Good morning. This is Gigi, and welcome to Sotera Health first quarter 2021 results call. You may find today's press release and accompanying supplemental slides in the Investors section of the company's website at soterahealth.com. This webcast is being recorded, and a replay will be available in the Investors section of the Sotera Health website. On the call today are Michael Petras, Chairman and Chief Executive Officer, and Scott Leffler, Chief Financial Officer. During the call, some of the statements the company may make may be considered forward-looking statements. The matters addressed in these statements are subject to the risks and uncertainties that could cause actual results to differ materially from those projected or implied. Please refer to Sotera Health SEC filings and the forward-looking statements slide at the beginning of its presentation for a description of these risks and uncertainties. The company assumes no obligation to update any such forward-looking statements. Please note that during the discussion today, the company will present both GAAP and non-GAAP financial measures, including adjusted EBITDA, adjusted EPS, and net leverage ratio. A reconciliation of non-GAAP to GAAP measures for all relevant periods may be found in the schedules attached to the company's press release and its supplemental slides. During the Q&A portion of today's call, please limit yourself to one question and one follow-up so that we can try and give everyone an opportunity to ask questions. I will now turn the call over to Sotera Health Chairman and CEO, Michael Petras. Thank you, operator. Good morning, everyone, and thank you for joining us on Sotera Health first quarter 2021 earnings call. We're off to a strong start in 2021, reporting double-digit growth in both revenue and adjusted EBITDA in the first quarter while managing ongoing challenges as a result of the pandemic. These strong results are our first full quarter as a public company, serve as a reminder that Sotera Health sits in a crucial position in the healthcare value chain as a leading global provider of mission-critical end-to-end sterilization solutions, lab testing, and advisory services for the healthcare industry. Compared to the first quarter of last year, we reported total revenue growth of approximately 13%, adjusted EBITDA growth of approximately 15%, and adjusted EPS of $0.18. We also continue to execute on our strategic priorities with the acquisition of BioScience Laboratories, capital deployment towards growth initiatives, and further deleveraging. Scott will go into more detail on our segment performances and our capital structure in a moment. This quarter, as in other quarters, our segments continue to focus on meeting the needs of customers, healthcare workers, and patients. We performed critical testing of personal protective equipment like masks and gowns, and we sterilized many medical devices and pharmaceutical products. Many of these products are being used in the global fight against COVID-19. We ensure this critical sterilization and testing is done while creating a safe environment for our employees through the pandemic. While we are focused on growing our business, we are also intent on strategic use of our cash as well as capital deployment. Our capital deployment priorities remain unchanged as we continue to invest for growth, delever, and pursue strategic M&A to grow the business for the long term. Regarding our debt position, our net leverage ratio improved from 4.3 x at year-end to 4.1 x as of March 31. We are on track to deliver the two to four times long-term net leverage target that we've previously communicated to you. Through a combination of debt paydown and repricing our term loan, first quarter 2021 interest expense declined by $35 million versus the first quarter of 2020. From an operational standpoint, we continue to invest during the first quarter to ensure we are meeting customers' current and future needs. Nordion is investing in three long-term Cobalt-60 supply development projects, and Sterigenics continue to advance its nine active capacity around the world. For Nelson Labs, we continue to expand capacity and capabilities to meet customer needs for microbiological and extractable and leachables testing. We're also making great progress on the build-out of our European Microbiological Center of Excellence, which we expect to be completed by year-end. On the M&A front, we also completed two small transactions in the first quarter. As we mentioned on our last earnings call, we welcome BioScience Laboratories to Nelson Labs in March. Located in Bozeman, Montana, BioScience is a provider of outsourced antimicrobial and virology testing in the pharmaceutical, med device, and consumer products industries. This strategic acquisition will complement Nelson's already existing capabilities in the antimicrobial and virology space. Also in March, we purchased the remaining 15% ownership of Nelson Labs Fairfield. This purchase had been negotiated in connection with the original acquisition of Gibraltar Laboratories in 2018. Nelson Labs Fairfield provides us with expanded microbiological and analytical chemistry testing capabilities to serve the pharmaceutical and med device market segments. We also continue to prioritize operational excellence projects across our segments in order to drive efficiencies and performance. We expect operational excellence to continue to drive margin expansion over time. Taking a step back from our specific results, I'll comment briefly on what we're seeing in the broader markets where we operate. When we communicated 2021 guidance, we also indicated assumption that there would be a gradual normalization of volumes throughout the year. I would say the first quarter trend is in line with that