Sotera Health Co
For the period ended Jun 30, 2026. Filed Aug 6, 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.
Jun 30, 2026 · Filed Aug 6, 2026
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 2026-03-31; filed 2026-05-05.
0001822479-26-000031
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001822479-26-000047
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 115 previous paragraphs and 161 current paragraphs.
71 unchanged; 37 reworded; 42 added; 6 removed; 1 previous and 11 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 (42)
Current report
Service revenues increased $21.1 million, or 8.2%, to $278.3 million for the three months ended June 30, 2026 as compared to $257.2 million for the three months ended June 30, 2025. The growth in net service revenues was primarily driven by pricing in the Sterigenics and Nelson Labs segments, favorable volume/mix across all three segments and changes in foreign currency exchange rates.
Current report
Product revenues increased $6.0 million, or 16.0%, to $43.1 million for the three months ended June 30, 2026 as compared to $37.1 million for the three months ended June 30, 2025. The increase was driven by higher revenues from Co-60 in the Nordion segment due to the timing of reactor harvest schedules and favorable pricing, partially offset by changes in foreign currency exchange rates.
Current report
SG&A expenses decreased $0.7 million, or 1.1%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, driven mainly by a decrease in litigation and other professional services expenses.
Current report
Loss on Refinancing of Debt
Current report
Loss on refinancing of debt for the three months ended June 30, 2026 was $0.9 million related to Amendment No. 7 to the Credit Agreement. Loss on refinancing of debt for the three months ended June 30, 2025 was $0.1 million related to Amendment No. 5 to the Credit Agreement. The refinancing activity resulted in the write off of certain unamortized debt issuance costs and discounts on the Term Loans. In addition, certain new debt issuance costs and discounts were expensed in connection with the Credit Agreement amendments.
Current report
Other income, net decreased $3.0 million, or 51.0%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, mainly arising from an unfavorable decrease in the net fair value of Nordion’s embedded derivatives for the three months ended June 30, 2026 compared to the same period of the prior year.
Current report
Provision for Income Taxes
Current report
Net Income, Adjusted Net Income and Adjusted EBITDA
Current report
Six Months Ended June 30, 2026 as compared to Six Months Ended June 30, 2025:
Current report
Total Net Revenues
Current report
The following table compares our net revenues by type for the six months ended June 30, 2026 to the six months ended June 30, 2025:
Current report
Net revenues were $601.4 million for the six months ended June 30, 2026, an increase of $52.6 million, or 9.6%, as compared to the six months ended June 30, 2025. Excluding the impact of foreign currency exchange rates, net revenues for the six months ended June 30, 2026 increased approximately 7.4% compared with the six months ended June 30, 2025.
Current report
Service revenues
Current report
Product revenues
Current report
Product revenues increased $13.8 million, or 20.4%, to $81.5 million for the six months ended June 30, 2026 as compared to $67.7 million for the six months ended June 30, 2025. The increase was driven by higher revenues from Co-60 in the Nordion segment due to the timing of reactor harvest schedules and favorable pricing.
Current report
Total Cost of Revenues
Current report
The following table compares our total cost of revenues by type for the six months ended June 30, 2026 to the six months ended June 30, 2025:
Current report
Cost of service revenues
Current report
Cost of service revenues increased $24.7 million, or 11.2%, for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The increase was driven by higher employee compensation costs, depreciation from capital assets recently placed into service, as well as expenditures for facility maintenance and direct materials. Changes in foreign currency exchange rates also had an unfavorable impact to cost of service revenues for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025.
Current report
Cost of product revenues
Current report
Cost of product revenues increased $4.8 million, or 18.7%, for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The increase was primarily a result of higher volumes of Co-60 shipments due to the timing of reactor harvest schedules, which resulted in increases in direct material and transportation costs.
Current report
SG&A expenses
Current report
Amortization of intangible assets
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, 2026 was $0.9 million related to Amendment No. 7 to the Credit Agreement. Loss on refinancing of debt for the six months ended June 30, 2025 was $0.1 million related to Amendment No. 5 to the Credit Agreement. The refinancing activity resulted in the write off of certain unamortized debt issuance costs and discounts on the Term Loans. In addition, certain new debt issuance costs and discounts were expensed in connection with the Credit Agreement amendments.
