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Sotera Health Co (SHC) Q2 2025 Earnings Call Highlights: Strong Revenue Growth and Raised Outlook

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09-08-2025

Business
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Sotera Health Co (SHC) Q2 2025 Earnings Call Highlights: Strong Revenue Growth and Raised Outlook

Revenue: Increased by 6.4% to $294 million in Q2 2025. Adjusted EBITDA: Grew by 9.8% to $151 million, with margins at 51.2%. Net Income: $8 million or $0.03 per diluted share for Q2 2025. Adjusted EPS: Improved to $0.20, up $0.01 from Q2 2024. Sterigenics Revenue: Increased by 10.5% to $195 million. Nordion Revenue: Increased by 2.9% to $42 million. Nelson Labs Revenue: Declined by 3.3% to $57 million. Operating Cash Flow: Approximately $57 million in Q2 2025. Capital Expenditures: Totaled approximately $31 million in the quarter. Net Leverage Ratio: Improved to 3.5 times from 3.7 times at the end of 2024. 2025 Revenue Growth Outlook: Raised to 4.5% to 6%. 2025 Adjusted EBITDA Growth Outlook: Increased to 6% to 7.5%. 2025 Adjusted EPS Outlook: Raised to $0.75 to $0.82. 2025 Capital Expenditures Outlook: Revised to $170 million to $180 million. Warning! GuruFocus has detected 3 Warning Sign with SHC. Release Date: August 08, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Sotera Health Co (NASDAQ:SHC) reported a strong second quarter with a 6.4% increase in revenue and a 9.8% growth in adjusted EBITDA. Sterigenics experienced a 10.5% year-over-year revenue growth, driven by increased customer demand and successful facility expansion. Nordion exceeded revenue expectations due to the timing of Cobalt-60 shipments, contributing positively to the quarter's performance. Nelson Labs achieved a 514 basis points expansion in segment income margin, marking the fourth consecutive quarter of year-over-year margin improvement. The company raised its 2025 revenue growth outlook to 4.5% to 6% and adjusted EBITDA growth outlook to 6% to 7.5%, reflecting improved performance expectations. Negative Points Nelson Labs experienced a 3.3% decline in revenue compared to Q2 2024, primarily due to the anticipated impact from expert advisory services. Nordion's segment income margin decreased by 145 basis points due to the timing of supplier mix, despite an increase in revenue. The company is facing increased maintenance-related downtime in the second half of the year, which may affect growth. There is a potential risk associated with Russian-supplied Cobalt-60, although it has improved to less than 0.5% of total company 2025 revenue. The effective tax rate is projected to be relatively high, in the range of 31.5% to 33.5%, despite recent favorable changes in US tax law. Q & A Highlights Q: Did Sotera Health see any pull-forward dynamics in Sterigenics due to tariff concerns? A: Michael Petras, CEO, stated that there were no significant pull-forward dynamics related to tariffs. The volume increase was anticipated and aligned with their expectations for the year. Q: Can you elaborate on the recovery in med tech and bioprocessing volumes? A: Michael Petras, CEO, explained that both med tech and bioprocessing showed strong performance. Bioprocessing, although a smaller part of the business, saw significant growth, supported by recent capacity expansions. Med tech volumes were steady, with growth across multiple categories. Q: What were the drivers behind the margin improvement at Nelson Labs? A: Michael Petras, CEO, attributed the margin improvement to labor productivity, favorable mix shifts from expert advisory services to core lab testing, and a 3% price increase. This marks the fourth consecutive quarter of margin expansion. Q: How does the extension of the EPA's updated ETO regulations impact Sotera Health's investments? A: Michael Petras, CEO, stated that the extension allows for optimal installation and validation of emissions controls. The company will continue to invest in compliance and sees this as an opportunity to optimize costs. Q: What is the outlook for Sterigenics' volume and mix growth in the second half of the year? A: Jonathan Lyons, CFO, indicated that while the first half saw strong growth, the second half might see slightly muted growth due to increased maintenance-related downtime. However, the overall trajectory remains positive. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.

Yahoo

09-08-2025

Business
Yahoo

Sotera Health Co (SHC) Q2 2025 Earnings Call Highlights: Strong Revenue Growth and Raised Outlook