expectation, as we saw a relatively weak start to the quarter in terms of volumes, and then a gradual strengthening as the quarter progressed. As one might expect, there was some variability from a regional perspective. The U.S. market has shown a quicker recovery on volumes, while Latin America and Europe, which are suffering from higher virus case counts and other pandemic-related challenges, have been slower to recover. Overall, we are comfortable with both the broader market trending and our own performance. That is why as the first quarter performance provides a solid foundation for the rest of the year, we are comfortable reaffirming the 2021 outlook that we provided on March 9th of this year. Before I turn it over to Scott to cover the first quarter and our 2021 outlook in more detail, I want to take a moment again to emphasize how proud I am of the entire Sotera Health team as we continue to strive for excellence during this challenging time. I'll now turn this call over to Scott. Thanks, Michael. I'll cover the first quarter highlights for Sotera Health on a consolidated basis, and then provide more detail by segment. I'll finish up with comments on our balance sheet and cash flows and some further details regarding our 2021 outlook. For the first quarter of 2021, revenue grew by approximately 13% to $212 million. On a constant currency basis, revenue grew by approximately 11%. Adjusted EBITDA grew by almost 15% to $105 million, as adjusted EBITDA margins expanded by over 80 basis points compared to Q1 of last year. Our strong operating performance resulted in adjusted EPS of $0.18 per share, up $0.08 from Q1 of 2020. Before I provide segment-level detail, I wanted to remind everyone of our methodology around reporting corporate costs. We do not report a separate corporate segment, but instead allocate all administrative costs to our segments. In Q1, our segments are absorbing approximately $4 million of incremental administrative costs compared to Q1 of last year. Approximately $1 million of the increase is attributable to the secondary offering we executed in March of this year, while the remainder is largely driven by the costs associated with being a public company. These costs created some margin headwind for all three segments. That margin headwind was particularly noteworthy for Nordion, which experienced margin compression as a result. Now, let's take a closer look at the segment performances. In Q1, Sterigenics delivered both 12% revenue growth and segment income growth over Q1 of the prior year. Revenue growth drivers for the first quarter included the acquisition of Iotron, which contributed 5%, while pricing contributed approximately 3% and organic volume growth contributed a little over 2%. Compared to the prior year first quarter, segment income margins in Q1 of 2021 expanded slightly as favorable pricing and operating leverage were mostly offset by the incremental administrative costs associated with being a public company. As Michael mentioned, we continue to make meaningful investments in Sterigenics. Recently, we announced the expansion of one of our facilities in Europe, which is one of six Sterigenics expansions expected to go live this year. We also continue to make progress on facility enhancements at our North America EO facilities. Nordion reported Q1 revenue growth over prior year of 10% to approximately $26 million and segment income growth of 6% to almost $14 million. Nordion's top-line growth is driven by a 4% benefit from the strengthening of the Canadian dollar compared to the US dollar, a 3.6% increase from pricing, and approximately 2% impact from volume, primarily related to shipments of medical use Cobalt-60. Margins fell by approximately 200 basis points, largely driven by the incremental administrative costs mentioned earlier. Nelson Labs grew Q1 revenue versus prior year by more than 16% to $55 million and grew segment income by approximately 30% to $23 million. The Q1 2021 revenue performance continued to be driven by strong demand for testing related to personal protective equipment, which accounted for 10.3% of the growth. While volumes were mixed in other testing categories, we are encouraged to see strong demand in some areas, including testing related to product development and antimicrobials. Q1 of 2021 margins expanded by 430 basis points over the prior year quarter, as Nelson Labs continues to benefit from a number of operational excellence initiatives, as well as favorable pricing and mix. CapEx spend is tracking in line with our total year guidance, with $21 million of spend occurring in the first quarter. We continued to spend primarily in the areas of EO facility enhancements, Sterigenics and Nelson Labs capacity expansions, and Nordion cobalt supply development. We finished the quarter with $108 million in cash, a slight increase over December 31 levels, even after funding approximately $25 million for the BioScience Labs acquisition and Nelson Labs Fairfield buyout. With combined cash and revolver availability of $390 million, the company remains in a solid liquidity position to fund our operational needs and investments. In March, we further optimized our capital structure by amending our revolving credit facility to reduce the interest rate on borrowings and extend the maturity date to June 2026. We have remained undrawn on that facility all year. We benefited from a significant reduction in interest expense in Q1, largely driven by debt paydown using IPO proceeds, as well as the recent repricing of our term loan. As Michael mentioned, our interest expense decreased by approximately $35 million compared to Q1 of last year. Our net leverage ratio continues to improve, with net leverage of 4.1x as of March 31, compared to 4.3x as of December 31. We also executed a