Sotera Health Co
For the period ended Jun 30, 2025. Filed Aug 8, 2025.
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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.
Jun 30, 2025 · Filed Aug 8, 2025
SHC$16.01+0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-01.
0001822479-25-000025
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0001822479-25-000044
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 119 previous paragraphs and 168 current paragraphs.
73 unchanged; 30 reworded; 55 added; 14 removed; 2 previous and 10 current paragraphs rearranged.
Tables are not compared: 6 previous and 10 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 (55)
Current report
Service revenues increased $19.5 million, or 8.2%, to $257.2 million in the three months ended June 30, 2025 as compared to $237.8 million in the three months ended June 30, 2024. The growth in net service revenues was driven by improvements in volume/mix in the Sterigenics and Nordion segments and core lab testing service volume/mix in the Nelson Labs segment. In addition, favorable pricing and changes in foreign currency exchange rates contributed to the increase in net service revenues. Partially offsetting these factors was a decline in expert advisory services revenue in the Nelson Labs segment.
Current report
Product revenues decreased $1.7 million, or 4.5%, to $37.1 million in the three months ended June 30, 2025 as compared to $38.8 million in the three months ended June 30, 2024. The decrease was driven by lower revenues from Co-60 in the Nordion segment due to the timing of reactor harvest schedules.
Current report
Cost of service revenues increased $4.2 million, or 3.8%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The increase was attributable to incremental depreciation and unfavorable changes in foreign currency exchange rates.
Current report
Cost of product revenues decreased $0.2 million, or 1.6%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The decrease was attributable to a decline in amortization of intangible assets that were fully amortized as of December 31, 2024, partially offset by an increase in the cost of direct materials.
Current report
Amortization of intangible assets decreased $6.1 million to $9.3 million, or 39.7%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The decline was primarily due to certain intangible assets that were fully amortized in May 2025.
Current report
Illinois EO litigation settlements
Current report
On July 23, 2025, the Company agreed to resolve 129 pending and threatened EO claims in the State of Illinois. Pursuant to the terms of the July Term Sheet, which is subject to the satisfaction of several conditions, the Company agreed to pay $34.0 million to settle the claims.
Current report
Loss on Refinancing of Debt
Current report
Loss on refinancing of debt for the three months ended June 30, 2025 was $0.1 million related to Amendment No. 5 to the Revolving Credit Facility. Loss on refinancing of debt for the three months ended June 30, 2024 was $23.4 million and occurred in connection with the refinancing of our capital structure in May 2024. The refinancing activity resulted in the write off of certain unamortized debt issuance costs and discounts on the Term Loans due 2026. In addition, certain new debt issuance costs and discounts were expensed upon the issuance of the Refinancing Term Loans and Secured Notes.
Current report
Other Income, Net
Current report
Other income, net increased $4.3 million, or 283.2%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, mainly arising from a $3.5 million favorable increase in the net fair value of Nordion’s embedded derivatives in the three months ended June 30, 2025 compared to the same period of the prior year.
Current report
Provision for Income Taxes
Current report
On July 4, 2025, new U.S tax legislation was signed into law (commonly referred to as the "One Big Beautiful Bill Act" or "OBBBA"). The OBBBA makes many of the temporary tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act permanent. Additionally, the OBBBA makes changes to certain U.S. corporate tax provisions, many of which are not effective until 2026. The Company is currently evaluating the impact of the OBBBA but does not expect it to have a material impact on its results of operations.
Current report
Six Months Ended June 30, 2025 as compared to Six Months Ended June 30, 2024
Current report
Total Net Revenues
Current report
The following table compares our revenues by type for the six months ended June 30, 2025 to the six months ended June 30, 2024.
Current report
Net revenues were $548.9 million in the six months ended June 30, 2025, an increase of $24.1 million, or 4.6%, as compared with the six months ended June 30, 2024. Excluding the impact of foreign currency exchange rates, net revenues in the six months ended June 30, 2025 increased approximately 5.3% compared with the six months ended June 30, 2024.
Current report
Service revenues
Current report
Service revenues increased $16.9 million, or 3.7%, to $481.2 million in the six months ended June 30, 2025 as compared to $464.2 million in the six months ended June 30, 2024. The growth in net service revenues was primarily driven by favorable pricing in the Sterigenics and Nelson Labs segments, favorable volume/mix in the Sterigenics and Nordion segments and improvements in volume/mix related to core lab testing services in the Nelson Labs segment. Partially offsetting these factors was a decline in expert advisory services revenue in the Nelson Labs segment coupled with an unfavorable impact from changes in foreign currency exchange rates.
