Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jan. 31, 2014 | Feb. 28, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'CANTEL MEDICAL CORP | ' |
Entity Central Index Key | '0000019446 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Jan-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--07-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 41,348,810 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Jan. 31, 2014 | Jul. 31, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents | $19,706,000 | $34,076,000 |
Accounts receivable, net of allowance for doubtful accounts of $1,853 at January 31 and $1,265 at July 31 | 59,947,000 | 52,753,000 |
Inventories: | ' | ' |
Raw materials | 24,069,000 | 23,815,000 |
Work-in-process | 7,557,000 | 6,945,000 |
Finished goods | 24,559,000 | 23,407,000 |
Total inventories | 56,185,000 | 54,167,000 |
Deferred income taxes | 4,078,000 | 4,129,000 |
Prepaid expenses and other current assets | 5,535,000 | 4,428,000 |
Income taxes receivable | 2,512,000 | 1,107,000 |
Total current assets | 147,963,000 | 150,660,000 |
Property and equipment, net | 47,072,000 | 46,465,000 |
Intangible assets, net | 76,476,000 | 75,929,000 |
Goodwill | 218,677,000 | 211,618,000 |
Other assets | 2,997,000 | 2,999,000 |
Total assets | 493,185,000 | 487,671,000 |
Current liabilities: | ' | ' |
Current portion of long-term debt | ' | 10,000,000 |
Accounts payable | 14,690,000 | 13,322,000 |
Compensation payable | 8,959,000 | 14,032,000 |
Accrued expenses | 10,870,000 | 10,417,000 |
Deferred revenue | 13,005,000 | 11,380,000 |
Total current liabilities | 47,524,000 | 59,151,000 |
Long-term debt | 74,500,000 | 85,000,000 |
Deferred income taxes | 22,304,000 | 21,186,000 |
Contingent consideration | 5,692,000 | 45,000 |
Other long-term liabilities | 1,147,000 | 1,157,000 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Preferred Stock, par value $1.00 per share; authorized 1,000,000 shares; none issued | ' | ' |
Common Stock, par value $.10 per share; authorized 75,000,000 shares; January 31 - 45,516,277 shares issued and 41,339,569 shares outstanding; July 31 - 45,181,655 shares issued and 41,138,121 shares outstanding | 4,552,000 | 4,518,000 |
Additional paid-in capital | 141,289,000 | 134,853,000 |
Retained earnings | 224,215,000 | 203,762,000 |
Accumulated other comprehensive income | 9,406,000 | 10,977,000 |
Treasury Stock, at cost; January 31 - 4,176,708 shares; July 31 - 4,043,534 shares | -37,444,000 | -32,978,000 |
Total stockholders' equity | 342,018,000 | 321,132,000 |
Total liabilities and stockholders' equity | $493,185,000 | $487,671,000 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Jan. 31, 2014 | Jul. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ' | ' |
Accounts receivable, allowance for doubtful accounts (in dollars) | $1,853 | $1,265 |
Preferred Stock, par value (in dollars per share) | $1 | $1 |
Preferred Stock, authorized shares | 1,000,000 | 1,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Common Stock, par value (in dollars per share) | $0.10 | $0.10 |
Common Stock, authorized shares | 75,000,000 | 75,000,000 |
Common Stock, shares issued | 45,516,277 | 45,181,655 |
Common Stock, shares outstanding | 41,339,569 | 41,138,121 |
Treasury Stock, shares | 4,176,708 | 4,043,534 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2013 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ' | ' | ' | ' |
Net sales | $119,042 | $106,363 | $237,314 | $206,044 |
Cost of sales | 66,707 | 61,212 | 133,480 | 117,166 |
Gross profit | 52,335 | 45,151 | 103,834 | 88,878 |
Expenses: | ' | ' | ' | ' |
Selling | 16,077 | 13,723 | 31,841 | 27,136 |
General and administrative | 15,557 | 12,382 | 30,721 | 24,430 |
Research and development | 2,492 | 2,183 | 4,751 | 4,477 |
Total operating expenses | 34,126 | 28,288 | 67,313 | 56,043 |
Income before interest and income taxes | 18,209 | 16,863 | 36,521 | 32,835 |
Interest expense | 645 | 791 | 1,302 | 1,437 |
Interest income | -15 | -16 | -28 | -29 |
Income before income taxes | 17,579 | 16,088 | 35,247 | 31,427 |
Income taxes | 6,453 | 5,636 | 12,936 | 11,399 |
Net income | $11,126 | $10,452 | $22,311 | $20,028 |
Earnings per common share: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.27 | $0.26 | $0.54 | $0.49 |
Diluted (in dollars per share) | $0.27 | $0.25 | $0.54 | $0.49 |
Dividends per common share (in dollars per share) | ' | ' | $0.05 | $0.04 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2013 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ' | ' | ' | ' |
Net income | $11,126 | $10,452 | $22,311 | $20,028 |
Other comprehensive (loss) income: | ' | ' | ' | ' |
Foreign currency translation, net of tax | -1,401 | 64 | -1,674 | 155 |
Unrealized holding losses on interest rate swaps arising during the period, net of tax | -9 | 2 | -30 | -9 |
Reclassification adjustments to interest expense for losses on interest rate swaps included in net income during the period, net of tax | 30 | 40 | 60 | 74 |
Reclassification adjustments to interest expense for ineffective hedge on interest rate swap included in net income during the period, net of tax | 73 | ' | 73 | ' |
Total other comprehensive (loss) income, net of tax | -1,307 | 106 | -1,571 | 220 |
Comprehensive income | $9,819 | $10,558 | $20,740 | $20,248 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
Cash flows from operating activities | ' | ' |
Net income | $22,311,000 | $20,028,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation | 3,967,000 | 3,574,000 |
Amortization | 5,245,000 | 4,840,000 |
Stock-based compensation expense | 2,556,000 | 1,887,000 |
Amortization of debt issuance costs | 162,000 | 176,000 |
Loss on disposal of fixed assets | 296,000 | 140,000 |
Deferred income taxes | 575,000 | 139,000 |
Excess tax benefits from stock-based compensation | -3,297,000 | -1,868,000 |
Changes in assets and liabilities, net of assets acquired and liabilities assumed: | ' | ' |
Accounts receivable | -7,190,000 | -2,265,000 |
Inventories | -1,812,000 | -4,000 |
Prepaid expenses and other current assets | -1,225,000 | -1,846,000 |
Accounts payable and other current liabilities | -1,807,000 | -8,766,000 |
Income taxes | 1,768,000 | 3,016,000 |
Net cash provided by operating activities | 21,549,000 | 19,051,000 |
Cash flows from investing activities | ' | ' |
Capital expenditures | -4,363,000 | -2,548,000 |
Proceeds from disposal of fixed assets | 3,000 | 4,000 |
Acquisition of Jet Prep, net of cash acquired | -5,332,000 | ' |
Acquisition of Sterilator, net of cash acquired | -2,829,000 | ' |
Acquisition of SPS Business, net of cash acquired | ' | -35,415,000 |
Acquisition of Polyp Trap | ' | -486,000 |
Acquisition of Eagle Pure Water | ' | -870,000 |
Other, net | -319,000 | -94,000 |
Net cash used in investing activities | -12,840,000 | -39,409,000 |
Cash flows from financing activities | ' | ' |
Borrowings under revolving credit facility, net of debt issuance costs | ' | 37,000,000 |
Repayments under term loan facility | -5,000,000 | -5,000,000 |
Repayments under revolving credit facility | -15,500,000 | -15,000,000 |
Proceeds from exercises of stock options | 207,000 | 1,409,000 |
Dividends paid | -1,858,000 | -1,494,000 |
Excess tax benefits from stock-based compensation | 3,297,000 | 1,868,000 |
Purchases of treasury stock | -4,057,000 | -1,872,000 |
Net cash (used in) provided by financing activities | -22,911,000 | 16,911,000 |
Effect of exchange rate changes on cash and cash equivalents | -168,000 | 86,000 |
Decrease in cash and cash equivalents | -14,370,000 | -3,361,000 |
Cash and cash equivalents at beginning of period | 34,076,000 | 30,186,000 |
Cash and cash equivalents at end of period | $19,706,000 | $26,825,000 |
Basis_of_Presentation
Basis of Presentation | 6 Months Ended |
Jan. 31, 2014 | |
Basis of Presentation | ' |
Basis of Presentation | ' |
Note 1. Basis of Presentation | |
The unaudited Condensed Consolidated Financial Statements have been prepared in accordance with United States generally accepted accounting principles for interim financial reporting and the requirements of Form 10-Q and Rule 10.01 of Regulation S-X. Accordingly, they do not include certain information and note disclosures required by generally accepted accounting principles for annual financial reporting and should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Annual Report of Cantel Medical Corp. (“Cantel”) on Form 10-K for the fiscal year ended July 31, 2013 (the “2013 Form 10-K”) and Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere herein. | |
The unaudited interim financial statements reflect all adjustments (of a normal and recurring nature) which management considers necessary for a fair presentation of the results of operations for these periods. The results of operations for the interim periods are not necessarily indicative of the results for the full year. | |
The Condensed Consolidated Balance Sheet at July 31, 2013 was derived from the audited Consolidated Balance Sheet of Cantel at that date. | |
Cantel had five principal operating companies at January 31, 2014 and July 31, 2013; Medivators Inc. (“Medivators”), Crosstex International, Inc. (“Crosstex”), Mar Cor Purification, Inc. (“Mar Cor”), Biolab Equipment Ltd. (“Biolab”) and Saf-T-Pak Inc. (“Saf-T-Pak”), all of which are wholly-owned operating subsidiaries. In addition, Medivators has two foreign subsidiaries, Medivators B.V. and Medivators Asia/Pacific Ltd., which serve as our bases in Europe and Asia/Pacific, respectively, and Crosstex has a subsidiary, SPS Medical Supply Corp., as more fully described below and in Note 3 to the Condensed Consolidated Financial Statements. | |
During the fourth quarter of fiscal 2013, we changed our internal reporting processes by combining our Therapeutic Filtration and Chemistries operating segments, previously reported in the Other reporting segment, with our Water Purification and Filtration reporting segment to reflect the way the Company, through its executive management, manages, allocates resources and measures the performance of its businesses. All periods presented have been recast to reflect these changes. | |
As such, we currently operate our business through five operating segments: Endoscopy (through Medivators), Water Purification and Filtration (through Mar Cor, Biolab and Medivators), Healthcare Disposables (through Crosstex), Dialysis (through Medivators) and Specialty Packaging (through Saf-T-Pak). The Specialty Packaging operating segment comprises the Other reporting segment for financial reporting purposes. | |
On January 7, 2014, Crosstex’ subsidiary acquired all the issued and outstanding stock of Sterilator Company, Inc. (the “Sterilator Business” or “Sterilator Acquisition”), as more fully described in Note 3 to the Condensed Consolidated Financial Statements. The results of operations of Sterilator, which had an insignificant effect on our consolidated net income due to the small size of this business, are included in the portion of the three and six months ended January 31, 2014 subsequent to its acquisition date and are not reflected in the three and six months ended January 31, 2013. The Sterilator Business is included in our Healthcare Disposables segment. | |
On November 5, 2013, our Medivators B.V. subsidiary acquired all the issued and outstanding capital stock of Jet Prep Ltd. (the “Jet Prep Business” or “Jet Prep Acquisition”), as more fully described in Note 3 to the Condensed Consolidated Financial Statements. The results of operations of Jet Prep, which had an insignificant effect on our consolidated net income due to the small size of this business, are included in the portion of the three and six months ended January 31, 2014 subsequent to its acquisition date and are not reflected in the three and six months ended January 31, 2013. The Jet Prep Business is included in our Endoscopy segment. | |
On March 22, 2013, Mar Cor entered into an agreement to acquire from Siemens Industry, Inc. and Siemens Canada Limited (collectively, “Siemens”) certain net assets of Siemens’ hemodialysis water business (the “Siemens Water Business” or the “Siemens Water Acquisition”), as more fully described in Note 3 to the Condensed Consolidated Financial Statements. The Siemens Water Acquisition had a nominal impact on our results of operations for the three and six months ended January 31, 2014 due to the size of this business in relation to our overall consolidated results of operations and is not reflected in our results of operations for the three and six months ended January 31, 2013. The Siemens Water Business is included in our Water Purification and Filtration segment. | |
On December 31, 2012, Mar Cor acquired certain net assets of Eagle Pure Water Systems, Inc. (the “Eagle Pure Water Business” or the “Eagle Pure Water Acquisition”), as more fully described in Note 3 to the Condensed Consolidated Financial Statements. The Eagle Pure Water Acquisition, which had an insignificant effect on our results of operations due to the small size of the business, is reflected in our results of operations for the three and six months ended January 31, 2014 and the portion of the three and six months ended January 31, 2013 subsequent to its acquisition date. The Eagle Pure Water Business is included in our Water Purification and Filtration segment. | |
On November 1, 2012, Crosstex acquired all the issued and outstanding stock of SPS Medical Supply Corp. (the “SPS Business” or “SPS Medical”), as more fully described in Note 3 to the Condensed Consolidated Financial Statements. The results of operations of SPS Medical are included in the three and six months ended January 31, 2014, the three months ended January 31, 2013, and the portion of the six months ended January 31, 2013 subsequent to its acquisition date. The SPS Business is included in our Healthcare Disposables segment. | |
During July 2013, the Company issued 15,044,000 additional shares of common stock in connection with a three-for-two stock split effected in the form of a 50% stock dividend paid on July 12, 2013 to stockholders of record on July 1, 2013. The effect of the stock split has been recognized retroactively in all share data in the Condensed Consolidated Statements of Income, Notes to the Condensed Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations. | |
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 March 4, 2014, we entered into a $250,000,000 Third Amended and Restated Credit Agreement with our senior lenders to refinance our working capital credit facilities, as more fully described in Note 9 to the Condensed Consolidated Financial Statements. | |
We performed a review of events subsequent to January 31, 2014. Based upon that review, no other subsequent events occurred that required updating to our Condensed Consolidated Financial Statements or disclosures. | |
StockBased_Compensation
Stock-Based Compensation | 6 Months Ended | |||||||||||||
Jan. 31, 2014 | ||||||||||||||
Stock-Based Compensation | ' | |||||||||||||
Stock-Based Compensation | ' | |||||||||||||
Note 2. Stock-Based Compensation | ||||||||||||||
The following table shows the income statement components of stock-based compensation expense recognized in the Condensed Consolidated Statements of Income: | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
January 31, | January 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Cost of sales | $ | 109,000 | $ | 37,000 | $ | 171,000 | $ | 92,000 | ||||||
Operating expenses: | ||||||||||||||
Selling | 191,000 | 82,000 | 301,000 | 181,000 | ||||||||||
General and administrative | 1,090,000 | 802,000 | 2,054,000 | 1,594,000 | ||||||||||
Research and development | 18,000 | 8,000 | 30,000 | 20,000 | ||||||||||
Total operating expenses | 1,299,000 | 892,000 | 2,385,000 | 1,795,000 | ||||||||||
Stock-based compensation before income taxes | 1,408,000 | 929,000 | 2,556,000 | 1,887,000 | ||||||||||
Income tax benefits | (493,000 | ) | (336,000 | ) | (905,000 | ) | (676,000 | ) | ||||||
Total stock-based compensation expense, net of tax | $ | 915,000 | $ | 593,000 | $ | 1,651,000 | $ | 1,211,000 | ||||||
The above stock-based compensation expense before income taxes was recorded in the Condensed Consolidated Financial Statements as stock-based compensation expense and an increase to additional paid-in capital. The related income tax benefits were recorded as an increase to long-term deferred income tax assets (which are netted with long-term deferred income tax liabilities) and a reduction to income tax expense. All of our stock options and stock awards (which consist only of restricted shares) are expected to be deductible for tax purposes, except for certain options and restricted shares granted to employees residing outside of the United States, and were tax-effected using the Company’s estimated U.S. effective tax rate at the time of grant. | ||||||||||||||
All of our stock options and stock awards are subject to graded vesting in which portions of the award vest at different times during the vesting period, as opposed to awards that vest at the end of the vesting period. We recognize compensation expense for awards subject to graded vesting using the straight-line basis over the vesting period, reduced by estimated forfeitures. At January 31, 2014, total unrecognized stock-based compensation expense, before income taxes, related to total nonvested stock options and stock awards was $10,187,000 with a remaining weighted average period of 22 months over which such expense is expected to be recognized. Most of our nonvested awards relate to stock awards. | ||||||||||||||
We determine the fair value of each stock award using the closing market price of our common stock on the date of grant. | ||||||||||||||
A summary of nonvested stock award activity follows: | ||||||||||||||
Weighted | ||||||||||||||
Number of | Average | |||||||||||||
Shares | Fair Value | |||||||||||||
Nonvested stock awards at July 31, 2013 | 605,767 | $ | 11.96 | |||||||||||
Granted | 247,136 | 31.84 | ||||||||||||
Canceled | (4,620 | ) | 9.02 | |||||||||||
Vested | (299,611 | ) | 10.51 | |||||||||||
Nonvested stock awards at January 31, 2014 | 548,672 | $ | 21.73 | |||||||||||
For the six months ended January 31, 2014 and 2013, the Company granted 30,000 and 52,500 options, respectively. | ||||||||||||||
The fair value of each option grant was estimated on the date of grant using the Black-Scholes option valuation model with the following weighted average assumptions for options granted during the six months ended January 31, 2014 and 2013: | ||||||||||||||
Weighted-Average | ||||||||||||||
Black-Scholes Option | Six Months Ended | Six Months Ended | ||||||||||||
Valuation Assumptions | January 31, 2014 | January 31, 2013 | ||||||||||||
Dividend yield | 0.28 | % | 0.37 | % | ||||||||||
Expected volatility (1) | 42.7 | % | 50.9 | % | ||||||||||
Risk-free interest rate (2) | 1.44 | % | 0.67 | % | ||||||||||
Expected lives (in years) (3) | 5 | 5 | ||||||||||||
(1) Volatility was based on historical closing prices of our common stock. | ||||||||||||||
(2) The U.S. Treasury rate on the expected life at the date of grant. | ||||||||||||||
(3) Based on historical exercise behavior. | ||||||||||||||
For the six months ended January 31, 2014 and 2013, these non-qualified options had a weighted average fair value of $12.08 and $7.27, respectively. | ||||||||||||||
The aggregate intrinsic value (i.e., the excess market price over the exercise price) of all options exercised was $1,748,000 and $2,419,000 for the three and six months ended January 31, 2014 and $3,224,000 and $3,488,000 for the three and six months ended January 31, 2013, respectively. | ||||||||||||||
A summary of stock option activity follows: | ||||||||||||||
Weighted | ||||||||||||||
Number of | Average | |||||||||||||
Shares | Exercise Price | |||||||||||||
Outstanding at July 31, 2013 | 403,831 | $ | 8.25 | |||||||||||
Granted | 30,000 | 31.81 | ||||||||||||
Exercised | (92,106 | ) | 6.69 | |||||||||||
Outstanding at January 31, 2014 | 341,725 | $ | 10.74 | |||||||||||
Exercisable at July 31, 2013 | 351,331 | $ | 6.94 | |||||||||||
Exercisable at January 31, 2014 | 276,725 | $ | 7.66 | |||||||||||
Upon exercise of stock options or grant of stock awards, we typically issue new shares of our common stock as opposed to using treasury shares. However, during the three and six months ended January 31, 2013, we reissued 282,978 and 474,266 shares, respectively, from treasury stock for the exercise of stock options and grant of stock awards. | ||||||||||||||
If certain criteria are met when options are exercised or restricted stock becomes vested, the Company is allowed a deduction on its United States income tax return. Accordingly, we account for the income tax effect on such income tax deductions as a reduction of previously recorded long-term deferred income tax assets (which are netted with long-term deferred income tax liabilities) and as a reduction of income taxes payable in the year of the deduction. Excess tax benefits arise when the ultimate tax effect of the deduction for tax purposes is greater than the tax benefit on stock compensation expense which was determined based upon the award’s fair value at the time the award was granted. The differences noted above between actual tax deductions and the previously recorded long-term deferred income tax assets are recorded as additional paid-in capital. For the six months ended January 31, 2014 and 2013, income tax deductions of $4,516,000 and $2,923,000, respectively, were generated and increased additional paid-in capital by $3,297,000 and $1,868,000, respectively. We classify the cash flows resulting from excess tax benefits as financing cash flows in our Condensed Consolidated Statements of Cash Flows. |