secondary offering in March, which resulted in the sale of approximately 9% of already outstanding shares to the public. The secondary offering did not result in the issuance of any new shares or in any proceeds to the company. Turning to our 2021 outlook, let me both reaffirm the guidance that we provided on our March 9 call and provide some additional color on the rest of the year. I'll start with the quantitative summary and finish with our assumptions. For full year 2021, we are reaffirming guidance of total revenues in the range of $890 million-$920 million, representing growth of approximately 9%-12%. Adjusted EBITDA in the range of $465 million-$485 million, representing growth of approximately 11%-16%. A tax rate applicable to adjusted net income of approximately 28%. Adjusted EPS in the range of $0.78-$0.86. Fully diluted share count in the range of 281 million-283 million shares on a weighted average basis. From a quantitative standpoint, I would like to reiterate, the year-over-year increase in weighted average shares outstanding is largely due to our IPO in November 2020. We expect approximately $135 million of interest expense savings annually from the paydown of our debt and the repricing of our term loan. The impact of that savings is reflected in our adjusted EPS guidance. From a qualitative standpoint, our assumptions are as follows: We are assuming continued normalization of volumes throughout the year. As Michael mentioned, we're seeing trends in that direction thus far. We also talk a lot about the variability in Nordion's performance, driven in large part by harvesting schedules for Cobalt-60. We mentioned on the last call an expectation that there will be a relatively even balance between sales in the first half of the year and the second half of the year. That is still our expectation based on Cobalt delivery schedules in Q2. Having said that, there's always the possibility that changes in the harvest schedule for Cobalt-60 can result in orders shifting from one quarter into another. From an FX standpoint, our guidance has and will be based on exchange rates in effect as of the time that we provide updates. From a capital deployment standpoint, we will continue to prioritize growth initiatives, debt repayment, and strategic acquisitions that we identify throughout the remainder of the year. We continue to expect CapEx spend to be in the range of $100 million-$110 million this year, which includes approximately $30 million earmarked for previously planned special project spend related to EO facility enhancements and Cobalt-60 supply development. Before I turn the call back to Michael to wrap things up, I wanted to echo his earlier comments about how proud we are of the entire team. Their hard work is evident in our Q1 results and has helped to position us for a solid 2021. Michael, back to you. Thank you, Scott. Overall, we're very pleased with our performance to start 2021, especially considering the continuing challenges posed by the global pandemic. As always, I want to thank the Sotera Health team for their great execution this quarter. I also want to thank our customers and our investors for their continued support and partnership. At this point in time, operator, we'd like to open up the call for the questions and answers. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from the line of Matt Miksic from Credit Suisse. Your line is now open. Hey, good morning. Thanks for taking the questions and for a great start to 2021. I had a couple of questions on some of the things that you mentioned, Michael and Scott, following up on the sort of build for the year, and then one, if I could, just a broad question on litigation. On some of the investments that you've made, in Nelson Labs, and in the sterilization, Sterigenics side of the business in terms of facilities, can you talk a little bit about the cadence of those adds and what the timing is for sort of additional growth or how that filters into the plan that you've laid out for the year, in terms of top-line growth? As I mentioned, I have one follow-up on litigation. Thanks. Thanks for the question. I appreciate it. Michael mentioned nine capacity expansions that are active for Sterigenics, and six of those expansions we expect to go live this year. In the past, when we've talked about those expansions, we've characterized them as representative of our typical cycle of investment. I wouldn't view those as investments or new capacity that as it comes online, is going to shift the growth trajectory from what we've communicated in the past. Those, again, are routine capacity expansions that enable the type of growth that we've expressed in the past as being achievable for the company. Okay. On the Nelson side, maybe just the recent adds and the Center of Excellence. I know it's part of your guidance, I'm assuming it's part of your guidance for the year, but maybe just does that start to add here in the second quarter immediately, in terms of the acquisition and maybe the cadence of the Center of Excellence and what that does for the Nelson side of the business? Sure. One thing to keep in mind for capacity expansions, either on the Sterigenics side or on the Nelson side, is that once these capacity expansions go live, there typically is an extended ramp-up period over a number of quarters and sometimes even years as they reach peak utilization levels. We have extensive qualification requirements both before we go live, and then each of our customers generally will have their own qualification for the products that they process in our facility or the testing that we do for them. I wouldn't look at these capacity expansions for either Nelson or Sterigenics as expansions that are going to move the needle here in 2021. There is going to be some incremental