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What changed in Steris's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Steris's 2023 and 2024 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 2024 report.

+366 added−377 removedSource: 10-K (2024-05-29) vs 10-K (2023-05-26)

Top changes in Steris's 2024 10-K

366 paragraphs added · 377 removed · 302 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

86 edited+14 added−12 removed60 unchanged
Biggest changeApplied Sterilization Technologies operates in a highly regulated industry and competes with Sterigenics International, Inc., other smaller contract sterilization companies and manufacturers that sterilize products in-house. LIFE SCIENCES SEGMENT Description of Business. Our Life Sciences segment provides a comprehensive offering of products and services that support pharmaceutical manufacturing, primarily for vaccine and other biopharma Customers focused on aseptic manufacturing.
Biggest changeFor the year ended March 31, 2024, no Customer represented more than 10% of the segment’s revenues. Competition. AST operates in a highly regulated industry and competes with Sterigenics International, Inc., other smaller contract sterilization companies, other manufacturers of sterilization equipment and control systems, and manufacturers that sterilize products in-house. LIFE SCIENCES SEGMENT Description of Business.
Competition. Our Life Sciences segment operates in highly regulated environments where the most intense competition results from technological innovations, product performance, convenience and ease of use, and overall cost-effectiveness.
Our Life Sciences segment operates in highly regulated environments where the most intense competition results from technological innovations, product performance, convenience and ease of use, and overall cost-effectiveness.
Our business is subject to various degrees of governmental regulation in the countries in which we operate. In the United States, the Food and Drug Administration (“FDA”), the Environmental Protection Agency (“EPA”), the Occupational Safety and Health Administration ("OSHA"), the Nuclear Regulatory Commission (“NRC”), and other governmental authorities regulate the development, manufacture, sale, and distribution of our products and services.
Our business is subject to various degrees of governmental regulation in the countries in which we operate. In the United States, the Food and Drug Administration (“FDA”), the Environmental Protection Agency (“EPA”), the Occupational Safety and Health Administration ("OSHA"), the Nuclear Regulatory Commission, and other governmental authorities regulate the development, manufacture, sale, and distribution of our products and services.
We also make available free of charge on our website our Corporate Governance Guidelines, our Director Code of Ethics, and our Code of Business Conduct, as well as the Charters of the Audit Committee, the Compensation and Organization Development Committee, the Nominating and Governance Committee, and the Compliance Committee of the Company’s Board of Directors.
We also make available free of charge on our website our Corporate Governance Guidelines, our Director Code of Ethics, and our Code of Business Conduct, as well as the Charters of the Audit Committee, the Compensation and Organization Development Committee, the Nominating and Governance Committee, and the Compliance and Technology Committee of the Company’s Board of Directors.
In addition, our procedural solutions also include endoscopy accessories and capital equipment infrastructure used primarily in operating rooms, ambulatory surgery centers, endoscopy suites, and other procedural areas. Products Offered.
In addition, our procedural solutions also include endoscopy accessories, instruments, and capital equipment infrastructure used primarily in operating rooms, ambulatory surgery centers, endoscopy suites, and other procedural areas. Products Offered.
However, there can be no assurance that future or current regulatory, governmental, or private action will not have a material adverse affect on us or on our performance, results, or financial condition. Environmental Matters. We are subject to various laws and governmental regulations concerning environmental matters and employee safety and health in Ireland, the United States and other countries.
However, there can be no assurance that future or current regulatory, governmental, or private action will not have a material adverse effect on us or on our performance, results, or financial condition. Environmental Matters. We are subject to various laws and governmental regulations concerning environmental matters and employee safety and health in Ireland, the United States and other countries.
The investigation and remediation of environmental obligations generally occur over an extended period of time, and therefore we do not know if these events would have a material adverse affect on our financial condition, liquidity, or cash flow, nor can there be any assurance that such liabilities would not have a material adverse affect on our performance, results, or financial condition.
The investigation and remediation of environmental obligations generally occur over an extended period of time, and therefore we do not know if these events would have a material adverse effect on our financial condition, liquidity, or cash flow, nor can there be any assurance that such liabilities would not have a material adverse effect on our performance, results, or financial condition.
FDA conducts inspections of our manufacturing and contract sterilization facilities on a periodic basis to confirm compliance. In connection with an inspection, the FDA may initiate warning letters and/or consent decrees, which list conditions or practices that may indicate a violation of the FDA’s requirements. In fiscal 2023, STERIS did not receive any warning letters, seizures, or consent decrees.
FDA conducts inspections of our manufacturing and contract sterilization facilities on a periodic basis to confirm compliance. In connection with an inspection, the FDA may initiate warning letters and/or consent decrees, which list conditions or practices that may indicate a violation of the FDA’s requirements. In fiscal 2024, STERIS did not receive any warning letters, seizures, or consent decrees.
We offer a wide range of sterilization modalities and an array of testing services that complement the manufacturing of single use, sterile products. Our facilities are located in regions with a concentration of medical device manufacturing throughout the Americas, Europe, and Asia. Our technical professionals supports Customers in all phases of product development, materials testing, and process validation.
We offer a wide range of sterilization modalities and an array of testing services that complement the manufacturing of single use, sterile products. Our facilities are located in regions with a concentration of medical device manufacturing throughout the Americas, Europe, and Asia. Our technical professionals support Customers in all phases of product development, materials testing, and process validation.
Our products include cleaning chemistries and sterility assurance products, automated endoscope reprocessing systems and tracking products, endoscopy accessories, washers, sterilizers and other pieces of capital equipment essential to the operations of a sterile processing department ("SPD") and equipment used directly in the procedure rooms, including surgical tables, lights, equipment management services, and connectivity solutions. Services Offered.
Our products include cleaning chemistries and sterility assurance products, automated endoscope reprocessing systems and tracking products, endoscopy accessories, instruments, washers, sterilizers and other pieces of capital equipment essential to the operations of a sterile processing department and equipment used directly in the procedure rooms, including surgical tables, lights, equipment management services, and connectivity solutions. Services Offered.
The ESG team regularly updates the Nominating and Governance Committee of our Board of Directors regarding its activities, including evaluating carbon emissions, preparing for regulatory requirements, reporting ESG metrics, and reviewing ESG ratings. Key performance indicators and metrics have been established for those areas we believe to be relevant and potentially significant to our business.
The Corporate Responsibility team regularly updates the Nominating and Governance Committee of our Board of Directors regarding its activities, including evaluating carbon emissions, preparing for regulatory requirements, reporting ESG metrics, and reviewing ESG ratings. Key performance indicators and metrics have been established for those areas we believe to be relevant and potentially significant to our business.
Our total rewards offerings include an array of programs to support our employees' financial, physical, and mental well-being, including providing competitive salaries, variable performance pay, healthcare benefits, tuition assistance, paid time off, annual merit increases, and incentive plans based on the national norms of employees' employment.
Compensation and Benefits. Our total rewards offerings include an array of programs to support our employees' financial, physical, and mental well-being, including providing competitive salaries, variable performance pay, healthcare benefits, tuition assistance, paid time off, annual merit increases, and incentive plans based on the national norms of employees' location of employment.
In 2023, STERIS incurred no monetary losses as a result of legal proceedings associated with bribery or corruption. Supplier Code of Conduct. Our expectations for ethical behavior extend beyond STERIS to our Suppliers as well. Our Supplier Code of Conduct defines the minimum requirements and expectations for all Suppliers and their subcontractors.
In 2024, STERIS incurred no monetary losses as a result of legal proceedings associated with bribery or corruption. Supplier Code of Conduct. Our expectations for ethical behavior extend beyond STERIS to our Suppliers as well. Our Supplier Code of Conduct defines the minimum requirements and expectations for all Suppliers and their subcontractors.
The MedTech Europe Code of Ethical Business Practice regulates all aspects of the industry’s relationship with Healthcare Professionals (HCPs) and Healthcare Organizations (HCOs), to ensure that all interactions are ethical and professional at all times and to maintain the trust of regulators, and patients. STERIS has adopted and requires compliance with the MedTech Europe Code of Ethical Business Practice.
The MedTech Europe Code of Ethical Business Practice regulates all aspects of the industry’s relationship with Healthcare Professionals and Healthcare Organizations, to ensure that all interactions are ethical and professional at all times and to maintain the trust of regulators, and patients. STERIS has adopted and requires compliance with the MedTech Europe Code of Ethical Business Practice.
Using the STERIS Integrity Helpline or Webline, employees can anonymously report potential Code of Conduct concerns. A management Ethics Committee meets monthly to monitor and investigate reports of Code of Business Conduct violations and provides quarterly reporting to the Board of Director's Compliance and Technology Committee.
Using the STERIS Integrity Helpline or Webline, employees can anonymously report potential Code of Conduct concerns. A management Ethics Committee meets monthly to monitor and investigate reports of Code of Business Conduct violations and provides quarterly reporting to the Board of Directors' Compliance and Technology Committee.
Every year we encourage all employees to participate in our employee engagement survey which is administered by a third party on a confidential basis. This process has been valuable in helping us recognize what we do well and foster an open conversation about how we can make STERIS an even better place to work.
We encourage all employees to participate in our employee engagement survey which is regularly administered by a third party on a confidential basis. This process has been valuable in helping us recognize what we do well and foster an open conversation about how we can make STERIS an even better place to work.
Tokich serves as Senior Vice President and Chief Financial Officer. He assumed this role in August 2017. From February 2014 to July 2017, he served as the Senior Vice President, Chief Financial Officer and Treasurer. Andrew Xilas serves as Senior Vice President and General Manager, Dental. He assumed this role in June 2021.
He assumed this role in August 2017. From February 2014 to July 2017, he served as Senior Vice President, Chief Financial Officer and Treasurer. Andrew Xilas serves as Senior Vice President and General Manager, Dental. He assumed this role in June 2021.
For more information about the risks we face regarding regulatory requirements, see Part I, Item 1A of this Annual Report titled, "Risk Factors." We are subject to extensive regulatory requirements and must receive and maintain regulatory clearance or approval for many products and operations.
For more information about the risks we face regarding regulatory requirements, see Part I, Item 1A of this Annual Report titled, "Risk Factors." We 5 Table of Contents are subject to extensive regulatory requirements and must receive and maintain regulatory clearance or approval for many products and operations.
We are dedicated to creating and sustaining a diverse, equitable and inclusive work environment. W e believe that the different ideas, experiences, perspectives and backgrounds of our global employees create a 9 Table of Contents stronger organization that allows us to fulfill our ultimate goal of serving our Customers.
We are dedicated to creating and sustaining a diverse, equitable and inclusive work environment. W e believe that the different ideas, experiences, perspectives and backgrounds of our global employees create a stronger organization that allows us to fulfill our ultimate goal of serving our Customers.
That can include anything from reformulating chemistries to eliminating metals-based ingredients or reducing the effluence produced as a result of the use of our products, to creating ultra-concentrate chemistries such as Prolystica® Ultra Concentrate Cleaning Chemistries, which offer 10x the uses per container.
That can include anything from reformulating chemistries to eliminating metals-based ingredients or reducing the effluence produced as a result of the use of our products, to creating ultra-concentrate chemistries such as Prolystica® Ultra Concentrate Cleaning Chemistries, which offer 10 times the uses per container.
We cannot predict the effect on our operations resulting from current or future governmental regulation or the interpretation or application of these regulations. 5 Table of Contents If we fail to comply with any applicable regulatory requirements, penalties could be imposed on us.
We cannot predict the effect on our operations resulting from current or future governmental regulation or the interpretation or application of these regulations. If we fail to comply with any applicable regulatory requirements, penalties could be imposed on us.
We consider our brand names and trademarks to be valuable in the marketing of our products. As of March 31, 2023, we had a total of approximately 2,482 trademark registrations worldwide. Quality Assurance. We manufacture, assemble, and package products in several countries. Each of our production facilities are dedicated to particular processes and products.
We consider our brand names and trademarks to be valuable in the marketing of our products. As of March 31, 2024, we had a total of approximately 2,550 trademark registrations worldwide. Quality Assurance. We manufacture, assemble, and package products in several countries. Each of our production facilities are dedicated to particular processes and products.
However, there can be no assurance that future or current regulatory, governmental, or private action will not have a material adverse affect on our performance, results, or financial condition. Please refer to Note 10 to our consolidated financial statements titled, "Commitments and Contingencies" for further information.
However, there can be no assurance that future or current regulatory, governmental, or private action will not have a material adverse effect on our performance, results, or financial condition. Please refer to Note 12 to our consolidated financial statements titled, "Commitments and Contingencies" for further information.
Examples of how we engage our employees include quarterly management meetings, a robust intranet for communication with our global teams and various communications efforts within each department. In addition, our global human resources team has programs focused on career development and training for employees at all levels.
Examples of how we engage our employees include quarterly video updates, a robust intranet for communication with our global teams and various communications efforts within each department. In addition, our global human resources team has programs focused on career development and training for employees at all levels.
From February 2003 to July 2020 she held various positions with Parker-Hannifin Corporation, a global motion control technologies company, serving most recently from September 2019 to July 2020, as Vice President Human Resources of its Aerospace Group and from March 2017 to September 2019 as its Corporate Director of Human Resources. Julia K.
From February 2003 to July 2020, she held various positions with Parker-Hannifin Corporation, a global motion control technologies company, serving most recently from September 2019 to July 2020, as Vice President Human Resources of its Aerospace Group and from March 2017 to September 2019 as its Corporate Director of Human Resources. Kenneth E.
STERIS tracks greenhouse gas ("GHG") emissions and we complete the annual Carbon Disclosure Project ("CDP") questionnaire. CDP is an internationally recognized nonprofit organization that collects and reports environmental metrics. Currently, we report our direct (Scope 1) and indirect (Scope 2) energy use and emissions from all legacy STERIS facilities.
STERIS tracks greenhouse gas ("GHG") emissions, and we complete the annual Carbon Disclosure Project ("CDP") questionnaire. CDP is an internationally recognized nonprofit organization that collects and reports environmental metrics. Currently, we report our direct (Scope 1) and indirect (Scope 2) energy use and emissions.
In the future, if a loss contingency related to environmental matters, employee safety, health or conditional asset retirement obligations is significantly greater than the current estimated amount, we would record a liability for the obligation and it may result in a material impact on net income for the annual or interim period during which the liability is recorded.
In the future, if a loss contingency related to environmental matters, employee safety, health or conditional asset retirement obligations which is estimable and probable is significantly greater than the current recorded amount, we would record an additional liability for the obligation and it may result in a material impact on net income for the annual or interim period during which the liability is recorded.
In fiscal 2023, STERIS incurred no monetary losses as a result of legal proceedings associated with false marketing claims. 8 Table of Contents ENERGY, GHG EMISSIONS AND ENVIRONMENTAL CONSERVATION We are subject to various laws and governmental regulations concerning environmental matters and employee safety and health in Ireland, the United States and other countries.
In fiscal 2024, STERIS incurred no monetary losses as a result of legal proceedings associated with false marketing claims. ENERGY, GHG EMISSIONS AND ENVIRONMENTAL CONSERVATION We are subject to various laws and governmental regulations concerning environmental matters and employee safety and health in Ireland, the United States and other countries.
From July 2013 to July 2018 he served as Vice President, General Counsel, and Secretary. 12 Table of Contents
From July 2013 to July 2018, he served as Vice President, General Counsel, and Secretary. 13 Table of Contents
Our employee turnover rate was 15% and 17% for fiscal 2023 and 2022, respectively, and we are continuously working towards a goal of achieving a rate of 10% or less, excluding retirements and reductions in force. Although reductions in force are sometimes necessary, we work to avoid them and they must always be approved by executive management.
Our employee turnover rate was 15% for both fiscal 2024 and 2023, and we are continuously working towards a goal of achieving a rate of 10% or less, excluding retirements and reductions in force. Although reductions in force are sometimes necessary, we work to avoid them, and they must always be approved by executive management.
The objective of ERM is to identify key risks, the potential impacts of compliance failure, identify key mitigating activities, develop potential improvements for managing the risks, and to ensure execution of oversight activities on a monthly, annual or as needed basis. Our Environmental, Social, and Governance ("ESG") function is led by the Vice President of ESG.
The objective of ERM is to identify key risks, the potential impacts of compliance failure, identify key mitigating activities, develop potential improvements for managing the risks, and to ensure execution of oversight activities on a monthly, annual or as needed basis. Our Corporate Responsibility function is led by the Vice President of ESG.
From August 2019 to August 2022, he served as Senior Vice President, Americas Commercial Operations. From April 2014 to August 2019 he served as Vice President, North America Commercial Operations. Renato G. Tamaro serves as Vice President and Corporate Treasurer. He assumed this role in August 2017. From March 2006 to July 2017, he served as Assistant Treasurer. Michael J.
From April 2014 to August 2019 he served as Vice President, North America Commercial Operations. Renato G. Tamaro serves as Vice President and Corporate Treasurer. He assumed this role in August 2017. From March 2006 to July 2017, he served as Assistant Treasurer. Michael J. Tokich serves as Senior Vice President and Chief Financial Officer.
We offer various preventive maintenance programs and repair services to support the effective operation of capital equipment over its lifetime. Customer Concentration. Our Life Sciences segment sells consumables, services and capital equipment, to Customers in many countries throughout the world. For the year ended March 31, 2023, no Customer represented more than 10% of the Life Sciences segment’s total revenues.
We offer various preventive maintenance programs and repair services to support the effective operation of capital equipment over its lifetime. Customer Concentration. Our Life Sciences segment sells consumables, services and capital equipment to Customers globally. For the year ended March 31, 2024, no Customer represented more than 10% of the Life Sciences segment’s total revenues. Competition.
ITEM 1. BUSINESS INTRODUCTION STERIS is a leading global provider of products and services that support patient care with an emphasis on infection prevention. WE HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare, life sciences and dental products and services.
ITEM 1. BUSINESS INTRODUCTION STERIS is a leading global provider of products and services that support patient care with an emphasis on infection prevention. WE HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare and life science products and services around the globe. We offer our Customers a unique mix of innovative products and services.
From August 2015 to February 2018, he served as Senior Vice President, STERIS Applied Sterilization Technologies and Life Sciences. Mary Clare Fraser serves as Senior Vice President and Chief Human Resources Officer. She assumed this role in May 2022. She joined STERIS in July 2020 as the Vice President and Chief Human Resources Officer.
From February 2018 to August 2018, he served as Senior Vice President, Sterilization and Disinfection. From August 2015 to February 2018, he served as Senior Vice President, STERIS AST and Life Sciences. Mary Clare Fraser serves as Senior Vice President and Chief Human Resources Officer. She assumed this role in May 2022.
The cornerstone of this initiative is the belief that incidents result from unsafe acts or conditions, both of which are preventable. We apply the U.S. Occupational Safety and Health Administration (OSHA) recordkeeping practices worldwide.
The cornerstone of this initiative is the belief that incidents result from unsafe acts or conditions, both of which are preventable. We apply OSHA recordkeeping practices worldwide.
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE Introduction WE HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare, life sciences and dental products and services. Inspired by our Customers’ efforts to create a healthier and safer world, and guided by our legacy of leadership and innovation, we strive to be a Great Company.
CORPORATE RESPONSIBILITY Introduction WE HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare and life sciences products and services around the globe. Inspired by our Customers’ efforts to create a healthier and safer world, and guided by our legacy of leadership and innovation, we strive to be a Great Company.
We offer our Customers a unique mix of innovative consumable products, such as detergents, endoscopy accessories, barrier products, and other products and services, including: equipment installation and maintenance, microbial reduction of medical devices, dental instruments and tools, instrument and scope repair, laboratory testing services, outsourced reprocessing, and capital equipment products, such as sterilizers and surgical tables, automated endoscope reprocessors, and connectivity solutions such as operating room (“OR”) integrati on.
