What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-07 compared with 2026-02-06 · 171 added, 300 removed, 261 unchanged (64% of the section changed)

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• where cash is expected to come from to fund future debt principal repayments, growth outside of core operations, repurchases of shares, cash dividends and future working capital needs.

As you read the MD&A, it may be helpful to refer to information in our consolidated financial statements contained herein, which present the results of our operations for the first nine months of fiscal 2026 and fiscal 2025.

It may also be helpful to refer to our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the Securities and Exchange Commission ("SEC") on May 29, 2026, including information in Item 1, "Business," Part I, Item 1A, "Risk Factors," and Note 12 to our consolidated financial statements titled, "Commitments and Contingencies," and Part II, Item 1A, "Risk Factors" of this Quarterly Report, for a discussion of some of the matters that can adversely affect our business and results of operations.

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We sometimes use the following financial measures in the context of this report:

debt-to-total capital;

and days sales outstanding.

backlog and debt-to-total capital.

We define these financial measures as follows:

• Backlog – We define backlog as the amount of unfilled capital equipment purchase orders at a point in time.

• Backlog – We define backlog as the amount of unfilled capital equipment purchase orders (excluding freight) at a point in time.

We use this figure as a measure to assist in the projection of short-term financial results and inventory requirements.

• Debt-to-total capital – We define debt-to-total capital as total debt divided by the sum of total debt and shareholders’ equity.

• Debt-to-total capital ratio – We define debt-to-total capital ratio as total debt divided by the sum of total debt and shareholders’ equity.

We use this figure as a financial liquidity measure to gauge our ability to borrow and fund growth.

• Days sales outstanding (“DSO”) – We define DSO as the average collection period for accounts receivable.

It is calculated as net accounts receivable divided by the trailing four quarters’ revenues, multiplied by 365 days.

We use this figure to help gauge the quality of accounts receivable and expected time to collect.

We, at times, may also refer to financial measures which are considered to be “non-GAAP financial measures” under SEC rules.

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• Service Revenues – We define Service revenues as revenues generated from parts and labor associated with the maintenance, repair, and installation of our capital equipment.

Service revenues also include outsourced reprocessing services and instrument and scope repairs, as well as revenues generated from contract sterilization and laboratory services offered through our Applied Sterilization Technologies ("AST") segment.

• Capital Equipment Revenues – We define capital equipment revenues as revenues generated from sales of capital equipment, which includes steam and gas sterilizers, low temperature liquid chemical sterilant processing systems, automated endoscope reprocessors, pure steam/water systems, surgical lights and tables, and integrated operating rooms ("OR").

Service revenues also include outsourced reprocessing

services and instrument and scope repairs, as well as revenues generated from contract sterilization and laboratory services offered through our Applied Sterilization Technologies ("AST") segment.

• Consumable Revenues – We define consumable revenues as revenues generated from sales of the consumable family of products, which includes dedicated consumables used in our capital equipment, gastrointestinal endoscopy accessories, instruments and tools, sterility assurance products, barrier protection solutions, and cleaning consumables.

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Healthcare, AST, and Life Sciences.

Previously, we had four reportable business segments;

however, as a result of the divestiture of our Dental segment, Dental is presented as discontinued operations.

Historical information has been retrospectively adjusted to exclude discontinued operations for comparability, as required.

For more information, refer to Note 4 to our consolidated financial statements titled, "Discontinued Operations." Non-allocated operating costs that support the entire Company and items not indicative of operating trends are excluded from segment operating income.

Non-allocated operating costs that support the entire Company and items not indicative of operating trends are excluded from segment operating income.

We describe our business segments in Note 10 to our consolidated financial statements titled, "Business Segment Information."

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and a desire by our Customers to operate more efficiently, all of which are driving increased demand for many of our products and services.

Acquisitions and Divestitures .

During the first nine months of fiscal 2026, we completed two tuck-in acquisitions, recorded at fair value, which continued to expand our product and service offerings in the Healthcare segment.

Total aggregate consideration was approximately $23.4 million.

During the first nine months of fiscal 2025, we completed several tuck-in acquisitions, recorded at fair value, which continued to expand our product and service offerings in the Healthcare and AST segments.

Acquisitions .

During the first three months of fiscal 2027, we completed three tuck-in acquisitions, recorded at fair value, which continued to expand our product and service offerings in the Healthcare segment.

Total aggregate consideration was approximately $17.3 million, including deferred consideration and the fair value of potential contingent consideration.

During the first three months of fiscal 2026, we completed a tuck-in acquisition which continued to expand our product and service offerings in the Healthcare segment.

Total aggregate consideration was approximately $15.0 million.

Acquisition and integration expenses totaled $3.3 million and $5.1 million for the three and nine months ended December 31, 2025, respectively.

Acquisition and integration expenses totaled $3.8 million and $9.2 million for the three and nine months ended December 31, 2024, respectively.

Acquisition and integration expenses are reported in the Selling, general and administrative expenses line of our Consolidated Statements of Income and include, but are not limited to, investment banker, advisory, legal and other professional fees, and certain employee-related expenses.

On April 1, 2024, we completed the sale of the Controlled Environment Certification Services ("CECS") business.

We recorded net proceeds of $41.9 million and recognized a pre-tax gain on the sale of $19.3 million in the first nine months of fiscal 2025.

For more information regarding our recent acquisitions, see Note 3 to our consolidated financial statements titled, " Business Acquisitions and Divestitures ."

Discontinued Operations .

On April 11, 2024, the Company announced its plan to sell substantially all of the net assets of its Dental segment for total cash consideration of $787.5 million , subject to customary adjustments, and up to an additional

$12.5 million in contingent payment had the Dental business achieved certain revenue targets in fiscal 2025.

No amounts have been recorded or are expected to be recorded with respect to this contingent consideration.

The transaction was structured as an equity sale and closed on May 31, 2024.

A component of an entity is reported in discontinued operations after meeting the criteria for held for sale classification if the disposition represents a strategic shift that has (or will have) a major effect on the entity's operations and financial results.

We analyzed the quantitative and qualitative factors relevant to the divestiture of our Dental segment and determined that those conditions for discontinued operations presentation had been met prior to March 31, 2024.

The Dental segment results of operations have been reclassified as income (loss) from discontinued operations in the Consolidated Statements of Income for all periods presented.

Our Consolidated Statements of Cash Flows include the financial results of the Dental segment through the date of sale on May 31, 2024.

A majority of the proceeds received from the sale were utilized to pay off existing debt.

For more information, see Note 4 to our consolidated financial statements titled, " Discontinued Operations ."

On July 4, 2025, the U.S.

enacted the One Big Beautiful Bill Act ("OBBBA") which contains substantial changes to its tax policies.

Business provisions in the OBBBA, some of which were extensions of those established in the Tax Cuts and Jobs Act, include favorable cost recovery allowances, changes to U.S.

international tax rules, and changes to energy and environmental related incentives.

The law has multiple effective dates, with certain provisions applicable to years beginning after fiscal 2026.

The law did not have a material impact on our consolidated financial statements for the three and nine month periods ended December 31, 2025, and we do not expect it to have a material impact on our effective tax rate.

Revenues increased 9.2% to $1,496.2 million for the three months ended December 31, 2025, as compared to $1,370.6 million for the same period in the prior year.

Revenues increased 9.3% to $4,347.5 million for the nine months ended December 31, 2025, as compared to $3,979.0 million for the same period in the prior year.

The increase during the three and nine month periods reflects the benefits of higher volume and pricing, with all three segments contributing to growth.

Gross profit percentage for the third quarter of fiscal 2026 was 43.8% compared to the gross profit percentage for the third quarter of fiscal 2025 of 44.5%.

Gross profit percentage for the first nine months of fiscal 2026 was 44.4% compared to the gross profit percentage for the first nine months of fiscal 2025 of 44.3%.

