STERIS plc

Previous wording

As you read the MD&A, it may be helpful to refer to information in our consolidated financial statements contained herein, which present the results of our operations for the first six months of fiscal 2026 and fiscal 2025. It may also be helpful to refer to our Annual Report on Form 10-K for the year ended March 31, 2025, which was filed with the Securities and Exchange Commission ("SEC") on May 29, 2025, including information in Item 1, "Business," Part I, Item 1A, "Risk Factors," and Note 12 to our consolidated financial statements titled, "Commitments and Contingencies," and Part II, Item 1A, "Risk Factors" of this Quarterly Report, for a discussion of some of the matters that can adversely affect our business and results of operations.

Current wording

As you read the MD&A, it may be helpful to refer to information in our consolidated financial statements contained herein, which present the results of our operations for the first nine months of fiscal 2026 and fiscal 2025. It may also be helpful to refer to our Annual Report on Form 10-K for the year ended March 31, 2025, which was filed with the Securities and Exchange Commission ("SEC") on May 29, 2025, including information in Item 1, "Business," Part I, Item 1A, "Risk Factors," and Note 12 to our consolidated financial statements titled, "Commitments and Contingencies," and Part II, Item 1A, "Risk Factors" of this Quarterly Report, for a discussion of some of the matters that can adversely affect our business and results of operations.

Previous wording

Acquisitions and Divestitures. During the firstsix months of fiscal 2026, we completed a tuck-in acquisition which continued to expand our product and service offerings in the Healthcare segment. Total aggregate consideration was approximately $15.0 million.

Current wording

Acquisitions and Divestitures. During the first nine months of fiscal 2026, we completed two tuck-in acquisitions, recorded at fair value, which continued to expand our product and service offerings in the Healthcare segment. Total aggregate consideration was approximately $23.4 million.

Previous wording

During the firstsix months of fiscal 2025, we completed several tuck-in acquisitions, which continued to expand our product and service offerings in the Healthcare and AST segments. Total aggregate consideration was approximately$17.5 million.

Current wording

During the first nine months of fiscal 2025, we completed several tuck-in acquisitions, recorded at fair value, which continued to expand our product and service offerings in the Healthcare and AST segments. Total aggregate consideration was approximately$53.7 million.

Previous wording

Acquisition and integration expenses totaled$1.3 million and$1.8 million for the three and six months ended September 30, 2025, respectively. Acquisition and integration expenses totaled$3.2 million and$5.5 million for the three and six months ended September 30, 2024, respectively. Acquisition and integration expenses are reported in the Selling, general and administrative expenses line of our Consolidated Statements of Income and include, but are not limited to, investment banker, advisory, legal and other professional fees, and certain employee-related expenses.

Current wording

Acquisition and integration expenses totaled$3.3 million and$5.1 million for the three and nine months ended December 31, 2025, respectively. Acquisition and integration expenses totaled$3.8 million and$9.2 million for the three and nine months ended December 31, 2024, respectively. Acquisition and integration expenses are reported in the Selling, general and administrative expenses line of our Consolidated Statements of Income and include, but are not limited to, investment banker, advisory, legal and other professional fees, and certain employee-related expenses.

Previous wording

On April 1, 2024, we completed the sale of the Controlled Environment Certification Services ("CECS") business. We recorded net proceeds of$41.9 million and recognized a pre-tax gain on the sale of$19.2 millionin the first three months of fiscal 2025.

Current wording

On April 1, 2024, we completed the sale of the Controlled Environment Certification Services ("CECS") business. We recorded net proceeds of$41.9 million and recognized a pre-tax gain on the sale of$19.3 millionin the first nine months of fiscal 2025.

