Cantel Medical Reports 72% Increase in Net Income on Record Sales – EPS of $0.20 vs. $0.12 for Quarter Ended October 31, 2008
Krakauer added, “While all businesses performed well, our Endoscope Reprocessing and Water Purification and Filtration units were significantly ahead of last year, aided by strong sales of higher margin consumables including disinfectants, sterilants and filters. We also benefited from our active cost reduction and margin improvement programs, the implementation of price increases and reduced interest expenses.”
Krakauer continued, “Despite economic uncertainties, we remain focused on our strategies to grow and improve performance. We believe our leadership positions in several infection prevention and control markets, coupled with the fact that over 70% of our sales come from disposables and service, will continue to benefit us despite difficult economic conditions. We are proactively taking steps to address challenges related to the weakening economy.”
The Company further reported that its balance sheet at
Cantel Medical Corp. is a leading provider of infection prevention and control products in the healthcare market. Our products include specialized medical device reprocessing systems for renal dialysis and endoscopy, dialysate concentrates and other dialysis supplies, disposable infection control products primarily for the dental industry, water purification equipment, sterilants, disinfectants and cleaners, hollow fiber membrane filtration and separation products for medical and non-medical applications, and specialty packaging for infectious and biological specimens. We also provide technical maintenance for our products and offer compliance training services for the transport of infectious and biological specimens.
The Company will hold a conference call to discuss the results for the first quarter ended
The call will be simultaneously broadcast live over the Internet on vcall.com at http://www.investorcalendar.com/IC/CEPage.asp?ID=138525. A replay of the webcast will be available on Vcall for 30 days.
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)
Three Months Ended
October 31,
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2008 2007
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Net sales $64,406 $60,005
Cost of sales 40,783 38,799
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Gross profit 23,623 21,206
Expenses:
Selling 7,350 6,789
General and administrative 9,024 8,957
Research and development 1,065 990
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Total operating expenses 17,439 16,736
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Income before interest and income taxes 6,184 4,470
Interest expense 751 1,222
Interest income (70) (147)
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Income before income taxes 5,503 3,395
Income taxes 2,170 1,456
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Net income $3,333 $1,939
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Earnings per common share - diluted $0.20 $0.12
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Weighted average shares - diluted 16,349 16,331
CANTEL MEDICAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
October 31, July 31,
2008 2008
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Assets
Current assets $81,736 $84,561
Property and equipment, net 37,139 37,920
Intangible assets 39,347 41,254
Goodwill 112,173 113,958
Other assets 1,290 1,497
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$271,685 $279,190
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Liabilities and stockholders' equity
Current portion of long-term debt $8,500 $8,000
Other current liabilities 26,248 30,922
Long-term debt 48,800 50,300
Other long-term liabilities 20,299 21,256
Stockholders' equity 167,838 168,712
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$271,685 $279,190
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SUPPLEMENTARY INFORMATION
Reconciliation of Earnings Before Interest, Taxes, Depreciation,
Amortization and Stock-Based Compensation Expense ("EBITDAS")
The reconciliation of EBITDAS with net income for the three months
ended October 31, 2008 and 2007, respectively, is as follows (in
thousands):
Three Months Ended
October 31,
-----------
2008 2007
---- ----
Net income $3,333 $1,939
Income taxes 2,170 1,456
Interest expense 751 1,222
Interest income (70) (147)
Depreciation 1,550 1,445
Amortization 1,338 1,399
Loss on disposal of fixed assets 14 -
-- -
EBITDA 9,086 7,314
Stock-based compensation expense 520 532
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EBITDAS $9,606 $7,846
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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, should be considered in addition to, and not as a substitute or superior to, net income, cash flows, or other measures of financial performance prepared in accordance with GAAP.
SOURCE Cantel Medical Corp.