Sotera Health Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 3, 2023

There are 11 speakers on the call.

Operator

Good morning, and welcome to the Cetera Health First Quarter 2023 Conference Call. All participants will be in a listen only mode. Then queue. Please note this event is being recorded.

Speaker 1

I would now like

Operator

to turn the conference over to Vice President and Treasurer, Jason Peterson. Please go ahead.

Speaker 2

Good morning, and thank you. Welcome to Cetera Health's Q1 2023 results call. You can find today's press release and accompanying supplemental slides on the Investors section of our website at zeterahealth.com. This webcast is being recorded and a replay will be Hello, Investors section of the Zatera Health website. On the call with me today are Chairman and Chief Executive Officer, Michael Petrus and Interim Chief Financial Officer, Michael Beals.

Speaker 2

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 on slide. Please refer to Cetera Health's SEC filings and the forward looking statements like the beginning of this 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 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 of this presentation.

Speaker 2

The operator will be assisting with the Q and A portion of the call today. Please limit yourself to one question and

Speaker 3

Cetera Health's Q1 2023 earnings call. Consistent with the commentary made during our Q4 2022 earnings call, Q1 20 23 revenues and adjusted EBITDA declined over the prior year, driven by the anticipated timing of Nordeon Cobalt 60 supply harvest And lower volumes at Nelson Labs and Sterigenics. The lower volumes are typical for the Q1 of the year, although want to highlight a few items from our Q1 results. Total company revenues declined 6.8% and adjusted EBITDA declined 14.6% compared to the Q1 of 2022. We delivered adjusted EPS of $0.13 for the quarter, which is a $0.09 decrease from the same period last year.

Speaker 3

Sterigenics, our largest reporting segment, delivered 7% top line growth for the quarter as Business units saw growth across all major modalities in what is typically a lighter quarter for the segment. The Sterigenics continues to work through inflation headwinds and some customer supply chain challenges. We continue to invest in additional capacity with 6 active Expansion projects at Sterigenics and are also making progress on our EO facility enhancements in North America. These industry leading enhancements underscore our unwavering commitment to ensure best in class emission controls for our employees, customers and communities in which we operate. Nordion, our other reporting segment within the Sterilization Services business, experienced an anticipated 75% year over year tied to the harvest schedules from our Cobalt 60 suppliers, which are large utilities.

Speaker 3

Since we have good visibility into these harvest schedules, we are confident in our 2023 revenue forecast even though the timing of Nordea's revenue will be especially irregular this year with approximately 70 5% of the revenue expected to occur in the back half of the year. As many of you know, Noreon sources a portion of its Cobalt-sixty supply from Russia. Previously, we stated that a total disruption of supply from Russia could Potentially result in 0% to 3% impact on total 2023 Centerra Health revenues. With the quarter complete, we now estimate the potential Russian Cobalt-sixty supply disruption risk to be 0% to 2.5% impact on Total Sotera Health Revenues. Even more importantly, ensuring uninterrupted supply of Cobalt-sixty is crucial to the global health community because Cobalt-sixty is used to sterilize approximately 30% of the world's single use Medical devices.

Speaker 3

I am proud of the continued efforts by our Nordion team in this area. This is a great example how we live our mission of safeguarding global health. Nelson Labs, our lab testing and advisory service business experienced lower volumes in the Q1 as revenue declined 2.3% compared to the prior year. The Q1 of the year is typically softer for Nelson Labs, while we also have not seen a full recovery Certain types of testing to pre pandemic levels. We are encouraged by some recent order trends and are operationally positioned for return to pre pandemic volume levels.

Speaker 3

As communicated during our last earnings call, SoTERRA Health closed on an issuance of a $500,000,000 Term Loan B during the Q1. Our net leverage ratio for the Q1 of 2023 was 3.4 times. Based on where we are positioned after the Q1, we feel comfortable reaffirming the outlook that we communicated on our last earnings As a reminder, our 2023 outlook calls for both revenue and adjusted EBITDA growth in a range of 5 to 9% versus 2022. Michael Beale will recap the details of our outlook in a few minutes. Although challenges still exist with inflation, labor and customer supply chains, we are seeing some stabilization in these areas.