The decrease in gross profit percentage for the three month period reflects favorable impacts from pricing, productivity and other cost reductions that were more than offset by unfavorable impacts from tariffs, inflation and mix.

The increase in gross profit percentage for the nine month period reflects favorable impacts from pricing, productivity and other cost reductions that were partially offset by unfavorable impacts from tariff and inflation costs.

Income from operations for the third quarter of fiscal 2026 was $273.2 million, compared to income from operations of $245.3 million for the third quarter of fiscal 2025.

Income from operations for the first nine months of fiscal 2026 was $785.0 million, compared to income from operations of $650.5 million for the first nine months of fiscal 2025.

The increase in income from operations for the three and nine month periods is primarily due to increased volume and pricing, which was partially offset by inflation and tariff costs.

Additionally, income from operations during the first nine months of fiscal 2026 reflected the benefit of lower restructuring expenses.

Cash flows from operations were $1,006.0 million and free cash flow was $737.6 million for the first nine months of fiscal 2026 compared to cash flows from operations of $887.3 million and free cash flow of $588.1 million for the first nine months of fiscal 2025 (see the subsection below titled "Non-GAAP Financial Measures" for additional information and related reconciliation of cash flows from operations to free cash flow).

The fiscal 2026 increase in cash flows from operations and free cash flow resulted from an increase in earnings when compared to the prior year.

Free cash flow was also favorably impacted by a decrease in capital expenditures when compared to the same prior year period.

Our debt-to-total capital ratio was 21.1% at December 31, 2025 and 23.6% at March 31, 2025.

During the first nine months of fiscal 2026, we declared and paid cash dividends totaling $1.83 per ordinary share.

Additional information regarding our financial performance during the third quarter of fiscal 2026 is included in the subsection below titled “Results of Operations.”

Acquisition and integration expenses totaled $1.5 million for the three months ended June 30, 2026.

Acquisition and integration expenses totaled $0.5 million for the three months ended June 30, 2025.

Acquisition and integration expenses reported in the Selling, general and administrative expenses and Cost of revenues lines of our Consolidated Statements of Income include, but are not limited to, investment banker, advisory, legal and other professional fees, and certain employee-related expenses.

For more information regarding our recent acquisitions, see Note 3 to our consolidated financial statements titled, " Business Acquisitions ."

Revenues increased 7.3% to $1,492.7 million for the three months ended June 30, 2026, as compared to $1,391.1 million for the same period in the prior year.

The increase during the three month period reflects the benefits of higher volume in the Healthcare and Life Sciences segments, and pricing across all three segments.

Gross profit percentage for the first three months of fiscal 2027 was 45.8% compared to the gross profit percentage for the first three months of fiscal 2026 of 45.1%.

The increase in gross profit percentage for the three month period reflects favorable impacts from pricing, productivity and mix that were partially offset by unfavorable impacts from inflation.

Income from operations for the first three months of fiscal 2027 was $285.8 million, compared to income from operations of $246.0 million for the first three months of fiscal 2026.

The increase in income from operations for the three month period is primarily due to increased pricing, volume, and productivity, which were partially offset by inflation and additional spending on operational investments and staffing.

Cash flows from operations were $367.1 million and free cash flow was $279.6 million for the first three months of fiscal 2027, compared to cash flows from operations of $420.0 million and free cash flow of $326.5 million for the first three months of fiscal 2026 (see the subsection below titled "Non-GAAP Financial Measures" for additional information and related reconciliation of cash flows from operations to free cash flow).

The fiscal 2027 decrease in cash flows from operations and free cash flow resulted from a significantly lower contribution from working capital partially offset by higher net income compared with fiscal 2026.

Our debt-to-total capital ratio was 20.9% at June 30, 2026 and 21.3% at March 31, 2026.

During the first three months of fiscal 2027, we declared and paid cash dividends totaling $0.63 per ordinary share.

Additional information regarding our financial performance during the first quarter of fiscal 2027 is included in the subsection below titled “Results of Operations.”

NON-GAAP FINANCIAL MEASURES

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These 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.

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.

We believe that the presentation of these non-GAAP financial measures, when considered along with our U.S.

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It is important for the reader to note that the non-GAAP financial measures used may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

Organic revenue growth and constant currency organic revenue growth are non-GAAP financial measures of revenue performance.

Organic revenue growth is calculated by removing the impact of acquisitions and divestitures for one year following the respective transaction from the GAAP revenue growth.

Constant currency organic revenue growth is subject to a further adjustment to eliminate the impact of foreign currency movements.

See the section below "Business Segment Results of Operations" for a reconciliation of organic revenue growth and constant currency organic revenue growth to U.S.

GAAP revenue.

We define free cash flow as net cash provided by operating activities as presented in the Consolidated Statements of Cash Flows less purchases of property, plant, equipment, and intangibles (capital expenditures) plus proceeds from the sale of property, plant, equipment, and intangibles, which are also presented within investing activities in the Consolidated Statements of Cash Flows.

We use this as a measure to gauge our ability to pay cash dividends, fund growth outside of core operations, fund future debt principal repayments, and repurchase shares.

The following table summarizes the calculation of our free cash flow for the nine months ended December 31, 2025 and 2024:

Nine Months Ended December 31,

The following table summarizes the calculation of our free cash flow for the three months ended June 30, 2026 and 2025:

Three Months Ended June 30,

(in millions) 2026 2025

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RESULTS OF OPERATIONS

In the following subsections, we discuss our earnings and the factors affecting earnings for the first nine months of fiscal 2026 compared to the same fiscal 2025 periods.

In the following subsections, we discuss our earnings and the factors affecting earnings for the first three months of fiscal 2027 compared to the same fiscal 2026 period.

We begin with a general overview of our operating results and then separately discuss earnings for our operating segments.

The following tables compare our revenues for the three and nine months ended December 31, 2025 to the revenues for the three and nine months ended December 31, 2024:

Three Months Ended December 31,

(dollars in millions) 2025 2024 Change Percent Change

Total revenues $ 1,496.2 $ 1,370.6 $ 125.6 9.2 %

Revenues by type:

Service revenues 717.3 652.2 65.0 10.0 %

Consumable revenues 463.3 427.5 35.8 8.4 %

Capital equipment revenues 315.6 290.9 24.7 8.5 %

Revenues by geography:

Ireland revenues 26.7 24.1 2.6 10.9 %

United States revenues 1,087.1 1,002.6 84.5 8.4 %

Other foreign revenues 382.3 343.9 38.4 11.2 %

Revenues increased 9.2% to $1,496.2 million for the three months ended December 31, 2025, as compared to $1,370.6 million for the same period in the prior year.

The increase reflects organic growth in all three segments due to the benefits of higher volume and pricing.

Service revenues increased 10.0% for the three months ended December 31, 2025, as compared to the same period in the prior year, reflecting growth in Healthcare and AST.

Consumable revenues increased by 8.4% for the three months ended December 31, 2025, as compared to the same period in the prior year, reflecting growth in the Healthcare and Life Sciences segments.

Capital equipment revenues increased 8.5% for the three months ended December 31, 2025, as compared to the same period in the prior year, reflecting growth in all three segments.

Ireland revenues increased 10.9% to $26.7 million for the three months ended December 31, 2025, as compared to $24.1 million for the same period in the prior year, reflecting growth in service and consumable revenues, partially offset by a decline in capital revenues.

United States revenues increased 8.4% to $1,087.1 million for the three months ended December 31, 2025, as compared to $1,002.6 million for the same period in the prior year, reflecting growth in service, consumable, and capital revenues.

Revenues from other foreign locations increased 11.2% to $382.3 million for the three months ended December 31, 2025, as compared to $343.9 million for the same period in the prior year, reflecting growth in all regions.

