LITTLE FALLS, N.J.,
Sept. 27, 2018 /PRNewswire/ -- Cantel
Medical Corp. (NYSE: CMD) today announced financial results for its
fourth quarter ended July 31, 2018.
Jørgen B. Hansen, President and Chief Executive Officer, stated,
"We are pleased to report record sales and strong earnings
performance this quarter. Our 11.4% reported sales increase was
driven by organic growth of 7.5%, the impact from acquisitions of
3.4% and a favorable impact from foreign currency of 0.5%. We
continue to perform well internationally where sales were up 30.2%
overall, driven by Germany and
China. Our U.S. business grew 5.7%
in the period.
For the full fiscal year, we reported record sales and earnings
performance. Reported sales increased 13.2%, driven by organic
growth of 8.4%, the impact from acquisitions of 4.0% and a
favorable impact from foreign currency of 0.8%. Internationally the
business grew at 33.8% driven by Germany, China and Canada. Our U.S. business grew at 7.4% for the
year.
Overall, the strong performance in the fourth quarter capped off
a record year for Cantel that was in line with our growth
objectives."
Financial Highlights (Quarter):
Endoscopy sales
grew 14.8%, with organic growth of 8.1%, showing continued
performance across our core product lines. Revenue from stronger
capital performance drove slight margin compression in the quarter,
while recurring revenue for this segment was up 11.4%. Sales in
Water Purification and Filtration increased 6.2%, led by strong
demand for capital, service and chemistry. Healthcare Disposables
reported year over year growth of 11.3%, with 10.1% organic, driven
by the strategic branded portfolio which grew by 12.6%.
The Company's balance sheet continues to generate significant
cash flow and EBITDAS. The fourth quarter ended with cash of
$94.1M and gross debt of $200.0M, while generating adjusted EBITDAS of
$44.5M in the quarter, up 4.5%.
The Company intends to release fiscal year 2019 guidance on its
fourth quarter earnings call.
Conference Call Information:
The Company will hold a
conference call to discuss the results for its fourth quarter ended
July 31, 2018 on Thursday, September 27, 2018 at 11:00
a.m. Eastern Daylight Time.
To participate in the conference call, dial 1-877-407-8033
(U.S. & Canada) or
1-201-689-8033 (International) 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,
September 27, 2018 through midnight on October 27, 2018 by dialing 1-877-481-4010 (U.S.
& Canada) or 1-919-882-2331
(International) and using conference ID #: 37531.
An audio webcast will be available via the Cantel website at
www.cantelmedical.com. A replay of the presentation will be
archived on the Cantel web site for those unable to listen live. In
addition, the Company will provide a supplemental presentation to
complement the conference call. The presentation can be accessed on
Cantel's website in the Investor Relations section under
presentations.
About Cantel Medical:
Cantel Medical is a
leading global company dedicated to delivering innovative infection
prevention 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. Additionally, we
provide technical service for our products.
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
(Unaudited)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
July
31,
|
|
July
31,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net sales
|
$
|
228,854
|
|
|
$
|
205,502
|
|
|
$
|
871,922
|
|
|
$
|
770,157
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
121,451
|
|
|
107,774
|
|
|
457,951
|
|
|
402,997
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
107,403
|
|
|
97,728
|
|
|
413,971
|
|
|
367,160
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
Selling
|
33,868
|
|
|
30,801
|
|
|
129,642
|
|
|
116,113
|
|
General and
administrative
|
35,951
|
|
|
34,598
|
|
|
138,019
|
|
|
122,270
|
|
Research and
development
|
7,103
|
|
|
5,039
|
|
|
24,646
|
|
|
18,367
|
|
Total operating
expenses
|
76,922
|
|
|
70,438
|
|
|
292,307
|
|
|
256,750
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
30,481
|
|
|
27,290
|
|
|
121,664
|
|
|
110,410
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
1,467
|
|
|
1,000
|
|
|
5,289
|
|
|
4,303
|
|
Other
income
|
—
|
|
|
(126)
|
|
|
(1,138)
|
|
|
(126)
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
29,014
|
|
|
26,416
|
|
|
117,513
|
|
|
106,233
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
12,126
|
|
|
9,419
|
|
|
26,472
|
|
|
34,855
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
16,888
|
|
|
$
|
16,997
|
|
|
$
|
91,041
|
|
|
$
|
71,378
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - diluted
|
$
|
0.41
|
|
|
$
|
0.41
|
|
|
$
|
2.18
|
|
|
$
|
1.71
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$
|
0.09
|
|
|
$
|
0.07
|
|
|
$
|
0.17
|
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
|
Weighted average
shares - diluted
|
41,667,741
|
|
|
41,799,602
|
|
|
41,635,078
|
|
|
41,542,765
|
|
|
(dollar amounts in
thousands except share and per share data or as otherwise
specified)
|
CANTEL MEDICAL
CORP.
