STERIS Announces Financial Results for Fiscal 2022 Third Quarter
•
Third quarter revenue increases 49% as reported; 9% constant currency organic
•
As reported EPS of $1.42; adjusted EPS of $2.12
•
Outlook for FY22 raised
DUBLIN, IRELAND - (February 8, 2022) - STERIS plc (NYSE: STE) (“STERIS” or the “Company”) today announced financial results for its fiscal 2022 third quarter ended December 31, 2021. Revenue as reported for the quarter increased 49% to $1.2 billion compared with $808.9 million in the third quarter of fiscal 2021. Constant currency organic revenue (see Non-GAAP Financial Measures) increased 9% for the third quarter of fiscal 2022 as compared to the third quarter of fiscal 2021.
“We are pleased with our performance in the third quarter, as our balanced revenue stream continues to deliver solid growth in the current environment,” said Dan Carestio, President and Chief Executive Officer of STERIS. “While supply chain and inflation continue to be a challenge, our teams have worked to manage through with minimal impact on our ability to serve our Customers. We continue to anticipate another record year for STERIS and are updating our outlook for the full fiscal year 2022 based on better than anticipated performance.”
As reported, net income for the third quarter was $143.6 million or $1.42 per diluted share, compared with net income of $114.5 million or $1.33 per diluted share in the third quarter of fiscal 2021. Fiscal 2022 third quarter was negatively impacted by amortization of acquired intangibles and inventory and property “step up” and one-time expenses associated with acquisitions totaling approximately $86.6 million. Adjusted net income (see Non-GAAP Financial Measures) for the third quarter of fiscal 2022 was $213.3 million or $2.12 per diluted share, compared with the previous year’s third quarter of $149.2 million or $1.73 per diluted share.
Third Quarter Segment Results
Healthcare revenue as reported grew 46% in the quarter to $759.7 million compared with $521.7 million in the third quarter of fiscal 2021, with $210.3 million added from acquisitions during the quarter. This performance reflected an 84% increase in consumable revenue, a 47% improvement in capital equipment revenue and a 19% increase in service revenue. Constant currency organic revenue increased 5% for the quarter. Healthcare operating income was $169.3 million compared with $115.4 million in last year’s third quarter. The increase in profitability was primarily due to the benefit of acquired businesses and the increase in organic volume.
Fiscal 2022 third quarter revenue for Applied Sterilization Technologies (AST) increased 23% as reported to $216.3 million compared with $176.5 million in the same period last year. Constant currency organic revenue increased 18%, driven primarily by increased demand from medical device and biopharma Customers in the quarter. Segment operating income was $101.3 million in the third quarter of fiscal 2022 compared with operating income of $81.6 million in the same period last year primarily due to increased volume.
Life Sciences third quarter revenue as reported grew 15% to $127.9 million compared with $110.8 million in the third quarter of fiscal 2021. Growth was driven by a 23% increase in consumable revenue, a 13% improvement in service revenue and a 5% increase in capital equipment revenue. Constant currency organic revenue increased 9% in the quarter. Operating income was $52.0 million in the third quarter of fiscal 2022 compared with $41.5 million in the prior year’s third quarter. The increase in profitability was primarily due to the increase in volume and contributions from acquisitions.
Dental third quarter revenue as reported was $105.1 million and operating income was $23.1 million, slightly below the Company’s expectations primarily due to lower patient volumes, supply chain constraints and inflation.
Cash Flow
Net cash provided by operations for the first nine months of fiscal 2022 was $513.1 million, compared with $501.8 million for the same period in fiscal 2021. Free cash flow (see Non-GAAP Financial Measures) for the first nine months of fiscal 2022 was $300.3 million compared with $337.7 million in the prior year period. The decrease in free cash flow is primarily due to anticipated costs associated with the Cantel Medical acquisition and higher capital spending year-over-year.
