2023 Q2 Form 10-Q Financial Statement

#000182247923000033 Filed on May 03, 2023

View on sec.gov

Income Statement

Concept 2023 Q2 2023 Q1 2022 Q1
Revenue $255.3M $220.6M $236.8M
YoY Change -4.26% -6.83% 11.6%
Cost Of Revenue $115.7M $109.1M $107.9M
YoY Change -0.47% 1.12% 11.47%
Gross Profit $139.6M $111.5M $128.9M
YoY Change -7.19% -13.48% 11.7%
Gross Profit Margin 54.68% 50.55% 54.43%
Selling, General & Admin $60.29M $61.91M $59.54M
YoY Change -4.51% 3.98% 13.49%
% of Gross Profit 43.19% 55.52% 46.2%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $39.49M $18.93M $15.87M
YoY Change 6.9% 19.31% 3.17%
% of Gross Profit 28.29% 16.98% 12.31%
Operating Expenses $76.38M $78.14M $75.38M
YoY Change -3.19% 3.65% 9.24%
Operating Profit $63.20M $33.37M $53.49M
YoY Change -11.6% -37.62% 15.37%
Interest Expense -$30.73M -$28.87M -$10.40M
YoY Change 118.8% 177.49% -51.11%
% of Operating Profit -48.62% -86.53% -19.45%
Other Income/Expense, Net $2.474M $1.253M $2.967M
YoY Change -610.1% -57.77% -23.73%
Pretax Income $34.49M $5.402M $45.27M
YoY Change -28.32% -88.07% 221.45%
Income Tax $10.97M $2.560M $14.63M
% Of Pretax Income 31.82% 47.39% 32.31%
Net Earnings $23.51M $2.842M $30.64M
YoY Change -22.7% -90.72% 182.61%
Net Earnings / Revenue 9.21% 1.29% 12.94%
Basic Earnings Per Share $0.08 $0.01 $0.11
Diluted Earnings Per Share $0.08 $0.01 $0.11
COMMON SHARES
Basic Shares Outstanding 282.5M shares 282.4M shares 279.8M shares
Diluted Shares Outstanding 283.1M shares 283.0M shares 279.9M shares

Balance Sheet

Concept 2023 Q2 2023 Q1 2022 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $262.7M $647.9M $121.4M
YoY Change 88.23% 433.55% 12.44%
Cash & Equivalents $262.7M $647.9M $121.4M
Short-Term Investments
Other Short-Term Assets $14.63M $11.87M $16.36M
YoY Change 26.39% -27.41% 39.06%
Inventory $42.10M $46.74M $45.70M
Prepaid Expenses
Receivables $117.3M $109.2M $114.8M
Other Receivables $31.48M $26.14M $11.00M
Total Short-Term Assets $546.7M $923.8M $371.6M
YoY Change 37.13% 148.63% 13.15%
LONG-TERM ASSETS
Property, Plant & Equipment $884.3M $841.1M $669.2M
YoY Change 26.41% 25.7% 9.41%
Goodwill $1.110B $1.103B $1.126B
YoY Change -0.49% -1.99% 1.73%
Intangibles $456.1M $471.9M $582.1M
YoY Change -16.01% -18.94% -11.34%
Long-Term Investments $9.550M
YoY Change 3.5%
Other Assets $34.08M $32.91M $27.49M
YoY Change -11.03% 19.72% 196.17%
Total Long-Term Assets $2.528B $2.490B $2.464B
YoY Change 3.57% 1.06% 0.64%
TOTAL ASSETS
Total Short-Term Assets $546.7M $923.8M $371.6M
Total Long-Term Assets $2.528B $2.490B $2.464B
Total Assets $3.075B $3.414B $2.836B
YoY Change 8.28% 20.4% 2.12%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $55.58M $61.94M $55.22M
YoY Change -14.85% 12.17% -3.42%
Accrued Expenses $103.5M $496.8M $60.46M
YoY Change 96.46% 721.7% 7.25%
Deferred Revenue $13.80M $15.20M $12.90M
YoY Change 100.0% 17.83% 115.0%
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $5.225M $4.031M $1.342M
YoY Change 223.53% 200.37% 22.0%
Total Short-Term Liabilities $200.3M $600.1M $143.9M
YoY Change 41.06% 317.2% 4.23%
LONG-TERM LIABILITIES
Long-Term Debt $2.222B $2.222B $1.745B
YoY Change 23.26% 27.39% -5.06%
Other Long-Term Liabilities $12.63M $15.05M $16.19M
YoY Change -19.42% -7.02% -13.87%
Total Long-Term Liabilities $2.235B $2.237B $1.761B
YoY Change 14162.27% 27.07% -5.15%
TOTAL LIABILITIES
Total Short-Term Liabilities $200.3M $600.1M $143.9M
Total Long-Term Liabilities $2.235B $2.237B $1.761B
Total Liabilities $2.657B $3.053B $2.194B
YoY Change 20.55% 39.18% -5.09%
SHAREHOLDERS EQUITY
Retained Earnings -$679.5M -$703.0M -$441.6M
YoY Change 65.24% 59.19% -23.64%
Common Stock $2.860M $2.860M $2.860M
YoY Change 0.0% 0.0% 0.0%
Preferred Stock
YoY Change
Treasury Stock (at cost) $29.42M $33.54M
YoY Change -12.27% -1.36%
Treasury Stock Shares 3.520M shares 3.107M shares
Shareholders Equity $418.4M $361.1M $642.1M
YoY Change
Total Liabilities & Shareholders Equity $3.075B $3.414B $2.836B
YoY Change 8.28% 20.4% 2.12%

