STERIS plc
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 5, 2026
STE$252.30-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001628280-26-054830
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001628280-26-070997
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 147 previous paragraphs and 157 current paragraphs.
74 unchanged; 59 reworded; 22 added; 11 removed; 3 previous and 2 current paragraphs rearranged.
Tables are not compared: 13 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
On October 11, 2026, we entered into the Purchase Agreement to acquire Xodus Medical for approximately $2.1 billion in cash at closing, subject to customary adjustments, plus potential earnout consideration of up to $150.0 million. We expect to close the Xodus Medical Acquisition by December 31, 2026, subject to customary closing conditions and regulatory approvals.
Current report
Highlights. Revenues increased 8.8% to $1,588.6 million for the three months ended September 30, 2026, as compared to $1,460.3 million for the same period in the prior year. Revenues increased 8.1% to $3,081.3 million for the six months ended September 30, 2026, as compared to $2,851.4 million for the same period in the prior year. The increases reflect higher volume and pricing.
Current report
Ireland revenues decreased 4.7% to $26.0 million for the three months ended September 30, 2026, as compared to $27.3 million for the same period in the prior year, reflecting a decline in capital equipment and consumable revenues, partially offset by growth in service revenues.
Current report
Revenues from other foreign locations increased 8.5% to $388.2 million for the three months ended September 30, 2026, as compared to $357.8 million for the same period in the prior year, reflecting growth in Europe, Middle East & Africa ("EMEA"), Latin America, Asia Pacific and Canada.
Current report
United States revenues increased 7.8% to $2,264.9 million for the six months ended September 30, 2026, as compared to $2,100.9 million for the same period in the prior year, reflecting growth in service, consumable, and capital equipment revenues.
Current report
Gross profit percentage for thesecond quarter of fiscal 2027 was 44.7% compared to the gross profit percentage for thesecond quarter of fiscal 2026 of 44.2%. Favorable impacts from pricing (130 basis points), tariff refunds (130 basis points) and mix (10 basis points), were partially offset by unfavorable impacts from material costs (90 basis points), restructuring costs (50 basis points), adjustments and other charges (40 basis points), labor and overhead costs (20 basis points), energy (10 basis points) and acquisitions (10 basis points).
Current report
nm - not meaningful
Current report
Restructuring Expenses. The Company has undertaken various restructuring actions to enhance profitability, improve operating efficiencies and optimize our manufacturing and distribution network. Restructuring charges and related liability activity associated with these plans are presented in the tables below. Restructuring charges are excluded from segment operating income. For more information regarding our business segments, refer to Note 10, titled "Business Segment Information."
Current report
Also during the second quarter of fiscal 2027, the Company approved an additional targeted restructuring plan (the "Fiscal 2027 Portfolio and Organizational Optimization Plan"). This plan includes targeted facility realignment, product rationalization and organizational realignment. The Company anticipates total charges of approximately $45 million associated with the plan, including approximately $10 million in cash expenditures and $35 million in non-cash charges. Cash expenditures will primarily consist of employee retention, severance and benefits, and also include transition, facility exit and other related costs. Non-cash charges primarily relate to asset impairment, and also include product rationalization and accelerated depreciation. These charges primarily relate to our Healthcare segment. The Fiscal 2027 Portfolio and Organizational Optimization Plan is anticipated to be substantially complete by the end of fiscal 2028. Total restructuring expense of $25.0 million has been recorded relating to this restructuring plan, of which $6.3 million has been recorded in Cost of revenues.
Current report
(1) Recorded in cost of revenues.
Current report
Fiscal 2027 restructuring charges primarily relate to the Fiscal 2027 Portfolio and Organizational Optimization Plan, while Fiscal 2026 restructuring charges related to the Fiscal 2025 Plan.
Current report
Interest expense decreased $3.7 million and $3.8 million during the second quarter and first six months of fiscal 2027, respectively, as compared to the prior year periods, primarily due to increased capitalized interest on capital projects.
Current report
For the three and six months ended September 30, 2026 and 2025, revenues from a single Customer did not represent ten percent or more of the Healthcare, AST or Life Sciences segment revenues.
Current report
AST revenues increased 5.0% to $295.6 million for the three months ended September 30, 2026, as compared to $281.5 million for the same prior year period. The constant currency organic growth of 5.3% is primarily due to increased pricing, impacting revenues by a mid-single digit percentage. AST revenues increased 5.4% to $593.2 million for the six months ended September 30, 2026, as compared to $562.7 million for the same prior year period. The constant currency organic growth of 5.0% is primarily due to increased pricing, impacting revenues by a mid-single digit percentage.
