On Nov. 7, STERIS (NYSE:STE), which makes products for sterilization, released second-quarter earnings for the period ended Sept. 30.

  • Revenues grew 3.7% to $283.5 million, boosted by the robust performance of the life sciences segment.
  • The decline in free cash flow reflects increased working capital, caused by increased inventory and when STERIS paid first-quarter tax expenses of $30 million to the IRS.
  • For fiscal 2007, the company expects revenues to grow at 4% and free cash flow of $60 million to $65 million.

(Figures in millions, except per-share data)

Income Statement Highlights

Q2 2007

Q2 2006

Change

Sales

$283.5

$273.4

3.7%

Net Profit*

$16.4

$15.4

6.2%

EPS

$0.25

$0.23

8.7%

Diluted Shares

66.1

69.0

(4.1%)



*Net profit does not include income from discontinued operations.

Get back to basics with a look at the income statement.

Margin Checkup

Q2 2007

Q2 2006

Change*

Gross Margin

41.9%

41.4%

0.5

Operating Margin

9.4%

9.3%

0.1

Net Margin

5.8%

5.6%

0.1



*Expressed in percentage points

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Cash + ST Invest.

$44.9

$46.4

(3.2%)

Accounts Rec.

$201.5

$228.1

(11.7%)

Inventory

$141.0

$114.7

22.9%



Liabilities Q2 2007 Q2 2006 Change

Accounts Payable

$66.6

$62.4

6.6%

Long-Term Debt

$147.0

$105.7

39.1%



Learn the ways of the balance sheet.

Cash Flow Highlights

YTD 2007

YTD 2006

Change

Cash From Ops.

$18.3

$85.7

(78.7%)

Capital Expenditures

$21.4

$22.7

(5.8%)

Free Cash Flow

($3.2)

$62.9

N/A



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