STERIS Q2 2023 Earnings Call Transcript

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Provided by Quartr
November 10, 2022

Key Takeaways

  • Steris reported 7% constant currency organic revenue growth in Q2, driven by volume gains and 2.9 basis points of pricing, and achieved $15 million in Cantel integration synergies bringing H1 synergies to $35 million on track for a $50 million goal.
  • Despite a 140 bps decline in gross margin to 44.8% due to productivity pressures and higher material and labor costs, EBIT margin rose 50 bps to 23.8% thanks to realized cost synergies and disciplined SG&A management.
  • Management recorded a $490.6 million non-cash goodwill impairment for the Dental segment amid rising interest rates and short-term headwinds, though the long-term growth outlook remains intact.
  • Free cash flow of $138.2 million in H1 prompted a full-year FCF reduction to ~$600 million, down $75 million from prior guidance, driven by elevated capital spending and inventory levels, with an expected step-up in H2 collections.
  • The company reaffirmed its full-year 10% constant currency organic revenue growth target, now forecasting 8% as-reported growth and maintaining adjusted EPS guidance of $8.40–$8.60 despite currency headwinds.
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Earnings Conference Call
STERIS Q2 2023
00:00 / 00:00

There are 9 speakers on the call.

Operator

Good morning, everyone, and welcome to the STERIS Plc Second Quarter 2023 Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please also note today's event is being recorded. At this time, I would like to turn the conference call over to Julie Winter, Investor Relations.

Operator

Ma'am, please go ahead.

Speaker 1

Thank you, Jamie, and good morning, everyone. As usual, speaking on today's call will be Mike Tucic, our Senior Vice President and CFO and Dan Crestio, our President and CEO. And I do have a few words of caution before we open for comments. This webcast contains time sensitive information that is accurate only as of today. Any redistribution, retransmission or rebroadcast of this call without the expressed written consent of STERIS is strictly prohibited.

Speaker 1

Some of the statements made during this review are or may be considered forward looking statements. Many important factors could cause Actual results could differ materially from those in the forward looking statements, including, without limitation, those risk factors described in our 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.

Speaker 1

Additional information regarding these measures, including definitions, is available in yesterday's release, also including 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 Mike.

Speaker 2

Thank you, Julie, and good morning. It is once again my pleasure to be with you this morning to review the highlights of our 2nd quarter performance. For the quarter, constant currency organic revenue increased 7%, driven by volume as well as 2.90 basis points of price. As anticipated, the divestiture of the Renal Care business impacted our comparisons to the prior year by about $45,000,000 as detailed in the Our year over year growth rates will be impacted by this divestiture for 1 more quarter. The integration of Cantel Medical continues to go well.

Speaker 2

We achieved approximately $15,000,000 of cost synergies in the 2nd quarter, bringing our first half total to about $35,000,000 We are on track to achieve our stated goal of approximately $50,000,000 in fiscal year 2023. As anticipated, gross margin for the quarter decreased 140 basis points compared with the prior year to 44.8% as pricing, currency and the favorable impact from the divestiture of Renal Care We're more than offset by lower productivity and higher material and labor costs. Material and labor costs continue to be a headwind and totaled about $30,000,000 in the quarter. Despite the decline in gross margin, EBIT margin increased 50 basis points to 23.8 percent of revenue, compared with the Q2 of last year, which reflects the benefit of realized cost synergies from the Cantel integration, Currency impact and lower than anticipated SG and A expenses driven by disciplined cost management and reduced incentive compensation. The adjusted effective tax rate in the quarter was 22.8%.

Speaker 2

Net income in the quarter increased to $200,000,000 and earnings were $1.99 per diluted share. You will notice that we reported a loss on a GAAP basis in the quarter. At the time of the Cantel acquisition, we determined the fair value of the dental segment based on projected cash flows discounted at rates reflecting market costs of capital and market EBITDA multiples. Macroeconomic conditions, including rising interest rates, may have on patient and customer behavior in the short term triggered an interim assessment of goodwill in the quarter. Revised cash flow projections and a current market weighted average cost of capital resulted in an estimated fair value of the dental segment below its carrying value.

