Only Its Product Is Sterile

Steris is one of those small, obscure companies that appears poised to burst into a big market. Why? It's the developer and maker of Steris 1, a portable sterilizing system that uses a low-temperature, liquid-chemical process to sterilize surgical instruments at operating rooms in clinics and hospitals, as well as in laboratories. Already, Steris has posted stellar results for the year ended Mar. 31: Sales jumped 106%, to $26.6 million, and profits totaled $2.5 million, or 31 a share, vs. a loss in 1992.

Analyst Lynn Malkes at Roney & Co. sees earnings rising to 51 in fiscal 1994 and 77 in 1995. "With projected 50% annual sales and earnings growth for the next two to three years, an exceptional balance sheet, and competition almost nil in its market, Steris is a compelling buy," she says. Malkes sees the stock hitting 25 in a year.

What's more, her estimates don't take into account a new market that the company expects to be in as early as this year: biohazardous-waste disposal. Steris has just formed a joint pact with Ecomed, a private company with a proprietary technology for destroying discarded materials such as hypodermic needles and surgical sharp instruments. Steris and Ecomed have developed a trash compactor that destroys and decontaminates this kind of waste. The remains from the Steris-Ecomed compactor can be thrown away as ordinary garbage, says Steris Chairman and CEO Bill Sanford.

"We are ready to break into this business as soon as the Environmental Protection Agency gives us the go-ahead," says Sanford. The market for this waste-disposal system could be huge, he adds, perhaps becoming as large as Steris' sterilizing business.

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