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What changed in Sotera Health Co's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Sotera Health Co's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+427 added−490 removedSource: 10-K (2026-02-24) vs 10-K (2025-02-27)

Top changes in Sotera Health Co's 2025 10-K

427 paragraphs added · 490 removed · 356 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

59 edited+10 added−48 removed68 unchanged
Biggest changeExtensive capital, technical expertise and regulatory knowledge are required to build and maintain our facilities. We estimate that building a new facility may cost over $50 million and the cost may vary depending on sterilization modality, in addition to requiring extensive and complex licensing approval and regulatory compliance processes.
Biggest changeWe estimate that building a new facility to cost over $50 million and the cost may vary depending on sterilization modality, in addition to requiring extensive and complex licensing approval and regulatory compliance processes. 7 Table of Contents By leveraging a global operating system, we drive operational excellence across our network of facilities to achieve high levels of safety, quality, operating efficiency and customer satisfaction to provide a uniform customer experience.
Nordion Nordion is the leading global provider of Co-60 used in the sterilization and irradiation processes for the medical device, pharmaceutical, food safety, and high-performance materials industries, as well as in the treatment of cancer. Co-60 is a radioactive isotope that emits gamma radiation that sterilizes items by killing contaminating micro-organisms.
Nordion Nordion is the leading global provider of Co-60 used in sterilization and irradiation processes for the medical device, pharmaceutical, food safety, and high-performance materials industries, as well as in the treatment of cancer. Co-60 is a radioactive isotope that emits gamma radiation that sterilizes items by killing contaminating micro-organisms.
Through Nordion, we are subject to additional Canadian regulations, including Transport Canada regulations for the Transportation of Dangerous Goods, CNSC regulations for the General Nuclear Safety and Controls, Health Canada requirements for drugs and devices and CNSC and Canadian Department of Foreign Affairs and International Trade requirements for import and export.
Through Nordion, we are subject to additional Canadian regulations, including Transport Canada regulations for the Transportation of Dangerous Goods, CNSC regulations for General Nuclear Safety and Controls, Health Canada requirements for drugs and devices and CNSC and Canadian Department of Foreign Affairs and International Trade requirements for import and export.
Specifically, these operations include some of our sterilization and product testing activities that may constitute “manufacturing” activities and are subject to FDA requirements. These requirements include site, contract drug manufacturer and supplier of active pharmaceutical ingredients registration and listing and manufacturing requirements. Regulations issued by the Occupational Safety and Health Administration (“OSHA”), the U.S.
Specifically, these operations include some of our sterilization and product testing activities that may constitute “manufacturing” activities and are therefore subject to FDA requirements. These requirements include site, contract drug manufacturer and supplier of active pharmaceutical ingredients registration and listing and manufacturing requirements. Regulations issued by the Occupational Safety and Health Administration (“OSHA”), the U.S.
In addition to the nuclear aspect of our products, many of the products that we process are medical devices directed for human use or products used in the manufacture of medical devices that are directed for human use. Our facilities hold various ISO certifications including ISO 9002, 9001, 13485, 14001, 45001 and 17025.
In addition to the nuclear aspect of our products, many of the products that we process are medical devices directed for human use or products used in the manufacture of medical devices that are directed for human use. Our facilities hold various ISO certifications including ISO 9001, 13485, 14001, 45001 and ISO 17025.
These include tests that assist the client in: ◦ Product design ◦ Material selection ◦ Biological safety evaluation ◦ Toxicological risk assessment ◦ Sterilization modality selection and sterilization validation ◦ Cleaning and disinfection validation (for reusable devices) ◦ Package barrier properties ◦ Distribution simulation ◦ Filtration efficiency and physical functionality of PPE (including surgical facemasks, N95 respirators, gowns, drapes and other PPE) We provide sterilization modality selection and sterilization validation services for a variety of sterilization modalities, including the three major modalities offered by Sterigenics—gamma irradiation, EO processing and E-beam—allowing us to serve our customers in multiple areas. 12 Table of Contents • Expert Advisory .
These include tests that assist the client in: ◦ Product design ◦ Material selection ◦ Biological safety evaluation ◦ Toxicological risk assessment ◦ Sterilization modality selection and sterilization validation ◦ Cleaning and disinfection validation (for reusable devices) ◦ Package barrier properties ◦ Distribution simulation ◦ Filtration efficiency and physical functionality of PPE (including surgical facemasks, N95 respirators, gowns, drapes and other PPE) We provide sterilization modality selection and sterilization validation services for a variety of sterilization modalities, including the three major modalities offered by Sterigenics—gamma irradiation, EO processing and E-beam—allowing us to serve our customers in multiple areas. • Expert Advisory .
We also have facilities in Itasca, Illinois; Leuven, 14 Table of Contents Belgium; Pleasant Prairie, Wisconsin; Wiesbaden, Germany, and seven other laboratories embedded in our Sterigenics sterilization facilities in North America, Europe and Asia. Intellectual Property Our businesses rely on certain proprietary technologies. Most of the proprietary technologies used in our businesses are unpatented.
We also have facilities in Itasca, Illinois; Leuven, Belgium; Pleasant Prairie, Wisconsin; Wiesbaden, Germany, and seven other laboratories embedded in our Sterigenics sterilization facilities in North America, Europe and Asia. 11 Table of Contents Intellectual Property Our businesses rely on certain proprietary technologies. Most of the proprietary technologies used in our businesses are unpatented.
Certain of our employees, primarily outside of the United States, are represented by labor unions or work councils and are negotiating or working under collective bargaining or similar agreements, some of which are subject to periodic renegotiation. One labor union within the U.S., representing approximately 40 employees, is covered under a collective bargaining agreement.
Certain of our employees, primarily outside of the United States, are represented by labor unions or work councils and are negotiating or working under collective bargaining or similar agreements, some of which are subject to periodic renegotiation. One labor union within the United States, representing approximately 40 employees, is covered under a collective bargaining agreement.
In 2024, our customers included over 40 of the top 50 medical device companies and nine of the top ten global pharmaceutical companies (based on revenue). Our services are an essential aspect of our customers’ manufacturing processes and supply chains, helping to ensure sterilized medical products reach healthcare practitioners and patients.
In 2025, our customers included over 40 of the top 50 medical device companies and nine of the top ten global pharmaceutical companies (based on revenue). Our services are an essential aspect of our customers’ manufacturing processes and supply chains, helping to ensure sterilized medical products reach healthcare practitioners and patients.
The use of EO for the reduction of bioburden on or sterilization of an approved list of products, including medical devices, pharmaceutical products, spices, and cosmetics is regulated by the U.S. Environmental Protection Agency (“US EPA”) under the Clean Air Act (“CAA”) and the Federal Insecticide, Fungicide and Rodenticide Act (“FIFRA”).
The use of EO for the reduction of bioburden on or sterilization of an approved list of products, including medical devices, pharmaceutical products, spices, and cosmetics is regulated by the U.S. Environmental Protection Agency (“U.S. EPA”) under the Clean Air Act (“CAA”) and the Federal Insecticide, Fungicide and Rodenticide Act (“FIFRA”).
We provide comprehensive outsourced terminal sterilization solutions to help our customers in the pharmaceutical industry meet regulatory requirements. Our sterilization expertise covers a variety of pharmaceutical drug products, such as active pharmaceutical ingredients, pre-filled syringes, drug components, excipients and primary packaging and components.
We provide comprehensive outsourced terminal sterilization solutions to help our customers in the pharmaceutical industry meet regulatory requirements. Our sterilization expertise covers a variety of pharmaceutical drug products, such as active pharmaceutical ingredients, pre-filled syringes, drug components, excipients and primary packaging and components. • Food and agricultural products .
Nordion’s customers include outsourced contract sterilizers, including Sterigenics, medical device manufacturers that sterilize their products in-house and other specialized medical device manufacturers. Approximately 90% of Nordion’s revenues for the year ended December 31, 2024 were from customers under multi-year contracts.
Nordion’s customers include outsourced contract sterilizers, including Sterigenics, medical device manufacturers that sterilize their products in-house and other specialized medical device manufacturers. Approximately 90% of Nordion’s revenues for the year ended December 31, 2025 were from customers under multi-year contracts.
We also provide regulatory and technical service expertise to improve the risk profiles and enhance effectiveness of gamma processing operations. Without this radioactive material, gamma sterilization would not be 9 Table of Contents possible on the global scale at which it is used today. We are integral to our customers’ operations due to highly coordinated and complex installation processes.
We also provide regulatory and technical service expertise to improve the risk profiles and enhance effectiveness of gamma processing operations. Without this radioactive material, gamma sterilization would not be possible on the global scale at which it is used today. We are integral to our customers’ operations due to highly coordinated and complex installation processes.
We also create succession plans and individual development plans to ensure we have the team needed for the future. As of December 31, 2024, we employed over 3,000 employees worldwide.
We also create succession plans and individual development plans to ensure we have the team needed for the future. As of December 31, 2025, we employed over 3,000 employees worldwide.
In the United States, our supplier maintains FIFRA registrations for EO as a medical device sterilant for users of EO across the United States. On March 14, 2024, the US EPA announced final rules under the National Emission Standards for Hazardous Air Pollutants (“NESHAP”) to govern EO sterilization facilities in the United States.
In the United States, our supplier maintains FIFRA registrations for EO as a medical device sterilant for users of EO across the United States. On March 14, 2024, the U.S. EPA announced final rules under the National Emission Standards for Hazardous Air Pollutants (“NESHAP”) to govern EO sterilization facilities in the United States.
Once a product has received regulatory approval and is in production, Nelson Labs provides ongoing quality control testing, including production batch verification testing and environmental testing of the client’s production systems and facilities, the requirements for which vary based on applicable standards.
Once a product has received regulatory approval and is in production, Nelson Labs provides ongoing quality control testing, including production batch verification testing and environmental testing of the client’s production systems and facilities, the requirements for which vary based on 10 Table of Contents applicable standards.
We have a proactive environmental health and safety (“EH&S”) program and a culture of safety and quality across all business units, and we employ a Senior Vice President of Environmental, Health and Safety who reports directly to the Chief Executive Officer and has a team of approximately 50 employees.
We have a proactive environmental health and safety (“EH&S”) program and a culture of safety and quality across all business units, and we employ 12 Table of Contents a Senior Vice President of Environmental, Health and Safety who reports directly to the Chief Executive Officer and has a team of approximately 50 employees.
Most of our services are necessary for our customers to satisfy applicable government requirements. We are a trusted partner to approximately 5,000 customers in over 50 countries. We strive to give our customers confidence that their products meet regulatory, safety and effectiveness requirements.
Most of our services are necessary for our customers to satisfy applicable government requirements. We are a trusted partner to customers in over 50 countries. We strive to give our customers confidence that their products meet regulatory, safety and effectiveness requirements.
We provide microbial reduction and microbial remediation services for food and agricultural products. Generally, in a microbial reduction process, products are exposed to lower levels of treatment than in a sterilization process. This process is not intended to render a product free of viable organisms but rather to reduce their number.
We provide microbial reduction and microbial remediation services for food and agricultural products. Generally, in a microbial reduction process, products are exposed to lower levels of treatment than in a sterilization process. This process is not intended to render a product free of viable organisms but rather to reduce their number. • Commercial, advanced and specialty applications .
We 16 Table of Contents consistently meet or exceed regulatory emissions control requirements, although we have periodically experienced isolated instances of emissions exceeding applicable standards or other non-compliance, none of which we believe were material.
We consistently meet or exceed regulatory emissions control requirements, although we have periodically experienced isolated instances of emissions exceeding applicable standards or other non-compliance, none of which we believe were material.
For 2025, we expect capital expenditures of approximately $46 million related to environmental facility enhancements across all facilities within our business, and we anticipate continuing to invest in environmental facility enhancements in the future.
For 2026, we expect capital expenditures of approximately $51 million related to environmental facility enhancements across all facilities within our business, and we anticipate continuing to invest in environmental facility enhancements in the future.
Sterigenics also provides decontamination services for the food industry. Additionally, Sterigenics provides various advanced applications for other organizations and companies, including the USPS and semiconductor manufacturers. Our customers select the sterilization method that meets the needs of their products and requirements of regulators and we deliver sterilization services according to their customer-specific protocols.
Additionally, Sterigenics provides various advanced applications for other organizations and companies, including the USPS and semiconductor manufacturers. Our customers determine the sterilization method that meets the needs of their products and requirements of regulators and we deliver sterilization services according to their customer-specific protocols.
The SEC maintains an internet website, https://www.sec.gov , that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 17 Table of Contents
The SEC maintains an internet website, https://www.sec.gov , that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
We also have a license in the United States to distribute EO to self-supply should the need arise and we determine the need to make the necessary investments. Sterigenics Facilities With 48 facilities in 13 countries, our global network of sterilization facilities represents a significant competitive advantage.
We also have a license in the United States to distribute EO to self-supply should the need arise and we determine the need to make the necessary investments. Sterigenics Facilities With 48 facilities in 13 countries, our global network of sterilization facilities represents a significant competitive advantage. We serve many of our sterilization customers at more than one facility.
Sterigenics Suppliers Sterigenics primarily purchases its supply of Co-60 sources, the key input into the gamma sterilization process, from Nordion. Our supply of Co-60 sources is at times impacted by the global availability of Co-60. Our supply of EO is sourced from various suppliers around the world.
Sterigenics Suppliers Sterigenics primarily purchases its supply of Co-60 sources, the key input into the gamma sterilization process, from Nordion. Our supply of EO is sourced from various suppliers around the world.
We employ approximately 600 scientists, technicians and service specialists, creating a substantial 13 Table of Contents competitive advantage in terms of expertise. Our experts serve in predominant roles on a number of standards writing organizations, including the United States Pharmacopeia, AAMI, American Society of Testing and Materials and the ISO.
We employ approximately 600 scientists, technicians and service specialists, creating a substantial competitive advantage in terms of expertise. Our experts serve in predominant roles on a number of standards writing organizations, including the United States Pharmacopeia, Association for the Advancement of Medical Instrumentation, American Society of Testing and Materials and the ISO.
In addition, FDA regulations dictate the acceptable amount of EO residue on different types of EO-processed products. Most other countries in which we operate have similar EH&S and worker exposure regulations. Our EO sterilization facilities evacuate EO from the sterilization chambers and aeration rooms.
In addition, FDA regulations dictate the acceptable amount of EO residue on different types of EO-processed products. Most other countries in which we operate have similar EH&S and worker exposure regulations. Our EO sterilization facilities evacuate EO from the sterilization chambers and aeration rooms in a manner designed to meet applicable regulatory requirements in the jurisdictions in which we operate.
We have device, facility, and specific product registrations with North American (Health Canada and the FDA) and European Drug and Device health regulators. These regulators exert oversight through requirements for a product registration and direct audit of our operations.
We have device, facility, and specific product registrations with North American (Health Canada and the Food and Drug Administration (“FDA”) and European Drug and Device health regulators. These regulators exert oversight through requirements for product registration and direct inspection of our operations.
We also face competition from other technologies. Our services generally compete on the basis of the quality of technology and services offered, level of expertise in each of the major sterilization methods, level of expertise in the applicable regulatory requirements, proximity to customers and the cost of services.
Our services generally compete on the basis of the quality of technology and services offered, level of expertise in each of the major sterilization methods, level of expertise in the applicable regulatory requirements, proximity to customers and the cost of services.
Specifically, our medical device lab testing services include microbiology, biocompatibility and toxicology assessments, material characterization, sterilization validation, sterility assurance, packaging validation and distribution simulation, reprocessing validations, facility and process validation and performance validation and verification of PPE barriers and material.
We provide microbiological and analytical chemistry laboratory tests across the medical device and pharmaceutical industries. Specifically, our medical device lab testing services include microbiology, biocompatibility and toxicology assessments, material characterization, sterilization validation, sterility assurance, packaging validation and distribution simulation, reprocessing validations, facility and process validation and performance validation and verification of PPE barriers and material.
We may face liability and reputational risks even if we comply with all laws and regulations.” EO Regulatory Overview In addition to general environmental laws and regulations, EO facilities and the EO sterilization process are subject to specific regulatory requirements under federal laws in the United States and the laws of the countries in which we operate, including European Union regulations.
EO Regulatory Overview In addition to general environmental laws and regulations, EO facilities and the EO sterilization process are subject to specific regulatory requirements under federal laws in the United States and the laws of the countries in which we operate, including European Union regulations.
Once the conversion to Co-60 is complete, the targets are extracted from the nuclear reactor while the reactor is shut down and shipped to Nordion to be processed into Co-60 sources to be sold to customers.
Once the conversion to Co-60 is complete, the targets are extracted from the nuclear reactor, often while the reactor is shut down and shipped to Nordion to be processed into Co-60 sources to be sold to customers. Nordion Products Co-60 is sold to customers by its level of radioactivity as measured in curies.
Nordion provides Co-59 targets to its Canadian and Russian reactor suppliers, manufactured to proprietary specifications customized for each supplier. We also acquire a portion of our Co-60 supply from reactors that produce Co-60 in Argentina, China and India.
The substantial majority of our Co-60 material has historically been produced under multi-year contracts with nuclear reactor operators in Canada and Russia. Nordion provides Co-59 targets to its Canadian and Russian reactor suppliers, manufactured to proprietary specifications customized for each supplier. We also acquire a portion of our Co-60 supply from reactors that produce Co-60 in Argentina, China and India.
We utilize X-ray irradiation at one of our sterilization facilities for bio-hazard reduction for the United States Postal Service (“USPS”). We are also investing in NO2-based sterilization and other technologies, which have been effective in sterilizing of prefilled syringes, drug-device combination products and custom implants. Sterilization Applications Sterigenics primarily provides sterilization services for medical device manufacturers and the pharmaceutical industry.
We are also investing in NO2-based sterilization and other technologies, which have been effective in the sterilization of prefilled syringes, drug-device combination products and custom implants. Sterilization Applications Sterigenics primarily provides sterilization services for medical device manufacturers and the pharmaceutical industry and also provides microbial reduction services for the food industry.
A gamma irradiation system is the infrastructure that houses the Co-60 sources and makes up a part of a sterilization and warehousing facility. We have designed and built over 100 of the estimated 290 large scale irradiation systems active globally.
A gamma irradiation system is the infrastructure that houses the Co-60 sources and makes up a part of a sterilization and warehousing facility. There are over 200 large scale irradiation systems active globally, with over 120 of them built by Nordion.
This dynamic contributes to low customer turnover and long-term relationships. In addition, Sterigenics has achieved high historical customer retention and renewal rates—Sterigenics has 100% renewal rates of its top ten customers for more than five consecutive years, and an average tenure of over a decade with its top 25 customers over the last five years—and minimal customer concentration.
Sterigenics has achieved high historical customer retention and renewal rates—Sterigenics has 100% renewal rates of its top ten customers for more than five consecutive years, and an average tenure of over a decade with its top 25 customers over the last five years—and minimal customer concentration, as no single customer accounted for more than 10% of our total revenues.