Speaker 2

Therefore, we recorded a $490,600,000 non cash impairment charge related to the goodwill associated with the dental segment. Our long term outlook for the dental segment is unchanged and we continue to see significant growth opportunities in the dental space for STERIS. Capital expenditures in the first half of the fiscal year totaled $198,700,000 while depreciation and amortization totaled $272,700,000 Year to date, our capital expenditures have been higher than anticipated, primarily driven by the timing of investments in the ASP segment. We still expect our full year capital expenditures to be approximately $330,000,000 Free cash flow for the first half of the year was $138,200,000 Free cash flow was limited by higher than planned capital spending, mainly due to timing and higher than planned levels of inventory. We do not anticipate same level of spend in the second half of the fiscal year for either, which will contribute to a significant step up in free cash flow.

Speaker 2

All in, we now anticipate the free cash flow for the full year will be about $600,000,000 or a reduction of $75,000,000 from our original guidance. I will now turn the call over to Dan for his remarks.

Speaker 3

Thanks, Mike, and good morning, everyone. Thank you for taking the time to join us to hear more about our 2nd quarter performance and our outlook for the rest of the fiscal year. We continue to see strong demand for our products and services. And as you've heard from Mike, we had a solid quarter despite the ongoing macroeconomic challenges. I will review the highlights of the quarter and then shift my commentary to our outlook.

Speaker 3

Total company constant currency organic revenue growth was 7% in the quarter. Once again, foreign currency was more impactful than previously planned on our as reported revenue, but we are pleased with our operational performance. From a segment perspective, healthcare constant currency organic revenue grew 7% in the quarter. As we discussed last quarter, by August, we had an improved visibility on supply chain challenges and that we anticipated that we would start to see better component deliveries in the quarter. We received several key components and were able to step up our shipments in September.

Speaker 3

We continue to expect to see significant levels of capital shipments in the second half based on our backlog, The inventory of key components that we have or will continue to receive. Reflecting that scenario, Capital equipment and service growth remained solid in the quarter as we continue to see good demand from our customers. Consumables were about flat on a constant currency organic basis. Our consumable growth is limited due to a lack of procedure growth on a year over year basis. As we have said before, we do not expect a significant pickup in procedures in the coming months, but we are optimistic we will get back to 100% pre pandemic levels over time.

Speaker 3

Hospital Capital spending remains robust as evidenced by our healthcare backlog, which totaled over $500,000,000 at the end of the quarter. Orders for the quarter were approximately 60% for replacement products and 40% for large projects. Despite the uptick in shipments at the end of the quarter, we believe approximately $60,000,000 in capital equipment Longer term, our portfolio of STERIS is essential to surgeries, either directly in the operating room or in the core support sterile department, and we believe this provides us some insulation to our revenue base from our customers' rising cost of capital. Moving on to AST. AST grew constant currency organic revenue 19% in the Q2 as we continue to benefit from underlying demand from our core customers.

Speaker 3

In the 2nd quarter, Mevex improve significantly on both a year over year basis and sequentially, which pushed our growth rate into the high teens. As you have already witnessed, shipments can be lumpy with this segment of the business. Similar to life sciences, these are large pieces of capital equipment that are not booked as revenue until they are fully installed and tested. From a profit perspective, increased energy cost, both in the U. S.

Speaker 3

And internationally are impacting margins for AST. All signs indicate that this will continue at least through the winter. We continue to look for ways to recoup these costs as the contracts allow and the timing of our increases. Life Sciences revenue was flat on a constant currency organic basis compared with the prior year. Solid service revenue growth was offset by declines in both capital and consumables.

Speaker 3

We believe capital equipment shipments are just a matter of timing as about $10,000,000 slipped into the 3rd quarter versus our expectations. And as a reminder, the business had a very strong shipment quarter in Q1. Also, our backlog continues to hover around $100,000,000 We are optimistic about the long term demand for our capital equipment in this segment. On the consumable side, we were about flat from a constant currency organic revenue perspective. This is primarily due to inventory management by our customers, in particulars in our barrier products line.

Speaker 3

Again, not concerned about the long term underlying trends for the business as aseptic pharma production demand remains very strong. Our Dental segment pre COVID levels. Year over year procedures have declined in the low single digit range. We believe this is due to the current macroeconomic conditions. Despite the decline in revenue, operating margins were over 25% as we manage spending and experience some relief on our supply chain costs.

