Cantel Medical Reports 62% Increase in Net Income - EPS of $0.30 vs. $0.19 - on 18% Sales Increase for Third Quarter Ended April 30, 2012

Jun 07, 2012, 08:30 ET from Cantel Medical Corp.

LITTLE FALLS, N.J., June 7, 2012 /PRNewswire/ -- CANTEL MEDICAL CORP. (NYSE: CMN) reported a 62% increase in net income to a record $8,174,000, or $0.30 per diluted share, on an 18% increase in sales to $97,238,000 for the third quarter ended April 30, 2012. This compares with net income of $5,048,000, or $0.19 per diluted share, on sales of $82,619,000 for the third quarter ended April 30, 2011. For the nine months ended April 30, 2012, the Company reported net income of $21,688,000, or $0.80 per diluted share, on a 22% increase in sales to $287,797,000. This compares with net income of $15,743,000, or $0.61 per diluted share, on sales of $235,633,000 for the nine months ended April 30, 2011.

Andrew Krakauer, Cantel's President and CEO stated, "We are pleased to have delivered strong sales growth and record quarterly earnings in the third quarter. Once again, Cantel's positive results were driven by the continued success of our three prong approach to growth which includes investing in new product development, sales and marketing programs and acquisitions. Most importantly this quarter, results in each of our three largest segments, Endoscopy, Healthcare Disposables and Water Purification and Filtration, greatly benefited from gross margin expansion driven by successful integration of acquisitions, greater sales of higher margin products and improved operating efficiencies. Gross margins increased by about 6 percentage points to 43.8% compared with the same quarter last year."

Krakauer added, "As in the first half of this fiscal year, our Endoscopy segment, led by our newly acquired Byrne Medical business, had excellent performance as sales increased by 41% and operating profit grew by 122%. Byrne products (now named Medivators procedural products) showed core growth of 28%, and the acquisition was accretive to earnings. The Byrne business has been integrated with our legacy endoscope reprocessing business under the "Medivators" name to establish the infection control leader in the gastrointestinal (GI) endoscopy market. We introduced the new Medivators business to our customers at two major trade shows in May and were very pleased by our customers' favorable reactions to the combined business, as well as to a number of new products launched or soon to be launched that were exhibited.

Cantel's two other largest business segments also performed well. In our Healthcare Disposables unit, due to greatly improved gross margins, operating profit increased 51% on a 6% increase in sales. Sales in our Water Purification and Filtration business were 11% higher. However, with effective integration of the Gambro water acquisition and a focus on margin improvement, operating profit in this segment grew by 73%."

The Company further reported that its balance sheet at April 30, 2012 included current assets of $126,661,000, including cash of $25,027,000, a current ratio of 2.5:1, debt of $100,500,000 and stockholders' equity of $266,382,000.  Krakauer stated, "The Company has a strong balance sheet and continues to generate significant cash flow and EBITDAS.  When compared with the same quarter last year, our EBITDAS grew by 58% to $18,552,000. Our net debt position improved during the quarter by almost $11 million to $75,473,000. We have reduced our net position during the first three quarters by over $28 million."

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 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 third quarter ended April 30, 2012 on Thursday, June 7, 2012 at 10:00 AM Eastern time. To participate in the conference call, dial 1-877-407-8033 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, June 7, 2012 at 2:00 PM through midnight on August 7, 2012 by dialing 1-877-660-6853 and using passcode #286 and conference ID #395388.

The call will be simultaneously broadcast live over the Internet on vcall.com at : http://www.investorcalendar.com/IC/CEPage.asp?ID=168743. 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

Nine Months Ended

April 30,

April 30,

2012

2011

2012

2011

Net sales

$97,238

$82,619

$287,797

$235,633

Cost of sales

54,619

51,317

166,407

144,747

Gross profit

42,619

31,302

121,390

90,886

Expenses:

  Selling

14,240

11,505

40,433

31,928

  General and administrative

12,388

10,439

36,582

29,863

  Research and development

2,217

1,715

6,660

4,779

Total operating expenses

28,845

23,659

83,675

66,570

Income before interest, other expense

and income taxes

13,774

7,643

37,715

24,316

Interest expense  

897

195

2,928

698

Interest income

(13)

(24)

(67)

(62)

Other expense

-

-

605

-

Income before income taxes

12,890

7,472

34,249

23,680

Income taxes

4,716

2,424

12,561

7,937

Net income 

$  8,174

$  5,048

$  21,688

$  15,743

Earnings per common share - diluted  

$    0.30

$    0.19

$      0.80

$      0.61

Dividends per common share 

$          -

$         -

$      0.05

$      0.04

Weighted average shares - diluted 

27,282

26,121

27,148

25,900

  

CANTEL MEDICAL CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)

April 30,

July 31,

2012

2011

                    Assets

     Current assets

$126,661

$111,324

     Property and equipment, net

43,260

34,459

     Intangible assets, net

73,640

39,191

     Goodwill

183,703

134,770

     Other assets

3,055

1,699

$430,319

$321,443

            Liabilities and stockholders' equity

     Current portion of long-term debt

$  10,000

$         -

     Other current liabilities

40,691

43,411

     Long-term debt

90,500

24,000

     Other long-term liabilities 

22,746

19,717

     Stockholders' equity

266,382

234,315

$430,319

$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 and nine months ended April 30, 2012 and 2011,

respectively, is as follows (in thousands):

Three Months Ended

Nine Months Ended

April 30,

April 30,

2012

2011

2012

2011

Net income

$  8,174

$  5,048

$21,688

$15,743

Income taxes

4,716

2,424

12,561

7,937

Interest expense  

897

195

2,928

698

Interest income

(13)

(24)

(67)

(62)

Other expense

-

-

605

-

Depreciation

1,735

1,745

5,129

5,039

Amortization

2,279

1,465

6,846

4,190

Loss (gain) on disposal of fixed assets

58

1

94

(8)

EBITDA

17,846

10,854

49,784

33,537

Stock-based compensation expense

706

871

3,019

2,553

EBITDAS

$18,552

$11,725

$52,803

$36,090

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.



RELATED LINKS

http://www.cantelmedical.com