Sotera Health Company (SHC) came out with quarterly earnings of $0.17 per share, missing the Zacks Consensus Estimate of $0.19 per share. This compares to earnings of $0.21 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -10.53%. A quarter ago, it was expected that this company would post earnings of $0.17 per share when it actually produced earnings of $0.19, delivering a surprise of 11.76%.Over the last four quarters, the co ...

CLEVELAND, Sept. 04, 2024 (GLOBE NEWSWIRE) -- Sotera Health Company (Nasdaq: SHC) (the "Company") today announced the launch of a secondary offering (the "Offering") of 25,000,000 shares of its common stock, par value $0.01 per share. All 25,000,000 shares are being offered for sale by certain affiliates of Warburg Pincus LLC ("Warburg Pincus") and GTCR LLC ("GTCR") as selling stockholders. No other entities, and no individuals, are selling shares in the Offering. It is expected that, as a result of the Off ...

Sotera Health Company (NASDAQ:SHC) Q2 2024 Earnings Conference Call August 5, 2024 9:00 AM ET Company Participants Jason Peterson - VP & Treasurer Michael Petras - Chairman & CEO Jonathan Lyons - SVP & CFO Conference Call Participants Dave Windley - Jefferies Brett Fishbin - KeyBanc Capital Markets Patrick Donnelly - Citigroup Inc. Casey Woodring - J.P. Morgan Chase Salem Salem - Barclays Jason Bednar - Piper Sandler Michael Polark - Wolfe Research Operator Good morning, and welcome to the Sotera Health Sec ...

Core Insights - Sotera Health Company reported Q2 2024 net revenues of $277 million, an increase of 8% compared to Q2 2023, with a constant currency increase of 8.8% [2][3] - The net income for Q2 2024 was $9 million, or $0.03 per diluted share, down from $24 million, or $0.08 per diluted share in Q2 2023, primarily due to refinancing charges [2][3] - Adjusted EBITDA for Q2 2024 was $137 million, a 6.9% increase from $128 million in Q2 2023, while Adjusted EPS decreased by $0.01 to $0.19 [2][3] Financial Performance - For the first six months of 2024, net revenues rose 10.3% to $525 million from $476 million in the same period of 2023, with a constant currency increase of approximately 10.2% [3] - Net income for the first half of 2024 was $15 million, or $0.05 per diluted share, compared to $26 million, or $0.09 per diluted share in the prior year [3] - Adjusted EBITDA for the first half of 2024 increased by 9.8% to $249 million, while Adjusted EPS decreased by $0.01 to $0.32 [3] Business Segment Review - Sterigenics reported Q2 2024 net revenues of $176 million, a 5.9% increase year-over-year, with segment income rising 5.8% to $97 million [4][5] - Nordion experienced significant growth, with Q2 2024 net revenues of $41 million, a 29% increase, and segment income up 31.7% to $23 million [6][7] - Nelson Labs saw Q2 2024 net revenues of $59 million, a 4% increase, but segment income decreased by 11% to $17 million [8][9] Debt and Liquidity - As of June 30, 2024, Sotera Health had total debt of $2.3 billion and $246 million in unrestricted cash, down from $296 million at the end of 2023 [10][28] - The company successfully refinanced its debt structure, extending maturities to 2031 [11] - The Net Leverage Ratio as of June 30, 2024, was 3.8x [10][37] 2024 Outlook - Sotera Health reaffirmed its 2024 outlook, expecting net revenues and Adjusted EBITDA growth in the range of 4% to 6% [12][13] - Interest expense is projected to be between $165 million and $175 million, with Adjusted EPS expected in the range of $0.67 to $0.75 [12][13]

