EX-99.1 2 d132645dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

STERIS plc Announces Fiscal 2016 Third Quarter Financial Results

Revenue growth of 31%, with 7% constant currency organic growth

Synergy Health integration on track

Record revenue and earnings and fiscal 2016 outlook confirmed

LEICESTER, U.K. – February 9, 2016 – STERIS plc (NYSE: STE) (“STERIS” or the “Company”) today announced financial results for its fiscal 2016 third quarter ended December 31, 2015. Fiscal 2016 third quarter revenue increased 31% to $618.7 million compared with $473.2 million for STERIS Corporation (“Old STERIS”) in the third quarter of fiscal 2015, with 7% constant currency organic growth. As reported, operating income was $46.7 million, compared with operating income of $61.3 million for Old STERIS for the third quarter of fiscal 2015. As reported, net income was $20.0 million, or $0.26 per diluted share, compared with net income of $38.1 million, or $0.63 per diluted share for Old STERIS in the third quarter of fiscal 2015. All succeeding references to results from prior year periods are for Old STERIS.

Adjusted Results

Adjusted net income for the third quarter of fiscal 2016 was $76.2 million, or $0.98 per diluted share, compared with adjusted net income for the third quarter of the previous year of $47.7 million, or $0.79 per diluted share. The improvement in net income reflects the Combination with Synergy Health, improved operating performance and a lower effective tax rate.

“Our performance in the third quarter reflects solid organic revenue growth and contributions from recent acquisitions,” said Walt Rosebrough, President and Chief Executive Officer of STERIS. “The integration efforts for Synergy Health are progressing well, and we believe we are positioned to meet the record revenue and adjusted earnings full-year guidance we gave in December.”


Segment Results

Beginning this quarter, STERIS is reporting four business segments:

 

    Healthcare Products—Infection prevention and procedural solutions for healthcare providers worldwide, including capital equipment and related maintenance and installation services, as well as consumables.

 

    Healthcare Specialty Services—A range of specialty services for healthcare providers including hospital sterilization services, instrument and scope repair, and linen management.

 

    Applied Sterilization Technologies—Contract sterilization and laboratory services for medical device and pharmaceutical Customers and others.

 

    Life Sciences—Capital equipment and consumable products, and equipment maintenance and specialty services, for pharmaceutical manufacturers and research.

Healthcare Products revenue grew 10% in the quarter to $317.1 million compared with $287.5 million in the third quarter of fiscal 2015 reflecting organic volume growth and acquisitions. Contributing to the quarter, consumable revenue grew 15%, capital equipment revenue increased 12% and service revenue grew 3%. Healthcare Products operating income was $52.1 million compared with $42.7 million in last year’s third quarter. The increase in profitability was primarily due to increased volume and favorable foreign currency exchange rates.

Healthcare Specialty Services revenue in the quarter was $128.3 million compared with $65.7 million in the third quarter of fiscal 2015, reflecting the addition of Synergy Health and organic volume growth. Healthcare Specialty Services operating income was $7.4 million compared with $5.2 million in last year’s third quarter. The increase in profitability was primarily due to the increased volume.

 

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Fiscal 2016 third quarter revenue for Applied Sterilization Technologies was $90.2 million compared with $51.0 million in the same period last year. Revenue benefited from the addition of Synergy Health and increased volume from the segment’s core medical device Customers. Segment operating income increased to $26.8 million in the third quarter of fiscal 2016 compared with operating income of $14.0 million last year, due primarily to the increase in volume and the addition of Synergy Health.

Life Sciences third quarter revenue increased 22% to $82.7 million compared with $68.0 million in the third quarter of fiscal 2015. Consumable revenue grew 45%, reflecting organic growth and the acquisition of GEPCO, capital equipment revenue increased 8% and service revenue grew 13%. Segment operating income was $24.1 million compared with $16.5 million in the prior year quarter. The increase in profitability was primarily due to the increased volume, including GEPCO, and favorable foreign currency exchange rates.