Current report
Product revenues
Current report
Product revenues increased $7.1 million, or 11.8%, to $67.7 million in the six months ended June 30, 2025 as compared to $60.5 million in the six months ended June 30, 2024. The increase was driven by favorable volume/mix and pricing in the Nordion segment, partially offset by an unfavorable impact from changes in foreign currency exchange rates.
Current report
Total Cost of Revenues
Current report
The following table compares our cost of revenues by type for the six months ended June 30, 2025 to the six months ended June 30, 2024.
Current report
Cost of service revenues
Current report
Cost of service revenues increased $0.9 million, or 0.4%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. The change was attributable to incremental depreciation, partially offset by a favorable impact from changes in foreign currency exchange rates.
Current report
Cost of product revenues
Current report
SG&A expenses
Current report
Amortization of intangible assets
Current report
Amortization of intangible assets decreased $6.5 million to $24.6 million, or 20.9%, for the six months ended June 30, 2025 as compared to the three months ended June 30, 2024. The decline was primarily due to certain intangibles assets that were fully amortized in May 2025.
Current report
Illinois EO litigation settlements
Current report
On July 23, 2025, the Company agreed to resolve 129 pending and threatened EO claims in the State of Illinois. Pursuant to the terms of the July Term Sheet, which is subject to the satisfaction of several conditions, the Company agreed to pay $34.0 million to settle the claims.
Current report
Interest Expense, Net
Current report
Loss on Refinancing of Debt
Current report
Loss on refinancing of debt for the six months ended June 30, 2025 was $0.1 million related to Amendment No. 5 to the Revolving Credit Facility. Loss on refinancing of debt for the six months ended June 30, 2024 was $24.1 million and occurred in connection with the refinancing our of our capital structure in May 2024. The refinancing activity resulted in the write off of certain unamortized debt issuance costs and discounts on the Term Loans due 2026. In addition, certain new debt issuance costs and discounts were expensed upon the issuance of the Term Loan and Secured Notes due 2031.
Current report
Foreign Exchange Loss (Gain)
Current report
Other Income, Net
Current report
Other income, net increased $4.8 million, or 385.7%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, mainly arising from a $3.8 million favorable increase in the net fair value of Nordion’s embedded derivatives in the six months ended June 30, 2025 compared to the same period of the prior year.
Current report
Provision for Income Taxes
Current report
Provision for income taxes decreased $1.7 million to a net provision of $9.4 million for the six months ended June 30, 2025 as compared to $11.1 million in the six months ended June 30, 2024. The change was primarily attributable to lower pre-tax income for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, partially offset by current year permanent differences.
Current report
Net loss for the six months ended June 30, 2025 was $5.3 million, as compared to net income of $15.1 million for the six months ended June 30, 2024 due to the factors described above. Adjusted Net Income was $95.1 million for the six months ended June 30, 2025, as compared to $90.8 million for the six months ended June 30, 2024, and Adjusted EBITDA was $272.6 million for the six months ended June 30, 2025, as compared to $249.3 million for the six months ended June 30, 2024. Please see “Non-GAAP Financial Measures” below for a reconciliation of Adjusted Net Income and Adjusted EBITDA to their most directly comparable financial measure calculated and presented in accordance with GAAP.
Showing the first 40 of 55 passages. Open the source sections for the rest.
Removed paragraphs (14)
Previous report
Service revenues decreased $2.5 million, or 1.1%, to $223.9 million for the three months ended March 31, 2025, as compared to $226.5 million for the three months ended March 31, 2024. Favorable pricing, combined with growth in core lab testing services was offset by a decline in expert advisory service revenue and unfavorable changes in foreign currency exchange rates across all segments.
Previous report
Product revenues increased $8.9 million, or 41.0%, to $30.6 million for the three months ended March 31, 2025, as compared to $21.7 million for the three months ended March 31, 2024. Favorable volume and mix at Nordion, which was primarily attributable to Co-60 harvest schedule timing, was the main driver of the increase in product revenues in the three months ended March 31, 2025 compared to the same period in the prior year, partially offset by changes in foreign currency exchange rates.
