SHC - Earnings call 4 2023 | Sotera Health Company

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Operator

Good morning, and welcome to the Sotera Health Fourth Quarter and Full Year 2023 Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Vice President and Treasurer, Mr. Jason Peterson. Please go ahead.

Jason Peterson

you. Thank welcome and today's to morning, call. Good

will find on the can This the is a Sotera today's section the website press slides supplemental webcast replay and recorded, accompanying Health and being available Investors of soterahealth.com. in Investors release at You be section website. our of

today Chairman Financial Lyons. Officer, Chief call Officer, Executive the On are Michael with Jon me and Petras; Chief and

adjusted EPS, uncertainties. to and the leverage Petras. currency some segment those these differ out forward-looking Chairman to forward-looking you assumes any company adjusted call, beginning and company's over non-GAAP this release today. the be to may to subject Health's tax as measures please and schedules any to and statements. update income Investor EBITDA margin, call, will note the The attached to and statements. Please statements net Instructions] non-GAAP operator constant will statements questions presentation. The of assisting if reach now Sotera CEO, at team. I and obligation and net financial of of discussion adjusted Q&A the in will the net free presentation slides comparisons. risks the to with matters press addressed materially be all have including implied. the well debt may me company could present as considered to Michael GAAP During a the that slide no filings reconciliation today, refer turn such our Relations for supplemental periods feel relevant [Operator margin, of the be call ratio during The A in the As to description always, that are to adjusted rate adjusted portion Health's for EBITDA, call cause post income, measures the projected risks of uncertainties results found the in SEC GAAP applicable Sotera forward-looking the Please to comments actual income, or both from and net these

Michael Petras

chain in and shifting Health while morning, top pressures, Sotera Good team presented landscape lumpy challenges, welcome regulatory adjusted at supply year, growth and and Throughout full the delivering a and everyone, customer to the morning, including today's harvest the reported macroeconomic call. margins. XXXX for XX%-plus adaptability we these of the unwavering bottom a resiliency, schedule the face challenges. the core and values many EBITDA and commitment demonstrated company's both to Nordion. quarter year, Cobalt-XX line This

we customers In capacity in The Sterigenics, operational throughout and secured supply to completed good team EO addition delivered, Cobalt-XX business facility At continues its X achieving of regulatory their such expansions as revenue in a development agencies as in to its the growth, XX% programs. Nelson technical year. progress successfully services the acquired supports delivered the we year full interactions growth in on and the Nordion of XXXX, strong RCA, progress in on fourth a significant we revenue achieved areas deliver our successful Cobalt-XX U.S. advisory also RCA growth long-term made FDA. significant we enhancements. the The made goals. team were number quarter. Labs with

the XXXX. $XXX with as We of approximately Illinois million well the ethylene XXXX We personal resolved of injury a in of $XXX position in which is Georgia. liquidity, XX% the XXXX of in end settlement over also liquidity approximately substantial with settlement an a finished in strong litigation the recent of oxide increase million from amount claims as claimants of XXX

total full financial the of our revenue year few growth fourth want moment, items We XX.X% from first, quarter highlight a to provide detail in and our adjusted to reported XXXX. compared EBITDA but more growth XX.X% a of on of will quarter fourth Jon results XXXX and I results.

by XXXX, X.X% EBITDA respect our year achieved year revenue in year. growth, single revenue by top the streak grew full year, delivered to the we the for full and of For which units, XXXX. XXXX both X.X% adjusted quarter annual which we've continue grew Sterigenics X.X% the marks since line every growth compared another XXXX. With business to and

Sterigenics of was cost business for This to segment segment, XXX.X% other product of bottom delivered largest schedules. reporting durability a services, our speak growth fraction top annual overall growth government-mandated line often harvest rate represents its within the provide base for compound global previously, and of driven the our discussed a services we've as delivered sterilization quarter. facilities, comprehensive the has the expected rates public through history. Serving As performance becoming a throughout growth Cobalt-XX Sterigenics, XX% its business which customers. Nordion, since growth XX of These the of company. revenue consistent on critical, our the timing segment, on line was its customer XX% has this network its delivered and a model by

