STERIS plc (STE) 2024 Q1 法說會逐字稿

Good day, and welcome to the STERIS plc First Quarter 2024 Earnings Conference Call. (Operator Instructions) Please note this event is being recorded.

美好的一天，歡迎參加 STERIS plc 2024 年第一季度收益電話會議。 （操作員說明）請注意此事件正在被記錄。

I would now like to turn the conference over to Ms. Julie Winter, Vice President of Investor Relations. Please go ahead.

我現在將會議交給投資者關係副總裁朱莉·溫特女士主持。請繼續。

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 Carestio, our President and CEO. I do have a few words of caution before we open for comments.

謝謝你，[查克]，大家早上好。與往常一樣，我們的高級副總裁兼首席財務官 Mike Tokich 在今天的電話會議上發言。以及我們的總裁兼首席執行官 Dan Caresio。在我們公開徵求意見之前，我確實有幾句話要提醒大家。

This webcast contains time-sensitive information that is accurate only as of today. Any redistribution, retransmission or rebroadcast of this call without the expressed 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' 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.

該網絡廣播包含時效性信息，僅在今天準確。未經 STERIS 明確書面同意，嚴禁對本次通話進行任何重新分發、轉播或轉播。本次審查期間做出的一些陳述是或可能被視為前瞻性陳述。許多重要因素可能導致實際結果與前瞻性陳述中的結果存在重大差異，包括但不限於 STERIS 證券文件中描述的那些風險因素。該公司不承諾因新信息或未來事件或發展而更新或修改任何前瞻性陳述。 STERIS 的 SEC 文件可通過公司和我們的網站獲取。

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.

此外，在今天的電話會議上，將使用非公認會計準則財務指標，包括調整後每股攤薄收益、調整後營業收入、恆定貨幣有機收入增長和自由現金流。有關這些措施的更多信息，包括定義，以及 GAAP 和非 GAAP 財務措施之間的調節表，請參閱我們的新聞稿。本次電話會議期間提出了非公認會計準則財務指標，旨在為管理層和董事會在財務分析和運營決策中使用的補充財務信息提供更大的透明度。

With those cautions, I will hand the call over to Mike.

出於這些警告，我會將電話轉交給邁克。

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.

謝謝朱莉，大家早上好。我很高興今天早上再次與您一起回顧我們第一季度業績的亮點。本季度，在銷量和價格上漲 290 個基點的推動下，按固定匯率計算的有機收入增長了 11%。本季度毛利率較上年同期下降 30 個基點至 44.8%。持續的材料和勞動力通脹以及生產率下降完全抵消了有利的價格。

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.

與去年第一季度相比，息稅前利潤率下降了 50 個基點，至收入的 22.4%，這反映了毛利率的下降以及企業及其他部門記錄的同比激勵薪酬的預期增長。

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.

本季度調整後有效稅率為22.6%。該季度淨利潤為 1.982 億美元，調整後每股攤薄收益為 2 美元。第一季度資本支出總計 6660 萬美元，折舊和攤銷總計 1.379 億美元。

Debt declined slightly in the first quarter and totaled just over $2.9 billion. Total debt to EBITDA was approximately 2.1x 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.

第一季度債務略有下降，總額略高於 29 億美元。 EBITDA 債務總額約為總槓桿率的 2.1 倍。 2024 年第一季度的自由現金流為 2.145 億美元，因為我們能夠憑藉第四季度的強勁收入實現盈利。由於我們繼續專注於縮短交貨時間和滿足客戶需求，庫存仍然很高。

With that, I will turn the call over to Dan for his remarks.

接下來，我將把電話轉給丹，聽他的講話。

Thanks, Mike, and good morning, everyone. Thank you for making time to join us to hear more about our first quarter performance and our outlook for the rest of the fiscal year. As you heard from Mike, we had a strong start to our new fiscal year exceeding our plans and The Street's expectations.

謝謝邁克，大家早上好。感謝您抽出時間加入我們，詳細了解我們第一季度的業績以及對本財年剩餘時間的展望。正如您從邁克那裡聽到的，我們新財年的開局良好，超出了我們的計劃和華爾街的預期。

Looking at our segments, Healthcare, constant currency organic revenue grew 18% in the quarter. We experienced double-digit growth across capital equipment, consumables and service. This is driven primarily by procedure volumes in the U.S. continuing to rebound as well as price and market share gains. In addition, the improving supply chain environment, coupled with our ability to reduce lead times, led to a very strong quarter of capital equipment shipments.

從我們的細分市場來看，醫療保健、按固定匯率計算的有機收入在本季度增長了 18%。我們的資本設備、消耗品和服務都實現了兩位數的增長。這主要是由於美國的手術量持續反彈以及價格和市場份額的增長推動的。此外，供應鏈環境的改善，加上我們縮短交貨時間的能力，導致本季度資本設備出貨量非常強勁。

Hospital capital spending remains robust as evidenced by our healthcare backlog, which totals almost $500 million at the end of the quarter despite the strong shipments. Large projects continue to drive orders representing 40% of first quarter orders. We are increasingly confident in our expectations of a strong year for our Healthcare segment.

