SHC 10-K & 10-Q changes, risk factors and insider trading

We describe below certain risks that could adversely affect our business, prospects, financial condition or results of operations. While we believe we have identified and discussed below the key risks affecting our business, there may be additional risks and uncertainties that are not presently known or that are not currently believed to be significant that may adversely affect our business, results of operations, cash flow, liquidity or financial condition in the future. These risk factors may change from time to time and may be amended, supplemented or superseded by updates to the risk factors contained in our future periodic reports, Quarterly Reports on Form 10-Q and reports on other forms we file with the SEC. All forward-looking statements about our future results of operations or other matters made by us in this Annual Report on Form 10-K as well as our consolidated financial statements and notes, and in our subsequently filed or furnished reports towith the SEC, as well as in our press releases and other public communications, are qualified by the risks described below.

Our business operations are subject to numerous risks, factors and uncertainties, including those outside of our control, that could cause our actual results to be harmed, including risks regarding the following:

•a disruption in the availability or supply of, or increases in the price of, EO, Co-60 or our other direct materials, services and supplies, including as a result of geopolitical instability and/or sanctions against Russia by the United States, Canada, the United Kingdom and/or the European UnionUnion, or sanctions by Russia against those countries;

•evolving changes in environmental, health and safety regulations, which may negatively impact our businessregulations;

•health and safety risks associated with the use, storage, transportation and disposal of potentially hazardous materialsmaterials, such as EO and Co-60;

•the impact and outcome of current and future legal proceedings and liability claims, including litigation related to the use, emissions and releases of EO from our facilities in California, Georgia, Illinoiscurrent and Newformer MexicoEO sterilization facilities, and the possibility that other claims will be made in the future relating to these or other facilities;

•market conditions and changes, including inflationary trends,trends and the impact of tariffs, that impact our long-term supply contracts with variable price clauses and increase our cost of revenues;

•business continuity hazards, including supply chain disruptionsdisruptions, federal government shutdowns, and other risks associated with our operations;

•the risks of doing business internationally, including global and regional economic and political instability and compliance with numerousvarious applicable laws and sometimespotentially inconsistent laws and regulations in multiple jurisdictions;

•cybersecurity incidents, unauthorized data disclosures, and our dependence on information technologyIT systems;

•our ability to maintain effective internal controlscontrol over financial reporting;

•our reliance on intellectual property rights to maintain our competitive position and the risk of current and potential claims from third parties that we have infringed or misappropriatedmisappropriated, or are infringing or misappropriatingmisappropriating, their intellectual property rights;

•our ability to comply with rapidly evolving data privacy and security laws and regulations in various jurisdictions (including California and the European Union) and any ineffective compliance efforts with such laws and regulations;

•our ability to maintain profitability in thefuture futureperiods;

•adverse changes to our tax positions in U.S. or non-U.S. jurisdictions or the interpretation and application of recent U.S. tax legislation or other changes in U.S. or non-U.S. taxation of our operations;

•our significant degree of leverage and how this significant leverage could adversely affect our ability to raise additional capital, limit our ability to react to challenges confrontingfacing our Company or broader changes in our industry or the economy, limit our flexibility in operating our business through restrictions contained in our debt agreements and/or prevent us from meeting our obligations under our existing and future indebtedness; and

•the substantial control that certain investment funds and entities affiliated with Warburg Pincus and GTCR, which we refer to collectively as the “Sponsors,” continue to have over us, which could limit stockholders’ ability to influence the outcome of key transactions, including a change of control.us.

We depend on a limited number of counterparties to provide the materials and resources we need to operate our business. Any disruption in the availability of, or increases in the price of, EO, Co-60 or our other direct materials, services and supplies, including as a result of geopolitical instability or sanctions against Russia by the United States, Canada, the United Kingdom and/or the European Union, or sanctions by Russia against those countries, may have a material adverse effect on our operating results.

We source a substantial portion of our Co-60 supply from three nuclear reactor operators and six reactor sites in Canada and Russia under contracts that extend to between 2026 and 2064. See Item 1, “Business—Our Businesses—Sterilization Services—Nordion—Nuclear Reactor Operators.” If there is a decrease in output from any of these reactors (including as a result of a natural disasterdisaster, war, geopolitical instability or other adverse occurrence), the counterparties fail to perform under their agreements with us or decline to enter into renewal contracts with us for our future supply needs and we are unable to obtain supply from other sources, or if such sources begin to compete with us in one or more geographies, this could have a material adverse effect on our business. In addition, a number of reactors that have the capacity to generate Co-60 are government owned. Priorities of governments can change. Shutdowns of government owned reactors in the past of a government-owned reactors have decreased the availability of Co-60 and potential shutdowns in the future could decrease the availability of Co-60, which could have a material adverse effect on our business, prospects, financial condition or results of operations.

We estimate approximately 20% of our long-term supply of Co-60 will be generated by Russian nuclear reactors. Further, over the next few years, we expect that there will be periods when, owing to planned or unplanned outages and variability in supply from reactors located in other countries, the proportion of our supply from Russian reactors may increase to as much as approximately 50% in a given year. The United States, Canada, the United Kingdom and the European Union have imposed and are expected to continue imposing sanctions against Russian industries, Russian officials and certain Russian companies, banks, logistics providers and individuals. Russia has responded and is expected to continue to respond with countermeasures, including prohibiting imports of certain goods from certain other countries and exports of certain goods from Russia to certain other countries.

Expanded sanctions could target additional government- and privately-owned operations in Russia, including nuclear reactor operators, banks and logistics providers, and these expanded sanctions could prevent us from doing business with them. For example, certain banks through which our suppliers have been paid in the past have been sanctioned and there is no assurance the suppliers will continuebe able to be ablecontinue to find new, unsanctioned banking relationships in the future. Moreover, although Co-60 has not been sanctioned directly, sanctions on other products and materials imported from and exported to Russia have disrupted the logistics required to import Co-60 from Russia, requiring us, our logistics providers (including the single ocean carrier that is presently licensed to carry radioactive goods from Russia to North America) and insurers to seek licenses that will come up for renewal in 2026 and 2027. There are also various Canadian CNSC and Global Affairs Canada licenses for export and import of Canadian Co-59 “targets,” such as cobalt pellets and slugs, that require renewal on a routine basis. Although these other licenses were historically required as part of control of the nuclear industry and are not related to the increased sanction frameworks, an inability to obtain these licenses would impact future supply. CNSC licenses for the imports and exports related to the targets expire in 2028. If present or future sanctions against Russia directly or indirectly impede the shipment of Co-60 from Russia to North America or targets from North America to Russia, if we or our logistics providers are unable to secure or renew licenses under existing or future sanctions, if we are unable to identify international logistics providers needed for the supply of Co-60 or if Russia responds with further countersanctions, it may generally become more difficult to do business with Russian entities, which could have a material adverse effect on our business, prospects, financial condition or results of operations.

Federal, state, local and international authorities regulate operations within our three business units, including the operation of our gamma irradiationirradiation, E-beam, X-ray, and EO processingsterilization plants,facilities, as well as the operations of our customers. If the regulators that govern our operations or the operations of our customers were to institute restrictive or onerous policies or regulations that increase our costs or change the preferences or requirements of our customers or suppliers, demand for and the timely and cost-effective availability of our products and services may be materially affected.

