Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Aug. 29, 2014 | Jan. 31, 2014 | |
Document and Entity Information | ' | ' | ' |
Entity Registrant Name | 'CANTEL MEDICAL CORP | ' | ' |
Entity Central Index Key | '0000019446 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Jul-14 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--07-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $1,076,240,423 |
Entity Common Stock, Shares Outstanding | ' | 41,451,139 | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Jul. 31, 2014 | Jul. 31, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents | $31,781,000 | $34,076,000 |
Accounts receivable, net of allowance for doubtful accounts of $1,874 in 2014 and $1,265 in 2013 | 62,225,000 | 52,753,000 |
Inventories | 59,737,000 | 54,167,000 |
Deferred income taxes | 3,551,000 | 4,129,000 |
Prepaid expenses and other current assets | 6,615,000 | 4,428,000 |
Income taxes receivable | ' | 1,107,000 |
Total current assets | 163,909,000 | 150,660,000 |
Property and equipment, at cost: | ' | ' |
Land, buildings and improvements | 32,774,000 | 30,088,000 |
Furniture and equipment | 70,694,000 | 63,461,000 |
Leasehold improvements | 4,492,000 | 3,397,000 |
Property and equipment, gross | 107,960,000 | 96,946,000 |
Less accumulated depreciation and amortization | -55,242,000 | -50,481,000 |
Property and equipment, net | 52,718,000 | 46,465,000 |
Intangible assets, net | 82,952,000 | 75,929,000 |
Goodwill | 231,647,000 | 211,618,000 |
Other assets | 4,919,000 | 2,999,000 |
Total assets | 536,145,000 | 487,671,000 |
Current liabilities: | ' | ' |
Current portion of long-term debt | ' | 10,000,000 |
Accounts payable | 19,529,000 | 13,322,000 |
Compensation payable | 14,866,000 | 14,032,000 |
Accrued expenses | 15,109,000 | 10,417,000 |
Deferred revenue | 16,102,000 | 11,380,000 |
Income taxes payable | 893,000 | ' |
Total current liabilities | 66,499,000 | 59,151,000 |
Long-term debt | 80,500,000 | 85,000,000 |
Deferred income taxes | 17,805,000 | 21,186,000 |
Contingent consideration | 2,722,000 | 45,000 |
Other long-term liabilities | 3,373,000 | 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; issued 2014 - 45,641,688 shares, outstanding 2014 - 41,442,260 shares; issued 2013 - 45,181,655 shares, outstanding 2013 - 41,138,121 shares | 4,564,000 | 4,518,000 |
Additional paid-in capital | 146,048,000 | 134,853,000 |
Retained earnings | 243,306,000 | 203,762,000 |
Accumulated other comprehensive income | 9,552,000 | 10,977,000 |
Treasury Stock, 2014 - 4,199,428 shares at cost; 2013 - 4,043,534 shares at cost | -38,224,000 | -32,978,000 |
Total stockholders' equity | 365,246,000 | 321,132,000 |
Total liabilities and stockholders' equity | $536,145,000 | $487,671,000 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Jul. 31, 2014 | Jul. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS | ' | ' |
Accounts receivable, allowance for doubtful accounts (in dollars) | $1,874 | $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 | 45,641,688 | 45,181,655 |
Common Stock, shares outstanding | 41,442,260 | 41,138,121 |
Treasury Stock, shares | 4,199,428 | 4,043,534 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Net sales | ' | ' | ' |
Product sales | $434,531,000 | $383,520,000 | $348,132,000 |
Product service | 54,218,000 | 41,506,000 | 38,358,000 |
Total net sales | 488,749,000 | 425,026,000 | 386,490,000 |
Cost of sales | ' | ' | ' |
Product sales | 236,429,000 | 210,433,000 | 193,668,000 |
Product service | 39,021,000 | 31,117,000 | 28,655,000 |
Total cost of sales | 275,450,000 | 241,550,000 | 222,323,000 |
Gross profit | 213,299,000 | 183,476,000 | 164,167,000 |
Expenses: | ' | ' | ' |
Selling | 66,519,000 | 57,786,000 | 55,166,000 |
General and administrative | 65,039,000 | 53,182,000 | 47,623,000 |
Research and development | 10,813,000 | 9,320,000 | 9,254,000 |
Total operating expenses | 142,371,000 | 120,288,000 | 112,043,000 |
Income before interest, other expense and income taxes | 70,928,000 | 63,188,000 | 52,124,000 |
Interest expense | 2,380,000 | 2,895,000 | 3,732,000 |
Interest income | -63,000 | -61,000 | -82,000 |
Other expense | ' | ' | 605,000 |
Income before income taxes | 68,611,000 | 60,354,000 | 47,869,000 |
Income taxes | 25,346,000 | 21,115,000 | 16,532,000 |
Net income | $43,265,000 | $39,239,000 | $31,337,000 |
Earnings per common share: | ' | ' | ' |
Basic (in dollars per share) | $1.05 | $0.96 | $0.78 |
Diluted (in dollars per share) | $1.04 | $0.95 | $0.77 |
Dividends per common share (in dollars per share) | $0.09 | $0.07 | $0.06 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ' | ' | ' |
Net income | $43,265,000 | $39,239,000 | $31,337,000 |
Other comprehensive (loss) income: | ' | ' | ' |
Foreign currency translation, net of tax | -1,528,000 | 2,695,000 | -898,000 |
Unrealized holding losses on interest rate swaps arising during the year, net of tax | -30,000 | -32,000 | -210,000 |
Reclassification adjustments to interest expense for losses on interest rate swaps included in net income during the year, net of tax | 60,000 | 139,000 | ' |
Reclassification adjustments to interest expense for ineffective hedge on interest rate swap included in net income during the year, net of tax | 73,000 | ' | ' |
Total other comprehensive (loss) income, net of tax | -1,425,000 | 2,802,000 | -1,108,000 |
Comprehensive income | $41,840,000 | $42,041,000 | $30,229,000 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Treasury Stock, at Cost |
Balance at Jul. 31, 2011 | $234,315,000 | $4,311,000 | $108,340,000 | $138,725,000 | $9,283,000 | ($26,344,000) |
Balance (in shares) at Jul. 31, 2011 | ' | 38,865,219 | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Exercises of options | 2,372,000 | 56,000 | 4,200,000 | ' | ' | -1,884,000 |
Exercises of options (in shares) | ' | 562,728 | ' | ' | ' | ' |
Issuance for Byrne Acquisition | 7,640,000 | 90,000 | 7,550,000 | ' | ' | ' |
Issuance for Byrne Acquisition (in shares) | ' | 902,528 | ' | ' | ' | ' |
Stock-split fractional share adjustment | -3,000 | ' | -3,000 | ' | ' | ' |
Stock-split fractional share adjustment (in shares) | ' | -204 | ' | ' | ' | ' |
Repurchases of shares | -1,904,000 | ' | ' | ' | ' | -1,904,000 |
Repurchases of shares (in shares) | ' | -133,034 | ' | ' | ' | ' |
Stock-based compensation | 3,840,000 | ' | 3,840,000 | ' | ' | ' |
Issuance of restricted stock | ' | 52,000 | -68,000 | ' | ' | 16,000 |
Issuance of restricted stock (in shares) | ' | 536,859 | ' | ' | ' | ' |
Cancellations of restricted stock | ' | -9,000 | 9,000 | ' | ' | ' |
Cancellations of restricted stock (in shares) | ' | -83,003 | ' | ' | ' | ' |
Excess tax benefit from exercises of stock options and vesting of restricted stock | 1,970,000 | ' | 1,970,000 | ' | ' | ' |
Dividends on common stock | -2,523,000 | ' | ' | -2,523,000 | ' | ' |
Net income | 31,337,000 | ' | ' | 31,337,000 | ' | ' |
Other comprehensive income (loss) | -1,108,000 | ' | ' | ' | -1,108,000 | ' |
Balance at Jul. 31, 2012 | 275,936,000 | 4,500,000 | 125,838,000 | 167,539,000 | 8,175,000 | -30,116,000 |
Balance (in shares) at Jul. 31, 2012 | ' | 40,651,093 | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Exercises of options | 1,817,000 | 18,000 | 2,606,000 | ' | ' | -807,000 |
Exercises of options (in shares) | ' | 412,279 | ' | ' | ' | ' |
Stock-split fractional share adjustment | -2,000 | ' | -2,000 | ' | ' | ' |
Stock-split fractional share adjustment (in shares) | ' | -92 | ' | ' | ' | ' |
Repurchases of shares | -2,252,000 | ' | ' | ' | ' | -2,252,000 |
Repurchases of shares (in shares) | ' | -121,399 | ' | ' | ' | ' |
Stock-based compensation | 3,733,000 | ' | 3,733,000 | ' | ' | ' |
Issuance of restricted stock | ' | 1,000 | -198,000 | ' | ' | 197,000 |
Issuance of restricted stock (in shares) | ' | 210,484 | ' | ' | ' | ' |
Cancellations of restricted stock | ' | -1,000 | 1,000 | ' | ' | ' |
Cancellations of restricted stock (in shares) | ' | -14,244 | ' | ' | ' | ' |
Excess tax benefit from exercises of stock options and vesting of restricted stock | 2,875,000 | ' | 2,875,000 | ' | ' | ' |
Dividends on common stock | -3,016,000 | ' | ' | -3,016,000 | ' | ' |
Net income | 39,239,000 | ' | ' | 39,239,000 | ' | ' |
Other comprehensive income (loss) | 2,802,000 | ' | ' | ' | 2,802,000 | ' |
Balance at Jul. 31, 2013 | 321,132,000 | 4,518,000 | 134,853,000 | 203,762,000 | 10,977,000 | -32,978,000 |
Balance (in shares) at Jul. 31, 2013 | 41,138,121 | 41,138,121 | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Exercises of options | 634,000 | 21,000 | 1,420,000 | ' | ' | -807,000 |
Exercises of options (in shares) | ' | 187,468 | ' | ' | ' | ' |
Repurchases of shares | -4,439,000 | ' | ' | ' | ' | -4,439,000 |
Repurchases of shares (in shares) | ' | -132,023 | ' | ' | ' | ' |
Stock-based compensation | 5,409,000 | ' | 5,409,000 | ' | ' | ' |
Issuance of restricted stock | ' | 26,000 | -26,000 | ' | ' | ' |
Issuance of restricted stock (in shares) | ' | 258,760 | ' | ' | ' | ' |
Cancellations of restricted stock | ' | -1,000 | 1,000 | ' | ' | ' |
Cancellations of restricted stock (in shares) | ' | -10,066 | ' | ' | ' | ' |
Excess tax benefit from exercises of stock options and vesting of restricted stock | 4,391,000 | ' | 4,391,000 | ' | ' | ' |
Dividends on common stock | -3,721,000 | ' | ' | -3,721,000 | ' | ' |
Net income | 43,265,000 | ' | ' | 43,265,000 | ' | ' |
Other comprehensive income (loss) | -1,425,000 | ' | ' | ' | -1,425,000 | ' |
Balance at Jul. 31, 2014 | $365,246,000 | $4,564,000 | $146,048,000 | $243,306,000 | $9,552,000 | ($38,224,000) |
Balance (in shares) at Jul. 31, 2014 | 41,442,260 | 41,442,260 | ' | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Cash flows from operating activities | ' | ' | ' |
Net income | $43,265,000 | $39,239,000 | $31,337,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Depreciation | 8,245,000 | 7,202,000 | 6,801,000 |
Amortization | 10,641,000 | 10,061,000 | 9,124,000 |
Stock-based compensation expense | 5,409,000 | 3,733,000 | 3,840,000 |
Amortization of debt issuance costs | 440,000 | 345,000 | 373,000 |
Loss on disposal of fixed assets | 501,000 | 184,000 | 105,000 |
Impairment of convertible notes receivable | ' | ' | 605,000 |
Deferred income taxes | -1,218,000 | -368,000 | 370,000 |
Excess tax benefits from stock-based compensation | -4,391,000 | -2,875,000 | -1,970,000 |
Changes in assets and liabilities, net of assets acquired and liabilities assumed: | ' | ' | ' |
Accounts receivable | -6,149,000 | -2,447,000 | 2,307,000 |
Inventories | -2,658,000 | -5,262,000 | -2,227,000 |
Prepaid expenses and other current assets | -2,388,000 | -1,387,000 | -345,000 |
Accounts payable and other current liabilities | 6,424,000 | -1,561,000 | -177,000 |
Income taxes | 6,151,000 | 4,630,000 | 437,000 |
Net cash provided by operating activities | 64,272,000 | 51,494,000 | 50,580,000 |
Cash flows from investing activities | ' | ' | ' |
Capital expenditures | -13,541,000 | -6,745,000 | -5,502,000 |
Proceeds from disposal of fixed assets | 14,000 | 32,000 | 9,000 |
Acquisition of Byrne | ' | ' | -95,261,000 |
Acquisition of ConFirm | ' | ' | -855,000 |
Acquisition of Gambro | ' | ' | -1,550,000 |
Acquisition of SPS, net of cash acquired | ' | -35,415,000 | ' |
Acquisition of Polyp Trap | ' | -486,000 | ' |
Acquisition of Eagle Pure Water | ' | -870,000 | ' |
Acquisition of Siemens Water | ' | -8,300,000 | ' |
Acquisition of Jet Prep, net of cash acquired | -5,332,000 | ' | ' |
Acquisition of Sterilator, net of cash acquired | -2,829,000 | ' | ' |
Acquisition of PuriCore, net of cash acquired | -25,386,000 | ' | ' |
Other, net | -358,000 | -262,000 | 44,000 |
Net cash used in investing activities | -47,432,000 | -52,046,000 | -103,115,000 |
Cash flows from financing activities | ' | ' | ' |
Borrowings under term loan facility, net of debt issuance costs | ' | ' | 49,647,000 |
Borrowings under revolving credit facility, net of debt issuance costs | 28,000,000 | 45,000,000 | 46,941,000 |
Repayments under term loan facility | -5,000,000 | -10,000,000 | -10,000,000 |
Repayments under revolving credit facility | -37,500,000 | -30,000,000 | -22,000,000 |
Debt modification costs | -1,314,000 | ' | ' |
Proceeds from exercises of stock options | 634,000 | 1,817,000 | 2,372,000 |
Dividends paid | -3,721,000 | -3,016,000 | -2,523,000 |
Excess tax benefits from stock-based compensation | 4,391,000 | 2,875,000 | 1,970,000 |
Repurchases of shares | -4,439,000 | -2,252,000 | -1,904,000 |
Net cash (used in) provided by financing activities | -18,949,000 | 4,424,000 | 64,503,000 |
Effect of exchange rate changes on cash and cash equivalents | -186,000 | 18,000 | -192,000 |
(Decrease) increase in cash and cash equivalents | -2,295,000 | 3,890,000 | 11,776,000 |
Cash and cash equivalents at beginning of year | 34,076,000 | 30,186,000 | 18,410,000 |
Cash and cash equivalents at end of year | $31,781,000 | $34,076,000 | $30,186,000 |
Business_Description
Business Description | 12 Months Ended |
Jul. 31, 2014 | |
Business Description | ' |
Business Description | ' |
1. Business Description | |
Cantel Medical Corp. (“Cantel”) is a leading provider of infection prevention and control products and services in the healthcare market, specializing in the following operating segments: | |
· Endoscopy: Medical device reprocessing systems, disinfectants, detergents and other supplies used to high-level disinfect flexible endoscopes. 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 (GI) endoscopy procedures. Additionally, this segment includes technical maintenance service on its products. | |
· Water Purification and Filtration: Water purification equipment and services, filtration and separation products, and disinfectants for the medical, pharmaceutical, biotech, beverage and commercial industrial markets and disinfectants and decontamination services used in various applications for infection prevention and control. | |
· Healthcare Disposables: Single-use, infection prevention and control products used principally in the dental market including face masks, self-sealing sterilization pouches, towels and bibs, tray covers, saliva ejectors, germicidal wipes, plastic cups and disinfectants. This segment also manufactures and provides biological and chemical indicators for sterility assurance monitoring services in the acute-care, alternate-care and dental markets. | |
· Dialysis: Medical device reprocessing systems, sterilants/disinfectants, dialysate concentrates and other supplies for renal dialysis. | |
· Specialty Packaging: Specialty packaging and thermal control products, as well as related compliance training, for the transport of infectious and biological specimens and thermally sensitive pharmaceutical, medical and other products. (The Specialty Packaging operating segment is reported in the Other reporting segment.) | |
Most of our equipment, consumables and supplies are used to help prevent or control the occurrence or spread of infections. | |
We currently operate our five operating segments through wholly-owned subsidiaries in the United States and internationally. Our principal operating subsidiaries in the United States are Medivators Inc., Mar Cor Purification, Inc., Crosstex International and SPS Medical Supply Corp. Internationally, our primary operating subsidiaries include Cantel Medical (UK) Limited, Cantel Medical Asia/Pacific Ltd., Biolab Equipment Ltd., Saf-T-Pak Inc. and Medivators B.V. | |
On June 30, 2014, we acquired all the issued and outstanding capital stock of PuriCore International Limited (“PuriCore”), as more fully described in Note 3 to the Consolidated Financial Statements, (the “PuriCore Acquisition”). The PuriCore Acquisition had an insignificant effect on our consolidated results of operations in fiscal 2014 subsequent to its acquisition date due to the date of the acquisition being near our year end and is not reflected in our consolidated results of operations in fiscals 2013 and 2012. PuriCore is included in our Endoscopy segment. Subsequent to its acquisition, we changed the name of PuriCore to Cantel Medical (UK) Limited. | |
On January 7, 2014, we acquired all the issued and outstanding stock of Sterilator Company, Inc. (“Sterilator”), as more fully described in Note 3 to the Consolidated Financial Statements (the “Sterilator Acquisition”). The Sterilator Acquisition had an insignificant effect on our consolidated results of operations in fiscal 2014 subsequent to its acquisition date due to the small size of this business (the “Sterilator Business”) and is not reflected in our consolidated results of operations in fiscals 2013 and 2012. The Sterilator Business is included in our Healthcare Disposables segment. | |
On November 5, 2013, we acquired all the issued and outstanding capital stock of Jet Prep Ltd. (“Jet Prep”), as more fully described in Note 3 to the Consolidated Financial Statements (the “Jet Prep Acquisition”). The Jet Prep Acquisition did not have a significant effect on our consolidated results of operations in fiscal 2014 subsequent to its acquisition date due to the small size of this business (the “Jet Prep Business”) and is not reflected in our consolidated results of operations in fiscals 2013 and 2012. The Jet Prep Business is included in our Endoscopy segment. | |
On March 22, 2013, we 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”), as more fully described in Note 3 to the Consolidated Financial Statements (the “Siemens Water Acquisition”). Due to the size of this business in relation to our overall consolidated results of operations, the Siemens Water Acquisition did not have a significant impact on our consolidated results of operations in fiscals 2014 and 2013 and is not reflected in our consolidated results of operations in fiscal 2012. The Siemens Water Business is included in our Water Purification and Filtration segment. | |
On December 31, 2012, we acquired certain net assets of Eagle Pure Water Systems, Inc. (“Eagle Pure Water”), as more fully described in Note 3 to the Consolidated Financial Statements (the “Eagle Pure Water Acquisition”). The Eagle Pure Water Acquisition, which had an insignificant effect on our consolidated results of operations due to the small size of the business (the “Eagle Pure Water Business”), is reflected in our consolidated results of operations in fiscal 2014 and the portion of fiscal 2013 subsequent to its acquisition date and is not reflected in our results of operations in fiscal 2012. The Eagle Pure Water Business is included in our Water Purification and Filtration segment. | |
On November 1, 2012, we acquired all the issued and outstanding stock of SPS Medical, as more fully described in Note 3 to the Consolidated Financial Statements (the “SPS Acquisition”). The results of operations of SPS Medical are included in our consolidated results of operations in fiscal 2014 and the portion of fiscal 2013 subsequent to its acquisition date and is not reflected in our consolidated results of operations in fiscal 2012. The business of SPS Medical (the “SPS Business”) is included in our Healthcare Disposables segment. | |
Throughout this document, references to “Cantel,” “us,” “we,” “our,” and the “Company” are references to Cantel Medical Corp. and its subsidiaries, except where the context makes it clear the reference is to Cantel itself and not its subsidiaries. | |
Subsequent Events | |
We performed a review of events subsequent to July 31, 2014. Based upon that review, no subsequent events occurred that required updating to our Consolidated Financial Statements or disclosures. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended |
Jul. 31, 2014 | |
Summary of Significant Accounting Policies | ' |
Summary of Significant Accounting Policies | ' |
2. Summary of Significant Accounting Policies | |
The following is a summary of our significant accounting policies used to prepare our Consolidated Financial Statements. | |
Principles of Consolidation | |
The Consolidated Financial Statements include the accounts of Cantel and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. | |
Revenue Recognition | |
Revenue on product sales is recognized as products are shipped to customers and title passes. The passing of title is determined based upon the FOB terms specified for each shipment. With respect to endoscopy, dialysis and specialty packaging products, shipment terms are generally FOB origin for common carrier and when our distribution fleet is utilized (except for one large customer in dialysis whereby all products are shipped FOB destination). With respect to water purification and filtration and healthcare disposable products, shipment terms may be either FOB origin or destination. Customer acceptance for the majority of our product sales occurs at the time of delivery. With respect to a portion of water purification and filtration product sales, equipment is sold as part of a system for which the equipment is functionally interdependent or the customer’s purchase order specifies “ship-complete” as a condition of delivery; revenue recognition on such sales is deferred until all equipment has been delivered, or post-delivery obligations such as installation have been substantially fulfilled such that the products are deemed functional by the end-user. | |
A portion of our endoscopy, water purification and filtration and dialysis sales are recognized as multiple element arrangements, whereby revenue is allocated to the equipment, installation and consumable components based upon vendor specific objective evidence, which includes comparable historical transactions of similar equipment, installation and consumables sold as stand-alone components. If vendor-specific objective evidence of selling price is not available, we allocate revenue to the elements of the bundled arrangement using the estimated selling price method in order to qualify the components as separate units of accounting. Revenue on the equipment and consumable components are recognized as the equipment or consumable is shipped to customers and title passes. Revenue on the installation component is recognized when the installation is complete. | |
A portion of our healthcare disposables sales relating to the mail-in spore test kit is recorded as deferred revenue when initially sold. We recognize the revenue on these test kits using an estimate based on historical experience of the amount of time that elapses from the point of sale to when the kit is returned to us and we communicate to the customer the results of the required laboratory test. The related cost of the kits is recorded in inventory and recognized in cost of sales as the revenue is earned. | |
Revenue on service sales is recognized when repairs are completed at the customer’s location or when repairs are completed at our facilities and the products are shipped to customers. With respect to certain service contracts in our Endoscopy and Water Purification and Filtration operating segments, service revenue is recognized on a straight-line basis over the contractual term of the arrangement. All shipping and handling fees invoiced to customers, such as freight, are recorded as revenue (and related costs are included within cost of sales) at the time the sale is recognized. | |
None of our sales contain right-of-return provisions. Customer claims for credit or return due to damage, defect, shortage or other reason must be pre-approved by us before credit is issued or such product is accepted for return. No cash discounts for early payment are offered except with respect to a small portion of our sales of dialysis, healthcare disposable, endoscopy and water purification and filtration products. We do not offer price protection, although advance pricing contracts or required notice periods prior to implementation of price increases exist for certain customers with respect to many of our products. With respect to certain of our dialysis, healthcare disposables, water purification and filtration and endoscopy customers, rebates are provided; such rebates, which consist primarily of volume rebates, are provided for as a reduction of sales at the time of revenue recognition and amounted to $4,498,000, $4,277,000 and $3,836,000 in fiscals 2014, 2013 and 2012, respectively. Such allowances are determined based on estimated projections of sales volume for the entire rebate periods. If it becomes known that sales volume to customers will deviate from original projections, the rebate provisions originally established would be adjusted accordingly. | |
Our endoscopy products and services are sold directly to hospitals and other end-users in the United States and primarily to distributors internationally except for the United Kingdom where we began selling directly to hospitals and other end-users subsequent to June 30, 2014 due to the PuriCore Acquisition; water purification and filtration products and services are sold directly to hospitals, dialysis clinics, pharmaceutical and biotechnology companies, laboratories, medical products and service companies and other end-users as well as through third-party distributors; the majority of our healthcare disposable products are sold to third party distributors and with respect to some of our sterility assurance products, to hospitals, surgery centers, physician and dental offices, dental schools, medical research companies, laboratories and other end-users; the majority of our dialysis products are sold to dialysis clinics and hospitals; and specialty packaging products are sold to third-party distributors, medical research companies, laboratories, pharmaceutical companies, hospitals, government agencies and other end-users. Sales to all of these customers follow our revenue recognition policies. | |
Translation of Foreign Currency Financial Statements | |
Assets and liabilities of our foreign subsidiaries are translated into United States dollars at year-end exchange rates; sales and expenses are translated using average exchange rates during the year. The cumulative effect of the translation of the accounts of the foreign subsidiaries is presented as a component of accumulated other comprehensive income or loss. Foreign exchange gains and losses related to the purchase of inventories denominated in foreign currencies are included in cost of sales and foreign exchange gains and losses related to the incurrence of operating costs denominated in foreign currencies and the conversion of foreign assets and liabilities into functional currencies are included in general and administrative expenses. | |
Cash and Cash Equivalents | |
We consider all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. | |
Accounts Receivable and Allowance for Doubtful Accounts | |
Accounts receivable consist of amounts due to us from normal business activities. Allowances for doubtful accounts are reserves for the estimated loss from the inability of customers to make required payments. We use historical experience as well as current market information in determining the estimate. While actual losses have historically been within management’s expectations and provisions established, if the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Alternatively, if certain customers paid their delinquent receivables, reductions in allowances may be required. | |
Inventories | |
Inventories consist of raw materials, work-in-process and finished products which are sold in the ordinary course of our business and are stated at the lower of cost (first-in, first-out) or market. In assessing the value of inventories, we must make estimates and judgments regarding reserves required for product obsolescence, aging of inventories and other issues potentially affecting the saleable condition of products. In performing such evaluations, we use historical experience as well as current market information. With few exceptions, the saleable value of our inventories has historically been within management’s expectation and provisions established, however, rapid changes in the market due to competition, technology and various other factors could have an adverse effect on the saleable value of our inventories, resulting in the need for additional reserves. | |
Property and Equipment | |
Property and equipment are stated at cost. Additions and improvements are capitalized, while maintenance and repair costs are expensed. When assets are retired or otherwise disposed, the cost and related accumulated depreciation or amortization is removed from the respective accounts and any resulting gain or loss is included in income. Depreciation and amortization is provided on the straight-line method over the estimated useful lives of the assets which generally range from 2-15 years for furniture and equipment, 5-32 years for buildings and improvements and the shorter of the life of the asset or the life of the lease for leasehold improvements. Depreciation and amortization expense related to property and equipment in fiscals 2014, 2013 and 2012 was $8,245,000, $7,202,000 and $6,801,000, respectively. | |
Goodwill and Intangible Assets | |
Certain of our identifiable intangible assets, including customer relationships, technology, brand names, non-compete agreements and patents, are amortized using the straight-line method over their estimated useful lives which range from 2 to 20 years. Additionally, we have recorded goodwill and trademarks and trade names, all of which have indefinite useful lives and are therefore not amortized. All of our intangible assets and goodwill are reviewed for impairment 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. Our management is responsible for determining if impairment exists and considers a number of factors, including third-party valuations, when making these determinations. | |
In accordance with Accounting Standards Update (“ASU”) 2011-08, “Intangibles — Goodwill and Other,” (“ASU 2011-08”), we first assess 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. Such qualitative factors that are assessed include evaluating a segment’s financial performance, industry and market conditions, macroeconomic conditions and specific issues that can directly affect the segment such as changes in business strategies, competition, supplier relationships, operating costs, regulatory matters, litigation and the composition of the segment’s assets due to acquisitions or other events. At July 31, 2014, because we determined through qualitative factors that the fair values of our Endoscopy, Water Purification and Filtration and Healthcare Disposables segments were unlikely to be less than the carrying value, we did not proceed to step one of the two-step quantitative goodwill impairment test for those three segments. We performed step one of the two-step quantitative goodwill impairment test for Dialysis (due to the decreasing operating results) and Specialty Packaging (due to fair value exceeding book value by a nominal amount in the prior year). In performing a detailed quantitative review for goodwill impairment, management uses a two-step process that begins with an estimation of the fair value of the related operating segments by using weighted fair value results of the discounted cash flow methodology, as well as the market multiple and comparable transaction methodologies, where appropriate. The first step is a review for potential impairment, and the second step measures the amount of impairment, if any. | |
In accordance with ASU 2012-02, “Intangibles — Goodwill and Other,” (“ASU 2012-02”), we perform our annual impairment review for indefinite lived intangibles by first assessing qualitative factors, such as those described above, to determine whether it is more likely than not that the fair value of such assets is less than the carrying values, and if necessary, we perform a quantitative analysis comparing the current fair value of our indefinite lived intangibles assets to their carrying values. At July 31, 2014, because we determined through qualitative factors that the fair values of our indefinite lived intangible assets in our Endoscopy, Water Purification and Filtration and Healthcare Disposables segments were unlikely to be less than the carrying value, we did not perform a quantitative analysis for those assets. We performed a quantitative analysis for indefinite lived intangible assets in our Dialysis and Specialty Packaging segments, for the same reasons stated above for our goodwill impairment test. With respect to amortizable intangible assets when impairment indicators are present, management would determine whether expected future non-discounted cash flows would be sufficient to recover the carrying value of the assets; if not, the carrying value of the assets would be adjusted to their fair value. | |