我們的醫療保健積壓訂單證明，醫院資本支出仍然強勁，儘管出貨量強勁，但截至本季度末，積壓訂單總額接近 5 億美元。大型項目繼續推動訂單，佔第一季度訂單的 40%。我們對醫療保健領域強勁的一年的預期越來越有信心。

Turning to AST. Constant currency organic revenue grew 5%. Our performance in the quarter was impacted by 2 temporary situations, inventory destocking in some categories of med tech and the year-over-year market decline of bioprocessing customer demand. As we said last quarter, FY '24 represents a bit of a reset and we do not anticipate returning to year-over-year growth in bioprocessing in fiscal 2024. As for the med tech inventory destocking, we would not expect that to continue beyond the first half of the year, and we anticipate customer inventories at that time will align with the procedural growth we are all experiencing. As a result, our expectations are for stronger growth in the second half of the year for AST.

轉向 AST。按固定匯率計算有機收入增長 5%。我們本季度的業績受到兩種臨時情況的影響，即某些醫療技術類別的庫存去庫存以及生物加工客戶需求的市場同比下降。正如我們上季度所說，24 財年代表了一點重置，我們預計 2024 財年生物加工不會恢復同比增長。至於醫療技術庫存去庫存，我們預計這種情況不會持續到 2024 財年。今年上半年，我們預計屆時客戶庫存將與我們正在經歷的程序增長保持一致。因此，我們預計 AST 下半年將出現更強勁的增長。

Life Sciences revenue declined slightly in the quarter due to the timing of capital shipments which more than offset the growth in service and consumables. Underlying demand for the business remains strong as evidenced by our near-record backlog. Our full year expectations for the Life Sciences segment continue to be mid-single-digit revenue growth despite the lumpy first quarter start.

由於資本運輸的時間安排抵消了服務和消耗品的增長，生命科學收入在本季度略有下降。我們接近創紀錄的積壓就證明了對該業務的潛在需求仍然強勁。儘管第一季度開局不順利，但我們對生命科學領域的全年收入預期仍保持中個位數增長。

Our Dental segment first quarter revenue declined 4% on a constant currency organic basis as revenue was limited by customer destocking of inventory, in particular, for infection control products. However, we did see patient volumes improve for the first time post-COVID. We are confident that we will achieve low single-digit revenue growth for the fiscal year in Dental.

我們的牙科部門第一季度收入按固定匯率有機計算下降了 4%，因為收入受到客戶庫存去庫存（特別是感染控制產品）的限制。然而，我們確實看到新冠疫情后患者數量首次有所改善。我們有信心本財年牙科業務將實現低個位數的收入增長。

All in, we are pleased with the start to the year. Trends continue to shift in a positive direction and our ability to execute and ship products has greatly improved. There are still pockets of uncertainty, whether that be supply chain, procedure volumes or inventory management.

總而言之，我們對今年的開局感到滿意。趨勢繼續向積極的方向轉變，我們執行和運輸產品的能力也大大提高。無論是供應鏈、程序量還是庫存管理，仍然存在一些不確定性。

As mentioned in our press release, we believe that the acquisition of the surgical instrumentation assets from Becton, Dickinson will close much earlier than we originally anticipated. As a result, we have updated our outlook for as-reported revenue, adjusted earnings per share and free cash flow. We are feeling increasingly optimistic about our constant currency organic performance for the year, yet we are still holding our outlook to 6% to 7% growth. We acknowledge that this is a somewhat conservative approach given our start to the year.

正如我們在新聞稿中提到的，我們相信從 Becton, Dickinson 收購手術器械資產的交易將比我們最初預期的早得多。因此，我們更新了對報告收入、調整後每股收益和自由現金流的展望。我們對今年穩定的貨幣有機表現感到越來越樂觀，但我們仍將增長前景維持在 6% 至 7%。我們承認，考慮到今年的開局，這是一種有點保守的做法。

That concludes our prepared remarks. Julie, would you please give the instructions, and we can begin Q&A.

我們準備好的發言到此結束。朱莉，請您給出指示，我們可以開始問答。

Thank you, Mike and Dan, for your comments. [Chuck], can you please give the instructions for Q&A and we can get started.

謝謝邁克和丹的評論。 [Chuck]，您能否給出問答說明，我們就可以開始了。

(Operator Instructions) And the first question will come from Matthew Mishan with KeyBanc.

（操作員說明）第一個問題將由 KeyBanc 的 Matthew Mishan 提出。

A really nice quarter to start the year. Dan, I first wanted to start on the capital equipment. As you kind of think about how you had contemplated the phasing of your guidance. Did you pull forward some capital into the first quarter with excess shipments? And also, how are you thinking about the order environment versus the shipments? I'm assuming it's not one for one and you are thinking about bringing that backlog down in FY '24.

這是一個非常美好的季度來開始新的一年。丹，我首先想從資本設備開始。當你思考你是如何考慮你的指導的階段性時。你們是否因超額出貨而將一些資金提前到第一季度？另外，您如何看待訂單環境與發貨情況？我假設這不是一對一的，並且您正在考慮在 24 財年減少積壓訂單。

Yes, sure. Thanks. That's correct. What I would say is we overdelivered in terms of what we had anticipated from a manufacturing perspective in Q1. We've been beaten a bit on the supply chain issues over the past year. And so we're trying to do everything possible to manage to our customer demand where they actually need the product now, and we did a better job on delivery. So that pulled forward some revenue that might otherwise been in Q2. But generally speaking, our ability to produce and deliver is getting better and our lead times are coming down across all of our capital equipment portfolios.

