Thanks, everybody, for joining us today. Welcome to the J.P. Morgan Healthcare Conference. My name is Casey Woodring from the Life Science Tools and Diagnostics team here at JPM. I'm pleased to be joined by Sotera Health today, CEO Michael Petras. So I'll turn it over here in a second to Michael to get started with the presentation. Afterwards, we'll do the standard Q&A session. So with that, take it away. Great. Thanks, Casey, and thanks to the J.P. Morgan team. Good morning and welcome. Forward-looking statements here. If there's any numbers, reconciliations you need to see, you can go to our website, as well as the SEC website to do any reconciliations for any of the measurements I'm going to be talking about here today. Sotera Health, an unbelievable company. Safeguarding global health is our mission. That's what we wake up and do every day across our company, safeguarding global health across our 3,000 employees around the world, our over 5,000 customers in 50 countries, providing end-to-end solutions for our customers, starting early on in the product development cycle all the way through distribution to the end customer in the products that we help sterilize and get to the market in a safe and compliant manner. When you look at our company, we've got deep embedded relationships with blue-chip customers that many of you know of. Our relationships average over 10+ years across our top 25 customers. We have a large and growing marketplace that we participate in. 70% of our contracts and revenue are tied to multi-year contracts. And on the foundation of all this is the commitment to our values and our culture across the organization. As I mentioned minutes ago here, you could see our role we play across healthcare and end-to-end supply chain, starting at R&D, materials, and packaging optimization, working through pre-FDA filings and clinical trials across our business units that we help support product manufacturing, all the way through quality control and testing. And you see here on this chart where each of the three businesses play in providing this end-to-end solution in safeguarding global health. Talking a little bit more depth about each of the three businesses, three unique businesses that are tied by one common mission of safeguarding global health, and if you look at the Sterigenics business, we have over 2,000 customers that are being fulfilled. Their needs are being fulfilled across our 48 facilities in 13 countries and four continents. You see on the chart here the modalities that we serve across ethylene oxide, gamma sterilization, and EB. This business is the business where your customers drop the product off. We don't take ownership of the product. They drop it off. We sterilize it by the modality that they've gotten approved with the FDA, and we go ahead and sterilize it. They pick the product back up, and they ultimately ship it to the end customers for point of care. Great business, 48 facilities across 13 countries, fulfilling the needs of over 2,000 customers. We move to our next business, which is Nordion, also in the sterilization services business. One of the key modalities for sterilization is cobalt or gamma sterilization. Nordion is the world leader in providing Cobalt-60. This is the only one of our three businesses that's a product business. The other two businesses are service businesses. And in this business, we get the cobalt from nuclear reactors around the world. We process it in the usual form. We ship it to sterilizers like Sterigenics and our competitors around the world. We have a one-of-a-kind facility. It's a nuclear site-licensed Class IB facility in Ottawa, Canada, where we fulfill over 400 orders a year across our customer base on a global basis. Great business. Again, the only one of our three businesses that's a product business. Our third business is Nelson Labs, which is another service business, and here, we provide microbiological and analytical lab testing and consulting services and advisory services for our customers here. We have about 3,000 customers. What really matters in this business is quality, reliability, and service, and timely service. We make sure the products meet the regulatory requirements, are safe for patients across the 900+ different tests that we do in this business. This business is based in Salt Lake City, Utah. You see here the mix of the business. We have routine testing. That's about 47% of the business. We have validation testing. That's approximately 41% of the business, and then we have an advisory service business. That's 12%. We've talked about multiple times our RCA business. As we talked about our Investor Day in November, you could see this business has consistently brought growth. If you look over the last several years since we went public in November of 2020, we've got 8% compounded annual growth rates on the top line and the bottom line adjusted EBITDA with free cash flow growth of 10% over that same time period. Over $140 million of adjusted EBITDA growth since we went public in November of 2020. We look forward into 2025 and beyond. The four key priorities across the company are our focus around excellence in servicing our customers with end-to-end solutions. It's bringing that full suite of capabilities across Nordion, Sterigenics, and Nelson Labs to our customers across the entire healthcare supply chain. Second key priority is winning in growth markets. As we all know, med tech and pharma, not everybody's winning. You've got to target and segment the right markets that are winning. And that's where we're well positioned as we continue to move forward in servicing these higher growth markets. Our third key priority is driving operational excellence to continue to focus on enhancing free cash flow. We're in