Condensed
Consolidated Balance Sheets
(Unaudited)
|
|
|
July 31,
2018
|
|
July 31,
2017
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
94,097
|
|
|
$
|
36,584
|
|
Accounts receivable,
net
|
118,642
|
|
|
110,656
|
|
Inventories,
net
|
107,592
|
|
|
98,724
|
|
Prepaid expenses and
other current assets
|
17,912
|
|
|
11,407
|
|
Property and
equipment, net
|
111,417
|
|
|
88,338
|
|
Intangible assets,
net
|
137,361
|
|
|
124,512
|
|
Goodwill
|
368,027
|
|
|
311,445
|
|
Other
assets
|
5,749
|
|
|
4,707
|
|
Deferred income
taxes
|
2,911
|
|
|
—
|
|
Total
assets
|
$
|
963,708
|
|
|
$
|
786,373
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities
|
$
|
134,783
|
|
|
$
|
106,779
|
|
Long-term
debt
|
187,302
|
|
|
126,000
|
|
Deferred income
taxes
|
27,624
|
|
|
24,714
|
|
Other long-term
liabilities
|
5,132
|
|
|
4,948
|
|
Stockholders'
equity
|
608,867
|
|
|
523,932
|
|
Total liabilities and
stockholders' equity
|
$
|
963,708
|
|
|
$
|
786,373
|
|
|
|
|
|
|
|
|
|
(dollar amounts in
thousands except share and per share data or as otherwise
specified)
|
Condensed
Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
Twelve Months
Ended July 31,
|
|
2018
|
|
2017
|
Cash flows from
operating activities
|
|
|
|
Net income
|
$
|
91,041
|
|
|
$
|
71,378
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation
|
17,473
|
|
|
15,045
|
|
Amortization
|
17,357
|
|
|
18,407
|
|
Stock-based
compensation expense
|
9,615
|
|
|
8,844
|
|
Deferred income
taxes
|
(7,520)
|
|
|
118
|
|
Other non-cash items,
net
|
1,076
|
|
|
1,102
|
|
Changes in assets and
liabilities, net of effects of business acquisitions
|
(3,130)
|
|
|
(6,701)
|
|
Net cash provided by
operating activities
|
125,912
|
|
|
108,193
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
Capital
expenditures
|
(37,698)
|
|
|
(27,065)
|
|
Proceeds from
disposal of fixed assets
|
—
|
|
|
47
|
|
Acquisition of
businesses, net of cash acquired
|
(87,488)
|
|
|
(70,044)
|
|
Net cash used in
investing activities
|
(125,186)
|
|
|
(97,062)
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
Proceeds from
issuance of long-term debt
|
200,000
|
|
|
—
|
|
Borrowings under
revolving credit facility
|
82,300
|
|
|
74,000
|
|
Repayments under
revolving credit facility
|
(208,300)
|
|
|
(64,000)
|
|
Debt issuance
costs
|
(2,698)
|
|
|
—
|
|
Dividends
paid
|
(7,091)
|
|
|
(5,841)
|
|
Purchases of treasury
stock
|
(7,074)
|
|
|
(6,910)
|
|
Net cash provided by
(used in) financing activities
|
57,137
|
|
|
(2,751)
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(350)
|
|
|
(163)
|
|
|
|
|
|
Increase in cash and
cash equivalents
|
57,513
|
|
|
8,217
|
|
Cash and cash
equivalents at beginning of period
|
36,584
|
|
|
28,367
|
|
Cash and cash
equivalents at end of period
|
$
|
94,097
|
|
|
$
|
36,584
|
|
|
(dollar amounts
in thousands except share and per share data or as otherwise
specified)
|
SUPPLEMENTARY INFORMATION - RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
In evaluating our operating performance, we supplement the
reporting of our financial information determined under generally
accepted accounting principles in the
United States ("GAAP") with certain non-GAAP financial
measures including (i) non-GAAP net income, (ii) non-GAAP earnings
per diluted share ("EPS"), (iii) earnings before interest, taxes,
depreciation, amortization, loss on disposal of fixed assets, and
stock-based compensation expense ("EBITDAS"), (iv) adjusted
EBITDAS, (v) net debt and (vi) organic sales. These non-GAAP
financial measures are indicators of our performance that are not
required by, or presented in accordance with, GAAP. They are
presented with the intent of providing greater transparency to
financial information used by us in our financial analysis and
operational decision-making. We believe that these non-GAAP
measures provide meaningful information to assist investors,
stockholders and other readers of our consolidated financial
statements in making comparisons to our historical operating