Core Insights - Sotera Health Company has appointed Christopher Simon as a new independent director to its Board of Directors, enhancing its leadership team [1][3] - Mr. Simon brings over 30 years of experience in the healthcare industry, including roles as President and CEO of Haemonetics Corporation and Senior Partner at McKinsey & Company [2][3] - Sotera Health operates through three business units: Sterigenics®, Nordion®, and Nelson Labs®, focusing on sterilization solutions and lab testing services for the healthcare sector [4] Company Overview - Sotera Health is a leading global provider of mission-critical end-to-end sterilization solutions and lab testing and advisory services for the healthcare industry [4] - The company is committed to its mission of "Safeguarding Global Health®" [4] Leadership Experience - Christopher Simon's leadership experience as a public company CEO and his strategic background in the life sciences industry are expected to be significant assets for Sotera Health's growth [3] - Mr. Simon also serves on the board of directors of AdvaMed, a global trade association for medical technology companies [3]

Updates can be found from time to time on recent developments in matters relevant to investors on the Investor Relations section of the Company's website at Investor Relations | Sotera Health. For developments related to Ethylene Oxide, updates can be found at Ethylene Oxide | Sotera Health. Contacts Source: Sotera Health Company To participate in the live call, please dial 1-844-481-2916 if dialing-in from the United States, or 1-412-317- 0709 if dialing-in from other locations. A live webcast of the confe ...

To participate in the live call, please dial 1-844-481-2916 if dialing-in from the United States, or 1-412-317- 0709 if dialing-in from other locations. A live webcast of the conference call can be accessed at this link or via the Investor Relations section of the Company's website at Presentation & Events | Sotera Health, along with the accompanying materials. A replay of the webcast will be available later in the day on August 5th. Jason Peterson Vice President & Treasurer, Sotera Health IR@soterahealth.c ...

Financial Data and Key Metrics Changes - Total company revenues increased by 12.5% year-over-year to $248 million, with an 11.8% increase on a constant currency basis [10][16] - Adjusted EBITDA rose by 13.7% compared to Q1 2023, reaching $112 million, with adjusted EBITDA margins at 45.1%, a 50 basis point increase from the previous year [10][16] - Adjusted EPS was flat at $0.13 per share compared to Q1 2023, while GAAP net income increased to $6 million or $0.02 per diluted share from $3 million or $0.01 per diluted share in the prior year [17] Business Line Data and Key Metrics Changes - Sterigenics, the largest segment, reported a revenue growth of 4.1% to $166 million, driven by favorable pricing and foreign currency impacts, despite unfavorable volume and mix [5][18] - Nordion experienced a significant revenue increase of 181% to $24 million, attributed to the timing of Cobalt-60 harvest delivery schedules [11][19] - Nelson Labs saw a revenue growth of 10.8% to $58 million, supported by strong performance in expert advisory services, although core lab testing volumes declined year-over-year [11][19] Market Data and Key Metrics Changes - The company noted that the sterilization industry faces challenges due to updated EPA emission standards, but believes its investments will allow compliance without significant additional capital expenditures [7][12] - The overall market for ethylene oxide sterilization remains tight, with over 50% of medical devices sterilized using this method, indicating ongoing demand despite regulatory pressures [57] Company Strategy and Development Direction - The company reaffirmed its 2024 outlook, expecting revenue and adjusted EBITDA growth in the range of 4% to 6% compared to 2023, with variability driven by market recovery timing [6][22] - Capital expenditures are focused on Sterigenics' capacity expansions and enhancements, with a total of $205 million to $225 million expected for the year [25][21] - The company aims to maintain a net leverage ratio within the target range of 2 to 4 times, finishing Q1 2024 at 3.8 times [21][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in slight improvements in volumes for both Nelson Labs and Sterigenics as the year progresses, with stabilization noted in certain categories [30][31] - The company is actively monitoring litigation related to ethylene oxide emissions, asserting confidence in its compliance and operational safety [12][34] - Management highlighted the importance of maintaining operational excellence and driving capacity from existing assets, especially in a tight market [59] Other Important Information - The company reported a strong liquidity position with over $660 million available, including more than $260 million in unrestricted cash [20] - Interest expenses increased to $42 million due to higher rates and a full quarter of a $500 million term loan [17] Q&A Session Summary Question: Volume trends and expectations for Q2 and Q3 - Management expects slight improvements in volumes for both Nelson Labs and Sterigenics, with stabilization noted in certain categories [30] Question: Updates on litigation related to ethylene oxide - Management stated it is early in the litigation process but remains confident in its defense and compliance with regulations [34] Question: Final NESHAP requirements and facility enhancements - Management indicated that approximately $40 million will be spent on facility enhancements this year, with significant progress already made [38] Question: SG&A expenses and run rate expectations - Management noted that there are no significant concerns regarding SG&A increases, attributing them to normal merit increases and variable compensation [39] Question: RCA dilution and margin expectations for Nelson - Management confirmed that while RCA has been a drag on mix, margins are improving, and they expect to approach mid-30% margins in the long term [45] Question: Capacity expansions and timelines - Management provided updates on three capacity expansions, with one going live soon and the others expected in late 2024 and 2025 [68]