Previous report
Cost of service revenues decreased $3.2 million, or 2.9%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. Lower employee compensation costs, due mainly to lab optimization activities in the Nelson Labs segment, was the main driver of the decrease. Changes in foreign currency exchange rates had a $1.9 million favorable impact to cost of service revenues in the three months ended March 31, 2025 compared to the same period in the prior year.
Previous report
Amortization of intangible assets decreased $0.4 million, or 2.6% for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024 due mainly to changes in foreign currency exchange rates.
Previous report
Illinois EO litigation settlement
Previous report
Other (Income) Expense, Net
Previous report
Other income, net increased $1.2 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The variance was primarily a result of $0.7 million of refinancing costs recognized in the three months ended March 31, 2024 (associated with Amendment No. 3 to the Revolving Credit Facility) that was not incurred in the three months ended March 31, 2025.
Previous report
(Benefit) Provision for Income Taxes
Previous report
(d) The three months ended March 31, 2024 includes $1.1 million of expenses incurred in connection with the secondary offering of our common stock that closed on March 4, 2024 and write-off of unamortized debt issuance costs in connection with Amendment No. 3 to the Revolving Credit Facility.
Previous report
Sterigenics net revenues were $169.7 million for the three months ended March 31, 2025, an increase of $3.2 million, or 1.9%, as compared to the three months ended March 31, 2024. The increase reflects a benefit from pricing of 4.1%, partially offset by an unfavorable impact from changes in foreign currency exchange rates of 1.9%.
Previous report
Nordion net revenues were $32.6 million for the three months ended March 31, 2025, an increase of $8.6 million, or 35.6%, as compared to the three months ended March 31, 2024. Revenue growth was driven mainly by volume and mix, which was largely attributable to a more favorable Co-60 harvest schedule timing for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, partially offset by an unfavorable impact from changes in foreign currency exchange rates of 5.0%.
Previous report
Sterigenics segment income was $88.0 million for the three months ended March 31, 2025, an increase of $2.2 million, or 2.5%, as compared to the three months ended March 31, 2024. Segment income and segment income margin increased primarily due to the benefit of pricing, partially offset by inflation and changes in foreign currency exchange rates.
Previous report
Nordion segment income was $17.4 million for the three months ended March 31, 2025, an increase of $6.6 million, or 61.5%, as compared to the three months ended March 31, 2024. The increase in segment income and segment income margin was primarily driven by higher volume and mix, stemming from favorable Co-60 harvest schedule timing, as referenced above.
Previous report
Cash used in financing activities decreased by $3.9 million to $8.1 million for the three months ended March 31, 2025 compared to $11.9 million for the three months ended March 31, 2024. The difference was due mainly to a $6.7 million payment to settle a finance lease in 2024, partially offset by an increase of $2.5 million in principal payments on long-term borrowings.
Reworded paragraphs (30)
Previous wording
For the three months ended March 31, 2025, we recorded net revenues of $254.5 million, net loss of $13.3 million, Adjusted Net Income of $39.0 million and Adjusted EBITDA of $121.8 million. Adjusted Net Income and Adjusted EBITDA are financial measures not based on any standardized methodology prescribed by U.S. Generally Accepted Accounting Principles (“GAAP”). For the definition of Adjusted Net Income and Adjusted EBITDA and the reconciliation of these non-GAAP measures from net income (loss), please see “Non-GAAP Financial Measures.”
Current wording
For the three and six months ended June 30, 2025, respectively, we recorded net revenues of $294.3 million and $548.9 million, net income of $8.0 million and net loss of $5.3 million, Adjusted Net Income of $56.1 million and $95.1 million, and Adjusted EBITDA of $150.7 million and $272.6 million. Adjusted Net Income and Adjusted EBITDA are financial measures not based on any standardized methodology prescribed by U.S. Generally Accepted Accounting Principles (“GAAP”). For the definition of Adjusted Net Income and Adjusted EBITDA and the reconciliation of these non-GAAP measures from net income (loss), please see “Non-GAAP Financial Measures.”
Previous wording
Net revenues were $254.5 million in the three months ended March 31, 2025, an increase of $6.3 million, or 2.6%, as compared with the three months ended March 31, 2024. Excluding the impact of foreign currency exchange rates, net revenues in the three months ended March 31, 2025 increased approximately 4.4% compared with the three months ended March 31, 2024.