an elevated period right now where we've had CapEx the last couple of years at the highest levels they've had in the history of the company. We see that coming down over time. But really important for us to continue to drive operational excellence and getting returns on the capital investments that we put in place, which leads us to our fourth key priority, making sure we're good stewards of the capital and making sure that we have great processes in place for how we deploy the capital with the elevated CapEx that we're currently experiencing throughout the business. This is all about how do we generate returns for our shareholders and broader stakeholders over time. We are well positioned for growth across the company, both organically and inorganically. If you look at the favorable healthcare trends, aging populations, demand for healthcare services, that positions the company very, very well. We've got strong end markets that we partake in. As I mentioned here earlier, we're going to continue to focus on higher growth markets within the MedTech and Pharma services area, and one of the other key benefits and strengths of this company is the cross-business unit collaboration and cross-business unit selling. We have a great business with Nelson and Sterigenics, significant customer overlap, significant growth by customers that want to do business with us in both segments of our business units. And when we do that, we see much higher customer satisfaction scores. There's also opportunities for organic growth that we'll continue to look at. We're in an $18 billion marketplace, as I mentioned to you earlier. Today, our company is just over a billion dollars in revenue, but we see opportunities for us to continue to grow this company over the long term. And we look at markets within our defined segments. We talked about in November, and I'm reiterating here today, we talked about the growth of the company 5%-7% on a constant currency basis at the time. We look at the three business units. You've got Sterigenics that'll be in the mid-single digits, the high single digits in this period. We're talking about over the next three years. Nelson Labs in the mid-single digits and Nordion on the low single digits. Nordion, low single digits, the mid-single digits across that business unit. You see within this 5%-7%, we feel confident in our ability to generate at least 3%-4% price across that. You see the respective impact across each of the three business units. This is a business that'll continue to grow, and it's grown every single year since 2004. We've grown every single year since we've gone public, and we see continued growth in the future. Talking about that 5%-7% growth, that could translate to 5%-8% growth in EBITDA over that same time period, 2025 to 2027. Excuse me. In that time period, we look to expand margins. On the lower end of that range of the 5% growth, we expect 50 basis points of margin enhancement over that time period. On the higher end of that range of 7% revenue growth, we expect the ability to generate 150 basis points of margin expansion, so we're continuing to look for operating leverage across the company and not only drawing top-line growth, but also bottom-line growth as well. As I mentioned, we talked about in the recent past, when we found the company, the last couple of years, we've had an elevated level of CapEx spend, and that's really because of the fact that we've got a couple of significant activities going on in the company right now. One is our U.S. EO facility enhancements. The second one is the build-out of greenfields within the Sterigenics business. We haven't done a greenfield since probably about 2017. We're in the midst of doing two of them currently, and then the third big activity is the cobalt development work. Again, in the early 2000s was the last time we did a cobalt development program. This is to assure long-term supply of cobalt. So we're in the midst of two cobalt development projects, one with Darlington. Darlington is part of the Ontario Power Generation, which is one of our largest and most reliable suppliers in Canada. The other partnership program that we're working with is Westinghouse around cobalt development. So we see over the time period between now and 2027, we see the CapEx spend coming down. So if you look at the chart, we did approximately $200 million on average of CapEx over the last couple of years. We see that coming down to approximately $100-$110 million by the time we get through 2027. Because of these programs, the facility enhancements will be going away, as well as the cobalt development into the greenfields that we're in the process of going forward on. One of the greenfields in Sterigenics will be coming on in late 2025. The other one will be coming in late 2026, early 2027. One thing I want to make sure people understand, we have a very disciplined capital allocation process within the company. All CapEx approvals above $500,000 require John, our CFO, and my own personal approval on that. We targeted 20% IRR on each of these programs. And we also look at the paybacks in these programs on an ongoing basis. We also do a say-do analysis, as we call it. We do look-backs with our leadership team, as well as our board, making sure we're delivering on what we committed when we put the program in place. All this should lead to free cash flow generation of $500-$600 million over that three-year time period, which is a significant improvement from where we've been the last couple of years. One of the topics I wanted to give a brief update on is litigation. As many of you know, the industry has been in a situation where there's been a significant amount of ethylene oxide litigation impacting all the players or many of the players in the