Rapid Sterility Testing yields product sterility test results in as little as 6 days and can be used for broadscale medical device and pharmaceutical product applicationSALT LAKE CITY, March 04, 2025 (GLOBE NEWSWIRE) -- Nelson Labs, a Sotera Health company and a global leader in microbiological and analytical chemistry testing and advisory services for the medical device and pharmaceutical industries, now performs product-sterility testing through rapid microbiological methods (RMMs) at three laboratory sit ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-39729 SOTERA HEALTH COMPANY (Exact name of registrant as specified in its charter) Delaware 47-3531161 (State or other jurisdiction of incorporation ...

Safeguarding Global Health® Fourth-Quarter & Full-Year 2024 Earnings Results February 27, 2025 © 2025 Sotera Health Company | All Rights Reserved. Cautionary Note Regarding Forward-Looking Statements and Non-GAAP Financial Measures 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 contai ...

Financial Data and Key Metrics Changes - For the full year 2024, the company reported total revenue of $1.1 billion, marking a 4.9% increase compared to 2023, or 5.4% on a constant currency basis [7][27] - Adjusted EBITDA for 2024 grew by 3.9% to $548.6 million, resulting in an adjusted EBITDA margin of approximately 50% [27][28] - In Q4 2024, total revenue declined by 6.5% to $290 million, with adjusted EBITDA declining by 8.3% to $153 million [13][20] Business Line Data and Key Metrics Changes - Sterigenics reported a revenue growth of 4.2% to $179 million in Q4 2024, driven by favorable pricing and volume mix [22] - Nordion's revenue decreased by 29% to $57 million in Q4 2024, primarily due to unfavorable volume mix [24] - Nelson Labs experienced a revenue decline of 7.3% to $54 million in Q4 2024, attributed to unfavorable volume mix and higher employee compensation costs [25] Market Data and Key Metrics Changes - The company expects total revenue growth for 2025 to be in the range of 4% to 6% on a constant currency basis, with adjusted EBITDA growth projected at 4.5% to 6.5% [18][31] - The first quarter of 2025 is anticipated to be the lightest quarter, with gradual improvement expected throughout the year [32] Company Strategy and Development Direction - The company aims to focus on customer satisfaction, operational excellence, and disciplined capital deployment [9][38] - Strategic priorities include serving customers with end-to-end solutions and winning in growth markets [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in gradual volume recovery in 2025, despite some challenges in the first quarter [42] - The company is monitoring potential tariff impacts but has not incorporated them into guidance yet [31][76] Other Important Information - The company completed a capacity expansion in its Sterigenics business and made significant progress on EO facility enhancements [10][30] - The net leverage ratio improved slightly, finishing the year at 3.7 times [30] Q&A Session Summary Question: Overall volume backdrop and guidance for the year - Management indicated that 2024 played out as expected with gradual improvement, and they anticipate continued volume improvement in 2025 [42] Question: Margins and pricing assumptions - Management expects solid margin improvement throughout 2025, with Q1 typically being the lowest quarter [45] Question: Nelson Labs margin improvement - Management highlighted improvements in labor productivity and consolidation of a lab as key factors for margin enhancement in Nelson Labs [51][63] Question: Capacity concerns in Nelson Labs - Management confirmed that they are in a good position regarding capacity and have consolidated a lab to improve operating leverage [63] Question: Cross-selling initiatives between Sterigenics and Nelson Labs - Management reported positive progress in cross-selling initiatives, which are included in the 2025 guidance [72] Question: Tariff risks and cobalt supply - Management noted that cobalt has historically been exempt from tariffs and expressed confidence in managing potential impacts [110] Question: Disconnect in growth compared to competitors - Management acknowledged that while there may be quarterly discrepancies, they feel confident about their competitive position and execution [115]

