What changed in this filing

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Item 1. Financial Statements

2025-02-07 compared with 2024-11-07 · 154 added, 144 removed, 842 unchanged (26% of the section changed)

3 unchanged sentences

(in thousands)

September 30,

2024 March 31,

43 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended September 30, Six Months Ended September 30,

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

2024 2023 2024 2023

10 unchanged sentences

Research and development 27,358 25,255 79,962 76,217

Restructuring expenses (credits) 2,796 ( 23 ) 28,496 ( 4 )

Restructuring expenses 2,231 6 30,727 2

Total operating expenses 365,039 333,556 1,111,063 1,019,474

4 unchanged sentences

( 2,434 ) ( 2,080 ) ( 4,869 ) ( 4,694 )

Loss (gain) on sale of business and equity investment, net

6,232 — ( 12,571 ) —

Gain on sale of business and equity investment, net ( 112 ) — ( 12,683 ) —

Total non-operating expenses, net 16,548 36,868 51,594 103,549

6 unchanged sentences

Net income 173,285 140,945 469,999 381,081

Net income attributable to noncontrolling interests

1,139 1,027 1,279 1,263

Net (loss) income attributable to noncontrolling interests ( 249 ) 202 1,030 1,465

Net income attributable to shareholders $ 173,534 $ 140,743 $ 468,969 $ 379,616

12 unchanged sentences

(in thousands)

Three Months Ended September 30, Six Months Ended September 30,

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

2024 2023 2024 2023

Net income $ 173,285 $ 140,945 $ 469,999 $ 381,081

Net income attributable to noncontrolling

Net (loss) income attributable to noncontrolling

( 249 ) 202 1,030 1,465

5 unchanged sentences

( 208,456 ) 134,048 ( 45,514 ) 67,906

Total other comprehensive income

Total other comprehensive (loss) income

( 208,414 ) 134,106 ( 45,593 ) 68,081

Comprehensive income

Comprehensive (loss) income

$ ( 34,880 ) $ 274,849 $ 423,376 $ 447,697

3 unchanged sentences

(in thousands)

Six Months Ended September 30,

Nine Months Ended December 31,

Operating activities:

6 unchanged sentences

Gain on sale of businesses and equity investment, net

Amortization of inventory fair value adjustments — 4,722

Other items ( 7,156 ) 4,536

Changes in operating assets and liabilities, net of effects of acquisitions:

Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:

Accounts receivable, net 79,295 ( 18,252 )

11 unchanged sentences

Financing activities:

Payments on Private Placement Senior Notes ( 80,000 ) —

Payments on term loans ( 638,125 ) ( 45,000 )

(Payments) proceeds under credit facilities, net ( 318,992 ) 265,501

Deferred financing fees and debt issuance costs ( 2,316 ) —

Acquisition related deferred or contingent consideration ( 266 ) ( 6,153 )

1 unchanged sentence

Cash dividends paid to ordinary shareholders ( 163,869 ) ( 149,173 )

Distributions to noncontrolling interest holders

( 1,579 ) ( 1,561 )

Contributions from noncontrolling interest holders

9 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended September 30, 2024

Three Months Ended December 31, 2024

Ordinary Shares Retained

4 unchanged sentences

Number Amount

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

Balance at September 30, 2024 98,709 $ 4,490,999 $ 2,268,326 $ ( 165,836 ) $ 16,973 $ 6,610,462

Comprehensive income:

Net income — — 150,034 — 1,139 151,173

Other comprehensive income

Net income (loss)

— — 173,534 — ( 249 ) 173,285

Other comprehensive loss

— — — ( 208,414 ) — ( 208,414 )

Repurchases of ordinary shares ( 471 ) ( 101,930 ) — — — ( 101,930 )

2 unchanged sentences

— — ( 56,196 ) — — ( 56,196 )

Distributions to noncontrolling interest — — — — ( 1,579 ) ( 1,579 )

Other changes in noncontrolling interest holders

— — — — ( 2,700 ) ( 2,700 )

Balance at September 30, 2024 98,709 $ 4,490,999 $ 2,268,326 $ ( 165,836 ) $ 16,973 $ 6,610,462

