MIRA
INFORM REPORT
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Report Date : |
17.04.2013 |
IDENTIFICATION DETAILS
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Name : |
STERIS CORP
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Registered Office : |
5960 Heisley Road, Mentor, OH 44060 |
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Country : |
United States |
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Financials (as on) : |
31.03.2012 |
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Year of Establishments: |
1985 |
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Legal Form : |
Public Parent Company |
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Line of Business : |
provider of
infection prevention and surgical products and services, focused on
healthcare, pharmaceutical and research |
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No. of Employees : |
5000 |
RATING & COMMENTS
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MIRAs Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List June 30th, 2012
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Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
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United
States |
A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
United States - ECONOMIC OVERVIEW
The US has the largest and most technologically powerful economy in the
world, with a per capita GDP of $48,100. In this market-oriented economy,
private individuals and business firms make most of the decisions, and the
federal and state governments buy needed goods and services predominantly in
the private marketplace. US business firms enjoy greater flexibility than their
counterparts in Western Europe and Japan in decisions to expand capital plant,
to lay off surplus workers, and to develop new products. At the same time, they
face higher barriers to enter their rivals' home markets than foreign firms
face entering US markets. US firms are at or near the forefront in
technological advances, especially in computers and in medical, aerospace, and
military equipment; their advantage has narrowed since the end of World War II.
The onrush of technology largely explains the gradual development of a
"two-tier labor market" in which those at the bottom lack the
education and the professional/technical skills of those at the top and, more
and more, fail to get comparable pay raises, health insurance coverage, and
other benefits. Since 1975, practically all the gains in household income have
gone to the top 20% of households. Since 1996, dividends and capital gains have
grown faster than wages or any other category of after-tax income. Imported oil
accounts for nearly 55% of US consumption. Oil prices doubled between 2001 and
2006, the year home prices peaked; higher gasoline prices ate into consumers'
budgets and many individuals fell behind in their mortgage payments. Oil prices
increased another 50% between 2006 and 2008. In 2008, soaring oil prices
threatened inflation and caused a deterioration in the US merchandise trade
deficit, which peaked at $840 billion. In 2009, with the global recession
deepening, oil prices dropped 40% and the US trade deficit shrank, as US
domestic demand declined, but in 2011 the trade deficit ramped back up to $803
billion, as oil prices climbed once more. The global economic downturn, the
sub-prime mortgage crisis, investment bank failures, falling home prices, and
tight credit pushed the United States into a recession by mid-2008. GDP
contracted until the third quarter of 2009, making this the deepest and longest
downturn since the Great Depression. To help stabilize financial markets, in
October 2008 the US Congress established a $700 billion Troubled Asset Relief
Program (TARP). The government used some of these funds to purchase equity in
US banks and industrial corporations, much of which had been returned to the
government by early 2011. In January 2009 the US Congress passed and President
Barack OBAMA signed a bill providing an additional $787 billion fiscal stimulus
to be used over 10 years - two-thirds on additional spending and one-third on
tax cuts - to create jobs and to help the economy recover. In 2010 and 2011,
the federal budget deficit reached nearly 9% of GDP; total government revenues
from taxes and other sources are lower, as a percentage of GDP, than that of
most other developed countries. The wars in Iraq and Afghanistan required major
shifts in national resources from civilian to military purposes and contributed
to the growth of the US budget deficit and public debt - through 2011, the
direct costs of the wars totaled nearly $900 billion, according to US
government figures. In March 2010, President OBAMA signed into law the Patient
Protection and Affordable Care Act, a health insurance reform bill that will
extend coverage to an additional 32 million American citizens by 2016, through
private health insurance for the general population and Medicaid for the
impoverished. Total spending on health care - public plus private - rose from
9.0% of GDP in 1980 to 17.9% in 2010. In July 2010, the president signed the
DODD-FRANK Wall Street Reform and Consumer Protection Act, a law designed to
promote financial stability by protecting consumers from financial abuses,
ending taxpayer bailouts of financial firms, dealing with troubled banks that
are "too big to fail," and improving accountability and transparency
in the financial system - in particular, by requiring certain financial
derivatives to be traded in markets that are subject to government regulation
and oversight. Long-term problems include inadequate investment in
deteriorating infrastructure, rapidly rising medical and pension costs of an
aging population, sizable current account and budget deficits - including
significant budget shortages for state governments - energy shortages, and
stagnation of wages for lower-income families.
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Source : CIA |
Company name & address
STERIS Corp
5960 Heisley Road
Mentor, OH 44060
United States
Tel: 440-354-2600
Fax: 440-639-4457
Toll Free: (800)
JIT-4-USE
Web: www.steris.com
Synthesis
Employees: 5,000
Company Type: Public Parent
Corporate Family: 57
Companies
Traded: New York Stock Exchange: STE
Incorporation Date: 1985
Auditor: Ernst & Young LLP
Financials in: USD
(Millions)
Fiscal Year End:
31-Mar-2012
Reporting Currency: US
Dollar
Annual Sales: 1,406.8 1
Net Income: 136.1
Total Assets: 1,405.7 2
Market Value: 2,432.8 (28-Mar-2013)
Business Description
STERIS Corporation (STERIS) is a provider of infection prevention and surgical products and services, focused on healthcare, pharmaceutical and research. The Company offers its Customers a mix of capital equipment products, such as sterilizers and surgical tables; consumable products, such as detergents and skin care products, and services, including equipment installation and maintenance; and microbial reduction of medical devices and other products. It operates in three business segments: Healthcare, Life Sciences, and STERIS Isomedix Services. For the nine months ended 31 December 2012, STERIS Corp revenues increased 6% to $1.07B. Net income increased 29% to $118.6M. Revenues reflect Healthcare segment increase from $259.1M to $757.4M, Life Sciences segment increase from $55.9M to $180.1M, Corporate and Other segment increase from $653K to $2.4M, United States segment increase from $263.5M to $815.6M, International segment increase from $91.7M to $258.1M.
Industry
Industry Medical Equipment and Supplies
ANZSIC 2006: 2412 - Medical and
Surgical Equipment Manufacturing
NACE 2002: 3310 - Manufacture
of medical and surgical equipment and orthopaedic appliances
NAICS 2002: 339113 - Surgical
Appliance and Supplies Manufacturing
UK SIC 2003: 3310 - Manufacture
of medical and surgical equipment and orthopaedic appliances
UK SIC 2007: 3250 - Manufacture
of medical and dental instruments and supplies
US SIC 1987: 3842 - Orthopedic,
Prosthetic, and Surgical Appliances and Supplies
Key Executives
(Emails Available)
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Name |
Title |
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Walter M. Rosebrough |
President, Chief Executive Officer, Director |
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Michael J. Tokich |
Chief Financial Officer, Senior Vice President |
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Mark D. McGinley |
Senior Vice President, General Counsel, Secretary |
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Peter A. Burke |
Chief Technology Officer, Senior Vice President |
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Kathleen L. Bardwell |
Chief Compliance Officer |
Significant Developments
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Topic |
#* |
Most Recent Headline |
Date |
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1 |
18-Jul-2012 |
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3 |
31-Oct-2012 |
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1 |
STERIS Corp
Issues FY 2013 Guidance Above Analysts' Estimates-Conference Call |
6-Feb-2013 |
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2 |
6-Feb-2013 |
* number of significant developments within the last 12 months
News
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Title |
Date |
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Orthopedic
Surgical Table |
12-Apr-2013 |
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Is Mine
Safety Appliances (MSA) Going to Burn These Hedge Funds? |
12-Apr-2013 |
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Uptrend
Call Working As STERIS Stock Rises 19.7% (STE) |
12-Apr-2013 |
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PDT Takes
Home Five ADEX Platinum Awards |
12-Apr-2013 |
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Soma
Technology, Inc. Will Attend ASCA 2013 in Boston, April 17-20 - Introducing
New Products and Services to the Ambulatory Surgical Center Market |
12-Apr-2013 |
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Fusioncast:
Unique Golf Partnership if a 'sign'of the times |
12-Apr-2013 |
Financial Summary
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As of 31-Dec-2012 |
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Stock Snapshot
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1 - Profit & Loss Item Exchange Rate: USD 1 = USD 1
2 - Balance Sheet Item Exchange Rate: USD 1 = USD 1
Corporate Overview
Location
5960 Heisley Road
Mentor, OH, 44060
Lake County
United States
Tel: 440-354-2600
Fax: 440-639-4457
Toll Free Tel: (800) JIT-4-USE
Web: www.steris.com
Quote Symbol - Exchange
STE - New York
Stock Exchange
Sales USD(mil): 1,406.8
Assets USD(mil): 1,405.7
Employees: 5,000
Fiscal Year End: 31-Mar-2012
Industry: Medical Equipment and Supplies
Incorporation Date: 1985
Company Type: Public Parent
Quoted Status: Quoted
President, Chief
Executive Officer, Director:
Walter M. Rosebrough
Industry Codes
ANZSIC 2006 Codes:
2412 - Medical and Surgical Equipment Manufacturing
2419 - Other Professional and Scientific Equipment Manufacturing
6910 - Scientific Research Services
NACE 2002 Codes:
3310 - Manufacture of medical and surgical equipment and
orthopaedic appliances
3320 - Manufacture of instruments and appliances for measuring,
checking, testing, navigating and other purposes, except industrial process
control equipment
7310 - Research and experimental development on natural sciences
and engineering
NAICS 2002 Codes:
339113 - Surgical Appliance and Supplies Manufacturing
339111 - Laboratory Apparatus and Furniture Manufacturing
334510 - Electromedical and Electrotherapeutic Apparatus
Manufacturing
541710 - Research and Development in the Physical, Engineering, and
Life Sciences
339112 - Surgical and Medical Instrument Manufacturing
US SIC 1987:
3842 - Orthopedic, Prosthetic, and Surgical Appliances and
Supplies
8731 - Commercial Physical and Biological Research
3841 - Surgical and Medical Instruments and Apparatus
3821 - Laboratory Apparatus and Furniture
3845 - Electromedical and Electrotherapeutic Apparatus
UK SIC 2003:
3310 - Manufacture of medical and surgical equipment and
orthopaedic appliances
3320 - Manufacture of instruments and appliances for measuring,
checking, testing, navigating and other purposes, except industrial process
control equipment
7310 - Research and experimental development on natural sciences
and engineering
UK SIC 2007:
3250 - Manufacture of medical and dental instruments and supplies
7219 - Other research and experimental development on natural
sciences and engineering
2651 - Manufacture of instruments and appliances for measuring,
testing and navigation
Business
Description
STERIS Corporation
(STERIS) is a provider of infection prevention and surgical products and
services, focused on healthcare, pharmaceutical and research. The Company
offers its Customers a mix of capital equipment products, such as sterilizers
and surgical tables; consumable products, such as detergents and skin care
products, and services, including equipment installation and maintenance; and
microbial reduction of medical devices and other products. It operates in three
business segments: Healthcare, Life Sciences, and STERIS Isomedix Services.
The Company’s
Healthcare is focused on assisting its Customers in enhancing their
perioperative performance. It provides support directly to the operating room,
as well as to the sterile processing functions where instruments are
reprocessed between surgeries and gastrointestinal procedures. Its second
segment, Life Sciences, serves pharmaceutical manufacturers and research
organizations by providing decontamination and sterilization technologies,
products and services that help support the safety and effectiveness of the
products they produce. STERIS Isomedix Services (Isomedix) provides ethylene
oxide and/or irradiation services on a contract basis through a network
offacilities in North America, where it processes medical devices and other
products as designated by its Customers' specifications prior to their delivery
to the end user.
Healthcare Segment
The Company’s
Healthcare segment manufactures and sells infrastructure capital equipment,
accessory, consumable, information support and service solutions to healthcare
providers, including acute care hospitals and surgery and gastrointestinal
centers. These capital equipment, accessory and consumable solutions include
steam, vaporized hydrogen peroxide and ethylene oxide (EO) sterilizers, as well
as liquid chemical sterilant processing systems; automated washer/disinfector
systems, which clean and disinfect a range of items from rolling instrument
carts and other healthcare equipment to small surgical instruments; general and
specialty surgical tables, surgical and examination lights, equipment
management systems, operating room storage cabinets, warming cabinets, scrub
sinks, and other complementary products and accessories for use in hospitals
and other ambulatory surgery sites, connectivity solutions, such as operating
room (OR) integration , workflow, patient tracking and instrument management
that allow for high quality transfer of information and images throughout the
hospital and between hospitals throughout the world; cleaning chemistries and sterility
assurance products used in instrument cleaning and decontamination systems, and
cleansing products, including hard surface disinfectants and skin care and hand
hygiene solutions, for use by care-givers and patients throughout healthcare
institutions. Brand names for these products include SYSTEM 1, SYSTEM 1E,
Amsco, Hamo, Reliance, Cmax, Harmony, Kindest Kare, Alcare, Verify, and Cal
Stat.
The Company’s Healthcare segment provides preventive maintenance programs and repair services to support the effective operation of capital equipment over its lifetime. It offers these corrective and preventive service solutions to Customers who have internal clinical/biomedical engineering departments and Customers who rely on it to provide those services. Field service personnel install, maintain, upgrade, repair, and troubleshoot equipment globally. It also offers sterilization and surgical management consulting services allowing healthcare facilities to achieve safety, quality, and productivity improvements in the perioperative loop, which flows between and among surgical suites and the central sterile department. It utilizes remote equipment monitoring technology to improve Customers’ equipment uptime by servicing equipment during off-peak hours. In addition, its Healthcare segment provides other support services, such as construction and facility planning, engineering support, device testing, Customer education, hand hygiene process excellence, asset management/planning, and the sale of replacement parts. It also provides information management and decision support solutions to operating room and central sterilization managers.
The Company competes with Getinge, Johnson & Johnson, 3M, Belimed, Berchtold, Cantel Medical, Ecolab, Go Jo, Kimberly-Clark, Skytron and Stryker.
Life Sciences Segment
The Company’s Life Sciences segment manufactures and sells a range of capital equipment, formulated cleaning chemistries, and service solutions to pharmaceutical companies, and private and public research facilities around the globe. These capital equipment and formulated cleaning chemistries include Formulated cleaning chemistries, which are used to prevent biological and chemical contamination and to monitor sterilization and decontamination processes, including products used to clean components used in manufacturing, decontaminate systems, and disinfect or sterilize hard surfaces; vaporized hydrogen peroxide (VHP) generators used to decontaminate value spaces, from small isolators to pharmaceutical processing and laboratory animal rooms; high-purity water equipment, which generates water for injection and pure steam; sterilizers used in the manufacture of pharmaceuticals and biopharmaceuticals, as well as sterilizers for equipment and instruments used in research studies, mitigating the risk of contamination, and washer/disinfectors, which decontaminate various components in pharmaceutical and industrial manufacturing processes and in research labs, such as glassware, vessels, equipment parts, drums, hoses, and animal cages. Brand names for these products include Amsco, Reliance, Finn-Aqua, VHP, and the CIP Products.
The Company’s Life Sciences segment offers preventive maintenance programs and repair services to support the effective operation of capital equipment over its lifetime. Field service personnel install, maintain, upgrade, repair, and troubleshoot equipment throughout the world. It utilizes remote equipment monitoring technology to improve Customers’ equipment uptime. It also offers consulting services and technical support to architecture and engineering firms and laboratory planners. Its services deliver in decontamination and infection control technologies and processes to end users. Its service personnel also provide higher-end validation services in support of its pharmaceutical Customers. Its Life Sciences segment sells capital equipment, consumables, and services to Customers in the United States and other countries globally.
The Company competes with Belimed, Ecolab, Fedegari, Getinge, MECO, Stilmas, and Techniplast.