Nine Months Ended December 31,

The following tables compare our revenues for the three months ended June 30, 2026 to the revenues for the three months ended June 30, 2025:

Three Months Ended June 30,

(dollars in millions) 2026 2025 Change Percent Change

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Other foreign revenues 373.2 342.9 30.3 8.8 %

Revenues increased 9.3% to $4,347.5 million for the nine months ended December 31, 2025, as compared to $3,979.0 million for the same period in the prior year.

The increase reflects the benefits of higher volume and pricing, with all three segments contributing to growth.

Service revenues increased 11.8% for the nine months ended December 31, 2025, as compared to the same period in the prior year, reflecting growth in all three segments.

Consumable revenues increased by 7.5% for the nine months ended December 31, 2025, as compared to the same period in the prior year, reflecting growth in the Healthcare and Life Sciences segments.

Capital equipment revenues increased 6.1% for the nine months ended December 31, 2025, as compared to the same period in the prior year, driven by growth in the Healthcare and Life Sciences segments.

Ireland revenues increased 10.8% to $76.6 million for the nine months ended December 31, 2025, as compared to $69.1 million for the same period in the prior year, reflecting growth in service and capital revenues, which was partially offset by a decline in consumable revenues.

United States revenues increased 8.8% to $3,188.0 million for the nine months ended December 31, 2025, as compared to $2,929.0 million for the same period in the prior year, reflecting growth in service, consumable, and capital equipment revenues.

Revenues from other foreign locations increased 10.4% to $1,083.0 million for the nine months ended December 31, 2025, as compared to $980.9 million for the same period in the prior year.

The increase reflects growth in all regions.

Gross Profit.

Our gross profit is affected by the volume, pricing, and mix of sales of our products and services, as well as the costs associated with the products and services that are sold.

The following tables compare our gross profit for the three and nine months ended December 31, 2025 to the three and nine months ended December 31, 2024:

Three Months Ended December 31, Change Percent

(dollars in millions) 2025 2024

Revenues increased 7.3% to $1,492.7 million for the three months ended June 30, 2026, as compared to $1,391.1 million for the same period in the prior year.

The increase reflects the benefits of higher volume in the Healthcare and Life Sciences segments, and pricing across all three segments.

Service revenues increased 7.8% for the three months ended June 30, 2026, as compared to the same period in the prior year, reflecting growth in all three segments.

Consumable revenues increased by 9.0% for the three months ended June 30, 2026, as compared to the same period in the prior year, reflecting growth in the Healthcare and Life Sciences segments.

Capital equipment revenues increased 3.0% for the three months ended June 30, 2026, as compared to the same period in the prior year, driven by growth in the Life Sciences and Healthcare segments.

Ireland revenues increased 28.7% to $29.0 million for the three months ended June 30, 2026, as compared to $22.5 million for the same period in the prior year, reflecting growth in service, capital equipment, and consumable revenues.

United States revenues increased 6.3% to $1,090.6 million for the three months ended June 30, 2026, as compared to $1,025.6 million for the same period in the prior year, reflecting growth in service, consumable and capital equipment revenues.

Revenues from other foreign locations increased 8.8% to $373.2 million for the three months ended June 30, 2026, as compared to $342.9 million for the same period in the prior year.

The increase reflects growth across all geographic regions.

Gross Profit.

Product $ 360.7 346.6 14.1 4.1 %

Service 294.8 263.7 31.1 11.8 %

Total gross profit $ 655.5 610.3 45.2 7.4 %

Gross profit percentage:

Product 46.3 % 48.3 %

Service 41.1 % 40.4 %

Total gross profit percentage 43.8 % 44.5 %

Gross profit percentage for the third quarter of fiscal 2026 was 43.8% compared to the gross profit percentage for the third quarter of fiscal 2025 of 44.5%.

Favorable impacts from pricing (110 basis points), productivity (40 basis points) and other cost reductions (30 basis points) were more than offset by unfavorable impacts from tariff costs (120 basis points), inflation (60 basis points), mix (60 basis points) and currency (10 basis points).

Nine Months Ended December 31, Change Percent

The following tables compare our gross profit for the three months ended June 30, 2026 to the three months ended June 30, 2025:

Three Months Ended June 30, Change Percent

(dollars in millions) 2026 2025

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Total gross profit percentage 45.8 % 45.1 %

Gross profit percentage for the first nine months of fiscal 2026 was 44.4% compared to gross profit percentage for the first nine months of fiscal of 2025 of 44.3%.

Favorable impacts from pricing (120 basis points), productivity (60 basis points) and other cost reductions (40 basis points) were partially offset by unfavorable impacts from tariff costs (90 basis points), inflation (80 basis points), material costs (20 basis points), mix (10 basis points) and currency (10 basis points).

Operating Expenses.

The following table compares our operating expenses for the three and nine months ended December 31, 2025 to the three and nine months ended December 31, 2024:

Three Months Ended December 31, Change Percent

(dollars in millions) 2025 2024

Our gross profit is affected by the volume, pricing, and mix of sales of our products and services, as well as the costs associated with the products and services that are sold.

Gross profit percentage for the first three months of fiscal 2027 was 45.8% compared to gross profit percentage for the first three months of fiscal of 2026 of 45.1%.

Favorable impacts from pricing (100 basis points), productivity (40 basis points), mix (40 basis points), and lower net tariffs (20 basis points) were partially offset by unfavorable impacts from inflation (60 basis points), adjustments and other charges (50 basis points), acquisitions (10 basis points), materials cost (10 basis points).

Operating Expenses.

Selling, general, and administrative $ 352.3 $ 335.5 $ 16.8 5.0 %

Research and development 29.5 27.4 2.1 7.7 %

Restructuring expenses 0.4 2.2 $ (1.8) (80.7) %

Total operating expenses $ 382.3 $ 365.0 $ 17.3 4.7 %

Nine Months Ended December 31, Change Percent

The following table compares our operating expenses for the three months ended June 30, 2026 to the three months ended June 30, 2025:

Three Months Ended June 30, Change Percent

(dollars in millions) 2026 2025

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Significant components of total selling, general, and administrative expenses (“SG&A”) are compensation and benefit costs, fees for professional services, travel and entertainment expenses, facility costs, and other general and administrative expenses.

SG&A increased 5.0% and 5.5% in the three and nine month periods ended December 31, 2025, respectively, compared to the same prior year periods.

The increase in SG&A during the three months ended December 31, 2025, compared to the same prior year period, is primarily attributable to increased compensation and benefit costs.

The increase in SG&A during the nine months ended December 31, 2025, compared to the same prior year period, is primarily attributable to increased compensation and benefit costs, unfavorable foreign currency movements, and increased bad debt expense, which were partially offset by lower fees for professional services.

SG&A increased 4.5% in the three month period ended June 30, 2026, compared to the same prior year period.

The increase in SG&A during the three months ended June 30, 2026, compared to the same prior year period, is primarily attributable to increased compensation and benefit costs and marketing and sales costs, which were partially offset by favorable foreign currency impacts and lower bad debt expense.

Research and Development.

Research and development expenses increased 7.7% and 5.2% in the three and nine month periods ended December 31, 2025, respectively, compared to the same prior year periods.

Research and development expenses increased 8.5% in the three month period ended June 30, 2026, compared to the same prior year period.

Research and development expenses are influenced by the number and timing of in-process projects and labor hours and other costs associated with these projects.

Our research and development initiatives continue to emphasize new product development, product improvements, and the development of new technological platform innovations.

Our research and development initiatives continue to emphasize improving innovation governance processes and leveraging technology to accelerate development initiatives to launch critical capital and consumable products.

During fiscal 2027, our investments in research and development have continued to be focused on, but were not limited to, enhancing capabilities of sterile processing technologies, procedural products and accessories, and devices and support accessories used in gastrointestinal endoscopy procedures.

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In May 2024, we adopted and announced a targeted restructuring plan (the "Restructuring Plan").

This plan includes a strategic shift in our approach to the Healthcare surgical business in Europe, as well as other actions including the impairment of an internally developed X-ray accelerator, product rationalizations and facility consolidations.

