Sotera Health (SHC) 9 Mar 212020 Q4 Earnings call transcript

Welcome to the Sotera Health Fourth Quarter and Full Year 2020 Earnings Call. The company would like me to read the following forward-looking statement on their behalf. Today, Sotera Health will be discussing its fourth quarter and year-end 2020 results, along with its 2021 outlook.

You can find today's press release and accompanying supplemental slides on the IR section of the company's website at soterahealth.com. This webcast is being recorded, and a replay will be available on the IR section of the Sotera Health website for at least 1 year. Michael Petras, Chairman and Chief Executive Officer; and Scott Leffler, Chief Financial Officer, will be making comments on today's call, followed by a question-and-answer period.

During the call, some of the company's statements may be considered forward-looking statements. these could subject differ cause those or in and the materially addressed projected that uncertainties actual implied. matters statements to are risks from The results to statements SEC earnings Health's for a risks and company's of these presentation the of uncertainties. to the beginning refer the Please forward-looking and slide description at Sotera filings

including measures CEO, EPS Sotera to now Health the will found during update Health's Petras. Michael GAAP discussion earnings net the attached all earnings GAAP today, the to Sotera non-GAAP and the I Instructions] non-GAAP A present turn and forward-looking reconciliation for be the both adjusted relevant such periods assumes any to no adjusted in financial presentation. [Operator in ratio. leverage measures, call can press over company and release Chairman and schedules obligation that statements. Please to EBITDA, will of note

company. Health's all kick our such on like of operator. team call as you, representing we're joining for start history. Thank us Health Sotera public very have today. who important morning, members building you global an Good first thanking part chapter by in earnings thank to this that new and We're excited Sotera our I'd everyone, been a the off to

in wanted serve open be uniquely a still familiarizing themselves in of and the customers X,XXX associates we we with With value even story tireless to that some quick the are mind, live us in to mission who Our public, sector their who with recently in I approximately went global environment. Considering are. the care this call and recap company's there our that and investment allowed safeguarding the might continue to our it's community breathe proposition. health health, of dedication challenging has that

the months few a of delivered reporting our very vast be majority The our were safety and services, pay used when for units, background, in to to tenure we health years and year. Nordion bit only our leading help proceeds. sterilization issued business in the to of sterilization Labs. global global Nelson using Nordion and provider major the little gamma a of best-in-class end-to-end patient processing world assess the review ensure business strong proceeds care and our Sterigenics Together, irradiation, irradiation. and industry. health and of been ethylene lab the the of I'm end-to-end primarily and pharmaceutical care complete around global testing sterility network to range only a growth we sterilization Labs debt. Sterigenics, mission-critical provide advisory sterilization advisory XXXX. testing sterilization provides scientific are integrated Nordion We X our since components Sotera product to technological across public key customers XX% which lab and offers the serve provider industry. Sterigenics' and highlights. It's to the combined billion results and gamma market process. services terminal electron our recent shares services, and device technologies, a leading With gamma of industry. mission-critical of through sterilization X outsourced let's is pleased of industry-recognized patients and the customers health solutions gamma global Nordion the vertically sterilization with continue $X.X in our every products. With some Cobalt-XX provider irradiators, and which the services results are generated and oxide care to solid the is practitioners effectiveness, millions IPO medical that Health of XXX financial We these nearly Nelson company's of comprehensive and of a November Sterigenics down quality, beam outstanding safety expertise, today.

For the XX% XX% for growth we of $X.XX. year and the reported EPS of EPS reported And XXXX, adjusted fourth and of we adjusted of growth EBITDA X%, growth full of adjusted EBITDA $X.XX. revenue adjusted revenue XX%, quarter, growth of

performance for how masks to and important and gowns, solidify and our year, all on Our business the creating services testing the pharma which of barrier performed health safe products, needs employees really devices workers critical year, capped global sector. care helped protective quarter the is the the fourth meeting health to We are Throughout pandemic. focused care sterilize our a and medical patients. and we devices environment while to like customers,

business across organic combination were excellence we and our For able achieve year, of operational to growth a the through growth initiatives.

to During satisfying services. to to pace testing additional XXXX, capacity customers' capital invest relative and keep our with continued we needs

will lines to efforts focus the deployment along We to these order reinvest future. in for continue capital

examples, As strategic X Nordion at and Sterigenics supply and in invest projects to long-term Nordion including Sterigenics. at X both continue projects development initiatives, cobalt expansion capacity

the build-out by our of year of On of microbiological the side, the we excellence complete XXXX. center European expect Nelson end the Labs to

continue the allowed combined reduce and This year. proceeds as in to to additional debt of we increased our also term approximately expense million leverage and expected is the the our almost revolving the of has credit us IPO paydown. quarter deleveraging facility X.Xx We The interest to the have loan $XXX XXXX, for per allocated towards XXXX, end repricing year-end, the debt prioritize liquidity. at size first all with of EBITDA of from save of paydown to of of adjusted