Core Insights - Sotera Health Company reported revenue of $290.2 million for the quarter ended December 2024, a decrease of 6.5% compared to the same period last year [1] - The earnings per share (EPS) for the quarter was $0.21, down from $0.26 in the year-ago quarter, aligning with the consensus EPS estimate [1] - The reported revenue fell short of the Zacks Consensus Estimate of $291.56 million, resulting in a surprise of -0.46% [1] Financial Performance - Net Revenues for Sterigenics were reported at $179.43 million, slightly below the estimated $182.82 million, but showed a year-over-year increase of 4.2% [4] - Nelson Labs reported Net Revenues of $53.98 million, which was lower than the estimated $55.49 million, reflecting a year-over-year decline of 7.3% [4] - Nordion's Net Revenues were $56.79 million, exceeding the average estimate of $53.25 million, but represented a significant year-over-year decrease of 28.9% [4] Segment Income - Segment Income for Sterigenics was $99.59 million, slightly below the average estimate of $101.07 million [4] - Nelson Labs achieved Segment Income of $18.07 million, which was above the average estimate of $17.87 million [4] - Nordion's Segment Income was reported at $35.28 million, surpassing the average estimate of $33.55 million [4] Stock Performance - Shares of Sotera Health have returned -0.3% over the past month, compared to a -2.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Insights - Sotera Health Company (SHC) reported quarterly earnings of $0.21 per share, matching the Zacks Consensus Estimate, but down from $0.26 per share a year ago [1] - The company posted revenues of $290.2 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.46% and down from $310.24 million year-over-year [2] - The stock has underperformed the market, losing about 0.3% since the beginning of the year compared to the S&P 500's gain of 1.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.14 on revenues of $262.37 million, and for the current fiscal year, it is $0.78 on revenues of $1.15 billion [7] - The estimate revisions trend for Sotera Health is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Medical Services industry, to which Sotera Health belongs, is currently ranked in the top 34% of over 250 Zacks industries, suggesting that the industry outlook can significantly impact stock performance [8]

Revenue Results - Sotera Health Company announced preliminary revenue results for full-year 2024, which are within the guidance provided during the third quarter earnings release[6] - The revenue results are subject to completion of year-end financial closing procedures and audit by the independent registered public accounting firm[7] Business Update - Michael B. Petras, Jr., Chairman and CEO, will deliver a business update at the 43rd Annual J.P. Morgan Healthcare Conference on January 14, 2025[8]

Core Insights - Sotera Health Company reported a decrease in net revenues for the fourth quarter of 2024, down 6.5% to $290 million compared to $310 million in the same period of 2023, with a net income of $12 million or $0.04 per diluted share [2][3] - For the full year 2024, net revenues increased by 4.9% to $1.10 billion, with net income of $44 million or $0.16 per diluted share, marking the 19th consecutive year of revenue growth for the company [3][4] - The company anticipates a revenue growth outlook for 2025 in the range of 4.0% to 6.0% and Adjusted EBITDA growth of 4.5% to 6.5%, both on a constant currency basis [9][18] Financial Performance - Fourth-quarter 2024 adjusted EBITDA decreased by 8.3% to $153 million, with adjusted earnings per diluted share of $0.21, a decrease of $0.02 from the previous year [2][3] - Full-year 2024 adjusted EBITDA increased by 3.9% to $549 million, with adjusted EPS of $0.70, down $0.02 from 2023 [3][9] - The company had total debt of $2.3 billion and cash and cash equivalents of $277 million as of December 31, 2024, with a net leverage ratio of 3.7x [16][46] Business Segment Performance - In the fourth quarter of 2024, Sterigenics reported net revenues of $179 million, an increase of 4.2% year-over-year, while Nordion's revenues decreased by 28.9% to $57 million due to cobalt harvest timing [5][10] - For full-year 2024, Sterigenics net revenues were $698 million, up 4.6%, and Nordion's revenues increased by 8.0% to $173 million [6][11] - Nelson Labs experienced a revenue decline of 7.3% in the fourth quarter, but for the full year, revenues increased by 3.4% to $229 million [13][14] Governance and Strategic Developments - The company appointed Chris Simon, CEO of Haemonetics, to its board and named Vince Petrella as lead independent director, enhancing its governance structure [4] - The company continues to focus on customer satisfaction, achieving scores over 80%, and has expanded its Sterigenics facility [4]

