MENTOR, Ohio — Ongoing cost-cutting and customer acceptance of new products drove up Steris Corp. profits 31 percent in the fiscal third quarter from a year ago.
However, a global recession helped cut revenue growth to an anemic 2 percent in the quarter ended Dec. 31 from the year-ago quarter as largely drug makers put capital equipment investments on hold.
Steris in Mentor, Ohio, makes infection prevention and decontamination equipment and supplies, and provides related services to health-care institutions, drug companies and researchers.
These Are the Top-Rated Autism Therapy Centers in Texas
There are a number of criteria for selecting the best autism therapy centers. Parents choosing a facility or professionals seeking to improve their offerings should consider certain standards to ensure the right fit.
As of Oct. 30, the recession had not hurt Steris’ business, company executives said during a conference call with securities analysts. The recession took hold with a vengeance over the last three months and now is showing up as slighly lower order growth rates — but no canceled orders — in Steris’ health care business, said CEO Walt Rosebrough during a call with analysts on Tuesday.
“However, we saw strong growth in our surgical business, driven by new products, with continued strength in both LED lights and our integrated [operating room] platform,” Rosebrough told analysts. “Our health care team has created another [order] backlog record this quarter, with growth in both infection prevention and surgical products.”
His company’s life science segment, which sells decontamination equipment to companies that make drugs, saw a “substantial decline in capital equipment revenue,” Rosebrough said. The fall came partly from order timing. “In addition, we made a strategic decision earlier in the year to focus on higher-margin capital equipment products, which is impacting revenue growth negatively and our profits positively,” he said.
Immune Support on Demand: Ranking the Top Mobile IV Therapy Companies
Explore the top mobile IV therapy companies boosting immune health on demand, with standout services, expert care and innovative delivery across the U.S.
Steris’ net income grew to $28.6 million, or 48 cents a diluted share, from $21.8 million, or 34 cents a diluted share, a year ago.
The recent quarter included $12.3 million in one-time charges for restructuring and efficiency-seeking moves, largely in the company’s international operations, Steris said in its earnings statement.
Steris’ chief financial officer, Mike Tokich, told analysts on the conference call that these charges related to severance and related benefits for workers who lost their jobs, cutting some product lines and closing some of sales offices among the international operations.
Steris also recorded a $1.3 million pre-tax charge in the third quarter to continue transferring sterilizer-making operations to a plant in Monterrey, Mexico, from one in Erie, Pa.
The company had pre-tax income of $7.9 million from changes in employee benefits policies during the recent quarter.
Steris expects to save $20 million a year, starting in fiscal 2011, from cost-cutting steps taken during the fiscal third quarter. The Steris 2009 fiscal year ends on March 31.
“Like many in our industry, we saw the impact of the broader economic issues affecting our top-line performance in the third quarter,” Rosebrough said in his company’s earnings statement. “We now believe that fiscal 2009 revenue growth will be approximately 4 percent, while [per-share] earnings will be toward the high end of our range of $1.65 — $1.80.”
For the nine months ended Dec. 31, Steris had net income of $82.9 million, or $1.39 a diluted share, up 31 percent from $51 million, or 79 cents a diluted share, in the year-ago period. Revenues rose 7 percent to $954.2 million in that time.
Steris shares rose $1.67, or 7 percent, to $25.93 Tuesday on the New York Stock Exchange.