaceuticals,
photographic chemicals, lead foil and amalgam for recycling in selected
geographic service areas.

THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED 
SEPTEMBER 30, 1995

REVENUES.  Revenues increased $974,000, or 18.2%, to $6,313,000 during the 
three months ended September 30, 1996 from $5,339,000 during the comparable 
period in 1995 as the Company continued to implement its strategy of focusing 
on sales to higher-margin Alternate Care generators while simultaneously 
paring certain higher-revenue but lower-margin accounts with Core generators. 
This increase also reflects the inclusion of three months of revenues from 
the WMI Medical Services of New England, Inc. ("WMI-NE") acquisition, which 
was completed in January 1996, and the Doctors Environmental Control, Inc. 
("DEC") and Sharps Incinerator of Fort, Inc. ("Sharps") acquisitions, both of 
which were completed in May 1996.

COST OF REVENUES.  Cost of revenues increased $598,000, or 13.6%, to 
$5,011,000 during the three months ended September 30, 1996 from $4,413,000 
during the comparable period in 1995. The principal reasons for the increase 
were higher transportation costs as a result of the WMI-NE, DEC and Sharps 
acquisitions and start-up expenses related to the Company's expansion into 
new geographic areas where the Company primarily serves Alternate Care 
generators. Cost of revenues as a percentage of revenues decreased to 79.4% 
during the three  months ended September 30, 1996 from 82.7% during the 
comparable period in 1995. 

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and 
administrative expenses increased to $1,802,000 for the three months ended 
September 30, 1996 as compared to $1,733,000 for the comparable period in 
1995 due to the increased focus on sales to the alternate care market. 
Selling, general and administrative expenses as a percentage of revenues 
decreased to 28.5% during the three  months ended September 30, 1996 from 
32.5% during the comparable period in 1995. 

INTEREST EXPENSE AND INTEREST INCOME.  Interest expense increased to $102,000 
during the three  months ended September 30, 1996 from $68,000 during the 
comparable period in 1995. This increase was primarily attributable to higher 
indebtedness under the Company's revolving credit facility. Interest income 
increased to $116,000 during the three months ended September 30, 1996 from 
$1,000 during the comparable period in 1995 primarily due to the investment 
of the proceeds from the initial public offering in August 1996.

NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED 
SEPTEMBER 30, 1995

REVENUES.  Revenues increased $1,835,000, or 11.4%, to $17,930,000 during the 
nine months ended September 30, 1996 from $16,095,000 during the comparable 
period in 1995 as the Company continued to focus on sales to higher-margin 
Alternate Care generators. This increase also reflects the inclusion of nine 
months of revenues from the Safetech Health Care, Inc. ("Safetech") 
acquisition, which was completed in June 1995, eight months of revenues from 
the WMI-NE acquisition, and five months of revenues from the DEC and Sharps 
acquisitions. The increase in revenues was partially offset by a decline in 
revenues from miscellaneous product sales during the nine months ended 
September 30, 1996 and the sales in April and July 1995 of certain 
unprofitable customer accounts and related assets obtained through 
acquisitions. 

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

COST OF REVENUES.  Cost of revenues increased $915,000, or 6.9%, to 
$14,200,000 during the nine months ended September 30, 1996 from $13,285,000 
during the comparable period in 1995. The principal reasons for the increase 
were higher transportation costs as a result of the Safetech, WMI-NE, DEC and 
Sharps acquisitions and start-up expenses related to the Company's expansion 
into new geographic areas where the Company primarily serves Alternate Care 
generators. Cost of revenues as a percentage of revenues decreased to 79.2% 
during the nine months ended September 30, 1996 from 82.5% during the 
comparable period in 1995. 
                                           
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and 
administrative expenses decreased to $5,118,000 during the nine months ended 
September 30, 1996 from $6,396,000 during the comparable period in 1995. This 
decrease was primarily attributable to a reduction in expenditures to develop 
treated medical waste as an alternate fuel for the production of cement and 
to savings from the integration into the Company's operations of the Safe Way 
Disposal Systems, Inc. ("Safe Way") acquisition in 1994. These savings 
resulted from the elimination of redundant employee and staff positions and 
the reallocation of resources to Alternate Care generators. In addition, 
corporate costs and permitting expenses were at lower levels during the 
current period than they were during the comparable period in 1995. Selling, 
general and administrative expenses as a percentage of revenues decreased to 
28.5% during the nine months ended September 30, 1996 from 39.7% during the 
comparable period in 1995. 

