STERIS plc

Good day and welcome to the STRIS PLC first quarter 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialists 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 Ms. Julie Winter, Vice President of Investor Relations. Please go ahead.

Thank you, Chuck, and good morning, everyone. As usual, speaking on our call today will be Mike Tokich, 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 forward-looking statements as a result of new information or future events or developments. Staris' 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 press 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 questions, 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 first quarter performance. For the quarter, constant currency organic revenue increased 11%, driven by volume as well as 290 basis points of price. Gross margin for the quarter decreased 30 basis points compared with the prior year to 44.8%. Favorable price was more than offset by continued material and labor inflation as well as lower productivity. EBIT margin decreased 50 basis points to 22.4% of revenue compared with the first quarter last year, which reflects the decline in gross margin as well as the anticipated increase in year-over-year incentive compensation, which is recorded in corporate and other. The adjusted effective tax rate in the quarter was 22.6%. Net income in the quarter was $198.2 million, and adjusted earnings were $2 per diluted share. Capital expenditures for the first quarter totaled $66.6 million, while depreciation and amortization totaled $137.9 million. Debt declined slightly in the first quarter and totaled just over $2.9 billion. Total debt to EBITDA was approximately 2.1 times gross leverage. Free cash flow for the first quarter of 2024 was $214.5 million, as we were able to collect on our strong fourth quarter revenue. Inventory remains elevated as we continue to focus on reducing lead times and meeting customer demand. With that, I will turn the call over to Dan for his remarks.