Current wording
Net revenues were $294.3 million in the three months ended June 30, 2025, an increase of $17.7 million, or 6.4%, as compared with the three months ended June 30, 2024. Excluding the impact of foreign currency exchange rates, net revenues in the three months ended June 30, 2025 increased approximately 6.0% compared with the three months ended June 30, 2024.
Previous wording
Total cost of revenues accounted for approximately 46.8% and 48.8% of our consolidated net revenues for the three months ended March 31, 2025 and 2024, respectively.
Current wording
Total cost of revenues accounted for approximately 43.4% and 44.8% of our consolidated net revenues for the three months ended June 30, 2025 and 2024, respectively.
Previous wording
Foreign exchange loss was $0.3 million for the three months ended March 31, 2025 compared to a gain of $0.6 million for the three months ended March 31, 2024. The change in foreign exchange loss (gain) mainly relates to short-term gains and losses on transactions denominated in currencies other than the functional currency of our operating entities. As described in Note 15, “Financial Instruments and Financial Risk,” we enter into monthly U.S. dollar-denominated foreign currency forward contracts to manage foreign currency exchange rate risk related to our international subsidiaries.
Current wording
Foreign exchange loss was $0.6 million for the three months ended June 30, 2025 as compared to a gain of $0.6 million in the three months ended June 30, 2024. The change in foreign exchange loss (gain) in our Consolidated Statements of Operations and Comprehensive Income (Loss) mainly relates to short-term gains and losses on transactions denominated in currencies other than the functional currency of our operating entities. As described in Note 15, “Financial Instruments and Financial Risk”, we enter into monthly U.S. dollar-denominated foreign currency forward contracts to manage foreign currency exchange rate risk related to our international subsidiaries.
Previous wording
The Company recognized a $1.6 million benefit for income taxes in the three months ended March 31, 2025, as compared to a $4.7 million income tax provision for the three months ended March 31, 2024. The change was primarily attributable to a pre-tax loss in the three months ended March 31, 2025 compared to pre-tax income in the three months ended March 31, 2024, partially offset by an increase in current year permanent tax differences.
Current wording
Provision for income taxes increased $4.5 million to a net provision of $10.9 million for the three months ended June 30, 2025 as compared to $6.4 million in the three months ended June 30, 2024. The change was primarily attributable to higher pre-tax income for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, and an increase in current year permanent tax differences.
Previous wording
Benefit for income taxes for the three months ended March 31, 2025 differed from the statutory rate primarily due to current year permanent differences, partially offset by the valuation allowance attributable to the limitation on the deductibility of interest expense and the impact of the foreign rate differential. Provision for income taxes for the three months ended March 31, 2024 differed from the statutory rate primarily due to an increase in the valuation allowance against our excess interest expense carryforward balance and the impact of the foreign rate differential, partially offset by a benefit for state income taxes.
Current wording
Provision for income taxes for the three months ended June 30, 2025 differed from the federal statutory rate primarily due to the valuation allowance attributable to the limitation on the deductibility of interest expense, the impact of the foreign rate differential and current year permanent tax differences, partially offset by a benefit for state income taxes. Income tax expense for the three months ended June 30, 2024 differed from the statutory rate primarily due to the valuation allowance attributable to the limitation on the deductibility of interest expense and the impact of the foreign rate differential, partially offset by a benefit for state income taxes.
Previous wording
Net loss for the three months ended March 31, 2025 was $13.3 million, as compared to net income of $6.3 million for the three months ended March 31, 2024. Adjusted Net Income was $39.0 million for the three months ended March 31, 2025, as compared to $35.6 million for the three months ended March 31, 2024, due to the factors described above. Adjusted EBITDA was $121.8 million for the three months ended March 31, 2025, as compared to $111.9 million for the three months ended March 31, 2024, due to the factors described above. Please see “Non-GAAP Financial Measures” below for a reconciliation of
Current wording
Net income for the three months ended June 30, 2025 was $8.0 million, as compared to net income of $8.8 million for the three months ended June 30, 2024 due to the factors described above. Adjusted Net Income was $56.1 million for the three months ended June 30, 2025, as compared to $55.2 million for the three months ended June 30, 2024, and Adjusted EBITDA was $150.7 million for the three months ended June 30, 2025, as compared to $137.3 million for the three months ended June 30, 2024. Please see “Non-GAAP Financial Measures” below for a reconciliation of Adjusted Net Income and Adjusted EBITDA to their most directly comparable financial measure calculated and presented in accordance with GAAP.