Acquisitions
Acquisitions | 6 Months Ended | ||||
Jan. 31, 2014 | |||||
Acquisitions | ' | ||||
Acquisitions | ' | ||||
Note 3. Acquisitions | |||||
Sterilator Company, Inc. | |||||
On January 7, 2014, Crosstex’ subsidiary acquired all the issued and outstanding stock of Sterilator Company, Inc., a private company based in Cuba, New York that manufactures biological indicators and supplies for sterility assurance products, which are used to accurately monitor the effectiveness of sterilization processes. The total consideration for the transaction was $2,829,000. | |||||
The purchase price was preliminarily allocated to the assets acquired and assumed liabilities based on estimated fair values as follows: | |||||
Preliminary | |||||
Net Assets | Allocation | ||||
Current assets | $ | 538,000 | |||
Property, plant and equipment | 535,000 | ||||
Amortizable intangible assets (9- year weighted average life): | |||||
Customer relationships (11- year life) | 130,000 | ||||
Technology (8- year life) | 510,000 | ||||
Current liabilities | (321,000 | ) | |||
Deferred income tax liabilities | (260,000 | ) | |||
Net assets acquired | $ | 1,132,000 | |||
There were no in-process research and development projects acquired in connection with the acquisition. The excess purchase price of $1,697,000 was assigned to goodwill. Such goodwill, none of which is deductible for income tax purposes, has been included in our Healthcare Disposables reporting segment. | |||||
The principal reasons for this vertical acquisition were to (i) add one of our key long-standing suppliers of biological indicators to our portfolio providing a strategic benefit and cost savings to our overall sterility assurance monitoring business and (ii) strengthen our new product development and overall research and development capabilities. Such reasons constitute the significant factors that contributed to a purchase price that resulted in recognition of goodwill. | |||||
The Sterilator Acquisition is included in our results of operations for the portion of the three and six months ended January 31, 2014 subsequent to its acquisition date and is not reflected in the three and six months ended January 31, 2013. This acquisition had an insignificant impact on our results of operations. | |||||
Jet Prep Ltd. | |||||
On November 5, 2013, our Medivators B.V. subsidiary acquired all the issued and outstanding capital stock of Jet Prep Ltd., a private Israeli company that developed the Jet Prep Flushing Device, a novel single-use irrigation and aspiration catheter to improve visualization during colonoscopy procedures. The device has FDA 510(k) and CE Mark clearances and is ready for immediate commercialization by our global endoscopy sales force. Total consideration for the transaction, excluding transaction costs of $200,000, was $5,332,000 plus estimated contingent consideration of $4,760,000 based on a percentage of sales above a minimum threshold over a seven year period as well as the assumption of an estimated $990,000 contingent obligation payable to the Israeli Government, as further explained below. The Jet Prep Acquisition is included in our Endoscopy segment. | |||||
We account for contingent consideration by recording the fair value of contingent consideration as a liability and an increase in goodwill on the date of the acquisition and continually re-measure the liability at each balance sheet date by recording changes in the fair value through our Condensed Consolidated Statements of Income. Accordingly, on November 5, 2013 we increased contingent consideration and goodwill by $4,760,000 to record our initial estimated fair value of the contingent consideration that would be earned over the seven year period ending November 4, 2020, as further explained in Note 6 of the Condensed Consolidated Financial Statements. At January 31, 2014, the estimated fair value remained at $4,760,000 and was recorded in contingent consideration in the Condensed Consolidated Balance Sheets. | |||||
In connection with the acquisition, we acquired certain ordinary course business assets and liabilities as well as an obligation to repay the Israeli Government for $810,000 of seed funding that was previously granted to Jet Prep. In accordance with the seed funding agreement, the Israeli Government is entitled to a return on their investment that can range from one to six times their total grant based upon specific conditions set forth in the seed funding agreement and applicable Israeli law, including the acceleration of payments if we transfer certain operations of the company or intellectual property outside of Israel. We account for this assumed contingent obligation to the Israeli Government by recording the fair value as a liability and an increase in goodwill on the date of the acquisition and continually re-measure the liability at each balance sheet date by recording changes in the fair value through our Condensed Consolidated Statements of Income. Accordingly, on November 5, 2013 we increased contingent consideration and goodwill by $990,000 to record our initial estimated fair value of the assumed contingent obligation to the Israeli Government that would be earned on a percentage of sales over a forecasted period, as further explained in Note 6 of the Condensed Consolidated Financial Statements. At January 31, 2014, the estimated fair value remained at $990,000, of which $58,000 was recorded in accrued expenses and $932,000 was recorded in contingent consideration. | |||||
Since we will be continually re-measuring the contingent consideration liability and the assumed contingent obligation at each balance sheet date and recording changes in the respective fair values through our Condensed Consolidated Statements of Income, we may potentially have significant earnings volatility in our future results of operations until the completion of the seven year period with respect to the contingent consideration and until the assumed contingent obligation is satisfied or until sales of the Jet Prep Ltd. products no longer exist. | |||||
The purchase price was preliminarily allocated to the assets acquired and assumed liabilities based on estimated fair values as follows: | |||||
Preliminary | |||||
Net Assets | Allocation | ||||
Current assets | $ | 64,000 | |||
Property, plant and equipment | 65,000 | ||||
Amortizable intangible asset - Technology (7- year life): | 5,050,000 | ||||
Current liabilities | (100,000 | ) | |||
Deferred income tax liabilities | (345,000 | ) | |||
Net assets acquired | $ | 4,734,000 | |||
There were no in-process research and development projects acquired in connection with the acquisition. The excess purchase price of $6,348,000 was assigned to goodwill. Such goodwill, none of which is deductible for income tax purposes, has been included in our Endoscopy reporting segment. | |||||
The principal reasons for the acquisition were (i) to address a market need for an effective technology that improves colonoscopy visualization through the use of irrigation and suction, (ii) to expand our endoscopy product portfolio further bolstering the Medivators brand in the gastrointestinal suite, (iii) to further expand our research and development capability by adding accomplished engineers to our existing research and development team and (iv) the expectation that the acquisition will be accretive to our earnings per share in fiscal 2015 and beyond. | |||||
The Jet Prep Acquisition is included in our results of operations for the portion of the three and six months ended January 31, 2014 subsequent to its acquisition date and is not reflected in the three and six months ended January 31, 2013. Since commercialization of this Jet Prep Flushing Device has just begun, this acquisition has not yet generated any sales and had an insignificant impact on our results of operations. | |||||
Siemens’ Hemodialysis Water Business | |||||
On March 22, 2013, Mar Cor and Siemens entered into an asset purchase agreement under which Mar Cor acquired certain net assets of Siemens’ hemodialysis water business primarily consisting of customer service agreements for over 600 dialysis customers in the United States and Canada. Such service agreements had contributed over $9 million in revenue to Siemens in calendar year 2012 (unaudited) and were assigned from Siemens to Mar Cor on an individual customer by customer basis to ensure a seamless transition. The acquisition date of the Siemens Water Business was July 30, 2013, which is when the majority of the customer service agreements were transferred and therefore control of the business had been achieved. The total consideration for the transaction, excluding transaction costs of $362,000, was $8,300,000, which was paid on March 22, 2013. | |||||
The purchase price was allocated to the assets acquired and assumed liabilities based on estimated fair values as follows: | |||||
Final | |||||
Net Assets | Allocation | ||||
Current assets | $ | 728,000 | |||
Property, plant and equipment | 231,000 | ||||
Amortizable intangible assets: | |||||
Customer relationships (12- year life) | 4,310,000 | ||||
Current liabilities | (415,000 | ) | |||
Net assets acquired | $ | 4,854,000 | |||
There were no in-process research and development projects acquired in connection with the acquisition. The excess purchase price of $3,446,000 was assigned to goodwill. Such goodwill, all of which is deductible for income tax purposes, is included in our Water Purification and Filtration reporting segment. | |||||
The principal reasons for the acquisition were as follows: (i) the opportunity to increase service revenue and profitability of the Mar Cor service network due to improved operating leverage, (ii) the expansion of Mar Cor’s North American footprint into new geographies, (iii) the opportunity to sell capital equipment and recurring consumables to new customers and (iv) the expectation that the acquisition will be accretive to our earnings per share beyond fiscal 2013. | |||||
The Siemens Water Acquisition had an insignificant effect on our results of operations for the three and six months ended January 31, 2014 due to the size of this business in relation to our overall consolidated results of operations and is not reflected in our results of operations for the three and six months ended January 31, 2013. The Siemens Water Business is included in our Water Purification and Filtration segment. | |||||
Eagle Pure Water Systems, Inc. | |||||
On December 31, 2012, we purchased substantially all of the assets of Eagle Pure Water Systems, Inc., a private company with pre-acquisition annual revenues (unaudited) of approximately $500,000 based in the suburbs of Philadelphia, Pennsylvania that provides water treatment services for laboratory, industrial and medical customers. The total consideration for the transaction was $870,000. | |||||
The purchase price was allocated to the assets acquired and assumed liabilities based on estimated fair values as follows: | |||||
Final | |||||
Net Assets | Allocation | ||||
Current assets | $ | 8,000 | |||
Property, plant and equipment | 70,000 | ||||
Amortizable intangible assets (3- year weighted average life): | |||||
Customer relationships (3- year life) | 150,000 | ||||
Brand names (3- year life) | 18,000 | ||||
Non-compete agreement (5- year life) | 32,000 | ||||
Current liabilities | (5,000 | ) | |||
Net assets acquired | $ | 273,000 | |||
There were no in-process research and development projects acquired in connection with the acquisition. The excess purchase price of $597,000 was assigned to goodwill. Such goodwill, all of which is deductible for income tax purposes, is included in our Water Purification and Filtration reporting segment. | |||||
The principal reasons for the acquisition were the strengthening of our sales and service business by adding Eagle Pure Water’s strategic Philadelphia market presence to enable us to better serve our national customers and to further expand our business into the laboratory and research segments. Such reasons constitute the significant factors that contributed to a purchase price that resulted in recognition of goodwill. | |||||
The acquisition of Eagle Pure Water is included in our results of operations for the three and six months ended January 31, 2014 and the portion of the three and six months ended January 31, 2013 subsequent to its acquisition date. This acquisition had an insignificant impact on our results of operations. | |||||
Polyp Trap | |||||
On November 13, 2012 we acquired the intellectual property, inventory, fixed assets and exclusive distribution rights of a polyp trap product line for $486,000. This product line is used principally in the performance of endoscopy procedures for the purpose of safely and efficiently collecting tissue biopsy material. The polyp trap product line is included in our Medivators procedural product portfolio, which is part of the Endoscopy segment. | |||||
This acquisition is included in our results of operations for the three and six months ended January 31, 2014 and the portion of the three and six months ended January 31, 2013 subsequent to its acquisition date. This acquisition had an insignificant impact on our results of operations. | |||||
SPS Medical Supply Corp. | |||||
On November 1, 2012, our Crosstex subsidiary acquired all the issued and outstanding stock of SPS Medical Supply Corp., a private company based in Rochester, New York with pre-acquisition annual revenues (unaudited) of approximately $17,500,000 that manufactures and provides biological and chemical indicators for sterility assurance monitoring services in the acute-care, alternate-care and dental markets. The SPS Business offers a wide-array of products and services that enable healthcare facilities to safely and accurately monitor and verify their sterilization practices and protocols. Total consideration for the transaction, excluding transaction costs of $157,000, was $32,500,000. In addition, we acquired the SPS manufacturing and warehouse facility in Rochester, New York for approximately $3,500,000 from an affiliate of SPS Medical. The SPS Business is included in our Healthcare Disposables segment. | |||||
The purchase price was allocated to the assets acquired and assumed liabilities based on estimated fair values as follows: | |||||
Final | |||||
Net Assets | Allocation | ||||
Current assets | $ | 4,810,000 | |||
Property, plant and equipment | 3,801,000 | ||||
Amortizable intangible assets (9- year weighted average life): | |||||
Customer relationships (10- year life) | 8,120,000 | ||||
Brand names (5- year life) | 760,000 | ||||
Technology (4- year life) | 500,000 | ||||
Non-compete agreements (6- year life) | 180,000 | ||||
Other assets | 28,000 | ||||
Current liabilities | (2,784,000 | ) | |||
Noncurrent deferred income tax liabilities, net | (3,659,000 | ) | |||
Net assets acquired | $ | 11,756,000 | |||
There were no in-process research and development projects acquired in connection with the acquisition. The excess purchase price of $24,244,000 was assigned to goodwill. Such goodwill, none of which is deductible for income tax purposes, has been included in our Healthcare Disposables reporting segment. | |||||
The principal reasons for the acquisition were (i) to expand our sterility assurance monitoring product portfolio, (ii) to expand our market share of the dental mail-in biological monitoring industry when combined with our existing monitoring business, (iii) to expand into the acute-care hospital market and alternate care markets, (iv) to increase the likelihood of cross-selling our existing products, (v) to leverage Crosstex’ sales and marketing infrastructure and (vi) the expectation that the acquisition will be accretive to our earnings per share. Such reasons constitute the significant factors that contributed to a purchase price that resulted in recognition of goodwill. | |||||
The acquisition of the SPS Business is included in our results of operations for the three and six months ended January 31, 2014 and the portion of the three and six months ended January 31, 2013 subsequent to its acquisition date. | |||||
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 6 Months Ended |
Jan. 31, 2014 | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | ' |
Note 4. Recent Accounting Pronouncements | |
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists,” (“ASU 2013-11”), which requires that a liability related to an unrecognized tax benefit be presented as a reduction of a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. ASU 2013-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of ASU 2013-11 is expected to have no impact on our financial condition, results of operations or cash flows. | |
Derivatives
Derivatives | 6 Months Ended |
Jan. 31, 2014 | |
Derivatives | ' |
Derivatives | ' |
Note 5. Derivatives | |
We recognize all derivatives on the balance sheet at fair value. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. If the derivative is designated as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in the fair value of the hedged assets, liabilities or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of the change in fair value of a derivative that is designated as a hedge will be recognized immediately in earnings. As of January 31, 2014, all of our derivatives were designated as hedges, except for our remaining interest rate swap agreement, as further explained below. We do not hold any derivative financial instruments for speculative or trading purposes. | |
Changes in the value of (i) the Euro against the United States dollar, (ii) the Canadian dollar against the United States dollar, (iii) the Singapore dollar against the United States dollar and (iv) the British pound against the United States dollar affect our results of operations because certain cash bank accounts, accounts receivable, and liabilities of our subsidiaries are denominated and ultimately settled in United States dollars, Canadian dollars, Euros, Singapore dollars or British pounds, but must be converted into their functional currency. | |
In order to hedge against the impact of fluctuations in the value of (i) the Euro relative to the United States dollar, (ii) the Singapore dollar relative to the United States dollar and (iii) the British pound relative to the United States dollar on the conversion of such net assets into the functional currencies, we enter into short-term contracts to purchase Euros, Singapore dollars and British pounds forward, which contracts are one month in duration. These short-term contracts are designated as fair value hedge instruments. There were two foreign currency forward contracts with an aggregate value of $6,264,000 at January 31, 2014, which covered certain assets and liabilities that were denominated in currencies other than our subsidiaries’ functional currencies. Such contracts expired on February 28, 2014. These foreign currency forward contracts are continually replaced with new one-month contracts as long as we have significant net assets at our subsidiaries that are denominated and ultimately settled in currencies other than their functional currencies. For the three and six months ended January 31, 2014, such forward contracts substantially offset the impact on operations relating to certain assets and liabilities that were denominated in currencies other than our subsidiaries’ functional currencies resulting in a net currency conversion loss, net of tax, of $34,000 and $96,000, respectively, on the items hedged. For the three and six months ended January 31, 2013, such forward contracts substantially offset the impact on operations relating to certain assets and liabilities that were denominated in currencies other than our subsidiaries’ functional currencies resulting in a net currency conversion loss, net of tax, of $29,000 and $44,000, respectively, on the items hedged. Gains and losses related to hedging contracts to buy Euros, Singapore dollars and British pounds forward are immediately realized within general and administrative expenses due to the short-term nature of such contracts. We do not currently hedge against the impact of fluctuations in the value of the Canadian dollar relative to the United States dollar because the currency impact on our Canadian and United States subsidiaries’ assets closely offset the currency impact on our Canadian and United States subsidiaries’ liabilities effectively minimizing realized gains and losses. | |