Steris Isomedix
Services Segment
The Company’s
Isomedix segment operates through a network of facilities located in North
America. It sells a range of contract materials processing services using gamma
irradiation (Gamma) and ethylene oxide (EO) technologies. It offers microbial
reduction services based on Customer specifications to companies, which supply
products to the healthcare, industrial, and consumer product industries. The
Company uses gamma irradiation (Gamma) and ethylene oxide (EO) technologies to
process a range of products at its facilities. Its locations are in population
centers and core distribution corridors throughout North America, in the
Northeast, Midwest, Southwest, and southern California. Its technical services
group supports Customers in all phases of product development, materials
testing, and process validation. The Company’s Isomedix segment operates in
North America. The segment’s services are offered to Customers throughout the
footprint of its network.
The Company
competes with Sterigenics International, Inc
More Business Descriptions
STERIS Corporation
(STERIS) is a provider of infection prevention and surgical products and
services, focused on healthcare, pharmaceutical and research. The Company
offers its Customers a mix of capital equipment products, such as sterilizers
and surgical tables; consumable products, such as detergents and skin care
products, and services, including equipment installation and maintenance; and
microbial reduction of medical devices and other products. It operates in three
business segments: Healthcare, Life Sciences, and STERIS Isomedix Services. For
the nine months ended 31 December 2012, STERIS Corp revenues increased 6% to
$1.07B. Net income increased 29% to $118.6M. Revenues reflect Healthcare segment
increase from $259.1M to $757.4M, Life Sciences segment increase from $55.9M to
$180.1M, Corporate and Other segment increase from $653K to $2.4M, United
States segment increase from $263.5M to $815.6M, International segment increase
from $91.7M to $258.1M.
Infection
Prevention, Contamination Prevention, Microbial Reduction & Surgical
Support Products & Services
Establishments
primarily engaged in manufacturing orthopedic, prosthetic, and surgical
appliances and supplies, arch supports and other foot appliances; fracture
appliances, elastic hosiery, abdominal supporters, braces, and trusses;
bandages; surgical gauze and dressings; sutures; adhesive tapes and medicated
plasters; and personal safety appliances and equipment.
Steris Corporation
(Steris) is a medical devices company. It specializes in the development,
manufacture, and marketing of infection prevention, contamination control,
microbial reduction, and surgical and critical care products and support
services for healthcare, pharmaceutical, scientific, research, industrial, and
governmental customers. The product portfolio of the company includes capital
equipments, consumable products and support services. Steris has manufacturing
facilities in the US, Canada, Brazil, Mexico and European countries. The
company operates in over 60 countries through a network of direct sales force
and a service organization. Steris is headquartered in Ohio, the US.The company
focuses on optimizing the business portfolio by focusing in various
affiliations, integrations, collaborations and alliances. This is indicated by
various acquisition and alliances made by the company in the past and new plans
to enter into a collaborative alliance with St. Jude Medical on planning and
implementation of advanced cardiac laboratories. The company also broadened its
portfolio by the launch of newer products such as Amsco Chimeron Small Steam
Sterilizers.The company reported revenues of (U.S. Dollars) USD 1,406.81
million during the fiscal year ended March 2012, an increase of 16.51% over
2011. The operating profit of the company was USD 222.32 million during the
fiscal year 2012, an increase of 160.90% over 2011. The net profit of the
company was USD 136.12 million during the fiscal year 2012, an increase of
165.51% over 2011.
Steris Corporation
(Steris), formerly Innovative Medical Technologies, carries out the
development, manufacture and marketing of infection prevention, endoscopy
solutions, sterile processing, surgical and critical care solutions,
detergents, disinfectants, skin care products, process indicators and gaseous
delivery system technologies. It also provides sterilization and
decontamination services.The company concentrates its research activities for
the development of newer products. As of March 2012, company has a patent
portfolio of 297 US patents and 699 foreign patents. The company also has 62
pending patent applications in the US and 290 patent applications pending in
the foreign countries. Steris operates its business through a research and
development facility located at its headquarters and manufacturing facilities
located in US, Canada, Brazil, Mexico and European countries. The company
markets its products in over 60 countries.In January 2013, the company selected
Sonitor Technologies, Inc., a Real Time Location System (RTLS) solutions
provider as a RTLS supplier for its RealView Visual Workflow Management
Software. In October 2012, the company acquired Spectrum Surgical Instruments
Corporation and Total Repair Express, LLC. In September 2012, the company
introduced the RealView Visual Workflow Management Software to help healthcare
providers achieve highly efficient healthcare environments.Steris operates its
business through three reportable segments, namely, Healthcare, Life Sciences,
and STERIS Isomedix Services.
The mission of
STERIS Corporation is to provide a healthier today and safer tomorrow through
knowledgeable people and innovative infection prevention decontamination and
health science technologies products and services. The Company has approximately
5000 dedicated employees around the world working together to supply a broad
array of solutions by offering a combination of equipment consumables and
services to healthcare pharmaceutical industrial and government Customers. The
Company is listed on the New York Stock Exchange under the symbol STE.
Researchers and
professionals in the pharmaceutical, medical device manufacturing, defense,
industrial and health care industries have used STERIS Corporation's products
and services in the worldwide fight against infection and contamination. Its
solutions include: consumable equipment and patient-handling systems to protect
patients and devices; flexible animal cage handling and bedding processing to
reduce risks to animals and lab personnel; and an array of bulk processing
options, which include gamma irradiation, 100-percent ethylene oxide and
electron beams. STERIS Corporation is located in Mentor, Ohio.
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Strategic Initiatives
Key Organizational
Changes
The improvement in
operating margin is primarily attributable to the mix shift in the business
toward recurring revenue. Fiscal 2013 second quarter revenue for Isomedix
Services was $44.3 million compared with $40.0 million in the same period last
year, an increase of 11%. Revenue benefited from increased volumes from core
medical device Customers as well as the acquisition of Biotest in March 2012.
Operating income was $12.7 million in the quarter compared with $11.2 million
in the second quarter of last year. Cash Flow Net cash provided by operations
for the six months of fiscal 2013 was $112.0 million, compared with $60.5
million last year.
Life Sciences
operating income was $12.8 million compared with $10.3 million in the same
period last year, driven primarily by the volume increases. Fiscal 2013 third
quarter revenue for Isomedix Services was $43.4 million compared with $39.6
million in the same period last year, an increase of 10%. Revenue benefited
from increased volumes from core medical device Customers as well as the
acquisition of Biotest in March 2012. Operating income in the quarter declined
slightly to $11.1 million compared with $11.8 million last year, as a result of
the additional costs of new capacity the Company has brought online in the
quarter. Cash Flow Net cash provided by operations for the first nine months of
fiscal 2013 was $180.9 million, compared with $112.8 million last year.
Dividend
Announcement The company also announced today that Steris's board of directors
has authorized a two cent increase in its quarterly dividend to $0.19 per
common share, representing the seventh consecutive year of double digit
percentage increases in the dividend. The dividend is payable September 20,
2012 to shareholders of record at the close of business on August 23, 2012.
Outlook STERIS announced the proposed acquisition of US Endoscopy on July 17,
2012. Reflecting the impact of that acquisition, the company now expects
revenue growth for fiscal 2013 to be in the range of 3-4%, compared with
previous expectations of flat revenue performance. Similarly, Healthcare
segment revenue is expected to grow low-single digits, compared with previous
expectations of a decline in revenue of low-single digits.
Adjusted earnings
will exclude the amortization of purchased intangible assets, acquisition
related transaction and integration costs, and certain other items to provide
meaningful comparative analysis. The company has provided adjusted financial
results for fiscal 2012 in order to provide meaningful year-over-year
comparisons. Adjusted earnings per diluted share for fiscal 2013 are
anticipated to be in the range of $2.15 to $2.35, including accretion of
approximately five cents per share from the proposed acquisition of US
Endoscopy. The company's outlook for fiscal 2013 reflects certain key
assumptions, some of which are listed below: • The company has assumed the
average forward exchange rates for the U.S. dollar and key international
currencies as of June 29, 2012. • The company has assumed a modest increase
in raw material costs.
The increase in
operating income was driven by higher volumes and improved operating leverage.
Fiscal 2013 first quarter revenue for Isomedix Services was $46.1m compared
with $42.0m in the same period last year, an increase of 10%. Revenue benefited
from increased volumes from core medical device Customers as well as the recent
acquisition of Biotest, which added 400 basis points to growth. Operating
income was $15.6m in the quarter compared with $13.0m in the first quarter of
last year. Cash Flow Net cash provided by operations for the first quarter of
fiscal 2013 was $61.3m, compared with $12.0m last year.
Partnerships
These solutions
are designed to offer healthcare providers improved coordination of care
through the ability to seamlessly share information and inter-operate across
the clinical workflow, which provides a simplified solution that supports
efficient delivery of care. Bill O’Riordan, vice president and general
manager of the Steris Surgical Solutions Group, said, "The relationship we
have with St. Jude Medical is a pioneering collaboration, and the opportunity
it offers to healthcare providers on the electrophysiology (EP) frontier is
unique. It allows us to jointly deliver laboratory solutions unlike any
others." Three fully functional labs located at St.
Jude Medical, Inc.
which is a global medical device manufacturer. The alliance will focus on the
planning and implementation of advanced cardiac laboratories for healthcare
providers in the US and will enable the company to deliver unique laboratory
solutions. In December 2011, the company entered into collaboration with
Toshiba America Medical Systems, Inc. for offering advanced cardiovascular,
vascular, neurosurgical and pediatric hybrid surgical suites to the healthcare
systems seeking the latest patient-focused interventions. Besides these
alliances, the company also expanded its gamma irradiation operations in
Chester, New York. These initiatives will help the company to expand its market
coverage and thus, cater to the market demand in an effective and efficient
manner which will fuel the future growth.New Product LaunchesThe newly launched
and pipeline products provide enough opportunities for the company to expand
its market share and generate significantly higher revenue.
It also makes
Steris vulnerable to potential risks in the US economy, the company’s major
market.Strategic InitiativesAs part of its business strategy, the company
establishes and nourishes collaboration and agreements with other companies to
gain financial, research and development, manufacturing, and sales and
marketing capabilities and enhance the scope of its business operations. Over
the year, the company has entered into alliances with various companies and
released its plans for some alliances. In February 2012, the company expressed
its plans to enter into an alliance with St. Jude Medical, Inc. which is a
global medical device manufacturer. The alliance will focus on the planning and
implementation of advanced cardiac laboratories for healthcare providers in the
US and will enable the company to deliver unique laboratory solutions.
Currently, Steris
serve a small portion of the world, which could benefit from its products.
Larger focus on the US market will restrict the company's income growth to the
local economy. It also makes Steris vulnerable to potential risks in the US
economy, the company’s major market.Strategic InitiativesAs part of its
business strategy, the company establishes and nourishes collaboration and
agreements with other companies to gain financial, research and development,
manufacturing, and sales and marketing capabilities and enhance the scope of
its business operations. Over the year, the company has entered into alliances
with various companies and released its plans for some alliances. In February
2012, the company expressed its plans to enter into an alliance with St.
Sales and Distribution
Contributing to
the quarter, consumable revenue grew 37% and service revenue grew 28%, while
capital equipment revenue declined 17%, primarily due to the ramp-up of SYSTEM
1E unit sales during the prior year. Excluding SYSTEM 1E unit sales, capital
equipment revenue was flat in the U.S. and declined internationally. The
performance of the Healthcare consumable franchise reflected a combination of
the acquisition of US Endoscopy and growth in other consumables offset by
expected declines in S20 sterilant. Service revenue growth reflects the
acquisitions of Spectrum and TRE. As reported, Healthcare segment operating
income was $45.5 million compared with $34.0 million in last year's third
quarter.
|
|
Helpful |
Harmful |
|
Internal Origin |
Strengths |
Weaknesses |
|
External Origin |
Opportunities |
Threats |
Overview
Steris Corporation develops, manufactures, and markets infection prevention, contamination prevention, microbial reduction, and therapy support systems, products, services, and technologies. It provides these products and services to a broad range of customers including health care, scientific, research, food and industrial customers. The company’s strong R&D activities and patent portfolio allow the company to gain competitive advantage and drive its product portfolio, helping it to gain large market share. However, non-compliance by the company with applicable laws and regulations or failure to maintain, renew or obtain necessary permits and licenses could have an adverse effect on the company's results of operations and financial performance.
Strengths
Strong Research and
Development Capabilities
The main focus of Steris is on product development and innovation. It continues to invest in new and advanced technologies across all its fields. This will result in a strong and growing patent portfolio. The company’s research and development (R&D) activities focus on the development of new products, improvements to its existing product line, and the development of new technological platforms. STERIS spent $35.95m on R&D activities during fiscal year 2012, contributing 2.5% of its total revenue. As of March 2012, the company held a patent estate of 297 US and 699 foreign patents. The company also has 62 pending patent applications in the US and 290 patent applications pending in the foreign countries. During March 2012, it held 995 trademark registrations in the US as well as in several other countries. STERIS’s strong R&D activities and patent portfolio allow the company to gain competitive advantage and drive its product portfolio, helping it to gain large market share.
Operating
Performance
STERIS reported
improved operating performance for the fiscal year ended March 2012. The
company’s revenue increased to $1,406.81m as compared to $1,207.45m in 2011,
reflecting an increase of 16.51%. Its operating income increased to $222.32m in
2012 as compared to $85.21m in 2011, reflecting an increase of 160.90%. The
growth in the revenue and operating income resulted in the increase of the
company’s net income. For the fiscal year ended March 2012, the company reported
net income of $136.12m, reflecting an increase of 165.49% over the previous
year. The company’s operating margin stood at 15.80% in 2012 as compared to
7.05% in 2011. Growth in the operating margin indicates that the company’s
revenue increased at a higher rate than that of its operating expenses. For the
fiscal year ended March 2012, the company’s operating costs as a percentage
of sales stood at 84.19% as compared to 92.94% in 2011. Such strong growth in
the operating performance enhances the company’s profitability.
Diversified
Product and Service Portfolio
The company is
offering a broad portfolio of products and services covering infection
prevention, contamination control, microbial reduction, and surgical and
critical care support. The products such as sterilization systems, washers,
general and specialty operating tables, and surgical lighting are offered under
the Healthcare segment. Life Sciences segment of the company manufactures
automated cage and bedding processing systems, sterilizers, washers, and
vaporized hydrogen peroxide bio-decontamination systems. Isomedix division of
STERIS has a network of facilities in North America. It provides a
comprehensive array of contract sterilization services. The company also
provides customer education services, contract sterilization services,
technical services, and testing and evaluation services. A broad product
portfolio helped the company to cater a wide range of customers and insulates
risks due to the adverse market conditions in any specific product segment.
Weaknesses
Warning Letters
On May 16, 2008,
the company obtained a warning letter from the FDA relating to its STERIS
SYSTEM 1 sterile processor and the S-20 sterilant used with the processor. This
letter by the FDA claims that some major changes has been made in the design,
components, method of manufacture or intended use of the device beyond the
FDA’s 1988 approval. The FDA states that there were several modification made
to the device, which has to be examined by the FDA. This letter also requests
documentation and explanation with respect to the various corrective actions
related to the device prior to 2003, and whether those actions should be
considered corrections or removals within the meaning of FDA regulations. In July
2008, the company provided a detailed response stating that the claims in the
warning letter are not correct. Further, on November 4, 2008, it obtained a
letter from the FDA stating that after reviewing its response, a new pre-market
notification submission is required. On December 3, 2009, the FDA issued a
notice to healthcare facility administrators with regards to the regulatory
status of the STERIS SYSTEM 1 Sterile Processing System. The FDA states that
the presently marketed device does not have a cleared pre-market notification.
The company disagreed with the FDA’s notice, stating that the system is safe
and effective when used as directed. On February 10, 2011, STERIS received a
warning letter from the FDA with regard to its Verify SixCess Class 6 Challenge
Packs and Verify SixCess Class 6 Chemical Indicators. FDA warning letters will
certainly have a negative impact on the corporate image of STERIS, which in
turn will affect its profitability.