Previous wording
Cost of product revenues increased $1.3 million, or 12.3%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase was primarily a result of higher volumes of Co-60 shipments, which resulted in increases in direct material and material transportation costs of $2.2 million. This was partially offset by a $1.0 million decrease in amortization of intangible assets that were fully amortized as of December 31, 2024. Changes in foreign currency exchange rates had a $0.5 million favorable impact to cost of product revenues in the three months ended March 31, 2025 compared to the same period in the prior year.
Current wording
Cost of product revenues increased $1.0 million, or 4.1%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. The increase was primarily a result of higher volumes of Co-60 shipments, which resulted in increases in direct material and transportation costs, partially offset by a decline in amortization of intangible assets that were fully amortized as of December 31, 2024.
Previous wording
SG&A expenses increased $4.9 million, or 8.3%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. A $6.3 million increase in litigation and other professional services expense associated with EO sterilization facilities was the main driver of the increase in SG&A expenses, partially offset by a $1.4 million decline in share-based compensation expense.
Current wording
SG&A expenses increased $13.2 million, or 11.1%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. A $14.3 million increase in litigation and other professional services expense associated with EO sterilization facilities was the main driver of the increase in SG&A expenses, partially offset by a decrease in share-based compensation expense.
Previous wording
On April 3, 2025, the Company agreed to resolve 97 pending and threatened EO claims in the State of Illinois. Pursuant to the terms of the Term Sheet, which is subject to the satisfaction of several conditions, the Company agreed to pay $30.9 million to settle the claims.
Current wording
On April 3, 2025, the Company agreed to resolve 97 pending and threatened EO claims in the State of Illinois. Pursuant to the terms of the April Term Sheet, which is subject to the satisfaction of several conditions, the Company agreed to pay $30.9 million to settle the claims.
Previous wording
Interest expense, net decreased $0.9 million, or 2.1%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily due to a decline in the variable interest rate on our Term Loan. The weighted average interest rate on our outstanding debt was 7.49% and 8.39% at March 31, 2025 and 2024, respectively.
Current wording
Interest expense, net decreased $0.6 million, or 0.8%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to a decline in the variable interest rate on our Term Loan, partially offset by a lower benefit from interest rate derivatives. The weighted average interest rate on our outstanding debt was 7.49% and 8.19% at June 30, 2025 and 2024, respectively.
Previous wording
(a)Represents share-based compensation expense to employees and Non-Employee Directors.
Current wording
(a) Represents share-based compensation expense related to employees and Non-Employee Directors.
Previous wording
(b)Represents the effects of (i) fluctuations in foreign currency exchange rates and (ii) non-cash mark-to-fair value of embedded derivatives relating to certain customer and supply contracts at Nordion.
Current wording
(c) Represents the effects of (i) fluctuations in foreign currency exchange rates and (ii) non-cash mark-to-fair value of embedded derivatives relating to certain customer and supply contracts at Nordion.
Previous wording
(c) Represents certain costs related to divestitures, acquisitions and the integration of recent acquisitions, as well as professional fees and other costs associated with business optimization, cost saving and other process enhancement projects.
Current wording
(d) Represents (i) certain costs related to divestitures, acquisitions and the integration of acquisitions, (ii) professional fees and other costs associated with business optimization, cost saving and other process enhancement projects, and (iii) legal, consulting, and other fees associated with the secondary offerings and shareholder engagement.
Previous wording
(e)Represents litigation and other professional fees associated with our EO sterilization facilities.
Current wording
(e) Represents litigation and other professional fees associated with our EO sterilization facilities.
Previous wording
(f) Represents the cost to settle 97 pending and threatened EO claims against Sterigenics in Illinois pursuant to the Term Sheet entered into on April 3, 2025. See Note 14, “Commitments and Contingencies.”
Current wording
(f) Represents (i) the cost to settle 97 pending and threatened EO claims against Sterigenics in Illinois pursuant to the term sheet entered into on April 3, 2025 and (ii) the cost to settle 129 pending and threatened EO claims against Sterigenics in Illinois pursuant to the term sheet entered into on July 23, 2025. See Note 14, “Commitments and Contingencies.”
