# Sotera Health Co (SHC)

Informational only - not investment advice.

CIK: 0001822479
SIC: 8090 Services-Misc Health & Allied Services, NEC
SIC breadcrumb: [Services](/division/I/) > [SIC Major Group 80](/major-group/80/) > [SIC 8090 Services-Misc Health & Allied Services, NEC](/industry/8090/)
Latest 10-K filed: 2026-02-24
SEC page: https://www.sec.gov/edgar/browse/?CIK=1822479
Filing source: https://www.sec.gov/Archives/edgar/data/1822479/000182247926000015/shc-20251231.htm

## At a glance

FY2025 · period end 2025-12-31 · filed 2026-02-24 · accession 0001822479-26-000015 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001822479.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 1,163,617,000 USD | 2025 | verified |
| Net income | 77,949,000 USD | 2025 | verified |
| Assets | 3,263,190,000 USD | 2025 | verified |
| Free cash flow | 149,177,000 USD | 2025 | computed |
| Net margin | 6.70% | 2025 | computed |
| Revenue YoY | +5.74% | 2025 | computed |
| ROE | 12.86% | 2025 | computed |

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity.

No market price, no rating, no forecast on this site. Not investment advice.

### Peer percentile fingerprint

| Ratio | SHC | Peer median | Percentile | N |
| --- | ---: | ---: | ---: | ---: |
| Net margin | 6.7% | 3.2% | 71 | 56 |
| Operating margin | 27.0% | 5.5% | 98 | 51 |
| Revenue growth | 5.7% | 11.8% | 29 | 57 |
| FCF margin | 12.8% | 5.4% | 91 | 48 |
| ROE | 12.9% | 7.9% | 71 | 53 |
| ROA | 2.4% | 2.8% | 46 | 58 |
| Liabilities / equity | 4.38 | 1.13 | 85 | 54 |
| Current ratio | 2.46 | 1.63 | 68 | 58 |

Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC major-group 80 SIC Major Group 80, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 1163617000 | USD | 2025 | 2026-02-24 |
| Net income | 77949000 | USD | 2025 | 2026-02-24 |
| Assets | 3263190000 | USD | 2025 | 2026-02-24 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-24. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001822479.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 778,327,000 | 818,158,000 | 931,478,000 | 1,003,687,000 | 1,049,288,000 | 1,100,441,000 | 1,163,617,000 |
| Net income | -20,850,000 | -38,617,000 | 116,882,000 | -233,570,000 | 51,376,000 | 44,398,000 | 77,949,000 |
| Operating income | 183,597,000 | 206,018,000 | 256,733,000 | 248,350,000 | 276,692,000 | 297,626,000 |  |
| Gross profit | 395,431,000 | 443,572,000 | 518,672,000 | 557,004,000 | 577,158,000 | 602,295,000 | 645,534,000 |
| Diluted EPS | -0.09 | -0.16 | 0.41 | -0.83 | 0.18 | 0.16 | 0.27 |
| Operating cash flow | 149,041,000 | 120,585,000 | 281,545,000 | 277,961,000 | -147,732,000 | 224,164,000 | 287,195,000 |
| Capital expenditures | 57,257,000 | 53,507,000 | 102,162,000 | 182,378,000 | 214,975,000 | 179,070,000 | 138,018,000 |
| Assets |  | 2,761,279,000 | 2,789,502,000 | 3,117,705,000 | 3,130,420,000 | 3,071,648,000 | 3,263,190,000 |
| Liabilities |  | 2,306,705,000 | 2,203,406,000 | 2,767,467,000 | 2,686,686,000 | 2,666,737,000 | 2,657,155,000 |
| Stockholders' equity |  | 452,302,000 | 586,096,000 | 350,238,000 | 443,734,000 | 404,911,000 | 606,035,000 |
| Cash and cash equivalents |  | 102,447,000 | 106,917,000 | 395,214,000 | 296,407,000 | 277,242,000 | 344,621,000 |
| Free cash flow | 91,784,000 | 67,078,000 | 179,383,000 | 95,583,000 | -362,707,000 | 45,094,000 | 149,177,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin | -2.68% | -4.72% | 12.55% | -23.27% | 4.90% | 4.03% | 6.70% |
| Operating margin | 23.59% | 25.18% | 27.56% | 24.74% | 26.37% | 27.05% |  |
| Return on equity |  | -8.54% | 19.94% | -66.69% | 11.58% | 10.96% | 12.86% |
| Return on assets |  | -1.40% | 4.19% | -7.49% | 1.64% | 1.45% | 2.39% |
| Liabilities / equity |  | 5.10 | 3.76 | 7.90 | 6.05 | 6.59 | 4.38 |
| Current ratio |  | 2.24 | 2.15 | 0.81 | 2.42 | 2.75 | 2.46 |

## As-reported value updates

No tracked differences above grepcent's stated thresholds and capped precision rule were found between the earliest XBRL-filed value and the value currently on file for the standardized annual metrics grepcent tracks.


