DUBLIN, IRELAND, May 18, 2021 (GLOBE NEWSWIRE) -- STERIS plc (NYSE: STE) (“STERIS” or the “Company”) today announced financial results for its fiscal 2021 fourth quarter ended March 31, 2021. Revenue as reported for the quarter increased 6% to $873.5 million compared with $823.0 million in the fourth quarter of fiscal 2020, with growth in all three segments. Constant currency organic revenue (see Non-GAAP Financial Measures) increased 0.3% for the fourth quarter of fiscal 2021 as compared to constant currency organic revenue results in the fourth quarter of fiscal 2020. For the full fiscal year, revenue as reported increased 3% to $3,107.5 million and constant currency organic revenue was up slightly from the prior year.
“We are pleased to finish fiscal 2021 with constant currency organic revenue up slightly from last year and double-digit adjusted net income growth, even with the impact of the COVID-19 pandemic. This performance speaks to the resilience of our business and the good work by our Associates," said Walt Rosebrough, President and Chief Executive Officer of STERIS. “Our outlook for fiscal 2022 reflects the additions of Key Surgical for the full year and ten months of Cantel Medical as-well-as another year of record organic revenue and earnings, as we expect healthcare procedure volumes to return to pre-pandemic levels.”
Fourth Quarter and Full Year Operating ResultsAs reported, net income for the fourth quarter was $87.4 million or $1.02 per diluted share, compared with $122.6 million or $1.43 per diluted share in the fourth quarter of fiscal 2020. Adjusted net income (see Non-GAAP Financial Measures) for the fourth quarter of fiscal 2021 was $140.3 million or $1.63 per diluted share, compared with the previous year’s fourth quarter of $139.8 million or $1.63 per diluted share. As reported, full year net income was $397.4 million, or $4.63 per diluted share, compared with $407.7 million, or $4.76 per diluted share in fiscal 2020. Adjusted net income for fiscal 2021 was $530.2 million, or $6.17 per diluted share, compared with adjusted net income of $482.7 million, or $5.64 per diluted share in fiscal 2020. The effective tax rate was primarily impacted by discrete item adjustments.
In the fourth quarter of fiscal 2021, STERIS eliminated the use of LIFO for inventory accounting, which impacted our quarterly profit measures for fiscal 2021. The impact of this accounting change for fiscal 2021 caused a $0.03 reduction in earnings per diluted share. This accounting change has been retrospectively applied to all periods presented in the attached tables.
Fourth Quarter Segment ResultsHealthcare revenue as reported grew 3% in the quarter to $561.8 million compared with $546.6 million in the fourth quarter of fiscal 2020. This performance reflected a 25% increase in consumable revenue, driven by the addition of $32.1 million in revenue from Key Surgical, and a 4% reduction in both service and capital equipment revenue. Constant currency organic revenue declined 4% for the quarter. Healthcare operating income was $122.7 million compared with $120.9 million in last year’s fourth quarter. The increase in profitability was primarily due to the favorable impact from Key Surgical.
Fiscal 2021 fourth quarter revenue for Applied Sterilization Technologies increased 15% as reported to $187.5 million compared with $163.7 million in the same period last year. Constant currency organic revenue increased 10%, driven primarily by increased demand from medical device Customers in the quarter. Segment operating income was $88.2 million in the fourth quarter of fiscal 2021 compared with operating income of $72.0 million in the same period last year primarily due to the increased volume, lower expenses and favorable foreign currency impact.
Life Sciences fourth quarter revenue as reported grew 10% to $124.2 million compared with $112.7 million in the fourth quarter of fiscal 2020, driven by 43% growth in capital equipment revenue and 5% growth in service revenue which were partially offset by a 4% decline in consumable revenue. Constant currency organic revenue growth was 7% in the quarter. Operating income was $44.4 million in the fourth quarter of fiscal 2021 compared with $41.0 million in the prior year’s fourth quarter primarily driven by increased volume.
Cash Flow Net cash provided by operations for fiscal 2021 was $689.6 million, compared with $590.6 million for fiscal 2020. Free cash flow (see Non-GAAP Financial Measures) for fiscal 2021 was $450.9 million compared with $380.2 million in the prior year period. The increase in free cash flow is primarily due to improvements in working capital somewhat offset by higher capital expenditures.
Fiscal 2022 OutlookWith Cantel Medical planned to close on June 2, STERIS is providing outlook including Cantel Medical for fiscal 2022. STERIS expects as reported revenue of approximately $4.5 billion. Constant currency organic revenue growth is expected to be in the range of 8-9% for fiscal 2022. Reflecting March 31, 2021 forward rates, currency movements are anticipated to be favorable to revenue by approximately $15 million for fiscal 2022. Adjusted earnings per diluted share are anticipated to be in the range of $7.40 - $7.65, which assumes an adjusted effective tax rate of 21-22% and a share count of approximately 99 million diluted shares.
Free cash flow for fiscal 2022 is expected to be approximately $380 million, reflecting approximately $200 million in integration and deal related costs primarily for the purchase of Cantel Medical. Capital spending is anticipated to be approximately $320 million for the combined company.
