Welcome to the STERIS plc first quarter 2027 financial results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star and then two. Please note this event is being recorded. I would now like to turn the conference over to Julie Winter, investor relations. Please go ahead. Thank you, Nick. Good morning, everyone. Speaking on today's call will be Karen Burton, our Senior Vice President and CFO, and Dan Carestio, our President and CEO. I do have a few words of caution before we open the comments. This webcast contains time-sensitive information that is accurate only as of today. Any redistribution, retransmission, or rebroadcast of this call without the express written consent of STERIS is strictly prohibited. Some of the statements made during this review are or may be considered forward-looking statements. Many important factors could cause actual results to differ materially from those in the forward-looking statements, including, without limitation, those risk factors described in STERIS' securities filings. The company does not undertake to update or revise any forward-looking statements as a result of new information or future events or developments. STERIS' SEC filings are available through the company and on our website. In addition, on today's call, non-GAAP financial measures, including adjusted earnings per diluted share, adjusted operating income, constant currency organic revenue growth, and free cash flow will be used. Additional information regarding these measures, including definitions, is available in our release, as well as reconciliations between GAAP and non-GAAP financial measures. Non-GAAP financial measures are presented during this call with the intent of providing greater transparency to supplemental financial information used by management and the Board of Directors in their financial analysis and operational decision-making. With those cautions, I will hand the call over to Karen. Thank you, Julie. Good morning, everyone. It's my pleasure to be with you this morning to review the highlights of our first quarter performance. For the first quarter, total as-reported revenue grew 7%. Constant currency organic revenue grew 6% in the quarter, driven by volume as well as 190 basis points of price. Gross margin for the quarter was 46%, up 70 basis points versus the prior year. Margin expansion was driven by price and favorable productivity, which were somewhat offset by inflation. Gross tariff costs, excluding refunds, were $14 million in the first quarter. As a reminder, tariffs were $12 million in the first quarter of last year. Tariff refunds of $4 million were received in the quarter. On a year-over-year basis, net tariffs were favorable $2 million. For clarity, tariff refunds are not being allocated to our business segments, but instead are booked in corporate to enable business segment analysis. EBIT margin for the quarter was 23.8% of revenue, an increase of 100 basis points versus the first quarter of last year. The gross margin improvement, coupled with favorable currency and operating cost discipline, drove the EBIT margin expansion in the quarter. The adjusted effective tax rate in the quarter was 25.9%, an increase of 23.5% in the first quarter of last year. The year-over-year increase was driven primarily by unfavorable discrete items. Adjusted net income in the quarter was $253.4 million. Earnings per diluted share were $2.59, an 11% increase over the prior year. Higher margins more than offset the increase in tax expense. Capital expenditures for the quarter were $87.5 million, and depreciation in amortization totaled $123.8 million. We ended the quarter with a strong balance sheet, reflecting $1.9 billion in total debt. Gross debt to EBITDA at quarter end was approximately 1.1 x, well below our targets of 2x to 2.5x. Free cash flow for the quarter was $279.6 million, down from $326.5 million in the first quarter last year. The decline in free cash was driven primarily by a lower contribution from working capital, despite improvement in net income. Share buybacks in the first quarter totaled $100 million, leaving us with $900 million under our current authorization. We also announced our 21st consecutive year of dividend increases last week with a $0.06 increase to $0.69 per quarter as we continue to prioritize dividend growth. With that, I will turn the call over to Dan for his remarks. Thanks, Karen. Good morning, everyone. Thank you for joining us to hear more about our first quarter 2027 performance and our outlook for the remainder of the year. Karen covered the quarter at a high level. I will add some commentary on our segments. Starting with Healthcare, constant currency organic revenue grew 6% for the first quarter. Our performance reflected stable underlying demand, while our commercial teams continue to drive meaningful growth across the Healthcare segment. The strength of our portfolio continues to enable us to help our customers navigate a complex operating environment. Our service team continued its streak of outperformance, growing 10% in the first quarter. Consumables grew 9%, benefiting from increased customer consumption, driven by share gains and procedural growth in endoscopy. Healthcare capital equipment revenue increased 1% for the quarter, with growth impacted by the timing of shipments. Orders remained solid, with 4% growth in the first quarter, and our ending backlog increased to $444 million. EBIT margins for Healthcare in the quarter increased 60 basis points to 24.8%, with volume, pricing, positive productivity, and favorable mix somewhat offset by inflation, investments in the business, and tariffs. Turning to AST, constant currency organic revenue grew 5% for the quarter, with 6% growth in services. As anticipated against difficult comparisons, services volume remained light in the quarter. Global demand