是的，當然。謝謝。這是正確的。我想說的是，從第一季度的製造角度來看，我們超額交付了。過去一年，我們在供應鏈問題上受到了一些打擊。因此，我們正在盡一切可能滿足客戶現在實際需要產品的需求，並且我們在交付方面做得更好。因此，這拉動了一些原本可能出現在第二季度的收入。但總的來說，我們的生產和交付能力正在變得更好，我們所有資本設備組合的交貨時間都在下降。

And in terms of the orders intake, yes, there is a point at which you will start to see declining backlog, obviously, as we get back to much more normalized delivery times, with the only caveat being there, some of the large project stuff, Matt, that's got longer lead.

就訂單量而言，是的，在某個時刻，您將開始看到積壓量下降，顯然，隨著我們回到更加標準化的交貨時間，唯一需要注意的是，一些大型項目的東西，馬特，領先優勢更長。

Okay. And then I have 2 more on the (inaudible). And I didn't catch it, but is the phasing 1H-2H still 45-55 from a revenue and EPS perspective? And then secondly, just can you comment a little bit more around the drag from destocking, especially in some categories of med tech? It seems a little bit counterintuitive when you think about the current environment.

好的。然後我還有 2 個（聽不清）。我沒明白，但從收入和每股收益的角度來看，1H-2H 階段仍然是 45-55 嗎？其次，您能否對去庫存的拖累進行更多評論，特別是在某些醫療技術類別中？當你考慮當前的環境時，這似乎有點違反直覺。

Yes. We agree. First off, yes, the phasing remains as originally anticipated. And in terms of the destocking that we're seeing in med tech, we really started to see it in Asia Pacific, in particularly around some sterile PPE and some of that was foreseeable given that the national stockpiles have been filled and all that demand sort of went back to normal levels. What we're a little surprised of is that we're seeing a pullback on our customers' level of inventory.

是的。我們同意。首先，是的，分階段仍然如最初預期的那樣。就我們在​​醫療技術領域看到的去庫存而言，我們確實開始在亞太地區看到這種情況，特別是在一些無菌個人防護裝備方面，考慮到國家庫存已經填滿並且所有需求排序，其中一些是可以預見的恢復到正常水平。令我們有點驚訝的是，我們發現客戶的庫存水平有所下降。

Now having said that, we shouldn't be surprised because we, like everybody else, have too much inventory right now. So -- and as confidence comes back in terms of your ability to produce and ability to get supplies and supply chain solidifies, the natural thing one would expect is to wring out some of that inventory down to levels that are matching demand.

話雖如此，我們不應該感到驚訝，因為我們和其他人一樣，現在庫存太多。因此，隨著人們對生產能力、獲取供應能力和供應鏈的信心恢復，人們自然會期望將部分庫存減少到與需求相匹配的水平。

I don't think that process is going to take too long. I think it's been going on for a period of months now. And then I think what you'll see is the inventory demand aligned with the procedure rates, which are clearly higher.

我認為這個過程不會花費太長時間。我認為這種情況已經持續了幾個月了。然後我認為你會看到庫存需求與程序率一致，這顯然更高。

So Matt, I agree with you that the 2 seem in opposite directions in terms of what we're seeing in Healthcare, in particular, our Healthcare Consumables business. And we know that our customers are seeing the same thing. I think they've just got to whittle down some inventory.

所以馬特，我同意你的觀點，就我們在醫療保健領域，特別是我們的醫療保健消耗品業務而言，這兩者似乎處於相反的方向。我們知道我們的客戶也看到了同樣的事情。我認為他們必須削減一些庫存。

The next question will come from David Turkaly with JMP Securities.

下一個問題將由 JMP 證券公司的 David Turkaly 提出。

Just looking at the Healthcare number into the capital one that I'd like to press you a little bit there and say, how are you reducing these lead times? And you called out market share gains, I'm wondering if there's -- are there any new products or there anything you'd highlight in how you put up a number (inaudible).

只要看看醫療保健數據，我想向您詢問一下，您如何縮短這些交付時間？您提到了市場份額的增長，我想知道是否有任何新產品，或者您在提供數字時需要強調什麼（聽不清）。

Well, I mean, Dave, we're working off a monster backlog that spilled into this fiscal year, and we had some challenges producing. And as we got parts in, our teams were ready and we were able to push up stuff down the line pretty quickly. And we would expect that to continue in terms of our ability to deliver on that backlog. So I wouldn't highlight any single product or any small group of products in terms of new products or anything like that. It's just generally speaking, I think our portfolio is in a really good spot in terms of how it's positioned, not just on a competitive basis on a product by product, but also as a total portfolio in terms of what we can offer.