The Restructuring Plan includes a strategic shift in our approach to the Healthcare surgical business in Europe, as well as other actions including the impairment of an internally developed X-ray accelerator, product rationalizations and facility consolidations.

Approximately 300 positions have been eliminated.

These restructuring actions were designed to enhance profitability and improve efficiency, and are expected to improve income from operations by approximately $25.0 million per year in fiscal 2026 and beyond.

The following table summarizes our total pre-tax restructuring expenses recorded during the three and nine months ended December 31, 2025 and 2024 related to the Restructuring Plan:

(in millions) Three Months Ended December 31, Nine Months Ended December 31,

These restructuring actions were designed to enhance profitability and improve efficiency, which we realized beginning in fiscal 2025 and 2026.

As of March 31, 2026, the execution of our Restructuring Plan was substantially complete.

During the three months ended June 30, 2026, we did not incur any expenses related to the Restructuring Plan.

The following table summarizes our total pre-tax restructuring expenses recorded during the three months ended June 30, 2025 related to the Restructuring Plan:

(in millions) Three Months Ended June 30,

Restructuring Plan 2025

Severance and other compensation related (credits) costs $ (0.5) $ — $ 2.8 $ 23.3

Lease and other contract termination and other costs

0.8 2.2 1.1 6.2

Product rationalization (credits) charges (1)

(0.3) — (1.3) 2.4

Severance and other compensation related costs $ 1.7

Accelerated depreciation and amortization 0.1

Total Restructuring Expense

$ 0.1 $ 2.2 $ 3.1 $ 33.1

(1) Recorded in Cost of revenues on the Consolidated Statements of Income.

The Restructuring Plan expenses incurred during the three and nine months ended December 31, 2025 and 2024 primarily related to actions taken within our Healthcare segment.

The Restructuring Plan expenses incurred during the three months ended June 30, 2025 primarily related to actions taken within our Healthcare and AST segments.

Total pre-tax restructuring expense of $110.1 million has been recorded relating to the Restructuring Plan since inception, of which $33.9 million has been recorded in Cost of revenues.

Additional costs with respect to our Restructuring Plan are not expected to be significant during fiscal 2026.

Liabilities related to restructuring activities are recorded as current liabilities in the accompanying Consolidated Balance Sheets within "Accrued payroll and other related liabilities" and "Accrued expenses and other." The following table summarizes our restructuring liability balances:

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Balance at March 31, 2026 $ 7.1

Fiscal 2026 charges, net 3.9

Balance at December 31, 2025 $ 10.8

Non-Operating Expenses, Net.

The following tables compare our net non-operating expenses for the three and nine months ended December 31, 2025 and 2024:

Three Months Ended December 31,

(in millions) 2025 2024 Change

Non-operating expenses, net:

Interest expense $ 14.9 $ 19.1 $ (4.2)

Interest and miscellaneous income

(2.9) (2.4) (0.4)

Other expense (income), net 3.3 (0.1) 3.4

Payments (2.5)

Balance at June 30, 2026 $ 4.6

On August 5, 2026, the Company announced a targeted restructuring plan to consolidate manufacturing and distribution for formulated chemistries to a new Center of Excellence in North Carolina.

The investment is expected to accelerate innovation, expand capacity and optimize our U.S.

chemistries manufacturing and distribution network.

The plan includes the anticipated closure of chemistry manufacturing and distribution facilities in St.

Louis, Missouri and Plymouth, Minnesota.

The Company currently expects to incur total pre-tax restructuring charges of approximately $55 million to $70 million, consisting of approximately $40 million to $50 million of cash expenditures and approximately $15 million to $20 million of non-cash charges.

Cash expenditures are expected to primarily consist of Associate retention, severance and benefits, and also include transition, facility exit and other related costs.

Non-cash charges are expected to primarily relate to accelerated depreciation.

These charges are expected to be incurred over time, with completion anticipated to occur during fiscal 2030.

No financial impact has been recognized to date with respect to these amounts.

This investment strengthens our Healthcare and Life Sciences formulated chemistries businesses, which together generate more than $700 million in annual revenue.

The estimated costs and timing associated with the restructuring actions are based on the Company's current expectations and are subject to various assumptions.

Actual results may differ materially from these estimates.

Accordingly, the Company may revise its estimates in future periods as implementation activities progress.

Non-Operating Expenses, Net.

Nine Months Ended December 31,

Non-operating expenses, net consists of interest expense on debt, offset by interest earned on cash, cash equivalents, short-term investment balances, losses (gains) related to disposal activities, and other expense (income) related to our equity investments, including our equity earnings and amortization of basis differences arising from our investments.

The following tables compare our net non-operating expenses, net for the three months ended June 30, 2026 and 2025:

Three Months Ended June 30,

(in millions) 2026 2025 Change

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(3.1) (1.8) (1.4)

Other expense (income), net 3.5 (12.7) 16.2

Other income, net (0.3) — (0.3)

Non-operating expenses, net $ 12.3 $ 14.1 $ (1.8)

Non-operating expenses, net consists of interest expense on debt, offset by interest earned on cash, cash equivalents, short-term investment balances, and other miscellaneous (income) expense.

Interest expense decreased $4.2 million and $23.5 million during the third quarter and first nine months of fiscal 2026, respectively, as compared to the same prior year periods, primarily due to the lower principal amount of debt outstanding.

Interest expense decreased $0.1 million during the first quarter of fiscal 2027, as compared to the same prior year period, primarily due to the lower principal amount of debt outstanding.

For more information, refer to Note 6 to our consolidated financial statements titled, "Debt."

Interest and miscellaneous income increased $0.4 million and $2.1 million during the third quarter and first nine months of fiscal 2026, respectively, when compared to the same prior year periods.

Other expense (income), net increased $3.4 million and increased $16.2 million during the third quarter and first nine months of fiscal 2026, when compared to the same prior year periods.

Other expense (income), net during the third quarter and first nine months of fiscal 2026 related to a loss on impairment of fixed assets which was partially offset by a gain recognized on the sale of a building, related to disposal activities.

Other expense (income), net during the third quarter of fiscal 2025 related to a loss recorded on an equity investment.

Other expense (income), net for the first nine months of fiscal 2025 primarily related to the sale of our CECS business, which was partially offset by a loss recorded on an equity investment.

For more information on our divestiture activity, refer to Note 3 to our consolidated financial statements titled, "Business Acquisitions and Divestitures."

Interest and miscellaneous income increased $1.4 million during the first three months of fiscal 2027, when compared to the same prior year period.

Other income, net increased $0.3 million during the first three months of fiscal 2027, when compared to the same prior year period.

Income Taxes.

The following tables compare our tax expense and effective income tax rates for the three and nine months ended December 31, 2025 and 2024:

Three Months Ended December 31, Change Percent

(dollars in millions) 2025 2024

Income tax expense

$ 63.5 $ 55.4 $ 8.1 14.6%

Effective income tax rate 24.6 % 24.2 %

Nine Months Ended December 31, Change Percent

The following tables compare our tax expense and effective income tax rates for the three months ended June 30, 2026 and 2025:

Three Months Ended June 30, Change Percent

(dollars in millions) 2026 2025

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Effective income tax rate 26.5 % 23.3 %

We record income tax expense during interim periods based on our estimate of the annual effective income tax rate, adjusted each quarter for discrete items.

We analyze various factors to determine the estimated annual effective income tax rate, including projections of our annual earnings and taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, our ability to use tax credits and net operating loss carryforwards, and available tax planning alternatives.

The effective income tax rates from continuing operations for the three month periods ended December 31, 2025 and 2024 were 24.6% and 24.2%, respective ly.

The effective income tax rates from continuing operations for the nine month periods ended December 31, 2025 and 2024 were 24.0% and 22.4%, respectively.

The fiscal 2026 effective tax rates increased when compared to fiscal 2025, primarily due to changes in geographic mix of projected profits and unfavorable changes in discrete items.

