By Mary Vanac
STERIS Corp. (NYSE: STE) continued its quest to make operations more efficient in fiscal 2010, leading to higher profits for the year. However, like so many other companies dealing with market uncertainties, revenues fell.
Net income for the Mentor, Ohio-based company was $128.5 million, or $2.16 a diluted share, for the year ended March 31. That was up 16 percent from $110.7 million, or $1.86 per diluted share, in fiscal 2009. Revenues for fiscal 2010 fell 3 percent to $1.26 billion compared with $1.3 billion in fiscal 2009.
Flush with cost-cutting success and some fortuitous foreign currency and raw materials rates, in November STERIS raised its earnings-per-share forecast for fiscal 2010 to between $1.90 to $2.05 and gave shareholders a special $2-a-share dividend. A month later, the Food & Drug Administration issued a safety alert about the company’s System 1 chemical sterilizer for medical instruments.
STERIS pulled its earnings and revenue guidance in its fiscal third quarter because of the financial uncertainty caused by the alert and how the company managed it. STERIS has since received market approval from the FDA for a new generation of chemical sterilization system — System 1E. But the company could pay up up to $100 million in customer rebates to provide for an orderly market removal of System 1.
Based on current trends, STERIS expects earnings per diluted share in the range of $2 to $2.30 and revenue growth of about 5 percent for fiscal year 2011.