Lack of
Geographical Diversification
The company conducts
its operations in over 60 countries across the world. Though its operations are
spread across the globe, it derives a significant share of its revenues from
the US market. The US geographic segment accounted for 75.1% of the company’s
consolidated revenue in fiscal year 2012. Wherein, sales from International
operations accounted for 24.9% of its total revenue in 2012. Currently, Steris
serve a small portion of the world, which could benefit from its products.
Larger focus on the US market will restrict the company's income growth to the
local economy. It also makes Steris vulnerable to potential risks in the US
economy, the company’s major market.
Opportunities
Strategic Initiatives
As part of its
business strategy, the company establishes and nourishes collaboration and
agreements with other companies to gain financial, research and development,
manufacturing, and sales and marketing capabilities and enhance the scope of
its business operations. Over the year, the company has entered into alliances
with various companies and released its plans for some alliances. In February
2012, the company expressed its plans to enter into an alliance with St. Jude
Medical, Inc. which is a global medical device manufacturer. The alliance will
focus on the planning and implementation of advanced cardiac laboratories for
healthcare providers in the US and will enable the company to deliver unique
laboratory solutions. In December 2011, the company entered into collaboration
with Toshiba America Medical Systems, Inc. for offering advanced
cardiovascular, vascular, neurosurgical and pediatric hybrid surgical suites to
the healthcare systems seeking the latest patient-focused interventions.
Besides these alliances, the company also expanded its gamma irradiation operations
in Chester, New York. These initiatives will help the company to expand its
market coverage and thus, cater to the market demand in an effective and
efficient manner which will fuel the future growth.
Restructuring of Operations
During the fourth
quarter of 2010, STERIS adopted a restructuring plan intended to improve its
profitability and enhance efficiency principally by reducing ongoing
international operating costs. The company has undertaken several cost
reduction and restructuring activities over the past few years, including the
transfer of its Erie, Pennsylvania manufacturing operations to Mexico,
reduction in direct and indirect corporate overhead expense, consolidation of
European Healthcare manufacturing operations into two central locations within
Europe, and the transfer of the remaining operations in its Erie, Pennsylvania
facility to its US headquarters in Mentor, Ohio. Additionally, it rationalized
certain products and eliminated certain positions. These restructuring efforts
will enable the company to have consolidated operations, streamline its costs
and optimize its profit.
New Product Launches
The newly launched
and pipeline products provide enough opportunities for the company to expand
its market share and generate significantly higher revenue. The company has
launched various new products over the year. These products include Amsco
Chimeron Small Steam Sterilizers, 16x16x26” and 20x20x38”, with pre-vacuum
and SFPP cycles; Amsco V-PRO maX Low Temperature Sterilization System. The
company also launched Revital-Ox, a new segment for consumable products which
addresses all aspects of the process, from pre-cleaning and transport through
cleaning and disinfecting. The Revital-Ox product line includes Bedside
Complete, Enzymatic Sponges, D-Sponge, Revital-Ox 2X Concentrate Enzymatic
Detergent and Endoscopy Brushes; Revital-Ox Resert XL HLD High Level
Disinfectant, and the Revital-Ox rigid and flexible container systems.
Threats
Competitive Landscape
The prevailing
competitive environment in the medical equipment sector and customer
preferences could affect the company’s performance. In Healthcare business
segment, the company competes with Johnson & Johnson, Belimed, Getinge, 3M,
Cantel Medical, Ecolab, Stryker, Skytron, Kimberly-Clark and Berchtold.
Competitors in the pharmaceutical industry include Getinge, Techniplast.
Ecolab, MECO, Belimed, Fedegari, and Stilmas. Isomedix segment competes with
Sterigenics International, Inc. Additionally, the pharmaceutical industry is
characterized by extensive research and development, and rapid technological
changes. Constant developments by other companies of new or improved products,
processes or technologies will make the company’s products obsolete or less
competitive. The demand for its products depends on the competitive atmosphere,
including the timely development and introduction of new and competitive
products and the company’s response to downward pricing to sustain competition.
Factors including changes in customer order patterns, changing incentive
programs or competitors’ new products can impact the company’s competitive
ability.
Stringent
Reimbursement Policies
STERIS is
providing its products to hospitals and other healthcare providers. The
company’s ability to price the devices is impacted by the increased scrutiny
of the cost effectiveness of treatments by government as well as private
players. The initiatives of managed care organizations and governments to
contain healthcare costs in the US led to increased demand for the delivery of
more cost-effective medical therapies. This could adversely affect the sales
and prices of the company’s products. Physicians, hospitals and other
healthcare providers may be reluctant to purchase the company's products if
they are not reimbursed by third-party payers such as Medicare, Medicaid and
health insurance programs.
Extensive Regulations
The company’s
business is subject to various degrees of governmental regulation in the
countries in which it operates. In the US, the FDA, the EPA, the US Nuclear
Regulatory Commission (NRC), and other governmental agencies regulate the
development, manufacture, sale, and distribution of its products and services.
The company has to comply with government regulations to conduct its operations
in international marketplace. Additional governmental regulations may also be
passed, which can prevent, delay, revoke, or result in the rejection of
regulatory approval of its products. Non-compliance by the company with
applicable laws and regulations or failure to maintain, renew or obtain
necessary permits and licenses could have an adverse effect on the company's
results of operations and financial performance.
Credit Report as of 09/01/2012
|
Location |
|
|
5960 Heisley Rd |
|
|
|
|
|
County: |
Lake |
|
MSA: |
Akron, OH |
|
|
|
|
Phone: |
440-354-2600 |
|
Fax: |
440-354-7078 |
|
URL: |
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|
|
|
|
ABI: |
456268739 |
|
|
|
|
Annual Sales: |
$1,406,810,000 (USD) |
|
Employees: |
5,000 |
|
|
|
|
Facility Size(ft2): |
40,000+ |
|
|
|
|
Business Type: |
Public |
|
Location Type: |
Headquarter |
|
|
|
|
Ticker: |
|
|
Exchange: |
NYSE |
|
Primary Line of
Business: |
|
|
SIC: |
3842-21 - Sterilizing Apparatus-Manufacturers |
|
NAICS: |
339113 - Surgical Appliance & Supplies Mfg |
|
Secondary Lines
of Business: |
|
|
SICs: |
3841-04 - Physicians & Surgeons Equip & Supls-Mfrs |
|
|
3841-01 - Surgical Instruments-Manufacturers |
|
|
3842-09 - Surgical Appliances-Manufacturers |
|
|
5099-05 - Importers (Whls) |
|
|
8742-13 - Marketing Programs & Services |
|
|
9999-66 - Federal Government Contractors |
|
NAICS: |
423990 - All Other Durable Goods Merchant Whols |
|
|
339112 - Surgical & Medical Instrument Mfg |
|
|
541613 - Marketing Consulting Svcs |
|
Corporate Family |
Corporate
Structure News: |
|
|
STERIS
Corp |
|
STERIS Corp |
|
|
|
|
|
Company
Name |
Company
Type |
Location |
Country |
Industry |
Sales |
Employees |
|
Parent |
Mentor, OH |
United States |
Medical Equipment and Supplies |
1,406.8 |
5,000 |
|
|
Unit |
Mentor, OH |
United States |
Medical Equipment and Supplies |
|
500 |
|
|
Subsidiary |
Mentor, OH |
United States |
Business Services |
0.6 |
362 |
|
|
Unit |
Montgomery, AL |
United States |
Medical Equipment and Supplies |
153.0 |
310 |
|
|
Subsidiary |
Quebec, QC |
Canada |
Rental and Leasing |
149.5 |
300 |
|
|
Branch |
St Louis, MO |
United States |
Medical Equipment and Supplies |
138.5 |
300 |
|
|
Unit |
Erie, PA |
United States |
Miscellaneous Capital Goods |
|
260 |
|
|
Branch |
Mentor, OH |
United States |
Medical Equipment and Supplies |
95.7 |
200 |
|
|
Branch |
St Louis, MO |
United States |
Medical Equipment and Supplies |
14.7 |
200 |
|
|
Subsidiary |
Tuusula |
Finland |
Medical Equipment and Supplies |
|
170 |
|
|
Subsidiary |
Basingstoke |
United Kingdom |
Miscellaneous Capital Goods |
34.0 |
114 |
|
|
Subsidiary |
Pieterlen |
Switzerland |
Healthcare Facilities |
|
100 |
|
|
Unit |
Chester, NY |
United States |
Business Services |
4.5 |
85 |
|
|
Subsidiary |
Le Haillan |
France |
Medical Equipment and Supplies |
31.8 |
77 |
|
|
Subsidiary |
Leicester |
United Kingdom |
Chemical Manufacturing |
26.3 |
66 |
|
|
Unit |
Groveport, OH |
United States |
Business Services |
7.0 |
60 |
|
|
Subsidiary |
Minneapolis, MN |
United States |
Scientific and Technical Instruments |
|
55 |
|
|
Unit |
Spartanburg, SC |
United States |
Business Services |
2.1 |
50 |
|
|
Unit |
Libertyville, IL |
United States |
Medical Equipment and Supplies |
|
50 |
|
|
Unit |
El Paso, TX |
United States |
Business Services |
2.4 |
45 |
|
|
Subsidiary |
Saran |
France |
Appliance and Tool |
11.6 |
34 |
|
|
Subsidiary |
Segrate |
Italy |
Medical Equipment and Supplies |
11.3 |
32 |
|
|
Subsidiary |
Mississauga, ON |
Canada |
Medical Equipment and Supplies |
78.0 |
30 |
|
|
Unit |
Whippany, NJ |
United States |
Business Services |
2.5 |
29 |
|
|
Unit |
Libertyville, IL |
United States |
Business Services |
|
25 |
|
|
Subsidiary |
Mentor, OH |
United States |
Business Services |
|
24 |
|
|
Branch |
El Paso, TX |
United States |
Business Services |
14.7 |
120 |
|
|
Branch |
Ontario, CA |
United States |
Business Services |
9.3 |
59 |
|
|
Branch |
Libertyville, IL |
United States |
Business Services |
3.0 |
30 |
|
|
Branch |
Laguna Hills, CA |
United States |
Business Services |
3.8 |
24 |
|
|
Unit |
Sandy, UT |
United States |
Business Services |
2.6 |
23 |
|
|
Subsidiary |
Mentor, OH |
United States |
Office Equipment |
|
20 |
|
|
Unit |
Temecula, CA |
United States |
Business Services |
3.1 |
19 |
|
|
Subsidiary |
Strangnas |
Sweden |
Healthcare Facilities |
|
16 |
|
|
Subsidiary |
Hillsborough, NJ |
United States |
Medical Equipment and Supplies |
35.3 |
15 |
|
|
Subsidiary |
Stow, OH |
United States |
Medical Equipment and Supplies |
4.7 |
15 |
|
|
Unit |
Minneapolis, MN |
United States |
Business Services |
2.9 |
15 |
|
|
Subsidiary |
Kobe, Hyogo |
Japan |
Medical Equipment and Supplies |
|
13 |
|
|
Subsidiary |
Kolkata |
India |
Medical Equipment and Supplies |
|
12 |
|
|
Unit |
Libertyville, IL |
United States |
Business Services |
|
11 |
|
|
Subsidiary |
Sao Paulo |
Brazil |
Medical Equipment and Supplies |
|
10 |
|
|
Unit |
Nogales, AZ |
United States |
Medical Equipment and Supplies |
|
8 |
|
|
Branch |
Erie, PA |
United States |
Medical Equipment and Supplies |
10.8 |
5 |
|
|
Branch |
Mentor, OH |
United States |
Medical Equipment and Supplies |
10.2 |
5 |
|
|
Subsidiary |
Antwerpen |
Belgium |
Medical Equipment and Supplies |
6.7 |
5 |
|
|
Branch |
Reno, NV |
United States |
Medical Equipment and Supplies |
1.1 |
3 |
|
|
Subsidiary |
Amsterdam, Noord-Holland |
Netherlands |
Consumer Financial Services |
|
2 |
|
|
Subsidiary |
Guadalupe, Nuevo Leon |
Mexico |
Medical Equipment and Supplies |
|
300 |
|
|
Subsidiary |
Köln, Nordrhein-Westfalen |
Germany |
Medical Equipment and Supplies |
|
35 |
|
|
Branch |
Little Rock, AR |
United States |
Medical Equipment and Supplies |
8.2 |
1 |
|
|
Subsidiary |
Pieterlen |
Switzerland |
Biotechnology and Drugs |
|
|
|
|
Subsidiary |
Chaponnay |
France |
Miscellaneous Capital Goods |
4.5 |
14 |
|
|
Subsidiary |
Singapore |
Singapore |
Medical Equipment and Supplies |
|
|
|
|
Subsidiary |
Petaling Jaya, Selangor |
Malaysia |
Electronic Instruments and Controls |
|
|
|
|
Subsidiary |
Mentor, OH |
United States |
Biotechnology and Drugs |
|
|
|
|
Subsidiary |
El Paso, TX |
United States |
Medical Equipment and Supplies |
|
|
|
|
Subsidiary |
Berchem |
Belgium |
Medical Equipment and Supplies |
|
|
Competitors Report
|
Company Name |
Location |
Employees |
Ownership |
|
3M Co |
St. Paul, Minnesota, United States |
87,677 |
Public |
|
Becton, Dickinson and Co. |
Franklin Lakes, New Jersey, United States |
29,600 |
Public |
|
BIOLASE Inc |
Irvine, California, United States |
184 |
Public |
|
Bioquell UK Ltd. |
Andover, United Kingdom |
172 |
Private |
|
Cantel Medical Corp. |
Little Falls, New Jersey, United States |
1,198 |
Public |
|
CollaGenex Pharmaceuticals, Inc. |
Newtown, Pennsylvania, United States |
147 |
Private |
|
Ecolab Inc. |
St. Paul, Minnesota, United States |
40,860 |
Public |
|
Getinge AB |
Getinge, Sweden |
14,919 |
Public |
|
Henry Schein, Inc. |
Melville, New York, United States |
15,000 |
Public |
|
Integra LifeSciences Holdings Corporation |
Plainsboro, New Jersey, United States |
3,500 |
Public |
|
Invacare Corporation |
Elyria, Ohio, United States |
6,200 |
Public |
|
Johnson & Johnson |
New Brunswick, New Jersey, United States |
127,600 |
Public |
|
Kimberly Clark Corp |
Dallas, Texas, United States |
58,000 |
Public |
|
Medline Industries, Inc. |
Mundelein, Illinois, United States |
7,500 |
Private |
|
Misonix, Inc. |
Farmingdale, New York, United States |
69 |
Public |
|
New Brunswick Scientific Co., Inc. |
Edison, New Jersey, United States |
437 |
Private |
|
Patterson Companies, Inc. |
St. Paul, Minnesota, United States |
7,059 |
Public |
|
Sirona Dental Systems, Inc. |
Long Island City, New York, United States |
2,979 |
Public |
|
Skytron |
Grand Rapids, Michigan, United States |
120 |
Private |
|
Stryker Corporation |
Kalamazoo, Michigan, United States |
21,241 |
Public |
|
Sybron Dental Specialties, Inc. |
Orange, California, United States |
4,117 |
Private |
|
Synthes, Inc. |
West Chester, Pennsylvania, United States |
12,005 |
Public |
|
Young Innovations, Inc. |
Earth City, Missouri, United States |
371 |
Public |
|
Zimmer Holdings, Inc. |
Warsaw, Indiana, United States |
9,300 |
Public |
Executive report
|
Board of
Directors |
|
|
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Independent Chairman of the Board |
Chairman |
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Independent Director |
Director/Board Member |
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Independent Director |
Director/Board Member |
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Independent Director |
Director/Board Member |
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Independent Director |
Director/Board Member |
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Independent Director |
Director/Board Member |
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President, Chief Executive Officer, Director |
Director/Board Member |
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Independent Director |
Director/Board Member |
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Independent Director |
Director/Board Member |
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Independent Director |
Director/Board Member |
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Executives |
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President, Chief Executive Officer,
Director |
Chief Executive Officer |
|
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Senior Vice President, Group President -
Healthcare |
Division Head Executive |
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Senior Vice President, Group President - STERIS Isomedix Services and
Life Sciences |
Division Head Executive |
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Business Manager |
Administration Executive |
NetProspex* |
|
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Senior Vice President, General Counsel, Secretary |
Company Secretary |
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Chief Financial Officer, Senior Vice President |
Finance Executive |
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Vice President, Corporate Treasurer |
Treasurer |
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Director-Human Resources |
Human Resources Executive |
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Account Manager, Life Sciences |
Sales Executive |
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Sales Representative |
Sales Executive |
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Marketing |
Marketing Executive |
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|
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Marketing |
Marketing Executive |
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|
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Director-Corporate Communications |
Corporate Communications Executive |
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|
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Information Technology |
Information Executive |
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Systems |
Information Executive |
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|
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Chief Information Officer |
Information Executive |
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|
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|
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Network Service |
Network Management Executive |
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|
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|
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Technical Publisher |
Engineering/Technical Executive |
|
|
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Chief Technology Officer, Senior Vice President |
Engineering/Technical Executive |
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|
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Engineer |
Engineering/Technical Executive |
|
|
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Chemical Engineer |
Engineering/Technical Executive |
|
|
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Seniuor Scientist |
Research & Development Executive |
|
|
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|
Chief Compliance Officer |
Legal Executive |
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|
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|
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Customs Compliance Analyst |
Legal Executive |
|
|
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Senior Vice President Government Affairs |
Government/Public Affairs Executive |
|
|
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|
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Director-Safety & Environmental |
Other |
|
|
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|
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Hse Manager |
Other |
|
|
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H and S Specialist |
Other |
|
|
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Vice President & General Manager-Surgical & Critical Care |
Other |
|
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Significant Developments
STERIS Corp Declares Quarterly Dividend Feb 06, 2013
STERIS Corp announced that Board of Directors has authorized a quarterly dividend of $0.19 per common share. The dividend is payable March 27, 2013 to shareholders of record at the close of business on February 27, 2013.