Additionally, certain regulators, including the FDA, have started initiatives to encourage development of sterilization alternatives to EO processing. For example, the FDA approved vaporized hydrogen peroxide as a Category-A sterilization methodology in 2024. We have taken part in some of these initiatives. We have also made proactive, voluntary investments to enhance the emissions controls and employee protections within our EO facilities. Still, new regulations or changes to existing or expected regulations may require additional investments in new emissions control or employee protection technology or otherwise increase the cost of our gamma irradiation or EO processing. See related Risk Factor “—We are subject to extensive regulatory requirements and routine regulatory audits in our operations. We must receive certain permits, licenses and/or regulatory clearance or approval for our operations. Compliance with these regulations is costly, and failure to comply with all laws and regulations or to receive or maintain permits, licenses, clearances or approvals may impact our revenues, profitability, financial condition or value. We may face liability and reputational risks even if we comply with all laws and regulations.” Reconfiguring a gamma irradiation or EO processingsterilization plantfacility so that it is suitable for a different sterilization technology, in response to changes in demand, regulations or other factors, would require significant capital investment and require us to suspend operations at the affected facility during the conversion. Any of the foregoing could have a material adverse effect on our business, prospects, financial condition or results of operations.

Safety risks associated with the use, storagestorage, transportation and disposal of potentially hazardous materials, such as EO and Co-60, may result in accidents or liabilities that materially affect our results of operations.

EO is flammable and potentiallyexplosive explosive.under certain conditions. Despite our extensive safety measures, a fire or explosion could occur at a sterilization facility where we use EO, which could interrupt our normal operations and result in facility closures, workplace and other injuries, property damage, or otherwise adversely affect our business.

Any incident at or emission from any of our EO, gamma or lab facilities that causes harm to workers or people who live, work, attend school or otherwise spend significant amounts of time near our facilities, or the interruption of normal operations at our facilities, could result in claims against us and, if those claims are successful, substantial liability to us. We are currently the subject of lawsuits alleging that purportedthe use, emissions and releases of EO emissions from certain of our current and former facilities have resulted in toxicological or health-related impacts on the environment and members of the communities that surround these facilities. We deny these allegations. We have also from time to time been involved with workers’ compensation claims relating to potentially hazardous materials. We may be subject to similar claims in the future, and one or more adverse judgments could result in significant liability for us and have a material adverse effect on our business, financial condition and results of operations. See related Risk Factors “—We are currently defending certain litigation, and we are likely to be subject to additional litigation in the future” and “—Potential health risks associated with the use of EO may subject us to future liability claims and associated adverse effects.”

Nordion contracts for the activation of Co-59 “targets,” such as cobalt pellets and slugs, into Co-60 in certain nuclear reactors in Canada and Russia. Our Co-59 targets (and in Canada, our adjuster rods provided to us by a supplier) function as part of the reactors’ reactivity control systems. While national laws or international conventions generally channel liability for nuclear incidents exclusively to reactor operators, equipment suppliers nevertheless could be subject to lawsuits for damage to the nuclear installation or damages from a nuclear incident that were allegedlyalleged intentionallyto caused.have been caused intentionally. While we make efforts to protect our interests through contractual provisions, quality assurance programs and the nature of our commercial relationships, there is no assurance that any of these measures or liability channeling laws or conventions will always prove effective in shielding us from liability, and any such liability or consequences could have a material adverse impact on our business, results of operationoperations and financial condition.

We currently carry pollution liability insurance for all our facilities and related operations and liability insurance, including from third party bodily injury or property damage allegedly arising from the storage, use, transportation or accident involving Co-60 sources throughoutin our operations. But this insurance may not cover all risks associated with the potential hazards of our business and is subject to limitations, including deductibles and maximum liabilities covered. We may incur losses beyond the limits, or outside the coverage, of our insurance policies. Additionally, our insurance for future alleged environmental liabilities excludes coverage for EO claims. Our ability to increase pollution liability insurance limits or replace any policies upon their expiration without exclusions for claims related to alleged EO exposure has been adversely impacted by claims against us, including pending claims alleging that purportedthe use, emissions and releases of EO emissions from certain of our facilities have resulted in toxicological or health-related impacts on the environment and members of the communities that surround these facilities. To the extent any pollution liability is not covered by our insurance or able to be recovered from other parties, our business, financial condition or results of operations could be materially adversely affected.

Potential health risks associated with exposure to EO subject us to the risk of liability claims being made against us by workers, contractors, employees of our customers and individuals who have resided, worked, attended school or otherwise spent time within miles of our EO sterilization facilities. Assessments of the potential health risks of exposure to EO have evolved over time. For example, although EO is present in the environment from a variety of sources and naturally produced by the human body, the USU.S. EPA has identified a potential for increased risk of certain cancers from exposure to EO emitted from sterilization facilities. In 2016, the USU.S. EPA published its Integrated Risk Information System toxicity assessment of EO (the “2016 IRIS Assessment”), and, since 2018, the USU.S. EPA has published National Air Toxics Assessments, which have been succeeded by Air Toxics Screening Assessments. These assessments have used the 2016 IRIS Assessment and other data to identify EO as a potential cancer concern in several areas across the country, including areas surrounding certain of our current and former facilityEO in Willowbrook, Illinois and oursterilization facilities in Atlanta,the GeorgiaUnited and Santa Teresa, New Mexico.States. Although we and other organizations disagree with the USU.S. EPA’s assessments of the carcinogenic potency of EO, Sterigenics’ facilities and other EO facilities could continue to be the subject of unfavorable air quality assessments, regulations and other initiatives as risk assessments of EO continue to evolveevolve. and weWe can give no assurance as to the impact of such EO risk or air quality assessments on our business, prospects, financial condition, litigation and regulatory risks or results of operations. See related Risk Factor “—We are subject to extensive regulatory requirements and routine regulatory audits in our operations. We must receive certain permits, licenses and/or regulatory clearance or approval for our operations. Compliance with these regulations is costly, and failure to comply with all laws and regulations or to receive or maintain permits, licenses, clearances or approvals may impact our revenues, profitability, financial condition or value. We may face liability and reputational risks even if we comply with all laws and regulations.”

We are currently subject to lawsuits in California, Georgia, Illinois and New Mexico alleging personal injury, property devaluation and other claims related to ourthe use of EO at, oruse, emissions and releases of EO from our facilities. Additional EO lawsuits have been threatened relating to Sterigenics’ former facility in Willowbrook and existing facilities in Atlanta, Georgia; Charlotte, North Carolina; Grand Prairie, Texas; and Vernon, California and may be filed in the future relating to these or Sterigenics’ otherour EO facilities; thesein the United States. These threats of additional EO lawsuits are comparable to threats that have similarly been made against other companies within our industry. We deny these allegations against us and our subsidiaries. See related Risk Factor “—We are currently defending certain litigation, and we are likely to be subject to additional litigation in the future,” Item 3, “Legal Proceedings” and Note 19, “Commitments and Contingencies,” to our consolidated financial statements. We may be subject to other claims by private plaintiffs and/or state or local governments and/or agencies in the future relating to our current or former facilities. In addition, we have encountered and may continue to encounter resistance, protests or other actions in communities where our existing facilities are located or where we seek to establish or expand facilities based on perceptions within these communities of the risks associated with exposure to EO. Publicity regarding community resistance to EO facilities may also have other adverse impacts, including damage to our reputation and public pressure against our facilities that may affect our ability to conduct our business.

Our business exposes us to significant potential risk from lawsuits, investigations and other legal proceedings. We are currently pursuing and defending various proceedings and will likely be subject to additional proceedings in the future, including potential litigation regarding the products and services we provide or which we or our predecessors have provided. As detailed in Note 19, “Commitments and Contingencies,” to our consolidated financial statements under the heading “Ethylene Oxide Tort Litigation,” we are currently subject to lawsuits in California, Georgia and Illinois brought by private plaintiffs and, in New Mexico, a government entity, alleging personal injury, property devaluation and other claims related to our use, emissions and releases of EO. Additional EO lawsuits have been threatened relating to Sterigenics’ former facility in Willowbrook and existing facilities in Atlanta, Georgia; Charlotte, North Carolina; Grand Prairie, Texas; and Vernon, California and may be filed in the future relating to these or Sterigenics’ otherour EO facilities in the United States; these threats of additional EO lawsuits are comparable to threats that have similarly been made against other companies within our industry.

