What changed in this filing

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Item 1. Financial Statements

2024-08-08 compared with 2024-02-08 · 313 added, 313 removed, 573 unchanged (52% of the section changed)

10 unchanged sentences

Prepaid expenses and other current assets 150,973 174,349

Current assets held for sale — 804,904

Total current assets 1,940,494 2,869,123

13 unchanged sentences

Accrued expenses and other 286,563 319,744

Current liabilities held for sale — 64,012

Total current liabilities 834,360 931,127

17 unchanged sentences

STERIS PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

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

2023 2022 2023 2022

Three Months Ended June 30,

Product $ 656,293 $ 612,702

8 unchanged sentences

Selling, general, and administrative 335,626 306,530

Goodwill impairment loss — — — 490,565

Research and development 25,573 24,694

4 unchanged sentences

Interest expense 30,384 32,357

Interest and miscellaneous (income) expense ( 2,080 ) 1,906 ( 4,710 ) 3,200

Interest and miscellaneous income

( 1,309 ) ( 1,377 )

Gain on sale of business ( 18,803 ) —

Total non-operating expenses, net 10,272 30,980

Income (loss) before income tax expense 179,289 160,338 487,357 ( 37,773 )

Income from continuing operations before income tax expense

175,259 166,781

Income tax expense 35,310 36,200

Net income (loss) 140,945 123,325 381,081 ( 81,151 )

Net income (loss) attributable to noncontrolling interests 202 ( 503 ) 1,465 ( 956 )

Net income (loss) attributable to shareholders $ 140,743 $ 123,828 $ 379,616 $ ( 80,195 )

Net income (loss) per share attributed to shareholders

Basic $ 1.42 $ 1.24 $ 3.84 $ ( 0.80 )

Diluted $ 1.42 $ 1.24 $ 3.82 $ ( 0.80 )

Income from continuing operations, net of income tax

139,949 130,581

Income (loss) from discontinued operations, net of income tax 5,592 ( 6,791 )

Net income 145,541 123,790

Net income attributable to noncontrolling interests

Net income attributable to shareholders $ 145,401 $ 123,554

Net income (loss) per share attributable to shareholders - Basic:

Continuing Operations $ 1.41 $ 1.32

Discontinued Operations $ 0.06 $ ( 0.07 )

Total $ 1.47 $ 1.25

Net income (loss) per share attributable to shareholders - Diluted:

Continuing Operations $ 1.41 $ 1.31

Discontinued Operations $ 0.06 $ ( 0.07 )

Total $ 1.46 $ 1.25

Cash dividends declared per share ordinary outstanding $ 0.52 $ 0.47

1 unchanged sentence

STERIS PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

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

2023 2022 2023 2022

Net income (loss) $ 140,945 $ 123,325 $ 381,081 $ ( 81,151 )

Net income (loss) attributable to noncontrolling

interests 202 ( 503 ) 1,465 ( 956 )

Net income (loss) attributable to shareholders 140,743 123,828 379,616 ( 80,195 )

Three Months Ended June 30,

Net income $ 145,541 $ 123,790

Net income attributable to noncontrolling

Net income attributable to shareholders 145,401 123,554

Other comprehensive income (loss)

Defined benefit plan changes (net of taxes of $( 14 ) and $( 17 ), respectively)

Change in cumulative currency translation adjustment 134,048 233,958 67,906 ( 154,438 )

Total other comprehensive income (loss) 134,106 233,985 68,081 ( 154,355 )

Comprehensive income (loss) $ 274,849 $ 357,813 $ 447,697 $ ( 234,550 )

Change in cumulative foreign currency translation adjustment

Total other comprehensive income

Comprehensive income

$ 150,988 $ 133,405

See notes to consolidated financial statements.

2 unchanged sentences

(in thousands)

Nine Months Ended December 31,

Three Months Ended June 30,

Operating activities:

Net income (loss) $ 381,081 $ ( 81,151 )

Net income $ 145,541 $ 123,790

Adjustments to reconcile net income to net cash provided by operating activities:

2 unchanged sentences

Share-based compensation expense 11,460 11,579

(Gain) loss on the disposal of property, plant, equipment, and intangibles, net ( 971 ) 653

Loss on sale of businesses, net — 3,939

Amortization of inventory fair value adjustments 4,722 2,477

Goodwill impairment loss — 490,565

Loss on the disposal of property, plant, equipment, and intangibles, net 2,151 93

Gain on sale of businesses, net ( 10,960 ) —

Other items ( 2,451 ) 1,995

8 unchanged sentences

Purchases of property, plant, equipment, and intangibles, net ( 108,083 ) ( 66,601 )

Proceeds from the sale of property, plant, and equipment

Proceeds from the sale of property, plant, equipment, and intangibles

Proceeds from the sale of businesses 809,571 —

Acquisition of businesses, net of cash acquired ( 13,659 ) —

Net cash used in investing activities ( 791,754 ) ( 305,752 )

Net cash provided by (used in) investing activities 687,829 ( 66,596 )

Financing activities:

Payments on Private Placement Senior Notes

Payments on term loans ( 638,125 ) ( 15,000 )

Proceeds under credit facilities, net

265,501 216,561

Payments on acquisition related deferred or contingent consideration

( 6,153 ) ( 310 )

Payments under credit facilities, net ( 253,200 ) ( 144,651 )

Acquisition related deferred or contingent consideration ( 87 ) ( 89 )

Repurchases of ordinary shares ( 64,203 ) ( 8,724 )

Cash dividends paid to ordinary shareholders ( 51,436 ) ( 46,427 )

Distributions to noncontrolling interest ( 1,561 ) ( 794 )

Contributions from noncontrolling interest 2,883 —

Contributions from noncontrolling interest holders

Stock option and other equity transactions, net 5,587 1,254

Net cash provided by (used in) financing activities

58,583 ( 306,771 )

Net cash used in financing activities ( 998,932 ) ( 213,637 )

Effect of exchange rate changes on cash and cash equivalents ( 1,332 ) ( 639 )

Decrease in cash and cash equivalents ( 12,772 ) ( 88,949 )

(Decrease) increase in cash and cash equivalents ( 8,692 ) 257

Cash and cash equivalents at beginning of period 207,020 208,357

4 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended December 31, 2023

Ordinary Shares Retained

Earnings Accumulated

Comprehensive

Noncontrolling

Number Amount

Balance at September 30, 2023 98,789 $ 4,518,911 $ 2,045,897 $ ( 386,735 ) $ 11,095 $ 6,189,168

Comprehensive income:

Net income — — 140,743 — 202 140,945

Other comprehensive income

— — — 134,106 — 134,106

Repurchases of ordinary shares ( 12 ) ( 731 ) ( 1,497 ) — — ( 2,228 )

Equity compensation programs and other 31 16,079 — — — 16,079

Cash dividends - $ 0.52 per ordinary share

— — ( 51,377 ) — — ( 51,377 )

Contributions from noncontrolling interest

— — — — 2,883 2,883

Distributions to noncontrolling interest — — — — ( 1,561 ) ( 1,561 )

Other changes in noncontrolling interest — — — — 84 84

Balance at December 31, 2023 98,808 $ 4,534,259 $ 2,133,766 $ ( 252,629 ) $ 12,703 $ 6,428,099