Our pharmaceutical lab testing services include microbiology, biocompatibility and toxicology assessments, extractables and leachables evaluations of pharmaceutical containers, sterilization validation, sterility assurance, packaging validation and distribution simulation and facility and process validation.
Our pharmaceutical lab testing services include microbiology, biocompatibility and toxicology assessments, extractables and leachables evaluations of pharmaceutical containers, sterilization validation, sterility assurance, packaging validation and distribution simulation and facility and process validation. Nelson Labs Customers Nelson Labs serves approximately 3,000 customers, including many leading medical device manufacturers and pharmaceutical companies.
Nuclear Regulatory Commission (“NRC”) and other agencies also require that equipment used at our facilities be designed and operated in a manner that is safe and with proper safety precautions and practices when handling, monitoring and storing EO and Co-60. 15 Table of Contents We strive to comply with these regulatory requirements and could be subject to significant civil and criminal fines and penalties for non-compliance.
Nuclear Regulatory Commission (“NRC”) and other agencies also require that equipment used at our facilities be designed and operated in a manner that is safe and with proper safety precautions and practices when handling, monitoring and storing EO and Co-60.
We have also introduced innovative, advanced processing systems for outsourced sterilization that are designed to enhance operating efficiencies, improve turnaround times and provide for greater processing flexibility without sacrificing quality, consistency or reliability.
We have also introduced innovative, advanced processing systems for outsourced sterilization that are designed to enhance operating efficiencies, improve turnaround times and provide for greater processing flexibility without sacrificing quality, consistency or reliability. More than 90% of Sterigenics’ revenues for the year ended December 31, 2025 were from customers under multi-year contracts.
Nordion Facilities Nordion’s operations are supported by a facility in Kanata, Canada dedicated to processing and shipping cobalt, and a European distribution facility in Milton, United Kingdom. Lab Testing and Advisory Services Nelson Labs Lab testing and advisory services are necessary across the medical device and pharmaceutical product lifecycles to evaluate and ensure the safety and effectiveness of healthcare products.
Nordion Facilities Nordion’s operations are supported by a facility in Kanata, Canada dedicated to processing and shipping cobalt, and a European distribution facility in Milton, United Kingdom. Lab Testing and Advisory Services Nelson Labs Nelson Labs is a global leader in outsourced microbiological and analytical chemistry testing services for the medical device and pharmaceutical industries.
Our primary terminal sterilization technologies include: 6 Table of Contents We provide gamma irradiation services at 23 of our facilities, EO processing services at 17 of our facilities and electron beam (“E-beam”) irradiation services at eight of our facilities. We also invest in alternative modalities to serve our customers.
We continue to invest in and develop our capabilities and our current methods of sterilization and we continue to explore new alternative modalities and technologies. We provide gamma irradiation services at 23 of our facilities, EO processing services at 17 of our facilities and electron beam (“E-beam”) irradiation services at eight of our facilities.
Nuclear Reactor Operators Given the timeline required to produce Co-60, forecasting supply and working closely with nuclear power reactor operators to manage the amount and timing of shipments represents an important business capability of Nordion. 10 Table of Contents The amount of Co-60 supply is ultimately determined by the number of nuclear reactors that are capable of producing Co-60 at a given point in time.
Nuclear Reactor Operators Given the timeline required to produce Co-60, forecasting supply and working closely with nuclear power reactor operators to manage the amount and timing of shipments represents an important business capability of Nordion.
To reduce the risk of noncompliance, we employ engineering and procedural controls and pollution control equipment and undertake internal and external regulatory compliance audits at our facilities.
We strive to comply with these regulatory requirements and could be subject to significant civil and criminal fines and penalties for non-compliance. To reduce the risk of noncompliance, we employ engineering and procedural controls and pollution control equipment and undertake internal and external regulatory compliance audits at our facilities.
With our industry-recognized scientific and technological expertise, we help promote the safety of millions of patients and healthcare practitioners around the world. Across our 62 facilities worldwide, we have over 3,000 employees who are dedicated to safety and quality. Sotera Health Company was incorporated in Delaware in November 2017 as the parent company for Sterigenics, Nordion and Nelson Labs.
With our industry-recognized scientific and technological expertise, we help to ensure the safety of millions of patients and healthcare practitioners around the world. Across our 62 facilities worldwide, we have over 3,000 employees who are dedicated to safety and quality. Our Businesses Sterilization Services Our sterilization services business is comprised of Sterigenics and Nordion.
We believe we have the most extensive expertise in Co-60 logistics. There is a significant regulatory burden in the production, management and transportation of fleets of containers of Co-60 sources. Our transportation routes and carriers are highly controlled, and we provide regular and comprehensive training for employees and carriers who are involved in moving the Co-60 globally.
We believe we have the most extensive expertise in Co-60 logistics. There is a significant regulatory burden in the production, management and transportation of fleets of containers of Co-60 sources.
In most cases, customers are serviced from more than one facility. • Medical device sterilization . Medical device sterilization is a regulatory requirement in many jurisdictions and an important and last step in the manufacturing of healthcare products such as medical protective barriers, including PPE, procedure kits and trays, implants, syringes, catheters and wound care products.
Medical device sterilization is a regulatory requirement in many jurisdictions and an important and last step performed prior to clinical use for many healthcare products such as procedure kits and trays, implants, syringes, catheters, wound care products and medical protective barriers including PPE. • Pharmaceuticals .
More than 90% of Sterigenics’ revenues for the year ended December 31, 2024 were from customers under multi-year contracts. 8 Table of Contents Sterigenics Competition We compete globally with Applied Sterilization Technologies, a segment of STERIS plc, as well as other smaller or regional outsourced sterilization companies. In addition, some manufacturers have invested or are investing in in-house sterilization capabilities.
Sterigenics Competition We compete globally with Applied Sterilization Technologies, a segment of STERIS plc, as well as other smaller or regional outsourced sterilization companies. In addition, some manufacturers have invested or are investing in in-house sterilization capabilities. We also face competition from other technologies.
We also design, install and maintain gamma irradiation systems, which include radiation shielding, a series of conveyors and control systems that are designed to expose products to the correct gamma radiation dosage in a safe and efficient manner.
Our transportation routes and carriers are highly controlled, and we provide regular and comprehensive training for employees and carriers who are involved in moving the Co-60 globally. 8 Table of Contents We also design, install and maintain gamma irradiation systems, which include radiation shielding, a series of conveyors and control systems that are designed to expose products to the correct gamma radiation dosage in a safe and efficient manner.
Nelson Labs Competition We primarily compete in the global lab testing services market with a range of providers, from national or international players to other smaller regional or niche laboratories.
We have recurring and stable customer relationships and benefit from minimal customer concentration, as no single customer accounted for more than 10% of our total revenues. Nelson Labs Competition We primarily compete in the global lab testing services market with a range of providers, from national or international players to other smaller regional or niche laboratories.
Our Nuclear Substance Processing Facility Operating license, CNSC Export license and CNSC Device servicing licenses for our Kanata facility were renewed in October 2015 for a 10-year period, and Nordion is currently engaged in the renewal process for these licenses set to expire in 2025.
Our Nuclear Substance Processing Facility Operating license, CNSC Export license and CNSC Device servicing licenses for our Kanata facility were renewed in September 2025 for a 25-year period.
We go to market leveraging our global footprint and an extensive range of services under our Nelson Labs brand. We have established ourselves as a critical partner for our customers through our delivery of high-quality services, quick testing turnaround times, responsiveness, high-touch support and easy accessibility to our science and service teams.
Nelson Labs is seen as a critical partner for our customers through our delivery of high-quality services, quick testing turnaround times, responsiveness, high-touch support and easy accessibility to our science and service teams. Our microbiology and analytical chemistry services include over 900 tests.
The advanced applications sterilization industry is comprised of a large number of distinct segments that can be addressed using our services for radiation processing. Materials that undergo advanced application processes include products such as power semiconductors, polymers and gemstones.
We provide a wide range of advanced applications services for industrial materials to customers that use ionizing radiation to modify materials or products. The advanced applications sterilization industry is comprised of a large number of distinct segments that can be addressed using our services for radiation processing.
We are a global leader in outsourced microbiological and analytical chemistry testing services for the medical device and pharmaceutical industries. In addition to our testing services, our customers often call upon our experts for technical assistance, regulatory consulting and our advisory services.
Lab testing and advisory services are necessary across the medical device and pharmaceutical product lifecycles to evaluate and ensure the safety and effectiveness of healthcare products. In addition to our testing services, our customers often call upon our experts for technical assistance, regulatory consulting and our advisory services.
We may face liability and reputational risks even if we comply with all laws and regulations.” In addition to government regulation, there are standards, guidelines and requirements established by industry organizations and other non-governmental bodies that may impact our operations, such as the ISO’s limit on the permissible levels of residual EO on sterilized medical devices.
We expect to be able to satisfy any changes to applicable regulatory requirements as they evolve and are committed to doing so, although there can be no assurance that we will always be able to meet new regulatory requirements. 13 Table of Contents In addition to government regulation, there are standards, guidelines and requirements established by industry organizations and other non-governmental bodies that may impact our operations, such as the ISO’s limit on the permissible levels of residual EO on sterilized medical devices.
We estimate that the cost to replicate the facilities in our network alone could exceed $2.0 billion, in addition to investments required to meet associated technical and regulatory requirements. Our global facility network, built and expanded over several decades, is strategically located convenient to customers’ manufacturing sites and distribution hubs or routes.
Our global facility network, built and expanded over several decades, is strategically located convenient to customers’ manufacturing sites and distribution hubs or routes. Extensive capital, technical expertise and regulatory knowledge are required to build and maintain our facilities.
Nordion also 11 Table of Contents competes indirectly with other developing modalities of sterilization, such as X-ray technology, that use electricity to generate radiation and therefore do not require Co-60 sources. Nordion’s main competitors in the HSA Co-60 industry include suppliers in China, Sweden and North America that have the capability to produce medical Co-60.
Nordion also competes indirectly with other developing modalities of sterilization, such as X-ray technology, which uses electricity to generate radiation and therefore does not require Co-60 sources.
We also supply other medical equipment manufacturers and sub-contractors in the industry who require the concentrated radiation dose capabilities of HSA Co-60.
We also supply other medical equipment manufacturers and sub-contractors in the industry who require the concentrated radiation dose capabilities of HSA Co-60. Nordion Competition Nordion’s competitors in Argentina, India and Russia operate primarily in domestic markets, with a smaller portion of their production being exported, usually to countries in close proximity.
X-ray irradiation is a process in which products such as medical devices and lab ware are exposed to machine-generated radiation in the form of X-rays for the purpose of sterilization and decontamination. X-rays are similar in performance to gamma rays and are useful for processing certain materials by virtue of the high penetration capabilities of X-ray.
We also invest in alternative modalities to serve our customers. X-ray irradiation is a process in which products, such as medical devices and labware, are exposed to machine-generated radiation in the form of X-rays for the purpose of sterilization and decontamination. Final qualification is currently underway for a new X-Ray facility adjacent to an existing gamma facility.
Our operations are required to comply with the final NESHAP EO sterilizer regulation by April 6, 2026 and to conduct a compliance test and demonstrate compliance within 180 days after that date. In January 2025, the US EPA announced its final Interim Decision (“ID”) under FIFRA relating to the registration of EO for medical device sterilization.
EPA announced its final Interim Decision (“ID”) under FIFRA relating to the registration of EO for medical device sterilization.
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We completed our initial public offering and listed our shares of common stock on the Nasdaq Global Select Market (“Nasdaq”) in November 2020 under the ticker symbol “SHC.” Our Businesses Sterilization Services Our sterilization services business is comprised of Sterigenics and Nordion.
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In most cases, customers are serviced by more than one facility. 6 Table of Contents • Medical device sterilization .
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We continue to invest in and develop our capabilities and our current methods of sterilization and we continue to explore new alternative modalities and technologies.
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Materials that undergo advanced application processes include products such as power semiconductors, polymers and gemstones. Sterigenics Customers Sterigenics serves more than 2,000 customers in industries ranging from medical device and healthcare products, pharmaceuticals, food and agricultural products as well as advanced commercial materials.
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A broad range of single-use, prepackaged medical products, as well as certain consumer products, are required by government regulations to be sterile, or meet certain acceptable microbial levels when sold. These products are not manufactured in a “sterile” or “clean” environment and are therefore inhabited by potentially harmful microbes.
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The amount of Co-60 supply is ultimately determined by the number of nuclear reactors that are capable of producing Co-60 at a given point in time.
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Products must therefore be treated before shipment, either in-house by the manufacturer or by an outsourced sterilization provider such as Sterigenics. We have developed a consultative approach with medical device manufacturers that expands our service offerings beyond core product sterilization, as we believe they want value-added solutions from their outsourced sterilization partners that reach beyond the traditional scope of sterilization.
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Nordion has partnered with Westinghouse Electric Company to develop technology for production of Co-60 in Pressurized Water reactors, and recently announced that PSEG will be the first utility to produce Co-60 in the U.S. The program has the ability to scale to more reactors in the U.S. and abroad, further increasing the robustness and reliability of the global supply chain.
Removed
We offer customers a comprehensive selection of advisory services in design, testing, production and supply chain management for sterile healthcare products before, during and after the sterilization process to ensure and improve a product’s speed to market and compliance with regulatory requirements. 7 Table of Contents • Pharmaceuticals .
Added
In addition, Nordion has made a significant investment in implementing Co-60 production capability at the Darlington reactors in Ontario, a project which is nearing completion. Nordion Customers Nordion primarily serves medical device manufacturers and gamma sterilization service providers.
Removed
In addition, pharmaceutical companies are starting to market disposable delivery devices, such as auto-inject devices for epinephrine, which are combined medical device and pharmaceutical products.
Added
The competitor in Russia has historically supplied markets 9 Table of Contents in China and Europe, but has faced export challenges in recent years given the current geopolitical situation. These competitors could potentially increase their production capacity in the future, though not without significant capital investment.
Removed
As these disposable delivery devices are subject to both medical device regulations and pharmaceutical regulations, we believe these companies are looking to leading outsourced sterilization providers like us for our expertise in sterilizing these complex devices.
Added
Nordion’s main competitors in the HSA Co-60 industry include suppliers in China, Sweden and North America that have the capability to produce medical Co-60 sources with cobalt supplied by any of the cobalt-producing countries.
Removed
We believe that the complementary capabilities and expertise in our Nelson Labs business make Sterigenics an attractive sterilization partner to customers in the pharmaceutical industry. We can provide a full suite of services across the Company to help our customers throughout key stages in the lifecycle of these complex products. • Food and agricultural products .
Added
The revised final NESHAP regulation generally allows two years for compliance. On March 12, 2025, the U.S. EPA announced that it was reconsidering the NESHAP regulation applicable to commercial sterilizers.
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In connection with our microbial reduction services, we treat a wide array of products such as spices, herbs, animal feed and food packaging materials to address safety concerns of customers and consumers or to extend shelf life.
Added
On July 17, 2025, the White House issued a CAA proclamation providing a two-year exemption for certain sterilization facilities to allow time to obtain and install new control technology and implement required changes. Although our facilities were granted this exemption, we continue progressing certain changes to our facilities to comply with the final NESHAP EO sterilizer regulation.
Removed
We currently irradiate a variety of food and food packaging products, ranging from orange juice to steaks, to guard against harmful bacteria, such as listeria, salmonella, E. coli and other pathogens. Microbial reduction and irradiation offer producers and processors a method to safeguard against bacteria from the time of the packaging of their products to the time they reach consumers.
Added
Additionally, a complaint was filed in January 2026 in the U.S. District Court for the District of Columbia against the President, U.S. EPA and the U.S. EPA Administrator seeking injunctive relief that would, if granted, invalidate the exemption and therefore require our facilities to comply with the original timeframe. In January 2025, the U.S.
Removed
We also provide microbial remediation services that stop the progression of damage to products and help make the products safe for distribution. • Commercial, advanced and specialty applications . We provide a wide range of advanced applications services for industrial materials to customers that use ionizing radiation to modify materials or products.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisk Factor Summary Our business operations are subject to numerous risks, factors and uncertainties, including those outside of our control, that could cause our actual results to be harmed, including risks regarding the following: • a disruption in the availability or supply of, or increases in the price of, EO, Co-60 or our other direct materials, services and supplies, including as a result of geopolitical instability and/or sanctions against Russia by the United States, Canada, United Kingdom and European Union; • fluctuations in foreign currency exchange rates; • evolving changes in environmental, health and safety regulations, which may negatively impact our business; • health and safety risks associated with the use, storage, transportation and disposal of potentially hazardous materials such as EO and Co-60; • the impact and outcome of current and future legal proceedings and liability claims, including litigation related to the use, emissions and releases of EO from our facilities in California, Georgia, Illinois and New Mexico and the possibility that other claims will be made in the future relating to these or other facilities; • allegations of our failure to properly perform services and potential product liability claims, recalls, penalties and reputational harm; • compliance with the extensive regulatory requirements to which we are subject, the related costs, and any failures to receive or maintain, or delays in receiving, required clearances or approvals; • adverse changes in industry trends; • competition we face; • market changes, including inflationary trends, that impact our long-term supply contracts with variable price clauses and increase our cost of revenues; • business continuity hazards, including supply chain disruptions and other risks associated with our operations; • the risks of doing business internationally, including global and regional economic and political instability and compliance with numerous and sometimes inconsistent laws and regulations in multiple jurisdictions; • our ability to increase capacity at existing facilities, build new facilities in a timely and cost-effective manner and renew leases for our leased facilities; • our ability to attract and retain qualified employees; • severe health events or environmental events; • cybersecurity incidents, unauthorized data disclosures, and our dependence on information technology systems; • an inability to pursue strategic transactions, find suitable acquisition targets, or integrate strategic acquisitions into our business successfully; • our ability to maintain effective internal controls over financial reporting; • our reliance on intellectual property to maintain our competitive position and the risk of current and potential claims from third parties that we have infringed or misappropriated or are infringing or misappropriating their intellectual property rights; 18 Table of Contents • our ability to comply with rapidly evolving data privacy and security laws and regulations in various jurisdictions (including California and the European Union) and any ineffective compliance efforts with such laws and regulations; • our ability to maintain profitability in the future; • impairment charges on our goodwill and other intangible assets with indefinite lives, as well as other long-lived assets and intangible assets with definite lives; • the effects of unionization efforts and labor regulations in countries in which we operate; • adverse changes to our tax positions in U.S. or non-U.S. jurisdictions or the interpretation and application of recent U.S. tax legislation or other changes in U.S. or non-U.S. taxation of our operations; • our significant leverage and how this significant leverage could adversely affect our ability to raise additional capital, limit our ability to react to challenges confronting our Company or broader changes in our industry or the economy, limit our flexibility in operating our business through restrictions contained in our debt agreements and prevent us from meeting our obligations under our existing and future indebtedness; and • the substantial control that certain investment funds and entities affiliated with Warburg Pincus and GTCR, which we refer to collectively as the “Sponsors,” continue to have over us, which could limit stockholders’ ability to influence the outcome of key transactions, including a change of control.
