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STERIS Corporation

Public Healthcare - Health Services 5,000 - 10,000 Employees 8 Active Jobs

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STERIS was founded in 1987 with a venture capital investment of $1.2 million and a plan for a healthier and safer world. Today, the Company stands at the forefront of efforts to prevent infection and contamination in healthcare and pharmaceutical environments, and is broadening its reach in consumer, defense, and industrial markets as well.

Benefits

Flexibility is built into many STERIS benefits to accommodate your needs. Employee benefits may vary by location. The following is a list of benefits which may be available to you.
  • Medical, dental and prescription options
  • Life insurance
  • 401(k) participation
  • Healthcare reimbursement benefits
  • Dependent care reimbursement benefits
  • Short- and long-term disability options
  • Tuition reimbursement
  • Employee assistance program
  • Scholarship fund
  • Paid vacation, sick days and holidays
  • Company vehicle, if applicable
  • Laptop computers and other technologies, if applicable

Career Opportunities

STERIS Corporation Announces Fiscal 2007 Fourth Quarter and Full Year Results
Fourth Quarter Revenues Increase 6% - Earnings Reach Quarterly Record at $0.45 per Diluted Share - Company Provides Update on President and CEO Search

MENTOR, Ohio, May 8 /PRNewswire-FirstCall/ -- STERIS Corporation (NYSE: STE) today announced financial results for its fiscal 2007 fourth quarter ended March 31, 2007. Fiscal 2007 fourth quarter revenues increased 6% to $349.8 million compared with $331.3 million in the fourth quarter of fiscal 2006, driven by strong growth in the Healthcare and Isomedix segments.

Fiscal 2007 fourth quarter net income was $29.8 million, or $0.45 per diluted share, compared with net income of $8.5 million, or $0.12 per diluted share, in the fourth quarter of fiscal 2006. Fiscal 2006 fourth quarter net income included a $1.1 million net gain related to discontinued operations. Net income from continuing operations for the fourth quarter of fiscal 2007 was $29.8 million, or $0.45 per diluted share, compared with net income from continuing operations of $7.4 million, or $0.11 per diluted share in the fourth quarter of fiscal 2006.

Included in fiscal 2007 fourth quarter net income from continuing operations is the impact of SFAS 123R, an accounting standard related to the expensing of stock-based compensation, which negatively impacted pre-tax income by $1.0 million. Also included in net income from continuing operations for the fourth quarter of fiscal 2007 and fiscal 2006 are expenses associated with the Erie/Mexico transfer of manufacturing operations. These expenses negatively impacted fiscal 2007 fourth quarter pre-tax income by $1.6 million, with $1.0 million of that amount reported as restructuring expenses. Restructuring expenses primarily related to the Erie/Mexico transfer negatively impacted fiscal 2006 fourth quarter pre-tax income by $25.3 million. The following table outlines the impact of these specific items on an after-tax basis, which affect the comparability of net income from continuing operations for the fourth quarter of fiscal 2007, relative to the same period in the prior year.

"We are very pleased to have ended the year on a strong note, delivering solid fourth quarter revenue growth and record quarterly earnings per share," said Les C. Vinney, STERIS's president and chief executive officer. "In particular, our Healthcare and Isomedix segments each delivered high single- digit revenue growth in the quarter, while the Life Sciences decline resulted from tough comparisons with a strong prior year fourth quarter. From a profitability standpoint, ongoing productivity enhancements, increased volume levels, and improved pricing all contributed to delivering strong operating profit levels and increased earnings for the quarter and full year. While market growth continues at a modest pace, we are confident that the strategic initiatives we have put into place have positioned STERIS to sustain strong financial performance and build upon the success of fiscal 2007. Fiscal 2008 is anticipated to be another solid year, with continued revenue and earnings growth, however, shifting cost and expense levels are expected to skew earnings to the latter half of the year."