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001822479.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q3 | 2022-09-30 |  |  | 0.09 | reported discrete quarter |
| 2022-Q4 | 2022-12-31 |  | -319,719,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2023-Q1 | 2023-03-31 |  |  | 0.01 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 |  | 23,513,000 | 0.08 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 263,177,000 | -13,660,000 | -0.05 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 310,239,000 | 38,681,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 248,176,000 |  | 0.02 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 276,594,000 | 8,754,000 | 0.03 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 285,468,000 | 16,998,000 | 0.06 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 290,203,000 | 12,323,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 254,523,000 |  | -0.05 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 294,341,000 | 7,962,000 | 0.03 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 311,312,000 | 48,400,000 | 0.17 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 303,441,000 | 34,847,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 280,045,000 | 26,589,000 | 0.09 | reported discrete quarter |
| 2026-Q2 | 2026-06-30 | 321,375,000 | 53,643,000 | 0.19 | reported discrete quarter |

## Filed narrative (10-K & 10-Q)

## Business

Verbatim Item 1 Business section from SHC's latest 10-K: [/company/SHC/business/](/company/SHC/business/).

## Risk Factors

Verbatim Item 1A Risk Factors from SHC's latest 10-K: [/company/SHC/risk-factors/](/company/SHC/risk-factors/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1822479/000182247926000047/shc-20260630.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high
Filing date: 2026-08-06
Report date: 2026-06-30

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis in conjunction with our consolidated financial statements and related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2025 Form 10-K. This discussion and analysis contains forward-looking statements that are based on management’s current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of various factors, including the factors we describe in the section entitled Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q, as well as Part I, Item 1A, “Risk Factors” in our 2025 Form 10-K.

OVERVIEW

We are a leading global provider of mission-critical end-to-end sterilization solutions, lab testing and advisory services for the healthcare industry. We are driven by our mission: Safeguarding Global Health®. We provide end-to-end sterilization as well as microbiological and analytical lab testing and advisory services to help ensure that medical, pharmaceutical and food products are safe for healthcare practitioners, patients and consumers in the United States and around the world. Our services are an essential aspect of our customers’ manufacturing processes and supply chains, helping to ensure sterilized medical products reach healthcare practitioners and patients. Most of these services are necessary for our customers to satisfy applicable government requirements.

We serve our customers throughout their product lifecycles, from product design to manufacturing and delivery, helping to ensure the sterility, effectiveness and safety of their products for the end user. We operate across two core businesses: sterilization services and lab services. Each of our businesses has a longstanding record and is a leader in its respective market, supported and connected by our core capabilities including deep end market, regulatory, technical and logistics expertise. The combination of Sterigenics, our terminal sterilization business, and Nordion, our Co-60 supply business, makes us the only vertically integrated global gamma sterilization provider in the sterilization industry. For financial reporting purposes, our sterilization services business is comprised of two reportable segments, Sterigenics and Nordion, and our lab services business constitutes a third reportable segment, Nelson Labs.

For the three and six months ended June 30, 2026, respectively, we recorded net revenues of $321.4 million and $601.4 million, net income of $53.6 million and $80.2 million, Adjusted Net Income of $74.0 million and $126.3 million, and Adjusted EBITDA of $165.7 million and $300.4 million. Adjusted Net Income and Adjusted EBITDA are financial measures not based on any standardized methodology prescribed by GAAP. For the definition of Adjusted Net Income and Adjusted EBITDA and the reconciliation of these non-GAAP measures from net income (loss), please see “Non-GAAP Financial Measures.”