Current report
The Healthcare segment’s operating income increased 3.8% to $269.2 million for the three months ended September 30, 2026, as compared to $259.5 million in the same prior year period. The segment's operating margins were 24.0% and 25.1% for the second quarter of fiscal 2027 and 2026, respectively. The Healthcare segment’s operating income increased 7.0% to $529.4 million for the six months ended September 30, 2026, as compared to $495.0 million in the same prior year period. The segment's operating margins were 24.4% and 24.6% for the first six months of fiscal 2027 and 2026, respectively. The increase in operating income for the three month period ended September 30, 2026 is primarily due to the benefits of higher volume and pricing, which were partially offset by higher inflation, increased operational investments, and lower productivity. The increase in operating income for the six month period ended September 30, 2026 is primarily due to the benefits of higher volume, pricing and productivity, which were partially offset by higher inflation and increased operational investments. The decrease in operating margins for the three month period ended September 30, 2026 is primarily due to higher inflation, increased operational investments and lower productivity, which were partially offset by increased pricing and volume. The decrease in operating margins for the six month period ended September 30, 2026 is primarily due to higher inflation and increased operational investments, which were partially offset by increased pricing and volume.
Current report
The AST segment's operating income increased 3.5% to $132.1 million for the three months ended September 30, 2026, as compared to $127.6 million during the same prior year period. The segment's operating margins were 44.7% and 45.3% for the second quarters of fiscal 2027 and 2026, respectively. The AST segment's operating income increased 4.0% to $275.1 million for the six months ended September 30, 2026, as compared to $264.4 million during the same prior year period. The segment's operating margins were 46.4% and 47.0% for the first six months of fiscal 2027 and 2026, respectively. The increase in operating income for the three and six month periods ended September 30, 2026 was primarily due to increased pricing, which was partially offset by increased depreciation expenses, decreased productivity, and increased labor costs. The decrease in operating margin for the three and six month periods ended September 30, 2026 was primarily due to increased depreciation expenses, decreased productivity, and increased labor costs, which were partially offset by increased pricing.
Current report
The Life Sciences segment’s operating income increased 26.6% to $75.8 million for the three months ended September 30, 2026, as compared to $59.9 million for the same prior year period. The segment's operating margins were 44.4% and 41.3% for the second quarter of fiscal 2027 and 2026, respectively. The Life Sciences segment’s operating income increased 16.0% to $137.5 million for the six months ended September 30, 2026, as compared to $118.6 million for the same prior year period. The segment's operating margins were 43.3% and 42.3% for the first six months of fiscal 2027 and 2026, respectively. The increases in segment operating income and margin for the three and six month periods ended September 30, 2026 were primarily due to increased volume, productivity, pricing and mix, which were partially offset by higher inflation.
Current report
•Acquisition related deferred or contingent consideration – During the first six months of fiscal 2027 and 2026, we paid $0.2 million in deferred and contingent consideration in each period.
Current report
•Transactions with noncontrolling interest holders – During the first six months of fiscal 2027, we paid $0.5 million in distributions to noncontrolling interest holders.
Current report
Upon entry into the New Revolving Credit Agreement, there was approximately $1.6 billion of availability under the New Revolving Credit Facility, net of outstanding letters of credit.
Current report
We expect to fund the purchase price of the Xodus Medical Acquisition with a combination of approximately $2.0 billion of new debt, including approximately $500.0 million of borrowings under the Delayed Draw Term Loan, and cash on hand. We have $1.5 billion of committed bridge financing and anticipate replacing such commitments with permanent financing prior to the closing of the Xodus Medical Acquisition. In addition, the Purchase Agreement provides for potential earnout consideration of up to $150 million based upon the achievement of specified post-closing performance targets in calendar 2028.
Current report
Further, as previously announced in connection with the Fiscal 2027 Manufacturing Restructuring Plan, we expect to invest approximately $600 million to build a new Center of Excellence facility in North Carolina.
Removed paragraphs (11)
Previous report
•Debt-to-total capital ratio – We define debt-to-total capital ratio as total debt divided by the sum of total debt and shareholders’ equity. We use this figure as a financial liquidity measure to gauge our ability to borrow and fund growth.
Previous report
Our debt-to-total capital ratio was 20.9% at June 30, 2026 and 21.3% at March 31, 2026. During the first three months of fiscal 2027, we declared and paid cash dividends totaling $0.63 per ordinary share.
Previous report
(1) Recorded in Cost of revenues on the Consolidated Statements of Income.