Biggest changeAll forward-looking statements about our future results of operations or other matters made by us in this Annual Report on Form 10-K as well as our consolidated financial statements and notes, and in our subsequently filed or furnished reports with the SEC, as well as in our press releases and other public communications, are qualified by the risks described below. 14 Table of Contents Risk Factor Summary Our business operations are subject to numerous risks, factors and uncertainties, including those outside of our control, that could cause our actual results to be harmed, including the following: • a disruption in the availability or supply of, or increases in the price of, EO, Co-60 or our other direct materials, services and supplies, including as a result of geopolitical instability and/or sanctions against Russia by the United States, Canada, the United Kingdom and/or the European Union, or sanctions by Russia against those countries; • fluctuations in foreign currency exchange rates; • evolving changes in environmental, health and safety regulations; • health and safety risks associated with the use, storage, transportation and disposal of potentially hazardous materials, such as EO and Co-60; • the impact and outcome of current and future legal proceedings and liability claims, including litigation related to the use, emissions and releases of EO from our current and former EO sterilization facilities, and the possibility that other claims will be made in the future; • allegations of our failure to properly perform services and potential product liability claims, recalls, penalties and reputational harm; • compliance with the extensive regulatory requirements to which we are subject, the related costs, and any failures to receive or maintain, or delays in receiving, required clearances or approvals; • adverse changes in industry trends; • competition we face; • market conditions and changes, including inflationary trends and the impact of tariffs, that impact our long-term supply contracts with variable price clauses and increase our cost of revenues; • business continuity hazards, including supply chain disruptions, federal government shutdowns, and other risks associated with our operations; • the risks of doing business internationally, including global and regional economic and political instability and compliance with various applicable laws and potentially inconsistent laws and regulations in multiple jurisdictions; • our ability to increase capacity at existing facilities, build new facilities in a timely and cost-effective manner and renew leases for our leased facilities; • our ability to attract and retain qualified employees; • severe health events or environmental events; • cybersecurity incidents, unauthorized data disclosures, and our dependence on IT systems; • the risks associated with the introduction of AI technology; • an inability to pursue strategic transactions, find suitable acquisition targets, or integrate strategic acquisitions into our business successfully; • our ability to maintain effective internal control over financial reporting; • our reliance on intellectual property rights to maintain our competitive position and the risk of claims from third parties that we have infringed or misappropriated, or are infringing or misappropriating, their intellectual property rights; • our ability to comply with rapidly evolving data privacy and security laws and regulations in various jurisdictions and any ineffective compliance efforts with such laws and regulations; • our ability to maintain profitability in future periods; • impairment charges on our goodwill and other intangible assets with indefinite lives, as well as other long-lived assets and intangible assets with definite lives; • the effects of unionization efforts and labor regulations in countries in which we operate; • adverse changes to our tax positions in U.S. or non-U.S. jurisdictions or the interpretation and application of U.S. tax legislation or other changes in U.S. or non-U.S. taxation of our operations; 15 Table of Contents • our significant degree of leverage and how this leverage could adversely affect our ability to raise additional capital, limit our ability to react to challenges facing our Company or broader changes in our industry or the economy, limit our flexibility in operating our business through restrictions contained in our debt agreements and/or prevent us from meeting our obligations under our existing and future indebtedness; and • the control that certain investment funds and entities affiliated with Warburg Pincus and GTCR, which we refer to collectively as the “Sponsors,” continue to have over us.
Shutdowns in the past of a government-owned reactors have decreased the availability of Co-60 and potential shutdowns in the future could decrease the availability of Co-60, which could have a material adverse effect on our business, prospects, financial condition or results of operations. We estimate approximately 20% of our long-term supply of Co-60 will be generated by Russian nuclear reactors.
Shutdowns of government owned reactors in the past have decreased the availability of Co-60 and potential shutdowns in the future could decrease the availability of Co-60, which could have a material adverse effect on our business, prospects, financial condition or results of operations. We estimate approximately 20% of our long-term supply of Co-60 will be generated by Russian nuclear reactors.
The United States, Canada, United Kingdom and European Union have imposed and are expected to continue imposing sanctions against Russian industries, Russian officials and certain Russian companies, banks, logistics providers and individuals.
The United States, Canada, the United Kingdom and the European Union have imposed and are expected to continue imposing sanctions against Russian industries, Russian officials and certain Russian companies, banks, logistics providers and individuals.
For example, certain banks through which our suppliers have been paid in the past have been sanctioned and there is no assurance the suppliers will continue to be able to find new, unsanctioned banking relationships in the future.
For example, certain banks through which our suppliers have been paid in the past have been sanctioned and there is no assurance the suppliers will be able to continue to find new, unsanctioned banking relationships in the future.
We could also face claims that we performed erroneous or out-of-specification testing or data integrity complaints, any of which could require retesting and result in claims of economic or other loss or personal injury. We derive limited revenue from government customers.
We could also face claims that we performed erroneous or out-of-specification testing or data integrity complaints, any of which could require retesting and result in personal injury claims or claims of economic or other loss. We derive limited revenue from government customers.
In addition, insurance coverage is subject to exclusions, which change from time to time based on industry developments. Our current product and professional liability insurance does not cover matters related to EO emissions, for example.
In addition, insurance coverage is subject to exclusions, which change from time to time based on industry developments. For example, our current product and professional liability insurance does not cover matters related to EO emissions.
Any changes in these regulations, the interpretation of such regulations or our customers’ perception of such changes could require us to make adaptations that may subject us to additional costs, and ultimate costs and the timing of such costs may be difficult to accurately predict and could be material.
Any changes in these regulations, or the interpretation of such regulations or our customers’ perception of such changes could require us to make adaptations that may subject us to additional costs, and ultimate costs and the timing of such costs may be difficult to accurately predict and could be material.
Any significant decrease in life science research and development expenditures by medical device, pharmaceutical and biotechnology companies, including as a result of a general economic slowdown, could in turn impact the volumes of medical products that require sterilization or lab testing services.
Any significant decrease in life science research and development expenditures by medical device, pharmaceutical or biotechnology companies, including as a result of a general economic slowdown, could in turn impact the volumes of medical products that require sterilization or lab testing services.
Russia’s invasion of Ukraine has significantly elevated global geopolitical tensions and continues to cause instability and volatility in global markets. The United States, Canada, the United Kingdom and European Union have implemented broad sanctions targeting Russia, which have the potential to disrupt our supply of Co-60 from Russia.
Russia’s invasion of Ukraine has significantly elevated global geopolitical tensions and continues to cause instability and volatility in global markets. The United States, Canada, the United Kingdom and the European Union have implemented broad sanctions targeting Russia, which have the potential to disrupt our supply of Co-60 from Russia.
Our international operations subject us to these laws and regulations, which are complex, restrict our business dealings with certain countries, governments, entities and individuals and are constantly changing.
Our international operations subject us to these complex laws and regulations, which restrict our business dealings with certain countries, governments, entities and individuals and are constantly changing.
If similarly severe global health crises occur in the future, the impact and effects on our business, operations and results of operations also could be material. Extreme environmental events, including impacts from climate change, could adversely affect our operating results and financial condition.
If similarly severe global health crises occur in the future, the impact and effects on our business, operations and results of operations could also be material. Extreme environmental events, including impacts from climate change, could adversely affect our operating results and financial condition.
If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of shares of our common stock could decline and we could be subject to sanctions or investigations by the Nasdaq, the SEC or other regulatory authorities.
If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of shares of our common stock could decline and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities.
Our high degree of leverage could have important consequences, including: • making it more difficult for us to satisfy our obligations; • increasing our vulnerability to general economic and industry conditions; • requiring a substantial portion of cash flow from operations to be used to pay off principal and interest on our indebtedness, thereby reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities; • exposing us to the risk of increased interest rates as our indebtedness is at variable interest rates; • restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; • limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions, appellate litigation bonding expenses and general corporate or other purposes; • limiting our ability to adjust to changing market conditions and placing us at a disadvantage compared to our competitors that are less highly leveraged; and • causing us to pay higher rates if we need to refinance our indebtedness at a time when prevailing market interest rates are unfavorable.
Our leverage could have important consequences, including: • making it more difficult for us to satisfy our obligations; • increasing our vulnerability to general economic and industry conditions; • requiring a substantial portion of cash flow from operations to be used to pay off principal and interest on our indebtedness, thereby reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities; • exposing us to the risk of increased interest rates as our indebtedness is at variable interest rates; • restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; • limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions, appellate litigation bonding expenses and general corporate or other purposes; • limiting our ability to adjust to changing market conditions and placing us at a disadvantage compared to our competitors that are less highly leveraged; and • causing us to pay higher rates if we need to refinance our indebtedness at a time when prevailing market interest rates are unfavorable.
If we were to determine in the future that there has been an impairment of long-lived assets or intangible assets subject to amortization, our financial results for the relevant period would be reduced by the amount of the non-cash impairment charge, net of any income tax effects, which could have an adverse effect on our financial condition or results of operations.
If we were to determine in the future that there has been an impairment of long-lived assets or intangible assets subject to amortization, our financial results for the relevant period would be reduced by the amount of the non-cash impairment charge, net of any income tax effects, which could have an adverse effect on our business, financial condition or results of operations.
Despite our extensive safety measures, a fire or explosion could occur at a sterilization facility where we use EO, which could interrupt our normal operations and result in facility closures, workplace injuries, property damage, or otherwise adversely affect our business. Because Co-60 is radioactive, its containment and proper shielding is important in preventing contamination or improper exposure.
Despite our extensive safety measures, a fire or explosion could occur at a sterilization facility where we use EO, which could interrupt our normal operations and result in facility closures, workplace and other injuries, property damage, or otherwise adversely affect our business. Because Co-60 is radioactive, its containment and proper shielding is important in preventing contamination or improper exposure.
Most of our customer contracts for sterilization services allow us to pass through our direct material costs, but we may not be able to immediately or completely implement increases in the prices of our products and services. Specifically, there is a risk that raising prices charged to our customers could result in a loss of sales volume.
Most of our customer contracts for sterilization services allow us to pass through all direct material costs, but we may not be able to immediately or completely implement increases in the prices of our products and services. Specifically, there is a risk that raising prices charged to our customers could result in a loss of sales volume.
Although we have attempted, and will continue to attempt, to match increases in the prices of direct materials or energy with corresponding increases in prices for our products and services, our ability to pass through increases in our input costs is highly dependent upon market conditions and we may not be able to immediately raise our prices, if at all.
Although we have attempted, and will continue to attempt, to match increases in the prices of labor, direct materials or energy with corresponding increases in prices for our products and services, our ability to pass through increases in our input costs is highly dependent upon market conditions and we may not be able to immediately raise our prices, if at all.
The US EPA has engaged in additional regulatory activities relating to EO emissions that could trigger additional community concerns and litigation regarding EO that could cause us to incur material defense costs, could result in diversion of management resources, and potentially could cause us to incur material liability or settlement costs or have other adverse effects on our business, financial condition, or operations.
EPA has engaged in additional regulatory activities relating to EO emissions that could trigger additional community concerns and litigation regarding EO that could cause us to incur material defense costs, could result in diversion of management resources, and potentially could cause us to incur material liability or settlement costs or have other adverse effects on our business, financial condition, or operations.
If we were to determine in the future that there has been an impairment, our financial results for the relevant period would be reduced by the amount of the non-cash impairment charge, net of any income tax effects, which could have an adverse effect on our financial condition or results of operations.
If we were to determine in the future that there has been an impairment, our financial results for the relevant period would be reduced by the amount of the non-cash impairment charge, net of any income tax effects, which could have an adverse effect on our business, financial condition or results of operations.
Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common stock include those listed in the related Risk Factor “—Risks Related to the Company,” “—Risks Related to Our Indebtedness and Liquidity” and the following, some of which are beyond our control: • developments in our litigation matters and governmental investigations or additional significant lawsuits or governmental investigations relating to our services or facilities, including our susceptibility as a publicly-traded company to enforcement proceedings and civil litigation alleging that our disclosures have not complied with federal and state securities laws and regulations; • regulatory or legal developments in the jurisdictions in which we operate; • adverse publicity about us or the industries in which we participate; • variations in our quarterly or annual results of operations, or in those of our competitors or of companies in the medical device and pharmaceutical industries; • the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; • sales of our common stock by us or our stockholders in the future or the perception that such sales may occur; • publication of research reports about the industries in which we participate; • changes in analysts’ estimates, investors’ perceptions, recommendations by securities analysts, our failure to achieve analysts’ estimates or failure of analysts to maintain coverage of us; • volatility in the trading prices and trading volumes of companies similar to us; • changes in operating performance and stock market valuations of companies in our industry; • changes in accounting principles, policies, guidance, interpretations or standards; • volatility or economic downturns in the markets in which we, our suppliers or our customers are located caused by pandemics, such as the COVID-19 pandemic, and related policies and restrictions undertaken to contain the spread of such pandemics or potential pandemics; • time and costs associated with potential shareholder activism campaigns and outreach efforts; and • general market conditions and other factors unrelated to our operating performance or the operating performance of our competitors.
Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common stock include those listed in the related Risk Factors “—Risks Related to the Company,” “—Risks Related to Our Indebtedness and Liquidity” and the following, some of which are beyond our control: • developments in our litigation matters and governmental investigations or additional significant lawsuits or governmental investigations relating to our services or facilities, including our susceptibility as a publicly-traded company to enforcement proceedings and civil litigation alleging that our disclosures have not complied with federal and state securities laws and regulations; • regulatory or legal developments in the jurisdictions in which we operate; • adverse publicity about us or the industries in which we participate; • variations in our quarterly or annual results of operations, or in those of our competitors or of companies in the medical device and pharmaceutical industries; • the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; • sales of our common stock by us or our stockholders in the future or the perception that such sales may occur; • publication of research reports about the industries in which we participate; • changes in analysts’ estimates, investors’ perceptions, recommendations by securities analysts, our failure to achieve analysts’ estimates or failure of analysts to maintain coverage of us; • volatility in the trading prices and trading volumes of companies similar to us; • changes in operating performance and stock market valuations of companies in our industry; • changes in accounting principles, policies, guidance, interpretations or standards; 36 Table of Contents • volatility or economic downturns in the markets in which we, our suppliers or our customers are located caused by pandemics, such as the COVID-19 pandemic, and related policies and restrictions undertaken to contain the spread of such pandemics or potential pandemics; • time and costs associated with potential shareholder activism campaigns and outreach efforts; and • general market conditions and other factors unrelated to our operating performance or the operating performance of our competitors.
Any disruption in the availability of, or increases in the price of, EO, Co-60 or our other direct materials, services and supplies, including as a result of geopolitical instability and sanctions against Russia by the United States, Canada, United Kingdom and European Union, may have a material adverse effect on our operating results.” While we maintain insurance policies covering, among other things, physical damage, premises liability, business interruptions and liability resulting from our services in amounts that we believe are customary for our industries, our insurance coverage may be inadequate or unavailable and we could incur uninsured losses and liabilities arising from such events.
Any disruption in the availability of, or increases in the price of, EO, Co-60 or our other direct materials, services and supplies, including as a result of geopolitical instability and sanctions against Russia by the United States, Canada, the United Kingdom and/or the European Union, or sanctions by Russia against those countries, may have a material adverse effect on our operating results.” While we maintain insurance policies covering, among other things, physical damage, premises liability, business interruptions and liability resulting from our services in amounts that we believe are customary for our industries, our insurance coverage may be inadequate or unavailable and we could incur uninsured losses and liabilities arising from such events.
We rely primarily on trade secrets and non-disclosure and confidentiality arrangements to protect our intellectual property rights, including such rights as related to our Nelson Labs business and its lab testing services. The efforts we have taken to protect our intellectual property and proprietary technology may not be sufficient or effective.
We rely primarily on trade secrets and non-disclosure and confidentiality arrangements to protect our intellectual property rights, including such rights related to our Nelson Labs business and its lab testing services. The efforts we have taken to protect our intellectual property and proprietary technology may not be sufficient or effective.
We operate in a number of countries whose governments and companies do not always share the depth or breadth of the commitment to anti-corruption and ethical behavior that is required by U.S. laws and our Code of Conduct and other corporate policies.
We operate in a number of countries whose governments and companies do not always share the depth or breadth of the commitment to anti-corruption and ethical behavior that is required by U.S. laws, our Global Code of Conduct and other corporate policies.
Similar actions in the future by local, state or federal officials might disrupt or shut down operations or otherwise adversely impact the production or profitability of our facilities or its operations as a whole. We obtain Co-60 from a limited number of suppliers.
Similar actions in the future by local, state or federal officials might disrupt or shut down operations or otherwise adversely impact the production or profitability of our facilities or operations as a whole. We obtain Co-60 from a limited number of suppliers.
Any severe health or environmental event including as described above may also affect our suppliers or customers, which could disrupt our access to raw materials and customer product processing and exacerbate supply-chain related risks.
Any severe health or environmental event including as described above may also affect our suppliers or customers, and could disrupt our access to raw materials and customer product processing and exacerbate supply-chain related risks.
Our Amended and Restated Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum, to the fullest extent permitted by law, for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers or other employees or stockholders to us or our stockholders, (3) any action asserting a claim against us or any of our directors or officers or other employees or stockholders arising pursuant to, any action to interpret, apply, enforce any right, obligation or remedy under, any provision of the DGCL our amended and restated certificate of incorporation or amended and restated bylaws, (4) any action asserting a claim that is governed by the internal affairs doctrine, or (5) any 43 Table of Contents other action asserting an “internal corporate claim” under the DGCL shall be the Court of Chancery of the State of Delaware (or any state or federal court located within the State of Delaware if the Court of Chancery does not have jurisdiction) (the “Delaware Forum Provision”).
Our Amended and Restated Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum, to the fullest extent permitted by law, for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers or other employees or stockholders to us or our stockholders, (3) any action asserting a claim against us or any of our directors or officers or other employees or stockholders arising pursuant to, any action to interpret, apply, enforce any right, obligation or remedy under, any provision of the DGCL, our amended and restated certificate of incorporation or amended and restated bylaws, (4) any action asserting a claim that is governed by the internal affairs doctrine, or (5) any other action asserting an “internal corporate claim” under the DGCL shall be the Court of Chancery of the State of Delaware (or any state or federal court located within the State of Delaware if the Court of Chancery does not have jurisdiction) (the “Delaware Forum Provision”).
We have experienced and may continue to experience, volatility and increases in the price of certain of these costs as a result of global market and supply chain disruptions and the broader inflationary environment.
We have experienced and may continue to experience, volatility and increases in the price of certain of these costs as a result of global market and supply chain disruptions, as well as the broader inflationary environment.