These include: consumable products, such as detergents, endoscopy accessories, barrier products, instruments and tools; and services, including equipment installation and maintenance, microbial reduction of medical devices, instrument and scope repair, laboratory testing, outsourced reprocessing; and capital equipment, such as sterilizers, surgical tables, and automated endoscope reprocessors, and connectivity solutions such as operating room (“OR”) integrati on.
He joined HuFriedyGroup (now part of STERIS) in 1987, holding roles of increasing responsibility, which included a promotion to President, HuFriedyGroup in January 2021. J. Adam Zangerle serves as Senior Vice President, General Counsel, and Company Secretary. He assumed this role in July 2018.
He joined HuFriedy Group (acquired by STERIS during fiscal 2022) in 1987, holding roles of increasing responsibility, which included a promotion to President, HuFriedy Group in January 2021. J. Adam Zangerle serves as Senior Vice President, General Counsel, and Company Secretary. He assumed this role in July 2018.
The ESG function, with support from our Chief Executive Officer, General Counsel and other senior executives, works to actively develop and refine our ESG strategies, programs, and policies. The ESG function works closely with our Global Sustainability Steering Committee to build ESG values and implement strategies, programs, and policies across the Company.
The Corporate Responsibility function, with support from our CEO, General Counsel and other senior executives, works to actively develop and refine our Environmental, Social, and Governance ("ESG") strategies, programs, and policies. The Corporate Responsibility function works closely with our Global Sustainability Steering Committee to build ESG values and implement strategies, programs, and policies across the Company.
We currently have 12 locations that hold the OSHA VPP Star Award. We utilize internal HSE management systems and compliance audits designed to identify percent compliance of our global operations against our standards. Employee Engagement and Development. We believe that engaged employees are more productive, innovative, and satisfied in their work.
We utilize internal HSE management systems and compliance audits designed to identify percent compliance of our global operations against our standards. Employee Engagement and Development. We believe that engaged employees are more productive, innovative, and satisfied in their work.
Madsen serves as Senior Vice President, Life Sciences. She assumed this role in July 2020. From August 2015 to July 2020 she served as Vice President and General Manager Life Sciences, Consumables. Cary L. Majors serves as Senior Vice President and President, Healthcare. He assumed this role in August 2022.
From August 2015 to July 2020, she served as Vice President and General Manager Life Sciences, Consumables. 12 Table of Contents Cary L. Majors serves as Senior Vice President and President, Healthcare. He assumed this role in August 2022. From August 2019 to August 2022, he served as Senior Vice President, Americas Commercial Operations.
Total directors and employee’s distribution by gender is shown in the table below: March 31, 2023 March 31, 2022 Male Female Male Female Non-Executive Directors 6 2 6 2 Senior Managers 739 297 663 236 Other employees of the Company 10,774 5,846 10,294 5,629 Directors and United States employees by race is shown in the table below: March 31, 2023 March 31, 2022 White Minority (1) White Minority (1) Non-Executive Directors 75% 25% 75% 25% Senior Managers 86% 14% 88% 12% Other employees of the Company 61% 39% 63% 37% (1) A minority person is defined as a person who identifies as American Indian/Alaskan Native, Asian, Black or African American, Hispanic or Latino, Native Hawaiian or Other Pacific Island, or two or more races.
Total directors and employees distribution by gender is shown in the table below: March 31, 2024 March 31, 2023 Male Female Male Female Non-Executive Directors 6 3 6 2 Senior Managers 801 321 739 297 Other employees of the Company 11,591 6,327 10,774 5,846 Directors and United States employees by race is shown in the table below: March 31, 2024 March 31, 2023 White Minority (1) White Minority (1) Non-Executive Directors 67% 33% 75% 25% Senior Managers 86% 14% 86% 14% Other employees of the Company 60% 40% 61% 39% (1) A minority person is defined as a person who identifies as American Indian/Alaskan Native, Asian, Black or African American, Hispanic or Latino, Native Hawaiian or Other Pacific Island, or two or more races.
Key metrics for purposes of benchmarking performance include Total Recordable Incident Rate ("TRIR") and Lost-time Incident Rate ("LTIR") injury and illness incident rates, both of which are presented in the table below: STERIS Industry Benchmarks (2) Fiscal 2023 Fiscal 2022 Average Best in Class Total Recordable Incident Rate (1) 1.05 0.85 2.50 1.43 Lost-time Incident Rate (1) 0.36 0.24 1.25 0.32 (1 ) We apply the U.S.
Key metrics for purposes of benchmarking performance include Total Recordable Incident Rate ("TRIR") and Lost-time Incident Rate ("LTIR") injury and illness incident rates, both of which are presented in the table below: STERIS Industry Benchmarks (2) Fiscal 2024 Fiscal 2023 Average Best in Class Total Recordable Incident Rate (1) 1.17 1.05 2.50 1.43 Lost-time Incident Rate (1) 0.43 0.36 1.25 0.42 10 Table of Contents (1 ) We apply OSHA recordkeeping practices worldwide.
We expect our people to treat each other with mutual respect. Our ideal business team is engaged, diverse, inclusive and talented, and we create programs and policies in support of these goals. We believe unity of purpose and teamwork enables us to do far more than we could individually.
Our ideal business team is engaged, diverse, inclusive and talented, and we create programs and policies in support of these goals. We believe unity of purpose and teamwork enables us to do far more than we could individually. We draw strength from each other and encourage communication with fairness, candor, respect and courage.
We cannot assure you that these patterns will not continue. Backlog. We define backlog as the amount of unfilled capital equipment purchase orders at a point in time. At March 31, 2023, we had a backlog of $599.6 million. Of this amount, $494.7 million and $104.9 million related to our Healthcare and Life Sciences segments, respectively.
We cannot assure you that these patterns will not continue. Backlog. We define backlog as the amount of unfilled capital equipment purchase orders at a point in time. At March 31, 2024, we had a backlog of $425.2 million. Of this amount, $353.8 million and $71.4 million related to our Healthcare and Life Sciences segments, respectively.
EMPLOYEES AND HUMAN CAPITAL MANAGEMENT Strategy and Overview. People are the key to our success, which is reflected in our two core values of people and teamwork. We are committed to the safety and success of our people. We expect the performance of every person to continually improve with personal initiative and proper support.
People are the key to our success, which is reflected in our two core values of people and teamwork. We are committed to the safety and success of our people. We expect the performance of every person to continually improve with personal initiative and proper support. We expect our people to treat each other with mutual respect.
We take prompt action whenever we are alerted to regulatory or field-safety issues with a STERIS product. Following immediate assessment, we take corrective action, including voluntary product recalls, when 11 Table of Contents needed. We examine underlying issues and root cause and work to resolve these to avoid recurrence.
We take prompt action whenever we are alerted to regulatory or field-safety issues with a STERIS product. Following immediate assessment, we take corrective action, including voluntary product recalls, when needed. We examine underlying issues and root cause and work to resolve these to avoid recurrence. STERIS had no Class I recalls in fiscal 2024, 2023 or 2022.
We compete with a number of large companies that have significant product portfolios and global reach, as well as a number of small companies with very limited product offerings.
We compete for pharmaceutical Customers with a number of large companies that have significant product portfolios and global reach, as well as a number of small companies with very limited product offerings and operations in one or a limited number of countries.
We have long-term supply contracts for certain materials for which there are few suppliers, or those that are single-sourced in certain regions of the world, such as ethylene oxide ("EO") and cobalt-60, which are necessary to our AST operations.
We anticipate continued inflation pressures in fiscal 2025 but not at the significant level experienced in fiscal 2024 and 2023.We have long-term supply contracts for certain materials for which there are few suppliers, or those that are single-sourced in certain regions of the world, such as ethylene oxide ("EO") and cobalt-60, which are necessary to our AST operations.
Designed for any type of organization, regardless of its activity or sector, it can provide assurance that environmental impact is being measured, controlled and improved in a holistic manner.
Designed for any type of organization, regardless of its activity or sector, it can provide assurance that environmental impact is being measured, controlled and improved in a holistic manner. We currently have three facilities and 14 reprocessing locations that are 14001 accredited locations.
Our Healthcare segment also provides comprehensive instrument and endoscope repair and maintenance services (on-site or at one of our dedicated facilities), custom process improvement consulting and outsourced instrument sterile processing (on-site at the hospital and in off-site reprocessing centers). Customer Concentration. Our Healthcare segment sells consumables, services and capital equipment, to Customers in many countries throughout the world.
Our Healthcare segment also provides comprehensive instrument, devices, and endoscope repair and maintenance services (on-site or at one of our dedicated facilities), custom process improvement consulting and outsourced instrument sterile processing (on-site at the hospital and in off-site reprocessing centers). 3 Table of Contents Customer Concentration.
In addition, we have developed a plan to expand our irradiation processing capacity with accelerator-based technologies, which may reduce the potential supply risk. In response to the active conflict between Russian and Ukraine, we stopped purchasing cobalt-60 from our Russian supplier.
In addition, we continue to expand our irradiation processing capacity with accelerator-based technologies, in order to help mitigate the potential cobalt-60 supply risk. In response to the active conflict between Russian and Ukraine, we stopped purchasing cobalt-60 from our Russian supplier in fiscal 2023.
Tokich 54 Senior Vice President and Chief Financial Officer Andrew Xilas 58 Senior Vice President and General Manager, Dental J. Adam Zangerle 56 Senior Vice President, General Counsel, and Company Secretary The following discussion provides a summary of each executive officer's recent business experience through March 31, 2023: Karen L. Burton serves as Vice President, Controller and Chief Accounting Officer.
Tamaro 55 Vice President and Corporate Treasurer Michael J. Tokich 55 Senior Vice President and Chief Financial Officer Andrew Xilas 59 Senior Vice President and General Manager, Dental J. Adam Zangerle 57 Senior Vice President, General Counsel, and Company Secretary The following discussion provides a summary of each executive officer's recent business experience through March 31, 2024: Karen L.
STERIS had no Class I recalls in fiscal 2023, 2022 or 2021. INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table presents certain information regarding our executive officers at March 31, 2023. All executive officers serve at the pleasure of the Board of Directors. Name Age Position Karen L. Burton 55 Vice President, Controller and Chief Accounting Officer Daniel A.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table presents certain information regarding our executive officers at March 31, 2024. All executive officers serve at the pleasure of the Board of Directors. Name Age Position Karen L. Burton 56 Vice President and Chief Accounting Officer Daniel A.
INFORMATION RELATED TO BUSINESS SEGMENTS Our chief operating decision maker is our President and Chief Executive Officer (“CEO”). The CEO is responsible for performance assessment and resource allocation. The CEO regularly receives discrete financial information about each reportable segment and uses this information to assess performance and allocate resources.
The CEO is responsible for performance assessment and resource allocation. The CEO regularly receives discrete financial information about each reportable segment and uses this information to assess performance and allocate resources.
Our focus is on safety, quality and consistency in approach and outcome. As a Lean focused organization, we have created standard work instructions for many processes and refresher courses are offered regularly for existing employees. Where possible, we look to provide cross-training for employees looking to expand their knowledge or grow into new roles.
As a Lean focused organization, we have created standard work instructions for many processes, and refresher courses are offered regularly for existing employees. Where possible, we look to provide cross-training for employees looking to expand their knowledge or grow into new roles. We encourage all employees to create individual development plans and provide the support to assist in that effort.
She assumed this role in January 2017. Daniel A. Carestio serves as President and Chief Executive Officer. He assumed this role in July 2021. From August 2018 to July 2021 he served as Senior Vice President and Chief Operating Officer. From February 2018 to August 2018 he served as Senior Vice President, Sterilization and Disinfection.
Burton serves as Vice President and Chief Accounting Officer. She assumed this role in January 2017. Previously, Ms. Burton also served as Controller from January 2017 until December 2023. Daniel A. Carestio serves as President and CEO. He assumed this role in July 2021. From August 2018 to July 2021, he served as Senior Vice President and Chief Operating Officer.
With respect to financial matters, reports are provided to the Board of Director’s Audit Committee. The STERIS Code of Business Conduct covers ethical marketing and off-label promotion.
With respect to financial matters, reports are provided to the Board of Directors' Audit Committee. With respect to human resources related matters, reports are provided to the Board of Dir ectors' Compensation and Organization Development Committee. 8 Table of Contents The STERIS Code of Business Conduct covers ethical marketing and off-label promotion.
In addition, we provide biennial Code of Conduct training and other key required training at all levels of the Company. In our manufacturing and service organizations, we provide training for employees who do not have the necessary experience or background. This training is conducted through a combination of hands-on and module-based training.
In our manufacturing and service organizations, we provide training for employees who do not have the necessary experience or background. This training is conducted through a combination of hands-on and module-based training. Our focus is on safety, quality and consistency in approach and outcome.
To date, one facility and 14 reprocessing locations have undergone the formal process to receive ISO 14001. 10 Table of Contents The OSHA Voluntary Protection Program ("VPP") Star Award recognizes employers who have implemented effective safety and health management systems and maintain injury and illness rates below national Bureau of Labor Statistics averages for their industry.
The OSHA Voluntary Protection Program ("VPP") Star Award recognizes employers who have implemented effective safety and health management systems and maintain injury and illness rates below national Bureau of Labor Statistics averages for their industry. We currently have 13 locations that hold the OSHA VPP Star Award.
We purchase raw materials, sub-assemblies, components, and other supplies needed in our operations from numerous suppliers in the United States and internationally. The principal raw materials and supplies used in our operations include stainless and carbon steel, organic and inorganic chemicals, fuel, and plastic components. These raw materials and supplies are generally available from several suppliers and in sufficient quantities.
The principal raw materials and supplies used in our operations include stainless and carbon steel, organic and inorganic chemicals, fuel, and plastic components. These raw materials and supplies are generally available from several suppliers and in sufficient quantities. However, in fiscal 2023 and 2024 we experienced delays in receiving materials and significant cost increases.
The average number of persons employed by STERIS plc and its subsidiaries during each of the following fiscal years was as follows: Fiscal 2023 Fiscal 2022 Healthcare 10,629 10,546 Applied Sterilization Technologies 3,163 2,961 Life Sciences 965 1,111 Dental 1,451 1,020 Corporate 892 784 Total employees 17,100 16,422 Diversity, Equity & Inclusion (DE&I).
The average number of persons employed by STERIS plc and its subsidiaries during each of the following fiscal years was as follows: 9 Table of Contents Fiscal 2024 Fiscal 2023 Healthcare 11,419 10,629 AST 3,340 3,163 Life Sciences 999 965 Dental 1,411 1,451 Corporate 1,010 892 Total employees 18,179 17,100 Diversity, Equity & Inclusion.
Total employee compensation is presented in the table below: (in thousands) Fiscal 2023 Fiscal 2022 Wages and salaries $ 1,172,234 $ 1,100,357 Commission and incentive plans 154,840 225,863 Social security costs 91,653 65,525 Share-based compensation expense 38,951 57,660 Pension and post-retirement benefits expense 37,936 32,423 Other, primarily employee benefits 139,133 130,217 Total employee costs $ 1,634,747 $ 1,612,045 QUALITY We are subject to strict regulatory compliance and quality standards to ensure the safety and supply of our products and services.
Total employee compensation is presented in the table below, including costs associated with employees in the Dental segment, which is currently held for sale: (in thousands) Fiscal 2024 Fiscal 2023 Wages and salaries $ 1,274,522 $ 1,172,234 Commission and incentive plans 211,342 154,840 Social security costs 106,585 91,653 Share-based compensation expense 56,535 38,951 Pension and post-retirement benefits expense 41,088 37,936 Other, primarily employee benefits 152,724 139,133 Total employee costs $ 1,842,796 $ 1,634,747 11 Table of Contents QUALITY We are subject to strict regulatory compliance and quality standards to ensure the safety and supply of our products and services.
We protect our technology and products by, among other means, obtaining United States and foreign patents. There can be no assurance, however, that any patent will provide adequate protection for the technology, system, product, service, or process it covers. In addition, the process of obtaining and protecting patents can be long and expensive.
There can be no assurance, however, that any patent will provide adequate protection for the technology, system, product, service, or process it covers. In addition, the process of obtaining and protecting patents can be long and expensive. We also rely upon trade secrets, technical know-how, and continuing technological innovation to develop and maintain our competitive position.
Within healthcare, there is increased concern regarding the level of hospital acquired infections around the world; increased demand for medical procedures, including preventive screenings such as endoscopies and colonoscopies; and a desire by our Customers to operate more efficiently, all which are driving increased demand for many of our products and services.
In addition, there is increased demand for medical procedures, including preventive screenings such as endoscopies and colonoscopies; and a desire by our Customers to operate more efficiently, all which are driving increased demand for many of our products and services. INFORMATION RELATED TO BUSINESS SEGMENTS Our chief operating decision maker is our President and Chief Executive Officer (“CEO”).
In fiscal 2023, we completed an energy assessment of our global operations to identify opportunities for reducing our global GHG emissions and evaluate potential target setting opportunities. We recognize that a significant portion of our carbon impact is as a result of our value chain, outside of electricity and energy consumption at our global sites.
We recognize that a significant portion of our carbon impact is as a result of our value chain, outside of electricity and energy consumption at our global sites.
At March 31, 2022, excluding Cantel, we had backlog orders of $528.3 million. Of this amount, $423.6 million and $104.7 million related to our Healthcare and Life Sciences segments, respectively. 6 Table of Contents Availability of Securities and Exchange Commission Filings.
At March 31, 2023, we had backlog orders of $599.6 million. Of this amount, $494.7 million and $104.9 million related to our Healthcare and Life Sciences segments, respectively. Backlog declined in fiscal 2024 as supply chain delays eased allowing us to reduce lead times and backlog. 6 Table of Contents Availability of Securities and Exchange Commission Filings.
We are pleased to report that 85% of our employees completed our 2023 survey. In our most recent survey, we measured fifteen principal factors and overall employee engagement was 74%, in-line with our results for the past five years.
In our fiscal 2023 survey, we measured fifteen principal factors and overall employee engagement was 74%, in-line with our results for the past five years. The results indicate that the substantial majority of our people are committed to serving our Customers, are proud to work for STERIS, and have confidence in the stability of our business.
Occupational Safety and Health Administration ("OSHA") recordkeeping practices worldwide. All rates are based on 100 full-time employees ("FTE") working one year. 100 FTEs equals 200,000 work hours. TRIR includes work-related injuries or illnesses requiring medical attention beyond first-aid.
All rates are based on 100 full-time employees ("FTE") working one year. 100 FTEs equals 200,000 work hours. TRIR includes work-related injuries or illnesses requiring medical attention beyond first-aid. LTIR includes work-related injuries or illnesses that cause an employee to be away from work at least one full day after the date of the incident.
The results indicate that the majority of our people are committed to serving our Customers, are proud to work for STERIS, and have confidence in the stability of our business. We are committed to supporting the development of our people. Employees benefit from hands-on continuous improvement ("Lean") training, a web-based learning management system and STERIS University.
We are committed to supporting the development of our people. Employees benefit from hands-on continuous improvement ("Lean") training, a web-based learning management system and STERIS University. In addition, we provide biennial Code of Conduct training and other key required training at all levels of the Company.
On a product basis, competitors include 3M, Baxter, Boston Scientific, Belimed, Ecolab, ERBE, Fortive, Getinge, Karl Storz, Metrex, Olympus, Ruhof, SteelCo, Stryker, Skytron and Wassenburg. On a service line basis, competitors include Agiliti, BBraun, Berendsen plc, CleanLease (Clean Lease Fortex), Parts Source, Olympus, Owens & Minor, Pentax, Rentex Awé and Rentex Floren and Sterilog Limited.