The financial impact of litigation, particularly mass action lawsuits, is difficult to assess or quantify. The outcomes of jury trials are unpredictableunpredictable, and a judgment entered or settlement reached in one case is not representative of the outcome of other seemingly comparable cases. If we are the subject of future lawsuits, regardless of the merits of the claims at issue or the ultimate outcome of a case, any litigation could be costly to defend, result in an increase of our insurance premiums, and exhaust any available insurance coverage. Claims against us that result in entry of a judgment orjudgment, that we settle that are not covered or not sufficiently covered by insurance policies, or whichthat fall within retained liability under our policies, could have a material adverse impact on our business, prospects, financial condition or results of operations. Our current environmental liability insurance does not cover claims related to EO. Even where we have coverage under prior or existing policies for claims brought against us, our insurance may not be adequate to cover all potential liabilities and losses arising from those claims, and we have significant self-insured retention amounts, which we would have to pay in full before obtaining any insurance proceeds. Additionally, even where a claim should be covered by insurance, an insurer might refuse coverage. To the extent our insurance coverage is inadequateinadequate, and we are not successful in identifying additional coverage for such claims, we would have to pay any costs or losses in excess of policy limits, including costs to defend such claims, and the amount of any settlement or judgment. Any settlement or judgment against us arising out of pending or future claims related to EO would likely exceed any insurance recoveries available to us and could have a material adverse effect on our business, prospects, financial condition or results of operations. See Note 19, “Commitments and Contingencies,” to our consolidated financial statements for more detail on our pending litigation.

As described elsewhere in Note 19, “Commitments and Contingencies,” to our consolidated financial statements under the heading “Ethylene Oxide Tort Litigation,” we are subject to tort lawsuits alleging injuries caused by our use of EO and low-level environmental exposure to EO emissions and releases from certain of our sterilization facilities. Trials were conducted in the Circuit Court of Cook County, Illinois in late 2022 in two individual cases related to theour former facility in Willowbrook, Illinois facility.Illinois. The first trial resulted in a verdict for the plaintiff and a judgment of $358.7 million (including $320 million in punitive damages) against Sterigenics U.S., LLC and Sotera Health LLC (the “Defendant Subsidiaries”). Two months later, the second trial resulted in a verdict for the Defendant Subsidiaries.

In January 2023, the Defendant Subsidiaries entered into binding term sheets that provided an agreed path to pay $408.0 million to settle over 880 claims related to our former facility in Willowbrook, Illinois, including the claim of the plaintiff in the first trial. The settlement was finalized in June 2023. TwoIn plaintiffsApril opted2025, outthe Defendant Subsidiaries entered into binding term sheets to pay $30.9 million to resolve 97 claims, including claimants with pending lawsuits and claimants who asserted claims but had yet to file lawsuits. The settlement was finalized in September 2025. In July 2025, the Defendant Subsidiaries entered into binding term sheets to pay $34.0 million to resolve 129 additional claims, including those of claimants with pending lawsuits and claimants who asserted claims but had yet to file lawsuits. That settlement was finalized in February 2026. In addition, in December 2025, the Defendant Subsidiaries settled with the remaining plaintiff to opt-out of the settlementJanuary and2023 approximately 100 more cases have since been brought relating to the Willowbrook facility, mostly in connection with illnesses diagnosed subsequent to June 2023.settlement.

In October 2023, the Defendant Subsidiaries entered into binding term sheets to pay $35 million to resolve 79 claims related to the Atlanta, Georgia facility. The settlement was finalized with 100 percent participation by the 79 eligible claimants in January 2024. Approximately 315450 personal injury claims and 345305 property devaluation claims related to the Atlanta facility, andas well as a lawsuit in which employees of a sterilization customer of Sterigenics allege they were injured while working at the customer’s distribution facility by exposure to residual EO allegedly emanating from products of the customer that had been sterilized by SterigenicsSterigenics, remain pending in the State Court of Cobb County, Georgia.

We continue to believe that the EO-related claims are without merit and intend to vigorously defend the remaining EO cases and any future EO cases. We do not believe the damages awardawarded in the first trial in Illinois isare predictive of potential future damage awards in the other EO tort cases, or that the settlement amounts reflected in the Willowbrook or Atlanta settlements described above are predictive of potential future settlements, but there can be no assurance that any cases proceeding to trial will not result in significant judgments adverse to us, the Defendant Subsidiaries or other subsidiaries and future settlements of EO cases are reasonably possible. In the event we or our subsidiaries receive one or more additional adverse judgments in any EO tort case(s), we or our subsidiaries may be required to post securitysecurity, such as an appellate bond, of a significant amount to stay those judgments through the appeals process.

In addition, an event of default under the Senior Secured Credit Facilities (as defined below) and the Indenture (as defined below) would occur if the Company or certain of its subsidiaries received one or more enforceable judgments for payment in an aggregate amount in excess of the greater of (i) $162.6 million or (ii) 30.0% of consolidated EBITDA or LTM EBITDA (as defined in the Credit Agreement (as defined below) and the Indenture, respectively) and the judgments were not stayed or remained undischarged for a period of 60 consecutive days. Thus, if we or our subsidiaries are unable to meet collateral requirements to post an appellate bond to stay the enforceability of a judgment, absent judicial relief, we may be required to negotiate with our current lenders to avert a default under our senior secured credit facilities and the success of such negotiations cannot be assured.

We face the risk of financial exposure to product and other liability claims alleging that our failure to adequately perform our services resulted in adverse effects, including product recalls or seizures, adverse publicity and safety alerts. In our Sterigenics business, for example, while our customers are generally responsible for determining the cycle parameters (the levels of temperature, humidity and EO concentration to which products are exposed during the sterilization process and the duration of such exposure) or dosage specifications (the amount of gamma or E-beam irradiation to which products are exposed) for their products, we are required to certify that such cycle or dosage parameters were achieved. If we fail to process a customer’s product in accordance with the cycle parameters, dosage specifications or testing requirements prescribed by the customer, our standard contract requires us to inform our customer of the nonconformance, to reprocess or retest the product if that is a feasible alternative and to reimburse the customer (subject to a maximum) for the cost of any products that are damaged as a result of the nonconformance. We could be held liable for personal injury, contractual or other damages that are alleged to result from improper or incorrect processing, cycle parameters or dosage specifications, testing or product damage. Even where processing occurred within cycle parameters, we have faced and may face future claims resulting from processing. In our Nelson Labs business, if we fail to perform our services in accordance with regulatory requirements for medical products, regulatory authorities may take action against us or our customers. Regulatory authorities may disqualify certain analyses from consideration in connection with marketing authorizations, which could result in our customers not being able to rely on our services in connection with their submissions, may subject our customers to additional studies or testing and delays in the development or authorization process, and may lead our customers to take actions such as terminating their contracts with us. We could also face claims that we performed erroneous or out-of-specification testing or data integrity complaints, any of which could require retesting and result in personal injury claims or claims of economic or other loss or personal injury.loss.

Although we maintain product and professional liability insurance coverage in amounts we believe are customary for a company of our size, there can be no assurance that this level of coverage is adequate or that we will be able to continue to maintain our existing insurance or obtain comparable insurance at a reasonable cost, if at all. In addition, insurance coverage is subject to exclusions, which change from time to time based on industry developments. OurFor example, our current product and professional liability insurance does not cover matters related to EO emissions, for example.emissions. A product recall or seizure or a partially or completely uninsured judgment against us could have a material adverse effect on our business, prospects, financial condition or results of operations.

