CMD Cantel Medical Corp

CANTEL MEDICAL CORP. (NYSE:CMN) reported net income of $4,714,000, an increase of 48%, or $0.29 per diluted share, on sales of $51,990,000, an increase of 15%, for the quarter ended July 31, 2005, as compared with net income of $3,192,000, or $0.20 per diluted share, on sales of $45,150,000 for the quarter ended July 31, 2004. Of the 15% increase in net sales, 14% was from the Company's core businesses and 1% was from the acquisition of Saf-T-Pak during fiscal 2004. For the year ended July 31, 2005, the Company reported net income of $15,505,000, an increase of 46%, or $0.96 per diluted share, on sales of $197,402,000, an increase of 16%, as compared with net income of $10,654,000, or $0.70 per diluted share, on sales of $169,993,000 for the year ended July 31, 2004. Of the 16% increase in net sales, 14% was from the Company's core businesses and 2% was from the acquisition of Saf-T-Pak during fiscal 2004. The Company further reported that its balance sheet at July 31, 2005 showed continued improvement with current assets of $93,666,000, including cash of $33,335,000, a current ratio of 2.94:1, a ratio of funded debt to equity of .15:1 and stockholders' equity of $108,626,000. Mr. James P. Reilly, President and Chief Executive Officer of Cantel, commented, "We are very pleased with the outstanding results for the quarter and the year ended July 31, 2005. These results, combined with the acquisition of Crosstex International in August 2005, provide significant momentum and position us well for fiscal 2006 and 2007." Reilly further commented, "Although we remain optimistic about Cantel's results during these periods, we face several challenges going forward. One such challenge arises from the non-renewal of the Carsen distribution of Olympus products in Canada at July 31, 2006 and the related wind down costs, some of which will be accrued throughout fiscal 2006. In addition, we will likely be affected by the continuing consolidation in the dialysis industry, which could result in a reduction of reuse dialysis clinics as well as increased pricing pressures on some of our dialysis products." Reilly added, "While Crosstex represents an outstanding growth opportunity, the Company's results will be impacted during the first quarter of fiscal 2006 by the one-time expenses related to the Crosstex acquisition and throughout the year by the effect of the purchase accounting adjustments." Reilly added, "During fiscal 2006, we will continue to concentrate on the growth of our existing businesses while searching for quality acquisition opportunities. We will continue to enhance our position as a leading provider of infection prevention and control products and services, while working to replace the Carsen distribution business in fiscal 2007." Cantel Medical Corp., a healthcare company, is a leading provider of infection prevention and control products, which include specialized medical device reprocessing systems for renal dialysis and endoscopy, disposable infection control products primarily for the dental industry, water treatment systems, sterilants, diagnostic imaging and therapeutic medical equipment primarily focused on endoscopy, hollow fiber membrane filtration and separation technologies for medical and non-medical applications, and specialized packaging for infectious and biological specimens. The Company also sells scientific instrumentation products and provides technical maintenance services for its products. The Company will hold a conference call to discuss the results for the quarter and year ended July 31, 2005 on Thursday, September 29, 2005 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 Thursday, September 29 at 2:00 PM through midnight on September 30, by dialing 1-877-660-6853 and using passcode #286 and conference ID #170903. The call will be simultaneously broadcast live over the Internet on vcall.com at http://www.vcall.com/CEPage.asp?ID= 95582. A replay of the webcast will be available on Vcall for 30 days. For further information, visit the Cantel Web site at www.cantelmedical.com. This press release contains forward-looking statements. All forward-looking statements involve risks and uncertainties, including, without limitation, the risks detailed in the Company's filings and reports with the Securities and Exchange Commission. Such statements are only predictions, and actual events or results may differ materially from those projected. -0- *T CANTEL MEDICAL CORP. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) Three Months Ended Year Ended July 31, July 31, --------------- ----------------- 2005 2004 2005 2004 ------- ------- -------- -------- Net sales $51,990 $45,150 $197,402 $169,993 Cost of sales 31,309 28,238 121,162 107,537 ------- ------- -------- -------- Gross profit 20,681 16,912 76,240 62,456 Operating expenses: Selling 5,787 5,732 23,016 20,749 General and administrative 6,444 4,623 22,935 18,599 Research and development 990 939 4,099 4,212 ------- ------- -------- -------- Total operating expenses 13,221 11,294 50,050 43,560 ------- ------- -------- -------- Income before interest and income taxes 7,460 5,618 26,190 18,896 Interest expense - net 175 377 1,058 1,582 ------- ------- -------- -------- Income before income taxes 7,285 5,241 25,132 17,314 Income taxes 2,571 2,049 9,627 6,660 ------- ------- -------- -------- Net income $ 4,714 $ 3,192 $ 15,505 $ 10,654 ======= ======= ======== ======== Earnings per common share - diluted $ 0.29 $ 0.20 $ 0.96 $ 0.70 ======= ======= ======== ======== Weighted average shares - diluted 16,248 15,659 16,208 15,244 CANTEL MEDICAL CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) July 31, July 31, 2005 2004 ----------- ------------ Assets Current assets $ 93,666 $ 73,863 Property and equipment, net 22,661 22,715 Intangible assets 13,317 13,897 Goodwill 33,343 33,330 Other assets 1,353 2,562 ----------- ------------ $ 164,340 $ 146,367 =========== ============ Liabilities and stockholders' equity Current liabilities $ 31,901 $ 27,128 Long-term liabilities 23,813 32,728 Stockholders' equity 108,626 86,511 ----------- ------------ $ 164,340 $ 146,367 =========== ============ *T