On a product basis, competitors include 3M, Baxter, Boston Scientific, Belimed, Fortive, Getinge, Karl Storz, Olympus, Ruhof, SteelCo, Stryker, Skytron and Wassenburg. On a service line basis, competitors include Agiliti, BBraun, Crothall, Olympus and Pentax. AST SEGMENT Description of Business.
APPLIED STERILIZATION TECHNOLOGIES SEGMENT Description of Business. Our Applied Sterilization Technologies ("AST") segment is a third-party service provider for contract sterilization, as well as testing services needed to validate sterility for medical device and pharmaceutical manufacturers. Our technology-neutral offering supports Customers every step of the way, from testing through sterilization. Services Offered.
Our AST segment supports medical device and pharmaceutical manufacturers through a global network of contract sterilization and laboratory testing facilities, and integrated sterilization equipment and control systems. Our technology-neutral offering supports Customers every step of the way, from testing through sterilization. Services Offered.
More recently, we initiated a comprehensive review to establish the baseline for our Scope 3 carbon emissions. We have a broad and comprehensive portfolio of sterilization and disinfection products that support the procedural spaces within hospitals, endoscopy and surgery centers as well as pharmaceutical, medical device and dental Customers.
We have a broad and comprehensive portfolio of sterilization and disinfection products that support the procedural spaces within hospitals, endoscopy and surgery centers as well as pharmaceutical and medical device Customers. When we think about new products or next generation products, part of our effort is to reduce the environmental impact of what we do.
However during fiscal 2022 and 2023, we experienced a rise in supply chain and labor costs and anticipate continued inflationary pressure in fiscal 2024 . We monitor the prices we charge for our products and services on an ongoing basis and plan to adjust those prices to take into account future changes in the rate of inflation. Intellectual Property.
We monitor the prices we charge for our products and services on an ongoing basis and plan to adjust those prices to take into account future changes in the rate of inflation. Intellectual Property. We protect our technology and products by, among other means, obtaining United States and foreign patents.
In addition, we manufacture and supply integrated sterilization equipment and control systems to medical device manufacturers and research institutions. Customer Concentration. Our Applied Sterilization Technologies segment’s services are offered to Customers throughout the world. For the year ended March 31, 2023, no Customer represented more than 10% of the segment’s revenues. Competition.
In addition, we manufacture and supply integrated sterilization equipment and control systems to medical device manufacturers and research institutions. Products Offered. We support Customers with process controls and monitoring systems, and integrated sterilization equipment, including accelerators, product handling, and automation. Customer Concentration. Our AST segment’s services are offered to Customers throughout the world.
Carestio 50 President and Chief Executive Officer Mary Clare Fraser 52 Senior Vice President and Chief Human Resources Officer Julia K. Madsen 58 Senior Vice President, Life Sciences Cary L. Majors 48 Senior Vice President and President, Healthcare Renato G. Tamaro 54 Vice President and Corporate Treasurer Michael J.
Carestio 51 President and CEO Mary Clare Fraser 53 Senior Vice President and Chief Human Resources Officer Kenneth E. Kohler 61 Senior Vice President and General Manager, AST Julia K. Madsen 59 Senior Vice President and General Manager, Life Sciences Cary L. Majors 49 Senior Vice President and President, Healthcare Renato G.
Our portfolio includes a full suite of consumable products, equipment maintenance and specialty services, and capital equipment. Products Offered. These products include formulated cleaning chemistries, barrier products, sterility assurance products, steam and vaporized hydrogen peroxide sterilizers and washer disinfectors. Services Offered. Our Life Sciences segment service employees install, maintain, upgrade, repair, and troubleshoot equipment throughout the world.
These products include pharmaceutical detergents, cleanroom disinfectants and sterilants, pharmaceutical grade and research sterilizers and washers, sterility assurance and maintenance products, vaporized hydrogen peroxide room decontamination systems and sterilizers, and high purity water and pure steam generators. Services Offered. Our Life Sciences segment service employees install, maintain, upgrade, repair, and troubleshoot equipment throughout the world.
Our senior management team and Board receive regular updates on our people, including data and metrics on retention, engagement and safety which are used to determine our human resources priorities, programs and training. We are committed to upholding human rights in all our operations globally and respect human rights as recognized by the principles of the United Nations Global Compact.
Our collaboration turns interesting ideas into great products and services for our Customers. Our senior management team and Board receive regular updates on our people, including data and metrics on retention, engagement and safety which are used to determine our human resources priorities, programs and training.
We operate our business and report our financial information in four reportable business segments: Healthcare, Applied Sterilization Technologies, Life Sciences and Dental. Non-allocated operating costs that support the entire Company and items not indicative of operating trends are excluded from segment operating income.
For more information, refer to Note 4 to our consolidated financial statements titled, "Discontinued Operations." Non-allocated operating costs that support the entire Company and items not indicative of operating trends are excluded from segment operating income.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeVarious additional health care reform proposals have emerged at the federal and state level, and we are unable to predict which, if any, of those proposals will be enacted. Product and Service Related Regulations and Claims We are subject to extensive regulatory requirements and must receive and maintain regulatory clearance or approval for many products and operations.
Biggest changeIn addition, our costs may increase more rapidly than reimbursement levels or permissible pricing increases or we may not satisfy the standards or requirements for reimbursement. Various additional healthcare reform proposals have emerged at the federal and state level, and we are unable to predict which, if any, of those proposals will be enacted.
Some are single-sourced in certain regions of the world, such as cobalt-60 and EO, which are necessary to our AST operations. Changes in regulatory requirements regarding the use of, the unavailability or short supply of these products might disrupt or cause shutdowns of portions of our AST operations or have other adverse consequences.
Some are single-sourced in certain regions of the world, such as cobalt-60 and EO, which are necessary to our AST operations. Changes in regulatory requirements regarding the use of, or the unavailability or short supply of, these products might disrupt or cause shutdowns of portions of our AST operations or have other adverse consequences.
Further, we could be liable for damages and fines as a result of legislative or regulatory action or litigation, and any liability could exceed our insurance and indemnification coverage, if any, and have a material adverse effect on our financial condition.
Further, we could be liable for material damages and fines as a result of legislative or regulatory action or litigation, and any liability could exceed our insurance and indemnification coverage, if any, and have a material adverse effect on our financial condition.
During the second quarter of fiscal 2023, in connection with the preparation of our quarterly consolidated financial statements, we identified and recognized a goodwill impairment loss of $490.6 million related to goodwill that arose with respect to Dental segment acquired in the Cantel acquisition.
During the second quarter of fiscal 2023, in connection with the preparation of our quarterly consolidated financial statements, we identified and recognized a goodwill impairment loss of $490.6 million related to goodwill that arose with respect to the Dental segment acquired in the Cantel acquisition.
Our increased indebtedness could have important consequences to our shareholders, including increasing STERIS’s interest obligations, general adverse economic and industry conditions, limiting our ability to obtain additional financing to fund future working capital, capital expenditures and other general corporate requirements, requiring the use of a substantial portion of our cash flow from operations for the payment of principal and interest on indebtedness, thereby reducing our ability to use our cash flow to fund working capital, acquisitions, capital expenditures and general corporate matters, including dividend payments and stock repurchases, limiting our flexibility in planning for, or reacting to, changes in its business and our industry and creating a disadvantage compared to our competitors with less indebtedness.
Our increased indebtedness could have important consequences to our shareholders, including increasing STERIS’s interest obligations, general adverse economic and industry conditions, limiting our ability to obtain additional financing to fund future working capital, capital expenditures and other general corporate requirements, requiring the use of a substantial portion of our cash flow from operations for the payment of principal and interest on indebtedness, thereby reducing our ability to use our cash flow to fund working capital, acquisitions, capital expenditures and general corporate matters, including dividend payments and stock repurchases, limiting our flexibility in planning for, or reacting to, changes in our business and our industry and creating a disadvantage compared to our competitors with less indebtedness.
To the extent our existing sources of cash are insufficient to fund these or other future activities, we have and may need to raise additional funds through new or expanded borrowing arrangements or equity.
To the extent our existing sources of cash are insufficient to fund these or other future activities, we have and may need to raise additional funds through new or expanded borrowing arrangements or equity issuances.
In addition, legal, regulatory or compliance matters create significant distraction or diversion of significant or unanticipated resources or attention that could have a material adverse effect on the responsibilities and retention of qualified employees. 20 Table of Contents We could experience a failure of a key information technology system, process or site or a breach of information security, including a cybersecurity breach or failure of one or more key information technology systems, networks, processes, associated sites or service providers.
In addition, legal, regulatory or compliance matters create significant distraction or diversion of significant or unanticipated resources or attention that could have a material adverse effect on the responsibilities and retention of qualified employees. 21 Table of Contents We could experience a failure of a key information technology system, process or site or a breach of information security, including a cybersecurity breach or failure of one or more key information technology systems, networks, processes, associated sites or service providers.
In Europe, our products are regulated primarily by country and community regulations of those countries within the European Economic Area and must conform to the requirements of those authorities. 14 Table of Contents Government regulation applies to nearly all aspects of testing, manufacturing, safety, labeling, storing, recordkeeping, reporting, promoting, distributing, and importing or exporting of medical devices, products, and services.
In Europe, our products are regulated primarily by country and community regulations of those countries within the European Economic Area and must conform to the requirements of those authorities. 15 Table of Contents Government regulation applies to nearly all aspects of testing, manufacturing, safety, labeling, storing, recordkeeping, reporting, promoting, distributing, and importing or exporting of medical devices, products, and services.
We may not be able to ascertain actual value or understand potential liabilities until or after we actually assume operation control of these businesses, product or service lines, assets or technologies. We have recorded goodwill and other intangible assets that could become impaired and result in material non-cash changes to our results of operation in the future.
We may not be able to ascertain actual value or understand potential liabilities until or after we actually assume operation control of these businesses, product or service lines, assets or technologies. We have recorded goodwill and other intangible assets that could become impaired and result in material non-cash charges to our results of operation in the future.
If our IT systems are damaged or cease to function properly, the networks or service providers we rely upon fail to function properly, or we or one of our third-party providers suffer a loss or disclosure of our business or stakeholder information due to any number of causes ranging from catastrophic events or power outages to improper data handling or security breaches and our business continuity plans do not effectively address these failures on a timely basis, we may be exposed to reputational, competitive and business harm as well as litigation and regulatory action.
If our IT systems are damaged or cease to function properly, the networks or service providers we rely upon fail to function properly, or we or one of our third-party providers suffer a loss or disclosure of our business or stakeholder information due to any number of causes ranging from catastrophic events or power outages to improper data handling or security breaches or other cyber incidents, and our business continuity plans do not effectively address these failures on a timely basis, we may be exposed to reputational, competitive and business harm as well as litigation and regulatory action.
The undersupply of highly qualified people has led to increased competition, which has led to higher costs and other labor-related difficulties. There is no assurance that we will be successful in attracting or retaining replacements to fill vacant positions, successors to fill retirements or employees moving to new positions, or other highly qualified personnel.
The shortage of highly qualified people has led to increased competition, which has led to higher costs and other labor-related difficulties. There is no assurance that we will be successful in attracting or retaining replacements to fill vacant positions, successors to fill retirements or employees moving to new positions, or other highly qualified personnel.
Any elongation or de-prioritization or delay in regulatory review could materially affect our ongoing device design, development, and commercialization plans. Regulatory agencies may refuse to grant approval or clearance, or review and disagree with our interpretation of approvals or clearances, or with our decision that regulatory approval is not required or has been maintained.
Any protraction or de-prioritization or delay in regulatory review could materially affect our ongoing device design, development, and commercialization plans. Regulatory agencies may refuse to grant approval or clearance, or review and disagree with our interpretation of approvals or clearances, or with our decision that regulatory approval is not required or has been maintained.
Some product replacements or substitutions may not be possible or may be prohibitively costly or time consuming. The impact of any legal, regulatory, or compliance claims, proceeding, investigation, or litigation, is difficult to predict. 15 Table of Contents We maintain product liability and other insurance with coverages believed to be adequate.
Some product replacements or substitutions may not be possible or may be prohibitively costly or time consuming. The impact of any legal, regulatory, or compliance claims, proceeding, investigation, or litigation, is difficult to predict. 16 Table of Contents We maintain product liability and other insurance with coverages believed to be adequate.
The GloBE rules, once implemented in the EU and other jurisdictions, could subject us to additional income taxes in those jurisdictions if our effective corporate tax rate in those 16 Table of Contents jurisdictions (determined under the GloBE rules) is below 15%. Accordingly, the GloBE rules could increase tax uncertainty and adversely impact our provision for income taxes.
The GloBE rules, once implemented in the EU and other jurisdictions, could subject us to additional income taxes in those jurisdictions if our effective corporate tax rate in those jurisdictions (determined under the GloBE rules) is below 15%. Accordingly, the GloBE rules could increase tax uncertainty and adversely impact our 17 Table of Contents provision for income taxes.
In addition, the GloBE rules, which are expected to be implemented in most of the jurisdictions where we have operations, and the CAMT may adversely impact our effective corporate tax rate. Changes in tax treaties and trade agreements could negatively impact our costs, results of operations and earnings per share.
In addition, the GloBE rules, which have been or are expected to be implemented in most of the jurisdictions where we have operations, and the CAMT may adversely impact our effective corporate tax rate. Changes in tax treaties and trade agreements could negatively impact our costs, results of operations and earnings per share.
Some current or past operators of EO sterilization facilities, including us, have been the target of litigation on behalf of private plaintiffs alleging personal and other injuries as a result of exposure to emissions from such facilities. Certain of those operators have experienced adverse judgments and entered into settlements.
Some current or past operators of EO sterilization facilities, including us, have been the target of litigation on behalf of private plaintiffs alleging personal and other injuries as a result of exposure to emissions from such facilities and have experienced adverse judgments and entered into settlements.
Adverse economic cycles or conditions, and Customer, regulatory or government response to those cycles or conditions, have affected and could further affect our results of operations. The onset of these cycles or conditions may not be foreseeable and there can be no assurance when they will begin to improve after they occur.
Adverse economic cycles or conditions, and Customer, regulatory or government responses to those cycles or conditions, have affected and could further affect our results of operations. The onset of these cycles or conditions may not be foreseeable and there can be no assurance when they will begin to improve after they occur.
Ongoing medical device reporting regulations require that we report to appropriate governmental authorities in the United States and/or other countries when our products cause or contribute to a death or serious injury or malfunction in a way that would be reasonably likely to contribute to a death or serious injury if the malfunction were to recur.
Ongoing medical device reporting regulations require that we report to appropriate governmental authorities in the United States and/or other countries when our products cause or contribute to a death or serious injury or malfunction in a way that would be reasonably likely to contribute to a death or serious injury if the malfunction were to reoccur.
The potential impacts include supply chain and logistics disruptions, financial impacts including volatility in foreign exchange and interest rates, increased inflationary pressure on raw materials and energy, and other risks, including an elevated risk of 13 Table of Contents cybersecurity threats and the potential for further sanctions.
The potential impacts include supply chain and logistics disruptions, financial impacts including volatility in foreign exchange 14 Table of Contents and interest rates, increased inflationary pressure on raw materials and energy, and other risks, including an elevated risk of cybersecurity threats and the potential for further sanctions.
Business continuity hazards and other risks include: explosions, fires, earthquakes, public health crises, inclement weather, and other disasters; utility or other mechanical failures; unscheduled downtime; labor difficulties; inability to obtain or maintain any required licenses or permits; disruption of communications; data security, preservation and redundancy disruptions; inability to hire or retain key management or employees; disruption of supply or distribution; and regulation of the safety, security or other aspects of our operations.
Business continuity hazards and other risks include: explosions, fires, earthquakes, public health crises, extreme weather conditions, and other disasters; utility or other mechanical failures; unscheduled downtime; labor difficulties; inability to obtain or maintain any required licenses or permits; disruption of communications; data security, preservation and redundancy disruptions; inability to hire or retain key management or employees; disruption of supply or distribution; and regulation of the safety, security or other aspects of our operations.
We also refinanced or settled approximately $1.0 billion of Cantel's long-term indebtedness, including convertible debt, outstanding. As of March 31, 2023, STERIS had approximately $3.1 billion of indebtedness outstanding. STERIS’s ability to repay all the forgoing obligations will depend on, among other things, STERIS’s financial position and performance, as well as prevailing market conditions and other factors beyond our control.
We also refinanced or settled approximately $1.0 billion of Cantel’s long-term indebtedness, including convertible debt. As of March 31, 2024, STERIS had approximately $3.2 billion of indebtedness outstanding. STERIS’s ability to repay all the forgoing obligations will depend on, among other things, STERIS’s financial position and performance, as well as prevailing market conditions and other factors beyond our control.
Any such claims, proceedings, investigations or litigation, regardless of the merits, might result in substantial costs, restrictions on product use or sales, or otherwise injure our business. Administratively or judicially imposed or agreed sanctions might include warning letters, fines, civil penalties, criminal penalties, loss of tax benefits, injunctions, product seizure, recalls, suspensions or restrictions, re-labeling, detention, and/or debarment.
Any such claims, proceedings, investigations or litigation, regardless of the merits, might result in substantial costs, restrictions on product use or sales, or otherwise negatively impact our business. Administratively or judicially imposed or agreed sanctions might include warning letters, fines, civil penalties, criminal penalties, loss of tax benefits, injunctions, product seizure, recalls, suspensions or restrictions, re-labeling, detention, and/or debarment.
Our AST segment is a technology-neutral contract sterilization service that offers our Customers a wide range of sterilization modalities through a worldwide network of over 50 contract sterilization and laboratory facilities. One of the modalities offered by our AST operations is ethylene oxide (EO) sterilization.
Our AST segment is a technology-neutral contract sterilization service that offers our Customers a wide range of sterilization modalities through a worldwide network of over 50 contract sterilization and laboratory facilities. One of the modalities offered by our AST operations is EO sterilization.
Our acquisition activity and ability to grow organically may be adversely affected if we are unable to continue to access the financial markets . Our recent acquisitions have been financed largely through cash on hand, borrowings under our bank credit facilities and through public note offerings. Future acquisitions or other capital requirements and investments will necessitate additional cash.
Our acquisition activity and ability to grow organically may be adversely affected if we are unable to continue to access the financial markets . We have financed acquisitions through cash on hand, borrowings under our bank credit facilities and through public note offerings. Future acquisitions or other capital requirements and investments will necessitate additional cash.
There can be no assurance that any acquisition or disposition will ultimately prove to 21 Table of Contents be a strategic success. Also, we may be unable to find or consummate future acquisitions and divestitures at acceptable prices and terms. We continually evaluate potential business developments opportunities in the ordinary course of business.
There can be no assurance that any acquisition or disposition will ultimately prove to be a strategic success. Also, we may be unable to find or consummate future acquisitions and divestitures at acceptable prices and terms. We continually evaluate potential business developments opportunities in the ordinary course of business.
However, no assurance can be given that current or future legislative or regulatory action, or current or future litigation to which we are or may become a 19 Table of Contents party, will not significantly increase the costs of conducting our EO contract sterilization operations or curtail or eliminate the use of EO in our contract sterilization operations.
However, no assurance can be given that current or future legislative or regulatory action, or current or future litigation to which we are or may become a party, will not significantly increase the costs of conducting our EO contract sterilization operations or curtail or eliminate the use of EO in our contract sterilization operations.