impact in the second half of the year from a couple of them, and that's reflected in our guidance. You were asking specifically about the Center of Excellence for Nelson Labs, and that is expected to go live in the second half of the year, and again, it'll have some ramp-up, and so the incremental impact here in 2021 would be modest. Great. If I could, on litigation, I'm guessing it's not something that you're going to want to go into detail on because it is ongoing. If you could maybe map out for us some of the events in the quarter and then some of the milestones coming up and how investors should think about those and in the scheme of moving through the cases that are out there and getting to some potential resolution at some point on some of the newer cases. Good morning, Matt. This is Michael. I'll take that. On the litigation side, if you look at Illinois first, that's going through the process of litigation, right? Discovery and depositions, we were thinking these were going to come in sometime in 2021. It looks like it's more likely in 2022 is when the first trial is, and it's the first five that'll be coming up sometime in 2022. There are no specific dates yet. The court systems are pretty backed up because of COVID, and we're in line. I think the last I heard, our five cases were one of 1,300 in backlog or something of that magnitude in Illinois. It's going to matter on how quickly they go through the Illinois court system, but we're talking about a 2022 midyear event at least. Georgia, a similar type of timeline, a similar type of update as far as discovery going on. Depositions have not started yet in that area. Again, that's rolling out later into 2022 is our current guess and expectation. We'll be prepared if something were to change and the timeline was accelerated, that's the current thinking. Then in Santa Teresa, New Mexico, which would probably be the one that's most recent, that was the suit brought by the AG. Again, that suit was not about closing our facility. That suit was about putting in control for uncontrolled emissions. I could tell you that we've been operating there since 1989. We've been compliant with all the rules and regs, I'll also tell you that it's a critical element of the healthcare system. 2.5 million devices a day are sterilized in that facility. The other part, we've been working for many, many years with our regulators, NMED, as well as the federal region of the EPA, and neither of them are party to this suit. Sometime later in the month of May, there'll be a court hearing with the judge. They had asked for a temporary restraining order. Based on the timeline, the judge has really moved forward and said, "No temporary restraining order. We'll have a discussion and preliminary injunction hearing sometime later in the month of May." Obviously, in all these suits, we feel very comfortable about where we stand, but it's really something we have to deal with, and we're just continuing to run and operate the business. All our facilities are up and operating, and we're providing critical medical supplies and pharmaceutical supplies to the healthcare industry. That is helpful, Michael. Thank you. Great. Thanks, Matt. Thank you. Our next question comes from the line of Sean Dodge from RBC Capital Markets. Your line is now open. Thanks. Good morning, I'll add my congratulations on the strong start to the year. Michael, you mentioned the gradual recovery in demand, but with still some regional variation, and Scott highlighted that as one of the underlying assumptions to the guidance was for a continued normalization. Do you have a sense of, maybe from a volume perspective, how close are you now back to being at pre-COVID levels? Maybe if you could give us a sense of how steep of a recovery you're building in here for the remainder of the year. Yeah. We've talked to you in the past about the volumes assumptions we make around these businesses, and I would tell you all three of them are below where our typical run rates of volume expectations are, and we expected that. The first quarter came in along the lines of what we thought, a gradual recovery, and we think that'll build as the year progresses, Sean. Second quarter will be a little better than the first, and the third will be a little bit better than the second, and hopefully by the end of the year, we start getting back to the more normal levels that we see on volumes and mix in the businesses. I did mention in my opening comments the geographic variation. The U.S. has come back a little bit better because I think the vaccines have really ramped up relatively quickly here. Europe continues to be a challenge. I think we're seeing it across multiple industries, not just healthcare. We're also seeing similar characteristics, if you will, in Latin America, particularly in Brazil. We're not hitting full volumes that we would hope, but this is consistent with how we built the plan for the year and what we communicated to you earlier. We see this ramping up second quarter, should be a little bit better. Again, though, we've got to see how COVID, particularly in some of those markets like Europe and Latin America, and how quickly they come online. We're cautiously optimistic, but we're taking the right actions to make sure we're here to satisfy our customers when they have the demand. Okay. In the Nelson Labs business, I think, Scott, you mentioned 10 points of that growth relating to increased testing of personal protective equipment. With that feeling like that's COVID related and given hopefully we're nearing the end of this all, I guess, how should we be thinking about kind of growth trajectories, kind of growth cadences in the Nelson Labs side for the duration of the year? When we look at our guidance for the year, if you go back to that