Previous wording
(g)Represents non-cash accretion of ARO related to Co-60 gamma and EO processing facilities, which are based on estimated site remediation costs for any future decommissioning of these facilities and are accreted over the life of the asset.
Current wording
(g) Represents non-cash accretion of ARO related to Co-60 gamma and EO sterilization facilities, which are based on estimated site remediation costs for any future decommissioning of these facilities and are accreted over the life of the asset.
Previous wording
(i)Includes depreciation of Co-60 held at gamma irradiation sites. The three months ended March 31, 2025 excludes accelerated depreciation associated with business optimization activities.
Current wording
(i)Includes depreciation of Co-60 held at gamma irradiation sites. The three and six months ended June 30, 2025 excludes accelerated depreciation associated with business optimization activities.
Previous wording
(j) Represents the difference between the income tax provision as determined under U.S. GAAP and the income tax provision or benefit associated with pre-tax adjustments described in footnote (h).
Current wording
(j) Represents the difference between the income tax provision or benefit as determined under U.S. GAAP and the income tax provision or benefit associated with pre-tax adjustments described in footnote (h).
Previous wording
(k) $24.2 million and $23.8 million of the adjustments for the three months ended March 31, 2025 and 2024, respectively, are included in cost of revenues, primarily consisting of amortization of intangible assets, depreciation, and accretion of asset retirement obligations.
Current wording
(k) $24.4 million and $23.4 million of the adjustments for the three months ended June 30, 2025 and 2024, respectively, and $48.6 million and $47.2 million of the adjustments for the six months ended June 30, 2025 and 2024, respectively, are included in cost of revenues, primarily consisting of amortization of intangible assets, depreciation, and accretion of asset retirement obligations.
Previous wording
We have three reportable segments: Sterigenics, Nordion and Nelson Labs. Our chief operating decision maker evaluates performance and allocates resources within our business based on segment income, which excludes certain items which are included in income (loss) before tax as determined in our Consolidated Statements of Operations and Comprehensive Income (Loss). The accounting policies for our reportable segments are the same as those for the consolidated Company.
Current wording
We have three reportable segments: Sterigenics, Nordion and Nelson Labs. Our chief operating decision-maker evaluates performance and allocates resources within our business based on segment income, which excludes certain items which are included in income before income taxes as determined in our Consolidated Statements of Operations and Comprehensive Income (Loss). The accounting policies for our reportable segments are the same as those for the consolidated Company.
Previous wording
Nelson Labs net revenues were $52.3 million for the three months ended March 31, 2025, a decrease of $5.4 million, or 9.3%, as compared to the three months ended March 31, 2024. Favorable pricing and improvement in core lab testing services was offset by a decline in expert advisory service revenue and changes in foreign currency exchange rates.
Current wording
Nelson Labs net revenues were $57.1 million for the three months ended June 30, 2025, a decrease of $1.9 million, or 3.3%, as compared to the three months ended June 30, 2024. Growth in core lab testing services, favorable pricing and changes in foreign currency exchange rates were offset by a decline in expert advisory services revenue.
Previous wording
Nelson Labs segment income was $16.4 million for the three months ended March 31, 2025, an increase of $1.1 million, or 7.0%, as compared to the three months ended March 31, 2024. The increase in segment income and segment income margin was attributable to favorable pricing and volume/mix improvements in core lab testing services coupled with lab optimization, partially offset by lower volume/mix in expert advisory services.
Current wording
Nelson Labs segment income was $35.9 million for the six months ended June 30, 2025, an increase of $3.4 million, or 10.6%, as compared to the six months ended June 30, 2024. The increase in segment income and segment income margin was primarily attributable to volume/mix improvements, lab optimization and favorable pricing.
Previous wording
The primary sources of liquidity for our business are cash flows from operations and borrowings under our credit facilities. As of March 31, 2025, we had $304.4 million of cash and cash equivalents. This is an increase of $27.1 million from the balance at December 31, 2024. The increase in cash and cash equivalents was attributable to $55.5 million of cash provided by operating activities, partially offset by $19.9 million of cash paid for purchases of property, plant and equipment and $8.1 million of cash used in financing activities. Our foreign subsidiaries held cash of approximately $291.6 million at March 31, 2025 and $259.8 million at December 31, 2024. No material restrictions exist to accessing cash held by our foreign subsidiaries notwithstanding any potential tax consequences.