嗯，我的意思是，戴夫，我們正在處理本財年的大量積壓工作，我們在生產過程中遇到了一些挑戰。當我們收到零件時，我們的團隊就做好了準備，我們能夠很快地將東西推向生產線。我們預計，就我們交付積壓訂單的能力而言，這種情況將繼續下去。因此，我不會在新產品或類似產品方面強調任何單一產品或任何小組產品。總的來說，我認為我們的產品組合在定位方面處於非常好的位置，不僅是在逐個產品的競爭基礎上，而且在我們可以提供的產品組合方面也是如此。

And so we think of the market share gains is sort of across the board or is there anything like more specific there that you were kind of calling out in any arena?

因此，我們認為市場份額的增長是全面的，或者是否有您在任何領域呼籲的更具體的東西？

Not specifically. I would tend to say we're in a really good position in sterile processing right now in our infection prevention technologies group. But I think we're in a good position as well in other areas of Healthcare. But IPT right now, I think, is really doing -- carrying a lot of the load.

不具體。我想說，我們的感染預防技術小組目前在無菌處理方面處於非常有利的位置。但我認為我們在醫療保健的其他領域也處於有利地位。但我認為，IPT 現在確實在做——承擔了很多責任。

Your next question will come from Mike Matson with Needham & Company.

您的下一個問題將來自 Needham & Company 的 Mike Matson。

I just had a couple of questions on the Becton, Dickinson deal. Can you maybe talk about the growth that, that business has had in recent years? And then I know you gave us kind of the EBIT or EBIT margin, but what about the gross margin of that business? How does that compare to your kind of corporate gross margin?

我只是對 Becton、Dickinson 交易有幾個問題。您能否談談該業務近年來的增長情況？然後我知道你給了我們息稅前利潤或息稅前利潤率，但是該業務的毛利率呢？與你們公司的毛利率相比如何？

Yes. I would say that, Mike, on the gross margin side, it's similar. The growth rates would be similar and our long-term view of Healthcare, mid- to high single digits, as we bring that portfolio of products into our Healthcare segment, it's 100% healthcare. So I would say not much different from what we currently have from a margin perspective, both gross margin and a little bit -- it's actually a little bit higher on the EBIT margin standpoint.

是的。邁克，我想說的是，在毛利率方面，情況是相似的。增長率將相似，我們對醫療保健的長期看法是中高個位數，當我們將該產品組合引入我們的醫療保健部門時，它是 100% 的醫療保健。因此，我想說，從利潤率的角度來看，與我們目前的情況沒有太大不同，無論是毛利率還是息稅前利潤率的角度來看，它實際上要高一點。

Unfortunately, we are going to incur in the short run, higher interest expense, I think as I looked at some of the models that were out there, I don't think everybody appreciated that we are going to use our full revolving credit facility for the $540 million, which is equivalent to about $25 million in interest expense this year. So I think there's a little bit of a slower ramp because of that interest expense. But once we clear some of that expense out, we'll be back to, what I'll call, normalized Healthcare margins.

不幸的是，我們將在短期內承擔更高的利息費用，我認為當我研究了一些現有的模型時，我認為每個人都不會意識到我們將使用我們的全額循環信貸設施5.4億美元，相當於今年約2500萬美元的利息支出。因此，我認為由於利息支出，增長速度會有點慢。但是，一旦我們清除了部分費用，我們就會回到我所說的標準化醫療保健利潤率。

Okay. That's helpful. And then I didn't hear you quantify the inflation impact. I know last fiscal year, you were kind of given that every quarter. And then just related to that, you also called out lower productivity in terms of your gross margin. So I don't know if you can comment on either of those things or quantify them.

好的。這很有幫助。然後我沒有聽到你量化通貨膨脹的影響。我知道上一財年，每個季度都會有這樣的情況。與此相關的是，您還指出毛利率方面的生產率較低。所以我不知道你是否可以對這些事情發表評論或量化它們。

Yes. So we originally anticipated this fiscal year that we would have about $30 million, and we've been using the term excess material labor inflation. We incurred $10 million of that $30 million in the first quarter.

是的。因此，我們最初預計本財年將有約 3000 萬美元，並且我們一直使用“過剩物質勞動力通脹”一詞。我們在第一季度支付了 3000 萬美元中的 1000 萬美元。

Okay. And the productivity, lower productivity that you called out, can you talk about that? Or...

好的。您所說的生產力，生產力較低，您能談談嗎？或者...

Yes, we really haven't quantified that, but we are having the same issue that we've had in the past, right? So we are touching our products multiple times as we're waiting on the parts. So that productivity should improve throughout the year, which will help not only our gross margin, but also get more of our EBIT margin back to flattish, which is where our original guidance was for FY '24.

是的，我們確實還沒有量化這一點，但我們遇到了與過去相同的問題，對吧？因此，在等待零件時，我們會多次接觸我們的產品。因此，全年生產率應該會有所提高，這不僅有助於我們的毛利率，而且還能使我們的息稅前利潤率恢復到持平狀態，這就是我們對 24 財年的最初指導。

Okay. Got it. So that's just sort of a byproduct of the supply chain challenge.

好的。知道了。所以這只是供應鏈挑戰的副產品。

Correct.

正確的。

The next question will come from Steven Etoch with Stephens Inc.

