Boston, MA 05/12/2014 (wallstreetpr) – STERIS Corp (NYSE:STE) posted its fourth quarter result with revenue of $465.3 million, operating income of $59.6 million and earnings of $0.65 per diluted share.
Increased volume drive segment revenues and profitability
Revenue increased by 9% to $465.3 million (4Q2013: $428.2 million) due to solid growth in Healthcare and Isomedix Services.
Healthcare revenue was up by 12% to $352.0 million (4Q2013: $315.4 million), due to increased revenue from services (+16%), capital equipments (+13%) and consumables (+5%). So, the increased volume, operating leverage and acquisition benefits improved the segment’s operating income significantly to $62.3 million (4Q2013: $42.9 million).
During 4Q2014, Life Sciences segment’s revenue was $63.7 million, down by 1%, due to 5% decline in revenue from capital equipments and 7% decrease from service revenues, partly offset by 9% year over year increase in consumables. So, lower volume across its businesses reduced the adjusted segment operating income to $12.0 million (4Q2013: $12.3 million).
Isomedix Services increased by 8% year over year to $49.4 million with increased volume and capacity addition that drove the adjusted segment operating income by 14% to $14.2 million (4Q2013: $12.4 million).
The increase in segments operating income improved the overall performance of Steris with adjusted operating income $86.5 million, up by 32% (4Q2013: $65.4 million) and raised the margins to 18.6%. As a result, adjusted net income increased by 30% to $54.2 million or $0.91 per diluted shares (4Q2013: $41.5 million or $0.70 per diluted shares).
Cash flow & liquidity
Factors like repayment of annual incentives and higher working capital improvement compressed the operating cash flow to $209.6 in FY2014 (FY2013: $227.8 million) and free cash flow to $128.0 million (FY2013: $140.4 million).
Liquidity improved with the cash balance of $152.8 million and net debt of $340.7 million as a result of higher repayment of debt ($70 million) during the period.
Outlook for 2015
Considering the growth trends across segments including backlog of $154.7 million, STERIS Corp (NYSE:STE) expects revenue growth at a range of 15% to 17% and anticipates an improvement in adjusted EPS in a range of $2.78-$2.91 in FY2015. Steris will generate $135 million as free cash flow in FY2015.