While we make efforts to protect our interests through contractual provisions, quality assurance programs and the nature of our commercial relationships, there is no assurance that any of these measures or liability channeling laws or conventions will always prove effective in shielding us from liability, and any such liability or consequences could have a material adverse impact on our business, results of operation and financial condition.
While we make efforts to protect our interests through contractual provisions, quality assurance programs and the nature of our commercial relationships, there is no assurance that any of these measures or liability channeling laws or conventions will always prove effective in shielding us from liability, and any such liability or consequences could have a material adverse impact on our business, results of operations and financial condition.
We may face liability and reputational risks even if we comply with all laws and regulations.” Reconfiguring a gamma irradiation or EO processing plant so that it is suitable for a different sterilization technology, in response to changes in demand, regulations or other factors, would require significant capital investment and require us to suspend operations at the affected facility during the conversion.
We may face liability and reputational risks even if we comply with all laws and regulations.” Reconfiguring a gamma irradiation or EO sterilization facility so that it is suitable for a different sterilization technology, in response to changes in demand, regulations or other factors, would require significant capital investment and require us to suspend operations at the affected facility during the conversion.
See Item 1, “Business—Our Businesses—Sterilization Services—Nordion—Nuclear Reactor Operators.” If there is a decrease in output from any of these reactors (including as a result of a natural disaster or other adverse occurrence), the counterparties fail to perform under their agreements with us or decline to enter into renewal contracts with us for our future supply needs and we are unable to obtain supply from other sources, or if such sources begin to compete with us in one or more geographies, this could have a material adverse effect on our business.
See Item 1, “Business—Our Businesses—Sterilization Services—Nordion—Nuclear Reactor Operators.” If there is a decrease in output from any of these reactors (including as a result of a natural disaster, war, geopolitical instability or other adverse occurrence), the counterparties fail to perform under their agreements with us or decline to enter into renewal contracts with us for our future supply needs and we are unable to obtain supply from other sources, or if such sources begin to compete with us in one or more geographies, this could have a material adverse effect on our business.
Trials were conducted in the Circuit Court of Cook County, Illinois in late 2022 in two individual cases related to the Willowbrook, Illinois facility. The first trial resulted in a verdict for the plaintiff and a judgment of $358.7 million (including $320 million in punitive damages) against Sterigenics U.S., LLC and Sotera Health LLC (the “Defendant Subsidiaries”).
Trials were conducted in the Circuit Court of Cook County, Illinois in late 2022 in two individual cases related to our former facility in Willowbrook, Illinois. The first trial resulted in a verdict for the plaintiff and a judgment of $358.7 million (including $320 million in punitive damages) against Sterigenics U.S., LLC and Sotera Health LLC (the “Defendant Subsidiaries”).
For example, activities conducted from our EU facilities or related to products and services that we may offer to EU users or customers are subject to the General Data Protection Regulation (Regulation (EU) 2016/679) (“GDPR”), which provides for enhanced data privacy obligations and fines of up to the higher of 4% of annual worldwide revenues or €20 million.
For example, activities conducted from our European Union facilities or related to products and services that we may offer to European Union users or customers are subject to the General Data Protection Regulation (Regulation (EU) 2016/679) (“GDPR”), which provides for enhanced data privacy obligations and fines of up to the higher of 4% of annual worldwide revenues or €20 million.
Any disruption in the availability of, or increases in the price of, EO, Co-60 or our other direct materials, services and supplies, including as a result of geopolitical instability or sanctions against Russia by the United States, Canada, the United Kingdom and the European Union, may have a material adverse effect on our operating results.
Any disruption in the availability of, or increases in the price of, EO, Co-60 or our other direct materials, services and supplies, including as a result of geopolitical instability or sanctions against Russia by the United States, Canada, the United Kingdom and/or the European Union, or sanctions by Russia against those countries, may have a material adverse effect on our operating results.
Risks Related to Our Indebtedness and Liquidity Our significant leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to challenges facing our Company or broader changes in our industry or the economy, expose us to interest rate risk and prevent us from meeting our obligations under our existing and future indebtedness.
Risks Related to Our Indebtedness and Liquidity Our significant degree of leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to challenges facing our Company or broader changes in our industry or the economy, expose us to interest rate risk and prevent us from meeting our obligations under our existing and future indebtedness.
These laws and regulations regulate our use of potentially hazardous materials, such as EO, Co-60 and E-beam, and can require us to carefully manage, control emissions of and/or limit human exposure to, these materials. For example, OSHA and U.S. EPA regulations and similar laws in other jurisdictions limit worker exposure to EO.
These laws and regulations regulate our use of potentially hazardous materials, such as EO, Co-60, E-beam, and X-ray, and can require us to carefully manage, control emissions of and/or limit human exposure to, these materials. For example, OSHA and U.S. EPA regulations and similar laws in other jurisdictions limit worker exposure to EO.
State and local authorities, including California and the South Coast Air Quality Management District (“SCAQMD”) in Southern California, are also conducting community outreach sessions relating to EO commercial sterilization facilities. SCAQMD also adopted new regulations for EO sterilization facilities in December 2023, which require new compliance actions by September 2025.
State and local authorities, including California and the South Coast Air Quality Management District (“SCAQMD”) in Southern California, are also conducting community outreach sessions relating to EO commercial sterilization facilities. SCAQMD also adopted new regulations for EO sterilization facilities in December 2023, which required new compliance actions by September 2025.
See related Risk Factor “—Our significant leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to challenges facing our Company or broader changes in our industry or the economy, expose us to interest rate risk and prevent us from meeting our obligations under our existing and future indebtedness.” Recent and future acquisitions could also result in the assumption of contingent liabilities, material expenses related to certain intangible assets, increased operating expenses and compliance issues under international laws and regulations, including antitrust laws, anti-corruption laws, the FCPA and similar anti-bribery laws, which could adversely affect our business, prospects, financial condition or results of operations.
See related Risk Factor “—Our significant degree of leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to challenges facing our Company or broader changes in our industry or the economy, expose us to interest rate risk and prevent us from meeting our obligations under our existing and future indebtedness.” Future acquisitions could also result in the assumption of contingent liabilities, material expenses related to certain intangible assets, increased operating expenses and compliance issues under international laws and regulations, including antitrust laws, anti-corruption laws, the FCPA, the CFPOA, the Bribery Act and similar anti-bribery laws, which could adversely affect our business, prospects, financial condition or results of operations.
See related Risk Factor “—Our operations are subject to a variety of business continuity hazards and risks, including supply chain disruptions due to geopolitical uncertainty and our reliance on the use and sale of products and services from single locations, any of which could interrupt production or operations or otherwise adversely affect our performance, results or value.” Our business may be subject to system interruptions, cybersecurity incidents and unauthorized data disclosures.
See related Risk Factor “—Our operations are subject to a variety of business continuity hazards and risks, including supply chain disruptions due to geopolitical uncertainty and federal government shutdowns, and our reliance on the use and sale of products and services from single locations, any of which could interrupt production or operations or otherwise adversely affect our performance, results of operations or value.” Our business may be subject to system interruptions, cybersecurity incidents and unauthorized data disclosures.
Pursuant to the Sarbanes-Oxley Act of 2002, we furnished a report by our management on the effectiveness of our internal control over financial reporting as of December 31, 2024. This assessment is required to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting.
Pursuant to the Sarbanes-Oxley Act of 2002, we furnished a report by our management on the effectiveness of our internal control over financial reporting as of December 31, 2025. This assessment is required to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting.
We are regulated by national and local agencies with jurisdiction over a number of areas directly or indirectly related to our businesses, including environmental, nuclear safety, homeland or national security, worker safety and health, food, drug and device manufacturing, fire protection, research, marketing, transportation, drug enforcement (governing the handling of controlled substances), protection against infectious diseases and pathogens and 24 Table of Contents agriculture, fish and wildlife.
We are regulated by national and local agencies with jurisdiction over a number of areas directly or indirectly related to our businesses, including environmental, nuclear safety, homeland or national security, worker safety and health, food, drug and device manufacturing, fire protection, research, marketing, transportation, drug enforcement (governing the handling of controlled substances), protection against infectious diseases and pathogens and agriculture, fish and wildlife.
We do not believe the damages award in the first trial in Illinois is predictive of potential future damage awards in the other EO tort cases, or that the settlement amounts reflected in the Willowbrook or Atlanta settlements described above are predictive of potential future settlements, but there can be no assurance that any cases proceeding to trial will not result in significant judgments adverse to us, the Defendant Subsidiaries or other subsidiaries and future settlements of EO cases are reasonably possible.
We do not believe the damages awarded in the first trial in Illinois are predictive of potential future damage awards in the other EO tort cases, or that the settlement amounts reflected in the Willowbrook or Atlanta settlements described above are predictive of potential future settlements, but there can be no assurance that any cases proceeding to trial will not result in significant judgments adverse to us, the Defendant Subsidiaries or other subsidiaries and future settlements of EO cases are reasonably possible.
We currently carry pollution liability insurance for all our facilities and related operations and liability insurance, including from third party bodily injury or property damage allegedly arising from the storage, use, transportation or accident involving Co-60 sources throughout our operations.
We currently carry pollution liability insurance for all our facilities and related operations and liability insurance, including from third party bodily injury or property damage allegedly arising from the storage, use, transportation or accident involving Co-60 sources in our operations.
For example, officials stopped operations at one of our facilities purportedly to review our fire and building code status and certificate of occupancy and we were required to initiate and prevail in litigation to establish that we were entitled to continue to operate our facility.
For example, in the past, officials stopped operations at one of our facilities purportedly to review our fire and building code status and certificate of occupancy and we were required to initiate and prevail in litigation to establish that we were entitled to continue to operate our facility.
Despite the Company’s security measures, cybersecurity threats, cybersecurity incidents, outages, malfunctions, or disruptions involving our systems or those of our third party business partners, or any failure by us or our third-party business partners to effectively address, enforce or maintain our information systems may adversely affect our business strategy, results of operations or financial condition, including the release of sensitive data to unauthorized persons or to the public or the alteration or corruption of data or systems.
Despite the Company’s security measures, cybersecurity threats, cybersecurity incidents, outages, malfunctions, or disruptions involving our systems or those of our third party business partners, or any failure by us or our third-party business partners to 29 Table of Contents effectively address, enforce or maintain our information systems may adversely affect our business strategy, results of operations or financial condition, including the release of sensitive data to unauthorized persons or to the public or the alteration or corruption of data or systems.
In our Sterigenics business, for example, while our customers are generally responsible for determining the cycle parameters (the levels of temperature, humidity and EO concentration to which products are exposed during the sterilization process and the duration of such exposure) or dosage specifications (the amount of gamma or E-beam irradiation to which products are exposed) for their products, we are required to certify that such cycle or dosage parameters were achieved.
In our Sterigenics business, for example, while our customers are generally responsible for determining the cycle parameters (the levels of temperature, humidity and EO concentration to which products are exposed during the sterilization process and the duration of such exposure) or dosage specifications (the amount of gamma or E-beam irradiation to which products are exposed) for their 20 Table of Contents products, we are required to certify that such cycle or dosage parameters were achieved.
See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” Our ability to 38 Table of Contents meet those financial ratios and tests can be affected by events beyond our control, including prevailing economic, financial market and industry conditions, and we cannot give assurance that we will be able to satisfy such ratios and tests when required.
See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” Our ability to meet those financial ratios and tests can be affected by events beyond our control, including prevailing economic, financial market and industry conditions, and we cannot give assurance that we will be able to satisfy such ratios and tests when required.
Clean-up and disposal costs for damaged Co-60 rods and radioactive contamination could be significant. If any liability claims are made against us in the future, we could be liable for damages that are alleged to have resulted from such exposure or contamination. 20 Table of Contents Potentially hazardous materials must be handled and disposed of properly.
Clean-up and disposal costs for damaged Co-60 rods and radioactive contamination could be significant. If any liability claims are made against us in the future, we could be liable for damages that are alleged to have resulted from such exposure or contamination. Potentially hazardous materials must be handled and disposed of properly.
We may face liability and reputational risks even if we comply with all laws and regulations.” We are currently subject to lawsuits in California, Georgia, Illinois and New Mexico alleging personal injury, property devaluation and other claims related to our use of EO at, or emissions and releases of EO from our facilities.
We may face liability and reputational risks even if we comply with all laws and regulations.” We are currently subject to lawsuits in California, Georgia, Illinois and New Mexico alleging personal injury, property devaluation and other claims related to the use, emissions and releases of EO from our facilities.
We believe that our investments in emission control enhancements and employee protection at our EO facilities have positioned us to be able to comply with the updated NESHAP and FIFRA ID requirements within the timeframes specified by the final rules, but the requirements of the final rules represent significant changes from historical requirements and are challenging for existing EO sterilization facilities like ours, and therefore we cannot provide certainty that we will be able to comply with the requirements of the final rules at our EO facilities within the time required.
We believe that our investments in emission control enhancements and employee protection at our EO facilities have positioned us to be able to comply with the updated NESHAP and FIFRA ID requirements within the timeframes specified by the final rules or regulatory exemptions received, but the requirements of the final rules represent significant changes from historical requirements and are challenging for existing EO sterilization facilities like ours, and therefore we cannot provide certainty that we will be able to comply with the requirements of the final rules at our EO facilities within the time required.
Our operations are subject to a variety of business continuity hazards and risks, including supply chain disruptions due to geopolitical uncertainty, and our reliance on the use and sale of products and services from single locations, any of which could interrupt production or operations or otherwise adversely affect our performance, results or value.
Our operations are subject to a variety of business continuity hazards and risks, including supply chain disruptions due to geopolitical uncertainty and federal government shutdowns, and our reliance on the use and sale of products and services from single locations, any of which could interrupt production or operations or otherwise adversely affect our performance, results of operations or value.
If Co-60 source suppliers in other countries, including China, India, Argentina or Russia, significantly increase their involvement in the global Co-60 sources market, this could have a material adverse effect over the long-term on our business, prospects, financial condition or results of operations.
If Co-60 source suppliers in other countries, including China, India, Argentina or Russia, significantly increase their involvement in the global Co-60 sources market, this could have a material adverse effect over the long-term on our business, 24 Table of Contents prospects, financial condition or results of operations.
As laws in the United States, Canada, Europe and other jurisdictions evolve, our activities in these spaces may face additional regulations, and it may be costly or burdensome to comply. Government or private civil antitrust actions could harm our business, prospects, financial condition or results of operations.
As laws in the United States, Canada, Europe and other jurisdictions evolve, our activities in these spaces may face additional regulations, and it may be costly or burdensome to comply. 33 Table of Contents Government or private civil antitrust actions could harm our business, prospects, financial condition or results of operations.
Our Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, the Stockholders Agreement and Delaware law contain provisions that might discourage, delay or prevent a merger, acquisition, or other change in control that stockholders may consider favorable, including transactions in which our stockholders might otherwise receive a premium for shares of our common stock.
Our Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, the Stockholders Agreement and Delaware law contain provisions that might discourage, delay or prevent a merger, acquisition, or other change in control that stockholders may consider favorable, including transactions in which our stockholders might otherwise receive a premium for 38 Table of Contents shares of our common stock.
Our ability to increase pollution liability insurance limits or replace any policies upon their expiration without exclusions for claims related to alleged EO exposure has been adversely impacted by claims against us, including pending claims alleging that purported EO emissions from certain of our facilities have resulted in toxicological or health-related impacts on the environment and the communities that surround these facilities.
Our ability to increase pollution liability insurance limits or replace any policies upon their expiration without exclusions for claims related to alleged EO exposure has been adversely impacted by claims against us, including pending claims alleging that the use, emissions and releases of EO from certain of our facilities have resulted in toxicological or health-related impacts on the environment and members of the communities that surround these facilities.
Regulations issued by OSHA, the NRC and other agencies also require that equipment used at our facilities be designed and operated in a manner that is safe. In the United States, the use of EO for medical device sterilization is regulated by the US EPA under the CAA and FIFRA.
Regulations issued by OSHA, the NRC and other agencies also require that equipment used at our facilities be designed and operated in a manner that is safe. In the United States, the use of EO for medical device sterilization is regulated by the U.S. EPA under the CAA and FIFRA.
Any such relocation or closure could have a material adverse effect on our business, prospects, financial condition or results of operations. 30 Table of Contents We conduct sales and distribution operations on a worldwide basis and are subject to a variety of risks associated with doing business outside the United States.
Any such relocation or closure could have a material adverse effect on our business, prospects, financial condition or results of operations. We conduct sales and distribution operations on a worldwide basis and are subject to a variety of risks associated with doing business outside the United States.
Like other companies with international operations, we have been subjected to targeted and non-targeted attacks and other cybersecurity incidents and continue to face numerous cybersecurity threats on a regular basis, including regular attempts to penetrate our information technology infrastructure and breaches of our security systems by our employees, both accidental and intentional.
Like other companies with international operations, we have been subjected to targeted and non-targeted attacks and other cybersecurity incidents and continue to face numerous cybersecurity threats on a regular basis, including regular attempts to penetrate our IT infrastructure and breaches of our security systems by our employees, both accidental and intentional.
Although these other licenses were historically required as part of control of the nuclear industry and are not related to the increased sanction frameworks, an inability to obtain these licenses would impact future supply. CNSC licenses for the imports and exports related to the targets expire in 2028.
Although these other licenses were historically required as part of control of the nuclear industry and are not related to the increased sanction frameworks, an inability to obtain these licenses would impact 16 Table of Contents future supply. CNSC licenses for the imports and exports related to the targets expire in 2028.
We maintain significant international operations, including operations in China, Brazil, Canada, Mexico, Costa Rica and other countries in Europe and Asia. As a result, we are subject to a number of risks and complications associated with international sales, services and other operations, as well as risks associated with U.S. foreign policy.
We maintain significant international operations, including operations in China, Brazil, Canada, Mexico, Costa Rica, the European Union and other countries in Europe and Asia. As a result, we are subject to a number of risks and complications associated with international sales, services and other operations, as well as risks associated with U.S. foreign policy.
Any of the foregoing could have a material adverse effect on our business, prospects, financial condition or results of operations. Safety risks associated with the use, storage and disposal of potentially hazardous materials, such as EO and Co-60, may result in accidents or liabilities that materially affect our results of operations. EO is flammable and potentially explosive.
Any of the foregoing could have a material adverse effect on our business, prospects, financial condition or results of operations. Safety risks associated with the use, storage, transportation and disposal of potentially hazardous materials, such as EO and Co-60, may result in accidents or liabilities that materially affect our results of operations. EO is flammable and explosive under certain conditions.
If our failure to adequately secure these materials leads to them being stolen or materially damaged, our licenses to operate could be suspended, resulting in a material adverse effect to our business, prospects, financial condition or results of operations.
If our failure to adequately secure these materials leads to them being stolen or materially damaged, our licenses to operate could be suspended, resulting in a material adverse effect to our business, 23 Table of Contents prospects, financial condition or results of operations.
We may be adversely affected by global and regional economic and political instability. We may be adversely affected by global and regional economic and political conditions. The uncertainty or deterioration of the global economic and political environment could adversely affect us.