下一個問題將由 Stephens Inc. 的 Steven Etoch 提出。

This is Mac on for Jacob. Just a couple of quick questions for me. Despite a sequential revenue decline, Dental margins increased sequentially. What is the outlook for margins in this segment?

這是為 Jacob 準備的 Mac。只是問我幾個簡單的問題。儘管收入環比下降，但牙科利潤率環比增長。該細分市場的利潤前景如何？

I'm sorry, what was the question?

抱歉，問的是什麼問題？

Dental margins.

牙齒邊緣。

Dental margins.

牙齒邊緣。

What should they be long term?

它們應該是長期的？

Yes. Long term, we said they should rise to near the corporate average. And you are seeing that they are getting much more operationally efficient, which is really helping drive that EBIT margin improvement. There's still a way to go, but we are happy -- more than happy with the progress that they are making within that segment.

是的。從長遠來看，我們認為它們應該上升到接近公司平均水平。您會看到他們的運營效率大大提高，這確實有助於推動息稅前利潤率的提高。還有很長的路要走，但我們很高興——對他們在該領域取得的進展感到非常高興。

Sorry, if you can't hear me, just let me know, I'll repeat the question. But Healthcare operating margins they're the highest it's been in some time, and 2 solid quarters in a row. Are there any onetime benefits? Or is this a good run rate going forward?

抱歉，如果您聽不到我的聲音，請告訴我，我會重複這個問題。但醫療保健業務的營業利潤率創下一段時間以來的最高水平，並且連續兩個季度保持穩定。有沒有一次性的好處？或者說這是一個良好的運行率嗎？

Obviously, volume is the biggest driver at this point in time. We have seen our Healthcare segment operating margins continually to increase. I don't know if we're ready to say this is new high and building off of there, but we are very pleased where we are at. And as we continue to put more volume through it and as the mix -- especially the mix on the consumables side, if that continues to remain throughout the year, obviously, there is still potential upside for those margins.

顯然，成交量是目前最大的推動因素。我們看到我們的醫療保健部門的營業利潤率不斷增加。我不知道我們是否準備好說這是新的高度並在此基礎上不斷發展，但我們對目前所處的位置感到非常高興。隨著我們繼續增加產量和混合——尤其是消耗品方面的混合，如果全年繼續保持這種情況，顯然，這些利潤仍然有潛在的上升空間。

The next question will come from Patrick Wood with Morgan Stanley.

下一個問題將由摩根士丹利的帕特里克·伍德提出。

Amazing. I'll keep it to 2, and I'll just ask them both upfront if that's easier. I guess the first one, obviously, everyone is talking about the big capital equipment number. I'm just curious like how the conversation with your customers has gone? I appreciate that some of this is working through the backlog and lead times on your end, but presumably, it seems like the customers are in a pretty healthy place if they're willing to be investing one the consume -- on the capital equipment side to that degree.

驚人的。我會將其保留為 2，並且我會提前詢問他們是否更容易。我猜第一個，顯然，每個人都在談論大資本設備數量。我只是好奇與客戶的對話進展如何？我很欣賞其中的一些工作正在解決你們那邊的積壓和交貨時間問題，但據推測，如果客戶願意在資本設備方面進行消費投資，那麼他們似乎處於一個非常健康的狀態到那個程度。

And then I guess the second one is essentially related to that, which is, in some ways, the more important component of that capital equipment side is the follow-on consumables componentry for the rest of the year. Is it fair to take a look at that strong conversion from the backlog and think about the consumable pull-through and the growth on that side, whether it's for the rest of this year or going into next year?

然後我想第二個本質上與此相關，即在某些方面，資本設備方面更重要的組成部分是今年剩餘時間的後續消耗品組件。看看積壓訂單的強勁轉化，並考慮消耗品的拉動和這方面的增長，無論是今年剩餘時間還是明年，是否公平？

Yes. Thanks, Patrick. So what I would -- this is Dan, by the way. What I would say is the conversations with the customer, it's interesting because you read the stress that the Healthcare system, in particular, in the U.S., but everywhere else, is under financially. I mean, the labor costs have gone up 20% in many places, and they operate on pretty thin margins to start with. So cash is a challenge.

是的。謝謝，帕特里克。所以我想說的是——順便說一句，這是丹。我想說的是與客戶的對話，這很有趣，因為你讀到醫療保健系統，特別是在美國，但在其他地方，都面臨著財務壓力。我的意思是，許多地方的勞動力成本上漲了 20%，而且他們的利潤率本來就相當微薄。所以現金是一個挑戰。

Now having said that, everybody agrees that procedure volumes are returning, recovering and growing and there's pent-up demand. And the STERIS equipment is seen more as a utility than it is a luxury because they can't get the capacity to get instruments through and surgeries process without sterile processing capacity, without ORs, without the SPD equipment. So we've -- knock on wood, we've remained pretty robust in terms of our order intake. And generally speaking, the outlook is pretty strong for that to continue for some period of time.