Cashflow Statement

Concept 2023 Q2 2023 Q1 2022 Q1
OPERATING ACTIVITIES
Net Income $23.51M $2.842M $30.64M
YoY Change -22.7% -90.72% 182.61%
Depreciation, Depletion And Amortization $39.49M $18.93M $15.87M
YoY Change 6.9% 19.31% 3.17%
Cash From Operating Activities -$336.6M $33.87M $49.97M
YoY Change -677.42% -32.21% -11.03%
INVESTING ACTIVITIES
Capital Expenditures $53.13M $45.00M $35.55M
YoY Change -247.2% 26.6% 69.74%
Acquisitions $0.00
YoY Change -100.0%
Other Investing Activities $0.00 -$32.00K $63.00K
YoY Change -100.0% -150.79% -100.25%
Cash From Investing Activities -$53.13M -$44.97M -$35.48M
YoY Change 48.8% 26.73% -23.72%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net $200.0M $0.00
YoY Change
Cash From Financing Activities -710.0K $273.9M -$449.0K
YoY Change 11.99% -61105.79% -88.13%
NET CHANGE
Cash From Operating Activities -336.6M $33.87M $49.97M
Cash From Investing Activities -53.13M -$44.97M -$35.48M
Cash From Financing Activities -710.0K $273.9M -$449.0K
Net Change In Cash -390.4M $263.9M $14.52M
YoY Change -1879.0% 1717.15% 161.09%
FREE CASH FLOW
Cash From Operating Activities -$336.6M $33.87M $49.97M
Capital Expenditures $53.13M $45.00M $35.55M
Free Cash Flow -$389.7M -$11.13M $14.42M
YoY Change -512.89% -177.17% -59.05%