On July 31, 2014, management concluded that none of our intangible assets or goodwill was 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 and earnings 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, 2014, 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 exceeded book value by a nominal amount. At July 31, 2014, goodwill relating to our Specialty Packaging reporting unit was $6,567,000. We believe the most significant assumptions impacting the impairment assessment of Specialty Packaging relate to the assumed compounded annual sales growth 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. | |
Long-Lived Assets | |
We evaluate the carrying value of long-lived assets including property, equipment and other assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. 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. Our historical assessments of our long-lived assets have not differed significantly from the actual amounts realized. However, the determination of fair value requires us to make certain assumptions and estimates and is highly subjective. On July 31, 2014, management concluded that no events or changes in circumstances have occurred that would indicate that the carrying amount of our long-lived assets may not be recoverable. | |
Other Assets | |
Debt issuance costs associated with our credit facilities are amortized to interest expense over the life of the credit facilities. As of July 31, 2014 and 2013, such debt issuance costs, net of related amortization, were included in other assets and amounted to $1,678,000 and $764,000, respectively. Debt issuance costs increased due to modifications to our credit facilities, as more fully described in Note 9 to the Consolidated Financial Statements. | |
Warranties | |
We provide for estimated costs that may be incurred to remedy deficiencies of quality or performance of our products at the time of revenue recognition. Most of our products have a one year warranty. We record provisions for product warranties as a component of cost of sales based upon an estimate of the amounts necessary to settle existing and future claims on products sold. The historical relationship of warranty costs to products sold is the primary basis for the estimate. A significant increase in third party service repair rates, the cost and availability of parts or the frequency of claims could have a material adverse impact on our results for the period or periods in which such claims or additional costs materialize. | |
Management reviews its warranty exposure periodically and believes that the warranty reserves are adequate; however, actual claims incurred could differ from original estimates, requiring adjustments to the reserves. | |
Stock-Based Compensation | |
We account for stock options and stock awards in which stock compensation expense is recognized for any option or stock award grant based upon the award’s fair value. All of our stock options and stock awards (which consist only of restricted stock) 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, reduced by estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures are estimated based on historical experience. | |
The stock-based compensation expense recorded in our Consolidated Financial Statements may not be representative of the effect of stock-based compensation expense in future periods due to the level of awards issued in past years (which level may not be similar in the future), modifications to existing awards, accelerated vesting related to certain employment terminations and assumptions used in determining fair value, expected lives and estimated forfeitures. We determine the fair value of each stock award using the closing market price of our common stock on the date of grant. We estimate the fair value of each option grant on the date of grant using the Black-Scholes option valuation model. The determination of fair value using an option-pricing model is affected by our stock price as well as assumptions regarding a number of subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the expected option life (which is determined by using the historical closing prices of our common stock), the expected dividend yield (which is approximately 0.3%), and the expected option life (which is based on historical exercise behavior). | |
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 adverse effect on our business, financial condition, results of operations or cash flows. | |
Costs Associated with Exit or Disposal Activities | |
We recognize costs associated with exit or disposal activities, such as costs to terminate a contract, the exit or disposal of a business, or the early termination of a leased property, by recognizing the liability at fair value when incurred, except for certain one-time termination benefits, such as severance costs, for which the period of recognition begins when a severance plan is communicated to employees. | |
Inherent in the calculation of liabilities relating to exit and disposal activities are significant management judgments and estimates, including estimates of termination costs, employee attrition and the interest rate used to discount certain expected net cash payments. Such judgments and estimates are reviewed by us on a regular basis. The cumulative effect of a change to a liability resulting from a revision to either timing or the amount of estimated cash flows is recognized by us as an adjustment to the liability in the period of the change. | |
Earnings Per Common Share | |
Basic EPS is computed based upon the weighted average number of common shares outstanding for the year. Diluted EPS is computed based upon the weighted average number of common shares outstanding for the year plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the year. We include participating securities (unvested share-based payment awards that contain non-forfeitable 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. | |
Advertising Costs | |
Our policy is to expense advertising costs as they are incurred. Advertising costs charged to expense were $2,656,000, $2,308,000 and $2,507,000 for fiscals 2014, 2013 and 2012, respectively. | |
IncomeTaxes | |
We recognize deferred tax assets and liabilities based on differences between the financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities also include items recorded in conjunction with the purchase accounting for business acquisitions as well as net operating loss carryforwards. We regularly review our deferred tax assets for recoverability and establish a valuation allowance, if necessary, based on historical taxable income, projected future taxable income, and the expected timing of the reversals of existing temporary differences. Although realization is not assured, management believes it is more likely than not that the recorded deferred tax assets, as adjusted for valuation allowances, will be realized. Additionally, deferred tax liabilities are regularly reviewed to confirm that such amounts are appropriately stated. A review of our deferred tax items considers known future changes in various income tax rates, principally in the United States. If income tax rates were to change in the future, particularly in the United States and to a lesser extent Canada, our items of deferred tax could be materially affected. All of such evaluations require significant management judgments. | |
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 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. Any adjustments upon resolution of income tax uncertainties are recognized in our results of operations. Unrecognized tax benefits are analyzed periodically and adjustments are made as events occur to warrant adjustment to the related liability. | |
Medical Device Taxes | |
The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 imposes significant new taxes on medical device makers in the form of an excise tax on certain U.S. medical device sales that began in January 2013. A significant portion of our sales are considered medical device sales under this new legislation. We calculate medical device excise taxes based on the latest available regulations and IRS notices and recognize the excise taxes in cost of sales at the time the medical device revenue is recognized in our Consolidated Statements of Income. In fiscals 2014 and 2013, we recorded excise taxes of $3,872,000 and $2,087,000, respectively, in cost of sales. The regulations regarding the calculations of the medical device taxes are complex and certain aspects can be subject to interpretation causing the IRS to issue notices clarifying various aspects of these new taxes. Although we have made all reasonable efforts to record accurate excise taxes, the determination of the tax requires us to make certain assumptions and estimates. Actual taxes for the period could differ from original estimates requiring adjustments to our Consolidated Financial Statements. | |
Business Combinations | |
Acquisitions require significant estimates and judgments related to the fair value of assets acquired and liabilities assumed. We determine fair value based on the estimated 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. | |
Certain liabilities and reserves are subjective in nature. We reflect such liabilities and reserves based upon the most recent information available. In conjunction with our acquisitions, such subjective liabilities and reserves principally include contingent consideration, certain income tax and sales and use tax exposures, including tax liabilities related to our foreign subsidiaries, as well as reserves for accounts receivable, inventories, warranties and contingent guaranteed obligations. We account for contingent consideration relating to business combinations in accordance with ASC 805, “Business Combinations,” which requires us to record the fair value of contingent consideration as a liability and an increase to goodwill at 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 Consolidated Statements of Income. We determine the fair value of contingent consideration based on future operating projections under various potential scenarios and weight the probability of these outcomes. Similarly, other acquisition related liabilities can be required to be recorded at fair value at the date of the acquisition and continually re-measured at each balance sheet date, such as the three year price floor relating to the August 1, 2011 acquisition of the business and substantially all of the assets of Byrne Medical, Inc. (the “Byrne Acquisition”) which fair value was determined using an option valuation model, the assumed contingent obligation relating to the Jet Prep Acquisition and the contingent guaranteed obligation relating to the PuriCore Acquisition, as further described in Note 6 to the Consolidated Financial Statements. The ultimate settlement of liabilities relating to business combinations may be for amounts which are materially different from the amounts initially recorded and may cause volatility in our results of operations. | |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. On an ongoing basis, we evaluate the adequacy of our reserves and the estimates used in calculations of reserves as well as other judgmental financial statement items, including, but not limited to: collectability of accounts receivable, volume rebates and trade-in allowances, inventory values and obsolescence reserves, warranty reserves, contingent consideration, contingent guaranteed obligations, depreciation and amortization periods, deferred income taxes, goodwill and intangible assets, impairment of long-lived assets, unrecognized tax benefits for uncertain tax positions, medical device excise tax expense, reserves for legal exposure, stock-based compensation and expense accruals. Such estimates and assumptions are subjective in nature. We reflect such amounts based upon the most recent information available. | |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” (“ASU 2014-09”), which will supersede the revenue recognition requirements in Accounting Standards Codification 605, “Revenue Recognition.” ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period. We are currently in the process of evaluating the impact of ASU 2014-09 on our financial position and results of operations. | |
In April 2014, the FASB issued ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” (“ASU 2014-08”). Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on an organization’s operations and financial results. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income and expenses of discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. ASU 2014-08 is effective for fiscal years beginning after December 15, 2014, with early adoption allowed. Once adopted, ASU 2014-08 will impact the reporting of future discontinued operations and disposals, if any. | |
In July 2013, the FASB issued 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 an unrecognized tax benefit to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, similar tax loss, or a tax credit carryforward. To the extent the tax benefit is not available at the reporting date under the governing tax law or if the entity does not intend to use the deferred tax asset for such purpose, the unrecognized tax benefit should be presented as a liability and not combined with deferred tax assets. ASU 2013-11 is effective for annual periods, and interim periods within those years, beginning after December 15, 2013. The amendments are to be applied to all unrecognized tax benefits that exist as of the effective date and may be applied retrospectively to each prior reporting period presented. As we do not have any unrecognized tax benefits at July 31, 2014, we do not expect ASU 2013-11 to have a material impact on our financial position and results of operations. |
Acquisitions
Acquisitions | 12 Months Ended | ||||
Jul. 31, 2014 | |||||
Acquisitions | ' | ||||
Acquisitions | ' | ||||
3. Acquisitions | |||||
Fiscal 2014 | |||||
PuriCore International Limited | |||||
On June 30, 2014, we acquired from PuriCore plc, a publicly traded company in the United Kingdom (“UK”), all the issued and outstanding stock of its subsidiary PuriCore, a company located in the UK with pre-acquisition annual revenues (unaudited) of approximately $25,000,000 that sells automated endoscope reprocessors, endoscope drying and storage cabinets, chemistry and consumables, as well as comprehensive maintenance and validation services, primarily in the United Kingdom (the “PuriCore Business”). The total consideration for the transaction, excluding acquisition-related costs of $703,000, was $27,675,000, net of a $337,000 net asset value adjustment paid by the seller in August 2014. The PuriCore Business is included in our Endoscopy segment. | |||||
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 | $ | 8,982,000 | |||
Property, plant and equipment | 972,000 | ||||
Amortizable intangible assets (9- year weighted average life): | |||||
Customer relationships (10- year life) | 11,340,000 | ||||
Technology (6- year life) | 1,760,000 | ||||
Other (3- year life) | 93,000 | ||||
Non-current deferred income tax assets, net | 1,924,000 | ||||
Current liabilities | (10,085,000 | ) | |||
Other long-term liabilities | (753,000 | ) | |||
Net assets acquired | $ | 14,233,000 | |||
There were no in-process research and development projects acquired in connection with the acquisition. The excess purchase price of $13,442,000 was assigned to goodwill. Such goodwill, none of which is deductible for income tax purposes, has been included in our Endoscopy segment. Following the acquisition, we changed the name of PuriCore to Cantel Medical (UK) Limited. | |||||
In connection with the acquisition, we acquired certain ordinary course business assets and liabilities which included a contingent guaranteed obligation to reimburse an endoscope service company for endoscope repair costs it incurs when servicing its customers’ endoscopes that are damaged by one of PuriCore’s discontinued endoscope reprocessing machine models. Although the terms of the guarantee provide for no limit to the maximum potential future payments, we have estimated the fair value of the liability on the date of the acquisition to be approximately $1,414,000, of which $693,000 was recorded in current liabilities and $721,000 was recorded in other long-term liabilities. This contingent guaranteed obligation increased goodwill on the date of the acquisition and is continually re-measured at each balance sheet date by recording changes in the fair value of the liability to general administrative expenses in our Consolidated Statements of Income, as further explained in Note 6 of the Consolidated Financial Statements. At July 31, 2014, such liability was $1,395,000 of which $684,000 was recorded in current liabilities and $711,000 was recorded in other long-term liabilities. | |||||
Since we will be continually re-measuring the contingent guaranteed obligation at each balance sheet date and recording changes in the fair value through our Consolidated Statements of Income, we may potentially have significant earnings volatility in our future results of operations until the discontinued endoscope reprocessing machine model is no longer used in the marketplace. | |||||
The principal reasons for the acquisition are as follows: (i) the expansion of our product offerings with a broader range of advanced endoscope reprocessing equipment suitable for various international markets, (ii) the opportunity to sell our chemistries and other products to PuriCore’s installed base through a direct sales force, (iii) the opportunity to transition our existing UK business from a distribution model to a direct sales model, (iv) the ability to expand our footprint and infrastructure in Europe and (v) the expectation that the acquisition will be accretive to our earnings per share in fiscal 2015 and beyond. | |||||
The PuriCore Business is included in our results of operations for the portion of fiscal 2014 subsequent to its acquisition date and is not reflected in fiscals 2013 and 2012. This acquisition had an insignificant impact on our results of operations due to the date of the acquisition being near our year-end. | |||||
Sterilator Company, Inc. | |||||
On January 7, 2014, we acquired all the issued and outstanding stock of Sterilator, 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 $3,349,000. | |||||
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 | $ | 1,058,000 | |||
Property, plant and equipment | 521,000 | ||||
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 | (276,000 | ) | |||
Net assets acquired | $ | 1,622,000 | |||
There were no in-process research and development projects acquired in connection with the acquisition. The excess purchase price of $1,727,000 was assigned to goodwill. Such goodwill, none of which is deductible for income tax purposes, has been included in our Healthcare Disposables 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 Business is included in our results of operations for the portion of fiscal 2014 subsequent to its acquisition date and is not reflected in fiscals 2013 and 2012. This acquisition had an insignificant impact on our results of operations due to the small size of this business. | |||||
Jet Prep Ltd. | |||||
On November 5, 2013, we acquired all the issued and outstanding capital stock of Jet Prep, a private Israeli company that developed the Jet PrepTM Endoscopic 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 in the beginning phase of commercialization by our global endoscopy sales force. Total consideration for the transaction, excluding transaction costs of $200,000, was $5,350,000 plus preliminarily estimated contingent consideration of $2,490,000 based on a percentage of sales above a minimum threshold over a seven year period, 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 Consolidated Statements of Income. Accordingly, on November 5, 2013 we increased contingent consideration and goodwill by $2,490,000 to record our initial estimated fair value of the contingent consideration that would be earned over the seven year period ending November 4, 2020. On a quarterly basis subsequent to November 5, 2013, we re-measured the fair value of the contingent consideration and recorded the changes in fair value by increasing both contingent consideration and general administrative expenses, as further explained in Note 6 of the Consolidated Financial Statements. At July 31, 2014, the preliminary estimated fair value was $2,722,000 and was recorded in contingent consideration in the 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 nine 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 Consolidated Statements of Income. Accordingly, on November 5, 2013 we increased accrued expenses by $4,000, other long-term liabilities by $1,716,000 and goodwill by $1,720,000 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. On a quarterly basis subsequent to November 5, 2013, we re-measured the fair value of the assumed contingent liability and recorded the changes in fair value by increasing both other long-term liabilities and general administrative expenses, as further explained in Note 6 of the Consolidated Financial Statements. At July 31, 2014, the estimated fair value was $1,752,000, of which $3,000 was recorded in accrued expenses and $1,749,000 was recorded in other long-term liabilities. | |||||
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 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 | $ | 82,000 | |||
Property, plant and equipment | 65,000 | ||||
Amortizable intangible asset: | |||||
Technology (7- year life) | 3,730,000 | ||||
Current liabilities | (104,000 | ) | |||
Other long-term liabilities | (1,716,000 | ) | |||
Net assets acquired | $ | 2,057,000 | |||
There were no in-process research and development projects acquired in connection with the acquisition. The excess purchase price of $5,783,000 was assigned to goodwill. Such goodwill, none of which is deductible for income tax purposes, has been included in our Endoscopy 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 Business is included in our results of operations for the portion of fiscal 2014 subsequent to its acquisition date and is not reflected in fiscals 2013 and 2012. Since the commercialization of the Jet Prep Endoscopic Flushing Device is in the beginning phase, this acquisition has not yet generated any sales and did not have a significant impact on our results of operations. | |||||
Fiscal 2013 | |||||
Siemens’ Hemodialysis Water Business | |||||
On March 22, 2013, we entered into an asset purchase agreement under which we 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 us 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 segment. | |||||
The principal reasons for the acquisition were as follows: (i) the opportunity to increase service revenue and profitability of our Water Purification and Filtration service network due to improved operating leverage, (ii) the expansion of our business’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. | |||||
Due to the size of this business in relation to our overall consolidated results of operations, the Siemens Water Acquisition did not have a significant effect on our results of operations in fiscal 2014 and the portion of fiscal 2013 subsequent to its acquisition date, and is not reflected in our results of operations in fiscal 2012. 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 fiscal 2014 and the portion of fiscal 2013 subsequent to its acquisition date, and is not reflected in fiscal 2012. 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 procedure product portfolio, which is part of the Endoscopy segment. | |||||
This acquisition is included in our results of operations for fiscal 2014 and the portion of fiscal 2013 subsequent to its acquisition date, and is not reflected in fiscal 2012. This acquisition had an insignificant impact on our results of operations. | |||||
SPS Medical Supply Corp. | |||||
On November 1, 2012, we 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, all of which is not 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 our Healthcare Disposables segment’s sales and marketing infrastructure and (vi) the expectation that the acquisition will be accretive to our earnings per share in fiscal 2013 and beyond. 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 fiscal 2014 and the portion of fiscal 2013 subsequent to its acquisition date, and is not reflected in fiscal 2012. | |||||
Fiscal 2012 | |||||
Byrne Medical, Inc. Disposable Endoscopy Products Business | |||||
On August 1, 2011 we acquired the business and substantially all of the assets of Byrne Medical, Inc. (“BMI”), a privately owned, Texas-based company that designed, manufactured and sold an innovative array of disposable infection control products intended to eliminate the challenges associated with proper cleaning and high-level disinfection of numerous reusable components used in gastrointestinal (GI) endoscopy procedures (the “Byrne Medical Business”). Excluding acquisition-related costs of $1,099,000 (of which $626,000 and $473,000 was recorded in general administrative expenses in fiscals 2013 and 2012, respectively), we paid an aggregate purchase price of $99,361,000 (which reflects a $639,000 decrease resulting from a net asset value adjustment that was recorded as a reduction of goodwill in December 2011). The purchase price was comprised of $89,361,000 in cash and $10,000,000 in shares of Cantel common stock that is subject to both a multi-year lock-up and three-year price floor (described below). After giving effect for the Company’s three-for-two stock splits, the stock consideration 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). In addition, there was up to $10,000,000 in potential cash contingent consideration payable to BMI over two years based on the achievement by the acquired business of certain targeted amounts of gross profit. A portion of the purchase price (including the stock consideration) was placed in escrow as security for indemnification obligations of BMI and its principal stockholder, Mr. Don Byrne. In addition, we purchased certain land and buildings utilized by the Byrne Medical Business from Byrne Investments LLC, an affiliate of Mr. Byrne, for $5,900,000. | |||||
We account for contingent consideration by recording the fair value of contingent consideration as a liability and an increase to 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 Consolidated Statements of Income. Accordingly, on August 1, 2011 we increased acquisitions payable and goodwill by $2,700,000 to record our initial estimated fair value of the contingent consideration that would be earned over the two years ending July 31, 2013. During fiscals 2013 and 2012, we re-measured the fair value of the contingent consideration and recorded a total of $1,500,000 and $1,200,000, respectively, in fair value changes decreasing both acquisitions payable and general and administrative expenses in the Consolidated Financial Statements, thereby decreasing the contingent consideration payable to zero in January 2013, as more fully described in Note 6 to the Consolidated Financial Statements. Based on actual gross profit results for the two year period ended July 31, 2013, contingent consideration was not earned. | |||||
Subject to certain conditions and limitations, under the price floor referred to above, 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 BMI 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 are required to record as a liability at fair value on the date of acquisition and continually re-measure the liability at each balance sheet date by recording changes in the fair value through our Consolidated Statements of Income. Accordingly, on August 1, 2011 we increased acquisitions payable and goodwill by $3,000,000 to record our initial estimated fair value of the three-year price floor. The fair value of this liability was determined using the Black-Scholes option valuation model. During fiscals 2014, 2013 and 2012, we re-measured the fair value of the price floor and recorded a total of $45,000, $992,000 and $1,963,000, respectively, in fair value changes decreasing both acquisitions payable and general and administrative expenses in the Consolidated Financial Statements, thereby decreasing the price floor liability to zero at July 31, 2014, as more fully described in Note 6 to the Consolidated Financial Statements. | |||||
The components of the purchase price, as explained above, consist of the following: | |||||
Cash (including purchase of buildings) | $ | 95,261,000 | |||
Fair value of the Cantel common stock with the multi-year lock-up | 7,310,000 | ||||
Total consideration paid at August 1, 2011 | 102,571,000 | ||||
Price floor | 3,000,000 | ||||
Contingent consideration | 2,700,000 | ||||
Total purchase price recorded at August 1, 2011 | $ | 108,271,000 | |||
In connection with the acquisition, we acquired certain tangible assets including accounts receivable, inventories and equipment and assumed certain liabilities of BMI including trade payables, sales commissions payable and ordinary course business liabilities. | |||||
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: | |||||
Accounts receivable | $ | 4,303,000 | |||
Inventory | 4,581,000 | ||||
Other assets | 588,000 | ||||
Property, plant and equipment | 10,074,000 | ||||
Amortizable intangible assets (13- year weighted average life): | |||||
Customer relationships (15-year life) | 25,300,000 | ||||
Brand names (10-year life) | 2,200,000 | ||||
Technology (8-year life) | 11,900,000 | ||||
Non-compete agreement (14- year weighted average life) | 2,000,000 | ||||
Other assets | 105,000 | ||||
Current liabilities | (2,277,000 | ) | |||
Other liabilities | (85,000 | ) | |||
Net assets acquired | $ | 58,689,000 | |||
There were no in-process research and development projects acquired in connection with the acquisition. The excess purchase price of $49,582,000 was assigned to goodwill. Such goodwill, all of which is deductible for income tax purposes over fifteen years, has been included in our Endoscopy segment. | |||||
Since the acquisition was completed on the first day of fiscal 2012, the results of operations of the Byrne Medical Business are included in our results of operations in fiscals 2014, 2013 and 2012. As a result of the acquisition, we changed the name of our reporting segment previously known as Endoscope Reprocessing to Endoscopy. The operations of the Byrne Medical Business are fully included within our Endoscopy segment. | |||||
The principal reasons for the Byrne Acquisition were as follows: (i) the complementary nature of its infection prevention and control business which further expands our business into hospital and outpatient center-based GI endoscopy; (ii) the addition of a market leading, high margin business in a familiar segment in infection prevention and control; (iii) the increase in the percentage of our net sales derived from recurring consumables; (iv) the expectation that the acquisition increases overall corporate gross margin percentage and will be accretive to our future earnings per share; (v) the belief that the endoscopy market will convert from re-using to disposing of certain components in GI endoscopy; and (vi) the opportunity for us to further expand our business into the design, manufacture and distribution of proprietary products. Such reasons constitute the significant factors that contributed to a purchase price that resulted in recognition of goodwill. |
Inventories
Inventories | 12 Months Ended | |||||||
Jul. 31, 2014 | ||||||||
Inventories | ' | |||||||
Inventories | ' | |||||||
4. Inventories | ||||||||
A summary of inventories is as follows: | ||||||||
July 31, | ||||||||
2014 | 2013 | |||||||
Raw materials and parts | $ | 27,365,000 | $ | 23,815,000 | ||||