Nine Months Ended December 31, 2023

Three Months Ended June 30, 2024

Ordinary Shares Retained

1 unchanged sentence

Comprehensive

Noncontrolling

Non-controlling

Interest Total

Number Amount

8 unchanged sentences

— — ( 51,436 ) — — ( 51,436 )

Contributions from noncontrolling interest — — — — 2,883 2,883

Distributions to noncontrolling interest — — — — ( 1,561 ) ( 1,561 )

Other changes in noncontrolling interest — — — — ( 58 ) ( 58 )

Balance at December 31, 2023 98,808 $ 4,534,259 $ 2,133,766 $ ( 252,629 ) $ 12,703 $ 6,428,099

STERIS PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands, except per share amounts)

Three Months Ended December 31, 2022

Ordinary Shares Retained

Earnings Accumulated

Comprehensive

Loss Noncontrolling

Number Amount

Balance at September 30, 2022 99,868 $ 4,705,118 $ 1,695,087 $ ( 598,148 ) $ 11,390 $ 5,813,447

Comprehensive income:

Net income (loss)

— — 123,828 — ( 503 ) 123,325

Other comprehensive income

Contributions from noncontrolling interest holders

— — — — 2,532 2,532

Repurchases of ordinary shares ( 493 ) ( 82,804 ) ( 1,226 ) — — ( 84,030 )

Equity compensation programs and other 25 9,389 — — — 9,389

Cash dividends – $ 0.47 per ordinary share

Other changes in noncontrolling interest holders

— — — — ( 6 ) ( 6 )

Distributions to noncontrolling interest — — — — ( 794 ) ( 794 )

Other changes in noncontrolling interest — — — — 115 115

Balance at December 31, 2022 99,400 $ 4,631,703 $ 1,770,772 $ ( 364,163 ) $ 10,208 $ 6,048,520

Nine Months Ended December 31, 2022

Balance at June 30, 2024 98,799 $ 4,499,580 $ 2,178,087 $ ( 323,070 ) $ 15,848 $ 6,370,445

Three Months Ended June 30, 2023

Ordinary Shares Retained

1 unchanged sentence

Comprehensive

Loss Noncontrolling

Loss Non-controlling

Interest Total

Number Amount

1 unchanged sentence

Comprehensive income:

Net loss — — ( 80,195 ) — ( 956 ) ( 81,151 )

Other comprehensive loss — — — ( 154,355 ) — ( 154,355 )

— — 123,554 — 236 123,790

Other comprehensive income — — — 9,851 — 9,851

Repurchases of ordinary shares ( 52 ) ( 997 ) ( 7,727 ) — — ( 8,724 )

2 unchanged sentences

— — ( 46,427 ) — — ( 46,427 )

Distributions to noncontrolling interest — — — — ( 794 ) ( 794 )

Other changes in noncontrolling interest — — — — ( 124 ) ( 124 )

Balance at December 31, 2022 99,400 $ 4,631,703 $ 1,770,772 $ ( 364,163 ) $ 10,208 $ 6,048,520

Balance at June 30, 2023 98,781 $ 4,498,212 $ 1,980,933 $ ( 310,859 ) $ 10,086 $ 6,178,372

See notes to consolidated financial statements.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

For the Three and Nine Months Ended December 31, 2023 and 2022

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

1 unchanged sentence

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, endoscopy accessories, barrier products, and other products and services, including 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.

We operate and report in four reportable business segments:

Healthcare, Applied Sterilization Technologies ("AST"), Life Sciences, and Dental.

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

We offer our Customers a unique mix of innovative products and services.

These include:

consumable products, such as detergents, endoscopy accessories, barrier products, instruments and tools;

services, including equipment installation and maintenance, microbial reduction of medical devices, instrument and scope repair, laboratory testing, and outsourced reprocessing;

capital equipment, such as sterilizers, surgical tables, and automated endoscope reprocessors;

and connectivity solutions such as operating room (“OR”) integrati on.

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

Healthcare, Applied Sterilization Technologies ("AST"), and Life Sciences.

Previously, we had four reportable business segments, however, as a result of the divestiture of our Dental segment, Dental is presented as discontinued operations.

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

We describe our business segments in Note 11 titled "Business Segment Information."

17 unchanged sentences

These investments are immaterial to the Company's consolidated financial statements.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

Discontinued Operations

On April 11, 2024, the Company announced its plan to sell substantially all of the net assets of its Dental segment for total cash consideration of $ 787,500 , subject to customary adjustments, and up to an additional $ 12,500 in contingent payment should the Dental business achieve certain revenue targets in fiscal 2025.

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

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

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

The Dental segment results of operations were reclassified to income (loss) from discontinued operations in the Consolidated Statements of Income for all periods presented, and we classified the Dental segment's assets and liabilities as held for sale for the year ended March 31, 2024 in the accompanying Consolidated Balance Sheets.

Due to the transaction closing in the first quarter of fiscal 2025, the held for sale assets and liabilities were classified as current as of March 31, 2024.

Our Consolidated Statements of Cash Flows include the financial results of the Dental segment for all periods presented.

For additional information regarding this transaction and its effect on our financial reporting, refer to Note 4 titled, "Discontinued Operations" and Note 11 titled, "Business Segment Information."

Use of Estimates

4 unchanged sentences

We revise the estimates and assumptions as new information becomes available.

This means that operating results for the three and nine month periods ended December 31, 2023 are not necessarily indicative of results that may be expected for future quarters or for the full fiscal year ending March 31, 2024.

This means that operating results for the three month period ended June 30, 2024 are not necessarily indicative of results that may be expected for future quarters or for the full fiscal year ending March 31, 2025.

Revenue Recognition and Associated Liabilities

7 unchanged sentences

Shipping and handling costs charged to Customers are included in Product revenues.

The associated

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three and Nine Months Ended December 31, 2023 and 2022

(dollars in thousands, except as noted)

expenses are treated as fulfillment costs and are included in Cost of revenues.

The associated expenses are treated as fulfillment costs and are included in Cost of revenues.

Revenues are reported net of sales and value-added taxes collected from Customers.

10 unchanged sentences

We do not capitalize sales commissions as substantially all of our sales commission programs have an amortization period of one year or less.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

Certain costs to fulfill a contract are capitalized and amortized over the term of the contract if they are recoverable, directly related to a contract and generate resources that we will use to fulfill the contract in the future.

At December 31, 2023, assets related to costs to fulfill a contract were not material to our consolidated financial statements.

At June 30, 2024, assets related to costs to fulfill a contract were not material to our consolidated financial statements.

Refer to Note 11 titled, "Business Segment Information" for disaggregation of revenue.

12 unchanged sentences

Contracts for instrument repairs are primarily based on a Customer’s purchase order, and the associated revenue is recognized upon completion of the repair.

We also offer preventive maintenance and separately priced extended warranty agreements to our Customers, which require us to maintain and repair our products over the duration of the contract.

We also offer preventive maintenance and separately priced extended warranty agreements to our Customers, which require us to maintain and repair products over the duration of the contract.

Generally, these contract terms are cancellable without penalty and range from one to five years.

