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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) August 24, 1998
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STERIS CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
Ohio 000-21553 34-1482024
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(State or Other Jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) File Number) Identification No.)
5960 Heisley Road, Mentor, Ohio 44124
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(Address of Principal Executive Offices) (Zip Code)
(440) 354-2600
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(Registrant's Telephone Number, Including Area Code)
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On August 24, 1998, STERIS Corporation effected a two-for-one
split of the company's common shares through a 100% stock
dividend at the rate of one common share for each common share
held by shareholders of record on August 10, 1998. The split was
announced by the company in a press release dated July 28, 1998,
reproduced as Exhibit 99.1 hereof.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Exhibit 99.1 Press Release
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SIGNATURES
Pursuant to the requirements of the 1933 Act, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, hereunto
duly authorized, in the City of Mentor, State of Ohio, on the 27th day of
August, 1998.
STERIS CORPORATION
By \s\ Bill R. Sanford
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Bill R. Sanford,
President and Chief Executive Officer,
Chairman of the Board of Directors
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EXHIBIT INDEX
Exhibit Number Exhibit Description
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99.1 Press Release
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EXHIBIT 99.1
STERIS REPORTS RECORD FISCAL FIRST QUARTER RESULTS;
ANNOUNCES 2-FOR-1 STOCK SPLIT
Mentor, Ohio, July 28--STERIS Corporation (Nasdaq: STRL - news) today announced
record first quarter revenues, net income, and net income per share in its
fiscal 1999 first quarter ended June 30, 1998. Additionally, the Company
announced the approval by its Board of Directors of a 2-for-1 stock splint by
means of a 100% stock dividend on STERIS common share. The stock split will be
effective on August 24, 1998, to shareholders of record on August 10, 1998.
Net income for the fiscal 1999 first quarter was $14.3 million, an increase of
22% from $11.7 million in the prior year fiscal first quarter. Diluted earnings
per share were $0.41, a 21% increase from $0.34 in the year earlier first
quarter. Basic earnings per share were $0.42 compared $0.35 in the same period
last year. The fiscal first quarter earnings per share were calculated without
the effect of the upcoming stock split.
Net revenues for the fiscal quarter were $173.8 million, an increase of 12% from
$155.1 million report in the first quarter of fiscal 1998. Strength in the
Infection Prevention (+16%), Scientific (+19%), and Management Services (+47%)
revenue categories was somewhat offset by quarterly softness in Surgical Support
(-13%). Recurring revenues from consumables and services were 56% of total sales
for the quarter.
Commenting on the results of the fiscal first quarter, Bill R. Sanford, STERIS's
Chairman, President, and CEO stated, "The first quarter results were a good
start to our 1999 fiscal year. The benefits of our systems selling approach were
clearly demonstrated by the mix of 44% of revenues from capital equipment sales
and 56% from recurring consumables and services. The sales mix and manufacturing
efficiencies contributed to the gross margin of 46.8%, an improvement of 370
basis points from 43.1% in the prior year first quarter. Operating income
increased 30% from last year's fiscal first quarter.
Mr. Sanford continued, "An important STERIS objective is to have a strong
recurring revenue base that will offset quarter-to-quarter capital sales
fluctuations. For example, sales of consumables and services in all of our
revenue categories grew nicely during the quarter. To a large degree, this
business is captive and predictable with a relatively smooth sales curve.
Conversely, much of the Surgical Support revenue category, which includes
surgical tables, surgical lights, and other ceiling mounted operating room
equipment, is project related. First quarter capital equipment sales in this
category were lower than the previous quarter because of the timing of the
completion of projects. Our Systems Group is currently very busy with capital
projects that will result in sales later in the year.
