What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-05-31 compared with 2021-05-28 · 237 added, 251 removed, 496 unchanged (50% of the section changed)

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The MD&A also analyzes and explains the annual changes in the specific line items in the Consolidated Statements of Income.

As you read the MD&A, it may be helpful to refer to information in Item 1, “Business,” Item 6, “Selected Financial Data,” and our consolidated financial statements, which present the results of our operations for fiscal 2021, 2020 and 2019 as well as Part I, Item 1A, “Risk Factors” and Note 10 of our consolidated financial statements titled, "Commitments and Contingencies" for a discussion of some of the matters that can adversely affect our business and results of operations.

As you read the MD&A, it may be helpful to refer to information in Item 1, "Business", Part I, Item 1A, "Risk Factors" and Note 10 of our consolidated financial statements titled, "Commitments and Contingencies" for a discussion of some of the matters that can adversely affect our business and results of operations.

This information, discussion, and disclosure may be important to you in making decisions about your investments in STERIS.

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Additional information regarding these financial measures, including reconciliations of each non- GAAP financial measure, is available in the subsection of MD&A titled, "Non-GAAP Financial Measures."

Information on our financial condition and results of our operations for our 2020 fiscal year period can be found in Exhibit 99.1 titled, "Updates to the Company's Annual Report on Form 10-K for the year ended March 31, 2020", of our Form 8-K, filed with the SEC on February 9, 2021.

REVENUES– DEFINED

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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 hospital sterilization services, instrument and scope repairs, and linen management as well as revenues generated from contract sterilization and laboratory services offered through our Applied Sterilization Technologies segment.

• Capital Equipment Revenues – We define capital equipment revenues as revenues generated from sales of capital equipment, which includes steam sterilizers, low temperature liquid chemical sterilant processing systems, including SYSTEM 1 and 1E, washing systems, VHP ® technology, water stills, and pure steam generators;

surgical lights and tables;

and integrated OR.

• Consumable Revenues – We define consumable revenues as revenues generated from sales of the consumable family of products, which includes SYSTEM 1 and 1E consumables, V-PRO consumables, gastrointestinal endoscopy accessories, sterility assurance products, skin care products, cleaning consumables, barrier product solutions and surgical instruments.

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 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, pure steam/water systems, surgical lights and tables, and integrated OR.

• Consumable Revenues – We define consumable revenues as revenues generated from sales of the consumable family of products, which includes dedicated consumables including V-PRO, SYSTEM 1 and 1E consumables, gastrointestinal endoscopy accessories, sterility assurance products, barrier protection solutions, cleaning consumables, dental and surgical instruments.

• Recurring Revenues – We define recurring revenues as revenues generated from sales of consumable products and service revenues.

GENERAL OVERVIEW AND EXECUTIVE SUMMARY

STERIS plc is a leading provider of infection prevention and other procedural products and services.

WE HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare and life science products and services around the globe.

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.

We offer our Customers a unique mix of innovative consumable products, such as detergents, gastrointestinal (“GI”) endoscopy accessories, barrier product solutions, and other products and services, including:

equipment installation and maintenance, microbial reduction of medical devices, instrument and scope repair solutions, laboratory testing services, on-site and off-site reprocessing, and capital equipment products, such as sterilizers and surgical tables, and connectivity solutions such as operating room (“OR”) integration.

On March 28, 2019, STERIS plc, a public limited company organized under the laws of England and Wales (“STERIS UK”), completed a redomiciliation from the United Kingdom to Ireland (the “Redomiciliation”).

The Redomiciliation was achieved through the insertion of a new Irish public limited holding company (“STERIS Ireland”) on top of STERIS UK pursuant to a court-approved scheme of arrangement under English law (the “Scheme”).

Following the Scheme effectiveness, STERIS UK was re-registered as a private limited company with the name STERIS Limited, and STERIS Emerald IE Limited, a company established in Ireland and a wholly-owned direct subsidiary of STERIS Ireland, was interposed as the direct parent company of STERIS UK.

We operate and report in three reportable business segments:

Healthcare, Applied Sterilization Technologies and Life Sciences.

equipment installation and maintenance, microbial reduction of medical devices, dental instruments and tools, instrument and scope repair, laboratory testing services, outsourced reprocessing, and capital equipment products, such as sterilizers and surgical tables, automated endoscope reprocessors, and connectivity solutions such as operating room (“OR”) integrati on.

As a result of the acquisition of Cantel, we have rea ssessed the organization of our business and have added a new segment called Dental.

We now operate and report our financial information in four reportable business segments:

Healthcare, Applied Sterilization Technologies, Life Sciences and Dental.

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 11 to our consolidated financial statements, titled "Business Segment Information."

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increased demand for medical procedures, including preventive screenings such as endoscopies and colonoscopies;

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

During fiscal 2021, we experienced reduced demand for certain products and services resulting from the reduction of deferrable surgical procedures and increased demand for other products and services from our pharmaceutical Customers focused on vaccines and biologics and increased demand in the Applied Sterilization Technologies segment for personal protective equipment product services, as a result of the COVID-19 pandemic.

For more information on the COVID-19 pandemic please refer to the subsection below, titled "COVID-19 Pandemic".

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

Acquisitions .

On June 2, 2021, we acquired all outstanding equity interests in Cantel Medical LLC ("Cantel") through a U.S.

Cantel, formerly headquartered in Little Falls, New Jersey, with approximately 3,700 employees, is a global provider of infection prevention products and services primarily to endoscopy and dental Customers.

The total consideration for Cantel Common Stock and stock equivalents was $3.6 billion .

We believe that the acquisition will strengthen STERIS’s leadership in infection prevention by bringing together two complementary businesse s able to offer a broader set of Customers a more diversified selection of infection prevention, endoscopy and sterilization products and services.

Cantel’s Dental business extends our business into a new Customer segment where there is an increasing focus on infection prevention protocols and processes.

This business is reported as the Dental segment.

The rest of Cantel was integrated into our existing Healthcare and Life Sciences segments.

Additionally, the acquisition is expected to result in cost savings from optimizing global back-office infrastructure, leveraging best-demonstrated practices across locations and eliminating redundant public company costs.

The results of Cantel are only reflected in the results of operations and cash flows from June 2, 2021 forward, which will affect results of comparability to the prior period operations and cash flows.

In addition to the acquisition of Cantel, we completed three other tuck-in acquisitions during fiscal 2022, which continued to expand our product and service offerings in the Healthcare segment.

Total aggregate consideration for these transactions was approximately $3.1 million, net of cash acquired and including deferred consideration of $0.1 million.

On January 4, 2021 , we purchased the remaining outstanding shares of an entity in which we had initially made an equity investment in fiscal 2019.

Total consideration was approximately $78.0 million, net of cash acquired and subject to any working capital adjustments.

Total non-cash consideration for this transaction was $41.8 million, which consisted of the settlement of outstanding principal and interest on a loan receivable, the initial equity investment, and receivables related to capital equipment purchases that existed at the acquisition date.

The business has been integrated into our Applied Sterilization Technologies business segment and we funded the transaction through a combination of cash on hand and credit facility borrowings.

On November 18, 2020, we acquired all of the outstanding units and equity of Key Surgical, LLC ("Key Surgical").

Key Surgical is a global provider of sterile processing, operating room and endoscopy consumable products serving hospitals and surgical facilities.

Key Surgical is being integrated into our Healthcare segment.

Key Surgical has been integrated into our Healthcare segment.

The total purchase price of the acquisition was $853.2 million, net of cash acquired and remains subject to customary working capital adjustments.

On January 4, 2021 , we purchased the remaining outstanding shares of an equity investment that we initially made in fiscal 2019.

Total consideration was approximately $78.0 million , net of cash acquired and subject to any working capital adjustments.

Total non-cash consideration for this transaction was $41.8 million , which consisted of the settlement of outstanding principal and interest on a loan receivable, the initial equity investment, and receivables related to capital equipment purchases that existed at the acquisition date.

The business is being integrated into our Applied Sterilization Technologies business segment and we funded the transaction through a combination of cash on hand and credit facility borrowings.

We also completed two other tuck-in acquisitions during fiscal 2021, which continued to expand our product and service offerings in the Healthcare segment.

Total aggregate consideration for these transactions was approximately $20.9 million , net of cash acquired and including deferred consideration of $1.2 million .

On January 12, 2021, we announced the signing of a definitive agreement to acquire Cantel Medical Corp.

CMD "Cantel"), through a U.S.

Cantel is a global provider of infection prevention products and services primarily to endoscopy and dental Customers.

Under the terms of the agreement, we will acquire Cantel in a cash and stock transaction valued at $84.66 per Cantel common share, based on STERIS’s closing share price of $200.46 on January 11, 2021.

This represents a total equity value of approximately $3.6 billion and a total enterprise value of approximately $4.6 billion.

The agreement has been unanimously approved by the Boards of Directors of both companies.

We expect to fund the cash portion of the transaction consideration and repay or otherwise satisfy a significant amount of Cantel’s existing debt obligations with approximately $2.1 billion of new debt, which is described in Note 6 of our Consolidated Financial Statements, titled "Debt".

