Stericycle reported strong fourth quarter 2014 results with year over year improvements in both earnings and revenues. The company is witnessing strong growth globally, driven by accretive acquisitions, new account wins and expansion of its portfolio of service offerings. Its acquisition pipeline remains robust across various geographies, generating operational synergies and aiding expansion. However, relatively higher overheads and integration-related costs resulting from acquisitions could have an adverse impact on operating margins in future. Nevertheless, we maintain our long-term Neutral recommendation on the stock as we expect it to perform in line with the broader market.
Incorporated in 1989 and headquartered in Lake Forest, Illinois, Stericycle Inc. is a leading provider of regulated medical waste management and product recall and return services in the U.S. It operates a national medical waste management network that caters to medical schools, hospitals, and other healthcare providers. Medical waste includes single-use disposables like needles, syringes, gloves, and other supplies that have been in contact with blood or other body fluids, blood products and other items that can spread infection. The company operates in the U.S., Argentina, Canada, Mexico, Chile, the United Kingdom, Ireland and Romania, with a network of 175 processing or combined processing and collection sites, and an additional 154 transfer, collection, or combined transfer and collection sites.
Stericycle's customers fall into two categories: small-quantity (SQ) (outpatient clinics, medical and dental offices, long-term and sub-acute care facilities, and retail pharmacies) and large-quantity (LQ) account (hospitals, blood banks, and pharmaceutical manufacturers). The company caters to a wide clientele spread across the domestic and international markets.