2 unchanged sentences

Sales contracts for contract sterilization and laboratory services are primarily based on a Customer’s purchase order and associated Customer agreement, and revenues are generally recognized upon completion of the service.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three and Nine Months Ended December 31, 2023 and 2022

(dollars in thousands, except as noted)

Contract Liabilities

2 unchanged sentences

Deferred revenue is recognized as revenue upon completion of the performance obligation, which generally occurs within one year.

During the first nine months of fiscal 2024, $ 70,181 of the March 31, 2023 deferred revenue balance was recorded as revenue.

During the first nine months of fiscal 2023, $ 76,861 of the March 31, 2022 deferred revenue balance was recorded as revenue.

During the first three months of fiscal 2025, $ 45,996 of the March 31, 2024 deferred revenue balance was recorded as revenue.

During the first three months of fiscal 2024, $ 42,300 of the March 31, 2023 deferred revenue balance was recorded as revenue.

Refer to Note 8 titled, "Additional Consolidated Balance Sheet Information" for deferred revenue balances.

5 unchanged sentences

Remaining performance obligations reflect only the performance obligations related to agreements for which we have a firm commitment from a Customer to purchase, and exclude variable consideration related to unsatisfied performance obligations.

With regard to products, these remaining performance obligations include orders for capital equipment and consumables where control of the product has not passed to the Customer.

With regard to products, these remaining performance obligations include orders for capital equipment and consumables where control of the products has not passed to the customer.

With regard to service, these remaining performance obligations primarily include installation, certification, and outsourced reprocessing services.

As of December 31, 2023, the transaction price allocated to remaining performance obligations was approximately $ 1,555,119 .

We expect to recognize approximately 56 % of the transaction price within one year and approximately 32 % beyond one year.

The remainder has yet to be scheduled for delivery.

As of June 30, 2024, the transaction price allocated to remaining performance obligations was approximately $ 1,499,543 .

We expect to recognize

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three and Nine Months Ended December 31, 2023 and 2022

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

approximately 53 % of the transaction price within one year and approximately 38 % beyond one year.

The remainder has yet to be scheduled for delivery.

Recently Issued Accounting Standards Impacting the Company

1 unchanged sentence

Standard Date of Issuance Description Date of Adoption Effect on the financial statements or other significant matters

Standards that have been adopted in fiscal 2024

ASU 2022-04 "Liabilities - Supplier Finance Programs (Subtopic 405-50) Disclosure of Supplier Finance Program Obligations." September 2022 The standard provides guidance to enhance the transparency of disclosures for entities that utilize supplier finance programs to include information about the key terms of the programs and present a rollforward of any obligations under the program where those obligations are presented in the balance sheet.

We adopted this standard in fiscal 2024 with no material impact to our consolidated financial statements.

Standards that have not yet been adopted

3 unchanged sentences

The amendments in this standard are effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

We are in the process of evaluating the impact that the standard will have on our consolidated financial statements.

ASU 2023-09 "Income Taxes (Topic 740) Improvements to Income Tax Disclosures." December 2023 The standard provides guidance to enhance disclosures related to income taxes paid (net of refunds), requiring disaggregation by federal, state, and foreign, and disclosure of income taxes paid (net of refunds received) by individual jurisdictions that represent greater than 5 percent of the total.

NA We are currently assessing the impact of this standard update on our disclosures in the notes to the consolidated financial statements.

The standard also requires disclosure of income (loss) from continuing operations before income taxes, disaggregated between domestic and foreign, and income tax expense (or benefit) disaggregated by federal, state, and foreign.

1 unchanged sentence

The amendments in this standard are effective for annual periods beginning after December 15, 2024.

NA We are in the process of evaluating the impact that the standard will have on our consolidated financial statements.

A detailed description of our significant and critical accounting policies, estimates, and assumptions is included in our consolidated financial statements in our Annual Report on Form 10-K for the year ended March 31, 2023, which was filed with the SEC on May 26, 2023.

NA We are currently assessing the impact of this standard update on our disclosures in the notes to the consolidated financial statements.

A detailed description of our significant and critical accounting policies, estimates, and assumptions is included in our consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2024, which was filed with the SEC on May 29, 2024.

Our significant and critical accounting policies, estimates, and assumptions have not changed materially from March 31, 2024.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three and Nine Months Ended December 31, 2023 and 2022

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

Business Acquisitions

On August 2, 2023, we purchased the surgical instrumentation, laparoscopic instrumentation and sterilization container assets from BD (Becton, Dickinson and Company) (NYSE:

The acquired assets from BD are being integrated into our Healthcare segment.

The purchase price of the acquisition was $ 539,758 .

Restructuring

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

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

Fewer than 300 positions are being eliminated.

These restructuring actions are designed to enhance profitability and improve efficiency, and we expect these actions to be substantially complete by the end of fiscal 2025.

The following tables summarize our total pre-tax restructuring expenses recorded in fiscal 2025 related to the Restructuring Plan:

Three Months Ended June 30, 2024 Restructuring Plan

Severance and other compensation related costs

Lease and other contract termination costs 2,970

Product rationalization (1)

Accelerated depreciation and amortization 1,250

Total Restructuring Expense

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

The Restructuring Plan expenses incurred during the three months ended June 30, 2024 primarily related to actions taken within our Healthcare segment.

Total pre-tax restructuring expense of $ 72,472 has been recorded relating to the Restructuring Plan since inception, of which $ 20,702 has been recorded in Cost of revenues.

We expect to incur additional costs through the remainder of fiscal 2025 for severance and other compensation related costs and lease and other contract termination and other costs, of approximately $ 28,000 .

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

Restructuring Plan

Balance at March 31, 2024 $ 678

Fiscal 2025 Charges 24,450

Balance at June 30, 2024 $ 21,375

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

Business Acquisitions and Divestitures

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

Total aggregate consideration was approximately $ 13,659 .

On June 20, 2023, we entered into a definitive agreement to purchase the surgical instrumentation, laparoscopic instrumentation and sterilization container assets from Becton, Dickinson and Company (NYSE:

The transaction was completed on August 2, 2023, and t he acquired assets from BD were integrated into our Healthcare segment.

The purchase price of the BD acquisition was $ 539,758 .

The acquisition also qualified for a tax benefit related to tax deductible goodwill, with a present value of approximately $ 60,000 .

The purchase price of the acquisition was financed with borrowings from our existing credit facility.

The purchase price of the acquisition was financed with borrowings from our existing Revolving Credit Facility.

For more information, refer to Note 7 titled, " Debt."

The table below summarizes the preliminary allocation of the purchase price to the net assets acquired from BD based on fair values at the acquisition date.

The table below summarizes the allocation of the purchase price to the net assets acquired from BD based on fair values at the acquisition date.

September 30, 2023

(As Previously Reported)

December 31, 2023 (1)

(As Previously Reported) Adjustments (2)

Inventory 27,006 4,821 31,827

Property, plant, and equipment 6,755 1,109 7,864

Lease right-of-use assets, net — 1,737 1,737

Intangible assets (1)

2 unchanged sentences

Total assets acquired 539,758 1,737 541,495

Lease obligations — 1,737 1,737

Total liabilities assumed — 1,737 1,737

Net assets acquired $ 539,758 $ — $ 539,758

(1) Purchase price allocation is preliminary as of December 31, 2023, as valuations have not been finalized.