Cantel shareholder vote and regulatory approvals have been obtained and the acquisition is expected to occur on June 2, 2021.

Total aggregate consideration for these transactions was approximately $20.9 million, net of cash acquired and including deferred consideration of approximately $1.2 million.

Divestitures.

In December 2021, we entered into an Asset Purchase Agreement to sell our Renal Care business to Evoqua Water Technologies Corp., for cash consideration of approximately $196.0 million, subject to certain potential adjustments, including a customary working capital adjustment and contingent consideration of $12.3 million.

We recognized a gain on the sale of $1.0 million.

The transaction closed on January 3, 2022.

We acquired the Renal Care business as part of the Cantel transaction, which closed on June 2, 2021, and had been integrated into STERIS's Healthcare segment.

The Renal Care business generated annual revenues of approximately $180.0 million.

The proceeds from the sale received at closing were used to repay outstanding debt.

During fiscal 2021, we sold an Applied Sterilization Technologies laboratory that was located in the Netherlands.

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The business generated annual revenues of approximately $6.0 million.

For more information regarding our recent acquisitions and divestitures see Note 2 titled, "Business Acquisitions and Divestitures."

COVID-19 Pandemic.

The COVID-19 pandemic began to impact our business late in fiscal 2020.

The pandemic and related public health recommendations and mandated precautions to mitigate the spread of COVID-19, including deferral of surgical procedures and treatments and shelter-in-place orders or similar measures, have negatively affected and are expected to continue to negatively affect some of our operations, which may impact our financial position and cash flows.

We have experienced and expect to continue to experience unpredictable fluctuations in demand for certain of our products and services, including some products and services that are experiencing increased demand.

To date, we do not believe that the COVID-19 pandemic has had a material impact on our operations, as we have been able to continue to operate our manufacturing facilities and meet the demand for essential products and services of our Customers.

During fiscal 2021, in response to the to the pandemic, we implemented several measures that we believe helped us protect the health and safety of our employees, preserve liquidity and enhance our financial flexibility.We allowed employees to work remotely when possible and implemented additional safety measures in compliance with applicable regulations to allow personnel to continue to work in our facilities.

We suspended all non-essential travel and enacted a temporary hiring freeze on certain positions.

To manage liquidity, we suspended our stock repurchase program and deferred certain planned capital expenditures;

however, we continued to invest in expansion projects as planned.

We do not believe that these actions will negatively impact our long-term ability to generate revenues or meet existing and future financial obligations.

We do not believe that the COVID-19 pandemic has had a material impact on our operations, as we have been able to continue to operate our manufacturing facilities and meet the demand for essential products and services of our Customers.

In response to the COVID-19 pandemic, we implemented several measures that we believe helped us protect the health and safety of our employees, preserve liquidity and enhance our financial flexibility.

We have successfully managed our liquidity throughout the COVID-19 pandemic and continue to invest in expansion projects as planned.

We obtained addi tional funding in the second half o f fiscal 2021 to continue to advance our growth strategy to supplement organic growth with acquisitions.

As a result, we do not believe that the COVID-19 pandemic or the actions we took in respo nse to the pandemic will negatively impact our long-term ability to generate revenues or meet existing and future financial obligations.

For additional information on our risk factors related to the COVID-19 pandemic please refer to Item 1A.

titled, "Risk Factors."

Revenues increased $1,477.5 million, or 47.5%, to $4,585.1 million for the year ended March 31, 2022, as compared to $3,107.5 million for the year ended March 31, 2021.

The increase reflects organic growth in the Applied Sterilization Technologies and Life Sciences segments and favorable fluctuations in currencies, which were partially offset by a decline in the Healthcare segment.

Growth in the Applied Sterilization Technologies segment was primarily due to volume.

Growth in the Life Sciences segment was due to increased demand for our products and services from our pharmaceutical Customers focused on vaccines and biologics.

The decline in the Healthcare segment was primarily due to reduced demand for our products and services resulting from the reduction of deferrable surgical procedures as a result of the COVID-19 pandemic and reduced capital spending by Customers in response to the uncertainty surrounding the COVID-19 pandemic.

The Healthcare decline was partially offset by the impact of our recent acquisitions and the recognition of $14.6 million of capital equipment revenues that were previously deferred, recorded in the first quarter of fiscal 2021 (for more information regarding this change refer to Note 1 of the consolidated statements, titled "Nature of Operations and Summary of Significant Accounting Policies").

Our gross profit percentage decreased slightly to 43.2% for fiscal 2021 as compared to 43.6% for fiscal 2020.

The unfavorable impact of incremental costs associated with COVID-19 (60 basis points), unfavorable fluctuations in currencies (10 basis points) and mix and other adjustments (20 basis points), more than offset favorable pricing (50 basis points).

Fiscal 2021 operating income increased 2.1% to $548.4 million over fiscal 2020 operating income of $537.0 million.

This increase was primarily attributable to higher gross margin attainment.

Additional expenses from our recent acquisitions were partially offset by reduced selling, general, and administrative (“SG&A”) expenses during fiscal 2021, as certain expenses were suspended or decreased as a result of the COVID-19 pandemic.

Net cash flows from operations were $689.6 million and free cash flow was $450.9 million in fiscal 2021 compared to net cash flows from operations of $590.6 million and free cash flow of $380.2 million in fiscal 2020 (see subsection of MD&A titled, "Non-GAAP Financial Measures" for additional information and related reconciliation of non-GAAP financial measures to the most comparable GAAP measures) .

The fiscal 2021 increases in cash flows from operations and free cash flow were primarily due to working capital improvements, somewhat offset by higher capital expenditures.

These increases reflect added volume from Cantel and other recent acquisitions, organic growth in the Healthcare, Applied Sterilization Technologies and Life Sciences segments, and favorable fluctuations in currencies.

Our gross profit percentage increased to 44.0% for fiscal 2022 as compared to 43.2% for fiscal 2021.

Favorable impact from productivity, pricing, and the decline in COVID-19 incremental costs, were partially offset by unfavorable impact from our recent acquisitions, material costs, inflation, fluctuations in currencies, and mix and other adjustments.

Fiscal 2022 operating income decreased 22.4% to $425.6 million over fiscal 2021 operating income of $548.4 million.

This decline was primarily due to additional acquisition and integration expenses and incremental amortization expense primarily related to the acquisition of Cantel.

Unplanned supply chain and inflation of approximately $45.0 million also contributed to the decline in fiscal 2022.

Net cash flows from operations were $684.8 million and free cash flow was $399.0 million in fiscal 2022 compared to net cash flows from operations of $689.6 million and free cash flow of $450.9 million in fiscal 2021 (see subsection of MD&A

titled, "Non-GAAP Financial Measures" for additional information and related reconciliation of non-GAAP financial measures to the most comparable GAAP measures) .

The fiscal 2022 decrease in free cash flow was anticipated and was primarily due to costs associated with the acquisition and integration of Cantel and higher capital expenditures in fiscal 2022.

Our debt-to-total capital ratio was 32.1% at March 31, 2022.

During the year, we increased our quarterly dividend for the fifteenth consecutive year to $0.40 per share per quarter.

In fiscal 2022 and beyond, we expect to continue to manage our costs, grow our business with internal product and service development, invest in greater capacity, and augment these value creating methods with potential acquisitions of additional products and service s.

In this regard, we are working diligently on the closing of our acquisition of Cantel Medical, which we continue to expect to occur on June 2, 2021.

During the year, we increased our quarterly dividend for the sixteenth consecutive year to $0.43 per share per quarter.

In fiscal 2023 and beyond, we expect to continue to realize incremental cost synergies as a result of the integration of Cantel, manage our costs, grow our business with internal product and service development, invest in greater capacity, and augment these value creating methods with potential acquisitio ns of additional products and services.

We anticipate continued supply chain and inflation pressures in fiscal 2023.

Please refer to "Information With Respect to Our Business In General" in Item 1."Business" to this Annual Report on Form 10-K.

NON-GAAP FINANCIAL MEASURES

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RESULTS OF OPERATIONS

In the following subsections, we discuss our earnings and the factors affecting them.

In the following subsections, we discuss our performance and the factors affecting it.

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

The discussion of and factors affecting our performance for the year ended March 31, 2021 compared to the fiscal year ended March 31, 2020 is included in Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II of our Annual Report on Form 10-K for the year ended March 31, 2021.

FISCAL 2022 AS COMPARED TO FISCAL 2021

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Revenues increased $1,477.5 million, or 47.5%, to $4,585.1 million for the year ended March 31, 2022, as compared to $3,107.5 million for the year ended March 31, 2021.

Growth in the Applied Sterilization Technologies segment was primarily due to increased volume.

Growth in the Life Sciences segment was due to increased demand for our products and services from our pharmaceutical Customers focused on vaccines and biologics.

Service revenues for fiscal 2021 increased $35.9 million, or 2.2% over fiscal 2020, reflecting growth in the Applied Sterilization Technologies and Life Sciences business segments, which was partially offset by decline in the Healthcare business segment.

Consumable revenues for fiscal 2021 increased $53.6 million, or 8.0%, over fiscal 2020, reflecting growth in the Healthcare and the Life Sciences segments.