話雖如此，每個人都同意手術量正在回歸、恢復和增長，並且存在被壓抑的需求。 STERIS 設備更多地被視為一種實用工具，而不是一種奢侈品，因為如果沒有無菌處理能力、沒有手術室、沒有 SPD 設備，它們就無法獲得器械通過和手術過程的能力。所以我們——敲敲木頭，我們的訂單量仍然相當強勁。總的來說，這種情況持續一段時間的前景相當強勁。

And yes, as we place those units and have that real estate in the sterile processing department, the onus is on us to make sure that we get the chemistries and all the other accessories consumables that go along with the steam sterilizer or a washer or an AER, whatever that may be, but the pull-through in that is consistently pretty strong and we have a highly focused dedicated channel in Healthcare organization to focus on that.

是的，當我們將這些設備放置在無菌處理部門並擁有該空間時，我們有責任確保我們獲得與蒸汽滅菌器或洗衣機或滅菌器一起使用的化學品和所有其他配件消耗品。 AER ，無論是什麼，但它的牽引力始終相當強大，我們在醫療保健組織中有一個高度集中的專用渠道來關注這一點。

The next question will come from Michael Polark with Wolfe.

下一個問題將由邁克爾·波拉克和沃爾夫提出。

I must say first, I counted 8 minutes of prepared remarks, including the disclaimer. So kudos there, that might be an all-time conference call record. My first question maybe a few parts to it is on AST. With the fresh call-out of med tech-related destock, internally is your full year revenue expectation for AST different than it was before?

首先我必須說，我算了8分鐘準備好的發言，包括免責聲明。值得稱讚的是，這可能是有史以來的電話會議記錄。我的第一個問題可能有幾個部分是關於 AST 的。隨著醫療技術相關庫存的減少，您對 AST 全年收入的內部預期是否與之前有所不同？

No. I think what I would say is that it may be weighted more negative in the front half of the year than we anticipated, and we expect to recover some of that in the second half. I mean, Mike, if not for bioprocessing and the destocking that we're seeing right now, I can say confidently we'd be somewhere in the, I don't know, pick a number between 9 and 12 kind of range is what we would have expected. And I think that those 2 issues sort themselves out by year-end. And I think that the health care destocking probably sorts it out sooner than year-end.

不。我想我想說的是，今年上半年的負面影響可能比我們預期的要大，我們預計下半年會恢復一些。我的意思是，邁克，如果不是我們現在看到的生物加工和去庫存，我可以自信地說，我們會處於，我不知道，選擇 9 到 12 之間的數字是什麼範圍內我們本可以預料到的。我認為這兩個問題到年底就會自行解決。我認為醫療保健去庫存可能會在年底之前解決這個問題。

So 2 follow-ups there on bioprocess and med tech. So on bioprocess, I think this is the third quarter you've called it out year-on-year. So it's definitely been in the run rate sequentially for at least 2 quarters. My question is June quarter versus March quarter, did it deteriorate incrementally? Or is it kind of consistent Q-over-Q in terms of overall order pattern from those customers?

所以有兩個關於生物過程和醫療技術的後續行動。因此，在生物工藝方面，我認為這是您同比公佈的第三季度。因此，它肯定至少連續兩個季度處於運行狀態。我的問題是，六月季度與三月季度相比，情況是否逐漸惡化？或者就這些客戶的整體訂單模式而言，Q-over-Q 是否一致？

It was flattish to the Q4. The reason why it sticks out a little more is the comp in Q1 and also in Q2 are the 2 highest, the 2 toughest comps for us.

與第四季度持平。它之所以更加突出，是因為 Q1 和 Q2 中的比較對我們來說是 2 個最高、2 個最難的比較。

Yes. And then on device customers, I heard the national stockpile call-out. I appreciate that. In kind of interventional medicine, let's say, the neuro and cardio and ortho, any categories there that you see as kind of especially kind of noteworthy in terms of reducing inventory levels? Or would you call it broad-based ex the PPE stockpiling?

是的。然後在設備客戶上，我聽到了全國庫存的呼聲。我很感激。在介入醫學方面，比如說，神經、心臟和骨科，您認為在降低庫存水平方面有哪些類別特別值得注意？或者你會稱其為基礎廣泛的個人防護裝備庫存嗎？

I would say it's broad-based. And I would also say there's some that are still surging and building inventory. We see that in ortho and spine and pain management right now. So -- but that's not a huge amount of the volume flowing through our plants necessarily in the grand scheme of things.

我想說這是基礎廣泛的。我還想說，有些庫存仍在激增和增加。我們現在在骨科、脊柱和疼痛管理中看到了這一點。所以，但從長遠來看，這並不是流經我們工廠的大量流量。

Okay. I hope that was a 3-parter, but I consider that my first topic. My second is more straightforward on BD transaction kind of very prudent entry price, so you're seemingly earning your return on the buy, which is nice to see. Over the mid- to longer term, do you anticipate revenue and/or cost synergies from this portfolio?

好的。我希望這是一個三部分的內容，但我認為這是我的第一個主題。我的第二個想法是更直接的 BD 交易，即非常謹慎的入場價格，因此您似乎在購買時獲得了回報，這是很高興看到的。從中長期來看，您預計該產品組合會產生收入和/或成本協同效應嗎？

I think mostly -- I mean, there are some cost synergies, but they're minimal. I mean, in terms of -- and it more has to do with scale and leverage on channels and things like that. I do think there's some sell-through synergies the way that instruments -- the BD instruments marry up with both our instrument repair business as well as instrument trace and tracking through the sterile processing department.