Core Viewpoint - Sotera Health Company reported a decline in net revenues for the fourth quarter of 2024, while achieving overall revenue growth for the full year, marking the 19th consecutive year of annual revenue growth [4][8]. Financial Performance - Fourth-quarter 2024 net revenues decreased by 6.5% to $290 million compared to $310 million in the same period of 2023, with a constant currency decrease of 5.2% [2]. - Full-year 2024 net revenues increased by 4.9% to $1.10 billion, up from $1.05 billion in 2023, with a constant currency increase of 5.4% [3][8]. - Fourth-quarter net income was $12 million, or $0.04 per diluted share, down from $39 million, or $0.14 per diluted share in the fourth quarter of 2023 [2]. - Full-year net income was $44 million, or $0.16 per diluted share, compared to $51 million, or $0.18 per diluted share in 2023 [3][8]. - Adjusted EBITDA for the fourth quarter decreased by 8.3% to $153 million, while for the full year, it increased by 3.9% to $549 million [2][3]. Business Segment Performance - Sterigenics segment revenues for the fourth quarter were $179 million, an increase of 4.2% year-over-year, with segment income rising by 5.1% to $100 million [5][6]. - Nordion segment revenues for the fourth quarter decreased by 28.9% to $57 million, primarily due to cobalt harvest schedule timing, with segment income down 33.8% to $35 million [9][11]. - Nelson Labs segment revenues for the fourth quarter were $54 million, a decrease of 7.3%, with segment income decreasing by 3.3% to $18 million [12][14]. Balance Sheet and Liquidity - As of December 31, 2024, Sotera Health had total debt of $2.3 billion and cash and cash equivalents of $277 million, compared to $2.3 billion in debt and $296 million in cash at the end of 2023 [15]. - The company's Net Leverage Ratio as of December 31, 2024, was 3.7x, down from 3.8x at the end of 2023 [15][46]. 2025 Outlook - The company anticipates net revenue growth of 4.0% to 6.0% and Adjusted EBITDA growth of 4.5% to 6.5% for the full year 2025, both on a constant currency basis [8][17].

Core Insights - Wall Street analysts expect Sotera Health Company (SHC) to report quarterly earnings of $0.21 per share, reflecting a year-over-year decline of 19.2% [1] - Revenues are projected to be $290.59 million, down 6.3% from the same quarter last year [1] - There has been no revision in the consensus EPS estimate over the past 30 days, indicating stability in analysts' projections [1] Earnings Estimates - Revisions to earnings estimates are crucial indicators for predicting investor actions regarding the stock [2] - Empirical research shows a strong correlation between earnings estimate revisions and short-term stock price performance [2] Key Metrics Analysis - Analysts predict 'Net Revenues- Sterigenics' at $182.82 million, indicating a change of +6.2% from the prior-year quarter [4] - 'Net Revenues- Nelson Labs' is expected to reach $55.49 million, reflecting a decline of 4.7% from the previous year [4] - 'Net Revenues- Nordion' is estimated at $53.25 million, showing a significant decrease of 33.3% from the prior-year quarter [4] Segment Income Projections - 'Segment Income- Sterigenics' is projected to be $101.07 million, up from $94.75 million in the same quarter last year [5] - 'Segment Income- Nelson Labs' is expected to reach $17.87 million, down from $18.68 million in the previous year [5] - 'Segment Income- Nordion' is estimated at $33.55 million, compared to $53.32 million a year ago [6] Stock Performance - Shares of Sotera Health have shown a return of -1% over the past month, compared to a -0.5% change in the Zacks S&P 500 composite [6] - With a Zacks Rank 4 (Sell), SHC is anticipated to underperform the overall market in the near future [6]