Sentences and paragraphs of STE's Risk Factors and MD&A, 10-K 2026-05-29 against 10-K 2025-05-29.
Each links to the text at sec.gov.
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AddedRisk Factors
From time to time, we may invest in technology, business infrastructure, new businesses, product offerings and manufacturing innovations and expansion of existing businesses, each of which may require substantial cash investments and management attention. We believe cost-effective investments are essential to business growth and profitability; however, significant investments are subject to typical risks and uncertainties inherent in developing a new business or expanding an existing business. The failure of any significant investment to provide expected returns or profitability could have a material adverse effect on our financial results and divert management attention from more profitable business operations.
Read it in 10-K 2026-05-29 at sec.gov ↗
AddedRisk Factors
STERIS may not achieve expected returns and benefits in connection with dispositions, which may require continued involvement in a divested business, such as through transition service agreements, guarantees, indemnities or other financial obligations. Under these arrangements, the performance of the divested business, or other conditions outside our control, could affect our future financial results. The costs described above, as well as other unanticipated costs and expenses, could have a material adverse effect on the financial condition and operating results.
Read it in 10-K 2026-05-29 at sec.gov ↗
RemovedRisk Factors
We might be adversely impacted by tax legislation or challenges to our tax positions.
Read it in 10-K 2025-05-29 at sec.gov ↗
RemovedRisk Factors
The U.S. Internal Revenue Service (the “IRS”) may not agree that we are a non-U.S. corporation for U.S. federal tax purposes.
Read it in 10-K 2025-05-29 at sec.gov ↗
RemovedRisk Factors
Although we are organized under the laws of Ireland and are a tax resident in Ireland for Irish tax purposes, the IRS may assert that we should be treated as a U.S. corporation (and, therefore, a U.S. tax resident) for U.S. federal tax purposes pursuant to Section 7874 of the Code (“Section 7874”). For U.S. federal tax purposes, a company generally is considered to be a tax resident in the jurisdiction of its organization. Because we are organized under the laws of Ireland, we would generally be classified as a non-U.S. corporation (and, therefore, a non-U.S. tax resident) under these rules. Section 7874, however, provides an exception to this general rule under which a non-U.S. organized entity may be treated as a U.S. corporation for U.S. federal tax purposes. The rules under Section 7874 are complex, but as a general matter, a foreign corporation is treated as a U.S. corporation if the foreign corporation acquires stock in or assets of a U.S. corporation (or a U.S. partnership) whereas, by reason of such acquisition, the former shareholders of the U.S. corporation (or the former partners of the U.S. partnership) own at least 80% (by vote or value) of the stock in the foreign corporation.
Read it in 10-K 2025-05-29 at sec.gov ↗
RemovedRisk Factors
gastrointestinal endoscopy accessories, contract sterilization, and other products and services entering the market. Competitors and potential competitors also are attempting to develop alternate technologies and sterilizing agents, as well as disposable medical instruments and other devices designed to address the risk of contamination.
Read it in 10-K 2025-05-29 at sec.gov ↗
RemovedRisk Factors
For example, on January 5, 2023, the CSRD became effective. The CSRD expands the number of companies required to publicly report ESG-related information, defines the ESG-related information that companies are required to disclose in accordance with ESRS and imposes additional assurance obligations with respect to such disclosures. While CSRD rules are prescriptive for the types of data to be reported, the methodology for quantifying and qualifying such data are still developing and uncertain and may impose increased costs on us related to complying with our reporting obligations and increase risks of non-compliance with ESRS and the CSRD. In addition, there is currently uncertainty surrounding the requirements to publish ESG-related information under the CSRD and the content requirements of such report under the ESRS. On February 26, 2025, the European Commission proposed an “Omnibus” reform law that would delay application of the CSRD by two years (so-called “stop the clock”) and that proposes reducing the number of reporting requirements under the ESRS. On April 17, 2025, the "stop the clock" delay became effective at the EU level, and EU member states have until December 31, 2025 to transpose the delay into national law. However, the balance of the changes to the CSRD proposed as part of the Omnibus package need to progress through the European Union's legislative process and require political approval. Responses from the European Union member countries have been varied, and there is uncertainty as to when and how the CSRD may be changed in light of these proposals; however, Irish officials have expressed support for the proposed changes and further pledged to amend existing Irish legislation to clarify and reduce the scope of companies covered. These changes, and any other new or pending legal or regulatory matters, may result in the expenditure of additional resources or costs to comply with such requirements, which could affect our financial condition, results of operations or cash flows.