Cash Flow

Net cash provided by operations for the first nine months of fiscal 2016 was $104.6 million, compared with $165.2 million in fiscal 2015. Free cash flow (see Non-GAAP Financial Measures) for the first nine months of fiscal 2016 was $22.9 million compared with $109.3 million in the prior year. The decline in free cash flow is primarily due to expenses related to the combination with Synergy Health and other acquisitions. In addition, free cash flow was reduced by an increased payout level for the Company’s prior year annual compensation program and a pension contribution made for the settlement of a legacy pension obligation. The total of these items, which reduced free cash flow year-over-year, is approximately $85 million.

Outlook

The Company is reiterating its outlook provided on December 22, 2015, which includes revenue growth of 21%-22% for the full fiscal 2016 year and adjusted earnings per diluted share in the range of $3.48 to $3.55. The Company currently anticipates free cash flow of approximately $100 million in fiscal 2016, reflecting approximately $100 million in acquisition and integration related costs.

 

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Dividend Announcement

The Company also announced today that STERIS’s Board of Directors has authorized a quarterly dividend of $0.25 per common share. The dividend is payable March 29, 2016 to shareholders of record at the close of business on March 1, 2016.

Conference Call

In conjunction with this release, STERIS management will host a conference call today at 10:00 a.m. Eastern time. The conference call can be heard live over the Internet at www.steris-ir.com or via phone by dialing 1-800-369-8428 in the United States and Canada, and 1-773-799-3378 internationally, then referencing the password “STERIS”.

For those unable to listen to the conference call live, a replay will be available beginning at 12:00 p.m. Eastern time today either over the Internet at www.steris-ir.com or via phone by calling 1-866-408-8448 in the United States and Canada, and 1-203-369-0632 internationally.

About STERIS

STERIS’s mission is to help our Customers create a healthier and safer world by providing innovative healthcare and life science product and service solutions around the globe. For more information, visit www.steris.com.

Investor Contact:

Julie Winter, Director, Investor Relations

Julie_Winter@steris.com

+1 440 392 7245

Media Contact:

Stephen Norton, Senior Director, Corporate Communications

Stephen_Norton@steris.com

+1 440 392 7482

 

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Non-GAAP Financial Measures

Adjusted net income and free cash flow are non-GAAP measures that may be used from time to time and should not be considered replacements for GAAP results. Non-GAAP financial measures are presented in this release with the intent of providing greater transparency to supplemental financial information used by management and the Board of Directors in their financial analysis and operational decision making. These amounts are disclosed so that the reader has the same financial data that management uses with the belief that it will assist investors and other readers in making comparisons to our historical operating results and analyzing the underlying performance of our operations for the periods presented. The Company believes that the presentation of these non-GAAP financial measures, when considered along with our GAAP financial measures, provides a more complete understanding of the factors and trends affecting our business than could be obtained absent this disclosure.

Adjusted net income excludes the amortization of intangible assets acquired in business combinations, acquisition-related transaction costs, integration costs related to acquisitions, and certain other unusual or non-recurring items. STERIS believes this measure is useful because it excludes items that may not be indicative of or are unrelated to our core operating results and provides a baseline for analyzing trends in our underlying businesses.

The Company defines free cash flow as cash flows from operating activities less purchases of property, plant, equipment and intangibles, net capital expenditures, plus proceeds from the sale or property, plant, equipment, and intangibles. STERIS believes that free cash flow is a useful measure of the Company’s ability to fund future principal debt repayments and growth outside of core operations, pay cash dividends, and repurchase ordinary shares.