The effective income tax rates for the three month periods ended June 30, 2026 and 2025 were 26.5% and 23.3%, respectively.

The fiscal 2027 effective tax rates increased when compared to fiscal 2026, primarily due to unfavorable changes in discrete items.

Business Segment Results of Operations.

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Healthcare, AST, and Life Sciences.

Previously, we had four reportable business segments;

however, as a result of the divestiture of our Dental segment, Dental is presented as discontinued operations.

Historical information has been retrospectively adjusted to reflect these changes for comparability, as required.

Our Healthcare segment provides a comprehensive offering for healthcare providers worldwide, focused on sterile processing departments and procedural centers, such as OR and endoscopy suites.

Our Healthcare segment provides a comprehensive offering for healthcare providers worldwide, focused on sterile processing departments and procedural centers, such as operating rooms and endoscopy suites.

Our products and services range from infection prevention consumables and capital equipment, as well as services to maintain that equipment;

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to outsourced instrument reprocessing services.

In addition, our procedural products also include endoscopy accessories, instruments, and capital equipment infrastructure used primarily in ORs, ambulatory surgery centers, endoscopy suites, and other procedural areas.

In addition, our procedural products also include endoscopy accessories, instruments, and capital equipment infrastructure used primarily in operating rooms, ambulatory surgery centers, endoscopy suites, and other procedural areas.

Our AST segment supports medical device and pharmaceutical manufacturers through a global network of contract sterilization and laboratory testing facilities, and integrated sterilization equipment and control systems.

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The accounting policies for reportable segments are the same as those for the consolidated Company.

For the three and nine months e nded December 31, 2025 and 2024 , revenues from a single Customer did not represent ten percent or more of the Healthcare, AST or Life Sciences segment revenues.

A dditional information regarding our segments is included in our consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the SEC on May 29, 2026.

The following tables compare business segment revenues as well as impacts from acquisitions, divestitures, and foreign currency movements for the three and nine months ended December 31, 2025 and 2024.

Three Months Ended December 31, (unaudited)

As reported, U.S.

GAAP Impact of Acquisitions Impact of Divestitures Impact of Foreign Currency Movements U.S.

GAAP Growth Organic Growth Constant Currency Organic Growth

2025 2024 2025 2024 2025 2025 2025 2025

Segment revenues:

Healthcare $ 1,063.8 $ 976.0 $ — $ — $ 7.8 9.0 % 9.0 % 8.2 %

AST 286.6 258.1 — — 8.0 11.0 % 11.0 % 7.9 %

Life Sciences 145.8 136.4 — $ — 2.6 6.9 % 6.9 % 5.0 %

Total $ 1,496.2 $ 1,370.6 $ — $ — $ 18.4 9.2 % 9.2 % 7.8 %

Nine Months Ended December 31, (unaudited)

The following tables compare business segment revenues as well as impacts from acquisitions, divestitures, and foreign currency movements for the three months ended June 30, 2026 and 2025.

Three Months Ended June 30, (unaudited)

As reported, U.S.

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Organic revenue growth and constant currency organic revenue growth are non-GAAP financial measures of revenue performance.

See "Non-GAAP Financial Measures" for more information.

Healthcare revenues increased 9.0% to $1,063.8 million for the three months ended December 31, 2025, as compared to $976.0 million for the same prior year period.

This increase reflects growth in service, consumable, and capital equipment revenues of 11.5%, 8.0% and 6.8%, respectively.

The constant currency organic growth of 8.2% is primarily due to increased volume, impacting revenues by a high-single digit percentage, as well as increased pricing, impacting revenues by a low-single digit percentage.

Healthcare revenues increased 8.9% to $3,072.3 million for the nine months ended December 31, 2025, as compared to $2,821.5 million for the same prior year period.

Organic revenue growth is calculated by removing the impact of acquisitions and divestitures for one year following the respective transaction from the GAAP revenue growth.

Constant currency organic revenue growth is subject to a further adjustment to eliminate the impact of foreign currency movements.

Healthcare revenues increased 7.6% to $1,048.3 million for the three months ended June 30, 2026, as compared to $974.7 million for the same prior year period.

This increase reflects growth in service, consumable, and capital equipment revenues of 9.6%, 9.2% and 1.4%, respectively.

The constant currency organic growth of 8.3% is primarily due to increased volume, impacting revenues by a high-single digit percentage, as well as increased pricing, impacting revenues by a low-single digit percentage.

The Healthcare segment's backlog at December 31, 2025 was $429.0 million.

The Healthcare segment's backlog at December 31, 2024 was $434.9 million.

The decrease is primarily due to the timing of shipments.

AST revenues increased 11.0% to $286.6 million for the three months ended December 31, 2025, as compared to $258.1 million for the same prior year period.

The constant currency organic growth of 7.9% is primarily due to increased pricing, impacting revenue by a mid-single digit percentage, and volume, impacting revenues by a low-single digit percentage, with growth in service and capital equipment.

AST revenues increased 11.1% to $849.3 million for the nine months ended December 31, 2025, as compared to $764.7 million for the same prior year period.

The constant currency organic growth of 8.5% is primarily due to increased pricing and volume, with pricing impacting revenues by a mid-single digit percentage, and volume impacting revenues by a low-single digit percentage, with service growth partially offset by a decline in capital equipment.

Life Sciences revenues increased 6.9% to $145.8 million for the three months ended December 31, 2025, as compared to $136.4 million for the same prior year period.

This increase reflects growth in consumable and capital equipment revenues of 10.6% and 7.2%, respectively, partially offset by a decline in service revenue of 0.4%.

The constant currency organic growth of 5.0% is primarily due to increased volume and pricing, both impacting revenues by a low-single digit percentage.

Life Sciences revenues increased 8.4% to $425.9 million for the nine months ended December 31, 2025, as compared to $392.8 million for the same prior year period.

The constant currency organic growth of 6.4% is primarily due to increased volume, impacting revenues by a mid-single digit percentage, as well as increased pricing, impacting revenues by a low-single digit percentage.

The Healthcare segment's backlog at June 30, 2026 was $444.0 million.

The Healthcare segment's backlog at June 30, 2025 was $403.5 million.

The increase is primarily due to the timing of orders and shipments, as well as the impact of an acquisition.

AST revenues increased 5.8% to $297.6 million for the three months ended June 30, 2026, as compared to $281.2 million for the same prior year period.

The constant currency organic growth of 4.7% is primarily due to increased pricing, impacting revenues by a mid-single digit percentage, partially offset by a decline in volume.

Life Sciences revenues increased 8.6% to $146.7 million for the three months ended June 30, 2026, as compared to $135.2 million for the same prior year period.

This increase reflects growth in capital equipment, consumable and service revenues of 17.4%, 8.2% and 2.4%, respectively.

The constant currency organic growth of 7.9% is primarily due to increased volume, impacting revenues by a mid-single digit percentage, as well as increased pricing, impacting revenues by a low-single digit percentage.

The Life Sciences backlog at December 31, 2025 was $113.4 million.

The Life Sciences backlog at December 31, 2024 was $85.1 million.

The increase is primarily due to the timing of shipments.

The following table compares business segment and Corporate operating income for the three and nine months ended December 31, 2025 and 2024.

Three Months Ended December 31, Nine Months Ended December 31,

(in millions) 2025 2024 2025 2024

Healthcare $ 1,063.8 $ 976.0 $ 3,072.3 $ 2,821.5

Applied Sterilization Technologies 286.6 258.1 849.3 764.7

Life Sciences 145.8 136.4 425.9 392.8

Total revenues $ 1,496.2 $ 1,370.6 $ 4,347.5 $ 3,979.0

The Life Sciences backlog at June 30, 2026 was $109.9 million.

The Life Sciences backlog at June 30, 2025 was $111.0 million.

The decrease is primarily due to the timing of orders and shipments.