call, the As did on Cobalt-XX The of fantastic irregular quarter-to-quarter job we've earlier, revenue a Nordion's results tied suppliers, schedule basis. is as a And Labs, services of Nordion the the I've take stated team by events. decline the macroeconomic revenues companies; unique to headwinds our customer XXXX year basis, down testing accomplishments in revenue in Cobalt-XX has Union demand pressures, and Nordion up which extension lot-release XXXX. a chain. made on fourth year. European destocking X.X% to referenced IPO start-ups quarter. continues uncertainty including sterilization the year delivering the fourth I consistently deadlines in of face in we compliance the testing harvest XXXX for since the our and messaged, volumes. Overall, lab navigating corporate prior softened was supply for moment we to proud progress grew quarter revenues for on a XX% am same quarter of third slowdown geopolitical and the year routine business, in highlight driven smaller the lastly, to was X% device expertise good also the Labs our tied full XXXX. for funding team year Nelson versus complex in quarter medical considering approximately our a patterns the regulations; X.X%. Revenue responsibility and versus full Nelson its initiatives. to the Full our in XXXX revenue want of were Sotera a On inventory Health team's I advisory in

IPO, the established As Committee. oversight within and our Corporate part ESG our of Governance Nominating Board

initiatives overall appointed business internal to implementation co-chairs executives senior strategy. with We an cross-functional also X committee, lead reports consistent established our seasoned into identification as and we of me, and which the

on During XXXX built initiatives in the XXXX. XXXX, begun and we've

software accomplishments solution of In first-time area, Some establish the been a we environmental environmental highlights include: baseline for published metrics. with a in working to the our have third-party

As facilities. previously EO mentioned, continue in we our in our investment state-of-the-art emission industry-leading, controls

published responsibility human statement rate. and with XXXX rights completed capital, corporate our management capital data. communities, a our With and formal culture also first environmental global to disclosed human in respect We participation XX% report. employee human survey initial We statement our we published engagement

leaders interactive Our Director, Sotera session held Ann with for Board our Women's Health Klee. our Network an

promotions. to proud than of global more in XX% announce are represented We leadership XXXX, women our that

strategy. is side, independence our commercial XX% Karen governance the important we brings adds long-term to valuable she the and space, an welcome Board in aspect Flynn pharma On our of to which experience Karen Board. services

company's results led These institutions stock launched to our initial X float process public a X of approximately formal to highlighted management and also Board responsibility enterprise continuing the in look XXXX float. areas We in greatly our XXXX accomplishments that us completed past XX% future. Earlier responsibility to prioritize holding of share feedback corporate outlook. we with institutions our held holding these value to ESG on finally, risk week. XXXX, and topics team are we of areas. meetings We in report. And the share regularly our forward with initial our today, the XX% this public provided including the with We Directors, corporate discussions outreach

recovery variability our be year within full the Labs. The range growth and by and another will deliver to XXXX. line Nelson we to market total XXXX, of revenues full X% driven to growth bottom both and the the with to compared For the revenue in adjusted year in and when of year be timing magnitude EBITDA of X% largely range expected expect top Sterigenics

take financials in the depth. Now, through Jon more us will

Jonathan Lyons

will leverage. I a Thank and almost XXX first mentioned. capital $XXX and Nordion's adjusted quarter consolidated with million. $XXX high landing XX% will I total quarter cover points with currency Michael to XX.X%. quarter in to constant and XX.X% as fourth period, year EBITDA XX.X% you, Michael. of updates grew full on Fourth details then or year expanded was deployment by on full on company fourth abnormally conclude revenues additional outlook. On The XXXX by EBITDA margins quarter by adjusted including a million, basis to growth results, the volume revenues grew previously basis, XXXX XX.X% basis fourth the

Our for $XX million. reported quarter, the XXXX or quarter increase quarter of million the diluted was $XX fourth expense interest $X.XX share. for net $X.XX. per Reported EPS income $X.XX an was the was Adjusted of for

foreign a its Revenue in by last and by driven exchange to currency the and fourth and segment mix to mix, revenue partially XXX XX% at was declined Revenue to $XX decreased currency some to by of was full unfavorable volume partially XX% favorable by to rates and basis drivers Now delivered to by changes costs increased XXX as income income unfavorable X.X% $XXX approximately higher XXX% X.X%, approximately million, offset foreign to X.X% the quarter X.X% growth points volume volume by offset grew the X.X% driven exchange million, to X.X%. let's more year quarter. of of revenue X.X% coupled in XXX% XXX% over inflationary of $XX XX.X%. Nelson our and segment and growth of Segment slightly of performance increased same changes million. revenue offset pricing income pricing. rates, revenue and mix. Nordion's for by pricing for income and to growth and take favorable million of driven X.X% margins quarter X%. of partially margin X.X%, by favorable $XX as partially quarter XXXX unfavorable favorable foreign volume Nordion over quarter and $XX by tailwind by million with as a fourth favorable than In fourth of unfavorable growth income driven by in generated Labs expected. volume pressure, look Segment mix XX.X%, pricing to points returned Sterigenics improved segment offset which Segment basis year. the expanded the in compared and and included pricing currency by quarter, fourth quarter million, mix favorable $XX the

