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