comment that we were assuming a normalization of volumes, we did contemplate both a normalization of those protective barriers testing back to pre, or at least closer to pre-pandemic levels, of course, offset by a ramp-up in other testing categories. Certainly then built into our own models is a modest headwind associated with the protective barriers ramping back down. As Michael mentioned, the other categories of testing, and remember, Nelson offers over 800 testing categories, there's certainly an expectation that we're going to have a tailwind from the rest of those testing categories to more than offset that. I think we'll be fine, and that's why we were comfortable reiterating our guidance. We did mention that we're already seeing demand perk up in certain categories relating to different product development related tests. A lot of great activity in terms of antimicrobials that we believe will persist even beyond the pandemic, and a number of other categories that are already beginning to wake back up again. Okay. That's very helpful. Thanks again. Thank you. Our next question comes from the line of Dave Windley from Jefferies. Your line is now open. Hi, thanks. Good morning. Thanks for taking my question. A follow-up to Sean's question there as relates to the reopening and the comments, Scott, that you just made on Nelson. Is there also an impact on, or by segment, a shift in activity from, say, Nelson to Sterigenics as you reopen? I'm thinking, if PPE is coming down as much as it is, or could come down as we reopen, do you see the offset to that in some cases in, say, Sterigenics instead? I just wanted to understand kind of the inter-segment impact of reopen. If I'm understanding your question right, I wouldn't think about it in terms of any kind of a direct offset between or amongst our businesses. Really, I would look at each business on a standalone basis and just say that we're beginning to see and expecting to see throughout the year a normalization for each of those businesses in their activity. I think when you look at Q1 results, you already begin to see that for each of our businesses, and we'll expect that to continue through the year. Okay. On the regulatory side of things, has the new administration been in place long enough to have some people in seats that your government affairs activities can interact with and begin to get a sense? Do you have any clear view as to when EPA regulations might be landing? Updated regulations, that is. Yeah, David, this is Michael. I would tell you, we meet with and discuss with our regulators on an ongoing basis at both state, local, and federal levels. They do have people in the seats that are running the EPA, and they're competent people, and we've been interacting with them. I will tell you from a timing perspective, NESHAP is the big standard that we're waiting for some new rules and regs around ethylene oxide. As I've reiterated in the past, we were hopeful in 2018, we were hopeful in 2019, 2020, and 2021 that we would see these new regs. We are now hearing late 2022. That is the word we're getting out of the regulators, that they expect this new NESHAP requirements and rules to come out in late 2022. I think that just speaks to the fact of how complex the issue is and the many stakeholders involved and criticality of ethylene oxide. Over 50% of the medical devices are sterilized with ethylene oxide, or 20 billion devices a year. There's no known alternative for that material. And people are operating in a very responsible way in handling this dangerous material, and I think people are getting a better appreciation of how complex the issue is. What we're hearing currently, David, is late 2022 for the new regs. If I could sneak one more in on that topic as a follow-up. Do you think that or are you finding, for example, in Atlanta, that your investments in your double scrubbing approach and tightened recapture approach are assuaging the concerns of the people that are bringing these actions in the cases where you've seen that? I will tell you, we're confident in our solutions that we put in place in Atlanta, and they're working well, and we're taking care of our customers. We already were far exceeding the regulatory requirements. That's just either further insurance around the ability to do that. I can't speak to the motives or the comfort level of these other parties, because sometimes their motives don't clearly align with ours or the broader healthcare industry. What I'll tell you is we're confident of our solution, and we continue to move forward in making sure we operate in a compliant manner and provide a critical service. Great. Thanks for that. Thank you. Our next question comes from the line of Patrick Donnelly from Citi. Your line is now open. Hey, guys. Thanks for taking the question. Just on the balance sheet side, you guys have obviously refinanced some debt. The annual interest rate has come down and got some real savings there. Can you just talk about the flexibility that gives you? Obviously, you've invested a little bit inorganically. Can you talk about the priorities here? Obviously continuing to de-lever towards that two to four range. You're almost there versus continuing maybe some of these bolt-on activities on the inorganic side. Would love just your general thoughts there. Patrick Donnelly, this is Michael Petras, and then Scott can chime in for any further detail. Obviously, this business operated at pretty high levels of leverage in the past. We're down to 4.1x, as we've referenced in our opening comments. We feel very comfortable about our leverage levels and our flexibility. We have $108 million, I believe it is, in cash on the balance sheet at the end of the quarter. Our priorities are to continue to invest in this business for growth, to