The interest rate on our outstanding borrowings under our credit facilities is variable and is affected by the general level of interest rates in the United States as well as LIBOR interest rates, as more fully described in Note 9 to the Condensed Consolidated Financial Statements. In order to protect our interest rate exposure in future years, we entered into forward starting interest rate swap agreements in February 2012 in which we agree to exchange our variable interest cash flows with fixed interest cash flows provided by one of our existing senior lenders. Such interest rate swap agreements were designated as cash flow hedge instruments and were designed to be effective in offsetting changes in the cash flows related to the hedged borrowings. With respect to our Term Loan Facility, the interest rate swap is for the period that began August 8, 2012 and ends July 31, 2015, initially covering $40,000,000 of borrowings based on one-month LIBOR and thereafter reducing in quarterly $2,500,000 increments consistent with the mandatory repayment schedule, and the fixed interest cash flow is at a one month LIBOR rate of 0.664%. With respect to our Revolving Credit Facility, the interest rate swap was for the period that began August 8, 2012 and ended January 31, 2014, initially covering $25,000,000 of borrowings based on one-month LIBOR and thereafter reduced semi-annually by increments of $5,000,000, and the fixed interest cash flow was at a one month LIBOR rate of 0.496%. As more fully described in Note 6 to the Condensed Consolidated Financial Statements, we account for the interest rate swap agreements by initially recording the fair value of the derivative instrument on the balance sheet as either an asset or liability, with a corresponding amount recorded in accumulated other comprehensive income. Amounts are reclassified from accumulated other comprehensive income to interest expense in the Condensed Consolidated Statements of Income in the period the hedged transaction affects earnings. At the hedge’s inception and on a regular basis thereafter, a formal assessment is performed to determine whether changes in the fair value or cash flows of the derivative instruments have been highly effective in offsetting changes in cash flows of the hedged items and whether they are expected to be highly effective in the future. This formal assessment includes a comparison of the terms of the interest rate swap agreements and hedged borrowings to ensure they coincide as well as an evaluation of the continued ability of the counterparty to the interest rate swap agreements and the Company to honor their obligations under such agreements. At January 31, 2014, our formal assessment concluded that the changes in the fair value of both derivative instruments that began on August 8, 2012 have been highly effective. However, the remaining derivative instrument at January 31, 2014, which relates solely to our Term Loan Facility, was determined to be ineffective at January 31, 2014 due to the modifications to our credit facilities in March 2014, as more fully described in Note 9 to the Condensed Consolidated Financial Statements. Accordingly, the fair value of the interest rate swap agreement of $113,000 relating to our Term Loan Facility was recognized in interest expense in the Condensed Consolidated Statements of Income for the three and six months ended January 31, 2014 and future changes in the fair value of the derivative instrument will be recognized immediately in interest expense. | |
Fair_Value_Measurements
Fair Value Measurements | 6 Months Ended | ||||||||||||||||
Jan. 31, 2014 | |||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
Note 6. Fair Value Measurements | |||||||||||||||||
Fair Value Hierarchy | |||||||||||||||||
We apply the provisions of Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” (“ASC 820”), for our financial assets and liabilities that are re-measured and reported at fair value each reporting period and our nonfinancial assets and liabilities that are re-measured and reported at fair value on a non-recurring basis. We define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three level fair value hierarchy to prioritize the inputs used in valuations, as defined below: | |||||||||||||||||
Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets. | |||||||||||||||||
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. | |||||||||||||||||
Level 3: Unobservable inputs for the asset or liability. | |||||||||||||||||
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis | |||||||||||||||||
As of January 31, 2014 and 2013, our financial assets that are re-measured at fair value on a recurring basis include money market funds that are classified as cash and cash equivalents in the Condensed Consolidated Balance Sheets. As there are no withdrawal restrictions, they are classified within Level 1 of the fair value hierarchy and are valued using quoted market prices for identical assets. | |||||||||||||||||
In order to protect our interest rate exposure in future years, we entered into forward starting interest rate swap agreements in February 2012 in which we agreed to exchange our variable interest cash flows with fixed interest cash flows provided by one of our existing senior lenders, as further described in Notes 5 and 9 to the Condensed Consolidated Financial Statements. Our interest rate swap agreements are classified within Level 2 and are valued using discounted cash flow analyses based on the terms of the contracts and the interest rate curves. Changes in fair value in the interest rate swap agreements relating to our Revolving Credit Facility during the three and six months ended January 31, 2014 and 2013 were recorded in accumulated other comprehensive income in the Condensed Consolidated Statements of Comprehensive Income. Amounts were reclassified from accumulated other comprehensive income in the period the hedged transaction affected earnings. Similarly, changes in fair value in the interest rate swap agreement relating to our Term Loan Facility during the three and six months ended January 31, 2014 and 2013 were recorded in accumulated other comprehensive income in the Condensed Consolidated Statements of Comprehensive Income until January 31, 2014, at which time the interest rate swap agreement was determined to be ineffective and the remaining fair value of the derivative instrument was recognized in interest expense, as further explained in Note 5 to the Condensed Consolidated Financial Statements. | |||||||||||||||||
On November 5, 2013, we recorded a $4,760,000 liability for the estimated fair value of contingent consideration and a $990,000 liability for the estimated fair value of an assumed contingent obligation payable to the Israeli Government relating to the Jet Prep Acquisition, as further described in Note 3 to the Condensed Consolidated Financial Statements. These fair value measurements were based on significant inputs not observed in the market and thus represent Level 3 measurements. | |||||||||||||||||
The fair values of the contingent consideration liability and assumed contingent obligation were based on percentages of future sales projections of the Jet Prep Business, above a minimum threshold with respect to the contingent consideration, under various potential scenarios over a seven year period ending November 4, 2020 and weighting the probability of these outcomes. As such, the determinations of fair values of these contingent liabilities are subjective in nature and highly dependent on future sales projections. At the date of the acquisition, these cash flow projections were discounted using a rate of 11.5%. The discount rate was based on the weighted average cost of capital of the acquired business plus a credit risk premium for non-performance risk. These two liabilities will be adjusted periodically by recording changes in the fair value through our Condensed Consolidated Statements of Income driven by the time value of money and changes in the assumptions that were initially used in the valuations. Due to the structure of the acquisition, any such adjustments through our Condensed Consolidated Statements of Income will not be tax effected except for amounts in excess of $810,000 with respect to the assumed contingent obligation, therefore impacting our effective tax rate. At January 31, 2014, the estimated fair value of the contingent consideration and assumed contingent obligation remained at $4,760,000 and $990,000, respectively. | |||||||||||||||||
The actual contingent consideration and assumed contingent obligation have the potential of being between zero and a percentage of unlimited sales that could occur until the completion of the seven year period with respect to the contingent consideration liability and until the assumed contingent obligation is satisfied in full, or until the sales of the Jet Prep Ltd. products no longer exist. However, with respect to the contingent consideration, the different likely scenarios of future sales projections used in our fair value determination resulted in total potential future contingent consideration payments ranging between zero and approximately $12,000,000 and the weighted average present value of such scenarios resulted in a fair value of $4,760,000 at January 31, 2014. With respect to the assumed contingent obligation, the different likely scenarios of future sales projections used in our fair value determination resulted in total potential future payments ranging between zero and approximately $2,430,000 and the weighted average present value of such scenarios resulted in a fair value of $990,000 at January 31, 2014. Such fair value amounts would have been higher or lower if we had used different probability factors, future sales projections or discount factors. Given the subjective nature of the assumptions used in the determinations of fair value, we may potentially have significant earnings volatility in our future results of operations. | |||||||||||||||||
On August 1, 2011 (the first day of our fiscal 2012), we recorded a $2,700,000 liability for the estimated fair value of contingent consideration and a $3,000,000 liability for the estimated fair value of a three year price floor relating to the August 1, 2011 acquisition of the endoscopy procedural product business of Byrne Medical, Inc. (the “Byrne Medical Business” or the “Byrne Acquisition”). These fair value measurements were based on significant inputs not observed in the market and thus represent Level 3 measurements. | |||||||||||||||||
The fair value of the contingent consideration liability was based on future gross profit projections of the Byrne Medical Business under various potential scenarios for the two year period ended July 31, 2013 and weighting the probability of these outcomes. As such, the determination of fair value of the contingent consideration is subjective in nature and highly dependent on future gross profit projections. At the date of the acquisition, these cash flow projections were discounted using a rate of 14%. The discount rate was based on the weighted average cost of capital of the acquired business plus a credit risk premium for non-performance risk. This contingent consideration liability was adjusted periodically by recording changes in the fair value through our Condensed Consolidated Statements of Income. Based on actual gross profit results for the two year period ended July 31, 2013, contingent consideration was not earned. | |||||||||||||||||
After giving effect for the Company’s three-for-two stock splits, the stock portion of the consideration paid for the Byrne Acquisition consisted of 902,528 shares of Cantel common stock and was based on the closing price of Cantel common stock on the NYSE on July 29, 2011 ($11.08). Subject to certain conditions and limitations, under a three year price floor, we agreed that if the aggregate value of the stock consideration is less than $10,000,000 on July 31, 2014, we will pay to the sellers in cash or stock (at our option) an amount equal to the difference between $10,000,000 and the then value of the shares (based on the closing price of Cantel common stock on the NYSE on July 31, 2014). This three-year price floor is a free standing financial instrument that we recorded as a liability at fair value on the date of acquisition. The 902,528 shares of Cantel common stock were (i) placed in escrow at the time of the acquisition as security for certain indemnification obligations of the sellers and (ii) subjected to a multi-year lock-up feature prohibiting the sellers from selling or otherwise transferring the shares. In November 2013, one-third of the shares were released from escrow and the lock-up feature. Likewise, the three year price floor was modified to exclude the released shares and reduce the $10,000,000 value guaranty by one-third to $6,666,666. | |||||||||||||||||
The fair value of the three year price floor liability was determined using the Black-Scholes option valuation model, which is affected by our stock price and risk free interest rate as well as assumptions regarding a number of subjective variables, including, but not limited to, the expected stock price volatility of our common stock over the expected life of the instrument and the expected dividend yield. This liability is adjusted periodically by recording changes in the fair value through our Condensed Consolidated Statements of Income, as shown below in the reconciliation of our liabilities that are measured and recorded at fair value on a recurring basis, driven by the time value of money and changes in the assumptions that were initially used in the valuation. The decrease to the fair value of the price floor (as determined by the Black-Scholes option valuation model) was recorded as a decrease to accrued expenses or other long-term liabilities and general and administrative expenses in the Condensed Consolidated Financial Statements and was primarily due to the impact of our stock price being higher than at the time of the acquisition, the life of the price floor being less than three years and changes in the expected stock price volatility. | |||||||||||||||||
The fair values of the Company’s financial instruments measured on a recurring basis were categorized as follows: | |||||||||||||||||
January 31, 2014 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets: | |||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Money markets | $ | 3,993,000 | $ | — | $ | — | $ | 3,993,000 | |||||||||
Total assets | $ | 3,993,000 | $ | — | $ | — | $ | 3,993,000 | |||||||||
Liabilities: | |||||||||||||||||
Accrued expenses: | |||||||||||||||||
Assumed contingent obligation | $ | — | $ | — | $ | 58,000 | $ | 58,000 | |||||||||
Interest rate swap agreement | — | 94,000 | — | 94,000 | |||||||||||||
Total accrued expenses | — | 94,000 | 58,000 | 152,000 | |||||||||||||
Contingent consideration: | |||||||||||||||||
Contingent consideration | — | — | 4,760,000 | 4,760,000 | |||||||||||||
Assumed contingent obligation | — | — | 932,000 | 932,000 | |||||||||||||
Other long-term liabilities: | |||||||||||||||||
Interest rate swap agreement | — | 19,000 | — | 19,000 | |||||||||||||
Total liabilities | $ | — | $ | 113,000 | $ | 5,750,000 | $ | 5,863,000 | |||||||||
July 31, 2013 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets: | |||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Money markets | $ | 4,241,000 | $ | — | $ | — | $ | 4,241,000 | |||||||||
Total assets | $ | 4,241,000 | $ | — | $ | — | $ | 4,241,000 | |||||||||
Liabilities: | |||||||||||||||||
Accrued expenses: | |||||||||||||||||
Interest rate swap agreements | $ | — | $ | 133,000 | $ | — | $ | 133,000 | |||||||||
Total accrued expenses | — | 133,000 | — | 133,000 | |||||||||||||
Other long-term liabilities: | |||||||||||||||||
Price floor | — | — | 45,000 | 45,000 | |||||||||||||
Interest rate swap agreements | — | 29,000 | — | 29,000 | |||||||||||||
Total other long-term liabilities | — | 29,000 | 45,000 | 74,000 | |||||||||||||
Total liabilities | $ | — | $ | 162,000 | $ | 45,000 | $ | 207,000 | |||||||||
A reconciliation of our liabilities that are measured and recorded at fair value on a recurring basis using significant unobservable inputs (Level 3) for the last six quarters is as follows: | |||||||||||||||||
Jet Prep | |||||||||||||||||
Byrne | Byrne | Jet Prep | Assumed | ||||||||||||||
Contingent | Price | Contingent | Contingent | ||||||||||||||
Consideration | Floor | Consideration | Obligation | Total | |||||||||||||
Balance, July 31, 2012 | $ | 1,500,000 | $ | 1,037,000 | $ | — | $ | — | $ | 2,537,000 | |||||||
Total net unrealized gains included in | — | (313,000 | ) | — | — | (313,000 | ) | ||||||||||
general and administrative expense in earnings | |||||||||||||||||
Balance, October 31, 2012 | 1,500,000 | 724,000 | — | — | 2,224,000 | ||||||||||||
Total net unrealized gains included in | (1,500,000 | ) | (410,000 | ) | — | — | (1,910,000 | ) | |||||||||
general and administrative expense in earnings | |||||||||||||||||
Balance, January 31, 2013 | — | 314,000 | — | — | 314,000 | ||||||||||||
Total net unrealized gains included in | — | (59,000 | ) | — | — | (59,000 | ) | ||||||||||
general and administrative expense in earnings | |||||||||||||||||
Balance, April 30, 2013 | — | 255,000 | — | — | 255,000 | ||||||||||||
Total net unrealized gains included in | — | (210,000 | ) | — | — | (210,000 | ) | ||||||||||
general and administrative expense in earnings | |||||||||||||||||
Balance, July 31, 2013 | — | 45,000 | — | — | 45,000 | ||||||||||||
Total net unrealized gains included in | — | (44,000 | ) | — | — | (44,000 | ) | ||||||||||
general and administrative expense in earnings | |||||||||||||||||
Balance, October 31, 2013 | — | 1,000 | — | — | 1,000 | ||||||||||||
Total net unrealized gains included in | — | (1,000 | ) | — | — | (1,000 | ) | ||||||||||
general and administrative expense in earnings | |||||||||||||||||
Net purchases, issuances, sales and settlements | — | — | 4,760,000 | 990,000 | 5,750,000 | ||||||||||||
Balance, January 31, 2014 | $ | — | $ | — | $ | 4,760,000 | $ | 990,000 | $ | 5,750,000 | |||||||
Assets Measured and Recorded at Fair Value on a Nonrecurring Basis | |||||||||||||||||
We re-measure the fair value of certain assets, such as intangible assets, goodwill and long-lived assets, including property, equipment and other assets, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, and goodwill and intangible assets with indefinite lives are reviewed for impairment at least annually. In performing a review for goodwill impairment, management first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than the carrying amount before proceeding to step one of the two-step quantitative goodwill impairment test, if necessary. For our quantitative test, we use a two-step process that begins with an estimation of the fair value of the related operating segments by using fair value results of the discounted cash flow methodology, as well as the market multiple and comparable transaction methodologies. The first step is a review for potential impairment, and the second step measures the amount of impairment, if any. In performing our annual review for indefinite lived intangibles, management performs a qualitative assessment, and if a quantitative assessment is necessary, we compare the current fair value of such assets to their carrying values. With respect to amortizable intangible assets when impairment indicators are present, management determines whether expected future non-discounted cash flows are sufficient to recover the carrying value of the assets; if not, the carrying value of the assets is adjusted to their fair value. With respect to long-lived assets, an assessment is made to determine if the sum of the expected future non-discounted cash flows from the use of the assets and eventual disposition is less than the carrying value. If the sum of the expected non-discounted cash flows is less than the carrying value, an impairment loss is recognized based on fair value. As the inputs utilized for our periodic impairment assessments are not based on observable market data, but are based on management’s assumptions and estimates, our goodwill, intangibles and long-lived assets are classified within Level 3 of the fair value hierarchy on a non-recurring basis. On July 31, 2013, management concluded that none of our long-lived assets, including goodwill and intangibles with indefinite-lives, were impaired and no other events or changes in circumstances have occurred during the six months ended January 31, 2014 that would indicate that the carrying amount of our long-lived assets may not be recoverable. | |||||||||||||||||
Disclosure of Fair Value of Financial Instruments | |||||||||||||||||
As of January 31, 2014 and July 31, 2013, the carrying amounts for cash and cash equivalents (excluding money markets), accounts receivable and accounts payable approximated fair value due to the short maturity of these instruments. We believe that as of January 31, 2014 and July 31, 2013, the fair value of our outstanding borrowings under our credit facilities approximated the carrying value of those obligations since the borrowing rates were at prevailing market interest rates, principally under LIBOR contracts ranging from one to twelve months. | |||||||||||||||||
Intangible_Assets_and_Goodwill
Intangible Assets and Goodwill | 6 Months Ended | |||||||||||||||||||
Jan. 31, 2014 | ||||||||||||||||||||
Intangible Assets and Goodwill | ' | |||||||||||||||||||
Intangible Assets and Goodwill | ' | |||||||||||||||||||