Our industry is characterized by evolving regulations, and our operations are subject to extensive regulation in the United States and other countries where we do business. We are regulated by national and local agencies with jurisdiction over a number of areas directly or indirectly related to our businesses, including environmental, nuclear safety, homeland or national security, worker safety and health, food, drug and device manufacturing, fire protection, research, marketing, transportation, drug enforcement (governing the handling of controlled substances), protection against infectious diseases and pathogens and agriculture, fish and wildlife. These laws and regulations regulate our use of potentially hazardous materials, such as EO, Co-60Co-60, E-beam, and E-beam,X-ray, and can require us to carefully manage, control emissions of and/or limit human exposure to, these materials. For example, OSHA and U.S. EPA regulations and similar laws in other jurisdictions limit worker exposure to EO. In addition, FDA and comparable foreign regulations dictate the acceptable amount of EO residue on different types of sterilized products. In most jurisdictions, we are required to maintain and operate pollution control equipment to minimize emissions and releases of EO. Regulations issued by OSHA, the NRC and other agencies also require that equipment used at our facilities be designed and operated in a manner that is safe.

In the United States, the use of EO for medical device sterilization is regulated by the USU.S. EPA under the CAA and FIFRA. Our supplier maintains a FIFRA registration for the EO they sell in the United States that is used to sterilize or reduce the viable microorganisms on a listed group of products, including medical devices, pharmaceutical products, cosmetics and spice products.

In March 2024, the USU.S. EPA announced final rules under the National Emissions Standards for Hazardous Air Pollutants (“NESHAP”) to govern EO sterilization facilities in the United States.States, and on April 5, 2024, the final NESHAP regulation became effective. The final regulation requires EO sterilization facilities to implement additional air pollution technologies, practices and procedures designed to further reduce EO emissions. For facilities like ours, the final NESHAP regulation imposes new requirements such as higher efficiencies for EO emission controls, implementation of permanent total enclosure capture technology, and use of CEMS. OurThe revised final NESHAP regulation generally allows two years for compliance. On March 12, 2025, the U.S. EPA announced that it was reconsidering the NESHAP regulation applicable to commercial sterilizers. On July 17, 2025, the White House issued a CAA proclamation providing a two-year exemption for certain sterilization facilities to allow time to obtain and install new control technology and implement required changes. Although our operations are requiredcovered by this exemption, we continue progressing certain changes to our facilities to comply with the final NESHAP EO sterilizer regulationregulation. byAdditionally, Aprila 6,complaint was filed in January 2026 in the U.S. District Court for the District of Columbia against the President, U.S. EPA and the U.S. EPA Administrator seeking injunctive relief that would, if granted, invalidate the exemption and therefore require our facilities to conductcomply awith compliancethe testoriginal and demonstrate compliance within 180 days after that date.timeframe.

We believe that our investments in emission control enhancements and employee protection at our EO facilities have positioned us to be able to comply with the updated NESHAP and FIFRA ID requirements within the timeframes specified by the final rules,rules or regulatory exemptions received, but the requirements of the final rules represent significant changes from historical requirements and are challenging for existing EO sterilization facilities like ours, and therefore we cannot provide certainty that we will be able to comply with the requirements of the final rules at our EO facilities within the time required. Compliance with the final NESHAP and FIFRA ID may ultimately require additional facility modifications, capital expenditures and operational costs beyond what the Company is presently anticipating.

The USU.S. EPA has engaged in additional regulatory activities relating to EO emissions that could trigger additional community concerns and litigation regarding EO that could cause us to incur material defense costs, could result in diversion of management resources, and potentially could cause us to incur material liability or settlement costs or have other adverse effects on our business, financial condition, or operations. For example, in recent years, the USU.S. EPA has conducted outreach sessions in communities located near commercial EO sterilization facilities. Such community outreach sessions have in the past, and may in the future, create community concerns and increase the risk of litigation near commercial EO sterilization facilities, including ours, notwithstanding facility compliance with applicable rules and control of emissions beyond the requirements of applicable rules.

State and local authorities, including California and the South Coast Air Quality Management District (“SCAQMD”) in Southern California, are also conducting community outreach sessions relating to EO commercial sterilization facilities. SCAQMD also adopted new regulations for EO sterilization facilities in December 2023, which requirerequired new compliance actions by September 2025. In 2024, SCAQMD published a new health risk assessment and conducted community meetings about risks related to EO emissions from Sterigenics facilities in Vernon, California, and is expected in 2025early 2026 to do the same related to the Sterigenics facility in Ontario, California. The European Union has also been reviewing current regulations for the use of EO in EO sterilization facilities and has decided that EO as a sterilizing agent for medical devices will fall under the scope of the European Union Medical Devices Regulation, which may impose new and different regulatory requirements for the use of EO in the European Union. We expect to incur capital costs for enhancements to our equipment and to implement process automation and emission control enhancements to comply with these and other evolving requirements, and we cannot provide assurance that we will be able to timely meet all requirements. If future regulations differ from our current expectations, they may require additional modifications and capital costs beyond what we have budgeted for, which could be material. New standards for commercial EO sterilization, such as the new USU.S. EPA standards based on the 2016 IRIS Assessment, could also make it more difficult and expensive to raise capital for future investments in EO sterilization facilities.

Additionally, our operations in the United States and the majority of our facilities outside the United States (to the extent we are processing a product in that facilityfacility, or providing lab services related to a product, that willmay end up in the U.S. market) are regulated by the FDA. We are also regulated by other health regulatory authorities in other countries. Specifically, these operations include some of our sterilization and product testing activities that may constitute as “manufacturing” activities and are therefore subject to FDA requirements. From time to time, the FDA issues Form 483 findings related to our operations and may issue warning letters or take other administrative or enforcement actions for noncompliance with FDA laws and regulations. The issues raised by such warning letters and related administrative actions require significant resources and time to correct. Failure to comply with regulatory requirements could have a material adverse effect on our business.

To the extent Nordion ceases to operate its facility in Kanata, Canada in the future, Nordion will be responsible for the radiological decommissioning of such facility, including in respect of the portion leased by BWX Technologies, Inc. in connection with its 2018 acquisition of the Medical Isotopes business to the extent any contamination precedes such transaction. In addition, if Sterigenics in the future ceases to operateoperating any of its irradiation facilities, it will be responsible for decommissioning costs in respect of such facilities. We currently provide financial assurance for approximately $49.1$50.3 million of such decommissioning liabilities in the aggregate in the form of letters of credit, surety bonds or other surety. Such potential decommissioning liabilities may be greater than currently estimated if additional irradiation facilities are licensed, unexpected radioactive contamination of those facilities occur, regulatory requirements change, waste volume increases, or decommissioning cost factors such as waste disposal costs increase.

See Item 1, “Business—Governmental Regulation and Environmental Matters” for more information on the regulatory requirements of our businesses. Compliance with these regulations, our own voluntary programs that relate to maintaining the safety of our employees and facilities as well as the environment, and the safety and competitiveness of our equipment, systems and facilities, may be difficult, burdensome or expensive. Any changes in these regulations, or the interpretation of such regulations or our customers’ perception of such changes could require us to make adaptations that may subject us to additional costs, and ultimate costs and the timing of such costs may be difficult to accurately predict and could be material. Regulatory agencies may refuse to grant approval or clearance or may require the provision of additional data, and regulatory processes may be time consuming and costly, and their outcome may be uncertain in some of the countries in which we operate. Failure to secure renewal of permits or tightening of restrictions within our existing permits could have a material adverse effect on our business or cause us to incur material expenses. Regulatory agencies may also change policies, adopt additional regulations or revise existing regulations, each of which could impact our ability to provide our services or increase our costs. Additionally, local regulatory authorities may change the way in which they interpret and apply local regulations. For example, in the past, officials stopped operations at one of our facilities purportedly to review our fire and building code status and certificate of occupancy and we were required to initiate and prevail in litigation to establish that we were entitled to continue to operate our facility.