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Basis of Presentation<div style="margin-top:6pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Principles of Consolidation</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> – Sotera Health Company (also referred to herein as the “Company,” “we,” “our,” “us” or “its”), is a global provider of mission-critical sterilization and lab testing and advisory services to the medical device and pharmaceutical industries with operations primarily in the Americas, Europe and Asia. </span></div><div style="margin-top:12pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We operate and report in three segments, Sterigenics, Nordion and Nelson Labs. We describe our reportable segments in Note 17, “Segment Information”. All significant intercompany balances and transactions have been eliminated in consolidation. </span></div><div style="margin-top:12pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">In July 2020, we acquired a 60% equity ownership interest in a joint venture to construct an E-beam facility in Alberta, Canada in connection with our acquisition of Iotron Industries Canada, Inc. (“Iotron”). Our equity ownership interest in the joint venture was determined to be an investment in a variable interest entity (“VIE”). The investment was not consolidated as the Company concluded that it was not the primary beneficiary of the VIE. The Company accounted for the joint venture using the equity method. </span></div><div style="margin-top:12pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">During the year ended December 31, 2022, we identified certain events and circumstances that indicated a decline in value of our investment in this joint venture that was other-than-temporary. Consequently, in the second quarter of 2022, we wrote down the investment in the joint venture to its fair value of $0, resulting in an impairment charge of approximately $9.6 million. In February 2023, we entered into a Share Purchase Agreement to transfer our equity ownership interest to the joint venture partner, thereby terminating our equity ownership interest.</span></div><div style="margin-top:12pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Use of Estimates</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> – In preparing our consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”), we make estimates and assumptions that affect the amounts reported and the accompanying notes. We regularly evaluate the estimates and assumptions used and revise them as new information becomes available. Actual results may vary from those estimates. </span></div><div style="margin-top:12pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Interim Financial Statements </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">– The accompanying consolidated financial statements include the assets, liabilities, operating results, and cash flows of the Company and its wholly owned subsidiaries. These financial statements are prepared in accordance with U.S. GAAP for interim financial information and the instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. These unaudited interim financial statements should be read in conjunction with the Company's annual consolidated financial statements and accompanying notes on Form 10-K for the year ended December 31, 2022.</span></div>
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Use of Estimates – In preparing our consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”), we make estimates and assumptions that affect the amounts reported and the accompanying notes. We regularly evaluate the estimates and assumptions used and revise them as new information becomes available. Actual results may vary from those estimates.
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CY2022Q4 us-gaap Accrued Liabilities Current
AccruedLiabilitiesCurrent
490130000 usd
CY2023Q1 us-gaap Debt Instrument Carrying Amount
DebtInstrumentCarryingAmount
2263550000 usd
CY2023Q1 us-gaap Deferred Finance Costs Net