INTEREST EXPENSE AND INTEREST INCOME.  Interest expense increased to $308,000 
during the nine months ended September 30, 1996 from $171,000 during the 
comparable period in 1995 due to higher indebtedness under the Company's 
revolving credit facility. Interest income increased to $116,000 during the 
nine months ended September 30, 1996 from $7,000 during the comparable period 
in 1995 due to the investment of the proceeds from the initial public 
offering in August 1996.

LIQUIDITY AND CAPITAL RESOURCES

       On August 28, 1996 the Company successfully completed an initial 
public offering of 3 million shares of common stock at $9 per share. On 
August 30, 1996 the underwriters exercised their option to purchase an 
additional 450,000 shares. The Company received total proceeds from the 
offering, net of offering costs, of $27,726,000. 

       Prior to the initial public offering, the Company was financed 
principally through the sale of preferred stock to investors. Purchasers of 
preferred stock have invested more than $50,137,000 in capital which has been 
used to fund research and development, acquisitions, capital expenditures, 
ongoing operating losses and working capital requirements. The Company has 
also been able to secure plant and equipment leasing or financing in 
connection with some of its facilities. These debt facilities are secured by 
security interests in the financed assets. In addition, during 1995 the 
Company was able to obtain a $2,500,000 revolving line of credit secured by 
accounts receivable and a security interest in all other assets of the 
Company. 

       During 1995 the Company's stockholders approved a plan of 
recapitalization, pursuant to which all of the Company's outstanding shares 
of preferred stock were reclassified as shares of new Class A common stock. 
As a result, the Company was able to eliminate any liability for accrued but 
unpaid dividends on its preferred stock and the preferential rights on 
liquidation of holders of preferred stock. 

       At September 30, 1996, the Company's working capital was $23,905,000 
compared to $(570,000) at September 30, 1995. The increase was primarily due 
to the proceeds from the initial public offering in August 1996. During the 
nine months ended September 30, 1996, the Company's depreciation and 
amortization expense of $1,500,000 exceeded its loss from operations of 
$1,388,000, resulting in cash flow from operations of $112,000 excluding 
changes in working capital accounts.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

       The Company will use its line of credit as appropriate to fund cash 
requirements of any future acquisitions. In August 1996 the Company paid down 
the balance due on the line of credit of $1,846,000. The revolving credit 
facility matures in October 1997. The facility requires the Company to 
maintain certain financial ratios and consult with the bank on acquisitions 
and also includes a prohibition on the payment of dividends.
                                           
      In May 1996, the Company borrowed $1,000,000 under a short-term loan 
from a lending group comprised of certain officers, directors and 
stockholders of the Company to provide working capital. The subordinated 
notes issued in connection with this loan were interest-free if paid when 
due, subject to certain exceptions, and were due within 30 days after 
completion of the initial public offering. This loan was paid in full on 
August 30, 1996.

       The Company's other financial obligations include industrial 
development revenue bonds issued on behalf of and guaranteed by the Company 
to finance its Woonsocket, Rhode Island treatment facility and equipment. 
These bonds, which had an outstanding aggregate balance of $1,526,000 as of 
September 30, 1996 at fixed interest rates ranging from 5.8% to 7.4%, are due 
in various amounts through June 2017. An agreement entered into by the 
Company in connection with the issuance of these bonds requires the Company 
to maintain specified levels of working capital and other debt and net worth 
ratios. As of December 31, 1995, the Company reclassified its reusable 
containers as long-term assets based upon their expected useful lives, which 
resulted in a violation of the Company's requirement to maintain a specified 
current ratio on December 31, of each year. The Company received a waiver of 
this requirement for December 31, 1995, to the extent of any violation as a 
result of the Company's reclassification of its reusable containers. Any 
violation of this or the other requirements of the Company's agreement in 
connection with the issuance of the industrial development revenue bonds 
would constitute a default under the Company's revolving credit facility with 
Silicon Valley Bank. 

