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Good afternoon, everyone. I am Rahul Sood, Managing Director in the Healthcare Investment Banking Group at Wells Fargo. On the stage, I'm joined by CEO of Sotera Health, Alton Scheher. Alton, welcome. Thank you. It's good to be here. Thank you for being here with us. So, for the investors who may be newer to the story, can you provide a brief overview of Soterra Health and explain why the services provided by your three different segments, Terragenics, Nordian, and Nelson Labs, are so critical for your customers? Yeah, absolutely. So TerraHealth's mission is safeguarding global health. And what we do is we advance that mission through three business units in Sterigenics, Nelson Labs, and Nordion. And our largest business unit is Sterigenrics. And Sterigencs is a leading global provider of outsourced sterilization services to both the medical device and pharmaceutical markets. We offer all major sterilization modalities and technologies, and we've got 49 facilities around the world. Now, sterilization, for those of you who aren't familiar, is the last government-mandated step that a med device, for example, needs to go through before it is available to be used by providers or for patients. The way the process works is for a medical device, a MedTech OEM will manufacture the product, they'll package the product, and they'll box the product. They'll put it on a pallet, and then they'll deliver it to one of our 49 facilities. We will then sterilize that product, utilizing one of the technologies or modalities that it's been validated for, and once that sterilization process is complete, it's now ready for use. So that's Sterigenics. Moving to Nelson Labs. Nelson Labs is a leading provider of microbiology and analytic chemistry testing. And again, we serve both the medical device and pharmaceutical industries. And the goal for Nelson Labs is to ensure that their customers have safe, compliant, and effective products. We offer over 900 tests, and we've got 12 labs globally to serve our customers. Our final business unit is Nordion. And Nordion is the leading provider of sealed source cobalt-60 in the world. And cobalт-60 is essential for the use in gamma sterilization, as well as targeted cancer treatments. We operate a class 1B nuclear facility. And we've got long-term contracts with nuclear reactors around the world to allow us to provide safe and effective and enough supply of Cobalt-60 to provide gamma sterilization around the World. Nordion also is a leader in transport technologies for Cobalt 60. This is not a typical product that you just put on the back of a truck. And it's really important because over 30 percent, around 30 percent of single-use medical devices are sterilized with gamma radiation. So each of our three business units are absolutely essential to the health care supply chain. But so TerraHealth is more than that. It's more compelling because of the complementary nature of these business units. For example, Sterigenics and Nelson Labs, they can offer an integrated offering for sterilization and lab services and lab testing to our customers. And that just shows the value of the one Sotera approach to our consumers. But overall, again, our goal is to advance our mission and ensure that our customers get safe, effective, and compliant product to market. Wonderful. You recently joined Sotera. Why? Yeah, so I joined back at the end of May. And I've been working in health care for over 25 years. So I knew about Sotero primarily through Sterigenics. And as I was doing more research and speaking with Michael Petras, who's now previous CEO for 10 years, who's now our executive chairman, did a lot more research on the company and realize just how essential and critical our offering is to the healthcare industry. And this was really inspiring. I also learned about, again, the complementary nature of our businesses. So Sterigenics and Nelson Labs, for example, there was a real opportunity, again for us to be even more coordinated in our approach to our customers to offer differentiated solutions across these businesses. And that's a very exciting opportunity to me. We also have an incredibly strong financial makeup in our organization. There's not a lot of scaled businesses with EBITDA margins over 50%. And that becomes even more interesting based on the amount of cash generation that we're going to see over the course of the next year. And that has really positive implications for capital deployment. So, I took that all into consideration and those are the main reasons I joined in and couldn't be happier to be here. Wonderful. You came from the customer side of the industry. What does that, if I can call it the outside-in perspective, tell you about what Zotero does especially well for its customers today? Yeah, absolutely. So, came from a company called Viant Medical, was the CEO there for about seven years. It's a large contract manufacturer focused on the med tech industry. And I reflected heavily on my experience with Sterigenics when I was at Viant, when I was thinking about this role. You know, one of the things we did at this company was we offered a variety of services across the manufacturing value chain, including final assembly of product and managing the sterilizer for our med device OEM customers. So we worked with Sterigenics a lot. And what I kept thinking back to was the really difficult time in our industry post-COVID. COVID itself was very difficult, but coming out of COVID, you had the supply chain crisis. And I think back to my time and how much of my day was spent with suppliers who were not delivering for Viant at the time. I never had to worry about Sterigenrics. I never had to pick up the phone and call Michael. In fact, I don't recall a meeting that I had during that time where somebody said that Sterigenics was