Note 7. Intangible Assets and Goodwill | ||||||||||||||||||||
Our intangible assets with definite lives consist of customer relationships, technology, brand names, non-compete agreements and patents. These intangible assets are being amortized using the straight-line method over the estimated useful lives of the assets ranging from 2-20 years and have a weighted average amortization period of 11 years. Amortization expense related to definite lived intangible assets was $2,619,000 and $5,245,000 for the three and six months ended January 31, 2014, respectively, and $2,573,000 and $4,840,000 for the three and six months ended January 31, 2013, respectively. Our intangible assets that have indefinite useful lives, and therefore are not amortized, consist of trademarks and trade names. | ||||||||||||||||||||
The Company’s intangible assets consist of the following: | ||||||||||||||||||||
January 31, 2014 | ||||||||||||||||||||
Accumulated | ||||||||||||||||||||
Gross | Amortization | Net | ||||||||||||||||||
Intangible assets with finite lives: | ||||||||||||||||||||
Customer relationships | $ | 71,949,000 | $ | (28,068,000 | ) | $ | 43,881,000 | |||||||||||||
Technology | 25,954,000 | (10,203,000 | ) | 15,751,000 | ||||||||||||||||
Brand names | 12,680,000 | (8,738,000 | ) | 3,942,000 | ||||||||||||||||
Non-compete agreements | 3,129,000 | (633,000 | ) | 2,496,000 | ||||||||||||||||
Patents and other registrations | 1,867,000 | (702,000 | ) | 1,165,000 | ||||||||||||||||
115,579,000 | (48,344,000 | ) | 67,235,000 | |||||||||||||||||
Trademarks and trade names | 9,241,000 | — | 9,241,000 | |||||||||||||||||
Total intangible assets | $ | 124,820,000 | $ | (48,344,000 | ) | $ | 76,476,000 | |||||||||||||
July 31, 2013 | ||||||||||||||||||||
Accumulated | ||||||||||||||||||||
Gross | Amortization | Net | ||||||||||||||||||
Intangible assets with finite lives: | ||||||||||||||||||||
Customer relationships | $ | 72,142,000 | $ | (25,379,000 | ) | $ | 46,763,000 | |||||||||||||
Technology | 21,006,000 | (9,642,000 | ) | 11,364,000 | ||||||||||||||||
Brand names | 12,680,000 | (8,045,000 | ) | 4,635,000 | ||||||||||||||||
Non-compete agreements | 3,159,000 | (541,000 | ) | 2,618,000 | ||||||||||||||||
Patents and other registrations | 1,768,000 | (606,000 | ) | 1,162,000 | ||||||||||||||||
110,755,000 | (44,213,000 | ) | 66,542,000 | |||||||||||||||||
Trademarks and trade names | 9,387,000 | — | 9,387,000 | |||||||||||||||||
Total intangible assets | $ | 120,142,000 | $ | (44,213,000 | ) | $ | 75,929,000 | |||||||||||||
Estimated amortization expense of our intangible assets for the remainder of fiscal 2014 and the next five years is as follows: | ||||||||||||||||||||
Six month period ending July 31, 2014 | $ | 5,513,000 | ||||||||||||||||||
Fiscal 2015 | 11,025,000 | |||||||||||||||||||
Fiscal 2016 | 7,786,000 | |||||||||||||||||||
Fiscal 2017 | 7,210,000 | |||||||||||||||||||
Fiscal 2018 | 6,933,000 | |||||||||||||||||||
Fiscal 2019 | 6,610,000 | |||||||||||||||||||
Goodwill changed during fiscal 2013 and the six months ended January 31, 2014 as follows: | ||||||||||||||||||||
Water | ||||||||||||||||||||
Purification | Healthcare | Total | ||||||||||||||||||
Endoscopy | and Filtration | Disposables | Dialysis | Other | Goodwill | |||||||||||||||
Balance, July 31, 2012 | $ | 59,230,000 | $ | 53,288,000 | $ | 55,864,000 | $ | 8,133,000 | $ | 7,140,000 | $ | 183,655,000 | ||||||||
Acquisitions | — | 4,043,000 | 24,244,000 | — | — | 28,287,000 | ||||||||||||||
Foreign currency translation | — | (152,000 | ) | — | — | (172,000 | ) | (324,000 | ) | |||||||||||
Balance, July 31, 2013 | 59,230,000 | 57,179,000 | 80,108,000 | 8,133,000 | 6,968,000 | 211,618,000 | ||||||||||||||
Acquisitions | 6,348,000 | — | 1,697,000 | — | — | 8,045,000 | ||||||||||||||
Foreign currency translation | — | (456,000 | ) | — | — | (530,000 | ) | (986,000 | ) | |||||||||||
Balance, January 31, 2014 | $ | 65,578,000 | $ | 56,723,000 | $ | 81,805,000 | $ | 8,133,000 | $ | 6,438,000 | $ | 218,677,000 | ||||||||
On July 31, 2013, we performed impairment studies of the Company’s goodwill and indefinite lived trademarks and trade names and concluded that such assets were not impaired. While the results of these annual reviews have historically not indicated impairment, impairment reviews are highly dependent on management’s projections of our future operating results and cash flows (which management believes to be reasonable), discount rates based on the Company’s weighted average cost of capital and appropriate benchmark peer companies. Assumptions used in determining future operating results and cash flows include current and expected market conditions and future sales forecasts. Subsequent changes in these assumptions and estimates could result in future impairment. Although we consistently use the same methods in developing the assumptions and estimates underlying the fair value calculations, such estimates are uncertain by nature and can vary from actual results. At July 31, 2013, the average fair value of all of our reporting units exceeded book value by substantial amounts, except our Specialty Packaging segment, which had an average estimated fair value that approximated book value. At January 31, 2014, goodwill relating to our Specialty Packaging reporting unit was $6,438,000. We believe the most significant assumptions impacting the impairment assessment of Specialty Packaging relate to an assumed compounded annual sales growth of 10.7% and future operating efficiencies included in our projections of future operating results and cash flows of this segment, which projections are in excess of historical run rates. If future operating results and cash flows are substantially less than our projections, future impairment charges may be recorded. On January 31, 2014, management concluded that no events or changes in circumstances have occurred during the three and six months ended January 31, 2014 that would indicate that the carrying amount of our intangible assets and goodwill may not be recoverable. |
Warranties
Warranties | 6 Months Ended | |||||||||||||
Jan. 31, 2014 | ||||||||||||||
Warranties | ' | |||||||||||||
Warranties | ' | |||||||||||||
Note 8. Warranties | ||||||||||||||
A summary of activity in the Company’s warranty reserves follows: | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
January 31, | January 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Beginning balance | $ | 1,261,000 | $ | 1,438,000 | $ | 1,261,000 | $ | 1,667,000 | ||||||
Provisions | 546,000 | 336,000 | 1,237,000 | 703,000 | ||||||||||
Settlements | (605,000 | ) | (542,000 | ) | (1,296,000 | ) | (1,138,000 | ) | ||||||
Foreign currency translation | (1,000 | ) | — | (1,000 | ) | — | ||||||||
Ending balance | $ | 1,201,000 | $ | 1,232,000 | $ | 1,201,000 | $ | 1,232,000 | ||||||
The warranty provisions and settlements for the three and six months ended January 31, 2014 and 2013 relate principally to the Company’s endoscope reprocessing and water purification equipment. Warranty reserves are included in accrued expenses in the Condensed Consolidated Balance Sheets. |
Financing_Arrangements
Financing Arrangements | 6 Months Ended |
Jan. 31, 2014 | |
Financing Arrangements | ' |
Financing Arrangements | ' |
Note 9. Financing Arrangements | |
In March 2014, we modified our existing $100,000,000 senior secured revolving credit facility (the “Existing Revolving Credit Facility”) and $50,000,000 senior secured term loan facility (the “Existing Term Loan Facility”) by entering into a $250,000,000 Third Amended and Restated Credit Agreement dated as of March 4, 2014 (the “New Credit Agreement”). The New Credit Agreement includes a five-year $250,000,000 senior secured revolving facility with sublimits of up to $100,000,000 for borrowings in foreign currencies, $30,000,000 for letters of credit and $10,000,000 for swing line loans (the “New Revolving Credit Facility”). The Existing Term Loan Facility was terminated after the outstanding balance was reassigned to the New Revolving Credit Facility. Subject to the satisfaction of certain conditions precedent including the consent of the lenders, the Company may from time to time increase the New Revolving Credit Facility by an aggregate amount not to exceed $100,000,000. The senior lenders include Bank of America N.A. (the lead bank and administrative agent), PNC Bank, National Association, and Wells Fargo Bank, National Association. The New Credit Agreement expires on March 4, 2019. Additionally, subject to certain restrictions and conditions (i) any of Cantel’s domestic or foreign subsidiaries may become borrowers and (ii) borrowings may occur in multi-currencies. Unamortized debt issuance costs recorded in other assets amounted to $619,000 at January 31, 2014, of which $90,000 related to the Existing Term Loan Facility and were expensed in March 2014. The remaining unamortized debt issuance cost relating to the Existing Revolving Credit Facility plus additional debt issuance cost of approximately $1,304,000 relating to the New Credit Agreement will be recorded in other assets and amortized over the life of the New Credit Agreement. | |
Borrowings under the New Credit Agreement bear interest at rates ranging from 0.25% to 1.25% above the lender’s base rate, or at rates ranging from 1.25% to 2.25% above the London Interbank Offered Rate (“LIBOR”), depending upon the Company’s “Consolidated Leverage Ratio,” which is defined as the consolidated ratio of total funded debt to earnings before interest, taxes, depreciation and amortization, and as further adjusted under the terms of the New Credit Agreement (“Consolidated EBITDA”). At January 31, 2014, the lender’s base rate was 3.25% and the LIBOR rates ranged from 0.16 % to 0.70%. The margins applicable to our outstanding borrowings were 0.25% above the lender’s base rate or 1.25% above LIBOR. Substantially all of our outstanding borrowings were under LIBOR contracts at January 31, 2014. The New Credit Agreement also provides for fees on the unused portion of our facilities at rates ranging from 0.20% to 0.40%, depending upon our Consolidated Leverage Ratio; such rate was 0.25% at January 31, 2014 and 0.20% at March 4, 2014. | |
In order to protect our interest rate exposure in future years, we entered into forward starting interest rate swap agreements in February 2012 in which we agreed to exchange our variable interest cash flows with fixed interest cash flows provided by one of our existing senior lenders. With respect to our Existing Term Loan Facility, the interest rate swap is for the period that began August 8, 2012 and ends July 31, 2015, initially covering $40,000,000 of borrowings based on one-month LIBOR and thereafter reducing in quarterly $2,500,000 increments consistent with the mandatory repayment schedule, and the fixed interest cash flow is at a one month LIBOR rate of 0.664%. As a result of the termination of our Existing Term Loan Facility, this interest rate swap will no longer be considered effective in mitigating the adverse impact on interest expense of increases in LIBOR. With respect to our Existing Revolving Credit Facility, the interest rate swap was for the period that began August 8, 2012 and ended January 31, 2014, initially covering $25,000,000 of borrowings based on one-month LIBOR and thereafter reducing semi-annually by increments of $5,000,000, and the fixed interest cash flow is at a one month LIBOR rate of 0.496%. | |
The New Credit Agreement contains affirmative and negative covenants reasonably customary for similar credit facilities and is secured by (i) substantially all assets of Cantel and its United States-based subsidiaries, (ii) a pledge by Cantel of all of the outstanding shares of its United States-based subsidiaries and 65% of the outstanding shares of certain of Cantel’s foreign-based subsidiaries and (iii) a guaranty by Cantel’s domestic subsidiaries. We are in compliance with all financial and other covenants under the New Credit Agreement. | |
On January 31, 2014, we had $74,500,000 of outstanding borrowings, which consisted of $25,000,000 and $49,500,000 under the Existing Term Loan Facility and the Existing Revolving Credit Facility, respectively. Subsequent to January 31, 2014, the outstanding balance under the Existing Term Loan Facility was reassigned to the New Revolving Credit Facility and we repaid $2,500,000 resulting in total outstanding borrowings of $72,000,000 at March 4, 2014, none of which is required to be repaid until March 2019. | |
Earnings_Per_Common_Share
Earnings Per Common Share | 6 Months Ended | |||||||||||||
Jan. 31, 2014 | ||||||||||||||
Earnings Per Common Share | ' | |||||||||||||
Earnings Per Common Share | ' | |||||||||||||
Note 10. Earnings Per Common Share | ||||||||||||||
Basic EPS is computed based upon the weighted average number of common shares outstanding during the period. Diluted EPS is computed based upon the weighted average number of common shares outstanding during the period plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the period. | ||||||||||||||
We include participating securities (unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents) in the computation of EPS pursuant to the two-class method. Our participating securities consist solely of unvested restricted stock awards, which have contractual participation rights equivalent to those of stockholders of unrestricted common stock. The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities. | ||||||||||||||
The following table sets forth the computation of basic and diluted EPS available to stockholders of common stock (excluding participating securities): | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
January 31, | January 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Numerator for basic and diluted earnings per share: | ||||||||||||||
Net income | $ | 11,126,000 | $ | 10,452,000 | $ | 22,311,000 | $ | 20,028,000 | ||||||
Less income allocated to participating securities | (149,000 | ) | (160,000 | ) | (309,000 | ) | (317,000 | ) | ||||||
Net income available to common stockholders | $ | 10,977,000 | $ | 10,292,000 | $ | 22,002,000 | $ | 19,711,000 | ||||||
Denominator for basic and diluted earnings per share, as adjusted for participating securities: | ||||||||||||||
Denominator for basic earnings per share - weighted average number of shares outstanding attributable to common stock | 40,754,707 | 40,247,046 | 40,668,731 | 40,122,245 | ||||||||||
Dilutive effect of stock options using the treasury stock method and the average market price for the period | 183,995 | 314,004 | 188,201 | 338,331 | ||||||||||
Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock | 40,938,702 | 40,561,050 | 40,856,932 | 40,460,576 | ||||||||||
Earnings per share attributable to common stock: | ||||||||||||||
Basic earnings per share | $ | 0.27 | $ | 0.26 | $ | 0.54 | $ | 0.49 | ||||||
Diluted earnings per share | $ | 0.27 | $ | 0.25 | $ | 0.54 | $ | 0.49 | ||||||
Stock options excluded from weighted average dilutive common shares outstanding because their inclusion would have been antidilutive | 30,000 | 52,500 | — | — | ||||||||||
A reconciliation of weighted average number of shares and common stock equivalents attributable to common stock, as determined above, to the Company’s total weighted average number of shares and common stock equivalents, including participating securities, are set forth in the following table: | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
January 31, | January 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock | 40,938,702 | 40,561,050 | 40,856,932 | 40,460,576 | ||||||||||
Participating securities | 554,029 | 631,364 | 576,119 | 655,627 | ||||||||||
Total weighted average number of shares and common stock equivalents attributable to both common stock and participating securities | 41,492,731 | 41,192,414 | 41,433,051 | 41,116,203 |
Income_Taxes
Income Taxes | 6 Months Ended | ||||
Jan. 31, 2014 | |||||
Income Taxes | ' | ||||
Income Taxes | ' | ||||
Note 11. Income Taxes | |||||
The consolidated effective tax rate was 36.7% and 36.3% for the six months ended January 31, 2014 and 2013, respectively. The increase in the consolidated effective tax rate was principally due to the geographic mix of pre-tax income and the impact of Federal tax legislation re-enacted in January 2013, as described below. | |||||
For the six months ended January 31, 2014 and 2013, approximately 96% and 97%, respectively, of our income before income taxes was generated from our United States operations, which had an overall effective tax rate of 37.4% and 36.8%, respectively. The higher overall effective tax rate for the six months ended January 31, 2014 was principally caused by Federal tax legislation that had expired in December 2011, but was re-enacted retroactively in January 2013, that enabled us to record the research and experimentation tax credit relating to the entire calendar 2012 in the six months ended January 31, 2013. Additionally, this same Federal tax legislation expired in December 2013 preventing us from recording a full research and experimentation tax credit for the six months ended January 31, 2014. | |||||
For the six months ended January 31, 2014 and 2013, approximately 4% and 3%, respectively, of our income before income taxes was generated from our operations in Canada, Singapore, the Netherlands and, for the six months ended January 31, 2014 as a result of the Jet Prep Acquisition, Israel. Collectively, these operations had an overall effective tax rate of 22.1% and 19.8% for the six months ended January 31, 2014 and 2013, respectively. All of these locations have lower statutory income tax rates compared to the United States. | |||||
We record liabilities for an unrecognized tax benefit when a tax benefit for an uncertain tax position is taken or expected to be taken on a tax return, but is not recognized in our Condensed Consolidated Financial Statements because it does not meet the more-likely-than-not recognition threshold that the uncertain tax position would be sustained upon examination by the applicable taxing authority. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon settlement with the tax authorities. Any adjustments upon resolution of income tax uncertainties are recognized in our results of operations. However, if our unrecognized tax benefits are recognized in our financial statements in future periods, there would not be a significant impact to our overall effective tax rate due to the size of the unrecognized tax benefits in relation to our income before income taxes. We do not expect such unrecognized tax benefits to significantly decrease or increase in the next twelve months. | |||||
A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits is as follows: | |||||
Unrecognized | |||||
Tax Benefits | |||||
Unrecognized tax benefits on July 31, 2012 | $ | 124,000 | |||
Activity during fiscal 2013 | — | ||||
Unrecognized tax benefits on July 31, 2013 | 124,000 | ||||
Activity during the six months ended January 31, 2014 | — | ||||
Unrecognized tax benefits on January 31, 2014 | $ | 124,000 | |||
Generally, the Company is no longer subject to federal, state or foreign income tax examinations for fiscal years ended prior to July 31, 2005. | |||||
Our policy is to record potential interest and penalties related to income tax positions in interest expense and general and administrative expense, respectively, in our Condensed Consolidated Financial Statements. However, such amounts have been relatively insignificant due to the amount of our unrecognized tax benefits relating to uncertain tax positions. |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended | ||||||||||||||||||||||
Jan. 31, 2014 | |||||||||||||||||||||||
Commitments and Contingencies | ' | ||||||||||||||||||||||
Commitments and Contingencies | ' | ||||||||||||||||||||||
Note 12. Commitments and Contingencies | |||||||||||||||||||||||
Long-Term Contractual Obligations | |||||||||||||||||||||||
As of January 31, 2014, aggregate annual payments over the remaining fiscal year, the next four years and thereafter under our contractual obligations that have long-term components were as follows: | |||||||||||||||||||||||
Six Months | |||||||||||||||||||||||
Ending | |||||||||||||||||||||||
July 31, | Year Ending July 31, | ||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | Total | |||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||
Maturity of the credit facility (1) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 74,500 | $ | 74,500 | |||||||||
Expected interest payments under the credit facility (2) | 595 | 1,189 | 1,189 | 1,189 | 1,189 | 694 | 6,045 | ||||||||||||||||
Minimum commitments under noncancelable operating leases | 1,902 | 3,041 | 2,142 | 1,484 | 1,261 | 3,679 | 13,509 | ||||||||||||||||
Contingent consideration (3) | — | 170 | 518 | 915 | 1,279 | 2,868 | 5,750 | ||||||||||||||||
Compensation agreements | 2,293 | 3,436 | 988 | 425 | 350 | 846 | 8,338 | ||||||||||||||||
Deferred compensation and other | 28 | 77 | 43 | 41 | 36 | 27 | 252 | ||||||||||||||||
Total contractual obligations | $ | 4,818 | $ | 7,913 | $ | 4,880 | $ | 4,054 | $ | 4,115 | $ | 82,614 | $ | 108,394 | |||||||||