Forward-Looking Statements

This release and the conference call may contain statements concerning certain trends, expectations, forecasts, estimates, or other forward-looking information affecting or relating to STERIS or its industry, products or activities that are intended to qualify for the protections afforded “forward-looking statements” under the Private Securities Litigation Reform Act of 1995 and other laws and regulations. Forward-looking statements speak only as to the date specified in this release and may be identified by the use of forward- looking terms such as “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “projects,” “targets,” “forecasts,” “outlook,” “impact,” “potential,” “confidence,” “improve,” “optimistic,” “deliver,” “comfortable,” “trend”, and “seeks,” or the negative of such terms or other variations on such terms or comparable terminology. Many important factors could cause actual results to differ materially from those in the forward-looking statements including, without limitation, disruption of production or supplies, changes in market conditions, political events, pending or future claims or litigation, competitive factors, technology advances, actions of regulatory agencies, and changes in laws, government regulations, labeling or product approvals or the application or

 

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interpretation thereof. Other risk factors are described herein and in STERIS’s, STERIS Corporation’s and Synergy’s other securities filings, including Item 1A of STERIS Corporation’s Annual Report on Form 10-K for the year ended March 31, 2015 and in Synergy’s annual report and accounts for the year ended 29 March 2015 (section headed “principal risks and uncertainties”). Many of these important factors are outside of STERIS’s control. No assurances can be provided as to any result or the timing of any outcome regarding matters described in the press release or otherwise with respect to any regulatory action, administrative proceedings, government investigations, litigation, warning letters, cost reductions, business strategies, earnings or revenue trends or future financial results. References to products are summaries only and should not be considered the specific terms of the product clearance or literature. Unless legally required, STERIS does not undertake to update or revise any forward-looking statements even if events make clear that any projected results, express or implied, will not be realized. Other potential risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, (a) STERIS’s ability to meet expectations regarding the accounting and tax treatments of the Combination, (b) the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in connection with the Combination within the expected time-frames or at all and to successfully integrate Synergy’s operations with those of STERIS Corporation, (c) the integration of Synergy’s operations with those of STERIS Corporation being more difficult, time-consuming or costly than expected, (d) operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) being greater than expected following the transaction, (e) the retention of certain key employees of Synergy being difficult, (f) changes in tax laws or interpretations that could increase our consolidated tax liabilities, including, changes in tax laws that would result in STERIS being treated as a domestic corporation for United States federal tax purposes, (g) the potential for increased pressure on pricing or costs that leads to erosion of profit margins, (h) the possibility that market demand will not develop for new technologies, products or applications or services, or business initiatives will take longer, cost more or produce lower benefits than anticipated, (i) the possibility that application of or compliance with laws, court rulings, certifications, regulations, regulatory actions, including without limitation those relating to FDA warning notices or letters, government investigations, the outcome of any pending FDA requests, inspections or submissions, or other requirements or standards may delay, limit or prevent new product introductions, affect the production and marketing of existing products or services or otherwise affect STERIS’s performance, results, prospects or value, (j) the potential of international unrest, economic downturn or effects of currencies, tax assessments, adjustments or anticipated rates, raw material costs or availability, benefit or retirement plan costs, or other regulatory compliance costs, (k) the possibility of reduced demand, or reductions in the rate of growth in demand, for STERIS’s products and services, (l) the possibility that anticipated growth, cost savings, new product acceptance, performance or approvals, or other results may not be achieved, or that transition, labor, competition, timing, execution, regulatory, governmental, or other issues or risks associated with STERIS’s businesses, industry or initiatives including, without limitation, those matters described in STERIS Corporation’s Form 10-K for the year ended March 31, 2015 and Synergy’s annual report and accounts for the year ended 29 March 2015 and other securities filings, may adversely impact STERIS’s performance, results, prospects or value, (m) the possibility that anticipated financial results or benefits of recent acquisitions, including the Combination, or of STERIS’s restructuring efforts will not be realized or will be other than anticipated and (n) the effects of the contractions in credit availability, as well as the ability of STERIS’s Customers and suppliers to adequately access the credit markets when needed.