Capital equipment revenues for fiscal 2021 decreased by $12.9 million, or 1.8%, over fiscal 2020, reflecting decline in the Healthcare segment which was partially offset by growth in the Life Sciences business segment.

In the first quarter of fiscal 2021, we recognized $14.6 million of capital equipment revenues that were previously deferred (for more information regarding this change refer to Note 1 of the consolidated statements, titled "Nature of Operations and Summary of Significant Accounting Policies").

Ireland revenues for fiscal 2021 were $71.9 million, representing an increase of $8.1 million, or 12.7%, over fiscal 2020 revenues of $63.8 million, reflecting growth in service, consumable and capital equipment revenues.

United States revenues for fiscal 2021 were $2,227.0 million, representing an increase of $15.3 million, or 0.7%, over fiscal 2020 revenues of $2,211.7 million, reflecting growth in consumable and service revenues, which were partially offset by a decline in capital equipment revenues.

Revenues from other foreign locations for fiscal 2021 were $808.6 million, representing an increase of $53.2 million, or 7.0% over the fiscal 2020 revenues of $755.4 million, reflecting strength in Canada and the Europe, Middle East and Africa ("EMEA") and Asia Pacific regions, which were partially offset by decline in the Latin American region.

The increase reflects added volume of $1,073.1 million from Cantel and other recent acquisitions, organic growth in the Healthcare, Applied Sterilization Technologies and Life Sciences segments and favorable fluctuations in currencies.

Service revenues for fiscal 2022 increased $364.8 million, or 21.9% over fiscal 2021, reflecting growth in the Healthcare, Life Sciences and Applied Sterilization Technologies business segments.

Consumable revenues for fiscal 2022 increased $881.2 million, or 121.4%, over fiscal 2021, reflecting growth in the Healthcare and Life Sciences segments and added volume from the addition of our new Dental segment.

Capital equipment revenues for fiscal 2022 increased by $231.6 million, or 32.3%, over fiscal 2021, reflecting growth in the Healthcare and Life Sciences segments.

Ireland revenues for fiscal 2022 were $82.0 million, representing an increase of $10.1 million, or 14.1%, over fiscal 2021 revenues of $71.9 million, reflecting growth in service and consumable revenues, which were partially offset by a decline in capital equipment revenues.

United States revenues for fiscal 2022 were $3,228.9 million, representing an increase of $1,001.8 million, or 45.0%, over fiscal 2021 revenues of $2,227.0 million, reflecting growth in consumable, service and capital equipment revenues.

These increases represent both organic growth and the impact of Cantel and our other recent acquisitions.

Revenues from other foreign locations for fiscal 2022 were $1,274.2 million, representing an increase of $465.6 million, or 57.6% over the fiscal 2021 revenues of $808.6 million, reflecting strength in Canada and the Europe, Middle East and Africa ("EMEA"), Asia Pacific and Latin American regions.

These increases represent both organic growth and the impact of Cantel and our other recent acquisitions.

Gross Profit.

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Gross profit:

(as adjusted)*

Product $ 1,136,356 $ 678,464 $ 457,892 67.5 %

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Total gross profit percentage 44.0 % 43.2 %

*Certain amounts have been adjusted to reflect the change in inventory accounting method, as described in Note 1 to our Consolidated Financial Statements.

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.

Our gross profit percentage decreased slightly to 43.2% for fiscal 2021 as compared to 43.6% for fiscal 2020.

The unfavorable impact of incremental costs associated with COVID-19 (60 basis points), unfavorable fluctuations in currencies (10 basis points), and mix and other adjustments (20 basis points), more than offset favorable pricing (50 basis points).

Our gross profit percentage increased to 44.0% for fiscal 2022 as compared to 43.2% for fiscal 2021 .

Favorable impact from productivity (170 basis points), pricing (70 basis points), and the decline in COVID-19 incremental costs (60 basis points) were partially offset by unfavorable impact from our recent acquisitions (80 basis points), material costs (70 basis points), inflation (50 basis points), fluctuations in currencies (10 basis points) and mix and other adjustments (10 basis points).

Operating Expenses.

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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, facilities costs, gains or losses from divestitures, and other general and administrative expenses.

SG&A increased 2.0% in fiscal 2021 over fiscal 2020, largely due to our recent acquisitions.

V olume and performance driven employee compensation costs and travel and meeting costs have declined in the fiscal 2021 as compared to fiscal 2020, as a result of the COVID-19 pandemic and measures we have taken in response to it.

SG&A increased 105.5% in fiscal 2022 over fiscal 2021.

During the fiscal 2022 period we had significant increases in acquisition related costs, which included amortization of acquired intangible assets, "step-up" of plant, property and equipment to fair value, and acquisition and integration expenses, which were primarily related to the acquisition of Cantel.

The increase also reflects the addition of expenses associated with the operations of Cantel and our other recent acquisitions.

Research and Development.

Research and development expenses increased $0.8 million during fiscal 2021, as compared to fiscal 2020, due primarily to increased spending within the Healthcare Products segment.

Research and development expenses increased $21.6 million during fiscal 2022, as compared to fiscal 2021, primarily due to the addition of Cantel and our other recent acquisitions.

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.

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These restructuring actions were designed to enhance profitability and improve efficiency.

Since inception of the Fiscal 2019 Restructuring Plan we have incurred pre-tax expenses totaling $40.8 million related to these restructuring actions, of which $28.7 million was recorded as restructuring expenses and $12.1 million was recorded in cost of revenues, with a total of $33.9 million, $4.5 million and $0.7 million related to the Healthcare, Applied Sterilization Technologies and Life Sciences segments, respectively.

Corporate related restructuring charges were $1.8 million.

Additional restructuring expenses related to this plan are not expected to be material to our results of operations.

Restructuring expenses incurred in fiscal 2022 and fiscal 2021 were not material.

For information on our restructuring efforts, refer to our Annual Report on Form 10-K filed with the SEC on May 28, 2021.

Non-Operating Expenses, Net.

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

Non-operating expense (income), net consists of interest expense on debt, offset by interest earned on cash, cash equivalents, short-term investment balances, a fair value adjustment related to convertible debt, and other

miscellaneous expense.

The following table compares our non-operating expense (income), net for the year ended March 31, 2022 to the year ended March 31, 2021:

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Interest expense $ 89,593 $ 37,180 $ 52,413

Fair value adjustment related to convertible debt, premium liability 27,806 — 27,806

Interest income and miscellaneous expense (6,284) (6,345) 61

Non-operating expenses, net $ 111,115 $ 30,835 $ 80,280

Interest expense decreased $3.1 million during fiscal 2021, as compared to fiscal 2020, primarily due to lower interest rates on floating rate debt and an incre ased amount of capitalized interest expensed (refer to our Note 6 to our consolidated financial statements, titled "Debt", for more information).

Interest (income) and miscellaneous expense changed by $4.4 million primarily due to movement on our equity investments (refer to our Note 15 to our consolidated financial statements, titled "Fair Value Measurements" for more information).

Additional information regarding our outstanding debt is included in Note 6 to our consolidated financial statements titled, “Debt,” and in the subsection of this MD&A titled, “Liquidity and Capital Resources.”

Interest expense increased $52.4 million during fiscal 2022, as compared to fiscal 2021, primarily due to debt incurred for acquisition financing including term loans and Senior Public Notes (as defined below).

During fiscal 2022, we recorded fair value adjustments of $27.8 million, based on appreciation in our share price related to premium liability associated with the convertible debt assumed in the acquisition of Cantel.

Interest (income) and miscellaneous expense is not material.

Additional information regarding our outstanding debt and the Cantel convertible debt is included in Note 6 to our consolidated financial statements titled, “Debt,” and in the subsection of this MD&A titled, "Liquidity and Capital Resources."

Income Tax Expense.

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(dollars in thousands) 2022 2021

(as adjusted)*

Income tax expense $ 71,633 $ 120,663 $ (49,030) (40.6)%

Effective income tax rate 22.8 % 23.3 %

*Certain amounts have been adjusted to reflect the change in inventory accounting method, as described in Note 1 to our Consolidated Financial Statements.

The effective income tax rate for fiscal 2022 was 22.8% as compared to 23.3% for fiscal 2021.

The fiscal 2021 effective tax rate increased when compared to fiscal 2020 primarily due to an increased percentage of profits earned and taxed in jurisdictions with a higher tax rate.

The fiscal 2022 effective tax rate decreased when compared to fiscal 2021, primarily due to a decrease in percentage of profits earned and taxed in jurisdictions with a higher tax rate.

The fiscal 2022 effective tax rate was also unfavorably impacted by certain one-time, non-deductible acquisition related costs.

Business Segment Results of Operations.

We operate and report our financial information in three reportable business segments:

Healthcare, Applied Sterilization Technologies and Life Sciences.

As a result of the acquisition of Cantel, we have rea ssessed the organization of our business and have added a new segment called Dental.

We now operate and report our financial information in four reportable business segments:

Healthcare, Applied Sterilization Technologies, Life Sciences and Dental.

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

Our Healthcare segment offers infection prevention and procedural products and services for healthcare providers worldwide, including consumable products, equipment maintenance and installation services, and capital equipment.