CONSOLIDATED RESULTS OF OPERATIONS

Three Months Ended June 30, 2026 as compared to Three Months Ended June 30, 2025

The following table sets forth the components of our results of operations for the three months ended June 30, 2026 and 2025:

[[GREPCENT_TABLE]]
[["(thousands of U.S. dollars)","2026","","2025","","$ Change","","% Change"],["Total net revenues","$","321,375","","","$","294,341","","","$","27,034","","","9.2","%"],["Total cost of revenues","143,412","","","127,720","","","15,692","","","12.3","%"],["Net income","53,643","","","7,962","","","45,681","","","573.7","%"],["Adjusted Net Income(a)","73,961","","","56,062","","","17,899","","","31.9","%"],["Adjusted EBITDA(a)","165,739","","","150,735","","","15,004","","","10.0","%"]]
[[/GREPCENT_TABLE]]

(a)Adjusted Net Income and Adjusted EBITDA are non-GAAP financial measures. For more information regarding our calculation of Adjusted Net Income and Adjusted EBITDA, including information about their limitations as tools for analysis and a reconciliation of net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted Net Income and Adjusted EBITDA, please see the reconciliation included below in “Non-GAAP Financial Measures.”

27

Total Net Revenues

The following table compares our revenues by type for the three months ended June 30, 2026 to the three months ended June 30, 2025.

[[GREPCENT_TABLE]]
[["(thousands of U.S. dollars)"],["Net revenues for the three months ended June 30,","2026","","2025","","$ Change","","% Change"],["Service","$","278,325","","","$","257,244","","","$","21,081","","","8.2","%"],["Product","43,050","","","37,097","","","5,953","","","16.0","%"],["Total net revenues","$","321,375","","","$","294,341","","","$","27,034","","","9.2","%"]]
[[/GREPCENT_TABLE]]

Net revenues were $321.4 million for the three months ended June 30, 2026, an increase of $27.0 million, or 9.2%, as compared to the three months ended June 30, 2025. Excluding the impact of foreign currency exchange rates, net revenues for the three months ended June 30, 2026 increased approximately 8.0% compared with the three months ended June 30, 2025.

Service revenues

Service revenues increased $21.1 million, or 8.2%, to $278.3 million for the three months ended June 30, 2026 as compared to $257.2 million for the three months ended June 30, 2025. The growth in net service revenues was primarily driven by pricing in the Sterigenics and Nelson Labs segments, favorable volume/mix across all three segments and changes in foreign currency exchange rates.

Product revenues

Product revenues increased $6.0 million, or 16.0%, to $43.1 million for the three months ended June 30, 2026 as compared to $37.1 million for the three months ended June 30, 2025. The increase was driven by higher revenues from Co-60 in the Nordion segment due to the timing of reactor harvest schedules and favorable pricing, partially offset by changes in foreign currency exchange rates.

Total Cost of Revenues

The following table compares our cost of revenues by type for the three months ended June 30, 2026 to the three months ended June 30, 2025:

[[GREPCENT_TABLE]]
[["(thousands of U.S. dollars)"],["Cost of revenues for the three months ended June 30,","2026","","2025","","$ Change","","% Change"],["Service","$","126,840","","","$","113,293","","","$","13,547","","","12.0","%"],["Product","16,572","","","14,427","","","2,145","","","14.9","%"],["Total cost of revenues","$","143,412","","","$","127,720","","","$","15,692","","","12.3","%"]]
[[/GREPCENT_TABLE]]

Total cost of revenues accounted for approximately 44.6% and 43.4% of our consolidated net revenues for the three months ended June 30, 2026 and 2025, respectively.

Cost of service revenues

Cost of service revenues increased $13.5 million, or 12.0%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The increase was driven by higher employee compensation costs and depreciation from capital assets recently placed into service. Changes in foreign currency exchange rates resulted in an unfavorable impact to cost of service revenues for the three months ended June 30, 2026.

Cost of product revenues

Cost of product revenues increased $2.1 million, or 14.9%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The increase was primarily a result of higher volumes of Co-60 shipments due to the timing of reactor harvest schedules, which resulted in increases in direct material and transportation costs.

28

SG&A Expenses

SG&A expenses decreased $0.7 million, or 1.1%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, driven mainly by a decrease in litigation and other professional services expenses.

Amortization of intangible assets

Amortization of intangible assets decreased $6.3 million to $3.0 million, or 67.6%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The decline was primarily due to certain intangible assets that were fully amortized in May 2025.

Interest Expense, Net

Interest expense, net decreased $6.2 million, or 15.4%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, primarily due to a lower interest rate on our Term Loan and a $75.0 million principal paydown. The weighted average interest rate on our outstanding debt was 6.49% and 7.49% for the three months ended June 30, 2026 and 2025, respectively.