Current report
Foreign Exchange (Gain) Loss
Current report
Other Income, Net
Current report
Other income, net decreased $2.3 million, or 37.1%, for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, mainly arising from an unfavorable change in the net fair value of Nordion’s embedded derivatives for the six months ended June 30, 2026 compared to the same period of the prior year.
Current report
Provision for Income Taxes
Current report
Provision for income taxes increased $31.1 million to a net provision of $40.4 million for the six months ended June 30, 2026 as compared to $9.4 million for the six months ended June 30, 2025. The change was primarily attributable to higher pre-tax income for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, partially offset by a decrease in the impact of the valuation allowance attributable to the limitation on the deductibility of interest expense.
Current report
Net income for the six months ended June 30, 2026 was $80.2 million as compared to net loss of $5.3 million for the six months ended June 30, 2025 due to the factors described above. Adjusted Net Income was $126.3 million for the six months ended June 30, 2026 as compared to $95.1 million for the six months ended June 30, 2025, and Adjusted EBITDA was $300.4 million for the six months ended June 30, 2026, as compared to $272.6 million for the six months ended June 30, 2025. 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.
Current report
(b) Represents the write-off of unamortized debt issuance costs and discounts, as well as certain other costs incurred related to the Refinancing Term Loans and the Revolving Credit Facility.
Current report
Sterigenics net revenues were $211.6 million for the three months ended June 30, 2026, an increase of $16.7 million, or 8.6%, as compared to the three months ended June 30, 2025. The increase is attributable to favorable pricing of 4.3%, volume and mix of 2.7% as well as favorable changes in foreign currency exchange rates of 1.6%.
Current report
Nelson Labs net revenues were $60.7 million for the three months ended June 30, 2026, an increase of $3.6 million, or 6.3%, as compared to the three months ended June 30, 2025. The increase is attributable to favorable impacts from pricing of 2.8%, volume and mix of 2.6% and changes in foreign currency exchange rates.
Current report
Nelson Labs segment income was $19.6 million for the three months ended June 30, 2026, an increase of $0.1 million, or 0.6%, as compared to the three months ended June 30, 2025. Segment income increased as a result of favorable pricing and volume/mix. Segment income margin decreased due to higher costs.
Current report
Net Revenues by Segment
Current report
Sterigenics net revenues were $397.7 million for the six months ended June 30, 2026, an increase of $33.2 million, or 9.1%, as compared to the six months ended June 30, 2025. The increase is attributable to favorable pricing of 4.4%, volume and mix of 2.2% as well as changes in foreign currency exchange rates of 2.5%.
Current report
Segment Income
Current report
Sterigenics segment income was $214.5 million for the six months ended June 30, 2026, an increase of $18.8 million, or 9.6%, as compared to the six months ended June 30, 2025. The increase in segment income was primarily a result of favorable customer pricing, increases in volume and mix, partially offset by inflation.
Showing the first 40 of 42 passages. Open the source sections for the rest.
Removed paragraphs (6)
Previous report
Product revenues increased $7.9 million, or 25.7%, to $38.4 million for the three months ended March 31, 2026, as compared to $30.6 million for the three months ended March 31, 2025. 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 for the three months ended March 31, 2026 compared to the same period in the prior year as well as a benefit from changes in foreign currency exchange rates and favorable pricing.
Previous report
Illinois EO litigation settlement
Previous report
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, the Company agreed to pay $30.9 million to settle the claims.
Previous report
Other income, net increased $0.7 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The increase was a result of a more favorable change in the fair value of embedded derivatives in the Nordion segment compared to the same period in the prior year and an increase in pension income in the Nordion segment.
Previous report
Provision (Benefit) for Income Taxes
Previous report
Sterigenics net revenues were $186.1 million for the three months ended March 31, 2026, an increase of $16.5 million, or 9.7%, as compared to the three months ended March 31, 2025. The increase was driven by a favorable impact from pricing of 4.5%, a favorable impact from changes in foreign currency exchange rates of 3.6% and an increase in volume/mix of 1.6%.
