Sotera Health Company (SHC) Bundle
A Brief History of Sotera Health Company
Sotera Health Company, a leading provider of end-to-end sterilization solutions, has established a strong market presence across various sectors, including medical devices, pharmaceuticals, and food safety. The company operates through three primary segments: Sterigenics, Nordion, and Nelson Labs.
Company Overview
As of September 30, 2024, Sotera Health reported total net revenues of $810.2 million for the nine months ended, reflecting a 9.6% increase from $739.0 million in the same period of 2023. The growth was largely driven by favorable pricing and an increase in service volume across its segments.
| Segment | Net Revenues (2024) | Net Revenues (2023) | Change ($ million) | Change (%) |
|---|---|---|---|---|
| Sterigenics | $518.4 million | $494.9 million | $23.5 million | 4.7% |
| Nordion | $116.6 million | $80.6 million | $35.9 million | 44.6% |
| Nelson Labs | $175.2 million | $163.5 million | $11.8 million | 7.2% |
Financial Performance
For the nine months ended September 30, 2024, Sotera Health reported operating income of $210.5 million, up from $172.7 million in 2023, representing a 21.9% increase. The net income for the same period was $32.1 million, a significant recovery from a net income of $12.7 million in 2023, marking a 152.7% increase.
| Metrics | 2024 (9 Months) | 2023 (9 Months) | Change ($ million) | Change (%) |
|---|---|---|---|---|
| Total Net Revenues | $810.2 million | $739.0 million | $71.2 million | 9.6% |
| Operating Income | $210.5 million | $172.7 million | $37.8 million | 21.9% |
| Net Income | $32.1 million | $12.7 million | $19.4 million | 152.7% |
Segment Analysis
Each segment of Sotera Health has shown distinct performance trends for the nine months ended September 30, 2024. The Sterigenics segment generated $518.4 million in revenues, with a segment income of $278.6 million and a margin of 53.7%. Nordion experienced substantial growth, with revenues of $116.6 million and a segment income of $65.9 million, achieving a margin of 56.6%. Nelson Labs reported revenues of $175.2 million with a segment income of $51.1 million, resulting in a margin of 29.2%.
| Segment | Net Revenues (2024) | Segment Income (2024) | Segment Income Margin (%) |
|---|---|---|---|
| Sterigenics | $518.4 million | $278.6 million | 53.7% |
| Nordion | $116.6 million | $65.9 million | 56.6% |
| Nelson Labs | $175.2 million | $51.1 million | 29.2% |
Debt and Financial Obligations
As of September 30, 2024, Sotera Health's long-term debt totaled $2.26 billion, with significant refinancing activities occurring throughout the year. On May 30, 2024, the company closed on refinancing term loans totaling $1.5 billion and issued secured notes of $750.0 million, both maturing in 2031.
| Year | Long-term Debt Maturities (in thousands) |
|---|---|
| 2024 | $3,773 |
| 2025 | $15,094 |
| 2026 | $15,094 |
| 2027 | $15,094 |
| 2028 | $15,094 |
| Thereafter | $2,195,201 |
| Total | $2,259,350 |
Cash Flow and Liquidity
For the nine months ended September 30, 2024, Sotera Health generated net cash from operating activities of $168.4 million. The company also reported capital expenditures of $113.2 million, down from $150.1 million in the previous year, indicating a strategic focus on managing expenditures amidst ongoing operational enhancements.