Sotera Health Reports Strong Second-Quarter and First-Half 2025 Results

Yahoo

08-08-2025

Business
Yahoo

Sotera Health Reports Strong Second-Quarter and First-Half 2025 Results

(1) CLEVELAND, Aug. 08, 2025 (GLOBE NEWSWIRE) -- Sotera Health Company ('Sotera Health' or the 'Company') (Nasdaq: SHC), a leading global provider of mission-critical end-to-end sterilization solutions, lab testing and advisory services for the healthcare industry, today announced financial results for the three- and six- months ended June 30, 2025. Second-quarter 2025 net revenues increased 6.4% to $294 million, compared to $277 million in the second-quarter 2024. Net revenues increased 6.0% on a constant currency basis. Net income was $8 million, or $0.03 per diluted share, which includes a pending and previously disclosed settlement of approximately $34 million related to ethylene oxide ('EO') claims against Sterigenics, compared to net income of $9 million, or $0.03 per diluted share, in the second-quarter of 2024. Adjusted EBITDA for the second-quarter 2025 increased 9.8% to $151 million compared to the second-quarter 2024, or 9.5% on a constant currency basis. Second-quarter 2025 Adjusted Earnings Per Diluted Share ('Adjusted EPS') increased $0.01 to $0.20 compared to the second-quarter of 2024. For the first six months of 2025, net revenues increased 4.6% to $549 million, compared to $525 million for the same period in 2024. Net revenues increased 5.3% on a constant currency basis. Net loss was $5 million, or $0.02 per diluted share, which includes pending and previously disclosed settlements of approximately $31 million and $34 million related to EO claims against Sterigenics, compared to net income of $15 million, or $0.05 per diluted share, for the same period last year. Adjusted EBITDA for the first half of 2025 increased 9.3% to $273 million, or 10.2% on a constant currency basis, compared to the same period last year. Adjusted EPS increased by $0.01 to $0.33 compared to the first half of 2024. 'We are pleased to announce that we delivered more than 6% top-line growth for the quarter, supported by strong volume performance at Sterigenics. Adjusted EBITDA grew nearly 10% in the quarter with approximately 160 basis points of margin expansion, driven by over 500 basis points of improvement at Nelson Labs,' said Chairman and Chief Executive Officer, Michael B. Petras, Jr. 'These positive results reflect the essential nature of our services and our team's disciplined execution.' Petras continued, 'With improving momentum through the first half of the year, we are raising our full-year outlook for revenue, Adjusted EBITDA and Adjusted EPS, reflecting our confidence in continued execution and performance.' ________________________(1) This is non-GAAP financial measure used throughout this press release; please refer to the section 'Non-GAAP Financial Measures' for explanations of our non-GAAP financial measures and the schedules provided later in this release for reconciliations of reported GAAP to non-GAAP financial measures. Second-Quarter and First-Half 2025 Review by Business Segment Sterigenics Sterigenics delivered strong results for the second-quarter 2025 with net revenues up 10.5% to $195 million, or 10.0% on a constant currency basis, compared to the second-quarter 2024. Second-quarter 2025 segment income was $108 million, an increase of 11.3%. For the first six months of 2025, Sterigenics net revenues increased 6.3% to $365 million, or 7.1% on a constant currency basis, compared to the same period in 2024. Segment income increased 7.2% to $196 million. Revenue growth for the quarter was primarily driven by favorable volume and mix, pricing, and changes in foreign currency exchange rates. Segment income and segment income margin increased for the quarter due to favorable volume and mix, as well as pricing, partially offset by inflation. Nordion Nordion net revenues increased 2.9% to $42 million, or 3.4% on a constant currency basis, compared to the second-quarter 2024. Second-quarter 2025 segment income increased slightly to $23 million. For the first six months of 2025, Nordion net revenues increased 14.9% to $75 million, or 16.8% on a constant currency basis, compared to the same period in 2024. Segment income increased 19.6% to $41 million. Revenue growth for the quarter was driven by favorable pricing, as well as volume and mix, partially offset by unfavorable changes in foreign currency exchange rates. Segment income margin decreased primarily due to supplier mix. Nelson Labs Nelson Labs net revenues decreased 3.3% to $57 million, or 4.4% on a constant currency basis, compared to the second-quarter 2024. Nelson Labs second-quarter 2025 segment income increased 13.9% to $20 million. For the first six months of 2025, Nelson Labs net revenues decreased 6.3% to $109 million, or 6.4% on a constant currency basis, compared to the same period in 2024. Segment income increased 10.6% to $36 million. Change in revenues for the quarter were driven by improvement in core lab testing services, favorable pricing, and changes in foreign currency exchange rates, offset by a decline in expert advisory services revenues. Segment income and segment income margin increases were driven by volume and mix improvements, lab optimization, and favorable pricing. Balance Sheet and Liquidity As of June 30, 2025, Sotera Health had $2.3 billion of total debt, and $332 million in unrestricted cash and cash equivalents, compared to $2.3 billion in total debt and $277 million in unrestricted cash and cash equivalents as of December 31, 2024. Sotera Health's Net Leverage Ratio(1) as of second-quarter 2025 improved to 3.5x compared to 3.7x as of December 31, 2024. As of June 30, 2025 the Company had no balance outstanding on its $600 million revolving credit facility. 2025 Outlook Update Sotera Health is providing an update to its full-year 2025 outlook: Net revenues growth range raised to 4.5% - 6.0% from 4.0% - 6.0%, on a constant currency basis, Adjusted EBITDA growth range raised to 6.0% - 7.5% from 4.5% - 6.5%, on a constant currency basis, Foreign currency impact on full-year net revenues and Adjusted EBITDA expected to be neutral, based on average second-quarter 2025 exchange rates, Interest Expense in the range of $155 million to $165 million, Tax rate applicable to Adjusted Net Income(1) range improved to 31.5% - 33.5% from 33% - 35%, Adjusted EPS range raised to $0.75 - $0.82 from $0.70 - $0.76, A weighted-average fully diluted share count in the range of 286 million to 287 million shares, and Capital expenditures are now expected to be in the range of $170 million to $180 million, from previous outlook of $190 million to $210 million. The Company does not provide a reconciliation for non-GAAP financial measures on a forward-looking basis where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items without unreasonable effort. The Company cannot reconcile its expected Adjusted EBITDA, Tax Rate Applicable to Net Income, Adjusted Net Income and Adjusted EPS without unreasonable effort because certain items that impact net income, earnings per share and other reconciling metrics are out of the Company's control and/or cannot be reasonably predicted at this time, including uncertainties caused by changes to the regulatory landscape, restructuring items and certain fair value measurements, all of which are potential adjustments for future earnings. The outlook provided above contains a number of assumptions, including, among others, the Company's current expectations regarding supply chain continuity, particularly for the supply of EO and Cobalt-60, the impact of inflationary trends, including the impact on energy prices and the supply of labor, and the expectation that average second-quarter 2025 exchange rates remain constant for the remainder of 2025. Our outlook is based on current plans and expectations and is subject to several known and unknown risks and uncertainties, including those set forth below under 'Cautionary Note Regarding Forward-Looking Statements.' Earnings Webcast Sotera Health management will host a conference call and live webcast to discuss the Company's financial results and operating highlights at 9:00 a.m. Eastern Daylight Time today. To participate in the live call, please dial 1-844-481-2916 (toll-free in the United States), or 1-412-317-0709 if