de-lever, and to pursue strategic M&A. I feel we have the flexibility in our capital structure to accomplish those, and we're optimistic about our ability to continue to drive the growth on high single digits that we've stated in the past. Okay. On the same topic, you guys have talked about some elevated CapEx over the next few years related to sourcing of new Cobalt-60 supply sources, facility enhancements at EO Sterilization. How do you think about balancing those investments with capacity expansion and other inorganic opportunities? We've got a pretty detailed capital deployment plan and approach. We rack and stack them based on the demands and the needs of the business. We work across the team. We have an investment committee that looks at these opportunities, but we feel comfortable with the visibility we've given you around Cobalt development, EO facility enhancements, as well as pursuing organic and inorganic growth opportunities. Yeah, I think just to add to that point, if you look at the guidance that we've given for CapEx here in 2021 of a range of $100 million-$110 million, we've also communicated in the past that around $30 million of that number relates to these "special projects" related to Cobalt development and EO facility enhancements. What's left after funding those two special projects is a pretty generous CapEx number relative to what we've spent in the past, and certainly enough to continue to invest in growth initiatives to continue to drive the top and bottom line at the levels that we're accustomed to. Got it. Thanks, guys. Thank you. Our next question comes from the line of Matthew Michon from KeyBanc. Hey, great. Thank you for taking the questions, and also thank you for the incremental details in the script. Much appreciated. On a follow-up on the Nordion investments, what is the ultimate outcome of that? Is it redundancy of supply? Does it help you kind of smooth the cadence of revenue and harvesting there? Does it open up capacity for new applications? Yeah. Matthew, it's Michael. Thank you for recognizing the additional details you asked us for. We want to be responsive, so thank you for recognizing that. From a Cobalt development perspective, we're building out capacity for long-term growth for the industry that needs Cobalt. That's what we're doing. I don't think it's going to smooth out variation from quarter to quarter because a lot of that is dependent upon, or most of that's dependent upon the utility and when they're able to harvest the Cobalt out of the reactor. What we're building and investing is to get more Cobalt for long-term growth that the industry needs. That's what the end result will be. Okay. My next question is just how are your customers, especially medicalized customers, thinking about inventory? In the past, contract sterilization could have been a little bit of a bottleneck. Are they trying to get ahead of the macro recovery? Are they careful of the pace of it? What are you telling them on the capacity of turnaround time as things start to progress faster? Yeah. We're working with our customers. We're not seeing them build a bunch of inventory. We don't have great visibility into that, Matthew, because we don't inventory product for them. We're seeing a steady supply of product coming through. We're not seeing large boluses of product move in to get ahead of any inventory build or anything of that nature. We see that continue to ramp up. We work with our customers around the world to find the right capacity in the right geography and the right modality to sterilize their products. That's something we constantly work with them on. I would tell you, we're not seeing huge inventory builds going on, but we don't have great visibility there. Within our facilities and the volumes we're seeing run through our facilities, we're not seeing that today. Okay. Lastly, just the 15% ownership of Nelson Labs. Fairfield, how should we be accounting for that? Is that incremental revenue or is that something that may have been below the line in minority interest or something like that? Just to give you a little bit of history on that transaction. We refer to that business as Nelson Labs Fairfield today. When we acquired it in 2018, it was the acquisition of Gibraltar Laboratories. When we acquired it in 2018, we acquired 85% of the equity interest, and effectively we pre-negotiated the buyout of the remaining 15% to take place here in 2021. The accounting for that at the time was that we consolidated 100% of that business into our P&L for reporting purposes, and we put the fair value of the repurchase obligation on the balance sheet as a liability. In terms of how that transaction flows through our financials, what you see is that the cash outlay basically offsets a balance sheet liability. There's actually a true up benefit in our GAAP financials to the tune of about $1 million or so. It doesn't impact, at least not the adjusted P&L, as we typically present the performance of the business. Okay. Thank you, Scott. Thank you, Michael. Thank you. Thank you. Our next question comes from the line of Tycho Peterson from JP Morgan. Your line is now open. Hey, thanks. I'll start with a question on Nelson Labs. EBITDA margins there have been pretty healthy, kind of north of 43% the last couple of quarters, and as you talked about, up 130 basis points year-over-year this quarter. Can you just talk about the sustainability of that kind of step up from the high 30s to the low 40s for Nelson Labs? Yeah. Thanks, Tycho, for the question. We continue to perform this business. It's expanded margins since we've owned it. It's a great business, well thought of and respected by our customers, and we're really focused on turnaround times and high-quality testing, which is what we provide to our customers. We