STERIS plc Files Q3 FY25 10-Q Report

TL;DR

STERIS Q3 FY25 10-Q filed. Financials and operations update.

AI Summary

STERIS plc filed its 10-Q for the period ending December 31, 2024. The filing covers the third quarter of their fiscal year 2025. Key financial data and operational details for this period are presented, including information on their product and service segments.

Why It Matters

This report provides investors and analysts with updated financial performance and operational insights for STERIS plc, crucial for evaluating the company's current standing and future prospects.

Risk Assessment

Risk Level: low — This is a routine quarterly financial filing with no immediate red flags.

Key Numbers

• 2024-12-31 — Fiscal Year End (End of the reporting period for the 10-Q)
• 2025-02-07 — Filing Date (Date the 10-Q was submitted to the SEC)

Key Players & Entities

• STERIS plc (company) — Filer of the 10-Q report
• 2024-12-31 (date) — End of the reporting period
• 2025-02-07 (date) — Filing date of the report

FAQ

Key Financial Figures

• $0.001 — e on Which Registered Ordinary Shares, $0.001 par value STE New York Stock Exchange

Filing Documents

• ste-20241231.htm (10-Q) — 1740KB
• ste12312024ex151.htm (EX-15.1) — 7KB
• ste12312024ex311.htm (EX-31.1) — 9KB
• ste12312024ex312.htm (EX-31.2) — 10KB
• ste12312024ex321.htm (EX-32.1) — 8KB
• 0001757898-25-000002.txt ( ) — 9473KB
• ste-20241231.xsd (EX-101.SCH) — 52KB
• ste-20241231_cal.xml (EX-101.CAL) — 115KB
• ste-20241231_def.xml (EX-101.DEF) — 325KB
• ste-20241231_lab.xml (EX-101.LAB) — 773KB
• ste-20241231_pre.xml (EX-101.PRE) — 533KB
• ste-20241231_htm.xml (XML) — 1515KB

—Financial Information

Part I—Financial Information Item 1.

Financial Statements

Financial Statements 3 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 31 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 47 Item 4.

Controls and Procedures

Controls and Procedures 48

—Other Information

Part II—Other Information Item 1.

Legal Proceedings

Legal Proceedings 49 Item 1A.

Risk Factors

Risk Factors 49 Item 2. Unregistered Sales of Equity Securities, Use or Proceeds, and Issuer Purchases of Equity Securities 50 Item 5. Other Information 50 Item 6. Exhibits 51 Signature 52 2 Table of Contents PART 1—FINANCIAL INFORMATION As used in this Quarterly Report on Form 10-Q, STERIS plc and its consolidated subsidiaries together are called "STERIS," the "Company," "we," "us," or "our," unless otherwise noted.

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS STERIS PLC AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) December 31, 2024 March 31, 2024 (Unaudited) Assets Current assets: Cash and cash equivalents $ 155,178 $ 207,020 Accounts receivable (net of allowances of $ 22,359 and $ 22,984 respectively) 915,199 1,008,315 Inventories, net 649,558 674,535 Prepaid expenses and other current assets 177,918 174,349 Current assets held for sale — 804,904 Total current assets 1,897,853 2,869,123 Property, plant, and equipment, net 1,921,733 1,765,180 Lease right-of-use assets, net 153,879 173,201 Goodwill 4,044,198 4,070,712 Intangibles, net 1,923,020 2,119,282 Other assets 67,679 66,199 Total assets $ 10,008,362 $ 11,063,697 Liabilities and equity Current liabilities: Accounts payable $ 238,298 $ 251,723 Accrued income taxes — 13,640 Accrued payroll and other related liabilities 160,785 164,831 Short-term lease obligations 32,451 31,239 Short-term indebtedness 125,000 85,938 Accrued expenses and other 334,586 319,744 Current liabilities held for sale — 64,012 Total current liabilities 891,120 931,127 Long-term indebtedness 2,038,725 3,120,162 Deferred income taxes, net 453,125 479,688 Long-term lease obligations 123,717 145,828 Other liabilities 73,129 71,546 Total liabilities $ 3,579,816 $ 4,748,351 Commitments and contingencies (see Note 10) Ordinary shares, with $ 0.001 par value; 500,000 shares authorized; 98,245 and 98,883 ordinary shares issued and outstanding, respectively 4,404,687 4,543,176 Retained earnings 2,385,664 2,087,645 Accumulated other comprehensive loss ( 374,250 ) ( 328,657 ) Total shareholders' equity 6,416,101 6,302,164 Noncontrolling interests 12,445 13,182 Total equity 6,428,546 6,315,346 Total liabilities and equity $ 10,008,362 $ 11,063,697 See notes to consolidated financial statements. 3 Table of Contents STERIS PLC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share a