The costs described above, as well as other unanticipated costs and expenses, could have a material adverse effect on the financial condition and operating results. We may fail to realize all of the anticipated benefits of an acquired business, or those benefits may take longer to realize than expected.
The costs described above, as well as other unanticipated costs and expenses, could have a material adverse effect on the financial condition and operating results. 24 Table of Contents We may fail to realize all of the anticipated benefits of an acquired business, or those benefits may take longer to realize than expected.
Shortages in supply, increased regulatory or security requirements, or increases in the price of raw materials, components and energy supplies may adversely affe ct us. In response to the active conflict between Russian and Ukraine, we have stopped purchasing cobalt-60 from our Russian supplier.
Shortages in supply, increased regulatory or security requirements, or increases in the price of raw materials, components and energy supplies may adversely affe ct us. In response to the active Russia-Ukraine military conflict, we have stopped purchasing cobalt-60 from our Russian supplier.
We make statements about our ESG priorities and initiatives through information provided on our website, press statements and other communications. Responding to these ESG considerations and implementation of these initiatives involves risks and uncertainties requires investments and is impacted by factors that may be outside our control.
We make statements about our ESG priorities and initiatives through information provided on our website, press statements and other communications. Responding to these ESG considerations and implementation of these laws, regulations and other initiatives involves risks and uncertainties, requires significant investments and is impacted by factors that may be outside our control.
This strategy depends upon our ability to identify, appropriately price, and complete these types of business development transactions or arrangements and to obtain any necessary financing. In the last several fiscal years we have made a number of acquisitions and dispositions.
This strategy depends upon our ability to identify, appropriately price, and complete these types of business development transactions or arrangements and to obtain any necessary financing. In 22 Table of Contents the last several fiscal years we have made a number of acquisitions and dispositions.
Although we conduct what we believe to be a prudent level of investigation regarding the operating and financial condition of the businesses, product or 23 Table of Contents service lines, assets or technologies we purchase, an unavoidable level of risk remains regarding their actual operating and financial condition, as well as their strategic fit.
Although we conduct what we believe to be a prudent level of investigation regarding the operating and financial condition of the businesses, product or service lines, assets or technologies we purchase, an unavoidable level of risk remains regarding their actual operating and financial condition, as well as their strategic fit.
When cybersecurity incidents occur, we expect to follow our incident response protocols and address them in accordance with applicable governmental regulations and other legal requirements.
When cybersecurity incidents occur, we expect to follow our incident response policy and address them in accordance with applicable governmental regulations and other legal requirements.
Additionally, if we were treated as a U.S. corporation for U.S. federal tax purposes, non-U.S. holders of our ordinary shares would be subject to U.S. withholding tax on the gross amount of any dividends we paid to such shareholders.
Additionally, if we were treated as a U.S. corporation for U.S. federal tax purposes, non-U.S. holders of our 18 Table of Contents ordinary shares would be subject to U.S. withholding tax on the gross amount of any dividends we paid to such shareholders.
Expectations relating to ESG considerations expose us to potential liabilities, increased costs, reputational harm and other adverse effects on our business. 18 Table of Contents Many governments, regulators, investors, employees, Customers and other stakeholders are increasingly focused on ESG considerations relating to businesses, including climate change and greenhouse gas emissions, human capital and diversity, equity and inclusion.
Expectations relating to Corporate Responsibility considerations expose us to potential liabilities, increased costs, reputational harm and other adverse effects on our business. Many governments, regulators, investors, employees, Customers and other stakeholders are increasingly focused on ESG considerations relating to businesses, including climate change and greenhouse gas emissions, human capital and diversity, 19 Table of Contents equity and inclusion.
Recent announcements of the temporary or permanent closure of EO sterilization facilities operated by others have been associated with state and/or local regulatory or other legal action related to EO emissions at those facilities. Our AST operations have taken and will continue to take measures to comply with all applicable emissions regulations and to reduce emissions.
Announcements of the temporary or permanent closure of EO sterilization facilities operated by others have been associated with state and/or local regulatory or other legal action related to EO emissions at those facilities. Our AST operations have taken and will continue to take measures to comply 20 Table of Contents with all applicable emissions regulations and to reduce emissions.
The MLI came into effect on July 1, 2018. The MLI may modify affected tax treaties making it more difficult for us to obtain advantageous tax-treaty benefits. The number of affected tax treaties could eventually be significant.
The MLI came into affect on July 1, 2018. The MLI may modify effected tax treaties making it more difficult for us to obtain advantageous tax-treaty benefits. The number of affected tax treaties could eventually be significant.
If a number of our essential employees become ill, incapacitated or are otherwise unable or unwilling to continue working during the current or any future health crises, our operations may be adversely impacted.
If a large or otherwise impactful number of our employees become ill, incapacitated or are otherwise unable or unwilling to continue working during the current or any future health crises, our operations may be adversely impacted.
These exemptions, however, may not persist in another pandemic or similar health crisis and there can be no assurance that in such a crisis, we will be able to operate in the same.
These exemptions, however, may not be available in another pandemic or similar health crisis and there can be no assurance that in such a crisis, we will be able to operate in the same manner.
Section 7874, however, provides an exception to this general rule under which a non-U.S. organized entity may be treated as a U.S. corporation for U.S. federal tax purposes. 17 Table of Contents If we were to be treated as a U.S. corporation for U.S. federal tax purposes, we could be subject to substantial additional U.S. tax liability.
Section 7874, however, provides an exception to this general rule under which a non-U.S. organized entity may be treated as a U.S. corporation for U.S. federal tax purposes. If we were to be treated as a U.S. corporation for U.S. federal tax purposes, we could be subject to substantial additional U.S. tax liability.
If government funding for healthcare becomes limited or restricted in countries in which we operate, including as a result of the impacts of the COVID-19 pandemic, our Customers may be unable to pay their obligations on a timely basis or to make payment in full and it may become necessary to increase reserves.
If government funding for healthcare becomes limited or restricted in countries in which we operate, including as a result of the impacts of a pandemic or its residual effects, our Customers may be unable to pay their obligations on a timely basis or to make payment in full and it may become necessary to increase reserves.
Moreover, because a large number of our employees have been and will continue to work from home routinely, we may be subject to increased vulnerability to cyber and other information technology risks. We have modified, and may further modify, our business practices in response to the risks and negative impacts associated with the COVID-19 pandemic.
Moreover, because a large number of our employees have worked and are expected to continue to work from home routinely, we may be subject to increased vulnerability to cyber and other information technology risks. We have modified, and may further modify, our business practices in response to the risks and negative impacts associated with the COVID-19 pandemic.
In recent years we have made several large acquisitions of business, including the acquisitions of Cantel Medical and Key Surgical. The integration of acquired businesses into STERIS involves numerous operational, strategic, financial, accounting, legal, tax and other risks; potential liabilities associated with the acquired businesses; and uncertainties related to design, operation and integration of internal controls over financial reporting.
We have made large acquisitions of businesses, including the acquisitions of Cantel Medical and Key Surgical. The integration of acquired businesses into STERIS involves numerous operational, strategic, financial, accounting, legal, tax and other risks; potential liabilities associated with the acquired businesses; and uncertainties related to design, operation and integration of internal controls over financial reporting.
We rely extensively on information technology (IT) systems to conduct business, including but not limited to interact with Customers and suppliers, fulfilling orders, generating invoices, collecting and making payments, shipping products, providing Customer support, and fulfilling contractual obligations.
We rely extensively on information technology (“IT”) systems to conduct business, including but not limited to interacting with Customers and suppliers, fulfilling orders, generating invoices, collecting and making payments, shipping products, providing Customer support, and fulfilling contractual obligations.
STERIS has incurred substantial expenses in connection with the negotiation and completion of past business acquisitions and dispositions, including Cantel Medical and Key Surgical, and expects to incur similar costs for any future business acquisitions or dispositions.
STERIS has incurred substantial expenses in connection with the negotiation and completion of past business acquisitions and dispositions, including Cantel Medical, Key Surgical and the planned divestment of the Dental segment, and expects to incur similar costs for any future business acquisitions or dispositions.
The COVID-19 pandemic may put pressure on overall spending for our products and services, and may cause our Customers to modify spending priorities or delay or abandon purchasing decisions.
For instance, the enduring effects of the COVID-19 pandemic may put pressure on overall spending for our products and services, and may cause our Customers to modify spending priorities or delay or abandon purchasing decisions.
Changes in laws and regulations or policies governing the terms of foreign trade, and in particular, increased trade restrictions, including as a result of the COVID-19 pandemic, tariffs or taxes on imports from countries where we manufacture products could have a material adverse impact on our business and financial results.
Changes in laws and regulations or policies governing the terms of foreign trade, and in particular, increased trade restrictions, tariffs or taxes on imports from countries where we manufacture products could have a material adverse impact on our business and financial results.
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, to assist in conducting our busines s.
In addition, we rely on networks and services, including internet sites, cloud and software-as-a-service solutions, data hosting, electronic payment systems, and processing facilities and tools and other hardware, software and technical applications and platforms, including some that employ artificial intelligence (“AI”), some of which are managed, hosted, provided and/or used by third-parties or their vendors, to assist in conducting our busines s.
Ongoing geopolitical instability, including as a result of Russia’s invasion of Ukraine, has negatively impacted, and could in the future negatively impact, the global and U.S. economies, including by causing supply chain disruptions, rising energy costs, volatility in capital markets and foreign currency exchange rates, rising interest rates and heightened cybersecurity risks.
Ongoing geopolitical instability, including as a result of the Russia-Ukraine and Israel-Hamas military conflicts, has negatively impacted, and could in the future negatively impact, the global and U.S. economies, including by causing supply chain disruptions, rising energy costs, volatility in capital markets and foreign currency exchange rates, rising interest rates and heightened cybersecurity risks.
Implementation costs also might exceed expectations. Increases in costs of doing business may have a material adverse effect on our financial condition and results of operations. A pandemic or similar public health crises, such as COVID-19, could have a material adverse impact on ability to staff our operations.
Implementation costs also might exceed expectations. Increases in costs of doing business may have a material adverse effect on our financial condition and results of operations. A pandemic or similar public health crisis could have a material adverse impact on our ability to staff our operations.
If we are unable to support Customers in achieving these reductions, we may lose revenue if our Customers find other suppliers who are better able to support such reductions.
If we are unable to support Customers in fulfilling these obligations or achieving reductions, we may lose revenue if our Customers find other suppliers who are better able to support such efforts.
Potential difficulties that may be encountered in the integration process include, among other factors: • the inability to successfully integrate the business of an acquired business into STERIS in a manner that permits STERIS to achieve the full revenue and cost savings anticipated from the acquisition; • complexities associated with managing the larger, more complex, integrated business; • not realizing anticipated operating synergies or incurring unexpected costs to realize such synergies; • integrating personnel from acquired businesses into STERIS while maintaining focus on providing consistent, high-quality products and services; • potential unknown liabilities and unforeseen expenses associated with the acquisition; • loss of key employees; • integrating relationships with Customers, vendors and business partners; • performance shortfalls as a result of the diversion of management’s attention caused by integration activities; and • the disruption of, or the loss of momentum in, an acquired business and STERIS’ ongoing business or inconsistencies in standards, controls, procedures and policies. 22 Table of Contents Past and future business acquisitions may not be as accretive to STERIS’s earnings per share and cash flow from operations per share, which may negatively affect the market price of STERIS Shares.
Potential difficulties that may be encountered in the integration process include, among other factors: 23 Table of Contents • the inability to successfully integrate the business of an acquired business into STERIS in a manner that permits STERIS to achieve the full revenue and cost savings anticipated from the acquisition; • complexities associated with managing the larger, more complex, integrated business; • not realizing anticipated operating synergies or incurring unexpected costs to realize such synergies; • integrating personnel from acquired businesses into STERIS while maintaining focus on providing consistent, high-quality products and services; • potential unknown liabilities and unforeseen expenses associated with the acquisition; • loss of key employees; • integrating relationships with Customers, vendors and business partners; • performance shortfalls as a result of the diversion of management’s attention caused by integration activities; and • the disruption of, or the loss of momentum in, an acquired business and STERIS’s ongoing business or inconsistencies in standards, controls, procedures and policies.
While based on our response to the current COVID-19 pandemic, we believe that we have developed appropriate measures to ensure the health and well-being of our employees for similar or future health crises, there can be no assurances that our measures will be sufficient to protect our employees in our workplace or that they may not otherwise be exposed to an illness outside of our workplace.
While we believe that we have developed appropriate measures to ensure the health and well-being of our employees for future health crises, there can be no assurances that our measures will be sufficient to protect our employees in our workplace or that they may not otherwise be exposed to an illness outside of our workplace.
These types of transactions are also subject to a number of other risks and uncertainties, including: delays in realizing or failure to realize anticipated benefits of the transactions; diversion of management’s time and attention from other business concerns; difficulties in retaining key employees, Customers, or suppliers of the acquired or divested businesses; difficulties in maintaining uniform standards, controls, procedures and policies, or other integration or divestiture difficulties; adverse effects on existing business relationships with suppliers or Customers; other events contributing to difficulties in generating future cash flows; risks associated with the assumption of contingent or other liabilities of acquisition targets or retention of liabilities for divested businesses and difficulties in obtaining financing.
These types of transactions are also subject to a number of other risks and uncertainties, including: delays in realizing or failure to realize anticipated benefits of the transactions; a termination or delay in the consummation of acquisition or disposition transactions by counterparties; diversion of management’s time and attention from other business concerns; difficulties in retaining key employees, Customers, or suppliers of the acquired or divested businesses; difficulties in maintaining uniform standards, controls, procedures and policies, or other integration or divestiture difficulties, including those that may expose us to greater cybersecurity risk; adverse effects on existing business relationships with suppliers or Customers; other events contributing to difficulties in generating future cash flows; risks associated with the assumption of contingent or other liabilities of acquisition targets or retention of liabilities for divested businesses and difficulties in obtaining financing.
The effects of geopolitical instability, including as a result of Russia’s invasion of Ukraine, may adversely affect us and create significant risks and uncertainties for our business, with the ultimate impact dependent on future developments, which are highly uncertain and unpredictable.
The effects of geopolitical instability, including as a result of the Russia-Ukraine and Israel-Hamas military conflicts, may adversely affect us and create significant risks and uncertainties for our business, with the ultimate impact dependent on future developments, which are highly uncertain and unpredictable.
To date, about 100 jurisdictions have joined the BEPS MLI, out of which about 79 jurisdictions have ratified, accepted, or approved the MLI, and it covers around 1850 bilateral tax treaties. Signatories include jurisdictions from all continents and all levels of development and other jurisdictions are also actively working towards signature.
To date, more than 100 jurisdictions have joined the BEPS MLI, out of which most jurisdictions have ratified, accepted, or approved the MLI, and it covers around 1,850 bilateral tax treaties. Signatories include jurisdictions from all continents and all levels of development and other jurisdictions are also actively working towards signature.
Our success depends, in part, on strategic acquisitions and joint ventures, which are intended to complement or expand our businesses, divestiture of non-strategic businesses and other assets, and other actions intended to optimize our portfolio of businesses.
Our success depends, in part, on strategic acquisitions and joint ventures, which are intended to complement or expand our businesses, divestiture of non-strategic businesses, such as our planned divestment of the Dental segment, and other assets, and other actions intended to optimize our portfolio of businesses.
Furthermore, we have experienced less demand for certain of our products and services as a result of reduced volume of medical procedures, and other factors, which we believe was exacerbated by the impact of stay-at-home orders and government responses to COVID-19.
We experienced temporary mandatory and voluntary facility closures in certain jurisdictions in which we operate and experienced less demand for certain of our products and services as a result of reduced volume of medical procedures, and other factors, which we believe was exacerbated by the impact of stay-at-home orders and government responses to COVID-19.
These other risks include additional uncertainties not presently known to us or that we currently believe are immaterial, but may ultimately have a significant impact. In addition, the impacts of the COVID-19 pandemic, Russia’s invasion of Ukraine and the ongoing inflationary environment may also exacerbate any of these risks, which could have a material effect on us.
These other risks include additional uncertainties not presently known to us or that we currently believe are immaterial, but may ultimately have a significant impact. In addition, the impacts of ongoing geopolitical conflicts, including the Russia-Ukraine and Israel-Hamas military conflicts, and the ongoing inflationary environment may also exacerbate any of these risks, which could have a material effect on us.
The GDPR creates a range of new compliance obligations and will significantly increase financial penalties for noncompliance (including possible fines of up to 4% of global annual revenues for the preceding financial year or €20 million (whichever is higher) for the most serious infringements).
The GDPR has created a range of compliance obligations and can impose significant financial penalties for noncompliance (including possible fines of up to 4% of global annual revenues for the preceding financial year or €20 million (whichever is higher) for the most serious infringements).
The CSRD expands the number of companies required to publicly report ESG-related information and defines the ESG-related information that companies are required to report in accordance with European Sustainability Reporting Standards (“ESRS”).
The CSRD expands the number of companies required to publicly report ESG-related information, defines the ESG-related information that companies are required to disclose in accordance with European Sustainability Reporting Standards (“ESRS”) and imposes additional assurance obligations with respect to such disclosures.
Certain casualties also might cause personal injury and loss of life, or severe damage to or destruction of property and equipment, and for casualties occurring at our facilities, result in liability claims against us.
These events also might cause personal injury and loss of life, or severe damage to or destruction of property and equipment, and for injuries occurring at our facilities or as a result of actions of our employees, result in liability claims against us.
This may result in greater pricing pressures on us and in some cases loss of Customers. Additional consolidations could result in a loss of Customers or more significant pricing pressures. Decreased availability or increased costs of raw materials or energy supplies or other supplies might increase our production costs or limit our production capabilities or curtail our operations.
This may result in greater pricing pressures on us and in some cases loss of Customers. Additional consolidations could result in a loss of Customers or more significant pricing pressures. Supply chain disruption might increase our production costs, limit our production capabilities or curtail our operations.
Our response to these incidents and our investments to protect our information technology infrastructure and data may not shield us from significant losses and potential liability or prevent any future interruption or breach of our systems.
Our response to these incidents and our investments to protect our information technology infrastructure and data may not shield us from significant losses and potential liability or prevent any future interruption or breach of our systems. We maintain cybersecurity liability insurance with terms, conditions, and limits believed to be adequate.
Our total assets include goodwill, intangibles and other long-lived assets. If we determine that these items have become impaired in the future, it may have a material adverse effect on our financial condition and results of operations. As of March 31, 2023, we had recorded goodwill of $4 billion and other intangible assets, net of accumulated amortization of $3 billion.
Our total assets include goodwill, intangibles and other long-lived assets. If we determine that these items have become impaired in the future, it may have a material adverse effect on our financial condition and results of operations.
The COVID-19 pandemic disrupted our operations and could have a material adverse effect on our business and financial condition if further significant disruptions occur. The COVID-19 pandemic, along with the response to the pandemic by governmental and other actors, disrupted our operations. We have experienced temporary mandatory and voluntary facility closures in certain jurisdictions in which we operate.
The COVID-19 pandemic disrupted our operations and could have a material adverse effect on our business and financial condition if further significant disruptions occur. The COVID-19 pandemic, along with the response to the pandemic by governmental and other actors, disrupted our operations.
We sell many of our products and services to hospitals and other healthcare providers and pharmaceutical manufacturers. Many of these Customers are subject to or supported by government programs or receive reimbursement for services from third-party payors, such as government programs, including Medicare and Medicaid in the U.S., private insurance plans, and managed care programs.
