Sotera Health Company · NASDAQ:SHC
Sotera Health — Q1 2023 Earnings Presentation
22 slides from Sotera Health's earnings presentation, May 3, 2023
Slide 1: First-Quarter 2023 Earnings Results
First-Quarter 2023 Earnings Results MAY 3, 2023
Slide 2: Cautionary Note Regarding Forward-Looking Statements and Non-GAAP Financial Measures
Cautionary Note Regarding Forward-Looking Statements and Non-GAAP Financial Measures Unless expressly indicated or the context requires otherwise, the terms “Sotera Health,” “Company,” “we,” “us,” and “our” in this document refer to Sotera Health Company, a Delaware corporation, and, where appropria
Slide 3: Speakers
Speakers Michael B. Petras, Jr. Chairman and Chief Executive Officer Michael F. Biehl Interim Chief Financial Officer 2
Slide 4: Safeguarding Global Health Through Our Sterilization Services, Lab Testing and Advisory Services
Safeguarding Global Health® Through Our Sterilization Services, Lab Testing and Advisory Services What we do… …and how we do it… …leads to strong results Leader in sterilization services Provide mission-critical services to blue chip Annual revenue growth every year since customers with multi-ye
Slide 5: Our Customers Trust and Value Our Expertise
Our Customers Trust and Value Our Expertise 5,000+ customers 900+ Customers laboratory located in 65+ tests countries Safeguarding Global Health® Deep market focus Customers include Significant industry expertise Customers include over 40 of top 9 of top 10 50 medical device End-to-end solutions pha
Slide 6: Safeguarding Global Health
Safeguarding Global Health® • Our Mission is at the heart of our work across Sotera Health. • Our mission-critical services help to ensure the safety of healthcare and protects the lives of millions around the world. • Safeguarding Global Health® embodies the essence of Corporate Responsibility. • C
Slide 7: Q1 2023 Highlights
Q1 2023 Highlights Business & Market Update Financial Performance • Some macro-economic pressures persist, such as inflation, FX Q1 2023 vs Q1 2022 and customer supply-chain Net Revenues -6.8% to $221M • Substantial revenue decrease for Nordion due to Co-60 harvest schedule timing, as expected Const
Slide 8: Financial Overview
FINANCIAL OVERVIEW Sotera » Health
Slide 9: Consolidated Q1 2023 Financial Performance
Consolidated Q1 2023 Financial Performance (In millions, except Adjusted EPS) Revenue Adjusted EBITDA (1) $237 -7% $115 -15% $221 $98 48.7%(2) 44.6%(2) 2022 2023 2022 2023 Adjusted EPS (1) $0.22 -$0.09 $0.13 2022 2023 (1) This is a non-GAAP financial measure. Please refer to Non-GAAP Financial Measu
Slide 10: Sterigenics Q1 2023 Financial Performance
Sterigenics Q1 2023 Financial Performance (In millions) First Quarter Commentary First Quarter Revenue +7% • Revenue and segment income increase driven by Segment income (1) +4% favorable pricing as well as volume and mix, partially $149 $160 offset by an unfavorable impact from changes in foreign c
Slide 11: Nordion Q1 2023 Financial Performance
Nordion Q1 2023 Financial Performance (In millions) First Quarter Commentary First Quarter Revenue -75% Q1 ‘23 revenue, segment income and segment income Segment income (1) -92% margin decline driven by anticipated volume decline $34 and mix due to timing of Co-60 supply harvest schedules and an unf
Slide 12: Nelson Labs Q1 2023 Financial Performance
Nelson Labs Q1 2023 Financial Performance (In millions) First Quarter Commentary First Quarter Revenue -2% • Revenue decline driven by volume and mix and an Segment income (1) -17% unfavorable impact from changes in foreign currency $53 $52 exchange rates, partially offset by favorable pricing • Seg
Slide 13: Capital Structure and Investments
Capital Structure and Investments (In millions) $1,007 $359 • $76.3M revolver upsize and $500M Term Loan closed in Q1 23 $599 $477 • No borrowings outstanding on revolver as of Q1 23 $81 $359 Liquidity $648 • $408M settlement funded into escrow on May 1, 2023; will be held on $395 $240 the balance s
Slide 14: 2023 Outlook
2023 Outlook On the following slide, Sotera Health presents an overview of its full-year 2023 outlook, including certain non-GAAP financial measures. As outlined in the Company’s May 3, 2023 press release, Sotera Health does not provide a reconciliation of the forward-looking Adjusted EBITDA, Adjust
Slide 15: Full-year 2023 Outlook
Full-year 2023 Outlook (1) FY 2023 Outlook YoY% Revenue $1.055B to $1.090B +5% to +9% Adj EBITDA(2) $530M to $550M +5% to +9% Adj NI Tax Rate(2)(3) 30% to 33% ~+400bps to ~+700bps Adj EPS(2) $0.78 to $0.86 -10% to -19% Weighted Avg. Diluted Shares 283M to 285M +1% to +2% Capital Expenditures $185M -
Slide 16: Appendix
Appendix Sotera » Health
Slide 17: Non-GAAP Financial Measures
Non-GAAP Financial Measures (unaudited) Three Months Ended March 31, (dollars in thousands, except per share amounts) 2023 2022 Net income $ 2,842 $ 30,641 Amortization of intangible assets 20,607 20,182 Share-based compensation(a) 7,348 4,538 Gain on foreign currency and derivatives not designated
Slide 18: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) (a) Represents non-cash share-based compensation expense. (b) Represents the effects of (i) fluctuations in foreign currency exchange rates, (ii) non-cash mark-to-fair value of embedded derivatives relating to certain customer and supply contracts at Nordion,
Slide 19: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) Twelve Months Twelve Months Ended March 31, Ended December 31, 2023 2022 Net income $ (261,369) $ (233,570) Amortization of intangible assets 81,979 81,554 Share-based compensation(a) 24,021 21,211 Gain on foreign currency and derivatives not designated as hed
Slide 20: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) (a) Represents share-based compensation expense to employees and Non-Employee Directors. (b) Represents the effects of (i) fluctuations in foreign currency exchange rates, (ii) non-cash mark-to-fair value of embedded derivatives relating to certain customer an
Slide 21: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) (unaudited) (in thousands, except Net Leverage) Pro Forma as of March 31,(1) As of March 31, As of December 31, 2023 2023 2022 Current portion of long-term debt $ 4,031 $ 4,031 $ 197,119 Long-term debt $ 2,222,333 $ 2,222,333 $ 1,747,115 Current portion of fin
Slide 22: Non-GAAP Financial Measures Definitions
Non-GAAP Financial Measures Definitions • We define Adjusted Net Income as net income (loss) before amortization and certain other adjustments that we do not consider in our evaluation of our ongoing operating performance from period to period. • We define Adjusted EBITDA as Adjusted Net Income befo
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