Previous report
The Restructuring Plan expenses incurred during the three months ended June 30, 2025 primarily related to actions taken within our Healthcare and AST segments. Total pre-tax restructuring expense of $110.1 million has been recorded relating to the Restructuring Plan since inception, of which $33.9 million has been recorded in Cost of revenues.
Previous report
The estimated costs and timing associated with the restructuring actions are based on the Company's current expectations and are subject to various assumptions. Actual results may differ materially from these estimates. Accordingly, the Company may revise its estimates in future periods as implementation activities progress.
Previous report
Interest expense decreased $0.1 million during the first quarter of fiscal 2027, as compared to the same prior year period, primarily due to the lower principal amount of debt outstanding. For more information, refer to Note 6 to our consolidated financial statements titled, "Debt."
Previous report
AST revenues increased 5.8% to $297.6 million for the three months ended June 30, 2026, as compared to $281.2 million for the same prior year period. The constant currency organic growth of 4.7% is primarily due to increased pricing, impacting revenues by a mid-single digit percentage, partially offset by a decline in volume.
Previous report
The Healthcare segment’s operating income increased $24.7 million to $260.2 million for the three months ended June 30, 2026, as compared to $235.5 million in the same prior year period. The segment's operating margins were 24.8% and 24.2% for the first three months of fiscal 2027 and 2026, respectively. The increase in operating income and operating margin for the three month period ended June 30, 2026 is primarily due to the benefits of higher volume, productivity, pricing and mix, which were partially offset by unfavorable labor inflation, tariffs, and additional spending on operational improvements and staffing.
Previous report
The AST segment's operating income increased $6.3 million to $142.9 million for the three months ended June 30, 2026, as compared to $136.7 million during the same prior year period. The increase in operating income for the three month period ended June 30, 2026 is primarily due to the benefits of higher pricing and favorable foreign currency impacts, which were partially offset by higher depreciation expense, lower productivity and unfavorable labor inflation. The segment's operating margins were 48.0% and 48.6% for the first three months of fiscal 2027 and 2026, respectively. Operating margin declined as higher depreciation expense, lower productivity and unfavorable labor inflation more than offset the benefit provided by higher pricing.
Previous report
The Life Sciences segment’s operating income increased $3.0 million to $61.8 million for the three months ended June 30, 2026, as compared to $58.7 million for the same prior year period. Theincrease in segment operating incomefor the three month period ended June 30, 2026 is primarily due to favorable volume and pricing which were partially offset by lower productivity and higher materials cost. The segment's operating margins were 42.1% and 43.5% for the first three months of fiscal 2027 and 2026, respectively. Operating margin declined as lower productivity and higher materials cost more than offset the benefits of higher pricing and volume.
Previous report
Our debt-to-total capital ratio was 20.9% at June 30, 2026 and 21.5% at June 30, 2025.
Reworded paragraphs (59)
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 three months of fiscal 2027 and fiscal 2026. It may also be helpful to refer to our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the Securities and Exchange Commission ("SEC") on May 29, 2026, 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 six months of fiscal 2027 and fiscal 2026. It may also be helpful to refer to our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the Securities and Exchange Commission ("SEC") on May 29, 2026, including information in Item 1, "Business," Part I, Item 1A, "Risk Factors," and Note 9 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
In the following sections of the MD&A, we may, at times, refer to financial measures that are not required to be presented in the consolidated financial statements under accounting principles generally accepted in the United States ("U.S. GAAP"). We sometimes use the following financial measures in the context of this report: backlog and debt-to-total capital. We define these financial measures as follows:
Current wording
In the following sections of the MD&A, we may, at times, refer to a financial measure that is not required to be presented in the consolidated financial statements under accounting principles generally accepted in the United States ("U.S. GAAP"). We sometimes use the following financial measure in the context of this report: backlog. We define backlog as the amount of unfilled capital equipment purchase orders (excluding freight) at a point in time. We use this figure as a measure to assist in the projection of short-term financial results and inventory requirements.
Previous wording
STERIS is a leading global provider of products and services that support patient care with an emphasis on infection prevention. WE HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare and life science products and services around the globe. We offer our Customers a unique mix of innovative products and services. These include: consumable products, such as detergents, endoscopy accessories, barrier products, instruments and tools; services, including equipment installation and maintenance, microbial reduction of medical devices, instrument and scope repair, laboratory testing, and outsourced reprocessing; capital equipment, such as sterilizers, surgical tables, and automated endoscope reprocessors; and connectivity solutions such as OR integration.
