UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

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): November 1, 2017

 

 

STERIS plc

(Exact Name of Registrant as Specified in Charter)

 

 

 

England and Wales		1-37614		98-1203539
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

Chancery House, 190 Waterside Road

Hamilton Industrial Park, Leicester LE5 1QZ

United Kingdom

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: +44 0 116 276 8636

Not Applicable

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company    ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

 

 

 

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ITEM 2.02.

Results of Operations and Financial Condition.

On November 1, 2017, STERIS plc (“STERIS”) issued a press release announcing financial results for its fiscal 2018 second quarter ended September 30, 2017, as well as an interim dividend. A copy of this press release is attached hereto as Exhibit 99.1.

The information contained in this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished to the Securities and Exchange Commission and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. Furthermore, the information contained in this Item 2.02 of this Current Report on Form 8-K shall not be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933.

 

ITEM 9.01.

Financial Statements and Exhibits.

 

(d)

Exhibits.

 

Exhibit
No.		Description
99.1		Press Release issued by STERIS plc on November 1, 2017 announcing financial results for its fiscal 2018 second quarter ended September 30, 2017.

 

2

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

STERIS plc
By:		/s/ J. Adam Zangerle
		J. Adam Zangerle
		Vice President, General Counsel and Secretary

Date: November 1, 2017

 

3

Exhibit 99.1

STERIS Announces Financial Results for Fiscal 2018 Second Quarter

 

•

Second quarter as reported revenue declines 2% due to divestitures; grows 4% on a constant currency organic basis

 

•

As reported and adjusted EPS grow 60% and 6%, respectively

 

•

Cash from operations increases 15% in first half

 

•

Fiscal 2018 outlook reconfirmed

LEICESTER, U.K. - (November 1, 2017) - STERIS plc (NYSE: STE) (“STERIS” or the “Company”) today announced financial results for its fiscal 2018 second quarter ended September 30, 2017. Fiscal 2018 second quarter revenue as reported was $634.2 million compared with $646.4 million in the second quarter of fiscal 2017. The decline in revenue was due to the impact of divestitures. Constant currency organic revenue (see Non-GAAP Financial Measures) growth was 4% for the second quarter of fiscal 2018.

“We are pleased with our second quarter and year-to-date performance, as our results were in-line with our expectations,” said Walt Rosebrough, President and Chief Executive Officer of STERIS. “Based on our first half results and our expectations for the remainder of the year, we expect to achieve our full year revenue and earnings targets for fiscal 2018, despite the anticipated impact of recent hurricanes.”

As reported, net income for the second quarter was $64.5 million, or $0.75 per diluted share, compared with net income of $40.4 million, or $0.47 per diluted share in the second quarter of fiscal 2017. Adjusted net income (see Non-GAAP Financial Measures) for the second quarter of fiscal 2018 was $80.3 million, or $0.94 per diluted share, compared with adjusted net income for the previous year’s second quarter of $76.4 million or $0.89 per diluted share.

First Half Results

As reported, fiscal 2018 first half revenue decreased 3% to $1,242.1 million compared with $1,284.8 million in the first half of fiscal 2017, due primarily to the impact of divestitures and changes in currency. Constant currency organic revenue growth was 5% for the first half of fiscal 2018. As reported, net income for the first half was $122.5 million, or $1.43 per diluted share, compared with net income of $88.8 million, or $1.03 per diluted share in the same period last fiscal year. Adjusted net income (see Non-GAAP Financial Measures) for the first half of fiscal 2018 was $153.5 million, or $1.79 per diluted share, compared with adjusted net income for the previous year’s first half of $144.8 million or $1.68 per diluted share.

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Second Quarter Segment Results

Healthcare Products revenue as reported declined 2% in the quarter to $302.1 million compared with $306.7 million in the second quarter of fiscal 2017. Service revenue grew 8%, offset by an 8% decline in capital equipment revenue. Backlog for capital equipment increased 11% sequentially, reflecting solid underlying orders, while capital equipment shipments were delayed in part due to the Texas and Florida hurricanes during the quarter. Consumables revenue declined 1% in the second quarter as a result of divestitures. Healthcare Products constant currency organic revenue was flat during the quarter. Healthcare Products operating income was $47.5 million compared with $50.8 million in last year’s second quarter. The decline in profitability was primarily due to lower volume and the impact of changes in currency rates.