The following table compares business segment and Corporate operating income for the three months ended June 30, 2026 and 2025.

Three Months Ended June 30, Percent

(in millions) 2026 2025 Change Change

Income (loss) from operations before adjustments:

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Corporate (1)

(110.1) (114.0) 3.9 (3.5) %

Total income from operations before adjustments $ 354.8 $ 316.9 $ 37.9 12.0 %

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Acquisition and integration related charges (3)

3.3 3.8 5.1 9.2

Tax restructuring costs (4)

— 0.1 0.5 0.1

Amortization of inventory and property "step up" to fair value (2)

1.1 1.3 3.8 4.1

Restructuring charges (5)

0.1 2.2 3.0 33.1

Total income from operations

$ 285.8 $ 246.0

(1) For more information regarding our recent acquisitions and divestitures, refer to Note 3 titled, "Business Acquisitions and Divestitures."

(1) Corporate costs include corporate and administrative functions, public company costs, legacy post-retirement benefits, certain services and facilities related to distribution and research and development that are shared by multiple segments, and the benefit of refunds received on tariffs previously paid under the International Economic Emergency Powers Act ("IEEPA").

(2) For more information regarding our recent acquisitions, refer to Note 3 titled, "Business Acquisitions."

(3) Acquisition and integration related charges include transaction costs and integration expenses associated with acquisitions.

(3) Costs incurred (credits recognized) in tax restructuring.

(4) Costs incurred in tax restructuring.

(5) For more information regarding our restructuring efforts, refer to Note 2 titled, "Restructuring ."

The Healthcare segment’s operating income increased 4.5% to $258.1 million for the three months ended December 31, 2025, as compared to $246.9 million in the same prior year period.

The segment's operating margins were 24.3% and 25.3% for the third quarter of fiscal 2026 and 2025, respectively.

The Healthcare segment’s operating income increased 8.9% to $753.1 million for the nine months ended December 31, 2025, as compared to $691.8 million in the same prior year period.

The segment's operating margins were 24.5% in each of the first nine months of fiscal 2026 and 2025.

The increase in operating income for the three and nine month periods ended December 31, 2025 is primarily due to the benefits of higher volume, pricing, productivity, and the benefit of prior restructuring efforts, which were partially offset by increased tariff costs and inflation.

The decrease in operating margin for the three month period ended December 31, 2025 is primarily due to increased tariff costs and inflation, which were partially offset by the benefits of higher volume, pricing, productivity, and the benefit of prior restructuring efforts.

Operating margin for the nine month period ended December 31, 2025 remained consistent with the same prior year period, as the benefits of increased volume, pricing, and productivity were offset by inflation and mix.

The AST segment's operating income increased 11.6% to $129.2 million for the three months ended December 31, 2025, as compared to $115.8 million during the same prior year period.

The segment's operating margins were 45.1% and 44.8% for the third quarter of fiscal 2026 and 2025, respectively.

The AST segment's operating income increased 14.6% to $393.6 million for the nine months ended December 31, 2025, as compared to $343.4 million during the same prior year period.

The segment's operating margins were 46.3% and 44.9% for the first nine months of fiscal 2026 and 2025, respectively.

The increase in operating income and margin for the three and nine month periods ended December 31, 2025 is primarily due to increased pricing and volume which were partially offset by increased energy and labor inflation costs and unfavorable mix.

The Life Sciences segment’s operating income increased 6.3% to $61.8 million for the three months ended December 31, 2025, as compared to $58.1 million for the same prior year period.

The segment's operating margins were 42.4% and 42.6% for the third quarter of fiscal 2026 and 2025, respectively.

The Life Sciences segment’s operating income increased 9.7% to $180.4 million for the nine months ended December 31, 2025, as compared to $164.4 million for the same prior year period.

The segment's operating margins were 42.4% and 41.9% for the first nine months of fiscal 2026 and 2025, respectively.

The changes in segment operating income and margin for the three month period ended December 31, 2025 are primarily due to favorable volume and pricing which were offset by increased tariff costs and inflation.

The increases in segment operating income and margin for the nine month period ended December 31, 2025 is primarily due to favorable volume and pricing which were partially offset by increased tariff costs and inflation.

The Healthcare segment’s operating income increased $24.7 million to $260.2 million for the three months ended June 30, 2026, as compared to $235.5 million in the same prior year period.

The segment's operating margins were 24.8% and 24.2% for the first three months of fiscal 2027 and 2026, respectively.

The increase in operating income and operating margin for the three month period ended June 30, 2026 is primarily due to the benefits of higher volume, productivity, pricing and mix, which were partially offset by unfavorable labor inflation, tariffs, and additional spending on operational improvements and staffing.

The AST segment's operating income increased $6.3 million to $142.9 million for the three months ended June 30, 2026, as compared to $136.7 million during the same prior year period.

The increase in operating income for the three month period ended June 30, 2026 is primarily due to the benefits of higher pricing and favorable foreign currency impacts, which were partially offset by higher depreciation expense, lower productivity and unfavorable labor inflation.

The segment's operating margins were 48.0% and 48.6% for the first three months of fiscal 2027 and 2026, respectively.

Operating margin declined as higher depreciation expense, lower productivity and unfavorable labor inflation more than offset the benefit provided by higher pricing.

The Life Sciences segment’s operating income increased $3.0 million to $61.8 million for the three months ended June 30, 2026, as compared to $58.7 million for the same prior year period.

The increase in segment operating income for the three month period ended June 30, 2026 is primarily due to favorable volume and pricing which were partially offset by lower productivity and higher materials cost.

The segment's operating margins were 42.1% and 43.5% for the first three months of fiscal 2027 and 2026, respectively.

Operating margin declined as lower productivity and higher materials cost more than offset the benefits of higher pricing and volume.

LIQUIDITY AND CAPITAL RESOURCES

The following table summarizes significant components of our cash flows for the nine months ended December 31, 2025 and 2024:

Nine Months Ended December 31,

The following table summarizes significant components of our cash flows for the three months ended June 30, 2026 and 2025:

Three Months Ended June 30,

(dollars in millions) 2026 2025

Net cash provided by operating activities $ 367.1 $ 420.0

Net cash (used in) provided by investing activities $ (295.3) $ 458.6

Net cash used in investing activities $ (108.5) $ (108.5)

Net cash used in financing activities $ (213.5) $ (213.1)

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Free cash flow $ 279.6 $ 326.5

Net Cash Provided by Operating Activities – The net cash provided by our operating activities was $1,006.0 million for the first nine months of fiscal 2026 and $887.3 million for the first nine months of fiscal 2025.

The fiscal 2026 increase in cash flows from operations resulted from an increase in earnings when compared to the prior year.

Net Cash Used In/Provided by Investing Activities – The net cash used in investing activities totaled $295.3 million for the first nine months of fiscal 2026 and net cash provided by investing activities totaled $458.6 million for the first nine months of fiscal 2025.

The following discussion summarizes the significant changes in our investing cash flows for the first nine months of fiscal 2026 and fiscal 2025:

• Purchases of property, plant, equipment, and intangibles, net – Capital expenditures totaled $278.8 million for the first nine months of fiscal 2026 and $299.2 million during the same prior year period.

Net Cash Provided by Operating Activities – The net cash provided by our operating activities was $367.1 million for the first three months of fiscal 2027 and $420.0 million for the first three months of fiscal 2026.

The fiscal 2027 decrease in cash flows from operations resulted from a significantly lower contribution from working capital partially offset by an increase in earnings when compared to the prior year.

Net Cash Used In Investing Activities – The net cash used in investing activities totaled $108.5 million for the first three months of fiscal 2027 and net cash used in investing activities totaled $108.5 million for the first three months of fiscal 2026.

The following discussion summarizes the significant changes in our investing cash flows for the first three months of fiscal 2027 and fiscal 2026:

• Purchases of property, plant, equipment, and intangibles, net – Capital expenditures totaled $87.5 million for the first three months of fiscal 2027 and $93.6 million during the same prior year period.