Work-in-process | 7,510,000 | 6,945,000 | ||||||
Finished goods | 24,862,000 | 23,407,000 | ||||||
Total | $ | 59,737,000 | $ | 54,167,000 |
Derivatives
Derivatives | 12 Months Ended |
Jul. 31, 2014 | |
Derivatives | ' |
Derivatives | ' |
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 July 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 three foreign currency forward contracts with an aggregate value of $11,800,000 at July 31, 2014, which covered certain assets and liabilities that were denominated in currencies other than our subsidiaries’ functional currencies. Such contracts expired on August 31, 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. 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 net currency conversion losses, net of tax, of $88,000, $86,000 and $20,000 in fiscals 2014, 2013 and 2012, 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 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 former 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 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 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 had been highly effective. However, the remaining derivative instrument, which relates solely to our former term loan facility, was determined to be ineffective beginning as of January 31, 2014 due to the modifications to our credit facilities in March 2014, as more fully described in Note 9 to the Consolidated Financial Statements. Accordingly, the fair value of the interest rate swap agreement of $113,000 relating to our former term loan facility was recognized in interest expense in January 2014. Changes in the fair value of the derivative instrument subsequent to January 31, 2014 are recognized immediately in interest expense. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||||||||
Jul. 31, 2014 | |||||||||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||||||
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 July 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 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 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 interest rate curves. Changes in fair value in the interest rate swap agreement relating to our revolving credit facility during the six months ended January 31, 2014 and fiscals 2013 and 2012 were recorded in accumulated other comprehensive income in the 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 former term loan facility were recorded in accumulated other comprehensive income in the 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 Consolidated Financial Statements. | |||||||||||||||||||||||
On June 30, 2014, we recorded a $1,414,000 liability for the estimated fair value of a contingent guaranteed obligation relating to the PuriCore Acquisition, as further described in Note 3 to the Consolidated Financial Statements. This fair value measurement was based on significant inputs not observed in the market and thus represents a Level 3 measurement. The fair value of the contingent guaranteed obligation was based on the estimated cost to repair endoscopes that may be damaged by one of PuriCore’s discontinued endoscope reprocessing machine models that remains in the marketplace, the historical frequency of claims and the likely timeframe that each machine will continue to be used. As such, the determination of the fair value of this contingent guarantee obligation is subjective in nature and can be impacted by significant changes in third party service repair rates, the frequency of claims and a change in the expected life of these discontinued machines. At the date of the acquisition, the cash flow projection relating to this contingent guaranteed obligation was discounted using a rate of 10.1%, which was based on the weighted average cost of capital of the acquired business plus a credit risk premium for non-performance risk. This liability will be adjusted periodically by recording changes in the fair value through our Consolidated Statements of Income driven by the time value of money and changes in the assumptions that were initially used in the valuation. Given the subjective nature of the assumptions used in the determination of fair value, we may potentially have significant earnings volatility in our future results of operations. | |||||||||||||||||||||||
On November 5, 2013, we recorded a $2,490,000 liability for the estimated fair value of contingent consideration and a $1,720,000 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 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, the cash flow projections relating to the contingent consideration and assumed contingent obligation were discounted using rates of 12.6% and 2.5%, respectively. The discount rate relating to the contingent consideration was based on the weighted average cost of capital of the acquired business plus a credit risk premium for non-performance risk. Since payment of the assumed contingent obligation to the Israeli Government is highly probable, the discount rate relating to this government obligation was based on a risk free rate plus a premium for non-performance risk. These two liabilities will be adjusted periodically by recording changes in the fair value through our 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 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. | |||||||||||||||||||||||
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 contingent consideration payments ranging between zero and approximately $7,000,000 and the weighted average present value of such scenarios plus the accretion of interest for the passing of time resulted in a fair value of $2,722,000 at July 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 plus the accretion of interest for the passing of time resulted in a fair value of $1,752,000 at July 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 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 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 would 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 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 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 contingent consideration and general and administrative expenses in the 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. Based on the closing price of Cantel common stock on the NYSE of $33.53 on July 31, 2014, payment to the sellers was not required. | |||||||||||||||||||||||
We had contingent consideration relating to the acquisition on February 11, 2011 of certain net assets of the sterilization monitoring business of ConFirm Monitoring Systems, Inc. (the “ConFirm Monitoring Business” or “ConFirm”). The fair value of this liability was based on future sales projections of the ConFirm Monitoring Business under various potential scenarios for the one year period ended January 31, 2012 and weighting the probability of these outcomes. At the date of the acquisition, these cash flow projections were discounted using a rate of 7%. 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 analysis resulted in an initial contingent consideration liability of $656,000, which was subsequently adjusted by recording the change in the fair value through our results of operations as shown below in the reconciliation of our liabilities that are measured and recorded at fair value on a recurring basis. These fair value measurements were based on significant inputs not observed in the market and thus represented Level 3 measurements. Based on actual sales results for the one year period ended January 31, 2012, the final contingent consideration liability was determined to be $855,000 at January 31, 2012 and was paid in March 2012. | |||||||||||||||||||||||
The fair values of the Company’s financial instruments measured on a recurring basis were categorized as follows: | |||||||||||||||||||||||
July 31, 2014 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||||||||
Money markets | $ | 1,702,000 | $ | — | $ | — | $ | 1,702,000 | |||||||||||||||
Total assets | $ | 1,702,000 | $ | — | $ | — | $ | 1,702,000 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||
Accrued expenses: | |||||||||||||||||||||||
Interest rate swap agreement | $ | — | $ | 69,000 | $ | — | $ | 69,000 | |||||||||||||||
Contingent guaranteed obligation | — | — | 684,000 | 684,000 | |||||||||||||||||||
Total accrued expenses | — | 69,000 | 684,000 | 753,000 | |||||||||||||||||||
Contingent consideration | — | — | 2,722,000 | 2,722,000 | |||||||||||||||||||
Other long-term liabilities: | |||||||||||||||||||||||
Assumed contingent obligation | — | — | 1,752,000 | 1,752,000 | |||||||||||||||||||
Contingent guaranteed obligation | — | — | 711,000 | 711,000 | |||||||||||||||||||
Total other long-term liabilities: | — | — | 2,463,000 | 2,463,000 | |||||||||||||||||||
Total liabilities | $ | — | $ | 69,000 | $ | 5,869,000 | $ | 5,938,000 | |||||||||||||||
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 | |||||||||||||||||||
Contingent consideration | — | — | 45,000 | 45,000 | |||||||||||||||||||
Other long-term liabilities: | |||||||||||||||||||||||
Interest rate swap agreements | — | 29,000 | — | 29,000 | |||||||||||||||||||
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 fiscals 2014, 2013 and 2012 is as follows: | |||||||||||||||||||||||
Jet Prep | PuriCore | ||||||||||||||||||||||
ConFirm | Byrne | Byrne | Jet Prep | Assumed | Contingent | ||||||||||||||||||
Contingent | Contingent | Price | Contingent | Contingent | Guaranteed | ||||||||||||||||||
Consideration | Consideration | Floor | Consideration | Obligation | Obligation | Total | |||||||||||||||||
Balance, July 31, 2011 | $ | 775,000 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 775,000 | |||||||||
Total net unrealized losses (gains) included in general and administrative expense in earnings | 80,000 | (1,200,000 | ) | (1,963,000 | ) | — | — | — | (3,083,000 | ) | |||||||||||||
Net purchases, issuances, sales and settlements | (855,000 | ) | 2,700,000 | 3,000,000 | — | — | — | 4,845,000 | |||||||||||||||
Balance, July 31, 2012 | — | 1,500,000 | 1,037,000 | — | — | — | 2,537,000 | ||||||||||||||||
Total net unrealized gains included in general and administrative expense in earnings | — | (1,500,000 | ) | (992,000 | ) | — | — | — | (2,492,000 | ) | |||||||||||||
Net purchases, issuances, sales and settlements | — | — | — | — | — | — | — | ||||||||||||||||
Balance, July 31, 2013 | — | — | 45,000 | — | — | — | 45,000 | ||||||||||||||||
Total net unrealized (gains) losses included in general and administrative expense in earnings | — | — | (45,000 | ) | 232,000 | 32,000 | — | 219,000 | |||||||||||||||
Net purchases, issuances, sales and settlements | — | — | — | 2,490,000 | 1,720,000 | 1,395,000 | 5,605,000 | ||||||||||||||||
Balance, July 31, 2014 | $ | — | $ | — | $ | — | $ | 2,722,000 | $ | 1,752,000 | $ | 1,395,000 | $ | 5,869,000 | |||||||||
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, where appropriate. 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, 2014, 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 fiscal 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 July 31, 2014 and 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 July 31, 2014 and 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. |
Intangibles_and_Goodwill
Intangibles and Goodwill | 12 Months Ended | |||||||||||||||||||
Jul. 31, 2014 | ||||||||||||||||||||
Intangibles and Goodwill | ' | |||||||||||||||||||
Intangibles and Goodwill | ' | |||||||||||||||||||
7. Intangibles and Goodwill | ||||||||||||||||||||
Our intangible assets with definite lives consist primarily of customer relationships, technology, brand names, non-compete agreements and patents. These intangible assets are being amortized on 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 intangible assets was $10,641,000, $10,061,000 and $9,124,000 for fiscals 2014, 2013 and 2012, 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: | ||||||||||||||||||||
July 31, 2014 | ||||||||||||||||||||
Accumulated | ||||||||||||||||||||
Gross | Amortization | Net | ||||||||||||||||||
Intangible assets with finite lives: | ||||||||||||||||||||
Customer relationships | $ | 83,145,000 | $ | (31,336,000 | ) | $ | 51,809,000 | |||||||||||||
Technology | 26,405,000 | (11,444,000 | ) | 14,961,000 | ||||||||||||||||
Brand names | 12,680,000 | (9,431,000 | ) | 3,249,000 | ||||||||||||||||
Non-compete agreements | 3,129,000 | (754,000 | ) | 2,375,000 | ||||||||||||||||
Patents and other registrations | 2,073,000 | (792,000 | ) | 1,281,000 | ||||||||||||||||
127,432,000 | (53,757,000 | ) | 73,675,000 | |||||||||||||||||
Trademarks and tradenames | 9,277,000 | — | 9,277,000 | |||||||||||||||||
Total intangible assets | $ | 136,709,000 | $ | (53,757,000 | ) | $ | 82,952,000 | |||||||||||||
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 tradenames | 9,387,000 | — | 9,387,000 | |||||||||||||||||
Total intangible assets | $ | 120,142,000 | $ | (44,213,000 | ) | $ | 75,929,000 | |||||||||||||
Estimated annual amortization expense of our intangible assets for the next five years is as follows: | ||||||||||||||||||||
Year Ending July 31, | ||||||||||||||||||||
2015 | $ | 12,150,000 | ||||||||||||||||||
2016 | 9,044,000 | |||||||||||||||||||
2017 | 8,466,000 | |||||||||||||||||||
2018 | 8,161,000 | |||||||||||||||||||
2019 | 7,838,000 | |||||||||||||||||||
Goodwill changed during fiscals 2014 and 2013 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 | 19,225,000 | — | 1,727,000 | — | — | 20,952,000 | ||||||||||||||
Foreign currency translation | (181,000 | ) | (341,000 | ) | — | — | (401,000 | ) | (923,000 | ) | ||||||||||
Balance, July 31, 2014 | $ | 78,274,000 | $ | 56,838,000 | $ | 81,835,000 | $ | 8,133,000 | $ | 6,567,000 | $ | 231,647,000 | ||||||||
On July 31, 2014, 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, 2014, 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 exceeded book value by a nominal amount. At July 31, 2014, goodwill relating to our Specialty Packaging reporting unit was $6,567,000. We believe the most significant assumptions impacting the impairment assessment of Specialty Packaging relate to the assumed compounded annual sales growth 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 July 31, 2014, management concluded that no events or changes in circumstances have occurred in fiscal 2014 that would indicate that the carrying amount of our intangible assets and goodwill may not be recoverable. |
Warranties
Warranties | 12 Months Ended | |||||||
Jul. 31, 2014 | ||||||||
Warranties | ' | |||||||
Warranties | ' | |||||||
8. Warranties | ||||||||
A summary of activity in the warranty reserves follows: | ||||||||
Year Ended July 31, | ||||||||
2014 | 2013 | |||||||
Beginning balance | $ | 1,261,000 | $ | 1,667,000 | ||||
Acquisitions | 221,000 | 45,000 | ||||||
Provisions | 2,627,000 | 1,893,000 | ||||||
Settlements | (2,519,000 | ) | (2,344,000 | ) | ||||
Foreign currency translation | (1,000 | ) | — | |||||
Ending Balance | $ | 1,589,000 | $ | 1,261,000 | ||||
The warranty provisions and settlements in fiscals 2014 and 2013 relate principally to the Company’s endoscope reprocessing and water purification products. Warranty reserves are included in accrued expenses in the Consolidated Balance Sheets. |
Financing_Arrangements
Financing Arrangements | 12 Months Ended |
Jul. 31, 2014 | |
Financing Arrangements | ' |
Financing Arrangements | ' |
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. Furthermore, we incurred debt issuance costs of $1,318,000 relating to the New Credit Agreement which was recorded in other assets along with the remaining unamortized debt issuance costs of $512,000 relating to the Existing Revolving Credit Facility. The total of these two amounts is being amortized over the life of the New Credit Agreement. The remaining unamortized debt issuance costs of $84,000 relating to the Existing Term Loan Facility was charged to interest expense on March 4, 2014 when the Existing Term Loan Facility was terminated. At July 31, 2014, unamortized debt issuance costs recorded in other assets amounted to $1,678,000. | |
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 July 31, 2014, the lender’s base rate was 3.50% and the LIBOR rates ranged from 0.16% to 0.60%. 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 July 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 0.20% at July 31, 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 is no longer 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 was 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 July 31, 2014, we had $80,500,000 of outstanding borrowings under the New Credit Agreement. Subsequent to July 31, 2014, we repaid $5,500,000 resulting in total outstanding borrowings of $75,000,000 at September 29, 2014, none of which is required to be repaid until March 2019. |
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||||||||||
Jul. 31, 2014 | ||||||||||||||||||||
Income Taxes | ' | |||||||||||||||||||
Income Taxes | ' | |||||||||||||||||||
10. Income Taxes | ||||||||||||||||||||
The consolidated effective tax rate was 36.9%, 35.0% and 34.5% for fiscals 2014, 2013, and 2012, respectively, and reflects income tax expense for our United States and international operations at their respective statutory rates. | ||||||||||||||||||||
The fiscal 2014 consolidated effective tax rate of 36.9% was adversely affected by (i) certain acquisition costs that are not tax deductible in certain foreign countries and (ii) the initial operating losses in our newly acquired Jet Prep entity for which no corresponding tax benefit was recorded since the commercialization of the product is in the beginning phase. Additionally, federal legislation that expired in December 2013 also had an unfavorable impact on our effective tax rate when compared to fiscal 2013. | ||||||||||||||||||||
The fiscal 2013 consolidated effective tax rate of 35.0% was favorably affected by the impact of the finalization of tax examinations in March 2013 and federal tax legislation enacted in January 2013. | ||||||||||||||||||||
The provision for income taxes consists of the following: | ||||||||||||||||||||
Year Ended July 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Current | Deferred | Current | Deferred | Current | Deferred | |||||||||||||||
United States: | ||||||||||||||||||||
Federal | $ | 22,119,000 | $ | (896,000 | ) | $ | 18,122,000 | $ | (351,000 | ) | $ | 13,593,000 | $ | 390,000 | ||||||
State | 3,710,000 | (348,000 | ) | 3,010,000 | 223,000 | 2,144,000 | 78,000 | |||||||||||||
Canada | 417,000 | (39,000 | ) | 221,000 | (174,000 | ) | 324,000 | (85,000 | ) | |||||||||||
Singapore | 175,000 | 19,000 | 130,000 | 10,000 | 101,000 | (13,000 | ) | |||||||||||||
Netherlands | 143,000 | 70,000 | — | (76,000 | ) | — | — | |||||||||||||
United Kingdom | — | (24,000 | ) | — | — | — | — | |||||||||||||
Total | $ | 26,564,000 | $ | (1,218,000 | ) | $ | 21,483,000 | $ | (368,000 | ) | $ | 16,162,000 | $ | 370,000 | ||||||
The geographic components of income before income taxes are as follows: | ||||||||||||||||||||
Year Ended July 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
United States | $ | 67,288,000 | $ | 57,973,000 | $ | 44,120,000 | ||||||||||||||
Canada | 1,030,000 | (5,000 | ) | 531,000 | ||||||||||||||||
Singapore | 1,093,000 | 1,038,000 | 713,000 | |||||||||||||||||
Netherlands | 46,000 | 1,344,000 | 152,000 | |||||||||||||||||
United Kingdom | (120,000 | ) | — | — | ||||||||||||||||
Israel | (726,000 | ) | — | — | ||||||||||||||||
Japan | — | 4,000 | 2,353,000 | |||||||||||||||||
Total | $ | 68,611,000 | $ | 60,354,000 | $ | 47,869,000 | ||||||||||||||
The effective tax rate differs from the United States statutory tax rate of 35.0% in fiscals 2014, 2013 and 2012 due to the following: | ||||||||||||||||||||
Year Ended July 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Expected statutory tax | $ | 24,014,000 | $ | 21,124,000 | $ | 16,754,000 | ||||||||||||||
Differential attributable to foreign operations: | ||||||||||||||||||||
Canada | 17,000 | 49,000 | 54,000 | |||||||||||||||||
Singapore | (189,000 | ) | (224,000 | ) | (161,000 | ) | ||||||||||||||
Netherlands | 197,000 | (546,000 | ) | (53,000 | ) | |||||||||||||||
United Kingdom | 18,000 | — | — | |||||||||||||||||
Israel | 254,000 | — | — | |||||||||||||||||
Japan | — | (1,000 | ) | (824,000 | ) | |||||||||||||||
State and local taxes | 2,178,000 | 2,044,000 | 1,434,000 | |||||||||||||||||
Domestic production deduction | (1,553,000 | ) | (1,265,000 | ) | (1,009,000 | ) | ||||||||||||||
Taxes on foreign dividends | 118,000 | 120,000 | (72,000 | ) | ||||||||||||||||
R&E tax credit | (183,000 | ) | (492,000 | ) | (138,000 | ) | ||||||||||||||
Investment impairment | — | — | 175,000 | |||||||||||||||||
Other | 475,000 | 306,000 | 372,000 | |||||||||||||||||
Total income tax expense | $ | 25,346,000 | $ | 21,115,000 | $ | 16,532,000 | ||||||||||||||
Deferred income tax assets and liabilities are comprised of the following: | ||||||||||||||||||||
July 31, | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Current deferred tax assets: | ||||||||||||||||||||
Accrued expenses | $ | 2,753,000 | $ | 2,337,000 | ||||||||||||||||
Inventories | 1,321,000 | 1,149,000 | ||||||||||||||||||
Accounts receivable | 732,000 | 676,000 | ||||||||||||||||||
Foreign NOLs | — | 76,000 | ||||||||||||||||||
Subtotal | 4,806,000 | 4,238,000 | ||||||||||||||||||
Valuation allowance | (1,255,000 | ) | (109,000 | ) | ||||||||||||||||
$ | 3,551,000 | $ | 4,129,000 | |||||||||||||||||
Non-current deferred tax assets: | ||||||||||||||||||||
Other long-term liabilities | $ | 928,000 | $ | 527,000 | ||||||||||||||||
Stock-based compensation | 2,633,000 | 2,138,000 | ||||||||||||||||||
Capital investment | 175,000 | 175,000 | ||||||||||||||||||
Foreign tax credit | 133,000 | 133,000 | ||||||||||||||||||
Domestic NOLs | 2,660,000 | 83,000 | ||||||||||||||||||
Foreign NOLs | 4,552,000 | — | ||||||||||||||||||
Subtotal | 11,081,000 | 3,056,000 | ||||||||||||||||||
Valuation allowance | (2,283,000 | ) | (199,000 | ) | ||||||||||||||||
8,798,000 | 2,857,000 | |||||||||||||||||||
Non-current deferred tax liabilities: | ||||||||||||||||||||
Property and equipment | (4,784,000 | ) | (6,310,000 | ) | ||||||||||||||||
Intangible assets | (12,554,000 | ) | (9,840,000 | ) | ||||||||||||||||
Goodwill | (9,265,000 | ) | (7,893,000 | ) | ||||||||||||||||
(26,603,000 | ) | (24,043,000 | ) | |||||||||||||||||
Net non-current deferred tax liabilities | $ | (17,805,000 | ) | $ | (21,186,000 | ) | ||||||||||||||
Deferred tax assets and liabilities have been adjusted for changes in statutory tax rates as appropriate. Such changes only have a significant impact in the United States, and to a lesser extent in Canada, where a substantial portion of our deferred tax items exist. Such deferred tax items existing in the United States reflect a combined U.S. Federal and state effective rate of approximately 37.6% and 37.9% for fiscals 2014 and 2013, respectively. | ||||||||||||||||||||
At July 31, 2014, we had federal and state NOLs for domestic tax reporting purposes of $29,098,000. Included in this amount is $155,000 in federal NOLs that originated from the acquisition of the Purity Water Company of San Antonio, Inc. on June 1, 2010 and will begin to expire on July 31, 2029. The remainder of $28,943,000 relates to New Jersey state NOLs for fiscal years 2012 through 2014. These NOLs will start to expire on July 31, 2032. Since we do not have any significant operations in New Jersey other than our corporate headquarters, we currently believe it is more likely than not that we will be unable to utilize these NOLs. Accordingly, valuation allowances have been established for these state NOLs. | ||||||||||||||||||||
For foreign tax reporting purposes, our NOLs at July 31, 2014 are approximately $21,076,000 and originated from the PuriCore and Jet Prep acquisitions. The PuriCore and Jet Prep NOLs, which both do not expire, are approximately $15,896,000 and $5,180,000, respectively, and are fully available for utilization against future profits in the United Kingdom and Israel, respectively. However, since Jet Prep was a development company and we are in the beginning phase of commercialization of its product, it has not generated any profits in fiscal 2014 or historically, and therefore valuation allowances have been established for these NOLs. | ||||||||||||||||||||
At both July 31, 2014 and 2013, we had deferred tax assets of $133,000 related to foreign tax credits that resulted from foreign source income in fiscals 2014 and 2013, net of foreign tax credit utilization. As we currently do not expect significant future foreign source income, valuation allowances have been established for these foreign tax credits as we currently believe that it is more likely than not that we will not utilize such foreign tax credits. | ||||||||||||||||||||
We increased our overall valuation allowances during fiscal 2014 by $3,230,000 from $308,000 at July 31, 2013 to $3,538,000 at July 31, 2014, primarily due to the increase in the domestic and foreign NOLs as described above. Such increases of our overall valuation allowances during fiscal 2014 did not have an impact on our consolidated effective tax rate. | ||||||||||||||||||||
We also have a $175,000 valuation allowance relating to our inability to deduct a fiscal 2012 capital loss on our BIOSAFE investment, as more fully explained in Note 21 to the Consolidated Financial Statements. | ||||||||||||||||||||
During fiscal 2014 and fiscal 2013, no dividends were repatriated from our foreign subsidiaries. All of the undistributed earnings of our foreign subsidiaries are considered to be indefinitely reinvested at July 31, 2014. Accordingly, no provision has been made for United States income taxes from repatriation of these earnings. | ||||||||||||||||||||
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 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. | ||||||||||||||||||||
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 fiscal 2014 | (124,000 | ) | ||||||||||||||||||
Unrecognized tax benefits on July 31, 2014 | $ | — | ||||||||||||||||||
Generally, the Company is no longer subject to federal, state or foreign income tax examinations for fiscal years ended prior to July 31, 2006. | ||||||||||||||||||||
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 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 | 12 Months Ended | ||||||||||||||||||||||
Jul. 31, 2014 | |||||||||||||||||||||||
Commitments and Contingencies | ' | ||||||||||||||||||||||
Commitments and Contingencies | ' | ||||||||||||||||||||||
11. Commitments and Contingencies | |||||||||||||||||||||||
Long-Term Contractual Obligations | |||||||||||||||||||||||
As of July 31, 2014, aggregate annual required payments over the next five years and thereafter under our contractual obligations that have long-term components are as follows: | |||||||||||||||||||||||
Year Ended July 31, | |||||||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | Total | |||||||||||||||||
Maturity of the credit facility | $ | — | $ | — | $ | — | $ | — | $ | 80,500 | $ | — | $ | 80,500 | |||||||||
Expected interest payments under the credit facility (1) | 1,465 | 1,465 | 1,465 | 1,465 | 855 | — | 6,715 | ||||||||||||||||
Minimum commitments under noncancelable operating leases | 3,811 | 2,940 | 2,252 | 1,529 | 990 | 2,772 | 14,294 | ||||||||||||||||
Compensation agreements | 7,271 | 1,769 | 600 | 350 | 350 | 496 | 10,836 | ||||||||||||||||
Contingent consideration (2) | — | 70 | 554 | 947 | 1,124 | 1,522 | 4,217 | ||||||||||||||||
Assumed contingent liability (3) | 4 | 47 | 226 | 428 | 574 | 622 | 1,901 | ||||||||||||||||
Contingent guaranteed obligation (4) | 683 | 454 | 234 | 171 | 171 | — | 1,713 | ||||||||||||||||
Deferred compensation and other | 42 | 64 | 50 | 35 | 12 | 15 | 218 | ||||||||||||||||
Total contractual obligations | $ | 13,276 | $ | 6,809 | $ | 5,381 | $ | 4,925 | $ | 84,576 | $ | 5,427 | $ | 120,394 | |||||||||
(1) The expected interest payments under our credit facility reflect an interest rate of 1.82%, which was our weighted average interest rate on outstanding borrowings at July 31, 2014. | |||||||||||||||||||||||
(2) These future potential payments of contingent consideration relate to the Jet Prep Acquisition, as further explained below, and are reflected in the July 31, 2014 Consolidated Balance Sheet at its net present value of $2,722,000 using a discount rate of 12.6%. | |||||||||||||||||||||||
(3) These future potential payments of an assumed contingent liability relate to the Jet Prep Acquisition, as further explained below, and are reflected in the July 31, 2014 Consolidated Balance Sheet at its net present value of $1,752,000 using a discount rate of 2.5%. | |||||||||||||||||||||||
(4) These future potential payments of a contingent guaranteed obligation relate to the PuriCore Acquisition, as further explained below, and are reflected in the July 31, 2014 Consolidated Balance Sheet at its net present value of $1,395,000 using a discount rate of 10%. | |||||||||||||||||||||||
Operating Leases | |||||||||||||||||||||||
Minimum commitments under operating leases include minimum rental commitments for our leased manufacturing facilities, warehouses, office space and equipment. | |||||||||||||||||||||||
Five of the more significant leases that contain escalation clauses are two building leases for our Water Purification and Filtration business, two building leases for our Healthcare Disposables business and one building lease for our Specialty Packaging business. The two Water Purification and Filtration building leases are for the United States headquarters in suburban Philadelphia, Pennsylvania and the Canadian headquarters in suburban Toronto, Ontario. The lease for the Philadelphia building provides for monthly base rent of approximately $16,200 during fiscal 2015 and escalates annually to approximately $20,100 in fiscal 2025 when it expires. The Toronto building lease provides for monthly base rent of approximately $15,000 in fiscal 2015 when it expires. Both the Philadelphia and Toronto building leases are guaranteed by Cantel. The Healthcare Disposables segment has two significant building leases with escalation clauses that are used for manufacturing and warehousing. One building in Sharon, Pennsylvania provides for monthly base rent of approximately $18,800 during fiscal 2015 and escalates annually to approximately $20,800 in fiscal 2024 when it expires. The second building lease in Santa Fe Springs, California provides for monthly base rent of approximately $19,300 in fiscal 2015 when it expires. Additionally, our Specialty Packaging segment has a building lease in Edmonton, Alberta with an escalation clause that is used for manufacturing and warehousing. Such lease provides for monthly base rent of approximately $7,600 escalating to approximately $8,500 for fiscals 2016 through 2021 when it expires. | |||||||||||||||||||||||
Our Healthcare Disposables business also rents a building in Cuba, New York for manufacturing and warehousing and has a lease that provides for monthly base rent of approximately $8,000 until it expires in fiscal 2019. This facility is owned by an entity controlled by two former owners of Sterilator who are now also employees in our Healthcare Disposable segment. | |||||||||||||||||||||||
Rent expense related to operating leases for fiscal 2014 was recorded on a straight-line basis and aggregated $4,409,000, compared with $4,147,000 and $4,104,000 for fiscals 2013 and 2012, respectively. | |||||||||||||||||||||||
Contingent Consideration and Assumed Contingent Liability | |||||||||||||||||||||||