我認為主要是——我的意思是，存在一些成本協同效應，但它們很小。我的意思是，就渠道而言，它更多地與規模和槓桿作用以及類似的事情有關。我確實認為儀器——BD 儀器與我們的儀器維修業務以及通過無菌處理部門進行儀器跟踪和跟踪相結合，會產生一些銷售協同效應。

Everything we do in terms of our washers and sterilizers in our infection prevention technologies group is dealing with instructions for use for all types of different instruments. And I think having the instruments available through STERIS; having the ability to supply, repair and manage the life cycle through washing and sterilization back to the OR is a compelling story from a customer perspective.

我們感染預防技術小組在洗衣機和滅菌器方面所做的一切都是為了處理所有類型不同儀器的使用說明。我認為通過 STERIS 可以獲得這些儀器；從客戶的角度來看，擁有通過清洗和滅菌返回手術室的供應、維修和管理生命週期的能力是一個引人注目的故事。

(Operator Instructions) Our next question will come from Jason Bednar with Piper Sandler.

（操作員說明）我們的下一個問題將由 Jason Bednar 和 Piper Sandler 提出。

I wanted to start a little bit with the guidance rationale. You beat consensus by almost $0.15, really strong free cash flow quarter revenue, obviously, as we've all talked about here is really strong, but you elected not to make any updates to full year guidance. I know we're only one quarter into the fiscal year. It sounds like there's some maybe early year fiscal year conservatism, but can you talk about the pushes and pulls that went into the decision to update or, I guess, in this case, not update core guidance the way you did?

我想從指導原理開始。您比共識高出近 0.15 美元，自由現金流季度收入非常強勁，顯然，正如我們在這裡討論的那樣，非常強勁，但您選擇不對全年指導進行任何更新。我知道本財年才剛剛過去四分之一。聽起來可能存在一些早期財政年度的保守主義，但您能談談決定更新的推動和拉動嗎？或者我想，在這種情況下，不像您那樣更新核心指導？

Yes. In short, I would say we did a really nice delivery in terms of our Healthcare business this quarter. And we're -- we look at that business and we're very optimistic in terms of how they're going to perform over this year.

是的。簡而言之，我想說，本季度我們的醫療保健業務交付非常好。我們正在關注該業務，我們對它們今年的表現非常樂觀。

In terms of Life Sciences and AST, there are some things that have to get worked out there relative to timing of some of these events. We think we understand the market. We think with a high degree of confidence with all the data we have that we know how things are going to play out, but there's no 100% guarantee and there's no 100% accuracy on the crystal ball. So the short answer is we're taking a conservative approach. And if things continue to do great, we'll have a different conversation sometime in the future.

就生命科學和 AST 而言，有一些與其中一些事件的時間相關的事情必須得到解決。我們認為我們了解市場。我們對所掌握的所有數據充滿信心，認為我們知道事情將如何發展，但沒有 100% 的保證，水晶球也沒有 100% 的準確性。所以簡短的回答是我們正在採取保守的方法。如果事情繼續進展順利，我們將來的某個時候將會進行不同的對話。

Okay. All right. Makes sense. And then I wanted to come back to the Dental business as well here. The core growth has been flat to down for, I think, 4 consecutive quarters now. So the commentary obviously getting easier here going forward. But maybe looking backwards first, are there actions you're taking or you have taken and exiting unprofitable areas or shutting down certain SKUs?

好的。好的。說得通。然後我也想回到這裡的牙科業務。我認為核心增長已經連續四個季度持平甚至下降。因此，接下來的評論顯然會變得更加容易。但也許首先回顧一下，您是否正在採取或已經採取了一些行動，退出無利可圖的領域或關閉某些 SKU？

And I really asked just because the performance we've seen so far does seem like it's running a little bit below market. So I'm trying to figure out if there's maybe some self-inflicted pain here that has a positive ROI? Or if you see any other factors that's contributing to the weakness for that segment, again, relative to maybe the market or your peers? And then just as a follow-up here on a two-parter. What contributes to the optimism of getting back -- that business back to low single-digit growth given where it's been trending here?

我真的這麼問只是因為到目前為止我們所看到的表現似乎確實略低於市場水平。所以我想弄清楚這裡是否有一些自我造成的痛苦可以帶來積極的投資回報率？或者，您是否發現任何其他因素導致該細分市場相對於市場或同行的疲軟？然後作為兩方的後續行動。考慮到目前的趨勢，是什麼讓人們對業務恢復到低個位數增長感到樂觀？

Yes, a couple of things. I would say I think that we have a little more exposure than some of our peers per se because of the amount of PPE and infection control that is almost half of the business, the STERIS Dental business. And that type of stuff got way overbought and overstocked and it needed to get burned down. And also the comparisons of how much was being used a few years ago versus now, it's a different time and a different world as it relates to that type of stuff.