(1) The maturity of the credit facility reflects the terms under the March 4, 2014 modification, as further explained in Note 9 of the Condensed Consolidated Financial Statements. | |||||||||||||||||||||||
(2) The expected interest payments under our credit facility reflect an interest rate of 1.60%, which was our weighted average interest rate on outstanding borrowings at January 31, 2014. | |||||||||||||||||||||||
(3) The future potential payments of contingent consideration are shown at present value using a discount rate of 11.5%. | |||||||||||||||||||||||
Operating Leases | |||||||||||||||||||||||
Minimum commitments under operating leases include minimum rental commitments for our leased manufacturing facilities, warehouses, office space and equipment. | |||||||||||||||||||||||
Contingent Consideration | |||||||||||||||||||||||
As part of the Jet Prep Acquisition on November 5, 2013, we recorded a $4,760,000 liability for the estimated fair value of contingent consideration payable to the sellers and a $990,000 liability for the estimated fair value of an assumed contingent obligation payable to the Israeli Government, as further described in Notes 3 and 6 to the Condensed Consolidated Financial Statements, which will be payable based on future sales of the Jet Prep Business (above a minimum threshold with respect to the contingent consideration liability.) As such, the estimates of the annual required payments as well as the fair value of these contingent liabilities are subjective in nature and highly dependent on future sales projections. Additionally, since we will be continually re-measuring the contingent consideration liability and the assumed contingent obligation at each balance sheet date and recording changes in the respective fair values through our Condensed Consolidated Statements of Income, we may potentially have significant earnings volatility in our future results of operations until the completion of the seven year period with respect to the contingent consideration liability and until the assumed contingent obligation is satisfied, or until the sales of the Jet Prep Ltd. products no longer exist. | |||||||||||||||||||||||
Compensation Agreements | |||||||||||||||||||||||
We have previously entered into various severance contracts with executives of the Company, including our Corporate executive officers and our subsidiary Chief Executive Officers, which define certain compensation arrangements relating to various employment termination scenarios. In conjunction with the acquisitions of the Byrne Medical Business on August 1, 2011, the SPS Business on November 1, 2012, the Eagle Pure Water Business on December 31, 2012 and the Sterilator Business on January 7, 2014, we entered into multi-year employment agreements with certain executive officers of the acquired businesses. | |||||||||||||||||||||||
Deferred Compensation and Other | |||||||||||||||||||||||
Deferred compensation and other primarily includes deferred compensation arrangements for certain former Medivators directors and officers and is recorded in other long-term liabilities. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended | |||||||||||||||||||
Jan. 31, 2014 | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ' | |||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ' | |||||||||||||||||||
Note 13. Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||
The components and changes in accumulated other comprehensive income (loss) for the three and six months ended January 31, 2014 and 2013 were as follows: | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
January 31, 2014 | January 31, 2014 | |||||||||||||||||||
Foreign | Foreign | |||||||||||||||||||
Currency | Interest Rate | Currency | Interest Rate | |||||||||||||||||
Translation | Swap | Translation | Swap | |||||||||||||||||
Adjustments | Agreements | Total | Adjustments | Agreements | Total | |||||||||||||||
Beginning balance | $ | 10,807,000 | $ | (94,000 | ) | $ | 10,713,000 | $ | 11,080,000 | $ | (103,000 | ) | $ | 10,977,000 | ||||||
Other comprehensive loss before reclassifications | (1,401,000 | ) | (14,000 | ) | (1,415,000 | ) | (1,674,000 | ) | (47,000 | ) | (1,721,000 | ) | ||||||||
Income tax effect on other comprehensive loss before reclassification | — | 5,000 | 5,000 | — | 17,000 | 17,000 | ||||||||||||||
Reclassification adjustments to interest expense for losses on interest rate swaps included in net income during the period | — | 48,000 | 48,000 | — | 96,000 | 96,000 | ||||||||||||||
Reclassification adjustments for ineffective hedge on interest rate swap included in net income during the period | — | 113,000 | 113,000 | — | 113,000 | 113,000 | ||||||||||||||
Income tax effect on reclassification adjustments | — | (58,000 | ) | (58,000 | ) | — | (76,000 | ) | (76,000 | ) | ||||||||||
Ending balance | $ | 9,406,000 | $ | — | $ | 9,406,000 | $ | 9,406,000 | $ | — | $ | 9,406,000 | ||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
January 31, 2013 | January 31, 2013 | |||||||||||||||||||
Foreign | Foreign | |||||||||||||||||||
Currency | Interest Rate | Currency | Interest Rate | |||||||||||||||||
Translation | Swap | Translation | Swap | |||||||||||||||||
Adjustments | Agreements | Total | Adjustments | Agreements | Total | |||||||||||||||
Beginning balance | $ | 8,476,000 | $ | (187,000 | ) | $ | 8,289,000 | $ | 8,385,000 | $ | (210,000 | ) | $ | 8,175,000 | ||||||
Other comprehensive income (loss) before reclassifications | 89,000 | 4,000 | 93,000 | 211,000 | (14,000 | ) | 197,000 | |||||||||||||
Income tax effect on other comprehensive income (loss) before reclassification | (25,000 | ) | (2,000 | ) | (27,000 | ) | (56,000 | ) | 5,000 | (51,000 | ) | |||||||||
Reclassification adjustments to interest expense for losses on interest rate swaps included in net income during the period | — | 61,000 | 61,000 | — | 116,000 | 116,000 | ||||||||||||||
Income tax effect on reclassification adjustments | — | (21,000 | ) | (21,000 | ) | — | (42,000 | ) | (42,000 | ) | ||||||||||
Ending balance | $ | 8,540,000 | $ | (145,000 | ) | $ | 8,395,000 | $ | 8,540,000 | $ | (145,000 | ) | $ | 8,395,000 |
Operating_Segments
Operating Segments | 6 Months Ended | |||||||||||||
Jan. 31, 2014 | ||||||||||||||
Operating Segments | ' | |||||||||||||
Operating Segments | ' | |||||||||||||
Note 14. Operating Segments | ||||||||||||||
Cantel Medical is a leading global company dedicated to delivering innovative infection prevention and control products and services for patients, caregivers, and other healthcare providers which improve outcomes, enhance safety and help save lives. Our products include specialized medical device reprocessing systems for endoscopy and renal dialysis, advanced water purification equipment, sterilants, disinfectants and cleaners, sterility assurance monitoring products for hospitals and dental clinics, disposable infection control products primarily for dental and GI endoscopy markets, dialysate concentrates, hollow fiber membrane filtration and separation products, and specialty packaging for infectious and biological specimens. Additionally, we provide technical service for our products. | ||||||||||||||
In accordance with FASB ASC Topic 280, “Segment Reporting,” (“ASC 280”), we have determined our reportable business segments based upon an assessment of product types, organizational structure, customers and internally prepared financial statements. The primary factors used by us in analyzing segment performance are net sales and operating income. | ||||||||||||||
During the fourth quarter of fiscal 2013, we changed our internal reporting processes by combining our Therapeutic Filtration and Chemistries operating segments, previously reported in the Other reporting segment, with our Water Purification and Filtration reporting segment to reflect the way the Company, through its executive management, manages, allocates resources and measures the performance of its businesses. All periods presented have been recast to reflect these changes. | ||||||||||||||
None of our customers accounted for 10% or more of our consolidated net sales for the six months ended January 31, 2014 and 2013, except for DaVita Inc. (“DaVita”), which accounted for approximately 10.9%, or approximately $25,948,000, for the six months ended January 31, 2014 and approximately 10.3%, or $21,290,000, for the six months ended January 31, 2013, of our consolidated net sales. For the six months ended January 31, 2014, DaVita accounted for approximately 25.3% and 37.6% of our net sales in our Water Purification and Filtration and Dialysis segments, respectively. | ||||||||||||||
The Company’s segments are as follows: | ||||||||||||||
Endoscopy, which includes medical device reprocessing systems, disinfectants, detergents and other supplies used to high-level disinfect flexible endoscopes. This segment also offers disposable infection control products intended to eliminate the challenges associated with proper cleaning and high-level disinfection of numerous reusable components used in gastrointestinal endoscopy procedures. Additionally, this segment includes technical maintenance service on its products. | ||||||||||||||
Water Purification and Filtration, which includes water purification equipment design and manufacturing, project management, installation, maintenance, deionization and mixing systems, as well as hollow fiber membrane filtration and separation technologies for high-purity fluid and separation applications for healthcare (with a large concentration in dialysis), pharmaceutical, biotechnology, research, beverage, semiconductor and other commercial industries. Additionally, this segment includes sterilants, disinfectants and decontamination services used in various applications for infection prevention and control. | ||||||||||||||
DaVita and another large customer accounted for approximately 25.3% and 21.9%, respectively, of our Water Purification and Filtration segment net sales for the six months ended January 31, 2014. Combined, these two customers accounted for approximately 18.3% of our consolidated net sales for the six months ended January 31, 2014. | ||||||||||||||
Healthcare Disposables, which includes single-use infection prevention and control products used principally in the dental market such as face masks, sterilization pouches, patient towels and bibs, self-sealing sterilization pouches, tray covers, surface barriers including eyewear, aprons and gowns, disinfectants, germicidal wipes, hand care products, gloves, sponges, cotton products, cups, needles and syringes, scalpels and blades, and saliva evacuators and ejectors. This segment also manufactures and provides biological and chemical indicators for sterility assurance monitoring services in the acute-care, alternate-care and dental markets. | ||||||||||||||
Four customers collectively accounted for approximately 52.3% of our Healthcare Disposables segment net sales and approximately 11.2% of our consolidated net sales for the six months ended January 31, 2014. | ||||||||||||||
Dialysis, which includes disinfection/sterilization reprocessing equipment, sterilants, supplies and concentrates related to hemodialysis treatment of patients with acute kidney failure or chronic kidney failure associated with end-stage renal disease. Additionally, this segment includes technical maintenance service on its products. | ||||||||||||||
Other | ||||||||||||||
In accordance with quantitative thresholds established by ASC 280, the Specialty Packaging operating segment is reported in the Other reporting segment. | ||||||||||||||
Specialty Packaging, which includes specialty packaging and thermal control products, as well as related compliance training, for the safe transport of infectious and biological specimens and thermally sensitive pharmaceutical, medical and other products. | ||||||||||||||
The operating segments follow the same accounting policies used for our Condensed Consolidated Financial Statements as described in Note 2 to the 2013 Form 10-K. | ||||||||||||||
Information as to operating segments is summarized below: | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
January 31, | January 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Net sales: | ||||||||||||||
Endoscopy | $ | 44,587,000 | $ | 39,422,000 | $ | 88,200,000 | $ | 76,101,000 | ||||||
Water Purification and Filtration | 40,719,000 | 32,369,000 | 80,469,000 | 65,530,000 | ||||||||||
Healthcare Disposables | 24,716,000 | 24,339,000 | 50,965,000 | 44,294,000 | ||||||||||
Dialysis | 7,611,000 | 8,760,000 | 14,920,000 | 16,947,000 | ||||||||||
Other | 1,409,000 | 1,473,000 | 2,760,000 | 3,172,000 | ||||||||||
Total | $ | 119,042,000 | $ | 106,363,000 | $ | 237,314,000 | $ | 206,044,000 | ||||||
Operating income: | ||||||||||||||
Endoscopy | $ | 8,218,000 | $ | 9,469,000 | $ | 16,402,000 | $ | 17,145,000 | ||||||
Water Purification and Filtration | 7,108,000 | 3,719,000 | 13,165,000 | 8,346,000 | ||||||||||
Healthcare Disposables | 4,563,000 | 4,709,000 | 10,282,000 | 8,800,000 | ||||||||||
Dialysis | 1,996,000 | 2,312,000 | 3,760,000 | 4,488,000 | ||||||||||
Other | 231,000 | 125,000 | 236,000 | 338,000 | ||||||||||
22,116,000 | 20,334,000 | 43,845,000 | 39,117,000 | |||||||||||
General corporate expenses | (3,907,000 | ) | (3,471,000 | ) | (7,324,000 | ) | (6,282,000 | ) | ||||||
Interest expense, net | (630,000 | ) | (775,000 | ) | (1,274,000 | ) | (1,408,000 | ) | ||||||
Income before income taxes | $ | 17,579,000 | $ | 16,088,000 | $ | 35,247,000 | $ | 31,427,000 |
Legal_Proceedings
Legal Proceedings | 6 Months Ended |
Jan. 31, 2014 | |
Legal Proceedings | ' |
Legal Proceedings | ' |
Note 15. Legal Proceedings | |
In the normal course of business, we are subject to pending and threatened legal actions. It is our policy to accrue for amounts related to these legal matters if it is probable that a liability has been incurred and an amount of anticipated exposure can be reasonably estimated. We do not believe that any of these pending claims or legal actions will have a material effect on our business, financial condition, results of operations or cash flows. | |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 6 Months Ended | |||||||||||||
Jan. 31, 2014 | ||||||||||||||
Stock-Based Compensation | ' | |||||||||||||
Schedule of the income statement components of stock-based compensation expense recognized in the Condensed Consolidated Statements of Income | ' | |||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
January 31, | January 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Cost of sales | $ | 109,000 | $ | 37,000 | $ | 171,000 | $ | 92,000 | ||||||
Operating expenses: | ||||||||||||||
Selling | 191,000 | 82,000 | 301,000 | 181,000 | ||||||||||
General and administrative | 1,090,000 | 802,000 | 2,054,000 | 1,594,000 | ||||||||||
Research and development | 18,000 | 8,000 | 30,000 | 20,000 | ||||||||||
Total operating expenses | 1,299,000 | 892,000 | 2,385,000 | 1,795,000 | ||||||||||
Stock-based compensation before income taxes | 1,408,000 | 929,000 | 2,556,000 | 1,887,000 | ||||||||||
Income tax benefits | (493,000 | ) | (336,000 | ) | (905,000 | ) | (676,000 | ) | ||||||
Total stock-based compensation expense, net of tax | $ | 915,000 | $ | 593,000 | $ | 1,651,000 | $ | 1,211,000 | ||||||
Summary of nonvested stock award activity | ' | |||||||||||||
Weighted | ||||||||||||||
Number of | Average | |||||||||||||
Shares | Fair Value | |||||||||||||
Nonvested stock awards at July 31, 2013 | 605,767 | $ | 11.96 | |||||||||||
Granted | 247,136 | 31.84 | ||||||||||||
Canceled | (4,620 | ) | 9.02 | |||||||||||
Vested | (299,611 | ) | 10.51 | |||||||||||
Nonvested stock awards at January 31, 2014 | 548,672 | $ | 21.73 | |||||||||||
Weighted-average assumptions used to estimate fair value of stock options granted using the Black-Scholes option valuation model | ' | |||||||||||||
Weighted-Average | ||||||||||||||
Black-Scholes Option | Six Months Ended | Six Months Ended | ||||||||||||
Valuation Assumptions | January 31, 2014 | January 31, 2013 | ||||||||||||
Dividend yield | 0.28 | % | 0.37 | % | ||||||||||
Expected volatility (1) | 42.7 | % | 50.9 | % | ||||||||||
Risk-free interest rate (2) | 1.44 | % | 0.67 | % | ||||||||||
Expected lives (in years) (3) | 5 | 5 | ||||||||||||
(1) Volatility was based on historical closing prices of our common stock. | ||||||||||||||
(2) The U.S. Treasury rate on the expected life at the date of grant. | ||||||||||||||
(3) Based on historical exercise behavior. | ||||||||||||||
Summary of stock option activity | ' | |||||||||||||
Weighted | ||||||||||||||
Number of | Average | |||||||||||||
Shares | Exercise Price | |||||||||||||
Outstanding at July 31, 2013 | 403,831 | $ | 8.25 | |||||||||||
Granted | 30,000 | 31.81 | ||||||||||||
Exercised | (92,106 | ) | 6.69 | |||||||||||
Outstanding at January 31, 2014 | 341,725 | $ | 10.74 | |||||||||||
Exercisable at July 31, 2013 | 351,331 | $ | 6.94 | |||||||||||
Exercisable at January 31, 2014 | 276,725 | $ | 7.66 |
Acquisitions_Tables
Acquisitions (Tables) | 6 Months Ended | ||||
Jan. 31, 2014 | |||||
Sterilator Company, Inc. | ' | ||||
Acquisitions | ' | ||||
Schedule of purchase price allocated to the assets acquired and assumed liabilities based on estimated fair values | ' | ||||
Preliminary | |||||
Net Assets | Allocation | ||||
Current assets | $ | 538,000 | |||
Property, plant and equipment | 535,000 | ||||
Amortizable intangible assets (9- year weighted average life): | |||||
Customer relationships (11- year life) | 130,000 | ||||
Technology (8- year life) | 510,000 | ||||
Current liabilities | (321,000 | ) | |||
Deferred income tax liabilities | (260,000 | ) | |||
Net assets acquired | $ | 1,132,000 | |||
Jet Prep Ltd. | ' | ||||
Acquisitions | ' | ||||
Schedule of purchase price allocated to the assets acquired and assumed liabilities based on estimated fair values | ' | ||||
Preliminary | |||||
Net Assets | Allocation | ||||
Current assets | $ | 64,000 | |||
Property, plant and equipment | 65,000 | ||||
Amortizable intangible asset - Technology (7- year life): | 5,050,000 | ||||
Current liabilities | (100,000 | ) | |||
Deferred income tax liabilities | (345,000 | ) | |||
Net assets acquired | $ | 4,734,000 | |||
Siemens' Hemodialysis Water Business | ' | ||||
Acquisitions | ' | ||||
Schedule of purchase price allocated to the assets acquired and assumed liabilities based on estimated fair values | ' | ||||
Final | |||||
Net Assets | Allocation | ||||
Current assets | $ | 728,000 | |||
Property, plant and equipment | 231,000 | ||||
Amortizable intangible assets: | |||||
Customer relationships (12- year life) | 4,310,000 | ||||
Current liabilities | (415,000 | ) | |||
Net assets acquired | $ | 4,854,000 | |||
Eagle Pure Water Systems, Inc. | ' | ||||
Acquisitions | ' | ||||
Schedule of purchase price allocated to the assets acquired and assumed liabilities based on estimated fair values | ' | ||||
Final | |||||
Net Assets | Allocation | ||||
Current assets | $ | 8,000 | |||
Property, plant and equipment | 70,000 | ||||
Amortizable intangible assets (3- year weighted average life): | |||||
Customer relationships (3- year life) | 150,000 | ||||
Brand names (3- year life) | 18,000 | ||||
Non-compete agreement (5- year life) | 32,000 | ||||
Current liabilities | (5,000 | ) | |||
Net assets acquired | $ | 273,000 | |||
SPS Medical Supply Corp. | ' | ||||
Acquisitions | ' | ||||
Schedule of purchase price allocated to the assets acquired and assumed liabilities based on estimated fair values | ' | ||||
Final | |||||
Net Assets | Allocation | ||||
Current assets | $ | 4,810,000 | |||
Property, plant and equipment | 3,801,000 | ||||
Amortizable intangible assets (9- year weighted average life): | |||||
Customer relationships (10- year life) | 8,120,000 | ||||
Brand names (5- year life) | 760,000 | ||||
Technology (4- year life) | 500,000 | ||||
Non-compete agreements (6- year life) | 180,000 | ||||
Other assets | 28,000 | ||||
Current liabilities | (2,784,000 | ) | |||
Noncurrent deferred income tax liabilities, net | (3,659,000 | ) | |||
Net assets acquired | $ | 11,756,000 |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | ||||||||||||||||
Jan. 31, 2014 | |||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
Schedule of fair values of financial instruments measured on a recurring basis | ' | ||||||||||||||||
January 31, 2014 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets: | |||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Money markets | $ | 3,993,000 | $ | — | $ | — | $ | 3,993,000 | |||||||||
Total assets | $ | 3,993,000 | $ | — | $ | — | $ | 3,993,000 | |||||||||
Liabilities: | |||||||||||||||||
Accrued expenses: | |||||||||||||||||
Assumed contingent obligation | $ | — | $ | — | $ | 58,000 | $ | 58,000 | |||||||||
Interest rate swap agreement | — | 94,000 | — | 94,000 | |||||||||||||
Total accrued expenses | — | 94,000 | 58,000 | 152,000 | |||||||||||||
Contingent consideration: | |||||||||||||||||
Contingent consideration | — | — | 4,760,000 | 4,760,000 | |||||||||||||
Assumed contingent obligation | — | — | 932,000 | 932,000 | |||||||||||||
Other long-term liabilities: | |||||||||||||||||
Interest rate swap agreement | — | 19,000 | — | 19,000 | |||||||||||||