       In connection with the Safe Way acquisition, the Company issued a note 
to Safe Way for $2,480,000  which did not bear interest and was due upon 
completion of the Company's initial public offering. The Safe Way Note was 
payable in cash for 40% of its face amount, or $992,000, and 60% in stock, or 
98,001 shares of Common Stock. The stock was issued in August 1996 in payment 
of the stock portion of this note. The Company has deferred payment of the 
cash portion of this note pending changes to the escrow agreement between 
Safe Way and its principal lender.

       The Company has an obligation to pay the Rhode Island Air and Water 
Protection Fund $35,000 each year from 1995 to 1998, $50,000 in 1999, $60,000 
in 2000 and $150,000 in 2001. Without admitting liability, the Company agreed 
to make these payments as part of a settlement of two notices of violations 
issued by the Rhode Island Department of Environmental Management in 1994 and 
1995. Although the Company disputed both the nature and extent of the alleged 
violations, the Company entered into the settlement in order to resolve the 
matter in the best interests of the Company and its customers in a timely 
manner. The Company recorded the present value of all payments to the Air and 
Water Protection Fund and the Company's legal fees relating to the matter as 
expenses in 1995. Under the settlement agreement, the Company is also 
required to perform certain community service and educational projects, 
including conducting environmental management seminars. The Company has 
accrued the expenses associated with conducting these activities.

       In connection with the Sharps acquisition, the Company issued a note 
payable to Sharps for $195,000 due on November 1, 1996 and bearing interest 
at the rate of prime rate plus 1%. The Company has deferred payment on this 
note pending adjustments to the purchase price.

                                           
      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 
OF OPERATIONS
                                           
       Capital expenditures for 1996 are currently estimated to be 
approximately $2,350,000, of which approximately $1,600,000 is for the 
construction and equipping of a treatment facility at the Company's San 
Leandro, California transfer station and approximately $750,000 is for 
containers and transportation equipment. Capital expenditures were $626,000 
for the nine month period ended September 30, 1996, compared to $282,000 for 
the same period in 1995. This increase was primarily due to plant projects at 
the Woonsocket, Rhode Island and Morton, Washington facilities. The Company 
did not open any new treatment facilities during 1995. The Company may decide 
to build additional treatment facilities as volumes increase in the Company's 
current geographic services areas or as the Company enters new areas. The 
Company also may elect to increase capacity in its existing treatment 
facilities, which would require additional capital expenditures. In addition, 
capital requirements for transportation equipment will continue to increase 
as the Company grows. The amount and level of these expenditures cannot be 
determined currently as they will depend upon the nature and extent of the 
Company's growth and acquisition opportunities. The Company believes that 
cash flow from operations and funds provided from the initial public offering 
will fund its capital requirements through 1997. 

       Net cash used for operations decreased to $485,000 for the nine month 
period ended September 30, 1996 from $1,264,000 for the comparable period in 
1995. The reduced cash usage reflects a smaller net loss, higher depreciation 
and amortization expenses and increased accrued liabilities, which was 
partially offset by increased accounts receivable collections and decreases 
in accounts payable.

       Net cash used in investing activities was $1,694,000 for nine months 
ended September 30, 1996. Net cash provided from investing activities was 
$51,000 for the comparable period in 1995. The increase in the usage of cash 
was due to the WMI-NE, DEC and Sharps acquisitions in 1996 and the benefit 
from the sale in April 1995 of certain unprofitable customer accounts and 
related assets obtained through acquisitions. 

       Net cash provided by financing activities increased to $26,306,000 for 
the nine months ended September 30, 1996 from $310,000  for the comparable 
period in 1995. The difference is primarily attributable to the initial 
public offering in August 1996.