Outlook
The Company is updating its expectations for fiscal 2022. Constant currency organic revenue growth is now anticipated to be approximately 11%, compared with prior expectations of 10-11%. Adjusted earnings per diluted share are now anticipated to be in the range of $7.85 to $7.95, compared with prior expectations of $7.60 to $7.85. The increased outlook reflects solid growth across the business and higher cost synergies from the Cantel acquisition somewhat offset by continued challenges from supply chain, inflation and earnings dilution from the recent divestiture of the Renal Care business.
Capital expenditures are now anticipated to be approximately $300 million and free cash flow is expected to be approximately $420 million.
Conference Call
As previously announced, STERIS management will host a conference call tomorrow, February 9, 2022 at 10:00 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 12:00 p.m. ET on February 9, 2022, either at www.steris-ir.com or via phone. To access the replay of the call, please use the access code 6968500 and dial 1-877-344-7529 in the United States or 1-412-317-0088 internationally.
About STERIS
STERIS is a leading global provider of products and services that support patient care with an emphasis on infection prevention. WE HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare, life sciences and dental products and services. For more information, visit www.steris.com.
Company Contact:
Julie Winter, Vice President, Investor Relations and Corporate Communications
Julie_Winter@steris.com
Non-GAAP Financial Measures
Adjusted 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 include 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
The release and the referenced conference call may contain statements concerning certain trends, expectations, forecasts, estimates, or other forward-looking information affecting or relating to STERIS or its industry, products or activities that are intended to qualify for the protections afforded “forward-looking statements” under the Private Securities Litigation Reform Act of 1995 and other laws and regulations. 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. Many important factors could cause actual results to differ materially from those in the forward-looking statements including, without limitation, disruption of production or supplies, changes in market conditions, political events, pending or future claims or litigation, competitive factors, technology advances, actions of regulatory agencies, and changes in laws, government regulations, labeling or product approvals or the application or interpretation thereof. Other risk factors are described in STERIS’s other securities filings, including Item 1A of our Annual Report on Form 10-K for the year ended March 31, 2021 and subsequently filed Quarterly Reports on Form 10-Q. Many of these important factors are outside of STERIS’s control. No assurances can be provided as to any result or the timing of any outcome regarding matters described in STERIS’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. References to products are summaries only and should not be considered the specific terms of the product clearance or literature. Unless legally required, STERIS does 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. Other potential risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, (a) the impact of the COVID-19 pandemic on STERIS’s operations, supply chain, material and labor costs, performance, results, prospects, or value, (b) STERIS's ability to achieve the expected benefits regarding the accounting and tax treatments of the redomiciliation to Ireland (“Redomiciliation”), (c) operating costs, Customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, Customers, clients or suppliers) being greater than expected following the Redomiciliation, (d) STERIS’s ability to successfully integrate the businesses of Cantel Medical into our existing businesses, including unknown or inestimable liabilities,
or increases in expected integration costs or difficulties in connection with the integration of Cantel Medical (e) STERIS’s ability to meet expectations regarding the accounting and tax treatment of the Tax Cuts and Jobs Act (“TCJA”) or the possibility that anticipated benefits resulting from the TCJA will be less than estimated, (f) changes in tax laws or interpretations that could increase our consolidated tax liabilities, including changes in tax laws that would result in STERIS being treated as a domestic corporation for United States federal tax purposes, (g) the potential for increased pressure on pricing or costs that leads to erosion of profit margins, (h) the possibility that market demand will not develop for new technologies, products or applications or services, or business initiatives will take longer, cost more or produce lower benefits than anticipated, (i) the possibility that application of or compliance with laws, court rulings, certifications, regulations, regulatory actions, including without limitation any of the same relating to FDA, EPA or other regulatory authorities, government investigations, the outcome of any pending or threatened FDA, EPA or other regulatory warning notices, actions, requests, inspections or submissions, or other requirements or