Loss on Refinancing of Debt

Loss on refinancing of debt for the three months ended June 30, 2026 was $0.9 million related to Amendment No. 7 to the Credit Agreement. Loss on refinancing of debt for the three months ended June 30, 2025 was $0.1 million related to Amendment No. 5 to the Credit Agreement. The refinancing activity resulted in the write off of certain unamortized debt issuance costs and discounts on the Term Loans. In addition, certain new debt issuance costs and discounts were expensed in connection with the Credit Agreement amendments.

Foreign Exchange (Gain) Loss

Foreign exchange gain was $3.7 million for the three months ended June 30, 2026 as compared to a loss of $0.6 million for the three months ended June 30, 2025. The change in foreign exchange (gain) loss in our Consolidated Statements of Operations and Comprehensive Income mainly relates to short-term gains and losses on transactions and certain assets and liabilities denominated in currencies other than the functional currency of our operating entities.

Other Income, Net

Other income, net decreased $3.0 million, or 51.0%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, mainly arising from an unfavorable decrease in the net fair value of Nordion’s embedded derivatives for the three months ended June 30, 2026 compared to the same period of the prior year.

Provision for Income Taxes

Provision for income taxes increased $13.5 million to a net provision of $24.4 million for the three months ended June 30, 2026 as compared to $10.9 million for the three months ended June 30, 2025. The change was primarily attributable to higher pre-tax income for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, partially offset by a decrease in the impact of the valuation allowance attributable to the limitation on the deductibility of interest expense.

Provision for income taxes for the three months ended June 30, 2026 differed from the federal statutory rate primarily due to the foreign rate differential, current year permanent differences, including foreign withholding taxes and other non-deductible items, and U.S. state income taxes (net of federal tax benefit). Income tax expense for the three months ended June 30, 2025 differed from the statutory rate primarily due to the valuation allowance attributable to the limitation on the deductibility of interest expense, the impact of the foreign rate differential and current year permanent tax differences, partially offset by a benefit for state income taxes.

Net Income, Adjusted Net Income and Adjusted EBITDA

Net income for the three months ended June 30, 2026 was $53.6 million as compared to net income of $8.0 million for the three months ended June 30, 2025 due to the factors described above. Adjusted Net Income was $74.0 million for the three months ended June 30, 2026, as compared to $56.1 million for the three months ended June 30, 2025, and Adjusted EBITDA was $165.7 million for the three months ended June 30, 2026 as compared to $150.7 million

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1822479/000182247926000015/shc-20251231.htm
Complete FY 2025 MD&A: /company/SHC/mda/fy2025/

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high
Filing date: 2026-02-24
Report date: 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read this Management’s Discussion and Analysis (“MD&A”) in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This MD&A contains forward-looking statements that are based on management’s current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of various factors, including the factors we describe in Item 1A, “Risk Factors” and elsewhere in this Annual Report on Form 10-K.

OVERVIEW

We are a leading global provider of mission-critical end-to-end sterilization solutions, lab testing and advisory services for the healthcare industry. We are driven by our mission: Safeguarding Global Health®. We provide end-to-end sterilization as well as microbiological and analytical lab testing and advisory services to help ensure that medical, pharmaceutical and food products are safe for healthcare practitioners, patients and consumers in the United States and around the world. Our services are an essential aspect of our customers’ manufacturing processes and supply chains, helping to ensure sterilized medical products reach healthcare practitioners and patients. Most of these services are necessary for our customers to satisfy applicable government requirements.

45

We serve our customers throughout their product lifecycles, from product design to manufacturing and delivery, helping to promote the sterility, effectiveness and safety of their products for the end user. We operate across two core businesses: sterilization services and lab services. Each of our businesses has a longstanding record and is a leader in its respective market, supported and connected by our core capabilities including deep end market, regulatory, technical and logistics expertise. The combination of Sterigenics, our terminal sterilization business, and Nordion, our Co-60 supply business, makes us the only vertically integrated global gamma sterilization provider in the sterilization industry. This provides us with additional insights and allows us to better serve our customers. For financial reporting purposes, our sterilization services business is comprised of two reportable segments, Sterigenics and Nordion, and our lab services business constitutes a third reportable segment, Nelson Labs.

