STERIS plc

Good day and welcome to the Staris PLC fourth quarter 2022 results 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 telephone keypad. 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 Julie Winter with Investor Relations. Please go ahead.

Thank you, Chad, and good morning, everyone. As usual, speaking on today's call will be Mike Tukich, our Senior Vice President and CFO, and Dan Crestio, our President and CEO. 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 express 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's securities filing. The company does not undertake to update or revise any of these forward-looking statements as a result of new information or future events or developments. JARIS's 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, currency organic revenue growth, and for cash flow, will be used. Additional information regarding these measures, including definitions, is available in today's release, also along 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'll 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 fourth quarter performance. For the quarter, constant currency organic revenue increased 11%. Growth was driven by organic volume as well as 120 basis points of price. Acquisitions added approximately $253 million to revenue in the quarter, which is broken down by segment in the press release tables. Gross margin for the quarter increased 120 basis points compared with the prior year to 45.5%, as favorable productivity, pricing, and acquisitions were somewhat offset by higher material and labor costs. We continue to face increased material labor costs, which totaled about $20 million in the quarter as anticipated. EBIT margin for the quarter was 23.6% of revenue, an increase of 130 basis points, versus the prior year. This is impressive performance as operating expenses, including R&D, increased, plus the continued headwind from supply chain and inflation. The adjusted tax rate in the quarter was 22.8 percent. Net income in the quarter was $205.4 million, and earnings per diluted share were $2.04. At the end of the fiscal year, cash totaled $348 million. We continue to focus on debt repayment as evidenced by our leverage ratio being now under 2.4 times at the end of the fiscal year. Our focus on debt reduction provides us flexibility to continue making investments in growth capital expenditures and allows us many opportunities to continue to expand our businesses. Year-to-date, capital expenditures totaled $218 at $87.6 million, while depreciation and amortization total $553.1 million. Free cash flow for the year was $399 million. As anticipated, this is a decline from the prior year due to costs associated with the acquisition and integration of Cantel, along with higher capital spending year over year. As we look forward to fiscal 23, We anticipate free cash flow generation of approximately $675 million as the majority of costs associated with the acquisition and integration of Cantel have occurred. We also expect interest expense to be higher year over year as rates continue to rise. Total non-operating expenses net is anticipated to be about $95 million. In addition, we expect to continue reinvesting in our businesses with capital expenditures totaling approximately $330 million. With that, I will turn the call over to Dan for his remarks.