Our products, supplies and by-products are transported through a combination of ground, seasea, and air transport. Co-60 and EO are radioactive and potentially combustible, respectively, and must be handled carefully and in accordance with applicable laws and regulations. An incident in the transportation of our raw materials, products and by-products or our failure to comply with laws and regulations applicable to the transfer of such products could lead to injuries or significant property damage, regulatory repercussions or difficulties fulfilling our obligations to our customers, any of which could have a material adverse effect on our business, prospects, financial condition or results of operations.

Our EO and Co-60 raw materials are potentially hazardoushazardous, and we are therefore subject to stringent requirements to secure these materials from theft or other unauthorized uses. If our failure to adequately secure these materials leads to them being stolen or materially damaged, our licenses to operate could be suspended, resulting in a material adverse effect to our business, prospects, financial condition or results of operations. Any such incident could also have legal consequences, such as fines and penalties for violations of regulatory requirements and/or lawsuits for personal injuries, property damage or diminution or other claims that could result in substantial liability to us. Additionally, loss of control of Co-60 sources by a customer could result in contamination and significant public health consequences.

Industry trends that affect medical device, pharmaceutical or biotechnology companies could affect our business. The medical device industry is characterized by frequent product development and technological advances, which may reduce demand for our sterilizing and testing services if our existing services no longer meet our customers’ requirements. Any significant decrease in life science research and development expenditures by medical device, pharmaceutical andor biotechnology companies, including as a result of a general economic slowdown, could in turn impact the volumes of medical products that require sterilization or lab testing services. Future demand for Co-60 or our sterilization services could also be adversely impacted by changes to preferred sterilization modalities. For example, while X-ray has yet to be widely adopted as a method of sterilization, X-ray could be adopted as an alternative to Co-60 gamma irradiation in the future because of potential concerns about the cost or availability of Co-60 or the perceived benefits of X-ray. In addition, government agencies may encourage the development of X-ray to mitigate potential risks to the supply of Co-60 or to try to reduce access to radioactive material in particular areas, which could have an adverse impact on our business.

If changes in healthcare regulations or other developments in the healthcare industry, including concerns around single-use medical devices or the impact of the COVID-19 pandemic, were to lead to a material reduction in medical procedures or use of medical devices, demand for our services could be adversely affected. For more information, see Risk Factor “— Severe health events or environmental events, including impacts from climate change, and natural disasters, could have material adverse effects on our business, financial condition and results of operations.” Demand for our products and services may also be affected by changes from time to time in the laws and regulations that govern our operations and industry, including the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, which in turn may impact industry trends. New regulatory requirements could lead to changes in the medical device industry and the behavior of our customers that are difficult to predict but could have a material adverse effect on our business, prospects, financial condition or results of operations. Further, if any significant disposal restrictions or requirements are imposed that materially increase the cost or administrative burden of the disposal process for single-use medical devices, hospitals and other end-users of such devices might decrease their use of such devices in favor of reusable medical products, which would decrease the demand for our services, which could in turn have a material adverse effect on our business, prospects, financial condition or results of operations.

Our business is highly competitive, and if we fail to compete successfully, our business, prospects, financial condition or results of operations may be materially adversely affected.

Our aggregate direct input costs, including labor, raw materials and energy, represent a significant portion of our cost of revenues. We have experienced and may continue to experience, volatility and increases in the price of certain of these costs as a result of global market and supply chain disruptionsdisruptions, andas well as the broader inflationary environment. Additionally, the cost of energy for some of our facilities is regulated, and we are required to work with the local utility provider, which prevents us from contracting for a lower rate or seeking an alternate supplier. Although we have attempted, and will continue to attempt, to match increases in the prices of labor, direct materials or energy with corresponding increases in prices for our products and services, our ability to pass through increases in our input costs is highly dependent upon market conditions and we may not be able to immediately raise our prices, if at all. Most of our customer contracts for sterilization services allow us to pass through ourall direct material costs, but we may not be able to immediately or completely implement increases in the prices of our products and services. Specifically, there is a risk that raising prices charged to our customers could result in a loss of sales volume. Reactions or anticipated reactions by our customers and competitors to our price increases could cause us to reevaluate and possibly reverse or reduce such price increases. We also may not be able to accurately predict the volume impact of price increases, especially if our competitors are able to adjust to such input cost volatility more successfully. Material increases in the price of labor, raw materials, or energy could have a material adverse effect on our business, prospects, financial condition or results of operations, particularly if we are unable to increase the prices to our customers of our products or services to offset inflationary cost trendstrends. orAdditionally, if we are unable to achieve cost savings to offset such cost increases, our profits and operating results could be adversely affected.

Our operations are subject to a variety of business continuity hazards and risks, including supply chain disruptions due to geopolitical uncertainty,uncertainty and federal government shutdowns, and our reliance on the use and sale of products and services from single locations, any of which could interrupt production or operations or otherwise adversely affect our performance, results of operations or value.

Our operations and our supplier and customers’ operations are subject to business continuity hazards and risks that include explosions, fires, earthquakes, inclement weather and other natural disasters; utility, equipment or other mechanical failures; unscheduled downtime; labor difficulties; disruption of communications; security breaches or other workplace violence events; changes in regulations, including sanctions, export and import controls and other trade restrictions; changes in the use of government-owned reactors, includingsuch as repurposing nuclear facilities; other governmental action; federal government shutdowns; and pandemics or other public health crises.

Supply chain disruptions, such as the onesdisruptions related to geopolitical uncertainty and conflicts, federal government shutdowns, severe health events or a natural disaster, may impair or delay our ability to obtain sufficient quantities of certain materials through our ordinary supply channels and cause us to incur higher costs by procuring raw materials from other sources in order to compensate for such delays or lack of availability. For example, the prolonged U.S. federal government shutdown that ended in November 2025 had supply chain disruptions resulting from worker shortages and delays in transportation services. Supply chain disruptions such as these may impair or delay our customers’ ability to provide us work or products for processing or affect the availability, quality and pricing of materials used in the operation of our business or our customers’ businesses. If we are not able to successfully mitigate such supply chain related risks, we could experience disruptions in production or increased costs, which may result in decrease in our gross margin or reduced sales, and have a material adverse effect on our business, results of operations and financial condition.

Governmental action may disrupt the operations of our facilities that process potentially hazardous materials. For example, in June 2021, in a lawsuit related to Sterigenics’ facility in Santa Teresa, New Mexico, the court granted a motion by New Mexico’s Attorney General for a preliminary injunction prohibiting Sterigenics from allowing any uncontrolled emission or release of EO from that facility. In December 2021, the court further established protocols to monitor Sterigenics’ compliance with the preliminary injunction. Although operations at the Santa Teresa facility comply with these orders, operations at the facility may be negatively impacted if Sterigenics is unable to continue to comply. Similar actions in the future by local, state or federal officials might disrupt or shut down operations or otherwise adversely impact the production or profitability of our facilities or its operations as a whole.