Total liabilities | $ | — | $ | 113,000 | $ | 5,750,000 | $ | 5,863,000 | |||||||||
July 31, 2013 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets: | |||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Money markets | $ | 4,241,000 | $ | — | $ | — | $ | 4,241,000 | |||||||||
Total assets | $ | 4,241,000 | $ | — | $ | — | $ | 4,241,000 | |||||||||
Liabilities: | |||||||||||||||||
Accrued expenses: | |||||||||||||||||
Interest rate swap agreements | $ | — | $ | 133,000 | $ | — | $ | 133,000 | |||||||||
Total accrued expenses | — | 133,000 | — | 133,000 | |||||||||||||
Other long-term liabilities: | |||||||||||||||||
Price floor | — | — | 45,000 | 45,000 | |||||||||||||
Interest rate swap agreements | — | 29,000 | — | 29,000 | |||||||||||||
Total other long-term liabilities | — | 29,000 | 45,000 | 74,000 | |||||||||||||
Total liabilities | $ | — | $ | 162,000 | $ | 45,000 | $ | 207,000 | |||||||||
Reconciliation of liabilities measured and recorded at fair value on a recurring basis using significant unobservable inputs (Level 3) | ' | ||||||||||||||||
Jet Prep | |||||||||||||||||
Byrne | Byrne | Jet Prep | Assumed | ||||||||||||||
Contingent | Price | Contingent | Contingent | ||||||||||||||
Consideration | Floor | Consideration | Obligation | Total | |||||||||||||
Balance, July 31, 2012 | $ | 1,500,000 | $ | 1,037,000 | $ | — | $ | — | $ | 2,537,000 | |||||||
Total net unrealized gains included in | — | (313,000 | ) | — | — | (313,000 | ) | ||||||||||
general and administrative expense in earnings | |||||||||||||||||
Balance, October 31, 2012 | 1,500,000 | 724,000 | — | — | 2,224,000 | ||||||||||||
Total net unrealized gains included in | (1,500,000 | ) | (410,000 | ) | — | — | (1,910,000 | ) | |||||||||
general and administrative expense in earnings | |||||||||||||||||
Balance, January 31, 2013 | — | 314,000 | — | — | 314,000 | ||||||||||||
Total net unrealized gains included in | — | (59,000 | ) | — | — | (59,000 | ) | ||||||||||
general and administrative expense in earnings | |||||||||||||||||
Balance, April 30, 2013 | — | 255,000 | — | — | 255,000 | ||||||||||||
Total net unrealized gains included in | — | (210,000 | ) | — | — | (210,000 | ) | ||||||||||
general and administrative expense in earnings | |||||||||||||||||
Balance, July 31, 2013 | — | 45,000 | — | — | 45,000 | ||||||||||||
Total net unrealized gains included in | — | (44,000 | ) | — | — | (44,000 | ) | ||||||||||
general and administrative expense in earnings | |||||||||||||||||
Balance, October 31, 2013 | — | 1,000 | — | — | 1,000 | ||||||||||||
Total net unrealized gains included in | — | (1,000 | ) | — | — | (1,000 | ) | ||||||||||
general and administrative expense in earnings | |||||||||||||||||
Net purchases, issuances, sales and settlements | — | — | 4,760,000 | 990,000 | 5,750,000 | ||||||||||||
Balance, January 31, 2014 | $ | — | $ | — | $ | 4,760,000 | $ | 990,000 | $ | 5,750,000 |
Intangible_Assets_and_Goodwill1
Intangible Assets and Goodwill (Tables) | 6 Months Ended | |||||||||||||||||||
Jan. 31, 2014 | ||||||||||||||||||||
Intangible Assets and Goodwill | ' | |||||||||||||||||||
Schedule of intangible assets | ' | |||||||||||||||||||
January 31, 2014 | ||||||||||||||||||||
Accumulated | ||||||||||||||||||||
Gross | Amortization | Net | ||||||||||||||||||
Intangible assets with finite lives: | ||||||||||||||||||||
Customer relationships | $ | 71,949,000 | $ | (28,068,000 | ) | $ | 43,881,000 | |||||||||||||
Technology | 25,954,000 | (10,203,000 | ) | 15,751,000 | ||||||||||||||||
Brand names | 12,680,000 | (8,738,000 | ) | 3,942,000 | ||||||||||||||||
Non-compete agreements | 3,129,000 | (633,000 | ) | 2,496,000 | ||||||||||||||||
Patents and other registrations | 1,867,000 | (702,000 | ) | 1,165,000 | ||||||||||||||||
115,579,000 | (48,344,000 | ) | 67,235,000 | |||||||||||||||||
Trademarks and trade names | 9,241,000 | — | 9,241,000 | |||||||||||||||||
Total intangible assets | $ | 124,820,000 | $ | (48,344,000 | ) | $ | 76,476,000 | |||||||||||||
July 31, 2013 | ||||||||||||||||||||
Accumulated | ||||||||||||||||||||
Gross | Amortization | Net | ||||||||||||||||||
Intangible assets with finite lives: | ||||||||||||||||||||
Customer relationships | $ | 72,142,000 | $ | (25,379,000 | ) | $ | 46,763,000 | |||||||||||||
Technology | 21,006,000 | (9,642,000 | ) | 11,364,000 | ||||||||||||||||
Brand names | 12,680,000 | (8,045,000 | ) | 4,635,000 | ||||||||||||||||
Non-compete agreements | 3,159,000 | (541,000 | ) | 2,618,000 | ||||||||||||||||
Patents and other registrations | 1,768,000 | (606,000 | ) | 1,162,000 | ||||||||||||||||
110,755,000 | (44,213,000 | ) | 66,542,000 | |||||||||||||||||
Trademarks and trade names | 9,387,000 | — | 9,387,000 | |||||||||||||||||
Total intangible assets | $ | 120,142,000 | $ | (44,213,000 | ) | $ | 75,929,000 | |||||||||||||
Schedule of estimated amortization expense of intangible assets for remainder of fiscal 2014 and the next five years | ' | |||||||||||||||||||
Six month period ending July 31, 2014 | $ | 5,513,000 | ||||||||||||||||||
Fiscal 2015 | 11,025,000 | |||||||||||||||||||
Fiscal 2016 | 7,786,000 | |||||||||||||||||||
Fiscal 2017 | 7,210,000 | |||||||||||||||||||
Fiscal 2018 | 6,933,000 | |||||||||||||||||||
Fiscal 2019 | 6,610,000 | |||||||||||||||||||
Schedule of changes in goodwill | ' | |||||||||||||||||||
Water | ||||||||||||||||||||
Purification | Healthcare | Total | ||||||||||||||||||
Endoscopy | and Filtration | Disposables | Dialysis | Other | Goodwill | |||||||||||||||
Balance, July 31, 2012 | $ | 59,230,000 | $ | 53,288,000 | $ | 55,864,000 | $ | 8,133,000 | $ | 7,140,000 | $ | 183,655,000 | ||||||||
Acquisitions | — | 4,043,000 | 24,244,000 | — | — | 28,287,000 | ||||||||||||||
Foreign currency translation | — | (152,000 | ) | — | — | (172,000 | ) | (324,000 | ) | |||||||||||
Balance, July 31, 2013 | 59,230,000 | 57,179,000 | 80,108,000 | 8,133,000 | 6,968,000 | 211,618,000 | ||||||||||||||
Acquisitions | 6,348,000 | — | 1,697,000 | — | — | 8,045,000 | ||||||||||||||
Foreign currency translation | — | (456,000 | ) | — | — | (530,000 | ) | (986,000 | ) | |||||||||||
Balance, January 31, 2014 | $ | 65,578,000 | $ | 56,723,000 | $ | 81,805,000 | $ | 8,133,000 | $ | 6,438,000 | $ | 218,677,000 |
Warranties_Tables
Warranties (Tables) | 6 Months Ended | |||||||||||||
Jan. 31, 2014 | ||||||||||||||
Warranties | ' | |||||||||||||
Summary of activity in warranty reserves | ' | |||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
January 31, | January 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Beginning balance | $ | 1,261,000 | $ | 1,438,000 | $ | 1,261,000 | $ | 1,667,000 | ||||||
Provisions | 546,000 | 336,000 | 1,237,000 | 703,000 | ||||||||||
Settlements | (605,000 | ) | (542,000 | ) | (1,296,000 | ) | (1,138,000 | ) | ||||||
Foreign currency translation | (1,000 | ) | — | (1,000 | ) | — | ||||||||
Ending balance | $ | 1,201,000 | $ | 1,232,000 | $ | 1,201,000 | $ | 1,232,000 |
Earnings_Per_Common_Share_Tabl
Earnings Per Common Share (Tables) | 6 Months Ended | |||||||||||||
Jan. 31, 2014 | ||||||||||||||
Earnings Per Common Share | ' | |||||||||||||
Schedule of computation of basic and diluted EPS available to stockholders of common stock (excluding participating securities) | ' | |||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
January 31, | January 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Numerator for basic and diluted earnings per share: | ||||||||||||||
Net income | $ | 11,126,000 | $ | 10,452,000 | $ | 22,311,000 | $ | 20,028,000 | ||||||
Less income allocated to participating securities | (149,000 | ) | (160,000 | ) | (309,000 | ) | (317,000 | ) | ||||||
Net income available to common stockholders | $ | 10,977,000 | $ | 10,292,000 | $ | 22,002,000 | $ | 19,711,000 | ||||||
Denominator for basic and diluted earnings per share, as adjusted for participating securities: | ||||||||||||||
Denominator for basic earnings per share - weighted average number of shares outstanding attributable to common stock | 40,754,707 | 40,247,046 | 40,668,731 | 40,122,245 | ||||||||||
Dilutive effect of stock options using the treasury stock method and the average market price for the period | 183,995 | 314,004 | 188,201 | 338,331 | ||||||||||
Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock | 40,938,702 | 40,561,050 | 40,856,932 | 40,460,576 | ||||||||||
Earnings per share attributable to common stock: | ||||||||||||||
Basic earnings per share | $ | 0.27 | $ | 0.26 | $ | 0.54 | $ | 0.49 | ||||||
Diluted earnings per share | $ | 0.27 | $ | 0.25 | $ | 0.54 | $ | 0.49 | ||||||
Stock options excluded from weighted average dilutive common shares outstanding because their inclusion would have been antidilutive | 30,000 | 52,500 | — | — | ||||||||||
Schedule of reconciliation of weighted average number of shares and common stock equivalents attributable to common stock to the Company's total weighted average number of shares and common stock equivalents including participating securities | ' | |||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
January 31, | January 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock | 40,938,702 | 40,561,050 | 40,856,932 | 40,460,576 | ||||||||||
Participating securities | 554,029 | 631,364 | 576,119 | 655,627 | ||||||||||
Total weighted average number of shares and common stock equivalents attributable to both common stock and participating securities | 41,492,731 | 41,192,414 | 41,433,051 | 41,116,203 |
Income_Taxes_Tables
Income Taxes (Tables) | 6 Months Ended | ||||
Jan. 31, 2014 | |||||
Income Taxes | ' | ||||
Schedule of reconciliation of the beginning and ending amounts of gross unrecognized tax benefits | ' | ||||
Unrecognized | |||||
Tax Benefits | |||||
Unrecognized tax benefits on July 31, 2012 | $ | 124,000 | |||
Activity during fiscal 2013 | — | ||||
Unrecognized tax benefits on July 31, 2013 | 124,000 | ||||
Activity during the six months ended January 31, 2014 | — | ||||
Unrecognized tax benefits on January 31, 2014 | $ | 124,000 |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 6 Months Ended | ||||||||||||||||||||||
Jan. 31, 2014 | |||||||||||||||||||||||
Commitments and Contingencies | ' | ||||||||||||||||||||||
Schedule of aggregate annual required payments over the remaining fiscal year, the next four years and thereafter under contractual obligations that have long-term components | ' | ||||||||||||||||||||||
Six Months | |||||||||||||||||||||||
Ending | |||||||||||||||||||||||
July 31, | Year Ending July 31, | ||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | Total | |||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||
Maturity of the credit facility (1) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 74,500 | $ | 74,500 | |||||||||
Expected interest payments under the credit facility (2) | 595 | 1,189 | 1,189 | 1,189 | 1,189 | 694 | 6,045 | ||||||||||||||||
Minimum commitments under noncancelable operating leases | 1,902 | 3,041 | 2,142 | 1,484 | 1,261 | 3,679 | 13,509 | ||||||||||||||||
Contingent consideration (3) | — | 170 | 518 | 915 | 1,279 | 2,868 | 5,750 | ||||||||||||||||
Compensation agreements | 2,293 | 3,436 | 988 | 425 | 350 | 846 | 8,338 | ||||||||||||||||
Deferred compensation and other | 28 | 77 | 43 | 41 | 36 | 27 | 252 | ||||||||||||||||
Total contractual obligations | $ | 4,818 | $ | 7,913 | $ | 4,880 | $ | 4,054 | $ | 4,115 | $ | 82,614 | $ | 108,394 | |||||||||
(1) The maturity of the credit facility reflects the terms under the March 4, 2014 modification, as further explained in Note 9 of the Condensed Consolidated Financial Statements. | |||||||||||||||||||||||
(2) The expected interest payments under our credit facility reflect an interest rate of 1.60%, which was our weighted average interest rate on outstanding borrowings at January 31, 2014. | |||||||||||||||||||||||
(3) The future potential payments of contingent consideration are shown at present value using a discount rate of 11.5%. |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended | |||||||||||||||||||
Jan. 31, 2014 | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ' | |||||||||||||||||||
Schedule of the components and changes in accumulated other comprehensive income (loss) | ' | |||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
January 31, 2014 | January 31, 2014 | |||||||||||||||||||
Foreign | Foreign | |||||||||||||||||||
Currency | Interest Rate | Currency | Interest Rate | |||||||||||||||||
Translation | Swap | Translation | Swap | |||||||||||||||||
Adjustments | Agreements | Total | Adjustments | Agreements | Total | |||||||||||||||
Beginning balance | $ | 10,807,000 | $ | (94,000 | ) | $ | 10,713,000 | $ | 11,080,000 | $ | (103,000 | ) | $ | 10,977,000 | ||||||
Other comprehensive loss before reclassifications | (1,401,000 | ) | (14,000 | ) | (1,415,000 | ) | (1,674,000 | ) | (47,000 | ) | (1,721,000 | ) | ||||||||
Income tax effect on other comprehensive loss before reclassification | — | 5,000 | 5,000 | — | 17,000 | 17,000 | ||||||||||||||
Reclassification adjustments to interest expense for losses on interest rate swaps included in net income during the period | — | 48,000 | 48,000 | — | 96,000 | 96,000 | ||||||||||||||
Reclassification adjustments for ineffective hedge on interest rate swap included in net income during the period | — | 113,000 | 113,000 | — | 113,000 | 113,000 | ||||||||||||||
Income tax effect on reclassification adjustments | — | (58,000 | ) | (58,000 | ) | — | (76,000 | ) | (76,000 | ) | ||||||||||
Ending balance | $ | 9,406,000 | $ | — | $ | 9,406,000 | $ | 9,406,000 | $ | — | $ | 9,406,000 | ||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
January 31, 2013 | January 31, 2013 | |||||||||||||||||||
Foreign | Foreign | |||||||||||||||||||
Currency | Interest Rate | Currency | Interest Rate | |||||||||||||||||
Translation | Swap | Translation | Swap | |||||||||||||||||
Adjustments | Agreements | Total | Adjustments | Agreements | Total | |||||||||||||||
Beginning balance | $ | 8,476,000 | $ | (187,000 | ) | $ | 8,289,000 | $ | 8,385,000 | $ | (210,000 | ) | $ | 8,175,000 | ||||||
Other comprehensive income (loss) before reclassifications | 89,000 | 4,000 | 93,000 | 211,000 | (14,000 | ) | 197,000 | |||||||||||||
Income tax effect on other comprehensive income (loss) before reclassification | (25,000 | ) | (2,000 | ) | (27,000 | ) | (56,000 | ) | 5,000 | (51,000 | ) | |||||||||
Reclassification adjustments to interest expense for losses on interest rate swaps included in net income during the period | — | 61,000 | 61,000 | — | 116,000 | 116,000 | ||||||||||||||
Income tax effect on reclassification adjustments | — | (21,000 | ) | (21,000 | ) | — | (42,000 | ) | (42,000 | ) | ||||||||||
Ending balance | $ | 8,540,000 | $ | (145,000 | ) | $ | 8,395,000 | $ | 8,540,000 | $ | (145,000 | ) | $ | 8,395,000 |
Operating_Segments_Tables
Operating Segments (Tables) | 6 Months Ended | |||||||||||||
Jan. 31, 2014 | ||||||||||||||
Operating Segments | ' | |||||||||||||
Information as to operating segments | ' | |||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
January 31, | January 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Net sales: | ||||||||||||||
Endoscopy | $ | 44,587,000 | $ | 39,422,000 | $ | 88,200,000 | $ | 76,101,000 | ||||||
Water Purification and Filtration | 40,719,000 | 32,369,000 | 80,469,000 | 65,530,000 | ||||||||||
Healthcare Disposables | 24,716,000 | 24,339,000 | 50,965,000 | 44,294,000 | ||||||||||
Dialysis | 7,611,000 | 8,760,000 | 14,920,000 | 16,947,000 | ||||||||||
Other | 1,409,000 | 1,473,000 | 2,760,000 | 3,172,000 | ||||||||||
Total | $ | 119,042,000 | $ | 106,363,000 | $ | 237,314,000 | $ | 206,044,000 | ||||||
Operating income: | ||||||||||||||
Endoscopy | $ | 8,218,000 | $ | 9,469,000 | $ | 16,402,000 | $ | 17,145,000 | ||||||
Water Purification and Filtration | 7,108,000 | 3,719,000 | 13,165,000 | 8,346,000 | ||||||||||
Healthcare Disposables | 4,563,000 | 4,709,000 | 10,282,000 | 8,800,000 | ||||||||||
Dialysis | 1,996,000 | 2,312,000 | 3,760,000 | 4,488,000 | ||||||||||
Other | 231,000 | 125,000 | 236,000 | 338,000 | ||||||||||
22,116,000 | 20,334,000 | 43,845,000 | 39,117,000 | |||||||||||
General corporate expenses | (3,907,000 | ) | (3,471,000 | ) | (7,324,000 | ) | (6,282,000 | ) | ||||||
Interest expense, net | (630,000 | ) | (775,000 | ) | (1,274,000 | ) | (1,408,000 | ) | ||||||
Income before income taxes | $ | 17,579,000 | $ | 16,088,000 | $ | 35,247,000 | $ | 31,427,000 |
Basis_of_Presentation_Details
Basis of Presentation (Details) (USD $) | 6 Months Ended | 12 Months Ended | ||
Jan. 31, 2014 | Jul. 31, 2013 | Mar. 04, 2014 | Jan. 31, 2014 | |
segment | company | Credit Agreement | Medivators | |
company | Subsequent Events | subsidiary | ||
Basis of Presentation | ' | ' | ' | ' |
Number of principal operating companies | 5 | 5 | ' | ' |
Business Description | ' | ' | ' | ' |
Number of foreign subsidiaries | ' | ' | ' | 2 |
Number of operating segments | 5 | ' | ' | ' |
Additional common stock issued as stock dividend (in shares) | ' | 15,044,000 | ' | ' |
Stock split ratio | ' | 1.5 | ' | ' |
Percentage of stock dividend paid | ' | 50.00% | ' | ' |
Maximum borrowing capacity | ' | ' | $250,000,000 | ' |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2013 | |
Income statement components of stock-based compensation expense recognized in Consolidated Statements of Income | ' | ' | ' | ' |
Stock-based compensation before income taxes | $1,408,000 | $929,000 | $2,556,000 | $1,887,000 |
Income tax benefits | -493,000 | -336,000 | -905,000 | -676,000 |
Total stock-based compensation expense, net of tax | 915,000 | 593,000 | 1,651,000 | 1,211,000 |
Cost of sales | ' | ' | ' | ' |
Income statement components of stock-based compensation expense recognized in Consolidated Statements of Income | ' | ' | ' | ' |
Stock-based compensation before income taxes | 109,000 | 37,000 | 171,000 | 92,000 |
Operating expenses: Selling | ' | ' | ' | ' |
Income statement components of stock-based compensation expense recognized in Consolidated Statements of Income | ' | ' | ' | ' |
Stock-based compensation before income taxes | 191,000 | 82,000 | 301,000 | 181,000 |
Operating expenses: General and administrative | ' | ' | ' | ' |
Income statement components of stock-based compensation expense recognized in Consolidated Statements of Income | ' | ' | ' | ' |
Stock-based compensation before income taxes | 1,090,000 | 802,000 | 2,054,000 | 1,594,000 |
Operating expenses: Research and development | ' | ' | ' | ' |
Income statement components of stock-based compensation expense recognized in Consolidated Statements of Income | ' | ' | ' | ' |
Stock-based compensation before income taxes | 18,000 | 8,000 | 30,000 | 20,000 |
Total operating expenses | ' | ' | ' | ' |
Income statement components of stock-based compensation expense recognized in Consolidated Statements of Income | ' | ' | ' | ' |
Stock-based compensation before income taxes | $1,299,000 | $892,000 | $2,385,000 | $1,795,000 |
StockBased_Compensation_Detail1
Stock-Based Compensation (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | |||
Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2013 | Jul. 31, 2013 | |
Stock-Based Compensation | ' | ' | ' | ' | ' |
Total unrecognized stock-based compensation expense, before income taxes, related to total nonvested stock options and stock awards (in dollars) | $10,187,000 | ' | $10,187,000 | ' | ' |
Remaining weighted average period over which unrecognized stock-based compensation expense is expected to be recognized | ' | ' | '22 months | ' | ' |
Stock-based awards, additional disclosure | ' | ' | ' | ' | ' |
Reissued shares from treasury stock for exercise of stock options and grant of stock awards (in shares) | ' | 282,978 | ' | 474,266 | ' |
Deduction in income tax due to exercise of options and vesting of restricted stock (in dollars) | ' | ' | 4,516,000 | 2,923,000 | ' |
Increase in additional paid-in capital due to excess tax benefit on stock-based compensation expense (in dollars) | ' | ' | 3,297,000 | 1,868,000 | ' |
Restricted shares | ' | ' | ' | ' | ' |
Number of Shares | ' | ' | ' | ' | ' |
Nonvested stock awards at the beginning of the period (in shares) | ' | ' | 605,767 | ' | ' |
Granted (in shares) | ' | ' | 247,136 | ' | ' |
Cancelled (in shares) | ' | ' | -4,620 | ' | ' |
Vested (in shares) | ' | ' | -299,611 | ' | ' |
Nonvested stock awards at the end of the period (in shares) | 548,672 | ' | 548,672 | ' | ' |
Weighted Average Fair Value | ' | ' | ' | ' | ' |
Nonvested stock awards at the beginning of the period (in dollars per share) | ' | ' | $11.96 | ' | ' |
Granted (in dollars per share) | ' | ' | $31.84 | ' | ' |
Cancelled (in dollars per share) | ' | ' | $9.02 | ' | ' |
Vested (in dollars per share) | ' | ' | $10.51 | ' | ' |
Nonvested stock awards at the end of the period (in dollars per share) | $21.73 | ' | $21.73 | ' | ' |
Stock options | ' | ' | ' | ' | ' |
Weighted-Average Black-Scholes Option Valuation Assumptions | ' | ' | ' | ' | ' |
Dividend yield (as a percent) | ' | ' | 0.28% | 0.37% | ' |
Expected volatility (as a percent) | ' | ' | 42.70% | 50.90% | ' |
Risk-free interest rate (as a percent) | ' | ' | 1.44% | 0.67% | ' |
Expected lives | ' | ' | '5 years | '5 years | ' |
Stock options, additional disclosure | ' | ' | ' | ' | ' |