Speaker 3

Our teams remain committed to delivering growth and profitability for our shareholders. I would like to reinforce our mission, safeguarding global health, which is at the heart of our work across the company. Our products and services serve broad human health and well-being needs. Whether we are providing critical scientific expertise and regulatory consulting to solve our customers' toughest really challenges, Preventing infection across a broad range of medical and pharmaceutical products or verifying the accuracy of a product's performance, We help to ensure the safety of healthcare and we protect the lives of millions around the world. Now, Michael Beal will take us through the financials in more detail.

Speaker 4

Thank you, Michael. I'll begin by covering the Q1 2023 highlights on a consolidated basis and then provide some details on each of the business segments along with updates on capital deployment and leverage. I will conclude with some additional comments around our 2023 outlook. On a consolidated total company basis, 1st quarter revenues declined by 6.8% as compared to the same period last year to $221,000,000 This equates to a 5 We do feel these headwinds are moderating and currently expect foreign currency to become a tailwind during the back half of the year. Adjusted EBITDA declined by 14.6 percent compared to the Q1 of 2022 to

Speaker 5

98,000,000

Speaker 4

Adjusted EBITDA margins were 44.6 percent, representing a 410 basis point decline from Q1 20 22 levels, the majority of which is explained by the anticipated Nordion Cobalt 60 supply harvest schedules. Our operating performance drove adjusted earnings per share of $0.13 a decrease of 0 point The Q1 of 20 22. The Q1 of 2023 had net income of 3,000,000 or $0.01 per diluted share compared to net income of $31,000,000 or $0.11 per diluted share in Q1 2022. Our reported interest expense for the quarter was $29,000,000 Now, let's take a closer look at our segment performances. Sterigenics delivered another good quarter with 7% revenue growth to $160,000,000 and over 4% Segment income growth of $83,000,000 as compared to the Q1 of last year.

Speaker 4

On a constant currency basis, Sterigenics grew revenue over 8% compared to the Q1 of last year. Revenue growth drivers for the Q1 include favorable pricing of about 6% and favorable volume mix and 2%, partially offset by unfavorable changes in foreign currency of about 1%. Compared to the Q1 of 2022, segment income margins contracted by 135 basis points to 51 point 8%, driven by the impacts of typical lighter first quarter volume relative to the remainder of the year And inflation, partially offset by favorable pricing. Nordeon's 1st quarter revenue declined by 75% to $9,000,000 compared to the Q1 of 2022, which as expected It was driven by volume decline and mix of nearly 71% and headwinds associated with changes in foreign currency of over 4%. For Nelson Labs, Q1 2023 revenue declined by 2.3% to $52,000,000 and segment income declined by over 17% to $14,000,000 compared to the Q1 of 2022.

Speaker 4

As we previously communicated, the Q1 is compared to the Q1 of last year. Reduced revenue for the Q1 of 2023 Was impacted by volume decline and mix of over 5%, as well as headwinds associated with changes in foreign currency of 1%. These were partially offset by an approximate 4% benefit from pricing. 1st quarter 2023 margins for Nelson Labs contracted to 27.1 percent or approximately 490 basis typical lighter first quarter volume relative to the remainder of the year, partially offset by favorable pricing.

Speaker 5

I want

Speaker 4

to note that we are maintaining staffing levels at Nelson Labs in anticipation of increased volumes throughout the year. I will now provide highlights on cash generation, capital deployment and net leverage. During the quarter, the company generated Approximately $34,000,000 of operating cash flow. As of March 31, 2023, We had $648,000,000 in cash and cash equivalents and over $1,000,000,000 of available liquidity. As Michael mentioned earlier, during the Q1, we closed on a $500,000,000 term loan B.

Speaker 4

Using cash on the balance sheet and a portion of the new term loan proceeds, we paid off the existing 200,000,000 The borrowings under our revolving credit facility and on May 1, funded into escrow the $408,000,000 related to the Illinois Although this new debt and the funding of the $408,000,000 cash settlement will initially increase our debt leverage ratio in the Q2 2023 to above 4 times, we expect net leverage to finish the year within our stated long term target range of 2 to 4 times. The $408,000,000 funded into escrow will be classified as restricted Cash on the company's balance sheet in Q2 2023 until the settlement is consummated and the funds are dispersed to the settling plaintiffs. During the Q1, the company also closed on an amendment to its 1st lien credit agreement, which added $76,300,000 of a new revolving loan commitments and increased our total available capacity to $423,800,000 On a pro form a basis, at the end of the first quarter, After funding $408,000,000 to the settlement escrow, our approximate liquidity is 600,000,000 putting us in strong position moving forward. We are also able to increase our letter of credit included in the revolving credit facility by $165,000,000 to a total of $361,000,000 Our capital expenses for the Q1 2023 totaled $45,000,000 Growth CapEx and Facility Enhancements drove the increased investment during the quarter.

