Sotera Health(US:SHC)2025-11-04 21:02Financial Performance - For the three months ended September 30, 2025, total net revenues increased by $25.8 million, or 9.1%, to $311.3 million compared to $285.5 million in the same period of 2024[170]. - Net income for the three months ended September 30, 2025 was $48.4 million, a significant increase of $31.4 million, or 184.7%, from $17.0 million in the same period of 2024[170]. - Adjusted Net Income for the three months ended September 30, 2025 was $75.3 million, up $26.3 million, or 53.8%, from $48.9 million in the same period of 2024[170]. - Adjusted EBITDA for the three months ended September 30, 2025 was $164.2 million, an increase of $17.8 million, or 12.2%, compared to $146.4 million in the same period of 2024[170]. - For the nine months ended September 30, 2025, total net revenues were $860.2 million, an increase of $49.9 million, or 6.2%, compared to $810.2 million in the same period of 2024[190]. - Adjusted EBITDA for the nine months ended September 30, 2025 was $436.8 million, an increase of $41.1 million, or 10.4%, from $395.6 million in the same period of 2024[190]. - Net income for the nine months ended September 30, 2025, was $43.1 million, compared to $32.1 million for the same period in 2024, while Adjusted Net Income rose to $170.4 million from $139.8 million[210]. Revenue Breakdown - Service revenues for the three months ended September 30, 2025 increased by $16.7 million, or 7.0%, to $255.5 million, driven by volume increases in the Sterigenics and Nordion segments[173]. - Product revenues for the three months ended September 30, 2025 rose by $9.1 million, or 19.5%, to $55.8 million, primarily due to higher revenues from Co-60 in the Nordion segment[174]. - Service revenues increased by $33.7 million, or 4.8%, to $736.7 million for the nine months ended September 30, 2025, compared to $703.0 million for the same period in 2024, driven by favorable pricing and volume/mix improvements[193]. - Product revenues rose by $16.3 million, or 15.2%, to $123.5 million for the nine months ended September 30, 2025, compared to $107.2 million in the prior year, primarily due to favorable volume/mix and pricing in the Nordion segment[194]. - Sterigenics segment net revenues increased by $17.3 million, or 9.8%, to $192.8 million for the three months ended September 30, 2025, driven by a 4.6% increase in volume and mix[218]. - Nordion segment net revenues increased by $11.5 million, or 22.4%, to $62.8 million for the three months ended September 30, 2025, primarily due to an 18.9% increase in volume and mix[219]. - Nelson Labs segment net revenues decreased by $2.9 million, or 5.0%, to $55.7 million for the three months ended September 30, 2025, impacted by a decline in expert advisory services revenue[220]. - Sterigenics net revenues increased by $38.9 million, or 7.5%, to $557.4 million for the nine months ended September 30, 2025, driven by favorable pricing and volume impacts[225]. - Nordion net revenues rose by $21.2 million, or 18.2%, to $137.8 million, primarily due to volume and mix changes of 16.7% and pricing of 3.1%[226]. - Nelson Labs net revenues decreased by $10.2 million, or 5.8%, to $165.0 million, impacted by a decline in expert advisory services revenue despite growth in core lab testing services[227]. Expenses and Costs - Total cost of revenues for the three months ended September 30, 2025 was $133.8 million, an increase of $6.3 million, or 4.9%, from $127.4 million in the same period of 2024[170]. - SG&A expenses increased by $1.3 million, or 2.1%, for the three months ended September 30, 2025, attributed to higher litigation and professional services expenses[180]. - Total cost of revenues increased by $8.3 million, or 2.2%, to $380.6 million for the nine months ended September 30, 2025, accounting for approximately 44.2% of consolidated net revenues[196]. - SG&A expenses increased by $14.5 million, or 8.0%, for the nine months ended September 30, 2025, mainly due to a $15.2 million increase in litigation and professional services expenses[199]. Cash Flow and Capital Expenditures - As of September 30, 2025, the company had $299.2 million of unrestricted cash, an increase of $22.0 million from December 31, 2024, due to $184.1 million in cash flows from operating activities[240]. - Capital expenditures for the nine months ended September 30, 2025, amounted to $87.3 million, down from $113.2 million in the same period of 2024[242]. - Net cash provided by operating activities was $184.1 million for the nine months ended September 30, 2025, compared to $168.4 million for the same period in 2024[243]. - Cash flows from operating activities increased by $15.6 million to $184.1 million for the nine months ended September 30, 2025, compared to $168.4 million for the same period in 2024[245]. - Cash used in investing activities decreased by $28.7 million to $84.4 million for the nine months ended September 30, 2025, compared to $113.1 million for the same period in 2024, primarily due to a $25.9 million decrease in capital expenditures[246]. - Cash used in financing activities increased by $48.3 million to $92.4 million for the nine months ended September 30, 2025, compared to $44.0 million for the same period in 2024, mainly due to an $81.3 million increase in principal repayments on Term Loans[247]. Debt and Financial Obligations - As of September 30, 2025, the company had debt obligations of $1,423.0 million under a term loan, a $600.0 million revolving credit facility, and $750.0 million of senior notes[248]. - Amendment No. 6 to the Credit Agreement reduced the interest rate margin by 0.50% and provided for refinancing lenders to offer term loans totaling $1,423.0 million[250]. - The company had $8.1 million of letters of credit issued against the Revolving Credit Facility, resulting in total availability of $591.9 million[255]. - The company utilizes interest rate derivatives to manage cash flow variability associated with variable rate debt[256]. Market and Accounting Policies - There have been no significant changes in critical accounting policies or management estimates since December 31, 2024[257]. - Market risks have not materially changed for the three and nine months ended September 30, 2025[259].