Many of these Customers are subject to or supported by government programs or receive reimbursement for services from third-party payors, such as government programs, including Medicare and Medicaid in the U.S., private insurance plans, and managed care programs. Reimbursement systems vary significantly by country. Government-managed healthcare systems control reimbursement for healthcare services in many countries.
Past and future acquisitions may not be as accretive to STERIS’s earnings per share and cash flow from operations per share as expected.
Past and future business acquisitions may not be as accretive to STERIS’s earnings per share and cash flow from operations per share, which may negatively affect the market price of STERIS shares. Past and future acquisitions may not be as accretive to STERIS’s earnings per share and cash flow from operations per share as expected.
In many foreign countries, sales of our products and services are subject to extensive regulations that may or may not be comparable to those of the FDA.
Our operations are subject to extensive regulation in the countries where we do business. In the United States, our products and services are regulated by the FDA and other regulatory authorities. In many foreign countries, sales of our products and services are subject to extensive regulations that may or may not be comparable to those of the FDA.
Enforcement of the General Data Protection Regulation (“GDPR”) was effective as of May 2018. The GDPR is focused on the protection of personal data not merely the privacy of personal data.
Other future or ongoing conflicts could also result in increases in cybersecurity incidents. Enforcement of the General Data Protection Regulation (“GDPR”) was effective as of May 2018. The GDPR is focused on the protection of personal data not merely the privacy of personal data.
As we continue to focus on developing our ESG practices, such practices may not meet the standards of all of our stakeholders and advocacy groups may campaign for further changes. Many of our Customers are also committing to long-term targets to reduce greenhouse gas emissions within their supply chains.
As we continue to focus on developing our ESG practices, such practices may not meet the standards of all of our stakeholders and advocacy groups may campaign for further changes.
In March 2022, the SEC published its proposed rule, “The Enhancement and Standardization of Climate-Related Disclosures for Investors,” which sets forth certain prescriptive rules that, if implemented as proposed, will significantly increase our reporting obligations and cost of compliance. On January 5, 2023, the European Commission’s Corporate Sustainability Reporting Directive (“CSRD”) became effective.
In March 2024, the SEC adopted its final rule, “The Enhancement and Standardization of Climate-Related Disclosures for Investors,” which sets forth certain prescriptive rules that would significantly increase our reporting obligations and cost of compliance.
In addition, the COVID-19 pandemic may increase the risk of such vulnerability and attacks, including unauthorized access or attacks exploiting the fact that a large number of employees are working remotely. Furthermore, there has also been an increase in cyber incidents that appears to be associated with the Ukraine-Russia military conflict.
In addition, a large number of our employees, as well as those of our Customers and suppliers, continue to work remotely, which may increase the risk of IT systems vulnerabilities and attacks and unauthorized access of information. Furthermore, there has also been an increase in cybersecurity incidents that appears to be associated with the Ukraine-Russia military conflict.
However, there can be no assurance that these measures will be temporary or successful. The impact of the COVID-19 pandemic continues to evolve and its ultimate duration, severity and disruption to our business, Customers and supply chain, and the related financial impact to us, cannot be accurately forecasted at this time.
Additionally, the COVID-19 outbreak caused disruptions and rising costs in our labor supply and supply chain and distribution network. The impact of the COVID-19 pandemic and its residual effects continues to evolve and its ultimate duration, severity and disruption to our business, Customers and supply chain, and the related financial impact to us, cannot be accurately forecasted at this time.
Failure to receive or maintain, or delays in receiving, clearance or approvals may negatively impact our revenues, profitability, financial condition, or value. Our operations are subject to extensive regulation in the countries where we do business. In the United States, our products and services are regulated by the FDA and other regulatory authorities.
Product and Service Related Regulations and Claims We are subject to extensive regulatory requirements and must receive and maintain regulatory clearance or approval for many products and operations. Failure to receive or maintain, or delays in receiving, clearance or approvals may negatively impact our revenues, profitability, financial condition, or value.
Reimbursement systems vary significantly by country. Government-managed healthcare systems control reimbursement for healthcare services in many countries. Public budgetary constraints may significantly impact the ability of hospitals, pharmaceutical manufacturers, and other Customers supported by such systems to purchase our products.
Public budgetary constraints may significantly impact the ability of hospitals, pharmaceutical manufacturers, and other Customers supported by such systems to purchase our products. Government or other third-party payors may deny or change coverage, reduce their current levels of reimbursement for healthcare services, or otherwise implement measures to regulate pricing or contain costs.
Furthermore, future public health crises are possible and could involve some or all of the risks discussed above. Healthcare Laws and Reimbursement Changes in healthcare laws or government and other third-party payor reimbursement levels to healthcare providers, or failure to meet healthcare reimbursement or other requirements, might negatively impact our business.
Healthcare Laws and Reimbursement Changes in healthcare laws or government and other third-party payor reimbursement levels to healthcare providers, or failure to meet healthcare reimbursement or other requirements, might negatively impact our business. We sell many of our products and services to hospitals and other healthcare providers and pharmaceutical manufacturers.
If the impairment evaluations for goodwill indicate the carrying amount exceeds the estimated fair value, an impairment loss is recognized in an amount equal to that excess. Our operating results may be significantly impacted from both the impairment and the underlying trends in the business that triggered the impairment.
Goodwill is evaluated for impairment annually or more frequently, if indicators of impairment exist. If the impairment evaluations for goodwill indicate the carrying amount exceeds the estimated fair value, an impairment loss is recognized in an amount equal to that excess.
Goodwill represents the excess of purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets of a business acquired. Goodwill is evaluated for impairment annually or more frequently, if indicators of impairment exist.
As of March 31, 2024 , we had recorded goodwill of $4 billion and other intangible assets, net of accumulated amortization of $2 billion . Goodwill represents the excess of purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets of a business acquired.
Removed
Additionally, the COVID-19 outbreak has caused temporary disruptions and rising costs in our labor supply and supply chain and distribution network. Long-term facility closures or other restrictions could materially adversely affect our ability to adequately staff, supply or otherwise maintain our operations. Such restrictions also may have a substantial impact on our Customers and our sales cycles.
Added
However, there can be no assurance that these measures will be temporary or successful. Furthermore, future public health crises are possible and could involve some or all of the risks discussed above.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLeased Clemmons, NC U.S. Leased Des Plaines, IL U.S. Owned Rush, NY U.S. Owned Chicago, IL U.S. Leased Conroe, TX U.S. Owned Plymouth, MN U.S. Owned/Leased Sharon, PA U.S. Owned Lawrenceville, GA U.S. Leased West Chicago, IL U.S. Leased Santa Fe Springs, CA U.S. Leased Phoenix, AZ U.S. Leased Stratford, CT U.S.
Biggest changeLeased Clemmons, NC U.S. Leased Conroe, TX U.S. Owned Plymouth, MN U.S. Owned/Leased Sharon, PA U.S.
Leased Fidenza, Italy INTL Leased Pomezia, Italy INTL Owned Tuttlingen, Germany INTL Leased Ontario, Canada INTL Leased Quebec City, Canada INTL Owned Tuusula, Finland INTL Owned Bordeaux, France INTL Owned Leicester, England INTL Owned Shanghai, China INTL Leased Guadalupe, Mexico INTL Leased Bishop Stortford, England INTL Leased * International includes all countries other than Ireland and the U.S.
Owned Fidenza, Italy INTL Leased Pomezia, Italy INTL Owned Tuttlingen, Germany INTL Leased Ontario, Canada INTL Leased Quebec City, Canada INTL Owned Tuusula, Finland INTL Owned Bordeaux, France INTL Owned Leicester, England INTL Owned Shanghai, China INTL Leased Guadalupe, Mexico INTL Leased Bishop Stortford, England INTL Leased * International includes all countries other than Ireland and the U.S.
ITEM 2. PROPERTIES The following discussion sets forth materially important properties of the Company and its subsidiaries as of March 31, 2023. The Company believes that its facilities are adequate for operations and are maintained in good condition. The Company is confident that, if needed, it will be able to acquire additional facilities at commercially reasonable rates.
ITEM 2. PROPERTIES The following discussion sets forth materially important properties of the Company and its subsidiaries as of March 31, 2024. The Company believes that its facilities are adequate for operations and are maintained in good condition. The Company is confident that, if needed, it will be able to acquire additional facilities at commercially reasonable rates.
The Company owns and leases several material manufacturing locations that support one or more of our segme nts, which are disclosed in the following table: 24 Table of Contents Location U.S./INTL* Owned/Leased Montgomery, AL U.S. Owned/Leased St. Louis, MO U.S. Owned/Leased Mentor, OH U.S. Owned/Leased Sharon Hill, PA U.S. Owned Franklin Park, IL U.S. Leased Point Richmond, CA U.S.
The Company owns and leases several material manufacturing locations that support the Healthcare, Life Sciences, and AST segme nts, which are disclosed in the following table: 26 Table of Contents Location U.S./INTL* Owned/Leased Montgomery, AL U.S. Owned/Leased St. Louis, MO U.S. Owned/Leased Mentor, OH U.S. Owned/Leased Sharon Hill, PA U.S. Owned Franklin Park, IL U.S. Leased Point Richmond, CA U.S.
In the following discussion “International” is defined as all countries other than Ireland and the United States. The Company’s principal executive office is located in Dublin, Ireland and its primary administrative offices are located in Mentor, OH (U.S.). The Company owns 54 and leases 17 contract sterilization locations, utilized in the Applied Sterilization Technologies Segment.
In the following discussion “International” is defined as all countries other than Ireland and the United States. The Company’s principal executive office is located in Dublin, Ireland and its primary administrative offices are located in Mentor, OH (U.S.). The AST global network utilized in delivery of contract sterilization services is comprised of more than 60 owned or leased facilities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS Information regarding our legal proceedings is included in Item 7 of Part II, Management's Discussion and Analysis ("MD&A"), and Note 10 to our consolidated financial statements titled, "Commitments and Contingencies," and is incorporated herein by reference thereto.
Biggest changeITEM 3. LEGAL PROCEEDINGS Information regarding our legal proceedings is included in Item 7 of Part II, Management's Discussion and Analysis, and Note 12 to our consolidated financial statements titled, "Commitments and Contingencies," and is incorporated herein by reference thereto.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table presents information with respect to purchases STERIS made of its ordinary shares during the fourth quarter of fiscal year 2023: Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans at Period End (dollars in thousands) January 1-31 122,400 $ 191.10 122,400 $ 137,236 February 1-28 230,200 $ 190.03 230,200 93,491 March 1-31 436,063 $ 182.45 436,063 13,932 Total 788,663 (1) $ 186.00 (1) 788,663 $ 13,932 (1) Does not include 8 shares purchased during the quarter at an average price of $194.76 per share by the STERIS Corporation 401(k) Plan on behalf of an executive officer of the Company who may be deemed to be an affiliated purchaser. 26 Table of Contents
Biggest changeThe following table presents information with respect to purchases STERIS made of its ordinary shares under the share repurchase program during the fourth quarter of fiscal year 2024: Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans at Period End (dollars in thousands) January 1-31 — $ — — $ 500,000 February 1-28 — $ — — 500,000 March 1-31 — $ — — 500,000 Total — $ — — $ 500,000 28 Table of Contents
ITEM 5. MARKET FOR REGISTRANT’S ORDINARY EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information. Our ordinary shares are traded on the New York Stock Exchange under the symbol “STE.” Holders. As of March 31, 2023, there were approxim ately 403 h olders of record of our ordinary shares. Dividend Policy.
ITEM 5. MARKET FOR REGISTRANT’S ORDINARY EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information. Our ordinary shares are traded on the New York Stock Exchange under the symbol “STE.” Holders. As of March 31, 2024, there were approxim ately 390 h olders of record of our ordinary shares. Dividend Policy.
During fiscal 2023, we obtained 79,169 of our ordinary shares in the aggregate amount of $13.5 million in connection with share-based compensation award programs.
During fiscal 2024, we obtained 76,645 of our ordinary shares in the aggregate amount of $11.8 million in connection with share-based compensation award programs.
Under the authorization, the Company may repurchase its shares from time to time through open market purchases, including 10b5-1 plans. Any share repurchases may be activated, suspended or discontinued at any time. During fiscal 2023, we repurchased 1,563,983 of our ordinary shares for the aggregate amount of $295.0 million (net of taxes, fees and commissions) pursuant to the authorizations.
As of March 31, 2024, there was $500.0 million (net of taxes, fees and commissions) of remaining availability under the Board authorized share repurchase program. Under the authorization, the Company may repurchase its shares from time to time through open market purchases, including 10b5-1 plans. Any share repurchases may be activated, suspended or discontinued at any time.
The foregoing authorization was terminated May 3, 2023 and replaced with a new $500.0 million (net of taxes, fees and commissions) share repurchase program, which has no specified expiration date. We have not made any repurchases under the new share repurchase program to date.
On May 3, 2023 our Board of Directors terminated the previous share repurchase program then in effect and authorized a new share repurchase program for the purchase of up to $500.0 million (net of taxes, fees and commissions), which has no specified expiration date.
Removed
On May 7, 2019, our Board of Directors authorized a share repurchase program of approximately $79.0 million (net of taxes, fees and commissions). On July 30, 2019, our Board of Directors approved an increase in the May 7, 2019 authorization of an additional amount of $300.0 million (net of taxes, fees and commissions).
Added
During fiscal 2024, we had no share repurchase activity pursuant to the previous share repurchase program or the May 3, 2023 authorization.
Removed
This share repurchases program was suspended on April 9, 2020 and the suspension was lifted effective February 10, 2022, enabling the Company to resume stock repurchases pursuant to prior authorizations. As of March 31, 2023, there was approximately $13.9 million (net of taxes, fees and commissions) of remaining availability under the Board authorized share repurchase program.
Added
This does not include 27 shares purchased during the year at an average price of $212.65 per share by the STERIS Corporation 401(k) Plan on behalf of an executive officer of the Company who may be deemed to be an affiliated purchaser.

Item 7. Management's Discussion & Analysis

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

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Biggest changeOther potential risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, (a) the impact of the COVID-19 pandemic or similar public health crises on STERIS’s operations, supply chain, material and labor costs, performance, results, prospects, or value, (b) STERIS's ability to achieve the expected benefits regarding the accounting and tax treatments of the redomiciliation to Ireland (“Redomiciliation”), (c) operating costs, Customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, Customers, clients or suppliers) being greater than expected, (d) STERIS’s ability to successfully integrate the businesses of Cantel Medical into our existing businesses, including unknown or inestimable liabilities, impairments, or increases in expected integration costs or difficulties in connection with the integration of Cantel Medical, (e) uncertainties related to tax treatments under the TCJA and the IRA, (f) the possibility that Pillar Two Model Rules could increase tax uncertainty and adversely impact STERIS's provision for income taxes and effective tax rate and subject STERIS to additional income tax in jurisdictions who adopt Pillar Two Model Rules, (g) STERIS's ability to continue to qualify for benefits under certain income tax treaties in light of ratification of more strict income tax treaty rules (through the MLI) in many jurisdictions where STERIS has operations, (h) changes in tax laws or interpretations that could increase our consolidated tax liabilities, including changes in tax laws that would result in STERIS being treated as a domestic corporation for United States federal tax purposes, (i) the potential for increased pressure on pricing or costs that leads to erosion of profit margins, including as a result of inflation, (j) the possibility that market demand will not develop for new technologies, products or applications or services, or business initiatives will take longer, cost more or produce lower benefits than anticipated, (k) the possibility that application of or compliance with laws, court rulings, certifications, regulations, or regulatory actions, including without limitation any of the same relating to FDA, EPA or other regulatory authorities, government investigations, the outcome of any pending or threatened FDA, EPA or other regulatory warning notices, actions, requests, inspections or submissions, the outcome of any pending or threatened litigation brought by private parties, or other requirements or standards may delay, limit or prevent new product or service introductions, affect the production, supply and/or marketing of existing products or services, result in costs to STERIS that may not be covered by insurance, or otherwise affect STERIS’s performance, results, prospects or value, (l) the potential of international unrest, including the Russia-Ukraine military conflict, economic downturn or effects of currencies, tax assessments, tariffs and/or other trade barriers, adjustments or anticipated rates, raw material costs or availability, benefit or retirement plan costs, or other regulatory compliance costs, (m) the possibility of reduced demand, or reductions in the rate of growth in demand, for STERIS’s products and services, (n) the possibility of delays in receipt of orders, order cancellations, or delays in the manufacture or shipment of ordered products, due to supply chain issues or otherwise , or in the provision of services, (o) the possibility that anticipated growth, cost savings, new product acceptance, performance or approvals, or other results may not be achieved, or that transition, labor, competition, timing, execution, impairments, regulatory, governmental, or other issues or risks associated with STERIS’s businesses, industry or initiatives including, without limitation, those matters described in STERIS's various securities filings, may adversely impact STERIS’s performance, results, prospects or value, (p) the impact on STERIS and its operations, or tax liabilities, of Brexit or the exit of other member countries from the EU, and the Company’s ability to respond to such impacts, (q) the impact on STERIS and its operations of any legislation, regulations or orders, including but not limited to any new trade or tax legislation (including CAMT and excise tax on stock buybacks), regulations or orders, that may be implemented by the U.S. administration or Congress, or of any responses thereto, (r) the possibility that anticipated financial results or benefits of recent acquisitions, including the acquisition of Cantel Medical and Key Surgical, or of STERIS’s restructuring efforts, or of recent divestitures, including anticipated revenue, productivity improvement, cost savings, growth synergies and other anticipated benefits, will not be realized or will be other than anticipated, (s) the increased level of STERIS’s indebtedness incurred in connection with the acquisition of Cantel Medical limiting financial flexibility or 49 Table of Contents increasing future borrowing costs, (t) rating agency actions or other occurrences that could affect STERIS’s existing debt or future ability to borrow funds at rates favorable to STERIS or at all, and (u) the effects of changes in credit availability and pricing, as well as the ability of STERIS’s Customers and suppliers to adequately access the credit markets, on favorable terms or at all, when needed. 50 Table of Contents
Biggest changeOther potential risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, (a) the ability to consummate the previously announced sale of STERIS’s Dental business segment (the “Transaction”) on the expected terms and within the anticipated time period, or at all, which is dependent on the satisfaction of certain closing conditions, some of which are outside of STERIS’s control, (b) STERIS’s ability to realize the expected benefits of the Transaction, including the earnout payment, (c) the risk that regulatory approvals that are required to complete the Transaction may not be received, may take longer than expected or may impose adverse conditions, (d) the impact of public health crises on STERIS’s operations, supply chain, material and labor costs, performance, results, prospects, or value, (e) STERIS's ability to achieve the expected benefits regarding the accounting and tax treatments of the redomiciliation to Ireland , (f) operating costs, Customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, Customers, clients or suppliers) being greater than expected, (g) STERIS’s ability to successfully integrate acquired businesses into its existing businesses, including unknown or inestimable liabilities, impairments, or increases in expected integration costs or difficulties in connection with the integration of such businesses, (h) uncertainties related to tax treatments under the TCJA and the IRA, (i) the possibility that Pillar Two Model Rules could increase tax uncertainty and adversely impact STERIS's provision for income taxes and effective tax rate and subject STERIS to additional income tax in jurisdictions who adopt Pillar Two Model Rules, (j) STERIS's ability to continue to qualify for benefits under certain income tax treaties in light of ratification of more strict income tax treaty rules (through the MLI) in many jurisdictions where STERIS has operations, (k) changes in tax laws or interpretations that could increase our consolidated tax liabilities, including changes in tax laws that would result in STERIS being treated as a domestic corporation for United States federal tax purposes, (l) the potential for increased pressure on pricing or costs that leads to erosion of profit margins, including as a result of inflation, (m) the possibility that market demand will not develop for new technologies, products or applications or services, or business initiatives will take longer, cost more or produce lower benefits than anticipated, (n) the possibility that application of or compliance with laws, court rulings, certifications, regulations, or regulatory actions, including without limitation any of the same relating to FDA, EPA or other regulatory authorities, government investigations, the outcome of any pending or threatened FDA, EPA or other regulatory warning notices, actions, requests, inspections or submissions, the outcome of any pending or threatened litigation brought by private parties, or other requirements or standards may delay, limit or prevent new product or service introductions, affect the production, supply and/or marketing of existing products or services, result in costs to STERIS that may not be covered by insurance, or otherwise affect STERIS’s performance, results, prospects or value, (o) the potential of international unrest, including the Russia-Ukraine or Israel-Hamas military conflicts, economic downturn or effects of currencies, tax assessments, tariffs and/or other trade barriers, adjustments or anticipated rates, raw material costs or availability, benefit or retirement plan costs, or other regulatory compliance costs, (p) the possibility of reduced demand, or reductions in the rate of growth in demand, for STERIS’s products and services, (q) the possibility of delays in receipt of orders, order cancellations, or delays in the manufacture or shipment of ordered products, due to supply chain issues or otherwise, or in the provision of services, (r) the possibility that anticipated growth, cost savings, new product acceptance, performance or approvals, or other results may not be achieved, or that transition, labor, competition, timing, execution, impairments, regulatory, governmental, or other issues or risks associated with STERIS’s businesses, industry or initiatives including, without limitation, those matters described in STERIS's various securities filings, may adversely impact STERIS’s performance, results, prospects or value, (s) the impact on STERIS and its operations, or tax liabilities, of Brexit or the exit of other member countries from the EU, and the Company’s ability to respond to such impacts, (t) the impact on STERIS and its operations of any legislation, regulations or orders, including but not limited to any new trade or tax legislation (including CAMT and excise tax on stock buybacks), regulations or orders, that may be implemented by the U.S. administration or Congress, or of any responses thereto, (u) the possibility that anticipated financial results or benefits of recent acquisitions, of STERIS’s restructuring efforts, or of recent divestitures, including anticipated revenue, productivity improvement, cost savings, growth synergies and other anticipated benefits, will not be realized or will be other than anticipated, (v) the level of STERIS’s indebtedness limiting financial flexibility or increasing future borrowing costs, 50 Table of Contents (w) rating agency actions or other occurrences that could affect STERIS’s existing debt or future ability to borrow funds at rates favorable to STERIS or at all, (x) the effects of changes in credit availability and pricing, as well as the ability of STERIS’s Customers and suppliers to adequately access the credit markets, on favorable terms or at all, when needed, and (y) the possibility that our expectations about the pre-tax savings resulting from the Restructuring Plan, the number of positions eliminated pursuant to the Restructuring Plan and the costs, charges and cash expenditures associated with the Restructuring Plan may not be realized on the timeline or timelines we expect, or at all. 51 Table of Contents
We 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.