In relation to the Jet Prep Acquisition on November 5, 2013, we have recorded a $2,490,000 liability for the estimated fair value of contingent consideration payable to the sellers and a $1,720,000 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 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). Additionally, in connection with the PuriCore Acquisition, we assumed a $1,414,000 contingent guaranteed obligation to reimburse an endoscope service company for endoscope repair costs it incurs when servicing its customers’ endoscopes that are damaged by one of PuriCore’s discontinued endoscope reprocessing machine models, as further described in Notes 3 and 6 to the Consolidated Financial Statements. 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 these liabilities at each balance sheet date and recording changes in the respective fair values through our 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 and contingent guaranteed obligation are satisfied, or until the sales of the Jet Prep 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. Additionally, we have previously entered into multi-year employment agreements with certain executive officers of businesses we have acquired. | |||||||||||||||||||||||
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) | 12 Months Ended | ||||||||||
Jul. 31, 2014 | |||||||||||
Accumulated Other Comprehensive Income (Loss) | ' | ||||||||||
Accumulated Other Comprehensive Income (Loss) | ' | ||||||||||
12. Accumulated Other Comprehensive Income (Loss) | |||||||||||
The components and changes in accumulated other comprehensive income (loss) for fiscals 2014, 2013 and 2012 were as follows: | |||||||||||
Foreign | |||||||||||
Currency | Interest Rate | ||||||||||
Translation | Swap | ||||||||||
Adjustments | Agreements | Total | |||||||||
Balance, July 31, 2011 | $ | 9,283,000 | $ | — | $ | 9,283,000 | |||||
Other comprehensive loss | (1,158,000 | ) | (335,000 | ) | (1,493,000 | ) | |||||
Income tax effect on other comprehensive loss | 260,000 | 125,000 | 385,000 | ||||||||
Balance, July 31, 2012 | 8,385,000 | (210,000 | ) | 8,175,000 | |||||||
Other comprehensive loss before reclassifications | (435,000 | ) | (50,000 | ) | (485,000 | ) | |||||
Income tax effect on other comprehensive loss before reclassifications | 3,130,000 | 18,000 | 3,148,000 | ||||||||
Reclassification adjustments to interest expense for losses on interest rate swaps included in net income during the period | — | 222,000 | 222,000 | ||||||||
Income tax effect on reclassification adjustments | — | (83,000 | ) | (83,000 | ) | ||||||
Balance, July 31, 2013 | 11,080,000 | (103,000 | ) | 10,977,000 | |||||||
Other comprehensive loss before reclassifications | (1,528,000 | ) | (47,000 | ) | (1,575,000 | ) | |||||
Income tax effect on other comprehensive loss before reclassifications | — | 17,000 | 17,000 | ||||||||
Reclassification adjustments to interest expense for losses on interest rate swaps included in net income during the period | — | 96,000 | 96,000 | ||||||||
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 | — | (76,000 | ) | (76,000 | ) | ||||||
Balance, July 31, 2014 | $ | 9,552,000 | $ | — | $ | 9,552,000 | |||||
In fiscal 2013, we made a decision to permanently reinvest our unremitted foreign earnings into our international growth initiatives and foreign working capital needs as part of our overall strategic growth plan. Accordingly, we recorded a tax adjustment of $3,130,000 in fiscal 2013 reversing the income tax effect on accumulated foreign currency translation adjustments. |
Earnings_Per_Common_Share
Earnings Per Common Share | 12 Months Ended | ||||||||||
Jul. 31, 2014 | |||||||||||
Earnings Per Common Share | ' | ||||||||||
Earnings Per Common Share | ' | ||||||||||
13. Earnings Per Common Share | |||||||||||
Basic EPS is computed based upon the weighted average number of common shares outstanding during the year. Diluted EPS is computed based upon the weighted average number of common shares outstanding during the year plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the year. | |||||||||||
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 shareholders of common stock (excluding participating securities): | |||||||||||
Year Ended July 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Numerator for basic and diluted earnings per share: | |||||||||||
Net income | $ | 43,265,000 | $ | 39,239,000 | $ | 31,337,000 | |||||
Less income allocated to participating securities | (581,000 | ) | (608,000 | ) | (580,000 | ) | |||||
Net income available to common shareholders | $ | 42,684,000 | $ | 38,631,000 | $ | 30,757,000 | |||||
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 | 40,751,629 | 40,267,885 | 39,586,170 | ||||||||
Dilutive effect of stock options using the treasury stock method and the average market price for the year | 159,685 | 289,007 | 438,753 | ||||||||
Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock | 40,911,314 | 40,556,892 | 40,024,923 | ||||||||
Earnings per share attributable to common stock: | |||||||||||
Basic earnings per share | $ | 1.05 | $ | 0.96 | $ | 0.78 | |||||
Diluted earnings per share | $ | 1.04 | $ | 0.95 | $ | 0.77 | |||||
Stock options excluded from weighted average dilutive common shares outstanding because their inclusion would have been antidilutive | — | — | — | ||||||||
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, is set forth in the following table: | |||||||||||
Year Ended July 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock | 40,911,314 | 40,556,892 | 40,024,923 | ||||||||
Participating securities | 558,252 | 639,827 | 751,896 | ||||||||
Total weighted average number of shares and common stock equivalents attributable to both common stock and participating securities | 41,469,566 | 41,196,719 | 40,776,819 |
Repurchase_of_Shares
Repurchase of Shares | 12 Months Ended |
Jul. 31, 2014 | |
Repurchase of Shares | ' |
Repurchase of Shares | ' |
14. Repurchase of Shares | |
The Company does not currently have a publicly announced stock repurchase program. All of the shares purchased during fiscals 2014 and 2013 represent shares surrendered to the Company relating to cashless exercises of stock options and to pay employee withholding taxes due upon the vesting of restricted stock or the exercise of stock options. In fiscals 2014 and 2013, such purchases amounted to 155,894 and 172,046 shares at a total average price per share of $33.65 and $19.37, respectively. | |
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 first six months of the twelve months ended July 31, 2013, we reissued 474,266 shares (and 160,904 shares during the fourth quarter of fiscal 2012) from treasury stock for the exercise of stock options and grant of stock awards. |
StockBased_Compensation
Stock-Based Compensation | 12 Months Ended | |||||||||||||||||
Jul. 31, 2014 | ||||||||||||||||||
Stock-Based Compensation | ' | |||||||||||||||||
Stock-Based Compensation | ' | |||||||||||||||||
15. Stock-Based Compensation | ||||||||||||||||||
The following table shows the income statement components of stock-based compensation expense recognized in the Consolidated Statements of Income: | ||||||||||||||||||
Year Ended July 31, | ||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||
Cost of sales | $ | 337,000 | $ | 174,000 | $ | 195,000 | ||||||||||||
Operating expenses: | ||||||||||||||||||
Selling | 665,000 | 329,000 | 397,000 | |||||||||||||||
General and administrative | 4,339,000 | 3,198,000 | 3,203,000 | |||||||||||||||
Research and development | 68,000 | 32,000 | 45,000 | |||||||||||||||
Total operating expenses | 5,072,000 | 3,559,000 | 3,645,000 | |||||||||||||||
Stock-based compensation before income taxes | 5,409,000 | 3,733,000 | 3,840,000 | |||||||||||||||
Income tax benefits | (1,909,000 | ) | (1,343,000 | ) | (1,363,000 | ) | ||||||||||||
Total stock-based compensation expense, net of tax | $ | 3,500,000 | $ | 2,390,000 | $ | 2,477,000 | ||||||||||||
Decrease in earnings per common share due to stock-based compensation: | ||||||||||||||||||
Basic | $ | 0.08 | $ | 0.06 | $ | 0.06 | ||||||||||||
Diluted | $ | 0.08 | $ | 0.06 | $ | 0.06 | ||||||||||||
The above stock-based compensation expense before income taxes was recorded in the 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. In January 2012, in connection with an employment termination, we were required to accelerate the vesting of certain stock options and restricted shares resulting in an additional $309,000 of stock-based compensation expense recorded in general and administrative expenses. | ||||||||||||||||||
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 July 31, 2014, total unrecognized stock-based compensation expense, before income taxes, related to total nonvested stock options and stock awards was $7,620,000 with a remaining weighted average period of 16 months over which such expense is expected to be recognized. The majority 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, 2011 | 545,838 | $ | 8.01 | |||||||||||||||
Granted | 536,859 | 9.48 | ||||||||||||||||
Canceled | (83,002 | ) | 8.63 | |||||||||||||||
Vested | (291,687 | ) | 7.77 | |||||||||||||||
Nonvested stock awards at July 31, 2012 | 708,008 | 9.15 | ||||||||||||||||
Granted | 210,484 | 17.55 | ||||||||||||||||
Canceled | (14,244 | ) | 11.31 | |||||||||||||||
Vested | (298,481 | ) | 9.26 | |||||||||||||||
Nonvested stock awards at July 31, 2013 | 605,767 | 11.96 | ||||||||||||||||
Granted | 258,760 | 31.95 | ||||||||||||||||
Canceled | (10,066 | ) | 15.7 | |||||||||||||||
Vested | (328,619 | ) | 11.13 | |||||||||||||||
Nonvested stock awards at July 31, 2014 | 525,842 | $ | 22.25 | |||||||||||||||
The fair value of each option grant was estimated on the date of grant using the Black-Scholes option valuation model with the following assumptions: | ||||||||||||||||||
Weighted-Average | ||||||||||||||||||
Black-Scholes Option | Year Ended | Year Ended | ||||||||||||||||
Valuation Assumptions | July 31, 2014 | July 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 based on the expected life at the date of grant. | ||||||||||||||||||
(3) Based on historical exercise behavior. | ||||||||||||||||||
Additionally, all options were considered to be deductible for tax purposes in the valuation model, except for certain options granted to employees residing outside of the United States. Such non-qualified options were tax-effected using the Company’s estimated U.S. effective tax rate at the time of grant. In fiscal 2014, the weighted average fair value of options granted was $12.08. The aggregate intrinsic value (i.e. the excess market price over the exercise price) of all options exercised was approximately $5,702,000, $6,616,000 and $5,793,000 in fiscals 2014, 2013 and 2012, respectively. The aggregate fair value of all options vested was approximately $127,000, $677,000 and $942,000 in fiscals 2014, 2013 and 2012, respectively. | ||||||||||||||||||
A summary of stock option activity follows: | ||||||||||||||||||
Weighted | ||||||||||||||||||
Number of | Average | |||||||||||||||||
Shares | Exercise Price | |||||||||||||||||
Outstanding at July 31, 2011 | 1,543,968 | $ | 6.47 | |||||||||||||||
Canceled | (24,748 | ) | 6.98 | |||||||||||||||
Exercised | (695,985 | ) | 6.32 | |||||||||||||||
Outstanding at July 31, 2012 | 823,235 | 6.57 | ||||||||||||||||
Granted | 52,500 | 17.04 | ||||||||||||||||
Canceled | (9,000 | ) | 8.4 | |||||||||||||||
Exercised | (462,904 | ) | 6.26 | |||||||||||||||
Outstanding at July 31, 2013 | 403,831 | 8.25 | ||||||||||||||||
Granted | 30,000 | 31.81 | ||||||||||||||||
Exercised | (211,339 | ) | 6.82 | |||||||||||||||
Outstanding at July 31, 2014 | 222,492 | $ | 12.78 | |||||||||||||||
Exercisable at July 31, 2012 | 546,165 | $ | 6.29 | |||||||||||||||
Exercisable at July 31, 2013 | 351,331 | $ | 6.94 | |||||||||||||||
Exercisable at July 31, 2014 | 157,492 | $ | 8.21 | |||||||||||||||
The outstanding options at July 31, 2014 and 2013 had an aggregate intrinsic value of approximately $4,616,000 and $7,386,000, respectively. As of July 31, 2014 and 2013, all of the outstanding options had vested or were expected to vest in future periods. | ||||||||||||||||||
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 first six months of the twelve months ended July 31, 2013, we reissued 474,266 shares (and 160,904 shares during the fourth quarter of fiscal 2012) 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. 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 is 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. In fiscals 2014 and 2013, such income tax deductions reduced income taxes payable by $5,905,000 and $3,892,000, respectively, and increased additional paid-in-capital by $4,391,000 and $2,875,000, respectively. We classify the cash flows resulting from excess tax benefits as financing cash flows on our Consolidated Statements of Cash Flows. | ||||||||||||||||||
The following table summarizes additional information related to stock options outstanding at July 31, 2014: | ||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||
Weighted | Weighted | |||||||||||||||||
Average | Average | |||||||||||||||||
Remaining | Weighted | Remaining | Weighted | |||||||||||||||
Number | Contractual | Average | Number | Contractual | Average | |||||||||||||
Range of Exercise | Outstanding | Life | Exercise | Exercisable | Life | Exercise | ||||||||||||
Prices | at July 31, 2014 | (Months) | Price | At July 31, 2014 | (Months) | Price | ||||||||||||
$4.26 - $7.60 | 139,992 | 8 | $ | 7.11 | 139,992 | 8 | $ | 7.11 | ||||||||||
$17.04 - $31.81 | 82,500 | 43 | $ | 22.41 | 17,500 | 39 | $ | 17.04 | ||||||||||
$4.26 - $31.81 | 222,492 | 21 | $ | 12.78 | 157,492 | 11 | $ | 8.21 | ||||||||||
Total Intrinsic Value | $ | 4,616,000 | $ | 3,987,000 | ||||||||||||||
A summary of our 2006 Equity Incentive Plan follows: | ||||||||||||||||||
The Cantel Medical Corp. 2006 Equity Incentive Plan (the “2006 Plan”) provides for the granting of stock options (including incentive stock options), restricted stock awards, stock appreciation rights and performance-based awards (collectively “equity awards”) to our employees and non-employee directors. The 2006 Plan does not permit the granting of discounted options or discounted stock appreciation rights. The maximum number of shares as to which stock options and stock awards may be granted under the 2006 Plan is 5,591,000 shares, of which 2,700,000 shares are authorized for issuance pursuant to stock options and stock appreciation rights and 2,891,000 shares are authorized for issuance pursuant to restricted stock and other stock awards. Stock options outstanding under this plan: | ||||||||||||||||||
· were granted at the closing market price at the time of the grant, | ||||||||||||||||||
· were granted as stock options that do not qualify as incentive stock options, | ||||||||||||||||||
· as to options granted to employees, are exercisable in three or four equal annual installments commencing on the first anniversary of the grant date, | ||||||||||||||||||
· include option grants of 1,688 shares on the last day of each of our fiscal quarters through October 31, 2009 to each non-employee director who attended that quarter’s regularly scheduled Board of Directors meeting (exercisable on the first anniversary of the grant date), | ||||||||||||||||||
· generally terminate three months following termination of employment or service as a non-employee director, and | ||||||||||||||||||
· expire five years from the date of the grant. | ||||||||||||||||||
Effective November 1, 2009, quarterly options were no longer granted to non-employee directors and, commencing July 31, 2010, the annual grants of 3,375 options to each member of the Board of Directors were changed to grants of 10,125 options to non-employee directors and 3,375 options to employee directors that are exercisable in full on the first anniversary of the grant date. | ||||||||||||||||||
Effective August 1, 2010, the annual grants of 10,125 options to non-employee directors and 3,375 options to employee directors were changed to annual grants of 3,375 shares of restricted stock to non-employee directors and 1,125 shares of restricted stock to employee directors, with such restriction lapsing as to one-third of the shares on each of the first three anniversaries of the grant date subject to being a director of the Company through such vesting date. | ||||||||||||||||||
Commencing July 31, 2012, the annual grants of 3,375 shares of restricted stock to non-employee directors and 1,125 shares of restricted stock to employee directors were changed to annual grants of shares of restricted stock to non-employee directors equivalent to $35,000 based on the closing price of our common stock on July 31 of each year that are exercisable in full on the first anniversary of the grant date. Employee directors no longer receive shares of restricted stock as part of the grants to the Board of Directors, but would receive shares or stock options as part of their employment compensation. | ||||||||||||||||||
Commencing July 31, 2014, the annual grants of shares of restricted stock to non-employee directors equivalent to $35,000 was increased to $50,000 based on the closing price of our common stock on July 31 of each year and are exercisable in full on the first anniversary of the grant date. | ||||||||||||||||||
Restricted stock shares outstanding under this plan are subject to risk of forfeiture solely due to an employment length-of-service restriction, with such restriction lapsing as to one-third of the shares on each of the first three anniversaries of the grant date subject to being employed by the Company through such vesting date. At July 31, 2014, options to purchase 222,492 shares of common stock were outstanding, and 525,842 unvested restricted stock shares were outstanding, under the 2006 Plan. At July 31, 2014, 386,810 shares are available for issuance pursuant to stock options and stock appreciation rights and 642,563 shares are available for issuance pursuant to restricted stock and other stock awards. The 2006 Plan expires on November 13, 2016. |
Retirement_Plans
Retirement Plans | 12 Months Ended |
Jul. 31, 2014 | |
Retirement Plans | ' |
Retirement Plans | ' |
16. Retirement Plans | |
We have 401(k) Savings and Retirement Plans for the benefit of eligible United States employees. Additionally, our Canadian and United Kingdom subsidiaries maintain profit sharing plans for the benefit of eligible employees. Contributions by the Company are both discretionary and non-discretionary and are limited in any year to the amount allowable by government tax authorities. | |
Aggregate employer contributions recognized under these plans were $2,196,000, $2,540,000 and $2,152,000 for fiscals 2014, 2013 and 2012, respectively. |
Supplemental_Cash_Flow_Informa
Supplemental Cash Flow Information | 12 Months Ended |
Jul. 31, 2014 | |
Supplemental Cash Flow Information | ' |
Supplemental Cash Flow Information | ' |
17. Supplemental Cash Flow Information | |
Interest paid was $1,787,000, $2,643,000 and $2,875,000 for fiscals 2014, 2013 and 2012, respectively. | |
Income tax payments were $20,481,000, $17,116,000 and $15,474,000 for fiscals 2014, 2013 and 2012, respectively. |
Information_as_to_Operating_Se
Information as to Operating Segments and Foreign and Domestic Operations | 12 Months Ended | ||||||||||
Jul. 31, 2014 | |||||||||||
Information as to Operating Segments and Foreign and Domestic Operations | ' | ||||||||||
Information as to Operating Segments and Foreign and Domestic Operations | ' | ||||||||||
18. Information as to Operating Segments and Foreign and Domestic Operations | |||||||||||
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. | |||||||||||
None of our customers accounted for 10% or more of our consolidated net sales during fiscals 2014, 2013 and 2012, except for DaVita Inc. (“DaVita”), which accounted for approximately 10.0%, 10.4% and 10.2%, of our consolidated net sales in fiscals 2014, 2013 and 2012, respectively. Net sales to DaVita were $48,620,000, $44,204,000 and $39,300,000 in fiscals 2014, 2013 and 2012, respectively. In fiscal 2014, Davita accounted for approximately 23.8% and 34.3% 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 and disposable infection control products intended to eliminate the challenges associated with proper cleaning and high-level disinfection of numerous reusable components used in gastrointestinal (GI) endoscopy procedures. Additionally, this segment includes technical maintenance service on its products. | |||||||||||
Water Purification and Filtration, which includes water purification equipment and services, filtration and separation products, and disinfectants for the medical, pharmaceutical, biotech, beverage and commercial industrial markets and disinfectants and decontamination services used in various applications for infection prevention and control. | |||||||||||
DaVita and another large dialysis provider accounted for approximately 23.8% and 24.1%, respectively, of our Water Purification and Filtration segment net sales for fiscal 2014. Combined, these two customers accounted for approximately 18.0% of our consolidated net sales in fiscal 2014. | |||||||||||
Healthcare Disposables, which includes single-use, infection prevention and control healthcare products including face masks, sterilization pouches, towels and bibs, tray covers, saliva ejectors, germicidal wipes, plastic cups and disinfectants. This segment also manufactures and sells biological and chemical indicators for sterility assurance monitoring services in the acute-care, alternate-care and dental markets. | |||||||||||
Four customers collectively accounted for approximately 51.4% of our Healthcare Disposables segment net sales and approximately 10.7% of our consolidated net sales in fiscal 2014. | |||||||||||
Dialysis, which includes medical device reprocessing systems, sterilants/disinfectants, dialysate concentrates and other supplies for renal dialysis. 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 Consolidated Financial Statements as described in Note 2. | |||||||||||
Information as to operating segments is summarized below: | |||||||||||
Year Ended July 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Net sales: | |||||||||||
Endoscopy | $ | 190,440,000 | $ | 160,317,000 | $ | 153,224,000 | |||||
Water Purification and Filtration | 159,505,000 | 134,196,000 | 114,609,000 | ||||||||
Healthcare Disposables | 101,809,000 | 90,904,000 | 76,229,000 | ||||||||
Dialysis | 30,926,000 | 33,148,000 | 35,644,000 | ||||||||
Other | 6,069,000 | 6,461,000 | 6,784,000 | ||||||||
Total | $ | 488,749,000 | $ | 425,026,000 | $ | 386,490,000 | |||||
Year Ended July 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Operating income: | |||||||||||
Endoscopy | $ | 34,194,000 | $ | 32,361,000 | $ | 31,083,000 | |||||
Water Purification and Filtration | 25,750,000 | 16,381,000 | 9,819,000 | ||||||||
Healthcare Disposables | 18,720,000 | 17,576,000 | 12,437,000 | ||||||||
Dialysis | 7,547,000 | 8,705,000 | 8,366,000 | ||||||||
Other | 815,000 | 857,000 | 1,065,000 | ||||||||
87,026,000 | 75,880,000 | 62,770,000 | |||||||||
General corporate expenses | (16,098,000 | ) | (12,692,000 | ) | (10,646,000 | ) | |||||
Interest expense, net | (2,317,000 | ) | (2,834,000 | ) | (3,650,000 | ) | |||||
Other expense | — | — | (605,000 | ) | |||||||
Income before income taxes | $ | 68,611,000 | $ | 60,354,000 | $ | 47,869,000 | |||||
July 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Identifiable assets: | |||||||||||
Endoscopy | $ | 203,582,000 | $ | 157,340,000 | $ | 153,994,000 | |||||
Water Purification and Filtration | 126,397,000 | 123,454,000 | 112,432,000 | ||||||||
Healthcare Disposables | 138,240,000 | 137,577,000 | 100,569,000 | ||||||||
Dialysis | 25,420,000 | 24,394,000 | 25,793,000 | ||||||||
Other | 9,316,000 | 10,078,000 | 10,944,000 | ||||||||
General corporate, including cash and cash equivalents | 33,190,000 | 34,828,000 | 31,080,000 | ||||||||
Total | $ | 536,145,000 | $ | 487,671,000 | $ | 434,812,000 | |||||
Year Ended July 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Capital expenditures: | |||||||||||
Endoscopy | $ | 6,820,000 | $ | 3,058,000 | $ | 2,356,000 | |||||
Water Purification and Filtration | 3,318,000 | 2,319,000 | 1,656,000 | ||||||||
Healthcare Disposables | 1,367,000 | 699,000 | 795,000 | ||||||||
Dialysis | 1,444,000 | 576,000 | 583,000 | ||||||||
Other | 34,000 | 30,000 | 97,000 | ||||||||
General corporate | 558,000 | 63,000 | 15,000 | ||||||||
Total | $ | 13,541,000 | $ | 6,745,000 | $ | 5,502,000 | |||||
Year Ended July 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Depreciation and amortization: | |||||||||||
Endoscopy | $ | 7,001,000 | $ | 6,374,000 | $ | 6,060,000 | |||||
Water Purification and Filtration | 4,416,000 | 3,866,000 | 3,807,000 | ||||||||
Healthcare Disposables | 5,968,000 | 5,500,000 | 4,490,000 | ||||||||
Dialysis | 1,142,000 | 1,188,000 | 1,230,000 | ||||||||
Other | 294,000 | 321,000 | 326,000 | ||||||||
General corporate | 65,000 | 14,000 | 12,000 | ||||||||
Total | $ | 18,886,000 | $ | 17,263,000 | $ | 15,925,000 | |||||
Information as to geographic areas (including net sales which represent the geographic area from which the Company derives its net sales from external customers) is summarized below: | |||||||||||
Year Ended July 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Net sales: | |||||||||||
United States | $ | 403,892,000 | $ | 357,378,000 | $ | 329,261,000 | |||||
Canada | 20,729,000 | 18,732,000 | 15,646,000 | ||||||||
Asia/Pacific | 24,736,000 | 21,895,000 | 16,323,000 | ||||||||
Europe/Africa/Middle East | 32,634,000 | 23,415,000 | 21,691,000 | ||||||||
Latin America/South America | 6,758,000 | 3,606,000 | 3,569,000 | ||||||||
Total | $ | 488,749,000 | $ | 425,026,000 | $ | 386,490,000 | |||||
July 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Total long-lived assets: | |||||||||||
United States | $ | 53,221,000 | $ | 47,043,000 | $ | 43,353,000 | |||||
Canada | 1,029,000 | 1,236,000 | 1,365,000 | ||||||||
Asia/Pacific | 1,112,000 | 1,030,000 | 1,130,000 | ||||||||
Europe | 2,275,000 | 155,000 | 106,000 | ||||||||
Total | 57,637,000 | 49,464,000 | 45,954,000 | ||||||||
Goodwill and intangible assets, net | 314,599,000 | 287,547,000 | 254,966,000 | ||||||||
Total | $ | 372,236,000 | $ | 337,011,000 | $ | 300,920,000 |
Quarterly_Results_of_Operation
Quarterly Results of Operations (unaudited) | 12 Months Ended | |||||||||||||
Jul. 31, 2014 | ||||||||||||||
Quarterly Results of Operations (unaudited) | ' | |||||||||||||
Quarterly Results of Operations (unaudited) | ' | |||||||||||||
19. Quarterly Results of Operations (unaudited) | ||||||||||||||
The following is a summary of the quarterly results of operations for the years ended July 31, 2014 and 2013: | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
2014 | ||||||||||||||
Net sales | $ | 118,272,000 | $ | 119,042,000 | $ | 120,058,000 | $ | 131,377,000 | ||||||
Cost of sales | 66,773,000 | 66,707,000 | 67,640,000 | 74,330,000 | ||||||||||
Gross profit | 51,499,000 | 52,335,000 | 52,418,000 | 57,047,000 | ||||||||||
Gross profit percentage | 43.5 | % | 44 | % | 43.7 | % | 43.4 | % | ||||||
Net income | $ | 11,185,000 | $ | 11,126,000 | $ | 10,249,000 | $ | 10,705,000 | ||||||
Earnings per common share: | ||||||||||||||
Basic | $ | 0.27 | $ | 0.27 | $ | 0.25 | $ | 0.26 | ||||||
Diluted (1) | $ | 0.27 | $ | 0.27 | $ | 0.25 | $ | 0.26 | ||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
2013 | ||||||||||||||
Net sales | $ | 99,681,000 | $ | 106,363,000 | $ | 105,009,000 | $ | 113,973,000 | ||||||
Cost of sales | 55,954,000 | 61,212,000 | 59,525,000 | 64,859,000 | ||||||||||
Gross profit | 43,727,000 | 45,151,000 | 45,484,000 | 49,114,000 | ||||||||||
Gross profit percentage | 43.9 | % | 42.4 | % | 43.3 | % | 43.1 | % | ||||||
Net income | $ | 9,576,000 | $ | 10,452,000 | $ | 8,998,000 | $ | 10,213,000 | ||||||
Earnings per common share: | ||||||||||||||
Basic (1) | $ | 0.24 | $ | 0.26 | $ | 0.22 | $ | 0.25 | ||||||
Diluted | $ | 0.23 | $ | 0.25 | $ | 0.22 | $ | 0.25 | ||||||
(1) The summation of quarterly earnings per share does not equal the fiscal year earnings per share due to rounding. |
Legal_Proceedings
Legal Proceedings | 12 Months Ended |
Jul. 31, 2014 | |
Legal Proceedings | ' |
Legal Proceedings | ' |
20. 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 adverse effect on our business, financial condition, results of operations or cash flows. |
Convertible_Note_Receivable
Convertible Note Receivable | 12 Months Ended |
Jul. 31, 2014 | |
Convertible Note Receivable | ' |
Convertible Note Receivable | ' |
21. Convertible Note Receivable | |
In February 2009, we invested an initial $200,000 in a senior subordinated convertible promissory note issued by BIOSAFE, Inc. (“BIOSAFE”), in connection with BIOSAFE’s grant to us of certain exclusive and non-exclusive license rights to BIOSAFE’s antimicrobial additive. BIOSAFE is the owner of a patented and proprietary antimicrobial agent that is built into the manufacturing of end-products to achieve long-lasting microbial protection on such end-products’ surface. As a result of BIOSAFE’s successful raising of a minimum incremental amount of cash following our investment, we invested an additional $300,000 in notes of BIOSAFE in January 2010 bringing the aggregate investment in BIOSAFE notes to $500,000, as obligated under our agreement with BIOSAFE. We are not obligated to invest any additional funds. | |
At January 31, 2012, we evaluated this investment for potential impairment and determined that repayment of the notes and accrued interest was unlikely primarily due to BIOSAFE’s inability to obtain additional financing and our assessment of BIOSAFE’s going concern. Accordingly, we deemed the investment, together with accrued interest of $105,000, fully impaired and recorded a loss of $605,000 during fiscal 2012, which was recorded as other expense and a reduction in other assets in the Consolidated Financial Statements. In addition, due to the inability to currently deduct a capital loss and the uncertainty of utilizing a capital loss tax benefit in the future, a tax benefit was not recognized on the loss relating to the impairment of this investment. |
SCHEDULE_II_VALUATION_AND_QUAL
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended | ||||||||||||||||
Jul. 31, 2014 | |||||||||||||||||
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | ' | ||||||||||||||||
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | ' | ||||||||||||||||
CANTEL MEDICAL CORP. | |||||||||||||||||
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | |||||||||||||||||
Balance at | Balance | ||||||||||||||||
Beginning | Translation | at End | |||||||||||||||
of Period | Additions | (Deductions) | Adjustments | of Period | |||||||||||||
Allowance for doubtful accounts: | |||||||||||||||||
Year ended July 31, 2014 | $ | 1,265,000 | $ | 706,000 | -1 | $ | (95,000 | ) | $ | (2,000 | ) | $ | 1,874,000 | ||||
Year ended July 31, 2013 | $ | 1,041,000 | $ | 516,000 | $ | (291,000 | ) | $ | (1,000 | ) | $ | 1,265,000 | |||||
Year ended July 31, 2012 | $ | 1,096,000 | $ | 177,000 | $ | (227,000 | ) | $ | (5,000 | ) | $ | 1,041,000 | |||||
Inventory valuation allowance: | |||||||||||||||||
Year ended July 31, 2014 | $ | 1,781,000 | $ | 3,480,000 | -2 | $ | (802,000 | ) | $ | (40,000 | ) | $ | 4,419,000 | ||||
Year ended July 31, 2013 | $ | 1,957,000 | $ | 750,000 | $ | (922,000 | ) | $ | (4,000 | ) | $ | 1,781,000 | |||||
Year ended July 31, 2012 | $ | 1,750,000 | $ | 956,000 | $ | (741,000 | ) | $ | (8,000 | ) | $ | 1,957,000 | |||||
. | |||||||||||||||||
Deferred tax asset valuation allowance: | |||||||||||||||||
Year ended July 31, 2014 | $ | 308,000 | $ | 3,363,000 | -3 | $ | (126,000 | ) | $ | (7,000 | ) | $ | 3,538,000 | ||||
Year ended July 31, 2013 | $ | 1,275,000 | $ | 133,000 | $ | (1,023,000 | ) | $ | (77,000 | ) | $ | 308,000 | |||||
Year ended July 31, 2012 | $ | 1,700,000 | $ | 259,000 | $ | (855,000 | ) | $ | 171,000 | $ | 1,275,000 | ||||||
(1) Additions include $119,000 recorded in connection with the acquisition accounting of PuriCore. | |||||||||||||||||
(2) Additions include $2,153,000 recorded in connection with the acquisition accounting of PuriCore. | |||||||||||||||||
(3) Additions include valuation allowances related to New Jersey net operating losses as well as the Jet Prep Acquisition, as further explained in Note 10 to the Consolidated Financial Statements. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jul. 31, 2014 | |
Summary of Significant Accounting Policies | ' |
Principles of Consolidation | ' |
Principles of Consolidation | |
The Consolidated Financial Statements include the accounts of Cantel and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. | |