During the first nine months of fiscal 2023, we completed several tuck-in acquisitions, which continued to expand our product and service offerings in the AST and Healthcare segments.

Total aggregate consideration was approximately $ 40,720 , including contingent deferred consideration of $ 6,700 .

Acquisition and integration expenses totaled $ 5,722 and $ 24,444 for the three and nine months ended December 31, 2023, respectively.

Acquisition and integration expenses totaled $ 4,817 and $ 18,493 for the three and nine months ended December 31, 2022, respectively.

The increase in acquisition and integration expenses for the three and nine months ended December 31, 2023 is primarily due to charges related to the acquisition of assets from BD and a fair value adjustment in the second quarter of fiscal 2024 related to a building held for sale from a previous acquisition.

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

(1) Includes estimated fair values of $ 238,000 for Customer relationships ( 13 years estimated useful life), $ 50,000 for Patents and technology ( 13 years estimated useful life), and $ 15,000 for Trademarks and tradenames ( 15 years estimated useful life) as of June 30, 2024.

(2) No additional adjustments made during the first three months of fiscal 2025.

Acquisition and integration expenses totaled $ 2,254 and $ 2,237 for the three months ended June 30, 2024 and 2023, respectively.

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

On April 11, 2024, the Company announced its plan to sell its Dental segment for total cash consideration of $ 787,500 , subject to customary adjustments, and up to an additional $ 12,500 in contingent payment should the Dental business achieve certain revenue targets in fiscal 2025.

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

The disposal of the Dental segment met the criteria to be presented as a discontinued operation.

For more information refer to Note 4 titled "Discontinued Operations."

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

We recorded net proceeds of $ 41,546 and recognized a pre-tax gain on the sale of $ 18,803 in the first quarter of fiscal 2025.

The business generated approximately $ 35,000 in revenues in fiscal 2024.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three and Nine Months Ended December 31, 2023 and 2022

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

Discontinued Operations

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

The Dental segment results of operations were reclassified to income (loss) from discontinued operations in the Consolidated Statements of Income for all periods presented, and we classified the Dental segment's assets and liabilities as held for sale as of March 31, 2024 in the accompanying Consolidated Balance Sheets.

Due to the transaction closing in the first quarter of fiscal 2025, the held for sale assets and liabilities were classified as current as of March 31, 2024.

Our Consolidated Statements of Cash Flows include the financial results of the Dental segment for all periods presented.

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

The following table summarizes the major classes of assets and liabilities of the Dental business segment that were classified as held for sale in the Consolidated Balance Sheets as of March 31, 2024:

Assets held-for-sale:

Accounts receivable, net $ 48,590

Inventories, net 89,345

Property, plant, and equipment, net 73,395

Lease right-of-use assets, net 22,822

Intangibles, net 770,731

Prepaid expenses and other assets 2,953

Loss accrued on classification as held for sale

Total assets held-for-sale $ 804,904

Liabilities held-for-sale:

Accounts payable $ 10,580

Accrued income taxes 433

Accrued payroll and other related liabilities 13,683

Lease obligations 23,722

Accrued expenses and other 15,594

Total liabilities held-for-sale $ 64,012

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

The following table summarizes the major line items constituting pre-tax income of discontinued operations associated with the Dental segment for the three months ending June 30, 2024 and 2023:

Three Months Ended June 30,

Product $ 63,936 $ 101,156

Cost of revenues:

Product 35,146 56,699

Gross profit:

28,790 44,457

Operating expenses:

Selling, general, and administrative 13,466 52,528

Research and development 369 808

Income (loss) from operations (1)

14,955 ( 8,879 )

Non-operating expenses (income), net 1 ( 12 )

Pre-tax loss on sale

Income (loss) before income tax expense 7,111 ( 8,867 )

Income tax expense (benefit) 1,519 ( 2,076 )

Income (loss) from discontinued operations, net of income tax 5,592 ( 6,791 )

(1) Income from operations for the three month period ended June 30, 2024 includes two months of operating results prior to the transaction close on May 31, 2024 and excludes depreciation and amortization of property, plant, equipment, and intangible assets subsequent to the held for sale classification as of March 2, 2024.

The effective income tax rates for the three month periods ending June 30, 2024 and 2023 from discontinued operations were 21.4 % and 23.4 %, respectively.

Significant non-cash operating items and capital expenditures related to discontinued operations are reflected in the statement of cash flows as follows:

Three Months Ended June 30,

Operating activities of discontinued operations:

Depreciation, depletion, and amortization $ — $ 30,744

Investing activities of discontinued operations:

Purchases of property, plant, equipment, and intangibles, net $ ( 433 ) $ ( 2,129 )

Inventories, Net

Inventories are stated at the lower of their cost and net realizable value determined by the first-in, first-out (“FIFO”) cost method.

7 unchanged sentences

Inventories, net $ 698,587 $ 674,535

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

Property, Plant, and Equipment

14 unchanged sentences

Construction in progress is not depreciated until placed in service.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three and Nine Months Ended December 31, 2023 and 2022

(dollars in thousands, except as noted)

Indebtedness was as follows:

3 unchanged sentences

Delayed draw term loan, current portion

Private Placement Senior Notes 80,000 —

Total short-term debt $ 80,000 $ 85,938

3 unchanged sentences

Deferred financing costs ( 16,428 ) ( 17,988 )

Term Loan 14,063 45,000

Delayed draw term loan

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three and Nine Months Ended December 31, 2023 and 2022

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

29 unchanged sentences

Total other liabilities $ 72,368 $ 71,546

The effective income tax rates for the three month periods ended December 31, 2023 and 2022 were 21.4 % and 23.1 %, respectively.

The fiscal 2024 effective tax rate for the three months ended December 31, 2023 decreased when compared to the prior year period, primarily due to favorable discrete items recognized during fiscal 2024.

The effective income tax rates for the nine month periods ended December 31, 2023 and 2022 were 21.8 % and ( 114.8 )%, respectively.

The fiscal 2024 effective tax rate for the nine months ended December 31, 2023 increased when compared to the prior year period, primarily due to the tax impact of the goodwill impairment loss recognized on the Dental segment during fiscal 2023.

Income tax expense (benefit) is provided on an interim basis based upon our estimate of the annual effective income tax rate, adjusted each quarter for discrete items.

Our effective tax rate is affected by (i) the tax rates in Ireland (our country of domicile), the United States, and other jurisdictions in which we operate, and (ii) the relative amount of income before income taxes by geography.

The effective income tax rates for the three month periods ended June 30, 2024 and 2023 from continuing operations were 20.1 % and 21.7 %, respectively.

The fiscal 2025 effective tax rate decreased when compared to fiscal 2024, primarily due to changes in geographic mix of projected profits and an increase in favorable discrete items.

Income tax expense is provided on an interim basis based upon our estimate of the annual effective income tax rate, adjusted each quarter for discrete items.

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

We operate in numerous taxing jurisdictions and are subject to regular examinations by various United States federal, state and local, as well as foreign jurisdictions.