efficiency both driver business operational projects will several well excellence an as margin expansion. for for on units. focus to executing continue has are our across This operational a Health be a and been continued of perspective all We as Sotera from

is helpful performance. With and for information year $XXX understanding begin EPS for factors range with We've to out adjusted approximately which range XX%; want time approximately backdrop, well guidance. $XXX in the million that total of expect our In $XXX be we providing and qualitative in to our to XXXX, the of to to the variations relevant overall to first detail, what calls, sharing are of in million, are as Scott see by earnings full currently EBITDA any adjusted XX%; in including million, may revenues of to Regarding in outlook, $X.XX. of on approach we million will point we to $X.XX growth we the representing the I trends XX% to the growth business timing X% on range seasonality guidance the relating XXXX $XXX cover will most connection not we cadence. of: since highlighting equates more describing focus full outlook believe as what quarters, our we the chosen investors. or are the this the if this that year assumptions

like As entire to with I a who their to now more our to conclude Health many had employees of to I the proud and of a my both thank executed support your achieved our into Sotera turn in with dedication. I'll exiting during and the challenges focused again results, review want We and enjoyed personal as entering commitment of our accomplishments global IPO, minute know analysts pandemic. on and We you the cover remarkable provides our foundation the employees we The discussions operational a and remarks, and our level for stayed challenging well. us, operating our their thank a and while commitment of professional equity the extremely team and am during Sotera all how we strong XXXX. and us call of over XXXX. To we've XXXX dealing in very and thoughtful Scott capital success team I XXXX more both result take our Health. The investors their since for XXXX guidance. depth structure Scott? insights continued financial emphasize XXXX

comments QX and I'll a like on outlook. XXXX high cover to XXXX quickly and Michael. business level year then with at by provide our I'd balance sheet end unit. more full our Thanks, and information financials some

For from grew margin points $X.XX $X.XX to XXXX. up of from EPS EBITDA million. by to of $XXX million, adjusted by drove strong benefiting share, operating XXX $XXX per the adjusted That EBITDA expansion. quarter, QX basis Adjusted XX% of revenue grew performance XX%

adjusted by the For the reflect $X.XX fully expense in to prior million. debt $X.XX An resulted and XXXX EBITDA don't full in recent impact interest note, to results XX% XXXX decline year $X.XX. year which slight basis EPS to by as a full We we by Please margins rate grew year repricing, by on $XXX adjusted XXX QX the X% in year, increase in million. $XXX have EPS. EBITDA revenue paydown a over and grew points expanded adjusted run to adjusted expect

look a unit take closer delivered XX% segment let's Sterigenics revenue and Next, QX, XX% performance. In business income growth. growth at

segment and X%. grew by about For the X% Sterigenics revenue year, income by almost

partially of network. X%. some basis facility Willowbrook its down organic and X%, each Focusing year margins the year Sterigenics ramped the offset as facility closure. about on headwinds contributed of residual about our and almost being from installation for performance enhancements impacts were from capacity and acquisition by XXX contributed EO Atlanta up across Iotron pricing and Segment points drivers, quarter facility some growth full the by expanded income both utilization the volume the during Those

million. Sterigenics, reported We growth future $XX of referenced, to facilities X and income approximately EO the QX for America capacity growth segment enhancements expansion emission as of XX% revenue invest our and, to projects. Nordion including North continue active control Michael $XX of to XX% at million

with as our Nordion were Cobalt-XX. XXXX $XX expanded year by line the basis slightly of QX favorable down over flat can approximately for $XXX income income price the Nordion's variable That X%. Shipments full cobalt. in more you a line. Nelson and important industrial-use volumes QX by as for almost mind to results bottom X%. Nordion for million normalizes is QX than revenue by a as XX% effect saw That's segment quarter one decline the Nordion's drove were from XXX year, contributed points suppliers revenues medical-use Labs Cobalt-XX results to decline favorable based was full increased delayed what to than prior on how grew deliveries to top into by for over increases year see the top It's to mix million. only XX% from we the which And in XXXX. bear and of slight For harvesting relatively year by a Segment in can XXXX in $XX were segment that more always industrial-use next and typically the for schedules the grew schedules X% impacted supplier be both margins harvest million, line. some income time. revenue Cobalt-XX year. Nordion's

and ensuring to sales top Labs protective margin line $XX margins margin Nelson result delivery bottom has to performance safe as income basis equipment. list segment Nelson expansion. testing, business and continuous income a under a million. President driven standpoint, year. The which points improvement. for segment very operational that is grew Joe barriers year, million critical Nelson demand XXX The contributed of our well embraced to The the growth nearly performed company-wide $XXX of by full OpEx QX from was achievements and XXX drove the last points the for Labs team new line XX% prioritization basis X% for Shrawder, for For segment to by Labs of protective personal by grew outstanding year excellence team, expanding long really is the this