We may be adversely affected by global and regional economic and political instability. We may be adversely affected by global and regional economic and political conditions. For example, the uncertainty or deterioration of the global economic and political environment could adversely affect us.
Further, any delay or inability to obtain these permits and licenses could delay or prevent us from fulfilling our obligations to our customers or suppliers, which could harm our business, financial condition or results of operations. Additionally, the U.S.
Further, any delay or inability to obtain 28 Table of Contents these permits and licenses could delay or prevent us from fulfilling our obligations to our customers or suppliers, which could harm our business, financial condition or results of operations. Additionally, the U.S.
Our 32 Table of Contents suppliers, contractors, service providers, and other third parties with whom we do business also experience cybersecurity threats and attacks that are similar in frequency and sophistication. Cybersecurity threat actors also may attempt to exploit vulnerabilities in software that is commonly used by companies in cloud-based services and bundled software.
Our suppliers, contractors, service providers, and other third parties with whom we do business also experience cybersecurity threats and attacks that are similar in frequency and sophistication. Cybersecurity threat actors also may attempt to exploit vulnerabilities in software that is commonly used by companies in cloud-based services and bundled software.
In 2024, SCAQMD published a new health risk assessment and conducted community meetings about risks related to EO emissions from Sterigenics facilities in Vernon, California, and is expected in 2025 to do the same related to the Sterigenics facility in Ontario, California.
In 2024, SCAQMD published a new health risk assessment and conducted community meetings about risks related to EO emissions from Sterigenics facilities in Vernon, California, and is expected in early 2026 to do the same related to the Sterigenics facility in Ontario, California.
These provisions include: • limiting the liability of, and providing indemnification to, our directors and officers; • establishing a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors; • providing that directors may be removed only for cause by the affirmative vote of the holders of at least 75% of the voting power of our outstanding common stock; • limiting the determination of the number of directors on our board of directors and the filling of vacancies or newly created seats on the board to our board of directors then in office; provided that for so long as investment funds and entities affiliated with either Warburg Pincus or GTCR have the right to designate at least one director for election to our board of directors, (i) any vacancies will be filled in accordance with the designation provisions set forth in the 42 Table of Contents Stockholders Agreement and (ii) the number of directors shall not exceed eleven without the consent of Warburg Pincus or GTCR; • advance notice requirements applicable to stockholders for matters to be brought before a meeting of stockholders and requirements as to the form and content of a stockholders’ notice; provided that no advance notice shall be required for nominations of candidates for election to our board of directors pursuant to the Stockholders Agreement; • requiring the affirmative vote of at least 66 2/3% of the voting power of our outstanding common stock to amend certain provisions of our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws; • providing that for so long as investment funds and entities affiliated with either Warburg Pincus or GTCR have the right (individually) to designate at least three directors for election to our board of directors, certain board approvals, including amendments to our Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws and certain specified corporate transactions, including certain acquisitions, mergers, other business combination transactions and dispositions, may be effected only with the affirmative vote of 75% of our board of directors, in addition to any other vote required by applicable law; • providing that for so long as investment funds and entities affiliated with Warburg Pincus have the right to designate at least one director for election to our board of directors and for so long as investment funds and entities affiliated with GTCR have the right to designate one director for election to our board of directors, in each case, a quorum of our board of directors (and committees of the board of directors on which a director designated by Warburg Pincus or GTCR will serve) will not exist without at least one director designee of each of Warburg Pincus and GTCR present at such meeting; provided that if a meeting of our board of directors (or a committee of the board of directors) fails to achieve a quorum due to the absence of a director designee of Warburg Pincus or GTCR, as applicable, the presence of a director designee of Warburg Pincus or GTCR, as applicable, will not be required in order for a quorum to exist at the next duly noticed meeting of our board of directors (or a committee thereof); • the right to issue blank check preferred stock without stockholder approval, which could be used to dilute the stock ownership of a potential hostile acquirer or adopt a stockholder rights plan; • a requirement that our stockholders may only take action at annual or special meetings of our stockholders and may not act by written consent; • limiting the ability of stockholders to call and bring business before special meetings; and • limiting the forum to the Court of Chancery of the State of Delaware or federal court located within the State of Delaware for certain types of actions and proceedings that may be initiated against us by stockholders.
These provisions include: • limiting the liability of, and providing indemnification to, our directors and officers; • establishing a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors; • providing that directors may be removed only for cause by the affirmative vote of the holders of at least 75% of the voting power of our outstanding common stock; • limiting the determination of the number of directors on our board of directors and the filling of vacancies or newly created seats on the board to our board of directors then in office; provided that for so long as investment funds and entities affiliated with either Warburg Pincus or GTCR have the right to designate at least one director for election to our board of directors, (i) any vacancies will be filled in accordance with the designation provisions set forth in the Stockholders Agreement and (ii) the number of directors shall not exceed eleven without the consent of Warburg Pincus or GTCR; • advance notice requirements applicable to stockholders for matters to be brought before a meeting of stockholders and requirements as to the form and content of a stockholders’ notice; provided that no advance notice shall be required for nominations of candidates for election to our board of directors pursuant to the Stockholders Agreement; • requiring the affirmative vote of at least 66 2/3% of the voting power of our outstanding common stock to amend certain provisions of our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws; • providing that for so long as investment funds and entities affiliated with Warburg Pincus have the right to designate at least one director for election to our board of directors and for so long as investment funds and entities affiliated with GTCR have the right to designate one director for election to our board of directors, in each case, a quorum of our board of directors (and committees of the board of directors on which a director designated by Warburg Pincus or GTCR will serve) will not exist without at least one director designee of each of Warburg Pincus and GTCR present at such meeting; provided that if a meeting of our board of directors (or a committee of the board of directors) fails to achieve a quorum due to the absence of a director designee of Warburg Pincus or GTCR, as applicable, the presence of a director designee of Warburg Pincus or GTCR, as applicable, will not be required in order for a quorum to exist at the next duly noticed meeting of our board of directors (or a committee thereof); • the right to issue blank check preferred stock without stockholder approval, which could be used to dilute the stock ownership of a potential hostile acquirer or adopt a stockholder rights plan; • a requirement that our stockholders may only take action at annual or special meetings of our stockholders and may not act by written consent; • limiting the ability of stockholders to call and bring business before special meetings; and • limiting the forum to the Court of Chancery of the State of Delaware or federal court located within the State of Delaware for certain types of actions and proceedings that may be initiated against us by stockholders.
Unionization efforts and labor regulations could materially increase our costs or limit our flexibility. Efforts have been made from time to time to unionize portions of our workforce and we are likely to experience similar efforts in the future.
Unionization efforts and labor regulations could materially increase our costs or limit our flexibility. Efforts have been made from time to time to unionize portions of our workforce, and we may experience similar efforts in the future.
Claims against us that result in entry of a judgment or that we settle that are not 22 Table of Contents covered or not sufficiently covered by insurance policies, or which fall within retained liability under our policies, could have a material adverse impact on our business, prospects, financial condition or results of operations.
Claims against us that result in entry of a judgment, that we settle that are not covered or not sufficiently covered by insurance policies, or that fall within retained liability under our policies, could have a material adverse impact on our business, prospects, financial condition or results of operations.
Our operations and our supplier and customers’ operations are subject to business continuity hazards and risks that include explosions, fires, earthquakes, inclement weather and other natural disasters; utility, equipment or other mechanical failures; 28 Table of Contents unscheduled downtime; labor difficulties; disruption of communications; security breaches or other workplace violence events; changes in regulations, including sanctions, export and import controls and other trade restrictions; changes in the use of government-owned reactors, including repurposing nuclear facilities; other governmental action; and pandemics or other public health crises.
Our operations and our supplier and customers’ operations are subject to business continuity hazards and risks that include explosions, fires, earthquakes, inclement weather and other natural disasters; utility, equipment or other mechanical failures; unscheduled downtime; labor difficulties; disruption of communications; security breaches or other workplace violence events; changes in regulations, including sanctions, export and import controls and other trade restrictions; changes in the use of government-owned reactors, such as repurposing nuclear facilities; other governmental action; federal government shutdowns; and pandemics or other public health crises.
The GDPR was transposed into United Kingdom domestic law following the United Kingdom’s exit from the EU, and the UK GDPR supplements the United Kingdom’s Data Protection Act of 2018. The UK GDPR mirrors the compliance requirements and fine structure of the GDPR.
The GDPR was transposed into United Kingdom domestic law following the United Kingdom’s exit from the European Union, and the UK GDPR supplements the United Kingdom’s Data Protection Act of 2018. The UK GDPR mirrors the compliance requirements and fine structure of the GDPR.
While national laws or international conventions generally channel liability for nuclear incidents exclusively to reactor operators, equipment suppliers nevertheless could be subject to lawsuits for damage to the nuclear installation or damages from a nuclear incident that were allegedly intentionally caused.
While national laws or international conventions generally channel liability for nuclear incidents exclusively to reactor operators, equipment suppliers nevertheless could be subject to lawsuits for damage to the nuclear installation or damages from a nuclear incident that were alleged to have been caused intentionally.
For example, although EO is present in the environment from a variety of sources and naturally produced by the human body, the US EPA has identified a potential for increased risk of certain cancers from exposure to EO emitted from sterilization facilities.
For example, although EO is present in the environment from a variety of sources and naturally produced by the human body, the U.S. EPA has identified a potential for increased risk of certain cancers from exposure to EO emitted from sterilization facilities. In 2016, the U.S.
If changes in healthcare regulations or other developments in the healthcare industry, including concerns around single-use medical devices or the impact of the COVID-19 pandemic, were to lead to a material reduction in medical procedures or use of medical devices, demand for our services could be adversely affected.
If changes in healthcare regulations or other developments in the healthcare industry, including concerns around single-use medical devices were to lead to a material reduction in medical procedures or use of medical devices, demand for our services could be adversely affected.
Our independent registered public accounting firm attested to the effectiveness of our internal controls as of December 31, 2024.
Our independent registered public accounting firm attested to the effectiveness of our internal controls as of December 31, 2025.
We may incur significant losses in the future for a number of reasons, including principal and interest expense related to our indebtedness and the other risks described herein, and we may encounter unforeseen expenses, difficulties, complications and delays and other unknown events. As a result, our operations may not maintain or increase profitability in the future.
We may incur significant losses in the future for a number of reasons, including principal and interest expense related to our indebtedness and the other risks described herein, and we may encounter unforeseen expenses, difficulties, complications and delays and other unknown events. Consequently, our results of operations may not maintain or increase profitability in future periods.
These include: • the imposition of or increases in duties and tariffs on foreign imports into the United States, particularly from Canada, China and Mexico, by the current U.S. federal administration, as well as duties and tariffs and any retaliatory measures imposed by Canada or other countries, and the Company’s ability or inability to pass through such price increases to customers; • difficulties associated with compliance with numerous, potentially conflicting and frequently complex and changing laws in multiple jurisdictions relating to environmental matters, intellectual property, privacy and data protection, corrupt practices, embargoes, trade sanctions, competition, employment and licensing, among other things; • general economic, social and political conditions in countries where we operate, including international and U.S. trade and sanctions policies and currency exchange rate fluctuations; • tax and other laws that restrict our ability to use tax credits, offset gains or repatriate funds; • currency restrictions, transfer pricing regulations and adverse tax consequences, which may affect our ability to transfer capital and profits; • inflation, deflation and stagflation in any country in which we have a manufacturing facility; and • foreign customers with longer payment cycles than customers in the United States.
These include: • the imposition of or increases in duties and tariffs on foreign imports into the United States, particularly from Canada, China and Mexico, by the United States, as well as duties and tariffs and any retaliatory measures imposed by Canada or other countries, as well as other new restrictions on international trade, and the Company’s ability or inability to pass through such price increases to customers or manage any such other restrictions; 27 Table of Contents • difficulties associated with compliance with numerous, potentially conflicting and frequently complex and changing laws in multiple jurisdictions relating to changes to international trade agreements and treaties, environmental matters, intellectual property, privacy and data protection, corrupt practices, embargoes, trade sanctions, competition, employment and licensing, among other things; • general economic, social and political conditions in countries where we operate, including international and U.S. trade and sanctions policies and currency exchange rate fluctuations; • tax and other laws that restrict our ability to use tax credits, offset gains or repatriate funds; • currency restrictions, transfer pricing regulations and adverse tax consequences, which may affect our ability to transfer capital and profits; • inflation, deflation and stagflation in any country in which we have an operating facility; and • foreign customers with longer payment cycles than customers in the United States.
Not only is the identification of such suitable acquisition candidates difficult and competitive, but these transactions, including the acquisitions completed in recent years also involve numerous risks, including the diversion of management’s attention and their ability to: • successfully integrate acquired facilities, companies, products, systems and personnel into our existing business, especially with respect to businesses or operations that are outside of the United States; • minimize any potential interruption to our ongoing business; • successfully enter categories and markets in which we may have limited or no prior experience, and ensure compliance with the regulatory requirements for such categories and markets; • achieve expected synergies and obtain the desired financial or strategic benefits; • detect and address any financial or control deficiencies of the acquired company; • retain key relationships with employees, customers, partners and suppliers of acquired companies as well as our own employees, customers, partners and suppliers; and • maintain uniform compliance standards, controls, procedures and policies throughout acquired companies. 33 Table of Contents Companies, businesses or operations acquired or joint ventures created may not be profitable or may not achieve revenue and profitability levels sufficient to justify the investments made.
Not only is the identification of such suitable acquisition candidates difficult and competitive, but these transactions, including the acquisitions completed in recent years also involve numerous risks, including the diversion of management’s attention and their ability to: • successfully integrate acquired facilities, companies, products, systems and personnel into our existing business, especially with respect to businesses or operations that are outside of the United States; • minimize any potential interruption to our ongoing business; • successfully enter categories and markets in which we may have limited or no prior experience, and ensure compliance with the regulatory requirements for such categories and markets; • achieve expected synergies and obtain the desired financial or strategic benefits; • detect and address any financial or control deficiencies of the acquired company; 30 Table of Contents • retain key relationships with employees, customers, partners and suppliers of acquired companies as well as our own employees, customers, partners and suppliers; and • maintain uniform compliance standards, controls, procedures and policies throughout acquired companies.
Compliance with the final NESHAP and ID may ultimately require additional facility modifications, capital expenditures and operational costs beyond what the Company is presently anticipating.
Compliance with the final NESHAP and FIFRA ID may ultimately require additional facility modifications, capital expenditures and operational costs beyond what the Company is presently anticipating. The U.S.
Because it conducts its operations through its operating subsidiaries, SHH depends on those entities to generate the funds necessary to meet its financial obligations, 39 Table of Contents including its required obligations under our Combined Senior Secured Credit Facilities.
Because it conducts its operations through its operating subsidiaries, SHH depends on those entities to generate the funds necessary to meet its financial obligations, including its required obligations under our Combined Senior Secured Credit Facilities.
We may incur impairment charges on our goodwill and other intangible assets with indefinite lives as well as other long-lived assets and intangible assets with definite lives, which could negatively impact our business, financial condition or results of operations.
We may incur impairment charges on our goodwill and other intangible assets with indefinite lives as well as other long-lived assets and intangible assets with definite lives, which could adversely affect our business, financial condition or results of operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeCybersecurity Risk Management and Strategy The Company has an enterprise risk management (“ERM”) program that includes the processes used to identify assess, and manage our most significant enterprise risks and uncertainties that could materially impact the long-term health of the Company or prevent the achievement of strategic objectives.
Biggest changeItem 1C. Cybersecurity Cybersecurity Risk Management and Strategy The Company has an enterprise risk management (“ERM”) program that includes the processes used to identify, assess, and manage our most significant enterprise risks and uncertainties that could materially impact the long-term health of the Company or prevent the achievement of strategic objectives.
However, this does not mean 44 that we meet any particular technical standards, specifications, or requirements, but rather that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks and threats relevant to our business.
However, this does not mean that we meet any particular technical standards, specifications, or requirements, but rather that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks and threats relevant to our business.
For example, we leverage the National Institute of Standards and Technology Cybersecurity Framework’s (“NIST CSF”) principles in developing our cybersecurity program to monitor our security environment and manage risk.
For example, we leverage the National Institute of Standards and Technology Cybersecurity Framework’s (“NIST CSF”) principles 40 in developing our cybersecurity program to monitor our security environment and manage risk.
In performing these oversight functions, the board of directors relies on advice, reports and opinions of management, counsel and our internal and external auditors, including mid-year and year-end cybersecurity inquiries by our external auditors on various aspects of the Company’s cybersecurity program, processes and training. 45 Use of Independent Experts The Company engages external resources in connection with our processes for assessing, identifying and managing material risks from cybersecurity threats.
In performing these oversight functions, the board of directors relies on advice, reports and opinions of management, counsel and our internal and external auditors, including mid-year and year-end cybersecurity inquiries by our external auditors on various aspects of the Company’s cybersecurity program, processes and training. 41 Use of Independent Experts The Company engages external resources in connection with our processes for assessing, identifying and managing material risks from cybersecurity threats.
Removed
Item 1C. Cybersecurity We rely on IT systems to conduct business, including but not limited to, interacting with customers and suppliers, fulfilling orders, generating invoices, collecting and making payments, fulfilling contractual obligations, communicating with internal and external stakeholders, and maintaining our business and financial records.
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In addition, we rely on networks and services, including internet sites, cloud and software-as-a-service solutions, data hosting and processing facilities and tools and other hardware, software and technical applications and platforms, some of which are managed, hosted, provided and/or used by third-parties or their vendors.
Removed
As a result, the Company is subject to various risks related to vulnerabilities, threats and attacks on these IT systems. See Item 1A, “Risks Related to the Company–“Our business may be subject to system interruptions, cybersecurity incidents and unauthorized data disclosures.” under Item 1A. Risk Factors for additional discussion of these risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table identified the number of owned and leased facilities, other than our headquarters listed above. We believe that our facilities are adequate for our current needs and that suitable additional or substitute space will be available as needed to accommodate our operations.
Biggest changeThe following table identified the number of owned and leased facilities, other than our headquarters listed above. We believe that our facilities are adequate for our current needs and that suitable additional or substitute space will be available as needed to accommodate our operations, subject to securing regulatory and other approvals discussed above.
Item 2. Properties Our corporate headquarters is in Broadview Heights, Ohio, our Sterigenics headquarters is in Oakbrook, Illinois, our Nelson Labs headquarters is in Taylorsville, Utah and our Nordion headquarters is in Kanata, Ontario. As of December 31, 2024, we operated 62 facilities in North America, South America, Europe and Asia.
Item 2. Properties Our corporate headquarters is in Broadview Heights, Ohio, our Sterigenics headquarters is in Oakbrook, Illinois, our Nelson Labs headquarters is in Taylorsville, Utah and our Nordion headquarters is in Kanata, Ontario, Canada. As of December 31, 2025, we operated 62 facilities in North America, South America, Europe and Asia.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeSEC regulations require disclosure of environmental proceedings that involve a government authority and potential monetary sanctions that the Company reasonably believes will 46 Table of Contents exceed a specified threshold.