For the year ended December 31, 2025, we achieved net revenues of $1,163.6 million, net income of $77.9 million, Adjusted Net Income of $245.4 million and Adjusted EBITDA of $593.8 million. Adjusted Net Income and Adjusted EBITDA are financial measures not based on any standardized methodology prescribed by U.S. Generally Accepted Accounting Principles (“GAAP”). For the definition of Adjusted Net Income and Adjusted EBITDA and the reconciliation of these non-GAAP measures from net income, please see “Non-GAAP Financial Measures.”

TRENDS AND KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS

We expect that our performance and financial condition will continue to be driven by the key trends impacting our industries, customers and their end markets as outlined in Item 1, “Business.” In addition, we believe the following trends and key factors have underpinned our recent operating results and may continue to affect our performance and financial condition in future periods.

•Business and market conditions. Consolidated net revenues for the year ended December 31, 2025 increased by 5.7% from the year ended December 31, 2024, driven by sustained favorability in pricing and volume/mix. All three reportable segments reported segment income growth for the year ended December 31, 2025.

•Investment initiatives. We continue to advance our growth-related investments, including our two active capacity expansion projects within the Sterigenics segment, Co-60 development projects in the Nordion segment and lab expansion efforts to support pharma testing services in the Nelson Labs segment.

•Disciplined and strategic M&A activity. We remain committed to our highly disciplined acquisition strategy and continue to seek suitable acquisition targets.

•Borrowings and financing costs. On April 30, 2025, the Company and SHH entered into Amendment No. 5 to the Credit Agreement. Among other changes, Amendment No. 5 provides (i) for an increase in the commitments under the existing Revolving Credit Facility, (ii) additional commitments for the issuance of letters of credit and (iii) extends the maturity date of the Revolving Credit Facility to April 30, 2030.

On September 17, 2025, the Company and SHH entered into Amendment No. 6 to the Credit Agreement. Amendment No. 6 reduced the interest rate to Adjusted Term SOFR (as defined in the Credit Agreement) plus 2.50%, with a 0.00% floor.

•Litigation costs. On April 3, 2025 and July 23, 2025, Sterigenics entered into binding term sheets to resolve 97 and 129 EO claims, respectively, against Sterigenics relating to its former facility in Willowbrook, Illinois. Pursuant to the term sheets, Sterigenics agreed to pay $30.9 million and $34.0 million, respectively, allowing for the settling plaintiffs’ claims to be dismissed with prejudice.

See Item 3, “Legal Proceedings” and Note 19, “Commitments and Contingencies,” to our consolidated financial statements.

In addition, for the years ended December 31, 2025, 2024 and 2023, we recorded $46.2 million, $32.7 million and $45.3 million, respectively, of litigation and other professional fees associated with our EO sterilization facilities.

COMPONENTS OF OUR RESULTS OF OPERATIONS

Net Revenues

Service revenues primarily consist of revenue generated from contract sterilization and lab testing and advisory services within our Sterigenics and Nelson Labs segments, respectively. Service revenues also primarily consist of Co-60 installation and disposal revenues and gamma irradiation system refurbishments and installation services within our Nordion segment. Product revenues primarily consist of revenues generated from sales of Co-60 radiation sources and gamma irradiation systems. Provisions for discounts, rebates to customers, and other adjustments may be provided for as reductions in net revenues.

46

Refunds, returns, warranties and other related obligations are not material to any of our business units, nor do we intend to incur material incremental costs to secure customer contracts.

Cost of Revenues

Our cost of revenues consists primarily of direct materials, utilities, labor and related benefit costs, and depreciation and amortization. Although the cost of utilities and direct materials can fluctuate, the remaining components of cost of revenues are generally more stable. Direct material costs relating to service revenues primarily include EO gas, nitrogen gas and Co-60. The physical decay of Co-60 assets is included within depreciation expense as a cost of revenue. Direct material costs relating to product revenues also include the costs associated with acquiring Co-60 in finished or semi-finished form, acquiring Co-59 in a form ready for insertion into reactors for conversion into Co-60, the reactor time and associated services to convert Co-59 into Co-60, and parts and equipment associated with maintaining gamma irradiation systems.

SG&A Expenses

Selling, general and administrative expenses (“SG&A”) primarily consists of compensation and benefits costs and general operating and administrative expenses, including professional service fees (which include finance and legal costs), travel and entertainment expenses, and other general and administrative expenses. Share-based compensation expense is also included in SG&A.

Amortization of Intangible Assets

Amortization of intangible assets primarily consists of expense associated with customer relationship, proprietary technology, trade names and other intangible assets. Amortization expense fluctuates when we have an acquisition, disposition, impairment charge, or as asset useful lives expire.