We are a leading global provider of mission-critical end-to-end sterilization solutions, lab testing and advisory services for the healthcare industry. We are driven by our mission: Safeguarding Global Health®. We provide end-to-end sterilization as well as microbiological and analytical lab testing and advisory services to help ensure that medical, pharmaceutical and food products are safe for healthcare practitioners, patients and consumers in the United States and around the world. In 2024, our customers included over 40 of the top 50 medical device companies and nine of the top ten global pharmaceutical companies (based on revenue). Our services are an essential aspect of our customers’ manufacturing processes and supply chains, helping to ensure sterilized medical products reach healthcare practitioners and patients. Most of these services are necessary for our customers to satisfy applicable government requirements.

We serve our customers throughout their product lifecycles, from product design to manufacturing and delivery, helping to promote the sterility, effectiveness and safety of their products for the end user. We operate across two core businesses: sterilization services and lab services. Each of our businesses has a longstanding record and is a leader in its respective market, supported and connected by our core capabilities including deep end market, regulatory, technical and logistics expertise. The combination of Sterigenics, our terminal sterilization business, and Nordion, our Co-60 supply business, makes us the only vertically integrated global gamma sterilization provider in the sterilization industry. This provides us with additional insights and allows us to better serve our customers. For financial reporting purposes, our sterilization services business breaksis outcomprised intoof two reportable segments, Sterigenics and Nordion, and our lab services business constitutes a third reportable segment, Nelson Labs.

For the year ended December 31, 2024,2025, we recordedachieved net revenues of $1,100.4$1,163.6 million, net income of $44.4$77.9 million, Adjusted Net Income of $198.5$245.4 million and Adjusted EBITDA of $548.6$593.8 million. Adjusted Net Income and Adjusted EBITDA are financial measures not based on any standardized methodology prescribed by U.S. Generally Accepted Accounting Principles (“GAAP”). For the definition of Adjusted Net Income and Adjusted EBITDA and the reconciliation of these non-GAAP measures from net income (loss),income, please see “Non-GAAP Financial Measures.”

•Business and market conditions. Consolidated net revenues for the year ended December 31, 2025 increased by 5.7% from the year ended December 31, 2024, driven by sustained favorability in pricing and Adjustedvolume/mix. EBITDAAll three reportable segments reported segment income growth for the year ended December 31, 2024 increased from the year ended December 31, 2023, which was primarily a result of favorable pricing and improvements in volume and mix across all three reportable segments, partially offset by unfavorable changes in foreign currency exchanges rates.2025.

ForIn addition, for the years ended December 31, 2024,2025, 20232024 and 2022,2023, we recorded costs of $32.7$46.2 million, $45.3$32.7 million and $72.6$45.3 million, respectively, representingof professional feeslitigation and other expensesprofessional related to litigationfees associated with our EO sterilization facilities.

Service revenues primarily consist of revenue generated from contract sterilization and lab testing and advisory services within our Sterigenics and Nelson Labs segments, respectively. Service revenues also primarily consist of Co-60 installation and disposal revenues and gamma irradiation system refurbishments and installation services within our Nordion segment. Product revenues primarily consist of revenues generated from sales of Co-60 radiation sources and gamma irradiation systems. Provisions for discounts, rebates to customers, and other adjustments may be provided for as reductions in net revenues. Refunds, returns, warranties and other related obligations are not material to any of our business units, nor do we intend to incur material incremental costs to secure customer contracts.

Our cost of revenues consists primarily of direct materials, utilities, labor and related benefit costs, and depreciation and amortization. Although the cost of utilities and direct materials can fluctuate, the remaining components of cost of revenues are generally more stable. Direct material costs relating to service revenues primarily includesinclude EO gas, nitrogen gas and Co-60. The physical decay of Co-60 assets is included within depreciation expense as a cost of revenue. Direct material costs relating to product revenues also include the costs associated with acquiring Co-60 in finished or semi-finished form, acquiring Co-59 in a form ready for insertion into reactors for conversion into Co-60, the reactor time and associated services to convert Co-59 into Co-60, and parts and equipment associated with maintaining gamma irradiation systems.

On October 16, 2023, the Company reached an agreement to resolve 79 EO claims in the State of Georgia. Under the terms of the agreements,agreement, the Company paid $35.0 million to settle the claims.

•On JanuaryApril 9,3, 2023,2025, the Company reached agreementsan agreement to settle approximately 88097 pending and threatened EO claims in Illinois. Under the terms of the agreements,agreement, the Company paid $407.7$30.9 million to settle the claims.

Other income, net primarily consists of changes in the fair value of the embedded derivatives in Nordion’s contracts,contracts and the net impact of pensionpension-related related benefits and the income related to deferred income on a lease associated with the 2018 divestiture of the Medical Isotopes business.benefits.

Provision (Benefit) for Income Taxes

Segment income is the primary earnings measure we use to evaluate the performance of our reportable segments, as disclosed in Note 21, “Segment and Geographic Information” to our consolidated financial statements. Costs associated with support functions that are not directly associated with one of the three reportable segments, such as corporate operating expenses for executive management, accounting, information technology, legal, human resources, treasury, investor relations, corporate development, tax, purchasing, and marketing, are allocated to the segments primarily based on net revenue. Corporate operating expenses that are directly incurred by a segment are reflected in each segment’s income. Segment income excludes certain items which are included in “Income (loss) before taxes” as determined in our Consolidated Statements of Operations and Comprehensive Income (Loss).

Service revenues increased $36.2$53.9 million, or 4.0%,5.7%, to $995.8 million in the year ended December 31, 2025 as compared to $941.8 million in 2024the asyear comparedended toDecember $905.631, million2024. inNet 2023.service Favorablerevenue growth was driven by favorable pricing of $30.6$28.3 million and $6.7$6.5 million in the Sterigenics and Nelson Labs segments, respectively, coupleda with$24.8 anmillion increase in service revenue volume and /mix of $2.2 million and $1.0 million in the Sterigenics andsegment, a $5.4 million increase in core lab testing service volume/mix in the Nelson Labs segments,segment respectively, were the primary drivers of service revenue growth. Partially offsetting these growth factors wasand a $2.2$7.3 million unfavorable impactbenefit from changes in foreign currency exchange ratesrates. acrossA all$5.0 segmentsmillion as well as a declineincrease in service revenue of $2.1 million in the Nordion segment also contributed to the growth in net service revenues. Partially offsetting these factors was a $23.4 million decline in revenue related to expert advisory services and consulting in the Nelson Labs segment.

Product revenues increased $14.9$9.2 million, or 10.4%,5.8%, to $167.9 million in the year ended December 31, 2025 as compared to $158.6 million in the year ended December 31, 2024 as compared to $143.7 million in the year ended December 31, 2023.2024. Volume and mix growth of $10.3$5.5 million coupled with favorable pricing of $7.3$4.9 million were the primary drivers of the increase in net product revenues. Partially offsetting these growth factors was an unfavorable change in foreign currency exchange rates of $2.7$1.2 million.

Cost of service revenues increased $20.9$16.8 million for the year ended December 31, 20242025 as compared to the prior year. The primaryincrease driverswas attributable to higher depreciation of the increase in cost of service revenues were higher employee compensation costs of $10.1 million, a $5.1$10.4 million increase in depreciation related to capital assets recently placed in service as well as inflation, which primarily impacted energy, direct materials, and anprofessional increaseservices costs. Partially offsetting these factors was a decrease in certain facility repairs and maintenancelabor costs ofrelated $3.3to million.expert Theadvisory remaining difference was primarily driven by other inflationary pressures. This was partially offset by favorable changesservices in foreignthe currencyNelson exchangeLabs rates of $1.2 million.segment.

Cost of product revenues increased $5.1$3.2 million, or 9.5%,5.4%, for the year ended December 31, 20242025 as compared to the prior year. The increasechange was primarilydriven aby resultan ofincrease higherin volumesproduct ofrevenue Co-60 shipmentsvolume and supplier mix, which resulted in increases in direct material and material transportation costsmaterials of $4.8$6.4 million.million, Changespartially offset by a $3.7 million decline in foreign currency exchange rates resulted in a $0.8 million favorable impact to costamortization of productintangible revenues.assets that were fully amortized as of December 31, 2024.

