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Sotera Health(SHC) - 2023 Q1 - Earnings Call Transcript
2023-05-06 09:33
Financial Data and Key Metrics Changes - Total company revenues declined by 6.8% year-over-year to $221 million, with a 5.3% decline on a constant currency basis [88][84] - Adjusted EBITDA decreased by 14.6% compared to the first quarter of 2022, amounting to $98 million, with adjusted EBITDA margins at 44.6%, a decline of 410 basis points [20][24] - Adjusted EPS for the quarter was $0.13, a decrease of $0.09 from the same period last year [20][108] Business Line Data and Key Metrics Changes - Sterigenics reported a 7% revenue growth to $160 million and over 4% segment income growth to $83 million compared to the first quarter of last year [8][104] - Nelson Labs experienced a revenue decline of 2.3% to $52 million, with segment income down over 17% to $14 million [109][86] - Nordion's revenue declined approximately 75% to $9 million, driven by the timing of cobalt-60 harvest supply schedules [25][85] Market Data and Key Metrics Changes - The potential impact of the complete loss of cobalt-60 supply from Russia on total Sotera Health 2023 revenues is now estimated at 0% to 2.5% [12][105] - The company expects to see increased volumes and margin expansion throughout the year for both Sterigenics and Nelson Labs [12][106] Company Strategy and Development Direction - The company is investing in additional capacity with six active expansion projects at Sterigenics and enhancements to EO facilities in North America [4][28] - The mission of safeguarding global health remains central to the company's operations, focusing on providing critical scientific expertise and regulatory consulting [6][5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the 2023 revenue forecast despite irregular timing of Nordion's revenue, with approximately 75% expected in the second half of the year [21][22] - The company anticipates total revenues for 2023 to be in the range of $1.055 billion to $1.090 billion, representing an annual growth rate of 5% to 9% [11][106] Other Important Information - The company generated approximately $34 million of operating cash flow during the quarter, with $648 million in cash and cash equivalents as of March 31, 2023 [26][27] - Capital expenditures are expected to be in the range of $185 million to $215 million, focusing on growth and capacity expansions [28][91] Q&A Session Summary Question: Any twists and turns in the segments relative to your prior plan? - Management indicated that there were no significant changes in the outlook for the segments compared to previous expectations [15][19] Question: Can you provide clarity on Nelson Labs' volume recovery? - Management noted that the first quarter is typically the lowest for Nelson Labs, but they expect volumes to pick up as the year progresses [14][43] Question: What is the expected impact of the EPA proposed regulations? - Management acknowledged the aggressive timeline for compliance but expressed confidence in their ability to meet the new standards due to prior investments [68][70] Question: How is the company positioned regarding the cobalt-60 supply? - Management confirmed that there was no disruption in supply during the first quarter and that they are well-positioned for the year [12][105] Question: What are the expectations for pricing and inflation? - Management expects pricing to settle in the range of 3.5% to 5% per year, with Sterigenics in the middle of that range [115][95]
Sotera Health(SHC) - 2023 Q1 - Quarterly Report
2023-05-03 21:06
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-39729 SOTERA HEALTH COMPANY (Exact name of registrant as specified in its charter) | Delaware | | 47-3531161 | ...
Sotera Health(SHC) - 2022 Q4 - Earnings Call Transcript
2023-03-03 22:09
Sotera Health Company (NASDAQ:SHC) Q4 2022 Earnings Conference Call February 28, 2023 9:00 AM ET Company Participants Jason Peterson - Vice President and Treasurer Michael Petras - Chairman and Chief Executive Officer Michael Biehl - Interim Chief Financial Officer Conference Call Participants Sean Dodge - RBC Capital Markets Patrick Donnelly - Citigroup Matthew Mishan - KeyBanc Capital Markets Luke Sergott - Barclays Casey Woodring - JPMorgan David Windley - Jefferies Michael Polark - Wolfe Research O ...