marketplace. I'll walk you through each of the geographies, the first one being Cobb County, Georgia. We have approximately 300 personal injury cases there, and there was a ruling in November 2024. What the process was with the courts, there's a two-phase process. The first one is general causation, and the second one is specific causation. In the first phase, general causation, there were eight pool cases. The judges ruled that the plaintiff's two experts were dismissed. They could not be experts any further in the cases. The third expert was able to stand through. And we have gone ahead and appealed that in the process. By the way, the other side has done the same thing. They're appealing that their two experts should be included as well. So we're in an appellate process right now. We expect to hear something in the latter part of 2025. In Los Angeles, there's really not a significant change from what we last discussed in our quarterly call. We have four cases. We have four cases, about 29 claims. In Santa Teresa, no personal injury claims. We have a New Mexico Attorney General case, which is scheduled for trial in 2026. And then in Cook County, Illinois, we have approximately 100 cases. These are all newly filed since the February 2023 settlement. We anticipate three trials in 2025, April, June, and late 2025. The other point I would make is we have a $110 million judgment that the courts have awarded to us on insurance defense costs. We're waiting for the appellate process. The insurers are appealing that. We're waiting for that ruling to come out. One thing I want to call out here is, listen, there's always people can bring these frivolous suits at any point in time. So there's risk of that occurring in any other jurisdictions. This is an industry-wide challenge. Our competitors are seeing that, as both in-house and outsourced sterilizers are seeing that. We are very confident in our position. When the science is fully, fairly, and appropriately presented, we are very confident in our ability to prevail in these cases. This company operates in a compliant, safe manner within the regulatory requirements, and we will continue to move forward in that vein and work through these defense programs, so this company is very well positioned for success, as we've talked about many times. The foundation, the values, the culture, the deep customer relationships, large and expanding markets, the deep expertise. We see this company growing 5%-7% organically over the next three years and cumulative free cash flow of $500-$600 million during that time period. So with that, Casey, that's all I had. All right. Thank you. That was a great overview. I guess to kick off the Q&A session here, just to start, I wanted to hit on the pre-announcement from this morning, the greater than 5% constant currency revenue growth rate for 2024. all I had. right. Thank you. That was a great overview. I guess to kick off the Q&A session here, just to start, I wanted to hit on the pre-announcement from this morning, the greater than 5% constant currency revenue growth rate for 2024. all I had. right. Thank you. That was a great overview. I guess to kick off the Q&A session here, just to start, I wanted to hit on the pre-announcement from this morning, the greater than 5% constant currency revenue growth rate for 2024. all I had. right. Thank you. That was a great overview. I guess to kick off the Q&A session here, just to start, I wanted to hit on the pre-announcement from this morning, the greater than 5% constant currency revenue growth rate for 2024. all I had. All right. Thank you. That was a great overview. I guess to kick off the Q&A session here, just to start, I wanted to hit on the pre-announcement from this morning, the greater than 5% constant currency revenue growth rate for 2024. Curious on how 4Q trended relative to expectations and if you could provide a breakdown of how each segment performed in the quarter and any further color on how pricing and volume trended? Yeah. So I would just say the quarter total came in, as we said this morning, at approximately $1.1 billion of revenue. It was consistent with what we expected. We'll get more details on this in February when we do our earnings call. But overall, things are moving in the direction we expected. Okay. Now that you have sort of an early look on how 2024 finished up, I'm curious on any preliminary thoughts on the puts and takes in 2025, how pricing and volume, particularly in Sterigenics, is expected to progress in 2025 relative to how 24 finished up? Yeah. I would say in. I would say in the first quarter earnings call, the fourth quarter earnings call in February, we'll give a more thorough outlook at 2025. But I would say overall, the expectations are consistent with what we've seen. The one thing that's moved significantly as everybody's been following post the elections in our last earnings call has been currency. So it's something we'll have to continue to monitor as the year plays out and our go forward for 2025, the value of strengthening as everybody's seeing. Got it. That's helpful. But overall, we feel good about where volumes have been coming together and around what we expected finishing out 2024. Okay. Maybe taking a step back here, just you're coming off your first analyst day post IPO. Just what was the key message that you hoped investors took away from the event? Yeah. Our goals in doing an Investor Day. Yeah. Our goals in doing an Investor Day. We went public in November 2020. And ironically, it was four years to the day that we had our Investor Day. There were a couple of things we were trying to accomplish at that. One, we wanted to make sure that people had a broad understanding of our capability across the broader healthcare supply chain. That