We 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 estimated useful lives with the exception of indefinite lived intangible assets.
This liability includes estimated amounts for both losses and incurred but not reported claims. We review the assumptions used to calculate the estimated liability at least annually to evaluate the adequacy of the amount recorded. We maintain insurance policies to cover losses greater than our estimated liability, which are subject to the terms and conditions of those policies.
This liability includes estimated amounts for both known losses and incurred but not reported claims. We review the assumptions used to calculate the estimated liability at least annually to evaluate the adequacy of the amount recorded. We maintain insurance policies to cover losses greater than our estimated liability, which are subject to the terms and conditions of those policies.
Bank National Association as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated as of April 1, 2021, among FinCo, the Guarantors and the Trustee (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”). Each of the Guarantors guaranteed the Senior Public Notes jointly and severally on a senior unsecured basis (the “Guarantees”).
Bank National Association as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated as of April 1, 2021, among FinCo, the Guarantors and the Trustee (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”). Each of the Guarantors guaranteed the Senior Public Notes jointly and severally on a senior unsecured basis.
Interest on Base Rate Advances is payable quarterly in arrears and interest on Term 38 Table of Contents Benchmark Advances is payable in arrears at the end of the relevant interest period therefor, but in no event less frequently than every three months. • Also on March 19, 2021, the Company, STERIS Corporation, Limited, and FinCo, each as a borrower and guarantor, entered into a delayed draw term loan agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Delayed Draw Term Loan Agreement”) providing for a delayed draw term loan facility of up to $750.0 million (the “Delayed Draw Term Loan”) in connection with STERIS’s acquisition of Cantel.
Interest on Base Rate Advances is payable quarterly in arrears and interest on Term Benchmark Advances is payable in arrears at the end of the relevant interest period therefor, but in no event less frequently than every three months. • Also on March 19, 2021, the Company, STERIS Corporation, Limited, and FinCo, each as a borrower and guarantor, entered into a delayed draw term loan agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Delayed Draw Term Loan Agreement”) providing for a delayed draw term loan facility of up to $750.0 million (the “Delayed Draw Term Loan”) in connection with STERIS’s acquisition of Cantel.
Additional information regarding these financial measures, including reconciliations of each non-GAAP financial measure, is available in the subsection of MD&A titled, "Non-GAAP Financial Measures." 28 Table of Contents REVENUES– DEFINED As required by Regulation S-X, we separately present revenues generated as either product revenues or service revenues on our Consolidated Statements of Income for each period presented.
Additional information regarding these financial measures, including reconciliations of each non-GAAP financial measure, is available in the subsection of MD&A titled, "Non-GAAP Financial Measures." 30 Table of Contents REVENUES– DEFINED As required by Regulation S-X, we separately present revenues generated as either product revenues or service revenues on our Consolidated Statements of Income for each period presented.
Additional information regarding income taxes is included in Note 8 to our consolidated financial statements titled, “Income Taxes.” Self-Insurance Liabilities. We record a liability for self-insured risks that we retain for general and product liabilities, workers’ compensation, and automobile liabilities based on actuarial calculations. We use our historical loss experience and actuarial methods to calculate the estimated liability.
Additional information regarding income taxes is included in Note 10 to our consolidated financial statements titled, “Income Taxes.” Self-Insurance Liabilities. We record a liability for self-insured risks that we retain for general and product liabilities, workers’ compensation, and automobile liabilities based on actuarial calculations. We use our historical loss experience and actuarial methods to calculate the estimated liability.
Holding all other assumptions constant, lowering the discount rate assumption for our defined benefit pension plans and for the other post-retirement benefits plan by 50 basis points would have decreased the fiscal 2023 net periodic benefit costs by less than $0.1 million and would have increased the projected benefit obligations by approximately $8.0 million at March 31, 2023.
Holding all other assumptions constant, lowering the discount rate assumption for our defined benefit pension plans and for the other post-retirement benefits plan by 50 basis points would have decreased the fiscal 2024 net periodic benefit costs by less than $0.1 million and would have increased the projected benefit obligations by approximately $8.0 million at March 31, 2024.
There can be no assurance that our financing arrangements will provide us with sufficient funds or that we will be able to obtain any additional funds on terms favorable to us or at all. Our material future cash obligations and commercial commitments as of March 31, 2023 are presented in the following tables.
There can be no assurance that our financing arrangements will provide us with sufficient funds or that we will be able to obtain any additional funds on terms favorable to us or at all. Our material future cash obligations and commercial commitments as of March 31, 2024 are presented in the following tables.
Our sources of funding from credit as of March 31, 2023 are summarized below: • On March 19, 2021, STERIS plc ("the Company"), STERIS Corporation, STERIS Limited (“Limited”), and STERIS Irish FinCo Unlimited Company ("FinCo", "STERIS Irish FinCo"), each as a borrower and guarantor, entered into a credit agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Revolving Credit Agreement”) providing for a $1,250.0 million revolving credit facility (the “Revolver”), which replaced a prior revolving credit agreement. • The Revolver provides for revolving credit borrowings, swing line borrowings and letters of credit, with sublimits for swing line borrowings and letters of credit.
Our sources of funding from credit as of March 31, 2024 are summarized below: • On March 19, 2021, the Company, STERIS Corporation, STERIS Limited (“Limited”), and STERIS Irish FinCo Unlimited Company ("FinCo", "STERIS Irish FinCo"), each as a borrower and guarantor, entered into a credit agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Revolving Credit Agreement”) providing for a $1,250.0 million revolving credit facility (the “Revolver”), which replaced a prior revolving credit agreement. • The Revolver provides for revolving credit borrowings, swing line borrowings and letters of credit, with sublimits for swing line borrowings and letters of credit.
As you read the MD&A, it may be helpful to refer to information in Item 1, "Business," Part I, Item 1A, "Risk Factors," and Note 10 to our consolidated financial statements titled, "Commitments and Contingencies" for a discussion of some of the matters that can adversely affect our business and results of operations.
As you read the MD&A, it may be helpful to refer to information in Item 1, "Business," Part I, Item 1A, "Risk Factors," and Note 12 to our consolidated financial statements titled, "Commitments and Contingencies" for a discussion of some of the matters that can adversely affect our business and results of operations.
The NPA Amendments provided, among other things, for the waiver of certain repurchase rights of the note holders and increased the size of certain baskets to more closely align with other current credit agreement baskets. At March 31, 2023, we were in compliance with all financial covenants associated with our indebtedness.
The NPA Amendments provided, among other things, for the waiver of certain repurchase rights of the note holders and increased the size of certain baskets to more closely align with other current credit agreement baskets. At March 31, 2024, we were in compliance with all financial covenants associated with our indebtedness.
In our opinion, the ultimate outcome of these proceedings and claims is not anticipated to have a material adverse affect on our consolidated financial position, results of operations, or cash flows. However, the ultimate outcome of proceedings, government investigations, and claims is unpredictable and actual results could be materially different from our estimates.
In our opinion, the ultimate outcome of these proceedings and claims is not anticipated to have a material adverse effect on our consolidated financial position, results of operations, or cash flows. However, the ultimate outcome of proceedings, government investigations, and claims is unpredictable and actual results could be materially different from our estimates.
Certain costs to fulfill a contract are capitalized and amortized over the term of the contract if they are recoverable, directly related to a contract and generate resources that we will use to fulfill the contract in the future. At March 31, 2023, assets related to costs to fulfill a contract were not material to our consolidated financial statements.
Certain costs to fulfill a contract are capitalized and amortized over the term of the contract if they are recoverable, directly related to a contract and generate resources that we will use to fulfill the contract in the future. At March 31, 2024, assets related to costs to fulfill a contract were not material to our consolidated financial statements.
We believe that the presentation of these non-GAAP financial measures, when considered along with our GAAP financial measures and the reconciliation to the corresponding GAAP financial measures, provides the reader with a more complete understanding of the factors and trends affecting our business than could be obtained absent this disclosure.
We believe that the presentation of these non-GAAP financial measures, when considered along with our U.S. GAAP financial measures and the reconciliation to the corresponding U.S. GAAP financial measures, provides the reader with a more complete understanding of the factors and trends affecting our business than could be obtained absent this disclosure.
A summary of significant assumptions used to determine the March 31, 2023 projected benefit obligations and the fiscal 2023 net periodic benefit costs is as follows: Synergy Health plc Isotron BV Synergy Health Daniken AG Synergy Health Radeberg Synergy Health Allershausen Harwell Dosimeters Ltd U.S.
A summary of significant assumptions used to determine the March 31, 2024 projected benefit obligations and the fiscal 2024 net periodic benefit costs is as follows: Synergy Health plc Isotron BV Synergy Health Daniken AG Synergy Health Radeberg Synergy Health Allershausen Harwell Dosimeters Ltd U.S.
We record expected recoveries under applicable insurance contracts when we are assured of recovery. Refer to Note 10 to our consolidated financial statements titled, "Commitments and Contingencies" for additional information. We are subject to taxation from federal, state and local, and foreign jurisdictions.
We record expected recoveries under applicable insurance contracts when we are assured of recovery. Refer to Note 12 to our consolidated financial statements titled, "Commitments and Contingencies" for additional information. We are subject to taxation from federal, state and local, and foreign jurisdictions.
Our self-insured liabilities contain uncertainties because management must make assumptions and apply judgments to estimate the ultimate cost to settle reported claims and claims incurred but not reported as of the balance sheet date. If actual results are not consistent with these assumptions and judgments, we could be exposed to additional costs in subsequent periods. Contingencies.
Our self-insured liabilities contain uncertainties because management must make assumptions and apply judgments to estimate the ultimate cost to settle reported claims and claims incurred but not reported as of the balance sheet date. If actual results are not consistent with these assumptions and judgments, we could be exposed to additional costs in subsequent periods. 47 Table of Contents Contingencies.
The Senior Public Notes were issued pursuant to an Indenture, dated as of April 1, 2021 (the “Base Indenture”), among FinCo, STERIS plc, STERIS Corporation and STERIS Limited (the “Guarantors”) and U.S.
The Senior Public Notes were issued pursuant to an Indenture, dated as of April 1, 2021 (the “Base Indenture”), among FinCo, the Company, STERIS Corporation and Limited (the “Guarantors”) and U.S.
We review and adjust our tax estimates periodically because of ongoing examinations by and settlements with the various taxing authorities, as well as changes in tax laws, regulations and precedent. 45 Table of Contents We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities.
We review and adjust our tax estimates periodically because of ongoing examinations by and settlements with the various taxing authorities, as well as changes in tax laws, regulations and precedent. We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities.
Shipping and handling costs charged to Customers are included in Product revenues. The associated expenses are treated as fulfillment costs and are included in Cost of revenues. Revenues are reported net of sales and value-added taxes collected from Customers. We have individual Customer contracts that offer discounted pricing.
Shipping and handling costs charged to Customers are included in Product revenues. The associated expenses are treated as fulfillment costs and are included in Cost of revenues. Revenues are reported net of sales and value-added taxes collected from Customers. 45 Table of Contents We have individual Customer contracts that offer discounted pricing.
The above descriptions reflect those amendments. • On April 1, 2021, STERIS Irish FinCo Unlimited Company ("FinCo," "STERIS Irish FinCo," the "Issuer") completed an offering of $1,350.0 million in aggregate principal amount, of its senior notes in two separate tranches: (i) $675.0 million aggregate principal amount of the Issuer’s 2.70% Senior Notes due 2031 (the “2031 Notes”) and (ii) $675.0 million aggregate principal amount of the Issuer’s 3.750% Senior Notes due 2051 (the “2051 Notes” and, together with the 2031 Notes, the “Senior Public Notes”).
The above descriptions reflect those amendments. • On April 1, 2021, FinCo (the "Issuer") completed an offering of $1,350.0 million in aggregate principal amount, of its senior notes in two separate tranches: (i) $675.0 million aggregate principal amount of the Issuer’s 2.70% Senior Notes due 2031 (the “2031 Notes”) and (ii) $675.0 million aggregate principal amount of the Issuer’s 3.750% Senior Notes due 2051 (the “2051 Notes” and, together with the 2031 Notes, the “Senior Public Notes”).
A 100 basis point change in the assumed healthcare cost trend rate (including medical, prescription drug, and long-term rates) would have had the following effect at March 31, 2023: 100 Basis Point (dollars in thousands) Increase Decrease Effect on total service and interest cost components $ — $ — Effect on postretirement benefit obligation 1 (1) 47 Table of Contents We recognize an asset for the overfunded status or a liability for the underfunded status of defined benefit pension and post-retirement benefit plans in our balance sheets.
A 100 basis point change in the assumed healthcare cost trend rate (including medical, prescription drug, and long-term rates) would have had the following effect at March 31, 2024: 100 Basis Point (dollars in thousands) Increase Decrease Effect on total service and interest cost components $ — $ — Effect on postretirement benefit obligation 1 (1) We recognize an asset for the overfunded status or a liability for the underfunded status of defined benefit pension and post-retirement benefit plans in our balance sheets.
Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II of our Annual Report on Form 10-K for the year ended March 31, 2022. 31 Table of Contents FISCAL 2023 AS COMPARED TO FISCAL 2022 Revenues.
Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II of our Annual Report on Form 10-K for the year ended March 31, 2023. 33 Table of Contents FISCAL 2024 AS COMPARED TO FISCAL 2023 Revenues.
For the period beginning from the thirteenth full fiscal quarter ended after the Term Loan Closing Date through the maturity of the loan, quarterly principal payments, each in the amount of 1.875% of the original principal amount of the Term Loan, are due on the last business day of each fiscal quarter.
For the period beginning from the thirteenth full fiscal quarter ended after the Term Loan Closing Date through the maturity of the loan, quarterly 40 Table of Contents principal payments, each in the amount of 1.875% of the original principal amount of the Term Loan, are due on the last business day of each fiscal quarter.
The following tables present summarized results of operations for the year ended March 31, 2023 and summarized balance sheet information at March 31, 2023 and 2022 for the obligor group of the Senior Public Notes. The obligor group consists of the Parent Company Guarantor, Subsidiary Issuer, and Subsidiary Guarantors for the Senior Public Notes.
GAAP. The following tables present summarized results of operations for the year ended March 31, 2024 and summarized balance sheet information at March 31, 2024 and 2023 for the obligor group of the Senior Public Notes. The obligor group consists of the Parent Company Guarantor, Subsidiary Issuer, and Subsidiary Guarantors for the Senior Public Notes.
The Senior Public Notes and the related guarantees are senior unsecured obligations of STERIS Irish FinCo and the Guarantors, respectively, and are equal in priority with all other unsecured and unsubordinated indebtedness of the Issuer and the Guarantors, respectively, from time to time outstanding, including, as applicable, under the Private Placement Senior Notes, borrowings under the Revolving Credit Facility, the Term Loan and the Delayed Draw Term Loan.
The Senior Public Notes and the related guarantees are senior unsecured obligations of FinCo and the Guarantors, respectively, and are equal in priority with all other 43 Table of Contents unsecured and unsubordinated indebtedness of the Issuer and the Guarantors, respectively, from time to time outstanding, including, as applicable, under the Private Placement Senior Notes, borrowings under the Revolving Credit Facility, the Term Loan and the Delayed Draw Term Loan.
Additional information regarding our commitments and contingencies is included in Note 10 to our consolidated financial statements titled, "Commitments and Contingencies." 46 Table of Contents Benefit Plans. We provide defined benefit pension plans for certain employees and retirees. In addition, we sponsor an unfunded post-retirement benefits plan for two groups of United States retirees.
Additional information regarding our commitments and contingencies is included in Note 12 to our consolidated financial statements titled, "Commitments and Contingencies." Benefit Plans. We provide defined benefit pension plans for certain employees and retirees. In addition, we sponsor an unfunded post-retirement benefits plan for two groups of United States retirees.
Our provision for income taxes is based on our current period income, changes in deferred income tax assets and liabilities, income tax rates, changes in uncertain tax benefits, and tax planning opportunities available to us in the various jurisdictions in which we operate.
Our provision for income taxes is based on our current period income, changes in deferred income tax assets and liabilities, income tax rates, changes in uncertain tax benefits, and tax planning opportunities available to us in the various 46 Table of Contents jurisdictions in which we operate.
Each Guarantor that makes a payment under its guarantee will be entitled upon payment in full of all guaranteed obligations under the indenture to a contribution from each 42 Table of Contents Guarantor in an amount equal to such other Guarantor’s pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.
Each Guarantor that makes a payment under its guarantee will be entitled upon payment in full of all guaranteed obligations under the indenture to a contribution from each Guarantor in an amount equal to such other Guarantor’s pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with U.S.
