Sotera Health Reports First-Quarter 2025 Results

Core Insights - Sotera Health Company reported a 2.6% increase in net revenues for Q1 2025, reaching $255 million compared to $248 million in Q1 2024, with a 4.4% increase on a constant currency basis [2][9] - The company experienced a net loss of $13 million, or $0.05 per diluted share, due to a pending settlement of approximately $31 million related to ethylene oxide claims, contrasting with a net income of $6 million, or $0.02 per diluted share, in Q1 2024 [2][9] - Adjusted EBITDA for Q1 2025 rose by 8.8% to $122 million, or 11.2% on a constant currency basis, with an Adjusted EPS of $0.14, an increase of $0.01 from Q1 2024 [2][9] Financial Performance - The Sterigenics segment reported net revenues of $170 million, a 1.9% increase compared to Q1 2024, with segment income rising by 2.5% to $88 million [4][5] - Nordion segment revenues surged by 35.6% to $33 million, with segment income increasing by 61.5% to $17 million, driven by volume and mix changes [6][7] - Nelson Labs saw a decrease in net revenues to $52 million, down 9.3% from Q1 2024, although segment income increased by 7.0% to $16 million due to favorable pricing in core lab testing services [10][11] Balance Sheet and Liquidity - As of March 31, 2025, Sotera Health had total debt of $2.3 billion and cash and cash equivalents of $304 million, compared to $2.3 billion in debt and $277 million in cash at the end of 2024 [12] - The company's Net Leverage Ratio improved to 3.6x from 3.7x as of December 31, 2024, indicating better financial health [12][44] - An amendment to the revolving credit facility increased its size by $176 million to a total of $600 million, extending the maturity date to April 2030 [13] 2025 Outlook - The company reaffirmed its 2025 outlook, projecting net revenue growth of 4.0% to 6.0% and Adjusted EBITDA growth of 4.5% to 6.5%, both on a constant currency basis [9][16] - Foreign currency headwinds are expected to impact net revenues and Adjusted EBITDA by approximately 1.25% and 1.50%, respectively, based on average March 2025 exchange rates [16] - The anticipated Adjusted EPS for 2025 is projected to be in the range of $0.70 to $0.76, with capital expenditures estimated between $190 million and $210 million [16]