the problem. I know that they were struggling as much as any other service provider during that time, but they continued to deliver for us. And we weren't their largest customer, but that showed the culture and the focus around the customer that Sotera has. And that's something that I feel very fortunate to be a part of. Great. As you've been in the seat for a few months now, what are your observations thus far about Sotera and any areas of focus for you? Sure. So a couple areas of focused. The first is I want to continue to build a great company here at Sotero Health for our customers and for all of our associates around the world. In addition, accelerating growth is a top priority for me. So we're a service business. And the first thing you need to do as a service business is take care of your current customers. And that is a real focus of mine, to ensure that every interaction we have with our customers, we are delighting them. We are differentiating ourselves based on our service every single day so that when our customers have a choice to make, they lean towards us. You know, we have thousands of customers today, and a good chunk of our growth in the future is going to come from our already established customer base. So having really crisp and high-quality operations, high- quality function is at the top of the list for me to ensure that we're delivering on. So that's one. Next is this integrated offering across Sterigenics and Nelson labs, we have a real opportunity to provide differentiated solutions on the sterilization and laboratory testing side to our customers. And I believe that we can drive incremental growth if we do that right. So again, we've got a fantastic offering on, you know, across our three business units. We have a, a real focus on customer service today. I think we can turn that up even more, become even more focused on ensuring that every interaction is positive with our customers. And if we do that right, we've got an opportunity to really drive additional growth in the business. Wonderful. Let's talk about Sterigenics for a little bit. Sterigencs had a great second quarter with 7% constant currency growth. What are you seeing across your primary medical device and pharmaceutical and markets? Yeah, so we're very pleased with Sterigenics' 7% constant currency growth in Q2. And overall, we see a stable demand environment in MedDevice and Pharma right now. The primary data point that we use when we're evaluating our demand and we're putting our forecasts and our guidance together is what we hear directly from our customers. So what are we hearing from our commercial teams? What are we hear from our operations teams? And they understand how important it is for us to gauge what's happening with demand. So it's a big part of what we do. So overall, we are, again, seeing this stable environment, and we feel good about where we are in the market. Great. There's been some commentary in the marketplace around softness and the surgical procedure growth. Yeah. Are you seeing any headwinds that your customer base is seeing and coming over to you? Sure. We're not seeing those headwindS right now. We see the same data that you're referring to. We recognize that there are a number of providers who had a reduction in procedures in Q2 of this year, but I'll note that a number of those providers also saw sequential growth Q1 to Q2. We also noted the relatively strong results from a number of large med techs. So, again, we see a pretty constructive environment right now within Sterigenics. But, again I'll go back to the point I made in the previous question. we are we are constantly polling and working with our customers to see what they really need and what their demand is going to be in current quarters and the future and overall we see a pretty stable environment great on the regulatory front there has been considerable discussion around the evolving nishap requirements can you please put the potential changes into perspective by comparing the current rule to the prior versions and when are these rules supposed to be finalized? Yeah, good question. So I'll start with an important fact, and that is the rulemaking process is still ongoing. So we don't know when we're going to get a final rule. So that's one. Two is we have seen a, you know, when 2024 NESHAP regulations, when those came out, we saw a lot of conversation around what that would mean for the industry. At that time, we made a number of investments to upgrade our emission controls within our EO facilities. So the short answer is, whatever comes out of the final rule from Nishap, our strategy's the same. So we've been investing, invested around $200 million in these improvements. So whatever the final rule is, our strategy is the same. We're confident that we're going to be able to comply with those regulations. Great. Can you walk us through the decision to expand the X-ray capacity in the U.S. and what factors go into these type of decisions for you? Do you have some level of customer commitment before deciding to build something like this? Yeah, sure. So our X-Ray facility in North Carolina is online now. We are expecting revenue in the second half of the year. And when we made the decision to invest in this facility, it was really to ensure that we had available capacity across all major modalities for our customers. So that's the main reason we did it. we generally have a pretty significant commitment from our customers before we start a greenfield project at really around 40% of the capacity spoken for at that time. We had a little less in this one because again it was a strategic move to have more x-ray capacity and again it's gone well. We're very happy with the pipeline and the funnel that we have and look forward to ramping that facility over the course of the next few years. Great. Over the next several years, how