Cantel Medical Reports EPS Of $0.35 vs. $0.18 On 15% Sales Increase For Fourth Quarter And EPS Of $1.15 vs. $0.79 On 20% Sales Increase For The Year Ended July 31, 2012
EPS INCLUSIVE OF $0.04 FAVORABLE TAX BENEFIT RELATED TO CLOSING JAPAN SUBSIDIARY IN FOURTH QUARTER

LITTLE FALLS, N.J., Oct. 11, 2012 /PRNewswire/ -- CANTEL MEDICAL CORP. (NYSE: CMN) reported record net income of $9,649,000, or $0.35 per diluted share, on a 15% increase in sales to a record $98,693,000 for the fourth quarter ended July 31, 2012, inclusive of a $0.04 favorable tax benefit related to the closing of our Japan subsidiary.  This compares with net income of $4,682,000, or $0.18 per diluted share, on sales of $86,018,000 for the fourth quarter ended July 31, 2011, inclusive of approximately $0.02 of expenses related to acquisitions.

For the fiscal year ended July 31, 2012, the Company reported net income of $31,337,000, or $1.15 per diluted share, on a 20% increase in sales to $386,490,000, inclusive of a $0.04 favorable tax benefit related to the closing of our Japan subsidiary and a $0.02 charge related to the impairment of an investment. This compares with net income of $20,425,000, or $0.79 per diluted share, on sales of $321,651,000 for the fiscal year ended July 31, 2011, inclusive of approximately $0.03 of acquisition related expenses.

Andrew Krakauer, Cantel's President and CEO, stated, "We are pleased to have delivered record sales and earnings this quarter.  We continued to achieve good financial performance growth in our three major business segments -- Endoscopy, Water Purification and Filtration, and Healthcare Disposables. All three business units have greatly benefited from further investments in new product development, sales and marketing programs and the full integration of recent acquisitions for this quarter and for the full year. Most importantly this quarter, gross margins increased by over 6 percentage points to 43.3%, driven by the effective integration of acquisitions, greater sales of higher margin products and improved operating efficiencies."

Krakauer added, "Our Medivators Endoscopy business continued its excellent performance this fiscal year as sales increased 35% for the quarter and 50% for the full year, led by sales of our newly acquired Byrne Medical business. Core operating profit in this segment more than doubled for the quarter and the full year. Byrne products showed core growth of over 25% for the year. Not only has this acquisition significantly enhanced revenue growth, overall margins and earnings this fiscal year, but it provides great momentum for future growth, as we expand our sales and marketing of these products worldwide in fiscal year 2013 under the Medivators brand.  We are also in the process of launching a number of important new products in this segment. Further, we were pleased that on September 27, 2012, we received FDA 510(k) clearance of our newest reprocessing high level disinfectant chemistry, Rapicide® OPA-28.

Cantel's two other largest business segments also performed well. In our Water Purification and Filtration segment, sales were 9% higher for the quarter and 12% for the year. More importantly, with the effective integration of the Gambro Water acquisition, shipments of higher margin products and a general focus on margin improvements, operating profit increased in this segment by over 40% in the quarter and 50% for the year. In our Healthcare Disposables unit, operating profit for the quarter and year increased by 26% and 30%, respectively, due to gross margin improvements, as sales increased by 1% and 9%, respectively.

I am optimistic about Cantel's prospects to expand sales and increase profits in fiscal year 2013. We expect to benefit from leveraging our significant sales and marketing investments, continued progress with new products, and from past and future acquisitions."

The Company further reported that its balance sheet at July 31, 2012 included current assets of $133,892,000, including cash of $30,186,000, a current ratio of 2.43:1, gross debt of $90,000,000 and stockholders' equity of $275,936,000.  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 74% to $19,191,000. Our net debt position improved this quarter by over $15 million to $59,814,000. For the full fiscal year 2012, we have reduced net debt by almost $44 million."

Cantel Medical Corp. (NYSE:CMN) is a leading provider of infection prevention and control products in the healthcare market. Our products include water purification equipment, sterilants, disinfectants and cleaners, specialized medical device reprocessing systems for endoscopy and renal dialysis, disposable infection control products primarily for dental and GI endoscopy markets, dialysate concentrates and other dialysis supplies, 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 fourth quarter ended July 31, 2012 on Thursday, October 11, 2012 at 11:00 AM Eastern Time. To participate in the conference call, dial (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, October 11, 2012 at 2:00 PM through midnight on December 11, 2012 by dialing (877) 660-6853 and using conference ID # 401299.

The call will be simultaneously broadcast live over the Internet on vcall.com at http://www.investorcalendar.com/IC/CEPage.asp?ID=169863.  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.

CANTEL MEDICAL CORP. 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(unaudited)












Three Months Ended


Twelve Months Ended



July 31, 


July 31,



2012


2011


2012


2011










Net sales


$98,693


$86,018


$386,490


$321,651










Cost of sales


55,916


54,121


222,323


198,868










Gross profit


42,777


31,897


164,167


122,783










Expenses:









  Selling


14,733


12,216


55,166


44,144

  General and administrative


11,041


10,792


47,623


40,655

  Research and development


2,594


1,869


9,254


6,648

Total operating expenses


28,368


24,877


112,043


91,447










Income before interest, other expense









and income taxes


14,409


7,020


52,124


31,336










Interest expense  


804


262


3,732


960

Interest income


(15)


(24)


(82)


(86)

Other expense


-


-


605


-










Income before income taxes


13,620


6,782


47,869


30,462










Income taxes


3,971


2,100


16,532


10,037










Net income 


$  9,649


$  4,682


$  31,337


$  20,425










Earnings per common share - diluted  


$    0.35


$    0.18


$     1.15


$     0.79










Dividends per common share 


$    0.05


$    0.04


$     0.09


$     0.08










Weighted average shares - diluted 


27,304


26,177


27,185


25,986

  

CANTEL MEDICAL CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)













July 31,


July 31,



2012


2011

                    Assets





     Current assets


$133,892


$111,324

     Property and equipment, net


43,022


34,459

     Intangible assets, net


71,311


39,191

     Goodwill


183,655


134,770

     Other assets


2,932


1,699



$434,812


$321,443






            Liabilities and stockholders' equity





     Current portion of long-term debt


$  10,000


$         -

     Other current liabilities


45,141


43,411

     Long-term debt


80,000


24,000

     Other long-term liabilities 


23,735


19,717

     Stockholders' equity


275,936


234,315



$434,812


$321,443

  

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 twelve months ended July 31, 2012 and 2011,

respectively, is as follows (in thousands):















Three Months Ended


Twelve Months Ended



July 31,


July 31,



2012


2011


2012


2011



















Net income


$  9,649


$  4,682


$31,337


$20,425










Income taxes


3,971


2,100


16,532


10,037

Interest expense  


804


262


3,732


960

Interest income


(15)


(24)


(82)


(86)

Other expense


-


-


605


-

Depreciation


1,672


1,720


6,801


6,759

Amortization


2,278


1,497


9,124


5,687

Loss on disposal of fixed assets


11


18


105


10










EBITDA


18,370


10,255


68,154


43,792










Stock-based compensation expense


821


797


3,840


3,350










EBITDAS


$19,191


$11,052


$71,994


$47,142




























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.

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