DeferredFinanceCostsNet
9709000 usd
CY2023Q1 shc Debt Instrument Unamortized Discount Excluding Current Portion
DebtInstrumentUnamortizedDiscountExcludingCurrentPortion
27477000 usd
CY2023Q1 us-gaap Long Term Debt
LongTermDebt
2226364000 usd
CY2023Q1 shc Long Term Debt Current Maturities Gross
LongTermDebtCurrentMaturitiesGross
4200000 usd
CY2023Q1 us-gaap Deferred Finance Costs Current Net
DeferredFinanceCostsCurrentNet
60000 usd
CY2023Q1 us-gaap Debt Instrument Unamortized Discount Current
DebtInstrumentUnamortizedDiscountCurrent
109000 usd
CY2023Q1 us-gaap Long Term Debt Current
LongTermDebtCurrent
4031000 usd
CY2023Q1 shc Long Term Debt Gross Noncurrent
LongTermDebtGrossNoncurrent
2259350000 usd
CY2023Q1 us-gaap Deferred Finance Costs Noncurrent Net
DeferredFinanceCostsNoncurrentNet
9649000 usd
CY2023Q1 us-gaap Debt Instrument Unamortized Discount
DebtInstrumentUnamortizedDiscount
27368000 usd
CY2023Q1 us-gaap Long Term Debt Noncurrent
LongTermDebtNoncurrent
2222333000 usd
CY2022Q4 us-gaap Debt Instrument Carrying Amount
DebtInstrumentCarryingAmount
1963550000 usd
CY2022Q4 us-gaap Deferred Finance Costs Net
DeferredFinanceCostsNet
5471000 usd
CY2022Q4 shc Debt Instrument Unamortized Discount Excluding Current Portion
DebtInstrumentUnamortizedDiscountExcludingCurrentPortion
13845000 usd
CY2022Q4 us-gaap Long Term Debt
LongTermDebt
1944234000 usd
CY2022Q4 shc Long Term Debt Current Maturities Gross
LongTermDebtCurrentMaturitiesGross
200450000 usd
CY2022Q4 us-gaap Deferred Finance Costs Current Net
DeferredFinanceCostsCurrentNet
3331000 usd
CY2022Q4 us-gaap Long Term Debt Current
LongTermDebtCurrent
197119000 usd
CY2022Q4 shc Long Term Debt Gross Noncurrent
LongTermDebtGrossNoncurrent
1763100000 usd
CY2022Q4 us-gaap Deferred Finance Costs Noncurrent Net
DeferredFinanceCostsNoncurrentNet
2140000 usd
CY2022Q4 us-gaap Debt Instrument Unamortized Discount
DebtInstrumentUnamortizedDiscount
13845000 usd
CY2022Q4 us-gaap Long Term Debt Noncurrent
LongTermDebtNoncurrent
1747115000 usd
CY2023Q1 shc Debt Instrument Prepayment Period Without Penalty
DebtInstrumentPrepaymentPeriodWithoutPenalty
P6M
CY2023Q1 us-gaap Long Term Debt Maturities Repayments Of Principal Remainder Of Fiscal Year
LongTermDebtMaturitiesRepaymentsOfPrincipalRemainderOfFiscalYear
2950000 usd
CY2023Q1 us-gaap Long Term Debt Maturities Repayments Of Principal In Next Twelve Months
LongTermDebtMaturitiesRepaymentsOfPrincipalInNextTwelveMonths
5000000 usd
CY2023Q1 us-gaap Long Term Debt Maturities Repayments Of Principal In Year Two
LongTermDebtMaturitiesRepaymentsOfPrincipalInYearTwo
5000000 usd
CY2023Q1 us-gaap Long Term Debt Maturities Repayments Of Principal In Year Three
LongTermDebtMaturitiesRepaymentsOfPrincipalInYearThree
2250600000 usd
CY2023Q1 us-gaap Long Term Debt Maturities Repayments Of Principal In Year Four
LongTermDebtMaturitiesRepaymentsOfPrincipalInYearFour
0 usd
CY2023Q1 shc Long Term Debt Maturity After Year Four
LongTermDebtMaturityAfterYearFour
0 usd
CY2023Q1 us-gaap Debt Instrument Carrying Amount
DebtInstrumentCarryingAmount
2263550000 usd
CY2023Q1 us-gaap Effective Income Tax Rate Continuing Operations
EffectiveIncomeTaxRateContinuingOperations
0.474
CY2022Q1 us-gaap Effective Income Tax Rate Continuing Operations
EffectiveIncomeTaxRateContinuingOperations
0.323
CY2023Q1 us-gaap Profit Loss
ProfitLoss
2842000 usd
CY2022Q1 us-gaap Profit Loss
ProfitLoss
30641000 usd
CY2023Q1 us-gaap Undistributed Earnings Loss Allocated To Participating Securities Basic
UndistributedEarningsLossAllocatedToParticipatingSecuritiesBasic
18000 usd
CY2022Q1 us-gaap Undistributed Earnings Loss Allocated To Participating Securities Basic
UndistributedEarningsLossAllocatedToParticipatingSecuritiesBasic
338000 usd
CY2023Q1 us-gaap Net Income Loss Available To Common Stockholders Diluted
NetIncomeLossAvailableToCommonStockholdersDiluted
2824000 usd
CY2023Q1 us-gaap Net Income Loss Available To Common Stockholders Basic
NetIncomeLossAvailableToCommonStockholdersBasic
2824000 usd
