Sotera Health Co. (SHC) Tops Q1 EPS by 2c, Revenues Beat; Reaffirms FY21 EPS/Revenues Outlook

Sotera Health Co. (NASDAQ: SHC) reported Q1 EPS of $0.18, $0.02 better than the analyst estimate of $0.16. Revenue for the quarter came in at $212 million versus the consensus estimate of $207.38 million.

• Q1 2021 net revenues of $212 million increased 13%, compared to Q1 2020
• Q1 2021 net income of $11 million or $0.04 per diluted share, compared to a net loss of $2 million or $0.01 per diluted share in Q1 2020; Q1 2021 includes $14 million of expense related to the repricing of the Company’s Term Loan
• Q1 2021 Adjusted EBITDA of $105 million increased 15%, compared to Q1 2020
• Q1 2021 Adjusted EPS increased 80% to $0.18, compared to Q1 2020 Adjusted EPS of $0.10
• March 31, 2021 total debt of $1.87 billion, net debt of $1.79 billion, and net leverage ratio improved to 4.1x
• Company reaffirms 2021 Outlook

“We are off to a strong start in 2021, reporting double-digit revenue growth, meaningful net income growth, and double-digit Adjusted EBITDA growth in the first quarter,” said Chairman and Chief Executive Officer, Michael B. Petras, Jr. “All three of our segments achieved solid revenue and segment income growth for the quarter, while managing ongoing challenges as a result of the pandemic. We also continued to execute on our strategic priorities, with the acquisition of BioScience Laboratories, capital deployment towards growth initiatives, and further deleveraging during the quarter.”

Petras continued, “I’m very proud of the entire Sotera Health team for delivering such strong financial and operational performance to start out 2021. These results establish a solid foundation for the remainder of the year, which is why we are comfortable reaffirming our Company’s 2021 outlook that we first provided on March 9, 2021. As we have said in the past, our focus remains on supporting our global team members while ensuring the highest quality of service for our customers.”

GUIDANCE:

Sotera Health Co. sees FY2021 EPS of $0.78-$0.86, versus the consensus of $0.82. Sotera Health Co. sees FY2021 revenue of $890-920 million, versus the consensus of $905.82 million.

Today, Sotera Health is reaffirming the 2021 outlook first provided on March 9, 2021. As a reminder, that outlook is:

• Net revenues in the range of $890 million to $920 million, representing growth of approximately 9% to 12%, compared to the prior year,
• Adjusted EBITDA in the range of $465 million to $485 million, representing growth of approximately 11% to 16%, compared to the prior year,
• Tax rate applicable to Adjusted Net Income of approximately 28%,
• Adjusted EPS in the range of $0.78 to $0.86,
• A fully diluted share count in the range of 281 million to 283 million shares on a weighted-average basis,
• Capital expenditures in the range of $100 million to $110 million, and
• Net leverage reduction of approximately 3/4 of a turn.

The outlook provided above contains a number of assumptions, including, among others, the Company’s current expectations regarding the impact of the COVID-19 pandemic, including the rate of recoveries of elective procedures and new product development testing, and exchange rates.

For earnings history and earnings-related data on Sotera Health Co. (SHC) click here.

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