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Sotera Health Reports First-Quarter 2025 Results

• Q1 2025 net revenues increased 2.6% to $255 million, compared to Q1 2024, or 4.4% on a constant currency basis
• Q1 2025 net loss of $13 million or $0.05 per diluted share, compared to net income of $6 million or $0.02 per diluted share in Q1 2024
• Q1 2025 Adjusted EBITDA⁽¹⁾ increased 8.8% to $122 million, compared to Q1 2024, or 11.2% on a constant currency basis
• Q1 2025 Adjusted EPS⁽¹⁾ of $0.14, an increase of $0.01 per diluted share, compared to Adjusted EPS of $0.13 in Q1 2024
• Company reaffirms full-year 2025 outlook of 4.0% - 6.0% net revenues growth and 4.5% - 6.5% Adjusted EBITDA growth, both on a constant currency basis
  

CLEVELAND, May 01, 2025 (GLOBE NEWSWIRE) -- Sotera Health Company (鈥淪otera Health鈥� or the 鈥淐ompany鈥�) (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 (鈥淓O鈥�) 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 (鈥淎djusted EPS鈥�) of $0.14, an increase of $0.01 compared to the first-quarter 2024.

鈥淲e 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,鈥� said Chairman and Chief Executive Officer, Michael B. Petras, Jr. 鈥淲e 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听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听31, 2024. As of March听31, 2025, the Company had no balance outstanding on its revolving credit facility. The Company鈥檚 material debt balances currently outstanding do not mature until 2031. Sotera Health鈥檚 Net Leverage Ratio⁽¹⁾ as of March听31, 2025 improved to 3.6x from 3.7x as of December听31, 2024.

On April 30, 2025 the Company closed on an amendment to its revolving credit facility that increased the facility鈥檚 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:

• Net revenues growth in the range of 4.0% to 6.0%, on a constant currency basis,
  • Foreign currency headwind to net revenues of approximately 1.25% based on average March 2025 exchange rates, updated from the previous outlook of 2.25%,
• Adjusted EBITDA growth in the range of 4.5% to 6.5%, on a constant currency basis,
  • Foreign currency headwind to Adjusted EBITDA of approximately 1.50% based on average March 2025 exchange rates, updated from the previous outlook of 2.50%,
• Interest Expense in the range of $155 million to $165 million,
• Tax rate applicable to Adjusted Net Income⁽¹⁾ in the range of 33.0% to 35.0%,
• Adjusted EPS in the range of $0.70 to $0.76,
• A weighted-average fully diluted share count in the range of 286 million to 287 million shares,
• Capital expenditures in the range 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 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鈥檚 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鈥檚 current expectations regarding supply chain continuity, particularly for the supply of EO and Cobalt-60 (鈥淐o-60鈥�), 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听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 鈥淐autionary Note Regarding Forward-Looking Statements.鈥�

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(1)}This is a non-GAAP financial measure used throughout this press release; please refer to the section 鈥淣on-GAAP Financial Measures鈥� 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鈥檚 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 or via the Investor Relations section of the Company鈥檚 website at , along with accompanying materials. A replay of the webcast will be available on the Company鈥檚 website.

Updates on recent developments in matters relevant to investors can be found on the Investor Relations section of the Sotera Health website at . For developments related to EO, updates can be found at .

Upcoming Investor Events

• Sotera Health 2025 Annual Meeting of Stockholders at 9:00 a.m. Eastern Daylight Time, May 21, 2025
• Jefferies Global Healthcare Conference at 7:35 a.m. Eastern Daylight Time, June 4, 2025
• Goldman Sachs 4th annual Global Healthcare Conference at 10:00 a.m. Eastern Daylight Time, June 10, 2025
  

Cautionary Note Regarding Forward-Looking Statements

Unless expressly indicated or the context requires otherwise, the terms 鈥淪otera Health,鈥� 鈥淐ompany,鈥� 鈥渨e,鈥� 鈥渦s,鈥� and 鈥渙ur鈥� 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鈥檚 expectations about future events and the Company鈥檚 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 鈥渁nticipate,鈥� 鈥渁ppear,鈥� 鈥渁ssume,鈥� 鈥渂elieve,鈥� 鈥渆stimate,鈥� 鈥渆xpect,鈥� 鈥渇orecast,鈥� 鈥渋ntend,鈥� 鈥渓ikely,鈥� 鈥渕ay,鈥� 鈥減lan,鈥� 鈥減roject,鈥� 鈥渟eek,鈥� 鈥渟hould,鈥� 鈥渟trategy,鈥� 鈥渨ill鈥� 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鈥檚 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 鈥� Sterigenics庐, Nordion庐 and Nelson Labs庐. Sotera Health is committed to its mission, Safeguarding Global Health庐.

INVESTOR RELATIONS CONTACT
Jason Peterson
Vice President Investor Relations & Treasurer
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MEDIA CONTACT
Kristin Gibbs
Chief Marketing Officer

Source: Sotera Health Company

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