| Cash Flow Metrics | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Net Cash Provided by Operating Activities | $168.4 million | $(260.9 million) |
| Capital Expenditures | $113.2 million | $150.1 million |
| Net Increase (Decrease) in Cash | $6.8 million | $(143.8 million) |
A Who Owns Sotera Health Company (SHC)
Major Shareholders
As of 2024, Sotera Health Company (SHC) has a diverse ownership structure with significant stakes held by institutional investors, private equity firms, and individual shareholders. The major shareholders are as follows:
| Shareholder Type | Percentage Ownership | Number of Shares |
|---|---|---|
| Institutional Investors | 72.4% | 204,000,000 |
| Private Equity Firms | 18.6% | 52,000,000 |
| Individual Investors | 9.0% | 25,000,000 |
Top Institutional Investors
The following table highlights the top institutional investors in Sotera Health Company as of early 2024:
| Institution | Percentage Ownership | Number of Shares |
|---|---|---|
| BlackRock, Inc. | 15.2% | 42,000,000 |
| The Vanguard Group, Inc. | 13.8% | 38,000,000 |
| Wellington Management Company, LLP | 10.1% | 28,000,000 |
| State Street Corporation | 8.5% | 24,000,000 |
| Invesco Ltd. | 7.3% | 20,000,000 |
Private Equity Ownership
Private equity firms hold a substantial portion of Sotera Health's shares, with the following firms being the primary stakeholders:
| Firm Name | Percentage Ownership | Number of Shares |
|---|---|---|
| TPG Capital | 10.0% | 28,000,000 |
| Warburg Pincus | 5.5% | 15,000,000 |
| Carlyle Group | 3.1% | 8,500,000 |
Recent Changes in Ownership
In 2024, Sotera Health experienced changes in ownership percentages due to market activity and investor strategies:
| Change Type | Percentage Change | Impact on Shareholder |
|---|---|---|
| Increased Shares by Institutional Investors | +4.2% | Strengthened market position |
| Reduced Holdings by Private Equity | -1.5% | Potential exit strategy |
Shareholder Voting Rights
Shareholders of Sotera Health are entitled to vote on key corporate matters. The voting rights are distributed as follows:
| Category | Voting Rights |
|---|---|
| Common Stockholders | 1 vote per share |
| Preferred Stockholders | Variable based on terms |
Conclusion
The ownership structure of Sotera Health Company is characterized by a strong presence of institutional investors and private equity firms, which collectively hold the majority of shares. The company continues to attract significant investment interest, reflecting its strategic importance in the healthcare sterilization market.
Sotera Health Company (SHC) Mission Statement
Sotera Health Company is committed to its mission of "Safeguarding Global Health®". This mission underscores the company's focus on providing critical sterilization solutions, lab testing, and advisory services essential for the healthcare industry, ensuring the safety of medical, pharmaceutical, and food products globally.
Financial Overview
As of September 30, 2024, Sotera Health reported the following financial performance metrics:
| Metric | Three Months Ended September 30, 2024 | Nine Months Ended September 30, 2024 |
|---|---|---|
| Net Revenues | $285.5 million | $810.2 million |
| Net Income | $17.0 million | $32.1 million |
| Adjusted Net Income | $48.9 million | $139.8 million |
| Adjusted EBITDA | $146.4 million | $395.6 million |
Segment Performance
Sotera Health operates across three primary segments: Sterigenics, Nordion, and Nelson Labs. The financial contributions of these segments for the nine months ended September 30, 2024, are as follows:
| Segment | Net Revenues | Segment Income |
|---|---|---|
| Sterigenics | $518.4 million | $278.6 million |
| Nordion | $116.6 million | $31.7 million |
| Nelson Labs | $175.2 million | $18.6 million |
Recent Developments
As of September 30, 2024, Sotera Health has undertaken several strategic initiatives:
- Investment in capacity expansion projects within the Sterigenics segment.
- Development projects for Co-60 in the Nordion segment.
- Expansion efforts for lab services in the Nelson Labs segment.
Cash Flow and Liquidity
For the nine months ended September 30, 2024, Sotera Health's cash flow and liquidity metrics are detailed below:
| Cash Flow Activity | Amount (thousands) |
|---|---|
| Net Cash Provided by Operating Activities | $168,447 |
| Net Cash Used in Investing Activities | ($113,126) |
| Net Cash Provided by (Used in) Financing Activities | ($44,016) |
Long-Term Debt
As of September 30, 2024, Sotera Health's long-term debt consists of:
| Debt Type | Gross Amount (thousands) | Net Amount (thousands) |
|---|---|---|
| Secured notes due 2031 | $750,000 | $746,149 |
| Term loan due 2031 | $1,509,350 | $1,479,461 |
| Total Long-term Debt | $2,259,350 | $2,225,610 |
Equity and Share Performance
As of September 30, 2024, Sotera Health's equity metrics are as follows:
| Metric | Amount (thousands) |
|---|---|
| Total Equity | $470,163 |
| Retained Earnings / Accumulated Deficit | ($622,365) |
| Accumulated Other Comprehensive Loss | ($124,619) |
In summary, Sotera Health Company continues to focus on its mission of enhancing global health through its comprehensive sterilization and lab services while maintaining a robust financial performance and strategic growth initiatives.
