What changed in this filing

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Item 1. Business

2025-05-29 compared with 2024-05-29 · 72 added, 73 removed, 355 unchanged (29% of the section changed)

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

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

and capital equipment, such as sterilizers, surgical tables, and automated endoscope reprocessors, and connectivity solutions such as operating room (“OR”) integrati on.

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:

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Previously, we had four reportable business segments;

however, as a result of the agreement to divest our Dental segment, Dental is presented as discontinued operations.

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

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

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

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

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In addition, there is increased demand for medical procedures, including preventive screenings such as endoscopies and colonoscopies;

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

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

INFORMATION RELATED TO BUSINESS SEGMENTS

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

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

to the repair of re-usable procedural instruments;

to outsourced instrument reprocessing services.

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

Our products and services range from infection prevention consumables and capital equipment, as well as services to maintain that equipment, to the repair of re-usable procedural instruments, to outsourced instrument reprocessing services.

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

Products Offered.

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We compete with a number of large companies that have significant product portfolios and global reach, as well as a number of small companies with very limited product offerings and operations in one or a limited number of countries.

On a product basis, competitors include 3M, Baxter, Boston Scientific, Belimed, Fortive, Getinge, Karl Storz, Olympus, Ruhof, SteelCo, Stryker, Skytron and Wassenburg.

On a service line basis, competitors include Agiliti, BBraun, Crothall, Olympus and Pentax.

On a product basis, competitors include 3M, Baxter, Boston Scientific, Belimed, Ecolab, Fortive, Getinge, Karl Storz, Olympus, Ruhof, SteelCo, Stryker, Skytron and Wassenburg.

On a service line basis, competitors include BBraun, Crothall, Olympus and Pentax.

Description of Business.

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We offer a wide range of sterilization modalities and an array of testing services that complement the manufacturing of single-use, sterile products.

Our facilities are located in regions with a concentration of medical device manufacturing throughout the Americas, Europe, and Asia.

Our facilities are located in regions with a concentration of medical device and pharmaceutical manufacturing throughout the Americas, Europe, and Asia.

Our technical professionals support Customers in all phases of product development, materials testing, and process validation.

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

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

Products Offered.

These products include pharmaceutical detergents, cleanroom disinfectants and sterilants, pharmaceutical grade and research sterilizers and washers, sterility assurance and maintenance products, vaporized hydrogen peroxide room decontamination systems and sterilizers, and high purity water and pure steam generators.

Our products include pharmaceutical detergen ts, cleanroom disinfectants and sterilants, pharmaceutical grade and research sterilizers and washers, sterility assurance and maintenance products, vaporized hydrogen peroxide room decontamination systems and sterilizers, and high purity water and pure steam generators.

Services Offered.

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These raw materials and supplies are generally available from several suppliers and in sufficient quantities.

However, in fiscal 2023 and 2024 we experienced delays in receiving materials and significant cost increases.

Our supply chain challenges eased during the second half of fiscal 2024 and we do not currently expect significant disruption to our operations due to sourcing delays in fiscal 2025.

We anticipate continued inflation pressures in fiscal 2025 but not at the significant level experienced in fiscal 2024 and 2023.We have long-term supply contracts for certain materials for which there are few suppliers, or those that are single-sourced in certain regions of the world, such as ethylene oxide ("EO") and cobalt-60, which are necessary to our AST operations.

We have long-term supply contracts for certain materials for which there are few suppliers, or those that are single-sourced in certain regions of the world, such as ethylene oxide ("EO") and radioisotope cobalt-60 ("cobalt-60"), which are necessary to our AST operations.

In addition, we continue to expand our irradiation processing capacity with accelerator-based technologies, in order to help mitigate the potential cobalt-60 supply risk.

In response to the active conflict between Russian and Ukraine, we stopped purchasing cobalt-60 from our Russian supplier in fiscal 2023.

A long-term disruption in cobalt-60 sourced from Russia may negatively impact gamma processing capacity or increase costs in certain portions of our AST operations but these impacts are not expected to be material to our AST segment and its results of operations.