Reworded paragraphs (37)
Previous wording
We serve our customers throughout their product lifecycles, from product design to manufacturing and delivery, helping to ensure the sterility, effectiveness and safety of their products for the end user. We operate across two core businesses: sterilization services and lab services. Each of our businesses has a longstanding record and is a leader in its respective market, supported and connected by our core capabilities including deep end market, regulatory, technical and logistics expertise. The combination of Sterigenics, our terminal sterilization business, and Nordion, our Co-60 supply business, makes us the only vertically integrated global gamma sterilization provider in the sterilization industry. This provides us with additional insights and allows us to better serve our customers. For financial reporting purposes, our sterilization services business is comprised of two reportable segments, Sterigenics and Nordion, and our lab services business constitutes a third reportable segment, Nelson Labs.
Current wording
We serve our customers throughout their product lifecycles, from product design to manufacturing and delivery, helping to ensure the sterility, effectiveness and safety of their products for the end user. We operate across two core businesses: sterilization services and lab services. Each of our businesses has a longstanding record and is a leader in its respective market, supported and connected by our core capabilities including deep end market, regulatory, technical and logistics expertise. The combination of Sterigenics, our terminal sterilization business, and Nordion, our Co-60 supply business, makes us the only vertically integrated global gamma sterilization provider in the sterilization industry. For financial reporting purposes, our sterilization services business is comprised of two reportable segments, Sterigenics and Nordion, and our lab services business constitutes a third reportable segment, Nelson Labs.
Previous wording
For the three months ended March 31, 2026, we recorded net revenues of $280.0 million, net income of $26.6 million, Adjusted Net Income of $52.4 million and Adjusted EBITDA of $134.7 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, 2026, respectively, we recorded net revenues of $321.4 million and $601.4 million, net income of $53.6 million and $80.2 million, Adjusted Net Income of $74.0 million and $126.3 million, and Adjusted EBITDA of $165.7 million and $300.4 million. Adjusted Net Income and Adjusted EBITDA are financial measures not based on any standardized methodology prescribed by 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 $280.0 million for the three months ended March 31, 2026, an increase of $25.5 million, or 10.0%, as compared with the three months ended March 31, 2025. Excluding the impact of foreign currency exchange rates, net revenues for the three months ended March 31, 2026 increased approximately 6.5% compared with the three months ended March 31, 2025.
Current wording
Net revenues were $321.4 million for the three months ended June 30, 2026, an increase of $27.0 million, or 9.2%, as compared to the three months ended June 30, 2025. Excluding the impact of foreign currency exchange rates, net revenues for the three months ended June 30, 2026 increased approximately 8.0% compared with the three months ended June 30, 2025.
Previous wording
Total cost of revenues accounted for approximately 47.5% and 46.8% of our consolidated net revenues for the three months ended March 31, 2026 and 2025, respectively.
Current wording
Total cost of revenues accounted for approximately 44.6% and 43.4% of our consolidated net revenues for the three months ended June 30, 2026 and 2025, respectively.
Previous wording
Cost of service revenues increased $11.2 million, or 10.4%, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The increase was driven by higher employee compensation costs, depreciation from capital assets recently placed into service, and an increase in direct material costs driven mainly by higher volumes. Changes in foreign currency exchange rates had a $3.8 million unfavorable impact to cost of service revenues for the three months ended March 31, 2026 compared to the same period in the prior year.
Current wording
Cost of service revenues increased $13.5 million, or 12.0%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The increase was driven by higher employee compensation costs and depreciation from capital assets recently placed into service. Changes in foreign currency exchange rates resulted in an unfavorable impact to cost of service revenues for the three months ended June 30, 2026.
Previous wording
Cost of product revenues increased $2.7 million, or 23.4%, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The increase was primarily a result of higher volumes of Co-60 shipments, which resulted in increases in direct material and material transportation costs. Changes in foreign currency exchange rates had an unfavorable impact to cost of product revenues for the three months ended March 31, 2026 compared to the same period in the prior year.
Current wording
Cost of product revenues increased $2.1 million, or 14.9%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The increase was primarily a result of higher volumes of Co-60 shipments due to the timing of reactor harvest schedules, which resulted in increases in direct material and transportation costs.
Previous wording
Amortization of intangible assets decreased $12.3 million, or 80.2% for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The decline was primarily due to certain intangible assets that were fully amortized in May 2025.
Current wording
Amortization of intangible assets decreased $6.3 million to $3.0 million, or 67.6%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The decline was primarily due to certain intangible assets that were fully amortized in May 2025.