Read it in 10-K 2025-05-29 at sec.gov ↗
RemovedRisk Factors
•potential unknown liabilities and unforeseen expenses associated with the acquisition;
Read it in 10-K 2025-05-29 at sec.gov ↗
RemovedRisk Factors
We may fail to realize all of the anticipated benefits of our strategic business initiatives, as well as acquisitions, dispositions or joint ventures, or those benefits may take longer to realize than expected.
Read it in 10-K 2025-05-29 at sec.gov ↗
RewordedRisk Factors
Our indebtedness could have important consequences to our shareholders, including increasing risk associated with general adverse economic and industry conditions, limiting our ability to obtain additional financing to fund future working capital, capital expenditures and other general corporate requirements, requiring the use of a substantial portion of our cash flow from operations for the payment of principal and interest on indebtedness, thereby reducing our ability to use our cash flow to fund working capital, acquisitions, capital expenditures and general corporate matters, including dividend payments and stock repurchases, limiting our flexibility in planning for, or reacting to, changes in our business and our industry and creating a disadvantage compared to our competitors with less indebtedness.
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedRisk Factors
While our employees and agents are required to comply with these laws, we cannot assure you that laws and regulations, our internal policies and procedures will always may not protect us from violations of these laws, despite our commitment to legal compliance and corporate ethics. which violations could affect financial condition, results of operations, or cash flows.
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedRisk Factors
While we believe There can be no assurances that we have developed appropriate our measures to protect the health and well-being wellbeing of our employees in the event of future health crises, there can be no assurances that our measures crises will be sufficient to protect our employees in our workplace or that they may not otherwise be exposed to an illness outside of our workplace.
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedRisk Factors
Furthermore, some non-U.S. jurisdictions have raised tax rates, and it is reasonable to expect that other global taxing authorities will be reviewing current legislation for potential modifications in reaction to the current provisions of the TCJA, potential future modifications or repeal of certain provisions of the TCJA, and other current economic conditions. modifications.
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedRisk Factors
Other stakeholders, including governments governments, regulators, and regulators, elected officials have expressed concerns about or opposition to businesses' social commitments commitments, and sustainability goals. goals, and other ESG-focused policies, including concerns about or allegations of "greenwashing".
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedRisk Factors
Both the standard setting and regulatory landscapes are also extremely complex and present significant compliance and communication challenges in light of these uncertain and varied approaches to greenhouse gas emissions disclosures and sustainability reporting.
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedRisk Factors
Further, we have settled claims of liability resulting from EO sterilization activities in the past and could in the future be liable for further material damages and fines as a result of legislative or regulatory action or litigation, and any current or future liability could exceed our insurance and indemnification coverage, if any, and have a material adverse effect on our financial condition.
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedRisk Factors
We could experience a failure of a key information technology system, process or site or a breach of information security, including a cybersecurity breach of one or more key information technology systems, networks, processes, associated sites or service providers. providers; failure to manage these and other risks associated with the use of sophisticated technology could materially impact our business.
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedRisk Factors
There can be no assurance that we will be able to obtain additional funds beyond those available under existing bank credit facilities on terms favorable to us, or at all, or that such our existing bank credit facilities or other indebtedness can be replaced or refinanced when they mature or terminate.
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedRisk Factors
Our We may be adversely impacted by changes in tax laws or challenges to our tax positions, and our effective tax rate is uncertain and may vary from expectations, which could have a material impact on our results of operations and earnings per share.
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedRisk Factors
In Pursuant to binding confidential settlement agreements entered into in March and October 2025, we agreed to pay up to approximately $48.2 million to resolve substantially all of the claims for personal injury against a subsidiary related to EO exposure that are pending in the Circuit Court of Cook County, Illinois.
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedRisk Factors
We These tax laws are extremely complex and subject to varying interpretations, and we are subject to tax examinations in various jurisdictions that might may assess additional tax liabilities against us.
Read it in 10-K 2026-05-29 at sec.gov ↗
Quiet changesRisk Factors
Tax laws might may change in ways that adversely affect our tax positions, effective tax rate and cash flow.