continue to look for operational excellence. Jill and the team there have done a lot of work around operational excellence and how they streamline processes and how they really run that business day in and day out. I could tell you the team's done a phenomenal job there. Obviously, price is a factor we give. We get some operating leverage with the volume as well. Overall, the team's done a really strong job on operational excellence, and we have a host of additional levers that we're looking to pull in that business as we continue to progress this year into 2022 and 2023 and beyond. We're optimistic about where we are and the value proposition we bring our customers in the market. Okay. On the COVID dynamic, I appreciate your commentary there. I'm curious, are there any kind of structural changes you think coming out of the pandemic in terms of outsourcing rates accelerating here, customers just not wanting to do it in-house? Any change in the trend there? Not seeing anything major in the trends there. I'm thinking through your question as I'm answering you here. We don't see anything that's dramatically going to change that insource, outsource view related to COVID. Maybe down the road as some of these new regs come in, that might change some of the dynamics in the market, I'd say it's too early to call that at this point in time. The answer to your question is no, we don't see anything changing the in-house outsource dynamic based on COVID. Okay. Last one, I'm just curious if you can give any color on 2Q. If I go back to last quarter, you actually gave 1Q guidance. I'm just curious, A, why you're not giving 2Q guidance and any kind of benchmarks you can put out there for us? Yeah. Tycho, we gave total year guidance. That was our plan. The reason we felt it was necessary to give the first quarter guidance, because we're only a couple of weeks away from that. We're going to stick to annual guidance and continue to give visibility to an annual guidance range, and we'll continue to keep you informed as we progress throughout the year on these quarterly calls. We're not going to do quarterly forecasts. It was just the last time we had a couple of weeks left, and we felt that was a responsible thing to do to make sure that you had visibility with such a short window there. Understood. Thank you. Just a reminder, though, that we did provide just some qualitative guidance on specific to Nordion, given the shifting order patterns there, and we are in our full year guidance, still reiterating the qualitative position that Nordion is going to be fairly balanced between the first and second half of the year. Thank you. Our next question comes from the line of Luke Sergott from Barclays. Your line is now open. Thanks. Hey, guys. Just a couple quick ones for me. On the guidance with the M&A and the recent acquisition of BioScience, is that expected to contribute anything incremental, or is that already contemplated within your prior guidance? At the time that we originally issued guidance back in March, that was basically at the same time that we closed this acquisition. We did already contemplate the acquisition of BioScience, but also just bear in mind that you're talking about an acquisition that had a $15 million purchase price, it's clearly immaterial in relation to the overall size of our company. Got it. Thanks. I guess, can you talk a little bit about the margin dynamics baked into guidance? I know Tycho dug into this a little bit, just from a mixed perspective and how that's going to flow through, just so we have an idea of the pacing here. Yeah, sorry, I'm not sure if I understand exactly. As Michael mentioned, we're not really breaking down the quarters in terms of our guidance. I guess what I'll say is that, and we talked about this a little bit on the last call, is that Q1 is the one quarter where we feel some impact, particularly at Sterigenics from seasonality. Given the operating leverage at Sterigenics, and this is true to at least some extent with Nelson Labs as well, Q1 margins are a little bit depressed, and that's aggravated by the ramp-up of these new public company costs that I mentioned, and then the one-off costs associated with the secondary. Based on that, I would look at our Q1 margins as being a starting point, and then we would expect to continue to build on our margin profile through the year. We're not providing anything more granular than that at this point. Okay. Then lastly here, just any change on the near-term capital deployment strategy ahead of the lockup next week? No. Listen, we just go ahead and operate the business. Investors make their decisions on what they're doing with their shares over time. Listen, we're going to continue to just run the business. Okay, great. Thanks. Thank you. Our next question comes from the line of Amit Hazan from Goldman Sachs. Your line is now open. Oh, thanks. Hey, good morning, everyone. I want to actually come back to margins for a second and just maybe have you help us think through just volume impacts versus margins. Obviously, you're seeing some pretty good margin improvements. We'll kind of put the public company stuff aside for a second, but that's happening on depressed volumes everywhere. I just have to imagine you're going to see improved leverage here if volumes do indeed come back through this year and into next year. How should we think about that? How much leverage would you have as volumes come back? If you can give us some color on that, and are there other offsets on the other side of this? Is some of the PPE stuff that you're doing higher margin or anything like that? Any color around this story would be helpful. Yeah. If you look at where we finished 2020, our total company margins, adjusted EBITDA margins, were 52.1%. As I mentioned in response