CMD Cantel Medical Corp

LITTLE FALLS, N.J., March 9 /PRNewswire-FirstCall/ -- CANTEL MEDICAL CORP. reported a 29% increase in net income to $4,876,000, or $0.29 per diluted share, on a 6.7% increase in sales to $66,587,000 for the second quarter ended January 31, 2010. This compares with net income of $3,774,000, or $0.23 per diluted share, on sales of $62,420,000 for the second quarter ended January 31, 2009. For the six months ended January 31, 2010, the Company reported a 55% increase in net income to $11,044,000, or $0.65 per diluted share, on an 8.5% increase in sales to $137,582,000. This compares with net income of $7,107,000, or $0.43 per diluted share, on sales of $126,826,000 for the six months ended January 31, 2009. Andrew Krakauer, Cantel's President and CEO, stated, "We are very pleased to have delivered another strong quarter of sales and earnings growth. These positive results confirm the continued success of our sales and marketing investments and various initiatives to improve operating margins. Cantel continued to benefit from growth of higher margin consumables and service revenue." Krakauer added, "While all of our businesses performed well, operating income in our Healthcare Disposables, Endoscope Reprocessing and Water Purification and Filtration units was substantially ahead of last year, aided by strong sales of consumables, including disinfectants, sterilants and face masks. Cantel's overall good performance was further supported by the realization of price increases and reduced interest expenses. On an additional favorable note, we also substantially increased sales of capital equipment worldwide in our Endoscope Reprocessing segment. The Healthcare Disposables business had higher than normal sales of face masks in the early part of the quarter as we filled orders generated during the novel H1N1 flu outbreak." The Company further reported that its balance sheet at January 31, 2010 included current assets of $90,018,000, including cash of $18,131,000, a current ratio of 1.7:1, debt of $30,500,000 and stockholders' equity of $199,900,000. Krakauer stated, "The Company has a strong balance sheet and continues to generate significant cash. We have reduced our net debt position during the first half of fiscal year 2010 by 38% to $12,369,000. EBITDAS for the quarter was $11,890,000." 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 second quarter ended January 31, 2010 on Tuesday, March 9, 2010 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 Tuesday, March 9 at 2:00 PM through midnight on March 16, by dialing 1-877-660-6853 and using passcode #286 and conference ID #346358. The call will be simultaneously broadcast live over the Internet on vcall.com at http://www.investorcalendar.com/IC/CEPage.asp?ID=156065. 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) (unaudited) Three Months Ended Six Months Ended January 31, January 31, ----------- ----------- 2010 2009 2010 2009 ---- ---- ---- ---- Net sales $66,587 $62,420 $137,582 $126,826 Cost of sales 39,463 38,809 81,000 79,592 ------ ------ ------ ------ Gross profit 27,124 23,611 56,582 47,234 Expenses: Selling 8,711 6,992 17,235 14,342 General and administrative 9,272 9,037 18,577 18,061 Research and development 1,157 983 2,422 2,048 ----- --- ----- ----- Total operating expenses 19,140 17,012 38,234 34,451 ------ ------ ------ ------ Income before interest and income taxes 7,984 6,599 18,348 12,783 Interest expense 339 674 726 1,425 Interest income (8) (38) (16) (108) -- --- --- ---- Income before income taxes 7,653 5,963 17,638 11,466 Income taxes 2,777 2,189 6,594 4,359 ----- ----- ----- ----- Net income $4,876 $3,774 $11,044 $7,107 ====== ====== ======= ====== Earnings per common share - diluted $0.29 $0.23 $0.65 $0.43 ===== ===== ===== ===== Dividends per common share $0.05 $ - $0.05 $ - ===== === ===== === Weighted average shares - diluted 16,983 16,503 16,885 16,478 CANTEL MEDICAL CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (unaudited) January 31, July 31, 2010 2009 ---- ---- Assets Current assets $90,018 $88,910 Property and equipment, net 35,679 35,968 Intangible assets, net 34,591 37,042 Goodwill 115,032 114,995 Other assets 1,259 956 ----- --- $276,579 $277,871 ======== ======== Liabilities and stockholders' equity Current portion of long-term debt $25,500 $10,000 Other current liabilities 27,572 29,113 Long-term debt 5,000 33,300 Other long-term liabilities 18,607 18,342 Stockholders' equity 199,900 187,116 ------- ------- $276,579 $277,871 ======== ======== 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 six months ended January 31, 2010 and 2009, respectively, is as follows (in thousands): Three Months Ended Six Months Ended January 31, January 31, ----------- ----------- 2010 2009 2010 2009 ---- ---- ---- ---- Net income $4,876 $3,774 $11,044 $7,107 Income taxes 2,777 2,189 6,594 4,359 Interest expense 339 674 726 1,425 Interest income (8) (38) (16) (108) Depreciation 1,574 1,525 3,138 3,075 Amortization 1,294 1,268 2,572 2,606 Loss on disposal of fixed assets 227 8 227 22 --- --- --- --- EBITDA 11,079 9,400 24,285 18,486 Stock-based compensation expense 811 525 1,600 1,045 --- --- ----- ----- EBITDAS $11,890 $9,925 $25,885 $19,531 ======= ====== ======= ======= 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 of Cantel Medical Corp.,+1-973-890-7220; or Richard E. Moyer, Cameron Associates, Inc.,+1-212-554-5466, richard@cameronassoc.com Web Site: http://www.cantelmedical.com/

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