For additional information about the risks we face concerning the conflict between Russia and Ukraine, see Part I, Item 1A of this Annual Report titled, "Risk Factors."

Historically, our business has not been significantly impacted by the overall effects of inflation.

However, during fiscal 2023 and 2024, we experienced a rise in supply chain and labor costs and anticipate continued inflationary pressure in fiscal 2025 but not at the significant level experienced in fiscal 2024 and 2023 .

However, during fiscal 2023 and 2024, we experienced a rise in supply chain and labor costs, which moderated in fiscal 2025.

Changes to trade policy, including tariff measures introduced in early calendar year 2025, may drive new inflation risks in our supply chain for materials as well as the costs of other goods and services important to our operations.

measures and the response from other countries continue to evolve, creating uncertainty in trade and economic dynamics.

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

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In addition, the process of obtaining and protecting patents can be long and expensive.

We also rely upon trade secrets, technical know-how, and continuing technological innovation to develop and maintain our competitive position.

We also rely upon trade secrets, technical know-how, and continuing technological innovation to develop and maintain our co mpetitive position.

As of March 31, 2025, we held 607 United States patents and 2,315 patents in other jurisdictions and had 90 United States patent applications and 289 patent applications pending in other jurisdictions.

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We have implemented quality assurance procedures to support the quality and integrity of scientific information and production processes.

Continuous Improvement.

Continuous improvement is fundamental to how we operate at STERIS.

We apply Lean principles across manufacturing, service operations, back office, and support functions through our Minimum Standard of Lean (MSoL) framework.

MSoL establishes a consistent foundation for problem solving, standard work, and performance management while enabling local ownership and innovation.

It assesses maturity across core dimensions—including continuous improvement training and development, routine management and strategic alignment, 5S, value stream mapping, kaizen management, lean tools and systems, and integration with new product development (NPD).

Our efforts are designed to deliver better outcomes for Customers, Shareholders, and employees.

By targeting key areas, we strengthen performance, agility, and value.

In manufacturing and service operations, we apply flow and cellular production concepts and cross-train employees to increase flexibility and throughput.

We also assess opportunities to in-source, outsource, or adopt technology to drive value.

We extend these principles to back office and support functions where Lean tools streamline workflows, reduce waste, and improve service delivery.

A dedicated Continuous Improvement team partners with the business to coach, build capability, and accelerate results.

Through kaizen events, tiered daily management, and employee-led initiatives, we foster a culture where employees are empowered to drive change.

This mindset is supported at all levels of the organization, reinforcing alignment, engagement, and long-term performance.

Government Regulation.

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If we fail to comply with any applicable regulatory requirements, penalties could be imposed on us.

For more information about the risks we face regarding regulatory requirements, see Part I, Item 1A of this Annual Report titled, "Risk Factors." We

are subject to extensive regulatory requirements and must receive and maintain regulatory clearance or approval for many products and operations.

For more information about the risks we face regarding regulatory requirements, see Part I, Item 1A of this Annual Report titled, "Risk Factors." We are subject to extensive regulatory requirements and must receive and maintain regulatory clearance or approval for many products and operations.

Failure to receive or maintain, or delays in receiving, clearance or approvals may hurt our revenues, profitability, financial condition, or value.

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In addition to research and development, we invest in quality control, Customer training programs, distribution systems, technical services, and other information services.

In addition to organic opportunities, acquisitions are a key part of our long-term strategy for growth.

There can be no assurance that we will develop significant new products or services, or that the new products or services we provide or develop in the future will be more commercially successful than those provided or developed by our competitors.

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Many of our operator training programs are approved by professional certifying organizations and offer continuing education credits to eligible course participants.

Our financial results have been, from time to time, subject to seasonal patterns.

We cannot assure you that these patterns will not continue.

Our financial results have, from time to time, exhibited seasonal patterns.

In particular, capital equipment revenues within our Healthcare segment have historically been higher in the fourth quarter of our fiscal year.

However, we cannot guarantee that these patterns will persist.

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

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At March 31, 2024, we had backlog orders of $425.2 million.