remains a bit soft as customers continue to manage down existing inventory. EBIT margins for AST were 48%, a decrease of 60 basis points from the first quarter of last year, as additional pricing was more than offset by increased depreciation and slightly lower productivity. Constant currency organic revenue increased 8% for the Life Sciences group in the quarter. Supporting that growth, capital equipment grew 17% and consumables increased 8%. Services grew 2%. Backlog at quarter end was about flat with prior year at $110 million. Margins were 42.1%, a decrease of 140 basis points as pricing and volume were more than offset by unfavorable productivity and inflation. Before we shift gears to outlook, I want to comment on the announcement we made yesterday that we will be investing $600 million to build a new Formulated Chemistry Center of Excellence in North Carolina. As noted in our release, this is our largest investment in our history in a single manufacturing site. We will be building two facilities totaling 600,000 sq ft under roof that will include manufacturing, R&D, and distribution. The facility will produce high-performance infection prevention and contamination control chemistries used by our healthcare and pharmaceutical customers across the globe. This investment strengthens our healthcare and life sciences formulated chemistries business, which together generate more than $700 million in revenue. These products are high growth, high margin, and highly regulated. They play an essential role in helping our customers deliver safe, compliant outcomes for patients. This investment positions us to scale with our customers, supports increasing demand, and sustains growth in these strategically important portfolios over the long term. The facility is expected to become operational in two to three years in a phased approach, beginning with distribution. Upon completion, we expect to transition the work from our St. Louis, Missouri, and Plymouth, Minnesota, chemistry manufacturing and distribution sites and close those facilities. When finalized, the Formulated Chemistry Center of Excellence will allow us to accelerate innovation, expand capacity, and optimize our U.S. chemistries manufacturing and distribution network. As a result, we announced today a restructuring program with anticipated pretax restructuring charges of approximately $55 million-$70 million, consisting of approximately $40 million-$50 million of cash expenditures and approximately $15 million-$20 million of non-cash charges. We anticipate that less than $10 million will be booked in fiscal 2027. This investment will generate an ROIC of over 10% within three to five years of opening, and it is essential to our long-term growth and profitability. Shifting gears to outlook. Based on our first quarter results, our expectations for the remainder of the year, we are maintaining our original outlook for fiscal 2027. This includes as-reported revenue growth of 7%-8% and constant currency organic revenue growth of 6%-7% for the total company. Our fiscal 2027 earnings per share outlook is also unchanged at $11.10-$11.30, growth of 9%-11% over fiscal 2026. While the total cost of the North Carolina facility is anticipated to be $600 million, the impact on fiscal 2027 is expected to be approximately $75 million in additional capital spending. As a result, CapEx is now anticipated to be approximately $450 million in fiscal 2027. Free cash flow is now expected to be $800 million, as the strong performance in the first quarter is helping to offset the additional CapEx spend for the year. For your modeling purposes, the investment in North Carolina will spread over the next three years. As of now, we expect the project to add approximately $350 million in capital spending into fiscal 2028 and the remaining $175 million in fiscal 2029. The project is in the early phases of development, and we will provide additional updates on timing as they become clear. Thank you to all of our associates for continuing to do what we do best, focusing on our customers and striving to do a little better each day. Thank you. That concludes our prepared remarks for the call. Operator, would you please give the instructions so we can begin the Q&A? Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble the roster. The first question will come from Brett Fishbin with KeyBanc Capital Markets. Please go ahead. Good morning, guys. Thank you so much for taking the questions. Good update today. Just wanted to ask a little bit about the underlying trends in AST service. I know you've talked about a progression in growth through the year given the tough 1H comps and inventory dynamics. Just curious, how you're still thinking about growth from here and if you still expect an uptick into 2H. Thanks, Brett. This is Dan. Like you said, tough comps in the first half last year. We expect that to linger a bit. We get into easier comparisons as we started seeing destocking in Q3. We would assume we'd see acceleration at that point in the growth rates of AST. Nothing has changed in the fundamentals. Coming out of gate last year at 13% in the first six months, has somewhat tamped down the growth right now. All right, great. Just to nitpick the other part of the business that was a little bit slower this quarter in healthcare capital equipment. I know you mentioned timing and the backlog number looked pretty strong still. Maybe just a little bit more background on what was going on with order timing and placements, and how you think that could ramp as well. Yeah. You can see our backlog swelled, it really is just a timing issue. Orders were up 4%. We are making real traction in the market right now. I'm highly confident that for the fiscal year, we're going to show solid growth for our capital equipment business. We're reaping the benefits of the last