Weighted average fair value of all options granted (in dollars per share) | ' | ' | $12.08 | $7.27 | ' |
Aggregate intrinsic value of all options exercised (in dollars) | $1,748,000 | $3,224,000 | $2,419,000 | $3,488,000 | ' |
Number of Shares | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | ' | ' | 403,831 | ' | ' |
Options granted (in shares) | ' | ' | 30,000 | 52,500 | ' |
Exercised (in shares) | ' | ' | -92,106 | ' | ' |
Outstanding at the end of the period (in shares) | 341,725 | ' | 341,725 | ' | ' |
Exercisable at the end of the period (in shares) | 276,725 | ' | 276,725 | ' | 351,331 |
Weighted Average Exercise Price | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | ' | ' | $8.25 | ' | ' |
Granted (in dollars per share) | ' | ' | $31.81 | ' | ' |
Exercised (in dollars per share) | ' | ' | $6.69 | ' | ' |
Outstanding at the end of the period (in dollars per share) | $10.74 | ' | $10.74 | ' | ' |
Exercisable at the end of the period (in dollars per share) | $7.66 | ' | $7.66 | ' | $6.94 |
Acquisitions_Details
Acquisitions (Details) (USD $) | Jan. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | Jan. 07, 2014 | Jan. 07, 2014 | Jan. 07, 2014 |
Sterilator Company, Inc. | Sterilator Company, Inc. | Sterilator Company, Inc. | ||||
Crosstex' subsidiary | Crosstex' subsidiary | Crosstex' subsidiary | ||||
project | Customer relationships | Technology | ||||
Acquisitions | ' | ' | ' | ' | ' | ' |
Total consideration for the transaction | ' | ' | ' | $2,829,000 | ' | ' |
Net Assets | ' | ' | ' | ' | ' | ' |
Current assets | ' | ' | ' | 538,000 | ' | ' |
Property, plant and equipment | ' | ' | ' | 535,000 | ' | ' |
Amortizable intangible assets | ' | ' | ' | ' | 130,000 | 510,000 |
Current liabilities | ' | ' | ' | -321,000 | ' | ' |
Deferred income tax liabilities | ' | ' | ' | -260,000 | ' | ' |
Net assets acquired | ' | ' | ' | 1,132,000 | ' | ' |
Amortizable intangible assets, useful life | ' | ' | ' | '9 years | '11 years | '8 years |
Number of in-process research and development projects acquired | ' | ' | ' | 0 | ' | ' |
Goodwill | 218,677,000 | 211,618,000 | 183,655,000 | 1,697,000 | ' | ' |
Goodwill deductible for income tax purposes | ' | ' | ' | $0 | ' | ' |
Acquisitions_Details_2
Acquisitions (Details 2) (USD $) | Jan. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | Nov. 05, 2013 | Jan. 31, 2014 | Jan. 31, 2014 | Jan. 31, 2014 | Nov. 05, 2013 | Nov. 05, 2013 | Nov. 05, 2013 | Nov. 05, 2013 | Nov. 05, 2013 |
Jet Prep Ltd. | Jet Prep Ltd. | Jet Prep Ltd. | Jet Prep Ltd. | Jet Prep Ltd. | Jet Prep Ltd. | Jet Prep Ltd. | Jet Prep Ltd. | Jet Prep Ltd. | ||||
Medivators B.V. subsidiary | Medivators B.V. subsidiary | Medivators B.V. subsidiary | Medivators B.V. subsidiary | Medivators B.V. subsidiary | Medivators B.V. subsidiary | Medivators B.V. subsidiary | Medivators B.V. subsidiary | Medivators B.V. subsidiary | ||||
project | Accrued expenses | Contingent consideration | Technology | Contingent consideration, payable to sellers | Contingent consideration, payable to Israeli Government | Contingent consideration, payable to Israeli Government | Contingent consideration, payable to Israeli Government | |||||
Minimum | Maximum | |||||||||||
Acquisitions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transaction costs | ' | ' | ' | $200,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Total consideration for the transaction, excluding transaction costs | ' | ' | ' | 5,332,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Contingent consideration liability | ' | ' | ' | 4,760,000 | 4,760,000 | ' | 4,760,000 | ' | 4,760,000 | ' | ' | ' |
Period over which potential cash contingent consideration is payable | ' | ' | ' | '7 years | ' | ' | ' | ' | ' | ' | ' | ' |
Assumed contingent obligation | ' | ' | ' | 990,000 | 990,000 | 58,000 | 932,000 | ' | ' | 990,000 | ' | ' |
Increase in goodwill | ' | ' | ' | ' | ' | ' | ' | ' | 4,760,000 | 990,000 | ' | ' |
Liabilities assumed | ' | ' | ' | ' | ' | ' | ' | ' | ' | 810,000 | ' | ' |
Israeli Government's rate of return on investment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | 6 |
Net Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current assets | ' | ' | ' | 64,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Property, plant and equipment | ' | ' | ' | 65,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Amortizable intangible assets | ' | ' | ' | ' | ' | ' | ' | 5,050,000 | ' | ' | ' | ' |
Current liabilities | ' | ' | ' | -100,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred income tax liabilities | ' | ' | ' | -345,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Net assets acquired | ' | ' | ' | 4,734,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Amortizable intangible assets, useful life | ' | ' | ' | ' | ' | ' | ' | '7 years | ' | ' | ' | ' |
Number of in-process research and development projects acquired | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill | 218,677,000 | 211,618,000 | 183,655,000 | 6,348,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill deductible for income tax purposes | ' | ' | ' | $0 | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisitions_Details_3
Acquisitions (Details 3) (Siemens' Hemodialysis Water Business, Mar Cor subsidiary, USD $) | 0 Months Ended |
Mar. 22, 2013 | |
project | |
Acquisitions | ' |
Transaction costs | $362,000 |
Total consideration for the transaction, excluding transaction costs | 8,300,000 |
Net Assets | ' |
Current assets | 728,000 |
Property, plant and equipment | 231,000 |
Current liabilities | -415,000 |
Net assets acquired | 4,854,000 |
Number of in-process research and development projects acquired | 0 |
Goodwill deductible for income tax purposes | 3,446,000 |
Customer relationships | ' |
Net Assets | ' |
Amortizable intangible assets | 4,310,000 |
Amortizable intangible assets, useful life | '12 years |
Minimum | ' |
Acquisitions | ' |
Number of dialysis customers | 600 |
Revenues generated by acquiree in latest fiscal year before the business acquisition | $9,000,000 |
Acquisitions_Details_4
Acquisitions (Details 4) (Eagle Pure Water Systems, Inc., USD $) | 0 Months Ended |
Dec. 31, 2012 | |
project | |
Acquisitions | ' |
Revenues generated by acquiree in latest fiscal year before the business acquisition | $500,000 |
Consideration for the transaction | 870,000 |
Net Assets | ' |
Current assets | 8,000 |
Property, plant and equipment | 70,000 |
Current liabilities | -5,000 |
Net assets acquired | 273,000 |
Amortizable intangible assets, useful life | '3 years |
Number of in-process research and development projects acquired | 0 |
Goodwill deductible for income tax purposes | 597,000 |
Customer relationships | ' |
Net Assets | ' |
Amortizable intangible assets | 150,000 |
Amortizable intangible assets, useful life | '3 years |
Brand names | ' |
Net Assets | ' |
Amortizable intangible assets | 18,000 |
Amortizable intangible assets, useful life | '3 years |
Non-compete agreement | ' |
Net Assets | ' |
Amortizable intangible assets | $32,000 |
Amortizable intangible assets, useful life | '5 years |
Acquisitions_Details_5
Acquisitions (Details 5) (Polyp Trap, USD $) | 0 Months Ended |
Nov. 13, 2012 | |
Polyp Trap | ' |
Acquisitions | ' |
Consideration for the transaction | $486,000 |
Acquisitions_Details_6
Acquisitions (Details 6) (USD $) | Jan. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | Nov. 03, 2012 | Nov. 03, 2012 | Nov. 03, 2012 | Nov. 03, 2012 | Nov. 03, 2012 | Nov. 03, 2012 | Nov. 03, 2012 |
SPS Medical Supply Corp. and SPS manufacturing and warehouse facility | SPS Medical Supply Corp. and SPS manufacturing and warehouse facility | SPS Medical Supply Corp. and SPS manufacturing and warehouse facility | SPS Medical Supply Corp. and SPS manufacturing and warehouse facility | SPS Medical Supply Corp. and SPS manufacturing and warehouse facility | SPS Medical Supply Corp | SPS manufacturing and warehouse facility in Rochester, New York | ||||
Crosstex subsidiary | Crosstex subsidiary | Crosstex subsidiary | Crosstex subsidiary | Crosstex subsidiary | Crosstex subsidiary | Crosstex subsidiary | ||||
Customer relationships | Brand names | Technology | Non-compete agreement | |||||||
project | ||||||||||
Acquisitions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues generated by acquiree in latest fiscal year before the business acquisition | ' | ' | ' | ' | ' | ' | ' | ' | $17,500,000 | ' |
Transaction costs | ' | ' | ' | ' | ' | ' | ' | ' | 157,000 | ' |
Total consideration for the transaction, excluding transaction costs | ' | ' | ' | ' | ' | ' | ' | ' | 32,500,000 | ' |
Consideration for the transaction | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,500,000 |
Net Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current assets | ' | ' | ' | 4,810,000 | ' | ' | ' | ' | ' | ' |
Property, plant and equipment | ' | ' | ' | 3,801,000 | ' | ' | ' | ' | ' | ' |
Amortizable intangible assets | ' | ' | ' | ' | 8,120,000 | 760,000 | 500,000 | 180,000 | ' | ' |
Other assets, Noncurrent | ' | ' | ' | 28,000 | ' | ' | ' | ' | ' | ' |
Current liabilities | ' | ' | ' | -2,784,000 | ' | ' | ' | ' | ' | ' |
Noncurrent deferred income tax liabilities, net | ' | ' | ' | -3,659,000 | ' | ' | ' | ' | ' | ' |
Net assets acquired | ' | ' | ' | 11,756,000 | ' | ' | ' | ' | ' | ' |
Amortizable intangible assets, useful life | ' | ' | ' | '9 years | '10 years | '5 years | '4 years | '6 years | ' | ' |
Number of in-process research and development projects acquired | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' |
Goodwill | 218,677,000 | 211,618,000 | 183,655,000 | 24,244,000 | ' | ' | ' | ' | ' | ' |
Goodwill deductible for income tax purposes | ' | ' | ' | $0 | ' | ' | ' | ' | ' | ' |
Derivatives_Details
Derivatives (Details) (USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | |||||||||
Feb. 29, 2012 | Jan. 31, 2014 | Jan. 31, 2014 | Jan. 31, 2014 | Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2014 | Jan. 31, 2014 | Aug. 08, 2012 | Jan. 31, 2014 | Jan. 31, 2014 | Aug. 08, 2012 | Jan. 31, 2014 | |
lender | Term Loan Facility | Revolving Credit Facility | Foreign currency forward contracts | Foreign currency forward contracts | Foreign currency forward contracts | Foreign currency forward contracts | Interest rate swap agreements | Interest rate swap agreements | Interest rate swap agreements | Interest rate swap agreements | Interest rate swap agreements | Interest rate swap agreements | Interest rate swap agreements | Interest rate swap agreements | ||
Fair value hedge instruments | Fair value hedge instruments | Fair value hedge instruments | Fair value hedge instruments | Term Loan Facility | Term Loan Facility | Cash flow hedge instruments | Cash flow hedge instruments | Cash flow hedge instruments | Cash flow hedge instruments | Cash flow hedge instruments | Cash flow hedge instruments | |||||
contract | contract | Term Loan Facility | Term Loan Facility | Term Loan Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | |||||||||
One month LIBOR | One month LIBOR | |||||||||||||||
Derivatives | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of contracts | ' | ' | ' | ' | ' | ' | '1 month | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of contracts | ' | ' | ' | ' | 2 | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate value of contracts | ' | ' | ' | ' | $6,264,000 | ' | $6,264,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of renewed contracts | ' | ' | ' | ' | ' | ' | '1 month | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net currency conversion loss, net of tax | ' | ' | ' | ' | 34,000 | 29,000 | 96,000 | 44,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of existing senior lenders of debt, whose variable interest cash flows will be exchanged by the entity with fixed interest cash flows | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowing initially hedged | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40,000,000 | ' | ' | 25,000,000 | ' |
Reference rate, description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'one month LIBOR | ' | ' | 'one month LIBOR |
Quarterly reduction in borrowings hedged | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000 | ' | ' | ' | ' | ' |
Semi-annual reduction in borrowings hedged | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.66% | ' | ' | 0.50% |
Outstanding borrowings | ' | 74,500,000 | 25,000,000 | 49,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of interest rate swap recognized in interest expense | ' | ' | ' | ' | ' | ' | ' | ' | $113,000 | $113,000 | ' | ' | ' | ' | ' | ' |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 1 Months Ended | 0 Months Ended | 0 Months Ended | |||||
Feb. 29, 2012 | Nov. 05, 2013 | Jan. 31, 2014 | Jan. 31, 2014 | Jan. 31, 2014 | Nov. 05, 2013 | Jan. 31, 2014 | Nov. 05, 2013 | |
lender | Medivators B.V. subsidiary | Medivators B.V. subsidiary | Medivators B.V. subsidiary | Medivators B.V. subsidiary | Level 3 | Level 3 | Level 3 | |
Jet Prep Ltd. | Jet Prep Ltd. | Jet Prep Ltd. | Jet Prep Ltd. | Medivators B.V. subsidiary | Medivators B.V. subsidiary | Medivators B.V. subsidiary | ||
Contingent consideration | Assumed contingent obligation | Jet Prep Ltd. | Jet Prep Ltd. | Jet Prep Ltd. | ||||
item | Minimum | |||||||
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis | ' | ' | ' | ' | ' | ' | ' | ' |
Number of existing senior lenders of debt, whose variable interest cash flows will be exchanged by the entity with fixed interest cash flows | 1 | ' | ' | ' | ' | ' | ' | ' |
Contingent consideration liability | ' | $4,760,000 | $4,760,000 | ' | ' | $4,760,000 | $4,760,000 | ' |
Assumed contingent obligation | ' | 990,000 | 990,000 | ' | ' | 990,000 | 990,000 | 810,000 |
Contingent consideration period | ' | '7 years | ' | ' | ' | '7 years | ' | ' |
Discount rate of cash flow projections (as a percent) | ' | ' | ' | ' | ' | 11.50% | ' | ' |
Number of liabilities adjusted periodically by recording changes in the fair value through condensed consolidated statements of Income | ' | ' | ' | ' | ' | 2 | ' | ' |
Total potential future contingent consideration payments, low end of range | ' | ' | ' | 0 | 0 | ' | ' | ' |
Total potential future contingent consideration payments, high end of range | ' | ' | ' | $12,000,000 | $2,430,000 | ' | ' | ' |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 2) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | |
Jul. 31, 2013 | Aug. 02, 2011 | Nov. 30, 2013 | Jul. 29, 2011 | |
Recurring basis | Recurring basis | Recurring basis | ||
Level 3 | Level 3 | Level 3 | ||
Byrne Medical Business | Byrne Medical Business | Byrne Medical Business | ||
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis | ' | ' | ' | ' |
Initial contingent consideration liability | ' | $2,700,000 | ' | ' |
Initial price floor | ' | 3,000,000 | ' | ' |
Price floor period | ' | '3 years | ' | ' |
Contingent consideration period | ' | '2 years | ' | ' |
Discount rate of cash flow projections (as a percent) | ' | 14.00% | ' | ' |
Stock split ratio | 1.5 | 1.5 | ' | ' |
Stock consideration (in shares) | ' | 902,528 | ' | ' |
Stock price (in dollars per share) | ' | ' | ' | $11.08 |
Total potential future contingent consideration payments, high end of range | ' | $10,000,000 | $6,666,666 | ' |
Cantel common stock placed in escrow at the time of acquisition | ' | 902,528 | ' | ' |
Proportion of shares released from escrow | ' | ' | 0.33 | ' |
Proportion of estimated contingent consideration reduced as a result of shares released from escrow | ' | ' | 0.33 | ' |
Fair_Value_Measurements_Detail2
Fair Value Measurements (Details 3) (Recurring basis, USD $) | Jan. 31, 2014 | Jul. 31, 2013 |
Level 1 | ' | ' |
Assets: | ' | ' |
Total assets | $3,993,000 | $4,241,000 |
Level 1 | Money markets | Cash and cash equivalents | ' | ' |
Assets: | ' | ' |
Money markets | 3,993,000 | 4,241,000 |
Level 2 | ' | ' |
Liabilities: | ' | ' |
Total accrued expenses | 94,000 | 133,000 |
Total other long-term liabilities | ' | 29,000 |
Total liabilities | 113,000 | 162,000 |
Level 2 | Interest rate swap agreements | Accrued expenses | ' | ' |
Liabilities: | ' | ' |
Interest rate swap agreement | 94,000 | 133,000 |
Level 2 | Interest rate swap agreements | Other long-term liabilities | ' | ' |
Liabilities: | ' | ' |
Interest rate swap agreement | 19,000 | 29,000 |
Level 3 | ' | ' |
Liabilities: | ' | ' |
Total accrued expenses | 58,000 | ' |
Total other long-term liabilities | ' | 45,000 |
Total liabilities | 5,750,000 | 45,000 |
Level 3 | Accrued expenses | ' | ' |
Liabilities: | ' | ' |
Assumed contingent obligation | 58,000 | ' |
Level 3 | Contingent consideration | ' | ' |
Liabilities: | ' | ' |
Assumed contingent obligation | 932,000 | ' |
Contingent consideration | 4,760,000 | ' |
Level 3 | Other long-term liabilities | ' | ' |
Liabilities: | ' | ' |
Price floor | ' | 45,000 |
Total | ' | ' |
Assets: | ' | ' |
Total assets | 3,993,000 | 4,241,000 |
Liabilities: | ' | ' |
Total accrued expenses | 152,000 | 133,000 |
Total other long-term liabilities | ' | 74,000 |
Total liabilities | 5,863,000 | 207,000 |
Total | Accrued expenses | ' | ' |
Liabilities: | ' | ' |
Assumed contingent obligation | 58,000 | ' |
Total | Contingent consideration | ' | ' |
Liabilities: | ' | ' |
Assumed contingent obligation | 932,000 | ' |
Contingent consideration | 4,760,000 | ' |
Total | Other long-term liabilities | ' | ' |
Liabilities: | ' | ' |
Price floor | ' | 45,000 |
Total | Interest rate swap agreements | Accrued expenses | ' | ' |
Liabilities: | ' | ' |
Interest rate swap agreement | 94,000 | 133,000 |
Total | Interest rate swap agreements | Other long-term liabilities | ' | ' |
Liabilities: | ' | ' |
Interest rate swap agreement | 19,000 | 29,000 |
Total | Money markets | Cash and cash equivalents | ' | ' |
Assets: | ' | ' |
Money markets | $3,993,000 | $4,241,000 |
Fair_Value_Measurements_Detail3
Fair Value Measurements (Details 4) (USD $) | 3 Months Ended | 3 Months Ended | ||||||||||||||
Jan. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2013 | Apr. 30, 2013 | Jan. 31, 2013 | Oct. 31, 2012 | Jan. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2013 | Apr. 30, 2013 | Jan. 31, 2013 | Oct. 31, 2012 | Jan. 31, 2013 | Jul. 31, 2012 | Jan. 31, 2014 | Jan. 31, 2014 | |
Byrne Medical Business | Byrne Medical Business | Byrne Medical Business | Byrne Medical Business | Byrne Medical Business | Byrne Medical Business | Contingent Consideration | Contingent Consideration | Contingent Consideration | Assumed Contingent Obligation | |||||||
Three-year price floor | Three-year price floor | Three-year price floor | Three-year price floor | Three-year price floor | Three-year price floor | Byrne Medical Business | Byrne Medical Business | Jet Prep Ltd. | Jet Prep Ltd. | |||||||
Reconciliation of liability measured and recorded at fair value on a recurring basis using Level 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning balance | $1,000 | $45,000 | $255,000 | $314,000 | $2,224,000 | $2,537,000 | $1,000 | $45,000 | $255,000 | $314,000 | $724,000 | $1,037,000 | $1,500,000 | $1,500,000 | ' | ' |
Total net unrealized gains included in general and administrative expense in earnings | -1,000 | -44,000 | -210,000 | -59,000 | -1,910,000 | -313,000 | -1,000 | -44,000 | -210,000 | -59,000 | -410,000 | -313,000 | -1,500,000 | ' | ' | ' |
Net purchases, issuances, sales and settlements | 5,750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,760,000 | 990,000 |
Ending balance | $5,750,000 | $1,000 | $45,000 | $255,000 | $314,000 | $2,224,000 | ' | $1,000 | $45,000 | $255,000 | $314,000 | $724,000 | ' | $1,500,000 | $4,760,000 | $990,000 |
Fair_Value_Measurements_Detail4
Fair Value Measurements (Details 5) (USD $) | 6 Months Ended | 12 Months Ended |
Jan. 31, 2014 | Jul. 31, 2013 | |
Fair Value Measurements | ' | ' |
Impairment of long-lived assets, including goodwill and intangibles with indefinite lives | 0 | ' |
Minimum | ' | ' |
Disclosure of Fair Value of Financial Instruments | ' | ' |
Interest rate base | 'One month LIBOR | 'One month LIBOR |
Maximum | ' | ' |
Disclosure of Fair Value of Financial Instruments | ' | ' |
Interest rate base | 'Twelve month LIBOR | 'Twelve month LIBOR |
Intangible_Assets_and_Goodwill2
Intangible Assets and Goodwill (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2013 | Jul. 31, 2013 | |
Intangible assets with finite lives: | ' | ' | ' | ' | ' |
Amortization expense | $2,619,000 | $2,573,000 | $5,245,000 | $4,840,000 | ' |
Gross | 115,579,000 | ' | 115,579,000 | ' | 110,755,000 |
Accumulated Amortization | -48,344,000 | ' | -48,344,000 | ' | -44,213,000 |
Net | 67,235,000 | ' | 67,235,000 | ' | 66,542,000 |
Intangible assets with indefinite lives: | ' | ' | ' | ' | ' |
Trademarks and trade names | 9,241,000 | ' | 9,241,000 | ' | 9,387,000 |
Total intangible assets | ' | ' | ' | ' | ' |
Gross | 124,820,000 | ' | 124,820,000 | ' | 120,142,000 |
Accumulated Amortization | -48,344,000 | ' | -48,344,000 | ' | -44,213,000 |
Net | 76,476,000 | ' | 76,476,000 | ' | 75,929,000 |
Low end of range | ' | ' | ' | ' | ' |
Intangible assets with finite lives: | ' | ' | ' | ' | ' |
Estimated useful lives | ' | ' | '2 years | ' | ' |
High end of range | ' | ' | ' | ' | ' |
Intangible assets with finite lives: | ' | ' | ' | ' | ' |