Revenue Recognition | ' |
Revenue Recognition | |
Revenue on product sales is recognized as products are shipped to customers and title passes. The passing of title is determined based upon the FOB terms specified for each shipment. With respect to endoscopy, dialysis and specialty packaging products, shipment terms are generally FOB origin for common carrier and when our distribution fleet is utilized (except for one large customer in dialysis whereby all products are shipped FOB destination). With respect to water purification and filtration and healthcare disposable products, shipment terms may be either FOB origin or destination. Customer acceptance for the majority of our product sales occurs at the time of delivery. With respect to a portion of water purification and filtration product sales, equipment is sold as part of a system for which the equipment is functionally interdependent or the customer’s purchase order specifies “ship-complete” as a condition of delivery; revenue recognition on such sales is deferred until all equipment has been delivered, or post-delivery obligations such as installation have been substantially fulfilled such that the products are deemed functional by the end-user. | |
A portion of our endoscopy, water purification and filtration and dialysis sales are recognized as multiple element arrangements, whereby revenue is allocated to the equipment, installation and consumable components based upon vendor specific objective evidence, which includes comparable historical transactions of similar equipment, installation and consumables sold as stand-alone components. If vendor-specific objective evidence of selling price is not available, we allocate revenue to the elements of the bundled arrangement using the estimated selling price method in order to qualify the components as separate units of accounting. Revenue on the equipment and consumable components are recognized as the equipment or consumable is shipped to customers and title passes. Revenue on the installation component is recognized when the installation is complete. | |
A portion of our healthcare disposables sales relating to the mail-in spore test kit is recorded as deferred revenue when initially sold. We recognize the revenue on these test kits using an estimate based on historical experience of the amount of time that elapses from the point of sale to when the kit is returned to us and we communicate to the customer the results of the required laboratory test. The related cost of the kits is recorded in inventory and recognized in cost of sales as the revenue is earned. | |
Revenue on service sales is recognized when repairs are completed at the customer’s location or when repairs are completed at our facilities and the products are shipped to customers. With respect to certain service contracts in our Endoscopy and Water Purification and Filtration operating segments, service revenue is recognized on a straight-line basis over the contractual term of the arrangement. All shipping and handling fees invoiced to customers, such as freight, are recorded as revenue (and related costs are included within cost of sales) at the time the sale is recognized. | |
None of our sales contain right-of-return provisions. Customer claims for credit or return due to damage, defect, shortage or other reason must be pre-approved by us before credit is issued or such product is accepted for return. No cash discounts for early payment are offered except with respect to a small portion of our sales of dialysis, healthcare disposable, endoscopy and water purification and filtration products. We do not offer price protection, although advance pricing contracts or required notice periods prior to implementation of price increases exist for certain customers with respect to many of our products. With respect to certain of our dialysis, healthcare disposables, water purification and filtration and endoscopy customers, rebates are provided; such rebates, which consist primarily of volume rebates, are provided for as a reduction of sales at the time of revenue recognition and amounted to $4,498,000, $4,277,000 and $3,836,000 in fiscals 2014, 2013 and 2012, respectively. Such allowances are determined based on estimated projections of sales volume for the entire rebate periods. If it becomes known that sales volume to customers will deviate from original projections, the rebate provisions originally established would be adjusted accordingly. | |
Our endoscopy products and services are sold directly to hospitals and other end-users in the United States and primarily to distributors internationally except for the United Kingdom where we began selling directly to hospitals and other end-users subsequent to June 30, 2014 due to the PuriCore Acquisition; water purification and filtration products and services are sold directly to hospitals, dialysis clinics, pharmaceutical and biotechnology companies, laboratories, medical products and service companies and other end-users as well as through third-party distributors; the majority of our healthcare disposable products are sold to third party distributors and with respect to some of our sterility assurance products, to hospitals, surgery centers, physician and dental offices, dental schools, medical research companies, laboratories and other end-users; the majority of our dialysis products are sold to dialysis clinics and hospitals; and specialty packaging products are sold to third-party distributors, medical research companies, laboratories, pharmaceutical companies, hospitals, government agencies and other end-users. Sales to all of these customers follow our revenue recognition policies. | |
Translation of Foreign Currency Financial Statements | ' |
Translation of Foreign Currency Financial Statements | |
Assets and liabilities of our foreign subsidiaries are translated into United States dollars at year-end exchange rates; sales and expenses are translated using average exchange rates during the year. The cumulative effect of the translation of the accounts of the foreign subsidiaries is presented as a component of accumulated other comprehensive income or loss. Foreign exchange gains and losses related to the purchase of inventories denominated in foreign currencies are included in cost of sales and foreign exchange gains and losses related to the incurrence of operating costs denominated in foreign currencies and the conversion of foreign assets and liabilities into functional currencies are included in general and administrative expenses. | |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents | |
We consider all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. | |
Accounts Receivable and Allowance for Doubtful Accounts | ' |
Accounts Receivable and Allowance for Doubtful Accounts | |
Accounts receivable consist of amounts due to us from normal business activities. Allowances for doubtful accounts are reserves for the estimated loss from the inability of customers to make required payments. We use historical experience as well as current market information in determining the estimate. While actual losses have historically been within management’s expectations and provisions established, if the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Alternatively, if certain customers paid their delinquent receivables, reductions in allowances may be required. | |
Inventories | ' |
Inventories | |
Inventories consist of raw materials, work-in-process and finished products which are sold in the ordinary course of our business and are stated at the lower of cost (first-in, first-out) or market. In assessing the value of inventories, we must make estimates and judgments regarding reserves required for product obsolescence, aging of inventories and other issues potentially affecting the saleable condition of products. In performing such evaluations, we use historical experience as well as current market information. With few exceptions, the saleable value of our inventories has historically been within management’s expectation and provisions established, however, rapid changes in the market due to competition, technology and various other factors could have an adverse effect on the saleable value of our inventories, resulting in the need for additional reserves. | |
Property and Equipment | ' |
Property and Equipment | |
Property and equipment are stated at cost. Additions and improvements are capitalized, while maintenance and repair costs are expensed. When assets are retired or otherwise disposed, the cost and related accumulated depreciation or amortization is removed from the respective accounts and any resulting gain or loss is included in income. Depreciation and amortization is provided on the straight-line method over the estimated useful lives of the assets which generally range from 2-15 years for furniture and equipment, 5-32 years for buildings and improvements and the shorter of the life of the asset or the life of the lease for leasehold improvements. Depreciation and amortization expense related to property and equipment in fiscals 2014, 2013 and 2012 was $8,245,000, $7,202,000 and $6,801,000, respectively. | |
Goodwill and Intangible Assets | ' |
Goodwill and Intangible Assets | |
Certain of our identifiable intangible assets, including customer relationships, technology, brand names, non-compete agreements and patents, are amortized using the straight-line method over their estimated useful lives which range from 2 to 20 years. Additionally, we have recorded goodwill and trademarks and trade names, all of which have indefinite useful lives and are therefore not amortized. All of our intangible assets and goodwill are reviewed for impairment 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. Our management is responsible for determining if impairment exists and considers a number of factors, including third-party valuations, when making these determinations. | |
In accordance with Accounting Standards Update (“ASU”) 2011-08, “Intangibles — Goodwill and Other,” (“ASU 2011-08”), we first assess 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. Such qualitative factors that are assessed include evaluating a segment’s financial performance, industry and market conditions, macroeconomic conditions and specific issues that can directly affect the segment such as changes in business strategies, competition, supplier relationships, operating costs, regulatory matters, litigation and the composition of the segment’s assets due to acquisitions or other events. At July 31, 2014, because we determined through qualitative factors that the fair values of our Endoscopy, Water Purification and Filtration and Healthcare Disposables segments were unlikely to be less than the carrying value, we did not proceed to step one of the two-step quantitative goodwill impairment test for those three segments. We performed step one of the two-step quantitative goodwill impairment test for Dialysis (due to the decreasing operating results) and Specialty Packaging (due to fair value exceeding book value by a nominal amount in the prior year). In performing a detailed quantitative review for goodwill impairment, management uses a two-step process that begins with an estimation of the fair value of the related operating segments by using weighted fair value results of the discounted cash flow methodology, as well as the market multiple and comparable transaction methodologies, where appropriate. The first step is a review for potential impairment, and the second step measures the amount of impairment, if any. | |
In accordance with ASU 2012-02, “Intangibles — Goodwill and Other,” (“ASU 2012-02”), we perform our annual impairment review for indefinite lived intangibles by first assessing qualitative factors, such as those described above, to determine whether it is more likely than not that the fair value of such assets is less than the carrying values, and if necessary, we perform a quantitative analysis comparing the current fair value of our indefinite lived intangibles assets to their carrying values. At July 31, 2014, because we determined through qualitative factors that the fair values of our indefinite lived intangible assets in our Endoscopy, Water Purification and Filtration and Healthcare Disposables segments were unlikely to be less than the carrying value, we did not perform a quantitative analysis for those assets. We performed a quantitative analysis for indefinite lived intangible assets in our Dialysis and Specialty Packaging segments, for the same reasons stated above for our goodwill impairment test. With respect to amortizable intangible assets when impairment indicators are present, management would determine whether expected future non-discounted cash flows would be sufficient to recover the carrying value of the assets; if not, the carrying value of the assets would be adjusted to their fair value. | |
On July 31, 2014, management concluded that none of our intangible assets or goodwill was 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 and earnings 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, 2014, 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 exceeded book value by a nominal amount. At July 31, 2014, goodwill relating to our Specialty Packaging reporting unit was $6,567,000. We believe the most significant assumptions impacting the impairment assessment of Specialty Packaging relate to the assumed compounded annual sales growth 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. | |
Long-Lived Assets | ' |
Long-Lived Assets | |
We evaluate the carrying value of long-lived assets including property, equipment and other assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. 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. Our historical assessments of our long-lived assets have not differed significantly from the actual amounts realized. However, the determination of fair value requires us to make certain assumptions and estimates and is highly subjective. On July 31, 2014, management concluded that no events or changes in circumstances have occurred that would indicate that the carrying amount of our long-lived assets may not be recoverable. | |
Other Assets | ' |
Other Assets | |
Debt issuance costs associated with our credit facilities are amortized to interest expense over the life of the credit facilities. As of July 31, 2014 and 2013, such debt issuance costs, net of related amortization, were included in other assets and amounted to $1,678,000 and $764,000, respectively. Debt issuance costs increased due to modifications to our credit facilities, as more fully described in Note 9 to the Consolidated Financial Statements. | |
Warranties | ' |
Warranties | |
We provide for estimated costs that may be incurred to remedy deficiencies of quality or performance of our products at the time of revenue recognition. Most of our products have a one year warranty. We record provisions for product warranties as a component of cost of sales based upon an estimate of the amounts necessary to settle existing and future claims on products sold. The historical relationship of warranty costs to products sold is the primary basis for the estimate. A significant increase in third party service repair rates, the cost and availability of parts or the frequency of claims could have a material adverse impact on our results for the period or periods in which such claims or additional costs materialize. | |
Management reviews its warranty exposure periodically and believes that the warranty reserves are adequate; however, actual claims incurred could differ from original estimates, requiring adjustments to the reserves. | |
Stock-Based Compensation | ' |
Stock-Based Compensation | |
We account for stock options and stock awards in which stock compensation expense is recognized for any option or stock award grant based upon the award’s fair value. All of our stock options and stock awards (which consist only of restricted stock) 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, reduced by estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures are estimated based on historical experience. | |
The stock-based compensation expense recorded in our Consolidated Financial Statements may not be representative of the effect of stock-based compensation expense in future periods due to the level of awards issued in past years (which level may not be similar in the future), modifications to existing awards, accelerated vesting related to certain employment terminations and assumptions used in determining fair value, expected lives and estimated forfeitures. We determine the fair value of each stock award using the closing market price of our common stock on the date of grant. We estimate the fair value of each option grant on the date of grant using the Black-Scholes option valuation model. The determination of fair value using an option-pricing model is affected by our stock price as well as assumptions regarding a number of subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the expected option life (which is determined by using the historical closing prices of our common stock), the expected dividend yield (which is approximately 0.3%), and the expected option life (which is based on historical exercise behavior). | |
Legal Proceedings | ' |
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 adverse effect on our business, financial condition, results of operations or cash flows. | |
Costs Associated with Exit or Disposal Activities | ' |
Costs Associated with Exit or Disposal Activities | |
We recognize costs associated with exit or disposal activities, such as costs to terminate a contract, the exit or disposal of a business, or the early termination of a leased property, by recognizing the liability at fair value when incurred, except for certain one-time termination benefits, such as severance costs, for which the period of recognition begins when a severance plan is communicated to employees. | |
Inherent in the calculation of liabilities relating to exit and disposal activities are significant management judgments and estimates, including estimates of termination costs, employee attrition and the interest rate used to discount certain expected net cash payments. Such judgments and estimates are reviewed by us on a regular basis. The cumulative effect of a change to a liability resulting from a revision to either timing or the amount of estimated cash flows is recognized by us as an adjustment to the liability in the period of the change. | |
Earnings Per Common Share | ' |
Earnings Per Common Share | |
Basic EPS is computed based upon the weighted average number of common shares outstanding for the year. Diluted EPS is computed based upon the weighted average number of common shares outstanding for the year plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the year. We include participating securities (unvested share-based payment awards that contain non-forfeitable 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. | |
Advertising Costs | ' |
Advertising Costs | |
Our policy is to expense advertising costs as they are incurred. Advertising costs charged to expense were $2,656,000, $2,308,000 and $2,507,000 for fiscals 2014, 2013 and 2012, respectively. | |
Income Taxes | ' |
IncomeTaxes | |
We recognize deferred tax assets and liabilities based on differences between the financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities also include items recorded in conjunction with the purchase accounting for business acquisitions as well as net operating loss carryforwards. We regularly review our deferred tax assets for recoverability and establish a valuation allowance, if necessary, based on historical taxable income, projected future taxable income, and the expected timing of the reversals of existing temporary differences. Although realization is not assured, management believes it is more likely than not that the recorded deferred tax assets, as adjusted for valuation allowances, will be realized. Additionally, deferred tax liabilities are regularly reviewed to confirm that such amounts are appropriately stated. A review of our deferred tax items considers known future changes in various income tax rates, principally in the United States. If income tax rates were to change in the future, particularly in the United States and to a lesser extent Canada, our items of deferred tax could be materially affected. All of such evaluations require significant management judgments. | |
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 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. Any adjustments upon resolution of income tax uncertainties are recognized in our results of operations. Unrecognized tax benefits are analyzed periodically and adjustments are made as events occur to warrant adjustment to the related liability. | |
Medical Device Taxes | ' |
Medical Device Taxes | |
The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 imposes significant new taxes on medical device makers in the form of an excise tax on certain U.S. medical device sales that began in January 2013. A significant portion of our sales are considered medical device sales under this new legislation. We calculate medical device excise taxes based on the latest available regulations and IRS notices and recognize the excise taxes in cost of sales at the time the medical device revenue is recognized in our Consolidated Statements of Income. In fiscals 2014 and 2013, we recorded excise taxes of $3,872,000 and $2,087,000, respectively, in cost of sales. The regulations regarding the calculations of the medical device taxes are complex and certain aspects can be subject to interpretation causing the IRS to issue notices clarifying various aspects of these new taxes. Although we have made all reasonable efforts to record accurate excise taxes, the determination of the tax requires us to make certain assumptions and estimates. Actual taxes for the period could differ from original estimates requiring adjustments to our Consolidated Financial Statements. | |
Business Combinations | ' |
Business Combinations | |
Acquisitions require significant estimates and judgments related to the fair value of assets acquired and liabilities assumed. We determine fair value based on the estimated 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. | |
Certain liabilities and reserves are subjective in nature. We reflect such liabilities and reserves based upon the most recent information available. In conjunction with our acquisitions, such subjective liabilities and reserves principally include contingent consideration, certain income tax and sales and use tax exposures, including tax liabilities related to our foreign subsidiaries, as well as reserves for accounts receivable, inventories, warranties and contingent guaranteed obligations. We account for contingent consideration relating to business combinations in accordance with ASC 805, “Business Combinations,” which requires us to record the fair value of contingent consideration as a liability and an increase to goodwill at 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 Consolidated Statements of Income. We determine the fair value of contingent consideration based on future operating projections under various potential scenarios and weight the probability of these outcomes. Similarly, other acquisition related liabilities can be required to be recorded at fair value at the date of the acquisition and continually re-measured at each balance sheet date, such as the three year price floor relating to the August 1, 2011 acquisition of the business and substantially all of the assets of Byrne Medical, Inc. (the “Byrne Acquisition”) which fair value was determined using an option valuation model, the assumed contingent obligation relating to the Jet Prep Acquisition and the contingent guaranteed obligation relating to the PuriCore Acquisition, as further described in Note 6 to the Consolidated Financial Statements. The ultimate settlement of liabilities relating to business combinations may be for amounts which are materially different from the amounts initially recorded and may cause volatility in our results of operations. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. On an ongoing basis, we evaluate the adequacy of our reserves and the estimates used in calculations of reserves as well as other judgmental financial statement items, including, but not limited to: collectability of accounts receivable, volume rebates and trade-in allowances, inventory values and obsolescence reserves, warranty reserves, contingent consideration, contingent guaranteed obligations, depreciation and amortization periods, deferred income taxes, goodwill and intangible assets, impairment of long-lived assets, unrecognized tax benefits for uncertain tax positions, medical device excise tax expense, reserves for legal exposure, stock-based compensation and expense accruals. Such estimates and assumptions are subjective in nature. We reflect such amounts based upon the most recent information available. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” (“ASU 2014-09”), which will supersede the revenue recognition requirements in Accounting Standards Codification 605, “Revenue Recognition.” ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period. We are currently in the process of evaluating the impact of ASU 2014-09 on our financial position and results of operations. | |
In April 2014, the FASB issued ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” (“ASU 2014-08”). Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on an organization’s operations and financial results. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income and expenses of discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. ASU 2014-08 is effective for fiscal years beginning after December 15, 2014, with early adoption allowed. Once adopted, ASU 2014-08 will impact the reporting of future discontinued operations and disposals, if any. | |
In July 2013, the FASB issued 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 an unrecognized tax benefit to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, similar tax loss, or a tax credit carryforward. To the extent the tax benefit is not available at the reporting date under the governing tax law or if the entity does not intend to use the deferred tax asset for such purpose, the unrecognized tax benefit should be presented as a liability and not combined with deferred tax assets. ASU 2013-11 is effective for annual periods, and interim periods within those years, beginning after December 15, 2013. The amendments are to be applied to all unrecognized tax benefits that exist as of the effective date and may be applied retrospectively to each prior reporting period presented. As we do not have any unrecognized tax benefits at July 31, 2014, we do not expect ASU 2013-11 to have a material impact on our financial position and results of operations. |
Acquisitions_Tables
Acquisitions (Tables) | 12 Months Ended | ||||
Jul. 31, 2014 | |||||
Puri Core International Limited | ' | ||||
Acquisitions | ' | ||||
Schedule of purchase price allocated to the assets acquired and assumed liabilities based on estimated fair values | ' | ||||
Preliminary | |||||
Net Assets | Allocation | ||||
Current assets | $ | 8,982,000 | |||
Property, plant and equipment | 972,000 | ||||
Amortizable intangible assets (9- year weighted average life): | |||||
Customer relationships (10- year life) | 11,340,000 | ||||
Technology (6- year life) | 1,760,000 | ||||
Other (3- year life) | 93,000 | ||||
Non-current deferred income tax assets, net | 1,924,000 | ||||
Current liabilities | (10,085,000 | ) | |||
Other long-term liabilities | (753,000 | ) | |||
Net assets acquired | $ | 14,233,000 | |||
Sterilator Company, 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 | $ | 1,058,000 | |||
Property, plant and equipment | 521,000 | ||||
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 | (276,000 | ) | |||
Net assets acquired | $ | 1,622,000 | |||
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 | $ | 82,000 | |||
Property, plant and equipment | 65,000 | ||||
Amortizable intangible asset: | |||||
Technology (7- year life) | 3,730,000 | ||||
Current liabilities | (104,000 | ) | |||
Other long-term liabilities | (1,716,000 | ) | |||
Net assets acquired | $ | 2,057,000 | |||
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 | |||
Byrne Medical 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: | |||||
Accounts receivable | $ | 4,303,000 | |||
Inventory | 4,581,000 | ||||
Other assets | 588,000 | ||||
Property, plant and equipment | 10,074,000 | ||||
Amortizable intangible assets (13- year weighted average life): | |||||
Customer relationships (15-year life) | 25,300,000 | ||||
Brand names (10-year life) | 2,200,000 | ||||
Technology (8-year life) | 11,900,000 | ||||
Non-compete agreement (14- year weighted average life) | 2,000,000 | ||||
Other assets | 105,000 | ||||
Current liabilities | (2,277,000 | ) | |||
Other liabilities | (85,000 | ) | |||
Net assets acquired | $ | 58,689,000 | |||
Schedule of components of the purchase price | ' | ||||
Cash (including purchase of buildings) | $ | 95,261,000 | |||
Fair value of the Cantel common stock with the multi-year lock-up | 7,310,000 | ||||
Total consideration paid at August 1, 2011 | 102,571,000 | ||||
Price floor | 3,000,000 | ||||
Contingent consideration | 2,700,000 | ||||
Total purchase price recorded at August 1, 2011 | $ | 108,271,000 |
Inventories_Tables
Inventories (Tables) | 12 Months Ended | |||||||
Jul. 31, 2014 | ||||||||
Inventories | ' | |||||||
Summary of inventories | ' | |||||||
July 31, | ||||||||
2014 | 2013 | |||||||
Raw materials and parts | $ | 27,365,000 | $ | 23,815,000 | ||||
Work-in-process | 7,510,000 | 6,945,000 | ||||||
Finished goods | 24,862,000 | 23,407,000 | ||||||
Total | $ | 59,737,000 | $ | 54,167,000 |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||||||||
Jul. 31, 2014 | |||||||||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||||||
Schedule of fair values of financial instruments measured on a recurring basis | ' | ||||||||||||||||||||||
July 31, 2014 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||||||||
Money markets | $ | 1,702,000 | $ | — | $ | — | $ | 1,702,000 | |||||||||||||||
Total assets | $ | 1,702,000 | $ | — | $ | — | $ | 1,702,000 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||
Accrued expenses: | |||||||||||||||||||||||
Interest rate swap agreement | $ | — | $ | 69,000 | $ | — | $ | 69,000 | |||||||||||||||
Contingent guaranteed obligation | — | — | 684,000 | 684,000 | |||||||||||||||||||
Total accrued expenses | — | 69,000 | 684,000 | 753,000 | |||||||||||||||||||
Contingent consideration | — | — | 2,722,000 | 2,722,000 | |||||||||||||||||||
Other long-term liabilities: | |||||||||||||||||||||||
Assumed contingent obligation | — | — | 1,752,000 | 1,752,000 | |||||||||||||||||||
Contingent guaranteed obligation | — | — | 711,000 | 711,000 | |||||||||||||||||||
Total other long-term liabilities: | — | — | 2,463,000 | 2,463,000 | |||||||||||||||||||
Total liabilities | $ | — | $ | 69,000 | $ | 5,869,000 | $ | 5,938,000 | |||||||||||||||
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 | |||||||||||||||||||
Contingent consideration | — | — | 45,000 | 45,000 | |||||||||||||||||||
Other long-term liabilities: | |||||||||||||||||||||||
Interest rate swap agreements | — | 29,000 | — | 29,000 | |||||||||||||||||||
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 | PuriCore | ||||||||||||||||||||||
ConFirm | Byrne | Byrne | Jet Prep | Assumed | Contingent | ||||||||||||||||||
Contingent | Contingent | Price | Contingent | Contingent | Guaranteed | ||||||||||||||||||
Consideration | Consideration | Floor | Consideration | Obligation | Obligation | Total | |||||||||||||||||
Balance, July 31, 2011 | $ | 775,000 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 775,000 | |||||||||
Total net unrealized losses (gains) included in general and administrative expense in earnings | 80,000 | (1,200,000 | ) | (1,963,000 | ) | — | — | — | (3,083,000 | ) | |||||||||||||
Net purchases, issuances, sales and settlements | (855,000 | ) | 2,700,000 | 3,000,000 | — | — | — | 4,845,000 | |||||||||||||||