Dividend AnnouncementSTERIS’s Board of Directors has approved a quarterly interim dividend of $0.40 per share. The dividend is payable June 25, 2021 to shareholders of record at the close of business on May 28, 2021.
Conference Call As previously announced, STERIS management will host a conference call tomorrow, May 19, 2021 at 11:00 a.m. ET. The conference call can be heard at www.steris-ir.com or via phone by dialing 1-833-535-2199 in the United States or 1-412-902-6776 internationally, then asking to join the conference call for STERIS plc.
For those unable to listen to the conference call live, a replay will be available beginning at 1:00 p.m. ET on May 19, 2021, either at www.steris-ir.com or via phone. To access the replay of the call, please use the access code 10154451 and dial 1-877-344-7529 in the United States or 1-412-317-0088 internationally.
About STERIS STERIS’s MISSION IS TO HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare and life science products and services around the globe. For more information, visit www.steris.com.
Investor Contact: Julie Winter, Vice President, Investor Relations and Corporate CommunicationsJulie_Winter@steris.com+1 440 392 7245
Media Contact: Stephen Norton, Senior Director, Corporate CommunicationsStephen_Norton@steris.com+1 440 392 7482
Non-GAAP Financial MeasuresAdjusted net income, adjusted EBIT, free cash flow and constant currency organic revenue are non-GAAP measures that may be used from time to time and should not be considered replacements for GAAP results. Non-GAAP financial measures are presented in this release with the intent of providing greater transparency to supplemental financial information used by management and the Board of Directors in their financial analysis and operational decision making. These amounts are disclosed so that the reader has the same financial data that management uses with the belief that it will assist investors and other readers in making comparisons to our historical operating results and analyzing the underlying performance of our operations for the periods presented. The Company believes that the presentation of these non-GAAP financial measures, when considered along with our GAAP financial measures, provides a more complete understanding of the factors and trends affecting our business than could be obtained absent this disclosure.
Adjusted net income excludes the amortization of intangible assets acquired in business combinations, acquisition related transaction costs, integration costs related to acquisitions, redomiciliation and tax restructuring costs, COVID-19 incremental costs, settlement of I.R.S. adjustments related to prior fiscal years, and certain other unusual or non-recurring items. COVID-19 incremental costs includes the additional costs attributable to COVID-19 such as enhanced cleaning protocols, personal protective equipment for our employees, event cancellation fees, and payroll costs associated with our response to COVID-19, net of any government subsidies available. STERIS believes this measure is useful because it excludes items that may not be indicative of or are unrelated to our core operating results and provides a baseline for analyzing trends in our underlying businesses.
The Company defines free cash flow as cash flows from operating activities less purchases of property, plant, equipment and intangibles, plus proceeds from the sale of property, plant, equipment, and intangibles. STERIS believes that free cash flow is a useful measure of the Company’s ability to fund future principal debt repayments and growth outside of core operations, pay cash dividends, and repurchase ordinary shares.
To measure the percentage organic revenue growth, the Company removes the impact of significant acquisitions and divestitures that affect the comparability and trends in revenue. To measure the percentage constant currency organic revenue growth, the impact of changes in currency exchange rates and acquisitions and divestitures that affect the comparability and trends in revenue are removed. The impact of changes in currency exchange rates is calculated by translating current year results at prior year average currency exchange rates.
Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported sales, gross profit, operating income, net earnings and net earnings per diluted share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of the Company’s operations that, when viewed with GAAP results and the reconciliations to corresponding GAAP financial measures below, provide a more complete understanding of the business. The Company strongly encourages investors and shareholders to review its financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This press release and the referenced conference call may contain forward-looking statements within the meaning of the federal securities laws about STERIS. Forward-looking statements speak only as to the date the statement is made and may be identified by the use of forward-looking terms such as “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “projects,” “targets,” “forecasts,” “outlook,” “impact,” “potential,” “confidence,” “improve,” “optimistic,” “deliver,” “orders,” “backlog,” “comfortable,” “trend”, and “seeks,” or the negative of such terms or other variations on such terms or comparable terminology. These forward-looking statements are based on current expectations, estimates or forecasts about our businesses, the industries in which we operate and current beliefs and assumptions of management and are subject to uncertainty and changes in circumstances. Investors should understand that these statements are not guarantees of performance or results. Many important factors could affect actual financial results and cause them to vary materially from the expectations contained in the forward-looking statements. No assurances can be provided as to any result or the timing of any outcome regarding matters described in STERIS’s or Cantel’s securities filings or otherwise with respect to any regulatory action, administrative proceedings, government investigations, litigation, warning letters, cost reductions, business strategies, earnings or revenue trends or future financial results. Unless legally required, we do not undertake to update or revise any forward-looking statements even if events make clear that any projected results, express or implied, will not be realized. These risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements include, without limitation:
Investors are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by applicable law. This cautionary statement is applicable to all forward-looking statements contained herein and in the referenced conference call.
Attachment
Source: STERIS plc