STERIS(US:STE)2022-11-08 16:00Financial Performance - Revenues increased 0.3% to $1,200.5 million for the three months ended September 30, 2022, and increased 8.8% to $2,357.0 million for the six months ended September 30, 2022, compared to the same periods in the prior year [160]. - Gross profit for the three months ended September 30, 2022, was $532.3 million, a 10.8% increase from $480.3 million in the prior year, with a gross profit percentage of 44.3% [180]. - Operating loss for the second quarter of fiscal 2023 was $(306.4) million, compared to operating income of $116.5 million for the same period in fiscal 2022 [162]. - Total revenues for the three months ended September 30, 2022, increased by 0.3% to $1,200.5 million compared to $1,197.0 million for the same period in the prior year [170]. - Total revenues for the six months ended September 30, 2022, increased by 8.8% to $2,357.0 million compared to $2,165.4 million for the same period in the prior year, with organic growth in multiple segments and an additional $166.2 million from the Cantel acquisition [175]. Segment Performance - Service revenues rose by 4.4% to $534.1 million for the three months ended September 30, 2022, driven by growth in the Healthcare and Applied Sterilization Technologies segments [171]. - Consumable revenues decreased by 7.7% to $413.4 million for the three months ended September 30, 2022, reflecting declines in the Healthcare, Life Sciences, and Dental segments [171]. - Capital equipment revenues increased by 6.5% to $253.0 million for the three months ended September 30, 2022, primarily due to growth in the Healthcare segment [171]. - Healthcare segment revenues decreased by 1.5% to $732.8 million for the three months ended September 30, 2022, compared to $744.1 million in the same prior year period [201]. - Applied Sterilization Technologies segment revenues increased by 13.4% to $232.4 million for the three months ended September 30, 2022, compared to $204.9 million in the prior year [203]. - Life Sciences revenues decreased by 5.0% to $125.8 million for the three months ended September 30, 2022, compared to $132.3 million in the prior year [204]. - Dental segment revenues for the three months ended September 30, 2022, decreased to $109.6 million from $115.6 million in the prior year [207]. Cash Flow and Capital Management - Cash flows from operations were $335.6 million in the first half of fiscal 2023, compared to $268.8 million in the first half of fiscal 2022 [163]. - Free cash flow was $138.2 million in the first half of fiscal 2023, slightly up from $135.8 million in the first half of fiscal 2022 [163]. - Capital expenditures were $198.7 million for the first six months of fiscal 2023, up from $133.4 million during the same prior year period [214]. - Total cash dividends paid to ordinary shareholders were $90.0 million, or $0.90 per outstanding share, in the first six months of fiscal 2023, compared to $77.1 million, or $0.83 per outstanding share, in the first six months of fiscal 2022 [219]. Debt and Financial Ratios - The debt-to-total capital ratio was 34.3% at September 30, 2022, compared to 32.1% at March 31, 2022 [164]. - The debt-to-total capital ratio was 34.3% at September 30, 2022, compared to 34.5% at September 30, 2021 [217]. Impairments and Expenses - A goodwill impairment loss of $490.6 million was recognized in connection with the Cantel acquisition [155]. - Goodwill impairment loss of $490.6 million was recorded during the second quarter of fiscal 2023 due to an interim assessment of the fair value of the Dental segment [186]. - Research and development expenses increased by 32.4% for the three months ended September 30, 2022, largely due to the addition of Cantel, focusing on new product development and technological innovations [186]. - Operating expenses for the three months ended September 30, 2022, totaled $838.8 million, a 130.5% increase from the prior year, primarily due to the goodwill impairment loss [183]. Tax and Non-Operating Items - Income tax expense for the three months ended September 30, 2022, was $19.98 million, compared to a benefit of $(17.83) million in the prior year, reflecting a change of $(37.81) million [190]. - Non-operating expenses decreased by $249,000 to $26.6 million for the three months ended September 30, 2022, compared to $26.9 million in the prior year [187]. - Interest expense increased by $3.1 million and $3.9 million during the second quarter and first half of fiscal 2023, primarily due to higher interest rates on floating rate debt [187]. Operational Challenges - Approximately $70 million in capital equipment shipments were delayed in the second quarter of fiscal 2023 due to supply chain disruptions [157]. - The company anticipates potential impacts from the COVID-19 pandemic and other market conditions on its operations and financial results [234]. Legal and Compliance - The company is involved in various legal proceedings and claims, which are considered normal for its size and complexity [229]. - The company evaluated the effectiveness of its disclosure controls and procedures, concluding they were effective as of the end of the reporting period [241]. - There were no changes in internal control over financial reporting during the quarter ended September 30, 2022, that materially affected the company's reporting [242].