Speaker 4

As Michael mentioned, based on where we ended the Q1 and what we see for the remainder of the year, we are comfortable reaffirming the outlook we provided in February 20 To recap, the full year 2023, we expect total revenues to be in the range of 1.055 The $1,090,000,000 represented an annual growth rate of 5% to 9%. Adjusted EBITDA to be in the range of $530,000,000 to $550,000,000 also represented an annual growth rate of 5% to 9%. Effective tax rate on our adjusted net income in the range of 30% to 33%. As I outlined in coupled with limitations and deductibility of interest expense as a result of 2017 U. S.

Speaker 4

Tax reform. Adjusted EPS is expected to be in the range of $0.78 to 0 $0.86 This represents a decline of 2022. Capital expenditures are expected to be in the range of 185,000,000 The expansions at both Sterigenics and Nelson Labs as well as invest in EO facility enhancements in North America And cobalt development projects at Nordea. The other elements of our previously issued outlook remain the same as well. As we look at the cadence of quarterly reporting, I will provide some specifics on each business unit.

Speaker 4

For Nordion, I will comment briefly on the lumpiness Complete loss of cobalt 60 supply from Russia on total Zotera Health 2023 revenues is now 0 2.5% as there was no disruption in supply during the Q1. We expect Sterigenics and Nelson Labs to realize increased volumes and margin expansion throughout the year. I'll now turn the call back over to you, Michael.

Speaker 3

Thank you, Michael. Before transitioning into Q and A session, I want to touch on the topic of ethylene oxide regulations and litigation. As many of you know, the EPA has released its proposals for stricter EO regulations. Now that the proposals Although the proposals pose challenges that would require all industry participants to make changes to their operations, we've invested a lot of time, effort and And our EO facilities and are confident in our leadership in this area. As for the Illinois EO settlement, The plaintiff's executive committee reports that the process remains on track for the participation rates to be presented in May.

Speaker 3

Pursuant to the terms of the settlement agreement, On May 1, Sterigenics funded into escrow the agreed upon settlement amount of $408,000,000 Subject to the participation by substantially all the eligible claimants, we expect the settlement to be completed in the settled cases to be dismissed in late summer. As I wrap up my comments, I want to reemphasize that Centerra Health remains in a strong position for growth throughout 2023. The Q1 was atypical due to the expected cadence of Cobalt 60 supply harvest schedules. Overall, we feel very good about the company's

Speaker 1

We will now begin the question and answer session. At this time, we will pause just momentarily to assemble our roster. And our first question here We'll come from Patrick Donnelly with Citi. Please go ahead.

Speaker 6

Hi, good morning. This is Lizzie on for Patrick. So I think on the 4Q call, you mentioned the return to the high 30% margins for Nelson Labs in the back half of the year. It sounded kind of constructive on order trends. Can you talk a little bit more about what you're seeing there?

Speaker 6

Thanks. And I have one follow-up.

Speaker 3

Good morning, Lizzie. This is Michael. Yes, we expect to see the Nelson Labs margin rates settled in around the levels you just Mid to high 30s, we expect volumes to continue to pick up as the year progresses.

Speaker 6

Great. Thanks. And then on Sterigenics, I think you mentioned around 6% pricing For the quarter, is that kind of how we should think about it for the year as well and just outlook on inflation broadly? Thanks. That's it for me.

Speaker 3

Thank you. As we've stated across the company, we expect 3.5% to 5% price per year. On those ranges because of the inflation offset, I think you'll see it settle in over time into the more typical ranges that we've seen. But the last couple of quarters have been a little higher because of the inflation offsets.

Speaker 6

Thank you.

Speaker 1

And our next question will come from Mike Pollack with Wolfe Research. Please go ahead with your question.

Speaker 7

Hi, good morning. Thank you for taking the question. 2 from me. First on the guidance, appreciate the affirmation of the full year. Any twists and turns in the segments relative to your prior plan?