President and CEO Search Update

The Company previously announced that Les C. Vinney would be stepping down as President and Chief Executive Officer by June 1, 2007. Since that announcement, the Search Committee of the Company's Board, with the help of an international executive search firm, has undertaken an extensive process to recruit the best candidate to succeed Mr. Vinney. The Search Committee evaluated a number of very strong candidates. However, the selection of a new President and Chief Executive Officer is not complete due to complications arising late in the process. As a result, the search is continuing. To allow for ongoing continuity of leadership and more time to complete this process, STERIS and Mr. Vinney have entered into a new agreement which provides for him to remain as President and Chief Executive Officer until the earlier date of the appointment of a successor, or October 1, 2007.

John P. Wareham, Chairman of the Board of Directors of STERIS, commented, "As we continue the process of selecting a new leader to take STERIS forward, the Board of Directors remains very positive about the Company's future. Under Les' continued leadership, the Company is making steady progress on its strategic initiatives, and is in a strong financial position. The process of selecting the best candidate to succeed Les is an important one and we expect our search efforts will be concluded in a considered and timely manner."

Quarterly Segment Results

Healthcare revenues in the quarter increased 8% to $251.6 million compared with the fourth quarter of fiscal 2006. The segment experienced strong growth in U.S. capital revenues as sterile processing equipment shipments rebounded, as well as strong consumable revenues and continued growth in service. Order backlog for the fourth quarter was $63.8 million, an increase of 3% compared with the prior year period. Operating income in the healthcare segment was $43.4 million, compared with $11.3 million in the fourth quarter of fiscal 2006. Pre-tax expenses primarily related to the Erie/Mexico transfer negatively impacted the fiscal 2007 quarter by $1.6 million and the fiscal 2006 quarter by $24.8 million. Excluding those expenses, Healthcare operating income increased 25% to $45.0 million compared with $36.1 million in the prior year quarter. The improvement was primarily driven by increased volumes, pricing and productivity improvements which helped to offset continued increases in raw material costs.

Life Sciences fourth quarter revenues were $63.6 million, a decrease of 4% compared with record revenue levels in fourth quarter of fiscal 2006. The segment experienced a decline in capital equipment being sold into the United States research market. However, pharmaceutical production capital equipment, consumables, and service revenue growth within the segment were strong. Order backlog increased 9% to $46.4 million compared with the prior year period.

Despite the decline in revenues, Life Sciences operating income increased 12% to $2.7 million in the quarter.

Fiscal 2007 fourth quarter revenues for Isomedix Services were $34.6 million, an increase of 9% compared with the same period last year. Revenue growth was primarily driven by increased demand from medical device customers and normal contracted price increases. Operating income increased 17% to $5.7 million compared with a weak prior year quarter, and reflected increased volumes and pricing.

Fiscal 2007 Full Year Results

For the full year fiscal 2007, revenues increased 3% to a record $1.2 billion compared with fiscal 2006. Net income was $82.2 million, or $1.25 per diluted share, compared with $70.3 million, or $1.02 per diluted share in fiscal 2006. Net income from continuing operations for fiscal 2007 was $81.1 million, or $1.23 per diluted share, compared with net income from continuing operations of $62.9 million, or $0.91 per diluted share in fiscal 2006. Included in fiscal 2007 net income from continuing operations is the impact of SFAS 123R, an accounting standard related to the expensing of stock-based compensation, which negatively impacted pre-tax income by $9.9 million. Also included in net income from continuing operations for fiscal 2007 are expenses associated with the Erie/Mexico transfer of manufacturing operations and European profitability improvement initiatives. Combined, these expenses negatively impacted fiscal 2007 pre-tax income by $11.9 million, with $6.6 million of that amount reported as restructuring expenses. Fiscal 2006 also was impacted by restructuring expenses primarily related the Erie/Mexico transfer, which negatively impacted fiscal 2006 pre-tax income by $25.3 million. The following table outlines the impact of these specific items on an after-tax basis, which affect the comparability of net income from continuing operations for fiscal 2007, relative to the prior year.