standards may delay, limit or prevent new product or service introductions, affect the production, supply and/or marketing of existing products or services or otherwise affect STERIS’s performance, results, prospects or value, (j) the potential of international unrest, economic downturn or effects of currencies, tax assessments, tariffs and/or other trade barriers, adjustments or anticipated rates, raw material costs or availability, benefit or retirement plan costs, or other regulatory compliance costs, (k) the possibility of reduced demand, or reductions in the rate of growth in demand, for STERIS’s products and services, (l) the possibility of delays in receipt of orders, order cancellations, or delays in the manufacture or shipment of ordered products or in the provision of services, (m) the possibility that anticipated growth, cost savings, new product acceptance, performance or approvals, or other results may not be achieved, or that transition, labor, competition, timing, execution, regulatory, governmental, or other issues or risks associated with STERIS’s businesses, industry or initiatives including, without limitation, those matters described in our Annual Report on Form 10-K for the year ended March 31, 2021, and other securities filings, may adversely impact STERIS’s performance, results, prospects or value, (n) the impact on STERIS and its operations, or tax liabilities, of Brexit or the exit of other member countries from the EU, and the Company’s ability to respond to such impacts, (o) the impact on STERIS and its operations of any legislation, regulations or orders, including but not limited to any new trade or tax legislation, regulations or orders, that may be implemented by the U.S. administration or Congress, or of any responses thereto, (p) the possibility that anticipated financial results or benefits of recent acquisitions, including the acquisition of Cantel Medical and Key Surgical, or of STERIS’s restructuring efforts, or of recent divestitures, including anticipated revenue, productivity improvement, cost savings, growth synergies and other anticipated benefits, will not be realized or will be other than anticipated, (q) the increased level of STERIS’s indebtedness incurred in connection with the acquisition of Cantel Medical limiting financial flexibility or increasing future borrowing costs, (r) rating agency actions or other occurrences that could affect STERIS’s existing debt or future ability to borrow funds at rates favorable to STERIS or at all, (s) the potential impact of the acquisition of Cantel Medical on relationships, including with suppliers, Customers, employees and regulators, and (t) the effects of contractions in credit availability, as well as the ability of STERIS’s Customers and suppliers to adequately access the credit markets when needed.
STERIS plc
Consolidated Condensed Statements of Operations
(In thousands, except per share data)
Three Months Ended December 31,
Nine Months Ended December 31,
2021
2020
2021
2020
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Recast)*
(Recast)*
Revenues
$
1,208,971
$
808,924
$
3,374,378
$
2,233,988
Cost of revenues
670,857
463,063
1,929,638
1,270,706
Gross profit
538,114
345,861
1,444,740
963,282
Operating expenses:
Selling, general, and administrative
310,564
182,373
1,049,116
510,250
Research and development
24,824
16,438
61,847
48,812
Restructuring expenses
(207)
20
17
110
Total operating expenses
335,181
198,831
1,110,980
559,172
Income from operations
202,933
147,030
333,760
404,110
Non-operating expenses, net
20,524
7,600
90,721
22,280
Income tax expense
39,315
24,842
52,222
71,703
Net income
$
143,094
$
114,588
$
190,817
$
310,127
Less: Net income (loss) attributable to noncontrolling interests
(529)
87
(810)
171
Net income attributable to shareholders
$
143,623
$
114,501
$
191,627
$
309,956
Earnings per ordinary share (EPS) data:
Basic
$
1.44
$
1.34
$
1.98
$
3.64
Diluted
$
1.42
$
1.33
$
1.97
$
3.61
Cash dividends declared per share ordinary outstanding
$
0.43
$
0.40
$
1.26
$
1.17
Weighted average number of shares outstanding used in EPS computation:
Basic number of shares outstanding
100,038
85,330
96,679
85,153
Diluted number of shares outstanding
100,826
86,032
97,502
85,851
STERIS plc
Consolidated Condensed Balance Sheets
(in thousands)
December 31,
March 31,
2021
2021
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
359,089
$
220,531
Accounts receivable, net
752,132
609,406
Inventories, net
594,599
315,067
Prepaid expenses and other current assets
221,274
66,750
Total current assets
1,927,094
1,211,754
Property, plant, and equipment, net
1,521,587
1,235,400
Lease right-of-use assets, net
194,026
150,142
Goodwill
5,115,323
3,026,049
Intangibles, net
2,876,041
898,406
Other assets
55,895
52,720
Total assets
$
11,689,966
$
6,574,471
Liabilities and equity
Current liabilities:
Accounts payable
$
207,152
$
156,950
Other current liabilities
697,155
420,970
Total current liabilities
904,307
577,920
Long-term indebtedness
3,175,316
1,650,540
Other liabilities
986,674
454,543
Total equity
6,623,669
3,891,468
Total liabilities and equity
$
11,689,966
$
6,574,471
*Certain amounts have been recast to reflect the change in inventory accounting method, as described in our Annual Report on Form 10-K filed with the SEC on May 28, 2021.