Mr. Sanford added, "We were pleased with the growth in the Infection Prevention
revenue category which makes up over half of our total business. The special
emphasis programs in our Scientific and Management Services categories are also
producing good results. STERIS's fiscal first quarter is historically full of
distractions with major national conventions, annual sales meetings, sales
territory alignments, and sales training programs, all necessary to position the
Company for continued growth throughout the year. The business activities were
effectively
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handled while building on our positive sales momentum, particularly in North
America. We did experience weakness in the Asian healthcare market with sales
down approximately $3 million from the prior year first quarter. Our Asian
business is relatively small and, therefore, we have minimal risk in the region.
Conversely, we see the current Asian situation as an opportunity to expand our
presence as some competitors pull back."
Mr. Sanford concluded, "STERIS's Annual Meeting of Shareholders was held last
week. We are appreciative of the support of our Shareholders in electing the
Director nominees and approving all ballot proposals. The approval of an
increase in the number of authorized shares enables the Directors to take action
following the Shareholders Meeting to authorize the 2-for-1 stock split that had
been requested by a large number of Shareholders. The Shareholders Meeting was
well attended and upbeat, consistent with management's enthusiasm for the
ongoing prospects for the Company."
STERIS Corporation is a leading provider of infection prevention, contamination
prevention, microbial reduction, and surgical support systems, products,
services, and technologies to healthcare, scientific, research, food, and
industrial Customers throughout the world. The Company has over 4,500 Associates
(employees) worldwide, including more than 1,700 direct sales, service, and
field support personnel. Customer Support facilities are located in major global
market centers with manufacturing operations in the United States, Canada,
Germany, and Finland.
This press release contains statements concerning certain trends and other
forward-looking information affecting or relating to the Company and its
industry that are intended to qualify for the protections afforded
"forward-looking statements" under the Private Securities Litigation Reform Act
of 1995. There are many important factors that could cause actual results to
differ materially from those in the forward-looking statements. Many of these
factors are outside STERIS's control. Changes in market conditions, including
competitive factors and changes in government regulations, could cause actual
results to differ materially from the Company's expectations. No assurance can
be provided as to any future financial results. Other potentially negative
factors that could cause actual results to differ materially from those in the
forward-looking statements include (a) the possibility that the continuing
integration of acquired businesses will take longer than anticipated, (b) the
potential for increased pressure on pricing that leads to erosion in profit
margins, (c) the possibility that market demand will develop for new
technologies, products, and applications, (d) the potential effects of
fluctuations in foreign currencies, and (e) the possibility of reduced demand,
or reductions in the rate of growth in demand, for the Company's product.
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- STERIS Corporation
- Statements of Operations
- (In Thousands, Except Per Share Amounts)
Three Months Ended
June 30
1998 1997
Net revenues $ 173,775 $ 155,134
Cost of goods and services sold 92,461 88,300
Gross profit 81,314 66,834
Costs and expenses:
Selling, informational, and administrative 49,531 41,143
Research and development 6,029 5,956
Total 55,560 47,099
Income from operations 25,754 19,735
Other income (expense) (2,239) (462)
Income before taxes 23,515 19,273
Income taxes 9,170 7,526
Net income $ 14,345 $ 11,747
Net income per share - Diluted (a) $ 0.41 $ 0.34
Net income per share - Basic (a) $ 0.42 $ 0.35
Weighted average number of shares (a) (b) 35,341 34,956
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Balance Sheets June 30, March 31,
(In Thousands) 1998 1998
ASSETS
Current assets $350,735 $344,332
Property, plant, and equipment, net 210,250 205,292
Other assets 183,048 182,701
TOTAL $744,033 $732,325
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $163,737 $169,654
Other liabilities 203,742 203,719
Shareholders' equity 376,554 358,952
TOTAL $744,033 $732,325
(a) Net income per common share and the weighted average number of common shares
has not been adjusted to reflect a 2-for-1 stock split that will be
effective on August 24, 1998, to shareholders of record on August 10, 1998.
(b) The weighted average number of common shares used in calculating net income
per share includes weighted average shares outstanding and the effects of
potentially dilutive securities (stock options). The weighted average number
of common shares has not been adjusted to reflect a 2-for-1 stock split that
will be effective on August 24, 1998.
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