Speaker 7

My suspicion is No, but I'm just wondering if, say, maybe Nelson's now a little lighter than you had before, Sterigenics

Speaker 3

Yes, Mike. This is Michael. I would say they're in line with what we gave you back in February when we did the initial outlook. It's pretty consistent.

Speaker 7

Thank you. The follow-up on Illinois, I guess, have you seen the participation rates or when Specifically, do you expect to see those? And will we, the public, see those at some point this month via filing or other forum.

Speaker 3

No. So that my deals are just being presented now to Claimants, so that's just going out. They'll have a period of time over the next weeks and months that they'll be reviewing that. We don't even have visibility to that right now. We do have Ongoing dialogue with the plaintiff counsel to make sure things are tracking along.

Speaker 3

As we stated on the call here today, we did fund the escrow, The May 1 escrow of $408,000,000 because we feel comfortable on how things are progressing, but we won't have visibility to this till late summer, as I mentioned in the past as well.

Speaker 7

Okay. Thank you.

Speaker 5

Thank you.

Speaker 1

And our next question will come from Sean Dodge with RBC Capital.

Speaker 5

Michael, now with the EPA proposal out, Can you update us on how far along you all are in upgrading your scrubbing capabilities? How many facilities are done? How many are left to go? And then the enhancements you've been making, are those sufficient to meet what the EPA has laid out in these more Stringent standards now?

Speaker 3

Yes. We're progressing very well on our improvements. As we've stated in the past, there's 3 primary improvements that we've been putting in place: Central discharge, double scrub and permanent total enclosure, negative pressure 204. We're very comfortable with the investments we've made, the progress we've made. There are some things in the proposal that the whole industry has got to address.

Speaker 3

There's a public comment period that will take place over the next several weeks months, And we'll provide our comments to that point. There will be some things that we need to modify. Based on that, it may require some additional capital. I mean, there are some things that are in there that potentially could be unachievable for the entire industry. I don't think ultimately that's the intention of the EPA.

Speaker 3

I think when they get in and understand from the industry how these Please operate. They'll make the appropriate adjustments. These are draft proposals. But we feel very, very good about the leadership position of the investments we've made And the direction that we're heading on that.

Speaker 5

Okay, great. And then on the guidance, you touched on a little bit, Michael Beal in the prepared remarks, but the steep ramp in EBITDA into the kind of the remainder of the year, I guess, is the expectation that will be driven pretty equally across all of the segments? Or is this mostly dependent on Nelson rebounding and Nordion operating at a more Kind of consistent cadence, I guess, is there anything more you can share on kind of the drivers and then the visibility you have at this point into the back half of the year?

Speaker 4

This is Michael Field. As we indicated, with Nordea being lumpy and we think 75 percent of the revenues and 80 percent of the EBITDA will be in the second half. That continues to be on track With what we had originally said and so there's no really change in from what we originally said. And really with Sterigenics and Nelson, 1st quarter is typically lighter as we've seen historically, and we think that will continue to ramp up over remainder of the year sort of on an even basis.

Speaker 5

Okay, great. Thanks again.

Speaker 1

And our next question will come from Luke Sergott with Barclays. Please go ahead with your questions.

Speaker 8

Good morning. Thank you. I appreciate that you're talking about the recovery here in Nelson, but and you're expecting volumes to come back, but anything you can point to That would give us a little bit more clarity there. Is there anything were there push outs in the quarter? Can you talk about any of your backlog you're building excess Backlog, anything just to give us some comfort that volumes will actually come back?

Speaker 3

Yes. We look at some of our order trends in our backlog, particularly in the validation We're seeing a little bit more strength than we saw earlier on. So that's some of the prepared remarks around the pre pandemic levels. As you may recall, we've talked validation, not fully recovering from the pandemic levels, that in particular some of the things that we're seeing some optimism around that as it moves forward. So the team continues to execute on it.

Speaker 3

As I've stated in the past, what I'm most proud of is the turnaround time competitiveness that we've improved as well as the customer sat scores and the net promoter scores that we continue to get strong results. So the team is doing fairly well as we expect the ramp to come. And one of the other things that we've Talked about in the past, it's just the labor situation that we feel pretty well situated on labor as we progress through the year as well.

Speaker 8

Okay. And then for follow-up here, can you disclose what your recapture rates are for the Atlanta facilities and your other EO Sterilization would depend on Sterigenics.

Speaker 3

Please define what you mean by recapture rate.