STERIS plc
Segment Data
Financial information for each of the segments is presented in the following table. We disclose a measure of segment income that is consistent with the way management operates and views the business. The accounting policies for reportable segments are the same as those for the consolidated Company. Segment income is calculated as the segment’s gross profit less direct costs and indirect costs if the resources are dedicated to a single segment. Corporate costs include corporate and administrative functions, public company costs, legacy post-retirement benefits, and certain services and facilities related to distribution and research and development that are shared by multiple segments.
Three Months Ended December 31,
Nine Months Ended December 31,
2021
2020
2021
2020
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(recast)*
(recast)*
Revenues:
Healthcare
$
759,675
$
521,662
$
2,106,626
$
1,392,247
Applied Sterilization Technologies
216,298
176,462
630,092
498,371
Life Sciences
127,908
110,800
381,706
343,370
Dental
105,090
—
255,954
—
Total revenues
$
1,208,971
$
808,924
$
3,374,378
$
2,233,988
Operating income (loss):
Healthcare
$
169,267
$
115,412
$
465,817
$
304,380
Applied Sterilization Technologies
101,343
81,626
303,059
222,416
Life Sciences
52,032
41,541
158,639
136,435
Dental
23,096
—
65,607
—
Corporate
(55,849)
(47,941)
(202,461)
(158,463)
Total operating income before adjustments
$
289,889
$
190,638
$
790,661
$
504,768
Less: Adjustments
Amortization of acquired intangible assets
$
75,021
$
23,194
$
191,552
$
62,648
Acquisition and integration related charges
9,298
11,563
167,698
13,984
Redomiciliation and tax restructuring costs
118
296
228
850
(Gain) on fair value adjustment of acquisition related contingent consideration
—
(500)
—
(500)
Net loss on divestiture of businesses
489
—
893
5
Amortization of inventory and property "step up" to fair value
2,237
1,784
96,513
3,101
COVID-19 incremental costs
—
7,251
—
20,460
Restructuring (credit) charges
(207)
20
17
110
Total operating income
$
202,933
$
147,030
$
333,760
$
404,110
*Certain amounts have been recast to reflect the change in inventory accounting method, as described in our Annual Report on Form 10-K filed with the SEC on May 28, 2021.
STERIS plc
Consolidated Condensed Statements of Cash Flows
(in thousands)
Nine Months Ended December 31,
2021
2020
Operating activities:
(Unaudited)
(Unaudited)
(Recast)*
Net income
$
190,817
$
310,127
Non-cash items
485,030
184,639
Changes in operating assets and liabilities
(162,767)
7,019
Net cash provided by operating activities
513,080
501,785
Investing activities:
Purchases of property, plant, equipment, and intangibles, net
(214,491)
(164,497)
Proceeds from the sale of property, plant, equipment, and intangibles
1,709
417
Acquisition of businesses, net of cash acquired
(547,353)
(869,431)
Other
—
(2,392)
Net cash used in investing activities
(760,135)
(1,035,903)
Financing activities:
Proceeds from issuance of senior public notes
1,350,000
—
Proceeds from term loans
650,000
550,000
Payments on term loans
(125,000)
—
Payments on long-term obligations
(721,284)
(35,000)
Payments on convertible debt
(371,361)
—
Proceeds (payments) under credit facilities, net
(203,805)
23,782
Deferred financing fees and debt issuance costs
(17,247)
(3,122)
Acquisition related deferred or contingent consideration
(32,583)
(2,968)
Repurchases of ordinary shares
(27,628)
(14,560)
Cash dividends paid to ordinary shareholders
(120,118)
(99,696)
Distributions to noncontrolling interest
(997)
(627)
Contributions from noncontrolling interest
3,672
2,258
Payment for acquisition of subsidiary's interests in noncontrolling interest
—
(3,552)
Stock option and other equity transactions, net
6,789
26,018
Net cash provided by financing activities
390,438
442,533
Effect of exchange rate changes on cash and cash equivalents
(4,825)
24,506
Increase (decrease) in cash and cash equivalents
138,558
(67,079)
Cash and cash equivalents at beginning of period
220,531
319,581