Moving balance sheet. to our

CapEx Sotera budgeted Health of to have projects. prior promote to normal safeguarding overall as In mission on lower in pandemic our QX, our than company's the to the impacted XXXX, of continue been invest to spend ability health. levels global We the platform

addition, Iotron capacity. add to of In opportunity acquisition another represented the

spend QX capacity Our CapEx several Labs. and at enhancements included $XX EO to relating expansions of Sterigenics million and Nelson facility

about we year, CapEx. spent million on the For $XX

Cobalt-XX continued addition $XXX we year. previously, development an Sterigenics EO expect Nelson related and in expanded finished increase million for last the sources capabilities investment the mentioned of capacity in we Labs. We Nordion, fund million new with next years of several year new to enhancements to do of $XX cash, and from As in investments and almost projects for facility as be to the for

was announced forma that efforts. that The Xx than adding XX-month needs all pro net XXXX, and $XXX lien of incremental In to have $XXX down operational QX the interest of more proceeds were million, to trailing undertook a combined leverage highest used retiring expense also revolver we our availability our more $XXX more financing solid way reduction million. position liquidity. liquidity to company debt, is million in activity than as result in we of of of our pay leverage resulted including the believe cash interest and substantial going notes. IPO public, deleveraging in cost revolver net the December, than We X.Xx. of investments. We and the and upsized we that Prior debt, to December most With our second from dropped fund

net further to pleased As as long-term our continue leverage leverage of our and intend to priorities. reduced levels XXXX, has of target Xx progress this capital the year-end in deployment with range one very X.Xx. towards paydown debt We're to with Xx

In a be by successful which paydown, substantial. highly term addition and repricing our paydown also interest around the to current expense debt our loan, recently X.XX%. on interest impact of will repricing rate combined reduced the The announced we effective of debt

deployed We free million any reinvestment the priorities approximately flow to on growth, accelerate run significant and be a charges full we amount with to a reported opportunistic from That $XXX infrastructure can that for paydown before onetime expense decline to in acquisitions. $XXX transaction. $XX other or expect will to basis that generate million additional interest associated million year as then of the rate such reduction cash debt XXXX

to I XXXX our want additional color Finally, outlook. provide around

As the Michael and quantitative mentioned, to summary our start full provide with assumptions. intent year our finish with guidance. is I'll

expect shares XX%; million range to guidance we're rate of of EPS are is million, largely on in shares XXXX; of that as to second, providing net basis. There average average we total $XXX calling to referenced million in I in weighted comments note adjusted of range approximately XX% of X $X.XX weighted additional IPO we're our first, that X% savings in guidance. From our savings quantitative million million, EPS the growth $XXX representing full standpoint, XXX to a debt $XXX interest XX%; $XXX share in growth increase due in applicable earlier, to count our follows. a our a out: to and repricing outstanding revenues $XXX the of: the and our year-over-year diluted EBITDA approximately is million qualitative of approximately to a as year of the to XXX For and reflected adjusted XXXX, range from approximately $X.XX; in income annually and million of representing expense adjusted fully loan, the the of paydown term of XX%; tax range impact the of the are assumptions adjusted November

are the We the improvement year. procedure and steady volumes throughout economy an the anticipating in normalization of

points quarterly are As X reporting, at the we of look cadence there main emphasize. to

and about large balance for this there Cobalt-XX. result one performance lot in schedules part second will between that the always how quarter there's be the possibility from of a on year by the harvest in year. first another. talked orders schedule half Nordion's we see even harvesting Cobalt-XX relatively the First, variability in the half shaping the shifting that, we Based in driven deliveries think said up for can changes year, of into the a we Having

what of the to with current more Second, based of on provide us, year able our XX-K behind more we're the first filing, already months update an quarter we seeing we than the than timing in of million expect X on the this in QX far, provide at From $XXX to so million. $XXX expectations would range stage. we're normally of be to revenues quarter

XX of wouldn't of FX year This a see EBITDA ramp full adjusted and to beginning based to our change requirements. expansion new effect being of XXXX filing in adjusted standpoint, related quarter to meeting expect on on XX a margin in SEC as the up rates margin and requirements, Sarbanes-Oxley an points first such XXXX. first is with compliance as EBITDA our basis We exchange guidance expectation the basis. From compression public to we compared quarter the as of company spend of

we're a amount acquisitions past, CapEx That EO mentioned lot, Cobalt-XX initiatives, debt And any continue earmarked to was million as related $XXX that growth to $XXX range we that of identify take to and during to the happy year. in and we for special Q&A. new repayment $XX million the enhancements in project opportunistic the year. expect to prioritize million communicated supply about know we've I we spend throughout this development. I the will questions facility As earlier, be includes spend and

Michael call put we things you. Michael, into position I wrap beyond. the to to XXXX are turn proud back team. echo work about entire has up, Sotera in back Health earlier wanted I of to helped how heading strong a comments the his Their and to Before

we're Sotera through and you, our I our and very more the satisfying especially us with for leading question that, considering period, Overall, them like part facing pleased with up journey. the invite company proud Scott. team please. open Thank of fourth in and performance the it's for unique to quarter and analysts to With XXXX, investors be especially for challenges this and world. able engage of couldn't it operator, the Health be to I'd for to answers, our be the equity

from Miksic [Operator our Suisse. the Instructions] first And line Matt question, of coming with Credit