results and analyzing the underlying performance of our results of
operations. These non-GAAP financial measures are not intended to
be, and should not be, considered separately from, or as an
alternative to, the most directly comparable GAAP financial
measures.
To measure earnings performance on a consistent and comparable
basis, we exclude certain items that affect comparability of
operating results and the trend of earnings. These adjustments are
irregular in timing, may not be indicative of our past and future
performance and are therefore excluded to allow investors to better
understand underlying operating trends. The following are examples
of the types of adjustments that are excluded: (i) amortization of
purchased intangible assets, (ii) acquisition-related items, (iii)
business optimization and restructuring-related charges, (iv)
certain significant and discrete tax matters and (v) other
significant items management deems irregular or non-operating in
nature.
Amortization expense of purchased intangible assets is a
non-cash expense related to intangibles that were primarily the
result of business acquisitions. Our history of acquiring
businesses has resulted in significant increases in amortization of
intangible assets that reduce our net income. The removal of
amortization from our overall operating performance helps in
assessing our cash generated from operations including our return
on invested capital, which we believe is an important analysis for
measuring our ability to generate cash and invest in our continued
growth.
Acquisition-related items consist of (i) fair value
adjustments to contingent consideration and other contingent
liabilities resulting from acquisitions, (ii) due diligence,
integration, legal fees and other transaction costs associated with
our acquisition program and (iii) acquisition accounting
charges for the amortization of the initial fair value adjustments
of acquired inventory and deferred revenue. The adjustments of
contingent consideration and other contingent liabilities are
periodic adjustments to record such amounts at fair value at each
balance sheet date. Given the subjective nature of the assumptions
used in the determination of fair value calculations, fair value
adjustments may potentially cause significant earnings volatility
that are not representative of our operating results. Similarly,
due diligence, integration, legal and other acquisition costs
associated with our acquisition program, including accounting
charges relating to recording acquired inventory and deferred
revenue at fair market value, can be significant and also adversely
impact our effective tax rate as certain costs are often not
tax-deductible. Since these acquisition-related items are irregular
and often mask underlying operating performance, we exclude these
amounts for purposes of calculating these non-GAAP financial
measures to facilitate an evaluation of our current operating
performance and a comparison to past operating performance.
The 2017 Tax Act significantly revised U.S. tax law by, among
other provisions, (a) lowering the applicable U.S. federal
statutory income tax rate from 35% to 21%, (b)
creating a partial territorial tax system that includes imposing a
mandatory one-time transition tax on previously deferred foreign
earnings, (c) creating provisions regarding the (1) Global
Intangible Low Tax Income, (2) the Foreign Derived Intangible
Income deduction, and (3) the Base Erosion Anti-Abuse Tax and (d)
eliminating or reducing certain income tax deductions, such as
interest expense, executive compensation expenses and certain
employee expenses. During fiscal 2018, we recorded a favorable
benefit related to a revaluation of our deferred tax assets and
liabilities as a result of the 2017 Tax Act. Since the tax benefit
is largely unrelated to our results and unrepresentative of our
normal effective tax rate, we excluded the impact on net income and
diluted EPS to arrive at our non-GAAP financial measures.
