LITTLE FALLS, N.J.,
March 11, 2014 /PRNewswire/
-- CANTEL MEDICAL CORP. (NYSE:CMN) reported net income
of $11,126,000, or $0.27 per diluted share, on a 12% increase in
sales to a record $119,042,000 for
the second quarter ended January 31,
2014. This compares with net income of $10,452,000, or $0.25 per diluted share, on sales of $106,363,000 for the second quarter ended
January 31, 2013. For the six months
ended January 31, 2014, the Company
reported record net income of $22,311,000, or $0.54 per diluted share, on a 15% increase in
sales to a record $237,314,000. This
compares with net income of $20,028,000, or $0.49 per diluted share, on sales of $206,044,000 for the six months ended
January 31, 2013. Results for the
prior year's second quarter and six months ended January 31, 2013 include $0.01 in net favorable adjustments related to
acquisition accounting fair value adjustments partially offset by
severance and recruiting costs.
Andrew Krakauer, Cantel's
President and CEO stated, "We are pleased to have delivered record
sales and solid earnings performance in the second quarter. These
positive results confirm the continued success of our strategic
approach to growth which includes investing in new product
development, sales and marketing programs and acquisitions. Most
importantly, for the third consecutive quarter we had strong
organic sales growth of 10%."
Krakauer added, "Financial performance was led this quarter by
our Water Purification and Filtration unit where year-over-year
sales increased 26%, of which 18% was organic. The record sales in
this segment were led by increased shipments of central and
portable water purification equipment. Our Medivators Endoscopy
business also had excellent organic growth of 13% for the quarter
and achieved record sales for the second consecutive quarter. In
this segment, organic growth was driven by strength in disinfectant
chemicals, procedural products, as well as service and spare parts.
Also during the quarter, the Company completed two small but
strategically important acquisitions, including Jet Prep Ltd. in
the Endoscopy segment and Sterilator Company, Inc. in the
Healthcare Disposables segment.
Our strong revenue increases have allowed us to improve
earnings, even as we are increasing investments in sales and
marketing and new product development. Further, we are taking an
aggressive approach in building our international sales, marketing,
and operations teams to grow this part of our business in the
medium-term. Overall, we expect to continue to accelerate these
investments over the next several quarters, while remaining
committed to an active global acquisition program.
The Company further reported that its balance sheet at
January 31, 2014 included current
assets of $147,963,000, including
cash of $19,706,000, a current ratio
of 3.1:1, gross debt of $74,500,000
and stockholders' equity of $342,018,000. Krakauer stated, "The Company
has a strong balance sheet and continues to generate significant
cash flow and EBITDAS. When compared with the same quarter
last year, our EBITDAS grew by 10% to $24,437,000. EBITDAS for the first six months of
fiscal year 2014 of $48,585.000 is
12% ahead of the same period in the prior year." Subsequent to
quarter-end on March 4, 2014, the
Company significantly increased its overall financial flexibility
and access to capital by entering into a $250,000,000 amended and restated credit facility
with its existing bank syndicate which established new and improved
terms under its revolving credit facility including an expansion of
borrowing capacity, a decrease in applicable rates used for
borrowings, the ability to borrow in multiple currencies and an
extension of the expiration date to March 4,
2019.
Cantel Medical is a leading global company dedicated to
delivering innovative infection prevention and control products and
services for patients, caregivers, and other healthcare providers
which improve outcomes, enhance safety and help save lives.
Our products include specialized medical device reprocessing
systems for endoscopy and renal dialysis, advanced water
purification equipment, sterilants, disinfectants and cleaners,
sterility assurance monitoring products for hospitals and dental
clinics, disposable infection control products primarily for dental
and GI endoscopy markets, dialysate concentrates, hollow fiber
membrane filtration and separation products, and specialty
packaging for infectious and biological specimens. Additionally, we
provide technical service for our products.
The Company will hold a conference call to discuss the results
for the second quarter ended January 31,
2014 on Tuesday, March 11,
2014 at 11:00 AM Eastern time.
To participate in the conference call, dial 1-877-407-8033
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 11,
2014 at 2:00 PM through
midnight on May 11, 2014 by dialing
1-877-660-6853 and using conference ID #13577321.
The call will be simultaneously broadcast live over the Internet
on vcall.com at
http://www.investorcalendar.com/IC/CEPage.asp?ID=172344. A replay
of the webcast will be available on Vcall for 90 days.
For further information, visit the Cantel website at
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.
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CANTEL MEDICAL
CORP.
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CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
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(In thousands, except
per share data)
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(unaudited)
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Three Months
Ended
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Six Months
Ended
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January
31,
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January
31,
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2014
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2013
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2014
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2013
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Net sales
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$119,042
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$106,363
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$237,314
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$206,044
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Cost of
sales
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66,707
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61,212
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133,480
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117,166
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Gross
profit
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52,335
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45,151
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103,834
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88,878
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Expenses:
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Selling
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16,077
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13,723
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31,841
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27,136
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General and administrative
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15,557
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12,382
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30,721
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24,430
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Research and development
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2,492
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2,183
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4,751
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4,477
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Total operating
expenses
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34,126
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28,288
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67,313
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56,043
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Income before
interest and income taxes
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18,209
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16,863
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36,521
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32,835
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Interest
expense
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645
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791
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1,302
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1,437
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Interest
income
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(15)
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(16)
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(28)
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(29)
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Income before income
taxes
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17,579
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16,088
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35,247
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31,427
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Income
taxes
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6,453
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5,636
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12,936
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11,399
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Net
income
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$
11,126
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$
10,452
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$
22,311
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$
20,028
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Earnings per common
share - diluted
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$
0.27
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$
0.25
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$
0.54
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$
0.49
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Dividends per common
share
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$
-
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$
-
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$
0.05
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$
0.04
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Weighted average
shares - diluted
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41,493
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41,192
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41,433
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41,116
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CANTEL MEDICAL
CORP.
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CONDENSED
CONSOLIDATED BALANCE SHEETS
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(In
thousands)
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(unaudited)
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January
31,
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July 31,
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2014
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2013
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Assets
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Current
assets
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$
147,963
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$150,660
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Property and
equipment, net
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47,072
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46,465
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Intangible assets,
net
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76,476
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75,929
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Goodwill
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218,677
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211,618
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Other
assets
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2,997
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2,999
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$
493,185
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$487,671
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Liabilities and stockholders' equity
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Current portion of
long-term debt
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$
-
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$
10,000
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Other current
liabilities
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47,524
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49,151
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Long-term
debt
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74,500
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85,000
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Other long-term
liabilities
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29,143
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22,388
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Stockholders'
equity
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342,018
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321,132
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$
493,185
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$487,671
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SUPPLEMENTARY
INFORMATION
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Reconciliation of
Earnings Before Interest, Taxes, Depreciation, Amortization and
Stock-Based
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Compensation
Expense ("EBITDAS")
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(unaudited)
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The reconciliation of
EBITDAS with net income for the three and six months ended January
31, 2014 and 2013,
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respectively, is as
follows (in thousands):
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Three Months
Ended
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Six Months
Ended
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January
31,
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January
31,
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2014
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2013
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2014
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2013
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Net income
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$
11,126
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$
10,452
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$
22,311
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$
20,028
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Income
taxes
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6,453
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5,636
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12,936
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11,399
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Interest
expense
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645
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791
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1,302
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1,437
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Interest
income
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(15)
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(16)
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(28)
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(29)
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Depreciation
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2,030
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1,814
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3,967
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3,574
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Amortization
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2,619
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2,573
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5,245
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4,840
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Loss on disposal of
fixed assets
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171
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99
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296
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140
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EBITDA
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23,029
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21,349
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46,029
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41,389
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Stock-based
compensation expense
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1,408
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929
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2,556
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1,887
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EBITDAS
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$
24,437
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$
22,278
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$
48,585
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$
43,276
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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.
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SOURCE Cantel Medical Corp.