QuickLinks -- Click here to rapidly navigate through this document
NEWS RELEASE
FOR 3:00 P.M. RELEASE July 25, 2001 | Contact: | Jules L. Fisher, Vice President Chief Financial Officer Minntech Corporation (763) 553-3300 Nasdaq Symbol: MNTX |
MINNTECH REPORTS FIRST QUARTER RESULTS
MINNEAPOLIS, July 25—Minntech Corporation (Nasdaq: MNTX), a worldwide leader in dialyzer reprocessing technologies, today reported financial results for the first quarter ended June 30, 2001. Revenues in the first quarter of fiscal 2002 were $20.0 million, up 13.3 percent from $17.6 million in the first quarter of fiscal 2001. Net earnings were $1.2 million, or 18 cents per diluted share, compared to a net loss of $197,000, or 3 cents per diluted share, in the prior-year period.
The company's gross margin improved to 39.1 percent, from 34 percent in the prior-year quarter. Operating expenses, at $6.2 million, were essentially flat with the fiscal 2001 first quarter. The company's fiscal 2002 first-quarter net earnings were reduced by $188,000 (after tax), or 3 cents per diluted share, due to charges recorded in Selling, General and Administrative expenses related to the company's pending merger with Cantel Medical Corp.
R. James Danehy, Minntech's President and Chief Executive Officer, said: "We were very pleased with the revenue growth and particularly with the improved profitability that we were able to achieve in the first quarter. Gross margins were up nicely due to strong sales volume across all business segments, an improved product mix, and cost efficiencies we have achieved in manufacturing and distribution."
Revenue Gains
Dialysis product sales were up 8.0 percent for the quarter, with growth of 14.2 percent in dialyzer reprocessing sales, which include dialyzer reprocessing equipment and supplies and reprocessing services. The company's cardiosurgery business demonstrated significant improvement, with revenue from OEM cardiosurgery product sales up 34.8 percent over the first quarter of fiscal 2001. Minntech has completed a transition to being an OEM supplier of cardiosurgery products, rather than a full-service manufacturer and marketer.
Minntech's developing business segment also showed strong growth, increasing 29.9 percent. Sales of filtration and separation products, led by sterilant sales, were up 38.5 percent over the prior-year quarter.
- more -
Minntech Corporation Announces Fiscal 2002 First-Quarter Results
Page 2 of 4
July 25, 2001
Growth Continues for Reprocessing Centers
During the first quarter, Minntech added patients at its Orlando reprocessing service center. Minntech's reprocessing service centers handle dialyzer transportation, cleaning, testing, inspection, sterilization, documentation, and regulatory compliance for dialysis clinics. During May in Orlando, Minntech signed a contract involving 400 additional patients with a large, fully integrated dialysis services provider. Several months ago, Minntech's original reprocessing center customer in Atlanta terminated its reprocessing center contract, and the Company continues to pursue reprocessing opportunities with dialysis providers in the Atlanta area.
Dialyzer reprocessing, the practice of cleaning and disinfecting dialyzers for reuse by the same patient, is performed in over 80 percent of U.S. dialysis facilities.
Merger Agreement
On May 30, 2001, Minntech entered into a merger agreement with Cantel Medical Corp. Under the terms of the agreement, Minntech will become a wholly-owned subsidiary of Cantel and Minntech's shareholders will receive $6.25 in cash and a fraction of a share of Cantel common stock having a value of $4.25 (based on an average closing price of Cantel stock during a defined period ending shortly before the merger) for each Minntech share that they hold, subject to adjustment if Cantel's average closing stock price during the defined period is less than $15.00 or more than $28.89 per share. The merger is subject to standard closing conditions, including the approval of Minntech and Cantel shareholders. Additional information about the proposed merger can be found in the proxy statement / prospectus available on or about August 3, 2001, and other documents filed with the Securities and Exchange commission, which can be accessed at www.sec.gov.
Minntech Corporation is a provider of products and services for the dialysis, medical device reprocessing, and filtration and separation markets. The Company's product portfolio and business development strategies focus on the strengths of its advanced proprietary technologies in hollow fibers, automated disinfection and sterilization systems, and sterilants. To learn more, visit Minntech online at www.minntech.com.
This news release contains forward-looking statements that involve risks and uncertainties. These risks and uncertainties include the opening of additional reprocessing centers and market acceptance of the reprocessing service. The Company's actual results could differ materially from those in any such forward-looking statements. Additional information concerning important factors that could cause results to differ materially from those in any such forward-looking statement is contained in the Company's Annual Report on Form 10-K for the year ended March 31, 2001, as filed with the Securities and Exchange Commission, and from time to time in the Company's other reports on file with the SEC.