The portion of the excess tax benefits related to stock
compensation which is recorded as a reduction of income tax expense
at the time of settlement or vesting amounted to $2,173 and $2,241
in fiscal 2018 and 2017, respectively. The magnitude of the impact
of excess tax benefits generated in the future, which may be
favorable or unfavorable, are dependent upon our future grants of
equity awards, our future share price on the date awards vest in
relation to the fair value of awards on grant date and the exercise
behavior of our stock option holders. Since these favorable tax
benefits are largely unrelated to our results and unrepresentative
of our normal effective tax rate, we excluded their impact on net
income and diluted EPS to arrive at our non-GAAP financial
measures.
During fiscal 2018, the Israeli Government notified us that they
would forgive any future amounts due under a contingent obligation
payable from a previous acquisition. As a result of this formal
notification, we reduced the $1,138
contingent obligation payable to $0
during fiscal 2018, resulting in a gain through other income. Since
this gain was irregular, we made an adjustment to our net income
and diluted EPS to exclude this gain to arrive at our non-GAAP
financial measures.
During fiscal 2018, we settled a patent infringement matter and
also recorded an adjustment to another minor litigation matter in
our consolidated financial statements. Since these costs are
irregular and mask our underlying operating performance, we made an
adjustment to our net income and diluted EPS to exclude such costs
to arrive at our non-GAAP financial measures.
During fiscal 2018, we recorded a $2,785 valuation allowance on deferred tax assets
related to a prior acquisition. Since this tax adjustment is
related to acquired net operating losses and is not representative
of our normal effective tax rate, we excluded its impact on net
income and diluted EPS for fiscal 2018 to arrive at our non-GAAP
financial measures.
During fiscal 2016, we announced the retirement plans of our
former Chief Executive Officer and recorded the majority of the
costs associated with his retirement in our consolidated financial
statements. Since these costs are irregular and mask our underlying
operating performance, we made an adjustment to our net income and
diluted EPS to exclude such costs to arrive at our non-GAAP
financial measures.
Three Months Ended July 31, 2018
We made adjustments to net income and diluted EPS to exclude
(i) amortization expense of purchased intangible assets,
(ii) acquisition-related items, (iii) other business
optimization and restructuring-related charges, (iv) a loss on
extinguishment of debt, (v) the excess tax benefits applicable to
stock compensation, (vi) the establishment of a valuation allowance
on deferred tax assets related to a prior acquisition and (vii) net
tax benefits associated with the estimated impact of the
revaluation of our U.S. net deferred tax liabilities as a result of
the 2017 Tax Act to arrive at our non-GAAP financial measures,
non-GAAP net income and non-GAAP diluted EPS.
Three Months Ended July 31, 2017
We made adjustments to net income and diluted EPS to exclude
(i) amortization expense of purchased intangible assets,
(ii) acquisition-related items and (iii) other business
optimization and restructuring-related charges to arrive at our
non-GAAP financial measures, non-GAAP net income and non-GAAP
diluted EPS.
The reconciliations of net income and diluted EPS to non-GAAP
net income and non-GAAP diluted EPS were calculated as follows:
|
Three Months Ended
July 31,
|
(Unaudited)
|
2018
|
|
2017
|
Net income/Diluted
EPS, as reported
|
$
|
16,888
|
|
|
$
|
0.41
|
|
|
$
|
16,997
|
|
|
$
|
0.41
|
|
Intangible
amortization, net of tax(1)
|
3,423
|
|
|
0.08
|
|
|
4,324
|
|
|
0.10
|
|
Acquisition-related
items, net of tax(2)
|
528
|
|
|
0.01
|
|
|
301
|
|
|
0.01
|
|
Business optimization
and restructuring-related charges, net of
tax(3)
|
1,814
|
|
|
0.04
|
|
|
867
|
|
|
0.02
|
|
Loss on debt
extinguishment, net of tax(4)
|
91
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Excess tax
benefits(5)
|
(161)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Tax valuation
allowance(5)
|
2,785
|
|
|
0.07
|
|
|
—
|
|
|
—
|
|
Tax legislative
changes(5)
|
295
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
Non-GAAP net
income/Non-GAAP diluted EPS
|
$
|
25,663
|
|
|
$
|
0.62
|
|
|
$
|
22,489
|
|
|
$
|
0.54
|
|
(1)
|
Amounts were recorded
in general and administrative expenses.