OperatingSG&A Expenses

SG&A increased $6.0$10.1 million, or 2.5%,4.2%, for the year ended December 31, 20242025 as compared to the prior year. The increase was driven primarily by $9.9 million of incremental SG&A compensation related costs and a $4.5$13.5 million increase in share-basedlitigation compensationand expense,other professional services expense associated with EO sterilization facilities, a $3.5 million increase in other professional services fees, partially offset by a $9.5$5.8 million decrease in legalshare-based andcompensation other professional services expenses.expense.

Amortization of intangible assets decreased $1.8$31.3 million, or 2.8%,50.5%, for the year ended December 31, 2024,2025, compared to the prior year,year. The decline was primarily due primarily to changescertain inintangible foreignassets currencythat exchangewere rates.fully amortized as of May 2025.

Loss on refinancing of debt for the year ended December 31, 2025 was $1.5 million primarily relating to the write-off of certain unamortized debt issuance costs and discounts on the Term Loans in connection with Amendment No. 6 to the Credit Agreement. Loss on refinancing of debt for the year ended December 31, 2024 was $24.2 million and primarily occurred in connection with the refinancing of our capital structure in May 20242024. and Amendment No. 3 to Revolving Credit Facility. TheThis refinancing activity resulted in the write off of certain unamortized debt issuance costs and discounts on the Term Loans due 2026.2026 Inand addition,the expensing of certain new debt issuance costs and discounts were expensed upon the issuance of the Refinancing Term Loans (as defined below) and Secured Notes.

GeorgiaIllinois EO litigation settlementsettlements

Foreign exchange loss was $0.2$0.9 million for the year ended December 31, 20242025 andas 2023.compared to $0.2 million in the prior year. Foreign exchange gains and losses in our Consolidated Statements of Operations and Comprehensive Income (Loss) mainly relatesrelate to short-term gains and losses on transactions denominated in currencies other than the functional currency of our operating entities. As described in Note 20, “Financial Instruments and Financial Risk”, we enter into monthly U.S. dollar-denominated foreign currency forward contracts to manage foreign currency exchange rate risk related to our international subsidiaries.

Other income, net was $5.3$8.5 million for the year ended December 31, 2024,2025, aan decreaseincrease of $2.1$3.2 million, or 28.0%,61.1%, as compared to the prior year. The fluctuation was primarily driven by a $3.9$3.1 million unfavorablenet favorable change in the fair value of embedded derivatives in Nordion’s purchase and sales contracts, partially offset by $1.1 million of other income related to a tax credit incentive.contracts.

Provision for income taxes was $69.5$69.6 million for the year ended December 31, 20242025 as compared to $54.7$69.5 million in the prior year. The change was primarily attributable to higheran pre-taxincrease in income ofbefore $113.9income milliontaxes in the year ended December 31, 20242025 compared to $106.0the millionprior year, the tax effects for thea yearchange endedin Decemberour 31,indefinite 2023,reinvestment assertion with respect to a portion of our foreign earnings and an incremental increase in current year permanent tax differences. This was partially offset by recognition of the cumulative tax effects of the change in U.S. income tax laws under the One Big Beautiful Bill Act (“OBBBA”) associated with the accounting for the valuation allowance attributable to the limitation on the deductibility of interest expense, partially offset by a decrease in Global Intangible Low Taxed Income (“GILTI”).expense.

Net income for the year ended December 31, 20242025 was $44.4$77.9 million, as compared to net income of $51.4$44.4 million for the year ended December 31, 2023,2024, primarily due to the factors described above. Adjusted Net Income was $245.4 million for the year ended December 31, 2025, as compared to $198.5 million for the year ended December 31, 2024, as compared to $204.3 million for the year ended December 31, 2023, primarily due to the factors described above. Adjusted EBITDA was $593.8 million for the year ended December 31, 2025, as compared to $548.6 million for the year ended December 31, 2024, as compared to $528.0 million for the year ended December 31, 2023, primarily due to the factors described above. Please see “Non-GAAP Financial Measures” below for a reconciliation of Adjusted Net Income and Adjusted EBITDA to theirNet Income, the most directly comparable financial measure calculated and presented in accordance with GAAP.

We define Adjusted Net Income as net income (loss) before amortization and certain other adjustments that we do not consider in our evaluation of our ongoing operating performance from period to period as discussed further below. We define Adjusted EBITDA as Adjusted Net Income before interest expense, depreciation (including depreciation of Co-60 used in our operations) and income tax provision applicable to Adjusted Net Income.

We use Adjusted Net Income and Adjusted EBITDA, non-GAAP financial measures, as the principal measures of our operating performance. Management believes Adjusted Net Income and Adjusted EBITDA are useful because they allow management to more effectively evaluate our operating performance and compare the results of our operations from period to period without the impact of certain non-cash items and non-routine items that we do not expect to continue at the same level in the future and other items that are not core to our operations. We believe that these measures are useful to our investors because they provide a more complete understanding of the factors and trends affecting our business than could be obtained absent this disclosure. In addition, we believe Adjusted Net Income and Adjusted EBITDA will assist investors in making comparisons to our historical operating results and analyzing the underlying performance of our operations for the periods presented. Our management also uses Adjusted Net Income and Adjusted EBITDA in theirits financial analysis and operational decision-making, and Adjusted EBITDA serves as the basis for the metric we utilize to determine attainment of our primary annual incentive program. Adjusted Net Income and Adjusted EBITDA may be calculated differently from, and therefore may not be comparable to, a similarly titled measure used by other companies.

Adjusted Net Income and Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted Net Income and Adjusted EBITDA rather than net income (loss),income, the nearest GAAP equivalent. For example, Adjusted Net Income and Adjusted EBITDA primarily exclude:

The following table presents a reconciliation of net income (loss),income, the most directly comparable financial measure calculated and presented in accordance with GAAP to Adjusted Net Income and Adjusted EBITDA, for each of the periods indicated:

We serve our customers throughout their product lifecycles, from product design to manufacturing and delivery, helping to ensure the sterility, effectiveness and safety of their products for the end user. We operate across two core businesses: sterilization services and lab services. Each of our businesses has a longstanding record and is a leader in its respective market, supported and connected by our core capabilities including deep end market, regulatory, technical and logistics expertise. The combination of Sterigenics, our terminal sterilization business, and Nordion, our Co-60 supply business, makes us the only vertically integrated global gamma sterilization provider in the sterilization industry. This provides us with additional insights and allows us to better serve our customers. For financial reporting purposes, our sterilization services business is comprised of two reportable segments, Sterigenics and Nordion, and our lab services business constitutes a third reportable segment, Nelson Labs.

For the three and six months ended MarchJune 31,30, 2026, respectively, we recorded net revenues of $280.0$321.4 million and $601.4 million, net income of $26.6$53.6 million and $80.2 million, Adjusted Net Income of $52.4$74.0 million and $126.3 million, and Adjusted EBITDA of $134.7$165.7 million and $300.4 million. Adjusted Net Income and Adjusted EBITDA are financial measures not based on any standardized methodology prescribed by U.S. Generally Accepted Accounting Principles (“GAAP”).GAAP. For the definition of Adjusted Net Income and Adjusted EBITDA and the reconciliation of these non-GAAP measures from net income (loss), please see “Non-GAAP Financial Measures.”