We are no longer subject to United States federal examinations for years before fiscal

We are no longer subject to United States federal examinations for years before fiscal 2018 and, with limited exceptions, we are no longer subject to United States state and local, or non-United States, income tax

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three and Nine Months Ended December 31, 2023 and 2022

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

2018 and, with limited exceptions, we are no longer subject to United States state and local, or non-United States, income tax examinations by tax authorities for years before fiscal 2017.

examinations by tax authorities for years before fiscal 2018.

We remain subject to tax authority audits in various jurisdictions wherever we do business.

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Internal Revenue Service (the “IRS”) regarding proposed audit adjustments related to deductibility of interest paid on intercompany debt for fiscal years 2016 through 2017.

An agreement was reached on final interest rates, which also impacts subsequent years through 2020.

We estimate the total federal, state, and local tax impact of the settlement to be approximately $ 12,000 , for the fiscal years 2016 through 2020, of which approximately $ 11,600 has been paid through December 31, 2023.

An agreement was reached on final interest rates, which also impacted subsequent years through 2020.

The total federal, state, and local tax impact of the settlement including interest is approximately $ 12,000 for the fiscal years 2016 through 2020, materially all of which has been paid through June 30, 2024.

In November 2023, we received two Notices of Deficiency from the IRS regarding the previously disclosed deemed dividend inclusions and associated withholding tax matter.

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For certain types of claims, we presently maintain insurance coverage for personal injury and property damage and other liability coverages in amounts and with deductibles that we believe are prudent, but there can be no assurance that these coverages will be applicable or adequate to cover adverse outcomes of claims or legal proceedings against us.

Civil, criminal, regulatory or other proceedings involving our products or services could possibly result in judgments, settlements or administrative or judicial decrees requiring us, among other actions, to pay damages or fines or affect recalls, or be subject to other governmental, Customer or other third party claims or remedies, which could materially affect our business, performance, prospects, value, financial condition, and results of operations.

Civil, criminal, regulatory or other proceedings involving our products or services could possibly result in judgments, settlements or administrative or judicial decrees requiring us, among other actions, to pay damages or fines or effect recalls, or be subject to other governmental, Customer or other third party claims or remedies, which could materially affect our business, performance, prospects, value, financial condition, and results of operations.

For additional information regarding these matters, see the following portions of our Annual Report on Form 10-K for the year ended March 31, 2024, which was filed with the SEC on May 29, 2024, Item 1 titled "Business - Information with respect to our Business in General - Government Regulation" and the "Risk Factors" in Item 1A titled "Product and service related regulations and claims."

7 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three and Nine Months Ended December 31, 2023 and 2022

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

Business Segment Information

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

Healthcare, AST, 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 operate and report our financial information in three reportable business segments:

Healthcare, AST, and Life Sciences.

Previously, we had four reportable business segments, however, as a result of the divestiture of our Dental segment, Dental is presented as discontinued operations.

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

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

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.

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to outsourced instrument reprocessing services.

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

Our AST 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.

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

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

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.

Our Life Sciences segment provides a comprehensive offering of products and services designed to support biopharmaceutical and medical device research and manufacturing facilities, in particular those focused on aseptic manufacturing.

Our portfolio includes a full suite of capital equipment, consumable products, equipment maintenance and specialty services.

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

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

For the three and nine months e nded December 31, 2023 and 2022 , revenues from a single Customer did not represent ten percent or more of the Healthcare, AST or Life Sciences segment revenues.

Three Customers collectively and consistently account for more than 40.0% of our Dental segment revenue.

The percentage associated with these three Customers collectively in any one period may vary due to the buying patterns of these three Customers as well as other Dental Customers.

These three Customers collectively accounted for appr oxi mately 47.5 % and 44.5 % o f our Dental segment revenues for the three and nine months ended December 31, 2023, respectively.

These three Customers collectively accounted for approximately 47.2 % and 43.8 % of our Dental segment revenues for the three and nine months ended December 31, 2022, respectively.

For the three months e nded June 30, 2024 and 2023 , revenues from a single Customer did not represent ten percent or more of the Healthcare, AST or Life Sciences segment revenues.

A dditional information regarding our segments is included in our consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2024, which was filed with the SEC on May 29, 2024.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three and Nine Months Ended December 31, 2023 and 2022

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

Financial information for each of our segments is presented in the following table:

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

2023 2022 2023 2022

Three Months Ended June 30,

Healthcare $ 901,221 $ 818,874

1 unchanged sentence

Life Sciences 128,478 131,413

Dental 97,921 103,563 303,233 317,988

Total revenues $ 1,279,502 $ 1,183,386

3 unchanged sentences

Life Sciences 52,584 49,841

Dental 18,292 20,337 64,847 67,992

Corporate ( 101,748 ) ( 91,873 )

3 unchanged sentences

Acquisition and integration related charges (2)

5,722 4,817 24,444 18,493

Tax restructuring costs (3)

643 282 652 533

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

— — — ( 3,100 )

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

— ( 838 ) — 3,939

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

6,348 1,608 9,329 5,697

Restructuring charges (4)

Goodwill impairment loss (5)

— — — 490,565

Total income from operations $ 216,156 $ 190,803 $ 590,895 $ 42,783

(1) For more information regarding our recent acquisitions and divestitures, refer to Note 2 titled, "Business Acquisitions and Divestitures" included in our Annual Report on Form 10-K for the year ended March 31, 2023, which was filed with the SEC on May 26, 2023.

Income from operations $ 185,531 $ 197,761

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

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

(3) Costs incurred in tax restructuring.

(4) For more information regarding our restructuring efforts, refer to our Annual R eport on Form 10-K for the year ended March 31, 2023, which was filed with the SEC on May 26, 2023.

(5) For more information regarding our goodwill impairment loss, see Note 17 to our consolidated financial statements titled, "Goodwill and Intangible Assets."

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

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three and Nine Months Ended December 31, 2023 and 2022

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

Additional information regarding our fiscal 2025 and fiscal 2024 revenue is disclosed in the following tables:

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

2023 2022 2023 2022

Three Months Ended June 30,

Capital equipment $ 214,639 $ 238,099

10 unchanged sentences

Total Life Sciences Revenues $ 128,478 $ 131,413

Dental Revenues $ 97,921 $ 103,563 $ 303,233 $ 317,988

Total Revenues $ 1,279,502 $ 1,183,386

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

2023 2022 2023 2022

Three Months Ended June 30,

Ireland $ 22,194 $ 20,036

7 unchanged sentences

We calculate diluted earnings per share based upon the weighted average number of shares outstanding plus the dilutive effect of share equivalents calculated using the treasury stock method.

Income from continuing operations is used as the benchmark to determine whether share equivalents are dilutive or anti-dilutive.

Earnings per share is calculated independently for earnings per share from continuing operations and earnings per share from discontinued operations.

The sum of earnings per share from continuing operations and earnings per share from discontinued operations may not equal total company earnings per share due to rounding.