Healthcare Specialty Services as reported revenue in the quarter was $116.1 million compared with $137.7 million in the second quarter of fiscal 2017, reflecting the impact of the linen divestitures year-over-year. Constant currency organic revenue grew 10% in the quarter. Healthcare Specialty Services operating income was $9.3 million compared with $1.4 million in last year’s second quarter, primarily due to continued improvement within IMS in North America.

Fiscal 2018 second quarter revenue for Applied Sterilization Technologies increased 5% as reported to $126.5 million compared with $120.6 million in the same period last year. Constant currency organic revenue increased 5%, primarily due to increased volume from the segment’s core medical device Customers. Segment operating income increased to $43.4 million in the second quarter of fiscal 2018 compared with operating income of $41.5 million in the same period last year, due primarily to the revenue growth and changes in currency rates. Although there was limited financial impact to this segment during the second quarter from the Puerto Rico hurricane, the Company anticipates an approximately $3 million reduction in profit due to disruption from the storms in the second half of the fiscal year.

Life Sciences second quarter revenue as reported grew 10% to $89.5 million compared with $81.5 million in the second quarter of fiscal 2017. Service revenue grew 13%, capital equipment revenue increased 9% and consumable revenue grew 8%. Constant currency organic revenue grew 9% in the quarter. Operating income improved with the increase in volume to $27.6 million compared with $22.5 million in the prior year’s second quarter.

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Cash Flow

Net cash provided by operations for the first six months of fiscal 2018 was $217.4 million, compared with $188.5 million in fiscal 2017. Free cash flow (see Non-GAAP Financial Measures) for the first six months of fiscal 2018 was $144.0 million compared with $119.4 million in the prior year. The improvement in cash flow is primarily due to improvements in net income and lower working capital requirements.

Dividend Announcement

STERIS’s Board of Directors has authorized a quarterly interim dividend of $0.31 per share. The dividend is payable December 20, 2017 to shareholders of record at the close of business on November 22, 2017.

Conference Call

As previously announced, STERIS management will host a conference call today at 10:00 a.m. Eastern time. The conference call can be heard live over the Internet at www.steris-ir.com or via phone by dialing 1- 877-317-6789 in the United States or 1-412-317-6789 internationally, then asking to join the conference call for STERIS plc.

For those unable to listen to the conference call live, a replay will be available beginning at 12:00 p.m. Eastern Time today, either over the Internet at www.steris-ir.com or via phone. To access the replay of the call, please use the access code 10113526 and dial 1-877-344-7529 in the United States or 1-412-317-0088 internationally.

About STERIS

STERIS’s mission is to help our Customers create a healthier and safer world by providing innovative healthcare and life science product and service solutions around the globe. For more information, visit www.steris.com.

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Investor Contact:

Julie Winter, Director, Investor Relations

Julie_Winter@steris.com

+1 440 392 7245

Media Contact:

Stephen Norton, Senior Director, Corporate Communications

Stephen_Norton@steris.com

+1 440 392 7482

Non-GAAP Financial Measures

Adjusted net income, free cash flow and constant currency organic revenue are non-GAAP measures that may be used from time to time and should not be considered replacements for GAAP results. Non-GAAP financial measures are presented in this release with the intent of providing greater transparency to supplemental financial information used by management and the Board of Directors in their financial analysis and operational decision making. These amounts are disclosed so that the reader has the same financial data that management uses with the belief that it will assist investors and other readers in making comparisons to our historical operating results and analyzing the underlying performance of our operations for the periods presented. The Company believes that the presentation of these non-GAAP financial measures, when considered along with our GAAP financial measures, provides a more complete understanding of the factors and trends affecting our business than could be obtained absent this disclosure.

