Cantel Medical Corp. (CMD) Q1 2021 Earnings Conference Call December 8, 2020 8:30 AM ET Company Participants Matt Micowski - VP, IR and Financial Planning and Analysis George Fotiades - CEO Chuck Diker - Chairman Shaun Blakeman - SVP and CFO Peter Clifford - EVP and COO Seth Yellin - EVP, Strategy and Corporate Development Brian Capone - SVP, Corporate Controller and Chief Accounting Officer Conference Call Participants Matt Mishan - KeyBanc Capital Markets Larry Keusch - Raymond James Mike Matson - Needham ...

Part I—Financial Information [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for STERIS plc for the three and six months ended September 30, 2020, including balance sheets, income statements, cash flow statements, and detailed notes [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show total assets increased to **$5.49 billion** as of September 30, 2020, with six-month revenues of **$1.425 billion** and net income attributable to shareholders rising to **$194.0 million** Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2020 | March 31, 2020 | | :--- | :--- | :--- | | **Total current assets** | $1,150,310 | $1,208,751 | | **Total assets** | $5,492,567 | $5,425,582 | | **Total current liabilities** | $435,418 | $503,607 | | **Long-term indebtedness** | $1,020,554 | $1,150,521 | | **Total liabilities** | $1,830,112 | $2,018,858 | | **Total shareholders' equity** | $3,647,145 | $3,393,876 | Consolidated Statement of Income Highlights (in thousands, except per share) | Metric | Six Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | **Total revenues** | $1,425,064 | $1,433,643 | | **Gross profit** | $615,605 | $624,510 | | **Income from operations** | $255,264 | $236,821 | | **Net income attributable to shareholders** | $194,048 | $179,359 | | **Diluted EPS** | $2.26 | $2.09 | Consolidated Statement of Cash Flows Highlights (in thousands) | Activity | Six Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $296,073 | $260,000 | | **Net cash used in investing activities** | $(112,863) | $(185,458) | | **Net cash used in financing activities** | $(199,319) | $(63,529) | | **Increase (decrease) in cash** | $(7,553) | $4,903 | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, segment information, debt, taxes, and COVID-19 impact, highlighting the **$850 million** Key Surgical acquisition agreement and segment reorganization - The company reorganized its reportable segments, combining the former Healthcare Products and Healthcare Specialty Services segments into a single segment named Healthcare, effective April 1, 2020. Prior period data has been recast for comparability[79](index=79&type=chunk) - On October 2, 2020, STERIS entered into an agreement to acquire Key Surgical, LLC for a purchase price of **$850 million** in cash. The acquisition is expected to be completed before December 31, 2020, and will be funded through a combination of debt and cash on hand[133](index=133&type=chunk)[134](index=134&type=chunk) - The COVID-19 pandemic has caused unpredictable fluctuations in demand, with some products seeing increased demand while others, tied to deferrable medical procedures, have seen reduced demand. The company has implemented measures to protect employees and preserve liquidity, including suspending its stock repurchase program[130](index=130&type=chunk) - Due to changes in selling philosophy and product architecture, the company changed its revenue recognition policy for certain capital equipment contracts, resulting in the recognition of **$14.6 million** in previously deferred revenue in the first quarter of fiscal 2021[31](index=31&type=chunk)[33](index=33&type=chunk) [Management's Discussion and Analysis (MD&A)](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The MD&A provides management's perspective on Q2 and first-half fiscal 2021 financial results, detailing COVID-19 impact, revenue and profit trends, segment performance, and liquidity, with Q2 revenues up **2.6%** to **$756.1 million** and first-half free cash flow increasing to **$185.6 million** [Results of Operations](index=32&type=section&id=Results%20of%20Operations) For Q2 FY2021, revenues increased **2.6%** year-over-year, driven by Applied Sterilization Technologies and Life Sciences, while gross profit margin improved to **43.6%** due to favorable pricing and mix Q2 FY2021 vs Q2 FY2020 Revenue Breakdown (in thousands) | Revenue Type | Q2 2020 | Q2 2019 | % Change | | :--- | :--- | :--- | :--- | | **Total revenues** | $756,132 | $736,840 | 2.6% | | Service revenues | $416,628 | $399,174 | 4.4% | | Consumable revenues | $178,590 | $158,573 | 12.6% | | Capital equipment revenues | $160,914 | $179,093 | (10.2)% | YTD FY2021 vs YTD FY2020 Revenue Breakdown (in thousands) | Revenue Type | YTD 2020 | YTD 2019 | % Change | | :--- | :--- | :--- | :--- | | **Total revenues** | $1,425,064 | $1,433,643 | (0.6)% | | Service revenues | $784,452 | $788,242 | (0.5)% | | Consumable revenues | $321,186 | $318,684 | 0.8% | | Capital equipment revenues | $319,426 | $326,717 | (2.2)% | - The gross profit margin for Q2 FY2021 increased to **43.6%** from **43.2%** in the prior year, driven by favorable pricing, product mix, and productivity, partially offset by incremental costs associated with COVID-19[181](index=181&type=chunk) - Selling, General, and