Current wording
The primary sources of liquidity for our business are cash flows from operations and borrowings under our credit facilities. As of June 30, 2025, we had $332.4 million of cash and cash equivalents. This is an increase of $55.2 million from the balance at December 31, 2024. The increase in cash and cash equivalents was attributable to $112.9 million of cash provided by operating activities, reduced by $51.1 million of cash paid for purchases of property, plant and equipment and $15.0 million of cash used in financing activities. Our foreign subsidiaries held cash of approximately $283.2 million at June 30, 2025 and $259.8 million at December 31, 2024. No material restrictions exist to accessing cash held by our foreign subsidiaries notwithstanding any potential tax consequences.
Previous wording
Our capital expenditure program is a component of our long-term strategy. This program includes, among other things, investments in new and existing facilities, business expansion projects, Co-60 used by Sterigenics at its gamma irradiation facilities, cobalt development projects and information technology enhancements. During the three months ended March 31, 2025, our capital expenditures amounted to $19.9 million, compared to $34.9 million for the three months ended March 31, 2024.
Current wording
Our capital expenditure program is a component of our long-term strategy. This program includes, among other things, investments in new and existing facilities, business expansion projects, Co-60 used by Sterigenics at its gamma irradiation facilities, cobalt development projects and information technology enhancements. During the six months ended June 30, 2025, our capital expenditures amounted to $51.1 million, compared to $76.8 million for the six months ended June 30, 2024.
Previous wording
Cash flows provided by operating activities increased $45.8 million to net cash provided of $55.5 million for the three months ended March 31, 2025 compared to $9.7 million for the three months ended March 31, 2024. The increase in cash flows from operating activities in the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was driven primarily by the $35.0 million payment of the Georgia EO litigation settlement in the three months ended March 31, 2024.
Current wording
Cash flows from operating activities increased $41.9 million to net cash provided of $112.9 million in the six months ended June 30, 2025 compared to $71.0 million of net cash used in operating activities for the six months ended June 30, 2024. The change in cash flows from operating activities was primarily driven by the $35.0 million payment of the Georgia EO litigation settlement in January 2024.
Previous wording
Cash used in investing activities decreased $15.0 million to net cash used of $19.9 million for the three months ended March 31, 2025 compared to $34.9 million for the three months ended March 31, 2024. The variance was driven by a decrease in capital expenditures of $15.0 million in the three months ended March 31, 2025 compared to the three months ended March 31, 2024.
Current wording
Cash used in investing activities decreased $25.7 million to net cash used of $51.1 million in the six months ended June 30, 2025 compared to $76.8 million for the six months ended June 30, 2025. The variance was primarily driven by a decrease in cash paid for capital expenditures of $25.7 million in the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
Previous wording
On December 13, 2019, SHH, our wholly owned subsidiary, entered into senior secured first lien credit facilities (the “Senior Secured Credit Facilities”), consisting of both a prepayable senior secured first lien term loan (the “Term Loan”) and a senior secured first lien revolving credit facility (the “Revolving Credit Facility”) pursuant to a first lien credit agreement (as amended through Amendment No. 5 (as defined below), the “Credit Agreement”). Amendment No. 5 increased the total borrowing capacity under the Revolving Credit Facility to$600.0 million. The Senior Secured Credit Facilities also provide SHH the right at any time and under certain conditions to request incremental term loans or incremental revolving credit commitments based on a formula defined in the Senior Secured Credit Facilities.
Current wording
On December 13, 2019, SHH, our wholly owned subsidiary, entered into senior secured first lien credit facilities (the “Senior Secured Credit Facilities”), consisting of both a prepayable senior secured first lien term loan (the “Term Loan”) and a senior secured first lien revolving credit facility (the “Revolving Credit Facility”) pursuant to a first lien credit agreement (as amended through Amendment No. 5 (as defined below), the “Credit Agreement”). Amendment No. 5 increased the total borrowing capacity under the Revolving Credit Facility to $600.0 million. The Senior Secured Credit Facilities also provide SHH the right at any time and under certain conditions to request incremental term loans or incremental revolving credit commitments based on a formula defined in the Senior Secured Credit Facilities.