Six Months Ended September 30, 2024

Balance at December 31, 2024 98,245 $ 4,404,687 $ 2,385,664 $ ( 374,250 ) $ 12,445 $ 6,428,546

Nine Months Ended December 31, 2024

Ordinary Shares Retained

7 unchanged sentences

Net income — — 468,969 — 1,030 469,999

Other comprehensive income — — — 162,821 — 162,821

Other comprehensive loss

— — — ( 45,593 ) — ( 45,593 )

Repurchases of ordinary shares ( 995 ) ( 205,478 ) ( 7,081 ) — — ( 212,559 )

3 unchanged sentences

Contributions from noncontrolling interest — — — — 2,532 2,532

Distributions to noncontrolling interest — — — — ( 1,579 ) ( 1,579 )

Other changes in noncontrolling interest — — — — ( 2,720 ) ( 2,720 )

Balance at September 30, 2024 98,709 $ 4,490,999 $ 2,268,326 $ ( 165,836 ) $ 16,973 $ 6,610,462

Three Months Ended September 30, 2023

Balance at December 31, 2024 98,245 $ 4,404,687 $ 2,385,664 $ ( 374,250 ) $ 12,445 $ 6,428,546

Three Months Ended December 31, 2023

Ordinary Shares Retained

4 unchanged sentences

Number Amount

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

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

Comprehensive income:

— — 140,743 — 202 140,945

Other comprehensive loss — — — ( 75,876 ) — ( 75,876 )

Other comprehensive income

— — — 134,106 — 134,106

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

2 unchanged sentences

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

Six Months Ended September 30, 2023

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

Ordinary Shares Retained

7 unchanged sentences

Net income — — 379,616 — 1,465 381,081

Other comprehensive loss — — — ( 66,025 ) — ( 66,025 )

Other comprehensive income

— — — 68,081 — 68,081

Repurchases of ordinary shares ( 69 ) ( 3,230 ) ( 8,210 ) — — ( 11,440 )

2 unchanged sentences

— — ( 149,173 ) — — ( 149,173 )

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

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

See notes to consolidated financial statements.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 2024 and 2023

(dollars in thousands, except as noted)

33 unchanged sentences

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

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 2024 and 2023

(dollars in thousands, except as noted)

14 unchanged sentences

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

This means that operating results for the three and six month periods ended September 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.

This means that operating results for the three and nine month periods ended December 31, 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

22 unchanged sentences

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

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 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 September 30, 2024, assets related to costs to fulfill a contract were not material to our consolidated financial statements.

At December 31, 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.

21 unchanged sentences

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

During the first six months of fiscal 2025, $ 52,122 of the March 31, 2024 deferred revenue balance was recorded as revenue.

During the first six months of fiscal 2024, $ 64,241 of the March 31, 2023 deferred revenue balance was recorded as revenue.

During the first nine months of fiscal 2025, $ 57,650 of the March 31, 2024 deferred revenue balance was recorded as revenue.

During the first nine months of fiscal 2024, $ 70,181 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.

7 unchanged sentences

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

As of September 30, 2024, the transaction price allocated to remaining performance obligations was approximately $ 1,627,045 .

As of December 31, 2024, the transaction price allocated to remaining performance obligations was approximately $ 1,675,500 .

We expect to recognize

1 unchanged sentence

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

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 2024 and 2023

(dollars in thousands, except as noted)

26 unchanged sentences

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

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 2024 and 2023

(dollars in thousands, except as noted)

7 unchanged sentences

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

Three Months Ended September 30, Six Months Ended September 30,

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

Restructuring Plan

Severance and other compensation related costs

$ 1,805 $ 23,285

Lease and other contract termination and other costs

4 unchanged sentences

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

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

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

Total pre-tax restructuring expense of $ 77,499 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 $ 25,000 .

We expect to incur additional costs, primarily for lease and other contract termination and other costs, of approximately $ 20,000 , predominantly through the remainder of fiscal 2025.

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:

2 unchanged sentences

Fiscal 2025 Charges 29,477

Balance at September 30, 2024 $ 21,826

Balance at December 31, 2024 $ 17,715

STERIS PLC AND SUBSIDIARIES

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

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 2024 and 2023

(dollars in thousands, except as noted)

Business Acquisitions and Divestitures

During the first six 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.