Read it in 10-K 2026-05-29 at sec.gov ↗
Quiet changesRisk Factors
Developments in examinations and challenges might may materially change our provision for taxes in the affected periods and might may differ materially from our historical tax accruals.
Read it in 10-K 2026-05-29 at sec.gov ↗
Quiet changesRisk Factors
As a result, our income may be taxed in jurisdictions where it is not currently taxed and at higher rates than it is currently taxed, all of which may increase our effective tax rate.
Read it in 10-K 2026-05-29 at sec.gov ↗
Quiet changesRisk Factors
Although we believe we have valid defenses to such claims, there can be no assurance that we will prevail on the merits, as the outcome of trials before juries and other aspects of litigation can be highly unpredictable, and, as a result, we have chosen to pursue a settlement process with respect to certain pending cases in Illinois.
Read it in 10-K 2026-05-29 at sec.gov ↗
AddedMD&A
U.S. Tax Reform. On July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act ("OBBBA") which contains substantial changes to its tax policies. Business provisions in the OBBBA, some of which were extensions of those established in the Tax Cuts and Jobs Act, include favorable cost recovery allowances, changes to U.S. international tax rules, and changes to energy and environmental related incentives. The law has multiple effective dates, with certain provisions applicable to fiscal years beginning after fiscal 2026. The law did not have a material impact on our consolidated financial statements for fiscal 2026, and we do not expect it to have a material impact on our effective tax rate in the future.
Read it in 10-K 2026-05-29 at sec.gov ↗
AddedMD&A
The table above also excludes potential obligations related to our investment activities of approximately $211.0 million (based on contractual amounts, excluding working capital adjustments), including arrangements that provide for the potential
Read it in 10-K 2026-05-29 at sec.gov ↗
AddedMD&A
acquisition of the remaining equity interests in an investee, as well as contingent consideration arrangements. The timing and ultimate amount of any such obligations cannot be determined at this time, as they are contingent on the occurrence of specified events or conditions and, in certain cases, future operating performance.
Read it in 10-K 2026-05-29 at sec.gov ↗
RemovedMD&A
•Days sales outstanding (“DSO”) – We define DSO as the average collection period for accounts receivable. It is calculated as net accounts receivable divided by the trailing four quarters’ revenues, multiplied by 365 days. We use this figure to help gauge the quality of accounts receivable and expected time to collect.
Read it in 10-K 2025-05-29 at sec.gov ↗
RemovedMD&A
On August 2, 2023 we purchased the surgical instrumentation, laparoscopic instrumentation and sterilization container assets from Becton, Dickinson and Company (NYSE: BDX) ("BD"). The acquired assets from BD were integrated into our Healthcare segment.
Read it in 10-K 2025-05-29 at sec.gov ↗
RemovedMD&A
The purchase price of the assets acquired from BD was $539.8 million. The acquisition also qualified for a tax benefit related to tax deductible goodwill, with a present value of approximately $60.0 million. The purchase price of the acquisition was financed with borrowings from our existing credit facility.
Read it in 10-K 2025-05-29 at sec.gov ↗
RemovedMD&A
•Proceeds from the sale of property, plant, equipment and intangibles – During fiscal 2025 and 2024 we received $9.2 million and $7.4 million, respectively, for proceeds from the sale of property, plant, equipment and intangibles. The fiscal 2025 proceeds primarily related to the sale of a building previously used by the Healthcare segment, and the fiscal 2024 proceeds primarily related to the sale of a facility previously used by the AST segment.
Read it in 10-K 2025-05-29 at sec.gov ↗
RemovedMD&A
•Acquisition related deferred or contingent consideration – During fiscal 2025 and 2024, we paid $0.4 million and $6.2 million in acquisition related deferred and contingent consideration, respectively.
Read it in 10-K 2025-05-29 at sec.gov ↗
RemovedMD&A
•Transactions with noncontrolling interest holders – During fiscal 2025, we paid $2.1 million in distributions to noncontrolling interest holders and received $2.5 million in contributions from noncontrolling interest holders. During fiscal 2024, we paid $1.6 million in distributions to noncontrolling interest holders and received $3.0 million in contributions from noncontrolling interest holders.