- more -
Minntech Corporation Announces Fiscal 2002 First-Quarter Results
Page 3 of 4
July 25, 2001
Minntech Corporation
Condensed Consolidated Statement of Earnings
(Unaudited)
(In thousands except per share amounts)
| Thirteen Weeks Ended June 30, 2001 | Thirteen Weeks Ended July 1, 2000 | ||||||
---|---|---|---|---|---|---|---|---|
Revenues by Product Group | ||||||||
Dialysis Products | $ | 14,869 | $ | 13,772 | ||||
Cardiosurgery Products | 2,770 | 2,055 | ||||||
Developing Businesses | 2,312 | 1,778 | ||||||
Total Revenues | 19,951 | 17,605 | ||||||
Operating Costs and Expenses | ||||||||
Cost of Product Sales | 12,151 | 11,622 | ||||||
Research and Development | 884 | 1,014 | ||||||
Selling, General, and Administrative | 5,262 | 5,051 | ||||||
Amortization of Intangible Assets | 52 | 59 | ||||||
Total Operating Costs and Expenses | 18,349 | 17,746 | ||||||
Earnings / (Loss) From Operations | 1,602 | (141 | ) | |||||
Other Income, Net | 250 | 52 | ||||||
Earnings / (Loss) Before Income Taxes | 1,852 | (89 | ) | |||||
Provision (benefit) for Income Taxes | 648 | (28 | ) | |||||
Net Earnings / (Loss) Before Cumulative Effect of Change in Accounting Principle | 1,204 | (61 | ) | |||||
Cumulative Effect of a Change in Accounting Principle | — | (136 | ) | |||||
Net Earnings / (Loss) | $ | 1,204 | $ | (197 | ) | |||
Weighted Average Common Shares Outstanding—Basic | 6,681 | 6,682 | ||||||
Earnings / (Loss) Per Share—Basic: | ||||||||
Earnings / (Loss) Before Cumulative Effect | $ | .18 | $ | (0.01 | ) | |||
Cumulative Effect | — | $ | (0.02 | ) | ||||
Net Earnings / (Loss) | $ | .18 | $ | (0.03 | ) | |||
Weighted Average Common Shares Outstanding—Diluted: | 6,707 | 6,682 | ||||||
Earnings / (Loss) Per Share—Diluted: | ||||||||
Earnings / (Loss) Before Cumulative Effect | $ | .18 | $ | (0.01 | ) | |||
Cumulative Effect | — | $ | (0.02 | ) | ||||
Net Earnings / (Loss) | $ | .18 | $ | (0.03 | ) | |||
- more -
Minntech Corporation Announces Fiscal 2002 First-Quarter Results
Page 4 of 4
July 25, 2001
Minntech Corporation
Condensed Consolidated Balance Sheets
(In thousands)
| June 30, 2001 | March 31, 2001 | |||||
---|---|---|---|---|---|---|---|
| (unaudited) | | |||||
ASSETS | |||||||
Current Assets | |||||||
Cash and Cash Equivalents | $ | 15,825 | $ | 15,344 | |||
Accounts Receivable, Net | 14,444 | 13,333 | |||||
Inventories | 10,934 | 11,246 | |||||
Prepaid's and Other Current Assets | 3,633 | 3,131 | |||||
Total Current Assets | 44,836 | 43,054 | |||||
Property and Equipment, net | 17,038 | 17,410 | |||||
Other Assets | 2,586 | 2,548 | |||||
Total Assets | $ | 64,460 | $ | 63,012 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current Liabilities | |||||||
Accounts Payable | $ | 4,019 | $ | 3,717 | |||
Accrued Expenses | 4,459 | 4,809 | |||||
Income Taxes Payable | 663 | 271 | |||||
Total Current Liabilities | 9,141 | 8,797 | |||||
Deferred Compensation | 754 | 738 | |||||
Deferred Income Taxes | 56 | 56 | |||||
Stockholders' Equity | 54,509 | 53,421 | |||||
Total Liabilities and Stockholders' Equity | $ | 64,460 | $ | 63,012 | |||
14605 28th Avenue North, Minneapolis, MN 55447 U.S.A. (763) 553-3300 Fax: (763) 553-3387
# # #
Exhibit 99
MINNTECH REPORTS FIRST QUARTER RESULTS