Previous wording
Interest expense, net decreased $6.1 million, or 15.0%, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily due to a lower variable interest rate on our Term Loan and a $75.0 million principal paydown. The weighted average interest rate on our outstanding debt for the three months ended March 31, 2026 and March 31, 2025 was 6.62% and 7.56%, respectively.
Current wording
Interest expense, net decreased $6.2 million, or 15.4%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, primarily due to a lower interest rate on our Term Loan and a $75.0 million principal paydown. The weighted average interest rate on our outstanding debt was 6.49% and 7.49% for the three months ended June 30, 2026 and 2025, respectively.
Previous wording
Foreign exchange gain was $0.6 million for the three months ended March 31, 2026 compared to a loss of $0.3 million for the three months ended March 31, 2025. The change in foreign exchange (gain) loss mainly relates to short-term gains and losses on transactions denominated in currencies other than the functional currency of our operating entities.
Current wording
Foreign exchange gain was $3.7 million for the three months ended June 30, 2026 as compared to a loss of $0.6 million for the three months ended June 30, 2025. The change in foreign exchange (gain) loss in our Consolidated Statements of Operations and Comprehensive Income mainly relates to short-term gains and losses on transactions and certain assets and liabilities denominated in currencies other than the functional currency of our operating entities.
Previous wording
The Company recognized a $16.0 million provision for income taxes for the three months ended March 31, 2026, as compared to a $1.6 million income tax benefit for the three months ended March 31, 2025. The change was primarily attributable to pre-tax income for the three months ended March 31, 2026 compared to pre-tax loss for the three months ended March 31, 2025, partially offset by a decrease in the impact of the valuation allowance attributable to the limitation on the deductibility of interest expense.
Current wording
Provision for income taxes increased $13.5 million to a net provision of $24.4 million for the three months ended June 30, 2026 as compared to $10.9 million for the three months ended June 30, 2025. The change was primarily attributable to higher pre-tax income for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, partially offset by a decrease in the impact of the valuation allowance attributable to the limitation on the deductibility of interest expense.
Previous wording
Provision for income taxes for the three months ended March 31, 2026 differed from the statutory rate primarily due to the foreign rate differential, current year permanent differences, including foreign withholding taxes and other non-deductible items, and U.S. state income taxes (net of federal tax benefit). Provision 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.
Current wording
Provision for income taxes for the three months ended June 30, 2026 differed from the federal statutory rate primarily due to the foreign rate differential, current year permanent differences, including foreign withholding taxes and other non-deductible items, and U.S. state income taxes (net of federal tax benefit). Income tax expense for the three months ended June 30, 2025 differed from the 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.
Previous wording
Net income for the three months ended March 31, 2026 was $26.6 million, as compared to a net loss of $13.3 million for the three months ended March 31, 2025. Adjusted Net Income was $52.4 million for the three months ended March 31, 2026, as compared to $39.0 million for the three months ended March 31, 2025, due to the factors described above. Adjusted EBITDA was $134.7 million for the three months ended March 31, 2026, as compared to $121.8 million for the three months ended March 31, 2025, due to the factors described above. 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.
Current wording
Net income for the three months ended June 30, 2026 was $53.6 million as compared to net income of $8.0 million for the three months ended June 30, 2025 due to the factors described above. Adjusted Net Income was $74.0 million for the three months ended June 30, 2026, as compared to $56.1 million for the three months ended June 30, 2025, and Adjusted EBITDA was $165.7 million for the three months ended June 30, 2026 as compared to $150.7 million for the three months ended June 30, 2025. 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
Service revenues increased $17.7 million, or 7.9%, to $241.6 million for the three months ended March 31, 2026, as compared to $223.9 million for the three months ended March 31, 2025. Net service revenue growth was driven by favorable pricing in the Sterigenics and Nelson Labs segments, an increase in volume/mix in the Sterigenics and Nordion segments and a benefit from changes in foreign currency exchange rates across all segments, partially offset by a decline in volume and mix in the Nelson Labs segment.
Current wording
Service revenues increased $38.7 million, or 8.1%, to $519.9 million for the six months ended June 30, 2026 as compared to $481.2 million for the six months ended June 30, 2025. The growth in net service revenues was primarily driven by pricing in the Sterigenics and Nelson Labs segments, favorable volume/mix in the Sterigenics and Nordion segments and changes in foreign currency exchange rates.