|
(2)
|
For the three months
ended July 31, 2018, pre-tax acquisition-related items of $745
were recorded in general and administrative expenses. For the three
months ended July 31, 2017, pre-tax acquisition-related items
of $148 favorable were recorded in cost of sales and $800 were
recorded in general and administrative expenses.
|
(3)
|
For the three months
ended July 31, 2018, pre-tax restructuring-related items of
$353 were recorded in cost of sales and $1,158 were recorded in
general and administrative expenses. For the three months ended
July 31, 2017, pre-tax restructuring-related items of $1,549
were recorded in general and administrative expenses.
|
(4)
|
Amounts were recorded
in interest expense, net
|
(5)
|
Amounts were recorded
in income taxes.
|
|
|
(dollar amounts in
thousands except share and per share data or as otherwise
specified)
|
Twelve Months Ended July 31, 2018
We made adjustments to net income and diluted EPS to exclude
(i) amortization expense of purchased intangible assets,
(ii) acquisition-related items, (iii) other business
optimization and restructuring-related charges, (iv) litigation
matters, (v) a loss on debt extinguishment, (vi) the resolution of
the contingent liability associated with a previous acquisition,
(vii) the excess tax benefits applicable to stock compensation,
(viii) the establishment of a valuation allowance on deferred tax
assets related to a prior acquisition and (ix) the net tax benefit
associated with the estimated impact of the revaluation of our U.S.
net deferred tax liabilities as a result of the 2017 Tax Act to
arrive at our non-GAAP financial measures, non-GAAP net income and
non-GAAP diluted EPS.
Twelve Months Ended July 31, 2017
We made adjustments to net income and diluted EPS to exclude
(i) amortization expense of purchased intangible assets,
(ii) acquisition-related items, (iii) costs associated
with the retirement of our former Chief Executive Officer, (iv)
other business optimization and restructuring-related charges and
(v) the excess tax benefits applicable to stock compensation to
arrive at our non-GAAP financial measures, non-GAAP net income and
non-GAAP diluted EPS.
The reconciliations of net income and diluted EPS to non-GAAP
net income and non-GAAP diluted EPS were calculated as follows:
|
Twelve Months
Ended July 31,
|
(Unaudited)
|
2018
|
|
2017
|
Net income/Diluted
EPS, as reported
|
$
|
91,041
|
|
|
$
|
2.18
|
|
|
$
|
71,378
|
|
|
$
|
1.71
|
|
Intangible
amortization, net of tax(1)
|
13,267
|
|
|
0.32
|
|
|
12,800
|
|
|
0.30
|
|
Acquisition-related
items, net of tax(2)
|
2,835
|
|
|
0.07
|
|
|
1,533
|
|
|
0.04
|
|
CEO retirement costs,
net of tax(1)
|
—
|
|
|
—
|
|
|
1,213
|
|
|
0.03
|
|
Business optimization
and restructuring-related charges, net of
tax(3)
|
4,658
|
|
|
0.11
|
|
|
2,057
|
|
|
0.05
|
|
Litigation matters,
net of tax(1)
|
1,637
|
|
|
0.04
|
|
|
—
|
|
|
—
|
|
Loss on debt
extinguishment, net of tax(4)
|
91
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Resolution of
contingent liability(5)
|
(1,138)
|
|
|
(0.03)
|
|
|
—
|
|
|
—
|
|
Excess tax
benefits(6)
|
(2,173)
|
|
|
(0.05)
|
|
|
(2,241)
|
|
|
(0.05)
|
|
Tax valuation
allowance(6)
|
2,785
|
|
|
0.07
|
|
|
—
|
|
|
—
|
|
Tax legislative
changes(6)
|
(8,657)
|
|
|
(0.20)
|
|
|
—
|
|
|
—
|
|
Non-GAAP net
income/Non-GAAP diluted EPS
|
$
|
104,346
|
|
|
$
|
2.51
|
|
|
$
|
86,740
|
|
|
$
|
2.08
|
|
(1)
|
Amounts were recorded
in general and administrative expenses.
