STERIS plc

STERIS plc provides infection-prevention products and services to healthcare and life-science customers. Its Healthcare business supplies hospitals with equipment, consumables and services. Applied Sterilization Technologies, or AST, sterilizes customer products, while Life Sciences serves pharmaceutical, biotechnology and laboratory customers. The Ireland-incorporated company trades on the New York Stock Exchange as STE. Dan Carestio is president and chief executive. Fiscal 2027 ends March 31, 2027.

Latest quarterly results

Adjusted earnings exclude acquired-intangible amortization, acquisition and integration costs, restructuring and other specified adjustments. Tariff refunds remain included. The second quarter benefited from about $20 million of tariff refunds and interest, out of approximately $24 million received in the first half.

Revenue growth excluding currency movements and acquisitions was 8.1%. Healthcare revenue was $1,122.4 million, AST revenue $295.6 million and Life Sciences revenue $170.6 million. On that same growth basis, the segments increased 7.4%, 5.3% and 18.1%, respectively. Life Sciences benefited from stronger equipment demand; Healthcare earnings faced inflation, lower productivity and investment spending.

How the annual outlook changed

The adjusted EPS increase includes an 18-cent benefit from tariff refunds received year to date. The expected restructuring adjustment increased from 7 cents to 28 cents a share. Annual revenue growth excluding currency movements and acquisitions remains 6% to 7%. Within that total, management raised Life Sciences to 9% to 10% from 6% to 7% and lowered AST to 6% to 7% from 7% to 8%. Healthcare remains at 6% to 7%.

Cash flow and balance sheet

For the six months ended September 30, operating cash flow was $656.1 million, versus $707.8 million a year earlier. Capital spending was $163.6 million, versus $180.1 million. Company-defined free cash flow, operating cash less capital spending plus asset-sale proceeds, was $492.5 million, versus $527.7 million. A lower working-capital contribution weighed on cash generation.

Cash and equivalents were $531.1 million at September 30. Carrying debt was $1,893.4 million, including the current portion, down from $1,931.7 million at March 31. Lease liabilities of $156.2 million were separate. STERIS reported compliance with its debt covenants.

The company paid $128.4 million in first-half cash dividends. It spent $200 million on program share repurchases and another $15.9 million on shares obtained through compensation programs. The cash-flow statement's combined repurchase figure is $215.9 million.

Restructuring and investment

A second-quarter facility, product and organizational restructuring plan is expected to cost about $45 million, including $10 million in cash and $35 million in noncash charges. It is intended to produce about $9 million of annual savings, with part realized in fiscal 2028 and the full benefit in later years.

That plan is separate from the manufacturing restructuring announced in August and the planned approximately $600 million North Carolina formulated-chemistries Center of Excellence. Annual capital spending remains forecast at about $450 million. STERIS also paid the remaining amounts under its Illinois ethylene-oxide litigation settlements during the quarter.

Acquisitions and funding

Three smaller Healthcare acquisitions were completed in the first half for total consideration of about $17.3 million, including deferred and potential contingent payments. Acquisition investing cash was $16 million.

On October 11, STERIS agreed to buy Xodus Medical and related businesses for approximately $2.1 billion in cash, plus a possible earnout of up to $150 million based on 2028 performance. The transaction remains subject to closing conditions and regulatory approval, with closing expected by December 31, 2026. Management expects funding from about $2 billion of new debt and cash on hand. Its current annual outlook excludes the purchase.

A November 4 commitment provides a $500 million term loan that can be drawn only when the Xodus purchase closes. That commitment reduced the remaining bridge commitment to $1.5 billion. A separate $1.6 billion revolving facility replaced the prior $1.1 billion facility and matures November 4, 2031. STERIS reported no borrowings to refinance the old agreement at closing.