Previous wording

$12.5 million in contingent payment had the Dental business achieved certain revenue targets in fiscal 2025. No amounts have been recorded with respect to this contingent consideration. The transaction was structured as an equity sale and closed on May 31, 2024. A component of an entity is reported in discontinued operations after meeting the criteria for held for sale classification if the disposition represents a strategic shift that has (or will have) a major effect on the entity's operations and financial results. We analyzed the quantitative and qualitative factors relevant to the divestiture of our Dental segment and determined that those conditions for discontinued operations presentation had been met prior to March 31, 2024. The Dental segment results of operations have been reclassified as income (loss) from discontinued operations in the Consolidated Statements of Income for all periods presented. Our Consolidated Statements of Cash Flows include the financial results of the Dental segment through the date of sale on May 31, 2024. A majority of the proceeds received from the sale were utilized to pay off existing debt.

Current wording

$12.5 million in contingent payment had the Dental business achieved certain revenue targets in fiscal 2025. No amounts have been recorded or are expected to be recorded with respect to this contingent consideration. The transaction was structured as an equity sale and closed on May 31, 2024. A component of an entity is reported in discontinued operations after meeting the criteria for held for sale classification if the disposition represents a strategic shift that has (or will have) a major effect on the entity's operations and financial results. We analyzed the quantitative and qualitative factors relevant to the divestiture of our Dental segment and determined that those conditions for discontinued operations presentation had been met prior to March 31, 2024. The Dental segment results of operations have been reclassified as income (loss) from discontinued operations in the Consolidated Statements of Income for all periods presented. Our Consolidated Statements of Cash Flows include the financial results of the Dental segment through the date of sale on May 31, 2024. A majority of the proceeds received from the sale were utilized to pay off existing debt.

Previous wording

U.S. Tax Reform. On July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act ("OBBBA") which contains substantial changes to its tax policies. Business provisions in the OBBBA, some of which were extensions of those established in the Tax Cuts and Jobs Act, include favorable cost recovery allowances, changes to U.S. international tax rules, and changes to energy and environmental related incentives. The law has multiple effective dates, with certain provisions applicable to years beginning after fiscal 2026. The law did not have a material impact on our consolidated financial statements for the three and six month periods ending September 30, 2025, and we do not expect it to have a material impact on our effective tax rate.

Current wording

U.S. Tax Reform. On July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act ("OBBBA") which contains substantial changes to its tax policies. Business provisions in the OBBBA, some of which were extensions of those established in the Tax Cuts and Jobs Act, include favorable cost recovery allowances, changes to U.S. international tax rules, and changes to energy and environmental related incentives. The law has multiple effective dates, with certain provisions applicable to years beginning after fiscal 2026. The law did not have a material impact on our consolidated financial statements for the three and nine month periods ended December 31, 2025, and we do not expect it to have a material impact on our effective tax rate.

Previous wording

Highlights. Revenues increased 9.9% to $1,460.3 million for the three months ended September 30, 2025, as compared to $1,328.9 million for the same period in the prior year. Revenues increased 9.3% to $2,851.4 million for the six months ended September 30, 2025, as compared to $2,608.4 million for the same period in the prior year. The increase during the three and six month periods reflects the benefits of higher volume and pricing, with all three segments contributing to growth.

Current wording

Highlights. Revenues increased 9.2% to $1,496.2 million for the three months ended December 31, 2025, as compared to $1,370.6 million for the same period in the prior year. Revenues increased 9.3% to $4,347.5 million for the nine months ended December 31, 2025, as compared to $3,979.0 million for the same period in the prior year. The increase during the three and nine month periods reflects the benefits of higher volume and pricing, with all three segments contributing to growth.

Previous wording

Gross profit percentage for the second quarter of fiscal 2026 was 44.2% compared to the gross profit percentage for the second quarter of fiscal 2025 of 43.6%. Gross profit percentage for the first six months of fiscal 2026 was 44.7% compared to the gross profit percentage for the first six months of fiscal 2025 of 44.1%. The increase in gross profit percentage for the three and six month periods reflects favorable impacts from pricing, productivity, mix, and other cost reductions that were partially offset by unfavorable impacts from inflation, and tariff costs.