Biggest changeSEC regulations require disclosure of environmental proceedings that involve a government authority and potential monetary sanctions that the Company reasonably 42 Table of Contents believes will exceed a specified threshold.
Legal Proceedings Described in Note 19, “Commitments and Contingencies,” of Our Consolidated Financial Statements Note 19, “Commitments and Contingencies,” t o our consolidated financial statements for the year ended December 31, 2024 contained in this Annual Report on Form 10-K includes information on legal proceedings that constitute material contingencies for financial reporting purposes that could have a material effect on our financial condition or results of operations.
Legal Proceedings Described in Note 19, “Commitments and Contingencies,” of Our Consolidated Financial Statements Note 19, “Commitments and Contingencies,” t o our consolidated financial statements for the year ended December 31, 2025 contained in this Annual Report on Form 10-K includes information on legal proceedings that constitute material contingencies for financial reporting purposes that could have a material effect on our financial condition or results of operations.
Legal Proceedings Not Described in Note 19, “Commitments and Contingencies,” to Our Consolidated Financial Statements In addition to the matters identified in Note 19, “Commitments and Contingencies,” to our consolidated financial statements for the year ended December 31, 2024 contained in this Annual Report on Form 10-K, and incorporated into this item by reference, we report matters, if any, that constitute material pending legal proceedings, other than ordinary course litigation incidental to our business, to which we are or any of our subsidiaries is a party.
Legal Proceedings Not Described in Note 19, “Commitments and Contingencies,” to Our Consolidated Financial Statements In addition to the matters identified in Note 19, “Commitments and Contingencies,” to our consolidated financial statements for the year ended December 31, 2025 contained in this Annual Report on Form 10-K, and incorporated into this Item 3 by reference, we report matters, if any, that constitute material pending legal proceedings, other than ordinary course litigation incidental to our business, to which we are or any of our subsidiaries is a party.
The Company uses a threshold of $1.0 million to determine whether the disclosure of any such proceedings is required because we believe matters under this threshold are not material to the Company. Item 4. Mine Safety Disclosures Not applicable. 47 Part II
The Company uses a threshold of $1.0 million to determine whether the disclosure of any such proceedings is required because we believe matters under this threshold are not material to the Company. Item 4. Mine Safety Disclosures Not applicable. 43 Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock The Company’s common stock is listed on the Nasdaq under the ticker symbol “SHC.” Holders As of February 20, 2025, we had approximately 77 holders of record of our common stock.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock The Company’s common stock is listed on the Nasdaq under the ticker symbol “SHC.” Holders As of February 17, 2026, we had approximately 75 holders of record of our common stock.
The returns shown are based on historical results and are not intended to suggest future performance. 48 The performance graph and other information furnished under this Part II Item 5 of this Annual Report on Form 10-K shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under, or to the liabilities of Section 18 of, the Exchange Act.
The returns shown are based on historical results and are not intended to suggest future performance. 44 The performance graph and other information furnished under this Part II Item 5 of this Annual Report on Form 10-K shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under, or to the liabilities of Section 18 of, the Exchange Act.
In addition, Delaware law imposes requirements that may restrict our ability to pay dividends. Stock Performance Graph The following performance graph compares the cumulative total return to stockholders on our common stock relative to the cumulative total returns of the Nasdaq Composite Index and the Standard and Poor’s (“S&P”) 500 Health Care Index.
In addition, Delaware law imposes requirements that may restrict our ability to pay dividends. Stock Performance Graph The following performance graph compares the cumulative total return to stockholders on our common stock relative to the cumulative total returns of the Nasdaq Composite Index and the Standard and Poor’s 500 Health Care Index.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock and in each index on November 20, 2020, the date our common stock began trading on the Nasdaq, and its relative performance is tracked through December 31, 2024.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock and in each index on November 20, 2020, the date our common stock began trading on the Nasdaq, and its relative performance is tracked through December 31, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAmong other changes, Amendment No. 3 provides (i) for new commitments under the existing Revolving Credit Facility to replace the existing revolving commitments in an aggregate principal amount of $83.0 million, (ii) that certain of the lenders providing revolving credit commitments shall also provide additional commitments for the issuance of letters of credit under the Revolving Credit Facility in an aggregate principal amount of $37.5 million and (iii) for the extension of the maturity date of the Revolving Credit Facility to March 1, 2029. 61 The Senior Secured Credit Facilities and the Indenture contain additional covenants that, among other things, restrict, subject to certain exceptions, limitations and qualifications, our ability and the ability of our restricted subsidiaries to engage in certain activities, such as incur additional indebtedness or permit to exist any lien on any property or asset now owned or hereafter acquired, as specified in the Senior Secured Credit Facilities and the Indenture.
Biggest changeAmong other changes, Amendment No. 5 provides (i) for an increase in the commitments under the existing Revolving Credit Facility in an aggregate principal amount of $176.2 million (ii) that certain lenders providing revolving credit commitments shall also provide additional commitments for the issuance of letters of credit under the Revolving Credit Facility in an aggregate principal amount of $186.3 million and (iii) for the extension of the maturity date of the Revolving Credit Facility to April 30, 2030.
Operating Expenses SG&A Expenses Selling, general and administrative expenses (“SG&A”) primarily consists of compensation and benefits costs and general operating and administrative expenses, including professional service fees (which include finance and legal costs), travel and entertainment expenses, and other general and administrative expenses. Share-based compensation expense is also included in SG&A.
SG&A Expenses Selling, general and administrative expenses (“SG&A”) primarily consists of compensation and benefits costs and general operating and administrative expenses, including professional service fees (which include finance and legal costs), travel and entertainment expenses, and other general and administrative expenses. Share-based compensation expense is also included in SG&A.
Management believes Adjusted Net Income and Adjusted EBITDA are useful because they allow management to more effectively evaluate our operating performance and compare the results of our operations from period to period without the impact of certain non-cash items and non-routine items that we do not expect to continue at the same level in the future and other items that are not core to our operations.
Management believes Adjusted Net Income and Adjusted EBITDA are useful because they allow management to more effectively evaluate our operating performance and compare the results of our operations from period to period without the impact of certain non-cash items and non-routine items that we do not expect to continue at the same level in the future and other items that are not core to our operations.
We believe that these measures are useful to our investors because they provide a more complete understanding of the factors and trends affecting our business than could be obtained absent this disclosure.
We believe that these measures are useful to our investors because they provide a more complete understanding of the factors and trends affecting our business than could be obtained absent this disclosure.
In addition, we believe Adjusted Net Income and Adjusted EBITDA will assist investors in making comparisons to our historical operating results and analyzing the underlying performance of our operations for the periods presented.
In addition, we believe Adjusted Net Income and Adjusted EBITDA will assist investors in making comparisons to our historical operating results and analyzing the underlying performance of our operations for the periods presented.
Our chief operating decision maker evaluates performance and allocates resources within our business based on segment income, which excludes certain items which are included in income (loss) before tax as determined in our Consolidated Statements of Operations and Comprehensive Income (Loss). The accounting policies for our reportable segments are the same as those for the consolidated Company.
Our chief operating decision maker evaluates performance and allocates resources within our business based on segment income, which excludes certain items which are included in income before tax as determined in our Consolidated Statements of Operations and Comprehensive Income (Loss). The accounting policies for our reportable segments are the same as those for the consolidated Company.
For example, Adjusted Net Income and Adjusted EBITDA primarily exclude: • certain recurring non-cash charges such as depreciation of fixed assets, although these assets may have to be replaced in the future, as well as amortization of acquired intangible assets and asset retirement obligations (“ARO”); • costs of acquiring and integrating businesses, which will continue to be a part of our growth strategy; • non-cash gains or losses from fluctuations in foreign currency exchange rates, and the mark-to-fair value of derivatives not designated as hedging instruments, which includes the embedded derivatives relating to certain customer and supply contracts at Nordion; • impairment charges on long-lived assets, intangible assets and investments accounted for under the equity method; • loss on refinancing of debt incurred in connection with refinancing or early extinguishment of long-term debt; • expenses incurred in connection with the secondary offering of our common stock and other shareholder activities; • expenses and charges related to the litigation, settlement agreements, and other activities associated with our EO sterilization facilities, including those related to Willowbrook, Illinois, Atlanta, Georgia, Santa Teresa, New Mexico and Vernon, California; 56 • in the case of Adjusted EBITDA, interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness; and • share-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense and an important part of our compensation strategy.
For example, Adjusted Net Income and Adjusted EBITDA primarily exclude: • certain recurring non-cash charges such as depreciation of fixed assets, although these assets may have to be replaced in the future, as well as amortization of acquired intangible assets and asset retirement obligations (“ARO”); • costs of acquiring and integrating businesses, which will continue to be a part of our growth strategy; • non-cash gains or losses from fluctuations in foreign currency exchange rates, and the mark-to-fair value of derivatives not designated as hedging instruments, which includes the embedded derivatives relating to certain customer and supply contracts at Nordion; • impairment charges on long-lived assets, intangible assets and investments accounted for under the equity method; • loss on refinancing of debt incurred in connection with refinancing or early extinguishment of long-term debt; • expenses incurred in connection with the secondary offering of our common stock and other shareholder activities; • expenses and charges related to the litigation, settlement agreements, and other activities associated with our EO sterilization facilities, including those related to Willowbrook, Illinois, Atlanta, Georgia, Santa Teresa, New Mexico and Vernon, California; • in the case of Adjusted EBITDA, interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness; and • share-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense and an important part of our compensation strategy.
For the definition of Adjusted Net Income and Adjusted EBITDA and the reconciliation of these non-GAAP measures from net income (loss), please see “Non-GAAP Financial Measures.” TRENDS AND KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS We expect that our performance and financial condition will continue to be driven by the key trends impacting our industries, customers and their end markets as outlined in Item 1, “Business.” In addition, we believe the following trends and key factors have underpinned our recent operating results and may continue to affect our performance and financial condition in future periods. • Business and market conditions.
For the definition of Adjusted Net Income and Adjusted EBITDA and the reconciliation of these non-GAAP measures from net income, please see “Non-GAAP Financial Measures.” TRENDS AND KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS We expect that our performance and financial condition will continue to be driven by the key trends impacting our industries, customers and their end markets as outlined in Item 1, “Business.” In addition, we believe the following trends and key factors have underpinned our recent operating results and may continue to affect our performance and financial condition in future periods. • Business and market conditions.
On May 30, 2024, SHH, the Company, certain subsidiaries of the Company (the “Guarantors”), and Wilmington Trust, National Association, as trustee, paying agent, registrar, transfer agent and notes collateral agent, entered into an Indenture (the “Indenture”) governing SHH’s $750.0 million aggregate principal amount of 7.375% senior secured notes due 2031 (the “Secured Notes”) issued in May 2024.
On May 30, 2024, SHH, the Company, certain subsidiaries of the Company, and Wilmington Trust, National Association, as trustee, paying agent, registrar, transfer agent and notes collateral agent, entered into an Indenture (the “Indenture”) governing SHH’s $750.0 million aggregate principal amount of 7.375% senior secured notes due 2031 (the “Secured Notes”) issued in May 2024.
Nelson Labs services are generally provided on a fee-for-service or project basis, and we recognize revenues over time generally using an input measure of time incurred to determine progress completed at the end of the period. Revenue recognized over time in excess of the amount billed to the customer is recorded as a customer contract asset.
Nelson Labs services are generally provided on a fee-for-service or project basis, and we recognize revenues over time generally using an input measure of time incurred to determine progress completed at the end of the period. Revenue recognized over time in excess of the 58 amount billed to the customer is recorded as a customer contract asset.
Costs associated with support functions that are not directly associated with one of the three reportable segments, such as corporate operating expenses for executive management, accounting, information technology, legal, human resources, treasury, investor relations, corporate development, tax, purchasing, and marketing, are allocated to the segments based on net revenue.
Costs associated with support functions that are not directly associated with one of the three reportable segments, such as corporate operating expenses for executive management, accounting, information technology, legal, human resources, treasury, investor relations, corporate development, tax, purchasing, and marketing, are allocated to the segments primarily based on net revenue.
Provision for income taxes for the year ended December 31, 2024 differed from the statutory rate of 21% primarily due to a net increase in the valuation allowance attributable to the limitation on the deductibility of interest expense and the foreign rate 55 differential, partially offset by a benefit for state income taxes.
The provision for income taxes for the year ended December 31, 2024 differed from the statutory rate of 21% primarily due to a net increase in the valuation allowance attributable to the limitation on the deductibility of interest expense and the foreign rate differential, partially offset by a benefit for state income taxes.
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 as discussed further below.
We define Adjusted Net Income as net income before amortization and certain other adjustments that we do not consider in our evaluation of our ongoing operating performance from period to period as discussed further below.
Uses of Cash We expect that cash on hand, operating cash flows and amounts available under our credit facilities will provide sufficient working capital to operate our business, meet foreseeable liquidity requirements (inclusive of debt service on our long-term debt), make expected capital expenditures including investments in fixed assets to build and/or expand existing facilities, and meet litigation costs that we expect to continue to incur for at least the next twelve months.
Uses of Cash We expect that cash on hand, operating cash flows and amounts available under our credit facilities will provide sufficient working capital to operate our business, meet foreseeable liquidity requirements (inclusive of debt service on our long-term debt), make expected capital expenditures, including investments in fixed assets to build and/or expand existing facilities, and meet litigation costs that we expect to continue to incur for at least the next twelve months and the foreseeable future thereafter.
Georgia EO litigation settlement On October 16, 2023, the Company reached an agreement to resolve 79 EO claims in the State of Georgia. Under the terms of the agreements, the Company paid $35.0 million to settle the claims.
Georgia EO litigation settlement On October 16, 2023, the Company reached an agreement to resolve 79 EO claims in the State of Georgia. Under the terms of the agreement, the Company paid $35.0 million to settle the claims.
For more information regarding our calculation of Adjusted Net Income and Adjusted EBITDA, including information about their limitations as tools for analysis and a reconciliation of net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted Net Income and Adjusted EBITDA, please see the reconciliation included below in “Non-GAAP Financial Measures.” Total Net Revenues The following table compares our revenues by type for the year ended December 31, 2024 to the year ended December 31, 2023.
For more information regarding our calculation of Adjusted Net Income and Adjusted EBITDA, including information about their limitations as tools for analysis and a reconciliation of net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted Net Income and Adjusted EBITDA, please see the reconciliation included below in “Non-GAAP Financial Measures.” Total Net Revenues The following table compares our revenues by type for the year ended December 31, 2025 to the year ended December 31, 2024.
A tax position that meets the more likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being 65 realized upon ultimate settlement.
A tax position that meets the more likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.
There are a number of limitations related to the use of Adjusted Net Income and Adjusted EBITDA rather than net income (loss), the nearest GAAP equivalent.
There are a number of limitations related to the use of Adjusted Net Income and Adjusted EBITDA rather than net income, the nearest GAAP equivalent.
As of December 31, 2024, our interest rate derivatives limit our cash flow exposure of our variable rate borrowings under the Term Loans. Refer to Note 20, “Financial Instruments and Financial Risk”, “ Derivative Instruments ” for additional information regarding the interest rate limits used to manage economic risks associated with our variable rate borrowings.
As of December 31, 2025, our interest rate derivatives limit the cash flow exposure of our variable rate borrowings under the Term Loans. Refer to Note 20, “Financial Instruments and Financial Risk”, “ Derivative Instruments ” for additional information regarding the interest rate limits used to manage economic risks associated with our variable rate borrowings.
Provision (Benefit) for Income Taxes Provision for income taxes primarily consists of income taxes in foreign jurisdictions and U.S. federal and state income taxes. Constant Currency Sales Growth (Non-GAAP) “Constant currency” is a non-GAAP financial measure we use to assess performance excluding the impact of foreign currency exchange rate changes.
Provision for Income Taxes Provision for income taxes primarily consists of income taxes in foreign jurisdictions and U.S. federal and state income taxes. 47 Constant Currency Sales Growth (Non-GAAP) “Constant currency” is a non-GAAP financial measure we use to assess performance excluding the impact of foreign currency exchange rate changes.
(i) Represents the income tax impact of adjustments calculated based on the tax rate applicable to each item. We eliminate the effect of tax rate changes as applied to tax assets and liabilities and unusual items from our presentation of adjusted net income.
(h) Represents the income tax impact of adjustments calculated based on the tax rate applicable to each item. We eliminate the effect of tax rate changes as applied to tax assets and liabilities, and unusual items from our presentation of adjusted net income.
There have been no other significant events or circumstances that occurred since the annual assessment date of October 1 that would change the conclusions reached above. We provide additional information about our goodwill and other indefinite-lived intangible assets in Note 7, “Goodwill and Other Intangible Assets” to our consolidated financial statements. Income Taxes .
There have been no other significant events or circumstances that occurred since the annual assessment date of October 1 that would change the conclusions reached above. We provide additional information about our goodwill in Note 7, “Goodwill and Other Intangible Assets” to our consolidated financial statements. Income Taxes .
Foreign exchange gains and losses in our Consolidated Statements of Operations and Comprehensive Income (Loss) mainly relates to short-term gains and losses on transactions denominated in currencies other than the functional currency of our operating entities.
Foreign exchange gains and losses in our Consolidated Statements of Operations and Comprehensive Income (Loss) mainly relate to short-term gains and losses on transactions denominated in currencies other than the functional currency of our operating entities.
For additional information on the derivative instruments described above, refer to Note 20, “Financial Instruments and Financial Risk”, “Derivative Instruments.” Cash Flow Information The following section summarizes cash flow information for the years ended December 31, 2024 and 2023.
For additional information on the derivative instruments described above, refer to Note 20, “Financial Instruments and Financial Risk”, “Derivative Instruments.” Cash Flow Information The following section summarizes cash flow information for the years ended December 31, 2025 and 2024.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Consolidated Results of Operations.” Year Ended December 31, 2024 as compared to Year Ended December 31, 2023 The following table sets forth the components of our results of operations for the years ended December 31, 2024 and 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Consolidated Results of Operations.” Year Ended December 31, 2025 as compared to Year Ended December 31, 2024 The following table sets forth the components of our results of operations for the years ended December 31, 2025 and 2024.
Please see “Non-GAAP Financial Measures” below for a reconciliation of Adjusted Net Income and Adjusted EBITDA to their most directly comparable financial measure calculated and presented in accordance with GAAP.
Please see “Non-GAAP Financial Measures” below for a reconciliation of Adjusted Net Income and Adjusted EBITDA to Net Income, the most directly comparable financial measure calculated and presented in accordance with GAAP.
The discussion of the segment results for the years ended December 31, 2023 and 2022 are presented within our Annual Report on Form 10-K for the year ended December 31, 2023 under “Item 7.