Adjusted net income excludes the amortization of intangible assets acquired in business combinations, acquisition-related transaction costs, integration costs related to acquisitions, and certain other unusual or non-recurring items. STERIS believes this measure is useful because it excludes items that may not be indicative of or are unrelated to our core operating results and provides a baseline for analyzing trends in our underlying businesses.

The Company defines free cash flow as cash flows from operating activities less purchases of property, plant, equipment and intangibles, plus proceeds from the sale of property, plant, equipment, and intangibles. STERIS believes that free cash flow is a useful measure of the Company’s ability to fund future principal debt repayments and growth outside of core operations, pay cash dividends, and repurchase ordinary shares.

To measure the percentage organic revenue growth, the Company removes the impact of acquisitions and divestitures that affect the comparability and trends in revenue. To measure the percentage constant currency organic revenue growth, the impact of changes in currency exchange rates and acquisitions and divestitures that affect the comparability and trends in revenue are removed. The impact of changes in currency exchange rates is calculated by translating current year results at prior year average currency exchange rates.

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Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported sales, gross profit, operating income, net earnings and net earnings per diluted share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of the Company’s operations that, when viewed with GAAP results and the reconciliations to corresponding GAAP financial measures below, provide a more complete understanding of the business. The Company strongly encourage investors and shareholders to review its financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

Forward-Looking Statements

This release and the conference call may contain statements concerning certain trends, expectations, forecasts, estimates, or other forward-looking information affecting or relating to STERIS or its industry, products or activities that are intended to qualify for the protections afforded “forward-looking statements” under the Private Securities Litigation Reform Act of 1995 and other laws and regulations. Forward-looking statements speak only as to the date the statement is made and may be identified by the use of forward-looking terms such as “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “projects,” “targets,” “forecasts,” “outlook,” “impact,” “potential,” “confidence,” “improve,” “optimistic,” “deliver,” “orders,” “backlog,” “comfortable,” “trend”, and “seeks,” or the negative of such terms or other variations on such terms or comparable terminology. Many important factors could cause actual results to differ materially from those in the forward-looking statements including, without limitation, disruption of production or supplies, changes in market conditions, political events, pending or future claims or litigation, competitive factors, technology advances, actions of regulatory agencies, and changes in laws, government regulations, labeling or product approvals or the application or interpretation thereof. Other risk factors are described in STERIS’s securities filings, including Item 1A of STERIS’s Annual Report on Form 10-K for the year ended March 31, 2017. Many of these important factors are outside of STERIS’s control. No assurances can be provided as to any result or the timing of any outcome regarding matters described in STERIS’s securities filings or otherwise with respect to any regulatory action, administrative proceedings, government investigations, litigation, warning letters, cost reductions, business strategies, earnings or revenue trends or future financial results. References to products are summaries only and should not be considered the specific terms of the product clearance or literature. Unless legally required, STERIS does not undertake to update or revise any forward-looking statements even if events make clear that any projected results, express or implied, will not be realized. Other potential risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, (a) STERIS’s ability to meet expectations regarding the accounting and tax treatments of the Combination (the “Combination”) with STERIS Corporation and Synergy Health plc (“Synergy”), (b) the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in connection with the Combination within the expected time-frames or at all and to successfully integrate the operations of the companies, (c) the integration of the operations of the companies being more difficult, time-consuming or costly than expected, (d) operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) being greater