Of this amount, $494.7 million and $104.9 million related to our Healthcare and Life Sciences segments, respectively.

Backlog declined in fiscal 2024 as supply chain delays eased allowing us to reduce lead times and backlog.

Of this amount, $353.8 million

and $71.4 million related to our Healthcare and Life Sciences segments, respectively.

Backlog increased in fiscal 2025 as a result of higher Customer orders.

Availability of Securities and Exchange Commission Filings.

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CORPORATE RESPONSIBILITY

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

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

Inspired by our Customers’ efforts to create a healthier and safer world, and guided by our legacy of leadership and innovation, we strive to be a Great Company.

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The objective of ERM is to identify key risks, the potential impacts of compliance failure, identify key mitigating activities, develop potential improvements for managing the risks, and to ensure execution of oversight activities on a monthly, annual or as needed basis.

Our Corporate Responsibility function is led by the Vice President of ESG.

The Corporate Responsibility function, with support from our CEO, General Counsel and other senior executives, works to actively develop and refine our Environmental, Social, and Governance ("ESG") strategies, programs, and policies.

Our Corporate Responsibility function is led by the Vice President of Environmental, Social, and Governance ("ESG").

The Corporate Responsibility function, with support from our CEO, General Counsel and other senior executives, works to actively develop and refine our ESG strategies, programs, and policies.

The Corporate Responsibility function works closely with our Global Sustainability Steering Committee to build ESG values and implement strategies, programs, and policies across the Company.

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As an ongoing due diligence measure, we have established a program to recognize those sales and marketing intermediaries who demonstrate an elevated commitment to compliance.

Through this Commercial Compliance Program, we formally recognize organizations that have not only met STERIS's standard ethical requirements for inclusion in our network but have also taken additional steps, such as adopting their own code of conduct and training their employees on their own firm's ethical values, to ensure compliant behavior.

Through this Commercial Compliance Program, we acknowledge organizations that have not only met STERIS's standard ethical requirements for inclusion in our network but have also taken additional steps, such as adopting their own code of conduct and training their employees on their own firm's ethical values, to ensure compliant behavior.

In 2025, STERIS incurred no monetary losses as a result of legal proceedings associated with bribery or corruption.

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Our Supplier Code of Conduct defines the minimum requirements and expectations for all Suppliers and their subcontractors.

We have mechanisms in place to identify when suppliers do not meet our Supplier Code of Conduct requirements.

Suspicions of

supplier non-compliance are promptly investigated and addressed.

Suspicions of supplier non-compliance are promptly investigated and addressed.

We believe in conducting business with integrity and honesty and in accordance with all applicable laws and regulations of the countries in which we operate.

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We regularly assess the risks associated with our business, including the risk of potential corruption or bribery in the environments where we do business, and we have designed our management systems to respond accordingly.

As part of our anti-corruption program, our employees and third-party intermediaries are subject to mandatory comprehensive anti-bribery and anti-corruption training online and in-person.

As part of our anti-corruption program, our employees and third-party intermediaries are subject to mandatory comprehensive anti-bribery and anti-corruption training online.

The training covers the various forms that corruption can take, red flags, and individuals’ roles in our anti-bribery and anti-corruption efforts.

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We are also an active member of the Association for the Advancement of Medical Instrumentation ("AAMI") and MedTech Europe.

AdvaMed has roughly 400 member companies and promotes policies that foster the highest ethical standards, timely patient access to safe and effective products, and economic policies that reward value creation.

AdvaMed has over 500 member companies and promotes policies that foster the highest ethical standards, timely patient access to safe and effective products, and economic policies that reward value creation.

The AdvaMed Code of Ethics on Interactions with Health Care Professionals ("AdvaMed Code") facilitates ethical interactions between MedTech companies and health care professionals to ensure that medical decisions are based on the best interests of the patient.

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A management Ethics Committee meets monthly to monitor and investigate reports of Code of Business Conduct violations and provides quarterly reporting to the Board of Directors' Compliance and Technology Committee.

With respect to financial matters, reports are provided to the Board of Directors' Audit Committee.