The segment also provides a range of specialty services for healthcare providers including hospital sterilization services and instrument and scope repairs.

Our Applied Sterilization Technologies ("AST") segment provides contract sterilization and testing services for medical device and pharmaceutical manufacturers.

Our Life Sciences segment designs, manufactures and sells consumable products, equipment maintenance, specialty services and capital equipment primarily to pharmaceutical manufacturers around the world.

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;

to the repair of re-usable procedural instruments;

to outsourced instrument reprocessing services.

In addition, our procedural solutions also include single-use devices and capital equipment infrastructure used primarily in operating rooms, ambulatory surgery centers, endoscopy suites, and other procedural areas.

Our Applied Sterilization Technologies segment is a third-party service provider for contract sterilization, as well as testing services needed to validate sterility services for medical device and pharmaceutical manufacturers.

Our technology-neutral offering supports Customers every step of the way, from testing through sterilization.

Our Life Sciences segment provides a comprehensive offering of products and services that support pharmaceutical manufacturing, primarily for vaccine and other biopharma Customers focused on aseptic manufacturing.

These solutions include a full suite of consumable products, equipment maintenance and specialty services, and capital equipment.

Our Dental segment provides a comprehensive offering for dental practitioners and dental schools, offering instruments, infection prevention consumables and instrument management systems.

We disclose a measure of segment income that is consistent with the way management operates and views the business.

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The following table compares business segment and Corporate and other revenues and operating income for the year ended March 31, 2022 to the year ended March 31, 2021.

The March 31, 2020 amounts have been adjusted to reflect the change in inventory accounting method, as described in Note 1 titled, "Nature of Operations and Summary of Significant Accounting Policies".

Years ended March 31, Percent

(dollars in thousands) 2022 2021 Change Change

(as adjusted)*

Healthcare $ 2,845,467 $ 1,954,055 $ 891,412 45.6 %

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Life Sciences 524,964 467,552 57,412 12.3 %

Dental 361,661 — 361,661 — %

Total revenues $ 4,585,064 $ 3,107,519 $ 1,477,545 47.5 %

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Life Sciences 216,188 180,796 35,392 19.6 %

Dental 84,441 — 84,441 — %

Corporate (260,059) (219,153) (40,906) 18.7 %

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Acquisition and integration related charges (2)

205,788 35,634

Redomiciliation and tax restructuring costs (3)

(Gain) on fair value adjustment of acquisition related contingent consideration (1)

Net loss (gain) on divestiture of businesses (1)

Amortization of inventory and property "step up" to fair value (1)

Restructuring charges (4)

(2,350) (500)

Net (gain) loss on divestiture of businesses (1)

Amortization of inventory and property "step up" to fair value (1)

COVID-19 incremental costs (4)

Restructuring charges (credit) (5)

Total operating income $ 425,618 $ 548,368

*Certain amounts have been adjusted to reflect the change in inventory accounting method, as described in Note 1 to our Consolidated Financial Statements.

(1) For more information regarding our recent acquisitions and divestitures see Note 18 titled, "Business Acquisitions and Divestitures".

Amortization of purchased intangible assets fiscal 2019 total includes an impairment charge of $16,249, see Note 3 titled, "Goodwill and Intangible Assets", for more information.

(1) For more information regarding our recent acquisitions and divestitures refer to Note 2 titled, "Business Acquisitions and Divestitures."

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

(3) Costs incurred in connection with the Redomiciliation and subsequent tax restructuring.

(4) For more information regarding our restructuring activities see Note 2 titled, "Restructuring".

(5) Represents a one-time special employee bonus paid to most U.S.

employees and associated professional fees.

(4) COVID-19 incremental costs includes the additional costs attributable to COVID-19 such as enhanced cleaning protocols, personal protective equipment for our employees, event cancellation fees, and payroll costs associated with our response to COVID-19, net of any government subsidies available.

Healthcare revenues decreased 1.6% in fiscal 2021, as compared to fiscal 2020, reflecting declines in capital equipment and service revenues of 4.7% and 3.2%, respectively, which were partially offset by an increase in consumable revenues of 5.0%.

The declines in capital equipment and services revenues were primarily due to reduced demand for our products and services resulting from the reduction of deferrable surgical procedures as a result of the COVID-19 pandemic and reduced capital spending by Customers in response to the uncertainty surrounding the COVID-19 pandemic.

Fluctuations in currencies and the impact from our recent acquisitions were favorable during fiscal 2021.

Consumable revenues increased during fiscal 2021, as procedure volumes continued to rebound during the second half of fiscal 2021.

At March 31, 2021, the Healthcare segment’s backlog amounted to $206.3 million, increasing 21.3%, as compared to the backlog of $170.1 million at March 31, 2020.

Fiscal 2021 backlog was impacted by the recognition of capital equipment revenues that were previously deferred, recorded in the first quarter of fiscal 2021 (for more information regarding this change refer to Note 1 of the consolidated statements, titled "Nature of Operations and Summary of Significant Accounting Policies").

Applied Sterilization Technologies revenues increased 9.4% in fiscal 2021, as compared to fiscal 2020.

The increase reflects organic growth and favorable fluctuations in currencies.

Life Sciences revenues increased 12.1% in fiscal 2021, as compared to fiscal 2020, reflecting growth in consumable, capital equipment and service revenues of 15.6%, 13.8% and 5.0%, respectively.

The increase reflects organic growth, favorable pricing, and favorable fluctuations in currencies.

Life Sciences backlog at March 31, 2021 amounted to $79.9 million, increasing 10.3%, as compared to backlog of $72.4 million at March 31, 2020.

The Healthcare segment’s operating income increased $6.4 million to $427.1 million in fiscal year 2021, as compared to $420.7 million in fiscal year 2020.

(5) For more information regarding our restructuring efforts refer to our Annual Report on Form 10-K for the year ended March 31, 2021, dated May 28, 2021.

Healthcare revenues increased 45.6% in fiscal 2022, as compared to fiscal 2021, reflecting growth in consumables, capital equipment, and service revenues of 96.6%, 32.9% and 23.9%, respectively.

This increase reflects the impact of Cantel and our other recent acquisitions, organic grow th and favorable fluctuations in foreign currencies.

Excluding Cantel, the Healthcare segment’s backlog at March 31, 2022 amounted to $423.6 million , increasing 105.4%, as compared to the backlog of $206.3 million at March 31, 2021.

The increase is primarily due to Customer demand but also reflects some delays in shipments due to supply chain disruptions.

App lied Sterilization Technologies revenues increased 24.4% in fiscal 2022, as compared to fiscal 2021.

The increase was primarily due to organic growth and favorable fluctuations.

The impact of a fiscal 2021 acquisition also contributed to the increases.

Life Sciences revenues increased 12.3% in fiscal 2022, as compared to fiscal 2021, reflecting growth in service, consumable, and capital equipment revenues of 15.4%, 11.3% an d 10.8%, respectively.

The increase reflects the impact of the Cantel acquisition, organic growth and favorable fluctuations in foreign currencies.

Excluding Cantel, the Life Sciences backlog at March 31, 2022 amounted to $104.7 million, increasing 31.1%, as compared to backlog of $79.9 million at March 31, 2021.

The increase is primarily due to Customer demand but also reflects some delays in shipments due to supply chain disruptions.

Dental segment revenues from the Cantel acquisition date of June 2, 2021 through March 31, 2022 were $361.7 million.

The Healthcare segment’s operating income increased $199.0 million to $626.1 million in fiscal year 2022, as compared to $427.1 million in fiscal year 2021, due to higher volumes primarily from the acquisition of Cantel.

The segment's operating margins were 22.0% for fiscal year 2022 and 21.9% for fiscal year 2021.

The increases in the fiscal 2021 period were primarily due to favorable impact from our recent acquisitions and reduced expenditures, including reductions in travel and meeting spend due to the COVID-19 pandemic.

Employee compensation associated with the Healthcare segment was also reduced due to lower volumes and measures taken in response to the COVID-19 pandemic.

During fiscal 2022, we experienced favorable impact from our recent acquisitions, partially offset by supply chain and inflationary cost increases.

In fiscal 2021, we benefited from lower expenditures, including reductions in travel and meeting spend due to the COVID-19 pandemic.

The Applied Sterilization Technologies segment’s operating income increased $99.5 million to $410.1 million in fiscal year 2022, as compared to $310.6 million in fiscal year 2021.

The Applied Sterilization Technologies segment's operating margins were 45.3% for fiscal year 2021 and 43.2% for fiscal year 2020.

The increases in the fiscal 2021 period were primarily due to higher volumes and reduced expenditures, including reductions in travel and meeting spend due to the COVID-19 pandemic.

The Applied Sterilization Technologies segment's operating marg ins were 48.1% f or fiscal year 2022 and 45.3% for fiscal year 2021.

The segment's operating income and operating margin improvements were primarily due to to higher volumes.

Additionally, in the prior year we experienced reduced expenditures, including reductions in travel and meeting spend due to the COVID-19 pandemic.

The Life Sciences business segment’s operating income increased $35.4 million to $216.2 million in fiscal year 2022, as compared to $180.8 million in fiscal year 2021.

