LITTLE FALLS, N.J.,
June 5, 2014 /PRNewswire/
-- CANTEL MEDICAL CORP. (NYSE: CMN) reported net income
of $10,249,000 or $0.25 per diluted share, on a 14% increase in
sales to a record $120,058,000 for
the third quarter ended April 30,
2014. These results are inclusive of $0.01 of acquisition related charges, including
contingent consideration fair value adjustments and professional
fees associated with our acquisition program. This compares with
net income of $8,998,000 or
$0.22 per diluted share, on sales of
$105,009,000 for the third quarter
ended April 30, 2013. For the nine
months ended April 30, 2014, the
Company reported record net income of $32,560,000 or $0.79 per diluted share, on a 15% increase in
sales to a record $357,372,000,
inclusive of $0.01 of acquisition
related expenses. This compares with net income of $29,026,000 or $0.71 per diluted share, on sales of $311,053,000, for the nine months ended
April 30, 2013 inclusive of
$0.01 in net favorable acquisition
related fair value contingent consideration 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 third quarter. All
three of our major segments had good sales and profit growth. 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 fourth consecutive quarter we had strong
organic sales growth of 10% or greater."
Krakauer added, "Sales growth performance was led this quarter
by our Medivators Endoscopy segment which had excellent
year-over-year organic growth of 19%. This unit achieved record
sales for the third consecutive quarter with double digit growth in
all product categories. Our Mar Cor Water Purification and
Filtration unit achieved sales growth of 16%, of which 10% was
organic. Sales in this segment were led by increased shipments of
central and portable water purification equipment. In our Crosstex
Healthcare Disposables segment, the increase in organic sales
exceeded 12%.
Our strong revenue increases have generated improved earnings,
even as we are increasing investments in sales and marketing and
new product development. Further, we are continuing our 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.
With regard to acquisitions, we were very pleased to have
announced yesterday that Cantel had reached a definitive agreement
to purchase PuriCore International Ltd., a wholly owned subsidiary
of PuriCore plc. PuriCore International Ltd. is a leading provider
of automated endoscope reprocessors, endoscope drying and storage
cabinets, and related chemistry and consumables in the United Kingdom. This acquisition is expected
to close on or about June 30, 2014
and will add a major $25 million
international business into Cantel's Medivators Endoscopy segment.
This acquisition is an important step in our strategic plan to
expand the Company's international business and will be slightly
accretive in FY 2015."
The Company further reported that its balance sheet at
April 30, 2014 included current
assets of $152,031,000, including
cash of $24,474,000, a current ratio
of 3:1, gross debt of $64,500,000 and
stockholders' equity of $354,435,000. 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 18% to $22,996,000. EBITDAS for the first nine months of
fiscal year 2014 of $71,581,000 is
14% ahead of the same period in the prior year. We reduced our net
debt in the past 3 months by almost $15
million to $40,026,000."
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 third quarter ended April 30,
2014 on Thursday, June 5, 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 Thursday, June 5, 2014
through midnight on August 5, 2014 by
dialing 1-877-660-6853 and using conference ID #13583774.
The call will be simultaneously broadcast live over the Internet
on vcall.com at
http://www.investorcalendar.com/IC/CEPage.asp?ID=172835. A replay
of the webcast will be available for 90 days on PrecisionIR and via
the investor relations page on the Cantel website.
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.
CANTEL MEDICAL
CORP.
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(In thousands, except
per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
April 30,
|
|
April 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
120,058
|
|
$
105,009
|
|
$
357,372
|
|
$
311,053
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
67,640
|
|
59,525
|
|
201,120
|
|
176,691
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
52,418
|
|
45,484
|
|
156,252
|
|
134,362
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Selling
|
|
16,532
|
|
15,096
|
|
48,373
|
|
42,232
|
General and
administrative
|
|
16,428
|
|
13,766
|
|
47,149
|
|
38,196
|
Research and
development
|
|
2,632
|
|
2,399
|
|
7,383
|
|
6,876
|
Total operating
expenses
|
|
35,592
|
|
31,261
|
|
102,905
|
|
87,304
|
|
|
|
|
|
|
|
|
|
Income before
interest and income taxes
|
|
16,826
|
|
14,223
|
|
53,347
|
|
47,058
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
552
|
|
749
|
|
1,854
|
|
2,186
|
Interest
income
|
|
(17)
|
|
(16)
|
|
(45)
|
|
(45)
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
16,291
|
|
13,490
|
|
51,538
|
|
44,917
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
6,042
|
|
4,492
|
|
18,978
|
|
15,891
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
10,249
|
|
$
8,998
|
|
$
32,560
|
|
$
29,026
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - diluted
|
|
$
0.25
|
|
$
0.22
|
|
$
0.79
|
|
$
0.71
|
|
|
|
|
|
|
|
|
|
Dividends per common
share
|
|
$
-
|
|
$
-
|
|
$
0.05
|
|
$
0.04
|
|
|
|
|
|
|
|
|
|
Weighted average
shares - diluted
|
|
41,502
|
|
41,251
|
|
41,457
|
|
41,163
|
|
|
|
|
|
CANTEL MEDICAL
CORP.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
April 30,
|
|
July 31,
|
|
|
2014
|
|
2013
|
Assets
|
|
|
|
|
Current assets
|
|
$
152,031
|
|
$
150,660
|
Property and equipment,
net
|
|
48,498
|
|
46,465
|
Intangible assets,
net
|
|
73,981
|
|
75,929
|
Goodwill
|
|
218,857
|
|
211,618
|
Other assets
|
|
4,508
|
|
2,999
|
|
|
$
497,875
|
|
$
487,671
|
|
|
|
|
|
Liabilities and stockholders' equity
|
|
|
|
Current portion of long-term
debt
|
|
$
-
|
|
$
10,000
|
Other current
liabilities
|
|
50,222
|
|
49,151
|
Long-term debt
|
|
64,500
|
|
85,000
|
Other long-term
liabilities
|
|
28,718
|
|
22,388
|
Stockholders'
equity
|
|
354,435
|
|
321,132
|
|
|
$
497,875
|
|
$
487,671
|
SUPPLEMENTARY
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Earnings Before Interest, Taxes, Depreciation, Amortization and
Stock-Based
|
|
Compensation
Expense ("EBITDAS")
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The reconciliation of
EBITDAS with net income for the three and nine months ended April
30, 2014 and 2013,
|
respectively, is as
follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
April 30,
|
|
April 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
10,249
|
|
$
8,998
|
|
$
32,560
|
|
$
29,026
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
6,042
|
|
4,492
|
|
18,978
|
|
15,891
|
Interest
expense
|
|
552
|
|
749
|
|
1,854
|
|
2,186
|
Interest
income
|
|
(17)
|
|
(16)
|
|
(45)
|
|
(45)
|
Depreciation
|
|
2,105
|
|
1,806
|
|
6,072
|
|
5,380
|
Amortization
|
|
2,637
|
|
2,598
|
|
7,882
|
|
7,438
|
Loss on disposal of
fixed assets
|
|
6
|
|
(16)
|
|
302
|
|
124
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
21,574
|
|
18,611
|
|
67,603
|
|
60,000
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
|
1,422
|
|
919
|
|
3,978
|
|
2,806
|
|
|
|
|
|
|
|
|
|
EBITDAS
|
|
$
22,996
|
|
$
19,530
|
|
$
71,581
|
|
$
62,806
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
SOURCE Cantel Medical Corp.