The fiscal 2027 decrease is due to the timing of capital spending.

• Proceeds from the sale of businesses – During the first nine months of fiscal 2025, we received proceeds of $811.4 million primarily from the sale of our Dental segment and the sale of our CECS business.

For more information, refer to Note 3 to our consolidated financial statements titled "Business Acquisitions and Divestitures" and Note 4 to our consolidated financial statements titled "Discontinued Operations."

• Acquisition of businesses, net of cash acquired – During the first nine months of fiscal 2026 and 2025, we used $20.1 million and $53.7 million, respectively, to acquire businesses.

For more information, refer to Note 3 to our consolidated financial statements titled, "Business Acquisitions and Divestitures."

Net Cash Used In Financing Activities – The net cash used in financing activities amounted to $470.3 million for the first nine months of fiscal 2026 compared to net cash used in financing activities of $1,394.3 million for the first nine months of fiscal 2025.

The following discussion summarizes the significant changes in our financing cash flows for the first nine months of fiscal 2026 and fiscal 2025:

• Payments on Private Placement Senior Notes – During the first nine months of fiscal 2026 and 2025, we repaid $125.0 million and $80.0 million, respectively, of Private Placement Senior Notes upon maturity.

• Purchases of investments – During the first three months of fiscal 2027, we used $5.0 million to purchase investments.

• Acquisition of businesses, net of cash acquired – During the first three months of fiscal 2027 and 2026, we used $16.0 million and $15.0 million, respectively, to acquire businesses.

For more information, refer to Note 3 to our consolidated financial statements titled, "Business Acquisitions."

Net Cash Used In Financing Activities – The net cash used in financing activities amounted to $213.5 million for the first three months of fiscal 2027 compared to net cash used in financing activities of $213.1 million for the first three months of fiscal 2026.

The following discussion summarizes the significant changes in our financing cash flows for the first three months of fiscal 2027 and fiscal 2026:

• Payments on Private Placement Senior Notes – During the first three months of fiscal 2026, we repaid $125.0 million, of Private Placement Senior Notes upon maturity.

For more information on our Private Placement Senior Notes, refer to Note 6 to our consolidated financial statements titled, "Debt" and to our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the SEC on May 29, 2026.

• Payments on term loans – During the first nine months of fiscal 2025, we repaid $638.1 million of our term loans.

The fiscal 2025 payment was primarily due to the use of proceeds from the sale of the Dental segment to pay off our outstanding term loans.

For more information on our term loans, refer to our Annual Report on Form 10-K for the year ended March 31, 2025, which was filed with the SEC on May 29, 2025.

For more information regarding the sale of the Dental segment, refer to Note 4 to our consolidated financial statements titled "Discontinued Operations."

• Payments under credit facilities, net – Net payments under credit facilities totaled $34.8 million and $319.0 million for the first nine months of fiscal 2026 and 2025, respectively.

The fiscal 2025 payments were primarily due to the use of proceeds from the sale of the Dental segment to pay down balances due under our credit agreement dated as of March 19, 2021.

For more information on our indebtedness, refer to Note 7 to our consolidated financial statements titled, "Debt" and to our Annual Report on Form 10-K for the year ended March 31, 2025, which was filed with the SEC on May 29, 2025.

For more information regarding the sale of the Dental segment, refer to Note 4 to our consolidated financial statements titled "Discontinued Operations."

• Repurchases of ordinary shares – During each of the first nine month periods of fiscal 2026 and 2025 , we obtained 0.1 million of our ordinary shares in connection with share-based compensation award programs in the aggregate amounts of $11.2 million and $11.0 million, respectively .

During the first nine month periods of fiscal 2026 and 2025, we purchased 0.6 million and 0.9 million, respectively, of our ordinary shares for the aggregate amount of $150.0 million and $200.0 million, respectively, through our share repurchase program.

• Payments under credit facilities, net – Net payments under credit facilities totaled $37.8 million and $30.5 million for the first three months of fiscal 2027 and 2026, respectively.

• Repurchases of ordinary shares – During each of the first three month periods of fiscal 2027 and 2026 , we obtained 0.1 million of our ordinary shares in connection with share-based compensation award programs in the aggregate amounts of $15.5 million and $10.6 million, respectively .

During the first three month period of fiscal 2027, we purchased 0.5 million of our ordinary shares for the aggregate purchase amount of $100.0 million (exclusive of fees, commissions, and other charges) pursuant to authorizations under our new share repurchase program, which was adopted by the Board of Directors on May 5, 2026.

During the first three months of fiscal 2026, we had no share repurchase activity under our previous share repurchase program.

For more information on our share repurchases, refer to Note 12 to our consolidated financial statements titled, "Repurchases of Ordinary Shares" and to our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the SEC on May 29, 2026.

• Cash dividends paid to ordinary shareholders – During the first nine months of fiscal 2026, we paid total cash dividends of $180.0 million, or $1.83 per outstanding share.

During the first nine months of fiscal 2025, we paid total cash dividends of $163.9 million, or $1.66 per outstanding share.

• Transactions with noncontrolling interest holders – During the first nine months of fiscal 2025, we received contributions of $2.5 million from noncontrolling interest holders.

• Cash dividends paid to ordinary shareholders – During the first three months of fiscal 2027, we paid total cash dividends of $61.4 million, or $0.63 per outstanding share.

During the first three months of fiscal 2026, we paid total cash dividends of $56.2 million, or $0.57 per outstanding share.

• Stock option and other equity transactions, net – We generally receive cash for issuing shares under our stock option programs.

During the first nine months of fiscal 2026 and fiscal 2025, we received cash proceeds totaling $32.3 million and $19.4 million, respectively, under these programs.

During the first three months of fiscal 2027 and fiscal 2026, we received cash proceeds totaling $1.3 million and $9.3 million, respectively, under these programs.

Cash Flow Measures.

The net cash provided by our operating activities was $1,006.0 million for the first nine months of fiscal 2026 and $887.3 million for the first nine months of fiscal 2025.

Free cash flow was $737.6 million in the first nine months of fiscal 2026 compared to $588.1 million in the first nine months of fiscal 2025 (see the subsection above titled "Non-GAAP Financial Measures" for additional information and related reconciliation of cash flows from operations to free cash flow).

The fiscal 2026 increase in cash flows from operations and free cash flow resulted from an increase in earnings when compared to the prior year.

Free cash flow was also impacted by a decrease in capital expenditures when compared to the same prior year period.

Our debt-to-total capital ratio was 21.1% at December 31, 2025 and 25.2% at December 31, 2024.

The net cash provided by our operating activities was $367.1 million for the first three months of fiscal 2027 and $420.0 million for the first three months of fiscal 2026.

Free cash flow was $279.6 million in the first three months of fiscal 2027 compared to $326.5 million in the first three months of fiscal 2026 (see the subsection above titled "Non-GAAP Financial Measures" for additional information and related reconciliation of cash flows from operations to free cash flow).

Our debt-to-total capital ratio was 20.9% at June 30, 2026 and 21.5% at June 30, 2025.

MATERIAL FUTURE CASH OBLIGATIONS AND COMMERCIAL COMMITMENTS

Information related to our material future cash obligations and commercial commitments is included in our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the SEC on May 29, 2026.

Our commercial commitments were approximately $163.2 million at December 31, 2025, reflecting a net increase of $35.8 million in surety bonds and other commercial commitments from March 31, 2025.

We had no outstanding borrowings under our Revolving Credit Facility as of December 31, 2025.

We had $9.4 million of letters of credit outstanding under the Revolving Credit Facility at December 31, 2025.

Our commercial commitments were approximately $165.7 million at June 30, 2026, reflecting a net increase of $4.4 million in surety bonds and other commercial commitments from March 31, 2026.

We had no outstanding borrowings under our Revolving Credit Facility as of June 30, 2026.