STERIS Corp Issues FY 2013 Guidance Above Analysts' Estimates-Conference Call Feb 06, 2013
STERIS Corp announced that for fiscal 2013, it expects revenue to grow about 5% and adjusted earnings per share (EPS) to be in the range of $2.25-$2.35. The Company reported revenue of $1.391 billion in fiscal 2012. According to I/B/E/S Estimates, analysts on an average are expecting the Company to report revenue of $1.44 billion and EPS of $2.22 for fiscal 2013.
STERIS Corp Declares Quarterly Dividend Oct 31, 2012
STERIS Corp announced that Board of Directors has authorized a quarterly dividend of $0.19 per common share. The dividend is payable December 19, 2012 to shareholders of record at the close of business on November 21, 2012.
STERIS Corp Comments On FY 20013 EBIT Outlook Oct 31, 2012
STERIS Corp announced that for fiscal 2013, it expects EBIT as a percent of revenue is anticipated to be approximately 15% on an adjusted basis. According to I/B/E/S Estimates, analysts on an average are expecting the Company to report EBIT of $206.27 million for fiscal 2013.
STERIS Corporation Updates On FY 2013 Revenue Guidance; Reaffirms FY 2013 EPS Guidance-Conference Call Aug 02, 2012
STERIS Corporation announced that for fiscal 2013, the Company now anticipate total revenue growth to be in the range of 3% to 4% compared with the Company's propr expectations of flat revenues for the year largely a result of the acquisition. On a US GAAP basis the Company maintaining earnings per diluted share in the range of $2.00 to $2.20. Adjusted earnings per diluted share are anticipated to be in the range of $2.15 to $2.35 including accretion of approximately $0.05 per share from the acquisition of U.S. Endoscopy. The Company reported revenues of $1.392 billion in fiscal 2012. According to I/B/E/S Estimates, analysts were expecting the Company to report revenues of $1.405 billion and EPS of $2.14 for fiscal 2013.
STERIS Corp will buy US Endoscopy Group-AP Jul 18, 2012
The Associated Press reported that STERIS Corp will spend $270 million
to acquire the United States Endoscopy Group. The company sells devices and
accessories used in gastrointestinal and urology procedures, and Steris said
the deal gives it a franchise of disposable gastrointestinal products. Steris
is a sterilization device maker. The acquisition is expected to close during
the fiscal second quarter, which ends September 30, 2012
STERIS Corporation Issues FY 2013 EPS Guidance-Conference Call May 08,
2012
STERIS Corporation announced that it expects earnings per diluted share
(EPS) of $2 to $2.20 for fiscal 2013.
Annual
Income Statement
Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)
|
|
31-Mar-2012 |
31-Mar-2011 |
31-Mar-2010 |
31-Mar-2009 |
31-Mar-2008 |
|
Period Length |
12 Months |
12 Months |
12 Months |
12 Months |
12 Months |
|
UpdateType/Date |
Updated Normal |
Updated Normal |
Updated Normal |
Updated Normal |
Reclassified
Normal |
|
Filed Currency |
USD |
USD |
USD |
USD |
USD |
|
Exchange Rate
(Period Average) |
1 |
1 |
1 |
1 |
1 |
|
Auditor |
Ernst &
Young LLP |
Ernst &
Young LLP |
Ernst &
Young LLP |
Ernst &
Young LLP |
Ernst &
Young LLP |
|
Auditor Opinion |
Unqualified |
Unqualified |
Unqualified with
Explanation |
Unqualified |
Unqualified |
|
|
|
|
|
|
|
|
Net Sales |
1,406.8 |
1,207.4 |
1,257.7 |
1,298.5 |
1,265.1 |
|
Revenue |
1,406.8 |
1,207.4 |
1,257.7 |
1,298.5 |
1,265.1 |
|
Total Revenue |
1,406.8 |
1,207.4 |
1,257.7 |
1,298.5 |
1,265.1 |
|
|
|
|
|
|
|
|
Cost of Revenue |
838.3 |
761.1 |
719.0 |
771.8 |
754.5 |
|
Cost of Revenue, Total |
838.3 |
761.1 |
719.0 |
771.8 |
754.5 |
|
Gross Profit |
568.5 |
446.3 |
538.7 |
526.7 |
510.6 |
|
|
|
|
|
|
|
|
Selling/General/Administrative Expense |
309.6 |
305.7 |
296.6 |
315.0 |
334.7 |
|
Total Selling/General/Administrative Expenses |
309.6 |
305.7 |
296.6 |
315.0 |
334.7 |
|
Research & Development |
36.0 |
34.3 |
34.0 |
32.8 |
36.9 |
|
Restructuring Charge |
0.7 |
1.4 |
4.4 |
3.6 |
15.5 |
|
Litigation |
0.0 |
19.8 |
- |
- |
- |
|
Unusual Expense (Income) |
0.7 |
21.1 |
4.4 |
3.6 |
15.5 |
|
Total Operating Expense |
1,184.5 |
1,122.2 |
1,054.0 |
1,123.1 |
1,141.5 |
|
|
|
|
|
|
|
|
Operating Income |
222.3 |
85.2 |
203.7 |
175.4 |
123.5 |
|
|
|
|
|
|
|
|
Interest Expense -
Non-Operating |
-12.1 |
-12.0 |
-13.2 |
-10.6 |
-6.0 |
|
Interest Expense, Net Non-Operating |
-12.1 |
-12.0 |
-13.2 |
-10.6 |
-6.0 |
|
Interest Income -
Non-Operating |
0.9 |
0.6 |
1.3 |
1.6 |
2.2 |
|
Interest/Investment Income - Non-Operating |
0.9 |
0.6 |
1.3 |
1.6 |
2.2 |
|
Interest Income (Expense) - Net Non-Operating Total |
-11.2 |
-11.4 |
-11.9 |
-9.0 |
-3.7 |
|
Income Before Tax |
211.1 |
73.8 |
191.8 |
166.5 |
119.8 |
|
|
|
|
|
|
|
|
Total Income Tax |
75.0 |
22.6 |
63.3 |
55.8 |
42.7 |
|
Income After Tax |
136.1 |
51.3 |
128.5 |
110.7 |
77.1 |
|
|
|
|
|
|
|
|
Net Income Before Extraord Items |
136.1 |
51.3 |
128.5 |
110.7 |
77.1 |
|
Discontinued Operations |
- |
- |
- |
0.0 |
0.0 |
|
Total Extraord Items |
- |
- |
- |
0.0 |
0.0 |
|
Net Income |
136.1 |
51.3 |
128.5 |
110.7 |
77.1 |
|
|
|
|
|
|
|
|
Income Available to Common Excl Extraord Items |
136.1 |
51.3 |
128.5 |
110.7 |
77.1 |
|
|
|
|
|
|
|
|
Income Available to Common Incl Extraord Items |
136.1 |
51.3 |
128.5 |
110.7 |
77.1 |
|
|
|
|
|
|
|
|
Basic/Primary Weighted Average Shares |
58.4 |
59.3 |
58.8 |
58.8 |
63.3 |
|
Basic EPS Excl Extraord Items |
2.33 |
0.86 |
2.18 |
1.88 |
1.22 |
|
Basic/Primary EPS Incl Extraord Items |
2.33 |
0.86 |
2.18 |
1.88 |
1.22 |
|
Diluted Net Income |
136.1 |
51.3 |
128.5 |
110.7 |
77.1 |
|
Diluted Weighted Average Shares |
59.0 |
60.1 |
59.4 |
59.4 |
64.0 |
|
Diluted EPS Excl Extraord Items |
2.31 |
0.85 |
2.16 |
1.86 |
1.20 |
|
Diluted EPS Incl Extraord Items |
2.31 |
0.85 |
2.16 |
1.86 |
1.20 |
|
Dividends per Share - Common Stock Primary Issue |
0.66 |
0.56 |
2.44 |
0.30 |
0.23 |
|
Gross Dividends - Common Stock |
38.6 |
33.2 |
144.0 |
17.7 |
14.6 |
|
Interest Expense, Supplemental |
12.1 |
12.0 |
13.2 |
9.6 |
5.6 |
|
Interest Capitalized, Supplemental |
-0.7 |
-0.6 |
-0.4 |
-0.9 |
-0.4 |
|
Depreciation, Supplemental |
53.0 |
47.8 |
49.3 |
51.3 |
55.2 |
|
Total Special Items |
0.7 |
19.7 |
4.4 |
3.6 |
15.5 |
|
Normalized Income Before Tax |
211.8 |
93.6 |
196.2 |
170.0 |
135.3 |
|
|
|
|
|
|
|
|
Effect of Special Items on Income Taxes |
0.2 |
6.0 |
1.5 |
1.2 |
5.5 |
|
Inc Tax Ex Impact of Sp Items |
75.2 |
28.6 |
64.8 |
57.0 |
48.2 |
|
Normalized Income After Tax |
136.5 |
65.0 |
131.4 |
113.0 |
87.1 |
|
|
|
|
|
|
|
|
Normalized Inc. Avail to Com. |
136.5 |
65.0 |
131.4 |
113.0 |
87.1 |
|
|
|
|
|
|
|
|
Basic Normalized EPS |
2.34 |
1.10 |
2.23 |
1.92 |
1.38 |
|
Diluted Normalized EPS |
2.32 |
1.08 |
2.21 |
1.90 |
1.36 |
|
Amort of Intangibles, Supplemental |
7.7 |
6.6 |
6.9 |
7.5 |
7.6 |
|
Rental Expenses |
14.6 |
16.9 |
17.6 |
18.0 |
18.2 |
|
Advertising Expense, Supplemental |
5.9 |
6.0 |
6.5 |
7.2 |
10.6 |
|
Research & Development Exp, Supplemental |
36.0 |
34.3 |
34.0 |
32.8 |
36.9 |
|
Reported Gross Profit |
568.5 |
446.2 |
539.2 |
- |
524.0 |
|
Reported Operating Profit |
- |
- |
- |
- |
123.5 |
|
Normalized EBIT |
223.0 |
105.0 |
208.1 |
179.0 |
139.0 |
|
Normalized EBITDA |
283.7 |
159.3 |
264.3 |
237.8 |
201.8 |
|
Current Tax - Domestic |
33.1 |
46.0 |
45.1 |
29.4 |
35.3 |
|
Current Tax - Foreign |
15.0 |
12.3 |
9.5 |
11.4 |
13.4 |
|
Current Tax - Local |
5.0 |
7.7 |
7.0 |
8.2 |
4.2 |
|
Current Tax - Total |
53.1 |
66.0 |
61.5 |
49.0 |
52.9 |
|
Deferred Tax - Domestic |
20.8 |
-36.5 |
2.6 |
6.0 |
-7.2 |
|
Deferred Tax - Foreign |
-2.4 |
-0.9 |
-1.1 |
-0.1 |
-2.4 |
|
Deferred Tax - Local |
3.5 |
-6.0 |
0.3 |
0.9 |
-0.5 |
|
Deferred Tax - Total |
21.9 |
-43.5 |
1.8 |
6.8 |
-10.2 |
|
Income Tax - Total |
75.0 |
22.6 |
63.3 |
55.8 |
42.7 |
|
Interest Cost - Domestic |
2.4 |
2.6 |
3.0 |
2.7 |
2.8 |
|
Service Cost - Domestic |
0.2 |
0.2 |
0.2 |
0.2 |
0.1 |
|
Prior Service Cost - Domestic |
- |
- |
- |
0.0 |
0.0 |
|
Expected Return on Assets - Domestic |
-3.3 |
-3.0 |
-2.5 |
-2.9 |
-3.1 |
|
Actuarial Gains and Losses - Domestic |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Other Pension, Net - Domestic |
1.1 |
1.1 |
1.1 |
0.5 |
0.3 |
|
Domestic Pension Plan Expense |
0.4 |
0.8 |
1.8 |
0.6 |
0.0 |
|
Interest Cost - Foreign |
0.2 |
0.3 |
0.4 |
0.5 |
0.3 |
|
Service Cost - Foreign |
0.3 |
0.5 |
0.6 |
0.4 |
0.5 |
|
Expected Return on Assets - Foreign |
-0.2 |
-0.4 |
-0.4 |
-0.5 |
-0.5 |
|
Curtailments & Settlements - Foreign |
-1.4 |
-0.1 |
-0.1 |
-0.4 |
- |
|
Other Pension, Net - Foreign |
0.0 |
0.0 |
0.0 |
0.8 |
- |
|
Foreign Pension Plan Expense |
-1.1 |
0.4 |
0.4 |
0.8 |
0.4 |
|
Interest Cost - Post-Retirement |
1.0 |
1.2 |
1.9 |
2.7 |
4.6 |
|
Service Cost - Post-Retirement |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Prior Service Cost - Post-Retirement |
-3.3 |
-3.3 |
-3.3 |
-3.9 |
- |
|
Curtailments & Settlements - Post-Retir. |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Other Post-Retirement, Net |
0.4 |
0.4 |
0.6 |
1.4 |
1.0 |
|
Post-Retirement Plan Expense |
-1.8 |
-1.7 |
-0.7 |
0.2 |
5.6 |
|
Defined Contribution Expense - Domestic |
7.3 |
7.5 |
6.2 |
6.0 |
5.8 |
|
Total Pension Expense |
4.8 |
7.0 |
7.8 |
7.5 |
11.8 |
|
Discount Rate - Domestic |
5.25% |
5.75% |
7.50% |
6.00% |
6.00% |
|
Discount Rate - Foreign |
2.75% |
3.00% |
3.25% |
3.75% |
3.00% |
|
Discount Rate - Post-Retirement |
4.50% |
5.00% |
7.00% |
6.00% |
6.00% |
|
Expected Rate of Return - Domestic |
8.00% |
8.00% |
8.00% |
8.00% |
8.00% |
|
Expected Rate of Return - Foreign |
3.25% |
4.00% |
4.50% |
4.50% |
5.00% |
|
Compensation Rate - Foreign |
2.50% |
2.50% |
2.50% |
2.50% |
2.50% |
|
Total Plan Interest Cost |
3.6 |
4.1 |
5.4 |
5.9 |
7.7 |
|
Total Plan Service Cost |
0.5 |
0.7 |
0.7 |
0.6 |
0.6 |
|
Total Plan Expected Return |
-3.5 |
-3.4 |
-2.9 |
-3.4 |
-3.6 |
|
Total Plan Other Expense |
1.5 |
1.5 |
1.7 |
2.7 |
1.3 |
Annual Balance Sheet
Financials in: USD (mil)
|
|
31-Mar-2012 |
31-Mar-2011 |
31-Mar-2010 |
31-Mar-2009 |
31-Mar-2008 |
|
UpdateType/Date |
Updated Normal |
Reclassified
Normal |
Updated Normal |
Updated Normal |
Updated Normal |
|
Filed Currency |
USD |
USD |
USD |
USD |
USD |
|
Exchange Rate |
1 |
1 |
1 |
1 |
1 |
|
Auditor |
Ernst &
Young LLP |
Ernst &
Young LLP |
Ernst &
Young LLP |
Ernst &
Young LLP |
Ernst &
Young LLP |
|
Auditor Opinion |
Unqualified |
Unqualified |
Unqualified with
Explanation |
Unqualified |
Unqualified |