Great.

the of for demand us some devices and And that markets devices preparing falling of have in maybe over the rising have for and with welcome -- of If to some the color have terms could in markets characteristics color line appreciate I of follow-up. customers, So the impacted last you end in what of for And with and earnings your Maybe a and used terms in exposure the months seeing end we exposure start general and the ebbs all QX. your some represent on then informing surgery to several QX. if solid and supplies call the say, on recovery? your broader how -- what's business one flows top just first of or or certainly to start. driving those of that I you're results or

I'll address Okay. questions. Thanks Michael. It's to try your for joining.

We then July, period, May, into and did the volume of some saw, and like had fell out if the started other side started January. positive we of you follow, come the XXXX over kind we pretty will, And move April, to the see, in procedures on to to you in June, off. get you start clearly to into a kind direction. volume good. And we companies season second dip that So starting started the of fall, holiday COVID, of with back COVID then

the of that mentioned how We we as the gradually saw as comments, we for his this as as well plan in kind numbers kind of the at expected looked Scott build, ramp coming. we We year. and

fourth quarter, and say March. I bit February. pretty say of And our we're a elective see January the that are So about were to February into businesses. and slow we going and And down little volumes with see you where would started now we then well, good doing feeling would procedures second we in I half the pretty across into

bit we Nelson some of the a the directly what little COVID procedures optimistic, But in Sterigenics, and continue areas a lines we've with side, it's shipments out more expected. because overall, countries. little along side, we movement in to that referenced. tied Nordion elective I around had and volumes just on On to of growing to are the pretty And the we're the of and tougher of some get impact see

great. taking have the and articulated, set as facility reallocating cap you expansion I just you've your a priorities or structure And sort facility down upgrades. and then of cost on That's in of that debt. job Nice CapEx of allocation. for capital realigning understand,

your bit your the and for X, that or a potential are of over core you any the of spending in the Is the back that what or Or a the end picture? talk of have? little strategically other that timing priorities some opportunities appetite markets of on businesses sort comes next of that something If is the could XX you part about months. investment

don't will inorganically. bought journey and of the that mind, the in enhance with virology told the help around about continue small in these we've growth the business. continue Yes. Matt, very we growth the into With other capabilities. capabilities as partaken. on to in well journey. To antimicrobial Xx We'll point, a focused we've upon for to you, be organic acquisitions very Labs you already invest just in, good expand that both questions our We what may our we that our work on M&A. marketplace's our really we markets And could existing going one leverage at a expands investors this points help to do X accelerate the about that look on we that We there term sight entries TAMs targeting thought in want Nelson that side, we continue yesterday, would and we end We to that feel good or well other growth. tuck-in just inorganic we're on Labs. lose continue accretive to feel to in and where we've on that that that asking what closed at markets. But told that's invest for I partake example, you Nelson for as transaction of small capability. big lab us be long we're do to on as position And deals our the organically grow to time that and

question, Sean coming line with Markets. Dodge the next from Capital Our RBC of

on great -- challenging Congratulations great XXXX. a but

going level expansions performed from in more investing of I capacity in the capacity we your how you're a revenue back made about Sterigenics to support more year normal guess in benefit without existing in? how impact that XXXX, could On much the of represent? guidance, COVID think footprint what utilization volumes, comments, Michael, ongoing on if the any you does the

I cobalt to give the as fulfill gamma talked location the would needs far on and sterilization capacity past, where but really where the -- of drive our right? are it as facility number, XX% geographic customers as can utilization, they XX%, about we've as macro really you, us that what tell well modality. capability. E-Beam? the I Is depends irradiation, Is EO? it it Is the Because a as that in you need

are opportunity So good for growth there's our more I we opening say remarks. about we're I our for as There referenced where that in overall, capital capacity. deploying areas expansions pretty would certain feel

opportunities, Nordion, coming largely growth, Nelson, the revenue on margin seems across optimization buying that. a With are like then leverage. upon And Sterigenics lot Okay. expansion work of operating done those dependent from it and you've so since really

results opportunity testament maybe Can that. I optimization us think reduction there? or kind XXXX of term guess then a give cost remains maybe I both are to XXXX here little that term. sense how a and the bit a of you near in longer much

shipment Sterigenics, we the investment comments leadership Shrawder the Nelson at ] mentioned in, I Yes. our how things reducing Scott to operational how the better We're and do make at areas. over I for course Joe after as multiple at notifications. advanced times, sleeves, do about of not didn't activities the they how going we've [ his the furloughs times, sure getting rolling we that you, IT Mike deployed in We're it's that they just Some business. would turn prep We're against in an And do continued se. a media do up this reduction excellence. tell expansion clear, looking opportunity margins see of out workflows, pandemic. isn't to anything how said we've pure drive load on cost do team at global We is like, workflows. really excellence. improve Limbs, the per operational this a looking they their focus -- or your Star heads, Labs, chambers, and bunch utilization? cutting up This looking during like how How of set within costs, of bunch capital you we we at want