Three Months Ended MarchJune 31,30, 2026,2026 as compared to Three Months Ended MarchJune 31,30, 2025

The following table sets forth the components of our results of operations for the three months ended MarchJune 31,30, 2026 and 2025:

The following table compares our net revenues by type for the threesix months ended MarchJune 31,30, 2026 to the threesix months ended MarchJune 31,30, 2025:

Net revenues were $280.0$601.4 million for the threesix months ended MarchJune 31,30, 2026, an increase of $25.5$52.6 million, or 10.0%,9.6%, as compared withto the threesix months ended MarchJune 31,30, 2025. Excluding the impact of foreign currency exchange rates, net revenues for the threesix months ended MarchJune 31,30, 2026 increased approximately 6.5%7.4% compared with the threesix months ended MarchJune 31,30, 2025.

Service revenues increased $17.7$38.7 million, or 7.9%,8.1%, to $241.6$519.9 million for the threesix months ended MarchJune 31,30, 2026,2026 as compared to $223.9$481.2 million for the threesix months ended MarchJune 31,30, 2025. NetThe growth in net service revenue growthrevenues was primarily driven by favorable pricing in the Sterigenics and Nelson Labs segments, an increase infavorable volume/mix in the Sterigenics and Nordion segments and a benefit from changes in foreign currency exchange rates across all segments, partially offset by a decline in volume and mix in the Nelson Labs segment.rates.

Product revenues increased $7.9$13.8 million, or 25.7%,20.4%, to $38.4$81.5 million for the threesix months ended MarchJune 31,30, 2026,2026 as compared to $30.6$67.7 million for the threesix months ended MarchJune 31,30, 2025. FavorableThe volume and mix at Nordion, whichincrease was primarilydriven attributableby tohigher revenues from Co-60 harvest schedule timing, wasin the mainNordion driversegment of the increase in product revenues for the three months ended March 31, 2026 compareddue to the sametiming periodof inreactor theharvest prior year as well as a benefit from changes in foreign currency exchange ratesschedules and favorable pricing.

The following table compares our total cost of revenues by type for the threesix months ended MarchJune 31,30, 2026 to the threesix months ended MarchJune 31,30, 2025:

Total cost of revenues accounted for approximately 47.5%46.0% and 46.8%45.0% of our consolidated net revenues for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.

Cost of service revenues increased $11.2$24.7 million, or 10.4%,11.2%, for the threesix months ended MarchJune 31,30, 2026,2026 as compared to the threesix months ended MarchJune 31,30, 2025. The increase was driven by higher employee compensation costs, depreciation from capital assets recently placed into service, as well as expenditures for facility maintenance and an increase in direct material costs driven mainly by higher volumes.materials. Changes in foreign currency exchange rates also had a $3.8 millionan unfavorable impact to cost of service revenues for the threesix months ended MarchJune 31,30, 2026 as compared to the samesix periodmonths inended theJune prior30, year.2025.

Cost of product revenues increased $2.7$4.8 million, or 23.4%,18.7%, for the threesix months ended MarchJune 31,30, 2026,2026 as compared to the threesix months ended MarchJune 31,30, 2025. The increase was primarily a result of higher volumes of Co-60 shipments,shipments due to the timing of reactor harvest schedules, which resulted in increases in direct material and material transportation costs. Changes in foreign currency exchange rates had an unfavorable impact to cost of product revenues for the three months ended March 31, 2026 compared to the same period in the prior year.

SG&A expenses increased $5.2$4.4 million, or 8.2%,3.3%, for the threesix months ended MarchJune 31,30, 2026,2026 as compared to the threesix months ended MarchJune 31,30, 2025. The increase was primarily driven by higher employee compensation costs mainly attributable to an increase in share-based compensation expense, partially offset by a decrease in litigation and other professional services expense associated with EO sterilization facilities.expenses.

Amortization of intangible assets decreased $12.3$18.6 million to $6.0 million, or 80.2%75.4%, for the threesix months ended MarchJune 31,30, 2026,2026 as compared to the threesix months ended MarchJune 31,30, 2025. The decline was primarily due to certain intangible assets that were fully amortized in May 2025.

Interest expense, net decreased $6.1$12.4 million, or 15.0%,15.2%, for the threesix months ended MarchJune 31,30, 2026,2026 as compared to the threesix months ended MarchJune 31,30, 2025, primarily due to a lower variable interest rate on our Term Loan and a $75.0 million principal paydown. The weighted average interest rate on our outstanding debt was 6.56% and 7.53% for the threesix months ended MarchJune 31,30, 2026 and March 31, 2025 was 6.62% and 7.56%,2025, respectively.

Foreign exchange gain was $0.6$4.3 million for the threesix months ended MarchJune 31,30, 2026 as compared to a loss of $0.3$0.9 million loss for the threesix months ended MarchJune 31,30, 2025. The change in foreign exchange (gain) loss in our Consolidated Statements of Operations and Comprehensive Income mainly relates to short-term gains and losses on transactions and certain assets and liabilities denominated in currencies other than the functional currency of our operating entities.

Other income, net increaseddecreased $0.7$2.3 millionmillion, or 37.1%, for the threesix months ended MarchJune 31,30, 2026 as compared to the threesix months ended MarchJune 31,30, 2025.2025, Themainly increasearising wasfrom aan result of a more favorableunfavorable change in the net fair value of Nordion’s embedded derivatives infor the Nordionsix segmentmonths ended June 30, 2026 compared to the same period inof the prior year and an increase in pension income in the Nordion segment.year.

Provision (Benefit) for Income Taxes

The Company recognized a $16.0 million provisionProvision for income taxes increased $31.1 million to a net provision of $40.4 million for the threesix months ended MarchJune 31,30, 2026,2026 as compared to a $1.6$9.4 million income tax benefit for the threesix months ended MarchJune 31,30, 2025. The change was primarily attributable to higher pre-tax income for the threesix months ended MarchJune 31,30, 2026 compared to pre-tax loss for the threesix months ended MarchJune 31,30, 2025, partially offset by a decrease in the impact of the valuation allowance attributable to the limitation on the deductibility of interest expense.

Provision for income taxes for the threesix months ended MarchJune 31,30, 2026 differed from the federal statutory rate primarily due to the foreign rate differential, current year permanent differences, including foreign withholding taxes and other non-deductible items, and U.S. state income taxes (net of federal tax benefit). ProvisionIncome fortax income taxesexpense for the threesix months ended MarchJune 31,30, 2025 differed from the statutory rate primarily due to current year permanent differences, partially offset by the valuation allowance attributable to the limitation on the deductibility of interest expense andexpense, the impact of the foreign rate differential.differential and current year permanent tax differences, partially offset by a benefit for state income taxes.

Net income for the threesix months ended MarchJune 31,30, 2026 was $26.6$80.2 million,million as compared to a net loss of $13.3$5.3 million for the threesix months ended MarchJune 31,30, 2025. Adjusted Net Income was $52.4 million for the three months ended March 31, 2026, as compared to $39.0 million for the three months ended March 31, 2025,2025 due to the factors described above. Adjusted EBITDANet Income was $134.7$126.3 million for the threesix months ended MarchJune 31,30, 2026 as compared to $95.1 million for the six months ended June 30, 2025, and Adjusted EBITDA was $300.4 million for the six months ended June 30, 2026, as compared to $121.8$272.6 million for the threesix months ended MarchJune 31,30, 2025, due to the factors described above.2025. Please see “Non-GAAP Financial Measures” below for a reconciliation of Adjusted Net Income and Adjusted EBITDA to their most directly comparable financial measure calculated and presented in accordance with GAAP.

•certain recurring non-cash charges such as depreciation of fixed assets, although these assets may have to be replaced in the future, as well as amortization of acquired intangible assets and asset retirement obligations (“ARO”);