ste-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______

Commission File Number 001-38848

STERIS plc

(Exact name of registrant as specified in its charter)

Ireland

98-1455064

(State or other jurisdiction of
incorporation or organization)

(IRS Employer
Identification No.)

70 Sir John Rogerson's Quay,

Dublin 2,

Ireland

D02 R296

(Address of principal executive offices)

(Zip code)

353 1 232 2000

(Registrant’s telephone number, including area code)

_______________________________________________

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:


Title of each class	Trading symbol(s)	Name of Exchange on Which Registered
Ordinary Shares, $0.001 par value	STE	New York Stock Exchange
2.700% Senior Notes due 2031	STE/31	New York Stock Exchange
3.750% Senior Notes due 2051	STE/51	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company,” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The number of ordinary shares outstanding as of August 3, 2023: 98,781,406

Table of Contents

STERIS plc and Subsidiaries

Form 10-Q

Index


		Page
Part I—Financial Information
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	39

Part II—Other Information
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 5.	Other Information	41
Item 6.	Exhibits	42
	Signature	43

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.

ITEM 1. FINANCIAL STATEMENTS

STERIS PLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands)


	June 30, 2023		March 31, 2023
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	208,614	$	208,357
Accounts receivable (net of allowances of $24,367 and $23,427 respectively)	887,756		928,315
Inventories, net	768,835		695,493
Prepaid expenses and other current assets	166,050		179,277
Total current assets	2,031,255		2,011,442
Property, plant, and equipment, net	1,726,091		1,705,512
Lease right-of-use assets, net	195,292		191,741
Goodwill	3,886,599		3,879,219
Intangibles, net	2,865,107		2,955,780
Other assets	80,036		78,145
Total assets	$	10,784,380	$	10,821,839
Liabilities and equity
Current liabilities:
Accounts payable	$	260,687	$	279,620
Accrued income taxes	63,501		43,804
Accrued payroll and other related liabilities	132,112		125,642
Short-term lease obligations	34,413		34,961
Short-term indebtedness	63,438		60,000
Accrued expenses and other	332,760		317,817
Total current liabilities	886,911		861,844
Long-term indebtedness	2,860,116		3,018,655
Deferred income taxes, net	617,633		617,538
Long-term lease obligations	164,744		160,493
Other liabilities	76,604		76,137
Total liabilities	$	4,606,008	$	4,734,667
Commitments and contingencies (see Note 8)
Ordinary shares, with $0.001 par value; 500,000 shares authorized; 98,781 and 98,629 ordinary shares issued and outstanding, respectively	4,498,212		4,486,375
Retained earnings	1,980,933		1,911,533
Accumulated other comprehensive loss	(310,859)		(320,710)
Total shareholders’ equity	6,168,286		6,077,198
Noncontrolling interests	10,086		9,974
Total equity	6,178,372		6,087,172
Total liabilities and equity	$	10,784,380	$	10,821,839

See notes to consolidated financial statements.

Table of Contents

STERIS PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(Unaudited)


	Three Months Ended June 30,
	2023		2022
Revenues:
Product	$	713,858	$	637,076
Service	570,684		519,415
Total revenues	1,284,542		1,156,491
Cost of revenues:
Product	377,178		332,855
Service	333,903		305,838
Total cost of revenues	711,081		638,693
Gross profit	573,461		517,798
Operating expenses:
Selling, general, and administrative	359,058		334,626

Research and development	25,502		24,751
Restructuring expenses	19		26
Total operating expenses	384,579		359,403
Income from operations	188,882		158,395
Non-operating expenses, net:
Interest expense	32,361		22,674

Interest and miscellaneous (income) expense	(1,393)		770
Total non-operating expenses, net	30,968		23,444
Income before income tax expense	157,914		134,951
Income tax expense	34,124		24,196
Net income	123,790		110,755
Less: Net income (loss) attributable to noncontrolling interests	236		(507)
Net income attributable to shareholders	$	123,554	$	111,262

Net income per share attributed to shareholders
Basic	$	1.25	$	1.11
Diluted	$	1.25	$	1.10
Cash dividends declared per share ordinary outstanding	$	0.47	$	0.43

See notes to consolidated financial statements.

Table of Contents

STERIS PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(Unaudited)


	Three Months Ended June 30,
	2023		2022

Net income	$	123,790	$	110,755
Less: Net income (loss) attributable to noncontrolling interests	236		(507)
Net income attributable to shareholders	123,554		111,262

Other comprehensive income (loss)
Amortization of pension and postretirement benefit plan costs, (net of taxes of $(17), and $(6), respectively)	58		29
Change in cumulative currency translation adjustment	9,793		(178,594)
Total other comprehensive income (loss)	9,851		(178,565)
Comprehensive income (loss)	$	133,405	$	(67,303)

See notes to consolidated financial statements.

Table of Contents

STERIS PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	Three Months Ended June 30,
	2023		2022
Operating activities:
Net income	$	123,790	$	110,755
Adjustments to reconcile net income to net cash provided by operating activities:

SEC Form 10-Q filed by STERIS plc (Ireland)