       FROM TIME TO TIME THE COMPANY MAY ISSUE FORWARD-LOOKING STATEMENTS 
RELATING TO SUCH THINGS AS ANTICIPATED FINANCIAL PERFORMANCE, BUSINESS 
PROSPECTS, ACQUISITION ACTIVITIES AND SIMILAR MATTERS. THE PRIVATE SECURITIES 
LITIGATION REFORM ACT OF 1995 PROVIDES A SAFE HARBOR FOR FORWARD-LOOKING 
STATEMENTS. IN ORDER TO COMPLY WITH THE TERMS OF THE SAFE HARBOR, THE COMPANY 
NOTES THAT A VARIETY OF FACTORS COULD CAUSE THE COMPANY'S ACTUAL RESULTS AND 
EXPERIENCE TO DIFFER MATERIALLY FROM THE ANTICIPATED RESULTS OR OTHER 
EXPECTATIONS EXPRESSED IN THE COMPANY'S FORWARD-LOOKING STATEMENTS. THE RISKS 
AND UNCERTAINTIES THAT MAY AFFECT THE COMPANY'S BUSINESS, FINANCIAL CONDITION 
AND RESULTS OF OPERATION INCLUDE: DIFFICULTIES AND DELAYS IN COMPLETING AND 
INTEGRATING BUSINESS ACQUISITIONS; DELAYS AND DIVERSION OF ATTENTION RELATING 
TO PERMITTING AND OTHER REGULATORY COMPLIANCE; DIFFICULTIES AND DELAYS 
RELATING TO MARKETING AND SALES ACTIVITIES; AND GENERAL UNCERTAINTIES 
ACCOMPANYING THE EXPANSION INTO NEW GEOGRAPHIC SERVICE AREAS.

PART II. OTHER INFORMATION              

Item 6.     EXHIBITS AND REPORTS ON FORM 8-K

       (a)  EXHIBITS

            11   Statement Re: Computation of Per Share Earnings
            27   Financial Data Schedule

       (b)  REPORTS ON FORM 8-K

            There were no reports on Form 8-K filed by the Company for the 
            quarter ended September 30, 1996.

                                      SIGNATURE
                                           
     Pursuant to the requirements of the Securities and Exchange Act of 1934, 
the registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

                                     Stericycle, Inc.

Date:  November 13, 1996             By: /s/ James F. Polark
                                     ---------------------------------------
                                     James F. Polark
                                     Vice President, Chief Financial Officer
                                     (Principal Financial and Accounting 
                                     Officer)

                                                                    Exhibit 11

                      STERICYCLE, INC. AND SUBSIDIARIES
             STATEMENT RE:  COMPUTATION OF PER SHARE EARNINGS
                             (UNAUDITED)

                                                 For the three               For the nine 
                                                 months ended                months ended
                                                 September 30,               September 30,
                                               -----------------------  -----------------------
                                                  1995         1996          1995        1996
                                                ---------    ---------    ---------    ---------
                                                                           
Weighted average common shares
  outstanding                                   5,605,495    7,668,295    5,605,495    6,663,738
Assumed conversion of Safeway note                 98,001       98,001       98,001       98,001
Common stock equivalents pursuant to
 SAB No. 83:
Net effect of stock options and warrants
  issued within one year of initial filing
  (June 11, 1996) - based on the treasury
  stock method                                  1,271,324     436,259    1,271,324      640,177
                                                ---------    ---------    ---------    ---------

Total                                           6,974,820   8,202,555    6,974,820    7,401,916
                                                ---------    ---------    ---------    ---------
                                                ---------    ---------    ---------    ---------
 
Net loss                                            ($874)      ($486)     ($3,750)     ($1,580)
                                                ---------    ---------    ---------    ---------
                                                ---------    ---------    ---------    ---------
 
Per share amount                                   ($0.13)     ($0.06)      ($0.54)      ($0.21)
                                                ---------    ---------    ---------    ---------
                                                ---------    ---------    ---------    ---------

  

 5
 1,000

                   9-MOS
                          DEC-31-1996
                             JAN-01-1996
                               SEP-30-1996
                                           24265
                                         0
                                     4802
                                       168
                                        458
                                 30081
                                           15044
                                    4765
                                   49815
                             6176
                                           2137
                                0
                                          0
                                           100
                                       40859
                     49815
                                              0
                                 17930
                                                0
                                    19318
                                     0
                                     0
                                 308
                                 (1580)
                                         0
                             (1580)
                                       0
                                      0
                                            0
                                    (1580)
                                    (.21)
                                    (.21)