Speaker 8

Well, the So it's expected that the new rulings are going to be around like 99.5% recapture? Are you guys operating above that?

Speaker 3

Yes. I think what you might be referencing is process emissions. I don't mean to

Speaker 4

get too technical here, but Yes.

Speaker 8

No, it's fine.

Speaker 1

Yes, yes. So by

Speaker 3

the way, I'm not an engineer, so Sean over at Sterigenics is probably throwing up or holding his nose right now. But let me just say, so there's process emissions, there's huge emissions, so it depends on what you're talking about. I think what you're referencing is probably some of the process emission stuff, And the goal is 99.5%. We're achieving in some of these facilities, particularly Atlanta where we put the improvements in, it's been well documented. We're achieving 99.996, I think is what it is, or 5.

Speaker 3

So we've got we feel very good about that. This is one of those things, so there's some monitoring things embedded within the new rules, the proposed rules That I think is going to be a challenge for the industry about the frequency of the monitoring and things like that. Some of those are really technical matters, but overall, We're not concerned about our ability to capture the efficiency required in the proposed rules.

Speaker 8

All right, great. Thanks.

Speaker 1

And our next question will come from David Windley with Jefferies. Please go ahead with your questions.

Speaker 9

Hi, thanks. I wanted to first come back to Nelson, if I could. Last year, Michael, you talked to you kind of had that Q1 seasonality. But in addition to that, there was a kind of a timing mismatch between inflation that was impacting the labor in the business and your ability to put through price, which was coming in later in the year. And then you had also made a couple of acquisitions that came in at lower margins and were expected to scale those margins over time.

Speaker 9

And so I guess those seem to add an additional anomaly to the margins last year And then this year margins are that much lower. So I guess I'm not hearing in I'm hearing in the prepared remarks that this was largely as you expected. And I guess if that's the case, I'm not understanding why that was what you expected.

Speaker 3

Yes. So David, I would say The overall geography of the business is the total and going forward was the question I was addressing. We'd like to see more volume in all three of our businesses. Obviously, De Nordio, we have very good visibility on to that. As far as Nelson Labs, the Q1 is always the lowest It has traditionally been the lowest, I shouldn't say always.

Speaker 3

It's traditionally been the lowest and our labor leverage isn't as strong there Because of the fact that we've got labor built in and we don't have the flexibility to drop labor in and out. So overall, we feel good about Where they're going to continue to get price to offset inflation. And I tell you, the challenge when you look at it for the quarter on the margin rates that you're looking at relative to Last year or previous quarters would be on the volume side and also the productivity.

Speaker 9

Thank you. On the EPA for my follow-up, one of the things that stood out to us, you mentioned The monitoring frequency is one I appreciate the specificity there. One of the things that stood out to us was Maybe the 18 months to come into compliance is you have a jump start at Cetera in the investments that you've been making. I guess I'm one Would be interested in your reaction to that 18 month timeframe. Is that pretty aggressive?

Speaker 9

And or is it something that because you've started ahead of the game that you could comply with in that timeframe, but maybe the industry couldn't? Thanks.

Speaker 3

Yes. Very good question, David. I think the 18 month time period is aggressive for everybody, including us, but I do think we're way ahead of this game. Okay? If we had to, I think we could be Pretty well situated to meet that timeline.

Speaker 3

That doesn't mean us and others in the industry won't take note of that in the proposal And our public comments, that is a very aggressive timeline. When you think about the amount of equipment in construction and ventilation, particularly the fact is, if I recall some of our previous conversations, one of the One of the things that we said is important that we took a leadership position is on negative pressure per minute total closure 204. The amount of work that's required to accomplish that with ductwork and everything else, just the supply chains to be able to keep up with the requirements for an entire industry, When you have 100 facilities across the U. S, this can be very challenging for many. We feel really good about where we're at in the advancement we've made in that area.

Speaker 3

Those are the kind of things David that I'm referencing. I think they're going to have to be sensitive to what industry can actually accomplish. I think there's already a comment in the document That said, there could be extensions up to a year on top of that. But in conclusion, we feel good about where we're sitting on this because we are pretty far along in this.

Speaker 9

Got it. Okay. I appreciate the perspective. Thank you very much.

Speaker 1

Our next question will come from Casey Woodring with JPMorgan.