Interest Expense, Net

Interest expense, net, represents interest paid or accruing on our outstanding indebtedness and the amortization of debt discount and debt issuance costs. Interest expense, net is primarily affected by changes in average outstanding indebtedness (including finance lease obligations) and variable interest rates. We present interest expense net of interest income, which primarily consists of interest earned on cash on hand.

Loss on Refinancing of Debt

Loss on refinancing of debt represents the write-off of unamortized debt issuance costs and discounts, as well as certain other costs incurred related to the refinancing activity for the Term Loans, the Secured Notes and the Revolving Credit Facility.

Georgia EO litigation settlement

On October 16, 2023, the Company reached an agreement to resolve 79 EO claims in the State of Georgia. Under the terms of the agreement, the Company paid $35.0 million to settle the claims.

Illinois EO litigation settlement

The following represents the costs related to EO litigation settlement agreements:

•On April 3, 2025, the Company reached an agreement to settle approximately 97 pending and threatened EO claims in Illinois. Under the terms of the agreement, the Company paid $30.9 million to settle the claims.

•On July 23, 2025 the Company reached an agreement to settle approximately 129 pending and threatened EO claims in Illinois. Under the terms of the agreements, the Company paid $34.0 million to settle the claims.

Foreign Exchange Loss

Foreign exchange loss mainly relates to short-term gains and losses on transactions denominated in currencies other than the functional currency of our operating entities.

Other Income, Net

Other income, net primarily consists of changes in the fair value of the embedded derivatives in Nordion’s contracts and the net impact of pension-related benefits.

Provision for Income Taxes

Provision for income taxes primarily consists of income taxes in foreign jurisdictions and U.S. federal and state income taxes.

47

Constant Currency Sales Growth (Non-GAAP)

“Constant currency” is a non-GAAP financial measure we use to assess performance excluding the impact of foreign currency exchange rate changes. Constant currency sales growth is calculated by translating prior year sales in local currency at the average exchange rates applicable for the current period. The translated results are then used to determine year-over-year percentage increases or decreases. We generally refer to such amounts calculated on a constant currency basis as excluding the impact of foreign currency exchange rates. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with U.S. GAAP.

Adjusted Net Income and Adjusted EBITDA (Non-GAAP)

We use Adjusted Net Income and Adjusted EBITDA, non-GAAP financial measures, as the principal measures of our operating performance. Management believes Adjusted Net Income and Adjusted EBITDA are useful because they allow management to more effectively evaluate our operating performance and compare the results of our operations from period to period without the impact of certain non-cash items and non-routine items that we do not expect to continue at the same level in the future and other items that are not core to our operations. We believe that these measures are useful to our investors because they provide a more complete understanding of the factors and trends affecting our business than could be obtained absent this disclosure. In addition, we believe Adjusted Net Income and Adjusted EBITDA will assist investor

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2025 MD&A: /company/SHC/mda/fy2025/
All MD&A years: /company/SHC/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2024 MD&A](/company/SHC/mda/fy2024/): filed 2025-02-27; accession 0001822479-25-000015 (https://www.sec.gov/Archives/edgar/data/1822479/000182247925000015/shc-20241231.htm)
- [FY 2023 MD&A](/company/SHC/mda/fy2023/): filed 2024-02-27; accession 0001822479-24-000011 (https://www.sec.gov/Archives/edgar/data/1822479/000182247924000011/shc-20231231.htm)
- [FY 2022 MD&A](/company/SHC/mda/fy2022/): filed 2023-02-28; accession 0001822479-23-000015 (https://www.sec.gov/Archives/edgar/data/1822479/000182247923000015/shc-20221231.htm)
- [FY 2021 MD&A](/company/SHC/mda/fy2021/): filed 2022-03-01; accession 0001822479-22-000014 (https://www.sec.gov/Archives/edgar/data/1822479/000182247922000014/shc-20211231.htm)




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 8090 Services-Misc Health & Allied Services, NEC) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [PCE](/indicator/PCE/): Personal Consumption Expenditures
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [UNRATE](/indicator/UNRATE/): Unemployment Rate
- [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income

Macro-to-micro threads including this sector: [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/SHC.md · JSON record: /company/SHC.json · verified financials: /company/SHC/financials.json / /company/SHC/financials.csv · machine TOC for the whole site: /llms.txt