2014

Cantel Medical Reports 25% Increase in Net Income - EPS of $0.35 vs. $0.29 - for Quarter Ended October 31, 2011 on 30% Sales Increase

LITTLE FALLS, N.J., Dec. 8, 2011 /PRNewswire/ -- CANTEL MEDICAL CORP. (NYSE: CMN) reported a 25% increase in net income to $6,220,000, or $0.35 per diluted share, on a 30% increase in sales to a record $93,262,000 for the first quarter ended October 31, 2011. This compares with net income of $4,975,000, or $0.29 per diluted share, on sales of $71,993,000 for the first quarter ended October 31, 2010.

Andrew Krakauer, Cantel's President and CEO stated, "We are pleased to have delivered record sales and strong quarterly earnings. These positive results confirm the continued success of our three prong approach to growth which includes investing in new product development, sales and marketing programs and acquisitions. All of these strategies positively affected the results this quarter."

Krakauer added, "Our Endoscopy segment had an especially stellar performance this quarter as organic sales grew by 25%, excluding sales from our newly acquired Byrne Medical business. This growth was driven by increased shipments of our newest reprocessor, the DSD Edge™, as well as disinfectants and sterilants, parts and service.  Byrne Medical, which is in the process of being integrated into the Endoscopy segment, had core sales growth in excess of 30% and was accretive to earnings in the quarter. We also had excellent performance in our Water Purification and Filtration segment, where sales growth of 21% and effective integration of the Gambro water acquisition resulted in a 57% increase in operating income."

The Company also reported that its balance sheet at October 31, 2011 included current assets of $118,617,000, including cash of $19,646,000, a current ratio of 2.27:1, gross debt of $116,500,000 and stockholders' equity of $247,257,000. Krakauer stated, "We continue to maintain a strong balance sheet and generate substantial cash flow and EBITDAS. When compared with the same quarter last year, our EBITDAS grew by 36% to $15,680,000. We were able to reduce our net debt position by approximately $7 million to $96,854,000, since the close of the Byrne Medical acquisition on the first day of this quarter."

Cantel Medical Corp. (NYSE: CMN) is a leading provider of infection prevention and control products in the healthcare market. Our products include water purification equipment, sterilants, disinfectants and cleaners, specialized medical device reprocessing systems for endoscopy and renal dialysis, disposable infection control products primarily for dental and GI endoscopy markets, dialysate concentrates and other dialysis supplies, hollow fiber membrane filtration and separation products for medical and non-medical applications, and specialty packaging for the transport and temperature regulation of infectious and biological specimens.

The Company will hold a conference call to discuss the results for the first quarter ended October 31, 2011 on Thursday, December 8, 2011 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, December 8, 2011 at 2:00 PM through midnight on February 8, 2012 by dialing (877) 660-6853 and using pass code # 286 and conference ID # 384108.

The call will be simultaneously broadcast live over the Internet on vcall.com at http://www.investorcalendar.com/IC/CEPage.asp?ID=166708.  A replay of the webcast will be available on Vcall for 90 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)

(unaudited)

 

 

 

 

 

 

 

Three Months Ended

 

 

October 31,

 

 

2011

 

2010

 

 

 

 

 

Net sales

 

$     93,262

 

$     71,993

 

 

 

 

 

Cost of sales

 

55,312

 

43,801

 

 

 

 

 

Gross profit

 

37,950

 

28,192

 

 

 

 

 

Expenses:

 

 

 

 

  Selling

 

12,923

 

9,631

  General and administrative

 

12,102

 

9,118

  Research and development

 

2,145

 

1,629

Total operating expenses

 

27,170

 

20,378

 

 

 

 

 

Income before interest and income taxes

 

10,780

 

7,814

 

 

 

 

 

Interest expense  

 

1,031

 

241

Interest income

 

(30)

 

(19)

 

 

 

 

 

Income before income taxes

 

9,779

 

7,592

 

 

 

 

 

Income taxes

 

3,559

 

2,617

 

 

 

 

 

Net income 

 

$      6,220

 

$      4,975

 

 

 

 

 

Earnings per common share - diluted  

 

$        0.35

 

$        0.29

 

 

 

 

 

Dividends per common share 

 

$        0.07

 

$        0.06

 

 

 

 

 

Weighted average shares - diluted 

 

17,933

 

16,993

  

 

CANTEL MEDICAL CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

October 31,

 

July 31,

 

 

2011

 

2011

                    Assets

 

 

 

 

     Current assets

 

$     118,617

 

$     111,324

     Property and equipment, net

 

44,214

 

34,459

     Intangible assets, net

 

78,167

 

39,191

     Goodwill

 

184,545

 

134,770

     Other assets

 

3,678

 

1,699

 

 

$     429,221

 

$     321,443

 

 

 

 

 

            Liabilities and stockholders' equity

 

 

 

 

     Current portion of long-term debt

 

$       10,000

 

$                -

     Other current liabilities

 

42,212

 

43,411

     Long-term debt

 

106,500

 

24,000

     Other long-term liabilities 

 

23,252

 

19,717

     Stockholders' equity

 

247,257

 

234,315

 

 

$     429,221

 

$     321,443

 

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, 2011 and 2010,

 

respectively, is as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

October 31,

 

 

 

 

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$      6,220

 

$      4,975

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

3,559

 

2,617

 

 

 

Interest expense  

 

1,031

 

241

 

 

 

Interest income

 

(30)

 

(19)

 

 

 

Depreciation

 

1,677

 

1,628

 

 

 

Amortization

 

2,289

 

1,319

 

 

 

Loss (gain) on disposal of fixed assets

 

3

 

(11)

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

14,749

 

10,750

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

931

 

765

 

 

 

 

 

 

 

 

 

 

 

EBITDAS

 

$    15,680

 

$    11,515

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.



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