Previous wording
SG&A expenses increased $5.2 million, or 8.2%, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The increase was mainly attributable to an increase in share-based compensation expense, partially offset by a decrease in litigation and other professional services expense associated with EO sterilization facilities.
Current wording
SG&A expenses increased $4.4 million, or 3.3%, for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The increase was primarily driven by higher employee compensation costs mainly attributable to share-based compensation expense, partially offset by a decrease in litigation and other professional services expenses.
Previous wording
•certain recurring non-cash charges such as depreciation of fixed assets, although these assets may have to be replaced in the future, as well as amortization of acquired intangible assets and asset retirement obligations (“ARO”);
Current wording
•certain recurring non-cash charges such as depreciation of fixed assets, although these assets may have to be replaced in the future, as well as amortization of acquired intangible assets and ARO;
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 (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 secondary offerings and shareholder engagement.
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
(d)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
(e) 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.
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.
Previous wording
(f)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 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.
Previous wording
(h)Includes depreciation of Co-60 held at gamma irradiation sites and excludes accelerated depreciation associated with business optimization activities.
Current wording
(i) Includes depreciation of Co-60 held at gamma irradiation sites and excludes accelerated depreciation associated with business optimization activities.
Previous wording
(i) Represents the difference between the income tax provision as determined under U.S. GAAP and the income tax benefit associated with pre-tax adjustments described in footnote (g).
Current wording
(j)Represents the difference between the income tax provision as determined under GAAP and the income tax benefit associated with pre-tax adjustments described in footnote (h).
Previous wording
(j) $26.3 million and $24.2 million of the adjustments for the three months ended March 31, 2026 and 2025, respectively, are included in cost of revenues, primarily consisting of amortization of intangible assets, depreciation, and accretion of asset retirement obligations.
Current wording
(k) $28.9 million and $24.4 million of the adjustments for the three months ended June 30, 2026 and 2025, respectively, and $55.2 million and $48.6 million of the adjustments for the six months ended June 30, 2026 and 2025, 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. 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 CODM evaluates performance and allocates resources within our business based on segment income, which excludes certain items which are included in income before income tax as determined in our Consolidated Statements of Operations and Comprehensive Income. The accounting policies for our reportable segments are the same as those for the consolidated Company.
Previous wording
Sterigenics provides outsourced terminal sterilization and irradiation services for the medical device, pharmaceutical, food safety and advanced applications markets using three major technologies: gamma irradiation, EO processing and E-beam irradiation.
Current wording
Sterigenics provides outsourced terminal sterilization and irradiation services for the medical device, pharmaceutical, food safety and advanced applications markets using four major technologies: gamma irradiation, EO processing, E-beam and X-Ray irradiation.
Previous wording
Nordion net revenues were $42.0 million for the three months ended March 31, 2026, an increase of $9.5 million, or 29.0%, as compared to the three months ended March 31, 2025. Revenue growth was driven mainly by volume and mix of 23.7%, which was largely attributable to favorable Co-60 harvest schedule timing, coupled with a favorable impact from changes in foreign currency exchange rates and pricing of 3.2% and 2.1%, respectively.
Current wording
Nordion net revenues were $49.1 million for the three months ended June 30, 2026, an increase of $6.7 million, or 15.8%, as compared to the three months ended June 30, 2025. Revenue growth was driven mainly by volume and mix of 13.6%, which was largely attributable to favorable Co-60 harvest schedule timing, coupled with a favorable impact from pricing of 3.1%, partially offset by changes in foreign currency exchange rates.
Previous wording
Sterigenics segment income was $96.4 million for the three months ended March 31, 2026, an increase of $8.4 million, or 9.6%, as compared to the three months ended March 31, 2025. Segment income increased primarily due to a benefit from pricing, favorable changes in foreign currency exchange rates and an increase in volume/mix, partially offset by higher costs.
Current wording
Sterigenics segment income was $118.1 million for the three months ended June 30, 2026, an increase of $10.4 million, or 9.6%, as compared to the three months ended June 30, 2025. The increase in segment income and segment income margin was primarily a result of favorable customer pricing, increases in volume and mix, partially offset by inflation.
Previous wording
Nordion segment income was $23.7 million for the three months ended March 31, 2026, an increase of $6.3 million, or 36.1%, as compared to the three months ended March 31, 2025. The increase in segment income and segment income margin was primarily driven by higher volume and mix due to favorable Co-60 harvest schedule timing, along with favorable changes in pricing and foreign currency exchange rates, partially offset by inflation.