Speaker 10

Just to follow-up on the EPA Proposed regulation, so you talked about the comment period that you're taking part in. Can you elaborate just on the range of outcomes there? If the

Speaker 3

Yes. Casey, we're still working our way through it. We're in the early stages Assessing the extent of the proposals and the required modifications in capital. I don't think it's going to be a huge number, but I don't want to throw a number out there until we get further In this assessment and also understand where the EPA is. This is a draft proposal that I think is going

Speaker 5

to be

Speaker 3

very there's going to be a lot of comments Not only from us, but I think people across the industry would be our suspicion.

Speaker 10

Got it. So MedTech performance has generally been better than expected so far this year. So wondering if you guys have any upside to the Sterigenics guide or if contracts there are more or less locked in at this point. Would you see any sort of benefit from that recent outsized growth from your customers?

Speaker 3

No. At this point in time, we're pretty confident in our guide that we've given in the 5% to 9% across the whole company. We haven't given specific Guidance around particular business unit, but we do expect Sterigenics to see increased levels as the year progresses.

Speaker 5

Got it. And if I

Speaker 10

could just fit one more in, what are your new FX assumptions embedded in the current guide and how have those changed from the beginning of the year? I think currency was expected to be neutral On the year in the prior guide, so what's your constant currency guidance look like now?

Speaker 4

This is Michael Beale. It's really pretty much the Same as what we when we originally guided in terms of the assumptions that are in there. And we really haven't seen Any big changes to cause us to pause on it.

Speaker 5

Thank you.

Speaker 1

And our next question will come from Matthew Mishan with KeyBanc. Please go ahead with your question.

Speaker 10

Hey, great. Hey, Michael. I'll ask the upside to like MedTech volumes, the question maybe

Speaker 5

in a little bit of

Speaker 10

a different way. Is there I'm assuming that Your customers would probably like more volume going through those facilities as you go through the rest of the year, I think some of their numbers are coming ahead of expectations. Anything that would prevent you from being able to add a little more on the capacity in the system and kind of to meet some volumes from the customers, especially if they're asking you to do so?

Speaker 3

No, Matthew, when we look at it, we're tracking kind of the end demand within healthcare and the volumes have been pretty We don't see that strength, one to one correlation translating back to us in the volumes. That could be caused by inventory that may be in the system or things on supply chain that may be a challenge. But If the demand were to suddenly start to mirror that on a one to one basis, I feel pretty good about our ability to react to that. We've been spending a lot of time as we've Talked in the past around operational excellence and the things we've been doing in our facilities to try to continue to get more capacity in place, not only Brick and mortar or additional chambers or whatever it may be, but also just how do we drive more efficiency within our operations. And Mike and the team continue to progress in that area as well.

Speaker 3

So I think we'd be able to react to any opportunities if they came to us.

Speaker 10

Okay. And then it looks like you're having continued negotiations with one of your Rio plants in Ontario, California. Can you just quantify like some extent, like what percentage of Ceragenyx that facility is? And if this were to drag on for a little bit longer. What would be like the worst case for that in the upcoming quarter?

Speaker 3

Yes. Matt, just to clarify, we really don't have an ongoing negotiation with them. They've asked us we have an agreement with them to put the facility enhancements in place We're coming to all our U. S. Facilities and we have a timeline across both LA and Ontario with them.

Speaker 3

And what they've asked So occasionally, you might have a blip or something exceeds that lower level until the new improvements are completely in. That's what you see going right now. Listen, this is important for our customers, it's important for us, but we have 50 facilities plus around The world, this is a relatively small portion of our Sterigenics business. I mean, the mix in that facility Okay. But that doesn't mean it's not important to our customers, doesn't mean it's not important to us, and we hope to have that up and running here shortly.

Speaker 10

Thank you for the color

Speaker 9

on that.

Speaker 5

Yes, great.

Speaker 1

And this concludes our question and answer session. I would like to turn the conference back over to Michael Petrus for any closing remarks.

Speaker 3

Great. Thank you, Joe. Thank you, everybody, for participating this morning. As you can see, the quarter pretty much came in as what we thought, a little softer in a couple of areas. But overall, the big driver here was the Nordion, which Nordion volumes, which we well expected and see that back end loaded throughout the year.

Speaker 3

So overall, we feel really good about where the company is situated. We thank you for your ongoing And wish everybody a good day. Thank you. Bye bye.

Speaker 1

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

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Earnings Conference Call
Sotera Health Q1 2023
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