Another quarter has gone by, and results at STERIS (NYSE:STE) still don't look all that healthy. While there are some bright spots in the story and management seems optimistic, the top line just doesn't lie.

Sales growth at this infection-prevention and -control company couldn't crack double digits in the second quarter, with total sales growth reported at 9%. Once again, the life sciences business was weak (sales down 6%), the health-care business was so-so (10% reported growth, 6% organic growth), and the Isomedix business got most of its growth through acquisition (33% reported growth and 7% organic growth).

Margins also took a bit of beating in the period. Higher raw material costs hurt gross margins, but increased non-research operating expenses did their damage as well. Operating margins fell from a mediocre 11% last year to an even more mediocre 9.8% for this period. As a result, reported operating and net income were actually down a bit versus last year.

I've followed this company off and on for almost 10 years now, and I can't say I'm overly enamored of what I see in the business these days. Looking at the double-digit disposables growth but weak overall revenue growth, I think I know what's going on here.

Hospitals have only a finite amount of money to spend on equipment, and it looks as though new equipment from STERIS just isn't a priority. When you look at the high cost of new equipment -- whether it's IntuitiveSurgical's (NASDAQ:ISRG) robots or multimillion-dollar medical imaging equipment from the likes of General Electric (NYSE:GE) or Philips (NYSE:PHG) -- it's easy to see how hospital budgets might be under pressure.

A turnaround here is not out of the question, but it will be difficult for the company to claw its way back against the likes of Johnson & Johnson (NYSE:JNJ), 3M (NYSE:MMM), and Kimberly-Clark (NYSE:KMB).

To its credit, the company continues to produce free cash flow and it sounds as though management is attempting to expand into new non-medical markets. That said, new market opportunities will take years to bear real fruit. They also don't change the nearly stagnant state of the company's core medical business -- at least in comparison to the larger medical device/health-care sector.

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Intuitive Surgical is a Motley Fool Rule Breakers recommendation.

Fool contributor Stephen Simpson owns shares of Johnson & Johnson.