STERIS plc (STE) Q4 2023 Earnings Call Transcript

For the period ending March 31, 2023

May 11, 2023 9:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks：

Operator

Good morning and welcome to the STERIS plc Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please also note, this event is being recorded.

I'd now like to turn the conference over to Julie Winter, Investor Relations. Please go ahead.

Julie Winter

Thank you, Chad, and good morning, everyone. As usual, speaking on our call this morning will be Mike Tokich, our Senior Vice President and CFO; and Dan Carestio, our President and CEO. And I do have a few words of caution before we open for comments.

This webcast contains time-sensitive information that is accurate only as of today. Any redistribution, retransmission or rebroadcast of this call without the expressed written consent of STERIS is strictly prohibited. Some of the statements made during this review are or may be considered forward-looking statements. Many important factors could cause actual results to differ materially from those in the forward-looking statements, including, without limitation, those risk factors described in STERIS' securities filings. The company does not undertake to update or revise any forward-looking statements as a result of new information or future events or developments. STERIS' SEC filings are available through the company and on our website.

In addition, on today's call, non-GAAP financial measures, including adjusted earnings per diluted share, adjusted operating income, constant currency organic revenue growth, and free cash flow will be used. Additional information regarding these measures, including definitions, is available in our release, as well as reconciliations between GAAP and non-GAAP financial measures. Non-GAAP financial measures are presented during this call with the intent of providing greater transparency to supplemental financial information used by management and the Board of Directors in their financial analysis and operational decision-making.

With those cautions, I will hand the call over to Mike.

Michael Tokich

Thank you, Julie, and good morning, everyone. It is once again my pleasure to be with you this morning to review the highlights of our fourth quarter performance. Following my review, Dan will comment on the full year of fiscal '23 and talk about our outlook for fiscal '24.

For the quarter, constant currency organic revenue increased 16% driven by volume as well as 330 basis points of price. As anticipated, gross margin for the quarter decreased 240 basis points, compared with the prior year to 43.1% as pricing and currency were more than offset by unfavourable mix and approximately $15 million in excess material labor inflation. We incurred approximately $90 million in higher material and labor costs during fiscal 2023.