The segment’s operating margins were 38.7% for fiscal year 2021 and 34.6% for fiscal year 2020.

These increases in the fiscal 2021 period were primarily due to higher volumes and favorable mix.

The segment’s operating margins w ere 41.2% for fiscal year 2022 and 38.7% for fiscal year 2021.

The segment's operating income and operating margin improvements were primarily due to to higher volumes partially due to the acquisition of Cantel and favorable mix.

The Dental business segment's operating income and operating margin for fiscal 2022 were $84.4 million and 23.3%, respectively.

LIQUIDITY AND CAPITAL RESOURCES

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Net cash used in investing activities (666,559) (1,154,159)

Net provided by (cash used) in financing activities 345,620 (163,146)

Net provided by financing activities 115,830 345,620

Debt-to-total capital ratio 32.1 % 29.8 %

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Net Cash Provided By Operating Activities – The net cash provided by our operating activities was $684.8 million for the year ended March 31, 2022, compared to $689.6 million for the year ended March 31, 2021.

The following discussion summarizes the significant changes in our operating cash flows for the years ended March 31, 2021 and 2020:

• Net cash provided by operating activities increased in fiscal 2021 by 16.8%, as compared to fiscal 2020, primarily due to working capital improvements and deferred tax payments under government COVID-19 relief programs.

Net cash provided by operating activities decreased in fiscal 2022 by 0.7%, as compared to fiscal 2021, largely due to the acquisition and integration expenditures related to our acquisition of Cantel.

Net Cash Used In Investing Activities – The net cash used in our investing activities was $666.6 million for the year ended March 31, 2022, compared to $1,154.2 million for the year ended March 31, 2021.

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• Purchases of property, plant, equipment, and intangibles, net – Capital expenditures totaled $287.6 million and $239.3 million for fiscal 2022 and 2021, respectively.

The fiscal 2021 increase was primarily due to expansion projects in the Applied Sterilization Technologies segment.

• Proceeds from the sale of property, plant, equipment and intangibles – During fiscal 2021 and 2020 we received $0.6 million and $4.2 million, respectively, for proceeds from the sale of property, plant, equipment and intangibles.

The majority of the fiscal 2021 proceeds were related the sale of a manufacturing facility located in Brazil.

The majority of the fiscal 2020 proceeds were related to the sale of Healthcare Products facilities that were located in the U.K.

The fiscal 2022 increase was primarily due to additional expenditures associated with Cantel and in our Applied Sterilization Technologies segment.

• Proceeds from the sale of property, plant, equipment and intangibles – During fis cal 2022 and 2021 we recei ved $1.7 million and $0.6 million, respectively, for proceeds from the sale of property, plant, equipment and intangibles.

• Proceeds from the sale of business – During fiscal 2022 and 2021, we received $169.7 million and $0.5 million, respectively, for proceeds from the sale of certain non-core businesses.

For more information, refer to our Note 2 to our consolidated financial statements, titled "Business Acquisitions and Divestitures."

• Purchases of investments – During fiscal 2021, we purchased an equity investment for $4.4 million.

• Investments in business, net of cash acquired – During fiscal 2021 and 2020, we used $909.2 million and $109.8 million, respectively, for acquisitions.

• Purchases of investments – During fiscal 2021, we purchased an equity inve stment for $4.4 million.

• Acquisition of businesses, net of cash acquired – During fiscal 2022 and 2021, we used $550.4 million and $909.2 million, respectively, for acquisitions.

For more information on these acquisitions refer to Note 2 to our consolidated financial statements titled, "Business Acquisitions and Divestitures."

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For more information on these agreements refer to our Note 2 to our consolidated financial statements, titled "Business Acquisitions and Divestitures."

Net Cash Provided By (Used In) Financing Activities – Net cash provided by financing activities was $345.6 million for the year ended March 31, 2021, compared to net cash used in financing activities of $163.1 million for the year ended March 31, 2020.

Net Cash Provided By Financing Activities – Net cash provided by financing activities was $115.8 million for the year ended March 31, 2022, compared to $345.6 million for the year ended March 31, 2021.

The following discussion summarizes the significant changes in our financing cash flows for the years ended March 31, 2022 and 2021:

• Payments on long-term obligations – During the second quarter of fiscal 2021, we repaid $35.0 million of principal for private placement notes that matured in Aug ust 2020 .

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

• (Payments) proceeds under credit facilities, net – At the end of fiscal 2021, $247.4 million of debt was outstanding under our bank credit facility, compared to $275.4 million of debt outstanding under this facility at the end of fiscal 2020.

• Proceeds from issuance of senior notes – During fiscal 2022, we received $1,350.0 million in proceeds from the issuance of our Senior Public Notes.

For more information on our Senior Public Notes, refer to Note 6 of our Consolidated Financial Statements titled, "Debt."

• Proceeds from term loan – During fiscal 2022, we received proceeds of $650.0 million under our Delayed Draw Term Loan.

During fiscal 2021, we received proceeds of $550.0 million under a prior Term Loan, which was subsequently replaced by another Term Loan of a like amount.

For more information on our term loans, refer to Note 6 of our Consolidated Financial Statements titled, "Debt."

• Payments on term loan – During fiscal 2022, we repaid $345.0 million of our Term Loan.

For more information on our term loans, refer to Note 6 of our Consolidated Financial Statements titled, "Debt."

• Payments on long-term obligations – During fiscal 2022, we repaid $721.3 million of Cantel's outstanding debt in connection with the acquisition.

For more information on Cantel's debt refer to Note 2 of our Consolidated Financial Statements titled, "Business Acquisitions and Divestitures." During fiscal 2021, we repaid $35.0 million of principal for private placement senior notes that matured in Aug ust 2020.

For more information on our debt, refer to Note 6 of our Consolidated Financial Statements titled, "Debt."

• Payments on convertible debt obligations – During fiscal 2022, we paid $371.4 million to settle obligations associated with Cantel's convertible debt assumed at the time of acquisition.

For more information on Cantel's debt refer to Note 6 of our Consolidated Financial Statements titled, "Debt."

• Payments under credit facilities, net – Net payments under credit facilities totaled $190.2 million for fiscal 2022, compared to $30.5 million for fiscal 2021.

At the end of fiscal 2022, $58.9 million of debt was outstanding under our bank credit facility, compared to $247.4 million of debt outstanding under this facility at the end of fiscal 2021.

We provide additional information about our bank credit facility in Note 6 to our consolidated financial statements titled, "Debt."

• Proceeds from the issuance of long-term obligations – During the third quarter of fiscal 2021, we received proceeds of $550.0 million under our Term Loan.

On March 19, 2021, we entered into a new term loan agreement which provided for a $550.0 million term loan facility (the “New Term Loan”), which replaced the November 2020 Term Loan agreement.

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

• Deferred financing fees and debt issuance costs – During fiscal 2021 and fiscal 2020, we paid $12.8 million and $1.3 million, respectively for financing fees and debt issuance costs .

F or more information on our debt refer to Note 6 to our consolidated financial statements titled, "Debt".

• Repurchases of shares – From the start of fiscal 2021 through April 9, 2020, we purchased 35,000 of our ordinary shares in the aggregate amount of $5.0 million.

Due to the uncertainty surrounding the COVID-19 pandemic, share repurchases were suspended on April 9, 2020 .

During fiscal 2021 we obtained 91,567 of our ordinary shares in connection with our stock-based compensation award programs in the amount of $9.6 million.

During fiscal 2020, we purchased 273,259 of our ordinary shares in the aggregate amount of $40.0 million.

• Deferred financing fees and debt issuance costs – During fiscal 2022 and fiscal 2021, we paid $17.5 million and $12.8 million, respectively for financing fees and debt issuance costs primarily related to our Senior Public Notes and Delayed Draw Term Loan.

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

• Repurchases of shares – Due to the uncertainty surrounding the COVID-19 pandemic, share repurchases were suspended on April 9, 2020.

The suspension was lifted effective February 10, 2022, enabling the Company to resume stock repurchases pursuant to the prior authorizations.

From February 14, 2022, through March 31, 2022, we repurchased 108,368 of our ordinary shares for the aggregate amount of $25.0 million pursuant to the authorizations.

We also obtained 244,395 of our ordinary shares in the aggregate amount of $30.8 million in connection with share based compensation award programs.

From the start of fiscal 2021 through April 9, 2020, we purchased 35,000 of our ordinary shares in the aggregate amount of $5.0 million.

We also obtained 91,567 of our ordinary shares in connection with our stock-based compensation award programs in the amount $9.6 million.

We provide additional information about our share repurchases in Note 13 to our consolidated financial statements titled, "Repurchases of Ordinary Shares."

• Acquisition related deferred or contingent consideration – During fiscal 2021 and 2020 we paid $2.4 million and $0.6 million, respectively, in acquisition related deferred or contingent consideration.

• Acquisition related deferred or contingent consideration – During fiscal 2022, we paid $32.7 million in acquisition related deferred or contingent consideration, the majority of which was associated with a pre-acquisition arrangement related to an acquisition made by Cantel prior to our purchase of Cantel.

During fiscal 2021, we paid $2.4 million in deferred and contingent consideration related to our recent acquisitions.