was the first thing. Second thing, there were some business units, particularly Nordion and Nelson, that we got feedback from investors that they wanted a better, deeper understanding around that business. So we made sure that we provided more clarity around that. We also wanted to make sure that we got our leadership team out there. You talk to John, and you talk to Jason and myself all the time. We wanted to also make sure we got some of our other leaders out front and center that are leading the 3,100 employees across the company, and then lastly, we wanted to give the next three-year outlook based on what we see today, based on today's volumes. We wanted to do that, so we felt we accomplished what we were trying to do with that session. Okay. At the event, you issued new three-year financial targets, the 5% to 7% annual top-line growth rate. That embeds 3% to 4% annual pricing benefit and then low single-digit kind of end-market growth rate. On the latter piece, can you walk through the volume and mix assumptions and the new targets and how those compared to your expectations prior? expectations prior? Yeah. I would say when you look at 5%-7% growth, I'll go back to one of the charts that I discussed here earlier. You look at about 65% of our revenue comes from the Sterigenics business. We think there'll be mid- to single-digit to high-single-digits on revenue growth. There'll be in the higher end of that price range, at least 4% price, we think, comes out of that business, which is consistent with what we've been able to achieve over the long run of that business historically. Nelson Labs, we see that business at the mid-single digits. It'll be in the lower end of the price range, which is pretty consistent with what we've seen in the past. Again, that business is about 20% of our total revenue. Then the last one is Nordion. This is the one that's probably changed from a pricing perspective. We see some of the pricing coming towards the lower end of the price range, and they've traditionally been in the higher end of that range. But we see this business continue as a low single-digit, mid-single-digit business. So the 3%-4%, we feel on the Sterigenics side, we're hopeful that we can see even better than that in price over time. Got it. Yeah. Just as a follow-up, I think coming out of the analyst day, the underlying market growth rate, that low single-digit number compares to the prior messaging of volume and mixed benefit of around mid to high single digits over the long term. So just any color on the discrepancy there is that just. Yeah. We're just looking at the volumes have been the last couple of years, the volumes have been a little choppier, and based on what we see over the next couple of years and the levels that we're going. We feel the next three years this is an appropriate level of guide. Okay, so in addition to the top-line target, your EBITDA margin expansion targets call for three-year expansion of at least 50 basis points cumulative at the low end of the target and 150 basis points at the high end of the revenue target. You've talked before about how volume is the key driver here of margin expansion in your business, but are there any other levers you can pull on the operational side? And just curious on how you think about margin expansion moving forward. Yeah. The price obviously is a factor that comes in there favorable mix. ay the other one is just operating leverage. The volume comes through. We'll continue to, if that marketplace continues to rebound and ends up having significant volume growth, we'll be well positioned to capitalize on that. So I think that's the biggest leverage you referenced, Casey. The other thing is the team continues to work on operational excellence activities as well and how to be more efficient in our current operations and get better utilization of our assets. So those all will factor in. Okay. Lastly, on the long-term targets, on your free cash flow target at the analyst day, you pointed to greater than $500 million cumulative from 2025 to 2027. Today, the slides, I think, were updated. It's $500 million to $600 million now. Okay. Lastly, on the long-term targets, on your free cash flow target at the analyst day, you pointed to greater than $500 million cumulative from 2025 to 2027. Today, the slides, I think, were updated. It's $500 million to $600 million now. Okay. Lastly, on the long-term targets, on your free cash flow target at the analyst day, you pointed to greater than $500 million cumulative from 2025 to 2027. Today, the slides, I think, were updated. It's $500 million to $600 million now. Okay. Lastly, on the long-term targets, on your free cash flow target at the analyst day, you pointed to greater than $500 million cumulative from 2025 to 2027. Today, the slides, I think, were updated. It's $500 million to $600 million now. Okay. Lastly, on the long-term targets, on your free cash flow target at the analyst day, you pointed to greater than $500 million cumulative from 2025 to 2027. Today, the slides, I think, were updated. It's $500 million to $600 million now. Maybe just walk through how conservative that prior estimate was, what's changed since the analyst day, or if we're kind of splitting hairs between the three different? Yeah. I wouldn't say much has changed. We did some clarification coming out of the Investor Day. Some investors said, "Hey, help us understand if you're in the higher end of that range of revenue growth and EBITDA growth, what does that mean?" So we came out with some investor conferences shortly after investor meeting just to make sure there's clarification that the 500 was at the lower end of the growth range, the 600 is in the higher end. So nothing really materially changed. We just wanted to be a little