Cash and cash equivalents at end of period
$
359,089
$
252,502
The following table presents a financial measure which is considered to be "non-GAAP financial measures" under Securities Exchange Commission rules. Free cash flow is defined by the Company as cash flows from operating activities less purchases of property, plant, equipment and intangibles (capital expenditures) plus proceeds from the sale of property, plant, equipment and intangibles. The Company uses free cash flow as a measure to gauge its ability to pay cash dividends, fund growth outside of core operations, fund future debt principal repayments, and repurchase shares. STERIS's calculation of free cash flows may vary from other companies.
Nine Months Ended December 31,
2021
2020
(Unaudited)
(Unaudited)
(Recast)*
Calculation of Free Cash Flow:
Cash flows from operating activities
$
513,080
$
501,785
Purchases of property, plant, equipment, and intangibles, net
(214,491)
(164,497)
Proceeds from the sale of property, plant, equipment, and intangibles
1,709
417
Free Cash Flow
$
300,298
$
337,705
*Certain amounts have been recast to reflect the change in inventory accounting method, as described in our Annual Report on Form 10-K filed with the SEC on May 28, 2021.
STERIS plc
Consolidated Condensed Statements of Cash Flows (Continued)
(in thousands)
Twelve Months Ended
March 31,
Calculation of free cash flow for outlook:
2022
(Outlook)**
Cash flows from operating activities
$720,000
Purchases of property, plant, equipment, and intangibles, net
(300,000)
Free Cash Flow
$420,000
** All amounts are estimates.
*Certain amounts have been recast to reflect the change in inventory accounting method, as described in our Annual Report on Form 10-K filed with the SEC on May 28, 2021.
STERIS plc
Non-GAAP Financial Measures
(in thousands, except per share data)
Non-GAAP financial measures are presented 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.
Management and the Board of Directors believe that the presentation of these non-GAAP financial measures, when considered along with our GAAP financial measures and the reconciliation to the corresponding GAAP financial measures, provides the reader with a more complete understanding of the factors and trends affecting our business than could be obtained absent this disclosure. It is important for the reader to note that the non-GAAP financial measure used may be calculated differently from, and therefore may not be comparable to, a similarly titled measure used by other companies.
To measure the percentage organic revenue growth, the Company removes the impact of 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.
Three months ended December 31, (unaudited)
As reported, GAAP
Impact of Acquisitions
Impact of Divestitures
Impact of Foreign Currency Movements
GAAP Growth
Organic Growth
Constant Currency Organic Growth
2021
2020
2021
2020
2021
2021
2021
2021
Segment revenues:
Healthcare
$
759,675
$
521,662
$
210,296
$
—
$
47
45.6
%
5.3
%
5.3
%
Applied Sterilization Technologies
216,298
176,462
10,236
—
(2,034)
22.6
%
16.8
%
17.9
%
Life Sciences
127,908
110,800
7,124
—
(440)
15.4
%
9.0
%
9.4
%
Dental
105,090
—
105,090
—
—
—
%
—
%
—
%
Total
$
1,208,971
$
808,924
$
332,746
$
—
$
(2,427)
49.5
%
8.3
%
8.6
%
Nine months ended December 31, (unaudited)
As reported, GAAP
Impact of Acquisitions
Impact of Divestitures
Impact of Foreign Currency Movements
GAAP Growth
Organic Growth
Constant Currency Organic Growth
2021
2020
2021
2020
2021
2021
2021
2021
Segment revenues:
Healthcare
$
2,106,626
$
1,392,247
$
526,894
$
—
$
11,508
51.3
%
13.5
%
12.6
%
Applied Sterilization Technologies
630,092
498,371
19,938
—
6,954
26.4
%
22.4
%
21.0
%
Life Sciences
381,706
343,370
17,374
—
3,598
11.2
%
6.1
%
5.1
%
Dental
255,954
—
255,954
—
—
—
%
—
%
—
%
Total
$
3,374,378
$
2,233,988
$
820,160
$
—
$
22,060
51.0
%
14.3
%
13.3
%
*Certain amounts have been recast to reflect the change in inventory accounting method, as described in our Annual Report on Form 10-K filed with the SEC on May 28, 2021.