million adjusted $XX grew EBITDA $X.XX For higher a expense X.X% and resulting to now million. or full interest the average net strong billion per rate. I of we on net share. $X.XX of XX%. margin the $XXX year EPS X.X% or diluted turn The was higher $X.XX year, a capital million, X.X% EBITDA full liquidity We was for by primarily interest adjusted to approximately leverage up XXXX diluted over weighted the company revenue, $X.XX driven decrease was currency share, a per constant Adjusted an continues income $XXX deployment. liquidity, to for delivered year in in for will and in position. a Reported tax Reported expense basis. be

of of included line available credit. of and $XXX $XXX As approximately million of unrestricted available we capacity had million million $XXX year-end, liquidity, our under which cash revolving of

million with For prior XXXX, in demonstrates $XXX for we Illinois of cash-generating the the of $XXX million strength and which settlement, business. after years line is cash, adjusting operating our generated

target leverage our within ratio the at of net year range to X.Xx finished Xx. X Our

in XXXX, leverage term net settlement growth. CapEx financing ratio X.Xx million. finished net to turn, QX our which after nearly demonstrates ratio for improved $XXX delever $XXX of to As the Since XXXX loan the recall, and $XXX you our payment. million quarter ability has X.X leverage million the subsequent may our of at increased second of through Illinois year our

X the Cobalt-XX programs Sterigenics growth made projects greenfields. Nordion's well. are EO enhancements. development mentioned, X year in significant We progress process, currently expansions on are which during completed have of X progressing facility Michael As capacity and the

I the during once-in-a-generation are QX As that mentioned won't long-term in projects yield our incremental until later these decade. call, cobalt

are we that management Nelson in to our For business information we pharma the continue across in lab and expanding invest Labs, system segment. our deploying capabilities

XXXX discuss I to like our Now, would outlook.

X% the to total revenues to in adjusted For EBITDA XXXX adjusted levels. of the EBITDA and expect year, with we similar to range full grow X%, margins

case and due the being the and timing quarter volumes more to in again We perspective, of in half X% price with From half is balanced long-term lightest another of to QX half expect than lightest end in that recovery year X.X% assuming of second the year the of year renewals lower XXXX. solid for will be typically performance flat first stated quarter at range at slight of in XXXX. In the moderation XXXX, of XXXX revenue long-term the XXXX. inflation we expect Nordion. second our the Nordion but be are to cadence relatively with a beginning Sterigenics, contract half the between first the being stronger and we Versus again revenues first the the of quarter the with company,

we risk provided For revenue with half of half the with being lightest have year. first will the the be associated first to years, of supply. slightly quarter cobalt the revenues the than couple back Nelson Russian for the the year visibility Labs, In the of quarter past historically lower

As will of XXXX, QX this settlement. million total fund direct XXXX $XXX litigation-related adjustment. making we this EO revenue. At costs related that I our we Presentations, during outlines on would website approximate a presentation the background, to X% $XXX Illinois adjusted point, $XXX of adjusted an income. of risk in is of X% a to income. costs, are to million to million net the EO Beginning to make interest net Slide with company calculate posted loan there we earnings to longer to like of Events which of of treatment By closed XXXX, of way calculation the loan excluded we and between today, our this of change Consistent no under investor term the is XX and you

would have this for forward. comparison We have basis so presented in right the going you the impact change have had XXXX,

tax As and to $XXX.X adjusted the our effective per basis EPS net XX.X% is from $X.XX These rate million applicable to adjusted you weighted income The diluted from average from adjusted to XX.X%, will appropriate for see income the are $XXX.X on million. reduced to guidance. EPS slide, changes comparison increased net share. $X.XX and for tax rate

XXXX, For $XXX million. expense and we million expect $XXX interest between

expected range We of to are projecting EPS range applicable tax net rate in in income is to XX.X% XX.X%. to Adjusted $X.XX adjusted of to effective an be the $X.XX. the

weighted expect We diluted XXX on share range basis. million a in to count shares average of the a fully XXX million