|
(2)
|
For the twelve months
ended July 31, 2018, pre-tax acquisition-related items of $893
were recorded in cost of sales and $3,154 were recorded in general
and administrative expenses. For the twelve months ended
July 31, 2017, pre-tax acquisition related items of $353 were
recorded in cost of sales and $2,094 were recorded in general and
administrative expenses.
|
(3)
|
For the twelve months
ended July 31, 2018, pre-tax restructuring-related items of
$1,517 were recorded in cost of sales and $3,814 were recorded in
general and administrative expenses. For the twelve months ended
July 31, 2017, pre-tax restructuring-related items of $3,284
were recorded in general and administrative expenses.
|
(4)
|
Amounts were recorded
in interest expense, net.
|
(5)
|
Amounts were recorded
in other income.
|
(6)
|
Amounts were recorded
in income taxes.
|
|
|
(dollar amounts in
thousands except share and per share data or as otherwise
specified)
|
Reconciliation of Net Income to EBITDAS and
Adjusted EBITDAS
We believe 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 have on net
income. In particular, acquisitions have historically resulted in
significant increases in amortization of purchased intangible
assets that reduce net income. Additionally, we regard EBITDAS as a
useful measure of operating performance and cash flow before the
effect of interest expense and is a complement to operating income,
net income and other GAAP financial performance measures.
We define adjusted EBITDAS as EBITDAS excluding the same
non-GAAP adjustments to net income discussed above. We use adjusted
EBITDAS when evaluating operating performance because we believe
the exclusion of such adjustments, of which a significant portion
are non-cash items, is necessary to provide the most accurate
measure of on-going core operating results and to evaluate
comparative results period over period.
The reconciliations of net income to EBITDAS and adjusted
EBITDAS were calculated as follows:
|
Three Months Ended
July 31,
|
|
Twelve Months
Ended July 31,
|
(Unaudited)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income, as
reported
|
$
|
16,888
|
|
|
$
|
16,997
|
|
|
$
|
91,041
|
|
|
$
|
71,378
|
|
Interest expense,
net
|
1,467
|
|
|
1,000
|
|
|
5,289
|
|
|
4,303
|
|
Income
taxes
|
12,126
|
|
|
9,419
|
|
|
26,472
|
|
|
34,855
|
|
Depreciation
|
4,657
|
|
|
4,123
|
|
|
17,473
|
|
|
15,045
|
|
Amortization
|
4,465
|
|
|
6,477
|
|
|
17,357
|
|
|
18,407
|
|
Loss on disposal of
fixed assets
|
247
|
|
|
477
|
|
|
768
|
|
|
966
|
|
Stock-based
compensation expense
|
2,582
|
|
|
1,861
|
|
|
9,615
|
|
|
8,844
|
|
EBITDAS
|
42,432
|
|
|
40,354
|
|
|
168,015
|
|
|
153,798
|
|
Acquisition-related
items
|
745
|
|
|
652
|
|
|
4,047
|
|
|
2,447
|
|
CEO retirement
costs(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,937
|
|
Business optimization
and restructuring-related charges(2)
|
1,280
|
|
|
1,549
|
|
|
5,001
|
|
|
2,760
|
|
Litigation
matters
|
—
|
|
|
—
|
|
|
2,345
|
|
|
—
|
|
Resolution of
contingent liability
|
—
|
|
|
—
|
|
|
(1,138)
|
|
|
—
|
|
Adjusted
EBITDAS
|
$
|
44,457
|
|
|
$
|
42,555
|
|
|
$
|
178,270
|
|
|
$
|
160,942
|
|
(1)
|
For comparative
purposes, we have revised the amounts associated with CEO
retirement costs for the twelve months ended July 31, 2017 to
exclude stock-based compensation expense which was reported in
"Stock-based compensation expense" above.
|
(2)
|
Excludes stock-based
compensation expense.
|
|
|
(dollar amounts in
thousands except share and per share data or as otherwise
specified)
|
Net Debt
We define net debt as long-term debt less cash and cash
equivalents. Each of the components of net debt appears on our
consolidated balance sheets. We believe that the presentation of
net debt provides useful information to investors because we review
net debt as part of our management of our overall liquidity,
financial flexibility, capital structure and leverage.