Current wording
STERIS is a leading global provider of products and services that support patient care with an emphasis on infection prevention. WE HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare and life science products and services around the globe. We offer our Customers a unique mix of innovative products and services. These include: consumable products, such as detergents, endoscopy accessories, barrier products, instruments and tools; services, including equipment installation and maintenance, microbial reduction of medical devices, instrument and scope repair, laboratory testing, and outsourced reprocessing; capital equipment, such as sterilizers, surgical tables, and automated endoscope reprocessors; and connectivity solutions such as operating room integration.
Previous wording
Acquisitions. During the first three months of fiscal 2027, we completed three 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 $17.3 million, including deferred consideration and the fair value of potential contingent consideration.
Current wording
Acquisitions. During the firstsix months of fiscal 2027, we completed three 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 $17.3 million, including deferred consideration and the fair value of potential contingent consideration.
Previous wording
Acquisition and integration expenses totaled$1.5 million for the three months ended June 30, 2026. Acquisition and integration expenses totaled$0.5 million for the three months ended June 30, 2025. Acquisition and integration expenses reported in the Selling, general and administrative expenses and Cost of revenues lines of our Consolidated Statements of Income 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 $4.0 million and $5.5 million for the three and six months ended September 30, 2026, respectively. 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 reported in the Selling, general and administrative expenses and Cost of revenues lines of our Consolidated Statements of Income include, but are not limited to, investment banker, advisory, legal and other professional fees, and certain employee-related expenses.
Previous wording
For more information regarding our recent acquisitions, see Note 3 to our consolidated financial statements titled, "Business Acquisitions."
Current wording
For more information regarding our recent acquisitions, see Note 3 to our consolidated financial statements titled, "Business Acquisitions." For more information regarding the pending Xodus Medical Acquisition, see Note 17 to our consolidated financial statements titled “Subsequent Events.”
Previous wording
Gross profit percentage for the first three months of fiscal 2027 was 45.8% compared to the gross profit percentage for the first three months of fiscal 2026 of 45.1%. The increase in gross profit percentage for the three month period reflects favorable impacts from pricing, productivity and mix that were partially offset by unfavorable impacts from inflation.
Current wording
Gross profit percentage for the second quarter of fiscal 2027 was 44.7% compared to the gross profit percentage for the second quarter of fiscal 2026 of 44.2%. The increase in gross profit percentage for the three month period reflects favorable impacts from pricing, tariff refunds, and mix that were partially offset by unfavorable impacts from materials, labor and restructuring costs. Gross profit percentage for the first six months of fiscal 2027 was 45.3% compared to the gross profit percentage for the first six months of fiscal 2026 of 44.7%. The increase in gross profit percentage for the six month period reflects favorable impacts from pricing and tariff refunds that were partially offset by unfavorable impacts from materials, labor and restructuring costs.
Previous wording
Income from operations for the first three months of fiscal 2027 was $285.8 million, compared to income from operations of $246.0 million for the first three months of fiscal 2026. The increase in income from operations for the three month period is primarily due to increased pricing, volume, and productivity, which were partially offset by inflation and additional spending on operational investments and staffing.
Current wording
Income from operations for the second quarter of fiscal 2027 was $294.3 million, compared to income from operations of $265.8 million for the second quarter of fiscal 2026. Income from operations for the first six months of fiscal 2027 was $580.1 million, compared to income from operations of $511.8 million for the first six months of fiscal 2026. The increase in income from operations for the three and six month periods reflects favorable impacts from pricing, volume, and tariff refunds, which were partially offset by unfavorable impacts from materials and labor costs, higher operational investments and restructuring expenses.
Previous wording
Cash flows from operations were $367.1 million and free cash flow was $279.6 million for the first three months of fiscal 2027, compared to cash flows from operations of $420.0 million and free cash flow of $326.5 million for the first three months of fiscal 2026 (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 2027 decrease in cash flows from operations and free cash flow resulted from a significantly lower contribution from working capital partially offset by higher net income compared with fiscal 2026.
Current wording
Cash flows from operations were $656.1 million and free cash flow was $492.5 million for the first six months of fiscal 2027 compared to cash flows from operations of $707.8 million and free cash flow of $527.7 million for the first six months of fiscal 2026 (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 2027 decrease in cash flows from operations and free cash flow resulted from a significantly lower contribution from working capital, as we utilized cash to build inventory, partially offset by higher net income compared with fiscal 2026.
Previous wording
Additional information regarding our financial performance during the first quarter of fiscal 2027 is included in the subsection below titled “Results of Operations.”