Current wording

Gross profit percentage for the third quarter of fiscal 2026 was 43.8% compared to the gross profit percentage for the third quarter of fiscal 2025 of 44.5%. Gross profit percentage for the first nine months of fiscal 2026 was 44.4% compared to the gross profit percentage for the first nine months of fiscal 2025 of 44.3%. The decrease in gross profit percentage for the three month period reflects favorable impacts from pricing, productivity and other cost reductions that were more than offset by unfavorable impacts from tariffs, inflation and mix. The increase in gross profit percentage for the nine month period reflects favorable impacts from pricing, productivity and other cost reductions that were partially offset by unfavorable impacts from tariff and inflation costs.

Previous wording

Income from operations for the second quarter of fiscal 2026 was $265.8 million, compared to income from operations of $219.7 million for the second quarter of fiscal 2025. Income from operations for the first six months of fiscal 2026 was $511.8 million, compared to income from operations of $405.2 million for the first six months of fiscal 2025. The increase in income from operations for the three and six month periods is primarily due to increased volume and pricing, which was partially offset by inflation and tariff costs. Additionally, income from operations during the first six months of fiscal 2026 reflected the benefit of lower restructuring expenses.

Current wording

Income from operations for the third quarter of fiscal 2026 was $273.2 million, compared to income from operations of $245.3 million for the third quarter of fiscal 2025. Income from operations for the first nine months of fiscal 2026 was $785.0 million, compared to income from operations of $650.5 million for the first nine months of fiscal 2025. The increase in income from operations for the three and nine month periods is primarily due to increased volume and pricing, which was partially offset by inflation and tariff costs. Additionally, income from operations during the first nine months of fiscal 2026 reflected the benefit of lower restructuring expenses.

Previous wording

Cash flows from operations were $707.8 million and free cash flow was $527.7 million for the first six months of fiscal 2026 compared to cash flows from operations of $554.5 million and free cash flow of $344.5 million for the first six months of fiscal 2025 (see the subsection below titled "Non-GAAP Financial Measures" for additional information and related reconciliation of cash flows from operations to free cash flow). The fiscal 2026 increase in cash flows from operations and free cash flow resulted from an increase in earnings and from the increase in cash provided by working capital improvements. Free cash flow was also impacted by a decrease in capital expenditures when compared to the same prior year period.

Current wording

Cash flows from operations were $1,006.0 million and free cash flow was $737.6 million for the first nine months of fiscal 2026 compared to cash flows from operations of $887.3 million and free cash flow of $588.1 million for the first nine months of fiscal 2025 (see the subsection below titled "Non-GAAP Financial Measures" for additional information and related reconciliation of cash flows from operations to free cash flow). The fiscal 2026 increase in cash flows from operations and free cash flow resulted from an increase in earnings when compared to the prior year. Free cash flow was also favorably impacted by a decrease in capital expenditures when compared to the same prior year period.

Previous wording

Our debt-to-total capital ratio was 21.3% at September 30, 2025 and 23.6% at March 31, 2025. During the first six months of fiscal 2026, we declared and paid cash dividends totaling $1.20 per ordinary share.

Current wording

Our debt-to-total capital ratio was 21.1% at December 31, 2025 and 23.6% at March 31, 2025. During the first nine months of fiscal 2026, we declared and paid cash dividends totaling $1.83 per ordinary share.

Previous wording

Additional information regarding our financial performance during the second quarter of fiscal 2026 is included in the subsection below titled “Results of Operations.”

Current wording

Additional information regarding our financial performance during the third quarter of fiscal 2026 is included in the subsection below titled “Results of Operations.”

Previous wording

The following table summarizes the calculation of our free cash flow for the six months ended September 30, 2025 and 2024:

Current wording

The following table summarizes the calculation of our free cash flow for the nine months ended December 31, 2025 and 2024:

Previous wording

In the following subsections, we discuss our earnings and the factors affecting earnings for the first six months of fiscal 2026 compared to the same fiscal 2025 periods. We begin with a general overview of our operating results and then separately discuss earnings for our operating segments.

Current wording

In the following subsections, we discuss our earnings and the factors affecting earnings for the first nine months of fiscal 2026 compared to the same fiscal 2025 periods. We begin with a general overview of our operating results and then separately discuss earnings for our operating segments.