The discussion of the segment results for the years ended December 31, 2024 and 2023 are presented within our Annual Report on Form 10-K for the year ended December 31, 2024 under “Item 7.
If circumstances change during interim periods between annual tests that indicate that the carrying amount of such assets may not be recoverable, the Company tests such assets at an interim date for impairment. Factors which would necessitate an interim impairment assessment include prolonged negative industry or economic trends and significant underperformance relative to historical or projected future operating results.
If circumstances change during interim periods between annual tests that indicate that the carrying amount of goodwill may not be recoverable, the Company tests the asset at an interim date for impairment. Factors which would necessitate an interim impairment assessment include prolonged negative industry or economic trends and significant underperformance relative to historical or projected future operating results.
Our management also uses Adjusted Net Income and Adjusted EBITDA in their financial analysis and operational decision-making, and Adjusted EBITDA serves as the basis for the metric we utilize to determine attainment of our primary annual incentive program.
Our management also uses Adjusted Net Income and Adjusted EBITDA in its financial analysis and operational decision-making, and Adjusted 51 EBITDA serves as the basis for the metric we utilize to determine attainment of our primary annual incentive program.
At December 31, 2024 and 2023, we had $58.5 million and $67.3 million, respectively, of standby letters of credit, surety bonds and other bank guarantees outstanding, primarily in favor of local and state licensing authorities for future decommissioning costs, and to support the unfunded portion of our pension obligation.
At December 31, 2025 and 2024, we had $54.5 million and $58.5 million, respectively, of standby letters of credit, surety bonds and other bank guarantees outstanding, primarily in favor of local and state licensing authorities for future decommissioning costs, and to support the unfunded portion of our pension obligation.
We have calculated the interest payments on the Senior Secured Credit Facilities using an assumed range of 6.91% to 7.84% based on anticipated forward movements in SOFR and the fixed rate of 7.375% for the Secured Notes.
We have calculated the interest payments on the Senior Secured Credit Facilities using an assumed range of 3.10% to 3.84% based on anticipated forward movements in SOFR and the fixed rate of 7.375% for the Secured Notes.
At December 31, 2024 and 2023, we maintained a valuation allowance of $160.6 million and $125.4 million, respectively, against our deferred tax assets, primarily attributable to the excess interest expense on our long-term debt in the United States, as well as state and foreign net operating loss carryforwards.
At December 31, 2025 and 2024, we maintained a valuation allowance of $172.3 million and $160.6 million, respectively, against our deferred tax assets, primarily attributable to the excess interest expense on our long-term debt in the United States, as well as state and foreign net operating loss carryforwards.
Partially offsetting these growth factors was an unfavorable change in foreign currency exchange rates of $2.7 million. Total Cost of Revenues The following table compares our cost of revenues by type for the year ended December 31, 2024 to the year ended December 31, 2023.
Partially offsetting these growth factors was an unfavorable change in foreign currency exchange rates of $1.2 million. 49 Total Cost of Revenues The following table compares our cost of revenues by type for the year ended December 31, 2025 to the year ended December 31, 2024.
Generally, the time between when revenue is recognized and when payment is due is not significant. We do not evaluate whether the selling price contains a financing component for contracts that have a duration of less than one year. 64 Goodwill and Other Indefinite-Lived Intangibles .
Generally, the time between when revenue is recognized and when payment is due is not significant. We do not evaluate whether the selling price contains a financing component for contracts that have a duration of less than one year. Goodwill .
Our capital expenditures for the year ended December 31, 2024 included approximately $32 million related to environmental facility enhancements. In 2024, we expect to continue to invest in facility expansions, ongoing routine maintenance for existing facilities, and acquisition of Co-60 for use by our Sterigenics segment in its gamma irradiation facilities.
Our capital expenditures for the year ended December 31, 2025 included approximately $24.4 million related to environmental facility enhancements. In 2026, we expect to continue to invest in facility expansions, ongoing routine maintenance for existing facilities, and acquisition of Co-60 for use by our Sterigenics segment in its gamma irradiation facilities.
See Note 15, “Share-Based Compensation” for further information. (b) Represents the write-off of unamortized debt issuance costs and discounts, as well as certain other costs incurred related to the Refinancing Term Loans and the Secured Notes.
See Note 15, “Share-Based Compensation” for further information. 52 (b) Represents the write-off of unamortized debt issuance costs and discounts, as well as certain other costs incurred related to the refinancing activity for the Term Loans, the Secured Notes and the Revolving Credit Facility.
This program includes, among other things, investments in new and existing facilities, business expansion projects, Co-60 used by Sterigenics at its gamma irradiation facilities, cobalt development projects and information technology enhancements. During the year ended December 31, 2024, our capital expenditures amounted to $179.1 million, compared to $215.0 million in the year ended December 31, 2023.
This program includes, among other things, investments in new and existing facilities, business expansion projects, Co-60 used by Sterigenics at its gamma irradiation facilities, cobalt development projects and IT enhancements. During the year ended December 31, 2025, our capital expenditures amounted to $138.0 million, compared to $179.1 million in the year ended December 31, 2024.
“Business” and Note 21, “Segment and Geographic Information” to our consolidated financial statements. 58 Segment Results for the Years Ended December 31, 2024 and 2023 The following section summarizes the segment results for the years ended December 31, 2024 and 2023.
“Business” and Note 21, “Segment and Geographic Information” to our consolidated financial statements. 53 Segment Results for the Years Ended December 31, 2025 and 2024 The following section summarizes the segment results for the years ended December 31, 2025 and 2024.
Under the terms of the agreements, the Company paid $35.0 million to settle the claims. NEW ACCOUNTING PRONOUNCEMENTS For a description of recent accounting pronouncements applicable to our business, see Note 2, “Recent Accounting Standards” to our consolidated financial statements.
Under the terms of the agreement, the Company paid $34.0 million to settle the claims. 60 NEW ACCOUNTING PRONOUNCEMENTS For a description of recent accounting pronouncements applicable to our business, see Note 2, “Recent Accounting Standards” to our consolidated financial statements.
CONSOLIDATED RESULTS OF OPERATIONS The following section summarizes the consolidated results of operations for the years ended December 31, 2024 and 2023. The discussion of the consolidated results of operation for the years ended December 31, 2023 and 2022 are presented within our Annual Report on Form 10-K for the year ended December 31, 2023 under “Item 7.
The discussion of the consolidated results of operation for the years ended December 31, 2024 and 2023 are presented within our Annual Report on Form 10-K for the year ended December 31, 2024 under “Item 7.
(m) $97.1 million and $94.1 million of the adjustments for the year ended December 31, 2024 and 2023, respectively, are included in cost of revenues, primarily consisting of amortization of intangible assets, depreciation, and accretion of ARO. SEGMENT RESULTS OF OPERATIONS We have three reportable segments: Sterigenics, Nordion and Nelson Labs.
(k) $99.9 million and $97.1 million of the adjustments for the year ended December 31, 2025 and 2024, respectively, are included in cost of revenues, primarily consisting of amortization of intangible assets, depreciation, and accretion of ARO. SEGMENT RESULTS OF OPERATIONS We have three reportable segments: Sterigenics, Nordion and Nelson Labs.
This provides us with additional insights and allows us to better serve our customers. For financial reporting purposes, our sterilization services business breaks out into two reportable segments, Sterigenics and Nordion, and our lab services business constitutes a third reportable segment, Nelson Labs.
This provides us with additional insights and allows us to better serve our customers. For financial reporting purposes, our sterilization services business is comprised of two reportable segments, Sterigenics and Nordion, and our lab services business constitutes a third reportable segment, Nelson Labs.
Our primary long-term liquidity requirements beyond the next twelve months will be to service our debt, make capital expenditures, and fund suitable business acquisitions. As of December 31, 2024, there were no outstanding borrowings on the Revolving Credit Facility.
We expect our primary long-term liquidity obligations and objectives beyond the next twelve months will be to service our debt, make capital expenditures, and fund suitable business acquisitions. As of December 31, 2025, there were no outstanding borrowings on the Revolving Credit Facility.
Net Income, Adjusted Net Income and Adjusted EBITDA Net income for the year ended December 31, 2024 was $44.4 million, as compared to net income of $51.4 million for the year ended December 31, 2023, primarily due to the factors described above.
Net Income, Adjusted Net Income and Adjusted EBITDA Net income for the year ended December 31, 2025 was $77.9 million, as compared to net income of $44.4 million for the year ended December 31, 2024, primarily due to the factors described above.
Our foreign subsidiaries held cash of approximately $259.8 million at December 31, 2024 and $224.1 million at December 31, 2023. No material restrictions exist to accessing cash held by our foreign subsidiaries notwithstanding any potential tax consequences.
Our foreign subsidiaries held cash of approximately $253.4 million at December 31, 2025 and $259.8 million at December 31, 2024. No material restrictions exist to accessing cash held by our foreign subsidiaries notwithstanding any potential tax consequences.
(k) Includes depreciation of Co-60 held at gamma irradiation sites. The year ended December 31, 2024 excludes accelerated depreciation associated with business optimization activities. (l) Represents the difference between the income tax provision/benefit as determined under U.S. GAAP and the income tax benefit associated with pre-tax adjustments described in footnote (i).
(i) Includes depreciation of Co-60 held at gamma irradiation sites and excludes accelerated depreciation associated with business optimization activities. (j) Represents the difference between the income tax provision/benefit as determined under U.S. GAAP and the income tax provision (benefit) associated with pre-tax adjustments described in footnote (h).
In addition, interest payments include the impact of existing interest rate swaps described in Note 20, “Financial Instruments and Financial Risk” in the notes to consolidated financial statements. (b) Consists of payments under our finance leases for various facilities and equipment. (c) Represents minimum lease payments under our operating leases for several of our facilities and other property and equipment.
In addition, interest payments include the impact of existing interest rate swaps described in Note 20, “Financial Instruments and Financial Risk” in the notes to consolidated financial statements. (b) Consists of payments under our finance leases for various facilities and equipment.
We serve our customers throughout their product lifecycles, from product design to manufacturing and delivery, helping to promote the sterility, effectiveness and safety of their products for the end user. We operate across two core businesses: sterilization services and lab services.
Most of these services are necessary for our customers to satisfy applicable government requirements. 45 We serve our customers throughout their product lifecycles, from product design to manufacturing and delivery, helping to promote the sterility, effectiveness and safety of their products for the end user. We operate across two core businesses: sterilization services and lab services.
Adjusted Net Income was $198.5 million for the year ended December 31, 2024, as compared to $204.3 million for the year ended December 31, 2023, primarily due to the factors described above.
Adjusted Net Income was $245.4 million for the year ended December 31, 2025, as compared to $198.5 million for the year ended December 31, 2024, primarily due to the factors described above.
Adjusted EBITDA was $548.6 million for the year ended December 31, 2024, as compared to $528.0 million for the year ended December 31, 2023, primarily due to the factors described above.
Adjusted EBITDA was $593.8 million for the year ended December 31, 2025, as compared to $548.6 million for the year ended December 31, 2024, primarily due to the factors described above.
The increase was driven by growth from volume and mix and pricing of 4.9% and 5.2%, respectively, partially offset by unfavorable changes in foreign currency exchange rates of 2.1%. Nelson Labs net revenues were $229.2 million for the year ended December 31, 2024, an increase of $7.5 million, or 3.4%, as compared to the prior year.
The increase was driven by growth from volume/mix and pricing of 6.2% and 2.9%, respectively, partially offset by unfavorable changes in foreign currency exchange rates of 0.9%. Nelson Labs net revenues were $220.2 million for the year ended December 31, 2025, a decrease of $9.0 million, or 3.9%, as compared to the prior year.
Loss on Refinancing of Debt Loss on refinancing of debt for the year ended December 31, 2024 was $24.2 million and primarily occurred in connection with the refinancing of our capital structure in May 2024 and Amendment No. 3 to Revolving Credit Facility.
Loss on refinancing of debt for the year ended December 31, 2024 was $24.2 million and occurred in connection with the refinancing of our capital structure in May 2024.
Cash flow information for the years ended December 31, 2023 and 2022 are presented within our Annual Report on Form 10-K for the year ended December 31, 2023 under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources.” Year Ended December 31, 2024 compared to the Year Ended December 31, 2023 (thousands of U.S. dollars) 2024 2023 Net Cash Provided by (Used in): Operating activities $ 224,164 $ (147,732) Investing activities (178,996) (214,906) Financing activities (50,564) 265,959 Effect of foreign currency exchange rate changes on cash and cash equivalents (17,393) 2,039 Net (decrease) increase in cash and cash equivalents, including restricted cash, during the period $ (22,789) $ (94,640) Operating activities Net cash provided by operating activities increased $371.9 million to net cash provided of $224.2 million for the year ended December 31, 2024 as compared to net cash used in operating activities of $147.7 million for the prior year.
Cash flow information for the years ended December 31, 2024 and 2023 are presented within our Annual Report on Form 10-K for the 56 year ended December 31, 2024 under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources.” Year Ended December 31, 2025 compared to the Year Ended December 31, 2024 (thousands of U.S. dollars) 2025 2024 Net Cash Provided by (Used in): Operating activities $ 287,195 $ 224,164 Investing activities (135,144) (178,996) Financing activities (100,534) (50,564) Effect of foreign currency exchange rate changes on cash and cash equivalents 16,074 (17,393) Net increase (decrease) in cash and cash equivalents, including restricted cash, during the period $ 67,591 $ (22,789) Operating activities Net cash provided by operating activities increased $63.0 million to net cash provided of $287.2 million for the year ended December 31, 2025 as compared to $224.2 million for the prior year.
Adjusted Net Income and Adjusted EBITDA may be calculated differently from, and therefore may not be comparable to, a similarly titled measure used by other companies. 52 For more information regarding our definition and calculation of Adjusted Net Income and Adjusted EBITDA, including information about its limitations as a tool for analysis and reconciliation to the most directly comparable financial measures calculated in accordance with GAAP, please see “Non-GAAP Financial Measures” within this Item 7.
For more information regarding our definition and calculation of Adjusted Net Income and Adjusted EBITDA, including information about its limitations as a tool for analysis and reconciliation to the most directly comparable financial measures calculated in accordance with GAAP, please see “Non-GAAP Financial Measures” within this Item 7.
Net revenues in the year ended December 31, 2024 increased approximately 5.4% compared with the same period in 2023 on a constant currency basis. 53 Service revenues Service revenues increased $36.2 million, or 4.0%, to $941.8 million in 2024 as compared to $905.6 million in 2023.
Net revenues in the year ended December 31, 2025 increased approximately 5.2% compared with the same period in 2024 on a constant currency basis. Service revenues Service revenues increased $53.9 million, or 5.7%, to $995.8 million in the year ended December 31, 2025 as compared to $941.8 million in the year ended December 31, 2024.
The refinancing activity resulted in the write off of certain unamortized debt issuance costs and discounts on the Term Loans due 2026. In addition, certain new debt issuance costs and discounts were expensed upon the issuance of the Refinancing Term Loans and Secured Notes.
This refinancing activity resulted in the write off of certain unamortized debt issuance costs and discounts on the Term Loans due 2026 and the expensing of certain new debt issuance costs and discounts upon the issuance of the Refinancing Term Loans (as defined below) and Secured Notes.
The preparation of consolidated financial statements and related disclosures in conformity with GAAP requires management to make judgments, estimates and assumptions at a specific point in time and in certain circumstances that affect amounts reported in the accompanying consolidated financial statements.
Our accounting policies are more fully described in Note 1, “Significant Accounting Policies” to our consolidated financial statements. The preparation of consolidated financial statements and related disclosures in conformity with GAAP requires management to make judgments, estimates and assumptions at a specific point in time and in certain circumstances that affect amounts reported in the accompanying consolidated financial statements.
The increase was attributable to a favorable impact from pricing of 4.6% and changes in volume and mix of 0.3%, partially offset by unfavorable changes in foreign currency exchange rates of 0.3%. Nordion net revenues were $173.4 million for the year ended December 31, 2024, an increase of $12.9 million, or 8.0%, as compared to the prior year.
The increase was attributable to a favorable impact from pricing and volume/mix of 4.1% and 3.6%, respectively, and favorable changes in foreign currency exchange rates of 0.6%. Nordion net revenues were $187.6 million for the year ended December 31, 2025, an increase of $14.3 million, or 8.2%, as compared to the prior year.
Product revenues Product revenues increased $14.9 million, or 10.4%, to $158.6 million in the year ended December 31, 2024 as compared to $143.7 million in the year ended December 31, 2023. Volume and mix growth of $10.3 million coupled with favorable pricing of $7.3 million were the primary drivers of the increase in product revenues.
Product revenues Product revenues increased $9.2 million, or 5.8%, to $167.9 million in the year ended December 31, 2025 as compared to $158.6 million in the year ended December 31, 2024. Volume and mix growth of $5.5 million coupled with favorable pricing of $4.9 million were the primary drivers of the increase in net product revenues.
We provide our customers mission-critical lab testing services, which assess the product quality, effectiveness, patient safety and end-to-end sterility of products. These services are necessary for our customers’ regulatory approvals, product releases and ongoing product performance evaluations.
The Nelson Labs segment provides outsourced microbiological and analytical chemistry testing and advisory services for the medical device and pharmaceutical industries. We provide our customers mission-critical lab testing services, which assess the product quality, effectiveness, patient safety and end-to-end sterility of products. These services are necessary for our customers’ regulatory approvals, product releases and ongoing product performance evaluations.
For the year ended December 31, 2024, we recorded net revenues of $1,100.4 million, net income of $44.4 million, Adjusted Net Income of $198.5 million and Adjusted EBITDA of $548.6 million. Adjusted Net Income and Adjusted EBITDA are financial measures not based on any standardized methodology prescribed by U.S. Generally Accepted Accounting Principles (“GAAP”).
For the year ended December 31, 2025, we achieved net revenues of $1,163.6 million, net income of $77.9 million, Adjusted Net Income of $245.4 million and Adjusted EBITDA of $593.8 million. Adjusted Net Income and Adjusted EBITDA are financial measures not based on any standardized methodology prescribed by U.S. Generally Accepted Accounting Principles (“GAAP”).
Deferred tax assets will be reduced by a valuation allowance if, based on management’s estimate, it is more likely than not that a portion of the deferred tax assets will not be realized in a future period. The estimates used in the recognition of deferred tax assets are subject to revision in future periods based on new facts and circumstances.
Deferred tax assets will be reduced by a valuation allowance if, based on management’s estimate, it is more likely than not that a portion of 59 the deferred tax assets will not be realized in a future period.
The estimated fair value of Sterigenics, Nordion and Nelson Labs each exceeded its carrying amount (including goodwill) by an adequate margin to support a positive assertion that goodwill is not impaired as of October 1, 2024. No factors were identified that would result in the potential impairment to the indefinite-lived intangible assets.
The estimated fair value of Sterigenics, Nordion and Nelson Labs each exceeded its carrying amount (including goodwill) by an adequate margin to support a positive assertion that goodwill is not impaired as of October 1, 2025.