3 Comprehensive end-to-end services offered (1) Based on revenue for the year ended December 31, 2023. • Nordion supplies high-specific activity (HSA) Cobalt-60 to use in Gamma Knife® radiosurgery for the precision treatment of brain cancer Adjusted EPS(1) $0.00 to $0.13 Business & Market Update Financial Performance • Top- and bottom-line growth compared to Q1 2023 • Completed annual customer satisfaction survey and received continued strong results • NESHAP regulations finalized in March 2024 7 2023 2024 ...

[Part I—FINANCIAL INFORMATION](index=5&type=section&id=Part%20I%E2%80%94FINANCIAL%20INFORMATION) [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The company's Q1 2024 financial statements present total assets of $3.06 billion, net revenues of $248.2 million, and net income of $6.3 million [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2024, total assets were $3.06 billion, total liabilities $2.63 billion, and total equity $429.4 million, reflecting slight decreases from year-end 2023 Consolidated Balance Sheets (in thousands) | Balance Sheet Items | March 31, 2024 (Unaudited) | December 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $261,133 | $296,407 | | Total current assets | $487,179 | $557,244 | | Total assets | $3,059,692 | $3,130,420 | | **Liabilities & Equity** | | | | Total current liabilities | $152,340 | $230,654 | | Long-term debt, less current portion | $2,224,611 | $2,223,674 | | Total liabilities | $2,630,300 | $2,686,686 | | Total equity | $429,392 | $443,734 | [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=7&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) For Q1 2024, net revenues increased to $248.2 million, operating income nearly doubled to $53.2 million, and net income more than doubled to $6.3 million year-over-year Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands) | Income Statement Items (in thousands) | Q1 2024 (Unaudited) | Q1 2023 (Unaudited) | | :--- | :--- | :--- | | Total net revenues | $248,176 | $220,590 | | Gross profit | $127,115 | $111,503 | | Operating income | $53,174 | $33,366 | | Interest expense, net | $41,771 | $28,870 | | Net income | $6,323 | $2,842 | | Diluted EPS | $0.02 | $0.01 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly decreased to $9.7 million in Q1 2024, primarily due to a $35.0 million litigation settlement payment Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activities (in thousands) | Q1 2024 (Unaudited) | Q1 2023 (Unaudited) | | :--- | :--- | :--- | | Net cash provided by operating activities | $9,699 | $33,871 | | Net cash used in investing activities | ($34,853) | ($44,968) | | Net cash (used in) provided by financing activities | ($11,941) | $273,916 | | Net (decrease) increase in cash | ($38,834) | $263,886 | - A **$35.0 million** payment for the Georgia EO litigation settlement was a significant use of cash from operating activities in Q1 2024[22](index=22&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed accounting policies, segment revenue disaggregation, debt structure, and updates on ongoing Ethylene Oxide (EO) litigation - The company operates and reports in three segments: Sterigenics (outsourced sterilization), Nordion (Co-60 supplier), and Nelson Labs (lab testing and advisory services)[28](index=28&type=chunk)[139](index=139&type=chunk) Revenue by Segment (in thousands) | Revenue by Segment (in thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Sterigenics | $166,497 | $159,997 | | Nordion | $24,007 | $8,551 | | Nelson Labs | $57,672 | $52,042 | | **Total** | **$248,176** | **$220,590** | - Accrued liabilities decreased significantly from **$122.5 million** at year-end 2023 to **$61.8 million** at March 31, 2024, primarily due to the payment of the **$35.0 million** Georgia EO litigation settlement reserve[47](index=47&type=chunk) - The company is involved in multiple Ethylene Oxide (EO) tort lawsuits in Illinois, Georgia, California, and New Mexico, alleging injuries from EO emissions, and is vigorously defending these cases[91](index=91&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) [Management's Discussion and Analysis (MD&A)](index=39&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2024 financial