Many important factors could cause actual results to differ materially from those in the forward-looking statements including, without limitation, disruption of production or supplies, changes in market conditions, political events, pending or future claims or litigation, competitive factors, technology advances, actions of regulatory agencies, and changes in laws, government regulations, labeling or product approvals or the application or interpretation thereof.
Many important factors could cause actual results to differ materially from those in the forward-looking statements including, without limitation, statements related to the expected benefits of and timing of completion of the Restructuring Plan, disruption of production or supplies, changes in market conditions, political events, pending or future claims or litigation, competitive factors, technology advances, actions of regulatory agencies, and changes in laws, government regulations, labeling or product approvals or the application or interpretation thereof.
This information, discussion, and disclosure may be important to you in making decisions about your investments in STERIS. FINANCIAL MEASURES In the following sections of the MD&A, we may, at times, refer to financial measures that are not required to be presented in the consolidated financial statements under U.S. GAAP.
This information, discussion, and disclosure may be important to you in making decisions about your investments in STERIS. FINANCIAL MEASURES In the following sections of the MD&A, we may, at times, refer to financial measures that are not required to be presented in the consolidated financial statements under accounting principles generally accepted in the United States ("U.S. GAAP").
Service revenues also include outsourced reprocessing services and instrument and scope repairs, as well as revenues generated from contract sterilization and laboratory services offered through our Applied Sterilization Technologies segment. • Capital Equipment Revenues – We define capital equipment revenues as revenues generated from sales of capital equipment, which includes: steam and gas sterilizers, low temperature liquid chemical sterilant processing systems, pure steam/water systems, surgical lights and tables, and integrated OR. • Consumable Revenues – We define consumable revenues as revenues generated from sales of the consumable family of products, which includes dedicated consumables including V-PRO, SYSTEM 1 and 1E consumables, gastrointestinal endoscopy accessories, sterility assurance products, barrier protection solutions, cleaning consumables, dental and surgical instruments. • Recurring Revenues – We define recurring revenues as revenues generated from sales of consumable products and service revenues.
Service revenues also include outsourced reprocessing services and instrument and scope repairs, as well as revenues generated from contract sterilization and laboratory services offered through our AST segment. • Capital Equipment Revenues – We define capital equipment revenues as revenues generated from sales of capital equipment, which includes steam and gas sterilizers, low temperature liquid chemical sterilant processing systems, pure steam/water systems, surgical lights and tables, and integrated OR. • Consumable Revenues – We define consumable revenues as revenues generated from sales of the consumable family of products, which includes dedicated consumables used in our V-PRO sterilizers and automated endoscope reprocessors, SYSTEM 1 and 1E consumables, gastrointestinal endoscopy accessories, instruments and tools, sterility assurance products, barrier protection solutions, and cleaning consumables. • Recurring Revenues – We define recurring revenues as revenues generated from sales of consumable products and service revenues.
Interest on the Senior Public Notes is payable on March 15 and September 15 of each year, beginning on September 15, 2021, until their respective maturities. • As of March 31, 2023, a total of $301.7 million was outstanding under the Revolving Credit Agreement, based on currency exchange rates as of March 31, 2023.
Interest on the Senior Public Notes is payable on March 15 and September 15 of each year, beginning on September 15, 2021, until their respective maturities. • As of March 31, 2024, a total of $484.5 million was outstanding under the Revolving Credit Agreement, based on currency exchange rates as of March 31, 2024.
For more information regarding our segments please refer to Note 11 to our consolidated financial statements titled, "Business Segment Information," and Item 1, "Business." The following table compares business segment revenues as well as impacts from acquisitions, divestitures, and foreign currency movements for the year ended March 31, 2023 to the year ended March 31, 2022.
For more information regarding our segments please refer to Note 13 to our consolidated financial statements titled, "Business Segment Information," and Item 1, "Business." 36 Table of Contents The following table compares business segment revenues as well as impacts from acquisitions, divestitures, and foreign currency movements for the year ended March 31, 2024 to the year ended March 31, 2023.
Holding all other assumptions constant, lowering the expected long-term rate of return on plan assets assumption for our funded defined benefit pension plans by 50 basis points would have increased the fiscal 2023 benefit costs by less than $0.1 million.
Holding all other assumptions constant, lowering the expected long-term rate of return on plan assets assumption for 48 Table of Contents our funded defined benefit pension plans by 50 basis points would have increased the fiscal 2024 benefit costs by less than $0.2 million.
Free cash flow was $409.6 million in fiscal 2023, compared to $399.0 million in fiscal 2022 (see subsection above titled "Non-GAAP Financial Measures" for additional information and related reconciliation of cash flows from operations to free cash flow).
Free cash flow was $620.3 million in fiscal 2024, compared to $409.6 million in fiscal 2023 (see subsection above titled "Non-GAAP Financial Measures" for additional information and related reconciliation of cash flows from operations to free cash flow).
Dollar Value at March 31, 2023 $80,000 Senior notes at 3.35% 2012 Private Placement December 2024 80,000 $25,000 Senior notes at 3.55% 2012 Private Placement December 2027 25,000 $125,000 Senior notes at 3.45% 2015 Private Placement May 2025 125,000 $125,000 Senior notes at 3.55% 2015 Private Placement May 2027 125,000 $100,000 Senior notes at 3.70% 2015 Private Placement May 2030 100,000 $50,000 Senior notes at 3.93% 2017 Private Placement February 2027 50,000 €60,000 Senior notes at 1.86% 2017 Private Placement February 2027 65,254 $45,000 Senior notes at 4.03% 2017 Private Placement February 2029 45,000 €20,000 Senior notes at 2.04% 2017 Private Placement February 2029 21,752 £45,000 Senior notes at 3.04% 2017 Private Placement February 2029 55,579 €19,000 Senior notes at 2.30% 2017 Private Placement February 2032 20,664 £30,000 Senior notes at 3.17% 2017 Private Placement February 2032 37,053 Total Senior Notes $ 750,302 The Private Placement Senior Notes were issued as follows: • On February 27, 2017, Limited issued and sold an aggregate principal amount of $95.0 million, €99.0 million, and £75.0 million of senior notes in a private placement to certain institutional investors in an offering that was exempt from the registration requirements of the Securities Act of 1933.
Dollar Value at March 31, 2024 $80,000 Senior notes at 3.35% 2012 Private Placement December 2024 80,000 $25,000 Senior notes at 3.55% 2012 Private Placement December 2027 25,000 $125,000 Senior notes at 3.45% 2015 Private Placement May 2025 125,000 $125,000 Senior notes at 3.55% 2015 Private Placement May 2027 125,000 $100,000 Senior notes at 3.70% 2015 Private Placement May 2030 100,000 $50,000 Senior notes at 3.93% 2017 Private Placement February 2027 50,000 €60,000 Senior notes at 1.86% 2017 Private Placement February 2027 64,708 $45,000 Senior notes at 4.03% 2017 Private Placement February 2029 45,000 €20,000 Senior notes at 2.04% 2017 Private Placement February 2029 21,569 £45,000 Senior notes at 3.04% 2017 Private Placement February 2029 56,799 €19,000 Senior notes at 2.30% 2017 Private Placement February 2032 20,491 £30,000 Senior notes at 3.17% 2017 Private Placement February 2032 37,866 Total Senior Notes $ 751,433 The Private Placement Senior Notes were issued as follows: • On February 27, 2017, Limited issued and sold an aggregate principal amount of $95.0 million, €99.0 million, and £75.0 million of senior notes in a private placement to certain institutional investors in an offering that was exempt from the registration requirements of the Securities Act of 1933.
At March 31, 2023, we had $938.4 million of unused funding available under the Revolving Credit Agreement. The Revolving Credit Agreement includes a sub-limit that reduces the maximum amount available to us by letters of credit outstanding. At March 31, 2023, there was $9.9 million in letters of credit outstanding under the Credit Agreement.
At March 31, 2024, we had $754.0 million of unused funding available under the Revolving Credit Agreement. The Revolving Credit Agreement includes a sub-limit that reduces the maximum amount available to us by letters of credit outstanding. At March 31, 2024, there was $11.4 million in letters of credit outstanding under the Credit Agreement.
During the year, we increased our quarterly dividend for the seventeenth consecutive year to $0.47 per share per quarter. Outlook. In fiscal 2024 and beyond, we expect to manage our costs, grow our business with internal product and service development, invest in greater capacity, and augment these value creating methods with potential acquisitions of additional products and services.
During the year, we increased our quarterly dividend for the eighteenth consecutive year to $0.52. Outlook. In fiscal 2025 and beyond, we expect to manage our costs, grow our business with internal product and service development, invest in greater capacity, and augment these value creating methods with potential acquisitions of additional products and services.
For more information on these acquisitions refer to Note 2 to our consolidated financial statements titled, "Business Acquisitions and Divestitures ." Net Cash Provided By/Used In Financing Activities – Net cash used in financing activities was $498.7 million for the year ended March 31, 2023, compared to net cash provided by financing activities of $115.8 million for the year ended March 31, 2022.
For more information on these acquisitions refer to Note 3 to our consolidated financial statements titled, "Business Acquisitions and Divestitures." Net Cash Used In Financing Activities – Net cash used in financing activities was $85.2 million for the year ended March 31, 2024, compared to net cash used in financing activities of $498.7 million for the year ended March 31, 2023.
We provide information about the interest component of our long-term debt in the subsection of MD&A titled, “Liquidity and Capital Resources,” and in Note 6 to our consolidated financial statements titled, “Debt.” Purchase obligations shown in the table above relate to minimum purchase commitments with suppliers for materials purchases and long-term construction contracts. 41 Table of Contents The table above excludes contributions we make to our defined contribution plans.
We provide information about the interest component of our long-term debt in the subsection of MD&A titled, “Liquidity and Capital Resources,” and in Note 8 to our consolidated financial statements titled, “Debt.” Purchase obligations shown in the table above relate to minimum purchase commitments with suppliers for materials purchases and long-term construction contracts.
Note 14 to our consolidated financial statements titled, “Share-Based Compensation,” contains additional information about our share-based compensation plans. 48 Table of Contents FORWARD-LOOKING STATEMENTS This Form 10-K may contain statements concerning certain trends, expectations, forecasts, estimates, or other forward-looking information affecting or relating to STERIS or its industry, products or activities that are intended to qualify for the protections afforded “forward-looking statements” under the Private Securities Litigation Reform Act of 1995 and other laws and regulations.
Note 11 to our consolidated financial statements titled, “Benefit Plans,” contains additional information about our pension and other post-retirement welfare benefits plans. 49 Table of Contents FORWARD-LOOKING STATEMENTS This Form 10-K may contain statements concerning certain trends, expectations, forecasts, estimates, or other forward-looking information affecting or relating to STERIS or its industry, products or activities that are intended to qualify for the protections afforded “forward-looking statements” under the Private Securities Litigation Reform Act of 1995 and other laws and regulations.
Our future contributions to the defined contribution plans depend on uncertain factors, such as the amount and timing of employee contributions and discretionary employer contributions.
The table above excludes contributions we make to our defined contribution plans. Our future contributions to the defined contribution plans depend on uncertain factors, such as the amount and timing of employee contributions and discretionary employer contributions.
Additional information regarding our mark to market adjustments of our equity investments is included in Note 17 to our consolidated financial statements titled, "Fair Value Measurements." 33 Table of Contents Income Tax Expense.
Additional information regarding the mark to market adjustments of our equity investments is included in Note 19 to our consolidated financial statements titled, "Fair Value Measurements." Income Tax Expense.
For more information on our term loans, refer to Note 6 to our consolidated financial statements titled, "Debt." 36 Table of Contents • Payments on long-term obligations – During fiscal 2023, we repaid $91.0 million of Private Placement Senior Notes.
For more information on our term loans, refer to Note 8 to our consolidated financial statements titled, "Debt." • Payments on Private Placement Senior Notes – During fiscal 2023, we repaid $91.0 million of private placement debt.
GENERAL OVERVIEW AND EXECUTIVE SUMMARY STERIS is a leading global provider of products and services that support patient care with an emphasis on infection prevention. WE HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare, life sciences and dental products and services.
GENERAL OVERVIEW AND EXECUTIVE SUMMARY STERIS is a leading global provider of products and services that support patient care with an emphasis on infection prevention. WE HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare and life science products and services around the globe. We offer our Customers a unique mix of innovative products and services.
We describe our business segments in Note 11 to our consolidated financial statements titled, "Business Segment Information." The bulk of our revenues are derived from the healthcare and pharmaceutical industries.
We describe our business segments in Note 13 to our consolidated financial statements titled, "Business Segment Information." The bulk of our revenues are derived from healthcare, medical device and pharmaceutical Customers.
Post- Retirement Benefits Plan Funding Status Funded Funded Unfunded Unfunded Unfunded Funded Unfunded Assumptions used to determine March 31, 2023 Benefit obligations: Discount rate 4.70 % 3.70 % 2.05 % 3.80 % 3.70 % 4.80 % 4.75 % Assumptions used to determine fiscal 2023 Net periodic benefit costs: Discount rate 2.80 % 1.80 % 2.05 % 2.00 % 2.20 % 4.80 % 3.25 % Expected return on plan assets 3.20 % 1.80 % 1.95 % n/a n/a n/a n/a NA – Not applicable.
Post- Retirement Benefits Plan Funding Status Funded Funded Unfunded Unfunded Unfunded Funded Unfunded Assumptions used to determine March 31, 2024 Benefit obligations: Discount rate 4.80 % 3.40 % 1.50 % 3.80 % 3.50 % 4.80 % 5.00 % Assumptions used to determine fiscal 2024 Net periodic benefit costs: Discount rate 4.70 % 3.70 % 1.50 % 2.00 % 2.20 % 4.85 % 4.75 % Expected return on plan assets 6.10 % 3.70 % 1.50 % n/a n/a n/a n/a NA – Not applicable.
We offer our Customers a unique mix of innovative consumable products, such as detergents, endoscopy accessories, barrier products, and other products and services, including: equipment installation and maintenance, microbial reduction of medical devices, dental instruments and tools, instrument and scope repair, laboratory testing services, outsourced reprocessing, and capital equipment products, such as sterilizers and surgical tables, automated endoscope reprocessors, and connectivity solutions such as operating room (“OR”) integrati on.
These include: consumable products, such as detergents, endoscopy accessories, barrier products, instruments and tools; and services, including equipment installation and maintenance, microbial reduction of medical devices, instrument and scope repair, laboratory testing, outsourced reprocessing; and capital equipment, such as sterilizers, surgical tables, and automated endoscope reprocessors, and connectivity solutions such as operating room (“OR”) integrati on.
During fiscal 2023 and fiscal 2022, we received cash procee ds totaling $1.8 million and $10.1 million, respectively, under these programs. Cash Flow Measures. The net cash provided by our operating activities was $756.9 million in fiscal 2023 compared to $684.8 million in fiscal 2022.
During fiscal 2024 and fiscal 2023, we received cash proceeds totaling $10.5 million and $1.8 million, respectively, under these programs. Cash Flow Measures. The net cash provided by our operating activities was $973.3 million in fiscal 2024 compared to $756.9 million in fiscal 2023.
Net Cash Used In Investing Activities – The net cash used in our investing activities was $383.3 million for the year ended March 31, 2023, compared to $666.6 million for the year ended March 31, 2022.
Net Cash Used In Investing Activities – The net cash used in our investing activities was $887.4 million for the year ended March 31, 2024, compared to $383.3 million for the year ended March 31, 2023.
At the end of fiscal 2023, $301.7 million of debt was outstanding under our bank credit facility, compared to $58.9 million of debt outstanding under this facility at the end of fiscal 2022.
At the end of fiscal 2024, $484.5 million of debt was outstanding under our bank credit facility, compared to $301.7 million of debt outstanding under this facility at the end of fiscal 2023.
Non-operating expenses, net consists of interest expense on debt, offset by interest earned on cash, cash equivalents, short-term investment balances, a fair value adjustment related to convertible debt, and other miscellaneous expense (income).
Non-operating expenses, net consists of interest expense on debt, offset by interest earned on cash, cash equivalents, short-term investment balances, and other miscellaneous (income) expense.
The amendment concerns technical, administrative or operational changes related to borrowings in British Pounds Sterling and Swiss Francs. • On March 19, 2021, the Company, STERIS Corporation, Limited, and FinCo, each as a borrower and guarantor, entered into a term loan agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Term Loan Agreement”) providing for a $550.0 million term loan facility (the “Term Loan”), which replaced an existing term loan agreement, dated as of November 18, 2020 (the “Existing Term Loan Agreement”).
Dollars or in specified alternative currencies. • On March 19, 2021, the Company, STERIS Corporation, Limited, and FinCo, each as a borrower and guarantor, entered into a term loan agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Term Loan Agreement”) providing for a $550.0 million term loan facility (the “Term Loan”), which replaced an existing term loan agreement, dated as of November 18, 2020 (the “Existing Term Loan Agreement”).
As of March 31, 2023, $72.5 million and $625.6 million were outstanding under the Term Loan and Delayed Draw Term Loan, respectively. 39 Table of Contents Our outstanding Private Placement Senior Notes at March 31, 2023 were as follows: (dollars in thousands) Applicable Note Purchase Agreement Maturity Date U.S.
As of March 31, 2024, $45.0 million and $593.1 million were outstanding under the Term Loan and Delayed Draw Term Loan, respectively. 41 Table of Contents Our outstanding Private Placement Senior Notes at March 31, 2024 were as follows: (dollars in thousands) Applicable Note Purchase Agreement Maturity Date U.S.
We provide additional information about our defined benefit pension plans, defined contribution plan, and other post-retirement benefits plan in Note 9 to our consolidated financial statements titled, "Benefit Plans." Amount of Commitment Expiring March 31, (dollars in thousands) 2024 2025 2026 2027 2028 and thereafter Totals Commercial Commitments: Letters of credit and surety bonds $ 98,411 $ 492 $ 358 $ 291 $ 782 $ 100,334 Letters of credit as security for self-insured risk retention policies 8,036 — — — — 8,036 Total Commercial Commitments $ 106,447 $ 492 $ 358 $ 291 $ 782 $ 108,370 SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION STERIS plc ("Parent") and its wholly-owned subsidiaries, STERIS Limited and STERIS Corporation (collectively "Guarantors" and each a "Guarantor"), each have provided guarantees of the obligations of STERIS Irish FinCo Unlimited Company ("FinCo", "STERIS Irish FinCo"), a wholly-owned subsidiary issuer, under Senior Public Notes issued by STERIS Irish FinCo on April 1, 2021 and of certain other obligations relating to the Senior Public Notes.
We provide additional information about our defined benefit pension plans, defined contribution plan, and other post-retirement benefits plan in Note 11 to our consolidated financial statements titled, "Benefit Plans." Amount of Commitment Expiring March 31, (dollars in thousands) 2025 2026 2027 2028 2029 and thereafter Totals Commercial Commitments: Letters of credit and surety bonds 90,095 445 7,998 1,359 $ 530 $ 100,427 Letters of credit as security for self-insured risk retention policies 9,975 — — — — 9,975 Total Commercial Commitments $ 100,070 $ 445 $ 7,998 $ 1,359 $ 530 $ 110,402 SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION STERIS plc ("Parent") and its wholly-owned subsidiaries, Limited and STERIS Corporation (collectively "Guarantors" and each a "Guarantor"), each have provided guarantees of the obligations of FinCo, a wholly-owned subsidiary issuer, under Senior Public Notes issued by FinCo on April 1, 2021 and of certain other obligations relating to the Senior Public Notes.