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than expected following the transaction, (e) the retention of certain key employees of Synergy being difficult, (f) changes in tax laws or interpretations that could increase our consolidated tax liabilities, including, changes in tax laws that would result in STERIS being treated as a domestic corporation for United States federal tax purposes, (g) the potential for increased pressure on pricing or costs that leads to erosion of profit margins, (h) the possibility that market demand will not develop for new technologies, products or applications or services, or business initiatives will take longer, cost more or produce lower benefits than anticipated, (i) the possibility that application of or compliance with laws, court rulings, certifications, regulations, regulatory actions, including without limitation those relating to FDA warning notices or letters, government investigations, the outcome of any pending FDA requests, inspections or submissions, or other requirements or standards may delay, limit or prevent new product introductions, affect the production and marketing of existing products or services or otherwise affect STERIS’s performance, results, prospects or value, (j) the potential of international unrest, economic downturn or effects of currencies, tax assessments, adjustments or anticipated rates, raw material costs or availability, benefit or retirement plan costs, or other regulatory compliance costs, (k) the possibility of reduced demand, or reductions in the rate of growth in demand, for STERIS’s products and services, (l) the possibility that anticipated growth, cost savings, new product acceptance, performance or approvals, or other results may not be achieved, or that transition, labor, competition, timing, execution, regulatory, governmental, or other issues or risks associated with STERIS’s businesses, industry or initiatives including, without limitation, those matters described in STERIS’s 10-K for the year ended March 31, 2017 and other securities filings, may adversely impact STERIS’s performance, results, prospects or value, (m) the impact on STERIS and its operations of the “Brexit” or the exit of other member countries from the EU, (n) the impact on STERIS and its operations of any legislation, regulations or orders, including but not limited to any new trade or tax legislation, regulations or orders, that may be implemented by the new U.S. administration or Congress, or of any responses thereto, (o) the possibility that anticipated financial results or benefits of recent acquisitions, including the Combination, or of STERIS’s restructuring efforts, or of recent divestitures will not be realized or will be other than anticipated and (p) the effects of the contractions in credit availability, as well as the ability of STERIS’s Customers and suppliers to adequately access the credit markets when needed.

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STERIS plc    

Consolidated Condensed Statements of Operations    

(In thousands, except per share data)    

 

		Three Months Ended								Six Months Ended
		September 30,								September 30,
		2017				2016				2017				2016
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Revenues		$	634,159			$	646,415			$	1,242,123			$	1,284,793
Cost of revenues			367,398				398,507				719,241				796,895
Gross profit			266,761				247,908				522,882				487,898
Operating expenses:
Selling, general, and administrative			153,356				163,680				309,167				315,566
Research and development			13,974				14,617				27,978				29,045
Restructuring expense			27				48				78				202
Total operating expenses			167,357				178,345				337,223				344,813
Income from operations			99,404				69,563				185,659				143,085
Non-operating expense, net			12,057				10,640				24,058				21,217
Income tax expense			22,903				18,721				38,942				32,955
Net income		$	64,444			$	40,202			$	122,659			$	88,913
Net income attributable to noncontrolling interest			(15	)			(214	)			123				95
Net income attributable to shareholders		$	64,459			$	40,416			$	122,536			$	88,818
Earnings per ordinary share (EPS) data:
Basic		$	0.76			$	0.47			$	1.44			$	1.03
Diluted		$	0.75			$	0.47			$	1.43			$	1.03
Cash dividends declared per share outstanding		$	0.31			$	0.28			$	0.59			$	0.53
Weighted average number of shares outstanding used in EPS computation:
Basic number of shares outstanding			85,199				85,851				85,145				85,944
Diluted number of shares outstanding			85,869				86,333				85,795				86,426

STERIS plc    

Consolidated Condensed Balance Sheets    

(In thousands)    

 

		September 30,				March 31,
		2017				2017
		(Unaudited)
Assets
Current assets:
Cash and cash equivalents		$	295,628			$	282,918
Accounts receivable, net			449,371				483,451
Inventories, net			224,795				197,837
Other current assets			57,441				53,596
Total Current Assets			1,027,235				1,017,802
Property, plant, and equipment, net			962,515				915,908
Goodwill and intangible assets, net			3,091,095				2,956,190
Other assets			39,431				34,555
Total Assets		$	5,120,276			$	4,924,455
Liabilities and Equity
Current liabilities:
Accounts payable		$	129,208			$	133,479
Other current liabilities			238,262				248,104
Total Current Liabilities			367,470				381,583
Long-term debt			1,445,297				1,478,361
Other liabilities			266,704				254,478
Equity			3,040,805				2,810,033
Total Liabilities and Equity		$	5,120,276			$	4,924,455

