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8-K - 8-K - CANTEL MEDICAL LLCa13-14494_18k.htm

Exhibit 99.1

 

CANTEL MEDICAL CORP.

150 Clove Road

Little Falls, New Jersey 07424

 

FOR IMMEDIATE RELEASE

 

Contact:

Andrew A. Krakauer

Richard E. Moyer

 

President & CEO

Cameron Associates, Inc.

 

Cantel Medical Corp.

richard@cameronassoc.com

 

Phone: (973) 890-7220

Phone: (212) 554-5466

 

CANTEL MEDICAL REPORTS EPS OF $0.33 vs. $0.30

ON 8% SALES INCREASE FOR THIRD QUARTER ENDED APRIL 30, 2013

 

LITTLE FALLS, New Jersey (June 6, 2013) ... CANTEL MEDICAL CORP. (NYSE:CMN) reported a 10% increase in net income to $8,998,000, or $0.33 per diluted share, on an 8% increase in sales to $105,009,000 for the third quarter ended April 30, 2013. This compares with net income of $8,174,000, or $0.30 per diluted share, on sales of $97,238,000 for the third quarter ended April 30, 2012. For the nine months ended April 30, 2013, the Company reported record net income of $29,026,000, or $1.06 per diluted share, inclusive of $0.02 in net favorable adjustments related to acquisition accounting partially offset by severance and recruiting costs, on an 8% increase in sales to a record $311,053,000.  This compares with net income of $21,688,000 or $0.80 per diluted share, inclusive of a $0.02 charge related to an asset impairment, on sales of $287,797,000 for the nine months ended April 30, 2012.

 

Andrew Krakauer, Cantel’s President and CEO stated, “We are pleased to have delivered solid financial performance in the third quarter. These positive results confirm the continued success of our three prong approach to growth which includes investing in new product development, sales and marketing programs and acquisitions. Reported earnings would have been $0.02 better if not for the Medical Device Tax which impacted all three months of this quarter.”

 

Krakauer added, “Performance this quarter was led by our Healthcare Disposables segment. With the benefit of the ongoing integration of the SPS Medical sterility assurance business acquired on November 1, 2012, sales in this segment grew by 17% compared to last year and we were able to offset the negative effect caused by our distributors pulling forward shipments last quarter. Operating profits were 13% higher and grew more slowly than sales as we made substantial investments in sales and marketing expenses. We are very pleased with the performance of SPS Medical and will be investing in additional sales and marketing resources, as well as R&D, to accelerate growth in fiscal year 2014 and beyond.

 



 

As in the first two quarters of this fiscal year, our Water Purification and Filtration segment had excellent year-over-year quarterly performance with organic sales growth of almost 14%. Operating profits in this segment were only slightly higher due to increases in selling expenses and transaction expenses associated with our recent acquisition. In our largest business unit, Endoscopy, quarterly sales growth of 3% was driven by our liquid chemical germicides, service and procedural products categories. We remain encouraged with the continued growth prospects for this segment as we continue to launch new products into this multi-billion market segment.  At two major endoscopy trade shows in May, we had a very successful turnout and were encouraged by the customer excitement and feedback on our portfolio of newly launched products.”

 

The Company further reported that its balance sheet at April 30, 2013 included current assets of $145,183,000, including cash of $30,669,000, a current ratio of 2.6:1, debt of $105,000,000 and stockholders’ equity of $307,955,000.  Krakauer stated, “The Company has a strong balance sheet and continues to generate significant cash flow and EBITDAS.  When compared with the first nine months of last year, our EBITDAS grew by 19% to $62,806,000.  Net debt was reduced during the quarter by almost $6 million to $74,331,000 despite the approximate $8 million acquisition of the Siemens hemodialysis water business announced on March 25.”

 

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 third quarter ended April 30, 2013 on Thursday, June 6, 2013 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 6, 2013 at 2:00 PM through midnight on August 6, 2013 by dialing 1-877-660-6853 and using conference ID #415610.

 

The call will be simultaneously broadcast live over the Internet on vcall.com at http://www.investorcalendar.com/IC/CEPage.asp?ID=171058. 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.

 

2



 

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,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

105,009

 

$

97,238

 

$

311,053

 

$

287,797

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

59,525

 

54,619

 

176,691

 

166,407

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

45,484

 

42,619

 

134,362

 

121,390

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

Selling

 

15,096

 

14,240

 

42,232

 

40,433

 

General and administrative

 

13,766

 

12,388

 

38,196

 

36,582

 

Research and development

 

2,399

 

2,217

 

6,876

 

6,660

 

Total operating expenses

 

31,261

 

28,845

 

87,304

 

83,675

 

 

 

 

 

 

 

 

 

 

 

Income before interest, other expense and income taxes

 

14,223

 

13,774

 

47,058

 

37,715

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

749

 

897

 

2,186

 

2,928

 

Interest income

 

(16

)

(13

)

(45

)

(67

)

Other expense

 

 

 

 

605

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

13,490

 

12,890

 

44,917

 

34,249

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

4,492

 

4,716

 

15,891

 

12,561

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

8,998

 

$

8,174

 

$

29,026

 

$

21,688

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - diluted

 

$

0.33

 

$

0.30

 

$

1.06

 

$

0.80

 

 

 

 

 

 

 

 

 

 

 

Dividends per common share

 

$

 

$

 

$

0.06

 

$

0.05

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares - diluted

 

27,501

 

27,282

 

27,442

 

27,148

 

 



 

CANTEL MEDICAL CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)

 

 

 

April 30,

 

July 31,

 

 

 

2013

 

2012

 

Assets

 

 

 

 

 

Current assets

 

$

145,183

 

$

133,892

 

Property and equipment, net

 

45,431

 

43,022

 

Intangible assets, net

 

74,165

 

71,311

 

Goodwill

 

208,176

 

183,655

 

Other assets

 

11,409

 

2,932

 

 

 

$

484,364

 

$

434,812

 

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

Current portion of long-term debt

 

$

10,000

 

$

10,000

 

Other current liabilities

 

46,260

 

45,141

 

Long-term debt

 

95,000

 

80,000

 

Other long-term liabilities

 

25,149

 

23,735

 

Stockholders’ equity

 

307,955

 

275,936

 

 

 

$

484,364

 

$

434,812

 

 



 

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, 2013 and 2012, respectively, is as follows (in thousands):

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

April 30,

 

April 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

8,998

 

$

8,174

 

$

29,026

 

$

21,688

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

4,492

 

4,716

 

15,891

 

12,561

 

Interest expense

 

749

 

897

 

2,186

 

2,928

 

Interest income

 

(16

)

(13

)

(45

)

(67

)

Other expense

 

 

 

 

605

 

Depreciation

 

1,806

 

1,735

 

5,380

 

5,129

 

Amortization

 

2,598

 

2,279

 

7,438

 

6,846

 

Loss (gain) on disposal of fixed assets

 

(16

)

58

 

124

 

94

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

18,611

 

17,846

 

60,000

 

49,784

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

919

 

706

 

2,806

 

3,019

 

 

 

 

 

 

 

 

 

 

 

EBITDAS

 

$

19,530

 

$

18,552

 

$

62,806

 

$

52,803

 

 

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.