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Steris 8-K Report, Financial Results (Aug 6, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed August 6, 2024
Period End
August 6, 2024
Security
STE
In the record · 2019–202610-K810-Q228-K64

STE filed 8 annual reports (10-K), 22 quarterly reports (10-Q) and 64 current reports (8-K) between 2019 and 2026.

  1. Change in control8-K · Mar ’19Mar ’19
  2. Leadership change8-K · Aug ’21Aug ’21
  3. Leadership change8-K · Jul ’23Jul ’23
  4. Material agreement8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed August 6, 2024. Cited figures are marked; the original filing is the authoritative source.

STERIS plc filed this Form 8-K on August 6, 2024 to furnish a press release (Exhibit 99.1) announcing financial results for its fiscal 2025 first quarter ended June 30, 2024.

Total revenue from continuing operations rose 8% to $1.28 billiona ($1,279.5 million) from $1.18 billion, and constant currency organic revenue grew 6%. Income from continuing operations was $139.9 million, or $1.41 per diluted share, versus $130.6 million, or $1.31 per diluted share, a year earlier. Adjusted net income was $201.7 million, or $2.03 per diluted share, compared with $182.5 million, or $1.84 per diluted share.

Reported income from operations declined to $185.5 millionb from $197.8 million, reflecting $25.7 million of restructuring expenses on the income statement. Segment performance was mixed but generally positive. Healthcare revenue grew 10% to $901.2 million with operating income of $216.9 million, supported by higher volume, favorable pricing and the addition of surgical instrumentation assets purchased from BD.

Applied Sterilization Technologies revenue rose 7% to $249.8 millionc, and Life Sciences revenue fell 2% to $128.5 million following the April 1, 2024 divestiture of the CECS business. Operating cash flow was $303.7 million and free cash flow was $195.7 million, down from $214.5 million, which the company attributed primarily to the timing of capital spending. Total long-term indebtedness fell to $2.24 billion from $3.12 billion at March 31, 2024, after payments on term loans of $638.1 million and proceeds from sale of businesses of $809.6 million.

Management reiterated its fiscal 2025 outlook: reported revenue from continuing operations to increase 6.5% to 7.5%, constant currency organic revenue growth of 6% to 7%, and adjusted EPS from continuing operations of $9.05 to $9.25d versus $8.20 in fiscal 2024. The outlook also projects capital expenditures of about $360 million and free cash flow of about $700 million. Management hosted a conference call on August 7, 2024.

02—Key points

Key Highlights

  1. Revenue from continuing operations rose 8% to $1.28 billion; constant currency organic revenue grew 6%.
  2. Diluted EPS from continuing operations was $1.41, up from $1.31; adjusted diluted EPS was $2.03, up from $1.84.
  3. Healthcare revenue grew 10% to $901.2 million, with consumable revenue up 23% and service revenue up 14%, partly offset by a 10% decline in capital equipment revenue.
  4. Reported income from operations fell to $185.5 million from $197.8 million, with restructuring expenses of $25.7 million.
  5. Free cash flow was $195.7 million versus $214.5 million, mainly due to the timing of capital spending.
  6. Long-term indebtedness decreased to $2.24 billion from $3.12 billion, following $809.6 million in proceeds from business sales and $638.1 million in term loan payments.
  7. Fiscal 2025 outlook was reiterated, including adjusted EPS of $9.05 to $9.25 and free cash flow of approximately $700 million.

03—Questions

Frequently Asked Questions

  1. Did STERIS change its fiscal 2025 guidance?

    No. The company reiterated its fiscal 2025 outlook, with reported revenue from continuing operations expected to increase 6.5% to 7.5%, constant currency organic revenue expected to grow 6% to 7%, and adjusted EPS from continuing operations of $9.05 to $9.25.

  2. What drove the growth in Healthcare results?

    The filing attributes Healthcare's improvement primarily to higher volume, favorable pricing, and the addition of surgical instrumentation assets purchased from BD. Consumable revenue rose 23% and service revenue rose 14%, partially offset by a 10% decline in capital equipment revenue.

  3. Why did Life Sciences revenue decline?

    Life Sciences revenue decreased 2% as reported to $128.5 million, due to the April 1, 2024 divestiture of the CECS business, which was primarily service revenue. Constant currency organic revenue increased 4%.

  4. Why did free cash flow decline and how did the balance sheet change?

    Free cash flow was $195.7 million versus $214.5 million, which the company said was driven primarily by the timing of capital spending. Long-term indebtedness fell to $2.24 billion from $3.12 billion, funded in part by $809.6 million in proceeds from the sale of businesses.

04—Continue

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