Balance, July 31, 2012 | — | 1,500,000 | 1,037,000 | — | — | — | 2,537,000 | ||||||||||||||||
Total net unrealized gains included in general and administrative expense in earnings | — | (1,500,000 | ) | (992,000 | ) | — | — | — | (2,492,000 | ) | |||||||||||||
Net purchases, issuances, sales and settlements | — | — | — | — | — | — | — | ||||||||||||||||
Balance, July 31, 2013 | — | — | 45,000 | — | — | — | 45,000 | ||||||||||||||||
Total net unrealized (gains) losses included in general and administrative expense in earnings | — | — | (45,000 | ) | 232,000 | 32,000 | — | 219,000 | |||||||||||||||
Net purchases, issuances, sales and settlements | — | — | — | 2,490,000 | 1,720,000 | 1,395,000 | 5,605,000 | ||||||||||||||||
Balance, July 31, 2014 | $ | — | $ | — | $ | — | $ | 2,722,000 | $ | 1,752,000 | $ | 1,395,000 | $ | 5,869,000 |
Intangibles_and_Goodwill_Table
Intangibles and Goodwill (Tables) | 12 Months Ended | |||||||||||||||||||
Jul. 31, 2014 | ||||||||||||||||||||
Intangibles and Goodwill | ' | |||||||||||||||||||
Schedule of intangible assets | ' | |||||||||||||||||||
July 31, 2014 | ||||||||||||||||||||
Accumulated | ||||||||||||||||||||
Gross | Amortization | Net | ||||||||||||||||||
Intangible assets with finite lives: | ||||||||||||||||||||
Customer relationships | $ | 83,145,000 | $ | (31,336,000 | ) | $ | 51,809,000 | |||||||||||||
Technology | 26,405,000 | (11,444,000 | ) | 14,961,000 | ||||||||||||||||
Brand names | 12,680,000 | (9,431,000 | ) | 3,249,000 | ||||||||||||||||
Non-compete agreements | 3,129,000 | (754,000 | ) | 2,375,000 | ||||||||||||||||
Patents and other registrations | 2,073,000 | (792,000 | ) | 1,281,000 | ||||||||||||||||
127,432,000 | (53,757,000 | ) | 73,675,000 | |||||||||||||||||
Trademarks and tradenames | 9,277,000 | — | 9,277,000 | |||||||||||||||||
Total intangible assets | $ | 136,709,000 | $ | (53,757,000 | ) | $ | 82,952,000 | |||||||||||||
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 tradenames | 9,387,000 | — | 9,387,000 | |||||||||||||||||
Total intangible assets | $ | 120,142,000 | $ | (44,213,000 | ) | $ | 75,929,000 | |||||||||||||
Schedule of estimated annual amortization expense of intangible assets for the next five years | ' | |||||||||||||||||||
Year Ending July 31, | ||||||||||||||||||||
2015 | $ | 12,150,000 | ||||||||||||||||||
2016 | 9,044,000 | |||||||||||||||||||
2017 | 8,466,000 | |||||||||||||||||||
2018 | 8,161,000 | |||||||||||||||||||
2019 | 7,838,000 | |||||||||||||||||||
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 | 19,225,000 | — | 1,727,000 | — | — | 20,952,000 | ||||||||||||||
Foreign currency translation | (181,000 | ) | (341,000 | ) | — | — | (401,000 | ) | (923,000 | ) | ||||||||||
Balance, July 31, 2014 | $ | 78,274,000 | $ | 56,838,000 | $ | 81,835,000 | $ | 8,133,000 | $ | 6,567,000 | $ | 231,647,000 |
Warranties_Tables
Warranties (Tables) | 12 Months Ended | |||||||
Jul. 31, 2014 | ||||||||
Warranties | ' | |||||||
Summary of activity in warranty reserves | ' | |||||||
Year Ended July 31, | ||||||||
2014 | 2013 | |||||||
Beginning balance | $ | 1,261,000 | $ | 1,667,000 | ||||
Acquisitions | 221,000 | 45,000 | ||||||
Provisions | 2,627,000 | 1,893,000 | ||||||
Settlements | (2,519,000 | ) | (2,344,000 | ) | ||||
Foreign currency translation | (1,000 | ) | — | |||||
Ending Balance | $ | 1,589,000 | $ | 1,261,000 |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||||||||||
Jul. 31, 2014 | ||||||||||||||||||||
Income Taxes | ' | |||||||||||||||||||
Schedule of provision for income taxes | ' | |||||||||||||||||||
Year Ended July 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Current | Deferred | Current | Deferred | Current | Deferred | |||||||||||||||
United States: | ||||||||||||||||||||
Federal | $ | 22,119,000 | $ | (896,000 | ) | $ | 18,122,000 | $ | (351,000 | ) | $ | 13,593,000 | $ | 390,000 | ||||||
State | 3,710,000 | (348,000 | ) | 3,010,000 | 223,000 | 2,144,000 | 78,000 | |||||||||||||
Canada | 417,000 | (39,000 | ) | 221,000 | (174,000 | ) | 324,000 | (85,000 | ) | |||||||||||
Singapore | 175,000 | 19,000 | 130,000 | 10,000 | 101,000 | (13,000 | ) | |||||||||||||
Netherlands | 143,000 | 70,000 | — | (76,000 | ) | — | — | |||||||||||||
United Kingdom | — | (24,000 | ) | — | — | — | — | |||||||||||||
Total | $ | 26,564,000 | $ | (1,218,000 | ) | $ | 21,483,000 | $ | (368,000 | ) | $ | 16,162,000 | $ | 370,000 | ||||||
Schedule of geographic components of income before income taxes | ' | |||||||||||||||||||
Year Ended July 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
United States | $ | 67,288,000 | $ | 57,973,000 | $ | 44,120,000 | ||||||||||||||
Canada | 1,030,000 | (5,000 | ) | 531,000 | ||||||||||||||||
Singapore | 1,093,000 | 1,038,000 | 713,000 | |||||||||||||||||
Netherlands | 46,000 | 1,344,000 | 152,000 | |||||||||||||||||
United Kingdom | (120,000 | ) | — | — | ||||||||||||||||
Israel | (726,000 | ) | — | — | ||||||||||||||||
Japan | — | 4,000 | 2,353,000 | |||||||||||||||||
Total | $ | 68,611,000 | $ | 60,354,000 | $ | 47,869,000 | ||||||||||||||
Schedule of reconciliation of differences in effective tax rate from the United States statutory tax rate | ' | |||||||||||||||||||
Year Ended July 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Expected statutory tax | $ | 24,014,000 | $ | 21,124,000 | $ | 16,754,000 | ||||||||||||||
Differential attributable to foreign operations: | ||||||||||||||||||||
Canada | 17,000 | 49,000 | 54,000 | |||||||||||||||||
Singapore | (189,000 | ) | (224,000 | ) | (161,000 | ) | ||||||||||||||
Netherlands | 197,000 | (546,000 | ) | (53,000 | ) | |||||||||||||||
United Kingdom | 18,000 | — | — | |||||||||||||||||
Israel | 254,000 | — | — | |||||||||||||||||
Japan | — | (1,000 | ) | (824,000 | ) | |||||||||||||||
State and local taxes | 2,178,000 | 2,044,000 | 1,434,000 | |||||||||||||||||
Domestic production deduction | (1,553,000 | ) | (1,265,000 | ) | (1,009,000 | ) | ||||||||||||||
Taxes on foreign dividends | 118,000 | 120,000 | (72,000 | ) | ||||||||||||||||
R&E tax credit | (183,000 | ) | (492,000 | ) | (138,000 | ) | ||||||||||||||
Investment impairment | — | — | 175,000 | |||||||||||||||||
Other | 475,000 | 306,000 | 372,000 | |||||||||||||||||
Total income tax expense | $ | 25,346,000 | $ | 21,115,000 | $ | 16,532,000 | ||||||||||||||
Schedule of deferred income tax assets and liabilities | ' | |||||||||||||||||||
July 31, | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Current deferred tax assets: | ||||||||||||||||||||
Accrued expenses | $ | 2,753,000 | $ | 2,337,000 | ||||||||||||||||
Inventories | 1,321,000 | 1,149,000 | ||||||||||||||||||
Accounts receivable | 732,000 | 676,000 | ||||||||||||||||||
Foreign NOLs | — | 76,000 | ||||||||||||||||||
Subtotal | 4,806,000 | 4,238,000 | ||||||||||||||||||
Valuation allowance | (1,255,000 | ) | (109,000 | ) | ||||||||||||||||
$ | 3,551,000 | $ | 4,129,000 | |||||||||||||||||
Non-current deferred tax assets: | ||||||||||||||||||||
Other long-term liabilities | $ | 928,000 | $ | 527,000 | ||||||||||||||||
Stock-based compensation | 2,633,000 | 2,138,000 | ||||||||||||||||||
Capital investment | 175,000 | 175,000 | ||||||||||||||||||
Foreign tax credit | 133,000 | 133,000 | ||||||||||||||||||
Domestic NOLs | 2,660,000 | 83,000 | ||||||||||||||||||
Foreign NOLs | 4,552,000 | — | ||||||||||||||||||
Subtotal | 11,081,000 | 3,056,000 | ||||||||||||||||||
Valuation allowance | (2,283,000 | ) | (199,000 | ) | ||||||||||||||||
8,798,000 | 2,857,000 | |||||||||||||||||||
Non-current deferred tax liabilities: | ||||||||||||||||||||
Property and equipment | (4,784,000 | ) | (6,310,000 | ) | ||||||||||||||||
Intangible assets | (12,554,000 | ) | (9,840,000 | ) | ||||||||||||||||
Goodwill | (9,265,000 | ) | (7,893,000 | ) | ||||||||||||||||
(26,603,000 | ) | (24,043,000 | ) | |||||||||||||||||
Net non-current deferred tax liabilities | $ | (17,805,000 | ) | $ | (21,186,000 | ) | ||||||||||||||
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 fiscal 2014 | (124,000 | ) | ||||||||||||||||||
Unrecognized tax benefits on July 31, 2014 | $ | — |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||||||||||||||||
Jul. 31, 2014 | |||||||||||||||||||||||
Commitments and Contingencies | ' | ||||||||||||||||||||||
Schedule of aggregate annual required payments over the next five years and thereafter under contractual obligations that have long-term components | ' | ||||||||||||||||||||||
Year Ended July 31, | |||||||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | Total | |||||||||||||||||
Maturity of the credit facility | $ | — | $ | — | $ | — | $ | — | $ | 80,500 | $ | — | $ | 80,500 | |||||||||
Expected interest payments under the credit facility (1) | 1,465 | 1,465 | 1,465 | 1,465 | 855 | — | 6,715 | ||||||||||||||||
Minimum commitments under noncancelable operating leases | 3,811 | 2,940 | 2,252 | 1,529 | 990 | 2,772 | 14,294 | ||||||||||||||||
Compensation agreements | 7,271 | 1,769 | 600 | 350 | 350 | 496 | 10,836 | ||||||||||||||||
Contingent consideration (2) | — | 70 | 554 | 947 | 1,124 | 1,522 | 4,217 | ||||||||||||||||
Assumed contingent liability (3) | 4 | 47 | 226 | 428 | 574 | 622 | 1,901 | ||||||||||||||||
Contingent guaranteed obligation (4) | 683 | 454 | 234 | 171 | 171 | — | 1,713 | ||||||||||||||||
Deferred compensation and other | 42 | 64 | 50 | 35 | 12 | 15 | 218 | ||||||||||||||||
Total contractual obligations | $ | 13,276 | $ | 6,809 | $ | 5,381 | $ | 4,925 | $ | 84,576 | $ | 5,427 | $ | 120,394 | |||||||||
(1) The expected interest payments under our credit facility reflect an interest rate of 1.82%, which was our weighted average interest rate on outstanding borrowings at July 31, 2014. | |||||||||||||||||||||||
(2) These future potential payments of contingent consideration relate to the Jet Prep Acquisition, as further explained below, and are reflected in the July 31, 2014 Consolidated Balance Sheet at its net present value of $2,722,000 using a discount rate of 12.6%. | |||||||||||||||||||||||
(3) These future potential payments of an assumed contingent liability relate to the Jet Prep Acquisition, as further explained below, and are reflected in the July 31, 2014 Consolidated Balance Sheet at its net present value of $1,752,000 using a discount rate of 2.5%. | |||||||||||||||||||||||
(4) These future potential payments of a contingent guaranteed obligation relate to the PuriCore Acquisition, as further explained below, and are reflected in the July 31, 2014 Consolidated Balance Sheet at its net present value of $1,395,000 using a discount rate of 10%. |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended | ||||||||||
Jul. 31, 2014 | |||||||||||
Accumulated Other Comprehensive Income (Loss) | ' | ||||||||||
Schedule of the components and changes in accumulated other comprehensive income (loss) | ' | ||||||||||
Foreign | |||||||||||
Currency | Interest Rate | ||||||||||
Translation | Swap | ||||||||||
Adjustments | Agreements | Total | |||||||||
Balance, July 31, 2011 | $ | 9,283,000 | $ | — | $ | 9,283,000 | |||||
Other comprehensive loss | (1,158,000 | ) | (335,000 | ) | (1,493,000 | ) | |||||
Income tax effect on other comprehensive loss | 260,000 | 125,000 | 385,000 | ||||||||
Balance, July 31, 2012 | 8,385,000 | (210,000 | ) | 8,175,000 | |||||||
Other comprehensive loss before reclassifications | (435,000 | ) | (50,000 | ) | (485,000 | ) | |||||
Income tax effect on other comprehensive loss before reclassifications | 3,130,000 | 18,000 | 3,148,000 | ||||||||
Reclassification adjustments to interest expense for losses on interest rate swaps included in net income during the period | — | 222,000 | 222,000 | ||||||||
Income tax effect on reclassification adjustments | — | (83,000 | ) | (83,000 | ) | ||||||
Balance, July 31, 2013 | 11,080,000 | (103,000 | ) | 10,977,000 | |||||||
Other comprehensive loss before reclassifications | (1,528,000 | ) | (47,000 | ) | (1,575,000 | ) | |||||
Income tax effect on other comprehensive loss before reclassifications | — | 17,000 | 17,000 | ||||||||
Reclassification adjustments to interest expense for losses on interest rate swaps included in net income during the period | — | 96,000 | 96,000 | ||||||||
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 | — | (76,000 | ) | (76,000 | ) | ||||||
Balance, July 31, 2014 | $ | 9,552,000 | $ | — | $ | 9,552,000 |
Earnings_Per_Common_Share_Tabl
Earnings Per Common Share (Tables) | 12 Months Ended | ||||||||||
Jul. 31, 2014 | |||||||||||
Earnings Per Common Share | ' | ||||||||||
Schedule of computation of basic and diluted EPS available to shareholders of common stock (excluding participating securities) | ' | ||||||||||
Year Ended July 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Numerator for basic and diluted earnings per share: | |||||||||||
Net income | $ | 43,265,000 | $ | 39,239,000 | $ | 31,337,000 | |||||
Less income allocated to participating securities | (581,000 | ) | (608,000 | ) | (580,000 | ) | |||||
Net income available to common shareholders | $ | 42,684,000 | $ | 38,631,000 | $ | 30,757,000 | |||||
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 | 40,751,629 | 40,267,885 | 39,586,170 | ||||||||
Dilutive effect of stock options using the treasury stock method and the average market price for the year | 159,685 | 289,007 | 438,753 | ||||||||
Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock | 40,911,314 | 40,556,892 | 40,024,923 | ||||||||
Earnings per share attributable to common stock: | |||||||||||
Basic earnings per share | $ | 1.05 | $ | 0.96 | $ | 0.78 | |||||
Diluted earnings per share | $ | 1.04 | $ | 0.95 | $ | 0.77 | |||||
Stock options excluded from weighted average dilutive common shares outstanding because their inclusion would have been antidilutive | — | — | — | ||||||||
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 | ' | ||||||||||
Year Ended July 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock | 40,911,314 | 40,556,892 | 40,024,923 | ||||||||
Participating securities | 558,252 | 639,827 | 751,896 | ||||||||
Total weighted average number of shares and common stock equivalents attributable to both common stock and participating securities | 41,469,566 | 41,196,719 | 40,776,819 |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 12 Months Ended | |||||||||||||||||
Jul. 31, 2014 | ||||||||||||||||||
Stock-Based Compensation | ' | |||||||||||||||||
Schedule of the income statement components of stock-based compensation expense recognized in the Consolidated Statements of Income | ' | |||||||||||||||||
Year Ended July 31, | ||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||
Cost of sales | $ | 337,000 | $ | 174,000 | $ | 195,000 | ||||||||||||
Operating expenses: | ||||||||||||||||||
Selling | 665,000 | 329,000 | 397,000 | |||||||||||||||
General and administrative | 4,339,000 | 3,198,000 | 3,203,000 | |||||||||||||||
Research and development | 68,000 | 32,000 | 45,000 | |||||||||||||||
Total operating expenses | 5,072,000 | 3,559,000 | 3,645,000 | |||||||||||||||
Stock-based compensation before income taxes | 5,409,000 | 3,733,000 | 3,840,000 | |||||||||||||||
Income tax benefits | (1,909,000 | ) | (1,343,000 | ) | (1,363,000 | ) | ||||||||||||
Total stock-based compensation expense, net of tax | $ | 3,500,000 | $ | 2,390,000 | $ | 2,477,000 | ||||||||||||
Decrease in earnings per common share due to stock-based compensation: | ||||||||||||||||||
Basic | $ | 0.08 | $ | 0.06 | $ | 0.06 | ||||||||||||
Diluted | $ | 0.08 | $ | 0.06 | $ | 0.06 | ||||||||||||
Summary of nonvested stock award activity | ' | |||||||||||||||||
Weighted | ||||||||||||||||||
Number of | Average | |||||||||||||||||
Shares | Fair Value | |||||||||||||||||
Nonvested stock awards at July 31, 2011 | 545,838 | $ | 8.01 | |||||||||||||||
Granted | 536,859 | 9.48 | ||||||||||||||||
Canceled | (83,002 | ) | 8.63 | |||||||||||||||
Vested | (291,687 | ) | 7.77 | |||||||||||||||
Nonvested stock awards at July 31, 2012 | 708,008 | 9.15 | ||||||||||||||||
Granted | 210,484 | 17.55 | ||||||||||||||||
Canceled | (14,244 | ) | 11.31 | |||||||||||||||
Vested | (298,481 | ) | 9.26 | |||||||||||||||
Nonvested stock awards at July 31, 2013 | 605,767 | 11.96 | ||||||||||||||||
Granted | 258,760 | 31.95 | ||||||||||||||||
Canceled | (10,066 | ) | 15.7 | |||||||||||||||
Vested | (328,619 | ) | 11.13 | |||||||||||||||
Nonvested stock awards at July 31, 2014 | 525,842 | $ | 22.25 | |||||||||||||||
Weighted-average assumptions used to estimate fair value of stock options granted using the Black-Scholes option valuation model | ' | |||||||||||||||||
Weighted-Average | ||||||||||||||||||
Black-Scholes Option | Year Ended | Year Ended | ||||||||||||||||
Valuation Assumptions | July 31, 2014 | July 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 based 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, 2011 | 1,543,968 | $ | 6.47 | |||||||||||||||
Canceled | (24,748 | ) | 6.98 | |||||||||||||||
Exercised | (695,985 | ) | 6.32 | |||||||||||||||
Outstanding at July 31, 2012 | 823,235 | 6.57 | ||||||||||||||||
Granted | 52,500 | 17.04 | ||||||||||||||||
Canceled | (9,000 | ) | 8.4 | |||||||||||||||
Exercised | (462,904 | ) | 6.26 | |||||||||||||||
Outstanding at July 31, 2013 | 403,831 | 8.25 | ||||||||||||||||
Granted | 30,000 | 31.81 | ||||||||||||||||
Exercised | (211,339 | ) | 6.82 | |||||||||||||||
Outstanding at July 31, 2014 | 222,492 | $ | 12.78 | |||||||||||||||
Exercisable at July 31, 2012 | 546,165 | $ | 6.29 | |||||||||||||||
Exercisable at July 31, 2013 | 351,331 | $ | 6.94 | |||||||||||||||
Exercisable at July 31, 2014 | 157,492 | $ | 8.21 | |||||||||||||||
Summary of additional information related to stock options outstanding | ' | |||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||
Weighted | Weighted | |||||||||||||||||
Average | Average | |||||||||||||||||
Remaining | Weighted | Remaining | Weighted | |||||||||||||||
Number | Contractual | Average | Number | Contractual | Average | |||||||||||||
Range of Exercise | Outstanding | Life | Exercise | Exercisable | Life | Exercise | ||||||||||||
Prices | at July 31, 2014 | (Months) | Price | At July 31, 2014 | (Months) | Price | ||||||||||||
$4.26 - $7.60 | 139,992 | 8 | $ | 7.11 | 139,992 | 8 | $ | 7.11 | ||||||||||
$17.04 - $31.81 | 82,500 | 43 | $ | 22.41 | 17,500 | 39 | $ | 17.04 | ||||||||||
$4.26 - $31.81 | 222,492 | 21 | $ | 12.78 | 157,492 | 11 | $ | 8.21 | ||||||||||
Total Intrinsic Value | $ | 4,616,000 | $ | 3,987,000 | ||||||||||||||
Information_as_to_Operating_Se1
Information as to Operating Segments and Foreign and Domestic Operations (Tables) | 12 Months Ended | ||||||||||
Jul. 31, 2014 | |||||||||||
Information as to Operating Segments and Foreign and Domestic Operations | ' | ||||||||||
Information as to operating segments | ' | ||||||||||
Year Ended July 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Net sales: | |||||||||||
Endoscopy | $ | 190,440,000 | $ | 160,317,000 | $ | 153,224,000 | |||||
Water Purification and Filtration | 159,505,000 | 134,196,000 | 114,609,000 | ||||||||
Healthcare Disposables | 101,809,000 | 90,904,000 | 76,229,000 | ||||||||
Dialysis | 30,926,000 | 33,148,000 | 35,644,000 | ||||||||
Other | 6,069,000 | 6,461,000 | 6,784,000 | ||||||||
Total | $ | 488,749,000 | $ | 425,026,000 | $ | 386,490,000 | |||||
Year Ended July 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Operating income: | |||||||||||
Endoscopy | $ | 34,194,000 | $ | 32,361,000 | $ | 31,083,000 | |||||
Water Purification and Filtration | 25,750,000 | 16,381,000 | 9,819,000 | ||||||||
Healthcare Disposables | 18,720,000 | 17,576,000 | 12,437,000 | ||||||||
Dialysis | 7,547,000 | 8,705,000 | 8,366,000 | ||||||||
Other | 815,000 | 857,000 | 1,065,000 | ||||||||
87,026,000 | 75,880,000 | 62,770,000 | |||||||||
General corporate expenses | (16,098,000 | ) | (12,692,000 | ) | (10,646,000 | ) | |||||
Interest expense, net | (2,317,000 | ) | (2,834,000 | ) | (3,650,000 | ) | |||||
Other expense | — | — | (605,000 | ) | |||||||
Income before income taxes | $ | 68,611,000 | $ | 60,354,000 | $ | 47,869,000 | |||||
July 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Identifiable assets: | |||||||||||
Endoscopy | $ | 203,582,000 | $ | 157,340,000 | $ | 153,994,000 | |||||
Water Purification and Filtration | 126,397,000 | 123,454,000 | 112,432,000 | ||||||||
Healthcare Disposables | 138,240,000 | 137,577,000 | 100,569,000 | ||||||||
Dialysis | 25,420,000 | 24,394,000 | 25,793,000 | ||||||||
Other | 9,316,000 | 10,078,000 | 10,944,000 | ||||||||
General corporate, including cash and cash equivalents | 33,190,000 | 34,828,000 | 31,080,000 | ||||||||
Total | $ | 536,145,000 | $ | 487,671,000 | $ | 434,812,000 | |||||
Year Ended July 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Capital expenditures: | |||||||||||
Endoscopy | $ | 6,820,000 | $ | 3,058,000 | $ | 2,356,000 | |||||
Water Purification and Filtration | 3,318,000 | 2,319,000 | 1,656,000 | ||||||||
Healthcare Disposables | 1,367,000 | 699,000 | 795,000 | ||||||||
Dialysis | 1,444,000 | 576,000 | 583,000 | ||||||||
Other | 34,000 | 30,000 | 97,000 | ||||||||
General corporate | 558,000 | 63,000 | 15,000 | ||||||||
Total | $ | 13,541,000 | $ | 6,745,000 | $ | 5,502,000 | |||||
Year Ended July 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Depreciation and amortization: | |||||||||||
Endoscopy | $ | 7,001,000 | $ | 6,374,000 | $ | 6,060,000 | |||||
Water Purification and Filtration | 4,416,000 | 3,866,000 | 3,807,000 | ||||||||
Healthcare Disposables | 5,968,000 | 5,500,000 | 4,490,000 | ||||||||
Dialysis | 1,142,000 | 1,188,000 | 1,230,000 | ||||||||
Other | 294,000 | 321,000 | 326,000 | ||||||||
General corporate | 65,000 | 14,000 | 12,000 | ||||||||
Total | $ | 18,886,000 | $ | 17,263,000 | $ | 15,925,000 | |||||
Information as to geographic areas | ' | ||||||||||
Year Ended July 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Net sales: | |||||||||||
United States | $ | 403,892,000 | $ | 357,378,000 | $ | 329,261,000 | |||||
Canada | 20,729,000 | 18,732,000 | 15,646,000 | ||||||||
Asia/Pacific | 24,736,000 | 21,895,000 | 16,323,000 | ||||||||
Europe/Africa/Middle East | 32,634,000 | 23,415,000 | 21,691,000 | ||||||||
Latin America/South America | 6,758,000 | 3,606,000 | 3,569,000 | ||||||||
Total | $ | 488,749,000 | $ | 425,026,000 | $ | 386,490,000 | |||||
July 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Total long-lived assets: | |||||||||||
United States | $ | 53,221,000 | $ | 47,043,000 | $ | 43,353,000 | |||||
Canada | 1,029,000 | 1,236,000 | 1,365,000 | ||||||||
Asia/Pacific | 1,112,000 | 1,030,000 | 1,130,000 | ||||||||
Europe | 2,275,000 | 155,000 | 106,000 | ||||||||
Total | 57,637,000 | 49,464,000 | 45,954,000 | ||||||||
Goodwill and intangible assets, net | 314,599,000 | 287,547,000 | 254,966,000 | ||||||||
Total | $ | 372,236,000 | $ | 337,011,000 | $ | 300,920,000 |
Quarterly_Results_of_Operation1
Quarterly Results of Operations (unaudited) (Tables) | 12 Months Ended | |||||||||||||
Jul. 31, 2014 | ||||||||||||||
Quarterly Results of Operations (unaudited) | ' | |||||||||||||
Summary of quarterly results of operations | ' | |||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
2014 | ||||||||||||||
Net sales | $ | 118,272,000 | $ | 119,042,000 | $ | 120,058,000 | $ | 131,377,000 | ||||||
Cost of sales | 66,773,000 | 66,707,000 | 67,640,000 | 74,330,000 | ||||||||||
Gross profit | 51,499,000 | 52,335,000 | 52,418,000 | 57,047,000 | ||||||||||
Gross profit percentage | 43.5 | % | 44 | % | 43.7 | % | 43.4 | % | ||||||
Net income | $ | 11,185,000 | $ | 11,126,000 | $ | 10,249,000 | $ | 10,705,000 | ||||||
Earnings per common share: | ||||||||||||||
Basic | $ | 0.27 | $ | 0.27 | $ | 0.25 | $ | 0.26 | ||||||
Diluted (1) | $ | 0.27 | $ | 0.27 | $ | 0.25 | $ | 0.26 | ||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
2013 | ||||||||||||||
Net sales | $ | 99,681,000 | $ | 106,363,000 | $ | 105,009,000 | $ | 113,973,000 | ||||||
Cost of sales | 55,954,000 | 61,212,000 | 59,525,000 | 64,859,000 | ||||||||||
Gross profit | 43,727,000 | 45,151,000 | 45,484,000 | 49,114,000 | ||||||||||
Gross profit percentage | 43.9 | % | 42.4 | % | 43.3 | % | 43.1 | % | ||||||
Net income | $ | 9,576,000 | $ | 10,452,000 | $ | 8,998,000 | $ | 10,213,000 | ||||||
Earnings per common share: | ||||||||||||||
Basic (1) | $ | 0.24 | $ | 0.26 | $ | 0.22 | $ | 0.25 | ||||||
Diluted | $ | 0.23 | $ | 0.25 | $ | 0.22 | $ | 0.25 | ||||||
(1) The summation of quarterly earnings per share does not equal the fiscal year earnings per share due to rounding. |
Business_Description_Details
Business Description (Details) | 12 Months Ended |
Jul. 31, 2014 | |
segment | |
Business Description | ' |
Number of operating segments | 5 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
item | |||
Revenue recognition - reductions | ' | ' | ' |
Number of customers all products shipped FOB destination | 1 | ' | ' |
Volume rebates | $4,498,000 | $4,277,000 | $3,836,000 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 |
Property and Equipment | ' | ' | ' |
Depreciation | $8,245 | $7,202 | $6,801 |
Furniture and equipment | Estimated lives, low end of the range | ' | ' | ' |
Property and Equipment | ' | ' | ' |
Estimated useful lives | '2 years | ' | ' |
Furniture and equipment | Estimated lives, high end of the range | ' | ' | ' |
Property and Equipment | ' | ' | ' |
Estimated useful lives | '15 years | ' | ' |
Buildings and improvements | Estimated lives, low end of the range | ' | ' | ' |
Property and Equipment | ' | ' | ' |
Estimated useful lives | '5 years | ' | ' |
Buildings and improvements | Estimated lives, high end of the range | ' | ' | ' |
Property and Equipment | ' | ' | ' |
Estimated useful lives | '32 years | ' | ' |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 3) (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
item | |||
Identifiable intangible assets | ' | ' | ' |
Number of segments for which a two-step quantitative goodwill impairment test was not proceeded by the company | 3 | ' | ' |
Intangible assets impairment | $0 | ' | ' |
Goodwill impairment | 0 | ' | ' |
Goodwill | 231,647,000 | 211,618,000 | 183,655,000 |
Specialty Packaging segment | ' | ' | ' |
Identifiable intangible assets | ' | ' | ' |
Goodwill | $6,567,000 | ' | ' |
Minimum | ' | ' | ' |
Identifiable intangible assets | ' | ' | ' |
Estimated useful lives | '2 years | ' | ' |
Maximum | ' | ' | ' |
Identifiable intangible assets | ' | ' | ' |
Estimated useful lives | '20 years | ' | ' |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 4) (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Other Assets | ' | ' | ' |
Debt issuance costs, net of related amortization | $1,678,000 | $764,000 | ' |
Warranties | ' | ' | ' |
Warranty period | '1 year | ' | ' |
Dividend yield | ' | ' | ' |
Dividend yield (as a percent) | 0.30% | ' | ' |
Advertising Costs | ' | ' | ' |
Advertising costs charged to expense | 2,656,000 | 2,308,000 | 2,507,000 |
Medical Device Taxes | ' | ' | ' |
Excise taxes | $3,872,000 | $2,087,000 | ' |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details 5) (BMI) | 12 Months Ended |
Jul. 31, 2014 | |
BMI | ' |
Business Combinations | ' |
Price floor period | '3 years |
Acquisitions_Details
Acquisitions (Details) (USD $) | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | Jun. 30, 2014 | Aug. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jun. 30, 2014 | Jul. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 |
Puri Core International Limited | Puri Core International Limited | Puri Core International Limited | Puri Core International Limited | Puri Core International Limited | Puri Core International Limited | Puri Core International Limited | Puri Core International Limited | Puri Core International Limited | Puri Core International Limited | ||||
project | Current liabilities | Current liabilities | Other long-term liabilities | Other long-term liabilities | Customer relationships | Technology | Other | ||||||
Acquisitions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Pre-acquisition annual revenues | ' | ' | ' | $25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisition-related costs | ' | ' | ' | 703,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total consideration for the transaction, excluding acquisition-related costs | ' | ' | ' | 27,675,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net asset value adjustment | ' | ' | ' | ' | 337,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Net Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current assets | ' | ' | ' | 8,982,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property, plant and equipment | ' | ' | ' | 972,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortizable intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,340,000 | 1,760,000 | 93,000 |
Non-current deferred income tax assets, net | ' | ' | ' | 1,924,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current liabilities | ' | ' | ' | -10,085,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other long-term liabilities | ' | ' | ' | -753,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net assets acquired | ' | ' | ' | 14,233,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortizable intangible assets, useful life | ' | ' | ' | '9 years | ' | ' | ' | ' | ' | ' | '10 years | '6 years | '3 years |
Number of in-process research and development projects acquired | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill | 231,647,000 | 211,618,000 | 183,655,000 | 13,442,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill deductible for income tax purposes | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contingent consideration liability | ' | ' | ' | $1,414,000 | ' | $1,395,000 | $684,000 | $693,000 | $711,000 | $721,000 | ' | ' | ' |
Acquisitions_Details_2
Acquisitions (Details 2) (USD $) | Jul. 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. | ||||
project | Customer relationships | Technology | ||||
Acquisitions | ' | ' | ' | ' | ' | ' |
Total consideration for the transaction | ' | ' | ' | $3,349,000 | ' | ' |
Net Assets | ' | ' | ' | ' | ' | ' |
Current assets | ' | ' | ' | 1,058,000 | ' | ' |
Property, plant and equipment | ' | ' | ' | 521,000 | ' | ' |
Amortizable intangible assets | ' | ' | ' | ' | 130,000 | 510,000 |
Current liabilities | ' | ' | ' | -321,000 | ' | ' |
Deferred income tax liabilities | ' | ' | ' | -276,000 | ' | ' |
Net assets acquired | ' | ' | ' | 1,622,000 | ' | ' |
Amortizable intangible assets, useful life | ' | ' | ' | '9 years | '11 years | '8 years |
Number of in-process research and development projects acquired | ' | ' | ' | 0 | ' | ' |
Goodwill | 231,647,000 | 211,618,000 | 183,655,000 | 1,727,000 | ' | ' |
Goodwill deductible for income tax purposes | ' | ' | ' | $0 | ' | ' |
Acquisitions_Details_3
Acquisitions (Details 3) (USD $) | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | Nov. 05, 2013 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 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. | Jet Prep Ltd. | ||||
project | Contingent consideration | Other long-term liabilities | Accrued expenses | 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 | ' | ' | ' | 5,350,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contingent consideration liability | ' | ' | ' | 2,490,000 | 2,722,000 | 2,722,000 | ' | ' | ' | 2,490,000 | ' | ' | ' |
Period over which potential cash contingent consideration is payable | ' | ' | ' | '7 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase in goodwill | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,490,000 | 1,720,000 | ' | ' |
Liabilities assumed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 810,000 | ' | ' |
Israeli Government's rate of return on investment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | 9 |
Increase in other long-term liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,716,000 | ' | ' |
Assumed contingent obligation | ' | ' | ' | 1,720,000 | 1,752,000 | ' | 1,749,000 | 3,000 | ' | ' | ' | ' | ' |
Increase in accrued expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,000 | ' | ' |
Net Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current assets | ' | ' | ' | 82,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property, plant and equipment | ' | ' | ' | 65,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortizable intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | 3,730,000 | ' | ' | ' | ' |