During the first nine 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 $ 53,659 .

20 unchanged sentences

(2) No additional adjustments made during fiscal 2025.

Acquisition and integration expenses totaled $ 3,205 and $ 5,459 for the three and six months ended September 30, 2024, respectively.

Acquisition and integration expenses totaled $ 15,808 and $ 18,045 for the three and six months ended September 30, 2023, respectively.

The decrease in acquisition and integration expenses for the three and six months ended September 30, 2024 is primarily due to charges related to the acquisition of assets from BD and a fair value adjustment related to a building held for sale from a previous acquisition during fiscal 2024.

Acquisition and integration expenses totaled $ 3,756 and $ 9,215 for the three and nine months ended December 31, 2024, respectively.

Acquisition and integration expenses totaled $ 6,263 and $ 24,308 for the three and nine months ended December 31, 2023, respectively.

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

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.

8 unchanged sentences

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

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 2024 and 2023

(dollars in thousands, except as noted)

27 unchanged sentences

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

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 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 and six months ending September 30, 2024 and 2023:

Three Months Ended September 30, 2024 Six Months Ended September 30,

The following table summarizes the major line items constituting pre-tax income of discontinued operations associated with the Dental segment for the three and nine months ending December 31, 2024 and 2023:

Three Months Ended December 31, 2024 Nine Months Ended December 31,

2024 2023 2024 2023

16 unchanged sentences

(Loss) income from discontinued operations, net of income tax ( 76 ) ( 7,658 ) 5,303 ( 18,900 )

(1) Income from operations for the six month period ended September 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 September 30, 2024 and 2023 from discontinued operations were 21.1 % and 21.9 %, respectively.

The effective income tax rates for the six month periods ending September 30, 2024 and 2023 from discontinued operations were 21.4 % and 22.8 %, respectively.

(1) Income from operations for the nine month period ended December 31, 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 December 31, 2024 and 2023 from discontinued operations were 21.6 % and 25.7 %, respectively.

The effective income tax rates for the nine month periods ending December 31, 2024 and 2023 from discontinued operations were 21.4 % and 24.0 %, respectively.

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

Six Months Ended September 30,

Nine Months Ended December 31,

Operating activities of discontinued operations:

6 unchanged sentences

Inventories, net consisted of the following:

September 30,

2024 March 31,

6 unchanged sentences

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

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 2024 and 2023

(dollars in thousands, except as noted)

1 unchanged sentence

Information related to the major categories of our depreciable assets is as follows:

September 30,

2024 March 31,

13 unchanged sentences

Indebtedness was as follows:

September 30,

2024 March 31,

12 unchanged sentences

Total debt $ 2,163,725 $ 3,206,100

On October 7, 2024, STERIS plc (“STERIS”), STERIS Corporation (the “Company”), STERIS Limited (“Limited”) and STERIS Irish FinCo Unlimited Company (“FinCo”), each as a borrower and guarantor, entered into a credit agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Revolving Credit Agreement”) providing for a $ 1,100,000 revolving credit facility (the “Revolving Credit Facility”), which replaced a prior credit agreement, dated as of March 19, 2021 (the “Previous Revolving Credit Facility”).

On October 7, 2024, STERIS plc (“Parent”), STERIS Corporation, STERIS Limited, and STERIS Irish FinCo Unlimited Company (“FinCo”), each as a borrower and guarantor, entered into a credit agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Revolving Credit Agreement”) providing for a $ 1,100,000 revolving credit facility (the “Revolving Credit Facility”), which replaced a prior credit agreement, dated as of March 19, 2021 (the “Previous Revolving Credit Facility”).

The Revolving Credit Agreement provides for revolving credit borrowings, swing line borrowings and letters of credit, with sublimits for swing line borrowings and letters of credit.

2 unchanged sentences

The Revolving Credit Facility bears interest from time to time, at either the Base Rate or the Relevant 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 STERIS, as defined in the Revolving Credit Agreement.