We had $9.6 million of letters of credit outstanding under the Revolving Credit Facility at June 30, 2026.

Cash Requirements.

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SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

STERIS plc ("Parent") and its wholly-owned subsidiaries, STERIS Limited ("Limited") and STERIS Corporation (collectively with Limited "Guarantors" and each a "Guarantor"), each have provided guarantees of the obligations of STERIS Irish FinCo Unlimited Company ("FinCo") a wholly-owned subsidiary issuer, under senior public notes issued by FinCo on April 1, 2021 (the "Senior Public Notes") and of certain other obligations relating to the Senior Public Notes.

Parent and its wholly-owned subsidiaries, Limited and Corporation (collectively with Limited "Guarantors" and each a "Guarantor"), each have provided guarantees of the obligations of FinCo ("FinCo") a wholly-owned subsidiary issuer, under senior public notes issued by FinCo on April 1, 2021 (the "Senior Public Notes") and of certain other obligations relating to the Senior Public Notes.

The Senior Public Notes are guaranteed, jointly and severally, on a senior unsecured basis.

The Senior Public Notes and the related guarantees are senior unsecured obligations of FinCo and the Guarantors, respectively, and are equal in priority with all other unsecured and unsubordinated indebtedness of FinCo and the Guarantors, respectively, from time to time outstanding, including, as applicable, under the Private Placement Senior Notes and borrowings under the Revolving Credit Facility.

All of the liabilities of non-guarantor direct and indirect subsidiaries of Parent, other than FinCo, Limited and STERIS Corporation, including any claims of trade creditors, are effectively senior to the Senior Public Notes.

All of the liabilities of non-guarantor direct and indirect subsidiaries of Parent, other than FinCo, Limited and Corporation, including any claims of trade creditors, are effectively senior to the Senior Public Notes.

FinCo’s main objective and source of revenues and cash flows is the provision of short- and long-term financing for the activities of Parent and its subsidiaries.

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Each Guarantor that makes a payment under its guarantee will be entitled upon payment in full of all guaranteed obligations under the indenture to a contribution from each Guarantor in an amount equal to such other Guarantor’s pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with U.S.

The following tables present summarized results of operations for the nine months ended December 31, 2025 and summarized balance sheet information at December 31, 2025 and March 31, 2025 for the obligor group of the Senior Public Notes.

The obligor group consists of the Parent, FinCo, and the other Guarantors.

The following tables present summarized results of operations for the three months ended June 30, 2026 and summarized balance sheet information at June 30, 2026 and March 31, 2026 for the obligor group of the Senior Public Notes.

The obligor group consists of Parent, FinCo, and the other Guarantors.

The summarized financial information is presented after elimination of (i) intercompany transactions and balances among the guarantors and issuer and (ii) equity in earnings from and investments in any subsidiary that is a non-guarantor or issuer.

1 unchanged sentence

Summarized Results of Operations

(in millions) Nine Months Ended

(in millions) Three Months Ended

Revenues $ 817.0

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(in millions)

December 31, March 31,

June 30, March 31,

Receivables due from non-issuers and non-guarantor subsidiaries $ 21,978.4 $ 21,513.5

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Other potential risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements include, without limitation:

(a) operating costs, pressure on pricing (including, without limitation, as a result of inflation), Customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, Customers, clients or suppliers) being greater than expected and leading to erosion of profit margins;

(b) STERIS’s ability to successfully integrate acquired businesses into its existing businesses, including unknown or inestimable liabilities, impairments, or increases in expected integration costs or difficulties in connection with the integration of such businesses;

(c) changes in tax laws or interpretations, including changes associated with the OBBBA, or the adoption of certain income tax treaties in jurisdictions where we operate 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, or tariffs and/or other trade barriers;

(d) the possibility that compliance with laws, court rulings, certifications, regulations, or other regulatory actions, or the outcome of any pending or threatened litigation, including the ethylene oxide litigation, may delay, limit or prevent new product or service introductions, impact production, supply and/or marketing of existing products or services, result in uncovered costs, or otherwise affect STERIS’s performance, results, prospects or value;

(e) the potential of international unrest, including military conflicts, economic downturn and effects of currency fluctuations;

(f) the possibility of delays in receipt of orders, order cancellations, or the manufacture or shipment of ordered products;

(g) the possibility that anticipated growth, performance or other results may not be achieved, or that timing, execution, impairments, or other issues associated with STERIS’s businesses, industry or initiatives may adversely impact STERIS’s performance, results, prospects or value;

(h) the impact on STERIS and its operations of any legislation, regulations or orders, including but not limited to any new trade, regulations or orders, that may be implemented by the U.S.

(a) the impact on STERIS and its operations of any legislation, regulations or orders, including but not limited to any new trade, regulations or orders, that may be implemented by the U.S.

administration or Congress, or of any responses thereto by non-U.S.

(i) the possibility that anticipated financial results, anticipated revenue, productivity improvements, cost savings, growth synergies, and other anticipated benefits of acquisitions, restructuring efforts, and divestitures will not be realized or will be less than anticipated;

(j) the level of STERIS’s indebtedness limiting financial flexibility or increasing future borrowing costs;

(k) the effects of changes in credit availability and pricing, as well as the ability of STERIS and STERIS’s Customers and suppliers to adequately access the credit markets, on favorable terms or at all, when needed;

(l) the impacts of increasing competition within our industry, which may exert pressure on our pricing strategy or lead to decreasing demand for our products and services;

(m) the effects on our operations resulting from labor-related issues, such as strikes, unsuccessful union negotiations and other workforce disruptions;

and (n) the possibility of economic downturns and recessions, which could negatively impact our business by reducing consumer and Customer spending.

(b) operating costs, pressure on pricing (including, without limitation, as a result of inflation), Customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, Customers, clients or suppliers) being greater than expected and leading to erosion of profit margins;

(c) the potential of international unrest, military conflicts, economic downturns, currency fluctuations and cybersecurity events and any resulting effects on STERIS’s anticipated growth, performance or other results;

(d) changes in healthcare policy or government or other third-party payor reimbursement levels;

(e ) the possibility that compliance with laws, court rulings, certifications, regulations, or other regulatory actions, or the outcome of any pending or threatened litigation, including the EO litigation, may delay, limit or prevent new product or service introductions, impact production, supply and/or marketing of existing products or services, result in uncovered costs, or otherwise affect STERIS’s performance, results, prospects or value;

( f) changes in tax laws or interpretations or the adoption of certain income tax treaties in jurisdictions where we operate that could increase our consolidated tax liabilities, including changes in tax laws that would result in STERIS being treated as a U.S.

resident for U.S.

federal tax purposes, or the impact of tariffs and/or other trade barriers as a result of STERIS’s corporate structure;

(g) the impacts of increasing consolidation and competition within our industry, which may exert pressure on our pricing strategy, manufacturing strategy or lead to decreasing demand for our products and services;

(h) the effects on our operations resulting from labor-related issues, such as strikes, unsuccessful union negotiations and other workforce disruptions or from our inability to recruit or retain management and other personnel;

(i) the level of STERIS’s indebtedness limiting financial flexibility or increasing future borrowing costs;

(j) the effects of changes in credit availability and pricing, as well as the ability of STERIS and STERIS’s Customers and suppliers to adequately access the credit markets, on favorable terms or at all, when needed;

and (k) the possibility that anticipated financial results, anticipated revenues, productivity improvements, cost savings, growth synergies, and other anticipated benefits of acquisitions, restructuring efforts, and divestitures will not be realized or will be less than anticipated due to unknown or inestimable liabilities, impairments, or increases in expected integration costs or difficulties in connection with the integration of acquired businesses;

and (l) the possibility that expectations about the benefits, charges and cash expenditures from the new Center of Excellence in North Carolina and the related facility consolidation plan may not be accurate or realized on anticipated timelines, or at all.

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.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis