STERIS Corporation Announces Fiscal 2010 First Quarter Results

Fiscal 2010 Outlook Unchanged

MENTOR, Ohio, July 30 /PRNewswire-FirstCall/ -- STERIS Corporation (NYSE: STE)
today announced financial results for its fiscal 2010 first quarter ended June
30, 2009. Fiscal 2010 first quarter revenues were $283.5 million compared
with $311.6 million in the first quarter of fiscal 2009, a decline of 9%. On
a constant currency basis, revenues decreased 7%. Operating profit increased
22% to $42.9 million, or 15.1% of revenues, compared with $35.0 million, or
11.2% of revenues in the first quarter of fiscal 2009. Fiscal 2010 first
quarter net income was $25.5 million, or $0.43 per diluted share, compared
with net income of $25.5 million, or $0.43 per diluted share, in the first
quarter of fiscal 2009.

"While our first quarter proved to be challenging from a top-line perspective,
we are pleased with our solid operating performance," said Walt Rosebrough,
President and Chief Executive Officer of STERIS. "In particular, capital
equipment in our Healthcare segment was impacted by challenging market
dynamics as well as the timing of shipments. However, we are cautiously
optimistic that our year-over-year growth rates will improve in the coming
quarters, and are increasingly comfortable with our earnings per share
guidance. As a result, our outlook for the full fiscal year is unchanged."

Segment Results
Healthcare revenues in the quarter were $200.6 million compared with $224.1
million in the first quarter of fiscal 2009, a decline of 10%. Strength in
consumables was more than offset by declines in capital equipment and service,
reflecting lower spending by hospital Customers across most major product
categories. Backlog levels at quarter end were $132.4 million, an increase of
16% compared with the same time last year. Operating income was $32.1
million, an increase of 10% compared with the prior year period, driven by
efficiency initiatives across the segment.

Life Sciences first quarter revenues were $46.1 million compared with $48.0
million in the first quarter of fiscal 2009, a decline of 4%. Strength in
consumables was more than offset by a decline in capital equipment and service
revenues. Backlog levels at quarter end were $46.3 million, a decline of 7%
compared with the prior year period. Life Sciences operating income was $4.8
million, an increase of $3.7 million compared with the prior year period,
driven by our focus on higher margin capital equipment and overall operating
efficiencies.

Fiscal 2010 first quarter revenues for Isomedix Services were $35.4 million
compared with $36.9 million in the same period last year, a decline of 4%.
Revenues were affected by the previously disclosed sale of two facilities
during fiscal 2009, which were partially offset by a modest improvement in
demand from medical device Customers. Operating income was $8.3 million in
the quarter compared with $8.2 million in the first quarter of last year.

Cash Flow
Net cash provided by operations for the first quarter of fiscal 2010 was $32.6
million, compared with net cash provided by operations of $28.7 million in the
same period last year. Free cash flow (see note 1) for the first quarter of
fiscal 2010 was $24.4 million, compared with free cash flow of $18.1 million
in the prior year quarter. The growth in free cash flow was driven by
improved working capital management and lower capital spending.

Regular Quarterly Dividend Announced
The Company also announced today that STERIS's Board of Directors has
authorized a regular quarterly dividend in the amount of $0.11 per common
share. The dividend is payable September 17, 2009 to shareholders of record
at the close of business on August 20, 2009.

Outlook
Based upon first quarter results and current anticipated trends, the Company's
expectations are unchanged for the full fiscal year, with revenues flat to
down mid-single digits and earnings per diluted share of $1.80 to $2.00. This
outlook assumes the average forward exchange rates for the U.S. dollar and key
international currencies as of June 30, 2009. Refer to the earnings
announcement dated May 7, 2009 for the detailed full year outlook and other
assumptions.

Conference Call
In conjunction with this release, STERIS Corporation management will host a
conference call today at 10:00 a.m. Eastern time. The conference call can be
heard live over the Internet at www.steris-ir.com or via phone by dialing
1-800-369-8428 in the United States and Canada, and 1-773-799-3378
internationally, then referencing the password "STERIS".

For those unable to listen to the conference call live, a replay will be
available from 12:00 p.m. Eastern time on July 30, 2009, until 5:00 p.m.
Eastern time on August 13, 2009, either over the Internet at www.steris-ir.com
or via phone by calling 1-866-416-1187 in the United States and Canada, and
1-203-369-0718 internationally.

