Financial Data and Key Metrics Changes - The company reported a 6.4% increase in total revenues to $294 million for Q2 2025 compared to Q2 2024, with a 9.8% increase in adjusted EBITDA to $151 million [11][12] - Adjusted EPS improved to $0.20, an increase of $0.01 from Q2 2024 [12] - The net leverage ratio improved to 3.5 times from 3.7 times in 2024, indicating progress towards the long-term goal of 2 to 3 times [16][21] Business Line Data and Key Metrics Changes - Sterigenics experienced a 10.5% year-over-year revenue growth, driven by increased customer demand and strong volume performance [5][13] - Nordion's revenue increased by 2.9% to $42 million, with a segment income margin decrease of 145 basis points to 55.3% due to supplier mix timing [14] - Nelson Labs reported a revenue of $57 million, a decline of 3.3%, but segment income increased by 13.9% to $20 million, with margin expansion driven by core lab testing volume improvements [15] Market Data and Key Metrics Changes - The company raised its 2025 revenue growth outlook to a range of 4.5% to 6% from the previous 4% to 6% [7][18] - The foreign currency impact is now expected to be neutral for the full year, compared to previous assumptions of a headwind [17] - Nearly 60% of full-year revenue is expected to occur in the second half of the year, with Q4 2025 revenue anticipated to decline mid-teens compared to Q4 2024 due to Cobalt 60 shipment timing [18] Company Strategy and Development Direction - The company continues to invest in its businesses to support organic growth and reduce leverage, reinforcing its commitment to disciplined financial management [5][21] - The focus remains on enhancing core lab testing and optimizing operations to improve margins, particularly in Nelson Labs [19][66] - The company is well-positioned to capitalize on opportunities arising from changes in customer supply chains due to tariff adjustments [52][56] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the outlook for the rest of the year, highlighting strong execution and customer care [99] - The company is not seeing significant destocking in the market and expects continued volume growth across multiple categories [88] - Management remains cautious about potential maintenance-related downtime impacting growth in the second half of the year [62][92] Other Important Information - The effective tax rate applicable to adjusted net income is projected to be in the range of 31.5% to 33.5%, reflecting recent U.S. tax law changes [20] - Capital expenditures for 2025 are now expected to be in the range of $170 million to $180 million, down from a previous outlook of $190 million to $210 million [20][21] Q&A Session Summary Question: Did you see any sort of pull forward dynamic in Sterigenics? - Management indicated that there was no material pull forward due to tariffs, and volumes were progressing as expected [25] Question: Can you parse out the performance between medtech and bioprocessing? - Management noted that both segments performed well, with bioprocessing showing significant growth supported by facility expansions [28] Question: What are the drivers of margin improvement in Nelson Labs? - Management attributed margin improvement to labor productivity optimization, favorable service mix, and consistent pricing [35] Question: How do you view the competitive implications of the updated ETO regulations? - Management feels well-positioned and plans to continue investing in compliance and emissions controls [38] Question: What is the expected growth rate for Nelson Labs in 2026? - Management refrained from providing specific guidance for 2026 but emphasized a focus on core lab volume growth [65]