STERIS plc
Non-GAAP Financial Measures (Continued)
(in thousands, except per share data)
Three months ended December 31, (unaudited) (recast)*
Gross Profit
Income from Operations
Net Income attributable to shareholders
Diluted EPS
2021
2020
2021
2020
2021
2020
2021
2020
GAAP
$
538,114
$
345,861
$
202,933
$
147,030
$
143,623
$
114,501
$
1.42
$
1.33
Adjustments:
Amortization of acquired intangible assets
2,871
5,709
75,021
23,194
Acquisition and integration related charges
1,611
120
9,298
11,563
Redomiciliation and tax restructuring costs
—
—
118
296
(Gain) on fair value adjustment of acquisition related contingent consideration
—
—
—
(500)
Net loss on divestiture of businesses
—
—
489
—
Amortization of inventory and property "step up" to fair value
2,184
1,786
2,237
1,784
COVID-19 incremental costs
—
3,867
—
7,251
Restructuring (credit) charges
—
—
(207)
20
Consideration received for pre-acquisitition arrangement
—
(7)
Net impact of adjustments after tax*
69,695
34,738
Net EPS impact
0.70
0.40
Adjusted
$
544,780
$
357,343
$
289,889
$
190,638
$
213,318
$
149,232
$
2.12
$
1.73
* The tax expense includes both the current and deferred income tax impact of the adjustments.
Nine months ended December 31, (unaudited) (recast)*
Gross Profit
Income from Operations
Net Income attributable to shareholders
Diluted EPS
2021
2020
2021
2020
2021
2020
2021
2020
GAAP
$
1,444,740
$
963,282
$
333,760
$
404,110
$
191,627
$
309,956
$
1.97
$
3.61
Adjustments:
Amortization of acquired intangible assets
8,347
11,059
191,552
62,648
Acquisition and integration related charges
7,030
313
167,698
13,984
Redomiciliation and tax restructuring costs
—
—
228
850
(Gain) on fair value adjustment of acquisition related contingent consideration
—
—
—
(500)
Net loss on divestiture of businesses
—
—
893
5
Amortization of inventory and property "step up" to fair value
88,592
3,096
96,513
3,101
COVID-19 incremental costs
—
16,335
—
20,460
Restructuring charges
—
—
17
110
Consideration received for pre-acquisitition arrangement
—
(826)
Fair value adjustment related to convertible debt, premium liability
27,806
—
Net impact of adjustments after tax*
354,120
80,697
Net EPS impact
3.91
0.93
Adjusted
$
1,548,709
$
994,085
$
790,661
$
504,768
$
573,553
$
389,827
$
5.88
$
4.54
* The tax expense includes both the current and deferred income tax impact of the adjustments.
*Certain amounts have been recast to reflect the change in inventory accounting method, as described in our Annual Report on Form 10-K filed with the SEC on May 28, 2021.
STERIS plc
Non-GAAP Financial Measures (Continued)
(in thousands, except per share data)
FY 2022 Outlook
Twelve Months
Ended March 31, 2022
(Outlook)***
Net income per diluted share
$3.12 - $3.22
Amortization of acquired intangible assets
2.10
Acquisition and integration related charges
1.63
Amortization of inventory and property "step up" to fair value
0.78
Fair value adjustment related to convertible debt, premium liability
0.22
Adjusted net income per diluted share
$7.85 - $7.95
*** All amounts are estimates.
*Certain amounts have been recast to reflect the change in inventory accounting method, as described in our Annual Report on Form 10-K filed with the SEC on May 28, 2021.