Cash Flow

Net cash provided by operations for fiscal 2007 was $95.7 million, compared with net cash provided by operations of $162.0 million in fiscal 2006. Free cash flow (see note 1) was $49.5 million in fiscal 2007, compared with free cash flow of $110.8 million in fiscal 2006. The decline in operating cash flow reflects working capital changes, including an approximately $30 million first quarter payment to the IRS for tax expenses and an increase in inventories of $17 million. The increase in inventories reflects new product and service initiatives, along with an $8 million inventory build related to the transfer of Erie manufacturing operations to Mexico.

Outlook

The table below provides the range of anticipated performance for fiscal year 2008 for key financial metrics.

Inherent in this outlook are certain key assumptions such as the expectation that the Company's revenue growth will be slightly above the anticipated growth rates in its key markets as the Company continues to benefit from new product offerings and improved pricing. Gross margin will vary within the ranges noted and could potentially be higher or lower due to changes in raw material costs, which are anticipated to continue to negatively impact the profitability of the Company. The tax rate for the full year is anticipated to be approximately 38.5% but will vary from quarter to quarter. The Company's results are expected to follow its regular pattern of sequentially increasing revenues and earnings throughout the year. In fiscal 2008, this earnings pattern may be accentuated by the nature of the costs and benefits associated with the transfer of Erie manufacturing operations to Mexico, the impact of raw material costs and the Company's own pricing strategy. As a result, roughly one-third of annual earnings is expected to be achieved in the first half of the year and two-thirds in the second half.

Conference Call

In conjunction with this press release, STERIS Corporation management will host a conference call today at 10:00 a.m. Eastern time. The conference call can be heard live over the Internet at www.steris-ir.com or via phone by dialing 1-888-392-9976 in the United States and Canada, and 1-517-645-6486 internationally, then referencing the password "STERIS" and the conference leader's name, "Aidan Gormley."

For those unable to listen to the conference call live, a replay will be available from 12:00 p.m. Eastern time on May 8, 2007, until 5:00 p.m. Eastern time on May 22, 2007, either over the Internet at www.steris-ir.com or via phone by calling 1-800-756-3940 in the United States and Canada, and 1-402-998-0796 internationally.

About STERIS

The mission of STERIS Corporation is to provide a healthier today and safer tomorrow through knowledgeable people and innovative infection prevention, decontamination and health science technologies, products and services. The Company's more than 5,000 dedicated employees around the world work together to supply a broad array of solutions by offering a combination of equipment, consumables and services to healthcare, pharmaceutical, industrial and government customers. The Company is listed on the New York Stock Exchange under the symbol STE. For more information, visit www.steris.com.

(1) Free cash flow is a non-GAAP number used by the Company as a measure to gauge its ability to fund future growth opportunities, repurchase common shares, and pay cash dividends. Free cash flow is defined as cash flows from operating activities less purchases of property, plant, equipment and intangibles, net (capital expenditures) plus proceeds from the sale of property, plant, equipment and intangibles. STERIS's calculation of free cash flow may vary from other companies.