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STERIS plc    

Segment Data     

 

 

		Three Months Ended								Six Months Ended
		September 30,								September 30,
(In thousands)		2017				2016				2017				2016
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Segment Revenues:
Healthcare Products		$	302,094			$	306,676			$	591,158			$	589,353
Healthcare Specialty Services			116,111				137,661				229,545				289,636
Life Sciences			89,461				81,519				170,396				162,917
Applied Sterilization Technologies			126,493				120,559				251,024				242,887
Total Segment Revenues		$	634,159			$	646,415			$	1,242,123			$	1,284,793
Segment Operating Income:
Healthcare Products		$	47,493			$	50,835			$	89,730			$	86,808
Healthcare Specialty Services			9,323				1,370				15,317				3,843
Life Sciences			27,646				22,471				49,461				46,715
Applied Sterilization Technologies			43,394				41,540				84,592				81,948
Total Reportable Segments			127,856				116,216				239,100				219,314
Corporate			(6,202	)			(5,149	)			(10,067	)			(6,723	)
Total Segment Operating Income		$	121,654			$	111,067			$	229,033			$	212,591
Less: Adjustments
Amortization of inventory and property “step up” to fair value			649				1,385				1,267				4,471
Amortization of acquired intangible assets			17,171				17,779				33,473				37,308
Acquisition and integration related charges			3,393				6,640				7,422				11,873
Loss (gain) on fair value adjustment of acquisition related contingent consideration			—				1,850				—				1,850
Net loss on divestiture of businesses			1,010				13,802				1,134				13,802
Restructuring charges			27				48				78				202
Total operating income		$	99,404			$	69,563			$	185,659			$	143,085

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STERIS plc    

Consolidated Condensed Statements of Cash Flows    

(In thousands)    

 

		Six Months Ended
		September 30,
		2017				2016
		(Unaudited)				(Unaudited)
Operating Activities:
Net income		$	122,659			$	88,913
Non-cash items			106,033				129,598
Changes in operating assets and liabilities			(11,315	)			(30,010	)
Net cash provided by operating activities			217,377				188,501
Investing Activities:
Purchases of property, plant, equipment, and intangibles, net			(75,420	)			(73,866	)
Proceeds from sale of property, plant, equipment and intangibles			2,075				4,763
Proceeds from the sale of businesses			1,313				131,586
Purchases of investments			—				(6,356	)
Acquisition of businesses, net of cash acquired			(29,509	)			(64,872	)
Net cash used in investing activities			(101,541	)			(8,745	)
Financing Activities:
Payments on long-term obligations			(15,000	)			(10,000	)
(Payments) proceeds under credit facilities, net			(38,199	)			(47,646	)
Acquisition related deferred or contingent consideration			(1,876	)			(6,000	)
Deferred financing fees and debt issuance costs			(44	)			—
Repurchases of shares			(20,652	)			(59,895	)
Cash dividends paid to shareholders			(50,280	)			(45,585	)
Stock option and other equity transactions, net			6,706				2,494
Proceeds from issuance of equity to minority shareholders			—				5,022
Net cash provided by financing activities			(119,345	)			(161,610	)
Effect of exchange rate changes on cash and cash equivalents			16,219				(12,636	)
Increase (decrease) in cash and cash equivalents			12,710				5,510
Cash and cash equivalents at beginning of period			282,918				248,841
Cash and cash equivalents at end of period		$	295,628			$	254,351

 

 

		Six Months Ended
		September 30,
		2017				2016
		(Unaudited)				(Unaudited)
Calculation of Free Cash Flow:
Cash flows from operating activities		$	217,377			$	188,501
Purchases of property, plant, equipment, and intangibles, net			(75,420	)			(73,866	)
Proceeds from the sale of property, plant, equipment, and intangibles			2,075				4,763
Free Cash Flow		$	144,032			$	119,398

 

		Twelve Months Ended
		March 31,
		2018
		(Outlook)*
Calculation of free cash flow for outlook:
Cash flows from operating activities		$	460,000
Purchases of property, plant, equipment, and intangibles, net			(180,000	)
Free Cash Flow		$	280,000

 

*	All amounts are estimates.