And will we as of well a and range prioritize expenditures million capital $XXX From we in to as capital XXXX. expect organic million standpoint, to $XXX the growth deployment continue deleveraging opportunistic M&A. in

elevated decline in As expect a previously before communicated, we XXXX see see to accelerate. be to will we CapEx spending generation cash flow XXXX we an level to free in at when start start

Finally, remarks. the improve and net call Michael XXXX. I our over to guidance M&A, back leverage any turn in closing assume not for anticipate we will now to does

Michael Petras

Thank you, Jon.

to We'll we in network invest of additional will we development on As emission global XXXX, to systems. A forward continue few our look priorities. our U.S. continue and control investment expanding capacity. EO focus Cobalt-XX to in priorities through to our include disciplined these upgrades

our year business our through model. company and spite business generation. I cross-functional we cash performance good line services another customers. of the our delivering bottom of criticality capabilities enhance our strength of demand with XXXX, flow while of the top recovery. remain expect The In intact fundamentals uncertain of in strong initiatives, further growth one all durability and with to want will We reemphasize

world top that We long-term contracts. have and of pharma are relationships multiyear device companies medical with the by the supported

market to improve, our and We Sotera from customers Health execute will benefit that will continue for when volumes recovery.

again we for XXXX. At a up health. open our for mission out day in day are safeguarding plays operator, role point, strong and critical care, global position in This in in let's growth this company the is and Q&A. of a call focus once Our health on

Operator

will Capital. [Operator And RBC come the Instructions] Sean first question from Dodge with

Sean Dodge

maybe revenue always could the Is lot recovery I half you talk the else seeing a half historically, visibility of market in be I year. Sterigenics. second guidance And into that? first second a expecting XXXX you you're recovery Sterigenics that now half? you to start said half indicates if have then volume on something sense about in you're proportions it more bigger just want have going of or of us pronounced? just Yes. guess, the of expecting the Is just Michael, second assumes been give Can you terms to that? revenue. there's to the a

Michael Petras

not We some and destocking it as channels, Sterigenics will not both it can think to don't side. occurring we get first half. worse. getting in Yes, be is overall, the the half. It's -- to the is little to Nelson comments, in recovery volumes. better to said, but as out. we're bit how stated in It's going typically second half the just are still it's well the second want my plays as see dramatic, visibility be give stable, but similar And what the come seen we've it tell a market I around as relatively we we the the you, flat recovery than the worse. just trying past, We to you the very about where I seeing start It's we in volumes back? half in as on side will the first really when question Sterigenics for predict, year in on the thinking improving

Sean Dodge

levers just the to more there volumes maybe Okay. in Aside Great. you drive can coming start improvement updates pull some can margin outlook you there? And actions cost or then in are on Nelson business? through, any some to on Nelson, the from take margins

Michael Petras

Yes.

that came that in service back. business. with sure we making in to And really As the We early we're an the had Sean, the based people place care of volumes overresourced where take eye 'XX that got did past, probably our and mentioned better position towards in the we we've volumes. on

tell would year -- going be that we improvements I as progresses. to in backfilling We'll We're that recover. see see We're work down. going get jobs will that to turnover not you we'll until many we the the business. volumes as

goal mid-XXs our time there want a us make some Sean. get service biggest mentioned. to as But volume It's comes. take sure We is the to that's that are our line That's to there, fine time. the there, we've to where It aspirations over will we're customers. when here to but the get thing ultimately

Okay? Thank you.

Operator

Windley Dave question will Jefferies. The from come next with

David Windley

on a to I strategic start Michael, bit wanted little question. more

long-term are when successful, working that new there's cobalt the around know I those I initiatives development things on, and impact these and you supply that, that, of if reactors are On what's some work like guess?

