CMD Cantel Medical Corp

LITTLE FALLS, N.J., June 4 /PRNewswire-FirstCall/ -- CANTEL MEDICAL CORP. (NYSE:CMN) reported a 109% increase in net income to $4,183,000, or $0.25 per diluted share, on a 3.5% increase in sales to a record $66,431,000 for the third quarter ended April 30, 2009. This compares with net income of $2,001,000, or $0.12 per diluted share (including costs of $0.03 related to the resignation of our former President), on sales of $64,178,000 for the third quarter ended April 30, 2008. For the nine months ended April 30, 2009, the Company reported an 85% increase in net income to $11,290,000, or $0.69 per diluted share (inclusive of $0.02 of expenses related to the relocation of its Dutch manufacturing operations to the United States), on a 4.4% increase in sales to $193,257,000. This compares with net income of $6,097,000, or $0.37 per diluted share (including costs of $0.03 related to the resignation of our former President), on sales of $185,093,000 for the nine months ended April 30, 2008. Andrew Krakauer, Cantel's President and CEO stated, "We are very pleased to have delivered another quarter of substantial earnings growth and our strongest quarterly performance of the past few years despite the worldwide economic slowdown. Cantel demonstrated sales growth in all reporting segments except for an expected decline in lower margin dialysate concentrate shipments in our Dialysis segment." Krakauer added, "While all our businesses performed well, operating income in our Endoscope Reprocessing, Dialysis, and Water Purification and Filtration units was substantially ahead of last year, aided by strong sales of consumables, including disinfectants, sterilants and an increase in service revenue. Additionally, the positive performance was helped by our active cost reduction and margin improvement programs, the effectiveness of price increases and reduced interest expenses." Krakauer continued, "Although our businesses are not immune to the economic downturn, we remain focused on our strategies to grow and improve performance. In this economy, our competitive advantage is our leadership positions in several infection prevention and control markets, a quality reputation and strong brands. Further, we have proactively developed our business to where approximately 75% of our sales come from disposables and service, which are supported by a large installed base of equipment." The Company further reported that its balance sheet at April 30, 2009 included current assets of $86,844,000, including cash of $22,328,000, a current ratio of 2.4:1, debt of $49,300,000, stockholders' equity of $177,862,000 and a ratio of funded debt to equity of .28:1. Krakauer stated, "The Company has a strong balance sheet and continues to generate significant cash. Our cash provided by operating activities for the quarter was $8,085,000. We have reduced our net debt position from the second quarter by 21% to $27 million." 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 third quarter ended April 30, 2009 on Thursday, June 4, 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 Thursday, June 4, 2009 at 2:00 PM through midnight on June 11, by dialing 1-877-660-6853 and using passcode #286 and conference ID #324315. The call will be simultaneously broadcast live over the Internet on vcall.com at http://www.investorcalendar.com/IC/CEPage.asp?ID=145679. 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 Nine Months Ended April 30, April 30, ------------------ ----------------- 2009 2008 2009 2008 ---- ---- ---- ---- Net sales $66,431 $64,178 $193,257 $185,093 Cost of sales 40,908 41,897 120,500 120,120 ------ ------ ------- ------- Gross profit 25,523 22,281 72,757 64,973 Expenses: Selling 7,984 7,190 22,326 20,815 General and administrative 9,106 9,923 27,167 27,847 Research and development 1,261 928 3,309 2,879 ----- --- ----- ----- Total operating expenses 18,351 18,041 52,802 51,541 ------ ------ ------ ------ Income before interest and income taxes 7,172 4,240 19,955 13,432 Interest expense 588 1,185 2,013 3,662 Interest income (24) (97) (132) (394) --- --- ---- ---- Income before income taxes 6,608 3,152 18,074 10,164 Income taxes 2,425 1,151 6,784 4,067 ----- ----- ----- ----- Net income $4,183 $2,001 $11,290 $6,097 ====== ====== ======= ====== Earnings per common share - diluted $0.25 $0.12 $0.69 $0.37 ===== ===== ===== ===== Weighted average shares - diluted 16,544 16,349 16,434 16,355 CANTEL MEDICAL CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) April 30, July 31, 2009 2008 ---- ---- Assets Current assets $86,844 $84,561 Property and equipment, net 35,685 37,920 Intangible assets 36,824 41,254 Goodwill 112,187 113,958 Other assets 1,062 1,497 ----- ----- $272,602 $279,190 ======== ======== Liabilities and stockholders' equity Current portion of long-term debt $9,500 $8,000 Other current liabilities 26,821 30,922 Long-term debt 39,800 50,300 Other long-term liabilities 18,619 21,256 Stockholders' equity 177,862 168,712 ------- ------- $272,602 $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 nine months ended April 30, 2009 and 2008, respectively, is as follows (in thousands): Three Months Ended Nine Months Ended April 30, April 30, ------------------ ----------------- 2009 2008 2009 2008 ---- ---- ---- ---- Net income $4,183 $2,001 $11,290 $6,097 Income taxes 2,425 1,151 6,784 4,067 Interest expense 588 1,185 2,013 3,662 Interest income (24) (97) (132) (394) Depreciation 1,562 1,515 4,637 4,490 Amortization 1,264 1,438 3,870 4,297 Loss on disposal of fixed assets - 31 22 80 --- --- --- --- EBITDA 9,998 7,224 28,484 22,299 Stock-based compensation expense 784 489 1,829 1,483 --- --- ----- ----- EBITDAS $10,782 $7,713 $30,313 $23,782 ======= ====== ======= ======= 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 and 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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