We do not amortize goodwill, but we evaluate it annually for impairment. Therefore, the allocation of the purchase price to intangible assets and goodwill has a significant impact on future operating results. Goodwill and other indefinite-lived intangible assets, primarily certain regulatory licenses and trade names, are tested for impairment annually as of October 1.
We do not amortize goodwill, but we evaluate it annually for impairment. Therefore, the allocation of the purchase price to goodwill has a significant impact on future operating results. Goodwill is tested for impairment annually as of October 1.
At December 31, 2024 and 2023, $49.1 million and $48.2 million, respectively, of the standby letters of credit and surety bonds referenced above were outstanding in favor of the various local and state licensing authorities in the event we defaulted on our decommissioning obligation. 63 CRITICAL ACCOUNTING POLICIES AND ESTIMATES The following subsections describe our most critical accounting policies, estimates, and assumptions.
At December 31, 2025 and 2024, $50.3 million and $49.1 million, respectively, of the standby letters of credit and surety bonds referenced above were outstanding in favor of the various local and state licensing authorities in the event we defaulted on our decommissioning obligation.
The Nordion segment is a provider of Co-60 and gamma irradiation systems, which are key components to the gamma sterilization process. Revenue from the sale of Co-60 radiation sources is recognized at a point-in-time upon satisfaction of our performance obligations for delivery/installation and disposal of existing sources.
Revenue from the sale of Co-60 radiation sources is recognized at a point-in-time upon satisfaction of our performance obligations for delivery/installation and disposal of existing sources. Revenue from the sale of gamma irradiation systems in our Nordion segment is recognized over time using an input measure of costs incurred and is immaterial to the overall business.
The decrease in cash and cash equivalents was attributable to $179.0 million of purchases of property, plant and equipment, $50.6 million of cash used in financing activities and a $17.4 million decline due to changes in foreign currency exchange rates, partially offset by $224.2 million of cash provided by operating activities.
The increase in cash and cash equivalents was attributable to $287.2 million of cash provided by operating activities and a $16.1 million increase due to favorable changes in foreign currency exchange rates, partially offset by $138.0 million of purchases of property, plant and equipment and $100.5 million of cash used in financing activities.
Our discussion of critical accounting policies and estimates is intended to supplement, not duplicate, our summary of significant accounting policies so that readers will have greater insight into the uncertainties involved in these areas. Our accounting policies are more fully described in Note 1, “Significant Accounting Policies” to our consolidated financial statements.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES The following subsections describe our most critical accounting policies, estimates, and assumptions. Our discussion of critical accounting policies and estimates is intended to supplement, not duplicate, our summary of significant accounting policies so that readers will have greater insight into the uncertainties involved in these areas.
Goodwill is assigned to our segments at December 31, 2024 as follows: (thousands of U.S. dollars) Sterigenics Nordion Nelson Labs Total Goodwill at December 31, 2024 $ 653,222 $ 255,485 $ 172,366 $ 1,081,073 We performed a quantitative assessment of all reporting units (Sterigenics, Nordion and Nelson Labs) as of October 1, 2024.
Goodwill is assigned to our segments at December 31, 2025 as follows: (thousands of U.S. dollars) Sterigenics Nordion Nelson Labs Total Goodwill at December 31, 2025 $ 658,919 $ 267,771 $ 176,542 $ 1,103,232 We performed a quantitative assessment of all reporting units (Sterigenics, Nordion and Nelson Labs) as of October 1, 2025.
The following table presents a reconciliation of net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP to Adjusted Net Income and Adjusted EBITDA, for each of the periods indicated: Year Ended December 31, (in thousands) 2024 2023 Net income $ 44,398 $ 51,376 Amortization of intangible assets 79,377 81,348 Share-based compensation (a) 36,896 32,364 Loss on refinancing of debt (b) 24,168 — Loss (gain) on foreign currency and derivatives not designated as hedging instruments, net (c) 2,448 (1,552) Business optimization expenses (d) 7,504 7,662 Professional services relating to EO sterilization facilities (e) 32,694 45,312 Georgia EO litigation settlement (f) — 35,000 Secondary offering and other shareholder activities (g) 1,864 — Accretion of asset retirement obligations (h) 2,638 2,413 Income tax benefit associated with pre-tax adjustments (i) (33,487) (49,597) Adjusted Net Income 198,500 204,326 Interest expense, net (j) 164,691 142,878 Depreciation (k) 82,420 76,577 Income tax provision applicable to Adjusted Net Income (l) 102,963 104,248 Adjusted EBITDA (m) $ 548,574 $ 528,029 (a) Represents share-based compensation expense to employees and Non-Employee Directors.
The following table presents a reconciliation of net income, the most directly comparable financial measure calculated and presented in accordance with GAAP to Adjusted Net Income and Adjusted EBITDA, for each of the periods indicated: Year Ended December 31, (in thousands) 2025 2024 Net income $ 77,949 $ 44,398 Amortization of intangible assets 41,798 79,377 Share-based compensation (a) 31,068 36,896 Loss on refinancing of debt (b) 1,462 24,168 Loss (gain) on foreign currency and derivatives not designated as hedging instruments, net (c) 58 2,448 Business optimization expenses (d) 8,068 9,368 Professional services relating to EO sterilization facilities (e) 46,225 32,694 Illinois EO litigation settlements (f) 64,943 — Accretion of asset retirement obligations (g) 2,321 2,638 Income tax benefit associated with pre-tax adjustments (h) (28,478) (33,487) Adjusted Net Income 245,414 198,500 Interest expense, net 155,722 164,691 Depreciation (i) 94,630 82,420 Income tax provision applicable to Adjusted Net Income (j) 98,035 102,963 Adjusted EBITDA (k) $ 593,801 $ 548,574 (a) Represents share-based compensation expense related to employees and Non-Employee Directors.
In addition, we expect to invest in special projects related to development of new Co-60 supply sources and facility enhancements at our EO sterilization facilities.
In addition, we expect to invest in special projects related to development of new Co-60 supply sources and facility enhancements at our EO sterilization facilities. For 2026, it is estimated that approximately $51 million of capital expenditures will relate to environmental facility enhancements.
Financing activities For the year ended December 31, 2024, net cash used in financing activities was $50.6 million compared to net cash provided by financing activities of $266.0 million for the year ended December 31, 2023 resulting in a net change of $316.5 million.
Financing activities For the year ended December 31, 2025, net cash used in financing activities increased $50.0 million to net cash used of $100.5 million as compared to $50.6 million for the year ended December 31, 2024.
Although the cost of utilities and direct materials can fluctuate, the remaining components of cost of revenues are generally more stable. Direct material costs relating to service revenues primarily includes EO gas, nitrogen gas and Co-60. The physical decay of Co-60 assets is included within depreciation expense as a cost of revenue.
Cost of Revenues Our cost of revenues consists primarily of direct materials, utilities, labor and related benefit costs, and depreciation and amortization. Although the cost of utilities and direct materials can fluctuate, the remaining components of cost of revenues are generally more stable. Direct material costs relating to service revenues primarily include EO gas, nitrogen gas and Co-60.
Our management also uses Adjusted Net Income and Adjusted EBITDA in their financial analysis and operational decision-making and Adjusted EBITDA serves as the metric for attainment of our primary annual incentive program.
Our management also uses Adjusted Net Income and Adjusted EBITDA in their financial analysis and operational decision-making and Adjusted EBITDA serves as the metric for attainment of our primary annual incentive program. Adjusted Net Income and Adjusted EBITDA may be calculated differently from, and therefore may not be comparable to, a similarly titled measure used by other companies.
See Note 19, “Commitments and Contingencies.” (g) Represents expenses incurred in connection with secondary offerings of our common stock that closed on March 4, 2024 and September 6, 2024 and legal, consulting, and other fees associated with shareholder engagement. 57 (h) Represents non-cash accretion of ARO related to Co-60 gamma and EO processing facilities, which are based on estimated site remediation costs for any future decommissioning of these facilities and are accreted over the life of the asset.
See Note 19, “Commitments and Contingencies.” (g) Represents non-cash accretion of ARO related to Co-60 gamma and EO processing facilities, which are based on estimated site remediation costs for any future decommissioning of these facilities and are accreted over the life of the asset.
We generally supplement management expertise with valuation specialists in performing appraisals to assist us in determining the fair values of assets acquired and liabilities assumed. These valuations require us to make estimates and assumptions, especially with respect to intangible assets. We generally amortize our intangible assets over their useful lives with the exception of indefinite lived intangible assets.
Any excess of the cost of the acquisition over the fair value of the net tangible and intangible assets acquired is recorded as goodwill. We generally supplement management expertise with valuation specialists in performing appraisals to assist us in determining the fair values of assets acquired and liabilities assumed. These valuations require us to make estimates and assumptions.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Segment Results for the years ended December 31, 2023 and 2022.” The following tables compare segment net revenue and segment income for the year ended December 31, 2024 to the year ended December 31, 2023: Year Ended December 31, (in thousands) 2024 2023 $ Change % Change Net Revenues Sterigenics $ 697,853 $ 667,130 $ 30,723 4.6 % Nordion 173,355 160,459 12,896 8.0 % Nelson Labs 229,233 221,699 7,534 3.4 % Segment Income Sterigenics $ 378,171 $ 362,212 $ 15,959 4.4 % Nordion 101,220 96,678 4,542 4.7 % Nelson Labs 69,183 69,139 44 0.1 % Segment Income Margin Sterigenics 54.2 % 54.3 % Nordion 58.4 % 60.3 % Nelson Labs 30.2 % 31.2 % Net Revenues Sterigenics net revenues were $697.9 million for the year ended December 31, 2024, an increase of $30.7 million, or 4.6%, as compared to the prior year.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Segment Results for the years ended December 31, 2023 and 2022.” The following tables compare segment net revenue and segment income for the year ended December 31, 2025 to the year ended December 31, 2024: Year Ended December 31, (in thousands) 2025 2024 $ Change % Change Net Revenues Sterigenics $ 755,780 $ 697,853 $ 57,927 8.3 % Nordion 187,618 173,355 14,263 8.2 % Nelson Labs 220,219 229,233 (9,014) (3.9 %) Segment Income Sterigenics $ 412,893 $ 378,171 $ 34,722 9.2 % Nordion 107,578 101,220 6,358 6.3 % Nelson Labs 73,330 69,183 4,147 6.0 % Segment Income Margin Sterigenics 54.6 % 54.2 % Nordion 57.3 % 58.4 % Nelson Labs 33.3 % 30.2 % Net Revenues Sterigenics net revenues were $755.8 million for the year ended December 31, 2025, an increase of $57.9 million, or 8.3%, as compared to the prior year.
The total borrowing capacity under the Revolving Credit Facility is $423.8 million. The Senior Secured Credit Facilities also provide SHH the right at any time and under certain conditions to request incremental term loans or incremental revolving credit commitments based on a formula defined in the Senior Secured Credit Facilities.
The Senior Secured Credit Facilities also provide SHH the right at any time and under certain conditions to request incremental term loans or incremental revolving credit commitments based on a formula defined in the Senior Secured Credit Facilities. On September 17, 2025, the Company and SHH entered into Amendment No. 6 (“Amendment No. 6”) to the Credit Agreement.
The increase was attributable to a 3.0% favorable impact from pricing and 0.4% from changes in volume and mix. Segment Income Sterigenics segment income was $378.2 million for the year ended December 31, 2024, an increase of $16.0 million, or 4.4%, as compared to the prior year.
Nordion segment income was $107.6 million for the year ended December 31, 2025, an increase of $6.4 million, or 6.3%, as compared to the prior year. The increase in segment income was attributable to favorable customer pricing and increases in volume and mix. Segment income margin decreased as a result of product mix.
Interest expense, net is primarily affected by changes in average outstanding indebtedness (including finance lease obligations) and variable interest rates.
Interest Expense, Net Interest expense, net, represents interest paid or accruing on our outstanding indebtedness and the amortization of debt discount and debt issuance costs. Interest expense, net is primarily affected by changes in average outstanding indebtedness (including finance lease obligations) and variable interest rates.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe interest rate caps became effective as of July 31, 2023 and expired on July 31, 2024. We designated these interest rate caps as cash flow hedges that were designed to hedge the variability of cash flows attributable to changes in the benchmark interest rate of our Term Loan.
Biggest changeWe designated the interest rate swap as a cash flow hedge designed to hedge the variability of cash flows attributable to changes in the SOFR benchmark interest rate of our Term Loans. We receive interest at the one-month Term SOFR rate and pay a fixed interest rate under the terms of the swap agreement.
From time to time, the Company utilizes interest rate derivatives to reduce the variability of cash flows in the interest payments associated with our variable rate borrowings. In March 2023, we entered into an interest rate swap agreement with a notional amount of $400.0 million.
From time to time, the Company utilizes interest rate derivatives to reduce the variability of cash flows in the interest payments associated with our variable rate borrowings. In March 2025, we entered into an interest rate swap agreement with a notional amount of $400.0 million.
The failure to receive or maintain, or delays in the receipt of, relevant U.S. or international regulatory qualifications could have a material adverse effect on our business, prospects, financial condition or results of operations. 68
The failure to receive or maintain, or delays in the receipt of, relevant U.S. or international regulatory qualifications could have a material adverse effect on our business, prospects, financial condition or results of operations. 62
Based on our indebtedness outstanding as of December 31, 2024, the interest rate under our Term Loans that was in effect on December 31, 2024, and after applying the effects of interest rate caps and the swap referenced above, a 1.0% increase in the interest rate under our outstanding debt obligations as of December 31, 2024, would increase interest expense by approximately $11.1 million per year.
Based on our indebtedness outstanding as of December 31, 2025, the interest rate under our Term Loans that was in effect on December 31, 2025, and after applying the effects of interest rate caps and the swap referenced above, a 1.0% increase in the interest rate under our outstanding debt obligations as of December 31, 2025, would increase interest expense by approximately $10.2 million per year.
Commodity Price Risk We purchase our supply of EO gas from various suppliers around the world, but in the United States there is a sole supplier for EO gas used for applications relevant to our business.
Commodity Price Risk We purchase our supply of EO gas from various suppliers around the world, but in the United States there is a sole supplier for EO gas used for applications relevant to our business. We are exposed to market risk based on fluctuations in the price of EO gas.
Holding other variables constant (such as interest rates and debt levels), if the U.S. dollar had appreciated by 10% against the foreign currencies used by our operations in the year ended December 31, 2024, revenues would have been reduced by approximately $48.4 million and gross profit by approximately $26.1 million.
Holding other variables constant (such as interest rates and debt levels), if the U.S. dollar had appreciated by 10% against the foreign currencies used by our operations in the year ended December 31, 2025, revenues would have been reduced by approximately $53.4 million and gross profit by approximately $29.2 million.
Approximately 44.0% of our revenues and 47.3% of our consolidated total assets as of December 31, 2024 were derived from operations outside the United States.
Approximately 45.9% of our revenues and 47.6% of our consolidated total assets as of December 31, 2025 were derived from operations outside the United States.
Most of our Sterigenics customer contracts contain provisions that permit us to pass through all or a portion of our supply price increases to our customers, though some of our contracts do not contain these provisions.
We actively seek to manage the risk of fluctuating prices through long-term supply and service contracts. Most of our Sterigenics customer contracts contain provisions that permit us to pass through all or a portion of our supply price increases to our customers, though some of our contracts do not contain these provisions.
Our results of operations are impacted by currency exchange rate fluctuations to the extent that we are unable to match net revenues received in foreign currencies with expenses incurred in the same currency.
Translation adjustments are recorded as a component of accumulated other comprehensive income (loss) within equity. 61 Our results of operations are impacted by currency exchange rate fluctuations to the extent that we are unable to match net revenues received in foreign currencies with expenses incurred in the same currency.
The interest rate swap’s effective date began on August 23, 2023 and expires on August 23, 2025. We designated the interest rate swap as a cash flow hedge designed to hedge the variability of cash flows attributable to changes in the SOFR benchmark interest rate of our Term Loan.
The interest rate swap became effective on August 31, 2025 and expires on August 31, 2027. We have designated the interest swap as a cash flow hedge designed to hedge the variability of cash flows attributable to changes in the SOFR benchmark interest rate of our Term Loans (or any successor thereto).
These translations could significantly affect the comparability of our results between financial periods and/or result in significant changes to the carrying value of our assets and liabilities. Translation adjustments are recorded as a component of accumulated other comprehensive income (loss) within equity.
These translations could significantly affect the comparability of our results between financial periods and/or result in significant changes to the carrying value of our assets and liabilities.
Transaction gains and losses arising from fluctuations in currency exchange rates on transactions denominated in currencies other than the functional currency are recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) as foreign exchange loss (gain). 67 The Company also routinely enters into foreign currency forward contracts to manage foreign currency exchange rate risk of our intercompany loans in certain of our international subsidiaries and non-functional currency assets and liabilities.
Transaction gains and losses arising from fluctuations in currency exchange rates on transactions denominated in currencies other than the functional currency are recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) as foreign exchange loss (gain).
We receive interest at the one-month Term SOFR rate and pay a fixed interest rate under the terms of the swap agreement. In May 2022, we entered into two interest rate cap agreements with a combined notional amount of $1,000.0 million for a total option premium of $4.1 million.
We receive interest at the one-month Term SOFR rate and pay a fixed interest rate under the terms of the swap agreement. In March 2023, we entered into an interest rate swap agreement with a notional amount of $400.0 million. The interest rate swap’s effective date began on August 23, 2023 and expired on August 23, 2025.
Removed
We are exposed to market risk based on fluctuations in the price of EO gas. 66 We actively seek to manage the risk of fluctuating prices through long-term supply and service contracts.
Added
The Company also enters into foreign currency forward contracts to manage foreign currency exchange rate risk of our intercompany loans in certain of our international subsidiaries and non-functional currency assets and liabilities. These foreign currency forward contracts generally expire on a monthly basis.
Removed
Under the current terms of the loan agreement, the benchmark interest rate index transitioned from LIBOR to Term SOFR on June 30, 2023. Accordingly, the interest rate cap agreements hedged the variability of cash flows attributable to changes in SOFR by limiting our cash flow exposure related to Term SOFR under a portion of our variable rate borrowings to 3.5%.
Removed
In October 2021, we entered into two interest rate cap agreements with a combined notional amount of $1,000.0 million for a total option premium of $1.8 million. Both interest rate caps were effective on December 31, 2022 and expired on July 31, 2023.
Removed
These interest rate caps were designated as cash flow hedges and were designed to hedge the variability of cash flows attributable to changes in LIBOR (or its successor), the benchmark interest rate being hedged, by limiting our cash flow exposure related to the LIBOR base rate under a portion of our variable rate borrowings to 1.0%.
Removed
The foreign currency forward contracts expire on a monthly basis. The net fair value of the outstanding foreign currency forward contracts was $0.1 million as of each of the years ended December 31, 2024 and 2023.

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