The following table summarizes the calculation of our free cash flow for the years ended March 31, 2023 and 2022: Years Ended March 31, (dollars in thousands) 2023 2022 Net cash provided by operating activities $ 756,947 $ 684,811 Purchases of property, plant, equipment and intangibles, net (361,969) (287,563) Proceeds from the sale of property, plant, equipment and intangibles 14,587 1,741 Free cash flow $ 409,565 $ 398,989 RESULTS OF OPERATIONS In the following subsections, we discuss our performance and the factors affecting it.
The following table summarizes the calculation of our free cash flow for the years ended March 31, 2024 and 2023: Years Ended March 31, (dollars in thousands) 2024 2023 Net cash provided by operating activities $ 973,274 $ 756,947 Purchases of property, plant, equipment and intangibles, net (360,326) (361,969) Proceeds from the sale of property, plant, equipment and intangibles 7,381 14,587 Free cash flow $ 620,329 $ 409,565 RESULTS OF OPERATIONS In the following subsections, we discuss our performance and the factors affecting it.
In fiscal 2024, we plan to continue to invest in facility expansions, particularly within the Healthcare and Applied Sterilization Technologies segments and in ongoing maintenance for existing facilities. MATERIAL FUTURE CASH OBLIGATIONS AND COMMERCIAL COMMITMENTS Cash Requirements.
In fiscal 2025, we plan to continue to invest in facility expansions, particularly within the Healthcare and AST segments and in ongoing maintenance for existing facilities. 42 Table of Contents MATERIAL FUTURE CASH OBLIGATIONS AND COMMERCIAL COMMITMENTS Cash Requirements.
During fiscal 2023, our investments in research and development have continued to be focused on, but were not limited to, enhancing capabilities of sterile processing combination technologies, procedural products and accessories, and devices and support accessories used in gastrointestinal endoscopy procedures. Non-Operating Expenses, Net.
During fiscal 2024, our investments in research and development have continued to be focused on, but were not limited to, enhancing capabilities of sterile processing combination technologies, procedural products and accessories, and devices and support accessories used in gastrointestinal endoscopy procedures. Restructuring Expenses. We adopted and announced a targeted restructuring plan (the "Restructuring Plan").
During fiscal 2022, we received contributions from noncontrolling interest hold ers of $3.7 million and paid $1.0 million in distributions to noncontrolling interest holders. • Stock option and other equity transactions, net – We generally receive cash for issuing shares upon the exercise of options under our employee stock option program.
During fiscal 2024, we also received $3.0 million in contributions from noncontrolling interest holders. 39 Table of Contents • Stock option and other equity transactions, net – We generally receive cash for issuing shares upon the exercise of options under our employee stock option program.
Cash flows from operations were $756.9 million and free cash flow was $409.6 million in fiscal 2023 compared to cash flows from operations of $684.8 million and free cash flow of $399.0 million in fiscal 2022 (see subsection of MD&A titled, "Non-GAAP Financial Measures" for additional information and related reconciliation of cash flows from operations to free cash flow) .
Cash flows provided by operating activities were $973.3 million and free cash flow was $620.3 million in fiscal 2024 compared to cash flows provided by operating activities of $756.9 million and free cash flow of $409.6 million in fiscal 2023 (see subsection of MD&A titled, "Non-GAAP Financial Measures" for additional information and related reconciliation of cash flows from operations to free cash flow).
Within healthcare, there is increased concern regarding the level of hospital acquired infections around the world; increased demand for medical procedures, including preventive screenings such as endoscopies and colonoscopies; and a desire by our Customers to operate more efficiently, all which are driving increased demand for many of our products and services. Acquisitions .
In addition, there is increased demand for medical procedures, including preventive screenings such as endoscopies and colonoscopies; and a desire by our Customers to operate more efficiently, all which are driving increased demand for many of our products and services. Acquisitions .
We anticipate continued supply chain and inflation pressures in fiscal 2024. Please refer to "Information With Respect to Our Business In General" in Item 1."Business" to this Annual Report on Form 10-K. 30 Table of Contents NON-GAAP FINANCIAL MEASURES We, at times, refer to financial measures which are considered to be “non-GAAP financial measures” under SEC rules.
Please refer to "Information With Respect to Our Business In General" in Item 1."Business" to this Annual Report on Form 10-K. 32 Table of Contents NON-GAAP FINANCIAL MEASURES We, at times, refer to financial measures which are considered to be “non-GAAP financial measures” under the Securities and Exchange Commission rules.
Beginning September 1, 2021, and through March 31, 2023, the coupon rates on the 2012 private placement notes were increased by 0.50%. • On March 19, 2021, STERIS Corporation as issuer, and the Company, Limited and FinCo, as guarantors, entered into (1) a First Amendment to Amended and Restated Note Purchase Agreement dated March 5, 2019 (which had amended and restated certain note purchase agreements originally dated December 4, 2012) per the 2012 and 2013 senior notes (the “2012 Amendment”), and (2) a First Amendment to Amended and Restated Note Purchase Agreement dated March 5, 2019 (which had amended and restated certain note purchase agreements originally dated March 31, 2015) for the 2015 senior notes (the “2015 Amendment”).
The agreement governing the notes contains leverage and interest coverage covenants. • On March 19, 2021, STERIS Corporation as issuer, and the Company, Limited and FinCo, as guarantors, entered into (1) a First Amendment to Amended and Restated Note Purchase Agreement dated March 5, 2019 (which had amended and restated certain note purchase agreements originally dated December 4, 2012) per the 2012 and 2013 senior notes (the “2012 Amendment”), and (2) a First Amendment to Amended and Restated Note Purchase Agreement dated March 5, 2019 (which had amended and restated certain note purchase agreements originally dated March 31, 2015) for the 2015 senior notes (the “2015 Amendment”).
Our accrual for self-insured risk retention as of March 31, 2023 and 2022 was $30.4 million and $26.1 million , respectively. We are also self-insured for employee medical claims. We estimate a liability for incurred but not reported claims based upon recent claims experience.
Our accrual for self-insured risk retention as of March 31, 2024 and 2023 was $30.7 million and $30.4 million , respectively and is included in Accrued expenses and other and Other liabilities in our Consolidated Balance Sheets. We are also self-insured for employee medical claims. We estimate a liability for incurred but not reported claims based upon recent claims experience.
Significant components of total Selling, general, and administrative expenses (“SG&A”) are compensation and benefit costs, fees for professional services, travel and entertainment, facilities costs, gains or losses from divestitures, and other general and administrative expenses. SG&A decreased 13.6% in fiscal 2023, as compared to fiscal 2022.
Significant components of total selling, general, and administrative expenses (“SG&A”) are compensation and benefit costs, fees for professional services, travel and entertainment expenses, facility costs, gains or losses from divestitures, and other general and administrative expenses. SG&A increased 14.8% in fiscal 2024 over fiscal 2023.
LIQUIDITY AND CAPITAL RESOURCES The following table summarizes significant components of our cash flows for the years ended March 31, 2023 and 2022: Years Ended March 31, (dollars in thousands) 2023 2022 Net cash provided by operating activities $ 756,947 $ 684,811 Net cash used in investing activities (383,330) (666,559) Net cash (used in) provided by financing activities (498,718) 115,830 Debt-to-total capital ratio 33.6 % 32.1 % Free cash flow $ 409,565 $ 398,989 Net Cash Provided By Operating Activities – The net cash provided by our operating activities was $756.9 million for the year ended March 31, 2023, compared to $684.8 million for the year ended March 31, 2022.
LIQUIDITY AND CAPITAL RESOURCES The following table summarizes significant components of our cash flows for the years ended March 31, 2024 and 2023: Years Ended March 31, (dollars in thousands) 2024 2023 Net cash provided by operating activities $ 973,274 $ 756,947 Net cash used in investing activities (887,361) (383,330) Net cash used in financing activities (85,186) (498,718) Debt-to-total capital ratio 33.7 % 33.6 % Free cash flow $ 620,329 $ 409,565 Net Cash Provided By Operating Activities – The net cash provided by our operating activities was $973.3 million for the year ended March 31, 2024, compared to $756.9 million for the year ended March 31, 2023.
Our Dental segment provides a comprehensive offering for dental practitioners and dental schools, offering instruments, infection prevention consumables and instrument management systems. We disclose a measure of segment income that is consistent with the way management operates and views the business. The accounting policies for reportable segments are the same as those for the consolidated Company.
We disclose a measure of segment income that is consistent with the way management operates and views the business. The accounting policies for reportable segments are the same as those for the consolidated Company.
During fiscal 2022, we paid cash dividends totaling $163.2 million or $1.69 per outstanding share. • Transactions with noncontrolling interest holders – During fiscal 2023, we paid $0.8 million in distributions to noncontrolling interest holders.
During fiscal 2023, we paid cash dividends totaling $183.5 million or $1.84 per outstanding share. • Transactions with noncontrolling interest holders – During fiscal 2024 and 2023, we paid $1.6 million and $0.8 million, respectively, in distributions to noncontrolling interest holders.
These non-GAAP financial measures are not intended to be, and should not be, considered separately from or as an alternative to the most directly comparable GAAP financial measures. These non-GAAP financial measures are presented with the intent of providing greater transparency to supplemental financial information used by management and the Board of Directors in their financial analysis and operational decision-making.
These non-GAAP financial measures are presented with the intent of providing greater transparency to supplemental financial information used by management and the Board of Directors in their financial analysis and operational decision-making.
The following discussion summarizes the significant changes in our investing cash flows for the years ended March 31, 2023 and 2022: • Purchases of property, plant, equipment, and intangibles, net – Capital expenditures totaled $362.0 million and $287.6 million for fiscal 2023 and 2022, respectively.
The following discussion summarizes the significant changes in our investing cash flows for the years ended March 31, 2024 and 2023: • Purchases of property, plant, equipment, and intangibles, net – Capital expenditures was comparable in fiscal 2024 and 2023, totaling $360.3 million and $362.0 million for fiscal 2024 and 2023, respectively. • Proceeds from the sale of property, plant, equipment and intangibles – During fiscal 2024 and 2023 we received $7.4 million and $14.6 million, respectively, for proceeds from the sale of property, plant, equipment and intangibles.
If future 44 Table of Contents market conditions vary from those projected, and our estimates prove to be inaccurate, we may be required to write-down inventory values and record an adjustment to Cost of revenues. Asset Impairment Losses.
We record an allowance for estimated losses when the facts and circumstances indicate that particular inventories will not be usable. If future market conditions vary from those projected, and our estimates prove to be inaccurate, we may be required to write-down inventory values and record an adjustment to Cost of revenues. Asset Impairment Losses.
We provide additional information about our share repurchases in Note 13 to our consolidated financial statements titled, "Repurchases of Ordinary Shares." • Acquisition related deferred or contingent consideration – During fiscal 2023, we paid $1.5 million in acquisition related deferred and contingent consideration.
We provide additional information about our bank credit facility in Note 8 to our consolidated financial statements titled, "Debt." • Acquisition related deferred or contingent consideration – During fiscal 2024 and 2023, we paid $6.2 million and $1.5 million in acquisition related deferred and contingent consideration, respectively.
Commercial commitments include standby letters of credit, letters of credit required as security under our self-insured risk retention policies, and other potential cash outflows resulting from events that require us to fulfill commitments.
Commercial commitments include standby letters of credit, letters of credit required as security under our self-insured risk retention policies, and other potential cash outflows resulting from events that require us to fulfill commitments. Due to the announced sale of the Dental segment, Dental is classified as a discontinued operation. As such, obligations included below do not include the Dental segment.
Our gross profit percentage decreased to 43.6% for fiscal 2023 as compared to 44.0% for fiscal 2022 .
Our gross profit percentage decreased to 43.2% for fiscal 2024 as compared to 43.7% for fiscal 2023.
Our sources of credit as of March 31, 2023 are summarized in the following table: (dollars in thousands) Maximum Amounts Available Reductions in Available Credit Facility for Other Financial Instruments March 31, 2023 Amounts Outstanding March 31, 2023 Amounts Available Sources of Credit Private Placement Senior Notes $ 750,302 — $ 750,302 $ — Term Loan 72,500 — 72,500 — Delayed Draw Term Loan 625,625 — 625,625 — Revolving Credit Agreement (1) 1,250,000 9,942 301,672 938,386 Senior Public Notes 1,350,000 — 1,350,000 — Total Sources of Credit $ 4,048,427 $ 9,942 $ 3,100,099 $ 938,386 (1) At March 31, 2023, there were $9.9 million of letters of credit outstanding under the Credit Agreement.
Our sources of credit as of March 31, 2024 are summarized in the following table: (dollars in thousands) Maximum Amounts Available Reductions in Available Credit Facility for Other Financial Instruments March 31, 2024 Amounts Outstanding March 31, 2024 Amounts Available Sources of Credit Private Placement Senior Notes $ 751,433 — $ 751,433 $ — Term Loan 45,000 — 45,000 — Delayed Draw Term Loan 593,126 — 593,126 — Revolving Credit Agreement (1) 1,250,000 11,444 484,529 754,027 Senior Public Notes 1,350,000 — 1,350,000 — Total Sources of Credit $ 3,989,559 $ 11,444 $ 3,224,088 $ 754,027 (1) At March 31, 2024, there were $11.4 million of letters of credit outstanding under the Credit Agreement.
The AST segment’s operating income increased $18.9 million to $429.0 million in fiscal year 2023, as compared to $410.1 million in fiscal year 2022. The AST segment's operating marg ins were 46.9% f or fiscal year 2023 and 48.1% for fiscal year 2022. The increase in segment operating income is primarily due to increased volume.
The AST segment’s operating income increased $10.7 million to $439.7 million in fiscal year 2024, as compared to $429.0 million in fiscal year 2023. The increase in operating income is primarily due to favorable pricing. The AST segment's operating margins were 46.1% for fiscal year 2024 and 46.9% for fiscal year 2023.
For more information on Cantel's debt, refer to Note 6 to our consolidated financial statements titled, "Debt." • Proceeds/Payments under credit facilities, net – Net proceeds received under credit facilities totaled $241.7 million for fiscal 2023, compared to net payments under credit facilities of $190.2 million for fiscal 2022.
For more information on our Private Placement Senior Notes, refer to Note 8 to our consolidated financial statements titled, "Debt." • Proceeds under credit facilities, net – Net proceeds received under credit facilities totaled $181.5 million and $241.7 million for fiscal 2024 and 2023, respectively.
Unfavorable impacts from inflation (330 basis points) and productivity (50 basis points) were partially offset by favorable impacts from pricing (150 basis points), mix and other adjustments (130 basis points), divestiture activity (40 basis points), and fluctuations in currency (20 basis points). 32 Table of Contents Operating Expenses.
Unfavorable impacts from inflation and material costs (120 basis points), restructuring charges (40 basis points), adjustments and other charges (40 basis points), productivity (30 basis points), and fluctuations in currency (10 basis points) were partially offset by favorable impacts from pricing (150 basis points), mix (30 basis points), and acquisitions (10 basis points). Operating Expenses.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+1 added−1 removed4 unchanged
Biggest changeOur financial results could be affected by the availability and changes in prices of these materials. Some of these materials are sourced from a limited number of suppliers or only a single supplier. These materials are also key source materials for our competitors. Therefore, if demand for these materials rises, we may experience increased costs and/or limited or unavailable supplies.
Biggest changeCOMMODITY RISK We are dependent on basic raw materials, sub-assemblies, components, and other supplies used in our operations. Our financial results could be affected by the availability and changes in prices of these materials. Some of these materials are sourced from a limited number of suppliers or only a single supplier.
We monitor our interest rate risk, but do not engage in any hedging activities using derivative financial instruments. For additional information regarding our debt structure, refer to Note 6 to our consolidated financial statements titled, “Debt.” FOREIGN CURRENCY RISK We are exposed to the impact of foreign currency exchange fluctuations.
We monitor our interest rate risk, but do not engage in any hedging activities using derivative financial instruments. For additional information regarding our debt structure, refer to Note 8 to our consolidated financial statements titled, “Debt.” FOREIGN CURRENCY RISK We are exposed to the impact of foreign currency exchange fluctuations.
Note 18 to our consolidated financial statements titled, “Reclassifications out of Accumulated Other Comprehensive (Loss) Income,” contains additional information about the impact of translation on accumulated other comprehensive income (loss) and equity.
Note 20 to our consolidated financial statements titled, “Reclassifications out of Accumulated Other Comprehensive (Loss) Income,” contains additional information about the impact of translation on accumulated other comprehensive income (loss) and equity.
We believe that we have adequate sources of supply for many of our key materials and energy sources. Where appropriate, we enter into long-term supply contracts as a basis to guarantee a reliable supply. We may also enter into commodity swap contracts to hedge price changes in a certain commodity that impacts raw materials included in our Cost of revenues.
We believe that we have adequate sources of supply for many of our key materials and energy sources. Where appropriate, we enter into long-term supply contracts as a basis to guarantee a reliable supply. We may also enter into commodity swap contracts to hedge price changes in commodities that impact raw materials included in our Cost of revenues.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK In the ordinary course of business, we are exposed to various risks, including, but not limited to, interest rate, foreign currency, and commodity risks. These risks are described in the sections that follow. INTEREST RATE RISK As of March 31, 2023, we had $2,100.3 million in fixed rate senior notes outstanding.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK In the ordinary course of business, we are exposed to various risks, including, but not limited to, interest rate, foreign currency, and commodity risks. These risks are described in the sections that follow. INTEREST RATE RISK As of March 31, 2024, we had $2,101.4 million in fixed rate senior notes outstanding.
As of March 31, 2023, we had $301.7 million in outstanding borrowings under our Credit Agreement and $698.1 million in term loans which are exposed to changes in interest rates. Based upon our debt structure at March 31, 2023, a hypothetical 100 basis point increase in floating interest rates would increase annual interest expense by approximately $10.0 million.
As of March 31, 2024, we had $484.5 million in outstanding borrowings under our Credit Agreement and $638.1 million in term loans which are exposed to changes in interest rates. Based upon our debt structure at March 31, 2024, a hypothetical 100 basis point increase in floating interest rates would increase annual interest expense by approximately $11.2 million.
At March 31, 2023, we held commodity swap contracts to buy 753.0 thousand pounds of nickel. 51 Table of Contents
At March 31, 2024, we held commodity swap contracts to buy 789.0 thousand pounds of nickel. 52 Table of Contents
Since we operate internationally and approximately 30% of our revenues and 30% of our Cost of revenues are generated outside the United States, foreign currency exchange rate fluctuations can significantly impact our financial position, results of operations, and competitive position.
Since we operate internationally and approximately 30% of our revenues and 20% of our Cost of revenues are generated outside the United States, foreign currency exchange rate fluctuations can significantly impact our financial position, results of operations, and competitive position. We enter into foreign currency forward contracts to hedge monetary assets and liabilities denominated in foreign currencies, including intercompany transactions.
At March 31, 2023, we held foreign currency forward contracts to buy 19.5 million British pounds sterling; and to sell 150.0 million Mexican pesos, and 7.0 million Singapore dollars and 6.0 million euros. COMMODITY RISK We are dependent on basic raw materials, sub-assemblies, components, and other supplies used in our operations.
We do not use derivative financial instruments for speculative purposes. At March 31, 2024, we held foreign currency forward contracts to buy 48.0 million British pounds sterling and 4.0 million euros; and to sell 150.0 million Mexican pesos, and 18.0 million Australian dollars.
Removed
We enter into foreign currency forward co ntracts to hedge monetary assets and liabilities denominated in foreign currencies, including intercompany transactions. We do not use derivative financial instruments for speculative purposes.
Added
These materials are also key source materials for our competitors. Therefore, if demand for these materials rises, we may experience increased costs and/or limited or unavailable supplies.

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