similar see And drive I businesses. as can excellence margin operational all continued on to in continue we Nordion the side opportunity So more well. for this then expansion as you across give business we examples

this which working in of actions, the based; businesses, we question; Sean, we and all have on projects on: one from of all In to that your have to we the of as are margin that leverage, of Michael X operating pricing is our much of Michael's a across talked them comments. of across contract drivers categories there I'll our then for is we focus one slate is just referenced said, add X X businesses. benefit about Scott. relates them you are past, OpEx which when

And businesses of drivers. least, each of certain so extent the all least we to have some at that extent, to the those at different believe benefit to a X opportunity from

line Our of Patrick from Citi. with next the Donnelly question, coming

out as congrats we one should And expectations. of litigation, expectations? gate what questions through the investor for here. the just your that and a quick Michael, go the on maybe on a first maybe We've lines, and the Great. Can the EO quarter you. guidance just of through year you just we time talk gotten bunch expect the here

timing to in in this declared trials officially by of XXXX. But for say courtship, late for the partake. continues a risk looks place to sterilized devices of care our U.S. together whole that about right our more are Ultimately, everybody litigation But of it comfortable Yes. was is and EO to details those so EO. one putting to here so go the year question. it's we a thanks the nothing's with health the trial some I is medical sometime take jury, now, in about come Obviously, of the that teams are critical for can't I feel But Patrick, into are front lot get that or XX% pretty in litigation, make industry. learn been trials that that but thing to associated this with would sure on what a the the there's will though, very defense. planning that. tell this want this. we're I high work initially I can the in where first there's situation you going in and is we like probability

have to these rely on run of sterile. medical who to regulatory continue compliant years. for our continue the we very what to the built we're our into to EO continue operate move and forward and requirements. critical done, culture, of care for we systems. team's for devices take have with It's And customers going businesses high like and proud We'll regard be really We to

you Okay. that, with on then I regarding the in That's update have you back guess, had U.S. then maybe in thought And you in region. the place? those through regulations new Can a also, regulations talk think Europe, for of two? administration the impending that capacity growth greater And any I helpful. EO in kind you maybe of needs just create some device could tailwind guys, medical the

We're have out would rights it out it they 'XX. on to out hopeful come wish have anxiously XXXX. in in would I I come in NESHAP. I Patrick. you, in we're Great, have Yes. out awaiting come come XXXX. it would And XXXX. would wish do tell wish I

the they'd of administration, first were quarter in new the get something With year. they out hopeful this

is fact sitting the days that in early we're very comes based March. hopeful later that the year. think in here out of I something the today We're on that unlikely

would We would to started we we're me also we've our My tell facilities. -- that feel facility. that deploy use. that Atlanta, that it's very confident around If EO engineers the the we in XX.XXXX% example be in in I -- an solutions represent XX.XX% where of use capturing

it regs, NESHAP kind and place a put uses until the of we to out. lot that we there for benchmarks key longer-term think but see baselines I don't that of in their know are we be that the improvements going come

the We against those Scott, But we here engage frustrating, direction tell I and always feel currently. And industry execute the the hope solutions deploying they can regulars, give I'm MDR address to sooner but piece? continue you confident them, rather hopeful waiting us little a that on like the outperform later. we why to always we're about We're have. than regulators don't MDR, rules. then I they so It's we still go just like rules, with our -- Patrick.

Sure.

seeing So we We go business gate we've stage Europe, new was May devices of demand position are that solid that And as we're growth increased you it upcoming new acquisition, a that extractables a category that to meet our for are of -- that And that anticipating area, in area. leachables least when in different now, part testing medical devices seen with and the year. type that of in regulations at invest medical we I this in marketplace standard. in is Toxikon and back organically, stage gate in introduced in acquired in recertification demand pipeline we're the a leadership with for Europe, for if But called to a either XXXX. device an this area. years of have here of demand up a that's acquired a requirement testing respect in called increase for there incorporated where the to XXXX, the XXXX or that medical we number will that mentioned new continued to legacy growth the testing a even hitting there be outlook we've anticipating that

of question, with the next line And coming our from Dave Windley Jefferies.

follow-up Congratulations Kind your Patrick's XXXX. enhancements on eventful to of and a question on in facility. challenging a navigating investments and

horizon? horizon I kind Michael, is mentioned, You on of is if Are concept a continuing of make same can that multiyear say of new all kind the the approaches it ahead get XX.XX%. what to regulations XXXX? Is delayed? facilities. going you're in that to in presume as but yes, they wondering for that ask investment continue your mentioned of And to anyway. those rest done or the something comfortable the there facilities approach facility cadence be Atlanta to that proved your of I'll you those Or I'm applying you the and you've

emission Atlanta been the confident the control these systems is on we're a already in David, in that are others that path. falling same near forefront couple continue of then improvements we've leader that in facilities and been that another are. to running. Yes. and completion into -- always where are with have up on behind we put feel operating and place, facilities and and We've we

