Segment Information (Tables)

3 Months Ended

Mar. 31, 2026

Schedule of Segment Reporting Information, by Segment


	Three Months Ended March 31, 2026
(thousands of U.S. dollars)	Sterigenics		Nordion		Nelson Labs		Total
Net revenues(a)	$	186,135	$	42,009	$	51,901	$	280,045
Segment expenses(b)	81,026		17,018		36,000		134,044
Corporate expense allocation(c)	8,695		1,280		1,373		11,348
Segment income	$	96,414	$	23,711	$	14,528	$	134,653


	Three Months Ended March 31, 2025
(thousands of U.S. dollars)	Sterigenics		Nordion		Nelson Labs		Total
Net revenues(a)	$	169,684	$	32,557	$	52,282	$	254,523
Segment expenses(b)	72,854		13,795		34,552		121,201
Corporate expense allocation(c)	8,826		1,340		1,317		11,483
Segment income	$	88,004	$	17,422	$	16,413	$	121,839

(a)Revenues are reported net of intersegment sales. Our Nordion segment recognized $19.2 million and $9.8 million in revenues from sales to our Sterigenics segment for the three months ended March 31, 2026 and 2025, respectively, that is not reflected in net revenues in the table above. Intersegment sales for Sterigenics and Nelson Labs are immaterial for all periods presented.

(b)Segment expenses are comprised of direct materials, labor, utilities, other costs of revenues, SG&A, and other non-operating expenses (income) attributable to each segment.

(c)Corporate expenses that are directly incurred by a segment are reflected in each segment’s income. The remaining Corporate expenses for executive management, accounting, information technology, legal, human resources, treasury, investor relations, corporate development, tax, purchasing, and marketing not directly incurred by a segment are allocated to the segments primarily based on total net revenue.

Capital expenditures by segment for the three months ended March 31, 2026 and 2025 were as follows:


	Three Months Ended March 31,
(thousands of U.S. dollars)	2026		2025
Sterigenics	$	37,893	$	16,395
Nordion	4,288		2,390
Nelson Labs	3,985		1,133
Total capital expenditures	$	46,166	$	19,918

Schedule of Reconciliation of Operating Profit (Loss) from Segments to Consolidated

A reconciliation of segment income to consolidated income (loss) before income taxes is as follows:


	Three Months Ended March 31,
(thousands of U.S. dollars)	2026		2025
Segment income	$	134,653	$	121,839
Less adjustments:
Interest expense, net	34,745		40,876
Depreciation and amortization(a)	30,744		40,734
Share-based compensation(b)	14,442		7,269
Loss on foreign currency and derivatives not designated as hedging instruments, net(c)	624		1,891
Business optimization expenses(d)	957		2,047
Professional services relating to EO sterilization facilities(e)	9,855		12,328
Illinois EO litigation settlement(f)	—		30,943
Accretion of asset retirement obligation(g)	673		574
Consolidated income (loss) before income taxes	$	42,613	$	(14,823)

(a)Includes depreciation of Co-60 held at gamma irradiation sites and excludes accelerated depreciation associated with business optimization activities.

(b)Represents share-based compensation expense to employees and Non-Employee Directors.

(c)Represents the effects of (i) fluctuations in foreign currency exchange rates and (ii) non-cash mark-to-fair value of embedded derivatives relating to certain customer and supply contracts at Nordion.

(d)Represents (i) certain costs related to divestitures, acquisitions and the integration of acquisitions, (ii) professional fees and other costs associated with business optimization, cost saving and other process enhancement projects, and (iii) legal, consulting, and other fees associated with secondary offerings and shareholder engagement.

(e)Represents litigation and other professional fees associated with our EO sterilization facilities.

(f)Represents the cost to settle 97 pending and threatened EO claims against Sterigenics in Illinois pursuant to the term sheet entered into on April 3, 2025.

(g)Represents non-cash accretion of ARO related to Co-60 gamma and EO processing facilities, which are based on estimated site remediation costs for any future decommissioning of these facilities and are accreted over the life of the asset.

Sotera Health Co 10-Q