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 Productsrevenue 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 forApplied 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 | ) | |||||||||||
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Cost of revenues, net | 380,507 | 276,088 | 916,895 | 787,375 | ||||||||||||
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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 | ) | ||||||||
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Total operating expenses | 191,459 | 135,810 | 517,991 | 402,304 | ||||||||||||
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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 | ||||||||||||
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Net income | 21,154 | 38,124 | 53,716 | 93,665 | ||||||||||||
Net income attributable to non controlling interest | 1,109 | — | 693 | — | ||||||||||||
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Net income attributable to shareholders | $ | 20,045 | $ | 38,124 | $ | 53,023 | $ | 93,665 | ||||||||
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Earnings per common share (EPS) data: | ||||||||||||||||
Basic | $ | 0.26 | $ | 0.64 | $ | 0.81 | $ | 1.58 | ||||||||
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Diluted | $ | 0.26 | $ | 0.63 | $ | 0.80 | $ | 1.56 | ||||||||
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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 | ||||||
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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 | ||||||
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Total Assets | $ | 5,350,283 | $ | 2,097,291 | ||||
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Liabilities and Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 116,336 | $ | 99,340 | ||||
Other current liabilities | 243,634 | 183,991 | ||||||
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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 | ||||||
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Total Liabilities and Equity | $ | 5,350,283 | $ | 2,097,291 | ||||
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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 | ||||||||||||
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Total Reportable Segments | 618,313 | 472,154 | 1,547,269 | 1,346,938 | ||||||||||||
Corporate and Other | 375 | 1,090 | 1,218 | 1,678 | ||||||||||||
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Total Segment Revenues | $ | 618,688 | $ | 473,244 | $ | 1,548,487 | $ | 1,348,616 | ||||||||
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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 | ||||||||||||
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Total Reportable Segments | 110,411 | 78,403 | 257,544 | 207,247 | ||||||||||||
Corporate and Other | (2,648 | ) | (1,406 | ) | (8,580 | ) | (5,310 | ) | ||||||||
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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 | — | |||||||||||
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Total operating income | $ | 46,722 | $ | 61,346 | $ | 113,601 | $ | 158,937 | ||||||||
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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 | ) | ||||
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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 | ) | |||||
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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 | ||||||
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Net cash provided by financing activities | 653,120 | 78,078 | ||||||
Effect of exchange rate changes on cash and cash equivalents | (7,669 | ) | (8,260 | ) | ||||
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Increase (decrease) in cash and cash equivalents | 63,671 | (8,290 | ) | |||||
Cash and cash equivalents at beginning of period | 167,689 | 152,802 | ||||||
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Cash and cash equivalents at end of period | $ | 231,360 | $ | 144,512 | ||||
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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 | ||||||
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Free Cash Flow | $ | 22,902 | $ | 109,265 | ||||
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| 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 | ) | ||
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Free Cash Flow | $ | 100,000 | ||
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| * | 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 | — | ||||||||||||||||||||||||
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Adjusted | $ | 243,344 | $ | 197,189 | $ | 107,763 | $ | 76,997 | $ | 76,199 | $ | 47,745 | $ | 0.98 | $ | 0.79 | ||||||||||||||||
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| 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 | — | ||||||||||||||||||||||||
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Adjusted | $ | 637,073 | $ | 562,058 | $ | 248,964 | $ | 201,937 | $ | 163,573 | $ | 120,358 | $ | 2.47 | $ | 2.01 | ||||||||||||||||
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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 | |||
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Adjusted net income per diluted share | $ | 3.48 - $3.55 | ||
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| * | 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 | ||||||||||||
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Total Recurring | 450,970 | 322,027 | 1,110,511 | 933,516 | ||||||||||||
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Total Revenues | $ | 618,688 | $ | 473,244 | $ | 1,548,487 | $ | 1,348,616 | ||||||||
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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 | % | ||||||||
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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 | ||||||||||||
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Total Recurring | 176,953 | 161,904 | 497,999 | 470,525 | ||||||||||||
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Total Healthcare Products Revenues | $ | 317,060 | $ | 287,515 | $ | 872,028 | $ | 823,957 | ||||||||
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Segment Operating Income | 52,141 | 42,720 | 120,674 | 109,766 | ||||||||||||
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Healthcare Specialty Services | ||||||||||||||||
Healthcare Services Revenues | $ | 128,326 | $ | 65,682 | $ | 264,974 | $ | 183,219 | ||||||||
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Segment Operating Income | 7,389 | 5,195 | 17,620 | 11,074 | ||||||||||||
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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 | ||||||||||||
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Total Recurring | 56,066 | 43,264 | 149,058 | 126,686 | ||||||||||||
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Total Life Sciences Revenues | $ | 82,702 | $ | 67,997 | $ | 210,514 | $ | 185,759 | ||||||||
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Segment Operating Income | 24,115 | 16,482 | 58,448 | 41,615 | ||||||||||||
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Applied Sterilization Technologies | ||||||||||||||||
Service Revenues | $ | 90,225 | $ | 50,960 | $ | 199,753 | $ | 154,003 | ||||||||
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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 | ) | ||||||||
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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 | ||||||||||||
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Total Backlog | $ | 190,014 | $ | 181,554 | n/a | n/a | ||||||||||
Free Cash Flow | $ | (16,680 | ) | $ | 40,088 | $ | 22,902 | $ | 109,265 | |||||||
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Net Debt | $ | 1,408,101 | $ | 466,168 | n/a | n/a | ||||||||||
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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 | ||||||||||||||||||
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Total | £ | 95,564 | £ | 101,946 | £ | 105,614 | £ | 105,703 | £ | 104,180 | £ | 102,109 | ||||||||||||
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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 | ||||||||||||||||||
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Total | £ | 95,564 | £ | 101,946 | £ | 105,614 | £ | 105,703 | £ | 104,180 | £ | 102,109 | ||||||||||||
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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 | ||||||||||||||||||
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Total | £ | 95,564 | £ | 101,946 | £ | 105,614 | £ | 105,703 | £ | 104,180 | £ | 102,109 | ||||||||||||
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| (1) | Excludes United Kingdom which is presented in separate line. |