Previous wording

Revenues. The following tables compare our revenues for the three and six months ended September 30, 2025 to the revenues for the three and six months ended September 30, 2024:

Current wording

Revenues. The following tables compare our revenues for the three and nine months ended December 31, 2025 to the revenues for the three and nine months ended December 31, 2024:

Previous wording

Revenues increased 9.9% to $1,460.3 million for the three months ended September 30, 2025, as compared to $1,328.9 million for the same period in the prior year. The increase reflects organic growth in all three segments due to the benefits of higher volume and pricing.

Current wording

Revenues increased 9.2% to $1,496.2 million for the three months ended December 31, 2025, as compared to $1,370.6 million for the same period in the prior year. The increase reflects organic growth in all three segments due to the benefits of higher volume and pricing.

Previous wording

Service revenues increased 12.9% for the three months ended September 30, 2025, as compared to the same period in the prior year, reflecting growth in all three segments. Consumable revenues increased by 9.1% for the three months ended September 30, 2025, as compared to the same period in the prior year, reflecting growth in the Healthcare and Life Sciences segments. Capital equipment revenues increased 4.2% for the three months ended September 30, 2025, as compared to the same period in the prior year, reflecting increases in the Life Sciences and Healthcare segments.

Current wording

Service revenues increased 10.0% for the three months ended December 31, 2025, as compared to the same period in the prior year, reflecting growth in Healthcare and AST. Consumable revenues increased by 8.4% for the three months ended December 31, 2025, as compared to the same period in the prior year, reflecting growth in the Healthcare and Life Sciences segments. Capital equipment revenues increased 8.5% for the three months ended December 31, 2025, as compared to the same period in the prior year, reflecting growth in all three segments.

Previous wording

United States revenues increased 9.8% to $1,075.2 million for the three months ended September 30, 2025, as compared to $979.5 million for the same period in the prior year, reflecting growth in service, consumable, and capital revenues.

Current wording

United States revenues increased 8.4% to $1,087.1 million for the three months ended December 31, 2025, as compared to $1,002.6 million for the same period in the prior year, reflecting growth in service, consumable, and capital revenues.

Previous wording

Revenues from other foreign locations increased 9.5% to $357.8 million for the three months ended September 30, 2025, as compared to $326.6 million for the same period in the prior year, reflecting growth in the Europe, Middle East & Africa, Asia Pacific, Latin America, and Canada.

Current wording

Revenues from other foreign locations increased 11.2% to $382.3 million for the three months ended December 31, 2025, as compared to $343.9 million for the same period in the prior year, reflecting growth in all regions.

Previous wording

Revenues increased 9.3% to $2,851.4 million for the six months ended September 30, 2025, as compared to $2,608.4 million for the same period in the prior year. The increase reflects the benefits of higher volume and pricing, with all three segments contributing to growth.

Current wording

Revenues increased 9.3% to $4,347.5 million for the nine months ended December 31, 2025, as compared to $3,979.0 million for the same period in the prior year. The increase reflects the benefits of higher volume and pricing, with all three segments contributing to growth.

Previous wording

Service revenues increased 12.7% for the six months ended September 30, 2025, as compared to the same period in the prior year, reflecting growth in all three segments. Consumable revenues increased by 7.1% for the six months ended September 30, 2025, as compared to the same period in the prior year, reflecting growth in the Healthcare and Life Sciences segments. Capital equipment revenues increased 4.8% for the six months ended September 30, 2025, as compared to the same period in the prior year, driven primarily by growth in the Life Sciences and Healthcare segments.

Current wording

Service revenues increased 11.8% for the nine months ended December 31, 2025, as compared to the same period in the prior year, reflecting growth in all three segments. Consumable revenues increased by 7.5% for the nine months ended December 31, 2025, as compared to the same period in the prior year, reflecting growth in the Healthcare and Life Sciences segments. Capital equipment revenues increased 6.1% for the nine months ended December 31, 2025, as compared to the same period in the prior year, driven by growth in the Healthcare and Life Sciences segments.