do you expect sterilization modality mix to change, if at all? Yeah, we don't see a big shift in the modalities. So today, the primary modalities are EO as well as gamma. You see about 50% of med device volume going through EO, about 30% of volume going through gamma sterilization and again we don't see material change from that sort of a mix I'll also state that you know because we're invested across all of those modalities we were a bit indifferent on on where the where the market moves but I'll say that you one of the things that we've got confidence in for gamma sterilisation for example we've had a lot of confidence in the short, mid-term, and long-term supply of cobalt-60. So we don't see any sort of limitations on that very important modality. For the audience's benefit, can you remind how embedded and sticky is the Sterigenics offering to its customers once they have decided to work with Sterigencs for sterilization? Thank you. It's very sticky. So you don't see a lot of movement from one modality to another. You don't See a lot of movement in our space from one sterilization facility to another either. Generally, if you do, one of a couple things is happening. One, a supplier may just not be performing, right? So again, we're a service business. If you don' t do what you're supposed to do, you don''t hit your commitments with your customers, then they're going to look for another opportunity to move to a different supplier. That's one. Two, sometimes a customer will open a new manufacturing facility, right? And if they want to move, if they're going to move that product from the facility they're in presently to a new geography, they're not going to use that same sterilizer because, in general, you want to have your sterilization provider close to you, either close to the manufacturing facility or close to The Ultimate distribution center, warehouse, wherever that's going, because the transportation costs are significant in comparison to the sterilization costs. So overall, it's pretty sticky as long as you're delivering for your customer and performing good customer service. Great. And lastly, on Sterigenics, can you provide an update on your Greenfield projects? Absolutely. So we talked about the X-ray project in North Carolina. Again, things are going well there. We are going to see revenue here in the second half of the year. We also have an additional Greenfield project, which will come online in early 2028. We've got a nice pipeline in that business, and we're on track to get that online again in early 2028, I mean, both of these investments reflect our confidence in the demand growth within this business. And we worked really closely with our customers before we went forward and put shovels into the ground here. So we've got a lot of confidence over the next few years that we will see high utilization in these sites. Wonderful. Switching gears a little bit, Nelson. Nelson Labs had a pretty solid second quarter, coming in at a little over 5% in constant currency growth. Can you talk about the different factors that contributed to the growth? Yeah, absolutely. We were really pleased with that 5.4% constant currency growth in Q2. One thing I'll highlight is part of Nelson's offering is working with customers who really need their help and sometimes urgently with regulatory issues. and we did see some of this in Q2. The team responded quickly and responded very well to our customers, and that was a nice bump in growth for us in the quarter. Overall, we are seeing steady demand in that business, and I'm very happy with how that business is operating. Wonderful. Switching over to the third part of the business, Nordian. Sure. made several investments to support the long-term supply of cobalt isotopes, including a partnership with Westinghouse in the U.S. You talk about the key factors that drove the decision to expand the domestic supply and how should investors think about the pace and magnitude of related capital investments going forward? Yeah, absolutely. So the primary driver is we want to ensure there is sufficient supply of Cobalt-60 to gamma sterilizers around the world also have enough cobalt-60 for those very important cancer treatments that it's it's used for so that that's the top of the list this is a generational investment in cobalit development so this isn't something that we're we're doing every couple years so we're making significant investments to ensure that we've got this security of supply for sterigenics but also the rest of the industry because we are the the leading provider of the again the sealed source cobalt-60 in the world you brought up Westinghouse great partnership here we're very excited about being able to work with them because it opens up a number of new nuclear reactors where we can get cobalts 60 from and it also gives us a US based source so overall we're happy with how that that's all going and we've got a lot of confidence in again the short term midterm and long-term supply of Cobalt-60. These Cobalt development projects are nearing an end, so we're at a bit of a high watermark when it comes to capital investment in these programs. So you'll see the capital invested in this area decline over the course of the next couple years. Great. We're living through this real time, and I'm talking about the tariff actions more specifically in relation to Canada the recent Canadian tariff actions that have happened are they expected to have any material impact on your business we have a very limited impact from tariffs on our business so about 85% of our business is service related so not impacted by tariffs the one area of the business that you may have concern about is the cobalt 60 product which we ship from our facility in Canada. The good news is that we've spent years educating policymakers around the importance and the central nature of this to health