 

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STERIS plc

Consolidated Condensed Statements of Operations

(In thousands, except per share data)

 

     Three Months Ended
December 31,
    Nine Months Ended
December 31,
 
     2015     2014     2015     2014  
     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  

Revenues

   $ 618,688      $ 473,244      $ 1,548,487      $ 1,348,616   

Cost of revenues

     380,506        276,055        916,576        787,792   

Cost of revenues—Restructuring

     1        33        319        (417
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues, net

     380,507        276,088        916,895        787,375   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     238,181        197,156        631,592        561,241   

Operating expenses:

        

Selling, general, and administrative

     177,319        122,370        476,613        362,350   

Research and development

     14,334        14,549        42,354        39,964   

Restructuring expense

     (194     (1,109     (976     (10
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     191,459        135,810        517,991        402,304   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     46,722        61,346        113,601        158,937   

Non-operating expense, net

     17,300        4,405        30,196        13,779   

Income tax expense

     8,268        18,817        29,689        51,493   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     21,154        38,124        53,716        93,665   

Net income attributable to non controlling interest

     1,109        —          693        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to shareholders

   $ 20,045      $ 38,124      $ 53,023      $ 93,665   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per common share (EPS) data:

        

Basic

   $ 0.26      $ 0.64      $ 0.81      $ 1.58   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.26      $ 0.63      $ 0.80      $ 1.56   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash dividends declared per share outstanding

   $ 0.25      $ 0.23      $ 0.73      $ 0.67   

Weighted average number of shares outstanding used in EPS computation:

        

Basic number of shares outstanding

     77,221        59,475        65,629        59,340   

Diluted number of shares outstanding

     77,712        60,146        66,123        59,993   

STERIS plc

Consolidated Condensed Balance Sheets

(In thousands)

 

     December 31,      March 31,  
     2015      2015  
     (Unaudited)         

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 231,360       $ 167,689   

Accounts receivable, net

     440,858         325,289   

Inventories, net

     208,306         160,818   

Other current assets

     85,184         66,636   
  

 

 

    

 

 

 

Total Current Assets

     965,708         720,432   

Property, plant, and equipment, net

     1,053,132         493,053   

Goodwill and intangible assets, net

     3,309,177         860,645   

Other assets

     22,266         23,161   
  

 

 

    

 

 

 

Total Assets

   $ 5,350,283       $ 2,097,291   
  

 

 

    

 

 

 

Liabilities and Equity

     

Current liabilities:

     

Accounts payable

   $ 116,336       $ 99,340   

Other current liabilities

     243,634         183,991   
  

 

 

    

 

 

 

Total Current Liabilities

     359,970         283,331   

Long-term debt

     1,639,461         621,075   

Other liabilities

     361,029         119,239   

Equity

     2,989,823         1,073,646   
  

 

 

    

 

 

 

Total Liabilities and Equity

   $ 5,350,283       $ 2,097,291   
  

 

 

    

 

 

 


STERIS plc

Segment Data

As a result of our recent combination with Synergy Health plc, which was completed on November 2, 2015, we have reassessed the organization of our business. Management will evaluate performance and allocate resources based on a segment operating income measure defined below. We have concluded that we operate and report in four reportable business segments: Healthcare Products, Healthcare Specialty Services, Life Sciences, and Applied Sterilization Technologies. Corporate and other, which is presented separately, contains the Defense and Industrial business unit plus costs that are associated with being a publicly traded company and certain other corporate costs.

Financial information for each of our segments is presented in the following table. The accounting policies for reportable segments are the same as those for the consolidated Company. Operating income (loss) for each segment is calculated as the segment’s gross profit less direct expenses and indirect cost allocations, which results in the full allocation of all distribution and research and development expenses, and the partial allocation of corporate costs. These allocations are based upon variables such as segment headcount and revenues. In addition, the Healthcare Products segment is responsible for the management of all but two manufacturing facilities and uses standard cost to sell products to the other segments. Corporate and other includes the gross profit and direct expenses of the Defense and Industrial business unit, as well as certain unallocated corporate costs related to being a publicly traded company and legacy pension and post-retirement benefits. Adjustments include acquisition related costs, amortization of acquired intangibles, restructuring costs and other charges that management believes may or may not recur with similar materiality or impact on operating income in future periods. Management believes that by excluding these items they gain better insight and greater transparency of the operating performance of the segments, thus aiding them in more meaningful financial trend analysis and operational decision making.