Previous wording

Ireland revenues increased 10.7% to $49.8 million for the six months ended September 30, 2025, as compared to $45.0 million for the same period in the prior year, reflecting growth in capital and service revenues, which was partially offset by a decline in consumable revenues.

Current wording

Ireland revenues increased 10.8% to $76.6 million for the nine months ended December 31, 2025, as compared to $69.1 million for the same period in the prior year, reflecting growth in service and capital revenues, which was partially offset by a decline in consumable revenues.

Previous wording

United States revenues increased 9.1% to $2,100.9 million for the six months ended September 30, 2025, as compared to $1,926.4 million for the same period in the prior year, reflecting growth in service, consumable, and capital equipment revenues.

Current wording

United States revenues increased 8.8% to $3,188.0 million for the nine months ended December 31, 2025, as compared to $2,929.0 million for the same period in the prior year, reflecting growth in service, consumable, and capital equipment revenues.

Previous wording

Revenues from other foreign locations increased 10.0% to $700.7 million for the six months ended September 30, 2025, as compared to $637.0 million for the same period in the prior year. The increase reflects growth within Europe, Middle East & Africa, Asia Pacific, Latin America, and Canada.

Current wording

Revenues from other foreign locations increased 10.4% to $1,083.0 million for the nine months ended December 31, 2025, as compared to $980.9 million for the same period in the prior year. The increase reflects growth in all regions.

Previous wording

Gross Profit. Our gross profit is affected by the volume, pricing, and mix of sales of our products and services, as well as the costs associated with the products and services that are sold. The following tables compare our gross profit for the three and six months ended September 30, 2025 to the three and six months ended September 30, 2024:

Current wording

Gross Profit. Our gross profit is affected by the volume, pricing, and mix of sales of our products and services, as well as the costs associated with the products and services that are sold. The following tables compare our gross profit for the three and nine months ended December 31, 2025 to the three and nine months ended December 31, 2024:

Previous wording

Gross profit percentage for thesecond quarter of fiscal 2026 was 44.2% compared to the gross profit percentage for thesecond quarter of fiscal 2025 of 43.6%. Favorable impacts from pricing (120 basis points), productivity (90 basis points), mix (50 basis points), and other cost reductions (30 basis points) were partially offset by unfavorable impacts from inflation (100 basis points), tariff costs (90 basis points), material costs (30 basis points), and currency (10 basis points).

Current wording

Gross profit percentage for thethird quarter of fiscal 2026 was 43.8% compared to the gross profit percentage for thethird quarter of fiscal 2025 of 44.5%. Favorable impacts from pricing (110 basis points), productivity (40 basis points) and other cost reductions (30 basis points) were more than offset by unfavorable impacts from tariff costs (120 basis points), inflation (60 basis points), mix (60 basis points) and currency (10 basis points).

Previous wording

Gross profit percentage for the first six months of fiscal 2026 was 44.7% compared to gross profit percentage for the first six months of fiscal of 2025 of 44.1%. Favorable impacts from pricing (120 basis points), productivity (80 basis points), other cost reductions (50 basis points), and mix (10 basis points) were partially offset by unfavorable impacts from inflation (90 basis points), tariff costs (80 basis points), and material costs (30 basis points).

Current wording

Gross profit percentage for the first nine months of fiscal 2026 was 44.4% compared to gross profit percentage for the first nine months of fiscal of 2025 of 44.3%. Favorable impacts from pricing (120 basis points), productivity (60 basis points) and other cost reductions (40 basis points) were partially offset by unfavorable impacts from tariff costs (90 basis points), inflation (80 basis points), material costs (20 basis points), mix (10 basis points) and currency (10 basis points).