About STERIS
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 5,000 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. For more information, visit www.steris.com.

(1) Free cash flow is a non-GAAP number used by the Company as a measure to
gauge its ability to fund future growth opportunities, repurchase common
shares, and pay cash dividends. Free cash flow is defined as cash flows from
operating activities less purchases of property, plant, equipment and
intangibles, net, plus proceeds from the sale of property, plant, equipment
and intangibles. STERIS's calculation of free cash flow may vary from other
companies.

This news release, and the conference call referenced here, may contain
statements concerning certain trends, expectations, forecasts, estimates, or
other forward-looking information affecting or relating to the Company or its
industry that are intended to qualify for the protections afforded
"forward-looking statements" under the Private Securities Litigation Reform
Act of 1995 and other laws and regulations. Forward-looking statements speak
only as to the date of this report, and may be identified by the use of
forward-looking terms such as "may," "will," "expects," "believes,"
"anticipates," "plans," "estimates," "projects," "targets," "forecasts,"
"outlook," "potential," "confidence," "improve," "optimistic," "comfortable,"
and "seeks," or the negative of such terms or other variations on such terms
or comparable terminology. Many important factors could cause actual results
to differ materially from those in the forward-looking statements including,
without limitation, disruption of production or supplies, changes in market
conditions, political events, pending or future claims or litigation,
competitive factors, technology advances, actions of regulatory agencies, and
changes in government regulations or the application or interpretation
thereof. Other risk factors are described in the Company's Form 10-K and other
securities filings. Many of these important factors are outside STERIS's
control. No assurances can be provided as to any outcome from litigation,
regulatory action, administrative proceedings, government investigations,
warning letters, cost reductions, business strategies, level of share
repurchases or dividends, earnings and revenue trends, expense reduction or
other future financial results. Unless legally required, the Company does not
undertake to update or revise any forward-looking statements even if events
make clear that any projected results, express or implied, will not be
realized. Other potential risks and uncertainties that could cause actual
results to differ materially from those in the forward-looking statements
include, without limitation, (a) the potential for increased pressure on
pricing that leads to erosion of profit margins, (b) the possibility that
market demand will not develop for new technologies, products or applications,
or the Company's business initiatives will take longer, cost more or produce
lower benefits than anticipated, (c) the possibility that application of or
compliance with laws, court rulings, regulations, regulatory actions,
including without limitation previously disclosed FDA warning letters and
government investigations, certifications or other requirements or standards
may delay or prevent new product introductions, affect the production and
marketing of existing products, or otherwise affect Company performance,
results, or value, (d) the potential of international unrest or effects of
fluctuations in currencies, tax assessments or rates, raw material costs,
benefit or retirement plan costs, or other regulatory compliance costs, (e)
the possibility of reduced demand, or reductions in the rate of growth in
demand, for the Company's products and services, (f) the possibility that
anticipated cost savings or other results may not be achieved, or that
transition, labor, competition, timing, execution, regulatory, governmental,
or other issues or risks associated with the matters described in this
release, and the conference call referenced here, may adversely impact Company
performance, results, or value, (g) the effect of the credit crisis on our
ability, as well as the ability of our customers and suppliers, to adequately
access the credit markets when needed, and (h) those risks described in our
Annual Report on Form 10-K for the year ended March 31, 2009, filed with the
SEC on May 30, 2009, under Item 1A, "Risk Factors."

STERIS Corporation
Consolidated Condensed Statements of Income
(In thousands, except per share data)

Three Months Ended
June 30,
----------
2009 2008
---- ----
(Unaudited) (Unaudited)

Revenues $283,543 $311,565
Cost of revenues 158,707 181,064
------- -------
Gross profit 124,836 130,501

Operating expenses:
Selling, general, and administrative 74,605 87,348
Research and development 7,580 8,279
Restructuring expense (211) (166)
---- ----
Total operating expenses 81,974 95,461
------ ------

Income from operations 42,862 35,040
Non-operating expense, net 2,865 1,385
Income tax expense 14,455 8,155
------ -----
Net income $25,542 $25,500
======= =======

Earnings per common share (EPS) data:
Basic $0.44 $0.43
===== =====
Diluted $0.43 $0.43
===== =====

Cash dividends declared per common
share outstanding $0.11 $0.06

Weighted average number of common
shares outstanding used in EPS
computation:
Basic number of common shares
outstanding 58,517 58,694
Diluted number of common shares
outstanding 58,984 59,647