Current wording
Additional information regarding our financial performance during the second quarter of fiscal 2027 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 three months ended June 30, 2026 and 2025:
Current wording
The following table summarizes the calculation of our free cash flow for the six months ended September 30, 2026 and 2025:
Previous wording
In the following subsections, we discuss our earnings and the factors affecting earnings for the first three months of fiscal 2027 compared to the same fiscal 2026 period. 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 second quarter and first six months of fiscal 2027 compared to the same fiscal 2026 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 months ended June 30, 2026 to the revenues for the three months ended June 30, 2025:
Current wording
Revenues. The following tables compare our revenues for the three and six months ended September 30, 2026 to the revenues for the three and six months ended September 30, 2025:
Previous wording
Revenues increased 7.3% to $1,492.7 million for the three months ended June 30, 2026, as compared to $1,391.1 million for the same period in the prior year. The increase reflects the benefits of higher volume in the Healthcare and Life Sciences segments, and pricing across all three segments.
Current wording
Revenues increased 8.8% to $1,588.6 million for the three months ended September 30, 2026, as compared to $1,460.3 million for the same period in the prior year. The increase reflects the benefits of higher volume in the Healthcare and Life Sciences segments, and higher pricing across all three segments.
Previous wording
Service revenues increased 7.8% for the three months ended June 30, 2026, as compared to the same period in the prior year, reflecting growth in all three segments. Consumable revenues increased by 9.0% for the three months ended June 30, 2026, as compared to the same period in the prior year, reflecting growth in the Healthcare and Life Sciences segments. Capital equipment revenues increased 3.0% for the three months ended June 30, 2026, as compared to the same period in the prior year, driven by growth in the Life Sciences and Healthcare segments.
Current wording
Service revenues increased 8.0% for the three months ended September 30, 2026, as compared to the same period in the prior year, reflecting growth in all three segments. Consumable revenues increased by 9.8% for the three months ended September 30, 2026, as compared to the same period in the prior year, reflecting growth in the Healthcare and Life Sciences segments. Capital equipment revenues increased 9.2% for the three months ended September 30, 2026, as compared to the same period in the prior year, reflecting growth in the Life Sciences and Healthcare segments.
Previous wording
United States revenues increased 6.3% to $1,090.6 million for the three months ended June 30, 2026, as compared to $1,025.6 million for the same period in the prior year, reflecting growth in service, consumable and capital equipment revenues.
Current wording
United States revenues increased 9.2% to $1,174.4 million for the three months ended September 30, 2026, as compared to $1,075.2 million for the same period in the prior year, reflecting growth in service, consumable, and capital equipment revenues.
Previous wording
Highlights. Revenues increased 7.3% to $1,492.7 million for the three months ended June 30, 2026, as compared to $1,391.1 million for the same period in the prior year. The increase during the three month period reflects the benefits of higher volume in the Healthcare and Life Sciences segments, and pricing across all three segments.
Current wording
Revenues increased 8.1% to $3,081.3 million for the six months ended September 30, 2026, as compared to $2,851.4 million for the same period in the prior year. The increase reflects the benefits of higher volume in the Healthcare and Life Sciences segments, and higher pricing across all three segments.
Previous wording
Ireland revenues increased 28.7% to $29.0 million for the three months ended June 30, 2026, as compared to $22.5 million for the same period in the prior year, reflecting growth in service, capital equipment, and consumable revenues.
Current wording
Ireland revenues increased 10.4% to $55.0 million for the six months ended September 30, 2026, as compared to $49.8 million for the same period in the prior year, reflecting growth in service, capital equipment, and consumable revenues.
Previous wording
Revenues from other foreign locations increased 8.8% to $373.2 million for the three months ended June 30, 2026, as compared to $342.9 million for the same period in the prior year. The increase reflects growth across all geographic regions.
Current wording
Revenues from other foreign locations increased 8.7% to $761.4 million for the six months ended September 30, 2026, as compared to $700.7 million for the same period in the prior year. The increase reflects growth within EMEA, Asia Pacific, Latin America and Canada.
Previous wording
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. Gross profit percentage for the first three months of fiscal 2027 was 45.8% compared to gross profit percentage for the first three months of fiscal of 2026 of 45.1%. Favorable impacts from pricing (100 basis points), productivity (40 basis points), mix (40 basis points), and lower net tariffs (20 basis points) were partially offset by unfavorable impacts from inflation (60 basis points), adjustments and other charges (50 basis points), acquisitions (10 basis points), materials cost (10 basis points).
Current wording
Gross profit percentage for the first six months of fiscal 2027 was 45.3% compared to gross profit percentage for the first six months of fiscal 2026 of 44.7%. Favorable impacts from pricing (110 basis points), tariff refunds (80 basis points), productivity (20 basis points), and mix (20 basis points), were partially offset by unfavorable impacts from material costs (50 basis points), adjustments and other charges (40 basis points), labor and overhead costs (40 basis points), restructuring costs (30 basis points) and acquisitions (10 basis points).