|
|
|
|
|
|
|
|
Cash & Equivalents |
150.8 |
193.0 |
215.0 |
154.2 |
51.9 |
|
Cash and Short Term Investments |
150.8 |
193.0 |
215.0 |
154.2 |
51.9 |
|
Accounts Receivable -
Trade, Gross |
291.8 |
281.3 |
224.2 |
249.2 |
259.2 |
|
Provision for Doubtful
Accounts |
-11.4 |
-9.1 |
-9.2 |
-10.7 |
-9.4 |
|
Trade Accounts Receivable - Net |
280.3 |
272.2 |
214.9 |
238.4 |
249.8 |
|
Total Receivables, Net |
280.3 |
272.2 |
214.9 |
238.4 |
249.8 |
|
Inventories - Finished Goods |
109.4 |
110.8 |
64.3 |
68.6 |
74.9 |
|
Inventories - Work In Progress |
25.2 |
19.9 |
20.7 |
24.3 |
28.2 |
|
Inventories - Raw Materials |
56.5 |
64.3 |
36.2 |
37.3 |
44.2 |
|
Inventories - Other |
-33.5 |
-27.7 |
- |
- |
- |
|
Total Inventory |
157.7 |
167.3 |
121.1 |
130.2 |
147.2 |
|
Prepaid Expenses |
19.8 |
16.5 |
18.4 |
23.1 |
35.5 |
|
Deferred Income Tax - Current Asset |
43.2 |
56.7 |
7.0 |
7.2 |
29.0 |
|
Other Current Assets, Total |
43.2 |
56.7 |
7.0 |
7.2 |
29.0 |
|
Total Current Assets |
651.9 |
705.8 |
576.5 |
553.1 |
513.4 |
|
|
|
|
|
|
|
|
Buildings |
230.8 |
201.9 |
192.7 |
188.1 |
184.9 |
|
Land/Improvements |
33.1 |
30.2 |
26.2 |
25.8 |
26.7 |
|
Machinery/Equipment |
622.7 |
582.9 |
552.3 |
525.5 |
547.1 |
|
Construction in
Progress |
22.8 |
40.7 |
29.6 |
17.7 |
38.1 |
|
Property/Plant/Equipment - Gross |
909.4 |
855.7 |
800.8 |
757.1 |
796.8 |
|
Accumulated Depreciation |
-523.0 |
-485.3 |
-454.0 |
-406.1 |
-412.2 |
|
Property/Plant/Equipment - Net |
386.4 |
370.4 |
346.9 |
351.0 |
384.6 |
|
Goodwill, Net |
305.8 |
289.2 |
276.9 |
272.0 |
290.9 |
|
Intangibles - Gross |
89.3 |
89.0 |
80.0 |
77.6 |
91.0 |
|
Accumulated Intangible Amortization |
-57.4 |
-59.3 |
-51.6 |
-44.5 |
-44.0 |
|
Intangibles, Net |
31.9 |
29.6 |
28.5 |
33.2 |
47.0 |
|
Other Long Term Assets |
29.6 |
31.7 |
9.8 |
7.6 |
3.3 |
|
Other Long Term Assets, Total |
29.6 |
31.7 |
9.8 |
7.6 |
3.3 |
|
Total Assets |
1,405.7 |
1,426.7 |
1,238.4 |
1,216.9 |
1,239.3 |
|
|
|
|
|
|
|
|
Accounts Payable |
83.2 |
91.0 |
66.0 |
68.6 |
75.5 |
|
Accrued Expenses |
122.3 |
198.4 |
77.0 |
108.0 |
106.3 |
|
Notes Payable/Short Term Debt |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Current Portion - Long Term Debt/Capital Leases |
- |
- |
- |
0.0 |
0.7 |
|
Customer Advances |
51.4 |
34.4 |
27.9 |
25.5 |
24.8 |
|
Income Taxes Payable |
- |
- |
- |
0.0 |
23.0 |
|
Other Current Liabilities |
21.5 |
21.0 |
26.2 |
- |
- |
|
Other Current liabilities, Total |
72.9 |
55.4 |
54.1 |
25.5 |
47.9 |
|
Total Current Liabilities |
278.4 |
344.7 |
197.1 |
202.0 |
230.4 |
|
|
|
|
|
|
|
|
Long Term Debt |
210.0 |
210.0 |
210.0 |
210.0 |
179.3 |
|
Total Long Term Debt |
210.0 |
210.0 |
210.0 |
210.0 |
179.3 |
|
Total Debt |
210.0 |
210.0 |
210.0 |
210.0 |
180.0 |
|
|
|
|
|
|
|
|
Deferred Income Tax - LT Liability |
44.6 |
35.8 |
32.4 |
30.0 |
5.9 |
|
Deferred Income Tax |
44.6 |
35.8 |
32.4 |
30.0 |
5.9 |
|
Minority Interest |
1.3 |
1.1 |
0.8 |
0.4 |
- |
|
Reserves |
8.8 |
10.2 |
10.0 |
11.0 |
- |
|
Pension Benefits - Underfunded |
36.0 |
32.4 |
34.4 |
45.7 |
- |
|
Other Long Term Liabilities |
5.2 |
4.8 |
0.0 |
- |
117.6 |
|
Other Liabilities, Total |
50.0 |
47.5 |
44.3 |
56.7 |
117.6 |
|
Total Liabilities |
584.3 |
639.1 |
484.7 |
499.2 |
533.1 |
|
|
|
|
|
|
|
|
Common Stock |
244.1 |
241.3 |
237.2 |
232.3 |
231.6 |
|
Common Stock |
244.1 |
241.3 |
237.2 |
232.3 |
231.6 |
|
Retained Earnings (Accumulated Deficit) |
914.4 |
816.8 |
798.8 |
814.4 |
721.3 |
|
Treasury Stock - Common |
-350.7 |
-305.8 |
-295.3 |
-313.1 |
-279.8 |
|
Unrealized Gain (Loss) |
0.2 |
0.1 |
-0.1 |
-0.5 |
- |
|
Translation Adjustment |
14.6 |
28.9 |
5.9 |
-21.9 |
- |
|
Minimum Pension Liability Adjustment |
-1.1 |
6.2 |
7.2 |
6.6 |
- |
|
Other Comprehensive Income |
- |
- |
- |
- |
33.1 |
|
Other Equity, Total |
13.5 |
35.1 |
13.1 |
-15.3 |
33.1 |
|
Total Equity |
821.4 |
787.6 |
753.7 |
717.7 |
706.2 |
|
|
|
|
|
|
|
|
Total Liabilities & Shareholders’ Equity |
1,405.7 |
1,426.7 |
1,238.4 |
1,216.9 |
1,239.3 |
|
|
|
|
|
|
|
|
Shares Outstanding - Common Stock Primary
Issue |
57.7 |
59.1 |
59.2 |
58.5 |
59.3 |
|
Total Common Shares Outstanding |
57.7 |
59.1 |
59.2 |
58.5 |
59.3 |
|
Treasury Shares - Common Stock Primary Issue |
12.3 |
10.9 |
10.8 |
11.6 |
10.8 |
|
Employees |
5,000 |
5,000 |
5,000 |
5,000 |
5,300 |
|
Number of Common Shareholders |
1,293 |
1,304 |
1,167 |
1,245 |
1,346 |
|
Accumulated Intangible Amort, Suppl. |
57.4 |
59.3 |
51.6 |
44.5 |
44.0 |
|
Deferred Revenue - Current |
51.4 |
34.4 |
27.9 |
25.5 |
24.8 |
|
Total Long Term Debt, Supplemental |
210.0 |
84.0 |
210.0 |
210.0 |
180.0 |
|
Long Term Debt Maturing within 1 Year |
0.0 |
0.0 |
0.0 |
0.0 |
40.7 |
|
Long Term Debt Maturing in Year 2 |
70.0 |
0.0 |
0.0 |
0.0 |
0.1 |
|
Long Term Debt Maturing in Year 3 |
0.0 |
70.0 |
0.0 |
0.0 |
0.0 |
|
Long Term Debt Maturing in Year 4 |
20.0 |
0.0 |
70.0 |
0.0 |
0.0 |
|
Long Term Debt Maturing in Year 5 |
120.0 |
- |
- |
- |
- |
|
Long Term Debt Maturing in 2-3 Years |
70.0 |
70.0 |
0.0 |
0.0 |
0.1 |
|
Long Term Debt Maturing in 4-5 Years |
140.0 |
0.0 |
70.0 |
0.0 |
0.0 |
|
Long Term Debt Matur. in Year 6 & Beyond |
0.0 |
14.0 |
140.0 |
210.0 |
139.2 |
|
Total Operating Leases, Supplemental |
48.2 |
47.9 |
57.2 |
54.8 |
57.0 |
|
Operating Lease Payments Due in Year 1 |
15.0 |
14.4 |
14.8 |
16.6 |
16.8 |
|
Operating Lease Payments Due in Year 2 |
12.2 |
11.7 |
12.6 |
13.0 |
12.9 |
|
Operating Lease Payments Due in Year 3 |
9.8 |
7.7 |
10.3 |
9.3 |
9.2 |
|
Operating Lease Payments Due in Year 4 |
6.4 |
4.5 |
6.9 |
4.7 |
5.2 |
|
Operating Lease Payments Due in Year 5 |
4.8 |
- |
- |
- |
- |
|
Operating Lease Pymts. Due in 2-3 Years |
22.0 |
19.5 |
22.9 |
22.3 |
22.1 |
|
Operating Lease Pymts. Due in 4-5 Years |
11.1 |
4.5 |
6.9 |
4.7 |
5.2 |
|
Oper. Lse. Pymts. Due in Year 6 & Beyond |
0.0 |
9.5 |
12.6 |
11.2 |
13.0 |
|
Pension Obligation - Domestic |
51.3 |
48.6 |
47.6 |
42.7 |
47.9 |
|
Pension Obligation - Foreign |
5.1 |
9.8 |
11.9 |
10.2 |
14.7 |
|
Post-Retirement Obligation |
24.9 |
23.8 |
25.2 |
29.9 |
82.7 |
|
Plan Assets - Domestic |
42.4 |
42.0 |
40.1 |
26.2 |
35.8 |
|
Plan Assets - Foreign |
4.2 |
8.3 |
9.2 |
8.5 |
12.7 |
|
Funded Status - Domestic |
-8.9 |
-6.5 |
-7.5 |
-16.5 |
-12.1 |
|
Funded Status - Foreign |
-1.0 |
-1.5 |
-2.7 |
-1.8 |
-2.0 |
|
Funded Status - Post-Retirement |
-24.9 |
-23.8 |
-25.2 |
-29.9 |
-82.7 |
|
Accumulated Obligation - Post-Retirement |
24.9 |
23.8 |
25.2 |
29.9 |
82.7 |
|
Total Funded Status |
-34.8 |
-31.8 |
-35.4 |
-48.1 |
-96.8 |
|
Discount Rate - Domestic |
4.25% |
5.25% |
5.75% |
7.50% |
6.00% |
|
Discount Rate - Foreign |
2.25% |
2.75% |
3.00% |
3.25% |
3.00% |
|
Discount Rate - Post-Retirement |
3.75% |
4.50% |
5.00% |
7.00% |
6.00% |
|
Expected Rate of Return - Domestic |
8.00% |
8.00% |
8.00% |
8.00% |
8.00% |
|
Expected Rate of Return - Foreign |
3.25% |
3.25% |
4.00% |
4.50% |
5.00% |
|
Compensation Rate - Foreign |
2.50% |
2.50% |
2.50% |
2.50% |
2.50% |
|
Accrued Liabilities - Domestic |
-8.9 |
-6.5 |
-7.5 |
- |
-4.8 |
|
Accrued Liabilities - Foreign |
-1.0 |
-1.5 |
-2.7 |
- |
-0.2 |
|
Accrued Liabilities - Post-Retirement |
-24.9 |
-23.8 |
-25.2 |
- |
-81.0 |
|
Other Assets, Net - Domestic |
16.6 |
-22.0 |
-56.9 |
10.4 |
- |
|
Net Assets Recognized on Balance Sheet |
-18.1 |
-53.8 |
-92.3 |
10.4 |
-86.0 |
|
Equity % - Domestic |
59.30% |
57.70% |
59.10% |
58.20% |
59.50% |
|
Equity % - Foreign |
- |
- |
38.70% |
42.40% |
19.50% |
|
Debt Securities % - Domestic |
39.90% |
41.40% |
40.00% |
39.10% |
40.50% |
|
Debt Securities % - Foreign |
- |
- |
9.40% |
13.00% |
46.80% |
|
Real Estate % - Foreign |
- |
- |
- |
- |
8.50% |
|
Private Investments % - Foreign |
100.00% |
100.00% |
29.00% |
23.50% |
- |
|
Other Investments % - Domestic |
0.80% |
0.90% |
0.00% |
2.70% |
0.00% |
|
Other Investments % - Foreign |
- |
- |
22.90% |
21.10% |
3.00% |
|
Total Plan Obligations |
81.3 |
82.1 |
84.7 |
82.9 |
145.3 |
|
Total Plan Assets |
46.5 |
50.3 |
49.4 |
34.7 |
48.5 |
Annual Cash Flows
Financials in: USD (mil)
|
|
31-Mar-2012 |
31-Mar-2011 |
31-Mar-2010 |
31-Mar-2009 |
31-Mar-2008 |
|
Period Length |
12 Months |
12 Months |
12 Months |
12 Months |
12 Months |
|
UpdateType/Date |
Updated Normal |
Updated Normal |
Updated Normal |
Updated Normal |
Updated Normal |
|
Filed Currency |
USD |
USD |
USD |
USD |
USD |
|
Exchange Rate
(Period Average) |
1 |
1 |
1 |
1 |
1 |
|
Auditor |
Ernst &
Young LLP |
Ernst &
Young LLP |
Ernst &
Young LLP |
Ernst &
Young LLP |
Ernst &
Young LLP |
|
Auditor Opinion |
Unqualified |
Unqualified |
Unqualified with
Explanation |
Unqualified |
Unqualified |
|
|
|
|
|
|
|
|
Net Income/Starting Line |
136.1 |
51.3 |
128.5 |
110.7 |
77.1 |
|
Depreciation |
62.9 |
54.4 |
56.2 |
58.8 |
62.8 |
|
Depreciation/Depletion |
62.9 |
54.4 |
56.2 |
58.8 |
62.8 |
|
Deferred Taxes |
22.1 |
-43.1 |
2.2 |
6.8 |
-10.2 |
|
Discontinued Operations |
- |
- |
- |
0.0 |
0.0 |
|
Unusual Items |
0.7 |
1.8 |
2.1 |
-2.8 |
5.8 |
|
Other Non-Cash Items |
3.2 |
18.3 |
8.9 |
-4.4 |
9.1 |
|
Non-Cash Items |
3.9 |
20.1 |
11.0 |
-7.2 |
14.9 |
|
Accounts Receivable |
-6.5 |
-54.5 |
27.8 |
0.5 |
9.2 |
|
Inventories |
11.8 |
-42.2 |
15.3 |
0.7 |
-4.9 |
|
Other Assets |
0.4 |
2.2 |
5.4 |
10.8 |
0.5 |
|
Accounts Payable |
-9.1 |
23.7 |
-4.5 |
-2.7 |
-3.1 |
|
Accrued Expenses |
-13.6 |
-21.8 |
-16.8 |
-11.0 |
-2.9 |
|
Other Liabilities |
-58.6 |
127.7 |
0.0 |
0.0 |
- |
|
Changes in Working Capital |
-75.6 |
35.0 |
27.1 |
-1.7 |
-1.2 |
|
Cash from Operating Activities |
149.4 |
117.7 |
225.0 |
167.4 |
143.4 |
|
|
|
|
|
|
|
|
Purchase of Fixed Assets |
-66.7 |
-77.4 |
-44.1 |
-40.9 |
-57.0 |
|
Capital Expenditures |
-66.7 |
-77.4 |
-44.1 |
-40.9 |
-57.0 |
|
Acquisition of Business |
-34.6 |
-4.0 |
0.0 |
0.0 |
0.0 |
|
Sale of Business |
- |
- |
- |
0.0 |
0.0 |
|
Sale of Fixed Assets |
0.0 |
1.3 |
3.1 |
19.3 |
5.2 |
|
Purchase of Investments |
0.0 |
-16.9 |
-1.5 |
-4.2 |
0.0 |
|
Other Investing Cash Flow |
- |
- |
- |
- |
0.0 |
|
Other Investing Cash Flow Items, Total |
-34.6 |
-19.6 |
1.6 |
15.2 |
5.2 |
|
Cash from Investing Activities |
-101.3 |
-97.0 |
-42.5 |
-25.7 |
-51.8 |
|
|
|
|
|
|
|
|
Other Financing Cash Flow |
1.5 |
2.5 |
2.5 |
6.5 |
2.8 |
|
Financing Cash Flow Items |
1.5 |
2.5 |
2.5 |
6.5 |
2.8 |
|
Cash Dividends Paid - Common |
-38.6 |
-33.2 |
-144.0 |
-17.7 |
-14.6 |
|
Total Cash Dividends Paid |
-38.6 |
-33.2 |
-144.0 |
-17.7 |
-14.6 |
|
Repurchase/Retirement
of Common |