For more information, refer to our Note 2 to our consolidated financial statements, titled "Business Acquisitions and Divestitures."

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During fiscal 2021, we paid cash dividends totaling $133.8 million or $1.57 per outstanding share.

• Transactions with noncontrolling interest holders – During fiscal 2021, we received $2.3 million of contributions from noncontrolling interest holders and paid $4.1 million in distributions to noncontrolling interest holders.

• Transactions with noncontrolling interest holders – During fiscal 2022, we received contributions from noncontrolling interest hold ers of $3.7 million and paid $1.0 million in distributions to noncontrolling interest holders.

During fiscal 2021, we received $2.3 million of contributions from noncontrolling interest holders and paid $4.1 million in distributions to noncontrolling interest holders.

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Free cash flow was $399.0 million in fiscal 2022, compared to $450.9 million in fiscal 2021.

The fiscal 2021 increase in free cash flow was primarily due to working capital improvements, somewhat offset by higher capital expenditures.

The fiscal 2022 decrease in free cash flow was anticipated and primarily due to costs associated with the acquisition and integration of Cantel and higher capital expenditures in fiscal 2022.

Our debt-to-total capital ratio was 32.1% at March 31, 2022 and 29.8% at March 31, 2021.

Cash Requirements.

We intend to use our existing cash and cash equivalent balances and cash generated from operations to fund capital expenditures and meet our other liquidity needs.

Our capital requirements depend on many uncertain factors, including our rate of sales growth, our Customers’ acceptance of our products and services, the costs of obtaining adequate manufacturing capacities, the timing and extent of our research and development projects, changes in our operating expenses and other factors.

To the extent that existing and anticipated sources of cash are not sufficient to fund our future activities, we may need to raise additional funds through additional borrowings or the sale of equity securities.

There can be no assurance that our financing arrangements will provide us with sufficient funds or that we will be able to obtain any additional funds on terms favorable to us or at all.

Sources of Credit.

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Sources of Credit

Private placement $ 860,308 $ — $ 860,308 $ —

New Term loan 550,000 — 550,000 —

Private Placement Senior Notes $ 849,726 $ — $ 849,726 $ —

Term Loan 205,000 — 205,000 —

Delayed Draw Term Loan 650,000 — 650,000 —

Revolving Credit Agreement (1)

1,250,000 15,371 58,908 1,175,721

Senior Public Notes 1,350,000 — 1,350,000 —

Total Sources of Credit $ 4,304,726 $ 15,371 $ 3,113,634 $ 1,175,721

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The Revolver matures on the date that is five years after March 19, 2021, and all unpaid borrowings, together with accrued and unpaid interest thereon, are repayable on that date.

The Revolver bears interest from time to time, at either the Base Rate or the Eurocurrency Rate, as defined in and calculated under and as in effect from time to time under the Revolving Credit Agreement, plus the Applicable Margin, as defined in the Revolving Credit Agreement.

The Applicable Margin is determined based on the Debt Rating of the Company, as defined in the Credit Agreement.

Base Rate Advances are payable quarterly in arrears and Eurocurrency Rate Advances are payable at the end of the relevant interest period therefor, but in no event less frequently than every three months.

The Revolver bears interest from time to time, at either the Base Rate, Eurocurrency Rate, or the Adjusted Daily Simple RFR, as defined in and calculated under and as in effect from time to time under the Revolving Credit Agreement, plus the Applicable Margin, as defined in the Revolving Credit Agreement.

The Applicable Margin is determined based on the Debt Rating of STERIS, as defined in the Credit Agreement.

Interest on Base Rate Advances is payable quarterly in arrears, and interest on Eurocurrency Rate Advances is payable at the end of the relevant interest period therefor, but in no event less frequently than every three months, and interest on RFR Advances is payable monthly after the date of borrowing.

Swingline borrowings bear interest at a rate to be agreed by the applicable swingline lender and the applicable borrower, subject to a cap in the case of swingline borrowings denominated in U.S.

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Dollars or in specified alternative currencies.

In connection with the cessation of British Pound Sterling LIBOR and Swiss Franc LIBOR as of December 31, 2021, JPMorgan Chase Bank, N.A.

as administrative agent, pursuant to authority contained in the Revolver, amended the Revolver on January 1, 2022 to make Benchmark Replacement Conforming Changes (as defined in the Revolver).

The amendment concerns technical, administrative or operational changes related to borrowings in British Pounds Sterling and Swiss Francs.

• On March 19, 2021, the Company, STERIS Corporation, Limited, and FinCo, each as a borrower and guarantor, entered into a term loan agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as Administrative agent (the “Term Loan Agreement”) providing for a $550.0 million term loan facility (the “Term Loan”), which replaced an existing term loan agreement, dated as of November 18, 2020 (the “Existing Term Loan Agreement”).

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For the period beginning from the fifth full fiscal quarter ended after the Term Loan Closing Date to and including the twelfth full fiscal quarter ended after the Term Loan Closing Date, quarterly principal payments, each in the amount of 1.25% of the original principal amount of the Term Loan, are due on the last business day of each fiscal quarter.

For the period beginning from the thirteenth full fiscal quarter ended after the Term Loan Closing Date through the maturity of the loan, quarterly principal payments, each in the amount of 1.875% of the original principal amount of the Term Loan, are due on the last business day of each fiscal quarter.

For the period beginning from the thirteenth full fiscal quarter ended after the Term Loan Closing Date through the maturity of the loan, quarterly

principal payments, each in the amount of 1.875% of the original principal amount of the Term Loan, are due on the last business day of each fiscal quarter.

The remaining unpaid principal is due and payable on the maturity date.

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The Applicable Margin is determined based on the Debt Rating of STERIS, as defined in the Term Loan Agreement.

• Also on March 19, 2021, the Company, STERIS Corporation, Limited, and FinCo, each as a borrower and guarantor, entered into a delayed draw term loan agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Delayed Draw Term Loan Agreement”) providing for a delayed draw term loan facility of up to $750 million (the “Delayed Draw Term Loan”) in connection with STERIS’s proposed acquisition of Cantel Medical Corp.

The Delayed Draw Term Loan will be funded by the lenders upon the satisfaction of certain

conditions, including the concurrent consummation of the acquisition (the “Acquisition Closing Date”).

The proceeds of the Delayed Draw Term Loan are expected to be used, together with the proceeds from other new indebtedness, to fund the cash consideration for the acquisition, as well as for various other items.

Base Rate Advances are payable quarterly in arrears and Eurocurrency Rate Advances are payable at the end of the relevant interest period therefore, but in no event less frequently than every three months.

• Also on March 19, 2021, the Company, STERIS Corporation, Limited, and FinCo, each as a borrower and guarantor, entered into a delayed draw term loan agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Delayed Draw Term Loan Agreement”) providing for a delayed draw term loan facility of up to $750.0 million (the “Delayed Draw Term Loan”) in connection with STERIS’s acquisition of Cantel.

During the first quarter of fiscal 2022, we borrowed $650.0 million under our Delayed Draw Term Loan Agreement.

The Delayed Draw Term Loan was funded by the lenders upon consummation of the Cantel acquisition (the “Acquisition Closing Date”).

The proceeds of the Delayed Draw Term Loan were used, together with the proceeds from other new indebtedness, to fund the cash consideration for the acquisition, as well as for various other items.

• The Delayed Draw Term Loan matures on the date that is five years after the Acquisition Closing Date.

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• The Delayed Draw Term Loan bears interest from time to time, at either the Base Rate or the Eurocurrency Rate, as defined in and calculated under and as in effect from time to time under the Delayed Draw Term Loan Agreement, plus the Applicable Margin, as defined in the Delayed Draw Term Loan Agreement.

The Applicable Margin is determined based on the Debt Rating of the Company, as defined in the Delayed Draw Term Loan Agreement.

The Applicable Margin is determined based on the Debt Rating of STERIS, as defined in the Delayed Draw Term Loan Agreement.

Interest on borrowings made at the Base Rate (“Base Rate Advances”) is payable quarterly in arrears and interest on borrowings made at the Eurocurrency Rate (“Eurocurrency Rate Advances”) is payable at the end of the relevant interest period therefor, but in no event less frequently than every three months.

There is no premium or penalty for prepayment of Base Rate Advances, but prepayments of Eurocurrency Rate Advances are subject to a breakage fee.

• On April 1, 2021, STERIS Irish FinCo Unlimited Company ("FinCo," "STERIS Irish FinCo," the "Issuer") completed an offering of $1,350.0 million in aggregate principal amount, of its senior notes in two separate tranches:

(i) $675.0 million aggregate principal amount of the Issuer’s 2.70% Senior Notes due 2031 (the “2031 Notes”) and (ii) $675.0 million aggregate principal amount of the Issuer’s 3.750% Senior Notes due 2051 (the “2051 Notes” and, together with the 2031 Notes, the “Senior Public Notes”).

The Senior Public Notes were issued pursuant to an Indenture, dated as of April 1, 2021 (the “Base Indenture”), among FinCo, and STERIS plc, STERIS Corporation and STERIS Limited (the “Guarantors”) and U.S.

Bank National Association, as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated as of April 1, 2021, among FinCo, the Guarantors and the Trustee (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”).