Previous wording

Operating Expenses. The following table compares our operating expenses for the three and six months ended September 30, 2025 to the three and six months ended September 30, 2024:

Current wording

Operating Expenses. The following table compares our operating expenses for the three and nine months ended December 31, 2025 to the three and nine months ended December 31, 2024:

Previous wording

Selling, General, and Administrative Expenses. 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, and other general and administrative expenses. SG&A increased 6.2% and 5.8% in the three and six month periods ended September 30, 2025, respectively, compared to the same prior year periods. The increase in SG&A during the three months ended September 30, 2025, compared to the same prior year period, is primarily attributable to increased compensation and benefit costs, partially offset by lower fees for professional services. The increase in SG&A during the six months ended September 30, 2025, compared to the same prior year period, is primarily attributable to increased compensation and benefit costs, as well as unfavorable foreign currency movements and increased bad debt expense, partially offset by lower fees for professional services.

Current wording

Selling, General, and Administrative Expenses. 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, and other general and administrative expenses. SG&A increased 5.0% and 5.5% in the three and nine month periods ended December 31, 2025, respectively, compared to the same prior year periods. The increase in SG&A during the three months ended December 31, 2025, compared to the same prior year period, is primarily attributable to increased compensation and benefit costs. The increase in SG&A during the nine months ended December 31, 2025, compared to the same prior year period, is primarily attributable to increased compensation and benefit costs, unfavorable foreign currency movements, and increased bad debt expense, which were partially offset by lower fees for professional services.

Previous wording

Research and Development. Research and development expenses increased 4.4% and 3.8% in the three and six month periods ended September 30, 2025, respectively, compared to the same prior year periods. Research and development expenses are influenced by the number and timing of in-process projects and labor hours and other costs associated with these projects. Our research and development initiatives continue to emphasize new product development, product improvements, and the development of new technological platform innovations. During fiscal 2026, our investments in research and development have continued to be focused on, but were not limited to, enhancing capabilities of sterile processing technologies, procedural products and accessories, and devices and support accessories used in gastrointestinal endoscopy procedures.

Current wording

Research and Development. Research and development expenses increased 7.7% and 5.2% in the three and nine month periods ended December 31, 2025, respectively, compared to the same prior year periods. Research and development expenses are influenced by the number and timing of in-process projects and labor hours and other costs associated with these projects. Our research and development initiatives continue to emphasize new product development, product improvements, and the development of new technological platform innovations. During fiscal 2026, our investments in research and development have continued to be focused on, but were not limited to, enhancing capabilities of sterile processing technologies, procedural products and accessories, and devices and support accessories used in gastrointestinal endoscopy procedures.

Previous wording

The following table summarizes our total pre-tax restructuring expenses recorded during the three and six months ended September 30, 2025 and 2024 related to the Restructuring Plan:

Current wording

The following table summarizes our total pre-tax restructuring expenses recorded during the three and nine months ended December 31, 2025 and 2024 related to the Restructuring Plan:

Previous wording

The Restructuring Plan expenses incurred during the three and six months ended September 30, 2025 and 2024 primarily related to actions taken within our Healthcare segment. Total pre-tax restructuring expense of $109.6 million has been recorded relating to the Restructuring Plan since inception, of which $33.6 million has been recorded in Cost of revenues. Additional costs with respect to our Restructuring Plan are not expected to be significant during fiscal 2026.

Current wording

The Restructuring Plan expenses incurred during the three and nine months ended December 31, 2025 and 2024 primarily related to actions taken within our Healthcare segment. Total pre-tax restructuring expense of $109.8 million has been recorded relating to the Restructuring Plan since inception, of which $33.3 million has been recorded in Cost of revenues. Additional costs with respect to our Restructuring Plan are not expected to be significant during fiscal 2026.

Previous wording

Non-Operating Expenses, Net. The following tables compare our net non-operating expenses for the three and six months ended September 30, 2025 and 2024:

Current wording

Non-Operating Expenses, Net. The following tables compare our net non-operating expenses for the three and nine months ended December 31, 2025 and 2024:

Previous wording

Interest expense decreased $4.8 million and $19.4 million during the second quarter and first six months of fiscal 2026, respectively, as compared to the same prior year periods, primarily due to the lower principal amount of debt outstanding. For more information, refer to Note 7 to our consolidated financial statements titled, "Debt."