Previous wording
Operating Expenses. The following table compares our operating expenses for the three months ended June 30, 2026 to the three months ended June 30, 2025:
Current wording
Operating Expenses. The following table compares our operating expenses for the three and six months ended September 30, 2026 to the three and six months ended September 30, 2025:
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 4.5% in the three month period ended June 30, 2026, compared to the same prior year period. The increase in SG&A during the three months ended June 30, 2026, compared to the same prior year period, is primarily attributable to increased compensation and benefit costs and marketing and sales costs, which were partially offset by favorable foreign currency impacts and lower bad debt expense.
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 4.6% in the three and six month periods ended September 30, 2026, compared to the same prior year periods. The increase in SG&A during the three months ended September 30, 2026, compared to the same prior year period, is primarily attributable to increased professional fees and dealer commissions, partially offset by lower compensation and benefit costs (primarily lower incentive compensation) and depreciation and amortization expenses. The increase in SG&A during the six months ended September 30, 2026, compared to the same prior year period, is primarily attributable to increased compensation and benefit costs (partially offset by lower incentive compensation), professional fees, and dealer commissions, which were partially offset by favorable foreign currency movements and lower depreciation and amortization expenses.
Previous wording
Research and Development. Research and development expenses increased 8.5% in the three month period ended June 30, 2026, compared to the same prior year period. 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 improving innovation governance processes and leveraging technology to accelerate development initiatives to launch critical capital and consumable products. During fiscal 2027, 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 11.7% and 10.2% in the three and six month periods ended September 30, 2026, 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 improving innovation governance processes and leveraging technology to accelerate development initiatives to launch critical capital and consumable products. During fiscal 2027, 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
On August 5, 2026, the Company announced a targeted restructuring plan to consolidate manufacturing and distribution for formulated chemistries to a new Center of Excellence in North Carolina. The investment is expected to accelerate innovation, expand capacity and optimize our U.S. chemistries manufacturing and distribution network. The plan includes the anticipated closure of chemistry manufacturing and distribution facilities in St. Louis, Missouri and Plymouth, Minnesota. The Company currently expects to incur total pre-tax restructuring charges of approximately $55 million to $70 million, consisting of approximately $40 million to $50 million of cash expenditures and approximately $15 million to $20 million of non-cash charges. Cash expenditures are expected to primarily consist of Associate retention, severance and benefits, and also include transition, facility exit and other related costs. Non-cash charges are expected to primarily relate to accelerated depreciation. These charges are expected to be incurred over time, with completion anticipated to occur during fiscal 2030. No financial impact has been recognized to date with respect to these amounts. This investment strengthens our Healthcare and Life Sciences formulated chemistries businesses, which together generate more than $700 million in annual revenue.
Current wording
On August 5, 2026, the Company announced a targeted restructuring plan (the "Fiscal 2027 Manufacturing Restructuring Plan") to consolidate manufacturing and distribution for formulated chemistries to a new Center of Excellence in North Carolina. The investment is expected to accelerate innovation, expand capacity and optimize our U.S. chemistries manufacturing and distribution network. The Fiscal 2027 Manufacturing Restructuring Plan includes the anticipated closure of chemistry manufacturing and distribution facilities in St. Louis, Missouri and Plymouth, Minnesota. The Company currently expects to incur total pre-tax restructuring charges of approximately $55 million to $70 million, consisting of approximately $40 million to $50 million of cash expenditures and approximately $15 million to $20 million of non-cash charges. These charges primarily relate to our Healthcare and Life Sciences segments. Cash expenditures are expected to primarily consist of employee retention, severance and benefits, and also include transition, facility exit and other related costs. Non-cash charges primarily relate to accelerated depreciation. These charges are expected to be incurred over time, with completion anticipated to occur during fiscal 2030. Total restructuring expense of $1.0 million has been recorded relating to this restructuring plan.
Previous wording
Restructuring Expenses. In May 2024, we adopted and announced a targeted restructuring plan (the "Restructuring Plan"). The Restructuring Plan includes a strategic shift in our approach to the Healthcare surgical business in Europe, as well as other actions including the impairment of an internally developed X-ray accelerator, product rationalizations and facility consolidations. Approximately 300 positions have been eliminated. These restructuring actions were designed to enhance profitability and improve efficiency, which we realized beginning in fiscal 2025 and 2026. As of March 31, 2026, the execution of our Restructuring Plan was substantially complete.