You haven't to more that supply in guess, don't you're have or MedTech this, of to you a you to discussed share? you Does what's supply? Cobalt-XX allow serve of I market for it your growth when kind Would Would get a sterilization. you and predictable serving input not I'm users I because wondering, on really rate, amount for it's far away, fairly costs? price today? notification a lever we think much certain length, that but you expect more for volume stable lower compete the

Michael Petras

Yes. David, thanks for the question.

capacity So really the just cobalt Power with folks around Group, is familiar, suppliers, as more Ontario with program are working programs longest-term working for our focused some which one Westinghouse. we're as aren't well of as our that getting there OPG, development

time. with to the market keep goal over able programs to growth Our up with be these is

maintenance replaces if portion work, more will will, a our global So it's being additional out of that chain. retired. reactors flexibility you also capacity in existing there'll just of bring longer-term some or But service that then supply be out it importantly, for to for go

to the with David, So over growth it's keep market long ultimately, run. we up think needed the

David Windley

Okay.

half? up have patterns volume you and Do they news. the seeing, destocking maybe on your you of a any quantification And destocking question. have little getting into you're that's order that of order tighten second of it's the any Sterigenics it that Sean's need that Okay. to emphasized on might volume the you correlation to much -- up How kind not underlying the The like more bit to do following sounds visibility worse, in do, then and comfort you your patterns, MedTech customers? start the give good

Michael Petras

the pretty it's who customers David, as your supply health the as Yes, distribution chain systems. channels inventory, complicated with well have their

example get and of not I sorry, MedTech to the it in saw are I seeing in "Listen, $XXX with seeing inventory CEO, year out worse, this year and I multiple late took We customer I'm of said, year it it are stated. we of customers. we be, as the the he working major on back met focused beginning right? So would across one actually, was million -- One half capital," that, the

of who space get bioprocessing that as I as it out back below. people think and trying or and slightly pre-COVID where you the follow space taking are many MedTech see well, to well levels to

pockets that, pretty us we're are seeing little a feel get volumes year mentioned, to a it to as it's feel us, well. to We're stabilize. be which recovery. seeing good draw in time R again, not the but calling able I visibility of David, come, of the more will, if seeing about to margin starting in If tied not We're going between position see great our service We're very we a because squared, some bit are We get and correlation in As we of will we're Sterigenics, for that it ability. the But volumes. not over to get help worse. the where on worse. improvement we really and confident you

Operator

Sergott Barclays. Luke with from come will question next The

Luke Sergott

to want bioprocessing after the destocking. it seeing I side on I up dealing that and with the with on the we're Great. follow mean with devices.

over use have like framework? full like that, you call you're I -- there so from and we as a anything the understand you way back on stocked could this -- any and up but something kind how where X down, that's in timing, months, that that of as stocked? just a like get a Or history, magnitude like not ever to estimate they're working there going can has been to can cadence, is have much guys going a is been seen from normal we year So this like

Michael Petras

Luke, you I all with unfortunately, we can't. Like it. of struggling are think

they're companies look you As device. med global at multiple pharma its with nature, got right, these they've in pharma and product companies, lines big MedTech and

filings on try conversations hand, We best at we their We do can. look have them. their around with inventory at to and their look we levels, job the sales -- days And see looking we've worse. of a having talked our tell base. to with it lot But don't They're same the would our through getting that you, struggles investors. we I customer public just we

would want channels. be that we the leave that through work with throughout So part overall to I continue you as to this the

Luke Sergott

All on right. just margin margin the Great. then flat And guidance, year-over-year.

year? from more accelerates Is if there. volumes the your pacing back from to growth the and up margins. in throughout the obviously, guys getting the bucket in any year, an investment margin can you As the the and we're why levels back takes -- like come there not I'm the normalized throughout But wondering there there back dynamics half pick just the should there standpoint, out puts

Michael Petras

Yes.

I look margins think -- time, XX-plus at at improvement. slightly XXXX. 'XX minutes XX%. more dollar driving I of would are not as right rate expecting really lead But over where operating flat help we consistent focused margin I us the ago, necessarily So percent. our with if now, But margins XX will our guide growth, that mentioned expansion. leverage, is that it guides We're just over you you in with on look pretty margin 'XX, That's at kind and when get

Operator

will next from Brett KeyBanc. come question Fishbin The

Brett Fishbin

walk you around one thoughts for just commentary expectation the I'm Just on step-up some proceed gave revenue a around performance Nelson and full more if in start the in some year? wanted more could Nordion on little Labs give the to Nelson think the think could But Labs year and just growth off on through I moving you to bit into hoping if whether follow-up XQ maybe guidance. pieces, particularly XXXX? could about how you phasing. the and of

Michael Petras

recovery. think all on volume I Brett, the predicated it's Yes.

pluses that's minuses remarks, I given. and As guide in the the stated around we've my that

on business in We continue Nelson had offset expect improve the our to growth over has time. able volume will to RCA We've of us help side. sterility been some good the

the lightest mentioned, MDR Nordion for first the Nordion, it performer On some quarter, because, of but year consistent over a that's we're was know, It quarter, be a be timing out I've As what will will compliance a quarter. but rate to be result also the played the us. going that's overall, slow will -- really slightly in last you But Nordion business. saw what last of than saw growth last better year as in year you you out.