CY2022Q1 us-gaap Net Income Loss Available To Common Stockholders Basic
NetIncomeLossAvailableToCommonStockholdersBasic
30303000 usd
CY2022Q1 us-gaap Net Income Loss Available To Common Stockholders Diluted
NetIncomeLossAvailableToCommonStockholdersDiluted
30303000 usd
CY2023Q1 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
280691000 shares
CY2022Q1 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
279829000 shares
CY2023Q1 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
2286000 shares
CY2022Q1 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
79000 shares
CY2023Q1 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
282977000 shares
CY2022Q1 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
279908000 shares
CY2023Q1 us-gaap Earnings Per Share Basic
EarningsPerShareBasic
0.01
CY2022Q1 us-gaap Earnings Per Share Basic
EarningsPerShareBasic
0.11
CY2023Q1 us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
0.01
CY2022Q1 us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
0.11
CY2023Q1 us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount
4062000 shares
CY2022Q1 us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount
3061000 shares
CY2023Q1 shc Loss Contingency Undiscounted Amount Of Insurance Related Assessment Liability Per Occurrence
LossContingencyUndiscountedAmountOfInsuranceRelatedAssessmentLiabilityPerOccurrence
10000000 usd
CY2023Q1 us-gaap Loss Contingency Undiscounted Amount Of Insurance Related Assessment Liability
LossContingencyUndiscountedAmountOfInsuranceRelatedAssessmentLiability
20000000 usd
CY2023Q1 us-gaap Derivative Notional Amount
DerivativeNotionalAmount
2727300000 usd
CY2023Q1 us-gaap Derivative Fair Value Of Derivative Asset
DerivativeFairValueOfDerivativeAsset
26669000 usd
CY2023Q1 us-gaap Derivative Fair Value Of Derivative Liability
DerivativeFairValueOfDerivativeLiability
5934000 usd
CY2022Q4 us-gaap Derivative Notional Amount
DerivativeNotionalAmount
2331400000 usd
CY2022Q4 us-gaap Derivative Fair Value Of Derivative Asset
DerivativeFairValueOfDerivativeAsset
37485000 usd
CY2022Q4 us-gaap Derivative Fair Value Of Derivative Liability
DerivativeFairValueOfDerivativeLiability
3780000 usd
CY2023Q1 us-gaap Other Comprehensive Income Loss Cash Flow Hedge Gain Loss Before Reclassification After Tax
OtherComprehensiveIncomeLossCashFlowHedgeGainLossBeforeReclassificationAfterTax
-3372000 usd
CY2022Q1 us-gaap Other Comprehensive Income Loss Cash Flow Hedge Gain Loss Before Reclassification After Tax
OtherComprehensiveIncomeLossCashFlowHedgeGainLossBeforeReclassificationAfterTax
6179000 usd
CY2023Q1 us-gaap Other Comprehensive Income Loss Cash Flow Hedge Gain Loss Reclassification After Tax
OtherComprehensiveIncomeLossCashFlowHedgeGainLossReclassificationAfterTax
-9275000 usd
CY2022Q1 us-gaap Other Comprehensive Income Loss Cash Flow Hedge Gain Loss Reclassification After Tax
OtherComprehensiveIncomeLossCashFlowHedgeGainLossReclassificationAfterTax
0 usd
CY2023Q1 shc Other Comprehensive Income Loss Cash Flow Hedge Gain Loss After Reclassification And After Tax
OtherComprehensiveIncomeLossCashFlowHedgeGainLossAfterReclassificationAndAfterTax
-12647000 usd
CY2022Q1 shc Other Comprehensive Income Loss Cash Flow Hedge Gain Loss After Reclassification And After Tax
OtherComprehensiveIncomeLossCashFlowHedgeGainLossAfterReclassificationAndAfterTax
6179000 usd
CY2023Q1 us-gaap Allowance For Doubtful Accounts Receivable Current
AllowanceForDoubtfulAccountsReceivableCurrent
2600000 usd
CY2022Q4 us-gaap Allowance For Doubtful Accounts Receivable Current
AllowanceForDoubtfulAccountsReceivableCurrent
1900000 usd
CY2023Q1 us-gaap Number Of Reportable Segments
NumberOfReportableSegments
3 segment
CY2022Q1 us-gaap Gain Loss On Interest Rate Derivative Instruments Not Designated As Hedging Instruments
GainLossOnInterestRateDerivativeInstrumentsNotDesignatedAsHedgingInstruments
6300000 usd
CY2023Q1 shc Cancellation Fee Received For Lease Termination
CancellationFeeReceivedForLeaseTermination
1000000 usd

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