1.Business Description

Cantel Medical Corp. (“Cantel”) is a leading provider of infection prevention and control products and services in the healthcare market, specializing in the following operating segments:

Endoscopy: Medical device reprocessing systems, disinfectants, detergents and other supplies used to high-level disinfect flexible endoscopes and disposable infection control products intended to eliminate the challenges associated with proper cleaning and high-level disinfection of numerous reusable components used in gastrointestinal (“GI”) endoscopy procedures. This segment recently commenced the sale of endoscope transport and storage systems, a comprehensive range of endoscopy consumable accessories, and OEM mobile medical carts. Additionally, this segment includes technical maintenance service on its products.

Water Purification and Filtration: Water purification equipment and services, filtration and separation products and disinfectant, sterilization and decontamination products and services for the medical, pharmaceutical, biotech, beverage and commercial industrial markets.

Healthcare Disposables: Single-use, infection prevention and control healthcare products including face masks, sterilization pouches, towels and bibs, tray covers, saliva ejectors, germicidal wipes, plastic cups and disinfectants, as well as a filter system for maintaining safe dental unit waterlines. This segment also manufactures and sells biological and chemical indicators for sterility assurance monitoring services in the acute-care, alternate-care and dental markets.

Dialysis: Medical device reprocessing systems, sterilants/disinfectants, dialysate concentrates and other supplies for renal dialysis.

In addition, through April 7, 2015, we had another operating segment, known as Specialty Packaging. This segment included specialty packaging and thermal control products, as well as related compliance training, for the transport of infectious and biological specimens and thermally sensitive pharmaceutical, medical and other products. The Specialty Packaging operating segment, which comprised the Other reporting segment for financial reporting purposes, was divested on April 7, 2015 as further described in Note 19 to the Consolidated Financial Statements.

Most of our equipment, consumables and supplies are used to help prevent or control the occurrence or spread of infections.

We operate our four operating segments through wholly-owned subsidiaries in the United States and internationally. Our principal operating subsidiaries in the United States are Medivators Inc., Mar Cor Purification, Inc., Crosstex International, Inc. and SPS Medical Supply Corp. Internationally, our primary operating subsidiaries include Cantel Medical (UK) Limited, Cantel Medical Asia/Pacific Ltd., Cantel Medical Devices (China) Co., Ltd., Biolab Equipment Ltd., Medivators B.V., and Cantel Medical (Italy) S.r.l.

In fiscal 2015, we acquired (i) all of the issued and outstanding stock of MRLB International, Inc. (“MRLB”) on February 20, 2015 (the “DentaPure Acquisition”), (ii) certain net assets of Pure Water Solutions, Inc. (“PWS”) on January 1, 2015 (the “PWS Acquisition”) and (iii) all of the issued and outstanding stock of International Medical Service S.r.l. (“IMS”) on November 3, 2014 (the “IMS Acquisition”), as more fully described in Note 3 to the Consolidated Financial Statements. With the exception of acquisition related costs of $2,776,000 primarily related to the IMS Acquisition, the businesses of MRLB (the “DentaPure Business), PWS (the “PWS Business”) and IMS (the “IMS Business”) did not have a significant effect on our consolidated results of operations in fiscal 2015 due to the size of the businesses in relation to our overall consolidated results of operations and are not reflected in our consolidated results of operations in fiscals 2014 and 2013. The DentaPure Business is included in our Healthcare Disposables segment. The PWS Business is included in our Water Purification and Filtration segment and the IMS Business is included in our Endoscopy segment. Subsequent to its acquisition, we changed the name of International Medical Service S.r.l. to Cantel Medical (Italy) S.r.l.

In fiscal 2014, we acquired all the issued and outstanding capital stock of (i) PuriCore International Limited (“PuriCore”) on June 30, 2014 (the “PuriCore Acquisition”), (ii) Sterilator Company, Inc. (“Sterilator”) on January 7, 2014 (the “Sterilator Acquisition”) and (iii) Jet Prep Ltd. (“Jet Prep”) on November 5, 2013 (the “Jet Prep Acquisition”), as more fully described in Note 3 to the Consolidated Financial Statements. Accordingly, the businesses of Sterilator (the “Sterilator Business”), Jet Prep (the “Jet Prep Business”) and PuriCore (the “PuriCore Business”) are reflected in our consolidated results of operations in fiscal 2015 and the portion of fiscal 2014 subsequent to their acquisition dates and are not reflected in fiscal 2013. With the exception of acquisition related costs related to the PuriCore Acquisition and acquisition related fair value adjustments related to the Jet Prep Business, these acquisitions did not have a significant effect on our consolidated results of operations in fiscals 2015 and 2014 due to the size of the acquisitions in relation to our overall consolidated results of operations. The PuriCore and Jet Prep Businesses are included in our Endoscopy segment and the Sterilator Business is included in our Healthcare Disposables segment. Subsequent to its acquisition, we changed the name of PuriCore to Cantel Medical (UK) Limited.

In fiscal 2013, we acquired (i) certain net assets from Siemens Industry, Inc. and Siemens Canada Limited (collectively, “Siemens”) on July 30, 2013 relating to Siemens’ hemodialysis water business (the “Siemens Water Business”), (ii) certain net assets of Eagle Pure Water Systems, Inc. (“Eagle Pure Water”) on December 31, 2012 (the “Eagle Pure Water Acquisition”) and (iii) all the issued and outstanding stock of SPS Medical Supply Corp. (“SPS Medical”) on November 1, 2012 (the “SPS Medical Acquisition”), as more fully described in Note 3 to the Consolidated Financial Statements. Accordingly, the Siemens Water Business as well as the businesses of Eagle Pure Water (the “Eagle Pure Water Business”) and SPS Medical (the “SPS Medical Business”) are reflected in our consolidated results of operations in fiscals 2015 and 2014 and the portion of fiscal 2013 subsequent to their acquisition dates. The Siemens Water Business and the Eagle Pure Water Business are included in our Water Purification and Filtration segment and the SPS Medical Business is included in our Healthcare Disposables segment.

Throughout this document, references to “Cantel,” “us,” “we,” “our,” and the “Company” are references to Cantel Medical Corp. and its subsidiaries, except where the context makes it clear the reference is to Cantel itself and not its subsidiaries.

Subsequent Events

On September 14, 2015, we acquired all of the issued and outstanding stock of Medical Innovations Group Holdings Limited and certain affiliated companies (collectively “MI”), as more fully described in Note 3 to the Consolidated Financial Statements. Since this acquisition occurred after July 31, 2015, its results of operations are not included in any periods presented. The acquisition of MI will be included in our Endoscopy segment. To fund the cash consideration paid and the costs associated with the MI Acquisition, we borrowed $83,000,000 in September 2015 under our revolving credit facility, as more fully described in Notes 9 and 11 to the Consolidated Financial Statements.

We performed a review of events subsequent to July 31, 2015. Based upon that review, no other subsequent events occurred that required updating to our Consolidated Financial Statements or disclosures.