Some in then of points. the big be we're discharge improvements scrubbing and negative pressure, place putting double centralized would

incremental We We along we're some across government the opportunities it to chance will EPA, possibly requirements may our improve. some in think and new place about those paths continually So feel we there's there continue take are of look to how for and well. But 'XX require, of 'XX as is moving situated that I pretty 'XX, the those good facilities. concerns. around a into

the are, our we in looking at well these that to believe I what as out facilities. But the advance So continue fact the there's about deployed in other be industry don't rules confident that where the in things feel that performance have forward pretty systems. path industry with new lead yet. in to leading We of we'll control we that in continue spite we're again we and our our

'XX. Iotron expected could harvest mentioned make pre-IPO may acquisition and revenue timing understood the Nordion, to even Nordion more Pivoting the growth first for second from contribution yesterday really clarify, the continuing good. 'XX. And the quarter just that the like exiting the and and make fourth Scott assumptions wanted our half closed guidance. in clarify was half, hoping I maybe a the have to maybe in to Sounds sure discussions, strong on into being timing this the It and in you then 'XX cadence harvest sounds of I you comments that. could that changed, to quarter was I

Dave. Thanks questions, the Sure. for

first me let just So hit the question.

the In terms of to the made going a we a closed at in we're just Iotron we've the But end this look terms of XXXX acquisition not if the that time. components breakdown past, our in of reminder disclosures of at at provide XXXX. you July the guidance,

facility during Iotron's were utilization. that million. around we capacity pre-acquisition And their that in is we've be period. so acquisition full through disclosed obviously, no ramped And January mature terms what period for July little then up acquired a impact And fairly of post-acquisition year-over-year going the revenue period, year-over-year $XX -- to or for the there's the that was the having with

You to could the for expect those similar XXXX be contribution periods.

guess, first, Nordion, over question, the always as getting terms of bit few in I of last shifting little months the have obvious terms second that the certainly risk seen well. schedules. a is of for we In there's your cobalt And harvest

you revenue share correctly, going it's of picked -- it XXXX. throughout when that And company's is hasn't that our up be been our Nordion's always hasn't so view XXXX, point on relative to you look something at the that for fairly stable, is which

And next Tycho line question, of Peterson JPMorgan. coming our the from with

guidance. start off a on I'll question with

upside And if there's segment-level where there's has give the do commentary that if you since any since. kind it above curious us. not if you changed model. but long we this see consensus, that did IPO you think were of since were any you're segment to if Just guiding above I'm to then from could you slightly commentary wondering It's see year? even just comes that, upside

Yes.

right the has go guidance, of individual not each just of I'll XXXX intent terms about strategic the ever the for terms in X said deep now nothing for priorities, drivers So as we've business of units business unit in components over in our overall couple to it's the what very the but the IPO. our say terms since months of underlying everything of well as changed our really, last storyline,

have, both there space. the do we price out so in and contemplated also, steady leverage. -- and And contemplating of And medical we're mentioned volumes in as normalization Michael some some device operating tailwinds of terms obviously, volumes then I processing earlier,

of capacity as underway our anticipated there going of that we've Sterigenics to consistent are made going well. have impact And they'll to about of But that during comments that's results are Michael obviously, businesses. a mention expansions particular, Nelson comments so which his And did the obviously, are number Sterigenics, and Labs. these always in XXXX. of online some some on are coming some all in be of for drivers the with on impact, some have

I That just I'd only Tycho, businesses line X% add X contributing XX% to would to other All you, year. this growth high would will level, we tell growth be EBITDA. for the meaningful the just to comment XX% and is achieving the Scott's. adjusted on said in the that XX% at Michael. top be

we've numbers? And on on about do COVID other pricing you Is side Can is X% know they related to in then be increased pricing? maybe push talked PPE, Could it's that And the quantify? -- for services something dynamic, ask, contractual, to projects. on is demand could Okay. COVID then X.X% to other on I there back just have you that it, touch of given biologics, upside you've the the it quantifying all any that ability had clients? hardships any risk by but to people material?

Yes.

So of customer look business. for in you very, terms both we're composition lines and services providing Nelson Labs that a is businesses of the when very well product the Sterigenics, it at underlying our the and diversified composition for,

some be the product benefiting that contemplating But year, down. a given categories And so we're of reality that you're some that particular to that right as that in and is always any are result we've going there's are COVID. talked some up about

I our than the would negative here all expecting And some net you COVID, top say for. think course I mix. impact even would a The so of when line said, at impact last the year broader in And lower falls net the top as into delivered it line because categories we these in kind just the of of just product normally with that of that little reality look bit benefited, XXXX, hope across of that throughout was portfolio we're growth normalization we we was XXXX.