Speaker 3

Turning to our full year outlook. Constant currency organic revenue growth expectations of 10% remain unchanged. However, based on the ongoing foreign currency challenges, we are revising our as reported revenue. As reported revenue is now expected to grow 8%, a reduction of 1% from the prior expectations due to continued foreign currency fluctuations. For the year, currency is now expected to reduce by $150,000,000 and adjusted EPS by approximately 0 point 15 dollars The primary drivers of this continue to be the weak euro and British pound.

Speaker 3

Reflected in our revenue outlook is improved pricing. We are now expecting around 250 basis points for the year. Combined pricing and disciplined spending will contribute to higher than planned operating margins for the fiscal year. This will help offset the impacts from foreign currency and additional supply chain inflation. For the year, we now expect an incremental $90,000,000 in extraordinary supply chain and labor cost inflation, an increase of $20,000,000 over our prior expectations.

Speaker 3

Factoring in these elements, our expectations for earnings are unchanged at the $8.40 to $8.60 range for the full fiscal year. However, with an additional 5% impact from foreign currency, we believe the high end of that range is less likely. Overall, our business continues to perform very well in this environment. Our teams and portfolios continue to come together to better meet the needs of our customers and the breadth of our offering allows us to take advantage of several significant trends in the industry by leveraging our relationships to cross sell within business segments and deliver value to our customers. Before we open for Q and A, I did want to address the challenges the industry is facing on ethylene oxide.

Speaker 3

As you all know, ethylene oxide is essential to the supply of sterile single use medical devices throughout the world. To date, the industry does not have an alternative to EO. And currently in the U. S, there is very limited capacity to manage the long term growth expectations for the medical products industry's demand for ethylene oxide processing technology. At STERIS, we take our responsibility very seriously as a provider of these crucial services and have always been committed to strict regulatory compliance and quality standards for the safety of our people, our facilities in the communities in which we operate.

Speaker 3

We are stewards of the long term success of our business, which I believe is exemplified by our actions. We have regularly updated our processes and equipment used within our facilities to reflect the adoption of new technology and deploy the best practices possible. In addition, we have led the industry in developing sustainable EO cycles, which significantly reduce the amount of EO gas used per cycle. And we have worked closely with the U. S.

Speaker 3

FDA to ease the regulatory transition for our customers so they can more easily adopt these cycles. This diligence is consistent with the way we have operated our contract sterilization business for many years. I am confident in how we have run and continue to run these facilities and the improvements we have made to our process within the AST segment. With that, I'll turn it over to Julie to begin the Q and A.

Speaker 1

Thank you, Mike and Dan, for your comments. Jamie, can you give the instructions and we'll get started on Q and A.

Operator

Ladies and gentlemen, at this time, we will begin that question and answer session. And our first question today comes from Matthew Mishan from KeyBanc. Please go ahead with your question. Good morning and thank you for taking the questions. Just first, How should we think about the second half acceleration in organic growth and kind of what are the key drivers around that?

Speaker 3

Matt, the main driver is

Speaker 2

as we continue to talk about is capital equipment shipments, in particular in our Healthcare segment. That is really going to be the factor that drives us from about 7% constant currency organic revenue growth to 13% constant currency organic revenue growth around there to achieve our 10% for the full year. So it's all driven by Our ability to ship capital equipment and healthcare.

Operator

Have you secured the components necessary so that you do have the confidence that you will be shipping those?

Speaker 3

Hi, Matt. This is Dan. I would say we have a lot more confidence today than we had 3 There's no guarantees as it relates to the current environment with supply chain, but we do have a lot now that's in stock and we are aggressively shipping as we can finish off machines. And I think that in terms of level of confidence from our suppliers that those shipments will continue to come in In a more predictable fashion is pretty high.

Operator

Okay. And then lastly, Does it require an inflection in dental? Or is it possible that you're still going to get the 10% with dental like remaining flat to down?

Speaker 3

We believe the dental business is going to stay suppressed until procedures come back. And I think that's tough to predict when that's going to happen given that these are highly elective and currently with inflation and everything else, It's something that we believe is good. We've got it modeled to stay where we've got it here today more or less.

Operator

All right. Thanks, Dan. Thanks, Mike.

Speaker 4

Yes. Yes, Matt.