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

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

1 unchanged sentence

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

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 2024 and 2023

(dollars in thousands, except as noted)

8 unchanged sentences

Additional information related to our Consolidated Balance Sheets is as follows:

September 30,

2024 March 31,

27 unchanged sentences

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 September 30, 2024 and 2023 from continuing operations were 22.3 % and 22.5 %, respectively.

The effective income tax rates for the six month periods ended September 30, 2024 and

The effective income tax rates for the three month periods ended December 31, 2024 and 2023 from continuing operations were 24.2 % and 21.6 %, respectively.

The effective income tax rates for the nine month periods ended December 31, 2024 and

STERIS PLC AND SUBSIDIARIES

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

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 2024 and 2023

(dollars in thousands, except as noted)

2023 from continuing operations were 22.4 % and 21.9 %, respectively.

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

The fiscal 2025 effective tax rates increased when compared to fiscal 2024, primarily due to unfavorable discrete items recorded in fiscal 2025 and changes in geographic mix of projected profits.

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.

6 unchanged sentences

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 September 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.

7 unchanged sentences

These legal proceedings, investigations and claims generally involve a variety of legal theories and allegations, including, without limitation, personal injury (e.g., slip and falls, burns, vehicle accidents), product liability or regulation (e.g., based on product operation or claimed malfunction, failure to warn, failure to meet specification, or failure to comply with regulatory requirements), product exposure (e.g., claimed exposure to chemicals, gases, asbestos, contaminants, radiation), property damage (e.g., claimed damage due to leaking equipment, fire, vehicles, chemicals), commercial claims (e.g., breach of contract, economic loss, warranty, misrepresentation), financial (e.g., taxes, reporting), employment (e.g., wrongful termination, discrimination, benefits matters), and other claims for damage and relief.

We believe we have adequately reserved for our current litigation and claims that are probable and estimable, and further believe that the ultimate outcome of these pending lawsuits and claims will not have a material adverse effect on our consolidated financial position or results of operations taken as a whole.

Due to their inherent uncertainty, however, there can be no assurance of the ultimate outcome or effect of current or future litigation, investigations, claims or other proceedings (including without limitation the matters discussed above).

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, and we may also have contractual indemnification rights against certain liabilities, but there can be no assurance that either 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, including the matters discussed herein, 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.

Further, the Company may incur material defense costs as a result of such proceedings, which may also divert management attention from other priorities.

From time to time, STERIS is also involved in legal proceedings as a plaintiff involving contract, patent protection, and other claims asserted by us.

Gains, if any, from these proceedings are recognized when they are realized.

STERIS PLC AND SUBSIDIARIES

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

For the Three and Nine Months Ended December 31, 2024 and 2023

(dollars in thousands, except as noted)

Ethylene Oxide Litigation in Illinois

A subsidiary of the Company has been sued in Illinois state court by individual plaintiffs who work or reside near a facility in Lake County, Illinois, where the subsidiary provided sterilization services using ethylene oxide (“EO”) from January 2005 to September 2008.

The plaintiffs have filed separate suits in which each alleges that they have been diagnosed with one or more types of cancer, allegedly resulting from exposure to EO emissions from the facility into the ambient air.

As of September 30, 2024, approximately 275 individual plaintiffs have filed such suits asserting individual personal injury claims and seeking compensatory and, if subsequently permitted by the court, punitive damages.

The first trial of a plaintiff’s claims is scheduled for November 2024.

As of December 31, 2024, approximately 250 individual plaintiffs have filed such suits asserting individual personal injury claims and seeking compensatory and, if subsequently permitted by the court, punitive damages.

The first trial of a plaintiff’s claims concluded in a mistrial on January 17, 2025 and is scheduled for retrial in May 2025.

The Company disputes the allegations, is vigorously defending itself in these matters, and is pursuing potential contribution and indemnity from other parties.

1 unchanged sentence

however, a range of loss cannot be reasonably estimated at this time because the evaluation of each case is highly fact-driven, subject to lengthy court proceedings, and impacted by each plaintiff's alleged disease, time and proximity of exposure, and other factors.

No amounts have been accrued in our consolidated financial statements with respect to any loss contingencies in this matter.

We believe that the ultimate outcome of these pending lawsuits and claims will not have a material adverse effect on our consolidated financial position or results of operations taken as a whole.