results, highlighting a 12.5% increase in net revenues to $248.2 million and a 13.7% increase in Adjusted EBITDA to $111.9 million Key Financial Metrics (in thousands) | Metric (in thousands) | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Total net revenues | $248,176 | $220,590 | 12.5% | | Operating income | $53,174 | $33,366 | 59.4% | | Net income | $6,323 | $2,842 | 122.5% | | Adjusted EBITDA | $111,944 | $98,468 | 13.7% | - Revenue growth was driven by a **5.6% increase in service revenues** and a significant **256.8% increase in product revenues**, primarily due to favorable Co-60 harvest schedule timing at Nordion[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) - SG&A expenses decreased by **6.0%** to **$58.2 million**, primarily due to a **$7.6 million** decline in litigation and professional services expenses related to EO sterilization facilities[170](index=170&type=chunk) - The company paid a **$35.0 million** Atlanta EO litigation settlement in January 2024, which was a primary driver for the decrease in cash from operations[160](index=160&type=chunk)[200](index=200&type=chunk)[206](index=206&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to the company's market risks occurred during the three months ended March 31, 2024, compared to the 2023 Form 10-K - Market risks have not materially changed for the three months ended March 31, 2024[221](index=221&type=chunk) [Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are effective as of the end of the reporting period[222](index=222&type=chunk) - No changes in internal control over financial reporting occurred during Q1 2024 that materially affected, or are reasonably likely to materially affect, internal controls[223](index=223&type=chunk) [Part II—OTHER INFORMATION](index=52&type=section&id=Part%20II%E2%80%94OTHER%20INFORMATION) [Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings.) The company provides updates on material legal proceedings, including EO tort litigation and ongoing settlement negotiations for Notices of Violation at various facilities - The company references Note 14 for details on material legal proceedings, including EO tort litigation in Illinois, Georgia, California, and New Mexico, as well as securities litigation[227](index=227&type=chunk) - A Notice of Violation was received for the Queensbury, NY facility following a power outage and scrubber system failure in May 2023, with ongoing settlement negotiations with the NYS DEC[229](index=229&type=chunk)[230](index=230&type=chunk) - Notices of Violation were issued to the Vernon and Ontario, CA facilities by the SCAQMD related to operational requirements and alleged public nuisance, with the company disputing allegations and in settlement negotiations[231](index=231&type=chunk) [Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors.) Updated risk factors include the final US EPA NESHAP rules for EO sterilization facilities, requiring new pollution control technologies and CEMS by April 6, 2026 - On March 14, 2024, the US EPA announced final NESHAP rules for EO sterilization facilities, requiring additional air pollution technologies and continuous emissions monitoring systems (CEMS)[233](index=233&type=chunk) - The compliance deadline for the new NESHAP rule is April 6, 2026, which the company notes will be challenging and may require capital expenditures beyond current anticipation[234](index=234&type=chunk) [Other Information](index=53&type=section&id=Item%205.%20Other%20Information.) No directors or executive officers adopted or terminated Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements during Q1 2024 - No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during Q1 2024[235](index=235&type=chunk) [Exhibits](index=54&type=section&id=Item%206.%20Exhibits.) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including officer certifications, credit agreement amendments, and XBRL data files - The Exhibit Index lists all documents filed or furnished as part of the 10-Q report[237](index=237&type=chunk) [Signatures](index=55&type=section&id=SIGNATURES) - The report was signed on May 2, 2024, by Jonathan M. Lyons, Senior Vice President and Chief Financial Officer[241](index=241&type=chunk)