Current wording
In May 2024, we adopted and announced a targeted restructuring plan (the "Fiscal 2025 Plan"). The Fiscal 2025 Plan includes a strategic shift in our approach to the Healthcare surgical business in Europe, as well as other actions including the impairment of an internally developed X-ray accelerator, product rationalizations and facility consolidations. Approximately 300 positions have been eliminated. These restructuring actions were designed to enhance profitability and improve efficiency. As of March 31, 2026, the execution of the Fiscal 2025 Plan was substantially complete. Total restructuring expense of $109.5 million has been recorded relating to the Fiscal 2025 Plan since inception, of which $33.9 million has been recorded in Cost of revenues.
Previous wording
During the three months ended June 30, 2026, we did not incur any expenses related to the Restructuring Plan. The following table summarizes our total pre-tax restructuring expenses recorded during the three months ended June 30, 2025 related to the Restructuring Plan:
Current wording
The following table summarizes our total pre-tax restructuring expenses recorded during the three and six months ended September 30, 2026 and 2025 related to our restructuring plans:
Previous wording
Non-Operating Expenses, Net. Non-operating expenses, net consists of interest expense on debt, offset by interest earned on cash, cash equivalents, short-term investment balances, losses (gains) related to disposal activities, and other expense (income) related to our equity investments, including our equity earnings and amortization of basis differences arising from our investments. The following tables compare our net non-operating expenses, net for the three months ended June 30, 2026 and 2025:
Current wording
Non-Operating Expenses, Net. Non-operating expenses, net consists of interest expense on debt, offset by interest earned on cash, cash equivalents, short-term investment balances, losses (gains) related to disposal activities, and other expense (income) related to our equity investments, including our equity earnings and amortization of basis differences arising from our investments. The following tables compare our net non-operating expenses, net for the three and six months ended September 30, 2026 and 2025:
Previous wording
Interest and miscellaneous income increased $1.4 million during the first three months of fiscal 2027, when compared to the same prior year period.
Current wording
Interest and miscellaneous income increased $1.3 million and $2.6 million during the second quarter and first six months of fiscal 2027, when compared to the same prior year periods, due in part to tariff refunds.
Previous wording
Other income, net increased $0.3 million during the first three months of fiscal 2027, when compared to the same prior year period.
Current wording
Other income, net increased $1.5 million and $1.9 million during the second quarter and first six months of fiscal 2027, when compared to the same prior year periods.
Previous wording
Income Taxes. The following tables compare our tax expense and effective income tax rates for the three months ended June 30, 2026 and 2025:
Current wording
Income Taxes. The following tables compare our tax expense and effective income tax rates for the three and six months ended September 30, 2026 and 2025:
Previous wording
The effective income tax rates for the three month periods ended June 30, 2026 and 2025 were 26.5% and 23.3%, respectively. The fiscal 2027 effective tax rates increased when compared to fiscal 2026, primarily due to unfavorable changes in discrete items.
Current wording
The effective income tax rates for the three month periods ended September 30, 2026 and 2025 were 25.7% and 23.9%, respectively. The effective income tax rates for the six month periods ended September 30, 2026 and 2025 were 26.1% and 23.6%, respectively. The fiscal 2027 effective tax rates increased when compared to fiscal 2026, primarily due to unfavorable changes in discrete items.
Previous wording
We operate and report our financial information in three reportable business segments: Healthcare, AST, and Life Sciences.
Current wording
We operate and report our financial information in three reportable business segments: Healthcare, AST, and Life Sciences. Non-allocated operating costs that support the entire Company and items not indicative of operating trends are excluded from segment operating income.
Previous wording
The following tables compare business segment revenues as well as impacts from acquisitions, divestitures, and foreign currency movements for the three months ended June 30, 2026 and 2025.
Current wording
The following tables compare business segment revenues as well as impacts from acquisitions, divestitures, and foreign currency movements for the three and six months ended September 30, 2026 and 2025.
Previous wording
Healthcare revenues increased 7.6% to $1,048.3 million for the three months ended June 30, 2026, as compared to $974.7 million for the same prior year period. This increase reflects growth in service, consumable, and capital equipment revenues of 9.6%, 9.2% and 1.4%, respectively. The constant currency organic growth of 6.4% is primarily due to increased volume, impacting revenues by a mid-single digit percentage, as well as increased pricing, impacting revenues by a low-single digit percentage.