clearer in our messaging. Okay. As a follow-up, I guess to that, just how much visibility do you have into your CapEx targets related to the free cash flow targets you have? And what's your confidence in bringing the CapEx spend down over time? So we've got pretty good visibility. That doesn't mean things won't shift from quarter to quarter slightly year over year. There's one CapEx program in particular that we're continuing to monitor and making sure that it's an appropriate way to deploy capital. But overall, we feel pretty confident about where we are on the capital targets we've laid out and our ability to get to approximately $100-$110 million in 2027. Okay. Yeah. We've got good visibility. The big things that are driving it is the Sterigenics growth that we talked about, those two greenfields, the Nordion CapEx, and cobalt development. The third one is the facility enhancements in Sterigenics. We have some CapEx within Nelson Labs that continue to drive growth, but it's pretty minimal and good returns in that business. Okay. Turning to some more business-specific topics, on Sterigenics, you talked throughout 2024 about gradual volume improvement there as your customers work through destocking. Should we continue to expect this gradual volume improvement in 2025? And at what point this year would you expect volume to return to more normalized levels as destocking hopefully abates? Yeah. We'll guidance 2025, as I mentioned, in late February. But overall, we expected gradual improvement throughout the year on Sterigenics. We saw that. We would have expected and hoped for significantly more volume, but it didn't play out in 2024. But where we see 2024 finishing and into 2025, we're confident the volumes will continue to improve. That's what we know today. Got it. Yeah. That makes sense. Can you give us an update on how destocking trends have progressed between different customer groups? Bioprocessing is one that has come up a lot this year. Just between MedTech, bioprocessing, the rest of your customers, how those have all kind of. Yeah. We're not a huge player in bioprocessing, I mentioned in the past. It is an important segment for us, but it's a smaller segment. And it's a good mix for us as a company. But overall, I'd say that's the one market that you've got a pretty consolidated four or five big players. And you saw those inventories very publicly available in the destocking playout. I think that's stabilized, and we're starting to see some returns. We saw third quarter, we saw the growth over the second quarter. We would expect that to continue over time. Some of the other categories, quite honestly, we're not having a lot of discussion around inventory destocking these days. Even in the third quarter, we mentioned that in our earnings call, that hasn't been a big topic. So I think it's stabilizing. Okay. A key part of your analyst day in terms of Sterigenics was the work that you've done to get ahead of the NESHAP rules and what those rules mean, both in terms of potential increased outsourced sterilization penetration and then potential competitive share gain for Sotera. Is there any way to frame what that opportunity looks like in terms of maybe how much the insourcing market could shift to outsourced and then the competitive market dynamics there? How much share is up for grabs for Sotera and any color around how the NESHAP rules have changed your market outlook? Yeah. I would just say the NESHAP rules are very challenging, as we've said all along. We feel we're well positioned to accelerate in that market, but they're not easy rules. And I think the broader marketplace is going to have a challenge. As we talked about at our analyst day, one competitor has recently filed bankruptcy. Not exactly sure if that person ends up long-term staying in the game or not, but that's one example of something that's very challenged by the ethylene oxide space and the regulatory requirements that are coming out. We're having lots of dialogue with customers about where they are today in their supply chain and trying to understand long-term what that looks like for them. You could say we're having positive conversations, but we're not at a point where we're quantifying share gains from that. But we're going to be positioned to help our customers if there's a challenge for them with the current supplier or their own in-house operations. We feel good about where we're positioned on this. Not easy, but we feel really good about where we're at in this. You'll have one of your Greenfield Sterigenics facilities coming online in the back half of 2025 and the other in 2026, 2027 timeframe. How should we think about capacity utilization as these Greenfields come online, and how will they factor into your margin cadence once they do come online? Yeah. I would say they're not significant operational cost. There's not a lot of big increases in the operations cost. So over time, you'll see the volumes continue to improve in those facilities. The second half of the year is where we'd expect that first Greenfield, as you mentioned, to take place. There'll be a slower ramp as you start to go through validation process with the customers. I wouldn't expect a big material impact in margins in 2025. Got it. That's helpful. Got it. That's helpful.. Along those same lines, the cobalt capacity expansion projects that you've detailed, can you just remind us of the timelines there and how materials those will be to the business? Yeah. The team's doing a really good job on that. Riaz and the group, as you know, we've got a global supply base for Cobalt-60. Our largest base has historically been around the Canadian operations. We've got two big suppliers there, Bruce Power and OPG. They're great suppliers and partners to us. So