Operator

Our next question comes from Mike Matson from Needham and Company. Please go ahead with your question.

Speaker 5

Yes, thanks. So I want to ask about There's kind of a big difference in the growth between the AST business and then the consumables on the healthcare side. And since I'd assume a lot of the AST volume is medical devices that are getting used in procedures or maybe will get used in procedures eventually. How do you kind of explain that if you believe that We're still below pre COVID levels in terms of procedures, which kind of hurt your consumable growth in healthcare, but ASD was still really

Speaker 3

Yes. I mean, there's 3 components of revenue, right? I mean, there's price, There's share and then there's just volume growth. And what I would say is, generally speaking for medical products, We've seen some recovery in terms of higher end, higher value, whether that's neuro or whether that's spine or whether that's ortho, we have seen recovery in those procedures, general surgery, we haven't seen any difference. In fact, it's still hovering at those pre COVID not back to those pre COVID levels.

Speaker 3

And that's largely a function of staffing in the healthcare network. The other side of that is we're doing everything we can to recoup price as costs go up in that business. We have a long history of being able to successfully do that with our customers. And then the other component is share. Maybe we've picked up a little bit of share over the last couple of years and there's a long tail on that in terms of annualizing those run rates.

Speaker 3

And keep in mind too, there is a significant portion of our business that's not Pure medical products, there is some level that is bioprocess type disposables and that part of the market continues grow at a pretty high rate and we've been benefiting from that.

Speaker 5

Okay, got it. And then in terms of the PO regulations, I guess, do you have any sense for the timing of when those are to be revealed? And then, do you how do you Feel in terms of where you're at with your PO practices, I mean, do you think there's a potential that you would have to make any changes? I mean, it seems like you've Really put into place some pretty rigorous processes to reduce emissions. But I don't know if there's any way to go beyond what you've already done there, but

Speaker 3

Yes. What I would say is this, I think we expect to see a rule draft sometime in 1st calendar quarter out for public viewing. I mean, I've said that before, but I think it actually may happen this time. And so I do expect to see something out in public domain sometime in the 1st calendar quarter of the year. Now having said that, what I would say is that We have consistently invested and found ways to improve our processes.

Speaker 3

And I would say generally above and beyond the regulatory requirements that are out there. If I look back in our history, a couple of notable examples of those types of improvements would be where we've proactively invested in our abatement Technology, and this is over decades, not in the last 18 months, including upgrading our flares with wet scrubbers And using catalytic oxidizers and developing also in the last few years, we've installed full abatement systems in our outbound warehouses in the U. S. AST locations for capturing any potential fugitive emissions. Within and around all of our EO chambers, we have Significant safety measures and enhancements in place, including locks that don't allow the chamber door to be open until the prescribed amount of EO is met in terms of the chamber to ensure the safety of our people and maximum capture of ethylene oxide.

Speaker 3

And then also a significant Thing around the STERIS ASTs, in particular the U. S. Locations, is any of those sterilizers that have or had back vents have always, I repeat, always been tied into the emission control systems for maximum destruction of any potential gas coming out of the facility.

Speaker 5

Okay, got it. And then just one on interest expense, it was a little higher than or I guess I should say other expense, but I think it's mostly It's a bit higher than what we expected. Is that because interest rates have gone up? And how much of your debt is variable rate? I don't know if you can give us any guidance on what to expect the full fiscal year for interest expense, but

Speaker 2

Yes, Mike, it's definitely the rates have gone up. We're all in about 3.6 Percent total, which is definitely higher than where we have been. And unfortunately, our projections are that rates will continue to rise. Currently, we sit at just over $3,000,000,000 of total debt and it's about seventythirty fixed versus floating is our percentage.

Speaker 5

Okay, got it. Thank you.

Operator

You're welcome. Our next question comes from Jacob Johnson from Stephens. Please go ahead with your question.

Speaker 6

Hey, good morning. Thanks for taking the questions. Just on the Life Sciences segment, it looks like the backlog growth decelerated some this quarter, Kind of flattish growth, volumes down. Can you just talk about demand trends from that end market? It sounds like maybe some of this is related to the timing of shipping orders, but any thoughts on that end market?

