EX-99.1 2 a08-15327_2ex99d1.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

 

Cameron Associates, Inc.

 

 

Cantel Medical Corp.

 

richard@cameronassoc.com

 

 

Phone: (973) 890-7220

 

Phone: (212) 554-5466

 

CANTEL MEDICAL REPORTS RESULTS FOR QUARTER ENDED APRIL 30, 2008

–   Sales increase of 18%

–   EPS of $0.12 (including costs of $0.03 related to the resignation of former President)

 

LITTLE FALLS, New Jersey (June 5, 2008) ... CANTEL MEDICAL CORP. (NYSE:CMN) reported income from continuing operations of $2,001,000, or $0.12 per diluted share, on an 18% increase in sales to $64,178,000 for the third quarter ended April 30, 2008.  The results for the third quarter included costs of approximately $720,000, or $0.03 per diluted share, related to the resignation of the former President. This compares with income from continuing operations of $2,230,000, or $0.14 per diluted share, on sales of $54,412,000 for the third quarter ended April 30, 2007.  For the nine months ended April 30, 2008, the Company reported income from continuing operations of $6,097,000, or $0.37 per diluted share (including costs of $0.03 related to the resignation of the former President), on an 18% increase in sales to $185,093,000.  This compares with income from continuing operations of $6,205,000, or $0.39 per diluted share, on sales of $156,531,000 for the nine months ended April 30, 2007.

 

According to Andrew Krakauer, Cantel’s President, “We were pleased with our revenue growth in the third quarter, as well as in the first nine months of 2008.  Excluding costs related to the resignation of our former President, Cantel’s earnings performance for the third quarter was one of the best in the past three years. We had a strong performance in the renal business and significantly improved results in the endoscope reprocessing segment. In our healthcare disposables and water purification segments, despite increases in sales, operating income in the third quarter declined due to a number of factors including sales and marketing investments and lower gross margins due to increased raw material and other costs. We are addressing gross margin issues throughout Cantel with several programs including initiation of price increases.  In addition, we are optimistic as

 

 



 

we go forward that Cantel will realize the benefits of ongoing efforts to reduce operating and overhead costs, as well as lower interest costs.”

 

The Company further reported that its balance sheet at April 30, 2008 included current assets of $87,304,000, including cash of $19,310,000, a current ratio of 2.55:1, a ratio of funded debt to equity of .38:1, debt of $63,800,000 and stockholders’ equity of $166,775,000.  Krakauer added, “Cantel continues to be a strong cash generator and during the third quarter the Company reduced its net debt position by 15% or over $8 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, 2008 on Thursday, June 5, 2008 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 5 at 2:00 PM through midnight on June 6, by dialing 1-877-660-6853 and using passcode #286 and conference ID #287083. The call will be simultaneously broadcast live over the Internet on vcall.com at http://www.investorcalendar.com/IC/CEPage.asp?ID=130277.  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,

 

 

 

2008

 

2007

 

2008

 

2007

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

64,178

 

$

54,412

 

$

185,093

 

$

156,531

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

41,897

 

34,203

 

120,120

 

98,632

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

22,281

 

20,209

 

64,973

 

57,899

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

Selling

 

7,190

 

5,958

 

20,815

 

17,397

 

General and administrative

 

9,923

 

8,530

 

27,847

 

24,126

 

Research and development

 

928

 

1,175

 

2,879

 

3,563

 

Total operating expenses

 

18,041

 

15,663

 

51,541

 

45,086

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before interest and income taxes

 

4,240

 

4,546

 

13,432

 

12,813

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

1,185

 

859

 

3,662

 

2,381

 

Interest income

 

(97

)

(156

)

(394

)

(606

)

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

 

3,152

 

3,843

 

10,164

 

11,038

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

1,151

 

1,613

 

4,067

 

4,833

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

2,001

 

2,230

 

6,097

 

6,205

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations, net of tax

 

 

18

 

 

281

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2,001

 

$

2,248

 

$

6,097

 

$

6,486

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - diluted

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.12

 

$

0.14

 

$

0.37

 

$

0.39

 

Discontinued operations

 

 

 

 

0.01

 

Net income

 

$

0.12

 

$

0.14

 

$

0.37

 

$

0.40

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares - diluted

 

16,349

 

16,195

 

16,355

 

16,064

 

 

 



 

CANTEL MEDICAL CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

April 30,

 

July 31,

 

 

 

2008

 

2007

 

Assets

 

 

 

 

 

Current assets

 

$

87,304

 

$

76,731

 

Property and equipment, net

 

38,089

 

38,577

 

Intangible assets

 

43,627

 

44,615

 

Goodwill

 

109,485

 

102,073

 

Other assets

 

1,470

 

1,675

 

 

 

$

279,975

 

$

263,671

 

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

Current portion of long-term debt

 

$

7,500

 

$

6,000

 

Other current liabilities

 

26,783

 

29,971

 

Long-term debt

 

56,300

 

51,000

 

Other long-term liabilities

 

22,617

 

21,630

 

Stockholders’ equity

 

166,775

 

155,070

 

 

 

$

279,975

 

$

263,671

 

 

 



 

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, 2008 and 2007, respectively, is as follows (in thousands):

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

April 30,

 

April 30,

 

 

 

2008

 

2007

 

2008

 

2007

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2,001

 

$

2,248

 

$

6,097

 

$

6,486

 

Income from discontinued operations, net of tax

 

 

(18

)

 

(281

)

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

2,001

 

2,230

 

6,097

 

6,205

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

1,151

 

1,613

 

4,067

 

4,833

 

Interest expense

 

1,185

 

859

 

3,662

 

2,381

 

Interest income

 

(97

)

(156

)

(394

)

(606

)

Depreciation

 

1,515

 

1,336

 

4,490

 

3,853

 

Amortization

 

1,438

 

1,210

 

4,297

 

3,509

 

Loss (gain) on disposal of fixed assets

 

31

 

(5

)

80

 

4

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

7,224

 

7,087

 

22,299

 

20,179

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

489

 

492

 

1,483

 

907

 

 

 

 

 

 

 

 

 

 

 

EBITDAS

 

$

7,713

 

$

7,579

 

$

23,782

 

$

21,086

 

 

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 from continuing operations 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, the acquisitions completed during our fiscal 2007 and the three months ended October 31, 2007 has resulted in a significant increase in amortization of intangible assets that reduced the Company’s net income during the three and nine months ended April 30, 2008, as compared with the three and nine months ended April 30, 2007. Additionally, the Company regards EBITDAS as a useful measure of operating performance and cash flow before the effect of interest expense, which increase in interest expense for the periods presented primarily related to borrowings for recent acquisitions, 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.