Current wording

Interest expense decreased $4.2 million and $23.5 million during the third quarter and first nine months of fiscal 2026, respectively, as compared to the same prior year periods, primarily due to the lower principal amount of debt outstanding. For more information, refer to Note 7 to our consolidated financial statements titled, "Debt."

Previous wording

Interest and miscellaneous income increased $1.2 million and $1.7 million during the second quarter and first six months of fiscal 2026, respectively, when compared to the same prior year periods.

Current wording

Interest and miscellaneous income increased $0.4 million and $2.1 million during the third quarter and first nine months of fiscal 2026, respectively, when compared to the same prior year periods.

Previous wording

Loss on sale of businesses and equity investment, net decreased $6.0 million and increased $12.8 million during the second quarter and first six months of fiscal 2026, when compared to the same prior year periods. Loss on sale of businesses and equity investment, net during the second quarter of fiscal 2025 related to a loss recorded on an equity investment. Gain on sale of businesses and equity investment, net for the first six months of fiscal 2025 primarily related to the sale of our CECS business, which was partially offset by a loss recorded on an equity investment. For more information on our divestiture activity, refer to Note 3 to our consolidated financial statements titled, "Business Acquisitions and Divestitures."

Current wording

Other expense (income), net increased $3.4 million and increased $16.2 million during the third quarter and first nine months of fiscal 2026, when compared to the same prior year periods. Other expense (income), net during the third quarter and first nine months of fiscal 2026 related to a loss on impairment of fixed assets which was partially offset by a gain recognized on the sale of a building, related to disposal activities. Other expense (income), net during the third quarter of fiscal 2025 related to a loss recorded on an equity investment. Other expense (income), net for the first nine months of fiscal 2025 primarily related to the sale of our CECS business, which was partially offset by a loss recorded on an equity investment. For more information on our divestiture activity, refer to Note 3 to our consolidated financial statements titled, "Business Acquisitions and Divestitures."

Previous wording

Income Taxes. The following tables compare our tax expense and effective income tax rates for the three and six months ended September 30, 2025 and 2024:

Current wording

Income Taxes. The following tables compare our tax expense and effective income tax rates for the three and nine months ended December 31, 2025 and 2024:

Previous wording

The effective income tax rates from continuing operations for the three month periods ended September 30, 2025 and 2024 were 23.9% and 22.3%, respectively. The effective income tax rates from continuing operations for the six month periods ended September 30, 2025 and 2024 were 23.6% and 21.3%, respectively. The fiscal 2026 effective tax rates increased when compared to fiscal 2025, primarily due to changes in geographic mix of projected profits and unfavorable changes in discrete items.

Current wording

The effective income tax rates from continuing operations for the three month periods ended December 31, 2025 and 2024 were 24.6% and 24.2%, respectively. The effective income tax rates from continuing operations for the nine month periods ended December 31, 2025 and 2024 were 24.0% and 22.4%, respectively. The fiscal 2026 effective tax rates increased when compared to fiscal 2025, primarily due to changes in geographic mix of projected profits and unfavorable changes in discrete items.

Previous wording

Our Healthcare segment provides a comprehensive offering for healthcare providers worldwide, focused on sterile processing departments and procedural centers, such as operating rooms and endoscopy suites. Our products and services range from infection prevention consumables and capital equipment, as well as services to maintain that equipment; to the repair of re-usable procedural instruments; to outsourced instrument reprocessing services. In addition, our procedural products also include endoscopy accessories, instruments, and capital equipment infrastructure used primarily in operating rooms, ambulatory surgery centers, endoscopy suites, and other procedural areas.

Current wording

Our Healthcare segment provides a comprehensive offering for healthcare providers worldwide, focused on sterile processing departments and procedural centers, such as OR and endoscopy suites. Our products and services range from infection prevention consumables and capital equipment, as well as services to maintain that equipment; to the repair of re-usable procedural instruments; to outsourced instrument reprocessing services. In addition, our procedural products also include endoscopy accessories, instruments, and capital equipment infrastructure used primarily in ORs, ambulatory surgery centers, endoscopy suites, and other procedural areas.