Brett Fishbin

I right. Maybe a just bit then had. if the just free how thinking could one for All cash should follow-up be give And you about little on more we setup flow XXXX.

thinking anything that you about going? you moving of the XXXX outside ongoing projects that should pretty changing obviously, the or we XXXX a had there a think CapEx maybe big have be piece adjustment I for is in around settlement, but outside significantly that, of

Jonathan Lyons

for the favorable do cash question. year. thanks flow see Brett, a We It's the for on position Yes. free Jon Lyons.

we in going inside pieces settlement, of think $XX million as or into when I that million A moving around look I the you are pull $XX XXXX. XXXX. couple out somewhere

settlement do have out Number the one, we Georgia in that paid January.

And piece. will then interest is elevated. taxes to for to the moving elevated a going slightly year that's be be So last slightly compared and

really we'll less EBITDA cash, very have capital side, on flip generating the a and cash focused said flow, we'll keep on growth coming into the we we performance QX, as of before, as CapEx And flow it. see cash 'XX. as accelerate move next -- I into we down over couple years, 'XX in driving and and we're And we the headwind some On will going year. free that will and free generate of have our working some

Operator

The with JPMorgan. question Woodring will Casey next come from

Casey Woodring

that high could NESHAP could to yes, on year. is then step Is down much finalized now million a And many the of $XXX and how capacity guide, you -- the repeating? you for on ruling year million us versus potentially? Just will enhancements CapEx how a this And elevated EO these that programs mentioned year take up underway. projects give if that Can this development just $XXX costs the the XXXX. in facility sense cobalt the not that or just number drive then us are break down the floor to maybe expansion follow CapEx the this you just for of

Michael Petras

year, guess XX one best can. on try to $XXX question compounds. million out We're we So million Casey, guide to I around to as CapEx. got biggest years expecting we We've cobalt investment $XXX there the as of significant the answer be that. for you $XX I'll stated, got in a is about GFE. year, The this the and this year this million development last

and to we position on that feel to feel giving the we how took As to in a incremental sometime far this We're what of expected we we're the requirements. Again, could challenges ability be government. as cost could exactly final on There by our guide on where very good guide from. we for the overall, about hear are But that know our meet on we pretty month something the that it based March. comes But emission XXXX. waiting today, pretty on EPA. confident trying the depending approach industry-leading the March. of NESHAP, NESHAP the It earlier cap be we're resolve in from expect for

I got missed I your think in were questions, there. several if sorry I'm there I all one.

Casey Woodring

No, was helpful. that Yes.

as Just a too. follow-up,

capacity X So you 'XX. in Sterigenics completed expansion projects

left finish. have to X You

that quarter. coming online one you think have those mentioned you last conference at of our month this I

expectations once the what normalizes? softer the projects. if are And easier in all and through walk at your of increase overall on would if then the utilization quantify then weighing comp expansion end for an demand XXXX, and if Just environment these capacity you could volume you Sterigenics curious create can by margins is capacity

Michael Petras

Okay.

in So programs, have guide get into happens first I then into mean live that X everyone, will that's generate expansions process the yes, 'XX our of don't do we before and at is. And the to come market. to but incremental would those in we the of late and we'll that. as capacity X But at XX% in we try much our for get quarter. doesn't that's this have year projects That ones. those XXXX it look of commitments customers we We you them coming will other of one one tell capacity the what particulars approximately again, for how for overall, that

utilization, I XX%. think your was We other about The of I all got think, capacity I target them. question.