Speaker 3

Yes. I mean, as those I'm sorry, this is Dan. As those shipments can be lumpy, so can orders because they tend to be pretty high in value. I'm confident that our backlog, if we can hold that around $100,000,000 That is absolutely outstanding for the long term success of the Life Science Capital business. And so I'm happy where it is and our order intake It's strong as well, as we look into the future.

Speaker 3

So I think we just got to get the stuff shipped out of our plants and we'll be working on that diligently over the next 6 months.

Speaker 6

Got it. Thanks for that, Dan. And then just circling back on the dental impairment, I think some of it's related to near term performance, but I suspect some of it might be related to rising interest rates. Can you just talk about those dynamics? And then I think you mentioned in Your comments, no real change to your long term outlook for that business, but I figure I'd ask about that as well.

Speaker 2

Yes, certainly. Yes, and as I did say at the end That paragraph in my prepared remarks, yes, we believe that long term outlook for dental segment is unchanged and that we continue to see significant growth opportunities in that space. What's really driving that is really what's driving the impairment and we have to look at this At any time we have any indicating factors, that, that goodwill will be maybe impaired the estimated fair value of that segment, maybe below its carrying value. And really what's driving that is you use a discounted cash flow model and interest rates, In particular, the rising interest rates, in addition to the inflationary pressures we're seeing on labor and material costs, are really the 2 key factors that are driving us to impair all of the goodwill associated with the dental segment.

Operator

Our next question comes from Jason Bednar from Piper Sandler. Please go ahead with your question.

Speaker 7

Hey, good morning. Thanks for taking the questions here. Great to hear the progress in the component sourcing in the quarter. It sounds like that's really going to contribute to a nice step up in growth here in the second half of the year. But I'm going to pack a few questions in here on this topic.

Speaker 7

Dan, can you say whether those capital equipment delays late in the quarter You referenced, are you catching up on those real time? Is there anything we should consider with respect to your capacity to deliver against that backlog? Because Again, that is a pretty big step up in growth. Just want to confirm that. And then finally, I can't imagine this is more aggressive shipping suddenly stops at the end of this fiscal year.

Speaker 7

So I guess is it right to think of this equipment momentum continuing into fiscal 2024 as well?

Speaker 3

Okay. Yes, sure. Thanks, Jason. In terms of your question around capacity, what I would say is this, we've been building machines without components now for the whole fiscal year basically. And because the demand is high, we can't lose a manufacturing slot.

Speaker 3

So we have a number of machines that at the end of the quarter, we're finished awaiting a $7 part before we could ship it to our customers. It's Not literally, but almost literally, yes. So we continue to manufacture every slot that we have and then finish out equipment as Those components show up on our docs, if you will. So I think we're in pretty good shape, but we've also historically have shown our ability to flex Manufacturing, pretty considerably in terms of if you look at historical performance of STERIS, we typically have a bigger back half than front half in terms of capital shipments. So our teams are able to do that and they have a long history of doing that.

Speaker 3

In terms of momentum going into the next year, yes, I think that's something that it's hard to look at right now and it's not something we're discussing in terms of our future outlook, in terms of what's going to happen in the I mean, we've got 6 months left to deliver on that's critically important for STERIS and our customers right now.

Speaker 7

Okay. Yes, fair enough. That's helpful. And then maybe a couple of clarification points. Mike, can you just confirm that the reaffirmed earnings guidance here today contemplates additional rate increase?

Speaker 7

It looks like we're going to be dealing with here over the coming months? And then second point, just on the higher inventory levels that are causing Free cash flow the free cash flow guidance cut, does that continue those inventory levels continue beyond fiscal 2023? Do we get a reversal at any point? Just how do you see that playing out?

Speaker 6

Thank you.

Speaker 2

Yes, definitely on the inventory levels, we've continued to hold higher inventory levels all this year projected the rest of this fiscal year, even last fiscal year. So hard for me to sit there and pinpoint exactly when we will turn that spigot off. And once we do, obviously, we will see a nice benefit to working capital. I don't know if that's going to be in 2024 or Beyond or timing is just too hard to predict at this point in time. We're just happy to get the inventory components in to ship the equipment for the customers.

Speaker 2

So More to come on that. And yes, we did bake in increased continued increased interest rates in our forecast. So that is already contemplated.

Operator

All right. Very good. Thanks so much.

Speaker 2

You're welcome, Jason.

