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, 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 | ...

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]

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 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 ...

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].

© 2023 Sotera Health Company | All Rights Reserved. This presentation refers to, and in other communications with investors the Company may refer to, net sales or revenues or other historical financial information on a "constant currency" basis, which is a non-GAAP financial measure we use to assess performance excluding the impact of foreign currency exchange rate changes. We calculate constant currency net revenues by translating prior year net revenues in local currency at the average exchange rates appl ...

Sotera Health Company (NASDAQ:SHC) Q3 2022 Earnings Conference Call November 2, 2022 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 Phil Coover - Goldman Sachs Matt Mishan - KeyBanc Mike Polark - Wolfe Research Operator Good morning. My name is Denise, and I will be your conference call operator today. At this time, ...

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, 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 | | 47-35311 ...

Sotera Health Company (NASDAQ:SHC) Q2 2022 Earnings Conference Call August 4, 2022 9:00 AM ET Company Participants Joe Vitale - VP, IR Michael Petras - Chairman and CEO Michael Biehl - Interim CFO Conference Call Participants Lizzie Speyer - Citi Casey Woodring - JPMorgan Michael Polark - Wolfe Research Matthew Mishan - KeyBanc Ben Flox - Jefferies Luke Sergott - Barclays Thomas Kelliher - RBC Capital Markets Operator Good morning. My name is Howard and I will be your conference call operator today. At this ...