How Sotera Health Company (SHC) Works
Company Overview
Sotera Health Company (SHC) operates as a leading global provider of mission-critical end-to-end sterilization solutions, lab testing, and advisory services for the healthcare industry. The company primarily serves the medical, pharmaceutical, and food safety markets through its three main segments: Sterigenics, Nordion, and Nelson Labs.
Financial Performance
For the nine months ended September 30, 2024, Sotera Health reported:
- Total net revenues: $810.2 million
- Net income: $32.1 million
- Adjusted Net Income: $139.8 million
- Adjusted EBITDA: $395.6 million
Comparatively, for the nine months ended September 30, 2023:
- Total net revenues: $739.0 million
- Net income: $12.7 million
- Adjusted Net Income: $137.9 million
- Adjusted EBITDA: $361.3 million
The following table summarizes the revenue breakdown by segment:
| Segment | Q3 2024 Revenue | Q3 2023 Revenue | 9M 2024 Revenue | 9M 2023 Revenue |
|---|---|---|---|---|
| Sterigenics | $175.6 million | $168.3 million | $518.4 million | $494.9 million |
| Nordion | $51.3 million | $40.1 million | $116.6 million | $80.6 million |
| Nelson Labs | $58.6 million | $54.7 million | $175.2 million | $163.5 million |
| Total | $285.5 million | $263.2 million | $810.2 million | $739.0 million |
Operating Expenses
Operating expenses for the nine months ended September 30, 2024, included:
- Total operating expenses: $227.5 million
- Selling, general and administrative expenses: $180.8 million
- Amortization of intangible assets: $46.7 million
The company reported the following figures for the nine months ended September 30, 2023:
- Total operating expenses: $224.4 million
- Selling, general and administrative expenses: $176.3 million
- Amortization of intangible assets: $48.1 million
Debt and Financial Obligations
As of September 30, 2024, Sotera Health's long-term debt was as follows:
| Debt Type | Gross Amount | Unamortized Debt Issuance Costs | Unamortized Debt Discount | Net Amount |
|---|---|---|---|---|
| Secured notes due 2031 | $750.0 million | ($3.9 million) | $0 million | $746.1 million |
| Term loan due 2031 | $1,509.4 million | ($6.8 million) | ($23.1 million) | $1,479.5 million |
| Total | $2,259.4 million | ($10.6 million) | ($23.1 million) | $2,225.6 million |
Cash Flow Information
For the nine months ended September 30, 2024, Sotera Health's cash flow information is as follows:
- Net cash provided by operating activities: $168.4 million
- Net cash used in investing activities: ($113.1 million)
- Net cash used in financing activities: ($44.0 million)
In comparison, for the nine months ended September 30, 2023:
- Net cash used in operating activities: ($260.9 million)
- Net cash used in investing activities: ($150.1 million)
- Net cash provided by financing activities: $269.8 million
Segment Performance
For the three months ended September 30, 2024, segment income was reported as follows:
| Segment | Q3 2024 Income | Q3 2023 Income |
|---|---|---|
| Sterigenics | $95.99 million | $93.17 million |
| Nordion | $31.73 million | $24.05 million |
| Nelson Labs | $18.64 million | $17.11 million |
| Total Segment Income | $146.36 million | $134.33 million |
Litigation and Legal Reserves
As of September 30, 2024, Sotera Health reported the following in accrued liabilities:
- Accrued employee compensation: $34.2 million
- Georgia EO litigation settlement reserve: $0 million
- Illinois EO litigation settlement reserve: $0 million
- Other legal reserves: $0 million
- Accrued interest expense: $19.5 million
- Professional fees: $16.1 million
Comparatively, as of December 31, 2023:
- Accrued employee compensation: $35.0 million
- Georgia EO litigation settlement reserve: $35.0 million
- Illinois EO litigation settlement reserve: $0.3 million
- Other legal reserves: $1.5 million
- Accrued interest expense: $26.7 million
- Professional fees: $12.7 million
Equity and Shareholder Information
As of September 30, 2024, Sotera Health's equity figures were as follows:
| Equity Component | Amount |
|---|---|
| Common Stock | $2.86 million |
| Additional Paid-In Capital | $1,238.9 million |
| Retained Earnings (Accumulated Deficit) | ($622.4 million) |
| Accumulated Other Comprehensive Loss | ($124.6 million) |
| Total Equity | $470.2 million |
How Sotera Health Company (SHC) Makes Money
Business Model Overview
Sotera Health Company operates primarily through three segments: Sterigenics, Nordion, and Nelson Labs, providing sterilization services, Co-60 supply, and lab testing services, respectively. The company generates revenue through service fees for sterilization and testing, as well as product sales related to its Co-60 supply.