And pricing? the Okay. on

under that contracts generated have X those of And revenue for is of remember and And pricing, for Sure. then price terms XX% escalators. businesses the long-term in Nordion, price for annual contracts. escalators, also Sterigenics built-in over those

And so But that just continue marketplace change kind we that, foreseeable in in pricing of even out see of after generally, of would price dynamic the under the kind of now we any contracts right future. the changing pressure. rhythm there market any for dynamic, increases more the terms would in anticipate also don't existing

years $XX to you one, $XX could last X upgrades. And the this want to in kind of of Dave And go terms then the X said talked this cycle. Okay. earlier in million then back about you for facility upgrade on million year. Because just to to Windley's question That's projects CapEx call, helpful. I the last X on

the So number we in the to terms going of think you're Or be we assume of upgrading? X/X, should pacing? how X/X of X/X, about facilities kind

there Sorry, projects expansion think a I one right capacity about mixed comments be thing, X may couple would because talked of facility up you -- now. we expansions, are active have which

kind our to EO. refer from growth investment facility of routine of the that's made And comments intended in of investment for initiatives. different was enhancements to that that so we about in typical And the pacing

that. Just to clarify

Yes.

be On excess those about million couple years and quarter facility over talking the fourth we've over of Tycho. in next the enhancements, we're years, to for facility going enhancements, multiple are before I think said $XX that the of

Okay.

Okay. give pacing the how to a just I'm by But be year? think here. this can't about focus the then of us to done you trying end much will

just ongoing large give total, kind facilities well Health. some all of environmental enhancements, will context EO just gives The in Sotera you you enhancements, included a environmental as across EO portion, this facilities to ballpark, our the That as right? enhancements. million, So across across obviously, is $XX all year, about just be

Yes.

line And our next question, Amit coming from of Goldman the with Hazan Sachs.

Atlanta. think net you negative impacts 'XX, some Willowbrook 'XX XXXX from maybe And I you like call. think, got in you've about start said you. with And things had kind from in guide. some a a number impact your far that obviously your of sounds also I also inorganic want It said perspective to obviously to and together try benefit COVID as guide like in a of the impact the it to was you've so It and put sounds you

still if comment you kind the unpackage Or the tell because me range? you wonder just kind So towards I'm COVID get I understand of if would than to and I what impact? would to seeing digits. drive it to we of suggest those the normalized that somewhere growth, what true kind how things mid-single is underlying could base on XXXX XXXX be for underlying of it because of you're I better just that just said. true was that if off the And what trying mentioned adjust would lower we that's kind of

sure. Sure,

try me and So little unpack a bit. that let

year at growth of was for questions looking X% inorganic that growth. we've went little full we deeper XXXX, part I revenue there But bit some your than there. revenue far. And gone our think delivered contribution so a

contributed so X% And the total about Iotron growth. company's to

of growth. that, revenue had you X% outside so And

is higher the have you sure in the of with growth we're consistent is that business said number on is single-digit -- expect, got the how guidance we're And seeing what normally grower. to basis. I kind absent line normalized And mid-single-digit well pandemic, think what least as and of so as implied giving we amount a top I'm past that high you that at a well. a the in not guess some around reflected viewing we the XXXX what for that's than would I

Okay.

Okay. implies the expansion, of which P&L, middle the And on basis is your margin outlook point XXX great. a about

us particular, was help In on fact, in already. pricing of sense are we And could moving understand, there margin, to? didn't just any an -- other there obviously, parts that maybe you talked gross is a you in little about you a But bit talk adjusted what that get could XXXX. basis

be where for If and expectations what would your 'XX, came out just help are that understand you that us can helpful.

Yes.

the since as November. it. The leading we profile is we units each when made and comment -- IPO-ed I mean, of the what been business few guess, the IPO were of say overall, to up I'll the X is which that financial talking I reiterate our same a we've the same in business business business that to about is is it's period the I minutes a ago, So

all I from see terms storylines do benefit, to underlying it units. then business Nelson would Labs. of units we've expect units, the to in you said drivers, expansion which across so all on across we is these business margin And that same and across the that focus key we real, earlier, of same all this business to X least And just categories X financial been some OpEx major X be at priced the talking profile in leverage organizational and it's the see extent all operating reported really for continue about. Margin drivers, expansion, of as

with P&L that the move can in and the we significantly how execution see area. You focus organizational

we guidance. to deliver that in continuing And drivers so what we our on impact business really as here the that's -- XXXX the see

of line Our from Matthew the coming KeyBanc. Mishan with next question,

is to be the how coming think go XX%, to component X% just much FX -- is What from sorry to the guidance? Okay. it I'm of FX? helpful, would it though. it, I Of back of the

way. basing things is you guidance January. if we as breaking of first that the we up the that indicated we're guidance So the one of of in -- are FX not all, But on