Each of the Guarantors guaranteed the Senior Public Notes jointly and severally on a senior unsecured basis (the “Guarantees”).

The 2031 Notes will mature on March 15, 2031 and the 2051 Notes will mature on March 15, 2051.

The Senior Public Notes will bear interest at the rates set forth above.

Interest on the Senior Public Notes is payable on March 15 and September 15 of each year, beginning on September 15, 2021, until their respective maturities.

• As of March 31, 2022, a total of $58.9 million was outstanding under the Revolving Credit Agreement, based on currency exchange rates as of March 31, 2022.

At March 31, 2022, we had $1,175.7 million of unused funding available under the Revolving Credit Agreement.

The Revolving Credit Agreement includes a sub-limit that reduces the maximum amount available to us by letters of credit outstanding.

At March 31, 2022, there was $15.4 million in letters of credit outstanding under the Credit Agreement.

As of March 31, 2022, $205.0 million and $650.0 million were outstanding under the Term Loan and Delayed Draw Term Loan, respectively.

Our outstanding Private Placement Senior Notes at March 31, 2022 were as follows:

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• On February 27, 2017, Limited issued and sold an aggregate principal amount of $95.0 million, €99.0 million, and £75.0 million, of senior notes in a private placement to certain institutional investors in an offering that was exempt from the registration requirements of the Securities Act of 1933.

These notes have maturities of between 10 and 15 years from the issue date.

These notes have maturities of between 10 years and 15 years from the issue date.

The agreement governing these notes contains leverage and interest coverage covenants.

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The agreement governing these notes contains leverage and interest coverage covenants.

• In December 2012, and in February 2013 STERIS Corporation issued and s old $200.0 million of senior notes, in a private placements to certain institutional investors in offerings that were exempt from the registration requirements of the Securities Act of 1933.

• In December 2012, and in February 2013 STERIS Corporation issued and sold $200.0 million of senior notes, in a private placement to certain institutional investors in offerings that were exempt from the registration requirements of the Securities Act of 1933.

The agreement governing the notes contains leverage and interest coverage covenants.

• All of the note agreements for the senior notes were amended in March 2019, in connection with the Redomiciliation.

The amendments waived certain repurchase rights for of the note holders and increased the size of certain baskets to more closely align with other than current credit agreement baskets.

• In addition, STERIS's STERIS Irish FinCo Unlimited Company ( "FinCo", "STERIS Irish FinCo" ) subsidiary issued $1.35 billion of 10 year and 30 year registered senior notes on April 1, 2021 (the "Senior Public Notes").

• The private placement note purchase agreements specify increases to the coupon interest rates while the ratio of Consolidated Total Debt to Consolidated EBITDA, as defined in the note purchase agreements, exceeds certain thresholds.

Beginning September 1, 2021 and through March 31, 2022 the coupon rates on the 2012 private placement notes were increased by 0.50%.

• On March 19, 2021, STERIS Corporation as issuer, and the Company, Limited and FinCo, as guarantors, entered into (1) a First Amendment to Amended and Restated Note Purchase Agreement dated March 5, 2019 (which had amended and restated certain note purchase agreements originally dated December 4, 2012) per the 2012 and 2013 senior notes (the “2012 Amendment”), and (2) a First Amendment to Amended and Restated Note Purchase Agreement dated March 5, 2019 (which had amended and restated certain note purchase agreements originally dated March 31, 2015) for the 2015 senior notes (the “2015 Amendment”).

Also on March 19, 2021, Limited, as Issuer, and the Company, STERIS Corporation and FinCo, as guarantors, entered into a First Amendment to Amended and Restated Note Purchase Agreement dated March 5, 2019 (which had amended and restated a certain note purchase agreement originally dated January 23, 2017) for the 2017 senior notes (together with the 2012 Amendment and the 2015 Amendment, the “NPA Amendments”).

The NPA Amendments provide for, among other things, the netting of cash proceeds received from qualifying capital markets events under certain circumstances for purposes of calculating the leverage ratio financial covenant.

As of March 31, 2021, a total of $247.4 million was outstanding under the Revolving Credit Agreement, based on currency exchange rates as of March 31, 2021.

At March 31, 2021, we had $992.8 million of unused funding available under the Revolving Credit Agreement.

The Revolving Credit Agreement includes a sub-limit that reduces the maximum amount available to us by letters of credit outstanding.

At March 31, 2021, there was $9.8 million in letters of credit outstanding under the Credit Agreement.

As of March 31, 2021, $550.0 million was outstanding under the Term Loan.

The NPA Amendments provided, among other things, for the waiver of certain repurchase rights of the note holders and increased the size of certain baskets to more closely align with other current credit agreement baskets.

At March 31, 2022, we were in compliance with all financial covenants associated with our indebtedness.

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We use cash provided by operating activities and our cash and cash equivalent balances to fund capital expenditures.

In fiscal 2022, we plan to continue to invest in facility expansions, particularly within the Applied Sterilization Technologies segment and in ongoing maintenance for existing facilities.

CONTRACTUAL AND COMMERCIAL COMMITMENTS

At March 31, 2021, we had commitments under non-cancelable operating leases totaling $195.1 million.

Our contractual obligations and commercial commitments as of March 31, 2021 are presented in the following tables.

In fiscal 2023, we plan to continue to invest in facility expansions, particularly within the Healthcare and Applied Sterilization Technologies segments and in ongoing maintenance for existing facilities.

MATERIAL FUTURE CASH OBLIGATIONS AND COMMERCIAL COMMITMENTS

Cash Requirements.

We intend to use our existing cash and cash equivalent balances and cash generated from operations to fund capital expenditures and meet our other liquidity needs.

There can be no assurance that our financing arrangements will provide us with sufficient funds or that we will be able to obtain any additional funds on terms favorable to us or at all.

Our material future cash obligations and commercial commitments as of March 31, 2022 are presented in the following tables.

Commercial commitments include standby letters of credit, letters of credit required as security under our self-insured risk retention policies, and other potential cash outflows resulting from events that require us to fulfill commitments.

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(dollars in thousands) 2023 2024 2025 2026 2027 and thereafter Total

Contractual Obligations:

Material Future Cash Obligations:

Debt $ 142,875 $ 60,000 $ 165,937 $ 341,408 $ 2,403,414 $ 3,113,634

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Expected contributions to defined benefit plans 4,103 4,227 2,129 — — 10,459

Total Contractual Obligations $ 153,780 $ 237,214 $ 47,732 $ 138,271 $ 1,501,163 $ 2,078,160

The table above includes only the principal amounts of our contractual obligations.

Total Material Future Cash Obligations $ 404,611 $ 133,847 $ 204,285 $ 364,276 $ 2,513,739 $ 3,620,758

The table above includes only the principal amounts of our material future cash obligations.

We provide information about the interest component of our long-term debt in the subsection of MD&A titled, “Liquidity and Capital Resources,” and in Note 6 to our consolidated financial statements titled, “Debt.”

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SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

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

STERIS plc ("Parent") and its wholly-owned subsidiaries, STERIS Limited and STERIS Corporation (collectively "Guarantors" and each a "Guarantor"), each have provided guarantees of the obligations of STERIS Irish FinCo Unlimited Company ("FinCo", "STERIS Irish FinCo"), a wholly-owned subsidiary issuer, under Senior Public Notes issued by STERIS Irish FinCo on April 1, 2021 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 will be senior unsecured obligations of STERIS Irish FinCo and the Guarantors, respectively, and will be equal in priority with all other unsecured and unsubordinated indebtedness of the Issuer and the Guarantors, respectively, from time to time outstanding, including, as applicable, under the Private Placement Senior Notes and borrowings under the credit facilities.

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

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

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

The ability of our subsidiaries to pay dividends, interest and other fees to the Issuer and ability of the Issuer and Guarantors to service the Senior Notes may be restricted by, among other things, applicable corporate and other laws and regulations as well as agreements to which our subsidiaries are or may become a party.

The ability of our subsidiaries to pay dividends, interest and other fees to the Issuer and ability of the Issuer and Guarantors to service the Senior Public Notes may be restricted by, among other things, applicable corporate and other laws and regulations as well as agreements to which our subsidiaries are or may become a party.

The following is a summary of these guarantees:

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The obligations of each Guarantor under its guarantee are expressly limited to the maximum amount that such Guarantor could guarantee without such guarantee constituting a fraudulent conveyance.

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 GAAP.

The following tables present summarized results of operations for the twelve months ended March 31, 2021 and summarized balance sheet information at March 31, 2021 for the obligor group of the Senior Notes.

The obligor group consists of the Parent Company Guarantor, Subsidiary Issuer, and Subsidiary Guarantors for the Senior Notes.

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 GAAP.

The following tables present summarized results of operations for the twelve months ended March 31, 2022 and summarized balance sheet information at March 31, 2022 and 2021 for the obligor group of the Senior Public Notes.

The obligor group consists of the Parent Company Guarantor, Subsidiary Issuer, and Subsidiary Guarantors for the Senior Public Notes.

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.

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( in thousands)

March 31, March 31,

Receivables due from non-issuers and non-guarantor subsidiaries $ 16,033,719 $ 14,102,215

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Intercompany transactions arise from internal financing and trade activities.