 

     Three Months Ended
December 31,
    Nine Months Ended
December 31,
 
(In thousands)    2015     2014     2015     2014  
     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  

Segment Revenues:

        

Healthcare Products

   $ 317,060      $ 287,515      $ 872,028      $ 823,957   

Healthcare Specialty Services

     128,326        65,682        264,974        183,219   

Life Sciences

     82,702        67,997        210,514        185,759   

Applied Sterilization Technologies

     90,225        50,960        199,753        154,003   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Reportable Segments

     618,313        472,154        1,547,269        1,346,938   

Corporate and Other

     375        1,090        1,218        1,678   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Segment Revenues

   $ 618,688      $ 473,244      $ 1,548,487      $ 1,348,616   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment Operating Income:

        

Healthcare Products

   $ 52,141      $ 42,720      $ 120,674      $ 109,766   

Healthcare Specialty Services

     7,389        5,195        17,620        11,074   

Life Sciences

     24,115        16,482        58,448        41,615   

Applied Sterilization Technologies

     26,766        14,006        60,802        44,792   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Reportable Segments

     110,411        78,403        257,544        207,247   

Corporate and Other

     (2,648     (1,406     (8,580     (5,310
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Segment Operating Income

   $ 107,763      $ 76,997      $ 248,964      $ 201,937   

Less: Adjustments

        

Restructuring charges

   $ (193   $ (1,076   $ (657   $ (427

Amortization of acquired intangible assets

     15,494        5,845        28,194        22,563   

Acquisition and integration related charges

     41,726        10,860        77,254        17,556   

Amortization of inventory and property “step up” to fair value

     4,060        22        4,102        1,310   

Loss (gain) on fair value adjustment of acquisition related contingent consideration

     —          —          —          1,998   

Settlement of pension obligation

     (46     —          26,470        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating income

   $ 46,722      $ 61,346      $ 113,601      $ 158,937   
  

 

 

   

 

 

   

 

 

   

 

 

 


STERIS plc

Consolidated Condensed Statements of Cash Flows

(In thousands)

 

     Nine Months Ended
December 31,
 
     2015     2014  
     (Unaudited)     (Unaudited)  

Operating Activities:

    

Net income

   $ 53,716      $ 93,665   

Pension settlement expense

     26,470        —     

Pension contributions

     (4,641     —     

Non-cash items

     76,408        75,401   

Changes in operating assets and liabilities

     (47,334     (3,856
  

 

 

   

 

 

 

Net cash provided by operating activities

     104,619        165,210   

Investing Activities:

    

Purchases of property, plant, equipment, and intangibles, net

     (82,117     (56,757

Proceeds from sale of property, plant, equipment and intangibles

     400        812   

Investments in businesses, net of cash acquired

     (604,682     (182,692

Purchases of investments

     —          (4,681
  

 

 

   

 

 

 

Net cash used in investing activities

     (686,399     (243,318

Financing Activities:

    

Proceeds from issuance of long-term obligations

     350,000        —     

(Payments) proceeds under credit facilities, net

     348,670        117,200   

Deferred financing fees and debt issuance costs

     (5,094     (7,347

Repurchases of shares

     (14,069     (20,110

Cash dividends paid to shareholders

     (43,728     (39,790

Stock option and other equity transactions, net

     10,944        19,245   

Proceeds from issuance of equity to minority interest shareholders

     488        —     

Excess tax benefit from share-based compensation

     5,909        8,880   
  

 

 

   

 

 

 

Net cash provided by financing activities

     653,120        78,078   

Effect of exchange rate changes on cash and cash equivalents

     (7,669     (8,260
  

 

 

   

 

 

 

Increase (decrease) in cash and cash equivalents

     63,671        (8,290

Cash and cash equivalents at beginning of period

     167,689        152,802   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 231,360      $ 144,512   
  

 

 

   

 

 

 

The following table presents a financial measure which is considered to be “non-GAAP financial measures” under Securities Exchange Commission rules. Free cash flow is defined by the Company as cash flows from operating activities less purchases of property, plant, equipment and intangibles, net (capital expenditures) plus proceeds from the sale of property, plant, equipment and intangibles. The Company uses free cash flow as a measure to gauge its ability to fund future principal debt repayments and growth outside of core operations, repurchase common shares, and pay cash dividends. STERIS’s calculation of free cash flow may vary from other companies.

 

     Nine Months Ended  
     December 31,  
     2015      2014  
     (Unaudited)      (Unaudited)  

Calculation of Free Cash Flow:

     

Cash flows from operating activities

   $ 104,619       $ 165,210   

Purchases of property, plant, equipment, and intangibles, net

     (82,117      (56,757

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

     400         812   
  

 

 

    

 

 

 

Free Cash Flow

   $ 22,902       $ 109,265   
  

 

 

    

 

 

 

 

     Twelve Months Ended
March 31,
2016
 
     (Outlook)*  

Calculation of free cash flow for outlook:

  

Cash flows from operating activities

   $ 235,000   

Purchases of property, plant, equipment, and intangibles, net

     (135,000
  

 

 

 

Free Cash Flow

   $ 100,000   
  

 

 

 

 

* All amounts are estimates.


STERIS plc

Non-GAAP Financial Measures

(In thousands, except per share data)

Non-GAAP financial measures are presented with the intent of providing greater transparency to supplemental financial information used by management and the Board of Directors in their financial analysis and operational decision making. These amounts are disclosed so that the reader has the same financial data that management uses with the belief that it will assist investors and other readers in making comparisons to our historical operating results and analyzing the underlying performance of our operations for the periods presented.

We believe that the presentation of these non-GAAP financial measures, when considered along with our GAAP financial measures and the reconciliation to the corresponding GAAP financial measures, provide the reader with a more complete understanding of the factors and trends affecting our business than could be obtained absent this disclosure. It is important for the reader to note that the non-GAAP financial measure used may be calculated differently from, and therefore may not be comparable to, a similarly titled measure used by other companies.

 

     Three months ended December 31, (unaudited)  
     Gross Profit      Income from Operations     Net income attributable to
shareholders
    Diluted EPS  
     2015      2014      2015     2014     2015     2014     2015      2014  

GAAP

   $ 238,181       $ 197,156      $ 46,722      $ 61,346     $ 20,045      $ 38,124     $ 0.26       $ 0.63   

Adjustments:

                   

Amortization of inventory and property “step up” to fair value

     3,631         —           4,060        22       3,155        18       0.04         —     

Amortization and impairment of acquired intangible assets

     —           —           15,494        5,845        10,937        3,634        0.14         0.06   

Acquisition related transaction and integration costs

     1,531         —           41,726        10,860       35,616        6,625       0.46         0.11   

Settlement of pension obligation

     —           —           (46     —          (28     —          —           —     

Restructuring

     1         33        (193     (1,076 )     (117     (656 )     —           (0.01

Make whole payments (interest expense)

     —           —           —          —          6,591        —          0.08         —     
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Adjusted

   $ 243,344       $ 197,189      $ 107,763      $ 76,997     $ 76,199      $ 47,745     $ 0.98       $ 0.79   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

 

    Nine months ended December 31, (unaudited)  
    Gross Profit     Income from Operations     Net income attributable to
shareholders
    Diluted EPS  
    2015     2014     2015     2014     2015     2014     2015     2014  

