EX-99.1 2 a09-14874_1ex99d1.htm EX-99.1

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 and CEO

 

Cameron Associates, Inc.

 

Cantel Medical Corp.

 

richard@cameronassoc.com

 

Phone: (973) 890-7220

 

Phone: (212) 554-5466

 

CANTEL MEDICAL REPORTS A 109% INCREASE IN NET INCOME - EPS OF $0.25 vs. $0.12 FOR QUARTER ENDED APRIL 30, 2009

 

LITTLE FALLS, New Jersey (June 4, 2009) ... CANTEL MEDICAL CORP. (NYSE:CMN) reported a 109% increase in net income to $4,183,000, or $0.25 per diluted share, on a 3.5% increase in sales to a record $66,431,000 for the third quarter ended April 30, 2009. This compares with net income of $2,001,000, or $0.12 per diluted share (including costs of $0.03 related to the resignation of our former President), on sales of $64,178,000 for the third quarter ended April 30, 2008. For the nine months ended April 30, 2009, the Company reported an 85% increase in net income to $11,290,000, or $0.69 per diluted share (inclusive of $0.02 of expenses related to the relocation of its Dutch manufacturing operations to the United States), on a 4.4% increase in sales to $193,257,000. This compares with net income of $6,097,000, or $0.37 per diluted share (including costs of $0.03 related to the resignation of our former President), on sales of $185,093,000 for the nine months ended April 30, 2008.

 

Andrew Krakauer, Cantel’s President and CEO stated, “We are very pleased to have delivered another quarter of substantial earnings growth and our strongest quarterly performance of the past few years despite the worldwide economic slowdown. Cantel demonstrated sales growth in all reporting segments except for an expected decline in lower margin dialysate concentrate shipments in our Dialysis segment.”

 

Krakauer added, “While all our businesses performed well, operating income in our Endoscope Reprocessing, Dialysis, and Water Purification and Filtration units was substantially ahead of last year, aided by strong sales of consumables, including disinfectants, sterilants and an increase in service revenue. Additionally, the positive performance was helped by our active cost reduction and margin improvement programs, the effectiveness of price increases and reduced interest expenses.”

 



 

Krakauer continued, “Although our businesses are not immune to the economic downturn, we remain focused on our strategies to grow and improve performance. In this economy, our competitive advantage is our leadership positions in several infection prevention and control markets, a quality reputation and strong brands. Further, we have proactively developed our business to where approximately 75% of our sales come from disposables and service, which are supported by a large installed base of equipment.”

 

The Company further reported that its balance sheet at April 30, 2009 included current assets of $86,844,000, including cash of $22,328,000, a current ratio of 2.4:1, debt of $49,300,000, stockholders’ equity of $177,862,000 and a ratio of funded debt to equity of .28:1. Krakauer stated, “The Company has a strong balance sheet and continues to generate significant cash. Our cash provided by operating activities for the quarter was $8,085,000. We have reduced our net debt position from the second quarter by 21% to $27 million.”

 

Cantel Medical Corp. is a leading provider of infection prevention and control products in the healthcare market. Our products include specialized medical device reprocessing systems for renal dialysis and endoscopy, dialysate concentrates and other dialysis supplies, disposable infection control products primarily for the dental industry, water purification equipment, sterilants, disinfectants and cleaners, 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, 2009 on Thursday, June 4, 2009 at 11:00 AM Eastern time. To participate in the conference call, dial 1-877-407-8035 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 4, 2009 at 2:00 PM through midnight on June 11, by dialing 1-877-660-6853 and using passcode #286 and conference ID #324315.

 

The call will be simultaneously broadcast live over the Internet on vcall.com at

http://www.investorcalendar.com/IC/CEPage.asp?ID=145679. A replay of the webcast will be available on Vcall for 30 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)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

April 30,

 

April 30,

 

 

 

2009

 

2008

 

2009

 

2008

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

66,431

 

$

64,178

 

$

193,257

 

$

185,093

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

40,908

 

41,897

 

120,500

 

120,120

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

25,523

 

22,281

 

72,757

 

64,973

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

Selling

 

7,984

 

7,190

 

22,326

 

20,815

 

General and administrative

 

9,106

 

9,923

 

27,167

 

27,847

 

Research and development

 

1,261

 

928

 

3,309

 

2,879

 

Total operating expenses

 

18,351

 

18,041

 

52,802

 

51,541

 

 

 

 

 

 

 

 

 

 

 

Income before interest and income taxes

 

7,172

 

4,240

 

19,955

 

13,432

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

588

 

1,185

 

2,013

 

3,662

 

Interest income

 

(24

)

(97

)

(132

)

(394

)

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

6,608

 

3,152

 

18,074

 

10,164

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

2,425

 

1,151

 

6,784

 

4,067

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

4,183

 

$

2,001

 

$

11,290

 

$

6,097

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - diluted

 

$

0.25

 

$

0.12

 

$

0.69

 

$

0.37

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares - diluted

 

16,544

 

16,349

 

16,434

 

16,355

 

 



 

CANTEL MEDICAL CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

April 30,

 

July 31,

 

 

 

2009

 

2008

 

Assets

 

 

 

 

 

Current assets

 

$

86,844

 

$

84,561

 

Property and equipment, net

 

35,685

 

37,920

 

Intangible assets

 

36,824

 

41,254

 

Goodwill

 

112,187

 

113,958

 

Other assets

 

1,062

 

1,497

 

 

 

$

 272,602

 

$

279,190

 

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

Current portion of long-term debt

 

$

9,500

 

$

8,000

 

Other current liabilities

 

26,821

 

30,922

 

Long-term debt

 

39,800

 

50,300

 

Other long-term liabilities

 

18,619

 

21,256

 

Stockholders’ equity

 

177,862

 

168,712

 

 

 

$

 272,602

 

$

279,190

 

 



 

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 nine months ended April 30, 2009 and 2008, respectively, is as follows (in thousands):

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

April 30,

 

April 30,

 

 

 

2009

 

2008

 

2009

 

2008

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

4,183

 

$

2,001

 

$

11,290

 

$

6,097

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

2,425

 

1,151

 

6,784

 

4,067

 

Interest expense

 

588

 

1,185

 

2,013

 

3,662

 

Interest income

 

(24

)

(97

)

(132

)

(394

)

Depreciation

 

1,562

 

1,515

 

4,637

 

4,490

 

Amortization

 

1,264

 

1,438

 

3,870

 

4,297

 

Loss on disposal of fixed assets

 

 

31

 

22

 

80

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

9,998

 

7,224

 

28,484

 

22,299

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

784

 

489

 

1,829

 

1,483

 

 

 

 

 

 

 

 

 

 

 

EBITDAS

 

$

10,782

 

$

7,713

 

$

30,313

 

$

23,782

 

 

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.