year and a half of solid capital sales as you look to the pull-through that we're getting in our consumables and chemistry, consumable chemistry, sterility assurance, and services. All right, last question from me. I think I caught, you might have said something about share gains in endoscopy. Maybe if you could just expand a little bit, where in the portfolio you're seeing the gains. Thank you so much. Yeah. Let me rephrase that or clarify. We've seen higher growth in endoscopy in terms of procedural growth. We have about a third of our healthcare franchise is correlated to endoscopy, it's helping us. We are gaining share in that space, I can assure you, both in the equipment side with the automatic endoscope reprocessors, which are driving solid growth of our chemistries, our dedicated chemistries, as well as the services surrounding the repair of endoscopes and different instruments. Okay, thanks so much. Yeah. The next question will come from Patrick Wood with UBS. Please go ahead. Beautiful. Thanks, guys. I've got two questions, please. I guess the first one, I'm too brain damaged to really wrap my head around some of the tariff stuff, but if we were to X out both the actual refund that you guys got, but then also the expense, so to truly treat it like it never existed. Were underlying margins, X all of that, up, and if so, why? That's the first question. Very quickly, second question, the $600 million deployment, that's obviously a big move for you guys. What was it that, you mentioned efficiencies and distribution outside, but that's a big move, so what was it that really tilted the scales into wanting to shift all that production? Thanks. Thanks, Patrick. I'll take the first one. I would love to not talk about tariffs as well. The gross margin is up. Absent tariffs, we got favorability from price, productivity. The tariff refunds did help us offset some of that cost. It's included in the gross margin. Our true tariff costs were $14 million in the quarter, and I guess I wouldn't take those out. They're not going anywhere. Patrick, this is Dan. Thanks for the question. Relative to the chemistry expansion. If you look back when we acquired Cantel. With Cantel, they had a large chemistry manufacturing facility in Minnesota, and we have our large facility in St. Louis, Missouri. The problem is that neither are really expandable, and both are going to be bumping up against the upper limits of capacity in the future. In order to do anything, we were going to have to do something greenfield. Once we decided that and the consolidation was imminent, we started determining what the location would be, and based on distribution efficiencies and access to talent, especially in the STEM world, we centered in on North Carolina. This factory will be the factory of the future for us. There's going to be significant automation. It's going to look and feel like a pharmaceutical clean room. It's going to be very impressive. Love it. Thanks, guys. The next question will come from Mac Etoch with Stephens Inc. Please go ahead. Hey, good morning and thank you for taking my questions. There's been some concern around hospital utilization rates and procedure volumes. You posted some pretty strong growth in your healthcare consumables franchise. I'd love to just double-tap on the performance there and what you're seeing within that end market. Thank you. Thanks, Mac. This is Dan. We haven't seen any slowdown whatsoever, and we see strong growth, especially in the ASC market. In particular, as I mentioned before, in the area of endoscopy, which carries a lot of weight with STERIS in terms of our procedure growth impact. I understand, and we are very involved in the conversation with our customers about the challenging environment that they are working in today and will work in the future as it relates to payment. We do not see an immediate or long-term impact in terms of procedure. As a result, we feel confident in the resiliency of our customers for the long term. I appreciate that. I'd love to just get a sense of what you're seeing within life sciences. Onshoring, it's been talked about, but it's still on the come, and I'd just love to get a sense from what you're hearing from potential projects in the pipeline. It's interesting. When you talk about onshoring, it's not just a move to the U.S. There's localization going on globally as tariffs become more of a play in Europe and in the U.S. You'll see some duplication of manufacturing sites, whereas maybe in the past, you might have one site globally that is focusing on one pharmaceutical product. As a result, that's good for us because it creates need for expansion or augmentation of the manufacturing footprint, which requires typically the tools, sterilizers, washers, things like that, to go into those aseptic manufacturing environments. As well as it gives us more at-bats and opportunities to install our chemistries into the cleaning processes. It is happening. It's not a revolution, but anytime there's disruption or change in manufacturing, generally, that's a good opportunity for us. I appreciate the color. Sure thing. The next question will come from Jason Bednar with Piper Sandler. Please go ahead. Hey, good morning. Thanks for taking the questions. Dan, I wanted to ask on or come back to AST. You referenced inventory destocking. Is trajectory of volume growth just how you budgeted this year? Based on your conversation with customers, can you talk about what kind of visibility you have in that segment accelerating from the current level and not having that destocking issue persist? Yeah. We modeled it, so we would expect it through Q2 and then see a ramp in AST in the second half of the year. That's what's playing out for the most part, we would expect that to continue, and start to see improvement, I would hope by the end of the second quarter, and definitely material improvement in terms of performance by Q3. All right, perfect. Karen, two for you as a follow-up here. First, for the avoidance of doubt, you've only received $4 million in total refund. That's all gone into corporate. It's a 30-basis point benefit to gross margins. Feel free to correct me if any of that's off. Have you requested any other refunds, or what's the status on those other refunds requests? On the restructuring, I heard all the costs. I know this is a longer-dated project, when should we expect to see savings from this project? Okay. Thanks, Jason. Yeah, on tariffs, you are correct. We received $4 million in the quarter. The total that we have potentially available is about $27 million. 