GAAP

  $ 631,592      $ 561,241      $ 113,601      $ 158,937      $ 53,023      $ 93,665      $ 0.80      $ 1.56   

Adjustments:

               

Amortization of inventory and property “step up” to fair value

    3,631        1,234        4,102        1,310        3,188        1,049        0.05        0.02   

Amortization and impairment of purchased intangible assets

    —          —          28,194        22,563        18,818        13,976        0.29        0.23   

Acquisition related transaction and integration costs

    1,531        —          77,254        17,556        66,016        10,709        0.99        0.18   

Loss (gain) on fair value adjustment of acquisition related contingent consideration

    —          —          —          1,998        —          1,219        —          0.02   

Settlement of pension obligation

    —          —          26,470        —          16,337        —          0.25        —     

Restructuring

    319        (417     (657     (427     (400     (260     (0.01     —     

Make whole payments (interest expense)

    —          —          —          —          6,591        —          0.10        —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted

  $ 637,073      $ 562,058      $ 248,964      $ 201,937      $ 163,573      $ 120,358      $ 2.47      $ 2.01   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

FY 2016 Outlook

 

     Twelve months ended
March 31, 2016
 
     (Outlook)*  

Net Income per diluted share

   $ 1.71 - 1.78   

Amortization of inventory and property “step up” to fair value

     0.11   

Amortization and impairment of purchased intangible assets

     0.47   

Acquisition related transaction and integration costs

     0.88   

Settlement of pension obligation

     0.23   

Restructuring

     (0.01

Make whole payments (interest expense)

     0.09   
  

 

 

 

Adjusted net income per diluted share

   $ 3.48 -  $3.55   
  

 

 

 

 

* All amounts are estimates.


STERIS plc

Unaudited Supplemental Financial Data

Third Quarter Fiscal 2016

As of December 31 , 2015

 

     FY 2016     FY 2015     FY 2016     FY 2015  

Total Company Revenues

   Q3     Q3     YTD     YTD  

Capital Equipment

   $ 167,718      $ 151,217      $ 437,976      $ 415,100   

Consumables

     137,438        116,068        373,632        339,470   

Service

     313,532        205,959        736,879        594,046   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Recurring

     450,970        322,027        1,110,511        933,516   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenues

   $ 618,688      $ 473,244      $ 1,548,487      $ 1,348,616   
  

 

 

   

 

 

   

 

 

   

 

 

 

United Kingdom Revenues

   $ 51,468      $ 13,421      $ 73,382      $ 38,225   

United Kingdom Revenues as a % of Total

     8     3     5     3

United States Revenues

   $ 438,250      $ 367,059      $ 1,193,940      $ 1,049,892   

United States Revenues as a % of Total

     71     78     77     78

International Revenues

   $ 128,970      $ 92,764      $ 281,165      $ 260,499   

International Revenues as a % of Total

     21     20     18     19
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment Data

   Q3     Q3     YTD     YTD  

Healthcare Products

        

Revenues

        

Capital Equipment

   $ 140,107      $ 125,611      $ 374,029      $ 353,432   

Consumables

     101,748        88,592        277,555        257,334   

Service

     75,205        73,312        220,444        213,191   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Recurring

     176,953        161,904        497,999        470,525   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Healthcare Products Revenues

   $ 317,060      $ 287,515      $ 872,028      $ 823,957   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment Operating Income

     52,141        42,720        120,674        109,766   
  

 

 

   

 

 

   

 

 

   

 

 

 

Healthcare Specialty Services

        

Healthcare Services Revenues

   $ 128,326      $ 65,682      $ 264,974      $ 183,219   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment Operating Income

     7,389        5,195        17,620        11,074   
  

 

 

   

 

 

   

 

 

   

 

 

 

Life Sciences

        

Revenues

        

