Exhibit 99.1
CANTEL MEDICAL CORP.
150 Clove Road
Little Falls, New Jersey 07424
FOR IMMEDIATE RELEASE
Contact: | | R. Scott Jones | | 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
18% INCREASE IN SALES AND EPS OF $0.13 FOR QUARTER ENDED JANUARY 31, 2008
LITTLE FALLS, New Jersey (March 6, 2008) ... CANTEL MEDICAL CORP. (NYSE:CMN) reported income from continuing operations of $2,157,000, or $0.13 per diluted share (inclusive of approximately $0.02 of stock-based compensation expense), on an 18% increase in sales to $60,910,000 for the second quarter ended January 31, 2008. This compares with income from continuing operations of $2,252,000, or $0.14 per diluted share (inclusive of approximately $0.01 of stock-based compensation expense), on sales of $51,635,000 for the second quarter ended January 31, 2007. For the six months ended January 31, 2008, the Company reported income from continuing operations of $4,096,000, or $0.25 per diluted share (inclusive of $0.04 of stock-based compensation expense), on an 18% increase in sales to $120,915,000. This compares with income from continuing operations of $3,975,000, or $0.25 per diluted share (inclusive of $0.02 of stock-based compensation expense), on sales of $102,119,000 for the six months ended January 31, 2007.
According to R. Scott Jones, Cantel’s President and CEO, “We were pleased with our continued core revenue growth in the second quarter, as well as the first half of 2008. Our growth in earnings from an EBITDAS(1) perspective was 15% (to $8,223,000) for the quarter and 19% (to $16,069,000) for the first half of the year, compared to the same periods last year. We have made significant investments in marketing and sales during the past six months, as well as in recent acquisitions, and anticipate realizing the benefits from these initiatives in the coming quarters.”
The Company further reported that its balance sheet at January 31, 2008 included current assets of $83,609,000, including cash of $14,208,000, a current ratio of 2.6:1, a ratio of funded debt to equity of .41:1, debt of $66,800,000 and stockholders’ equity of $163,784,000.
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, 2008 on Thursday, March 6, 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, March 6 at 2:00 PM through midnight on March 7, by dialing 1-877-660-6853 and using passcode #286 and conference ID #276770. The call will be simultaneously broadcast live over the Internet on vcall.com at http://www.vcall.com/IC/CEPage.asp?ID=126619. 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.
(1) A reconciliation of net income to earnings before interest, taxes, depreciation, amortization and stock-based compensation expense (“EBITDAS”) and a description of this measure and the reasons for presenting it, as well as its limitations, are set forth in “Supplementary Information” included as part of this press release.
2
CANTEL MEDICAL CORP.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
| | Three Months Ended
January 31, | | Six Months Ended
January 31, | |
| | 2008 | | 2007 | | 2008 | | 2007 | |
| | | | | | | | | |
Net sales | | $ | 60,910 | | $ | 51,635 | | $ | 120,915 | | $ | 102,119 | |
| | | | | | | | | |
Cost of sales | | 39,424 | | 32,114 | | 78,223 | | 64,429 | |
| | | | | | | | | |
Gross profit | | 21,486 | | 19,521 | | 42,692 | | 37,690 | |
| | | | | | | | | |
Expenses: | | | | | | | | | |
Selling | | 6,836 | | 5,729 | | 13,625 | | 11,439 | |
General and administrative | | 8,967 | | 8,058 | | 17,924 | | 15,596 | |
Research and development | | 961 | | 1,222 | | 1,951 | | 2,388 | |
Total operating expenses | | 16,764 | | 15,009 | | 33,500 | | 29,423 | |
| | | | | | | | | |
Income from continuing operations before interest and income taxes | | 4,722 | | 4,512 | | 9,192 | | 8,267 | |
| | | | | | | | | |
Interest expense | | 1,255 | | 759 | | 2,477 | | 1,522 | |
Interest income | | (150 | ) | (160 | ) | (297 | ) | (450 | ) |
| | | | | | | | | |
Income from continuing operations before income taxes | | 3,617 | | 3,913 | | 7,012 | | 7,195 | |
| | | | | | | | | |
Income taxes | | 1,460 | | 1,661 | | 2,916 | | 3,220 | |
| | | | | | | | | |
Income from continuing operations | | 2,157 | | 2,252 | | 4,096 | | 3,975 | |
| | | | | | | | | |
Income from discontinued operations, net of tax | | — | | 18 | | — | | 263 | |
| | | | | | | | | |
Net income | | $ | 2,157 | | $ | 2,270 | | $ | 4,096 | | $ | 4,238 | |
| | | | | | | | | |
Earnings per common share - diluted | | | | | | | | | |
Continuing operations | | $ | 0.13 | | $ | 0.14 | | $ | 0.25 | | $ | 0.25 | |
Discontinued operations | | — | | — | | — | | 0.01 | |
Net income | | $ | 0.13 | | $ | 0.14 | | $ | 0.25 | | $ | 0.26 | |
| | | | | | | | | |
Weighted average shares - diluted | | 16,386 | | 16,064 | | 16,359 | | 16,052 | |
CANTEL MEDICAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| | January 31,
2008 | | July 31,
2007 | |
Assets | | | | | |
Current assets | | $ | 83,609 | | $ | 76,731 | |
Property and equipment, net | | 38,550 | | 38,577 | |
Intangible assets | | 45,090 | | 44,615 | |
Goodwill | | 109,555 | | 102,073 | |
Other assets | | 1,588 | | 1,675 | |
| | $ | 278,392 | | $ | 263,671 | |
| | | | | |
Liabilities and stockholders’ equity | | | | | |
Current portion of long-term debt | | $ | 7,000 | | $ | 6,000 | |
Other current liabilities | | 25,058 | | 29,971 | |
Long-term debt | | 59,800 | | 51,000 | |
Other long-term liabilities | | 22,750 | | 21,630 | |
Stockholders’ equity | | 163,784 | | 155,070 | |
| | $ | 278,392 | | $ | 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 six months ended January 31, 2008 and 2007, respectively, is as follows (in thousands):
| | Three Months Ended
January 31, | | Six Months Ended
January 31, | |
| | 2008 | | 2007 | | 2008 | | 2007 | |
| | | | | | | | | |
Net income | | $ | 2,157 | | $ | 2,270 | | $ | 4,096 | | $ | 4,238 | |
Income from discontinued operations, net of tax | | — | | (18 | ) | — | | (263 | ) |
| | | | | | | | | |
Income from continuing operations | | 2,157 | | 2,252 | | 4,096 | | 3,975 | |
| | | | | | | | | |
Income taxes | | 1,460 | | 1,661 | | 2,916 | | 3,220 | |
Interest expense | | 1,255 | | 759 | | 2,477 | | 1,522 | |
Interest income | | (150 | ) | (160 | ) | (297 | ) | (450 | ) |
Depreciation | | 1,530 | | 1,239 | | 2,975 | | 2,517 | |
Amortization | | 1,460 | | 1,146 | | 2,859 | | 2,299 | |
Loss on disposal of fixed assets | | 49 | | 9 | | 49 | | 9 | |
| | | | | | | | | |
EBITDA | | 7,761 | | 6,906 | | 15,075 | | 13,092 | |
| | | | | | | | | |
Stock-based compensation expense | | 462 | | 217 | | 994 | | 415 | |
| | | | | | | | | |
EBITDAS | | $ | 8,223 | | $ | 7,123 | | $ | 16,069 | | $ | 13,507 | |
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 six months ended January 31, 2008, as compared with the three and six months ended January 31, 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.