Operator

Our next question comes from Michael Pollard from Wolfe Research. Please go ahead with your question.

Speaker 4

Good morning. I want to ask about the back half And then 24 on equipment and then maybe 1 or 2 follow ups. On the back half, just as we December quarter lower than that, March quarter higher, any flavor you can provide on phasing because Clearly, the toggle in the spreadsheet is the healthcare equipment revenue, and it's in pretty big numbers, and it's obviously difficult to predict quarter to quarter. So I think it'd be helpful just to level set like how you expect this to unfold the next 6 months between December versus March quarters?

Speaker 2

Yes. Eddie, just looking at it, obviously, in order for us to meet our intended free cash flow, we need to ship capital equipment earlier so we can collect. So I would say that Q3 would be a little bit higher, from a growth standpoint than Q4 would be if we're modeling this.

Speaker 3

Yes. But I would also say, to use your words, it is difficult to predict. In terms of Revenue recognition at the end of the quarter, it's a different world today in terms of getting things accepted and received around the holiday season than maybe it was in the past With labor shortages, so we believe we're going to deliver on the year. And I think Trying to be extremely precise from Q3 to Q4 is a little tough right now.

Speaker 1

Can't do get much harder Sorry, Mike. In the Q4, we have 11% comps, constant currency organic last year Q4. So certainly, there's a comp issue as well in the Q4.

Speaker 4

Yes. You talked me up versus my initial stab sequentially. So, okay, I will consider. Appreciate that comment. And then I guess, look, I understand you're not going to comment on fiscal 24, but these equipment revenue numbers are potentially very large in fiscal 'twenty 3, and I guess we have to take a stab at publishing a fiscal 'twenty four framework.

Speaker 4

And It just seems kind of reasonable to think total company equipment revenue might kind of Be down in fiscal 'twenty four on a very significant comp as you unlock the backlog. Is that an unreasonable thought?

Speaker 3

Keep in mind, a lot of that backlog is in large project that could extend out in the future fiscal periods. So the short answer is we don't know right now. I mean if order rates Stay high like they have been, then there's no reason why we shouldn't continue to do incredibly well on capital. If they slow down, then that will impact it. I mean, the good thing is that we have an awful lot of other business in healthcare that tends to buoy us when capital slows or And when capital is going great, it helps.

Speaker 4

If I could add one more on life sciences consumables, The kind of inventory management that you called out at production facilities. I mean, what inning do you feel like in did that just kind of start in biopharma? Are we halfway through the game? Any flavor for how long that's been kind of Happening would be helpful. Thanks so much.

Speaker 3

Yes, I think it's been happening now for a couple of quarters, and I think that we'll see it reverse trend in the back half of the year.

Operator

Our next question comes from Dave Turkaly from JMP Securities. Please go ahead with your question.

Speaker 8

I'll get that name right. Good morning. Maybe just when I've been jumping around, so I apologize if somebody hit this. But you mentioned the price again and almost 300 bps is It's a lot different than a lot of the companies we cover. So I was wondering if you might be willing to give us a little color either on divisions or geographies or products or like where It's mainly coming from or any of the drivers there.

Speaker 8

And do you think that's sort of sustainable? Thank you.

Speaker 3

I think it's sustainable in the sense that we have an obligation as we have sustained higher costs to pass that on wherever we can and wherever our customers can accept it. So that's something that I don't think is going to change, assuming that we consider on this We continue on this rate of relatively high inflation and especially when there are certain components of inflation that are unique to STERIS in terms of having more meaningful impacts on costs, whether that's electricity or steel or electronics or things like that. So I think that those trends will continue as long as they need to. In terms of breakdown of price by segments, We don't really wade into that. I mean clearly, healthcare hospital systems is tougher than some where we have contracts, but as those contracts roll from a GPO perspective, then we'll be incorporating appropriate new pricing levels.

Speaker 3

The one thing I can

Speaker 2

say, Dave, is that we are getting price across all of our segments.

Operator

Thank you. And ladies and gentlemen, at this time, I'm showing no additional questions. I'd like to turn the floor back over to Julie Winter

Speaker 1

Thanks everybody for taking the time to join us. We will be on the road quite a bit over the next few weeks, and we look forward to seeing many of you in person.

Operator

And ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.

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