Operator

from with will Citi. come Patrick The Donnelly next question

Patrick Donnelly

on this Michael, know to -- this It the algorithm. the to of low the X% is on pricing that all -- maybe I timing side. kind want of little Is going some X.X% you be just that touched like stuff. year that long-term sounds of a just one just more Is hearing I from you're at end business. sounds forward beyond of a right talk kind that you is going the on through the on what dragging customers what's the Nordion way hearing again, think It down that to bit. core to pricing? well? piece year And like maybe as are what But about little just

Michael Petras

very just range, the it it's referenced. that a the X%. end lower 'XX. of the could price soften you it's Yes. rolled just signal a question. for Nordion Patrick, XXXX, in just little point been performance The to the just off. contracts to thanks it on for strong we term, X.X% you Yes, of by longer-term be bit We year, in feel wanted driven had confident We Nordion which to the nature this would longer what

are we to concerned We value customers. offer long-range based our the our to not proposition price ability generate about on

Patrick Donnelly

top with mean, intel the the thinking there. a had I like helpful. into it Okay. And the That's concentrated past sounds what holding there's any of you couple Obviously, kind pretty or maybe of investors. some good insight at quarters about over dialogue things things you up top, holdings them seem you initial given like holders terms a of good the the amount? like just that secondaries, in concentration of with can terms chat potentially like that in of of kind are

Michael Petras

Yes. they're Well, on board. our

we how not sure company. and they're what equity they're do. being that. of thoughtful I It's stock. a of very going it they're great that the day, been So with investment private manner. when quite sell to overall, their they they're it, make shareholders, sell not in over position, in want the They chat decisions supportive as they to down. firms, on a end for about they'll all a They're doing very the ramp And time, make to do eventually that's bit. they're our reckless on they've reckless thoughtful them. At got very them the But know, They're be they

Operator

with come Research. The next Polark question will from Michael Wolfe

Michael Polark

Nordion the XQ, you bus could a comment, drive paint but thematic the look, could I hear we range through.

So quite like and not what's high? that at revenue $XX or the the right Nordion in 'XX that million, million, something $XX for number first Should look quarter? 'XX, like we

Michael Petras

Yes.

it. get won't XXXX, year. quarter. from the on to way about a be will the came Michael, last high I into -- we -- hardly into because last It's inventory particulars wasn't businesses not recall, up low going individual year as all year, be by any had abnormally is last position., we're It really just we're think would It year. at So as As coming we you in

Michael Polark

tax And The high? expense, to is tax was it follow-up a bridge then I'm on do the year, last get this is it there rate year. 'XX here, tax. And excluded Jon, trying The question interest below is comment and the just clear expense line included why so path lower? the is it's interest Illinois, to on the to 'XX. on

do million $XX million. if probably Illinois I interest is $XXX of that, year, last expense If

from and on some in cycling $XXX $XXX at million generally an point you're So just modeling I'm just balance, the going now fully want $XXX in the to bridge million. to you else Is draw What higher 'XX million understand or I are of incremental there? to overall kind the on guiding rates year? interest? is 'XX on that

Jonathan Lyons

understand and make Yes. clarify. Thanks folks sure just And that want for the to I question.

outlook, able tax the deduct a future bit which the rate. Continuing why and U.S. higher elevated have being tax a out -- our that it's not our expense against trick higher have to because comparison EPS us grow take right, we an of to rate When at baseline and leading that the new today it. to a is of And we our improve look interest interest these interest tax like for $X.XX income expense excess the and drive yes, in things on there make lowering to that time we that, use here that valuation for and to for adjustment a to adjusted sticks reported little get tax on this, reducing leads taxable is tax $X.XX. rate is deduct over a we up allowance rate. The the tax help we XXXX. deductions path purposes adjustments, As will basis the ability U.S. our can't benefit, we to

Michael Petras

just other that Any last guide no contemplated put I $XXX would that's Is the of timing Mike, add, there's guide. also to full out the loan out incremental that and to number $XXX operator? new So debt the year other thing and million last million, And $XXX year it, finished at interest the for in is we run million just the the the Chuck? in we that that of a questions, rate higher rolling year environment. compared

Operator

pass That is it. closing call for remarks. any Petras I over would like to the to back Mr.

Michael Petras

everybody, you, Thank for Great. getting this morning. together

excited accomplished what really of and We're XXXX. in optimistic we're As proud see, we XXXX. about you can

business here care. to play We role have health a in a critical great

We relationships. have sticky customer

safe operate. we the the day out. providing bring value in, we're where environment customers patients to employees, continue our day really, But and a We to communities for real our

we're you we a forward of you, Thank to look and great all conversations XXXX. day. Bye-bye. with more really proud in doing, team So what the have is and

Operator

Thank presentation. has you for conference today's now concluded. attending The

now may You disconnect.

Sotera Health (SHC) 27 Feb 242023 Q4 Earnings call transcript