NASDAQ$SHC

Sotera Health Company · Q1 2022 earnings

Q1 2022 earnings · · Investor relations

Briefing

Sotera Health's first-quarter performance in 2022 reflected double-digit top-line and bottom-line growth, driven by volume, mix, and pricing, while reaffirming the 2022 outlook.

Sotera Health reported a 12% increase in net revenues to $237 million for Q1 2022, with net income rising to $31 million, or $0.11 per diluted share. The company reaffirmed its 2022 financial outlook, focusing on execution and capacity building to meet future demand.

  • Net revenues for Q1 2022 reached $237 million, a 12% increase compared to Q1 2021.
  • Net income for Q1 2022 was $31 million, or $0.11 per diluted share, compared to $11 million, or $0.04 per diluted share in Q1 2021.
  • Adjusted EBITDA for Q1 2022 increased by 10% to $115 million compared to the prior-year quarter.
  • The company reaffirmed its 2022 financial outlook, initially provided on March 1, 2022.

Headline financials

Total Revenue

$237M

Previous: $212M+11.6%
EPS (adj)

$0.22

Previous: $0.18+22.2%
Adjusted EBITDA

$115M

Previous: $105M+9.5%
Net Leverage Ratio

3.4

Previous: 4.1-17.1%
Capital Expenditures

-$35.5M

Previous: -$20.9M-69.7%
Free Cash Flow

-$4.91M

Previous: -$10.1M+51.4%
Net Income

$30.6M

Previous: $10.8M+182.6%
Operating Income

$53.5M

Previous: $46.4M+15.4%
Gross Profit

$129M

Previous: $115M+11.7%
Cash & Equivalents

$121M

Previous: $108M+12.4%
Total Assets

$2.84B

Previous: $2.78B+2.1%
Stock-Based Comp

$4.54M

Previous: $3.45M+31.6%

Revenue & EPS history

Sotera Health · Revenue · Quarterly

$237M

Q1 2022+11.6%vs Q1 2021
Beat estimate in 10 of 10 quarters(100%)
ActualEstimate

Revenue by segment

Sotera Health · $236M total across 3 segments · Q1 2022

  • Sterigenics
    $149M+13.6%
  • Nelson Labs
    $53.3M-3.2%
  • Nordion
    $34M+31.2%

Forward guidance

Sotera Health reaffirmed its 2022 outlook, with net revenues expected to be in the range of $1.0 billion to $1.03 billion, representing growth of approximately 7% to 11%. Adjusted EBITDA is projected to be between $515 million and $535 million, reflecting growth of approximately 7% to 11%. Adjusted EPS is anticipated to be in the range of $0.93 to $0.99, up 6% to 13% versus the prior year.

Tailwinds

  • Net revenues in the range of $1.0 billion to $1.03 billion, representing growth of approximately 7% to 11%, compared to the prior year.
  • Adjusted EBITDA in the range of $515 million to $535 million, representing growth of approximately 7% to 11%, compared to the prior year.
  • Tax rate applicable to Adjusted Net Income in the range of 29% to 30%.
  • Adjusted EPS in the range of $0.93 to $0.99, representing growth of 6% to 13% versus the prior year.
  • Net leverage reduction of approximately 1⁄2 of a turn.

Headwinds

  • Supply chain continuity, particularly for the supply of ethylene oxide (“EO”) and cobalt-60 (“Co-60”).
  • The impact of inflationary trends including the impact on the supply of labor.
  • The impact of the COVID-19 pandemic including the rate of recoveries of elective procedures and new product development testing.
  • The expectation that exchange rates as of Q1 2022 remain constant for the remainder of 2022.
  • Known and unknown risks and uncertainties, including those set forth below under “Forward-Looking Statements.”

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2022

Historical avgQ1 2022

-2.7%

Avg return

Earnings day

-3.0%

Avg return

5 days after

-2.4%

Avg return

30 days after

25%

6 / 24 earnings

Positive

+11.2%

Q2 2024

Best reaction

-15.9%

Q3 2021

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-0.3%+2.6%+1.2%
Q4 2025-0.5%-7.1%-22.6%
Q3 2025-1.1%-5.6%-0.3%
Q1 2025+5.2%+11.7%+6.4%
Q4 2024-10.0%-15.9%-13.7%
Q3 2024+2.0%+1.8%-17.9%
Q2 2024+11.2%+10.1%+16.6%
Q1 2024-2.2%+1.8%-0.8%
Q4 2023-12.3%-14.7%-29.6%
Q3 2023+1.2%+5.8%+10.6%
Q2 2023-3.7%-7.1%-13.4%
Q1 2023-7.5%-7.9%-9.2%
Q4 2022-0.5%+3.9%+2.0%
Q3 2022-10.6%-7.7%+28.6%
Q2 2022+2.1%+4.2%-6.7%
Q1 2022-2.8%-5.4%+3.7%
Q4 2021-8.4%-11.4%-1.0%
Q4 2019-8.4%-11.4%-1.0%
Q3 2021-15.9%-13.7%-20.0%
Q2 2021-0.7%-6.3%+1.0%
Q2 2020-0.7%-6.3%+1.0%
Q1 2021-5.4%-3.4%+3.5%
Q1 2020-5.4%-3.4%+3.5%
Q4 2020+8.9%+13.6%+1.4%
Q3 2019
Q2 2019
Q1 2019

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