Previous wording
Outstanding letters of credit are collateralized by encumbrances against the Revolving Credit Facility and the collateral pledged thereunder, or by cash placed on deposit with the issuing bank. As of April 30, 2025, the Company had $13.7 million of letters of credit issued against the Revolving Credit Facility, resulting in total availability under the Revolving Credit Facility of $586.3 million.
Current wording
Outstanding letters of credit are collateralized by encumbrances against the Revolving Credit Facility and the collateral pledged thereunder, or by cash placed on deposit with the issuing bank. As of June 30, 2025, the Company had $14.2 million of letters of credit issued against the Revolving Credit Facility, resulting in total availability under the Revolving Credit Facility of $585.8 million.
Previous wording
A comprehensive discussion of the Company’s critical accounting policies and management estimates made in connection with the preparation of the financial statements is included in Item 7 of our 2024 Form 10-K. There have been no significant changes in critical accounting policies, management estimates or accounting policies since the year ended December 31, 2024.
Current wording
A comprehensive discussion of the Company’s critical accounting policies and management estimates made in connection with the preparation of the financial statements is included in Item 7 of the Company’s 2024 Form 10-K. There have been no significant changes in critical accounting policies, management estimates or accounting policies since the year ended December 31, 2024.
Rearranged current paragraphs (10)
Current report — wording carried from elsewhere
(a)Adjusted Net Income and Adjusted EBITDA are non-GAAP financial measures. For more information regarding our calculation of Adjusted Net Income and Adjusted EBITDA, including information about their limitations as tools for analysis and a reconciliation of net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted Net Income and Adjusted EBITDA, please see the reconciliation included below in “Non-GAAP Financial Measures.”
Current report — wording carried from elsewhere
SG&A expenses increased $8.3 million, or 13.7%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. A $6.2 million increase in litigation and other professional services expense associated with EO sterilization facilities was the main driver of the increase in SG&A expenses.
Current report — wording carried from elsewhere
Interest expense, net increased $0.3 million, or 0.7%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to a decreased benefit from interest rate derivatives, partially offset by a lower interest rate on our Term Loan. The weighted average interest rate on our outstanding debt was 7.49% and 8.19% at June 30, 2025 and 2024, respectively.
Current report — wording carried from elsewhere
Net Income, Adjusted Net Income and Adjusted EBITDA
Current report — wording carried from elsewhere
The following table sets forth the components of our results of operations for the six months ended June 30, 2025 and 2024.
Current report — wording carried from elsewhere
Total cost of revenues accounted for approximately 45.0% and 46.7% of our consolidated net revenues for the six months ended June 30, 2025 and 2024, respectively.
Current report — wording carried from elsewhere
Foreign exchange loss was $0.9 million for the six months ended June 30, 2025 as compared to a gain $1.2 million loss in the six months ended June 30, 2024. The change in foreign exchange loss in our Consolidated Statements of Operations and Comprehensive Income (Loss) mainly relates to short-term losses (offset by short-term gains) on sales denominated in currencies other than the functional currency of our operating entities. As described in Note 15, “Financial Instruments and Financial Risk”, we enter into monthly U.S. dollar-denominated foreign currency forward contracts to manage foreign currency exchange rate risk related to our international subsidiaries.
Current report — wording carried from elsewhere
Provision for income taxes for the six months ended June 30, 2025 differed from the federal statutory rate primarily due to the valuation allowance attributable to the limitation on the deductibility of interest expense, the impact of the foreign rate differential and current year permanent tax differences, partially offset by a benefit for state income taxes. Income tax expense for thesix months ended June 30, 2024 differed from the statutory rate primarily due to the valuation allowance attributable to the limitation on the deductibility of interest expense and the impact of the foreign rate differential, partially offset by a benefit for state income taxes.
Current report — wording carried from elsewhere
Segment Results for the Six Months Ended June 30, 2025 and 2024
Current report — wording carried from elsewhere
The following tables compare segment net revenue and segment income for the six months ended June 30, 2025 to the six months ended June 30, 2024:
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Adjusted Net Income and Adjusted EBITDA to their most directly comparable financial measure calculated and presented in accordance with GAAP.
Previous report — wording carried elsewhere
Three Months Ended March 31, 2025 compared to the Three Months Ended March 31, 2024