the one program we have going is with Darlington. That is within the OPG family of reactors. We expect the first harvest to be 2028 out of that facility. That program is moving along very, very well. The team's doing an outstanding job, both OPG and our team. We expect that 2028. And then the other program that we're in development on is the Westinghouse program. And we expect that to be the latter part of the decade. Timing is still a little bit in movement, but overall, the program's progressing well with the tea m at Westinghouse. Got it. On the Trump administration. Remember the other big benefit. I'm sorry, Casey. Remember the other big benefit for some of your owners who are familiar with the stories on Westinghouse. That helps us open up a U.S. reactor base, which today, there are no U.S. reactors that can make Cobalt-60. So that's the one benefit of that program that we like as well. Okay. Got it. No, just on the Trump administration and potential tariffs. I know that you have significant exposure in Canada, right, with Nordion. So how easy would it be to maneuver supply chains if tariffs were to go into effect? And maybe just give us an updated picture on your manufacturing exposure across the different regions. Yeah. As I mentioned, the only business of our three businesses, that's a product business, the Nordion business. They do have a significant base in Canada. Obviously, it's too early to finalize exactly any potential impacts of that. A couple of things I can tell you. One, there's no rules out there yet. No tariffs are in place. There's rumored to be. The other thing I would say, in the past, cobalt has been excluded from those tariffs. I don't know that that's any indication for the future on how that'll play out. The other point that I would make is TIPFI is the importer of record, which, i.e., would be the customer in that case that brought the cobalt in that would be on the hook for the tariff. So those are a couple of things I'd keep in mind. As we look through, we're continuing to monitor the situation, and we'll see how it plays out broadly with the tariffs between the U.S., Canada, and Mexico. We don't have a big presence in Mexico from a product perspective either. Got it. Can you walk through your exposure to Russia and supply there on the cobalt side? Yeah. So on Russia, we get Russia as a supplier to us. And approximately 20% a year, I believe, is what our public disclosures are around that we get from Russia. At any given year, it could be higher than that. The team has done a great job making sure we're compliant with all the rules and regs around some of the sanctions, but we've been able to get an ongoing supply for the last several years, and I really pay tribute to our team that's been able to execute on that across all the regulatory bodies and making sure we're compliant and making sure we're getting this key product for the healthcare system out in front of people so they all understand it, so overall, we'll continue to execute against that program we have in place. Got it. Turning to Nelson, I wanted to touch on some of the noise out there around whether a divestiture of Nelson would be on the table for that business. Can you just remind us of the overlap between Nelson and the rest of Sotera, the strategic fit there, and why it makes sense in your portfolio? Yeah. Nelson Labs, great business, really plays a key role in safeguarding global health. A couple of key things. One, I'd say significant customer overlap. That's really important for people to understand. Significant 70%+ customer overlap. The key role they play, examples that we give is customers come to us and say, "Hey, we got a critical product we got to get to market." We're able to coordinate that across Sterigenics and Nelson and making sure we help accelerate those products to the marketplace, which is really important. If it's a new product or an existing product in short supply, we're able to really help that out with end-to-end capabilities there. I would say the other part is the customer satisfaction scores. When customers do XBU with us, they have higher customer satisfaction scores. And I'd say another big part that we don't talk about often, many people don't understand, there's a significant number of the Nelson Labs facilities that are embedded within the Sterigenics facilities. And that's really a key differentiator for our customers in being able to get these products to market. So these were Sterigenics facilities way back in the day. And when we bought Nelson Labs, we reverse integrated them into Nelson Labs. And Nelson runs all those facilities within the Sterigenics platform, which is a big deal. It helps get uniformity and quality and reporting capability and service expectations and just the overall knowledge that Nelson has. That's another big factor. So overall, Nelson is a really critical part. The business continues to improve. We said the low- to mid-30s margins. The teams continue to execute on that as we came off the COVID, if you will, the COVID dip. Got it. Maybe just on that synergy opportunity, what can you do to drive that forward? You mentioned some cross-business opportunities at the Analyst Day and here today. I'm curious, would that be a 2025 benefit, or is that more of a longer-term target? We continue to get benefits every day from the relationships. And we work with our customers. There's teams actively engaged around this. B.J. talked about it at our Investor Day, some of the things, the resource and the program elements that he's put in place to even formalize that and accelerate even further. So you'll see that coming into 2025, but over the long term, we expect even more growth from that. And then last one on Nelson for now, I guess. What are your pricing