STERIS Corporation
Consolidated Condensed Balance Sheets
(In thousands)
June 30, March 31,
2009 2009
---- ----
Assets (Unaudited)
Current assets:
Cash and cash equivalents $176,072 $154,180
Accounts receivable, net 205,327 238,438
Inventories, net 137,533 130,218
Other current assets 25,053 30,294
------ ------
Total Current Assets 543,985 553,130

Property, plant, and
equipment, net 350,171 350,996
Goodwill and intangible
assets, net 312,991 305,189
Other assets 8,050 7,624
----- -----
Total Assets $1,215,197 $1,216,939
========== ==========

Liabilities and Equity
Current liabilities:
Accounts payable $51,514 $68,573
Other current liabilities 113,309 133,453
------- -------
Total Current Liabilities 164,823 202,026

Long-term debt 210,000 210,000
Other liabilities 76,632 86,748
Equity 763,742 718,165
------- -------
Total Liabilities and Equity $1,215,197 $1,216,939
========== ==========

STERIS Corporation
Consolidated Condensed Statements
of Cash Flows
(In thousands)
Three Months Ended
June 30,
----------
2009 2008
---- ----
(Unaudited) (Unaudited)
Operating Activities:
Net income $25,542 $25,500
Non-cash items 11,568 20,971
Working capital adjustments (4,490) (17,744)
------ -------
Net cash provided by operating activities 32,620 28,727

Investing Activities:
Purchases of property, plant, equipment,
and intangibles, net (8,355) (10,615)
Proceeds from sale of property, plant,
equipment and intangibles 175 7
--- -
Net cash used in investing activities (8,180) (10,608)

Financing Activities:
(Payments) proceeds under credit
facilities, net - (1,720)
Repurchases of common shares - (31,584)
Cash dividends paid to common shareholders (6,441) (3,513)
Tax benefit from stock options exercised 47 1,413
Stock options and other equity
transactions, net 152 14,302
--- ------
Net cash used in financing activities (6,242) (21,102)
Effect of exchange rate changes on cash
and cash equivalents 3,694 153
----- ---
Increase in cash and cash equivalents 21,892 (2,830)
Cash and cash equivalents at
beginning of period 154,180 51,868
------- ------
Cash and cash equivalents at end of period $176,072 $49,038
======== =======

STERIS Corporation
Segment Data
(In thousands)
Three Months Ended
June 30,
----------
2009 2008
---- ----
(Unaudited) (Unaudited)
Segment Revenues:

Healthcare $200,604 $224,065
Life Sciences 46,116 48,039
STERIS Isomedix Services 35,407 36,863
------ ------
Total Reportable Segments 282,127 308,967
Corporate and Other 1,416 2,598
----- -----
Total Segment Revenues $283,543 $311,565
======== ========

Segment Operating Income (Loss):

Healthcare $32,102 $29,230
Life Sciences 4,779 1,047
STERIS Isomedix Services 8,339 8,187
----- -----
Total Reportable Segments 45,220 38,464
Corporate and Other (2,358) (3,424)
------ ------
Total Segment Operating Income $42,862 $35,040
======= =======

STERIS Corporation
Non-GAAP Disclosures (Unaudited)
(In thousands, except per share data)

The following table presents financial measures which are considered to
be "non-GAAP financial measures" under Securities Exchange Commissions
rules. Free cash flow is defined by the Company as cash flows from
operating activities less purchases of property, plant, equipment and
intangibles, net (capital expenditures), plus proceeds from the sale of
property, plant, equipment and intangibles. The Company uses free cash
flow as a measure to gauge its ability to fund future growth
opportunities, repurchase common shares, and pay cash dividends. STERIS's
calculation of free cash flow may vary from other companies.

Three Months Ended
June 30,
----------
2009 2008
---- ----
(Unaudited) (Unaudited)
Calculation of Free Cash Flow:

Cash flows from operating activities $32,620 $28,727
Purchases of property, plant, equipment,
and intangibles, net (8,355) (10,615)
Proceeds from the sale of property, plant,
equipment, and intangibles 175 7
--- -
Free Cash Flow $24,440 $18,119
======= =======

SOURCE STERIS Corporation

Julie Winter, Director, Investor Relations of STERIS Corporation,
+1-440-392-7245