This news release and the conference call referenced here may contain statements concerning certain trends, expectations, forecasts, estimates, or other forward-looking information affecting or relating to the Company or its industry that are intended to qualify for the protections afforded "forward- looking statements" under the Private Securities Litigation Reform Act of 1995 and other laws and regulations. Forward-looking statements speak only as to the date of this report, and may be identified by the use of forward-looking terms such as "may," "will," "expects," "believes," "anticipates," "plans," "estimates," "projects," "targets," "forecasts," "confidence," and "seeks," or the negative of such terms or other variations on such terms or comparable terminology. Many important factors could cause actual results to differ materially from those in the forward-looking statements including, without limitation, disruption of production or supplies, changes in market conditions, political events, pending or future claims or litigation, competitive factors, technology advances, and changes in government regulations or the application or interpretation thereof. Other risk factors are described in the Company's Form 10-K and other securities filings. Many of these important factors are outside STERIS's control. No assurances can be provided as to any future financial results. Unless legally required, the Company does not undertake to update or revise any forward-looking statements even if events make clear that any projected results, express or implied, will not be realized. Other potential risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, (a) the potential for increased pressure on pricing that leads to erosion of profit margins, (b) the possibility that market demand will not develop for new technologies, products or applications, or the Company's business initiatives will take longer, cost more or produce lower benefits than anticipated, (c) the possibility that application of or compliance with laws, court rulings, regulations, certifications or other requirements or standards may delay or prevent new product introductions, affect the production and marketing of existing products, or otherwise affect Company performance, results, or value, (d) the potential of international unrest or effects of fluctuations in currencies, tax assessments or rates, raw material costs, benefit or retirement plan costs, or other regulatory compliance costs, (e) the possibility of reduced demand, or reductions in the rate of growth in demand, for the Company's products and services, and (f) the possibility that anticipated cost savings may not be achieved, or that transition, labor, competition, timing, execution, regulatory, governmental, executive transition or other issues or risks associated with the matters described in this release, or the referenced conference call, may adversely impact Company performance, results, or value.

Free cash flow is defined by the Company as cash flows from operating activities less purchases of property, plant, equipment and intangibles, net(capital expenditures) plus proceeds from the sale of property, plant, equipment and intangibles. Free cash flow is a non-GAAP figure under Securities and Exchange Commission rules. The Company uses free cash flow as a measure to gauge its ability to fund future growth opportunities, repurchase common shares, and pay cash dividends. STERIS's calculation of free cash flow may vary from other companies.

SOURCE STERIS Corporation

CONTACT: Aidan Gormley Senior Director, Corporate Communications and Investor Relations
STERIS Corporation
+1-440-392-7607
Web site: http://www.steris.com

Please copy and paste or click on the following URL to view Financial Tables:
http://media.corporate-ir.net/media_files/irol/68/68786/STE_Q407.pdf

Mission & Vision

To provide a healthier today and a safer tomorrow through knowledgeable people and innovative infection prevention, decontamination, and health science technologies, products, and services.

VISION
To be a trusted and valued global resource in the advancement of health science and the effort to protect people from the dangers of infection and contamination. We will continually reach higher in our pursuit of innovative technologies that foster superior products and services and help make the world a safer place.

People

Our corporate culture encourages entrepreneurs and people with new ideas. It’s a dynamic environment that thrives on continuous education, training and improvement. We work hard as individuals and within teams, and are recognized for our efforts.

Our employees continually stretch to enhance skills and knowledge because customers depend on our help to manage complex issues with far-reaching repercussions. These high-stakes scenarios require attention to detail, grace under pressure and a drive to surpass customer expectations. STERIS professionals deliver, day in and day out.

Culture

These values are fundamental to our business activities: Integrity – We embrace truthfulness and trust. We say what we mean and deliver what and when we promise. Mutual Respect – We value and respect our customers, suppliers, fellow employees, and communities. Responsibility – We strive for excellence in everything we do. We adhere to established legal and ethical standards. We take responsibility for our actions. Corporate Citizenship – We operate our businesses in a manner that respects and obeys all applicable laws, and reflects a commitment to excellence in safety, health, and environmental matters.

Products & Services

STERIS develops and creates products that are used around the world to prevent infection and contamination in critical environments where the highest levels of sterility are required to ensure successful outcomes. These include hospitals, outpatient clinics, pharmaceutical manufacturing operations, research labs, and other industrial environments. Discover the breadth of our products.

STERIS offers a range of services that help our customers do their jobs more safely, effectively, and efficiently.

Our services range from maintaining laboratory medical equipment to providing hospital, laboratory and health care design. We offer the educational and operational support our customers need to meet sterility assurance standards, fight contamination threats, and implement healthcare process improvements. Additionally, STERIS finance allows payment plans that suit your organization’s needs.