care. So it's exempt under the USMCA. So we expect that to continue. So good news. I mean, obviously, it's an incredibly turbulent time, and I've lived this in former lives. But the good news is we're pretty insulated from the tariff situation. Great. Speaking of the volatile times that we live in, the Middle East conflict, how does that affect your business, if at all, or are you relatively insulated? So financially, we are relatively insilated. So it's not material for us financially. We do have customers in the Middle Eastern. We're doing what we can to work with them closely. But financially, it's on impact. Okay. At your investor day in November 24th, so pre your time at the company, spoke about committing to 50 to 150 basis points of margin expansion over the period. How are you tracking on that? And can you help explain the primary drivers for that margin expansion? Sure, so we're tracking well. So as you said, in November of 24, we outlined from 25 to 27, between a 50 and 150 basis point improvement in our EBITDA margin. We improved our EBIDDA margin 118 basis points in 2025. And if you look at the midpoint of our guide for full year 2026, we're between 20 and 25 basis point improvements. So through 26, we're very close to achieving the top end of our EBITA margin expansion guide. So we feel very good about that, and obviously we're going to continue to do what we can to improve that further. There are a few drivers here, but the number one driver is really volume. So when we think about our sterigenics business in particular, obviously large, high-margin business, the more volume that we can push through those plants, the more we can leverage our fixed costs, and that's some of the impact that you've seen over the course of the last couple years. We're obviously also incredibly focused on operational efficiency and productivity measures and you know not only does that help our margin but that helps our customer service and again building more trust with our customers, building more partnerships with our customer, which long-term are going to have a positive impact on our business, but also we continue to have a really strong pricing discipline in our business and that obviously has a material impact on our margins as well. Great. You touched upon this earlier in the conversation about the integration between Sterigenics and Nelson Labs. Can you help expand on that a bit and help the audience and the investors understand? How are the two together synergistic for the customers? Absolutely. So the easiest way to think about this is when you have a a product that's being sterilized, you need to test it for sterility assurance as well. So the investment thesis for Nelson Labs and Sterigenics to be together under Sotero Health is if you can have that seamless experience with the customer, you can offer differentiated solutions and just make life easier for that customer. So that is something that we are pushing very hard to be able to deliver to our customers now so we've done a number of things in our organization to facilitate this you know we've got a corporate accounts team that manages our largest customers and they coordinate between the Nelson leaders or the Nelson account leaders and the stereogenic account leaders and really work on having that integrated approach to the customer in In addition, and this is an area where I personally am pushing pretty hard since I've been in the organization. Once you get to, not those top 20, not those top 25 accounts that don't have a corporate account leader. You need to rely on the teams that are working with those customers within each of the regions in Nelson Labs and within Sterigenics. So we're working hard on ensuring there's a strong coordination and that there is an integrated approach in how we go to market and how we can provide additional services to our customers. Which again, not only should help us because they'll do more lab testing services, for example, which is good for Nelson Labs and overall Zotera. But it should be good for the customer, right? They have potentially one less supplier that they need to worry about. They get to work with a company like Nelson Labs that is an absolute technical expert with fantastic reputation in the market, if we can execute on that both operationally and with our commercial teams, I see a real opportunity there. And, you know, we've been talking about cross-business unit coordination for a while. I'm very excited that we're putting even more heat on that right now and shining a brighter light on it. And I'm hopeful that it's going to drive additional growth. Wonderful. If we can just switch gears and talk about capital allocation. Sure. Can you talk a bit about your recent CapEx profile and how it might look going forward? Yeah, so we guided to between 200 and 225 million in capital or CapEx here in 2026 and that's really a high watermark for our organization and that is driven by three key programs. One is the enhancements to our US-based EO facilities in response to the the NESHAP regulations. Two is the Cobalt 60 development programs that we talked about including the the work with with Westinghouse. And then third is the Greenfield projects that that we're engaged in today. Obviously the North Carolina based X-ray facility is up and running, but our new facility that we have that will be up and running in early 2028, there's still a good chunk of capital that needs to be spent on that. That said, we're starting to roll off on all three of these because the EO work should be essentially complete by early 2027. So as we go forward and we get into 2027, we haven't commented on what our capex will be in 2027 but it will be materially lower than what we see here in 2026. Overall, we're very happy with the investments that we've made for capacity and security supply for Cobalt 60, capacity for