And out last business is there year, to -- is January anchor rates by to most a obviously, currencies some going so you are that significantly be yourself are if that Nordion. so remember there The to compared FX that tailwind. impacted

Nordion Nordion in internationally. where now, terms base, little that's is -- little with indexed the Canadian being is a is significantly you so domestically their heavily CAD of and most going Canadian at bit sits a be impacted. Sterigenics primarily revenue to based look And when a bit the company dollar underindexed

impact some amount and the heavily tailwind not currencies And with But some so that in. more other we are other they'll companies indexed. from internationally as some an euro that have large of operate

Okay. on that Excellent. And help and this modest some were some better one. I'm in build then initial between people models to and looks just there -- IPO change trying some like -- reporting the

segment. like just of margin income through excluding from did gross if segment, walk presenting least, the by depreciation just EBITDA we you number no look segment by previously could a Are versus at longer you're income, So segment like was line? then it it adjusted couple them. And

X those pieces be just moving helpful. So would

Sure.

team the essentially for income, term So that to segment management the approximate EBITDA business, adjusted is an a the as metric. defined is metric evaluating use which we

there. nomenclature it's really, so question a just And

-- incorporate to amortization a business tendency conforms of closely question, equity-based conforms prior about it so perspectives, mean, on and in expense. GAAP that reporting our to think company, other GAAP more U.S. have U.S. now would G&A. margins as to depreciation so I from obviously, IPO your yes, our we our the the Regarding But that terms excluded to gross so the did private a on

using people Okay. are were revenue X were just different there reported the using. S-X. And from then metrics People

guys We're a the revenue some making you now, S-X think have definitively the and pro reported I on forma lot from of adjustments. right?

That's correct.

July in disclosed $XX forma as for has separately all you that we our did of million impact. did for the right, revenue in our And Iotron clean reporting revenue period. time been you're a Now showing today But are that prerelease just number number numbers. when January, reference we January that we pre-acquisition GAAP through a pro period revenue contemplated

[Operator Baird. Polark Instructions] the of question, from line And our Michael coming with next

status Teresa, in that specifically all perhaps facility, facility that attorney fresh that your your operational in state? I'm of as general know expectations sit on EO does but the And upgrading I Santa that timing for for emission facility XXXX facilities -- where for progresses, comment a controls, hoping engagement you're with those terms of where your investments? of of

Michael, Yes. Petras. it's Michael

for fully New So up sterilized surgical facility United dialogue time And a EO work make clear some lot in it's sterile Mexico, that that really kits the normal want of was are The operational. really AG system. regulators seizing request and enhancements the to running, operational, continue that to the facility relies emissions States on -- health focused surgical we're demand the I quite that. And more fully they that were not through to kits. but to care been A through closure, so uncontrolled with or releases. there on facility, to be is facility. We've for in permitting whole we process and critical with critical

the is performing. where lawyers not of determine most that. get can't pretty And of is other and confident the and get is on back just and don't bunch we third I I lawyer very thing, by facility running. well the up litigation accurate, unfortunate. to a So We'll reported is We into feel how there's doing detail tell a the party papers level around that want but point of is important information that lot that. But are business forth, you details lot a I the on of let than a into the would large, and filing which

us. upon rely customers Our

those We continue topics we've including care on quite critical health But for engaged are all the -- belief in facilities, clearly that, been operate, regulators the some for improvement continued that that and we'll plans with Santa provide to and Teresa, there. we time. to will we continue perform facility have role those

the Hear by loan sense on you My run interest follow-up $XX $XX Maybe line. debt for million for the expense $XX million, divided is for is and quarter the clearly, not number one below rate on repricing. reduction term first Scott the four. pro the forma million

What just first that the the for can XQ should don't So be? quarter? too have comment expense wonky you interest so EPS we here in

Sure.

that comments. One we're our So reminder EPS guidance. a I And -- couple right? is basis, we just adjusted an our adjusted referencing so on guess of a numbers provided

associated with going And so a that be pricing that we the from we -- kind charge January. to repricing there I'm going to is effect of executed in my so in answer. But executed the activity with January. early eliminate noncash -- But the repricing activity

expect December we year January. would repricing point, the at most of impact full And the and already to this done debt so get we've the in pay down because in

January. most would number, adjust that all really in of that for in should to And environment other of subperiod $XX you and get rate and so million assuming have equal out the run in on, XXXX, effect that so interest rate being you of terms just things here

back remarks. today. to turn for And call questions that's Mr. Petras would like I all we the time have Michael for to over closing now the

us unique versus good competition growth asset, and really a very positioned for believe proud joining for our XXXX. We're first team's the is us you, future continue the growth, very us We're big what for market for Great. Well, move earnings call. opportunities XXXX. everybody, optimistic this We competitive, in end to about accomplished thank holds we well what to in the forward. of

our So have the upcoming a for engagements and day. in investor some great we thanks forward look conferences, and you. future of us today, joining to Thank

conference Thank does for your our conclude today. gentlemen, that and you for Ladies participation.

now disconnect. You may