Sotera Health(SHC) - 2022 Q4 - Annual Report
2023-02-28 21:36
Supply Chain and Production - The vertical integration of Nordion and Sterigenics has enabled significant long-term investments to expand Co-60 supply for the medical sterilization industry, with approximately 9% of nuclear reactors globally capable of producing commercial quantities of Co-60[48]. - Co-60 has an annual natural decay rate of approximately 12%, creating stable, recurring demand as customers must purchase incremental supply to meet ongoing needs[50]. - Nordion serves around 40 customers, including medical device manufacturers and gamma sterilization service providers, with multi-year supply agreements governing customer relationships[50]. - The company has established a collaboration with Westinghouse Electric Company to develop technology for producing Co-60 in Pressurized Water Reactors, potentially diversifying supply with reliable U.S. domestic partners[48]. Customer Relationships and Market Demand - Nelson Labs served over 3,000 customers in 2022, benefiting from minimal customer concentration and stable relationships, which are essential for ongoing quality control processes[64]. - Recent global regulatory changes, including the European Union Medical Device Regulation and FDA modernization, have increased testing requirements for medical devices, benefiting Nelson Labs' services[63]. Acquisitions and Enhancements - The company acquired BioScience Laboratories in March 2021, enhancing its capabilities in antimicrobial and virology testing[68]. - The acquisition of Regulatory Compliance Associates in November 2021 further strengthens Nelson Labs' technical consulting and expert advisory services[69]. Financial Performance and Capital Expenditures - As of December 31, 2022, the company had $200.0 million outstanding borrowings on the Revolving Credit Facility[334]. - Capital expenditures for the year ended December 31, 2022, amounted to $182.4 million, an increase from $102.2 million in 2021[336]. - For 2023, the company expects capital expenditures to be in the range of approximately $185.0 million to $215.0 million, including $33.2 million for environmental facility enhancements and $31.6 million for cobalt development projects[338]. - The weighted average interest rate on borrowings under the Term Loan for the year ended December 31, 2022, was 4.63%, compared to 3.44% in 2021[339]. - The total borrowing capacity under the Revolving Credit Facility is $347.5 million[339]. Environmental and Safety Compliance - The company has a proactive environmental health and safety program and employs a Senior Vice President of Environmental, Health and Safety[77]. - The company expects to continue to invest in facility expansions and ongoing maintenance for existing facilities in 2023[337]. - The company has experienced instances of emissions exceeding applicable standards, but none were deemed material[80]. Cash Flow and Financial Obligations - For the year ended December 31, 2022, net cash provided by operating activities was $277.96 million, a decrease of $3.6 million compared to $281.54 million in 2021[353]. - Cash used in investing activities increased to $181.90 million in 2022, up $22.10 million from $159.83 million in 2021, primarily due to an increase in capital expenditures[354]. - Net cash provided by financing activities was $197.76 million in 2022, compared to net cash used of $117.29 million in 2021, with a primary source being a $200.0 million borrowing on the Revolving Credit Facility[355]. - The Company had total contractual obligations of $4.66 billion as of December 31, 2022, with $2.44 billion in long-term debt and $1.59 billion in supply and service obligations[356]. Asset Management and Valuation - As of December 31, 2022, goodwill and intangible assets totaled $1,593.0 million, representing 51.1% of total assets[375]. - Goodwill assigned to segments as of December 31, 2022: Sterigenics $657.5 million, Nordion $271.0 million, Nelson Labs $173.3 million, totaling $1,101.8 million[376]. - A valuation allowance of $90.2 million was established against excess interest expense on long-term debt in the U.S. as of December 31, 2022[377]. - The company assesses long-lived assets for impairment whenever events indicate that the carrying amount may be impaired[370]. Revenue Recognition - The Sterigenics segment provides outsourced terminal sterilization and irradiation services, typically under multi-year contracts with significant customers[364]. - The Nordion segment's revenue from Co-60 radiation sources is recognized upon delivery and installation, while gamma irradiation systems revenue is recognized over time, which is immaterial to overall business[365]. - Nelson Labs segment offers microbiological and analytical chemistry testing services, with revenue recognized over time based on project progress[366]. - Revenue from the sale of gamma irradiation systems is recognized over time using an input measure of costs incurred[365]. - The company does not capitalize sales commissions as most programs have an amortization period of one year or less[367].
Sotera Health(SHC) - 2022 Q2 - Quarterly Report
2022-08-04 20:08
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-39729 SOTERA HEALTH COMPANY (Exact name of registrant as specified in its charter) | Delaware | | 47-3531161 | ...
Sotera Health(SHC) - 2022 Q1 - Quarterly Report
2022-05-05 21:02
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-39729 SOTERA HEALTH COMPANY (Exact name of registrant as specified in its charter) | Delaware | | 47-3531161 | ...
Sotera Health(SHC) - 2021 Q4 - Annual Report
2022-03-01 21:09
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-39729 SOTERA HEALTH COMPANY (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I. ...
Sotera Health(SHC) - 2021 Q3 - Quarterly Report
2021-11-10 21:11
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-39729 Indicate by check mark whether the registrant has submitted electronically every Interactive Data Fi ...
Sotera Health(SHC) - 2021 Q2 - Quarterly Report
2021-08-12 20:07
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-39729 SOTERA HEALTH COMPANY (Exact name of registrant as specified in its charter) | Delaware | | 47-3531161 | ...
Sotera Health(SHC) - 2021 Q1 - Quarterly Report
2021-05-13 20:05
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Commission file number 001-39729 SOTERA HEALTH COMPANY (Exact name of registrant as specified in its charter) | Delaware | | 47-3531161 | | --- | --- | --- | | (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) | | 9100 South Hills Blvd, Suite 300 | | | | Broadview Heights, Ohio | | 44147 | | (Address of principal executive offices) | | (Zip Code) | | Regis ...