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Last updated on April 24, 2014 at 21:24 EDT

Cantel Medical Reports Record Performance on 15% Sales Increase with EPS of $0.25 vs. $0.24 ($0.22 as Adjusted) for Fourth Quarter

September 26, 2013

Full Year EPS of $0.95 Up 23% Over Prior Year on 10% Sales Growth

LITTLE FALLS, N.J., Sept. 26, 2013 /PRNewswire/ — CANTEL MEDICAL CORP. (NYSE: CMN) reported record net income of $10,213,000, or $0.25 per diluted share, on a 15% increase in sales to a record $113,973,000 for the fourth quarter ended July 31, 2013. This compares with net income of $9,649,000,or $0.24 per diluted share, on sales of $98,693,000 for the fourth quarter ended July 31, 2012, inclusive of a $0.02 favorable tax benefit related to the closing of our Japan subsidiary.

For the fiscal year ended July 31, 2013, the Company reported record net income of $39,239,000, or $0.95 per diluted share, on a 10% increase in sales to $425,026,000, inclusive of $0.01 in net favorable adjustments related to acquisition accounting partially offset by severance and recruiting costs. This compares with net income of $31,337,000, or $0.77 per diluted share, on sales of $386,490,000 for the fiscal year ended July 31, 2012, inclusive of a $0.02 favorable tax benefit related to the closing of our Japan subsidiary and a $0.01 charge related to the impairment of an investment.

Andrew Krakauer, Cantel’s President and CEO, stated, “We are pleased to have delivered record sales and earnings this quarter. We achieved good financial performance growth in our three major business segments — Endoscopy, Water Purification and Filtration, and Healthcare Disposables. All three business units have greatly benefited from further investments in new product development, sales and marketing programs and the integration of recent acquisitions for this quarter and for the full year. Most importantly this quarter, we had strong organic sales growth of 10% with a total sales increase of over 15%.”

Krakauer added, “Our Medivators Endoscopy business achieved record sales in the quarter with growth of 17%. All categories were strong, including equipment, disinfectant chemicals, procedural products, as well as service and spare parts. Our Mar Cor Water Purification and Filtration unit continued its excellent performance as it has all fiscal year with sales growth this quarter of 16%. Sales growth in this segment was led by increased shipments of central and portable water purification equipment. In our Crosstex Healthcare Disposables business, sales growth this quarter was 22% primarily due to the successful integration of the SPS Medical sterility assurance acquisition completed in November 2012. These substantial revenue increases drove the significantly improved operating earnings.

We are optimistic about Cantel’s prospects to expand sales and increase profits in fiscal year 2014. We expect to benefit from past and additional significant sales and marketing investments, continued progress with new products, and from recent and future acquisitions.”

The Company further reported that its balance sheet at July 31, 2013 included current assets of $150,660,000, including cash of $34,076,000, a current ratio of 2.5:1, gross debt of $95,000,000 and stockholders’ equity of $321,132,000. Krakauer stated, “The Company has a strong balance sheet and continues to generate significant cash flow and EBITDAS. For the full fiscal year 2013, EBITDAS grew by 17% to $84,368,000. Our net debt position improved this quarter by over $13 million to $60,924,000. In the nine months since the purchase of SPS Medical, we have reduced net debt by over $28 million.”

Cantel Medical is a leading global company dedicated to delivering innovative infection prevention and control products and services for patients, caregivers, and other healthcare providers which improve outcomes, enhance safety and help save lives. Our products include specialized medical device reprocessing systems for endoscopy and renal dialysis, advanced water purification equipment, sterilants, disinfectants and cleaners, sterility assurance monitoring products for hospitals and dental clinics, disposable infection control products primarily for dental and GI endoscopy markets, dialysate concentrates, hollow fiber membrane filtration and separation products, and specialty packaging for infectious and biological specimens. Additionally, we provide technical service for our products.

The Company will hold a conference call to discuss the results for the fourth quarter ended July 31, 2013 on Thursday, September 26, 2013 at 11:00 AM Eastern time. To participate in the conference call, dial (877) 407-8033 approximately 5 to 10 minutes before the beginning of the call. If you are unable to participate, a digital replay of the call will be available from Thursday, September 26, 2013 at 2:00 PM through midnight on November 26, 2013 by dialing (877) 660-6853 and using conference ID #100313.

The call will be simultaneously broadcast live over the Internet on vcall.com at http://www.investorcalendar.com/IC/CEPage.asp?ID=171627. A replay of the webcast will be available on Vcall for 90 days and via the investor relations page of the Cantel website.

For further information, visit the Cantel website at www.cantelmedical.com.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks and uncertainties, including, without limitation, the risks detailed in Cantel’s filings and reports with the Securities and Exchange Commission. Such forward-looking statements are only predictions, and actual events or results may differ materially from those projected or anticipated.

                            CANTEL MEDICAL CORP.