Current wording
Nordion segment income was $28.0 million for the three months ended June 30, 2026, an increase of $4.5 million, or 19.2%, as compared to the three months ended June 30, 2025. The increase in segment income and segment income margin was primarily driven by higher volume and mix due to favorable Co-60 harvest schedule timing, along with favorable changes in pricing and foreign currency exchange rates, partially offset by inflation.
Previous wording
Nelson Labs net revenues were $51.9 million for the three months ended March 31, 2026, a decrease of $0.4 million, or 0.7%, as compared to the three months ended March 31, 2025. The decrease in net revenues was due to an unfavorable change in volume and mix of 6.6% offset by a benefit from changes in foreign currency exchange rates and pricing of 3.1% and 2.8%, respectively.
Current wording
Nelson Labs net revenues were $112.6 million for the six months ended June 30, 2026, an increase of $3.2 million, or 2.9%, as compared to the six months ended June 30, 2025. The increase is attributable to favorable impacts from pricing and changes in foreign currency exchange rates of 2.8% and 2.0%, respectively, partially offset by an unfavorable change in volume and mix.
Previous wording
Nelson Labs segment income was $14.5 million for the three months ended March 31, 2026, a decrease of $1.9 million, or 11.5%, as compared to the three months ended March 31, 2025. The decrease in segment income and segment income margin was attributable to lower volume/mix, partially offset by a favorable impact from pricing and changes in foreign currency exchange rates.
Current wording
Nelson Labs segment income was $34.2 million for the six months ended June 30, 2026, a decrease of $1.8 million, or 4.9%, as compared to the six months ended June 30, 2025. Segment income and segment income margin decreased as a result of lower volume/mix and increases in other direct costs, partially offset by 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, 2026, we had $315.9 million of cash and cash equivalents, a decrease of $30.5 million from the balance at December 31, 2025. The decrease in cash and cash equivalents was mainly attributable to the $34.0 million payment for the July 2025 Illinois EO litigation settlement, $46.2 million of cash paid for purchases of property, plant and equipment and $12.8 million of cash used in financing activities. This was partially offset by $63.4 million of cash flows provided by operating activities exclusive of the Illinois EO litigation settlement payment. Our foreign subsidiaries held cash of approximately $282.0 million at March 31, 2026 and $253.4 million at December 31, 2025. 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, 2026, we had $356.7 million of cash and cash equivalents. This is an increase of $10.3 million from the balance at December 31, 2025. The increase in cash and cash equivalents was primarily attributable to $117.9 million of cash flows provided by operating activities, reduced by $92.6 million of cash paid for purchases of property, plant and equipment and $15.2 million of cash used in financing activities. Our foreign subsidiaries held cash of approximately $306.5 million at June 30, 2026 and $253.4 million at December 31, 2025. No material restrictions exist on 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, 2026, our capital expenditures amounted to $46.2 million, compared to $19.9 million for the three months ended March 31, 2025.
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, 2026, our capital expenditures amounted to $92.6 million, compared to $51.1 million for the six months ended June 30, 2025.
Previous wording
Cash flows provided by operating activities decreased $26.1 million to net cash provided of $29.4 million for the three months ended March 31, 2026 compared to $55.5 million for the three months ended March 31, 2025. The decrease in cash flows provided by operating activities for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily driven by the $34.0 million payment of the Illinois EO litigation settlement, partially offset by a $10.9 million decrease in cash paid for interest.
Current wording
Cash flows provided by operating activities increased $5.0 million to net cash provided of $117.9 million for the six months ended June 30, 2026 compared to $112.9 million of net cash provided by operating activities for the six months ended June 30, 2025. The increase in cash flows provided by operating activities was primarily driven by higher gross profit and a decrease in cash paid for interest, partially offset by the $34.0 million payment of the Illinois EO litigation settlement paid in February 2026.