Current liabilities | ' | ' | ' | -104,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other long-term liabilities | ' | ' | ' | -1,716,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net assets acquired | ' | ' | ' | 2,057,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortizable intangible assets, useful life | ' | ' | ' | ' | ' | ' | ' | ' | '7 years | ' | ' | ' | ' |
Number of in-process research and development projects acquired | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill | 231,647,000 | 211,618,000 | 183,655,000 | 5,783,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill deductible for income tax purposes | ' | ' | ' | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisitions_Details_4
Acquisitions (Details 4) (Siemens' Hemodialysis Water Business, 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_5
Acquisitions (Details 5) (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_6
Acquisitions (Details 6) (Polyp Trap, USD $) | 1 Months Ended |
Dec. 13, 2012 | |
Polyp Trap | ' |
Acquisitions | ' |
Consideration for the transaction | $486,000 |
Acquisitions_Details_7
Acquisitions (Details 7) (USD $) | Jul. 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 | ||||
project | Customer relationships | Brand names | Technology | Non-compete agreement | ||||||
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 | ' | ' | ' | 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 | $231,647,000 | $211,618,000 | $183,655,000 | ' | ' | ' | ' | ' | ' | $24,244,000 |
Acquisitions_Details_8
Acquisitions (Details 8) (BMI, USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 24 Months Ended | ||||
Aug. 02, 2011 | Dec. 31, 2011 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2012 | Jan. 31, 2013 | Jul. 29, 2011 | |
item | ||||||||
Acquisitions | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisition-related costs | ' | ' | ' | ' | ' | $1,099,000 | ' | ' |
Aggregate purchase price | ' | 99,361,000 | ' | ' | ' | ' | ' | ' |
Reduction in goodwill resulting from net asset value adjustment | ' | 639,000 | ' | ' | ' | ' | ' | ' |
Portion of purchase price paid in cash | ' | 89,361,000 | ' | ' | ' | ' | ' | ' |
Portion of purchase price paid in shares | 10,000,000 | ' | ' | ' | ' | ' | ' | ' |
Price floor period | '3 years | ' | ' | ' | ' | ' | ' | ' |
Stock split ratio | 1.5 | ' | ' | ' | ' | ' | ' | ' |
Stock consideration (in shares) | 902,528 | ' | ' | ' | ' | ' | ' | ' |
Closing share price of Cantel to determine stock consideration (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | $11.08 |
Potential cash contingent consideration payable | 10,000,000 | ' | ' | ' | ' | ' | ' | ' |
Contingent consideration | 2,700,000 | ' | ' | ' | ' | ' | 0 | ' |
Period over which potential cash contingent consideration is payable | '2 years | ' | ' | ' | ' | ' | ' | ' |
Change in fair value of contingent consideration liability | ' | ' | ' | 1,500,000 | 1,200,000 | ' | ' | ' |
Aggregate value of the stock consideration threshold | 10,000,000 | ' | ' | ' | ' | ' | ' | ' |
Price floor liability | 3,000,000 | ' | 0 | ' | ' | ' | ' | ' |
Change in fair value of price floor liability | ' | ' | 45,000 | 992,000 | 1,963,000 | ' | ' | ' |
Components of the purchase price | ' | ' | ' | ' | ' | ' | ' | ' |
Cash (including purchase of buildings) | 95,261,000 | ' | ' | ' | ' | ' | ' | ' |
Fair value of the multi-year lock-up of Cantel common stock | 7,310,000 | ' | ' | ' | ' | ' | ' | ' |
Consideration for the transaction | 102,571,000 | ' | ' | ' | ' | ' | ' | ' |
Price floor | 3,000,000 | ' | 0 | ' | ' | ' | ' | ' |
Contingent consideration | 2,700,000 | ' | ' | ' | ' | ' | 0 | ' |
Total purchase price recorded | 108,271,000 | ' | ' | ' | ' | ' | ' | ' |
Net Assets | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts receivable | 4,303,000 | ' | ' | ' | ' | ' | ' | ' |
Inventory | 4,581,000 | ' | ' | ' | ' | ' | ' | ' |
Other assets | 588,000 | ' | ' | ' | ' | ' | ' | ' |
Property, plant and equipment | 10,074,000 | ' | ' | ' | ' | ' | ' | ' |
Other assets, Noncurrent | 105,000 | ' | ' | ' | ' | ' | ' | ' |
Current liabilities | -2,277,000 | ' | ' | ' | ' | ' | ' | ' |
Other liabilities | -85,000 | ' | ' | ' | ' | ' | ' | ' |
Net assets acquired | 58,689,000 | ' | ' | ' | ' | ' | ' | ' |
Amortizable intangible assets, useful life | '13 years | ' | ' | ' | ' | ' | ' | ' |
Number of in-process research and development projects acquired | 0 | ' | ' | ' | ' | ' | ' | ' |
Goodwill deductible for income tax purposes | 49,582,000 | ' | ' | ' | ' | ' | ' | ' |
Period for income tax deduction | '15 years | ' | ' | ' | ' | ' | ' | ' |
General administrative expenses | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisitions | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisition-related costs | ' | ' | ' | 626,000 | 473,000 | ' | ' | ' |
Customer relationships | ' | ' | ' | ' | ' | ' | ' | ' |
Net Assets | ' | ' | ' | ' | ' | ' | ' | ' |
Amortizable intangible assets | 25,300,000 | ' | ' | ' | ' | ' | ' | ' |
Amortizable intangible assets, useful life | '15 years | ' | ' | ' | ' | ' | ' | ' |
Brand name | ' | ' | ' | ' | ' | ' | ' | ' |
Net Assets | ' | ' | ' | ' | ' | ' | ' | ' |
Amortizable intangible assets | 2,200,000 | ' | ' | ' | ' | ' | ' | ' |
Amortizable intangible assets, useful life | '10 years | ' | ' | ' | ' | ' | ' | ' |
Technology | ' | ' | ' | ' | ' | ' | ' | ' |
Net Assets | ' | ' | ' | ' | ' | ' | ' | ' |
Amortizable intangible assets | 11,900,000 | ' | ' | ' | ' | ' | ' | ' |
Amortizable intangible assets, useful life | '8 years | ' | ' | ' | ' | ' | ' | ' |
Non-compete agreement | ' | ' | ' | ' | ' | ' | ' | ' |
Net Assets | ' | ' | ' | ' | ' | ' | ' | ' |
Amortizable intangible assets | 2,000,000 | ' | ' | ' | ' | ' | ' | ' |
Amortizable intangible assets, useful life | '14 years | ' | ' | ' | ' | ' | ' | ' |
Purchase of land and buildings from Byrne Investments LLC | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisitions | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase price | $5,900,000 | ' | ' | ' | ' | ' | ' | ' |
Inventories_Details
Inventories (Details) (USD $) | Jul. 31, 2014 | Jul. 31, 2013 |
Inventories | ' | ' |
Raw materials and parts | $27,365,000 | $23,815,000 |
Work-in-process | 7,510,000 | 6,945,000 |
Finished goods | 24,862,000 | 23,407,000 |
Total | $59,737,000 | $54,167,000 |
Derivatives_Details
Derivatives (Details) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | |||||
Feb. 29, 2012 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | Jan. 31, 2014 | Aug. 08, 2012 | Aug. 08, 2012 | Aug. 08, 2012 | Aug. 08, 2012 | |
lender | 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 | |
Fair value hedge instruments | Fair value hedge instruments | Fair value hedge instruments | Term Loan Facility | Cash flow hedge instruments | Cash flow hedge instruments | Cash flow hedge instruments | Cash flow hedge instruments | ||
contract | Term Loan Facility | Term Loan Facility | Revolving Credit Facility | Revolving Credit Facility | |||||
One month LIBOR | One month LIBOR | ||||||||
Derivatives | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of contracts | ' | '1 month | ' | ' | ' | ' | ' | ' | ' |
Number of contracts | ' | 3 | ' | ' | ' | ' | ' | ' | ' |
Aggregate value of contracts | ' | $11,800,000 | ' | ' | ' | ' | ' | ' | ' |
Term of renewed contracts | ' | '1 month | ' | ' | ' | ' | ' | ' | ' |
Net currency conversion losses, net of tax | ' | -88,000 | -86,000 | -20,000 | ' | ' | ' | ' | ' |
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% |
Fair value of interest rate swap recognized in interest expense | ' | ' | ' | ' | $113,000 | ' | ' | ' | ' |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 1 Months Ended | 0 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | |||||||
Feb. 29, 2012 | Nov. 05, 2013 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jun. 30, 2014 | Jul. 31, 2014 | Nov. 05, 2013 | Nov. 05, 2013 | Nov. 05, 2013 | Nov. 05, 2013 | Nov. 05, 2013 | Jun. 30, 2014 | |
lender | Jet Prep Ltd. | Jet Prep Ltd. | Jet Prep Ltd. | Jet Prep Ltd. | Puri Core International Limited | Puri Core International Limited | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | |
Contingent consideration | Assumed contingent liability | Jet Prep Ltd. | Jet Prep Ltd. | Jet Prep Ltd. | Jet Prep Ltd. | Jet Prep Ltd. | Puri Core International Limited | ||||||
Minimum | Contingent consideration | Assumed contingent liability | |||||||||||
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 | ' | $2,490,000 | $2,722,000 | ' | ' | $1,414,000 | $1,395,000 | ' | $2,490,000 | ' | ' | ' | $1,414,000 |
Assumed contingent obligation | ' | 1,720,000 | 1,752,000 | ' | 1,752,000 | ' | ' | ' | 1,720,000 | 810,000 | ' | ' | ' |
Contingent consideration period | ' | '7 years | ' | ' | ' | ' | ' | '7 years | ' | ' | ' | ' | ' |
Discount rate of cash flow projections (as a percent) | ' | ' | ' | ' | ' | 10.10% | 10.00% | ' | ' | ' | 12.60% | 2.50% | ' |
Total potential contingent consideration payments, low end of range | ' | ' | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' |
Total potential contingent consideration payments, high end of range | ' | ' | ' | $7,000,000 | $2,430,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 2) (USD $) | 0 Months Ended | 0 Months Ended | 0 Months Ended | 1 Months Ended | |||||
Aug. 02, 2011 | Jan. 31, 2013 | Jul. 29, 2011 | Aug. 02, 2011 | Jul. 31, 2014 | Jul. 29, 2011 | Feb. 11, 2011 | Mar. 31, 2012 | Jan. 31, 2012 | |
Byrne Medical Business | Byrne Medical Business | Byrne Medical Business | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | |
Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | ||||
Byrne Medical Business | Byrne Medical Business | Byrne Medical Business | ConFirm Monitoring Business | ConFirm Monitoring Business | ConFirm Monitoring Business | ||||
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Initial contingent consideration liability | $2,700,000 | $0 | ' | $2,700,000 | ' | ' | $656,000 | ' | $855,000 |
Initial price floor | ' | ' | ' | 3,000,000 | ' | ' | ' | ' | ' |
Price floor period | '3 years | ' | ' | '3 years | ' | ' | ' | ' | ' |
Contingent consideration period | '2 years | ' | ' | '2 years | ' | ' | ' | ' | ' |
Discount rate of cash flow projections (as a percent) | ' | ' | ' | 14.00% | ' | ' | 7.00% | ' | ' |
Stock split ratio | 1.5 | ' | ' | 1.5 | ' | ' | ' | ' | ' |
Stock consideration (in shares) | 902,528 | ' | ' | 902,528 | ' | ' | ' | ' | ' |
Stock price (in dollars per share) | ' | ' | $11.08 | ' | $33.53 | $11.08 | ' | ' | ' |
Total potential contingent consideration payments, high end of range | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Contingent consideration paid | ' | ' | ' | ' | ' | ' | ' | $855,000 | ' |
Fair_Value_Measurements_Detail2
Fair Value Measurements (Details 3) (Recurring basis, USD $) | Jul. 31, 2014 | Jul. 31, 2013 |
Level 1 | ' | ' |
Assets: | ' | ' |
Total assets | $1,702,000 | $4,241,000 |
Level 1 | Money markets | Cash and cash equivalents | ' | ' |
Assets: | ' | ' |
Money markets | 1,702,000 | 4,241,000 |
Level 2 | ' | ' |
Liabilities: | ' | ' |
Total accrued expenses | 69,000 | 133,000 |
Total liabilities | 69,000 | 162,000 |
Level 2 | Interest rate swap agreements | Accrued expenses | ' | ' |
Liabilities: | ' | ' |
Interest rate swap agreement | 69,000 | 133,000 |
Level 2 | Interest rate swap agreements | Other long-term liabilities | ' | ' |
Liabilities: | ' | ' |
Interest rate swap agreement | ' | 29,000 |
Level 3 | ' | ' |
Liabilities: | ' | ' |
Total accrued expenses | 684,000 | ' |
Total other long-term liabilities | 2,463,000 | ' |
Total liabilities | 5,869,000 | 45,000 |
Level 3 | Accrued expenses | ' | ' |
Liabilities: | ' | ' |
Contingent consideration | 684,000 | ' |
Level 3 | Contingent consideration | ' | ' |
Liabilities: | ' | ' |
Contingent consideration | 2,722,000 | 45,000 |
Level 3 | Other long-term liabilities | ' | ' |
Liabilities: | ' | ' |
Assumed contingent obligation | 1,752,000 | ' |
Contingent consideration | 711,000 | ' |
Total | ' | ' |
Assets: | ' | ' |
Total assets | 1,702,000 | 4,241,000 |
Liabilities: | ' | ' |
Total accrued expenses | 753,000 | 133,000 |
Total other long-term liabilities | 2,463,000 | ' |
Total liabilities | 5,938,000 | 207,000 |
Total | Accrued expenses | ' | ' |
Liabilities: | ' | ' |
Contingent consideration | 684,000 | ' |
Total | Contingent consideration | ' | ' |
Liabilities: | ' | ' |
Contingent consideration | 2,722,000 | 45,000 |
Total | Other long-term liabilities | ' | ' |
Liabilities: | ' | ' |
Assumed contingent obligation | 1,752,000 | ' |
Contingent consideration | 711,000 | ' |
Total | Interest rate swap agreements | Accrued expenses | ' | ' |
Liabilities: | ' | ' |
Interest rate swap agreement | 69,000 | 133,000 |
Total | Interest rate swap agreements | Other long-term liabilities | ' | ' |
Liabilities: | ' | ' |
Interest rate swap agreement | ' | 29,000 |
Total | Money markets | Cash and cash equivalents | ' | ' |
Assets: | ' | ' |
Money markets | $1,702,000 | $4,241,000 |
Fair_Value_Measurements_Detail3
Fair Value Measurements (Details 4) (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Reconciliation of liability measured and recorded at fair value on a recurring basis using Level 3 | ' | ' | ' |
Beginning balance | $45,000 | $2,537,000 | $775,000 |
Total net unrealized (gains) losses included in general and administrative expense in earnings | 219,000 | -2,492,000 | -3,083,000 |
Net purchases, issuances, sales and settlements | 5,605,000 | ' | 4,845,000 |
Ending balance | 5,869,000 | 45,000 | 2,537,000 |
Byrne Medical Business | Price floor | ' | ' | ' |
Reconciliation of liability measured and recorded at fair value on a recurring basis using Level 3 | ' | ' | ' |
Beginning balance | 45,000 | 1,037,000 | ' |
Total net unrealized (gains) losses included in general and administrative expense in earnings | -45,000 | -992,000 | -1,963,000 |
Net purchases, issuances, sales and settlements | ' | ' | 3,000,000 |
Ending balance | ' | 45,000 | 1,037,000 |
Contingent Consideration | ConFirm Monitoring Business | ' | ' | ' |
Reconciliation of liability measured and recorded at fair value on a recurring basis using Level 3 | ' | ' | ' |
Beginning balance | ' | ' | 775,000 |
Total net unrealized (gains) losses included in general and administrative expense in earnings | ' | ' | 80,000 |
Net purchases, issuances, sales and settlements | ' | ' | -855,000 |
Contingent Consideration | Byrne Medical Business | ' | ' | ' |
Reconciliation of liability measured and recorded at fair value on a recurring basis using Level 3 | ' | ' | ' |
Beginning balance | ' | 1,500,000 | ' |
Total net unrealized (gains) losses included in general and administrative expense in earnings | ' | -1,500,000 | -1,200,000 |
Net purchases, issuances, sales and settlements | ' | ' | 2,700,000 |
Ending balance | ' | ' | 1,500,000 |
Contingent Consideration | Jet Prep Ltd. | ' | ' | ' |
Reconciliation of liability measured and recorded at fair value on a recurring basis using Level 3 | ' | ' | ' |
Total net unrealized (gains) losses included in general and administrative expense in earnings | 232,000 | ' | ' |
Net purchases, issuances, sales and settlements | 2,490,000 | ' | ' |
Ending balance | 2,722,000 | ' | ' |
Assumed Contingent Obligation | Jet Prep Ltd. | ' | ' | ' |
Reconciliation of liability measured and recorded at fair value on a recurring basis using Level 3 | ' | ' | ' |
Total net unrealized (gains) losses included in general and administrative expense in earnings | 32,000 | ' | ' |
Net purchases, issuances, sales and settlements | 1,720,000 | ' | ' |
Ending balance | 1,752,000 | ' | ' |
Contingent Guaranteed Obligation | PuriCore | ' | ' | ' |
Reconciliation of liability measured and recorded at fair value on a recurring basis using Level 3 | ' | ' | ' |
Net purchases, issuances, sales and settlements | 1,395,000 | ' | ' |
Ending balance | $1,395,000 | ' | ' |
Fair_Value_Measurements_Detail4
Fair Value Measurements (Details 5) (USD $) | 12 Months Ended | |
Jul. 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 |
Intangibles_and_Goodwill_Detai
Intangibles and Goodwill (Details) (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Intangible assets with finite lives: | ' | ' | ' |
Amortization expense | $10,641,000 | $10,061,000 | $9,124,000 |
Gross | 127,432,000 | 110,755,000 | ' |
Accumulated Amortization | -53,757,000 | -44,213,000 | ' |
Net | 73,675,000 | 66,542,000 | ' |
Intangible assets with indefinite lives: | ' | ' | ' |
Trademarks and trade names | 9,277,000 | 9,387,000 | ' |
Total intangible assets | ' | ' | ' |
Gross | 136,709,000 | 120,142,000 | ' |
Accumulated Amortization | -53,757,000 | -44,213,000 | ' |
Net | 82,952,000 | 75,929,000 | ' |
Estimated lives, low end of the range | ' | ' | ' |
Intangible assets with finite lives: | ' | ' | ' |
Estimated useful lives | '2 years | ' | ' |
Estimated lives, high end of the 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 | 83,145,000 | 72,142,000 | ' |
Accumulated Amortization | -31,336,000 | -25,379,000 | ' |
Net | 51,809,000 | 46,763,000 | ' |
Total intangible assets | ' | ' | ' |
Accumulated Amortization | -31,336,000 | -25,379,000 | ' |
Technology | ' | ' | ' |
Intangible assets with finite lives: | ' | ' | ' |
Gross | 26,405,000 | 21,006,000 | ' |
Accumulated Amortization | -11,444,000 | -9,642,000 | ' |
Net | 14,961,000 | 11,364,000 | ' |
Total intangible assets | ' | ' | ' |
Accumulated Amortization | -11,444,000 | -9,642,000 | ' |
Brand names | ' | ' | ' |
Intangible assets with finite lives: | ' | ' | ' |
Gross | 12,680,000 | 12,680,000 | ' |
Accumulated Amortization | -9,431,000 | -8,045,000 | ' |
Net | 3,249,000 | 4,635,000 | ' |
Total intangible assets | ' | ' | ' |
Accumulated Amortization | -9,431,000 | -8,045,000 | ' |
Non-compete agreements | ' | ' | ' |
Intangible assets with finite lives: | ' | ' | ' |
Gross | 3,129,000 | 3,159,000 | ' |
Accumulated Amortization | -754,000 | -541,000 | ' |
Net | 2,375,000 | 2,618,000 | ' |
Total intangible assets | ' | ' | ' |
Accumulated Amortization | -754,000 | -541,000 | ' |
Patents and other registrations | ' | ' | ' |
Intangible assets with finite lives: | ' | ' | ' |
Gross | 2,073,000 | 1,768,000 | ' |
Accumulated Amortization | -792,000 | -606,000 | ' |
Net | 1,281,000 | 1,162,000 | ' |
Total intangible assets | ' | ' | ' |
Accumulated Amortization | ($792,000) | ($606,000) | ' |
Intangibles_and_Goodwill_Detai1
Intangibles and Goodwill (Details 2) (USD $) | Jul. 31, 2014 |
Estimated annual amortization expense of intangible assets for next five years | ' |
2015 | $12,150,000 |
2016 | 9,044,000 |
2017 | 8,466,000 |
2018 | 8,161,000 |
2019 | $7,838,000 |
Intangibles_and_Goodwill_Detai2
Intangibles and Goodwill (Details 3) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2012 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 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 | $6,567,000 |
Acquisitions | 20,952,000 | 28,287,000 | 19,225,000 | ' | ' | 4,043,000 | 1,727,000 | 24,244,000 | ' | ' | ' | ' | ' | ' |
Foreign currency translation | -923,000 | -324,000 | -181,000 | ' | -341,000 | -152,000 | ' | ' | ' | ' | ' | -401,000 | -172,000 | ' |
Balance at the end of the period | $231,647,000 | $211,618,000 | $78,274,000 | $59,230,000 | $56,838,000 | $57,179,000 | $81,835,000 | $80,108,000 | $8,133,000 | $8,133,000 | $8,133,000 | $6,567,000 | $6,968,000 | $6,567,000 |
Warranties_Details
Warranties (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Summary of activity in warranty reserves | ' | ' |
Beginning balance | $1,261,000 | $1,667,000 |
Acquisitions | 221,000 | 45,000 |
Provisions | 2,627,000 | 1,893,000 |
Settlements | -2,519,000 | -2,344,000 |
Foreign currency translation | -1,000 | ' |
Ending Balance | $1,589,000 | $1,261,000 |
Financing_Arrangements_Details
Financing Arrangements (Details) (USD $) | 1 Months Ended | 12 Months Ended | 0 Months Ended | 5 Months Ended | 2 Months Ended | 5 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | |||||||||||||||||||||
Feb. 29, 2012 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2013 | Mar. 04, 2014 | Jul. 31, 2014 | Sep. 29, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Mar. 04, 2014 | Jan. 31, 2014 | Aug. 08, 2012 | Aug. 08, 2012 | Mar. 04, 2014 | Jan. 31, 2014 | Aug. 08, 2012 | Aug. 08, 2012 | 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 | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit 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 | LIBOR | LIBOR | LIBOR | Interest rate swap with fixed interest cash flows | One month LIBOR | Interest rate swap with fixed interest cash flows | One month LIBOR | ||||||||||||||||||
Minimum | Maximum | Minimum | Maximum | Cash flow hedge instruments | Interest rate swap with fixed interest cash flows | Cash flow hedge instruments | Interest rate swap with fixed interest cash flows | |||||||||||||||||||||||
Cash flow hedge instruments | Cash flow hedge instruments | |||||||||||||||||||||||||||||
Financing Arrangements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | $250,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $250,000,000 | $100,000,000 | ' | ' | ' | ' | ' | ' | $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 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt issuance costs | ' | ' | ' | ' | ' | ' | ' | ' | 1,318,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized debt issuance costs | ' | 1,678,000 | 764,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 512,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized debt issuance costs charged to interest expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 84,000 | ' | ' | ' | ' | ' | ' |
Margin on reference rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.25% | 0.25% | 1.25% | 0.25% | 1.25% | 2.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reference rate, description | ' | ' | ' | ' | 'One month LIBOR | 'One month LIBOR | 'Twelve month LIBOR | 'Twelve month LIBOR | ' | ' | ' | ' | ' | 'lender's base rate | ' | ' | 'LIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reference rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.50% | ' | ' | ' | 0.16% | 0.60% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fees on unused portion of credit facilities (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 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 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 80,500,000 | 75,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayment of borrowings | ' | $5,000,000 | $10,000,000 | $10,000,000 | ' | ' | ' | ' | ' | ' | $5,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Income Taxes | ' | ' | ' |
Consolidated effective tax rate (as a percent) | 36.90% | 35.00% | 34.50% |
Income tax benefit on investment losses | $0 | ' | ' |
Current | ' | ' | ' |
Federal | 22,119,000 | 18,122,000 | 13,593,000 |
State | 3,710,000 | 3,010,000 | 2,144,000 |
Total | 26,564,000 | 21,483,000 | 16,162,000 |
Deferred | ' | ' | ' |
Federal | -896,000 | -351,000 | 390,000 |
State | -348,000 | 223,000 | 78,000 |
Total | -1,218,000 | -368,000 | 370,000 |
Canada | ' | ' | ' |
Current | ' | ' | ' |
Foreign | 417,000 | 221,000 | 324,000 |
Deferred | ' | ' | ' |
Foreign | -39,000 | -174,000 | -85,000 |
Singapore | ' | ' | ' |
Current | ' | ' | ' |
Foreign | 175,000 | 130,000 | 101,000 |
Deferred | ' | ' | ' |
Foreign | 19,000 | 10,000 | -13,000 |
Netherlands | ' | ' | ' |
Current | ' | ' | ' |
Foreign | 143,000 | ' | ' |
Deferred | ' | ' | ' |
Foreign | 70,000 | -76,000 | ' |
United Kingdom | ' | ' | ' |
Deferred | ' | ' | ' |
Foreign | ($24,000) | ' | ' |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Income Taxes | ' | ' | ' |
Income before income taxes | $68,611,000 | $60,354,000 | $47,869,000 |
United States | ' | ' | ' |
Income Taxes | ' | ' | ' |
Income before income taxes | 67,288,000 | 57,973,000 | 44,120,000 |
Canada | ' | ' | ' |
Income Taxes | ' | ' | ' |
Income before income taxes | 1,030,000 | -5,000 | 531,000 |
Singapore | ' | ' | ' |
Income Taxes | ' | ' | ' |
Income before income taxes | 1,093,000 | 1,038,000 | 713,000 |
Netherlands | ' | ' | ' |
Income Taxes | ' | ' | ' |
Income before income taxes | 46,000 | 1,344,000 | 152,000 |
United Kingdom | ' | ' | ' |
Income Taxes | ' | ' | ' |
Income before income taxes | -120,000 | ' | ' |
Israel | ' | ' | ' |
Income Taxes | ' | ' | ' |
Income before income taxes | -726,000 | ' | ' |
Japan | ' | ' | ' |
Income Taxes | ' | ' | ' |
Income before income taxes | ' | $4,000 | $2,353,000 |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Income tax reconciliation disclosure | ' | ' | ' |
United States statutory tax rate (as a percent) | 35.00% | 35.00% | 35.00% |
Expected statutory tax | $24,014,000 | $21,124,000 | $16,754,000 |
State and local taxes | 2,178,000 | 2,044,000 | 1,434,000 |
Domestic production deduction | -1,553,000 | -1,265,000 | -1,009,000 |
Taxes on foreign dividends | 118,000 | 120,000 | -72,000 |
R&E tax credit | -183,000 | -492,000 | -138,000 |
Investment impairment | ' | ' | 175,000 |
Other | 475,000 | 306,000 | 372,000 |
Total income tax expense | 25,346,000 | 21,115,000 | 16,532,000 |
Canada | ' | ' | ' |
Income tax reconciliation disclosure | ' | ' | ' |
Differential attributable to foreign operations: | 17,000 | 49,000 | 54,000 |
Singapore | ' | ' | ' |
Income tax reconciliation disclosure | ' | ' | ' |
Differential attributable to foreign operations: | -189,000 | -224,000 | -161,000 |
Netherlands | ' | ' | ' |
Income tax reconciliation disclosure | ' | ' | ' |
Differential attributable to foreign operations: | 197,000 | -546,000 | -53,000 |
United Kingdom | ' | ' | ' |
Income tax reconciliation disclosure | ' | ' | ' |
Differential attributable to foreign operations: | 18,000 | ' | ' |
Israel | ' | ' | ' |
Income tax reconciliation disclosure | ' | ' | ' |
Differential attributable to foreign operations: | 254,000 | ' | ' |
Japan | ' | ' | ' |
Income tax reconciliation disclosure | ' | ' | ' |
Differential attributable to foreign operations: | ' | ($1,000) | ($824,000) |
Income_Taxes_Details_4
Income Taxes (Details 4) (USD $) | Jul. 31, 2014 | Jul. 31, 2013 |
Current deferred tax assets: | ' | ' |
Accrued expenses | $2,753,000 | $2,337,000 |
Inventories | 1,321,000 | 1,149,000 |
Accounts receivable | 732,000 | 676,000 |
Foreign NOLs | ' | 76,000 |
Subtotal | 4,806,000 | 4,238,000 |
Valuation allowance | -1,255,000 | -109,000 |
Total current deferred tax assets | 3,551,000 | 4,129,000 |
Non-current deferred tax assets: | ' | ' |
Other long-term liabilities | 928,000 | 527,000 |
Stock-based compensation | 2,633,000 | 2,138,000 |
Capital investment | 175,000 | 175,000 |
Foreign tax credit | 133,000 | 133,000 |
Domestic NOLs | 2,660,000 | 83,000 |
Foreign NOLs | 4,552,000 | ' |
Subtotal | 11,081,000 | 3,056,000 |
Valuation allowance | -2,283,000 | -199,000 |
Net non-current deferred tax assets | 8,798,000 | 2,857,000 |
Non-current deferred tax liabilities: | ' | ' |
Property and equipment | -4,784,000 | -6,310,000 |
Intangible assets | -12,554,000 | -9,840,000 |
Goodwill | -9,265,000 | -7,893,000 |
Gross non-current deferred tax liabilities | -26,603,000 | -24,043,000 |
Net non-current deferred tax liabilities | ($17,805,000) | ($21,186,000) |
Income_Taxes_Details_5
Income Taxes (Details 5) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Income Taxes | ' | ' |
Combined U.S. Federal and state effective rate applied to deferred taxes (as a percent) | 37.60% | 37.90% |
Israel | Jet Prep Ltd. | ' | ' |
Operating loss carryforwards | ' | ' |
Net operating loss carryforwards (NOLs) | 5,180,000 | ' |
Domestic | Purity Acquisition | ' | ' |
Operating loss carryforwards | ' | ' |
Net operating loss carryforwards (NOLs) | 155,000 | ' |
Foreign | ' | ' |
Operating loss carryforwards | ' | ' |
Net operating loss carryforwards (NOLs) | 21,076,000 | ' |
Foreign | United Kingdom | Puri Core International Limited | ' | ' |
Operating loss carryforwards | ' | ' |
Net operating loss carryforwards (NOLs) | 15,896,000 | ' |
State | New Jersey | ' | ' |
Operating loss carryforwards | ' | ' |
Net operating loss carryforwards (NOLs) | 28,943,000 | ' |
Federal and state | ' | ' |
Operating loss carryforwards | ' | ' |
Net operating loss carryforwards (NOLs) | 29,098,000 | ' |
Income_Taxes_Details_6
Income Taxes (Details 6) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Income Taxes | ' | ' |
Deferred tax assets related to foreign tax credits carryovers | $133,000 | $133,000 |
Increase in overall valuation allowances | 3,230,000 | ' |
Valuation allowances | ' | ' |
Valuation allowances | 3,538,000 | 308,000 |
BIOSAFE investment | ' | ' |
Valuation allowances | ' | ' |
Valuation allowances | $175,000 | ' |
Income_Taxes_Details_7
Income Taxes (Details 7) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Income Taxes | ' | ' |
Repatriated dividends | $0 | $0 |
Provision for United States income taxes from repatriation of earnings | 0 | 0 |
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 |
Activity during fiscal 2014 | -124,000 | ' |
Unrecognized tax benefits at the end of the period | ' | $124,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Jul. 31, 2014 | Jul. 31, 2014 | Nov. 05, 2013 | Jun. 30, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 |
Jet Prep Ltd. | Jet Prep Ltd. | Puri Core International Limited | Puri Core International Limited | Compensation agreements | Contingent consideration | Contingent consideration | Assumed contingent liability | Assumed contingent liability | Deferred compensation and other | Contingent guaranteed obligation | Expected interest payments under the credit facility | Maturity of the credit facility | Maturity of the credit facility | ||
Jet Prep Ltd. | Jet Prep Ltd. | Weighted average | |||||||||||||
Long term debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2019 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $80,500,000 | ' |
Total | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 80,500,000 | ' |
Minimum commitments under noncancelable operating leases | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | 3,811,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | 2,940,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | 2,252,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2018 | 1,529,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2019 | 990,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Thereafter | 2,772,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | 14,294,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other commitments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | ' | ' | ' | ' | ' | 7,271,000 | ' | ' | 4,000 | ' | 42,000 | 683,000 | ' | ' | ' |
2016 | ' | ' | ' | ' | ' | 1,769,000 | 70,000 | ' | 47,000 | ' | 64,000 | 454,000 | ' | ' | ' |
2017 | ' | ' | ' | ' | ' | 600,000 | 554,000 | ' | 226,000 | ' | 50,000 | 234,000 | ' | ' | ' |
2018 | ' | ' | ' | ' | ' | 350,000 | 947,000 | ' | 428,000 | ' | 35,000 | 171,000 | ' | ' | ' |
2019 | ' | ' | ' | ' | ' | 350,000 | 1,124,000 | ' | 574,000 | ' | 12,000 | 171,000 | ' | ' | ' |
Thereafter | ' | ' | ' | ' | ' | 496,000 | 1,522,000 | ' | 622,000 | ' | 15,000 | ' | ' | ' | ' |
Total | ' | ' | ' | ' | ' | 10,836,000 | 4,217,000 | ' | 1,901,000 | ' | 218,000 | 1,713,000 | ' | ' | ' |
Total contractual obligations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | 13,276,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,465,000 | ' | ' |
2016 | 6,809,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,465,000 | ' | ' |
2017 | 5,381,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,465,000 | ' | ' |
2018 | 4,925,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,465,000 | ' | ' |
2019 | 84,576,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 855,000 | ' | ' |
Thereafter | 5,427,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | 120,394,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,715,000 | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.82% |
Contingent consideration | ' | 2,722,000 | 2,490,000 | 1,414,000 | 1,395,000 | ' | ' | 2,722,000 | ' | ' | ' | ' | ' | ' | ' |
Assumed contingent obligation | ' | $1,752,000 | $1,720,000 | ' | ' | ' | ' | ' | ' | $1,752,000 | ' | ' | ' | ' | ' |