The following is a summary of shares and share equivalents outstanding used in the calculations of basic and diluted earnings per share:

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

Three Months Ended June 30,

Denominator (shares in thousands):

2023 2022 2023 2022

Weighted average shares outstanding—basic 98,869 98,708

Dilutive effect of share equivalents 507 531

552 450 568 —

Weighted average shares outstanding and share equivalents—diluted 99,376 99,239

(1) The dilutive effect of share equivalents is excluded from the calculation of diluted earnings per share for the nine months ended December 31, 2022 due to our net loss for that period.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three and Nine Months Ended December 31, 2023 and 2022

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

Options to purchase the following number of shares were outstanding but excluded from the computation of diluted earnings per share because the combined exercise prices, unamortized fair values, and assumed tax benefits upon exercise were greater than the average market price for the shares during the periods, so including these options would be anti-dilutive:

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

Three Months Ended June 30,

(shares in thousands) 2024 2023

4 unchanged sentences

On May 3, 2023 our Board of Directors terminated the previous share repurchase program and authorized a new share repurchase program for the purchase of up to $ 500,000 (net of taxes, fees and commissions).

This share repurchase program has no specified expiration date.

Under the authorization, the Company may repurchase its shares from time to time through open market purchases, including 10b5-1 plans.

As of June 30, 2024, there was $ 443,876 (net of taxes, fees and commissions) of remaining availability under the Board authorized share repurchase program.

The share repurchase program has no specified expiration date.

Under the repurchase program, the Company may repurchase its shares from time to time through open market purchases, including 10b5-1 plans.

Any share repurchases may be activated, suspended or discontinued at any time.

During the first nine months of fiscal 2024, we had no share repurchase activity pursuant to authorizations under the share repurchase program.

During the first nine months of fiscal 2023, we repurchased 775,320 of our ordinary shares for the aggregate amount of $ 148,306 (net of fees and commissions) pursuant to the authorizations under the share repurchase program.

During the first nine months of fiscal 2024, we obtained 69,276 of our ordinary shares in the aggregate amount of $ 11,440 in connection with share-based compensation award programs.

During the first nine months of fiscal 2023, we obtained 74,897 of our ordinary shares in the aggregate amount of $ 13,060 in connection with share-based compensation award programs.

During the first three months of fiscal 2025, we repurchased 251,507 of our ordinary shares for the aggregate amount of $ 56,124 (net of fees and commissions) pursuant to authorizations, under the share repurchase program.

During the first three months of fiscal 2024, we had no share repurchase activity.

During the first three months of fiscal 2025, we obtained 69,780 of our ordinary shares in the aggregate amount of $ 10,256 in connection with share-based compensation award programs.

During the first three months of fiscal 2024, we obtained 51,494 of our ordinary shares in the aggregate amount of $ 8,724 in connection with share-based compensation award programs.

Share-Based Compensation

We maintain a long-term ince ntive plan that makes available shares for grants, at the discretion of the Board of Directors or the Compensation and Organizational Development Committee of the Board of Directors, to officers, directors, and key employees in the form of stock options, restricted shares, restricted share units, stock appreciation rights and share grants.

We maintain a long-term incentive plan that makes available shares for grants, at the discretion of the Board of Directors or Compensation and Organizational Development Committee of the Board of Directors, to officers, directors, and key employees in the form of stock options, restricted shares, restricted share units, stock appreciation rights and share grants.

We satisfy share award incentives through the issuance of new ordinary shares.

Stock options provide the right to purchase our shares at the market price on the date of grant, or for options granted to employees in fiscal 2019 and thereafter, 110% of the market price on the date of grant, subject to the terms of the plan and agreements.

Generally, one-fourth of the stock options granted to employees become exercisable for each full year of employment following the grant date.

Stock options granted generally expire 10 years after the grant date, or in some cases earlier if the option holder is no longer employed by us.

Restricted shares and restricted share units generally cliff vest after a three or four year period or vest in equal tranches for each year of employment after the grant date.

As of December 31, 2023, 2,368,027 ordinary shares remained available for grant under the long-term incentive plan.

Stock option awards to employees generally vest and become nonforfeitable in increments of 25% per year over a four-year period, with full vesting four years after the date of grant.

Historically, restricted stock awards to employee recipients generally cliff vested on the fourth anniversary of the grant date if the recipient remained in continuous employment through that date.

Beginning with fiscal 2024 grants, Company restricted stock (and restricted stock units) generally cliff vest over a three year period after the grant date.

However, employees who are grantees of restricted stock and have attained age 55 and been employed for at least five years at the time of the grant or meet these criteria during the term of the grant and are employed in the U.S.

or in a few other foreign jurisdictions, or employees who have 25 years of service at the time of grant or meet that criterion during the term of the grant, will be subject to installment vesting rules over the applicable vesting period.

Awards to certain employees in the U.S.

or a few other jurisdictions may provide for continued vesting after “retirement,” if certain conditions are met.

As of June 30, 2024, 2,028,765 ordinary shares remained available for grant under the long-term incentive plan.

The fair value of share-based stock option compensation awards was estimated at their grant date using the Black-Scholes-Merton option pricing model.

1 unchanged sentence

If the model permitted consideration of the unique characteristics of employee stock options, the resulting estimate of the fair value of the stock options could be different.

The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods, which may be impacted by retirement eligibility, in our Consolidated Statements of Income (Loss).

The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our Consolidated Statements of Income.

The expense is classified as Cost of revenues or Selling, general, and administrative expenses in a manner consistent with the employee’s compensation and benefits.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three and Nine Months Ended December 31, 2023 and 2022

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

The following weighted average assumptions were used for options granted during the first nine months of fiscal 2024 and 2023:

The following weighted average assumptions were used for options granted during the first three months of fiscal 2025 and 2024:

Fiscal 2025 Fiscal 2024

20 unchanged sentences

Forfeited ( 654 ) 219.97

Outstanding at December 31, 2023 1,946,379 $ 165.69 6.1 years $ 112,785

Exercisable at December 31, 2023 1,343,419 $ 139.95 5.1 years $ 109,367

We estimate that 591,310 of the non-vested stock options outstanding at December 31, 2023 will ultimately vest.

The aggregate intrinsic value in the table above represents the total pre-tax difference between the $ 219.85 closing price of our ordinary shares on December 31, 2023 over the exercise prices of the stock options, multiplied by the number of options outstanding or outstanding and exercisable, as applicable.

( 512 ) 250.06

Outstanding at June 30, 2024 1,993,759 $ 180.32 6.3 years $ 92,209

Exercisable at June 30, 2024 1,418,051 $ 157.46 5.3 years $ 91,771

We estimate that 559,526 of the non-vested stock options outstanding at June 30, 2024 will ultimately vest.

The aggregate intrinsic value in the table above represents the total pre-tax difference between the $ 219.54 closing price of our ordinary shares on June 30, 2024 over the exercise prices of the stock options, multiplied by the number of options outstanding or outstanding and exercisable, as applicable.

The aggregate intrinsic value is not recorded for financial accounting purposes and the value changes daily based on the daily changes in the fair market value of our ordinary shares.

The total intrinsic value of stock options exercised during the first nine months of fiscal 2024 and fiscal 2023 was $ 8,350 and $ 4,638 , respectively.

Net cash proceeds from the exercise of stock options were $ 3,526 and $ 1,497 for the first nine months of fiscal 2024 and fiscal 2023, respectively.

The weighted average grant date fair value of stock option grants was $ 54.60 and $ 50.72 for the first nine months of fiscal 2024 and fiscal 2023, respectively.

The total intrinsic value of stock options exercised during the first three months of fiscal 2025 and fiscal 2024 was $ 12,372 and $ 4,831 , respectively.