Part I—FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The unaudited consolidated financial statements for the six months ended June 30, 2022, show an 8.5% increase in total net revenues to $503.4 million, net income rising to $61.1 million, total assets at $2.84 billion, total liabilities at $2.20 billion, and operating cash flow decreasing to $108.3 million Balance Sheet Highlights | Metric | June 30, 2022 ($ thousands) | December 31, 2021 ($ thousands) | | :--- | :--- | :--- | | **Total Assets** | $2,839,685 | $2,789,502 | | **Total Liabilities** | $2,203,685 | $2,203,406 | | **Total Equity** | $636,000 | $586,096 | Consolidated Statements of Operations Highlights | Metric ($ thousands, except per share) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Total Net Revenues** | $266,639 | $251,917 | $503,393 | $464,065 | | **Operating Income** | $71,495 | $78,272 | $124,987 | $124,636 | | **Net Income** | $30,418 | $42,615 | $61,059 | $53,680 | | **Diluted EPS** | $0.11 | $0.15 | $0.22 | $0.19 | Consolidated Statements of Cash Flows Highlights | Metric ($ thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $108,256 | $134,256 | | **Net cash used in investing activities** | $(71,192) | $(70,974) | | **Net cash used in financing activities** | $(1,083) | $(12,090) | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, revenue disaggregation, recent acquisitions, ongoing ethylene oxide (EO) litigation, and financial risk management, highlighting a $9.6 million impairment charge and three reportable segments - The company operates and reports in three segments: **Sterigenics** (sterilization services), **Nordion** (Co-60 supply), and **Nelson Labs** (lab testing and advisory)[29](index=29&type=chunk) - An impairment charge of approximately **$9.6 million** was recorded in Q2 2022, writing down the investment in the Auralux joint venture to its fair value of **$0**, as the project to construct an E-beam facility will not proceed[31](index=31&type=chunk) Segment Revenue Breakdown | Metric ($ thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | **Sterigenics Revenue** | $307,254 | $276,333 | | **Nordion Revenue** | $84,480 | $75,043 | | **Nelson Labs Revenue** | $111,659 | $112,689 | | **Total Net Revenues** | $503,393 | $464,065 | - The company is subject to significant tort litigation related to ethylene oxide (EO) emissions from its facilities in Illinois (approx. **780 plaintiffs**) and Georgia (approx. **300 plaintiffs**), with the first Illinois trial expected to begin on August 12, 2022[106](index=106&type=chunk)[108](index=108&type=chunk)[110](index=110&type=chunk) [Management's Discussion and Analysis (MD&A)](index=41&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses an 8.5% revenue increase for H1 2022, driven by Sterigenics and Nordion, offset by Nelson Labs' decline, with operating income flat due to inflation, supply chain issues, and increased litigation costs, while liquidity remains strong with increased capital expenditures [Consolidated Results of Operations](index=42&type=section&id=Consolidated%20Results%20of%20Operations) For Q2 2022, net revenues increased 5.8% to $266.6 million, while net income decreased 28.6% to $30.4 million due to an investment impairment and increased litigation expenses, with H1 2022 net revenues growing 8.5% to $503.4 million and net income increasing 13.7% to $61.1 million, despite rising SG&A expenses Q2 2022 Consolidated Performance | Metric ($ thousands) | Q2 2022 | Q2 2021 | % Change | | :--- | :--- | :--- | :--- | | **Total Net Revenues** | $266,639 | $251,917 | 5.8% | | **Operating Income** | $71,495 | $78,272 | (8.7)% | | **Net Income** | $30,418 | $42,615 | (28.6)% | H1 2022 Consolidated Performance | Metric ($ thousands) | H1 2022 | H1 2021 | % Change | | :--- | :--- | :--- | :--- | | **Total Net Revenues** | $503,393 | $464,065 | 8.5% | | **Operating Income** | $124,987 | $124,636 | 0.3% | | **Net Income** | $61,059 | $53,680 | 13.7% | - SG&A expenses for H1 2022 increased by **$20.4 million (19.9%)** year-over-year, primarily driven by an **$11.7 million** increase in litigation and professional services expense related to EO sterilization facilities[197](index=197&type=chunk)[198](index=198&type=chunk) - A **$9.6 million** impairment charge was recorded in Q2 2022 related to the Auralux joint venture, which will not proceed with its planned facility construction[179](index=179&type=chunk) [Segment Results of Operations](index=54&type=section&id=Segment%20Results%20of%20Operations) For H1 2022, Sterigenics revenues increased 11.2% to $307.3 million and Nordion revenues grew 12.6% to $84.5 million, while Nelson Labs revenues decreased 0.9% to $111.7 million due to reduced pandemic-related testing, leading to a significant contraction in its segment income margin H1 2022 Net Revenues by Segment | Metric ($ thousands) | H1 2022 Net Revenues | H1 2021 Net Revenues | % Change | | :--- | :--- | :--- | :--- | | **Sterigenics** | $307,254 | $276,333 | 11.2% | | **Nordion** | $84,480 | $75,043 | 12.6% | | **Nelson Labs** | $111,659 | $112,689 | (0.9)% | H1 2022 Segment Income | Metric ($ thousands) | H1 2022 Segment Income | H1 2021 Segment Income | % Change | | :--- | :--- | :--- | :--- | | **Sterigenics** | $164,501 | $148,030 | 11.1% | | **Nordion** | $48,885 | $44,954 | 8.7% | | **Nelson Labs** | $38,098 | $46,896 | (18.8)% | - Nelson Labs' performance was negatively impacted by a **7.8%** revenue decline from reduced demand for pandemic-related testing, supply chain pressures, and labor market constraints, leading to an **18.8%** drop in segment income for H1 2022[230](index=230&type=chunk)[233](index=233&type=chunk) [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2022, the company had $140.6 million in cash and $277.4 million available under its Revolving Credit Facility, with operating cash flow decreasing by $26.0 million to $108.3 million due to higher tax and interest payments, while capital expenditures increased to $71.6 million - As of June 30, 2022, the company had **$140.6 million** in cash and cash equivalents and total availability of **$277.4 million** under its Revolving Credit Facility[235](index=235&type=chunk)[248](index=248&type=chunk) - Capital expenditures for the six months ended June 30, 2022, increased to **$71.6 million**, up from **$44.8 million** in the same period of 2021, as part of the company's long-term strategy for facility and business expansion[236](index=236&type=chunk) - Cash flow from operations decreased by **$26.0 million** in H1 2022 compared to H1 2021, primarily due to a **$14.6 million** increase in cash paid for taxes and a **$5.4 million** increase in cash paid for interest[239](index=239&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that there have been no material changes to the market risks previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2021 - There were no material changes in market risks for the three and six months ended June 30, 2022, compared to those disclosed in the 2021 Form 10-K[254](index=254&type=chunk) [Controls and Procedures](index=60&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2022, with no material changes in internal control over financial reporting during the quarter - Management concluded that as of June 30, 2022, the company's disclosure controls and procedures are effective[255](index=255&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[256](index=256&type=chunk) Part II—OTHER INFORMATION [Legal Proceedings](index=61&type=section&id=Item%201.%20Legal%20Proceedings.) The company is involved in significant legal proceedings, primarily related to ethylene oxide (EO) tort litigation in Illinois and Georgia, and ongoing criminal proceedings in Zoetermeer, Holland, concerning alleged environmental permit violations, with an escrow account available for potential claims - The report incorporates by reference the material legal proceedings detailed in Note 16, which include the Ethylene Oxide (EO) tort litigation in Illinois, Georgia, and New Mexico[260](index=260&type=chunk)[265](index=265&type=chunk) - Criminal proceedings are ongoing in Holland against subsidiary DEROSS Holding B.V. for alleged environmental permit violations between 2004-2009, with potential fines estimated at **€0.8 million** for the company and **€0.2 million** for individuals, and an appeal by the Public Prosecutor against a favorable 2018 judgment is pending[262](index=262&type=chunk)[264](index=264&type=chunk) - An escrow account with a balance of approximately **$1.8 million** and cash collateral of **€2.4 million** were in place as of June 30, 2022, to cover potential losses from the Zoetermeer, Holland matter[265](index=265&type=chunk) [Risk Factors](index=62&type=section&id=Item%201A.%20Risk%20Factors.) The company reports that there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2021 - There have been no material changes to the risk factors previously disclosed in the 2021 Form 10-K[267](index=267&type=chunk) [Exhibits](index=63&type=section&id=Item%206.%20Exhibits.) This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including CEO and CFO certifications and Inline XBRL data files - The report includes standard exhibits such as Sarbanes-Oxley Act certifications (Sections 302 and 906) and Inline XBRL filings[270](index=270&type=chunk)