Sotera Health Company

Good morning and welcome to the Satara Health fourth quarter and full year 2024 conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. And to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Vice President of Investor Relations and Treasurer, Mr. Jason Peterson. Jason, please go ahead.

Good morning and thank you. Welcome to Cetera Health's fourth quarter and full year 2024 earnings call. You can find today's press release and accompanying supplemental slides on the investor section of our website at ceterahealth.com. This webcast is being recorded and a replay will be available in the investor section of the Cetera Health website. On the call with me today are Chairman and Chief Executive Officer Michael Petras and Chief Financial Officer John Lyons. During the call, some of our comments may be considered forward-looking statements. The matters addressed in these statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied. Please refer to Sotero Health's SEC filings in the forward-looking statement slide at the beginning of the presentation for a description of these risks and uncertainties. The company assumes no obligation to update any such forward-looking statements. Please note that during the discussion today, the company will present both GAAP and non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, segment income margin, tax rate applicable to net income, adjusted net income, adjusted EPS, net leverage ratio, and free cash flow, as well as constant currency comparisons. A reconciliation of GAAP to non-GAAP measures for all relevant periods may be found in the schedules attached to the company's press release and in the supplemental slides to this presentation. The operator will be assisting with the Q&A portion of the call today. Please limit yourself to one question and one follow-up so that everyone has an opportunity to ask questions. As always, if you have any questions after the call, please feel free to reach out to me and the investor relations team. I'll now turn the call over to Sotero Health Chairman and CEO, Michael Petras.

Good morning and welcome to today's call. This morning we reported both top and bottom line growth for the full year 2024 while delivering $1.1 billion of revenue and approximately 50% FIBO adjusted EBITDA margins. 2024 marks the 19th consecutive year of annual revenue growth, further evidence of the resiliency of our business model and the critical role we play in healthcare. In addition to the growth we delivered, we continue to make progress in 2024 on our strategic priorities. Throughout the year, our customer satisfaction rates continue to be over 80%, which reflects our focus on serving our customers with excellence. We also strengthened our balance sheet by successfully refinancing our capital structure, extending maturities to 2031. We finished the year with strong liquidity. In our stereogenics business, We completed a capacity expansion and continue to make significant progress on our U.S. EO facility enhancements. Nelson Labs achieved sequential margin improvement as the year progressed. Embedded Labs and Expert Advisory Services both realized double-digit revenue growth versus 2023. The performance in Embedded Labs demonstrates the cross-business unit synergies we discussed at our investor day this past November. Norion grew revenue to upper single digits for the year, while continue to make progress on their cobalt development projects. The first installation of cobalt was placed into a Darlington reactor with an expected cobalt 60 harvest in 2028. I want to highlight a few items from our fourth quarter and full year 2024 financial results. I'll begin with the fourth quarter. As expected, total company revenue declined 6.5% and adjusted EBITDA declined 8.3% compared to the fourth quarter of 2023. On a constant currency basis, revenue declined 5.2% and adjusted EBITDA declined 6.7%. As we communicated during our last earnings call, Norden revenue in the fourth quarter was expected to be down significantly versus the prior year's 50%, 5-0, of Norden's full year 2023 revenue occurred in the fourth quarter. As a reminder, Norden revenue can be lumpy from quarter to quarter due to the timing of Cobalt 60 harvest schedules. Over the long term, Norden revenue is very consistent. Transitioning to the full year 2024 as compared to 2023, total company revenues increased 4.9% or 5.4% on a constant currency basis and adjusted EBITDA by 3.9% or 4.6% on a constant currency basis. John will take us through the business results in more details later. I also wanted to take a moment to highlight progress made on our corporate responsibility initiatives. We welcome President and CEO of Humanities Corporation, Chris Simon, to the board in August of last year. Chris brings extensive experience in the medical device industry, which we believe will serve us and our stakeholders well. In January, we named Vince Patrell Lead Independent Director. Vince has been on our board since 2020 and brings a wealth of experience and deep understandings of TerraHealth's strategic vision and operations. Additionally, we published our third annual corporate responsibility report. Overall, 2024 was a good year for Sotero Health, and we continue to stay focused on serving our customers with excellence, and we look forward to delivering growth once again in 2025. Earlier today, we provided our initial 2025 outlook. For the full year 2025, we expect to deliver another year of top and bottom line growth with total company revenue growth to be in the range of 4% to 6% on a constant currency basis when compared to 2024, with the midpoint being within our long-term 5% to 7% guidance range. Adjusted EBITDA growth is expected to be in the range of 4.5% to 6.5% on a constant currency basis. Now, John will take us through our fourth quarter full-year 2024 financials and our 2025 outlook in more depth. Thank you, Michael.