CRITICAL ACCOUNTING POLICIES, ESTIMATES, AND ASSUMPTIONS

The following subsections describe our most critical accounting policies, estimates, and assumptions.

Our accounting policies are more fully described in Note 1 to our consolidated financial statements titled, “Nature of Operations and Summary of Significant Accounting Policies.”

Credit Ratings

STERIS's Senior Public Notes have been assigned the following credit ratings:

Standard & Poor's Moody's Fitch

Credit Ratings BBB- Baa2 BBB

Each of the credit rating agencies reviews its rating periodically and there is no guarantee our current credit ratings will remain the same.

If our credit ratings were lowered, our ability to access the debt markets, our cost of funds, and other terms for new debt issuances could be adversely impacted.

CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

The following subsections describe our most critical accounting estimates, and assumptions.

Our accounting policies and recently issued accounting pronouncements are more fully described in Note 1 to our consolidated financial statements titled, "Nature of Operations and Summary of Significant Accounting Policies."

Estimates and Assumptions.

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In transactions that contain multiple performance obligations, such as when products, maintenance services, and other services are combined, we recognize revenue as each product is delivered or service is provided to the Customer.

the total arrangement consideration to each performance obligation based on its relative standalone selling price, which is the price for the product or service when it is sold separately.

We allocate the total arrangement consideration to each performance obligation based on its relative standalone selling price, which is the price for the product or service when it is sold separately.

Payment terms vary by the type and location of the Customer and the products or services offered.

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If the financial condition of our Customers worsens, or economic conditions change, we may be required to make changes to our allowance for doubtful accounts receivable.

Allowance for Sales Returns.

We maintain an allowance for sales returns based upon known returns and estimated returns for both capital equipment and consumables.

We estimate returns of capital equipment and consumables based upon historical experience.

Inventories and Reserves.

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We record an allowance for estimated losses when the facts and circumstances indicate that particular inventories will not be usable.

If future market conditions vary from those projected, and our estimates prove to be inaccurate, we may be required to write-down inventory values and record an adjustment to cost of revenues.

market conditions vary from those projected, and our estimates prove to be inaccurate, we may be required to write-down inventory values and record an adjustment to cost of revenues.

Asset Impairment Losses.

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If we incorrectly anticipate these factors, or unexpected events occur, our operating results could be materially affected.

Asset Retirement Obligations.

We incur retirement obligations for certain assets.

We record an initial liability for the asset retirement obligations (ARO) at fair value.

Accounting for the ARO at inception and in subsequent periods includes the determination of the present value of a liability and offsetting asset, the subsequent accretion of that liability and depletion of the asset, and a periodic review of the ARO liability estimates and discount rates used in the analysis.

We provide additional information about our asset retirement obligations in Note 5 to our consolidated financial statements titled, “Property, Plant and Equipment.”

Restructuring.

We record specific accruals in connection with plans for restructuring elements of our business.

These accruals include estimates principally related to employee separation costs, the closure and/or consolidation of facilities, and contractual obligations.

Actual amounts could differ from the original estimates.

We review our restructuring-related accruals on a quarterly basis and changes to plans are appropriately recognized in the Consolidated Statements of Income in the period the change is identified.

Purchase Accounting and Goodwill.

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We evaluate several qualitative indicators and assumptions, and trends that influence the valuation of the assets to determine if any evidence of potential impairment exists.

During the third quarter of fiscal 2019, management adopted a branding strategy that included phasing out the usage of a tradename associated with certain products in the Healthcare Products business segment.

As a result, management recorded an impairment charge of $16.2 million, which is included within the Selling, general, and administrative line of the Consolidated Statements of Income.

The remaining fair value of the asset was calculated using an income approach (the relief from royalty method).

The remaining fair value was not material and was amortized over the asset's remaining useful life.

Fair value calculated using this approach is classified within Level 3 of the fair value hierarchy and requires several assumptions.

Income Taxes.

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Retirement Benefits Plan

Funding Status Funded Funded Funded Unfunded Unfunded Funded Unfunded

Funding Status Funded Funded Unfunded Unfunded Unfunded Funded Unfunded

Assumptions used to determine March 31, 2022

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NA – Not applicable.

We develop our expected long-term rate of return on plan assets assumptions by evaluating input from third-party professional advisors, taking into consideration the asset allocation of the portfolios, and the long-term asset class return expectations.

We develop our expected long-term rate of return on plan assets a ssumptions by evaluating input from third-party professional advisors, taking into consideration the asset allocation of the portfolios, and the long-term asset class return expectations.

Generally, net periodic benefit costs increase as the expected long-term rate of return on plan assets assumption decreases.

Holding all other assumptions constant, lowering the expected long-term rate of return on plan assets assumption for our funded defined benefit pension plans by 50 basis points would have increased the fiscal 2021 benefit costs by l ess than $0.1 million.

We develop our discount rate assumptions by evaluating input from third-party professional advisers, taking into consideration the current yield on country specific investment grade long-term bonds which provide for similar cash flow streams as our projected benefit obligations.

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This model involves assumptions that are judgmental and affect share-based compensation expense.

Share-based compensation expense was $26.0 million in fiscal 2021, $23.8 million in fiscal 2020 and $24.0 million in fiscal 2019.

Share-based compensation ex pense was $57.7 million in fiscal 2022, $26.0 million in fiscal 2021 and $23.8 million in fiscal 2020.

Note 14 to our consolidated financial statements titled, “Share-Based Compensation,” contains additional information about our share-based compensation plans.

RECENTLY ISSUED ACCOUNTING STANDARDS IMPACTING THE COMPANY

Recently issued accounting standards that are relevant to us are presented in Note 1 to our consolidated financial statements titled, “Nature of Operations and Summary of Significant Accounting Policies.”

Our business has not been significantly impacted by the overall effects of inflation.

We monitor the prices we charge for our products and services on an ongoing basis and plan to adjust those prices to take into account future changes in the rate of inflation.

However, we may not be able to completely offset the impact of inflation.

FORWARD-LOOKING STATEMENTS

This Form 10-K contains forward-looking statements within the meaning of the federal securities laws about STERIS, and the acquisition of Cantel.

This Form 10-K 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.

These forward-looking statements are based on current expectations, estimates or forecasts about our businesses, the industries in which we operate and current beliefs and assumptions of management and are subject to uncertainty and changes in circumstances.

These statements are not guarantees of performance or results.

Many important factors could affect actual financial results and cause them to vary materially from the expectations contained in the forward-looking statements.

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.

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.

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

• the failure to obtain Cantel stockholder approval of acquisition of Cantel;

• the possibility that the closing conditions to the acquisition of Cantel may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant a necessary regulatory approval and any conditions imposed on the combined entity in connection with consummation of the acquisition of Cantel;

• delay in closing the acquisition of Cantel or the possibility of non-consummation of the acquisition of Cantel;

• the risk that the cost savings and any other synergies from the acquisition of Cantel may not be fully realized or may take longer to realize than expected, including that the acquisition of Cantel may not be accretive within the expected timeframe or to the extent anticipated;

• the occurrence of any event that could give rise to termination of the merger agreement;

• the risk that shareholder/stockholder litigation in connection with the acquisition of Cantel may affect the timing or occurrence of the acquisition of Cantel or result in significant costs of defense, indemnification and liability;

• risks related to the disruption of the acquisition of Cantel to STERIS, Cantel and our respective managements;

• risks relating to the value of the STERIS shares to be issued in the transaction;

• the effect of announcement of the acquisition of Cantel on our ability to retain and hire key personnel and maintain relationships with customers, suppliers and other third parties;

• the impact of the COVID-19 pandemic on STERIS’s or Cantel’s operations, performance, results, prospects, or value;

• STERIS’s ability to achieve the expected benefits regarding the accounting and tax treatments of the redomiciliation to Ireland (“Redomiciliation”);

• 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;

• 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;

• 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;

• the potential for increased pressure on pricing or costs that leads to erosion of profit margins;

• 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;

• 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 or Cantel’s performance, results, prospects or value;

• 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;

• the possibility of reduced demand, or reductions in the rate of growth in demand, for STERIS’s or Cantel’s products and services;

• 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;

• 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 and Cantel’s businesses, industry or initiatives including, without limitation, those matters described in this Form 10-K, and other securities filings, may adversely impact STERIS’s and/or Cantel’s performance, results, prospects or value;

• the impact on STERIS and its operations, or tax liabilities, of Brexit or the exit of other member countries from the EU, and STERIS’s ability to respond to such impacts;

• the impact on STERIS, Cantel and their respective 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;

• the possibility that anticipated financial results or benefits of recent acquisitions, including the acquisition of Key Surgical, or of STERIS’s restructuring efforts, or of recent divestitures, or of restructuring plans will not be realized or will be other than anticipated;

• the effects of contractions in credit availability, as well as the ability of STERIS’s and Cantel’s Customers and suppliers to adequately access the credit markets when needed;

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 or similar public health crises 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, (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, including the Russia-Ukraine military conflict, 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, due to supply chain issues or otherwise , 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 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.

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-K

Item 7. Management’s Discussion and Analysis