Administrative (SG&A) expenses decreased by **7.6%** in the first half of fiscal 2021 compared to the prior year, primarily due to reduced employee compensation, travel, and meeting costs resulting from the COVID-19 pandemic[182](index=182&type=chunk)[183](index=183&type=chunk) [Business Segment Results of Operations](index=37&type=section&id=Business%20Segment%20Results%20of%20Operations) In Q2 FY2021, Healthcare revenue declined **3.0%**, while Applied Sterilization Technologies (AST) saw **10.9%** growth and Life Sciences achieved exceptional **17.2%** revenue increase with a **40.1%** operating margin Segment Revenue Performance (Q2 FY2021 vs Q2 FY2020, in thousands) | Segment | Q2 2020 Revenue | Q2 2019 Revenue | % Change | | :--- | :--- | :--- | :--- | | Healthcare | $470,927 | $485,283 | (3.0)% | | Applied Sterilization Technologies | $169,547 | $152,907 | 10.9% | | Life Sciences | $115,658 | $98,650 | 17.2% | Segment Operating Income & Margin (Q2 FY2021 vs Q2 FY2020, in thousands) | Segment | Q2 2020 Op. Income | Q2 2020 Margin | Q2 2019 Op. Income | Q2 2019 Margin | | :--- | :--- | :--- | :--- | :--- | | Healthcare | $104,796 | 22.3% | $103,035 | 21.2% | | Applied Sterilization Technologies | $76,835 | 45.3% | $65,386 | 42.8% | | Life Sciences | $46,433 | 40.1% | $32,315 | 32.8% | [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity, with net cash from operations increasing to **$296.1 million** and free cash flow to **$185.6 million** for the first six months of fiscal 2021, improving the debt-to-total capital ratio to **21.9%** Key Liquidity Metrics (Six Months Ended Sep 30, in thousands) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $296,073 | $260,000 | | Free cash flow | $185,602 | $162,038 | | Debt-to-total capital ratio | 21.9% | 26.9% | - The increase in operating cash flow was primarily due to working capital improvements and deferred tax payments under government COVID-19 relief programs[202](index=202&type=chunk) - To fund the acquisition of Key Surgical, the company has obtained a **$550.0 million** term loan commitment[209](index=209&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk exposures, including interest rate, currency, and commodity risks, have not materially changed since March 31, 2020, though new forward currency contracts for hedging non-U.S. dollar earnings may introduce volatility - The company's market risk exposures have not changed materially since the fiscal year-end 2020[218](index=218&type=chunk) - In Q2 FY2021, the company began using forward currency contracts to hedge earnings denominated in euros, Mexican pesos, and Canadian dollars. Hedge accounting was not elected, which could cause earnings volatility due to the timing of recognizing gains/losses[219](index=219&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2020, with no material changes to internal control over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[221](index=221&type=chunk) - No material changes were made to the internal control over financial reporting during the quarter ended September 30, 2020[222](index=222&type=chunk) Part II—Other Information [Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings and claims arising in the ordinary course of business, for which management believes adequate reserves have been established, expecting no material adverse effect on financial position or results - The company is involved in a number of legal proceedings, government investigations, and claims arising in the normal course of business[70](index=70&type=chunk) - Management believes that adequate reserves have been established and that the ultimate outcome of pending litigation will not have a material adverse effect on the company's financial position or results[71](index=71&type=chunk) [Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the comprehensive discussion of risk factors included in the company's Annual Report on Form 10-K for the fiscal year ended March 31, 2020, indicating no material changes to those risks - The report directs readers to the risk factors detailed in the Annual Report on Form 10-K for the fiscal year ended March 31, 2020[226](index=226&type=chunk) [Share Repurchases and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) As of September 30, 2020, approximately **$333.9 million** remained available under the share repurchase program, though repurchases were suspended on April 9, 2020, due to COVID-19 uncertainty, with no shares repurchased in Q2 FY2021 - As of September 30, 2020, approximately **$333.9 million** remained available under the Board-authorized share repurchase program[228](index=228&type=chunk) - Share repurchases were suspended on April 9, 2020, due to uncertainty related to the COVID-19 pandemic[229](index=229&type=chunk) - No shares were repurchased under the publicly announced plan during the three months ended September 30, 2020[231](index=231&type=chunk) [Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the purchase agreement for Key Surgical, officer certifications, and interactive data files (Inline XBRL) - Key exhibits filed include the Purchase Agreement for Key Surgical, LLC, and certifications from the Principal Executive Officer and Principal Financial Officer[233](index=233&type=chunk)