(Unaudited)
|
July 31,
2018
|
|
July 31,
2017
|
Long-term debt
(excluding debt issuance costs)
|
$
|
200,000
|
|
|
$
|
126,000
|
|
Less cash and cash
equivalents
|
(94,097)
|
|
|
(36,584)
|
|
Net debt
|
$
|
105,903
|
|
|
$
|
89,416
|
|
|
(dollar amounts in
thousands except share and per share data or as otherwise
specified)
|
Reconciliation of Net Sales Growth to Organic
Sales Growth
We define organic sales as net sales less (i) the impact of
foreign currency translation, (ii) net sales related to
acquired businesses during the first twelve months of ownership and
(iii) divestitures during the periods being compared. We believe
that reporting organic sales provides useful information to
investors by helping identify underlying growth trends in our
business and facilitating easier comparisons of our revenue
performance with prior periods. We exclude the effect of foreign
currency translation from organic sales because foreign currency
translation is not under management's control, is subject to
volatility and can obscure underlying business trends. We exclude
the effect of acquisitions and divestitures because the nature,
size, and number of acquisitions and divestitures can vary
dramatically from period to period and can obscure underlying
business trends and make comparisons of financial performance
difficult.
For the three months ended July 31, 2018, the
reconciliation of net sales growth to organic sales growth for
total net sales and net sales of our four reportable segments were
calculated as follows:
(Unaudited)
|
|
Net Sales
|
|
Endoscopy
Net Sales
|
|
Water
Purification
and
Filtration
Net Sales
|
|
Healthcare
Disposables
Net Sales
|
|
Dialysis
Net Sales
|
Net sales
growth
|
|
11.4
|
%
|
|
14.8
|
%
|
|
6.2
|
%
|
|
11.3
|
%
|
|
(2.0)
|
%
|
Impact due to foreign
currency translation
|
|
(0.5)
|
%
|
|
(0.7)
|
%
|
|
(0.1)
|
%
|
|
—
|
%
|
|
(0.6)
|
%
|
Sales related to
acquisitions
|
|
(3.4)
|
%
|
|
(6.0)
|
%
|
|
—
|
%
|
|
(1.2)
|
%
|
|
—
|
%
|
Organic sales
growth
|
|
7.5
|
%
|
|
8.1
|
%
|
|
6.1
|
%
|
|
10.1
|
%
|
|
(2.6)
|
%
|
|
(dollar amounts in
thousands except share and per share data or as otherwise
specified)
|
For the twelve months ended July 31, 2018, the
reconciliation of net sales growth to organic sales growth for
total net sales and net sales of our four reportable segments were
calculated as follows:
(Unaudited)
|
|
Net Sales
|
|
Endoscopy
Net Sales
|
|
Water
Purification
and
Filtration
Net Sales
|
|
Healthcare
Disposables
Net Sales
|
|
Dialysis
Net Sales
|
Net sales
growth
|
|
13.2
|
%
|
|
18.8
|
%
|
|
7.5
|
%
|
|
7.4
|
%
|
|
3.7
|
%
|
Impact due to foreign
currency translation
|
|
(0.8)
|
%
|
|
(1.4)
|
%
|
|
(0.3)
|
%
|
|
—
|
%
|
|
(0.8)
|
%
|
Sales related to
acquisitions
|
|
(4.0)
|
%
|
|
(7.4)
|
%
|
|
—
|
%
|
|
(0.8)%
|
|
|
—
|
%
|
Organic sales
growth
|
|
8.4
|
%
|
|
10.0
|
%
|
|
7.2
|
%
|
|
6.6
|
%
|
|
2.9
|
%
|
|
(dollar amounts in
thousands except share and per share data or as otherwise
specified)
|
View original
content:http://www.prnewswire.com/news-releases/cantel-medical-reports-financial-results-for-its-fourth-quarter-fiscal-year-2018-300720181.html
SOURCE Cantel Medical Corp.