STERIS(US:STE)2025-11-06 21:08Revenue Growth - Revenues increased 9.9% to $1,460.3 million for the three months ended September 30, 2025, compared to $1,328.9 million for the same period in the prior year[158]. - Revenues increased 9.3% to $2,851.4 million for the six months ended September 30, 2025, compared to $2,608.4 million for the same period in the prior year[158]. - Total revenues increased by 9.9% to $1,460.3 million for the three months ended September 30, 2025, and by 9.3% to $2,851.4 million for the six months ended September 30, 2025, compared to the same periods in 2024[199]. - Service revenues rose by 12.9% to $714.9 million for the three months ended September 30, 2025, reflecting growth across all segments[171]. - United States revenues increased by 9.8% to $1,075.2 million for the three months ended September 30, 2025, compared to $979.5 million for the same period in 2024[172]. - Ireland revenues increased by 19.8% to $27.3 million for the three months ended September 30, 2025, compared to $22.8 million in the prior year[172]. - Healthcare segment revenues increased by 9.5% to $1,033.8 million for the three months ended September 30, 2025, and by 8.8% to $2,008.5 million for the six months ended September 30, 2025, compared to the same periods in 2024[200]. - AST segment revenues increased by 9.7% to $281.5 million for the three months ended September 30, 2025, and by 11.1% to $562.7 million for the six months ended September 30, 2025, compared to the same periods in 2024[202]. - Life Sciences segment revenues increased by 13.3% to $145.0 million for the three months ended September 30, 2025, and by 9.3% to $280.2 million for the six months ended September 30, 2025, compared to the same periods in 2024[203]. Profitability - Gross profit percentage for the second quarter of fiscal 2026 was 44.2%, up from 43.6% in the second quarter of fiscal 2025[159]. - Gross profit for the three months ended September 30, 2025, was $645.9 million, an increase of 11.6% from $578.8 million in the prior year[180]. - The Healthcare segment's operating margins were 25.1% for the second quarter of fiscal 2026, compared to 24.1% for the same period in fiscal 2025[204]. - The AST segment's operating margins were 45.3% for the second quarter of fiscal 2026, compared to 42.8% for the same period in fiscal 2025[206]. - Healthcare segment operating income increased 13.8% to $259.5 million for the three months ended September 30, 2025, compared to $228.0 million in the same prior year period[204]. - AST segment operating income rose 16.1% to $127.6 million for the three months ended September 30, 2025, compared to $109.9 million during the same prior year period[206]. - Life Sciences segment operating income increased 11.5% to $59.9 million for the three months ended September 30, 2025, compared to $53.7 million for the same prior year period[207]. Cash Flow and Capital Management - Cash flows from operations were $707.8 million for the first six months of fiscal 2026, compared to $554.5 million for the same period in fiscal 2025[161]. - Free cash flow was $527.7 million for the first six months of fiscal 2026, compared to $344.5 million for the same period in fiscal 2025[161]. - Net cash provided by operating activities was $707.8 million for the first six months of fiscal 2026, up from $554.5 million in the first six months of fiscal 2025[208]. - Free cash flow increased to $527.7 million in the first six months of fiscal 2026 from $344.5 million in the same period of fiscal 2025[212]. - Capital expenditures totaled $180.1 million for the first six months of fiscal 2026, down from $210.0 million during the same prior year period[210]. - The debt-to-total capital ratio was 21.3% at September 30, 2025, down from 23.6% at March 31, 2025[162]. - Debt-to-total capital ratio improved to 21.3% at September 30, 2025, down from 25.3% at September 30, 2024[213]. - The company declared and paid cash dividends totaling $1.20 per ordinary share during the first six months of fiscal 2026[162]. - Total cash dividends paid to ordinary shareholders increased to $118.1 million, or $1.20 per share, in the first six months of fiscal 2026, compared to $107.7 million, or $1.09 per share, in the same period of fiscal 2025[219]. Expenses and Taxation - Total operating expenses for the three months ended September 30, 2025, were $380.1 million, up 5.8% from $359.1 million in the same period in 2024[182]. - Research and development expenses increased by 4.4% to $28.2 million for the three months ended September 30, 2025, focusing on new product development and technological innovations[184]. - Interest expense decreased by $4.8 million and $19.4 million for the three months and six months ended September 30, 2025, respectively, compared to the same periods in 2024, primarily due to a lower principal amount of debt outstanding[189]. - Non-operating expenses, net decreased by $12.1 million to $12.7 million for the three months ended September 30, 2025, and by $8.2 million to $26.8 million for the six months ended September 30, 2025, compared to the same periods in 2024[188]. - Income tax expense increased by $17.1 million (39.3%) to $60.6 million for the three months ended September 30, 2025, and by $35.7 million (45.3%) to $114.5 million for the six months ended September 30, 2025, compared to the same periods in 2024[190]. - The effective income tax rate increased to 23.9% for the three months ended September 30, 2025, and to 23.6% for the six months ended September 30, 2025, compared to 22.3% and 21.3% for the same periods in 2024, respectively[191]. Acquisitions and Restructuring - The company completed a tuck-in acquisition for approximately $15.0 million during the first six months of fiscal 2026[152]. - Acquisition and integration expenses totaled $1.3 million for the three months ended September 30, 2025[153]. - The restructuring plan is expected to improve income from operations by approximately $25.0 million per year starting in fiscal 2026[185]. Backlog and Future Outlook - The Healthcare segment's backlog increased to $427.5 million at September 30, 2025, from $405.3 million at September 30, 2024[201]. - The Life Sciences backlog increased to $113.7 million at September 30, 2025, from $75.6 million at September 30, 2024, primarily due to an increase in orders[204]. - Forward-looking statements indicate potential risks including operating costs, integration of acquired businesses, and changes in tax laws that could affect future performance[229]. - The company does not undertake to update forward-looking statements unless legally required, indicating a cautious approach to future projections[230]. Legal and Financial Instruments - The company is involved in various legal proceedings and claims, which may impact financial results but are not expected to have a material adverse effect overall[226][227]. - The company held net foreign currency forward contracts to buy €8.5 million and to sell A$9.0 million and NZ$8.0 million as of September 30, 2025[234]. - Commodity swap contracts were in place to buy 0.3 million pounds of nickel, indicating hedging against raw material price fluctuations[235]. Current Assets and Liabilities - Total current assets increased to $21,597.1 million from $20,762.0 million as of March 31, 2025[224]. - Total current liabilities increased to $25,126.7 million from $23,891.0 million, reflecting higher payables[224]. - Goodwill rose significantly to $610.5 million from $297.2 million, indicating potential acquisitions or increased valuations[224].