Due to their inherent uncertainty, however, there can

STERIS PLC AND SUBSIDIARIES

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

For the Three and Six Months Ended September 30, 2024 and 2023

(dollars in thousands, except as noted)

be no assurance of the ultimate outcome or effect of current or future litigation, investigations, claims or other proceedings (including without limitation the matters discussed above).

Civil, criminal, regulatory or other proceedings involving our products or services, including the matters discussed above, 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.

Further, the Company may incur material defense costs as a result of such proceedings, which may also divert management attention from other priorities.

Additional Information

For additional information, 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."

From time to time, STERIS is also involved in legal proceedings as a plaintiff involving contract, patent protection, and other claims asserted by us.

Gains, if any, from these proceedings are recognized when they are realized.

We are subject to taxation from United States federal, state and local, and foreign jurisdictions.

19 unchanged sentences

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

For the three and six months e nded September 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.

For the three and nine months e nded December 31, 2024 and 2023 , revenues from a single Customer did not represent ten percent or more of the Healthcare, AST or Life Sciences segment revenues.

STERIS PLC AND SUBSIDIARIES

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

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 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 September 30, Six Months Ended September 30,

The following table compares business segment revenues and business segment and Corporate operating income for the three and nine months e nded December 31, 2024 and 2023:

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

2024 2023 2024 2023

3 unchanged sentences

Total revenues $ 1,370,570 $ 1,297,724 $ 3,978,984 $ 3,719,314

Operating income (loss):

Income (loss) from operations before adjustments:

Healthcare $ 246,917 $ 223,898 $ 691,810 $ 626,134

2 unchanged sentences

Corporate ( 100,843 ) ( 81,559 ) ( 299,720 ) ( 260,452 )

Total operating income $ 294,479 $ 278,101 $ 579,916 $ 543,841

Total income from operations before adjustments $ 319,965 $ 304,233 $ 899,881 $ 848,074

Amortization of acquired intangible assets (1)

2 unchanged sentences

3,756 6,263 9,215 24,308

Tax restructuring (credits) costs (3)

Tax restructuring costs (3)

97 643 54 652

1 unchanged sentence

1,345 6,127 4,138 8,666

Restructuring charges (credits) (4)

Restructuring charges (4)

2,231 6 33,109 2

6 unchanged sentences

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

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 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 September 30, Six Months Ended September 30,

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

2024 2023 2024 2023

12 unchanged sentences

Total Revenues $ 1,370,570 $ 1,297,724 $ 3,978,984 $ 3,719,314

Three Months Ended September 30, Six Months Ended September 30,

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

2024 2023 2024 2023

12 unchanged sentences

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 September 30, Six Months Ended September 30,

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

Denominator (shares in thousands):

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

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 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 September 30, Six Months Ended September 30,

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

(shares in thousands) 2024 2023 2024 2023

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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).

As of September 30, 2024, there was $ 400,000 (net of taxes, fees and commissions) of remaining availability under the Board authorized share repurchase program.

As of December 31, 2024, there was $ 300,000 (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.

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

During the first six months of fiscal 2025, we repurchased 446,661 of our ordinary shares for the aggregate amount of $ 100,000 (net of fees and commissions) pursuant to authorizations, under the share repurchase program.

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

During the first six months of fiscal 2025, we obtained 77,544 of our ordinary shares in the aggregate amount of $ 10,616 in connection with share-based compensation award programs.

During the first six months of fiscal 2024, we obtained 57,161 of our ordinary shares in the aggregate amount of $ 9,213 in connection with share-based compensation award programs.

During the first nine months of fiscal 2025, we repurchased 907,158 of our ordinary shares for the aggregate amount of $ 200,000 (net of excise taxes, fees, and commissions) pursuant to authorizations, under the share repurchase program.

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

During the first nine months of fiscal 2025, we obtained 87,436 of our ordinary shares in the aggregate amount of $ 11,040 in connection with share-based compensation award programs.

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.

Share-Based Compensation

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

In recent years, grants have been limited to stock options, restricted shares, and restricted share units.

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.

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

As of September 30, 2024, 2,020,289 ordinary shares remained available for grant under the long-term incentive plan.