是的，有幾件事。我想說的是，我認為我們比一些同行本身擁有更多的曝光度，因為個人防護裝備和感染控制的數量幾乎佔了 STERIS 牙科業務的一半。這類東西被過度購買和庫存過剩，需要被燒毀。還有幾年前和現在的使用量的比較，這是一個不同的時間和不同的世界，因為它與此類東西相關。

What I would say is on the instrument side, the Hu-Friedy brand stuff is doing really well in terms of growth, and we would expect that to continue. And we would expect to see innovation from a product perspective and also cost management from a manufacturing and delivery perspective. And the team in the Dental Group has done a really nice job managing the OpEx until we see the market recover as well and making sure that we're not overspending.

我想說的是，在樂器方面，Hu-Friedy 品牌的產品在增長方面做得非常好，我們預計這種情況會持續下去。我們期望從產品角度看到創新，從製造和交付角度看到成本管理。牙科集團的團隊在管理運營支出方面做得非常出色，直到我們看到市場也復甦並確保我們不會超支。

The next question will come from Matthew Mishan with KeyBanc.

下一個問題將由 KeyBanc 的 Matthew Mishan 提出。

I just wanted to talk about like longer-term GI procedures. One of the larger hospital systems was saying that they're realizing pent-up demand, seeing a lot of strong growth for GI and endoscopy. And one of the factors they're starting to see is like a change in guidelines, reducing the age for, I think, colon cancer screening down to 45 and 50 and that's starting to play through. I was just hoping you could talk a little bit about your endoscopy business, some of the Cantel doctors and kind of how you're looking at that over the next year or 2?

我只是想談談長期胃腸道手術。較大的醫院系統之一表示，他們正在意識到被壓抑的需求，胃腸道和內窺鏡檢查出現了強勁增長。他們開始看到的因素之一就是指南的改變，我認為將結腸癌篩查的年齡降低到 45 歲和 50 歲，這一點已經開始發揮作用。我只是希望您能談談您的內窺鏡業務、坎特爾的一些醫生以及您對未來一兩年的看法？

Yes. What I would say is that the drivers in terms of the 45 age recommendation has helped. I mean it does open up for a lot more screening. The sort of the governor on that for the past, I don't know, up until about a quarter ago or 6 months ago was really Healthcare staffing and the ability to get colonoscopy scheduled.

是的。我想說的是，45 歲司機的建議有所幫助。我的意思是它確實需要進行更多的篩選。我不知道過去的那種州長，直到大約一個季度前或六個月前，實際上是醫療保健人員配置和安排結腸鏡檢查的能力。

I know that I personally tried to schedule one in December, and they told me as soon as I could get in was the end of February. So I think a lot of that's been sorted. So it does have an impact, and that is reflected, in particular, in both our capital equipment with all the AERs that we sell, but it also is a major contributor to why we had strong delivery in Healthcare consumables in the first quarter.

我知道我個人試圖在 12 月安排一次，他們告訴我，我一能進去就在 2 月底。所以我認為很多事情都已經解決了。因此，它確實產生了影響，這尤其體現在我們銷售的所有 AER 的資本設備上，但這也是我們第一季度醫療保健消耗品交付強勁的一個主要因素。

And then I had a follow-up on the Corporate and Other. I believe you mentioned that it was an incentive comp and kind of a reset incentive comp that drive that. Is that type of year-over-year increase from a dollar perspective, something we should be modeling in over the next several quarters as well?

然後我對公司和其他進行了跟進。我相信你提到過這是一種激勵補償和一種重置激勵補償來推動這一點。從美元角度來看，這種同比增長是否是我們在接下來的幾個季度中也應該建模的？

Yes, Matt, if you recall, we called out last quarter that we will have a $40 million hole, if you will, that we have to fill from an incentive comp expense year-over-year. So that is a big driver of that increase in corporate expense. A couple of the other drivers in there. We also opened a new distribution center in Indianapolis, Indiana. So that is also at additive cost.

是的，馬特，如果你還記得的話，我們上個季度曾表示，如果你願意的話，我們將有 4000 萬美元的缺口，我們必須逐年通過激勵補償費用來填補。因此，這是企業支出增加的一個重要推動因素。那裡還有其他幾個司機。我們還在印第安納州印第安納波利斯開設了一個新的配送中心。所以這也是附加成本。

And then one of the other things that we're seeing is our usage of our employee health care benefits is on the rise. So we're also incurring slightly more expense there. So those are the 3 main components that we saw in the first quarter. But for sure, that $40 million we called out last quarter.

我們看到的另一件事是我們對員工醫療保健福利的使用正在增加。因此，我們在那裡的支出也略多一些。這些是我們在第一季度看到的三個主要組成部分。但可以肯定的是，我們上季度撥出了 4000 萬美元。

This concludes our question-and-answer session. I would like to turn the conference back over to Ms. Julie Winter for any closing remarks. Please go ahead.

我們的問答環節到此結束。我想將會議轉交給朱莉·溫特女士發表閉幕詞。請繼續。

Thank you, everybody, for taking the time to join us this morning, and we look forward to seeing many of you out on the road this fall.

謝謝大家今天早上抽出時間加入我們，我們期待著今年秋天在路上見到你們中的許多人。

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

會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。