Net cash proceeds from the exercise of stock options were $ 5,587 and $ 1,254 for the first three months of fiscal 2025 and fiscal 2024, respectively.

The weighted average grant date fair value of stock option grants was $ 66.87 and $ 53.45 for the first three months of fiscal 2025 and fiscal 2024, respectively.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three and Nine Months Ended December 31, 2023 and 2022

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

5 unchanged sentences

Forfeited ( 24,655 ) ( 1,339 ) 205.12

Non-vested at December 31, 2023 463,241 30,059 $ 199.57

Non-vested at June 30, 2024 465,902 31,941 $ 213.46

Restricted shares and restricted share unit grants are valued based on the closing stock price at the grant date.

The value of restricted shares and units at the time of grant that vested during the first nine months of fiscal 2024 was $ 26,487 .

As of December 31, 2023, there was a total of $ 68,670 in unrecognized compensation cost related to non-vested share-based compensation granted under our share-based compensation plans.

The value of restricted shares and units that vested during the first three months of fiscal 2025 at the time of grant was $ 23,694 .

As of June 30, 2024, there was a total of $ 93,968 in unrecognized compensation cost related to non-vested share-based compensation granted under our share-based compensation plans.

We expect to recognize the cost over a weighted average period of 1.8 years.

Cantel Share Based Compensation Plan

In connection with the acquisition of Cantel, outstanding, non-vested Cantel restricted share units were replaced with STERIS restricted share units.

As of December 31, 2023, there was a total of $ 16 in unrecognized compensation cost related to non-vested STERIS restricted shar e units awarded to replace Cantel restricted share units.

We expect to recognize the remaining cost by the fourth quarter of fiscal 2024.

A summary of the non-vested restricted share units activity associated with the Cantel share-based compensation plans is presented below:

Number of Restricted Share Units Weighted Average

Non-vested at March 31, 2023 15,670 $ 191.18

Vested ( 14,358 ) 191.18

Forfeited ( 762 ) 191.18

Non-vested at December 31, 2023 550 $ 191.18

Financial and Other Guarantees

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We periodically assess the adequacy of our recorded warranty liabilities and adjust the amounts as necessary.

Changes in our warranty liability during the first nine months of fiscal 2024 were as follows:

Changes in our warranty liability during the first three months of fiscal 2025 were as follows:

Balance at March 31, 2024 $ 15,388

1 unchanged sentence

Settlements made during the period ( 4,274 )

Balance at December 31, 2023 $ 14,951

Balance at June 30, 2024 $ 14,570

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three and Nine Months Ended December 31, 2023 and 2022

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

2 unchanged sentences

We may also enter into commodity swap contracts to hedge price changes in nickel that impact raw materials included in our Cost of revenues.

During the third quarter of fiscal 2024, we also held forward foreign currency contracts to hedge a portion of our expected non-U.S.

During the first quarter of fiscal 2025, we also held forward foreign currency contracts to hedge a portion of our expected non-U.S.

dollar-denominated earnings against our reporting currency, the U.S.

4 unchanged sentences

These contracts are not designated as hedging instruments and do not receive hedge accounting treatment;

therefore, changes in their fair value are not deferred but are recognized immediately in the Consolidated Statements of Income (Loss).

At December 31, 2023, we held net foreign currency forward contracts to buy 42.0 million British pounds sterling;

and to sell 49.9 million Mexican pesos, 24.0 million Australian dollars, and 18.1 million euros.

At December 31, 2023, we held commodity swap contracts to buy 188.3 thousand pounds of nickel.

therefore, changes in their fair value are not deferred but are recognized immediately in the Consolidated Statements of Income.

At June 30, 2024, we held net foreign currency forward contracts to buy 50.0 million British pounds sterling;

and to sell 100.0 million Mexican pesos, 25.0 million Canadian dollars, 18.2 million euros, and 15.0 million Australian dollars.

At June 30, 2024, we held commodity swap contracts to buy 591.8 thousand pounds of nickel.

Asset Derivatives Liability Derivatives

Fair Value at Fair Value at Fair Value at Fair Value at

Balance sheet location December 31, 2023 March 31, 2023 December 31, 2023 March 31, 2023

Balance sheet location June 30, 2024 March 31, 2024 June 30, 2024 March 31, 2024

Prepaid & other $ 389 $ 208 $ — $ —

Accrued expenses and other $ — $ — $ 427 $ 1,014

The following table presents the impact of derivative instruments and their location within the Consolidated Statements of Income (Loss):

The following table presents the impact of derivative instruments and their location within the Consolidated Statements of Income:

Location of gain (loss)

recognized in income Amount of gain (loss) recognized in income

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

2023 2022 2023 2022

Three Months Ended June 30,

Foreign currency forward contracts Selling, general and administrative $ 386 $ 1,458

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three and Nine Months Ended December 31, 2023 and 2022

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

6 unchanged sentences

and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring the entity to develop its own assumptions.

The following table shows the fair value of our financial assets and liabilities at December 31, 2023 and March 31, 2023:

The following table shows the fair value of our financial assets and liabilities at June 30, 2024 and March 31, 2024:

Fair Value Measurements

4 unchanged sentences

Level 1 Level 2 Level 3

December 31, March 31, December 31, March 31, December 31, March 31, December 31, March 31,

June 30, March 31, June 30, March 31, June 30, March 31, June 30, March 31,

Cash and cash equivalents $ 198,328 $ 207,020 $ 198,328 $ 207,020 $ — $ — $ — $ —

16 unchanged sentences

Employees who made deferrals are entitled to receive distributions of their hypothetical account balances (amounts deferred, together with earnings (losses)).

We also hold an investment in the common stock of Servizi Italia, S.p.A, a leading provider of integrated linen washing and outsourced sterile processing services to hospital Customers.

Changes in the fair value of these investments are recorded in the "Interest and miscellaneous (income) expense" line of the Consolidated Statements of Income (Loss).

During the third quarter and first nine months of fiscal 2024, we recorded gains of $ 881 and $ 1,019 , respectively, related to these investments.

During the third quarter and first nine months of fiscal 2023, we recorded (losses) gains of $( 342 ) and $ 1,385 ,respectively, related to these investments.

Changes in the fair value of these investments are recorded in the "Interest and miscellaneous income" line of the Consolidated Statement of Income.

During the first three months of fiscal 2025 and 2024, we recorded gains of $ 53 and $ 73 , respectively, related to these investments.

(3) We estimate the fair value of our debt using discounted cash flow analyses, based on estimated current incremental borrowing rates for similar types of borrowing arrangement s.

The fair values of our Senior Public Notes are estimated using quoted market prices for the Senior Public Notes.

(4) Contingent consideration obligations arise from prior business acquisitions.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three and Nine Months Ended December 31, 2023 and 2022

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis at December 31, 2023 are summarized as follows:

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis at June 30, 2024 are summarized as follows:

Contingent Consideration

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Payments ( 19 )

Currency translation adjustments ( 17 )

Balance at December 31, 2023 $ 10,801

Balance at June 30, 2024 $ 11,204

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three and Nine Months Ended December 31, 2023 and 2022

For the Three Months Ended June 30, 2024 and 2023

(dollars in thousands, except as noted)

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Currency Translation is not adjusted for income taxes.