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STERIS plc

Non-GAAP Financial Measures

(In thousands, except per share data)

 

 

		Three months ended September 30, (unaudited)
		As reported, GAAP								Impact of Acquisitions				Impact of Divestitures				Impact of Currency Movements				GAAP growth				Organic growth				Constant currency organic growth
Segment Revenues:		2017				2016				2017				2016				2017				2017				2017				2017
Healthcare Products		$	302,094			$	306,676			$	1,246			$	(6,057	)		$	823				-1.5	%			0.1	%			-0.2	%
Healthcare Specialty Services			116,111				137,661				—				(32,495	)			66				-15.7	%			10.4	%			10.3	%
Life Sciences			89,461				81,519				—				—				466				9.7	%			9.7	%			9.2	%
Applied Sterilization Technologies			126,493				120,559				—				(1,931	)			1,513				4.9	%			6.6	%			5.4	%
Total		$	634,159			$	646,415			$	1,246			$	(40,483	)		$	2,868				-1.9	%			4.5	%			4.0	%
		Six months ended September 30, (unaudited)
		As reported, GAAP								Impact of Acquisitions				Impact of Divestitures				Impact of Currency Movements				GAAP growth				Organic growth				Constant currency organic growth
Segment Revenues:		2017				2016				2017				2016				2017				2017				2017				2017
Healthcare Products		$	591,158			$	589,353			$	7,432			$	(15,292	)		$	(2,692	)			0.3	%			1.7	%			2.2	%
Healthcare Specialty Services			229,545				289,636				—				(79,002	)			(3,032	)			-20.7	%			9.0	%			10.4	%
Life Sciences			170,396				162,917				—				—				(596	)			4.6	%			4.6	%			5.0	%
Applied Sterilization Technologies			251,024				242,887				—				(5,091	)			(720	)			3.4	%			5.6	%			5.9	%
Total		$	1,242,123			$	1,284,793			$	7,432			$	(99,385	)		$	(7,040	)			-3.3	%			4.2	%			4.8	%

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		Three months ended September 30, (unaudited)
		Gross Profit								Income from Operations								Net income attributable to shareholders*								Diluted EPS
		2017				2016				2017				2016				2017				2016				2017				2016
GAAP		$	266,761			$	247,908			$	99,404			$	69,563			$	64,459			$	40,416			$	0.75			$	0.47
Adjustments:
Amortization of inventory and property “step up” to fair value			671				1,395				649				1,385
Amortization and impairment of purchased intangible assets			28				46				17,171				17,779
Acquisition and integration related charges			213				(56	)			3,393				6,640
Loss (gain) on fair value adjustment of acquisition related contingent consideration			—				—				—				1,850
Net loss on divestiture of businesses			—				—				1,010				13,802
Restructuring charges							—				27				48
Net impact of adjustments after tax																			15,836				36,029
Net EPS impact																											0.19				0.42
Adjusted		$	267,673			$	249,293			$	121,654			$	111,067			$	80,295			$	76,445			$	0.94			$	0.89
		Six months ended September 30, (unaudited)
		Gross Profit								Income from Operations								Net income attributable to shareholders*								Diluted EPS
		2017				2016				2017				2016				2017				2016				2017				2016
GAAP		$	522,882			$	487,898			$	185,659			$	143,085			$	122,536			$	88,818			$	1.43			$	1.03
Adjustments:
Amortization of inventory and property “step up” to fair value			1,307				4,471				1,267				4,471
Amortization and impairment of purchased intangible assets			50				—				33,473				37,308
Acquisition and integration related charges			329				745				7,422				11,873
Loss (gain) on fair value adjustment of acquisition related contingent consideration			—				—				—				1,850
Net loss on divestiture of businesses			—				—				1,134				13,802
Restructuring charges			—				—				78				202
Net impact of adjustments after tax																			30,960				56,018
Net EPS impact																											0.36				0.65
Adjusted		$	524,568			$	493,114			$	229,033			$	212,591			$	153,496			$	144,836			$	1.79			$	1.68

 

*	The tax expense (benefit) includes both the current and deferred income tax impact of the adjustments.