STERIS plc
Unaudited Supplemental Financial Data
Third Quarter Fiscal 2022
For the Periods Ending December 31, 2021 and 2020
FY 2022
FY 2021
FY 2022
FY 2021
Total Company Revenues
Q3
Q3
YTD
YTD
(recast)*
(recast)*
Consumables
$
440,328
$
198,466
$
1,187,014
$
519,652
Service
511,715
433,610
1,502,605
1,218,062
Total Recurring
$
952,043
$
632,076
$
2,689,619
$
1,737,714
Capital Equipment
$
256,928
$
176,848
$
684,759
$
496,274
Total Revenues
$
1,208,971
$
808,924
$
3,374,378
$
2,233,988
Ireland Revenues
$
20,086
$
20,316
$
62,077
$
51,779
Ireland Revenues as a % of Total
2
%
3
%
2
%
2
%
United States Revenues
$
851,292
$
572,397
$
2,383,039
$
1,613,554
United States Revenues as a % of Total
70
%
71
%
71
%
72
%
International Revenues
$
337,593
$
216,211
$
929,262
$
568,655
International Revenues as a % of Total
28
%
27
%
28
%
25
%
Segment Data
FY 2022
FY 2021
FY 2022
FY 2021
Q3
Q3
YTD
YTD
Healthcare
(recast)*
(recast)*
Revenues
Consumables
$
273,750
$
148,839
$
750,531
$
355,390
Service
268,711
224,968
785,586
629,247
Total Recurring
$
542,461
$
373,807
$
1,536,117
$
984,637
Capital Equipment
217,214
147,855
570,509
407,610
Total Healthcare Revenues
$
759,675
$
521,662
$
2,106,626
$
1,392,247
Segment Operating Income
$
169,267
$
115,412
$
465,817
$
304,380
Applied Sterilization Technologies
Applied Sterilization Technologies Revenues
$
216,298
$
176,462
$
630,092
$
498,371
Segment Operating Income
$
101,343
$
81,626
$
303,059
$
222,416
0
Life Sciences
Revenues
Consumables
$
61,096
$
49,627
$
179,380
$
164,262
Service
36,400
32,180
104,983
90,444
Total Recurring
$
97,496
$
81,807
$
284,363
$
254,706
Capital Equipment
30,412
28,993
97,343
88,664
Total Life Sciences Revenues
$
127,908
$
110,800
$
381,706
$
343,370
Segment Operating Income
$
52,032
$
41,541
$
158,639
$
136,435
Total Dental Revenues
$
105,090
$
—
$
255,954
$
—
Segment Operating Income
$
23,096
$
—
$
65,607
$
—
Corporate
Operating loss
$
(55,849)
$
(47,941)
$
(202,461)
$
(158,463)
Other Data
FY 2022
FY 2021
FY 2022
FY 2021
Q3
Q3
YTD
YTD
(recast)*
(recast)*
Healthcare Backlog **
$
381,601
$
215,543
Life Sciences Backlog **
117,235
81,981
Total Backlog **
$
498,836
$
297,524
GAAP Income Tax Rate
21.6
%
17.8
%
21.5
%
18.8
%
Adjusted Income Tax Rate
21.0
%
18.4
%
21.3
%
19.0
%
** Backlog totals exclude Cantel Medical.
This supplemental data is consistent with publicly disclosed information provided in quarterly conference calls, earnings releases and SEC filings, and is subject to all definitions, precautions and limitations contained in those disclosures. Please see the Company's most recent 10-K for definitions (and reconciliation where appropriate) of adjusted measures, backlog, free cash flow and net debt.
*Certain amounts have been recast to reflect the change in inventory accounting method, as described in our Annual Report on Form 10-K filed with the SEC on May 28, 2021.