Cantel Medical to Relocate Dutch Manufacturing Operations to the United States to Achieve Operating Savings
June 30 2008 - 12:01PM
PR Newswire (US)
- Part of continuing effort to reduce costs and improve operating
efficiencies LITTLE FALLS, N.J., June 30 /PRNewswire-FirstCall/ --
CANTEL MEDICAL CORP. (NYSE:CMN) announced that its Minntech
Corporation subsidiary will relocate all of its remaining Dutch
manufacturing operations to the United States. This action is part
of Cantel's continuing effort to reduce operating costs and
leverage the existing infrastructure of its Minntech operations in
Minneapolis. The elimination of the Dutch manufacturing operations
will lead to the discontinuance of onsite material management,
quality assurance, finance and accounting, human resources and some
customer service functions. Minntech will continue to maintain a
strong marketing, sales, service and technical support presence
based in Holland to serve customers throughout Europe, the Middle
East and Africa. According to Andrew Krakauer, Cantel's President,
"This action is designed to keep a strong sales and service
presence in Europe, while significantly leveraging existing
infrastructure and overhead in our Minntech subsidiary. This
streamlining should be completed by December 31, 2008 and is
anticipated to result in annual pre-tax savings of over
$1,000,000." In connection with the relocation plan, based on
management's preliminary good faith estimate, the Company
anticipates incurring severance costs of approximately $550,000,
asset impairment charges in the range of $200,000 to $300,000 and
inventory write-down and other associated costs of approximately
$200,000. Of those amounts, the Company anticipates that
approximately 50-60% will be recorded in the 4th quarter of FY 2008
and the balance recorded during the first four months of FY 2009.
Additionally, the Company intends to sell its facility in Holland.
Although the timing and financial effect of this sale are currently
unknown, based on the appraised value of the facility, the Company
anticipates that it will generate a gain on the sale of
approximately $300,000. Krakauer added, "This restructuring
exemplifies Cantel's commitment to improved financial performance,
especially in light of the recent unprecedented cost increases in
raw material and transportation costs being experienced throughout
its divisions. These cost increases will clearly have a negative
impact on the Company's FY 2008 4th quarter performance. However,
despite these increases, we believe various initiatives now being
undertaken by our divisions and at corporate headquarters
(including the imposition of price increases to our customers) will
lead to significant earnings growth in FY 2009 and beyond." 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. 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. DATASOURCE: Cantel
Medical Corp. CONTACT: Andrew A. Krakauer, President of Cantel
Medical Corp., +1-973-890-7220; or Richard E. Moyer of Cameron
Associates, Inc., +1-212-554-5466, , for Cantel Medical Corp. Web
site: http://www.cantelmedical.com/
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