-56.8 |
-30.0 |
-0.3 |
-80.5 |
-177.2 |
|
Common Stock, Net |
-56.8 |
-30.0 |
-0.3 |
-80.5 |
-177.2 |
|
Options Exercised |
5.7 |
12.7 |
14.0 |
33.6 |
14.6 |
|
Issuance (Retirement) of Stock, Net |
-51.0 |
-17.2 |
13.7 |
-46.8 |
-162.6 |
|
Short Term Debt, Net |
- |
0.0 |
0.0 |
-79.2 |
79.2 |
|
Long Term Debt Issued |
- |
0.0 |
0.0 |
150.0 |
0.0 |
|
Long Term Debt, Net |
- |
0.0 |
0.0 |
109.2 |
-0.7 |
|
Issuance (Retirement) of Debt, Net |
- |
0.0 |
0.0 |
30.0 |
78.5 |
|
Cash from Financing Activities |
-88.1 |
-47.9 |
-127.8 |
-28.0 |
-95.9 |
|
|
|
|
|
|
|
|
Foreign Exchange Effects |
-2.2 |
5.3 |
6.1 |
-11.4 |
3.9 |
|
Net Change in Cash |
-42.2 |
-22.0 |
60.8 |
102.3 |
-0.4 |
|
|
|
|
|
|
|
|
Net Cash - Beginning Balance |
193.0 |
215.0 |
154.2 |
51.9 |
52.3 |
|
Net Cash - Ending Balance |
150.8 |
193.0 |
215.0 |
154.2 |
51.9 |
|
Cash Interest Paid |
12.5 |
12.5 |
13.4 |
10.7 |
6.0 |
|
Cash Taxes Paid |
51.8 |
61.3 |
57.1 |
46.6 |
53.2 |
Annual Income Statement
Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)
|
|
31-Mar-2012 |
31-Mar-2011 |
31-Mar-2010 |
31-Mar-2009 |
31-Mar-2008 |
|
Period Length |
12 Months |
12 Months |
12 Months |
12 Months |
12 Months |
|
UpdateType/Date |
Updated Normal |
Updated Normal |
Updated Normal |
Updated Normal |
Reclassified
Normal |
|
Filed Currency |
USD |
USD |
USD |
USD |
USD |
|
Exchange Rate
(Period Average) |
1 |
1 |
1 |
1 |
1 |
|
Auditor |
Ernst &
Young LLP |
Ernst &
Young LLP |
Ernst &
Young LLP |
Ernst &
Young LLP |
Ernst &
Young LLP |
|
Auditor Opinion |
Unqualified |
Unqualified |
Unqualified with
Explanation |
Unqualified |
Unqualified |
|
|
|
|
|
|
|
|
Product |
928.1 |
743.8 |
799.0 |
831.5 |
812.1 |
|
Service |
478.7 |
463.6 |
458.7 |
467.0 |
453.0 |
|
Total Revenue |
1,406.8 |
1,207.4 |
1,257.7 |
1,298.5 |
1,265.1 |
|
|
|
|
|
|
|
|
Cost of Product |
552.0 |
494.3 |
455.4 |
496.9 |
490.1 |
|
Cost of Service |
286.4 |
266.8 |
263.6 |
274.9 |
264.4 |
|
Restructuring- COGS |
0.0 |
0.2 |
-0.5 |
- |
- |
|
Class action settlement |
0.0 |
19.8 |
- |
- |
- |
|
Selling, general, and administrative |
309.6 |
305.7 |
296.6 |
315.0 |
334.7 |
|
Research/Develop. |
36.0 |
34.3 |
34.0 |
32.8 |
36.9 |
|
Restructuring Expenses |
0.6 |
1.2 |
4.8 |
3.6 |
15.5 |
|
Total Operating Expense |
1,184.5 |
1,122.2 |
1,054.0 |
1,123.1 |
1,141.5 |
|
|
|
|
|
|
|
|
Int. Income/Other |
0.9 |
0.6 |
1.3 |
1.6 |
2.2 |
|
Interest Expense |
-12.1 |
-12.0 |
-13.2 |
-10.6 |
-6.0 |
|
Net Income Before Taxes |
211.1 |
73.8 |
191.8 |
166.5 |
119.8 |
|
|
|
|
|
|
|
|
Provision for Income Taxes |
75.0 |
22.6 |
63.3 |
55.8 |
42.7 |
|
Net Income After Taxes |
136.1 |
51.3 |
128.5 |
110.7 |
77.1 |
|
|
|
|
|
|
|
|
Net Income Before Extra. Items |
136.1 |
51.3 |
128.5 |
110.7 |
77.1 |
|
Gain on the sale of discontinued operati |
- |
- |
- |
0.0 |
0.0 |
|
Income from discontinued operations |
- |
- |
- |
0.0 |
0.0 |
|
Net Income |
136.1 |
51.3 |
128.5 |
110.7 |
77.1 |
|
|
|
|
|
|
|
|
Income Available to Com Excl ExtraOrd |
136.1 |
51.3 |
128.5 |
110.7 |
77.1 |
|
|
|
|
|
|
|
|
Income Available to Com Incl ExtraOrd |
136.1 |
51.3 |
128.5 |
110.7 |
77.1 |
|
|
|
|
|
|
|
|
Basic Weighted Average Shares |
58.4 |
59.3 |
58.8 |
58.8 |
63.3 |
|
Basic EPS Excluding ExtraOrdinary Items |
2.33 |
0.86 |
2.18 |
1.88 |
1.22 |
|
Basic EPS Including ExtraOrdinary Item |
2.33 |
0.86 |
2.18 |
1.88 |
1.22 |
|
Diluted Net Income |
136.1 |
51.3 |
128.5 |
110.7 |
77.1 |
|
Diluted Weighted Average Shares |
59.0 |
60.1 |
59.4 |
59.4 |
64.0 |
|
Diluted EPS Excluding ExtraOrd Items |
2.31 |
0.85 |
2.16 |
1.86 |
1.20 |
|
Diluted EPS Including ExtraOrd Items |
2.31 |
0.85 |
2.16 |
1.86 |
1.20 |
|
DPS-Common Stock |
0.66 |
0.56 |
2.44 |
0.30 |
0.23 |
|
Gross Dividends - Common Stock |
38.6 |
33.2 |
144.0 |
17.7 |
14.6 |
|
Normalized Income Before Taxes |
211.8 |
93.6 |
196.2 |
170.0 |
135.3 |
|
|
|
|
|
|
|
|
Inc Tax Ex Impact of Sp Items |
75.2 |
28.6 |
64.8 |
57.0 |
48.2 |
|
Normalized Income After Taxes |
136.5 |
65.0 |
131.4 |
113.0 |
87.1 |
|
|
|
|
|
|
|
|
Normalized Inc. Avail to Com. |
136.5 |
65.0 |
131.4 |
113.0 |
87.1 |
|
|
|
|
|
|
|
|
Basic Normalized EPS |
2.34 |
1.10 |
2.23 |
1.92 |
1.38 |
|
Diluted Normalized EPS |
2.32 |
1.08 |
2.21 |
1.90 |
1.36 |
|
Interest Expense |
12.1 |
12.0 |
13.2 |
9.6 |
5.6 |
|
Interest Capitalized |
-0.7 |
-0.6 |
-0.4 |
-0.9 |
-0.4 |
|
Research & Development Exp |
36.0 |
34.3 |
34.0 |
32.8 |
36.9 |
|
Rental Expense |
14.6 |
16.9 |
17.6 |
18.0 |
18.2 |
|
Amortization of Intangibles |
7.7 |
6.6 |
6.9 |
7.5 |
7.6 |
|
Depreciation |
53.0 |
47.8 |
49.3 |
51.3 |
55.2 |
|
Advertisement Expenses |
5.9 |
6.0 |
6.5 |
7.2 |
10.6 |
|
Current Tax - Federal |
33.1 |
46.0 |
45.1 |
29.4 |
35.3 |
|
Current Tax - Local |
5.0 |
7.7 |
7.0 |
8.2 |
4.2 |
|
Current Tax - Foreign |
15.0 |
12.3 |
9.5 |
11.4 |
13.4 |
|
Current Tax - Total |
53.1 |
66.0 |
61.5 |
49.0 |
52.9 |
|
Deferred Tax - Federal |
20.8 |
-36.5 |
2.6 |
6.0 |
-7.2 |
|
Deferred Tax - Local |
3.5 |
-6.0 |
0.3 |
0.9 |
-0.5 |
|
Deferred Tax - Foreign |
-2.4 |
-0.9 |
-1.1 |
-0.1 |
-2.4 |
|
Deferred Tax - Total |
21.9 |
-43.5 |
1.8 |
6.8 |
-10.2 |
|
Income Tax - Total |
75.0 |
22.6 |
63.3 |
55.8 |
42.7 |
|
Gross profit |
568.5 |
446.2 |
539.2 |
- |
524.0 |
|
Income from operations |
- |
- |
- |
- |
123.5 |
|
Service Cost - U.S. |
0.2 |
0.2 |
0.2 |
0.2 |
0.1 |
|
Interest Cost - U.S. |
2.4 |
2.6 |
3.0 |
2.7 |
2.8 |
|
Expected Return on Assets - U.S. |
-3.3 |
-3.0 |
-2.5 |
-2.9 |
-3.1 |
|
Curtailment Losses - U.S. |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Net Amortization & Deferral - U.S. |
1.1 |
1.1 |
1.1 |
0.5 |
0.3 |
|
Recognized Prior Service Cost - U.S. |
- |
- |
- |
0.0 |
0.0 |
|
Domestic Pension Plan Expense |
0.4 |
0.8 |
1.8 |
0.6 |
0.0 |
|
Service Cost - Int'l |
0.3 |
0.5 |
0.6 |
0.4 |
0.5 |
|
Interest Cost - Int'l |
0.2 |
0.3 |
0.4 |
0.5 |
0.3 |
|
Expected Return on Assets - Int'l |
-0.2 |
-0.4 |
-0.4 |
-0.5 |
-0.5 |
|
Curtailment-Int'l |
-1.4 |
-0.1 |
-0.1 |
-0.4 |
- |
|
Termination Benefits-Int'l |
0.0 |
0.0 |
0.0 |
0.8 |
- |
|
Net Amortization & Deferral - Int'l |
0.0 |
0.0 |
0.0 |
0.0 |
- |
|
Foreign Pension Plan Expense |
-1.1 |
0.4 |
0.4 |
0.8 |
0.4 |
|
Service Cost - Post-Retirement |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Interest Cost - Post-Retirement |
1.0 |
1.2 |
1.9 |
2.7 |
4.6 |
|
Special Termination Benefits - Post-Ret. |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Prior service cost -Post -Retirement |
-3.3 |
-3.3 |
-3.3 |
-3.9 |
- |
|
Net Amort. & Deferral - Post-Retirement |
0.4 |
0.4 |
0.6 |
1.4 |
1.0 |
|
Post-Retirement Plan Expense |
-1.8 |
-1.7 |
-0.7 |
0.2 |
5.6 |
|
401(k) Defined Contribution Plan |
7.3 |
7.5 |
6.2 |
6.0 |
5.8 |
|
Total Pension Expense |
4.8 |
7.0 |
7.8 |
7.5 |
11.8 |
|
Discount Rate - U.S. |
5.25% |
5.75% |
7.50% |
6.00% |
6.00% |
|
Discount Rate - Switzerland |
2.75% |
3.00% |
3.25% |
3.75% |
3.00% |
|
Discount Rate - Post-Retirement |
4.50% |
5.00% |
7.00% |
6.00% |
6.00% |
|
Expected Rate of Return - U.S. |
8.00% |
8.00% |
8.00% |
8.00% |
8.00% |
|
Expected Rate of Return - Switzerland |
3.25% |
4.00% |
4.50% |
4.50% |
5.00% |
|
Compensation Rate - Switzerland |
2.50% |
2.50% |
2.50% |
2.50% |
2.50% |
Annual Balance Sheet
Financials in: USD (mil)
|
|
31-Mar-2012 |
31-Mar-2011 |
31-Mar-2010 |
31-Mar-2009 |
31-Mar-2008 |
|
UpdateType/Date |
Updated Normal |
Reclassified
Normal |
Updated Normal |
Updated Normal |
Updated Normal |
|
Filed Currency |
USD |
USD |
USD |
USD |
USD |
|
Exchange Rate |
1 |
1 |
1 |
1 |
1 |
|
Auditor |
Ernst & Young
LLP |
Ernst &
Young LLP |
Ernst &
Young LLP |
Ernst &
Young LLP |
Ernst &
Young LLP |
|
Auditor Opinion |
Unqualified |
Unqualified |
Unqualified with
Explanation |
Unqualified |
Unqualified |
|
|
|
|
|
|
|
|
Cash/Equivalents |
150.8 |
193.0 |
215.0 |
154.2 |
51.9 |
|
Raw Materials |
56.5 |
64.3 |
36.2 |
37.3 |
44.2 |
|
Work in Progress |
25.2 |
19.9 |
20.7 |
24.3 |
28.2 |
|
Finished Goods |
109.4 |
110.8 |
64.3 |
68.6 |
74.9 |
|
LIFO reserve |
-18.2 |
-17.6 |
- |
- |
- |
|
Reserve for excess and obsolete inventor |
-15.3 |
-10.1 |
- |
- |
- |
|
Prepaid/Other |
19.8 |
16.5 |
18.4 |
23.1 |
35.5 |
|
Accounts Rcvbl. |
291.8 |
281.3 |
224.2 |
249.2 |
259.2 |
|
Doubtful Account |
-11.4 |
-9.1 |
-9.2 |
-10.7 |
-9.4 |
|
Deferred income taxes |
43.2 |
56.7 |
7.0 |
7.2 |
29.0 |
|
Total Current Assets |
651.9 |
705.8 |
576.5 |
553.1 |
513.4 |
|
|
|
|
|
|
|
|
Goodwill, Net |
305.8 |
289.2 |
276.9 |
272.0 |
290.9 |
|
Land/Improvement |
33.1 |
30.2 |
26.2 |
25.8 |
26.7 |
|
Buildings/Lease |
230.8 |
201.9 |
192.7 |
188.1 |
184.9 |
|
Mach./Equipment |
301.7 |
286.1 |
276.7 |
271.1 |
271.6 |
|
Information Sys. |
110.1 |
101.9 |
103.1 |
93.0 |
126.7 |
|
Radioisotope |
210.9 |
194.9 |
172.5 |
161.4 |
148.7 |
|
Constr. in Prog. |
22.8 |
40.7 |
29.6 |
17.7 |
38.1 |
|
Depreciation |
-523.0 |
-485.3 |
-454.0 |
-406.1 |
-412.2 |
|
Other |
29.6 |
31.7 |
9.8 |
7.6 |
3.3 |
|
Intangibles |
89.3 |
89.0 |
80.0 |
77.6 |
91.0 |
|
Intangible Amort |
-57.4 |
-59.3 |
-51.6 |
-44.5 |
-44.0 |
|
Total Assets |
1,405.7 |
1,426.7 |
1,238.4 |
1,216.9 |
1,239.3 |
|
|
|
|
|
|
|
|
Accounts Payable |
83.2 |
91.0 |
66.0 |
68.6 |
75.5 |
|
Accrued/Other |
23.4 |
18.5 |
18.0 |
48.3 |
47.0 |
|
Deferred Revenue |
51.4 |
34.4 |
27.9 |
25.5 |
24.8 |
|
Other current liabilities |
21.5 |
21.0 |
26.2 |
- |
- |
|
Accrued Payroll |
29.9 |
52.3 |
59.0 |
59.7 |
59.2 |
|
Accrued Tax |
- |
- |
- |
0.0 |
23.0 |
|
Accrued SYSTEM 1 Rebate Program and clas |
69.1 |
127.7 |
0.0 |
- |
- |
|
Current Portion of Long Term Debt |
- |
- |
- |
0.0 |
0.7 |
|
Total Current Liabilities |
278.4 |
344.7 |
197.1 |
202.0 |
230.4 |
|
|
|
|
|
|
|
|
Long Term Debt |
210.0 |
210.0 |
210.0 |
210.0 |
179.3 |
|
Total Long Term Debt |
210.0 |
210.0 |
210.0 |
210.0 |
179.3 |
|
|
|
|
|
|
|
|
Other liabilities |
- |
- |
- |
- |
117.6 |
|
Self-insured risk reserves- long-term po |
8.8 |
10.2 |
10.0 |
11.0 |
- |
|
Other post-retirement benefit obligation |
21.6 |
20.5 |
21.8 |
26.1 |
- |
|
Defined benefit pension plans obligatio |
9.9 |
8.0 |
10.2 |
18.4 |
- |
|
Other employee benefit plans obligation |
4.5 |
3.9 |
2.3 |
1.2 |
- |
|
Accrued long-term income taxes |
1.9 |
9.1 |
11.7 |
11.9 |
- |
|
Other contingent obligations |
5.2 |
4.8 |
0.0 |
- |
- |
|
Deferred income taxes, net |
42.7 |
26.7 |
20.7 |
18.1 |
5.9 |
|
Noncontrolling interest |
1.3 |
1.1 |
0.8 |
0.4 |
- |
|
Total Liabilities |
584.3 |
639.1 |
484.7 |
499.2 |
533.1 |
|
|