dialing-in from other locations. A live webcast of the conference call will be accessible at this link or via the Investor Relations section of the Company's website at Presentation & Events | Sotera Health, along with accompanying materials. A replay of the webcast will be available on the Company's website. Updates on recent developments in matters relevant to investors can be found on the Investor Relations section of the Sotera Health website at Investor Relations | Sotera Health. For developments related to EO, updates can be found at Ethylene Oxide | Sotera Health. Cautionary Note Regarding Forward-Looking Statements Unless expressly indicated or the context requires otherwise, the terms 'Sotera Health,' 'Company,' 'we,' 'us,' and 'our' in this document refer to Sotera Health Company, a Delaware corporation, and, where appropriate, its subsidiaries on a consolidated basis. This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and reflects management's expectations about future events and the Company's operating plans and performance and speak only as of the date hereof. Forward-looking statements present our current forecasts and estimates of future events. These statements do not strictly relate to historical or current results and can be identified by words such as 'anticipate,' 'appear,' 'assume,' 'believe,' 'estimate,' 'expect,' 'forecast,' 'intend,' 'likely,' 'may,' 'plan,' 'project,' 'seek,' 'should,' 'strategy,' 'will' and other terms of similar meaning or import in connection with any discussion of future operating, financial or other performance. These forward-looking statements are subject to risks, uncertainties and other factors and actual results may differ materially from those results projected in the statements. These forward-looking statements are subject to various risks, uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. These risks and uncertainties include, but are not limited to, a disruption in the availability or supply of, or increases in the price of, EO, Co-60 or our other direct materials, services and supplies, including as a result of geopolitical instability and/or sanctions against Russia by the United States, Canada, United Kingdom and/or the European Union; fluctuations in foreign currency exchange rates; evolving changes in environmental, health and safety regulations or preferences, and general economic, social and business conditions; health and safety risks associated with the use, storage, transportation and disposal of potentially hazardous materials such as EO and Co-60; the impact and outcome of current and future legal proceedings and liability claims, including litigation related to the use, emissions and releases of EO from our facilities in California, Georgia, Illinois and New Mexico and the possibility that additional claims will be made in the future relating to these or other facilities; our ability to satisfy the conditions for settlement of the EO claims related to our former facility in Willowbrook, Illinois; allegations of our failure to properly perform services and potential product liability claims, recalls, penalties and reputational harm; compliance with the extensive regulatory requirements to which we are subject, the related costs, and any failures to receive or maintain, or delays in receiving, required clearances or approvals; adverse changes in industry trends; competition we face; market conditions and changes, including inflationary trends and the impact of tariffs, that impact our long-term supply contracts with variable price clauses and increase our cost of revenues; business continuity hazards, including supply chain disruptions and other risks associated with our operations; the risks of doing business internationally, including global and regional economic and political instability and compliance with various applicable laws and potentially inconsistent laws and regulations in multiple jurisdictions; our ability to increase capacity at existing facilities, build new facilities in a timely and cost-effective manner and renew leases for our leased facilities; our ability to attract and retain qualified employees; severe health events or environmental events; cybersecurity incidents, unauthorized data disclosures, and our dependence on information technology systems; an inability to pursue strategic transactions, find suitable acquisition targets, or integrate strategic acquisitions into our business successfully; our ability to maintain effective internal control over financial reporting; our reliance on intellectual property to maintain our competitive position and the risk of claims from third parties that we have infringed or misappropriated, or are infringing or misappropriating, their intellectual property rights; our ability to comply with rapidly evolving data privacy and security laws and regulations in various jurisdictions and any ineffective compliance efforts with such laws and regulations; our ability to generate profitability in future periods; impairment charges on our goodwill and other intangible assets with indefinite lives, as well as other long-lived assets and intangible assets with definite lives; the effects of unionization efforts and labor regulations in countries in which we operate; adverse changes to our tax positions in U.S. or non-U.S. jurisdictions or the interpretation and application of U.S. tax legislation or other changes in U.S. or non-U.S. taxation of our operations; and our significant leverage and how this significant leverage could adversely affect our ability to raise additional capital, limit our ability to react to challenges confronting our Company or broader changes in our industry or the economy, limit our flexibility in operating our business through restrictions contained in our debt agreements and/or prevent us from meeting our obligations under our existing and future agreements governing our indebtedness. For additional discussion of these risks and uncertainties, please refer to the Company's filings with the Securities and Exchange Commission, such as its Annual Report on Form 10-K and quarterly reports. We do not undertake any obligation to publicly update or revise these forward-looking statements, except as otherwise required by law. Non-GAAP Financial Measures To supplement our consolidated financial statements presented in accordance with GAAP, we consider Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted EPS, Net Debt and Net Leverage Ratio and constant currency, financial measures that are not based on any standardized methodology prescribed by GAAP. We define Adjusted Net Income as net income (loss) before amortization and certain other adjustments that we do not consider in our evaluation of our ongoing operating performance from period to period. We define Adjusted EBITDA as Adjusted Net Income before interest expense, depreciation (including depreciation of Co-60 used in our operations) and income tax provision applicable to Adjusted Net Income. Adjusted EBITDA margin is equal to Adjusted EBITDA divided by net revenues. Segment income margin is equal to segment income divided by net segment revenues. We define Adjusted EPS as Adjusted Net Income divided by the weighted average number of diluted shares outstanding. Our Net Debt is equal to our total debt net of unamortized debt issuance costs and debt discounts, less cash and cash equivalents. Our Net Leverage Ratio is equal to Net Debt divided by Adjusted EBITDA. Constant currency is a non-GAAP financial measure we use to assess performance excluding the impact of foreign currency exchange rate changes. We calculate constant currency net revenues by translating prior year net revenues in local currency at the average exchange rates applicable for the current period. The translated results are then used to determine year-over-year percentage increases or decreases. We generally refer to such amounts calculated on a constant currency basis as excluding the impact of foreign currency exchange rates. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP. We use these non-GAAP financial measures as the principal measures of our operating performance. Management believes these measures allow management to more effectively evaluate our operating performance and compare the results of our operations from period to period without the impact of certain non-cash items and non-routine items that we do not expect to continue at the same level in the future and other items that are not core to our operations. We believe that these measures are useful to our investors because they provide a more complete understanding of the factors and trends affecting our business than could be obtained without these measures and their disclosure. In addition, we believe these measures will assist investors in making comparisons to our historical operating results and analyzing the underlying performance of our operations for the periods presented. Our management also uses these measurements in their financial analysis and operational decision-making and Adjusted EBITDA serves as the key metric for the attainment of our primary annual incentive program. These measures may be calculated differently from, and therefore may not be comparable to, a similarly titled measure used by other companies. About Sotera Health Sotera Health Company is a leading global provider of mission-critical end-to-end sterilization solutions and lab testing and advisory services for the healthcare industry. Sotera Health goes to market through three businesses – Sterigenics®, Nordion® and Nelson Labs®. Sotera Health is committed to its mission, Safeguarding Global Health®. INVESTOR RELATIONS Jason Peterson Vice President Investor Relations & Treasurer, Sotera Health IR@ MEDIA Kristin GibbsChief Marketing Officer, Sotera Healthkgibbs@ Source: Sotera Health Company Sotera Health CompanyConsolidated Statements of Operations(in thousands, except per share amounts)(unaudited) Three Months EndedJune 30, Six Months EndedJune 30, 2025 2024 2025 2024 Revenues: Service $ 257,244 $ 237,756 $ 481,184 $ 464,237 Product 37,097 38,838 67,680 60,533 Total net revenues 294,341 276,594 548,864 524,770 Cost of revenues: Service 113,293 109,136 220,922 219,988 Product 14,427 14,667 25,889 24,876 Total cost of revenues 127,720 123,803 246,811 244,864 Gross profit 166,621 152,791 302,053 279,906 Selling, general and administrative expenses 68,893 60,575 131,954 118,784 Amortization of intangible assets 9,298 15,417 24,625 31,149 Illinois EO litigation settlements 34,000 — 64,943 — Interest expense, net 40,651 40,388 81,527 82,159 Loss on refinancing of debt 80 23,400 80 24,090 Foreign exchange loss (gain) 627 (611 ) 916 (1,183 ) Other income, net (5,825 ) (1,520 ) (6,066 ) (1,249 ) Income before income taxes 18,897 15,142 4,074 26,156 Provision for income taxes 10,935 6,388 9,372 11,079 Net income (loss) $ 7,962 $ 8,754 $ (5,298 ) $ 15,077 Earnings (Loss) per share: Basic $ 0.03 $ 0.03 $ (0.02 ) $ 0.05 Diluted 0.03 0.03 (0.02 ) 0.05 Weighted average number of common shares outstanding: Basic 283,933 282,894 283,747 282,403 Diluted 285,756 284,541 283,747 284,264 Sotera Health CompanySegment Data(in thousands)(unaudited) Three Months EndedJune 30, Six Months EndedJune 30, 2025 2024 2025 2024 Segment revenues: Sterigenics $ 194,839 $ 176,354 $ 364,523 $ 342,851 Nordion 42,431 41,244 74,988 65,251 Nelson Labs 57,071 58,996 109,353 116,668 Total net revenues $ 294,341 $ 276,594 $ 548,864 $ 524,770 Segment income: Sterigenics $ 107,745 $ 96,778 $ 195,749 $ 182,596 Nordion 23,477 23,420 40,899 34,205 Nelson Labs 19,513 17,137 35,926 32,478 Total segment income 150,735 137,335 272,574 249,279 Less adjustments: Interest expense, net $ 40,651 $ 40,388 $ 81,527 $ 82,159 Depreciation and amortization(a) 34,948 39,830 75,682 80,260 Share-based compensation(b) 8,149 10,206 15,418 18,863 Loss on refinancing of debt(c) 80 23,400 80 24,090 (Gain) Loss on foreign currency and derivatives not designated as hedging instruments, net(d) (3,018 ) (698 ) (1,127 ) 532 Business optimization expenses(e) 2,430 613 4,477 1,784 Professional services relating to EO sterilization facilities(f) 14,035 7,818 26,363 14,157 Illinois EO litigation settlements(g) 34,000 — 64,943 — Accretion of asset retirement obligation(h) 563 636 1,137 1,278 Consolidated income before income taxes $ 18,897 $ 15,142 $ 4,074 $ 26,156 (a) Includes depreciation of Co-60 held at gamma irradiation sites. The three and six months ended June 30, 2025 exclude accelerated depreciation associated with business optimization activities. (b) Represents share-based compensation expense related to employees and Non-Employee Directors. (c) Represents the write-off of unamortized debt issuance costs and discounts, as well as certain other costs incurred related to the Refinancing Term Loans, the Secured Notes and the Revolving Credit Facility. (d) Represents the effects of (i) fluctuations in foreign currency exchange rates and (ii) non-cash mark-to-fair value of embedded derivatives relating to certain customer and supply contracts at Nordion. (e) Represents (i) certain costs related to divestitures, acquisitions and the integration of acquisitions, (ii) professional fees and other costs associated with business optimization, cost saving and other process enhancement projects, and (iii) legal, consulting and other fees associated with the secondary offerings and shareholder engagement. (f) Represents litigation and other professional fees associated with our EO sterilization facilities. (g) Represents (i) the cost to settle 97 pending and threatened EO claims against Sterigenics in Illinois pursuant to the term sheet entered into on April 3, 2025 and (ii) the cost to settle 129 pending and threatened EO claims against Sterigenics in Illinois pursuant to the term sheet entered into on July 23, 2025. (h) Represents non-cash accretion of ARO related to Co-60 gamma and EO sterilization facilities, which are based on estimated site remediation costs for any future decommissioning of these facilities and are accreted over the life of the asset. Sotera Health CompanyCondensed Consolidated Balance Sheets(in thousands)(unaudited) As of June 30, As of December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 334,272 $ 278,865 Accounts receivable, net 136,557 140,327 Inventories, net 59,949 49,158 Other current assets 77,397 57,687 Total current assets 608,175 526,037 Property, plant, and equipment, net 1,080,399 1,036,892 Operating lease assets 31,524 27,551 Other intangible assets, net 300,109 317,653 Goodwill 1,104,502 1,081,073 Other assets 92,020 82,442 Total assets $ 3,216,729 $ 3,071,648 Liabilities and equity Total current liabilities $ 246,320 $ 191,002 Long-term debt, less current portion 2,202,651 2,208,100 Other noncurrent liabilities 208,407 198,135 Deferred income taxes 48,068 69,500 Total liabilities 2,705,446 2,666,737 Total equity 511,283 404,911 Total liabilities and equity $ 3,216,729 $ 3,071,648 Sotera Health CompanyCondensed Consolidated Statements of Cash Flows(in thousands)(unaudited) Six Months EndedJune 30, 2025 2024 Operating activities: Net (loss) income $ (5,298 ) $ 15,077 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Non-cash items 84,361 112,589 Changes in operating assets and liabilities 33,874 (56,672 ) Net cash provided by operating activities 112,937 70,994 Investing activities: Purchases of property, plant and equipment (51,147 ) (76,811 ) Other investing activities 37 37 Net cash used in investing activities (51,110 ) (76,774 ) Financing activities: Proceeds from long-term borrowings — 2,259,350 Payments on long-term borrowings (7,547 ) (2,260,600 ) Payments of debt issuance costs and debt discount (2,326 ) (30,204 ) Buyout of leased facilities — (6,736 ) Shares withheld for employee taxes on equity awards (3,654 ) (2,176 ) Other financing activities (1,493 ) (996 ) Net cash used in financing activities (15,020 ) (41,362 ) Effect of exchange rate changes on cash and cash equivalents 8,600 (6,754 ) Net increase (decrease) in cash and cash equivalents, including restricted cash 55,407 (53,896 ) Cash and cash equivalents, including restricted cash, at beginning of period 278,865 301,654 Cash and cash equivalents, including restricted cash, at end of period $ 334,272 $ 247,758 Supplemental disclosures of cash flow information: Cash paid during the period for interest $ 102,716 $ 111,169 Cash paid during the period for income taxes, net of tax refunds received 32,207 27,714 Purchases of property, plant and equipment included in accounts payable 10,307 13,538 Sotera Health CompanyNon-GAAP Financial Measures(in thousands, except per share amounts)(unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net income (loss) $ 7,962 $ 8,754 $ (5,298 ) $ 15,077 Amortization of intangible assets 11,924 19,755 30,598 39,879 Share-based compensation(a) 8,149 10,206 15,418 18,863 Loss on refinancing of debt(b) 80 23,400 80 24,090 (Gain) Loss on foreign currency and derivatives not designated as hedging instruments, net(c) (3,018 ) (698 ) (1,127 ) 532 Business optimization expenses(d) 2,430 613 4,477 1,784 Professional services relating to EO sterilization facilities(e) 14,035 7,818 26,363 14,157 Illinois EO litigation settlements(f) 34,000 — 64,943 — Accretion of asset retirement obligation(g) 563 636 1,137 1,278 Income tax benefit associated with pre-tax adjustments(h) (20,063 ) (15,297 ) (41,485 ) (24,844 ) Adjusted Net Income 56,062 55,187 95,106 90,816 Interest expense, net 40,651 40,388 81,527 82,159 Depreciation(i) 23,024 20,075 45,084 40,381 Income tax provision applicable to Adjusted Net Income(j) 30,998 21,685 50,857 35,923 Adjusted EBITDA(k) $ 150,735 $ 137,335 $ 272,574 $ 249,279 Net Revenues $ 294,341 $ 276,594 $ 548,864 $ 524,770 Adjusted EBITDA Margin 51.2 % 49.7 % 49.7 % 47.5 % Weighted average number of shares outstanding Basic 283,933 282,894 283,747 282,403 Diluted(l) 285,756 284,541 285,684 284,264 Earnings (Loss) per share Basic $ 0.03 $ 0.03 $ (0.02 ) $ 0.05 Diluted 0.03 0.03 (0.02 ) 0.05 Adjusted earnings per share Basic $ 0.20 $ 0.20 $ 0.34 $ 0.32 Diluted 0.20 0.19 0.33 0.32 (a) Represents share-based compensation expense related to employees and Non-Employee Directors. (b) Represents the write-off of unamortized debt issuance costs and discounts, as well as certain other costs incurred related to the Refinancing Term Loans, the Secured Notes and the Revolving Credit Facility. (c) Represents the effects of (i) fluctuations in foreign currency exchange rates and (ii) non-cash mark-to-fair value of embedded derivatives relating to certain customer and supply contracts at Nordion. (d) Represents (i) certain costs related to divestitures, acquisitions and the integration of acquisitions, (ii) professional fees and other costs associated with business optimization, cost saving and other process enhancement projects, and (iii) legal, consulting and other fees associated with the secondary offerings and shareholder engagement. (e) Represents litigation and other professional fees associated with our EO sterilization facilities. (f) Represents (i) the cost to settle 97 pending and threatened EO claims against Sterigenics in Illinois pursuant to the term sheet entered into on April 3, 2025 and (ii) the cost to settle 129 pending and threatened EO claims against Sterigenics in Illinois pursuant to the term sheet entered into on July 23, 2025. (g) Represents non-cash accretion of ARO related to Co-60 gamma and EO sterilization facilities, which are based on estimated site remediation costs for any future decommissioning of these facilities and are accreted over the life of the asset. (h) Represents the income tax impact of adjustments calculated based on the tax rate applicable to each item. We eliminate the effect of tax rate changes as applied to tax assets and liabilities and unusual items from our presentation of adjusted net income. (i) Includes depreciation of Co-60 held at gamma irradiation sites. The three and six months ended June 30, 2025 excludes accelerated depreciation associated with business optimization activities. (j) Represents the difference between the income tax provision or benefit as determined under U.S. GAAP and the income tax provision or benefit associated with pre-tax adjustments described in footnote (h). (k) $24.4 million and $23.4 million of the adjustments for the three months ended June 30, 2025 and 2024, respectively, and $48.6 million and $47.2 million of the adjustments for the six months ended June 30, 2025 and 2024, respectively, are included in cost of revenues, primarily consisting of amortization of intangible assets, depreciation, and accretion of asset retirement obligations. (l) For the six months ended June 30, 2025, the diluted weighted average shares outstanding presented in this table reflects the amount that would be reported under U.S. GAAP if the Company were to have net income in the six months ended June 30, 2025. Sotera Health CompanyNon-GAAP Financial Measures($'s in thousands except Net Leverage)(unaudited) As of June 30, As of December 31, 2025 2024 Current portion of long-term debt $ 14,820 $ 14,803 Long-term debt 2,202,651 2,208,100 Current portion of finance leases 3,237 2,923 Finance leases less current portion 95,420 95,286 Total Debt 2,316,128 2,321,112 Less: cash and cash equivalents (332,437 ) (277,242 ) Net Debt $ 1,983,691 $ 2,043,870 Adjusted EBITDA(a) $ 571,869 $ 548,574 Net Leverage 3.5x 3.7x (a) Represents Adjusted EBITDA for the twelve months ended June 30, 2025 and December 31, 2024, respectively. Refer to the reconciliation of net income (the most comparable GAAP measure) to Adjusted EBITDA on the following page. Sotera Health CompanyNon-GAAP Financial Measures(in thousands)(unaudited) Twelve MonthsEnded June 30, Twelve MonthsEnded December 31, 2025 2024 Net income $ 24,023 $ 44,398 Amortization of intangible assets 70,096 79,377 Share-based compensation(a) 33,451 36,896 Loss on refinancing of debt(b) 158 24,168 Loss on foreign currency and derivatives not designated as hedging instruments, net(c) 789 2,448 Business optimization expenses(d) 12,061 9,368 Professional services relating to EO sterilization facilities(e) 44,900 32,694 Illinois EO litigation settlement(f) 64,943 — Accretion of asset retirement obligation(g) 2,497 2,638 Income tax benefit associated with pre-tax adjustments(h) (50,128 ) (33,487 ) Adjusted Net Income 202,790 198,500 Interest expense, net 164,059 164,691 Depreciation(i) 87,123 82,420 Income tax provision applicable to Adjusted Net Income(j) 117,897 102,963 Adjusted EBITDA(k) $ 571,869 $ 548,574 Net Revenues $ 1,124,535 $ 1,100,441 Adjusted EBITDA Margin 50.9 % 49.9 %(a) Represents share-based compensation expense related to employees and Non-Employee Directors. (b) Represents the write-off of unamortized debt issuance costs and discounts, as well as certain other costs incurred related to the Refinancing Term Loans, the Secured Notes and the Revolving Credit Facility. (c) Represents the effects of (i) fluctuations in foreign currency exchange rates and (ii) non-cash mark-to-fair value of embedded derivatives relating to certain customer and supply contracts at Nordion. (d) Represents (i) certain costs related to divestitures, acquisitions and the integration of acquisitions, (ii) professional fees and other costs associated with business optimization, cost saving and other process enhancement projects, and (iii) legal, consulting and other fees associated with the secondary offerings and shareholder engagement. (e) Represents litigation and other professional fees associated with our EO sterilization facilities. (f) Represents (i) the cost to settle 97 pending and threatened EO claims against Sterigenics in Illinois pursuant to the term sheet entered into on April 3, 2025 and (ii) the cost to settle 129 pending and threatened EO claims against Sterigenics in Illinois pursuant to the term sheet entered into on July 23, 2025. (g) Represents non-cash accretion of ARO related to Co-60 gamma and EO sterilization facilities, which are based on estimated site remediation costs for any future decommissioning of these facilities and are accreted over the life of the asset. (h) Represents the income tax impact of adjustments calculated based on the tax rate applicable to each item. We eliminate the effect of tax rate changes as applied to tax assets and liabilities and unusual items from our presentation of adjusted net income. (i) Includes depreciation of Co-60 held at gamma irradiation sites and excludes accelerated depreciation associated with business optimization activities. (j) Represents the difference between the income tax provision or benefit as determined under U.S. GAAP and the income tax provision or benefit associated with pre-tax adjustments described in footnote (h). (k) $98.5 million and $97.1 million of the adjustments for the twelve months ended June 30, 2025 and December 31, 2024, respectively, are included in cost of revenues, primarily consisting of amortization of intangible assets, depreciation, and accretion of asset retirement obligations.

