LITTLE FALLS, N.J., March 9, 2017 /PRNewswire/ -- CANTEL MEDICAL CORP. (NYSE: CMD) reported GAAP net income of $18,070,000, or $0.43 per diluted share, on a 16.8% increase in sales to $184,817,000 for the second quarter ended January 31, 2017. This compares with net income of $15,389,000, or $0.37 per diluted share, on sales of $158,271,000 for the second quarter ended January 31, 2016.
Non-GAAP net income increased 23.8% for the second quarter ended January 31, 2017 to $21,551,000, or $0.52 per diluted share, compared with non-GAAP net income of $17,413,000, or $0.42 per diluted share, for the same quarter last year.
Jørgen B. Hansen, Cantel's President and Chief Executive Officer stated, "We are pleased to report solid sales growth and earnings performance this quarter. Our 16.8% reported sales growth is driven by strong organic growth of 12.1%, acquisitions contributing 5.8% and foreign currency translation impact of (1.1%). All three of our major business segments had strong performance in the second quarter. The dedicated focus on our strategic prioritiesnew product development, global market expansion and strategic acquisitions continues to drive our growth. Execution of these initiatives has helped us achieve double-digit organic sales growth in 12 of the past 14 quarters. We are also pleased to report a gross margin of 47.9%, up 220 basis points driven by a continued favorable shift in product mix as well as our ongoing continuous improvement efforts."
Hansen added, "For the second consecutive quarter, our Healthcare Disposables segment yielded our strongest sales growth, up 35.6%. Organic growth for the quarter was 6.5%. Growth in this segment continues to be led by our branded products which grew at 11.0%. We are pleased with the integration and performance of the Accutron acquisition and remain optimistic about the future growth opportunities of both this product portfolio and the segment.
"Our Endoscopy segment had another great quarter with overall growth of 15.8% with outstanding organic growth of 16.0%. Sales performance was led by our chemistries and procedural product portfolios. Our continued investments in direct sales teams, products and programs drove healthy growth globally, mainly driven by our North American and Asia Pacific regions.
"Overall sales in our Water Purification and Filtration segment increased 9.6%. The continued strength of our backlog translated into strong shipments for the quarter with capital equipment leading the growth. Order intake in the second quarter remained strong, and our backlog reached record levels for the third consecutive quarter, positioning us well for the remainder of fiscal year 2017.
"The Company has a strong balance sheet and continues to generate significant cash flow and EBITDAS. We finished the second quarter with cash of $24,351,000 and gross debt of $149,000,000, while generating adjusted EBITDAS of $39,514,000 in the quarter, up 19.6%."
Conference Call Information
The Company will hold a conference call to discuss the results for the second quarter ended January 31, 2017 on Thursday, March 9, 2017 at 11:00 AM Eastern time. To participate in the conference call, dial 1-877-407-8033 (US & Canada) or 1-201-689-8033 (International) approximately 5 to 10 minutes before the beginning of the call. If you are unable to participate, a digital replay of the call will be available from Thursday, March 9, 2017 through midnight on May 9, 2017 by dialing 1-877-481-4010 (US & Canada) or 1-919-882-2331 (International) and using conference ID #:10259. An audio webcast will be available via the Cantel website at www.cantelmedical.com. A replay of the webcast will be archived on the Cantel web site for those unable to listen live.
In addition, the Company will provide a supplemental presentation to complement the conference call. The presentation can be accessed on Cantel's website in the Investor Relations section under presentations.
About Cantel Medical
Cantel Medical is a leading global company dedicated to delivering innovative infection prevention 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. Additionally, we provide technical service for our products.
For further information, visit the Cantel website at www.cantelmedical.com.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks and uncertainties, including, without limitation, the risks detailed in Cantel's filings and reports with the Securities and Exchange Commission. Such forward-looking statements are only predictions, and actual events or results may differ materially from those projected or anticipated.