                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME

                    (In thousands, except per share data)

                                 (unaudited)

                                   Three Months Ended          Twelve Months
                                                                     Ended

                                        July 31,                 July 31,
                                        --------                 --------

                                      2013          2012         2013          2012
                                      ----          ----         ----          ----

    Net sales                     $113,973       $98,693     $425,026      $386,490

    Cost of sales                   64,859        55,916      241,550       222,323
                                    ------        ------      -------       -------

    Gross profit                    49,114        42,777      183,476       164,167

    Expenses:

      Selling                       15,554        14,733       57,786        55,166

      General and
       administrative               14,986        11,041       53,182        47,623

      Research and
       development                   2,444         2,594        9,320         9,254
                                     -----         -----        -----         -----

    Total operating
     expenses                       32,984        28,368      120,288       112,043
                                    ------        ------      -------       -------

    Income before
     interest, other
     expense and
     income taxes                   16,130        14,409       63,188        52,124

    Interest expense                   709           804        2,895         3,732

    Interest income                    (16)          (15)         (61)          (82)

    Other expense                        -             -            -           605
                                       ---           ---          ---           ---

    Income before
     income taxes                   15,437        13,620       60,354        47,869

    Income taxes                     5,224         3,971       21,115        16,532
                                     -----         -----       ------        ------

    Net income                     $10,213        $9,649      $39,239       $31,337
                                   =======        ======      =======       =======

    Earnings per
     common share -
     diluted                         $0.25         $0.24        $0.95         $0.77
                                     =====         =====        =====         =====

    Dividends per
     common share                    $0.04         $0.03        $0.07         $0.06
                                     =====         =====        =====         =====

    Weighted average
     shares -
     diluted                        41,296        40,956       41,197        40,777


                              CANTEL MEDICAL CORP.

                     CONDENSED CONSOLIDATED BALANCE SHEETS

                                 (In thousands)

                                  (unaudited)

                                           July 31,             July 31,

                                                   2013                 2012
                                                   ----                 ----

                        Assets

         Current assets                        $150,660             $133,892

         Property and equipment, net             46,465               43,022

         Intangible assets, net                  75,929               71,311

         Goodwill                               211,618              183,655

         Other assets                             2,999                2,932
                                                  -----                -----

                                               $487,671             $434,812
                                               ========             ========

                Liabilities and stockholders' equity

         Current portion of long-term
          debt                                  $10,000              $10,000

         Other current liabilities               49,151               45,141

         Long-term debt                          85,000               80,000

         Other long-term liabilities             22,388               23,735

         Stockholders' equity                   321,132              275,936

                                               $487,671             $434,812
                                               ========             ========

    SUPPLEMENTARY INFORMATION

    Reconciliation of Earnings Before Interest, Taxes, Depreciation, Amortization and Stock-Based

    Compensation Expense ("EBITDAS")

    (unaudited)

    The reconciliation of EBITDAS with net income for the three and twelve months ended July 31, 2013 and 2012,

    respectively, is as follows (in thousands):

                                               Three Months Ended         Twelve Months Ended

                                                    July 31,                    July 31,
                                                    --------                    --------

                                                  2013           2012           2013           2012
                                                  ----           ----           ----           ----

    Net income                                 $10,213         $9,649        $39,239        $31,337

    Income taxes                                 5,224          3,971         21,115         16,532

    Interest expense                               709            804          2,895          3,732

    Interest income                                (16)           (15)           (61)           (82)

    Other expense                                    -              -              -            605

    Depreciation                                 1,822          1,672          7,202          6,801

    Amortization                                 2,623          2,278         10,061          9,124

    Loss on disposal of
     fixed assets                                   60             11            184            105
                                                   ---            ---            ---            ---

    EBITDA                                      20,635         18,370         80,635         68,154

    Stock-based
     compensation expense                          927            821          3,733          3,840
                                                   ---            ---          -----          -----

    EBITDAS                                    $21,562        $19,191        $84,368        $71,994
                                               =======        =======        =======        =======

                                                                                                                EBITDAS is a measure of the Company's performance that is not required by, or presented in accordance with, Generally
                                                                                                                 Accepted Accounting Principles ("GAAP"). EBITDAS is a non-GAAP financial measure defined by the Company as income before
                                                                                                                 interest, taxes, depreciation, amortization and stock-based compensation expense. The Company believes EBITDAS is an
                                                                                                                 important valuation measurement for management and investors given the increasing effect that non-cash charges, such as
                                                                                                                 stock-based compensation, amortization related to acquisitions and depreciation of capital equipment, has on the
                                                                                                                 Company's net income. In particular, acquisitions have historically resulted in significant increases in amortization of
                                                                                                                 intangible assets that reduced the Company's net income. Additionally, the Company regards EBITDAS as a useful measure of
                                                                                                                 operating performance and cash flow before the effect of interest expense and complements operating income, net income and
                                                                                                                 other GAAP financial performance measures. Generally, a non-GAAP financial measure is a numerical measure of a Company's
                                                                                                                 performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or
                                                                                                                 included in the most directly comparable measure calculated and presented in accordance with GAAP. This measure, however,

SOURCE Cantel Medical Corp.


Source: PR Newswire