and volume mix assumptions embedded in the long-term Nelson revenue target? You touched on that earlier, but just, I guess, what's the visibility into those and the split between the RCA and the core business there? Yeah. So I would say we've talked about RCA is approximately 12%, I think, of that business in total. We'd say mid-single digits revenue outlook. They'd be in the lower end of the price ranges, which is consistent with where they've been. Out of the three businesses, it's the business we probably have the least visibility to. Customers send samples in a very short order. Nordion, obviously, we have the longer visibility. And then on the Sterigenics side, it's probably in between the two, but tending towards the Nelson side. Gotcha. And then just a few on the litigation piece. Can you just elaborate on the latest update in Georgia, that phase one causation case? How many cases does this impact in terms of the plaintiff's or, I'm sorry, the judge denying the plaintiff's motion or your, I'm sorry, getting tongue-tied, the denial of the motion to exclude the third expert? Yeah. No. Just how many cases does this impact, and what's the update on timing of future cases in the appeal process there? All right. So I'll go back through. I talked about this a little bit earlier, but let me go back through specifically around Georgia. So it's approximately 300 cases. And the process was eight cases were going to be these pool cases that they're going to look at for two phases: general causation and specific causation. So eight cases. What the judge was doing here is saying, "Listen, I don't want a process like we had in other jurisdictions where the jury's got to deal with all this science and epidemiology, toxicology, SEC filings, and private equity and everything else. I want to focus on causation. Okay? Could this EO cause this cancer that's alleged?" That's what phase one and phase two is geared towards. Whatever cases of these eight survive that will ultimately go to trials at the end. In the eight cases, the eight cases that were pulled out for this process in phase one, the judge heard arguments on the science and causation, general causation from both parties. The other side, the plaintiffs put three experts forward. The judge said two of them—I don't know the exact words—two of them aren't allowed, whatever the words were. Okay. Two of them aren't allowed. One of them will allow to go forward. The number of cases is very small that are associated with those two. But the logic for disqualifying those two experts should apply equally to the third expert, is our point of view, and that's what we're appealing. Obviously, the plaintiffs on the other side are saying all three should be allowed, so they're appealing that. So what'll happen is there'll be some more hearings and filings and motions. I don't even know how many things will occur between now and then, but sometime the back half of 2025, we'll get clarity through the appellate process. So the first phase went through a panel of one judge. The second, the appellate process, is through three judges. Okay? We'll get a ruling sometime by the end of this by late second half of 2025 of where they stand on these eight pooled cases. Whatever survives that will go to phase two. Sorry. There's a lot there. I apologize. I hate to be able to tell you this in this level of detail, but I want to make sure investors have an understanding best that we know it at this point. No, that's all really helpful. Maybe shifting over to the. By the way, we feel very confident that when science is front and center and you put science fully, fairly, and appropriate out in front of the court system, we're going to prevail. Okay? So I want to make sure that through all that conversation, I want to make sure people understand our point of view on this. Gotcha. No, that's helpful. Maybe just as a follow-up, the cases in Illinois, you noted 100 are outstanding. You have three upcoming trials there. Can you just remind us on the mechanics of those trials relative to the cases that were already settled in Willowbrook? Yeah. These are people that were newly diagnosed, allegedly newly diagnosed. Knew nothing about ethylene oxide litigation until they were diagnosed recently in the last two years. That's allegedly what these cases are. So those will go through a process in the trial system. Okay. And then last one on the litigation, just any sort of update on the timeline for the California cases and. No. There's no timeline. There hasn't been a case management order yet. We're in discussions with both sides, with the judge, and we'll see how that plays out in 2025 as far as timelines. are hearings and motions and everything else that lawyers do, but I don't know particularly exactly the big ones that matter in 2025. There isn't anything meaningful yet. Got it. Okay. Maybe turning back to Sterigenics, I wanted to ask one on EO. Are there any sort of alternative technologies to EO that you guys are currently investing in or that clients are focused on given these new regulations and kind of this litigation risk? Is that something you're hearing from clients? Yeah. I would say to get grounded for everybody, the market is familiar. The FDA has come out in the past and said approximately 50% of the medical devices in the U.S. are sterilized with ethylene oxide, approximately 20 billion devices a year. That's the FDA's numbers. Okay? Remember, we as the outsourced sterilizer, we do not determine a modality. That's determined by the customer in coordination with the FDA. Right? There continue to be—we do investments in R&D. We're not a significant R&D company, but we do do investments in R&D looking at new technologies. But there's nothing of scale that's able to replace ethylene