With respect to financial

matters, reports are provided to the Board of Directors' Audit Committee.

With respect to human resources related matters, reports are provided to the Board of Dir ectors' Compensation and Organization Development Committee.

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We recognize that a significant portion of our carbon impact is as a result of our value chain, outside of electricity and energy consumption at our global sites.

In fiscal 2024, we completed a comprehensive review to establish the baseline for our upstream and downstream emissions (Scope 3) and reported aggregate Scope 3 emissions in our most recent CDP response and on our website.

We also report aggregate Scope 3 (upstream and downstream) emissions in our most recent CDP response and on our website.

We have a broad and comprehensive portfolio of sterilization and disinfection products that support the procedural spaces within hospitals, endoscopy and surgery centers as well as pharmaceutical and medical device Customers.

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The CSRD expands the number of companies required to publicly report ESG-related information and defines the ESG-related information that companies are required to report in accordance with European Sustainability Reporting Standards ("ESRS").

As STERIS prepares for upcoming CSRD disclosures, we continue to make significant efforts in gathering baseline information, strengthening our internal controls, and evaluating our current ESG data.

Although the European Parliament voted to postpone the application dates, STERIS continues to prepare for the upcoming CSRD disclosure requirement.

We are making significant efforts in gathering baseline information, strengthening our internal controls, and evaluating our current ESG data.

As part of this project, we continue to evaluate our ability to report in accordance with the Task Force on Climate-Related Financial Disclosures ("TCFD") framework and in light of evolving regulatory disclosure requirements.

In fiscal 2024, we initiated a TCFD aligned climate scenario analysis.

We completed TCFD aligned climate scenario analysis in fiscal 2025.

We are evaluating how this information will inform global reporting requirements.

Risks and Prevention.

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Our ideal business team is engaged, diverse, inclusive and talented, and we create programs and policies in support of these goals.

We believe unity of purpose and teamwork enables us to do far more than we could individually.

We believe unity of purpose and teamwork enables us to do far more together than we could individually.

We draw strength from each other and encourage communication with fairness, candor, respect and courage.

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Employees by Segment.

During the course of fiscal 2024, we averaged just over 18,000 employees throughout the world including approximately 1,400 employees within the Dental segment, which is currently held for sale.

Less than 12% of our employees are represented by work councils or labor unions.

During the course of fiscal 2025, we averaged approximately 18,000 employees throughout the world of which less than 11% are represented by work councils or labor unions.

We believe we generally have good relations with our employees.

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Life Sciences 834 999

Dental 1,411 1,451

Corporate 1,110 1,010

Total employees (1)

Diversity, Equity & Inclusion.

We are dedicated to creating and sustaining a diverse, equitable and inclusive work environment.

W e believe that the different ideas, experiences, perspectives and backgrounds of our global employees create a stronger organization that allows us to fulfill our ultimate goal of serving our Customers.

To put it simply, we believe a diverse and inclusive workforce is essential to a thriving organization.

17,787 16,768

(1) Excludes Dental segment divested on May 31, 2024.

We strive to recruit the best available people who are aligned with and embody our core values.

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LTIR includes work-related injuries or illnesses that cause an employee to be away from work at least one full day after the date of the incident.

(2) Our external benchmarks include the OSHA average and 1st Quartile injury/illness rates which are derived from the Bureau of Labor Statistics.

(2) Our external benchmarks include the OSHA average and 1st Quartile injury/illness rates which are derived from 2022 Bureau of Labor Statistics data.

Our annual workplace injury prevention results are within the manufacturing sector's best-in-class performance as defined by the Bureau of Labor Statistics.

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Designed for any type of organization, regardless of its activity or sector, it can provide assurance that environmental impact is being measured, controlled and improved in a holistic manner.

We currently have three facilities and 14 reprocessing locations that are 14001 accredited locations.

We currently have three facilities that are 14001 and 45001 accredited locations.

Our HSE teams and management are committed to supporting HSE programs with ongoing involvement in aligning HSE management systems to ISO 14001 and ISO 45001 standards, internal compliance reviews, and developing HSE training content and platforms.

