79% Increase In Net Income - EPS of $0.94 vs. $0.53 - For Year
Ended July 31, 2009 LITTLE FALLS, N.J., Oct. 9
/PRNewswire-FirstCall/ -- CANTEL MEDICAL CORP. (NYSE:CMN) reported
a 65% increase in net income to $4,279,000, or $0.26 per diluted
share, on a 4% increase in sales to a record $66,793,000 for the
fourth quarter ended July 31, 2009. This compares with net income
of $2,596,000, or $0.16 per diluted share, on sales of $64,281,000
for the fourth quarter ended July 31, 2008. For the fiscal year
ended July 31, 2009, the Company reported a 79% increase in net
income to $15,569,000, or $0.94 per diluted share, on a 4% increase
in sales to $260,050,000. This compares with net income of
$8,693,000, or $0.53 per diluted share, on sales of $249,374,000
for the fiscal year ended July 31, 2008. Additionally, EBITDAS for
the fiscal year increased 32% from $31,786,000 to $42,059,000.
According to Andrew Krakauer, Cantel's President and CEO, "We are
pleased to have delivered another quarter of substantial earnings
growth. This reflects our seventh sequential quarter of improved
results. Cantel continued to benefit from increased sales of higher
margin consumables, including disinfectants, sterilants and face
masks, as well as an increase in service. These recurring revenues
now make up 75% of overall sales." Krakauer added, "Specifically,
Cantel benefited greatly in the quarter from the strength of its
Healthcare Disposables segment where sales and operating profits
grew by 21% and 146%, respectively. This outstanding performance
was primarily driven by face mask sales tied to the spread of the
'swine flu' or novel H1N1 virus. Cantel is one of the largest
United States based manufacturers of FDA-cleared face masks. In the
quarter, we also had strong performances in both our dialysis and
endoscope reprocessing businesses due to increased sales of both
reprocessing equipment and consumables, further aided by reductions
in manufacturing and distribution costs." Krakauer continued, "The
diversity of Cantel's product portfolio within Infection Prevention
and Control and our focus on growing consumables and service
revenue, supported by a large base of installed equipment, have
benefited our consolidated results during the quarter and for the
full 2009 fiscal year. Excluding the Dialysis segment, where sales
of low margin dialysate concentrate fell as expected, revenue
growth for the full fiscal year was 7.6%. Despite difficult
economic conditions during the year, all of our reporting segments
showed good growth in earnings resulting from a favorable sales
mix, the implementation of price increases, success from new
product introductions, benefits derived from sales and marketing
investments, and ongoing cost improvement programs. Additionally,
our earnings were positively impacted from reduced interest
expenses. We remain optimistic that our strong momentum will
continue into fiscal year 2010, and we plan to accelerate our new
product development efforts, continue investing in sales and
marketing (including our alternative channel programs) and
aggressively seek strategic acquisitions to improve our revenue
growth rate and operating margins in fiscal year 2011 and beyond."
The Company further reported that its balance sheet at July 31,
2009 included current assets of $88,910,000, including cash of
$23,368,000, a current ratio of 2.3:1, gross debt of $43,300,000,
stockholders' equity of $187,116,000 and a ratio of gross debt to
EBITDAS of 1.0. Krakauer stated, "The Company has a strong balance
sheet and continues to generate significant cash flow. Our cash
provided by operating activities was $9,699,000 for the fourth
quarter and $30,992,000 for the full year. We have halved our net
debt position in fiscal 2009 to $19,932,000, including a reduction
of over $7 million in the fourth quarter, even after funding more
than $4 million to acquire G.E.M. Water Systems." 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 fourth quarter ended July 31, 2009 on Friday,
October 9, 2009 at 11:00 AM Eastern time. To participate in the
conference call, dial 1-877-407-8035 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 Friday, October
9 at 2:00 PM through midnight on October 16, by dialing
1-877-660-6853 and using passcode #286 and conference ID #334331.
The call will be simultaneously broadcast live over the Internet on
vcall.com at
http://www.investorcalendar.com/IC/CEPage.asp?ID=150483. A replay
of the webcast will be available on Vcall for 30 days. For further
information, visit the Cantel website at
http://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 Twelve Months Ended July
31, July 31, ------------------ ------------------- 2009 2008 2009
2008 ------ ------ ------ ------ Net sales $66,793 $64,281 $260,050
$249,374 Cost of sales 40,071 41,628 160,571 161,748 ------ ------
------ ------ Gross profit 26,722 22,653 99,479 87,626 Expenses:
Selling 8,072 7,821 30,398 28,636 General and administrative 9,831
9,166 36,998 37,013 Research and development 1,323 1,131 4,632
4,010 ------ ------ ------ ------ Total operating expenses 19,226
18,118 72,028 69,659 ------ ------ ------ ------ Income before
interest and income taxes 7,496 4,535 27,451 17,967 Interest
expense 626 969 2,639 4,631 Interest income (12) (121) (144) (515)
------ ------ ------ ------ Income before income taxes 6,882 3,687
24,956 13,851 Income taxes 2,603 1,091 9,387 5,158 ------ ------
------ ------ Net income $4,279 $2,596 $15,569 $8,693 ====== ======
======= ====== Earnings per common share - diluted $0.26 $0.16
$0.94 $0.53 ====== ====== ======= ====== Weighted average shares -
diluted 16,606 16,396 16,481 16,371 CANTEL MEDICAL CORP. CONDENSED
CONSOLIDATED BALANCE SHEETS (In thousands) July 31, July 31, 2009
2008 -------- -------- Assets Current assets $88,910 $84,561
Property and equipment, net 35,968 37,920 Intangible assets 37,042
41,254 Goodwill 114,995 113,958 Other assets 956 1,497 --------
-------- $277,871 $279,190 ======== ======== Liabilities and
stockholders' equity Current portion of long-term debt $10,000
$8,000 Other current liabilities 29,113 30,922 Long-term debt
33,300 50,300 Other long-term liabilities 18,342 21,256
Stockholders' equity 187,116 168,712 -------- -------- $277,871
$279,190 ======== ======== 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 twelve months ended July
31, 2009 and 2008, respectively, is as follows (in thousands):
Three Months Ended Twelve Months Ended July 31, July 31,
------------------ ------------------- 2009 2008 2009 2008 ------
------ ------ ------ Net income $4,279 $2,596 $15,569 $8,693 Income
taxes 2,603 1,091 9,387 5,158 Interest expense 626 969 2,639 4,631
Interest income (12) (121) (144) (515) Depreciation 1,580 1,568
6,217 6,058 Amortization 1,282 1,377 5,152 5,674 Loss on disposal
of fixed assets 30 46 52 126 ------ ------ ------ ------ EBITDA
10,388 7,526 38,872 29,825 Stock-based compensation expense 1,358
478 3,187 1,961 ------ ------ ------ ------ EBITDAS $11,746 $8,004
$42,059 $31,786 ======= ====== ======= ======= 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.
DATASOURCE: Cantel Medical Corp. CONTACT: Andrew A. Krakauer,
President & CEO, Cantel Medical Corp., +1-973-890-7220; or
Richard E. Moyer, Cameron Associates, Inc., +1-212-554-5466, Web
Site: http://www.cantelmedical.com/
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