Estimated useful lives | ' | ' | '20 years | ' | ' |
Weighted average | ' | ' | ' | ' | ' |
Intangible assets with finite lives: | ' | ' | ' | ' | ' |
Estimated useful lives | ' | ' | '11 years | ' | ' |
Customer relationships | ' | ' | ' | ' | ' |
Intangible assets with finite lives: | ' | ' | ' | ' | ' |
Gross | 71,949,000 | ' | 71,949,000 | ' | 72,142,000 |
Accumulated Amortization | -28,068,000 | ' | -28,068,000 | ' | -25,379,000 |
Net | 43,881,000 | ' | 43,881,000 | ' | 46,763,000 |
Total intangible assets | ' | ' | ' | ' | ' |
Accumulated Amortization | -28,068,000 | ' | -28,068,000 | ' | -25,379,000 |
Technology | ' | ' | ' | ' | ' |
Intangible assets with finite lives: | ' | ' | ' | ' | ' |
Gross | 25,954,000 | ' | 25,954,000 | ' | 21,006,000 |
Accumulated Amortization | -10,203,000 | ' | -10,203,000 | ' | -9,642,000 |
Net | 15,751,000 | ' | 15,751,000 | ' | 11,364,000 |
Total intangible assets | ' | ' | ' | ' | ' |
Accumulated Amortization | -10,203,000 | ' | -10,203,000 | ' | -9,642,000 |
Brand names | ' | ' | ' | ' | ' |
Intangible assets with finite lives: | ' | ' | ' | ' | ' |
Gross | 12,680,000 | ' | 12,680,000 | ' | 12,680,000 |
Accumulated Amortization | -8,738,000 | ' | -8,738,000 | ' | -8,045,000 |
Net | 3,942,000 | ' | 3,942,000 | ' | 4,635,000 |
Total intangible assets | ' | ' | ' | ' | ' |
Accumulated Amortization | -8,738,000 | ' | -8,738,000 | ' | -8,045,000 |
Non-compete agreements | ' | ' | ' | ' | ' |
Intangible assets with finite lives: | ' | ' | ' | ' | ' |
Gross | 3,129,000 | ' | 3,129,000 | ' | 3,159,000 |
Accumulated Amortization | -633,000 | ' | -633,000 | ' | -541,000 |
Net | 2,496,000 | ' | 2,496,000 | ' | 2,618,000 |
Total intangible assets | ' | ' | ' | ' | ' |
Accumulated Amortization | -633,000 | ' | -633,000 | ' | -541,000 |
Patents and other registrations | ' | ' | ' | ' | ' |
Intangible assets with finite lives: | ' | ' | ' | ' | ' |
Gross | 1,867,000 | ' | 1,867,000 | ' | 1,768,000 |
Accumulated Amortization | -702,000 | ' | -702,000 | ' | -606,000 |
Net | 1,165,000 | ' | 1,165,000 | ' | 1,162,000 |
Total intangible assets | ' | ' | ' | ' | ' |
Accumulated Amortization | ($702,000) | ' | ($702,000) | ' | ($606,000) |
Intangible_Assets_and_Goodwill3
Intangible Assets and Goodwill (Details 2) (USD $) | Jan. 31, 2014 |
Estimated annual amortization expense of intangible assets for next five years | ' |
Six month period ending July 31, 2014 | $5,513,000 |
Fiscal 2015 | 11,025,000 |
Fiscal 2016 | 7,786,000 |
Fiscal 2017 | 7,210,000 |
Fiscal 2018 | 6,933,000 |
Fiscal 2019 | $6,610,000 |
Intangible_Assets_and_Goodwill4
Intangible Assets and Goodwill (Details 3) (USD $) | 6 Months Ended | 12 Months Ended | 6 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jan. 31, 2014 | Jul. 31, 2013 | Jan. 31, 2014 | Jul. 31, 2012 | Jan. 31, 2014 | Jul. 31, 2013 | Jan. 31, 2014 | Jul. 31, 2013 | Jan. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | Jan. 31, 2014 | Jul. 31, 2013 | Jan. 31, 2014 | |
Endoscopy | Endoscopy | Water Purification and Filtration | Water Purification and Filtration | Healthcare Disposables | Healthcare Disposables | Dialysis | Dialysis | Dialysis | Other | Other | Specialty Packaging segment | |||
Changes in Goodwill | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | $211,618,000 | $183,655,000 | $59,230,000 | $59,230,000 | $57,179,000 | $53,288,000 | $80,108,000 | $55,864,000 | $8,133,000 | $8,133,000 | $8,133,000 | $6,968,000 | $7,140,000 | $6,438,000 |
Acquisitions | 8,045,000 | 28,287,000 | 6,348,000 | ' | ' | 4,043,000 | 1,697,000 | 24,244,000 | ' | ' | ' | ' | ' | ' |
Foreign currency translation | -986,000 | -324,000 | ' | ' | -456,000 | -152,000 | ' | ' | ' | ' | ' | -530,000 | -172,000 | ' |
Balance at the end of the period | $218,677,000 | $211,618,000 | $65,578,000 | $59,230,000 | $56,723,000 | $57,179,000 | $81,805,000 | $80,108,000 | $8,133,000 | $8,133,000 | $8,133,000 | $6,438,000 | $6,968,000 | $6,438,000 |
Assumed compounded annual sales growth impacting the impairment assessments (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.70% |
Warranties_Details
Warranties (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2013 | |
Summary of activity in warranty reserves | ' | ' | ' | ' |
Beginning balance | $1,261,000 | $1,438,000 | $1,261,000 | $1,667,000 |
Provisions | 546,000 | 336,000 | 1,237,000 | 703,000 |
Settlements | -605,000 | -542,000 | -1,296,000 | -1,138,000 |
Foreign currency translation | -1,000 | ' | -1,000 | ' |
Ending Balance | $1,201,000 | $1,232,000 | $1,201,000 | $1,232,000 |
Financing_Arrangements_Details
Financing Arrangements (Details) (USD $) | 1 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 6 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 6 Months Ended | |||||||||||||||
Feb. 29, 2012 | Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jul. 31, 2013 | Jan. 31, 2014 | Jul. 31, 2013 | Jan. 31, 2014 | Mar. 04, 2014 | Mar. 04, 2014 | Mar. 04, 2014 | Jan. 31, 2014 | Mar. 04, 2014 | Mar. 04, 2014 | Mar. 04, 2014 | Jan. 31, 2014 | Mar. 04, 2014 | Jan. 31, 2014 | Mar. 04, 2014 | Jan. 31, 2014 | Mar. 04, 2014 | Jan. 31, 2014 | Mar. 04, 2014 | Jan. 31, 2014 | Aug. 08, 2012 | Jan. 31, 2014 | Jan. 31, 2014 | Mar. 04, 2014 | Jan. 31, 2014 | Aug. 08, 2012 | Jan. 31, 2014 | Mar. 04, 2014 | Mar. 04, 2014 | Mar. 04, 2014 | |
lender | Minimum | Minimum | Maximum | Maximum | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Term Loan Facility | Term Loan Facility | Term Loan Facility | Term Loan Facility | Term Loan Facility | Borrowings of foreign currency | Letters of credit | Swing line loans | |||
Subsequent Events | Minimum | Maximum | Lender's base rate | Lender's base rate | Lender's base rate | Lender's base rate | LIBOR | LIBOR | LIBOR | LIBOR | LIBOR | LIBOR | Subsequent Events | Interest rate swap with fixed interest cash flows | Interest rate swap with fixed interest cash flows | One month LIBOR | Subsequent Events | Interest rate swap with fixed interest cash flows | Interest rate swap with fixed interest cash flows | One month LIBOR | Subsequent Events | Subsequent Events | Subsequent Events | |||||||||||
Subsequent Events | Subsequent Events | Subsequent Events | Minimum | Maximum | Subsequent Events | Minimum | Minimum | Maximum | Maximum | Cash flow hedge instruments | Cash flow hedge instruments | Interest rate swap with fixed interest cash flows | Cash flow hedge instruments | Cash flow hedge instruments | Interest rate swap with fixed interest cash flows | |||||||||||||||||||
Subsequent Events | Subsequent Events | Subsequent Events | Subsequent Events | Cash flow hedge instruments | Cash flow hedge instruments | |||||||||||||||||||||||||||||
Financing Arrangements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | $250,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $100,000,000 | $250,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | $100,000,000 | $30,000,000 | $10,000,000 |
Borrowings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000,000 | ' | ' | ' | ' | ' | ' | ' |
Term of line of credit facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum additional borrowing capacity available at the entity's option | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized debt issuance costs | ' | 619,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 90,000 | ' | ' | ' | ' | ' | ' | ' |
Additional debt issuance costs | ' | ' | ' | ' | ' | ' | ' | ' | 1,304,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Margin on reference rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.25% | ' | 0.25% | 1.25% | 1.25% | ' | ' | 1.25% | ' | 2.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reference rate, description | ' | ' | ' | 'One month LIBOR | 'One month LIBOR | 'Twelve month LIBOR | 'Twelve month LIBOR | ' | ' | ' | ' | 'lender's base rate | 'lender's base rate | ' | ' | 'LIBOR | 'LIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reference rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.325 | ' | ' | ' | ' | ' | 0.0016 | ' | 0.007 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fees on unused portion of credit facilities (as a percent) | ' | ' | ' | ' | ' | ' | ' | 0.25% | 0.20% | 0.20% | 0.40% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of existing senior lenders of debt, whose variable interest cash flows will be exchanged by the entity with fixed interest cash flows | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowing initially hedged | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | 40,000,000 | ' | ' | ' | ' |
Reference rate, description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'one month LIBOR | ' | ' | ' | ' | 'one month LIBOR | ' | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | ' | ' | ' | ' | 0.66% | ' | ' | ' |
Quarterly reduction in borrowings hedged | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000 | ' | ' | ' | ' | ' |
Semi-annual reduction in borrowings hedged | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares of foreign subsidiaries pledged as security (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 65.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding borrowings | ' | 74,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 49,500,000 | ' | ' | ' | ' | 25,000,000 | 72,000,000 | ' | ' | ' | ' | ' | ' |
Repayment of borrowings | ' | $5,000,000 | $5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,500,000 | ' | ' | ' | ' | ' | ' |
Earnings_Per_Common_Share_Deta
Earnings Per Common Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2013 | |
Numerator for basic and diluted earnings per share: | ' | ' | ' | ' |
Net income | $11,126,000 | $10,452,000 | $22,311,000 | $20,028,000 |
Less income allocated to participating securities | -149,000 | -160,000 | -309,000 | -317,000 |
Net income available to common shareholders | $10,977,000 | $10,292,000 | $22,002,000 | $19,711,000 |
Denominator for basic and diluted earnings per share, as adjusted for participating securities: | ' | ' | ' | ' |
Denominator for basic earnings per share - weighted average number of shares outstanding attributable to common stock | 40,754,707 | 40,247,046 | 40,668,731 | 40,122,245 |
Dilutive effect of stock options using the treasury stock method and the average market price for the period (in shares) | 183,995 | 314,004 | 188,201 | 338,331 |
Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock | 40,938,702 | 40,561,050 | 40,856,932 | 40,460,576 |
Basic earnings per share attributable to common stock (in dollars per share) | $0.27 | $0.26 | $0.54 | $0.49 |
Diluted earnings per share attributable to common stock (in dollars per share) | $0.27 | $0.25 | $0.54 | $0.49 |
Stock options excluded from weighted average dilutive common shares outstanding because their inclusion would have been antidilutive (in shares) | 30,000 | 52,500 | ' | ' |
Earnings_Per_Common_Share_Deta1
Earnings Per Common Share (Details 2) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2013 | |
Reconciliation of weighted average number of shares and common stock equivalents attributable to common stock, to the entity's total weighted average number of shares and common stock equivalents, including participating securities | ' | ' | ' | ' |
Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock | 40,938,702 | 40,561,050 | 40,856,932 | 40,460,576 |
Participating securities (in shares) | 554,029 | 631,364 | 576,119 | 655,627 |
Total weighted average number of shares and common stock equivalents attributable to both common stock and participating securities | 41,492,731 | 41,192,414 | 41,433,051 | 41,116,203 |
Income_Taxes_Details
Income Taxes (Details) | 6 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
Income Taxes | ' | ' |
Consolidated effective tax rate (as a percent) | 36.70% | 36.30% |
United States | ' | ' |
Income Taxes | ' | ' |
Consolidated effective tax rate (as a percent) | 37.40% | 36.80% |
Percentage of income before income taxes | 96.00% | 97.00% |
Canada, Singapore and Netherlands | ' | ' |
Income Taxes | ' | ' |
Consolidated effective tax rate (as a percent) | ' | 19.80% |
Percentage of income before income taxes | ' | 3.00% |
Canada, Singapore, Netherlands and Israel | ' | ' |
Income Taxes | ' | ' |
Consolidated effective tax rate (as a percent) | 22.10% | ' |
Percentage of income before income taxes | 4.00% | ' |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Jan. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 |
Reconciliation of the beginning and ending amounts of gross unrecognized tax benefits | ' | ' | ' |
Unrecognized tax benefits at the beginning of the period | $124,000 | $124,000 | $124,000 |
Unrecognized tax benefits at the end of the period | $124,000 | $124,000 | $124,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 6 Months Ended |
Jan. 31, 2014 | |
Long term debt | ' |
Total | $74,500,000 |
Minimum commitments under noncancelable operating leases | ' |
Remaining fiscal year | 1,902,000 |
2015 | 3,041,000 |
2016 | 2,142,000 |
2017 | 1,484,000 |
2018 | 1,261,000 |
Thereafter | 3,679,000 |
Total | 13,509,000 |
Total contractual obligations | ' |
Remaining fiscal year | 4,818,000 |
2015 | 7,913,000 |
2016 | 4,880,000 |
2017 | 4,054,000 |
2018 | 4,115,000 |
Thereafter | 82,614,000 |
Total | 108,394,000 |
Credit Facility | Weighted average | ' |
Total contractual obligations | ' |
Interest rate (as a percent) | 1.60% |
Contingent consideration | ' |
Other commitments | ' |
2015 | 170,000 |
2016 | 518,000 |
2017 | 915,000 |
2018 | 1,279,000 |
Thereafter | 2,868,000 |
Total | 5,750,000 |
Total contractual obligations | ' |
Discount rate of potential payments (as a percent) | 11.50% |
Compensation agreements | ' |
Other commitments | ' |
Remaining fiscal year | 2,293,000 |
2015 | 3,436,000 |
2016 | 988,000 |
2017 | 425,000 |
2018 | 350,000 |
Thereafter | 846,000 |
Total | 8,338,000 |
Deferred compensation and other | ' |
Other commitments | ' |
Remaining fiscal year | 28,000 |
2015 | 77,000 |
2016 | 43,000 |
2017 | 41,000 |
2018 | 36,000 |
Thereafter | 27,000 |
Total | 252,000 |
Maturity of the credit facility | ' |
Long term debt | ' |
Thereafter | 74,500,000 |
Total | 74,500,000 |
Expected interest payments under the credit facility | ' |
Total contractual obligations | ' |
Remaining fiscal year | 595,000 |
2015 | 1,189,000 |
2016 | 1,189,000 |
2017 | 1,189,000 |
2018 | 1,189,000 |
Thereafter | 694,000 |
Total | $6,045,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 2) (Jet Prep Ltd., Medivators B.V. subsidiary, USD $) | 0 Months Ended | |
Nov. 05, 2013 | Jan. 31, 2014 | |
Jet Prep Ltd. | Medivators B.V. subsidiary | ' | ' |
Long-Term Contractual Obligations | ' | ' |
Contingent consideration liability | $4,760,000 | $4,760,000 |
Assumed contingent obligation | $990,000 | $990,000 |
Period over which potential cash contingent consideration is payable | '7 years | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2013 | |
Components and changes in accumulated other comprehensive income (loss) | ' | ' | ' | ' |
Balance at the beginning of the period | $10,713,000 | $8,289,000 | $10,977,000 | $8,175,000 |
Other comprehensive income (loss) before reclassifications | -1,415,000 | 93,000 | -1,721,000 | 197,000 |
Income tax effect on other comprehensive income (loss) before reclassifications | 5,000 | -27,000 | 17,000 | -51,000 |
Reclassification adjustments to interest expense for losses on interest rate swaps included in net income during the period | 48,000 | 61,000 | 96,000 | 116,000 |
Reclassification adjustments for ineffective hedge on interest rate swap included in net income during the period | 113,000 | ' | 113,000 | ' |
Income tax effect on reclassification adjustments | -58,000 | -21,000 | -76,000 | -42,000 |
Balance at the end of the period | 9,406,000 | 8,395,000 | 9,406,000 | 8,395,000 |
Foreign Currency Translation Adjustments | ' | ' | ' | ' |
Components and changes in accumulated other comprehensive income (loss) | ' | ' | ' | ' |
Balance at the beginning of the period | 10,807,000 | 8,476,000 | 11,080,000 | 8,385,000 |
Other comprehensive income (loss) before reclassifications | -1,401,000 | 89,000 | -1,674,000 | 211,000 |
Income tax effect on other comprehensive income (loss) before reclassifications | ' | -25,000 | ' | -56,000 |
Balance at the end of the period | 9,406,000 | 8,540,000 | 9,406,000 | 8,540,000 |
Interest Rate Swap Agreements | ' | ' | ' | ' |
Components and changes in accumulated other comprehensive income (loss) | ' | ' | ' | ' |
Balance at the beginning of the period | -94,000 | -187,000 | -103,000 | -210,000 |
Other comprehensive income (loss) before reclassifications | -14,000 | 4,000 | -47,000 | -14,000 |
Income tax effect on other comprehensive income (loss) before reclassifications | 5,000 | -2,000 | 17,000 | 5,000 |
Reclassification adjustments to interest expense for losses on interest rate swaps included in net income during the period | 48,000 | 61,000 | 96,000 | 116,000 |
Reclassification adjustments for ineffective hedge on interest rate swap included in net income during the period | 113,000 | ' | 113,000 | ' |
Income tax effect on reclassification adjustments | -58,000 | -21,000 | -76,000 | -42,000 |
Balance at the end of the period | ' | ($145,000) | ' | ($145,000) |
Operating_Segments_Details
Operating Segments (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2013 | |
Concentration risk | ' | ' | ' | ' |
Consolidated net sales | $119,042,000 | $106,363,000 | $237,314,000 | $206,044,000 |
Water Purification and Filtration | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' |
Consolidated net sales | 40,719,000 | 32,369,000 | 80,469,000 | 65,530,000 |
Dialysis | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' |
Consolidated net sales | 7,611,000 | 8,760,000 | 14,920,000 | 16,947,000 |
Healthcare Disposables | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' |
Consolidated net sales | 24,716,000 | 24,339,000 | 50,965,000 | 44,294,000 |
Segment sales | Customer concentration | Water Purification and Filtration | DaVita | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' |
Concentration risk (as a percent) | ' | ' | 25.30% | ' |
Segment sales | Customer concentration | Water Purification and Filtration | Another large customer | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' |
Concentration risk (as a percent) | ' | ' | 21.90% | ' |
Segment sales | Customer concentration | Dialysis | DaVita | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' |
Concentration risk (as a percent) | ' | ' | 37.60% | ' |
Segment sales | Customer concentration | Healthcare Disposables | Four customers | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' |
Number of customers concentration risk | ' | ' | 4 | ' |
Concentration risk (as a percent) | ' | ' | 52.30% | ' |
Net sales | Customer concentration | DaVita | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' |
Concentration risk (as a percent) | ' | ' | 10.90% | 10.30% |
Consolidated net sales | ' | ' | $25,948,000 | $21,290,000 |
Net sales | Customer concentration | DaVita and another large customer | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' |
Number of customers concentration risk | ' | ' | 2 | ' |
Concentration risk (as a percent) | ' | ' | 18.30% | ' |
Net sales | Customer concentration | Four customers | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' |
Number of customers concentration risk | ' | ' | 4 | ' |
Concentration risk (as a percent) | ' | ' | 11.20% | ' |
Operating_Segments_Details_2
Operating Segments (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2013 | |
Information as to operating segments | ' | ' | ' | ' |
Net sales | $119,042,000 | $106,363,000 | $237,314,000 | $206,044,000 |
Operating income | 18,209,000 | 16,863,000 | 36,521,000 | 32,835,000 |
Interest expense, net | -630,000 | -775,000 | -1,274,000 | -1,408,000 |
Income before income taxes | 17,579,000 | 16,088,000 | 35,247,000 | 31,427,000 |
Operating Segments | ' | ' | ' | ' |
Information as to operating segments | ' | ' | ' | ' |
Operating income | 22,116,000 | 20,334,000 | 43,845,000 | 39,117,000 |
General corporate expenses | ' | ' | ' | ' |
Information as to operating segments | ' | ' | ' | ' |
Operating income | -3,907,000 | -3,471,000 | -7,324,000 | -6,282,000 |
Endoscopy | ' | ' | ' | ' |
Information as to operating segments | ' | ' | ' | ' |
Net sales | 44,587,000 | 39,422,000 | 88,200,000 | 76,101,000 |
Operating income | 8,218,000 | 9,469,000 | 16,402,000 | 17,145,000 |
Water Purification and Filtration | ' | ' | ' | ' |
Information as to operating segments | ' | ' | ' | ' |
Net sales | 40,719,000 | 32,369,000 | 80,469,000 | 65,530,000 |
Operating income | 7,108,000 | 3,719,000 | 13,165,000 | 8,346,000 |
Healthcare Disposables | ' | ' | ' | ' |
Information as to operating segments | ' | ' | ' | ' |
Net sales | 24,716,000 | 24,339,000 | 50,965,000 | 44,294,000 |
Operating income | 4,563,000 | 4,709,000 | 10,282,000 | 8,800,000 |
Dialysis | ' | ' | ' | ' |
Information as to operating segments | ' | ' | ' | ' |
Net sales | 7,611,000 | 8,760,000 | 14,920,000 | 16,947,000 |
Operating income | 1,996,000 | 2,312,000 | 3,760,000 | 4,488,000 |
Other | ' | ' | ' | ' |
Information as to operating segments | ' | ' | ' | ' |
Net sales | 1,409,000 | 1,473,000 | 2,760,000 | 3,172,000 |
Operating income | $231,000 | $125,000 | $236,000 | $338,000 |