EX-99.1 2 a10-5399_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 & CEO

 

Cameron Associates, Inc.

 

Cantel Medical Corp.

 

richard@cameronassoc.com

 

Phone: (973) 890-7220

 

Phone: (212) 554-5466

 

CANTEL MEDICAL REPORTS 29% INCREASE IN NET INCOME - EPS OF $0.29 vs. $0.23 FOR QUARTER ENDED JANUARY 31, 2010

 

LITTLE FALLS, New Jersey (March 9, 2010) ... CANTEL MEDICAL CORP. (NYSE:CMN) reported a 29% increase in net income to $4,876,000, or $0.29 per diluted share, on a 6.7% increase in sales to $66,587,000 for the second quarter ended January 31, 2010. This compares with net income of $3,774,000, or $0.23 per diluted share, on sales of $62,420,000 for the second quarter ended January 31, 2009. For the six months ended January 31, 2010, the Company reported a 55% increase in net income to $11,044,000, or $0.65 per diluted share, on an 8.5% increase in sales to $137,582,000. This compares with net income of $7,107,000, or $0.43 per diluted share, on sales of $126,826,000 for the six months ended January 31, 2009.

 

Andrew Krakauer, Cantel’s President and CEO stated, “We are very pleased to have delivered another strong quarter of sales and earnings growth. These positive results confirm the continued success of our sales and marketing investments and various initiatives to improve operating margins. Cantel continued to benefit from growth of higher margin consumables and service revenue.”

 

Krakauer added, “While all of our businesses performed well, operating income in our Healthcare Disposables, Endoscope Reprocessing and Water Purification and Filtration units was substantially ahead of last year, aided by strong sales of consumables, including disinfectants, sterilants and face masks. Cantel’s overall good performance was further supported by the realization of price increases and reduced interest expenses. On an additional favorable note, we also substantially increased sales of capital equipment worldwide in our Endoscope Reprocessing segment. The Healthcare Disposables business had higher than normal sales of face masks in the early part of the quarter as we filled orders generated during the novel H1N1 flu outbreak.”

 


 

The Company further reported that its balance sheet at January 31, 2010 included current assets of $90,018,000, including cash of $18,131,000, a current ratio of 1.7:1, debt of $30,500,000 and stockholders’ equity of $199,900,000.  Krakauer stated, “The Company has a strong balance sheet and continues to generate significant cash. We have reduced our net debt position during the first half of fiscal year 2010 by 38% to $12,369,000. EBITDAS for the quarter was $11,890,000.”

 

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 second quarter ended January 31, 2010 on Tuesday, March 9, 2010 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 Tuesday, March 9 at 2:00 PM through midnight on March 16, by dialing 1-877-660-6853 and using passcode #286 and conference ID #346358.

 

The call will be simultaneously broadcast live over the Internet on vcall.com at http://www.investorcalendar.com/IC/CEPage.asp?ID=156065. 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)

(unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

January 31,

 

January 31,

 

 

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

66,587

 

$

62,420

 

$

137,582

 

$

126,826

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

39,463

 

38,809

 

81,000

 

79,592

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

27,124

 

23,611

 

56,582

 

47,234

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

Selling

 

8,711

 

6,992

 

17,235

 

14,342

 

General and administrative

 

9,272

 

9,037

 

18,577

 

18,061

 

Research and development

 

1,157

 

983

 

2,422

 

2,048

 

Total operating expenses

 

19,140

 

17,012

 

38,234

 

34,451

 

 

 

 

 

 

 

 

 

 

 

Income before interest and income taxes

 

7,984

 

6,599

 

18,348

 

12,783

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

339

 

674

 

726

 

1,425

 

Interest income

 

(8

)

(38

)

(16

)

(108

)

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

7,653

 

5,963

 

17,638

 

11,466

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

2,777

 

2,189

 

6,594

 

4,359

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

4,876

 

$

3,774

 

$

11,044

 

$

7,107

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - diluted

 

$

0.29

 

$

0.23

 

$

0.65

 

$

0.43

 

 

 

 

 

 

 

 

 

 

 

Dividends per common share

 

$

0.05

 

$

—

 

$

0.05

 

$

—

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares - diluted

 

16,983

 

16,503

 

16,885

 

16,478

 

 


 

CANTEL MEDICAL CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)

 

 

 

January 31,

 

July 31,

 

 

 

2010

 

2009

 

Assets

 

 

 

 

 

Current assets

 

$

90,018

 

$

88,910

 

Property and equipment, net

 

35,679

 

35,968

 

Intangible assets, net

 

34,591

 

37,042

 

Goodwill

 

115,032

 

114,995

 

Other assets

 

1,259

 

956

 

 

 

$

276,579

 

$

277,871

 

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

Current portion of long-term debt

 

$

25,500

 

$

10,000

 

Other current liabilities

 

27,572

 

29,113

 

Long-term debt

 

5,000

 

33,300

 

Other long-term liabilities

 

18,607

 

18,342

 

Stockholders’ equity

 

199,900

 

187,116

 

 

 

$

276,579

 

$

277,871

 

 


 

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 six months ended January 31, 2010 and 2009, respectively, is as follows (in thousands):

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

January 31,

 

January 31,

 

 

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

4,876

 

$

3,774

 

$

11,044

 

$

7,107

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

2,777

 

2,189

 

6,594

 

4,359

 

Interest expense

 

339

 

674

 

726

 

1,425

 

Interest income

 

(8

)

(38

)

(16

)

(108

)

Depreciation

 

1,574

 

1,525

 

3,138

 

3,075

 

Amortization

 

1,294

 

1,268

 

2,572

 

2,606

 

Loss on disposal of fixed assets

 

227

 

8

 

227

 

22

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

11,079

 

9,400

 

24,285

 

18,486

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

811

 

525

 

1,600

 

1,045

 

 

 

 

 

 

 

 

 

 

 

EBITDAS

 

$

11,890

 

$

9,925

 

$

25,885

 

$

19,531

 

 

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.