Discount rate of potential payments (as a percent) | ' | ' | ' | 10.10% | 10.00% | ' | ' | 12.60% | ' | 2.50% | ' | ' | ' | ' | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 2) (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
item | |||
Operating Leases | ' | ' | ' |
Number of significant leases that contain escalation clauses | 5 | ' | ' |
Rent expense | $4,409,000 | $4,147,000 | $4,104,000 |
Building | Water Purification and Filtration | ' | ' | ' |
Operating Leases | ' | ' | ' |
Number of significant leases that contain escalation clauses | 2 | ' | ' |
Building | Water Purification and Filtration | Pennsylvania | Fiscal 2015 | ' | ' | ' |
Operating Leases | ' | ' | ' |
Monthly base rent | 16,200 | ' | ' |
Building | Water Purification and Filtration | Pennsylvania | Fiscal 2025 | ' | ' | ' |
Operating Leases | ' | ' | ' |
Monthly base rent | 20,100 | ' | ' |
Building | Water Purification and Filtration | Toronto, Ontario | Fiscal 2015 | ' | ' | ' |
Operating Leases | ' | ' | ' |
Monthly base rent | 15,000 | ' | ' |
Building | Healthcare Disposables | ' | ' | ' |
Operating Leases | ' | ' | ' |
Number of significant leases that contain escalation clauses | 2 | ' | ' |
Building | Healthcare Disposables | Pennsylvania | ' | ' | ' |
Operating Leases | ' | ' | ' |
Number of significant leases that contain escalation clauses | 1 | ' | ' |
Building | Healthcare Disposables | Pennsylvania | Fiscal 2015 | ' | ' | ' |
Operating Leases | ' | ' | ' |
Monthly base rent | 18,800 | ' | ' |
Building | Healthcare Disposables | Pennsylvania | Fiscal 2024 | ' | ' | ' |
Operating Leases | ' | ' | ' |
Monthly base rent | 20,800 | ' | ' |
Building | Healthcare Disposables | California | Fiscal 2015 | ' | ' | ' |
Operating Leases | ' | ' | ' |
Monthly base rent | 19,300 | ' | ' |
Building | Healthcare Disposables | Cuba, New York | ' | ' | ' |
Operating Leases | ' | ' | ' |
Monthly base rent | 8,000 | ' | ' |
Number of former owners of Sterilator and current employees of the segment that control entity that owns facility | 2 | ' | ' |
Building | Specialty Packaging business | ' | ' | ' |
Operating Leases | ' | ' | ' |
Number of significant leases that contain escalation clauses | 1 | ' | ' |
Building | Specialty Packaging business | Alberta | Fiscal 2016 | ' | ' | ' |
Operating Leases | ' | ' | ' |
Monthly base rent | 7,600 | ' | ' |
Building | Specialty Packaging business | Alberta | Fiscal 2021 | ' | ' | ' |
Operating Leases | ' | ' | ' |
Monthly base rent | $8,500 | ' | ' |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details 3) (Jet Prep Ltd., USD $) | 0 Months Ended | |
Nov. 05, 2013 | Jul. 31, 2014 | |
Jet Prep Ltd. | ' | ' |
Long-Term Contractual Obligations | ' | ' |
Contingent consideration liability | $2,490,000 | $2,722,000 |
Assumed contingent obligation | $1,720,000 | $1,752,000 |
Period over which potential cash contingent consideration is payable | '7 years | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Components and changes in accumulated other comprehensive income (loss) | ' | ' | ' |
Balance at the beginning of the period | $10,977,000 | $8,175,000 | $9,283,000 |
Other comprehensive loss | ' | ' | -1,493,000 |
Income tax effect on other comprehensive loss | ' | ' | 385,000 |
Other comprehensive loss before reclassifications | -1,575,000 | -485,000 | ' |
Income tax effect on other comprehensive loss before reclassifications | 17,000 | 3,148,000 | ' |
Reclassification adjustments to interest expense for losses on interest rate swaps included in net income during the period | 96,000 | 222,000 | ' |
Reclassification adjustments for ineffective hedge on interest rate swaps included in net income during the period | 113,000 | ' | ' |
Income tax effect on reclassification adjustments | -76,000 | -83,000 | ' |
Balance at the end of the period | 9,552,000 | 10,977,000 | 8,175,000 |
Foreign Currency Translation Adjustments | ' | ' | ' |
Components and changes in accumulated other comprehensive income (loss) | ' | ' | ' |
Balance at the beginning of the period | 11,080,000 | 8,385,000 | 9,283,000 |
Other comprehensive loss | ' | ' | -1,158,000 |
Income tax effect on other comprehensive loss | ' | ' | 260,000 |
Other comprehensive loss before reclassifications | -1,528,000 | -435,000 | ' |
Income tax effect on other comprehensive loss before reclassifications | ' | 3,130,000 | ' |
Balance at the end of the period | 9,552,000 | 11,080,000 | 8,385,000 |
Interest Rate Swap Agreements | ' | ' | ' |
Components and changes in accumulated other comprehensive income (loss) | ' | ' | ' |
Balance at the beginning of the period | -103,000 | -210,000 | ' |
Other comprehensive loss | ' | ' | -335,000 |
Income tax effect on other comprehensive loss | ' | ' | 125,000 |
Other comprehensive loss before reclassifications | -47,000 | -50,000 | ' |
Income tax effect on other comprehensive loss before reclassifications | 17,000 | 18,000 | ' |
Reclassification adjustments to interest expense for losses on interest rate swaps included in net income during the period | 96,000 | 222,000 | ' |
Reclassification adjustments for ineffective hedge on interest rate swaps included in net income during the period | 113,000 | ' | ' |
Income tax effect on reclassification adjustments | -76,000 | -83,000 | ' |
Balance at the end of the period | ' | ($103,000) | ($210,000) |
Earnings_Per_Common_Share_Deta
Earnings Per Common Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2014 | Apr. 30, 2014 | Jan. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2013 | Apr. 30, 2013 | Jan. 31, 2013 | Oct. 31, 2012 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Numerator for basic and diluted earnings per share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | $10,705,000 | $10,249,000 | $11,126,000 | $11,185,000 | $10,213,000 | $8,998,000 | $10,452,000 | $9,576,000 | $43,265,000 | $39,239,000 | $31,337,000 |
Less income allocated to participating securities | ' | ' | ' | ' | ' | ' | ' | ' | -581,000 | -608,000 | -580,000 |
Net income available to common shareholders | ' | ' | ' | ' | ' | ' | ' | ' | $42,684,000 | $38,631,000 | $30,757,000 |
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 | ' | ' | ' | ' | ' | ' | ' | ' | 40,751,629 | 40,267,885 | 39,586,170 |
Dilutive effect of stock options using the treasury stock method and the average market price for the year (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 159,685 | 289,007 | 438,753 |
Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock | ' | ' | ' | ' | ' | ' | ' | ' | 40,911,314 | 40,556,892 | 40,024,923 |
Basic earnings per share attributable to common stock (in dollars per share) | $0.26 | $0.25 | $0.27 | $0.27 | $0.25 | $0.22 | $0.26 | $0.24 | $1.05 | $0.96 | $0.78 |
Diluted earnings per share attributable to common stock (in dollars per share) | $0.26 | $0.25 | $0.27 | $0.27 | $0.25 | $0.22 | $0.25 | $0.23 | $1.04 | $0.95 | $0.77 |
Earnings_Per_Common_Share_Deta1
Earnings Per Common Share (Details 2) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
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 | 40,911,314 | 40,556,892 | 40,024,923 |
Participating securities (in shares) | 558,252 | 639,827 | 751,896 |
Total weighted average number of shares and common stock equivalents attributable to both common stock and participating securities | 41,469,566 | 41,196,719 | 40,776,819 |
Repurchase_of_Shares_Details
Repurchase of Shares (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jul. 31, 2012 | Jan. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2013 | |
Repurchase of Shares | ' | ' | ' | ' |
Shares purchased | ' | ' | 155,894 | 172,046 |
Total average price per share (in dollars per share) | ' | ' | $33.65 | $19.37 |
Reissued shares from treasury stock for exercise of stock options and grant of stock awards (in shares) | 160,904 | 474,266 | ' | ' |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Income statement components of stock-based compensation expense recognized in Consolidated Statements of Income | ' | ' | ' |
Stock-based compensation before income taxes | $5,409,000 | $3,733,000 | $3,840,000 |
Income tax benefits | -1,909,000 | -1,343,000 | -1,363,000 |
Total stock-based compensation expense, net of tax | 3,500,000 | 2,390,000 | 2,477,000 |
Decrease in earnings per common share due to stock-based compensation: | ' | ' | ' |
Basic (in dollars per share) | $0.08 | $0.06 | $0.06 |
Diluted (in dollars per share) | $0.08 | $0.06 | $0.06 |
Cost of sales | ' | ' | ' |
Income statement components of stock-based compensation expense recognized in Consolidated Statements of Income | ' | ' | ' |
Stock-based compensation before income taxes | 337,000 | 174,000 | 195,000 |
Operating expenses: Selling | ' | ' | ' |
Income statement components of stock-based compensation expense recognized in Consolidated Statements of Income | ' | ' | ' |
Stock-based compensation before income taxes | 665,000 | 329,000 | 397,000 |
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 | 4,339,000 | 3,198,000 | 3,203,000 |
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 | 68,000 | 32,000 | 45,000 |
Total operating expenses | ' | ' | ' |
Income statement components of stock-based compensation expense recognized in Consolidated Statements of Income | ' | ' | ' |
Stock-based compensation before income taxes | $5,072,000 | $3,559,000 | $3,645,000 |
StockBased_Compensation_Detail1
Stock-Based Compensation (Details 2) (USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jan. 31, 2012 | Jul. 31, 2012 | Jan. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Stock-Based Compensation | ' | ' | ' | ' | ' | ' |
Additional stock-based compensation expense in connection with an employment termination requiring to accelerate vesting of certain stock options and restricted shares (in dollars) | $309,000 | ' | ' | ' | ' | ' |
Total unrecognized stock-based compensation expense, before income taxes, related to total nonvested stock options and stock awards (in dollars) | ' | ' | ' | 7,620,000 | ' | ' |
Remaining weighted average period over which unrecognized stock-based compensation expense is expected to be recognized | ' | ' | ' | '16 months | ' | ' |
Weighted-Average Black-Scholes Option Valuation Assumptions | ' | ' | ' | ' | ' | ' |
Dividend yield (as a percent) | ' | ' | ' | 0.30% | ' | ' |
Stock options, additional disclosure | ' | ' | ' | ' | ' | ' |
Aggregate intrinsic value of all options exercised (in dollars) | ' | ' | ' | 5,702,000 | 6,616,000 | 5,793,000 |
Aggregate fair value of all options vested (in dollars) | ' | ' | ' | 127,000 | 677,000 | 942,000 |
Weighted Average Exercise Price | ' | ' | ' | ' | ' | ' |
Aggregate intrinsic value of outstanding options (in dollars) | ' | ' | ' | 4,616,000 | 7,386,000 | ' |
Stock-based awards, additional disclosure | ' | ' | ' | ' | ' | ' |
Reissued shares from treasury stock for exercise of stock options and grant of stock awards (in shares) | ' | 160,904 | 474,266 | ' | ' | ' |
Reduction in income tax payable due to exercise of options and vesting of restricted stock (in dollars) | ' | ' | ' | 5,905,000 | 3,892,000 | ' |
Increase in additional paid-in capital due to excess tax benefit on stock-based compensation expense (in dollars) | ' | ' | ' | $4,391,000 | $2,875,000 | ' |
Restricted shares | ' | ' | ' | ' | ' | ' |
Number of Shares | ' | ' | ' | ' | ' | ' |
Nonvested stock awards at the beginning of the period (in shares) | ' | ' | 708,008 | 605,767 | 708,008 | 545,838 |
Granted (in shares) | ' | ' | ' | 258,760 | 210,484 | 536,859 |
Cancelled (in shares) | ' | ' | ' | -10,066 | -14,244 | -83,002 |
Vested (in shares) | ' | ' | ' | -328,619 | -298,481 | -291,687 |
Nonvested stock awards at the end of the period (in shares) | ' | 708,008 | ' | 525,842 | 605,767 | 708,008 |
Weighted Average Fair Value | ' | ' | ' | ' | ' | ' |
Nonvested stock awards at the beginning of the period (in dollars per share) | ' | ' | 9.15 | $11.96 | $9.15 | $8.01 |
Granted (in dollars per share) | ' | ' | ' | $31.95 | $17.55 | $9.48 |
Cancelled (in dollars per share) | ' | ' | ' | $15.70 | $11.31 | $8.63 |
Vested (in dollars per share) | ' | ' | ' | $11.13 | $9.26 | $7.77 |
Nonvested stock awards at the end of the period (in dollars per share) | ' | 9.15 | ' | $22.25 | $11.96 | $9.15 |
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 | ' | ' |
Number of Shares | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | ' | ' | 823,235 | 403,831 | 823,235 | 1,543,968 |
Options granted (in shares) | ' | ' | ' | 30,000 | 52,500 | ' |
Canceled (in shares) | ' | ' | ' | ' | -9,000 | -24,748 |
Exercised (in shares) | ' | ' | ' | -211,339 | -462,904 | -695,985 |
Outstanding at the end of the period (in shares) | ' | 823,235 | ' | 222,492 | 403,831 | 823,235 |
Exercisable at the end of the period (in shares) | ' | 546,165 | ' | 157,492 | 351,331 | 546,165 |
Weighted Average Exercise Price | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | ' | ' | 6.57 | $8.25 | $6.57 | $6.47 |
Granted (in dollars per share) | ' | ' | ' | $31.81 | $17.04 | ' |
Canceled (in dollars per share) | ' | ' | ' | ' | $8.40 | $6.98 |
Exercised (in dollars per share) | ' | ' | ' | $6.82 | $6.26 | $6.32 |
Outstanding at the end of the period (in dollars per share) | ' | 6.57 | ' | $12.78 | $8.25 | $6.57 |
Exercisable at the end of the period (in dollars per share) | ' | 6.29 | ' | $8.21 | $6.94 | $6.29 |
StockBased_Compensation_Detail2
Stock-Based Compensation (Details 3) (USD $) | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 |
Range of Exercise Prices one | Range of Exercise Prices two | Range of Exercise Prices three | |||
Additional information related to stock options outstanding | ' | ' | ' | ' | ' |
Exercise price low end of range (in dollars per share) | ' | ' | $4.26 | $17.04 | $4.26 |
Exercise price high end of range (in dollars per share) | ' | ' | $7.60 | $31.81 | $31.81 |
Options Outstanding | ' | ' | ' | ' | ' |
Number Outstanding (in shares) | ' | ' | 139,992 | 82,500 | 222,492 |
Weighted Average Remaining Contractual Life | ' | ' | '8 months | '43 months | '21 months |
Weighted Average Exercise Price (in dollars per share) | ' | ' | $7.11 | $22.41 | $12.78 |
Total Intrinsic Value (in dollars) | $4,616,000 | $7,386,000 | ' | ' | ' |
Options Exercisable | ' | ' | ' | ' | ' |
Number Exercisable (in shares) | ' | ' | 139,992 | 17,500 | 157,492 |
Weighted Average Remaining Contractual Life (in months) | ' | ' | '8 months | '39 months | '11 months |
Weighted Average Exercise Price (in dollars per share) | ' | ' | $7.11 | $17.04 | $8.21 |
Total Intrinsic Value (in dollars) | $3,987,000 | ' | ' | ' | ' |
StockBased_Compensation_Detail3
Stock-Based Compensation (Details 4) (USD $) | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2011 | Jul. 31, 2010 | Jul. 31, 2010 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2011 | Jul. 31, 2014 | Jul. 31, 2012 | Jul. 31, 2011 | Jul. 31, 2011 | Jul. 31, 2011 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Oct. 31, 2009 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 |
Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Restricted shares | Restricted shares | Restricted shares | Restricted shares | Restricted shares | Restricted shares | Restricted shares | Restricted shares | Restricted shares | 2006 Plan | 2006 Plan | 2006 Plan | 2006 Plan | 2006 Plan | 2006 Plan | 2006 Plan | 2006 Plan | 2006 Plan | |
Non-employee director | Employee director | Non-employee director | Non-employee director | Non-employee director | Member of the Board of Directors | Employee director | Stock options and stock appreciation rights | Restricted stock and other stock awards | Stock options | Stock options | Stock options | Employee stock options | Employee stock options | Restricted shares | ||||||||||
Awards vesting on the first anniversary | Awards vesting on the first anniversary | Awards vesting on the first anniversary | Awards vesting on the first anniversary | Three year vesting stock awards | Three year vesting stock awards | Three year vesting stock awards | Non-employee director | Newly appointed or elected director | Minimum | Maximum | item | |||||||||||||
item | item | item | item | |||||||||||||||||||||
Stock award plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum number of shares authorized for issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,591,000 | 2,700,000 | 2,891,000 | ' | ' | ' | ' | ' | ' |
Options granted to each director quarterly (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,688 | ' | ' | ' | ' |
Options granted to each director on the last day of fiscal year (in shares) | ' | ' | ' | ' | 10,125 | 3,375 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of equal annual installments in which the options are exercisable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | 3 | 4 | ' |
Termination period following termination of employment or service | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 months | ' | ' | ' | ' | ' |
Expiration term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' |
Vesting percentage on each of the first three anniversaries of the grant date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 33.33% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 33.33% |
Number of anniversary dates in which the stock awards vest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 |
Stock awards granted to each director on the last day of fiscal year (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,375 | ' | 1,125 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Annual grant (in dollars) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $50,000 | $35,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding options to purchase shares of common stock (in shares) | 222,492 | 403,831 | 823,235 | 1,543,968 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 222,492 | ' | ' | ' | ' | ' |
Outstanding unvested restricted stock shares | ' | ' | ' | ' | ' | ' | 525,842 | 605,767 | 708,008 | 545,838 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 525,842 |
Shares available for issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 386,810 | 642,563 | ' | ' | ' | ' | ' | ' |
Retirement_Plans_Details
Retirement Plans (Details) (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Retirement Plans | ' | ' | ' |
Aggregate employer contributions recognized under 401(k) Savings and Retirement Plans | $2,196,000 | $2,540,000 | $2,152,000 |
Supplemental_Cash_Flow_Informa1
Supplemental Cash Flow Information (Details) (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Supplemental Cash Flow Information | ' | ' | ' |
Interest paid | $1,787,000 | $2,643,000 | $2,875,000 |
Income tax payments | $20,481,000 | $17,116,000 | $15,474,000 |
Information_as_to_Operating_Se2
Information as to Operating Segments and Foreign and Domestic Operations (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2014 | Apr. 30, 2014 | Jan. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2013 | Apr. 30, 2013 | Jan. 31, 2013 | Oct. 31, 2012 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Concentration risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consolidated net sales | $131,377,000 | $120,058,000 | $119,042,000 | $118,272,000 | $113,973,000 | $105,009,000 | $106,363,000 | $99,681,000 | $488,749,000 | $425,026,000 | $386,490,000 |
Water Purification and Filtration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consolidated net sales | ' | ' | ' | ' | ' | ' | ' | ' | 159,505,000 | 134,196,000 | 114,609,000 |
Dialysis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consolidated net sales | ' | ' | ' | ' | ' | ' | ' | ' | 30,926,000 | 33,148,000 | 35,644,000 |
Healthcare Disposables | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consolidated net sales | ' | ' | ' | ' | ' | ' | ' | ' | 101,809,000 | 90,904,000 | 76,229,000 |
Segment sales | Customer concentration | Water Purification and Filtration | DaVita | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 23.80% | ' | ' |
Segment sales | Customer concentration | Water Purification and Filtration | Another large customer | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 24.10% | ' | ' |
Segment sales | Customer concentration | Dialysis | DaVita | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 34.30% | ' | ' |
Segment sales | Customer concentration | Healthcare Disposables | Four customers | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of customers concentration risk | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' |
Concentration risk (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 51.40% | ' | ' |
Net sales | Customer concentration | DaVita | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | 10.40% | 10.20% |
Consolidated net sales | ' | ' | ' | ' | ' | ' | ' | ' | $48,620,000 | $44,204,000 | $39,300,000 |
Net sales | Customer concentration | DaVita and another large customer | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of customers concentration risk | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' |
Concentration risk (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 18.00% | ' | ' |
Net sales | Customer concentration | Four customers | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 10.70% | ' | ' |
Information_as_to_Operating_Se3
Information as to Operating Segments and Foreign and Domestic Operations (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2014 | Apr. 30, 2014 | Jan. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2013 | Apr. 30, 2013 | Jan. 31, 2013 | Oct. 31, 2012 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Information as to operating segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | $131,377,000 | $120,058,000 | $119,042,000 | $118,272,000 | $113,973,000 | $105,009,000 | $106,363,000 | $99,681,000 | $488,749,000 | $425,026,000 | $386,490,000 |
Operating income | ' | ' | ' | ' | ' | ' | ' | ' | 70,928,000 | 63,188,000 | 52,124,000 |
Interest expense, net | ' | ' | ' | ' | ' | ' | ' | ' | -2,317,000 | -2,834,000 | -3,650,000 |
Other expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -605,000 |
Income before income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 68,611,000 | 60,354,000 | 47,869,000 |
Identifiable assets | 536,145,000 | ' | ' | ' | 487,671,000 | ' | ' | ' | 536,145,000 | 487,671,000 | 434,812,000 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 13,541,000 | 6,745,000 | 5,502,000 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 18,886,000 | 17,263,000 | 15,925,000 |
Operating Segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Information as to operating segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating income | ' | ' | ' | ' | ' | ' | ' | ' | 87,026,000 | 75,880,000 | 62,770,000 |
General corporate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Information as to operating segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating income | ' | ' | ' | ' | ' | ' | ' | ' | -16,098,000 | -12,692,000 | -10,646,000 |
Identifiable assets | 33,190,000 | ' | ' | ' | 34,828,000 | ' | ' | ' | 33,190,000 | 34,828,000 | 31,080,000 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 558,000 | 63,000 | 15,000 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 65,000 | 14,000 | 12,000 |
Endoscopy | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Information as to operating segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 190,440,000 | 160,317,000 | 153,224,000 |
Endoscopy | Operating Segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Information as to operating segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating income | ' | ' | ' | ' | ' | ' | ' | ' | 34,194,000 | 32,361,000 | 31,083,000 |
Identifiable assets | 203,582,000 | ' | ' | ' | 157,340,000 | ' | ' | ' | 203,582,000 | 157,340,000 | 153,994,000 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 6,820,000 | 3,058,000 | 2,356,000 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 7,001,000 | 6,374,000 | 6,060,000 |
Water Purification and Filtration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Information as to operating segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 159,505,000 | 134,196,000 | 114,609,000 |
Water Purification and Filtration | Operating Segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Information as to operating segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating income | ' | ' | ' | ' | ' | ' | ' | ' | 25,750,000 | 16,381,000 | 9,819,000 |
Identifiable assets | 126,397,000 | ' | ' | ' | 123,454,000 | ' | ' | ' | 126,397,000 | 123,454,000 | 112,432,000 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 3,318,000 | 2,319,000 | 1,656,000 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 4,416,000 | 3,866,000 | 3,807,000 |
Healthcare Disposables | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Information as to operating segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 101,809,000 | 90,904,000 | 76,229,000 |
Healthcare Disposables | Operating Segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Information as to operating segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating income | ' | ' | ' | ' | ' | ' | ' | ' | 18,720,000 | 17,576,000 | 12,437,000 |
Identifiable assets | 138,240,000 | ' | ' | ' | 137,577,000 | ' | ' | ' | 138,240,000 | 137,577,000 | 100,569,000 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 1,367,000 | 699,000 | 795,000 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 5,968,000 | 5,500,000 | 4,490,000 |
Dialysis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Information as to operating segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 30,926,000 | 33,148,000 | 35,644,000 |
Dialysis | Operating Segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Information as to operating segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating income | ' | ' | ' | ' | ' | ' | ' | ' | 7,547,000 | 8,705,000 | 8,366,000 |
Identifiable assets | 25,420,000 | ' | ' | ' | 24,394,000 | ' | ' | ' | 25,420,000 | 24,394,000 | 25,793,000 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 1,444,000 | 576,000 | 583,000 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 1,142,000 | 1,188,000 | 1,230,000 |
Other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Information as to operating segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 6,069,000 | 6,461,000 | 6,784,000 |
Other | Operating Segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Information as to operating segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating income | ' | ' | ' | ' | ' | ' | ' | ' | 815,000 | 857,000 | 1,065,000 |
Identifiable assets | 9,316,000 | ' | ' | ' | 10,078,000 | ' | ' | ' | 9,316,000 | 10,078,000 | 10,944,000 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 34,000 | 30,000 | 97,000 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | $294,000 | $321,000 | $326,000 |
Information_as_to_Operating_Se4
Information as to Operating Segments and Foreign and Domestic Operations (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2014 | Apr. 30, 2014 | Jan. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2013 | Apr. 30, 2013 | Jan. 31, 2013 | Oct. 31, 2012 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | $131,377,000 | $120,058,000 | $119,042,000 | $118,272,000 | $113,973,000 | $105,009,000 | $106,363,000 | $99,681,000 | $488,749,000 | $425,026,000 | $386,490,000 |
Total long-lived assets | 57,637,000 | ' | ' | ' | 49,464,000 | ' | ' | ' | 57,637,000 | 49,464,000 | 45,954,000 |
Goodwill and intangible assets, net | 314,599,000 | ' | ' | ' | 287,547,000 | ' | ' | ' | 314,599,000 | 287,547,000 | 254,966,000 |
Total | 372,236,000 | ' | ' | ' | 337,011,000 | ' | ' | ' | 372,236,000 | 337,011,000 | 300,920,000 |
United States | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 403,892,000 | 357,378,000 | 329,261,000 |
Total long-lived assets | 53,221,000 | ' | ' | ' | 47,043,000 | ' | ' | ' | 53,221,000 | 47,043,000 | 43,353,000 |
Canada | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 20,729,000 | 18,732,000 | 15,646,000 |
Total long-lived assets | 1,029,000 | ' | ' | ' | 1,236,000 | ' | ' | ' | 1,029,000 | 1,236,000 | 1,365,000 |
Asia/Pacific | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 24,736,000 | 21,895,000 | 16,323,000 |
Total long-lived assets | 1,112,000 | ' | ' | ' | 1,030,000 | ' | ' | ' | 1,112,000 | 1,030,000 | 1,130,000 |
Europe | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total long-lived assets | 2,275,000 | ' | ' | ' | 155,000 | ' | ' | ' | 2,275,000 | 155,000 | 106,000 |
Europe/Africa/Middle East | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 32,634,000 | 23,415,000 | 21,691,000 |
Latin America/South America | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | $6,758,000 | $3,606,000 | $3,569,000 |
Quarterly_Results_of_Operation2
Quarterly Results of Operations (unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2014 | Apr. 30, 2014 | Jan. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2013 | Apr. 30, 2013 | Jan. 31, 2013 | Oct. 31, 2012 | Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Quarterly Results of Operations (unaudited) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | $131,377,000 | $120,058,000 | $119,042,000 | $118,272,000 | $113,973,000 | $105,009,000 | $106,363,000 | $99,681,000 | $488,749,000 | $425,026,000 | $386,490,000 |
Cost of sales | 74,330,000 | 67,640,000 | 66,707,000 | 66,773,000 | 64,859,000 | 59,525,000 | 61,212,000 | 55,954,000 | 275,450,000 | 241,550,000 | 222,323,000 |
Gross profit | 57,047,000 | 52,418,000 | 52,335,000 | 51,499,000 | 49,114,000 | 45,484,000 | 45,151,000 | 43,727,000 | 213,299,000 | 183,476,000 | 164,167,000 |
Gross profit percentage | 43.40% | 43.70% | 44.00% | 43.50% | 43.10% | 43.30% | 42.40% | 43.90% | ' | ' | ' |
Net income | $10,705,000 | $10,249,000 | $11,126,000 | $11,185,000 | $10,213,000 | $8,998,000 | $10,452,000 | $9,576,000 | $43,265,000 | $39,239,000 | $31,337,000 |
Earnings per common share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic (in dollars per share) | $0.26 | $0.25 | $0.27 | $0.27 | $0.25 | $0.22 | $0.26 | $0.24 | $1.05 | $0.96 | $0.78 |
Diluted (in dollars per share) | $0.26 | $0.25 | $0.27 | $0.27 | $0.25 | $0.22 | $0.25 | $0.23 | $1.04 | $0.95 | $0.77 |
Convertible_Note_Receivable_De
Convertible Note Receivable (Details) (USD $) | 12 Months Ended | 1 Months Ended | 3 Months Ended | |
Jul. 31, 2012 | Jan. 31, 2010 | Jan. 31, 2012 | Feb. 28, 2009 | |
BIOSAFE notes | BIOSAFE notes | BIOSAFE notes | ||
Convertible Note Receivable | ' | ' | ' | ' |
Investment at cost (in dollars) | ' | $500,000 | ' | $200,000 |
Additional investment made (in dollars) | ' | 300,000 | ' | ' |
Accrued interest (in dollars) | ' | ' | 105,000 | ' |
Loss on investment (in dollars) | $605,000 | ' | $605,000 | ' |
SCHEDULE_II_VALUATION_AND_QUAL1
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Allowance for doubtful accounts: | ' | ' | ' |
Changes in allowance for doubtful accounts | ' | ' | ' |
Balance at Beginning of Period | $1,265,000 | $1,041,000 | $1,096,000 |
Additions | 706,000 | 516,000 | 177,000 |
(Deductions) | -95,000 | -291,000 | -227,000 |
Translation Adjustments | -2,000 | -1,000 | -5,000 |
Balance at End of Period | 1,874,000 | 1,265,000 | 1,041,000 |
Allowance for doubtful accounts: | Puri Core International Limited | ' | ' | ' |
Changes in allowance for doubtful accounts | ' | ' | ' |
Additions | 119,000 | ' | ' |
Inventory valuation allowance: | ' | ' | ' |
Changes in allowance for doubtful accounts | ' | ' | ' |
Balance at Beginning of Period | 1,781,000 | 1,957,000 | 1,750,000 |
Additions | 3,480,000 | 750,000 | 956,000 |
(Deductions) | -802,000 | -922,000 | -741,000 |
Translation Adjustments | -40,000 | -4,000 | -8,000 |
Balance at End of Period | 4,419,000 | 1,781,000 | 1,957,000 |
Inventory valuation allowance: | Puri Core International Limited | ' | ' | ' |
Changes in allowance for doubtful accounts | ' | ' | ' |
Additions | 2,153,000 | ' | ' |
Deferred tax asset valuation allowance: | ' | ' | ' |
Changes in allowance for doubtful accounts | ' | ' | ' |
Balance at Beginning of Period | 308,000 | 1,275,000 | 1,700,000 |
Additions | 3,363,000 | 133,000 | 259,000 |
(Deductions) | -126,000 | -1,023,000 | -855,000 |
Translation Adjustments | -7,000 | -77,000 | 171,000 |
Balance at End of Period | $3,538,000 | $308,000 | $1,275,000 |