Sotera Health Company's Q1 Earnings Call: Our Top 5 Analyst Questions

Yahoo

26-06-2025

Business
Yahoo

Sotera Health Company's Q1 Earnings Call: Our Top 5 Analyst Questions

Sotera Health's first quarter results were well received by the market, as the company's revenue and non-GAAP profit surpassed Wall Street's expectations. Management credited this performance to stable demand across its sterilization and lab testing services, with Sterigenics benefiting from favorable pricing and steady volume trends. CEO Michael Petras highlighted the company's ability to deliver 'mid-single digit top-line growth and double-digit bottom line growth on a constant currency basis,' while also noting strong customer relationships and operational execution as contributing factors. Notably, the Nordion segment saw higher-than-anticipated revenue due to a shift in the timing of Cobalt-60 shipments, though this is expected to balance out over the coming quarters. Is now the time to buy SHC? Find out in our full research report (it's free). Revenue: $254.5 million vs analyst estimates of $246.9 million (2.6% year-on-year growth, 3.1% beat) Adjusted EPS: $0.14 vs analyst estimates of $0.12 (14.9% beat) Adjusted EBITDA: $121.8 million vs analyst estimates of $113.6 million (47.9% margin, 7.2% beat) Management reiterated its full-year Adjusted EPS guidance of $0.73 at the midpoint Operating Margin: 22.4%, in line with the same quarter last year Organic Revenue rose 3.5% year on year (12.1% in the same quarter last year) Market Capitalization: $3.16 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Patrick Donnelly (Citi) asked about the potential impact of tariffs and the company's confidence in navigating them. CEO Michael Petras replied that current tariff policies are not expected to materially affect operations, with most revenue shielded by service-based business and trade agreements. Brett Fishbin (KeyBanc) inquired about drivers of Nelson Labs' margin improvement and future trajectory. CFO Jonathan Lyons explained that stable labor, lab optimization, and regulatory-driven volume growth have supported margin gains, with continued progress expected. Matt Sykes (Goldman Sachs) questioned the legal risk strategy and cross-selling between Nelson Labs and Sterigenics. CEO Michael Petras emphasized confidence in defending legal claims and pointed to ongoing incentives and integration efforts to deepen cross-segment customer relationships. Luke Sergott (Barclays) sought clarification on margin sustainability, particularly after the Nordion shipment timing shift. CEO Michael Petras stated that margin improvement will be primarily sustained by Nelson Labs, with other segments remaining stable. Jason Bednar (Piper Sandler) asked about pricing stability in Sterigenics and potential customer pushback. CEO Michael Petras confirmed that price levels are defensible and consistent with long-term targets, with ongoing discussions reflecting the value delivered to customers. In future quarters, the StockStory team will pay close attention to (1) the pace of volume recovery in Sterigenics and the sustainability of recent pricing gains, (2) whether Nelson Labs can maintain its margin expansion amid regulatory changes and advisory service headwinds, and (3) the normalization of Nordion's revenue as shipment timing effects subside. Ongoing litigation outcomes and any regulatory developments related to ethylene oxide emissions will also be important markers to watch. Sotera Health Company currently trades at $10.85, down from $11.49 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today. Sign in to access your portfolio