|
|
|
|
|
|
Common Share |
244.1 |
241.3 |
237.2 |
232.3 |
231.6 |
|
Treasury Share |
-350.7 |
-305.8 |
-295.3 |
-313.1 |
-279.8 |
|
Retained Erngs. |
914.4 |
816.8 |
798.8 |
814.4 |
721.3 |
|
Trans.Adjustment |
14.6 |
28.9 |
5.9 |
-21.9 |
- |
|
Pension Liab. |
-1.1 |
6.2 |
7.2 |
6.6 |
- |
|
Unrealized Loss on Investments |
0.2 |
0.1 |
-0.1 |
-0.5 |
- |
|
Accumulated other comprehensive income ( |
- |
- |
- |
- |
33.1 |
|
Total Equity |
821.4 |
787.6 |
753.7 |
717.7 |
706.2 |
|
|
|
|
|
|
|
|
Total Liabilities & Shareholders' Equity |
1,405.7 |
1,426.7 |
1,238.4 |
1,216.9 |
1,239.3 |
|
|
|
|
|
|
|
|
S/O-Common Stock |
57.7 |
59.1 |
59.2 |
58.5 |
59.3 |
|
Total Common Shares Outstanding |
57.7 |
59.1 |
59.2 |
58.5 |
59.3 |
|
T/S-Common Stock |
12.3 |
10.9 |
10.8 |
11.6 |
10.8 |
|
Deferred Revenue |
51.4 |
34.4 |
27.9 |
25.5 |
24.8 |
|
Accumulated Intangible Amortization |
57.4 |
59.3 |
51.6 |
44.5 |
44.0 |
|
Full-Time Employees |
5,000 |
5,000 |
5,000 |
5,000 |
5,300 |
|
Number of Common Shareholders |
1,293 |
1,304 |
1,167 |
1,245 |
1,346 |
|
Long Term Debt Maturing within 1 Year |
0.0 |
0.0 |
0.0 |
0.0 |
40.7 |
|
Long Term Debt Maturing within 2 Years |
70.0 |
0.0 |
0.0 |
0.0 |
0.1 |
|
Long Term Debt Maturing within 3 Years |
0.0 |
70.0 |
0.0 |
0.0 |
0.0 |
|
Long Term Debt Maturing within 4 Years |
20.0 |
0.0 |
70.0 |
0.0 |
0.0 |
|
Long Term Debt Maturing within 5 Years |
120.0 |
- |
- |
- |
- |
|
Long Term Debt Remaining Maturities |
- |
14.0 |
140.0 |
210.0 |
139.2 |
|
Total Long Term Debt, Supplemental |
210.0 |
84.0 |
210.0 |
210.0 |
180.0 |
|
Operating Lease Maturing within 1 Year |
15.0 |
14.4 |
14.8 |
16.6 |
16.8 |
|
Operating Lease Maturing within 2 Years |
12.2 |
11.7 |
12.6 |
13.0 |
12.9 |
|
Operating Lease Maturing within 3 Years |
9.8 |
7.7 |
10.3 |
9.3 |
9.2 |
|
Operating Lease Maturing within 4 Years |
6.4 |
4.5 |
6.9 |
4.7 |
5.2 |
|
Operating Lease Maturing within 5 Years |
4.8 |
- |
- |
- |
- |
|
Operating Lease Remaining Maturities |
- |
9.5 |
12.6 |
11.2 |
13.0 |
|
Total Operating Leases |
48.2 |
47.9 |
57.2 |
54.8 |
57.0 |
|
Projected Benefit Obligation - U.S. |
51.3 |
48.6 |
47.6 |
42.7 |
47.9 |
|
FV of Plan Assets - U.S. |
42.4 |
42.0 |
40.1 |
26.2 |
35.8 |
|
Funded Status - U.S. |
-8.9 |
-6.5 |
-7.5 |
-16.5 |
-12.1 |
|
Projected Benefit Obligation - Int'l |
5.1 |
9.8 |
11.9 |
10.2 |
14.7 |
|
FV of Plan Assets - Int'l |
4.2 |
8.3 |
9.2 |
8.5 |
12.7 |
|
Funded Status - Int'l |
-1.0 |
-1.5 |
-2.7 |
-1.8 |
-2.0 |
|
Projected Benefit Obligation - Post-Ret. |
24.9 |
23.8 |
25.2 |
29.9 |
82.7 |
|
Funded Status - Post-Retirement |
-24.9 |
-23.8 |
-25.2 |
-29.9 |
-82.7 |
|
Accumulated Benefit Obligation - Post-Re |
24.9 |
23.8 |
25.2 |
29.9 |
82.7 |
|
Total Funded Status |
-34.8 |
-31.8 |
-35.4 |
-48.1 |
-96.8 |
|
Discount Rate - U.S. |
4.25% |
5.25% |
5.75% |
7.50% |
6.00% |
|
Discount Rate - Switzerland |
2.25% |
2.75% |
3.00% |
3.25% |
3.00% |
|
Discount Rate - Post-Retirement |
3.75% |
4.50% |
5.00% |
7.00% |
6.00% |
|
Expected Rate of Return - U.S. |
8.00% |
8.00% |
8.00% |
8.00% |
8.00% |
|
Expected Rate of Return - Switzerland |
3.25% |
3.25% |
4.00% |
4.50% |
5.00% |
|
Compensation Rate - Switzerland |
2.50% |
2.50% |
2.50% |
2.50% |
2.50% |
|
Accrued Benefit Liability - U.S. |
-8.9 |
-6.5 |
-7.5 |
- |
-4.8 |
|
Accrued Benefit Liability - Int'l |
-1.0 |
-1.5 |
-2.7 |
- |
-0.2 |
|
Accrued Benefit Liability - Post-Ret. |
-24.9 |
-23.8 |
-25.2 |
- |
-81.0 |
|
AOCI-Net Actuarial Loss - Pension |
-16.3 |
-9.7 |
-17.5 |
-31.6 |
- |
|
AOCI- Prior Service Cost-Pension |
32.9 |
-12.2 |
-39.4 |
42.1 |
- |
|
AOCI-Transition Obligation - Pension |
- |
- |
- |
-0.1 |
- |
|
Net Assets Recognized on Balance Sheet |
-18.1 |
-53.8 |
-92.3 |
10.4 |
-86.0 |
|
Equity Securities% - U.S. |
59.30% |
57.70% |
59.10% |
58.20% |
59.50% |
|
Debt Securities % - U.S. |
39.90% |
41.40% |
40.00% |
39.10% |
40.50% |
|
Cash % - U.S. |
0.80% |
0.90% |
0.00% |
2.70% |
0.00% |
|
Equity Securities % - Switzerland |
- |
- |
38.70% |
42.40% |
19.50% |
|
Debt Securities % - Switzerland |
- |
- |
9.40% |
13.00% |
46.80% |
|
Real Estate % - Switzerland |
- |
- |
- |
- |
8.50% |
|
Cash % - Switzerland |
- |
- |
22.90% |
21.10% |
3.00% |
|
Insurance Contracts-Switzerland |
100.00% |
100.00% |
29.00% |
23.50% |
- |
Annual Cash Flows
Financials in: USD (mil)
|
|
31-Mar-2012 |
31-Mar-2011 |
31-Mar-2010 |
31-Mar-2009 |
31-Mar-2008 |
|
Period Length |
12 Months |
12 Months |
12 Months |
12 Months |
12 Months |
|
UpdateType/Date |
Updated Normal |
Updated Normal |
Updated Normal |
Updated Normal |
Updated Normal |
|
Filed Currency |
USD |
USD |
USD |
USD |
USD |
|
Exchange Rate
(Period Average) |
1 |
1 |
1 |
1 |
1 |
|
Auditor |
Ernst &
Young LLP |
Ernst &
Young LLP |
Ernst &
Young LLP |
Ernst &
Young LLP |
Ernst &
Young LLP |
|
Auditor Opinion |
Unqualified |
Unqualified |
Unqualified with
Explanation |
Unqualified |
Unqualified |
|
|
|
|
|
|
|
|
Net Income |
136.1 |
51.3 |
128.5 |
110.7 |
77.1 |
|
Depreciation |
62.9 |
54.4 |
56.2 |
58.8 |
62.8 |
|
Tax benefit from stock options exercised |
- |
- |
- |
- |
0.0 |
|
Share-based compensation expense |
7.9 |
10.2 |
7.4 |
7.4 |
8.6 |
|
Deferred income taxes |
22.1 |
-43.1 |
2.2 |
6.8 |
-10.2 |
|
Gain on Sale of Discontinued Operations |
- |
- |
- |
0.0 |
0.0 |
|
Other items |
-4.7 |
8.1 |
1.6 |
-11.8 |
0.5 |
|
Accounts receivable, net |
-6.5 |
-54.5 |
27.8 |
0.5 |
9.2 |
|
Inventories, net |
11.8 |
-42.2 |
15.3 |
0.7 |
-4.9 |
|
Other Assets |
0.4 |
2.2 |
5.4 |
10.8 |
0.5 |
|
Accounts Payable |
-9.1 |
23.7 |
-4.5 |
-2.7 |
-3.1 |
|
Change in Accrued SYSTEM 1 Rebate Progra |
-58.6 |
127.7 |
0.0 |
0.0 |
- |
|
Accruals and other, net |
-13.6 |
-21.8 |
-16.8 |
-11.0 |
-2.9 |
|
Assets of Discontinued Operations |
- |
- |
- |
- |
0.0 |
|
Liabilities of Disocontinued Operations |
- |
- |
- |
- |
0.0 |
|
Loss (gain) on the disposal of property, |
0.7 |
1.8 |
2.1 |
-2.8 |
5.8 |
|
Cash from Operating Activities |
149.4 |
117.7 |
225.0 |
167.4 |
143.4 |
|
|
|
|
|
|
|
|
Capital Expenditures |
-66.7 |
-77.4 |
-44.1 |
-40.9 |
-57.0 |
|
Capital Expendiutures, Discontinued Ops. |
- |
- |
- |
- |
0.0 |
|
Proceeds from the sale of discontinued o |
- |
- |
- |
0.0 |
0.0 |
|
Investment in Business, Net of Cash |
-34.6 |
-4.0 |
0.0 |
0.0 |
0.0 |
|
Equity investment in joint venture |
0.0 |
-16.9 |
-1.5 |
-4.2 |
0.0 |
|
Proceeds from sale of Equipment |
0.0 |
1.3 |
3.1 |
19.3 |
5.2 |
|
Cash from Investing Activities |
-101.3 |
-97.0 |
-42.5 |
-25.7 |
-51.8 |
|
|
|
|
|
|
|
|
Proceeds from the issuance of long-term |
- |
0.0 |
0.0 |
150.0 |
0.0 |
|
Payments on long-term obligations and ca |
- |
0.0 |
0.0 |
-40.8 |
-0.7 |
|
Stock option/other equity transaction |
5.7 |
12.7 |
14.0 |
33.6 |
14.6 |
|
Tax benefit from stock options exercised |
1.5 |
2.5 |
2.5 |
7.0 |
3.2 |
|
(Payments) proceeds under credit facilit |
- |
0.0 |
0.0 |
-79.2 |
79.2 |
|
Treasury Shares |
-56.8 |
-30.0 |
-0.3 |
-80.5 |
-177.2 |
|
Cash Dividends - Common |
-38.6 |
-33.2 |
-144.0 |
-17.7 |
-14.6 |
|
Deferred financing fees and debt issuanc |
- |
0.0 |
0.0 |
-0.5 |
-0.4 |
|
Cash from Financing Activities |
-88.1 |
-47.9 |
-127.8 |
-28.0 |
-95.9 |
|
|
|
|
|
|
|
|
Foreign Exchange Effects |
-2.2 |
5.3 |
6.1 |
-11.4 |
3.9 |
|
Net Change in Cash |
-42.2 |
-22.0 |
60.8 |
102.3 |
-0.4 |
|
|
|
|
|
|
|
|
Net Cash - Beginning Balance |
193.0 |
215.0 |
154.2 |
51.9 |
52.3 |
|
Net Cash - Ending Balance |
150.8 |
193.0 |
215.0 |
154.2 |
51.9 |
|
Cash Interest Paid |
12.5 |
12.5 |
13.4 |
10.7 |
6.0 |
|
Cash Taxes Paid |
51.8 |
61.3 |
57.1 |
46.6 |
53.2 |
Financial
Health
Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)
|
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Ratio
Comparisons
|
Traded: New York Stock
Exchange: STE |
Financials in:
USD (actual units) |
|
Industry: Medical
Equipment & Supplies |
As of
28-Mar-2013 |
|
Sector: Healthcare |
|
|
|
Company |
Industry |
Sector |
S&P 500 |
|
Valuation Ratios |
||||
|
14.97 |
23.34 |
19.06 |
19.68 |
|
|
40.53 |
35.24 |
32.55 |
32.79 |
|
|
12.50 |
13.80 |
11.26 |
10.71 |
|
|
0.72 |
0.85 |
0.76 |
1.00 |
|
|
1.66 |
3.45 |
4.02 |
2.57 |
|
|
2.64 |
3.58 |
3.44 |
3.67 |
|
|
11.63 |
8.18 |
5.81 |
5.21 |
|
|
10.67 |
16.53 |
14.76 |
14.22 |
|
|
24.50 |
21.71 |
24.30 |
26.26 |
|
|
|
|
|
|
|
|
Dividends |
||||
|
1.83% |
1.90% |
3.40% |
2.26% |
|
|
0.84 |
0.62 |
1.80 |
1.99 |
|
|
29.67% |
19.99% |
8.02% |
0.08% |
|
|
25.73% |
13.50% |
29.31% |
25.98% |
|
|
|
|
|
|
|
|
Growth Rates (%) |
||||
|
7.09% |
6.99% |
21.66% |
15.58% |
|
|
4.99% |
11.58% |
23.66% |
17.69% |
|
|
3.28% |
13.75% |
11.06% |
8.97% |
|
|
41.16% |
-2.96% |
-18.48% |
19.49% |
|
|
26.16% |
29.26% |
10.33% |
32.55% |
|
|
13.35% |
23.05% |
15.73% |
9.86% |
|
|
6.35% |
-1.74% |
-6.72% |
-2.04% |
|
|
|
|
|
|
|
|
Financial Strength |
||||
|
2.01 |
1.96 |
1.93 |
1.24 |
|
|
2.73 |
2.84 |
2.58 |
1.79 |
|
|
0.57 |
0.31 |
0.39 |
0.64 |
|
|
0.57 |
0.37 |
0.45 |
0.73 |
|
|
19.32 |
12.95 |
16.52 |
13.80 |
|
|
|
|
|
|
|
|
Profitability Ratios (%) |
||||
|
41.51% |
58.21% |
62.24% |
45.21% |
|
|
40.26% |
56.84% |
63.86% |
44.91% |
|
|
21.65% |
21.49% |
23.23% |
24.43% |
|
|
17.14% |
20.90% |
24.01% |
22.84% |
|
|
17.20% |
17.09% |
17.64% |
20.63% |
|
|
12.59% |
15.65% |
16.41% |
18.28% |
|
|
16.31% |
16.76% |
17.73% |
17.95% |
|
|
11.86% |
15.07% |
16.36% |
17.10% |
|
|
11.12% |
10.96% |
13.04% |
13.65% |
|
|
7.83% |
10.37% |
11.79% |
12.10% |
|
|
31.82% |
27.35% |
24.27% |
28.45% |
|
|
33.99% |
26.96% |
25.73% |
29.92% |
|
|
|
|
|
|
|
|
Management Effectiveness (%) |
||||
|
10.36% |
7.42% |
6.40% |
8.54% |
|
|
7.83% |
7.43% |
5.64% |
8.40% |
|
|
12.44% |
6.00% |
5.33% |
7.90% |
|
|
9.68% |
7.76% |
5.83% |
8.27% |
|
|
19.17% |
13.52% |
15.07% |
19.72% |
|
|
13.38% |
14.40% |
16.49% |
20.06% |
|
|
|
|
|
|
|
|
Efficiency |
||||
|
292,787.00 |
359,092.44 |
728,942.74 |
927,613.77 |
|
|
32,553.40 |
57,420.34 |
120,994.68 |
116,121.92 |
|
|
5.86 |
6.18 |
7.34 |
13.25 |
|
|
5.14 |
5.09 |
8.08 |
14.53 |
|
|
0.93 |
0.72 |
0.81 |
0.93 |
|
Annual
Ratios
Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)
|
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Standard &
Poors
|
United
States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks,
Rising Debt Burden; Outlook Negative |
|
Publication
date: 05-Aug-2011 20:13:14 EST |
We have lowered our long-term
sovereign credit rating on the United States of America to 'AA+' from 'AAA' and
affirmed the 'A-1+' short-term rating.