Capital Equipment

   $ 26,636      $ 24,733      $ 61,456      $ 59,073   

Consumables

     32,720        22,611        85,807        67,185   

Service

     23,346        20,653        63,251        59,501   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Recurring

     56,066        43,264        149,058        126,686   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Life Sciences Revenues

   $ 82,702      $ 67,997      $ 210,514      $ 185,759   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment Operating Income

     24,115        16,482        58,448        41,615   
  

 

 

   

 

 

   

 

 

   

 

 

 

Applied Sterilization Technologies

        

Service Revenues

   $ 90,225      $ 50,960      $ 199,753      $ 154,003   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment Operating Income

   $ 26,766      $ 14,006      $ 60,802      $ 44,792   

Corporate and Other

        

Revenues

   $ 375      $ 1,090      $ 1,218      $ 1,678   

Operating Income (Loss)

     (2,648     (1,406     (8,580     (5,310
  

 

 

   

 

 

   

 

 

   

 

 

 

Other Data

   Q3     Q3     YTD     YTD  

Healthcare Products Backlog

   $ 144,644      $ 137,806        n/a        n/a   

Life Sciences Backlog

     45,370        43,748        n/a        n/a   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Backlog

   $ 190,014      $ 181,554        n/a        n/a   

Free Cash Flow

   $ (16,680   $ 40,088      $ 22,902      $ 109,265   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Debt

   $ 1,408,101      $ 466,168        n/a        n/a   
  

 

 

   

 

 

   

 

 

   

 

 

 

This supplemental data is consistent with publicly disclosed information provided in quarterly conference calls, earnings releases and SEC filings, and is subject to all definitions, precautions and limitations contained in those disclosures. Please see the Company’s most recent 10-K for definitions (and reconciliation where appropriate) of adjusted measures, backlog, free cash flow and net debt.


The following table provides historical data for Synergy Health in categories consistent with the future reporting of Synergy within the STERIS plc group.

The fiscal year of Synergy Health was the nearest weekend to the end of March each year. Accordingly reported quarters do not align to calendar quarters.

The accounting periods have been changed to calendar periods subsequent to the acquisition in November 2015.

Synergy Health

Fiscal 2015 and First Half Fiscal 2016 Revenue Data

 

Unaudited, Amounts in £000

 
     Synergy Health
Three Months
Ended
June 2014
     Synergy Health
Three Months
Ended
September 2014
     Synergy Health
Three Months
Ended
December 2014
     Synergy Health
Three Months
Ended
March 2015
     Synergy Health
Three Months
Ended
June 2015
     Synergy Health
Three Months
Ended
September 2015
 

Revenues by type:

                 

Product

   £ 11,035       £ 11,436       £ 11,535       £ 10,984       £ 10,307       £ 9,869   

Service

     84,529         90,510         94,079         94,719         93,873         92,240   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   £ 95,564       £ 101,946       £ 105,614       £ 105,703       £ 104,180       £ 102,109   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Revenues by segment:

                 

Healthcare Products

   £ 7,945       £ 8,455       £ 8,697       £ 8,314       £ 7,744       £ 7,395   

Healthcare Specialty Services

     54,909         59,170         61,749         62,090         61,126         59,290   

Applied Sterilization Technologies

     32,710         34,321         35,168         35,299         35,310         35,423   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   £ 95,564       £ 101,946       £ 105,614       £ 105,703       £ 104,180       £ 102,109   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Revenues by location:

                 

United Kingdom

   £ 39,574       £ 41,435       £ 42,458       £ 42,346       £ 41,656       £ 41,739   

United States

     16,937         20,359         22,292         23,028         24,116         22,601   

Europe, Middle East & Africa (1)

     34,715         35,385         35,825         35,206         33,220         32,517   

Asia Pacific and Latin America

     4,338         4,767         5,039         5,123         5,188         5,252   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   £ 95,564       £ 101,946       £ 105,614       £ 105,703       £ 104,180       £ 102,109   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Excludes United Kingdom which is presented in separate line.