Sotera Health Reports First-Quarter 2025 Results

Associated Press

01-05-2025

Business
Associated Press

Sotera Health Reports First-Quarter 2025 Results

CLEVELAND, May 01, 2025 (GLOBE NEWSWIRE) -- Sotera Health Company ('Sotera Health' or the 'Company') (Nasdaq: SHC), a leading global provider of mission-critical end-to-end sterilization solutions, lab testing and advisory services for the healthcare industry, today announced financial results for the three months ended March 31, 2025. First-quarter 2025 net revenues increased 2.6% to $255 million, compared to $248 million in the first-quarter 2024. Net revenues increased 4.4% on a constant currency basis. Net loss was $13 million, or $0.05 per diluted share, which includes a pending and previously disclosed settlement of approximately $31 million related to ethylene oxide ('EO') claims against Sterigenics, compared to net income of $6 million, or $0.02 per diluted share for the first-quarter 2024. Adjusted EBITDA for the first-quarter 2025 increased by 8.8% to $122 million compared to the first-quarter 2024, or 11.2% on a constant currency basis. First-quarter 2025 Adjusted Earnings Per Diluted Share ('Adjusted EPS') of $0.14, an increase of $0.01 compared to the first-quarter 2024. 'We are pleased to report a solid start to the year with mid-single digit revenue growth and strong double digit Adjusted EBITDA growth, on a constant currency basis,' said Chairman and Chief Executive Officer, Michael B. Petras, Jr. 'We have consistently demonstrated the ability to sustain growth and navigate challenges through varying market conditions. Today we are reaffirming our 2025 outlook as our team remains steadfast in our mission of Safeguarding Global Health.' First-Quarter Review by Business Segment Sterigenics For first-quarter 2025, net revenues were $170 million, an increase of 1.9% compared to the first-quarter 2024, or 3.9% on a constant currency basis. Segment income was $88 million, an increase of 2.5% compared to the first-quarter 2024. Net revenue growth for first-quarter 2025 was driven by favorable pricing, partially offset by an unfavorable impact from changes in foreign currency exchange rates. Segment income and segment income margin growth for the quarter was driven by favorable pricing, partially offset by inflation and changes in foreign currency exchange rates. Nordion For first-quarter 2025, net revenues were $33 million, an increase of 35.6% compared to the first-quarter 2024, or 40.6% on a constant currency basis. Segment income increased 61.5% to $17 million compared to the first-quarter 2024. Net revenue growth for the first-quarter 2025 was driven mainly by volume and mix, which was largely attributable to the timing of reactor harvest schedules, partially offset by changes in foreign currency rates. Segment income and segment income margin growth for the first-quarter 2025 were primarily driven by higher volume and mix. Nelson Labs For first-quarter 2025, net revenues were $52 million, a decrease of 9.3% compared to the first-quarter 2024, or 8.6% on a constant currency basis. Segment income increased 7.0% to $16 million compared to the first-quarter 2024. Favorable pricing and improvement in core lab testing services was offset by a decline in expert advisory service revenue and changes in foreign currency exchange rates. Segment income and segment income margin growth for the first-quarter 2025 was primarily driven by favorable pricing as well as volume and mix improvements in core lab testing services coupled with lab optimization, partially offset by lower volume and mix in expert advisory services. Balance Sheet and Liquidity As of March 31, 2025, Sotera Health had $2.3 billion in total debt, and $304 million in cash and cash equivalents, compared to $2.3 billion in total debt and $277 million in cash and cash equivalents as of December 31, 2024. As of March 31, 2025, the Company had no balance outstanding on its revolving credit facility. The Company's material debt balances currently outstanding do not mature until 2031. Sotera Health's Net Leverage Ratio(1) as of March 31, 2025 improved to 3.6x from 3.7x as of December 31, 2024. On April 30, 2025 the Company closed on an amendment to its revolving credit facility that increased the facility's size by $176 million to a total of $600 million, and extended its maturity date to April 2030. Reaffirming 2025 Outlook The 2025 outlook below, first provided on February 27, 2025, remains unchanged except for updates to our foreign currency assumptions: The Company does not provide a reconciliation for non-GAAP financial measures on a forward-looking basis where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items without unreasonable effort. The Company cannot reconcile its expected Adjusted EBITDA, Tax Rate Applicable to Adjusted Net Income, Adjusted Net Income and Adjusted EPS without unreasonable effort because certain items that impact net income, earnings per share and other reconciling metrics are out of the Company's control and/or cannot be reasonably predicted at this time, including uncertainties caused by changes to the regulatory landscape, restructuring items and certain fair value measurements, all of which are potential adjustments for future earnings. The outlook provided above contains a number of assumptions, including, among others, the Company's current expectations regarding supply chain continuity, particularly for the supply of EO and Cobalt-60 ('Co-60'), the impact of inflationary trends including their impact on energy prices and the supply of labor, and the expectation that exchange rates as of March 31, 2025 remain constant for the remainder of 2025. Our outlook is based on current plans and expectations and is subject to several known and unknown risks and uncertainties, including those set forth below under 'Cautionary Note Regarding Forward-Looking Statements.' ______________________________________________ (1)This is a non-GAAP financial measure used throughout this press release; please refer to the section 'Non-GAAP Financial Measures' for explanations of our Non-GAAP financial measures and the schedules provided later in this release for reconciliations of reported GAAP to Non-GAAP financial measures. Earnings Webcast Sotera Health management will host a conference call and live webcast to discuss the Company's financial results and operating highlights at 9:00 a.m. Eastern Daylight Time today. To participate in the live call, please dial 1-844-481-2916 (toll-free in the United States), or 1-412-317-0709 if dialing-in from other locations. A live webcast of the conference call will be accessible at this link or via the Investor Relations section of the Company's website at Presentation & Events | Sotera Health, along with accompanying materials. A replay of the webcast will be available on the Company's website. Updates on recent developments in matters relevant to investors can be found on the Investor Relations section of the Sotera Health website at Investor Relations | Sotera Health. For developments related to EO, updates can be found at Ethylene Oxide | Sotera Health. Upcoming Investor Events Cautionary Note Regarding Forward-Looking Statements Unless expressly indicated or the context requires otherwise, the terms 'Sotera Health,' 'Company,' 'we,' 'us,' and 'our' in this document refer to Sotera Health Company, a Delaware corporation, and, where appropriate, its subsidiaries on a consolidated basis. This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and reflects management's expectations about future events and the Company's operating plans and performance and speak only as of the date hereof. Forward-looking statements present our current forecasts and estimates of future events. These statements do not strictly relate to historical or current results and can be identified by words such as 'anticipate,' 'appear,' 'assume,' 'believe,' 'estimate,' 'expect,' 'forecast,' 'intend,' 'likely,' 'may,' 'plan,' 'project,' 'seek,' 'should,' 'strategy,' 'will' and other terms of similar meaning or import in connection with any discussion of future operating, financial or other performance. These forward-looking statements are subject to