STERIS plc

Good morning, everyone, and welcome to the Staris PLC second quarter 2021 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. Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Julie Winter, Vice President of Investor Relations. Ma'am, please go ahead.

Thank you, Jamie, and good morning, everyone. On today's call, we have Walt Rosebroth, our President and CEO, Mike Tokich, our Senior Vice President and CFO, and Dan Carestio, our Chief Operating Officer. I do have a few words of caution before we open for comments from management. This webcast contains time-sensitive information that is accurate only as of today. Any redistribution, retransmission, or rebroadcast of this call without the express written consent of Staris 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 today's release with 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.

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 second quarter performance. For the quarter, constant currency organic revenue increased 2%, driven by 100 basis points of volume and 100 basis points of price. Constant currency organic revenue for the quarter includes a total of about $5 million from prior year tuck-in acquisitions, primarily in health care, spread across capital equipment, consumables, and service. Gross margin for the quarter was up 140 basis points to 45%, and benefited from mixed price and productivity. EBIT margin for the quarter was 22.5% of revenue, an increase of 220 basis points from the second quarter last year due to higher gross margin attainment and lower operating expenses, mainly for travel, sales and marketing and compensation due in part from business disruption from COVID-19. The adjusted tax rate in the quarter was 21.1% and includes the benefit of stock compensation offset by unfavorable discrete item adjustments. That income in the quarter grew 13% to $127.3 million and earnings increased to $1.48 per diluted share as compared to $1.32 per diluted share in the prior year. Our balance sheet is a continued source of strength for the company. Considering our cash position of $312 million, access to available credit lines, and a low leverage ratio, we are well positioned from a liquidity standpoint. Even reflecting the anticipated additional leverage for the key surgical acquisition, our debt levels remained solidly in our comfort zone. During the second quarter, capital expenditures totaled $43.9 million, while depreciation and amortization was $54.4 million. Free cash flow for the first half was $185.6 million, an increase of $23.6 million over the first half of last year, primarily due to improvements in net income and working capital somewhat offset by higher capital expenditures. With that, I will now turn the call over to Walt for his remarks.