Current wording
Healthcare revenues increased 8.6% to $1,122.4 million for the three months ended September 30, 2026, as compared to $1,033.8 million for the same prior year period. This increase reflects growth in service, consumable, and capital equipment revenues of 10.1%, 10.0% and 4.1%, respectively. The constant currency organic growth of 7.4% is primarily due to increased volume, impacting revenues by a mid-single digit percentage, as well as increased pricing, impacting revenues by a low-single digit percentage. Healthcare revenues increased 8.1% to $2,170.8 million for the six months ended September 30, 2026, as compared to $2,008.5 million for the same prior year period. This increase reflects growth in service, consumable, and capital equipment revenues of 9.9%, 9.6% and 2.8%, respectively. The constant currency organic growth of 6.9% is primarily due to increased volume, impacting revenues by a mid-single digit percentage, as well as increased pricing, impacting revenues by a low-single digit percentage.
Previous wording
The Healthcare segment's backlog at June 30, 2026 was $444.0 million. The Healthcare segment's backlog at June 30, 2025 was $403.5 million. The increase is primarily due to the timing of orders and shipments, as well as the impact of an acquisition.
Current wording
The Healthcare segment's backlog at September 30, 2026 was $455.5 million. The Healthcare segment's backlog at September 30, 2025 was $427.5 million. The increase is primarily due to the timing of orders and shipments, as well as the impact of an acquisition.
Previous wording
Life Sciences revenues increased 8.6% to $146.7 million for the three months ended June 30, 2026, as compared to $135.2 million for the same prior year period. This increase reflects growth in capital equipment, consumable and service revenues of 17.4%, 8.2% and 2.4%, respectively. The constant currency organic growth of 7.9% is primarily due to increased volume, impacting revenues by a mid-single digit percentage, as well as increased pricing, impacting revenues by a low-single digit percentage.
Current wording
Life Sciences revenues increased 17.7% to $170.6 million for the three months ended September 30, 2026, as compared to $145.0 million for the same prior year period. This increase reflects growth in capital equipment, consumable, and service revenues of 53.0%, 8.8% and 5.2%, respectively. The constant currency organic growth of 18.1% is primarily due to increased volume, as well as increased pricing, impacting revenues by a low-single digit percentage. Life Sciences revenues increased 13.3% to $317.4 million for the six months ended September 30, 2026, as compared to $280.2 million for the same prior year period. This increase reflects growth in capital equipment, consumable, and service revenues of 36.9%, 8.5% and 3.8%, respectively. The constant currency organic growth of 13.2% is primarily due to increased volume, as well as increased pricing, impacting revenues by a low-single digit percentage.
Previous wording
The Life Sciences backlog at June 30, 2026 was $109.9 million. The Life Sciences backlog at June 30, 2025 was $111.0 million. The decrease is primarily due to the timing of orders and shipments.
Current wording
The Life Sciences backlog at September 30, 2026 was $93.4 million. The Life Sciences backlog at September 30, 2025 was $113.7 million. The decrease is primarily due to strong capital order shipments.
Previous wording
The following table compares business segment and Corporate operating income for the three months ended June 30, 2026 and 2025.
Current wording
The following table compares business segment and Corporate operating income for the three and six months ended September 30, 2026 and 2025.
Previous wording
(1) Corporate costs include corporate and administrative functions, public company costs, legacy post-retirement benefits, certain services and facilities related to distribution and research and development that are shared by multiple segments, and the benefit of refunds received on tariffs previously paid under the International Economic Emergency Powers Act ("IEEPA").
Current wording
(1) Corporate costs include corporate and administrative functions, public company costs, legacy post-retirement benefits, certain services and facilities related to distribution and research and development that are shared by multiple segments, and the benefit of refunds received on tariffs previously paid under the International Emergency Economic Powers Act ("IEEPA").
Previous wording
The following table summarizes significant components of our cash flows for the three months ended June 30, 2026 and 2025:
Current wording
The following table summarizes significant components of our cash flows for the six months ended September 30, 2026 and 2025:
Showing the first 40 of 59 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Service revenues increased 7.9% for the six months ended September 30, 2026, as compared to the same period in the prior year, reflecting growth in all three segments. Consumable revenues increased by 9.4% for the six months ended September 30, 2026, as compared to the same period in the prior year, reflecting growth in the Healthcare and Life Sciences segments. Capital equipment revenues increased 6.3% for the six months ended September 30, 2026, as compared to the same period in the prior year, reflecting growth in the Life Sciences and Healthcare segments.
Current report — wording carried from elsewhere
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, 2026 to the three and six months ended September 30, 2025:
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
•Backlog – We define backlog as the amount of unfilled capital equipment purchase orders (excluding freight) at a point in time. We use this figure as a measure to assist in the projection of short-term financial results and inventory requirements.
Previous report — wording carried elsewhere
During the first three 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.
Previous report — wording carried elsewhere
Gross Profit. The following tables compare our gross profit for the three months ended June 30, 2026 to the three months ended June 30, 2025: