STERIS(STE) - 2020 Q4 - Annual Report

PART I Item 1. Business STERIS plc provides infection prevention and procedural products and services across four segments, with growth driven by healthcare demand and regulatory factors - STERIS plc is a leading provider of infection prevention and procedural products and services, aiming to create a healthier and safer world[12] - The company operates in four reportable business segments: Healthcare Products, Healthcare Specialty Services, Life Sciences, and Applied Sterilization Technologies[15] - Growth is driven by the aging global population, advancements in healthcare, new technologies, government policies, and increased demand for medical procedures and infection prevention[16] Backlog Orders (in millions USD) | Segment | March 31, 2020 | March 31, 2019 | | :---------------------- | :------------- | :------------- | | Healthcare Products | $170.1 | $154.5 | | Life Sciences | $72.4 | $60.7 | | Total Backlog | $242.5 | $215.2 | Item 1A. Risk Factors The company faces market, legal, regulatory, tax, business, and operational risks, including COVID-19 impacts and EO sterilization regulations - The COVID-19 pandemic has disrupted operations, caused temporary facility closures, reduced demand, and impacted the supply chain[68] - International operations expose the company to currency fluctuations, enforcement difficulties, credit risks, varying tax rates, and trade restrictions[66] - Extensive government regulations (FDA, EPA, NRC) apply to product lifecycle, with non-compliance risking sanctions, recalls, or approval delays[40][42][73] - Regulations regarding Ethylene Oxide (EO) sterilization, particularly EPA's carcinogenic classification, could significantly increase costs, curtail operations, or lead to litigation for the AST segment[80] Item 1B. Unresolved Staff Comments The company reported no unresolved staff comments from the SEC Item 2. Properties STERIS plc maintains its principal executive office in Dublin, Ireland, and primary administrative offices in Mentor, OH, U.S., operating numerous global sterilization and operational sites - Principal executive office in Dublin, Ireland; primary administrative offices in Mentor, OH (U.S.)[84] - Owns 44 and leases 11 contract sterilization locations in the Americas, Europe, and Asia[84] - Operates over 75 sales, administrative, and operational locations in the U.S. and 19 other countries[85] Key Manufacturing Locations | Location | U.S./INTL* | | :---------------- | :--------- | | Montgomery, AL | U.S. | | St. Louis, MO | U.S. | | Mentor, OH | U.S. | | Sharon Hill, PA | U.S. | | Franklin Park, IL | U.S. | | Point Richmond, CA| U.S. | | Quebec City, Canada| INTL | | Tuusula, Finland | INTL | | Bordeaux, France | INTL | | Leicester, England| INTL | | Shanghai, China | INTL | | Guadalupe, Mexico | INTL | Item 3. Legal Proceedings Information regarding legal proceedings is incorporated by reference from Item 7, Management's Discussion and Analysis, and Note 10 of the consolidated financial statements - Legal proceedings information is cross-referenced to Item 7 and Note 10 of the consolidated financial statements[87] Item 4. Mine Safety Disclosures The company reported no disclosures related to mine safety PART II Item 5. Market for Registrant's Ordinary Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities STERIS plc's ordinary shares are traded on the NYSE under 'STE', with approximately 1,040 holders of record as of March 31, 2020, and the Board expects to continue paying cash dividends - Ordinary shares are traded on the New York Stock Exchange (NYSE) under the symbol 'STE'[90] - As of March 31, 2020, there were approximately 1,040 holders of record of ordinary shares[90] - The Board of Directors expects to continue paying cash dividends for the foreseeable future[91] Share Repurchase Activity (Fiscal Year 2020 Q4) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans (in thousands) | | :------------ | :------------------------------- | :--------------------------- | :----------------------------------------------------------------------------------- | | January 1-31 | — | — | $348,979 | | February 1-29 | 22,500 | $166.20 | $345,239 | | March 1-31 | 45,700 | $136.55 | $338,979 | | Total | 68,200 | $146.08 | $338,979 | Item 6. Selected Financial Data This section provides a five-year summary of selected financial data, highlighting key trends in revenues, gross profit, net income, EPS, dividends, and balance sheet items Selected Financial Data (Years Ended March 31, in thousands, except per share data) | Metric | 2020 | 2019 | 2018 | 2017 | 2016 | | :-------------------------------------- | :------------ | :------------ | :------------ | :------------ | :------------ | | Statements of Income Data: | | | | | | | Revenues | $3,030,895 | $2,782,170 | $2,619,996 | $2,612,756 | $2,238,764 | | Gross profit | $1,319,923 | $1,175,427 | $1,092,746 | $1,026,213 | $895,348 | | Income from continuing operations | $536,973 | $411,465 | $399,883 | $226,206 | $237,576 | | Net income attributable to shareholders | $407,605 | $304,051 | $290,915 | $109,965 | $110,763 | | Basic income per ordinary share | $4.81 | $3.59 | $3.42 | $1.29 | $1.57 | | Diluted income per ordinary share | $4.76 | $3.56 | $3.39 | $1.28 | $1.56 | | Dividends per ordinary share | $1.45 | $1.33 | $1.21 | $1.09 | $0.98 | | Balance Sheets Data: | | | | | | | Working capital | $705,144 | $588,539 | $591,195 | $636,219 | $571,919 | | Total assets | $5,425,582 | $5,073,071 | $5,200,334 | $4,924,555 | $5,346,416 | | Long-term indebtedness | $1,150,521 | $1,183,227 | $1,316,001 | $1,478,361 | $1,567,796 | | Total liabilities | $2,018,858 | $1,887,273 | $1,983,034 | $2,114,422 | $2,307,524 | | Total shareholders' equity | $3,393,876 | $3,177,810 | $3,205,960 | $2,798,602 | $3,023,034 | Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations This section analyzes STERIS's financial condition and results for fiscal years 2020, 2019, and 2018, covering