Previous wording
Cash used in investing activities increased $25.2 million to net cash used of $45.1 million for the three months ended March 31, 2026 compared to $19.9 million for the three months ended March 31, 2025. The variance was mainly driven by an increase in capital expenditures of $26.2 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Current wording
Cash used in investing activities increased $37.3 million to net cash used of $88.4 million for the six months ended June 30, 2026 compared to $51.1 million for the six months ended June 30, 2025. The variance was primarily driven by an increase in cash paid for capital expenditures of $41.5 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Previous wording
Cash used in financing activities increased by $4.7 million to $12.8 million for the three months ended March 31, 2026 compared to $8.1 million for the three months ended March 31, 2025. The difference was due mainly to a $5.2 million increase in cash flows used in shares withheld for employee taxes on equity awards.
Current wording
Cash used in financing activities increased $0.2 million to net cash used of $15.2 million for the six months ended June 30, 2026 compared to $15.0 million for the six months ended June 30, 2025. The increase in cash used in financing activities was mainly attributable to a $5.4 million increase in cash used in shares withheld for employee taxes on equity awards, partially offset by a $4.0 million decrease in cash paid for repayments of debt and a $1.4 million decrease in cash paid for debt issuance costs.
Previous wording
On May 30, 2024, SHH, the Company, certain subsidiaries of the Company, and Wilmington Trust, National Association, as trustee, paying agent, registrar, transfer agent and notes collateral agent, entered into an Indenture (the “Indenture”) governing SHH’s $750.0 million aggregate principal amount of 7.375% senior secured notes due 2031 (the “Secured Notes”) issued in May 2024.
Current wording
On May 30, 2024, SHH, the Company, certain subsidiaries of the Company, and Wilmington Trust, National Association, as trustee, paying agent, registrar, transfer agent and notes collateral agent, entered into the Indenture governing SHH’s $750.0 million aggregate principal amount of the Secured Notes issued in May 2024.
Rearranged current paragraphs (11)
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
The following table sets forth the components of our results of operations for the six months ended June 30, 2026 and 2025.
Current report — wording carried from elsewhere
Total cost of revenues accounted for approximately 46.0% and 45.0% of our consolidated net revenues for the six months ended June 30, 2026 and 2025, respectively.
Current report — wording carried from elsewhere
Amortization of intangible assets decreased $18.6 million to $6.0 million, or 75.4%, for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The decline was primarily due to certain intangible assets that were fully amortized in May 2025.
Current report — wording carried from elsewhere
Interest expense, net decreased $12.4 million, or 15.2%, for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, primarily due to a lower variable interest rate on our Term Loan and a $75.0 million principal paydown. The weighted average interest rate on our outstanding debt was 6.56% and 7.53% for the six months ended June 30, 2026 and 2025, respectively.
Current report — wording carried from elsewhere
Foreign exchange gain was $4.3 million for the six months ended June 30, 2026 as compared to a $0.9 million loss for the six months ended June 30, 2025. The change in foreign exchange (gain) loss in our Consolidated Statements of Operations and Comprehensive Income mainly relates to short-term gains and losses on transactions and certain assets and liabilities denominated in currencies other than the functional currency of our operating entities.
Current report — wording carried from elsewhere
Provision for income taxes for the six months ended June 30, 2026 differed from the federal statutory rate primarily due to the foreign rate differential, current year permanent differences, including foreign withholding taxes and other non-deductible items, and U.S. state income taxes (net of federal tax benefit). Income tax expense for thesix months ended June 30, 2025 differed from the 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.
Current report — wording carried from elsewhere
Segment Results for the Six Months Ended June 30, 2026 and 2025
Current report — wording carried from elsewhere
The following tables compare segment net revenue and segment income for the six months ended June 30, 2026 to the six months ended June 30, 2025:
Current report — wording carried from elsewhere
Nordion net revenues were $91.2 million for the six months ended June 30, 2026, an increase of $16.2 million, or 21.6%, as compared to the six months ended June 30, 2025. Revenue growth was driven mainly by volume and mix of 18.1%, which was largely attributable to favorable Co-60 harvest schedule timing, coupled with a favorable impact from pricing of 2.7% and changes in foreign currency exchange rates.
Current report — wording carried from elsewhere
Nordion segment income was $51.7 million for the six months ended June 30, 2026, an increase of $10.8 million, or 26.4%, as compared to the six months ended June 30, 2025. The increase in segment income and segment income margin was primarily driven by higher volume and mix due to favorable Co-60 harvest schedule timing, along with favorable changes in pricing and foreign currency exchange rates, partially offset by inflation.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Three Months Ended March 31, 2026 compared to the Three Months Ended March 31, 2025