Changes in our Accumulated Other Comprehensive Income (Loss) balances, net of tax, for the three and nine months ended December 31, 2023 and 2022 were as follows:

Changes in our Accumulated Other Comprehensive Income (Loss) balances, net of tax, for the three months ended June 30, 2024 and 2023 were as follows:

Defined Benefit Plans (1)

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Total Accumulated Other Comprehensive Loss

Three Months Nine Months Three Months Nine Months Three Months Nine Months

Beginning Balance $ 129 $ 12 $ ( 386,864 ) $ ( 320,722 ) $ ( 386,735 ) $ ( 320,710 )

Other Comprehensive Income (Loss) before reclassifications

Balance at March 31, 2024 $ ( 724 ) $ ( 327,933 ) $ ( 328,657 )

Other Comprehensive (Loss) Income before reclassifications

( 91 ) 5,751 5,660

Amounts reclassified from Accumulated Other Comprehensive Loss ( 73 ) — ( 73 )

Net current-period Other Comprehensive Income (Loss)

58 175 134,048 67,906 134,106 68,081

Balance at December 31, 2023 $ 187 $ 187 $ ( 252,816 ) $ ( 252,816 ) $ ( 252,629 ) $ ( 252,629 )

(1) The amortization (gain) of defined benefit plan costs is reported in the Interest and miscellaneous (income) expense line of our Consolidated Statements of Income (Loss).

Net current-period Other Comprehensive (Loss) Income ( 164 ) 5,751 5,587

Balance at June 30, 2024 $ ( 888 ) $ ( 322,182 ) $ ( 323,070 )

(1) The amortization (gain) of defined benefit pension items is reported in the Interest and miscellaneous (income) expense line of our Consolidated Statements of Income.

(2) The effective portion of gain or loss on net debt designated as non-derivative net investment hedging instruments is recognized in Accumulated Other Comprehensive Income and is reclassified to income in the same period when a gain or loss related to the net investment is included in income.

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Total Accumulated Other Comprehensive Loss

Three Months Nine Months Three Months Nine Months Three Months Nine Months

Beginning Balance $ 1,332 $ 1,276 $ ( 599,480 ) $ ( 211,084 ) $ ( 598,148 ) $ ( 209,808 )

Other Comprehensive Income (Loss) before reclassifications 138 431 233,958 ( 154,438 ) 234,096 ( 154,007 )

Amounts reclassified from Accumulated Other Comprehensive Loss ( 111 ) ( 348 ) — — ( 111 ) ( 348 )

Net current-period Other Comprehensive Income (Loss) 27 83 233,958 ( 154,438 ) 233,985 ( 154,355 )

Balance at December 31, 2022 $ 1,359 $ 1,359 $ ( 365,522 ) $ ( 365,522 ) $ ( 364,163 ) $ ( 364,163 )

1) The amortization (gain) of defined benefit plan costs is reported in the Interest and miscellaneous (income) expense line of our Consolidated Statements of Income (Loss).

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three and Nine Months Ended December 31, 2023 and 2022

(dollars in thousands, except as noted)

Goodwill and Intangible Assets

Changes to the carrying amount of goodwill for the nine months ended December 31, 2023 and 2022 are as follows:

Healthcare Segment Life Sciences Segment AST Segment Dental Segment Total

Balance at March 31, 2023 $ 12 $ ( 320,722 ) $ ( 320,710 )

Goodwill acquired 202,399 — — — 202,399

Measurement period adjustments to acquired goodwill (1)

Other Comprehensive Income before reclassifications

418 9,793 10,211

Foreign currency translation adjustments 12,244 2,135 23,491 — 37,870

Balance at December 31, 2023 $ 2,508,111 $ 183,947 $ 1,419,625 $ — $ 4,111,683

Healthcare Segment Life Sciences Segment AST Segment Dental Segment Total

Balance at March 31, 2022 $ 2,326,830 $ 179,288 $ 1,432,858 $ 465,367 $ 4,404,343

Goodwill acquired 10,753 — — — 10,753

Measurement period adjustments to acquired goodwill (1)

Amounts reclassified from Accumulated Other Comprehensive Loss ( 360 ) — ( 360 )

Net current-period Other Comprehensive Income

58 9,793 9,851

Impairment — — — ( 490,565 ) ( 490,565 )

Divestiture ( 2,358 ) — — — ( 2,358 )

Foreign currency translation adjustments ( 18,157 ) ( 1,073 ) ( 56,655 ) ( 15,367 ) ( 91,252 )

Balance at December 31, 2022 $ 2,295,444 $ 181,362 $ 1,376,203 $ — $ 3,853,009

1) Measurement period adjustments represent adjustments to the purchase price allocations for recent acquisitions whose allocations had been considered preliminary.

See Note 2, titled "Business Acquisitions," for additional information regarding our recent business acquisitions.

We evaluate the recoverability of recorded goodwill and indefinite-lived intangible assets annually during the third fiscal quarter, or when indicators of potential impairment exist.

Our goodwill is assessed at the reporting unit level which is equivalent to the Company's reportable operating segments.

As of the period ended December 31, 2023, there were no indicators that impairment of goodwill or indefinite-lived intangible assets was more likely than not.

In the prior year period, we recorded a goodwill impairment charge of $ 490,565 related to our Dental segment.

For more information regarding the goodwill impairment loss, refer to our Annual Report on Form 10-K for the year ended March 31, 2023, which was filed with the SEC on May 26, 2023.

Identifiable intangible assets are reviewed for impairment when events and circumstances indicate that the carrying value of such assets may not be recoverable.

Impaired assets are recorded at the lower of carrying value or estimated fair value.

We conduct this review on an ongoing basis, and, if impairment exists, we record the loss in the Consolidated Statements of Income during that period.

When we evaluate these assets for impairment, we make certain judgments and estimates, including interpreting current economic indicators and market valuations, evaluating our strategic plans with regards to operations, historical and anticipated performance of operations, and other factors.

It is possible that unfavorable developments related to these factors in the near term could result in an impairment loss relative to intangible assets.

Such an impairment loss may be material to our results of operations in the period recorded.

Balance at June 30, 2023 $ 70 $ ( 310,929 ) $ ( 310,859 )

1) The amortization (gain) of defined benefit pension items is reported in the Interest and miscellaneous (income) expense line of our Consolidated Statements of Income.

Report of Independent Registered Public Accounting Firm

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Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidated balance sheet of STERIS plc and subsidiaries (the Company) as of December 31, 2023, the related consolidated statements of income (loss), comprehensive income (loss) and shareholders’ equity for the three- and nine- month periods ended December 31, 2023 and 2022 and the consolidated statement of cash flows for the nine- month periods ended December 31, 2023 and 2022, and the related notes (collectively referred to as the “consolidated interim financial statements”).

We have reviewed the accompanying consolidated balance sheet of STERIS plc and subsidiaries (the Company) as of June 30, 2024, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for the three-month periods ended June 30, 2024 and 2023, and the related notes (collectively referred to as the “consolidated interim financial statements”).

Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial statements for them to be in conformity with U.S.

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Cleveland, Ohio

February 8, 2024

August 8, 2024

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

What changed 10-Q

Item 1. Financial Statements