STERIS plc

Good morning, everyone, and welcome to the Staris PLC third quarter FY 2021 conference call. All participants will be in a listen-only mode. Should you need assistance, please know 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 and then one using a touch-tone telephone. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. And at this time, I'd like to turn the conference call over to Julie Winner, Investor Relations. Ma'am, please go ahead.

Thank you, Jamie. Good morning, everyone. As usual, on today's call, we have Walt Rosebra, our President and CEO, Mike Tokitz, our Senior Vice President and CFO, and Dan Crestio, 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 on today's 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. 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 third quarter performance. For the quarter, cost of currency organic revenue increased 1.4%, driven by 130 basis points of favorable price and 10 basis points of organic volume growth. Gross margin for the quarter was up 110 basis points to 44.2% and benefited from productivity, price, and acquisitions. EBIT margin for the quarter was 23.6% of revenue, an increase of 250 basis points from the third quarter last year, due primarily to higher gross margin attainment and lower operating expenses for travel, sales and marketing, and compensation due in part from the business disruption from COVID-19. Our adjusted effective tax rate in the quarter was 18.4%, somewhat lower than anticipated due to favorable discrete items. That income in the quarter grew 20% to $149.2 million, and earnings increased to $1.73 per diluted share as compared to $1.45 per diluted share in the prior year. Our balance sheet is a continued source of strength for the company. Our leverage ratio at the end of the third quarter is once again below two times as we continue to pay down debt post the key surgical acquisition. Considering our cash position of $253 million, access to available credit lines, and a low leverage ratio, we are well positioned from a liquidity standpoint. During the third quarter, capital expenditures totaled $53.8 million, while depreciation and amortization was $56.8 million. Free cash flow for the first nine months was strong at $337.7 million, an increase of almost $100 million over the same period last year, primarily due to improvement 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.