Sterigenics and we're in a good place for capacity in Nelson Labs as well. Wonderful. You've recently achieved the top end of your long term net leverage ratio goal of two to three times. Can you describe your capital allocation strategy and if that may evolve? Yeah, sure. So our capital allocation strategy has remained relatively unchanged over the course of the last couple years. So we continue to prioritize organic investments or organic growth investments. Next, we have strategic M&A. So we are going to obviously generate a lot of cash over the course of the next couple years and naturally that leverage ratio is going to come down with the improvement of our EBITDA so we do have more flexibility with our capital so you could see things like share repurchases that we're going to look at we don't have authorization for that at this time but that's something that we will will likely entertain and take a look at at this point because of the natural leverage reduction due to the improvement in in EBITDA, we don't expect to pay down any debt, additional debt, anytime soon. But overall, we really like the flexibility that we've got with the improved cash generation. And personally, I'm excited about investing in growth opportunities. Great. One of the things you just touched upon was M&A. Yeah. Can you elaborate on how are you thinking about M&As and specifically what are your areas of focus, if any? Sure. We are actively evaluating M&A opportunities now, and we're going to continue to be disciplined and ensure that any M&As that we engage in is going to be strategic and drive growth for our organization. We are primarily focused in sterigenics and sterilization services. So we are looking across geographies, looking at tuck-in acquisitions for sterigencs. Our eyes are open in the other businesses, but there's a real focus in sterilization services at this time. Great. What do you think is the most underappreciated part about Sotero Health by its investors today? A couple things. One, and probably the top of the list, is just the durability of this business. This business has grown revenue every year for the last 20 years. We are in a, we serve markets that we know are going to grow in medical device as well as pharmaceuticals. We have an absolutely essential offering across our businesses and it's hard for me to imagine a more durable investment in this environment. So that's one thing. The second is the growth opportunities that we have within our organization. One is around the flexibility we'll have with increased capital to deploy. But also, we think about how we're going to market, how we are serving our customers. I firmly believe that with the continued improvement in our culture around customer focus, a continued focus on providing an integrated solution to our customers, especially across Sterigenics and Nelson Labs. And just becoming easier to work with and having a seamless experience for our customers is going to drive incremental growth for our business. I know we've been talking about it for a while, but again, there is a, I'd say, increased intensity around that within our organization now. And I think there's a real opportunity to drive additional growth. Great, one last question from me. Sure. When you look out three to five years, how do you think Zotero service offerings will evolve for its customers? Are there any obvious places where you would like Zotera to be where it's not in today? Yeah, one thing I'll hit on, for M&A I didn't hit on. We're not looking to add another leg to the stool here, right? So when I look out three to five years, I'm not envisioning another completely different business unit that we don't have today, so that's one. I think the most important difference in our business and something that I think is something that would really like to see, again, is more of a one Sotera approach to our customers. Integration of our businesses and not structural integration, but being able to have an integrated offering and how we go to market is something that can truly differentiate our business in the eyes of the customer. As we do that, as we become more seamless in our offering, we become easier to work with, all of those things really matter as a service business. On top of that, I expect us to have more scale in regions outside of the U.S., so I would expect us to see more opportunities outside the U!S. and be able to invest in those opportunities, and I think if we do those things right, we're going to continue to build on the great base that we have as a business today and become an absolute leader in our space and drive outsized growth. Wonderful. I think we have two minutes left. Any questions from the audience? Sure. so we haven't done an analysis on that we have not and we haven t really seen either the benefit or the downside to any inventory stocking or D stocking so I I don't see a a material impact from that at this time but thanks for the question. Yeah, so you talked about free cash flow conversion that you said. So a couple things I'll hit on. One, in our 2024 investor day, we hit on the fact that in the planning period from 25 to 27 we expect to generate between 500 and 600 million dollars of free cash flow and we're very confident that we're going to be able to achieve that or over achieve that uh 600 million number um so you know that that's uh that's how i'd address that would you like me to go into any more detail on that Sure, so part of that is the capital we're investing at this time. As we move forward, again, as I said, we've got this high watermark in CapEx right now. As that capital comes down, we're going to see an improvement in the free cash conversion and overall free cash flow. Thank you so much, Alton. That's all the time we have for today. Thank you for coming and taking our questions. Yeah, appreciate it. Thank you. Thanks, sir.