to the last question, we do see a dip in Q1 that's driven in part by seasonality, and so that's why you have total company margins here in Q1 that are below 50%. I think when you look at those Q4 numbers, that's more representative of the run rate that we're at as a company when you adjust out the seasonality of Q1. I think you could look at that as a starting point, and that we'd expect to continue to grow off of that. We're focused on continuing to grow margin dollars and driving growth in the business. As you know, we've given guidance of 9%-12% top-line growth and 11%-16% adjusted EBITDA growth. That's really where we're focused on how we continue to drive growth in this business. Kind of related to that, some of the possibilities that might happen as this year and next year ensue is that we'll see greater volumes than what is in normal year, just given ability to capture prior procedures and things like that. What does capacity look like for you if that were to happen? How much excess capacity would you have in the system, if that were to transpire later this year and into next? Yeah, I'd say we're today across the Sterigenics network, we're at 73%-75% capacity, approximately. Net varies by region, by technology, but that's a general directional comment. On the Nelson side, we feel we've got ample supply, especially with all the work going on in productivity that Joe and the team are doing there, as well as what's going on in the Sterigenics side, we feel good. The Nordion side, it's really driven around cobalt timing and the harvesting and how quickly you can turn that around. Those are the things that really impact our capacity. Overall, I'd say we feel good at where we're at with the outlook for the rest of the year. Just a last quick one from me for Scott. Inflation, obviously everywhere in the news. Can you just give us a sense of your own input costs, other costs you have, and considerations as they relate to inflation, any pressures you're seeing already, and your ability to pass those on to customers if they were to accelerate? Yeah. Obviously, we're going to be impacted by that to at least some extent, like any other company out there. In terms of our input cost, obviously being primarily a service company, excluding Nordion, then that insulates us at least somewhat from some of the inflationary forces out there. I would say the biggest one that we're worried about is wage-related inflation, because certainly we're seeing that type of pressure out there across our network, across all three of our businesses. One thing that I'd remind you of, and this goes back to in the past when we've talked more fundamentally about the nature of our relationships with our customers, is that a lot of our contract-based services and commercial relationships have built-in price escalators that in many cases are actually linked to some type of index that would protect us against inflationary factors. That gives us some comfort that we'll be able to maintain margins in the event of a more aggressive inflationary environment. Thanks, folks. Thank you. Our next question comes from the line of Michael Polark from Baird. Your line is now open. Hey, good morning. You provided good details on EPA rulemaking. Thank you for that. I did have a follow-up. Earlier this week, just on May 10th, I believe, on the Federal Register, it was posted that the EPA has expanded its data request, data collection efforts, as it relates to EO and commercial sterilizers. My question is, why is the EPA doing this, or why do you think the EPA is doing this, number one? Number two, what are they looking for now that they haven't been looking for previously? Yeah. Michael, I'm not exactly sure, but I think you might be talking about the toxicity reporting. I think that might be what you're referencing. That is something that the EPA has not required in the past. I don't see any issue for Sterigenics if that ends up being a new requirement. We're not required to report under the EPCRA as of today, but we currently report our emissions to all the state authorities already because of our permit. I don't foresee that being an issue. My suspicion is they're trying to get more visibility to ethylene oxide emissions, more holistically across the industry. Okay. The other one I had was on the topic of outsourcing, insourcing in terminal sterilization. I was a little surprised to see BD in early April announce a substantial facility in Arizona to expand its infrastructure, including sterilization. I believe that facility will use EO. Curious for your views on this. Is this a one-off? Any insights you can share, without talking specifically about this customer, just any insights you can share on that development? Yeah. Obviously, BD is a very strong player in the med device space. I don't know all the particulars. It appears from what I've read in the public releases that they're doing a large hub for manufacturing sterilization. They do have some in-house EO sterilization today. I don't know if that's a consolidation of existing capacity into a hub arrangement or if that's truly incremental. I don't see that as a material long-term impact to us or the industry from an outsource, insource perspective, if that's what you're asking. Okay. Yep. Thank you very much. Thank you. Thank you. At this time, I am showing no further questions. I would like to turn the call back over to Michael Petras for closing remarks. Great. Thank you. Hopefully, you can see we're off to a strong start this year, and Scott and I look forward to seeing you at some of the upcoming investor conferences that we have going on. Thank you for your time, and operator, that concludes our call for today. Bye-bye. This concludes today's conference call. Thank you for participating. You may now disconnect.