 

FY 2018 Outlook		Twelve Months Ended March 31 2018
		(Outlook)**
Net Income per diluted share		$	3.25 - $3.38
Amortization of inventory and property “step up” to fair value			0.02
Amortization and impairment of purchased intangible assets			0.61
Acquisition and integration related charges			0.08
Adjusted net income per diluted share		$	3.96 - $4.09

 

**	All amounts are estimates.

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STERIS plc    

Unaudited Supplemental Financial Data     

Second Quarter Fiscal 2018    

For Periods Ending September 30, 2017 and 2016    

 

		FY 2018				FY 2017				FY 2018				FY 2017
Total Company Revenues		Q2				Q2				YTD				YTD
Consumables		$	141,241			$	139,576			$	289,103			$	285,241
Service		$	347,602			$	354,199			$	681,961			$	720,827
Total Recurring		$	488,843			$	493,775			$	971,064			$	1,006,068
Capital Equipment		$	145,316			$	152,640			$	271,059			$	278,725
Total Revenues		$	634,159			$	646,415			$	1,242,123			$	1,284,793
United Kingdom Revenues		$	54,587			$	53,369			$	107,309			$	123,808
United Kingdom Revenues as a % of Total			9	%			8	%			9	%			10	%
United States Revenues		$	446,708			$	450,513			$	869,667			$	878,618
United States Revenues as a % of Total			70	%			70	%			70	%			68	%
International Revenues		$	132,864			$	142,533			$	265,147			$	282,367
International Revenues as a % of Total			21	%			22	%			21	%			22	%
Segment Data		Q2				Q2				YTD				YTD
Healthcare Products
Revenues
Consumables		$	100,844			$	101,493			$	204,532			$	206,492
Service			81,815				75,445				161,626				149,745
Total Recurring			182,659				176,938				366,158				356,237
Capital Equipment			119,435				129,738				225,000				233,116
Total Healthcare Products Revenues		$	302,094			$	306,676			$	591,158			$	589,353
Segment Operating Income			47,493				50,835				89,730				86,808
Healthcare Specialty Services
Healthcare Services Revenues		$	116,111			$	137,661			$	229,545			$	289,636
Segment Operating Income			9,323				1,370				15,317				3,843
Life Sciences
Revenues
Consumables		$	37,639			$	34,851			$	75,958			$	72,350
Service			28,347				25,192				52,682				48,408
Total Recurring			65,986				60,043				128,640				120,758
Capital Equipment			23,475				21,476				41,756				42,159
Total Life Sciences Revenues		$	89,461			$	81,519			$	170,396			$	162,917
Segment Operating Income			27,646				22,471				49,461				46,715
Applied Sterilization Technologies
Applied Sterilization Technologies Revenues		$	126,493			$	120,559			$	251,024			$	242,887
Segment Operating Income		$	43,394			$	41,540			$	84,592			$	81,948
Corporate
Operating Loss		$	(6,202	)		$	(5,149	)		$	(10,067	)		$	(6,723	)
Other Data		Q2				Q2				YTD				YTD
Healthcare Products Backlog		$	150,386			$	152,107				n/a				n/a
Life Sciences Backlog			69,773				40,996				n/a				n/a
Total Backlog		$	220,159			$	193,103				n/a				n/a
GAAP Income Tax Rate			26.2	%			31.8	%			24.1	%			27.0	%
Adjusted Income Tax Rate			26.7	%			24.1	%			25.1	%			24.3	%

This supplemental data is consistent with publicly disclosed information provided in quarterly conference calls, earnings releases and SEC filings, and is subject to all definitions, precautions and limitations contained in those disclosures. Please see the Company’s most recent 10-K for definitions (and reconciliation where appropriate) of adjusted measures, backlog, free cash flow and net debt.