We have also removed both the short- and long-term ratings
from CreditWatch negative.
The downgrade reflects our opinion that the fiscal
consolidation plan that Congress and the Administration recently agreed to
falls short of what, in our view, would be necessary to stabilize the
government's medium-term debt dynamics.
More broadly, the downgrade reflects our view that the
effectiveness, stability, and predictability of American policymaking and
political institutions have weakened at a time of ongoing fiscal and economic
challenges to a degree more than we envisioned when we assigned a negative
outlook to the rating on April 18, 2011.
Since then, we have changed our view of the difficulties in
bridging the gulf between the political parties over fiscal policy, which makes
us pessimistic about the capacity of Congress and the Administration to be able
to leverage their agreement this week into a broader fiscal consolidation plan
that stabilizes the government's debt dynamics any time soon.
The outlook on the long-term rating is negative. We could
lower the long-term rating to 'AA' within the next two years if we see that
less reduction in spending than agreed to, higher interest rates, or new fiscal
pressures during the period result in a higher general government debt
trajectory than we currently assume in our base case.
TORONTO (Standard &
Poor's) Aug. 5, 2011--Standard & Poor's Ratings Services said today that it
lowered its long-term sovereign credit rating on the United States of America
to 'AA+' from 'AAA'. Standard & Poor's also said that the outlook on the
long-term rating is negative. At the same time, Standard & Poor's affirmed
its 'A-1+' short-term rating on the U.S. In addition, Standard & Poor's
removed both ratings from CreditWatch, where they were placed on July 14, 2011,
with negative implications.
The transfer
and convertibility (T&C) assessment of the U.S.--our assessment of the
likelihood of official interference in the ability of U.S.-based public- and
private-sector issuers to secure foreign exchange for
debt service--remains
'AAA'.
We lowered our long-term
rating on the U.S. because we believe that the prolonged controversy over
raising the statutory debt ceiling and the related fiscal policy debate
indicate that further near-term progress containing the growth in public
spending, especially on entitlements, or on reaching an agreement on raising
revenues is less likely than we previously assumed and will remain a
contentious and fitful process. We also believe that the fiscal consolidation
plan that Congress and the Administration agreed to this week falls short of
the amount that we believe is necessary to stabilize the general government
debt burden by the middle of the decade.
Our lowering of the
rating was prompted by our view on the rising public debt burden and our
perception of greater policymaking uncertainty, consistent with our criteria
(see "Sovereign Government Rating Methodology and
Assumptions ," June 30, 2011,
especially Paragraphs 36-41). Nevertheless, we view the U.S. federal
government's other economic, external, and monetary credit attributes, which
form the basis for the sovereign rating, as broadly unchanged.
We have taken the ratings
off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment
of 2011 has removed any perceived immediate threat of payment default posed by
delays to raising the government's debt ceiling. In addition, we believe that
the act provides sufficient clarity to allow us to evaluate the likely course
of U.S. fiscal policy for the next few years.
The
political brinksmanship of recent months highlights what we see as America's
governance and policymaking becoming less stable, less effective, and less
predictable than what we previously believed. The statutory debt ceiling and
the threat of default have become political bargaining chips in the debate over
fiscal policy. Despite this year's wide-ranging debate, in our view, the
differences between political parties have proven to be extraordinarily
difficult to bridge, and, as we see it, the resulting agreement fell well short
of the comprehensive fiscal consolidation program that some proponents had
envisaged until quite recently. Republicans and Democrats have only been able
to agree to relatively modest savings on discretionary spending while
delegating to the Select Committee decisions on more comprehensive measures. It
appears that for now, new revenues have dropped down on the menu of policy
options. In addition, the plan envisions only minor policy changes on Medicare
and little change in other entitlements,
the containment of which
we and most other independent observers regard as key to long-term fiscal
sustainability.
Our opinion is that
elected officials remain wary of tackling the structural issues required to
effectively address the rising U.S. public debt burden in a manner consistent
with a 'AAA' rating and with 'AAA' rated sovereign peers (see Sovereign Government Rating Methodology and
Assumptions," June 30, 2011,
especially Paragraphs 36-41). In our view, the difficulty in framing a
consensus on fiscal policy weakens the government's ability to manage public
finances and diverts attention from the debate over how to achieve more
balanced and dynamic economic growth in an era of fiscal stringency and
private-sector deleveraging (ibid). A new political consensus might (or might
not) emerge after the 2012 elections, but we believe that by then, the
government debt burden will likely be higher, the needed medium-term fiscal
adjustment potentially greater, and the inflection point on the U.S.
population's demographics and other age-related spending drivers closer at hand
(see "Global Aging 2011: In The U.S., Going Gray Will Likely
Cost Even More Green, Now,"
June 21, 2011).
Standard & Poor's
takes no position on the mix of spending and revenue measures that Congress and
the Administration might conclude is appropriate for putting the U.S.'s
finances on a sustainable footing.
The act calls for as much
as $2.4 trillion of reductions in expenditure growth over the 10 years through
2021. These cuts will be implemented in two steps: the $917 billion agreed to
initially, followed by an additional $1.5 trillion that the newly formed
Congressional Joint Select Committee on Deficit Reduction is supposed to
recommend by November 2011. The act contains no measures to raise taxes or
otherwise enhance revenues, though the committee could recommend them.
The act further provides
that if Congress does not enact the committee's recommendations, cuts of $1.2
trillion will be implemented over the same time period. The reductions would
mainly affect outlays for civilian discretionary spending, defense, and
Medicare. We understand that this fall-back mechanism is designed to encourage
Congress to embrace a more balanced mix of expenditure savings, as the
committee might recommend.
We note that in a letter
to Congress on Aug. 1, 2011, the Congressional Budget Office (CBO) estimated
total budgetary savings under the act to be at least $2.1 trillion over the
next 10 years relative to its baseline assumptions. In updating our own fiscal
projections, with certain modifications outlined below, we have relied on the
CBO's latest "Alternate Fiscal Scenario" of June 2011, updated to
include the CBO assumptions contained in its Aug. 1 letter to Congress. In
general, the CBO's "Alternate Fiscal Scenario" assumes a continuation
of recent Congressional action overriding existing law.
We view the act's
measures as a step toward fiscal consolidation. However, this is within the
framework of a legislative mechanism that leaves open the details of what is
finally agreed to until the end of 2011, and Congress and the Administration
could modify any agreement in the future. Even assuming that at least $2.1
trillion of the spending reductions the act envisages are implemented, we
maintain our view that the U.S. net general government debt burden (all levels
of government combined, excluding liquid financial assets) will likely continue
to grow. Under our revised base case fiscal scenario--which we consider to be
consistent with a 'AA+' long-term rating and a negative outlook--we now project
that net general government debt would rise from an estimated 74% of GDP by the
end of 2011 to 79% in 2015 and 85% by 2021. Even the projected 2015 ratio of
sovereign indebtedness is high in relation to those of peer credits and, as
noted, would continue to rise under the act's revised policy settings.
Compared with previous
projections, our revised base case scenario now assumes that the 2001 and 2003
tax cuts, due to expire by the end of 2012, remain in place. We have changed
our assumption on this because the majority of Republicans in Congress continue
to resist any measure that would raise revenues, a position we believe Congress
reinforced by passing the act. Key macroeconomic assumptions in the base case scenario
include trend real GDP growth of 3% and consumer price inflation near 2%
annually over the decade.
Our revised upside
scenario--which, other things being equal, we view as consistent with the
outlook on the 'AA+' long-term rating being revised to stable--retains these
same macroeconomic assumptions. In addition, it incorporates $950 billion of
new revenues on the assumption that the 2001 and 2003 tax cuts for high earners
lapse from 2013 onwards, as the Administration is advocating. In this scenario,
we project that the net general government debt would rise from an estimated
74% of GDP by the end of 2011 to 77% in 2015 and to 78% by 2021.
Our revised downside
scenario--which, other things being equal, we view as being consistent with a
possible further downgrade to a 'AA' long-term rating--features less-favorable
macroeconomic assumptions, as outlined below and also assumes that the second
round of spending cuts (at least $1.2 trillion) that the act calls for does not
occur. This scenario also assumes somewhat higher nominal interest rates for
U.S. Treasuries. We still believe that the role of the U.S. dollar as the key
reserve currency confers a government funding advantage, one that could change
only slowly over time, and that Fed policy might lean toward continued loose
monetary policy at a time of fiscal tightening. Nonetheless, it is possible
that interest rates could rise if investors re-price relative risks. As a
result, our alternate scenario factors in a 50 basis point (bp)-75 bp rise in 10-year
bond yields relative to the base and upside cases from 2013 onwards. In this
scenario, we project the net public debt burden would rise from 74% of GDP in
2011 to 90% in 2015 and to 101% by 2021.
Our revised scenarios
also take into account the significant negative revisions to historical GDP
data that the Bureau of Economic Analysis announced on July 29. From our
perspective, the effect of these revisions underscores two related points when
evaluating the likely debt trajectory of the U.S. government. First, the
revisions show that the recent recession was deeper than previously assumed, so
the GDP this year is lower than previously thought in both nominal and real
terms. Consequently, the debt burden is slightly higher. Second, the revised
data highlight the sub-par path of the current economic recovery when compared
with rebounds following previous post-war recessions. We believe the sluggish
pace of the current economic recovery could be consistent with the experiences
of countries that have had financial crises in which the slow process of debt
deleveraging in the private sector leads to a persistent drag on demand. As a
result, our downside case scenario assumes relatively modest real trend GDP
growth of 2.5% and inflation of near 1.5% annually going forward.
When comparing the U.S.
to sovereigns with 'AAA' long-term ratings that we view as relevant
peers--Canada, France, Germany, and the U.K.--we also observe, based on our
base case scenarios for each, that the trajectory of the U.S.'s net public debt
is diverging from the others. Including the U.S., we estimate that these five
sovereigns will have net general government debt to GDP ratios this year
ranging from 34% (Canada) to 80% (the U.K.), with the U.S. debt burden at 74%.
By 2015, we project that their net public debt to GDP ratios will range between
30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at
79%. However, in contrast with the U.S., we project that the net public debt
burdens of these other sovereigns will begin to decline, either before or by
2015.
Standard & Poor's
transfer T&C assessment of the U.S. remains 'AAA'. Our T&C assessment
reflects our view of the likelihood of the sovereign restricting other public
and private issuers' access to foreign exchange needed to meet debt service.
Although in our view the credit standing of the U.S. government has
deteriorated modestly, we see little indication that official interference of
this kind is entering onto the policy agenda of either Congress or the Administration.
Consequently, we continue to view this risk as being highly remote.
The outlook on the
long-term rating is negative. As our downside alternate fiscal scenario
illustrates, a higher public debt trajectory than we currently assume could
lead us to lower the long-term rating again. On the other hand, as our upside
scenario highlights, if the recommendations of the Congressional Joint Select
Committee on Deficit Reduction--independently or coupled with other
initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high
earners--lead to fiscal consolidation measures beyond the minimum mandated, and
we believe they are likely to slow the deterioration of the government's debt
dynamics, the long-term rating could stabilize at 'AA+'.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.54.33 |
|
UK Pound |
1 |
Rs.83.17 |
|
Euro |
1 |
Rs.71.05 |
INFORMATION DETAILS
|
Report Prepared
by : |
MNL |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
---- |
NB |
New Business |
---- |
This score serves as a reference to assess SCs credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial condition
(40%) Ownership background
(20%) Payment record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.