24 of that is eligible for claim under the phase one and phase two claim processes. We have submitted all of those claims. Far, what we're seeing is the initial phase one refunds coming in. In terms of restructuring, that's really the cost of shutting down and consolidating the old facilities. All of those benefits are built into what we expect in the new facility, the benefits of consolidation and modernization. Okay. Sorry. I heard the comment earlier around capacity expansion and modernization. Are there going to be cost savings or efficiency moves with this new facility, or is this more cost neutral? Initially, it'll be cost neutral, but over time, as we drive scale through the operation, we'll get considerably more leverage out of it by having the combined volume all in one location. We're also deploying significant amounts of automation to the process, which does increase the front-end cost, obviously, but our labor requirements are going down dramatically in order to operate the facility. Got it. Very helpful. Thank you. The next question will come from Michael Polark with Wolfe Research. Please go ahead. Hey, good morning. AST services follow-up. For the rest of the year, still fair to model 7% to 8% organic for that segment. Over the last few years, a lot of growth CapEx into AST to expand capacity. Are there go-lives penciled the rest of the fiscal year that kind of might help the growth be higher in 2H than we're going to see here in 1H? Thank you. Thanks, Mike. This is Dan. I'll answer this. Maybe Karen wants to add to it. In terms of the modeling, yes, we still fully expect AST to deliver in the 7%- 8% range. No change there. In terms of the builds that we have coming online, the biggest driver is going to be recovery from inventory destocking, going back to more normalized volume coming through the facility. Those builds facilitate that's obviously baked into our number in terms of how we understand it. The incremental depreciation with bringing those online is built into our modeling, it's pretty equal paced over the course of the year. You will see depreciation build in that segment. Maybe for the follow-up, the mentions of increased procedure volumes in endoscopies, specifically, to which you have a high exposure, just stood out to my ear as well. What do you think is driving that? Yeah. I'm curious for your two cents on that. Thank you. There's been a change that's been promoted now over the last couple of years about the early age of detection, that has shifted down below 50 years now, so more people are eligible or being pulled in for endoscopies. I think there's more awareness around colon cancer at this point, and it's driving maybe some intake as a result. Yeah, look, I can't sit here and tell you that it's sustainable at the high level that it's at right now, but what we saw was a really strong quarter in endoscopy, and we also saw that amongst some of our other peers that play in the same space. Based on the information we have from our service organization, everything else, we're happy with the growth we're seeing there. Thank you. Yes, sir. The next question will come from Mike Matson with Needham & Company. Please go ahead. Yeah, thanks. I wanted to ask one on the Nubis AI collaboration that was announced in March. What is your view of robotics and AI in sterile processing? Is this collaboration something that could generate meaningful revenue for STERIS? Thanks, Mike. I appreciate the question. It's early development right now. We're very excited about the technology. I do think there's a world in the future where there's some AI or robotic assist that's meaningful in the SPD. As we know, there's a huge challenge of labor in that environment, there's certain tasks that over time could be automated, like any other process. We're working hard on what's fairly nascent right now, when we have something more material to talk about, we will do that. At this point, it's just early days. Yeah, understand. Just in AST, capital declined again. I know it's a tiny part of that business, one, can you explain what happened? Two, can you just remind us what the capital is that you're selling in that business? Thanks. Yeah, Mike, the capital is typically, they're electron beam accelerators that we sell to med tech customers typically, or other applications for electron beam. It's a lumpy business because these projects can be anywhere from $2 million-$10 million a unit, even more. In a quarter where we don't ship a unit, you see a huge change versus prior period if we ship a unit. The total revenue of the equipment businesses, it fluctuates, call it somewhere between $18 million and $30 million a year. It's just purely timing, it's too small to really spend any time on. Okay, thank you. Yeah. This will conclude our question and answer session. I would like to turn the conference back over to Julie Winter for any closing remarks. Thank you all for taking the time to join us this morning. Look forward to catching up with many of you offline and on the road later this fall. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.