risks, uncertainties and other factors and actual results may differ materially from those results projected in the statements. These forward-looking statements are subject to various risks, uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. These risks and uncertainties include, but are not limited to, a disruption in the availability or supply of, or increases in the price of, EO, Co-60 or our other direct materials, services and supplies, including as a result of geopolitical instability and/or sanctions against Russia by the United States, Canada, United Kingdom and/or the European Union; fluctuations in foreign currency exchange rates; evolving changes in environmental, health and safety regulations or preferences, and general economic, social and business conditions; health and safety risks associated with the use, storage, transportation and disposal of potentially hazardous materials such as EO and Co-60; the impact and outcome of current and future legal proceedings and liability claims, including litigation related to the use, emissions and releases of EO from our facilities in California, Georgia, Illinois and New Mexico and the possibility that additional claims will be made in the future relating to these or other facilities; our ability to satisfy the conditions for settlement of the EO claims related to our former facility in Willowbrook, Illinois; allegations of our failure to properly perform services and potential product liability claims, recalls, penalties and reputational harm; compliance with the extensive regulatory requirements to which we are subject, the related costs, and any failures to receive or maintain, or delays in receiving, required clearances or approvals; adverse changes in industry trends; competition we face; market conditions and changes, including inflationary trends and the impact of tariffs, that impact our long-term supply contracts with variable price clauses and increase our cost of revenues; business continuity hazards, including supply chain disruptions and other risks associated with our operations; the risks of doing business internationally, including global and regional economic and political instability and compliance with various applicable laws and potentially inconsistent laws and regulations in multiple jurisdictions; our ability to increase capacity at existing facilities, build new facilities in a timely and cost-effective manner and renew leases for our leased facilities; our ability to attract and retain qualified employees; severe health events or environmental events; cybersecurity incidents, unauthorized data disclosures, and our dependence on information technology systems; an inability to pursue strategic transactions, find suitable acquisition targets, or integrate strategic acquisitions into our business successfully; our ability to maintain effective internal control over financial reporting; our reliance on intellectual property to maintain our competitive position and the risk of claims from third parties that we have infringed or misappropriated, or are infringing or misappropriating, their intellectual property rights; our ability to comply with rapidly evolving data privacy and security laws and regulations in various jurisdictions and any ineffective compliance efforts with such laws and regulations; our ability to generate profitability in future periods; impairment charges on our goodwill and other intangible assets with indefinite lives, as well as other long-lived assets and intangible assets with definite lives; the effects of unionization efforts and labor regulations in countries in which we operate; adverse changes to our tax positions in U.S. or non-U.S. jurisdictions or the interpretation and application of recent U.S. tax legislation or other changes in U.S. or non-U.S. taxation of our operations; and our significant leverage and how this significant leverage could adversely affect our ability to raise additional capital, limit our ability to react to challenges confronting our Company or broader changes in our industry or the economy, limit our flexibility in operating our business through restrictions contained in our debt agreements and/or prevent us from meeting our obligations under our existing and future agreements governing our indebtedness. For additional discussion of these risks and uncertainties, please refer to the Company's filings with the Securities and Exchange Commission, such as its Annual Report on Form 10-K and quarterly reports. We do not undertake any obligation to publicly update or revise these forward-looking statements, except as otherwise required by law. Non-GAAP Financial Measures To supplement our consolidated financial statements presented in accordance with GAAP, we consider Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted EPS, Net Debt and Net Leverage Ratio and constant currency, financial measures that are not based on any standardized methodology prescribed by GAAP. We define Adjusted Net Income as net income (loss) before amortization and certain other adjustments that we do not consider in our evaluation of our ongoing operating performance from period to period. We define Adjusted EBITDA as Adjusted Net Income before interest expense, depreciation (including depreciation of Co-60 used in our operations) and income tax provision applicable to Adjusted Net Income. Adjusted EBITDA margin is equal to Adjusted EBITDA divided by net revenues. We define Adjusted EPS as Adjusted Net Income divided by the weighted average number of diluted shares outstanding. Our Net Debt is equal to our total debt net of unamortized debt issuance costs and debt discounts, less cash and cash equivalents. Our Net Leverage Ratio is equal to Net Debt divided by Adjusted EBITDA. Constant currency is a non-GAAP financial measure we use to assess performance excluding the impact of foreign currency exchange rate changes. We calculate constant currency net revenues by translating prior year net revenues in local currency at the average exchange rates applicable for the current period. The translated results are then used to determine year-over-year percentage increases or decreases. We generally refer to such amounts calculated on a constant currency basis as excluding the impact of foreign currency exchange rates. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP. We use these non-GAAP financial measures as the principal measures of our operating performance. Management believes these measures allow management to more effectively evaluate our operating performance and compare the results of our operations from period to period without the impact of certain non-cash items and non-routine items that we do not expect to continue at the same level in the future and other items that are not core to our operations. We believe that these measures are useful to our investors because they provide a more complete understanding of the factors and trends affecting our business than could be obtained without these measures and their disclosure. In addition, we believe these measures will assist investors in making comparisons to our historical operating results and analyzing the underlying performance of our operations for the periods presented. Our management also uses these measurements in their financial analysis and operational decision-making and Adjusted EBITDA serves as the key metric for the attainment of our primary annual incentive program. These measures may be calculated differently from, and therefore may not be comparable to, a similarly titled measure used by other companies. About Sotera Health Sotera Health Company is a leading global provider of mission-critical end-to-end sterilization solutions and lab testing and advisory services for the healthcare industry. Sotera Health goes to market through three businesses – Sterigenics®, Nordion® and Nelson Labs®. Sotera Health is committed to its mission, Safeguarding Global Health®. INVESTOR RELATIONS CONTACT Jason Peterson Vice President Investor Relations & Treasurer [email protected] MEDIA CONTACT Kristin Gibbs Chief Marketing Officer [email protected] Source: Sotera Health Company

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