CANTEL MEDICAL CORP. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||
(In thousands, except per share data) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | Six Months Ended | |||||||
January 31 | January 31 | |||||||
2017 | 2016 | 2017 | 2016 | |||||
Net sales | $ 184,817 | $ 158,271 | $ 372,542 | $ 312,050 | ||||
Cost of sales | 96,340 | 85,934 | 194,558 | 168,515 | ||||
Gross profit | 88,477 | 72,337 | 177,984 | 143,535 | ||||
Expenses: | ||||||||
Selling | 26,910 | 22,620 | 54,803 | 44,080 | ||||
General and administrative | 28,465 | 22,252 | 58,468 | 44,449 | ||||
Research and development | 4,489 | 3,069 | 9,037 | 6,834 | ||||
Total operating expenses | 59,864 | 47,941 | 122,308 | 95,363 | ||||
Income from operations | 28,613 | 24,396 | 55,676 | 48,172 | ||||
Interest expense, net | 1,126 | 871 | 2,219 | 1,616 | ||||
Income before income taxes | 27,487 | 23,525 | 53,457 | 46,556 | ||||
Income taxes | 9,417 | 8,136 | 16,587 | 16,913 | ||||
Net income | $ 18,070 | $ 15,389 | $ 36,870 | $ 29,643 | ||||
Earnings per common share - diluted | $ 0.43 | $ 0.37 | $ 0.88 | $ 0.71 | ||||
Dividends per common share | $ - | $ - | $ 0.07 | $ 0.06 | ||||
Weighted average shares - diluted | 41,793 | 41,748 | 41,789 | 41,708 | ||||
CANTEL MEDICAL CORP. | ||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
(In thousands) | ||||
(Unaudited) | ||||
January 31, | July 31, | |||
2017 | 2016 | |||
Assets | ||||
Current assets | $ 233,672 | $ 222,742 | ||
Property and equipment, net | 83,042 | 74,604 | ||
Intangible assets, net | 128,667 | 111,719 | ||
Goodwill | 302,637 | 280,318 | ||
Other assets | 5,212 | 5,149 | ||
$ 753,230 | $ 694,532 | |||
Liabilities and stockholders' equity | ||||
Current liabilities | $ 92,142 | $ 96,335 | ||
Long-term debt | 149,000 | 116,000 | ||
Other long-term liabilities | 28,928 | 27,827 | ||
Stockholders' equity | 483,160 | 454,370 | ||
$ 753,230 | $ 694,532 | |||
SUPPLEMENTARY INFORMATION - RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
In evaluating our operating performance, we supplement the reporting of our financial information determined under accounting principles generally accepted in the United States ("GAAP") with certain internally driven non-GAAP financial measures, namely (i) non-GAAP net income, (ii) non-GAAP diluted earnings per share ("EPS"), (iii) income before interest, taxes, depreciation, amortization and stock-based compensation expense ("EBITDAS"), (iv) EBITDAS adjusted for atypical items ("Adjusted EBITDAS"), (v) net debt and (vi) organic sales. These non-GAAP financial measures are indicators of the Company's performance that are not required by, or presented in accordance with, GAAP. They are presented with the intent of providing greater transparency to financial information used by us in our financial analysis and operational decision-making. We believe that these non-GAAP measures provide meaningful information to assist investors, shareholders and other readers of our Condensed Consolidated Financial Statements in making comparisons to our historical operating results and analyzing the underlying performance of our results of operations. These non-GAAP financial measures are not intended to be, and should not be, considered separately from, or as an alternative to, the most directly comparable GAAP financial measures.
Reconciliations of Net Income and Diluted EPS to Non-GAAP Net Income and Non-GAAP Diluted EPS
We define non-GAAP net income and non-GAAP diluted EPS as net income and diluted EPS, respectively, adjusted to exclude amortization, acquisition related items, significant reorganization and restructuring charges, major tax events and other significant items management deems atypical or non-operating in nature.
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