As of December 31, 2024, 2,027,503 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.

5 unchanged sentences

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

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 2024 and 2023

(dollars in thousands, except as noted)

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

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

Fiscal 2025 Fiscal 2024

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( 512 ) 250.06

Outstanding at September 30, 2024 1,891,572 $ 183.52 6.2 years $ 115,080

Exercisable at September 30, 2024 1,322,218 $ 160.66 5.1 years $ 109,084

We estimate that 556,678 of the non-vested stock options outstanding at September 30, 2024 will ultimately vest.

The aggregate intrinsic value in the table above represents the total pre-tax difference between the $ 242.54 closing price of our ordinary shares on September 30, 2024 over the exercise prices of the stock options, multiplied by the number of options outstanding or outstanding and exercisable, as applicable.

Outstanding at December 31, 2024 1,886,368 $ 183.51 5.9 years $ 67,166

Exercisable at December 31, 2024 1,334,958 $ 161.48 4.9 years $ 67,166

We estimate that 541,677 of the non-vested stock options outstanding at December 31, 2024 will ultimately vest.

The aggregate intrinsic value in the table above represents the total pre-tax difference between the $ 205.56 closing price of our ordinary shares on December 31, 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 six months of fiscal 2025 and fiscal 2024 was $ 24,446 and $ 6,467 , respectively.

Net cash proceeds from the exercise of stock options were $ 19,092 and $ 2,740 for the first six months of fiscal 2025 and fiscal 2024, respectively.

The weighted average grant date fair value of stock option grants was $ 67.81 and $ 54.60 for the first six months of fiscal 2025 and fiscal 2024, respectively.

The total intrinsic value of stock options exercised during the first nine months of fiscal 2025 and fiscal 2024 was $ 24,647 and $ 8,350 , respectively.

Net cash proceeds from the exercise of stock options were $ 19,380 and $ 3,526 for the first nine months of fiscal 2025 and fiscal 2024, respectively.

The weighted average grant date fair value of stock option grants was $ 67.81 and $ 54.60 for the first nine months of fiscal 2025 and fiscal 2024, respectively.

STERIS PLC AND SUBSIDIARIES

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

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 2024 and 2023

(dollars in thousands, except as noted)

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Forfeited ( 38,911 ) ( 1,792 ) 207.88

Non-vested at September 30, 2024 461,561 31,718 $ 213.79

Non-vested at December 31, 2024 454,009 31,173 $ 214.16

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 that vested during the first six months of fiscal 2025 at the time of grant was $ 25,968 .

As of September 30, 2024, there was a total of $ 75,899 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 nine months of fiscal 2025 at the time of grant was $ 26,891 .

As of December 31, 2024, there was a total of $ 60,400 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 1.7 years.

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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 six months of fiscal 2025 were as follows:

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

Balance at March 31, 2024 $ 15,388

1 unchanged sentence

Settlements made during the period ( 13,388 )

Balance at September 30, 2024 $ 15,010

Balance at December 31, 2024 $ 14,732

STERIS PLC AND SUBSIDIARIES

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

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 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 second quarter of fiscal 2025, we also held forward foreign currency contracts to hedge a portion of our expected non-U.S.

During the third 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.

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

At September 30, 2024, we held net foreign currency forward contracts to buy 58.0 million British pounds sterling;

and to sell 18.0 million Australian dollars, 6.0 million Canadian dollars, and 1.8 million euros.

At September 30, 2024, we held commodity swap contracts to buy 394.5 thousand pounds of nickel.

At December 31, 2024, we held net foreign currency forward contracts to buy 40.0 million British pounds sterling, 14.0 million Canadian dollars, and 49.0 million Mexican pesos;

and to sell 15.0 million Australian dollars and 8.4 million euros.

At December 31, 2024, we held commodity swap contracts to buy 197.3 thousand pounds of nickel.