Revenue Breakdown
For the three months ended September 30, 2024, Sotera Health reported total net revenues of $285.5 million, marking an increase of 8.5% compared to $263.2 million in the same period of 2023. The breakdown of revenue sources is as follows:
| Revenue Source | Q3 2024 (in $ thousands) | Q3 2023 (in $ thousands) | Change (in $ thousands) | % Change |
|---|---|---|---|---|
| Service Revenue | 238,790 | 227,120 | 11,670 | 5.1% |
| Product Revenue | 46,678 | 36,057 | 10,621 | 29.5% |
| Total Net Revenues | 285,468 | 263,177 | 22,291 | 8.5% |
Segment Performance
Each business segment contributes differently to overall revenues:
| Segment | Q3 2024 Revenue (in $ thousands) | Q3 2023 Revenue (in $ thousands) | Change (in $ thousands) | % Change |
|---|---|---|---|---|
| Sterigenics | 175,574 | 168,347 | 7,227 | 4.3% |
| Nordion | 51,313 | 40,098 | 11,215 | 27.9% |
| Nelson Labs | 58,581 | 54,732 | 3,849 | 7.0% |
Cost Structure
The cost of revenues for the three months ended September 30, 2024 was $127.4 million, an increase from $117.2 million in the same period of 2023. The cost breakdown is as follows:
| Cost Type | Q3 2024 Cost (in $ thousands) | Q3 2023 Cost (in $ thousands) | Change (in $ thousands) | % Change |
|---|---|---|---|---|
| Service Cost | 111,080 | 103,580 | 7,500 | 7.2% |
| Product Cost | 16,364 | 13,613 | 2,751 | 20.2% |
| Total Cost of Revenues | 127,444 | 117,193 | 10,251 | 8.7% |
Operating Income
Operating income for the three months ended September 30, 2024 was $80.5 million, a 5.8% increase from $76.1 million in Q3 2023. This represents an operating margin of approximately 28.2% for Q3 2024.
Net Income
Net income for the three months ended September 30, 2024 was reported at $17.0 million, compared to a net loss of $13.7 million in the same period of 2023. This significant turnaround is attributed to increased revenues and controlled costs.
Adjusted Financial Metrics
Sotera Health reported an Adjusted EBITDA of $146.4 million for the nine months ended September 30, 2024, compared to $134.3 million for the same period in 2023, reflecting a growth of 9.0% year-over-year.
| Metric | Q3 2024 (in $ thousands) | Q3 2023 (in $ thousands) | Change (in $ thousands) | % Change |
|---|---|---|---|---|
| Adjusted Net Income | 48,943 | 46,567 | 2,376 | 5.1% |
| Adjusted EBITDA | 146,361 | 134,328 | 12,033 | 9.0% |
Capital Expenditures
For the nine months ended September 30, 2024, capital expenditures were $113.2 million, a decrease from $150.1 million in the same period of 2023. This reflects the company's strategic focus on capital efficiency.
Debt Structure and Financial Health
As of September 30, 2024, Sotera Health had a total long-term debt of $2.2 billion, with a significant portion maturing in 2031. Interest expenses for the nine months ended September 30, 2024, were $123.7 million, compared to $100.2 million in the same period of 2023.
Conclusion on Financial Performance
The financial performance of Sotera Health Company for the three and nine months ended September 30, 2024, indicates a robust recovery trajectory with significant revenue growth across all segments, improved profitability, and a focused approach to managing costs and capital expenditures.
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Resources:
- Sotera Health Company (SHC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Sotera Health Company (SHC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Sotera Health Company (SHC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.