oxide that we're seeing in the near term or midterm. Okay. On capital allocation, how should we think about working down? What's the target leverage ratio? How should we think about you guys working down debt? And at what point would you look to do some strategic M&A? Yeah. So we continue to—we came out when we went public and said we were at net two to four times net leverage. We're under four times. We'll continue to move that towards three times leverage over time. We see that playing out as we expected. M&A, we'll continue to look at M&A. We're going to be very good stewards of capital, making sure we get the appropriate returns when we look at that across the three businesses. And we got to make sure our businesses are performing in an appropriate manner to have the right to go ahead and continue to do M&A. So we'll look at that. We've done M&A in the past. They've worked out very, very well for us. And we'll continue to evaluate that with the appropriate returns that they could generate for us. But we have significant opportunities around organic growth as well, as I mentioned earlier. Okay. Just on Sterigenics volume drivers over the long term, it seems like you guys are pretty well positioned for GLP-1s as you sterilize both the prefilled syringes as well as diabetes and bariatric surgery products. What's your opportunity in GLP-1s? Do you see this having an outsized impact on the business moving forward? Or are there any other kind of areas in Sterigenics that will drive volume growth? Yeah. I would say on GLP-1s, specifically, the company has made a priority over the last several years to focus more on pharma and pharma capabilities. We've shown that in both Sterigenics and the Nelson Labs. GLP-1 is not a material number for us in volumes today. We don't expect that in the future either. We continue to believe in our capabilities and the service offer we can bring to the pharma space. We continue to work with customers across existing technologies, new technologies, scaling technologies, and also just end-to-end our capabilities between Nelson and Sterigenics in that area. That's another area where there's close collaboration and g uide. Got it. On Nelson Labs, just any update in terms of what you're hearing from pharma and biotech customers on spending into next year and how kind of leveraged you are towards R&D spend from those customers in that position? Yeah. I mean, it's been a challenge the last couple of years has been better than we do. I would just say overall, our business in Leuven, Belgium, where Nelson Labs does a lot of pharma work. Again, we're not huge players in pharma. We shared some of those numbers with you at Investor Day, but the Nelson Labs team in Leuven continues to do well, and that's got a little bit more longer-cycle business in some aspects of that, but overall, they've done well over the last several years. Okay. Maybe another one on Sterigenics, just outsourcing penetration rates. How do you see those trending over time and across the different modalities between EO, Gamma, and X-ray? Yeah. I think our latest look was approximately 60% was outsourced and about 40% was insourced. Obviously, with these new regulations coming on, it's going to be very interesting to monitor that going forward here. And we think we're well positioned with our capacity and our customer relationships to help them if they need the help. O kay. Gotcha. Maybe we have two minutes here left. I'll open the floor up. Michael, is there anything that investors are misunderstanding about Sotera's story? And maybe what are you most excited for for 2025? Just what we do every day. I know the litigation is a distraction for investors on this, but I would just tell you overall, this is an unbelievable company. Every day, it continues to generate strong cash flow, generates growth, and we provide a critical service to our customers. And that's what we're going to continue to do. We've done that consistently when we went public, and we'll do that going forward into 2025. And we're looking forward to what 2025 brings. All right. We have one minute left, I guess. We'll open it up to the floor. Anybody have any questions? I can probably just show the $110 million of CapEx. Do you view that as a run rate number, or is that just like a trough in your spending? No, I think that's pretty normalized. I mean, obviously, if there's growth opportunities, we'll continue to evaluate this going forward. What we said in that number is about $60 million ± $10 million is maintenance, and then the rest would be growth CapEx. So think about it that way. Thank you. And then on the legal spend, how are you accounting for the legal fees on all the lawsuits? Is that in EBITDA, or where does that number go? So thank you for bringing that up. So on a free cash flow basis, those numbers are excluding legal and defense costs, and the EO litigation is excluding on those free cash flow targets that we mentioned. We've got it below the line is where it's at today. And last question on Nelson Labs. You mentioned some of the facilities are shared. Approximately how many of the facilities are integrated? So we've got, let's see, 13 labs, I think it is in total. And I would say probably nine of them or so, or approximately nine, are embedded within Sterigenics. The big bulk of the Salt Lake City, the Nelson Labs business, Salt Lake City, and that's freestanding. But then each of the Sterigenics facilities have been reversed. This has been done for years, by the way. It's been reverse integrated, if you will, within the Nelson Labs business since 2017. G ot it. Thank you. All right. Looks like we have to end it there. Thank you, Michael. Thank you, everybody, for coming. Thank you. All right. Bye-bye. Enjoy the rest of the conference.