Read it in 10-K 2025-05-29 at sec.gov ↗
RemovedMD&A
subsidiary that is a non-guarantor or issuer. Transactions with non-issuer and non-guarantor subsidiaries have been presented separately.
Read it in 10-K 2025-05-29 at sec.gov ↗
RemovedMD&A
We have made assumptions regarding healthcare costs in computing our other post-retirement benefit obligation. The assumed rates of increase generally decline ratably over a five year-period from the assumed current year healthcare cost trend rate of 8.5% to the assumed long-term healthcare cost trend rate. A 100 basis point change in the assumed healthcare cost trend rate (including medical, prescription drug, and long-term rates) would impact the total service and interest cost components and the post retirement benefit obligation by less than $0.1 million as of March 31, 2025.
Read it in 10-K 2025-05-29 at sec.gov ↗
RewordedMD&A
(k) (j) the effects of changes in credit availability and pricing, as well as the ability of STERIS and STERIS’s Customers and suppliers to adequately access the credit markets, on favorable terms or at all, when needed; and (k) the possibility that anticipated financial results, anticipated revenues, productivity improvements, cost savings, growth synergies, and other anticipated benefits of acquisitions, restructuring efforts, and divestitures will not be realized or will be less than anticipated due to unknown or inestimable liabilities, impairments, or increases in expected integration costs or difficulties in connection with the integration of acquired businesses.
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedMD&A
Summarized Balance Sheet Information At March 31, (dollars in thousands) (in millions) 2026 2025 2024 Receivables due from non-issuers and non-guarantor subsidiaries $19,931,477 $19,120,843 $21,513.5 $19,931.5 Other current assets 830,522 846,149 1,039.2 830.5 Total current assets $20,761,999 $19,966,992 $22,552.7 $20,762.0 Non-current receivables due from non-issuers and non-guarantor subsidiaries $1,278,411 $1,797,274 $1,280.3 $1,278.4 Goodwill 297,209 292,559 298.0 297.2 Other non-current assets 632,555 642,240 639.9 632.6 Total non-current assets $2,208,175 $2,732,073 $2,218.1 $2,208.2 Payables due to non-issuers and non-guarantor subsidiaries $23,557,233 $21,415,901 $25,938.3 $23,557.2 Other current liabilities 333,726 289,047 510.0 333.7 Total current liabilities $23,890,959 $21,704,948 $26,448.3 $23,891.0 Non-current payables due to non-issuers and non-guarantor subsidiaries $285,630 $598,730 $285.9 $285.6 Other non-current liabilities 2,060,771 3,247,978 1,820.7 2,060.8 Total non-current liabilities $2,346,401 $3,846,708 $2,106.6 $2,346.4
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedMD&A
Favorable impacts from pricing (130 (120 basis points), mix operational improvements and lower restructuring costs (70 basis points), material costs (30 basis points), and productivity (20 basis points), and divestitures (20 (50 basis points) were partially offset by unfavorable impacts from tariffs (80 basis points), inflation (150 (70 basis points) and adjustments and other charges points), materials costs (30 basis points), mix (30 basis points), and currency (10 basis points).
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedMD&A
The fiscal 2025 increase in cash flows from operations and free cash flow resulted during the period was driven primarily by improvements in net income, which more than offset the significantly lower contribution from the increase in cash provided by working capital, primarily driven by higher collections on accounts receivable and improved inventory management capital when compared to the prior year.
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedMD&A
Net Cash Provided By/Used In Investing Activities – The net cash used in our investing activities was $512.5 million for the year ended March 31, 2026, compared to net cash provided by our investing activities was of $388.8 million for the year ended March 31, 2025, compared to net cash used in our investing activities of $887.4 million for the year ended March 31, 2024. 2025.