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In addition, our global human resources team has programs focused on career development and training for employees at all levels.

Our employee turnover rate was 15% for both fiscal 2024 and 2023, and we are continuously working towards a goal of achieving a rate of 10% or less, excluding retirements and reductions in force.

Our employee turnover rate was 16% and 15% for fiscal 2025 and 2024, r espectively, and we are continuously working towards a goal of achieving a rate of 10% or less, excluding retirements and reductions in force.

Although reductions in force are sometimes necessary, we work to avoid them, and they must always be approved by executive management.

We encourage all employees to participate in our employee engagement survey which is regularly administered by a third party on a confidential basis.

We encourage all employees to participate in our regular engagement survey which is administered by a third party on a confidential basis.

This process has been valuable in helping us recognize what we do well and foster an open conversation about how we can make STERIS an even better place to work.

We have pushed our fiscal 2024 survey to the fall of fiscal 2025 as we are currently redesigning the survey for more frequent distribution.

During fiscal 2023, we reported that 85% of our employees completed our survey .

In our fiscal 2023 survey, we measured fifteen principal factors and overall employee engagement was 74%, in-line with our results for the past five years.

The results indicate that the substantial majority of our people are committed to serving our Customers, are proud to work for STERIS, and have confidence in the stability of our business.

We are committed to supporting the development of our people.

Employees benefit from hands-on continuous improvement ("Lean") training, a web-based learning management system and STERIS University.

In addition, we provide biennial Code of Conduct training and other key required training at all levels of the Company.

In our manufacturing and service organizations, we provide training for employees who do not have the necessary experience or background.

This training is conducted through a combination of hands-on and module-based training.

Our focus is on safety, quality and consistency in approach and outcome.

As a Lean focused organization, we have created standard work instructions for many processes, and refresher courses are offered regularly for existing employees.

Where possible, we look to provide cross-training for employees looking to expand their knowledge or grow into new roles.

We encourage all employees to create individual development plans and provide the support to assist in that effort.

We are pleased to report that 88% of our employees completed our pulse survey in fiscal 2025.

The pulse survey results are grouped around four key themes:

Employee Engagement;

Leadership Effectiveness;

Inclusion and Belonging;

and Job and Work Experience.

The results indicate strong favorability in each of these areas.

Moreover, this initial pulse survey sets a baseline from which we can track progress over time.

Compensation and Benefits.

Our total rewards offerings include an array of programs to support our employees' financial, physical, and mental well-being, including providing competitive salaries, variable performance pay, healthcare benefits, tuition assistance, paid time off, annual merit increases, and incentive plans based on the national norms of employees' location of employment.

Total employee compensation is presented in the table below, including costs associated with employees in the Dental segment, which is currently held for sale:

(in thousands) Fiscal 2024 Fiscal 2023

Total employee compensation is presented in the table below:

(dollars in thousands) Fiscal 2025 Fiscal 2024

Wages and salaries $ 1,273,381 $ 1,187,970

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We take prompt action whenever we are alerted to regulatory or field-safety issues with a STERIS product.

Following immediate assessment, we take corrective action, including voluntary product recalls, when needed.

Following immediate assessment, we take corrective action, including voluntary product recalls, when

We examine underlying issues and root cause and work to resolve these to avoid recurrence.

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Tokich 56 Senior Vice President and Chief Financial Officer

Andrew Xilas 59 Senior Vice President and General Manager, Dental

Adam Zangerle 58 Senior Vice President, General Counsel, and Company Secretary

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From February 2014 to July 2017, he served as Senior Vice President, Chief Financial Officer and Treasurer.

Andrew Xilas serves as Senior Vice President and General Manager, Dental.

He assumed this role in June 2021.

He joined HuFriedy Group (acquired by STERIS during fiscal 2022) in 1987, holding roles of increasing responsibility, which included a promotion to President, HuFriedy Group in January 2021.

Adam Zangerle serves as Senior Vice President, General Counsel, and Company Secretary.

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

What changed 10-K

Item 1. Business