Asset Derivatives Liability Derivatives

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

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

Balance sheet location December 31, 2024 March 31, 2024 December 31, 2024 March 31, 2024

Prepaid & other $ 489 $ 208 $ — $ —

3 unchanged sentences

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

Three Months Ended September 30, Six Months Ended September 30,

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

2024 2023 2024 2023

3 unchanged sentences

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

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 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 September 30, 2024 and March 31, 2024:

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

Fair Value Measurements

4 unchanged sentences

Level 1 Level 2 Level 3

September 30, March 31, September 30, March 31, September 30, March 31, September 30, March 31,

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

Cash and cash equivalents $ 155,178 $ 207,020 $ 155,178 $ 207,020 $ — $ — $ — $ —

17 unchanged sentences

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 and six months of fiscal 2025, we recorded gains of $ 51 and $ 104 , respectively, related to these investments.

During the first three and six months of fiscal 2024, we recorded gains of $ 65 and $ 138 , respectively, related to these investments.

We also held other equity investments in which we recorded a loss during the second quarter of fiscal 2025 in the "Loss (gain) on sale of business and equity investment, net" line of the Consolidated Statement of Income.

During the first three and nine months of fiscal 2025, we recorded gains of $ 774 and $ 878 , respectively, related to these investments.

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

We also held other equity investments in which we recorded a loss during the second quarter of fiscal 2025 in the "Gain on sale of business and equity investment, net" line of the Consolidated Statement of Income.

(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.

5 unchanged sentences

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

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 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 September 30, 2024 are summarized as follows:

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis at December 31, 2024 are summarized as follows:

Contingent Consideration

3 unchanged sentences

Currency translation adjustments 14

Balance at September 30, 2024 $ 11,442

Balance at December 31, 2024 $ 11,625

STERIS PLC AND SUBSIDIARIES

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

For the Three and Six Months Ended September 30, 2024 and 2023

For the Three and Nine Months Ended December 31, 2024 and 2023

(dollars in thousands, except as noted)

2 unchanged sentences

Currency Translation is not adjusted for income taxes.

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

Changes in our Accumulated Other Comprehensive Income (Loss) balances, net of tax, for the three and nine months ended December 31, 2024 and 2023 were as follows:

Defined Benefit Plans (1)

1 unchanged sentence

Total Accumulated Other Comprehensive Loss

Three Months Six Months Three Months Six Months Three Months Six Months

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

Beginning Balance $ ( 845 ) $ ( 724 ) $ ( 164,991 ) $ ( 327,933 ) $ ( 165,836 ) $ ( 328,657 )

4 unchanged sentences

Net current-period Other Comprehensive Income (Loss) 42 ( 79 ) ( 208,456 ) ( 45,514 ) ( 208,414 ) ( 45,593 )

Balance at September 30, 2024 $ ( 845 ) $ ( 845 ) $ ( 164,991 ) $ ( 164,991 ) $ ( 165,836 ) $ ( 165,836 )

Balance at December 31, 2024 $ ( 803 ) $ ( 803 ) $ ( 373,447 ) $ ( 373,447 ) $ ( 374,250 ) $ ( 374,250 )

(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 amounts previously recognized in currency translation adjustments related to our Dental business were reclassified when realized and included in the calculation of the loss on sale, net of previous accrued losses, within (Loss) income from discontinued operations, net of tax, for the six month period ended September 30, 2024.

Defined Benefit Plans (1)

1 unchanged sentence

Total Accumulated Other Comprehensive Loss

Three Months Six Months Three Months Six Months Three Months Six Months

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

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

2 unchanged sentences

Net current-period Other Comprehensive Income (Loss) 58 175 134,048 67,906 134,106 68,081

Balance at September 30, 2023 $ 129 $ 129 $ ( 386,864 ) $ ( 386,864 ) $ ( 386,735 ) $ ( 386,735 )

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

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 unchanged sentences

Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidated balance sheet of STERIS plc and subsidiaries (the Company) as of September 30, 2024, the related consolidated statements of income, comprehensive income, and shareholders’ equity for the three- and six- month periods ended September 30, 2024 and 2023 and the consolidated statement of cash flows for the six- month periods ended September 30, 2024 and 2023 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 December 31, 2024, the related consolidated statements of income, comprehensive income, and shareholders’ equity for the three- and nine- month periods ended December 31, 2024 and 2023 and the consolidated statement of cash flows for the nine- month periods ended December 31, 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.

13 unchanged sentences

Cleveland, Ohio

November 7, 2024

February 7, 2025

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