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) For the Three and Nine Months Ended December 31, 2024 and 2023 (dollars in thousands, except as noted) 1. Nature of Operations and Summary of Significant Accounting Policies STERIS is a leading global provider of products and services that support patient care with an emphasis on infection prevention. WE HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare and life science products and services around the globe. We offer our Customers a unique mix of innovative products and services. These include: consumable products, such as detergents, endoscopy accessories, barrier products, instruments and tools; services, including equipment installation and maintenance, microbial reduction of medical devices, instrument and scope repair, laboratory testing, and outsourced reprocessing; capital equipment, such as sterilizers, surgical tables, and automated endoscope reprocessors; and connectivity solutions such as operating room ("OR") integrati on. We operate and report our financial information in three reportable business segments: Healthcare, Applied Sterilization Technologies ("AST"), and Life Sciences. Previously, we had four reportable business segments, however, as a result of the divestiture of our Dental segment, Dental is presented as discontinued operations. Historical information has been retrospectively adjusted to reflect these changes for comparability purposes, as required. We describe our business segments in Note 11 titled "Business Segment Information." Our fiscal year ends on March 31. References in this Quarterly Report to a particular "year" or "year-end" mean our fiscal year. The significant accounting policies applied in preparing the accompanying consolidated financial statements of the Company are summarized below: Interim Financial Statements We prepared the accompanying unaudited consolidated financial statements of the Company according to accountin

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued) For the Three and Nine Months Ended December 31, 2024 and 2023 (dollars in thousands, except as noted) Discontinued Operations On April 11, 2024, the Company announced its plan to sell substantially all of the net assets of its Dental segment for total cash consideration of $ 787,500 , subject to customary adjustments, and up to an additional $ 12,500 in contingent payment should the Dental business achieve certain revenue targets in fiscal 2025. The transaction was structured as an equity sale and closed on May 31, 2024. A component of an entity is reported in discontinued operations after meeting the criteria for held for sale classification if the disposition represents a strategic shift that has (or will have) a major effect on the entity's operations and financial results. We analyzed the quantitative and qualitative factors relevant to the divestiture of our Dental segment and determined that those conditions for discontinued operations presentation had been met prior to March 31, 2024. The Dental segment results of operations were reclassified to income (loss) from discontinued operations in the Consolidated Statements of Income for all periods presented, and we classified the Dental segment's assets and liabilities as held for sale for the year ended March 31, 2024 in the accompanying Consolidated Balance Sheets. Due to the transaction closing in the first quarter of fiscal 2025, the held for sale assets and liabilities were classified as current as of March 31, 2024. Our Consolidated Statements of Cash Flows include the financial results of the Dental segment through the date of sale on May 31, 2024. For additional information regarding this transaction and its effect on our financial reporting, refer to Note 4 titled, "Discontinued Operations" and Note 11 titled, "Business Segment Information." Use of Estimates We make certain estimates and assumptions when preparing financial statem

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued) For the Three and Nine Months Ended December 31, 2024 and 2023 (dollars in thousands, except as noted) Certain costs to fulfill a contract are capitalized and amortized over the term of the contract if they are recoverable, directly related to a contract and generate resources that we will use to fulfill the contract in the future. At December 31, 2024, assets related to costs to fulfill a contract were not material to our consolidated financial statements. Refer to Note 11 titled, "Business Segment Information" for disaggregation of revenue. Product Revenues Product revenues consist of revenues generated from sales of consumables and capital equipment. These contracts are primarily based on a Customer's purchase order and may include a distributor, dealer or group purchasing organization ("GPO") agreement. We recognize revenue for sales of products when control passes to the Customer, which generally occurs either when the products are shipped or when they are received by the Customer. Revenue related to capital equipment products is deferred until installation is complete if the capital equipment and installation are highly integrated and form a single performance obligation. Service Revenues Within our Healthcare and Life Sciences segments, Service revenues include revenue generated from parts and labor associated with the maintenance, repair and installation of capital equipment. These contracts are primarily based on a Customer's purchase order and may include a distributor, dealer, or GPO agreement. For maintenance, repair and installation of capital equipment, revenue is recognized upon completion of the service. Healthcare service revenues also include outsourced reprocessing services and instrument repairs. Contracts for outsourced reprocessing services are primarily based on an agreement with a Customer, ranging in length from several months to 15 years. Outsourced reprocessing ser

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued) For the Three and Nine Months Ended December 31, 2024 and 2023 (dollars in thousands, except as noted) approximately 53 % of the transaction price within one year and approximately 36 % beyond one year. The remainder has yet to be scheduled for delivery. Recently Issued Accounting Standards Impacting the Company Recently Issued Accounting Standards Impacting the Company are presented in the following table: Standard Date of Issuance Description Dat

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