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedMD&A
Dollar Value at March 31, 2025 2026 $25,000 Senior notes at 3.55% 2012 Private Placement December 2027 25,000 $125,000 Senior notes at 3.45% 2015 Private Placement May 2025 125,000 $ 25.0 $125,000 Senior notes at 3.55% 2015 Private Placement May 2027 125,000 125.0 $100,000 Senior notes at 3.70% 2015 Private Placement May 2030 100,000 100.0 $50,000 Senior notes at 3.93% 2017 Private Placement February 2027 50,000 50.0 €60,000 Senior notes at 1.86% 2017 Private Placement February 2027 64,967 68.9 $45,000 Senior notes at 4.03% 2017 Private Placement February 2029 45,000 45.0 €20,000 Senior notes at 2.04% 2017 Private Placement February 2029 21,656 23.0 £45,000 Senior notes at 3.04% 2017 Private Placement February 2029 58,212 59.5 €19,000 Senior notes at 2.30% 2017 Private Placement February 2032 20,573 21.8 £30,000 Senior notes at 3.17% 2017 Private Placement February 2032 38,807 39.7 Total Private Placement Senior Notes $ 674,215 557.8
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedMD&A
The increase in SG&A during the fiscal 2025 increase year ended March 31, 2026, compared to the fiscal year ended March 31, 2025, is primarily attributable to increased compensation and benefit costs, as well as legal dealer commissions, and bad debt expense, which were partially offset by lower costs associated with our EO litigation.
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedMD&A
Adjustments Amortization of acquired intangible assets (1) 273,784 266,420 $ 265.0 $ 273.8 Acquisition and integration related charges (2) 11,159 25,526 6.2 11.2 Tax restructuring costs (3) 54 620 Net loss on divestiture of businesses (1) — 873 0.5 0.1 Amortization of inventory and property "step up" to fair value (1) 5,442 10,032 5.0 5.4 Restructuring charges (4) 62,275 44,365 3.4 62.3 Illinois EO litigation settlement (5) 48,150 — 48.2 Total income from operations $ 866,641 1,101.8 $ 836,118 866.6
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedMD&A
Selling, general, and administrative $ 1,334,276 1,407.7 $ 1,252,318 1,334.3 $ 81,958 6.5% 73.4 5.5% Research and development 107,648 103,679 3,969 3.8% 112.9 107.6 5.3 4.9% Illinois EO litigation settlement 48,150 — 48,150 48.2 (48.2) NM Restructuring expenses 46,049 26,045 20,004 76.8% 4.1 46.0 (42.0) (91.1)% Total operating expenses $ 1,536,123 1,524.7 $ 1,382,042 1,536.1 $ 154,081 11.1% (11.4) (0.7)%
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedMD&A
Our sources of credit as of March 31, 2025 2026 are summarized in the following table:(dollars in thousands) table:(in millions) Maximum Reductions in March 31, 2025 2026 Amounts Outstanding March 31, 2025 2026 Amounts Amounts Available Credit Available Available Facility for Other Financial Instruments Sources of Credit Private Placement Senior Notes $ 674,215 557.8 — $ 674,215 557.8 $ — Revolving Credit Facility (1) 1,100,000 16,694 34,750 1,048,556 1,100.0 9.8 37.8 1,052.5 Senior Public Notes 1,350,000 1,350.0 — 1,350,000 1,350.0 — Total Sources of Credit $ 3,124,215 3,007.8 $ 16,694 9.8 $ 2,058,965 1,945.6 $ 1,048,556 1,052.5
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedMD&A
The Dental segment results of operations were have been reclassified to as income (loss) from discontinued operations in the Consolidated Statements of Income for all periods presented, and we have classified our Dental segment's assets and liabilities as held for sale as of March 31, 2024 in the accompanying Consolidated Balance Sheets. presented.
Read it in 10-K 2026-05-29 at sec.gov ↗
RewordedMD&A
Letters of credit and surety bonds 110,901 2,907 595 1,731 $388 $116,522 $ 141.6 $2.3 $0.3 $1.4 $1.5 $147.2 Letters of credit as security for self-insured risk retention policies 10,875 14.1 — — — — 10,875 14.1 Total Commercial Commitments $ 121,776 $ 2,907 $ 595 $ 1,731 $388 $127,397 155.7 $2.3 $0.3 $1.4 $1.5 $161.3
Read it in 10-K 2026-05-29 at sec.gov ↗
Quiet changesMD&A
On April 11, 2024, the Company announced its plan to sell substantially all of the net assets of its Dental segment for total cash consideration of $787.5 million, subject to customary adjustments, and up to an additional $12.5 million in contingent payment should had the Dental business achieve achieved certain revenue targets in fiscal 2025.
Read it in 10-K 2026-05-29 at sec.gov ↗