Financial Data and Key Metrics Changes - Net sales decreased by 2.5% year-over-year in Q4 2020, with a negative 2.7% change on a constant currency basis [20] - GAAP operating profit decreased by 51.2% year-over-year to $7.2 million, while non-GAAP operating profit decreased by 31% year-over-year to $26.5 million [23] - GAAP earnings per share decreased by 125.5% year-over-year to negative $0.05, while non-GAAP earnings per share decreased by 62.6% year-over-year to $0.24 [25] - Adjusted EBITDAS was $37.9 million, down 19.6% year-over-year [25] - Cash flow from operations for the quarter was $44 million, an increase of 138.7% year-over-year, ending the year with $277.9 million in cash [26] Business Line Data and Key Metrics Changes - Life Sciences segment grew by 0.7%, while Dialysis segment remained relatively flat during the pandemic [20] - Dental segment grew by 59% on a reported basis due to the acquisition of Hu-Friedy but declined by 20.6% on an organic basis due to COVID-related deferrals [21] - Medical segment decreased by 24.8% on an organic basis, driven by COVID-related procedural declines [21] Market Data and Key Metrics Changes - Procedures in both medical and dental sectors have improved to about 80% to 85% of pre-COVID levels [12] - Hospitals are operating at over 90% of pre-COVID levels, ASCs are close to 85%, and dental practices are around 80% to 85% of baseline [43] Company Strategy and Development Direction - The company is focused on infection prevention and control, which has become increasingly relevant due to COVID [10] - The integration of Hu-Friedy and initiatives related to Cantel 2.0 are ongoing, with a focus on enhancing sales and marketing strategies [11][50] - The company aims to gradually improve EBITDAS margin to over 19% by the end of fiscal year 2021 [14] Management's Comments on Operating Environment and Future Outlook - Management is optimistic about the long-term relevance of Cantel's offerings, despite the near-term impacts of COVID [15] - The company is not providing conventional financial guidance but is focused on managing operating expenses and profitability [13] - There is a commitment to pay down debt and maintain a strong balance sheet while navigating uncertainties in the market [31][109] Other Important Information - The company has invested in expanding mask production capacity, with plans to double capacity by adding eight new machines [48] - The company is targeting to pay down at least $125 million in fiscal year 2021 [31] Q&A Session Summary Question: What does the incremental capacity from new mask manufacturing represent in dollar amounts? - The incremental revenue opportunity from full capacity is estimated to be around $3 million to $4 million per quarter [67] Question: Why did the dental segment perform worse in Q4 compared to Q3? - The overall Q4 was more affected by COVID volume declines, despite April not being included in Q4 [70] Question: How does the company plan to track progress on Cantel 2.0? - The company is looking at revenue comparisons, new setups, and audits as key indicators of progress [84] Question: What is the outlook for free cash flow in the upcoming year? - There will be natural cash outflows due to investments in working capital and sequential expenses returning [91] Question: What are the expectations for restructuring and acquisition-related costs? - Most large acquisition costs are behind, but some restructuring costs will still be seen in Q1 [103] Question: What is the company's approach to M&A in the current environment? - The focus remains on Cantel 2.0 initiatives and debt reduction before pursuing new acquisitions [109]

4th Quarter FY20 Earnings Call September 17th, 2020 2 Forward Looking Statements This press release contains "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995 and other securities laws. For these statements, we claim the protection of the safe harbor for forwardlooking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on current expectations, estima ...

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, 2020 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 001-38848 STERIS plc (Exact name of registrant as specified in its charter) Ireland 98-1455064 (St ...

Cantel Medical Corp. (CMD) Q3 2020 Results Earnings Conference Call June 4, 2020 8:30 AM ET Company Participants Matthew Micowski - VP, IR and Financial Planning and Analysis George Fotiades - President and Chief Executive Officer Shaun Blakeman - Senior Vice President and Chief Financial Officer Seth Yellin - Executive Vice President, Strategy and Corporate Development Peter Clifford - Executive Vice President and Chief Operating Officer Conference Call Participants Lawrence Keusch - Raymond James Financia ...

NYSE:CM N 3rd Quarter FY20 Earnings Call June 4th, 2020 Forward Looking Statements 2 This press release contains "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995 and other securities laws. For these statements, we claim the protection of the safe harbor for forwardlooking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on current expectations, es ...

For the fiscal year ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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 ☒ Commission file number 001-38848 STERIS plc (Exact name of registrant as specified in its charter) (State or other jurisdiction o ...

Cantel Medical Corp. (CMD) Q2 2020 Earnings Conference Call March 5, 2020 8:30 AM ET Company Participants Matt Micowski - Investor Relations Chuck Diker - Chairman of the Board George Fotiades - President & Chief Executive Officer Peter Clifford - Executive Vice President & Chief Operating Officer Seth Yellin - Executive Vice President & Chief Growth Officer Shaun Blakeman - Senior Vice President & Chief Financial Officer Brian Capone - Senior Vice President, Corporate Controller & Chief Accounting Officer. ...

NYSE:CM N 2nd Quarter FY20 Earnings Call March 5th, 2020 Forward Looking Statements 2 This presentation may contain "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995 and other securities laws. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on current expectations ...