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Cantel Medical Reports EPS of $0.35 vs. $0.23 for First Quarter Ended October 31, 2012

--Net Income 54% Higher on 7% Sales Increase

LITTLE FALLS, N.J., Dec. 6, 2012 /PRNewswire/ -- CANTEL MEDICAL CORP. (NYSE:CMN) reported a 54% increase in net income to $9,576,000, or $0.35 per diluted share, on a 7% increase in sales to a record $99,681,000 for the first quarter ended October 31, 2012. This compares with net income of $6,220,000, or $0.23 per diluted share, on sales of $93,262,000 for the first quarter ended October 31, 2011.

Andrew Krakauer, Cantel's President and CEO stated, "We are pleased to have delivered another strong financial performance this quarter. All three major business segments contributed to the favorable results. As in the past four quarters, much of our success resulted from the continued expansion of our gross margins, which improved to 43.9%. This was three percentage points better than in the same quarter last year and was mostly driven by greater shipments of higher margin products."

Krakauer added, "Our Water Purification and Filtration segment had an especially strong performance this quarter with organic sales growth of 16%. Operating profits in the segment grew by 46% due to greater sales of advanced technology higher margin products and improved operating efficiencies driven by higher production volumes. We also saw substantial operating leverage in our Healthcare Disposables and Endoscopy businesses, primarily driven by the sales of higher margin products. Operating profit in these two segments grew by 37% and 33%, respectively.  Additionally, we also had some benefit from opportunistic sales in our Therapeutic Filtration business and stringent expense control across all units."

In November, we announced two important events which will greatly benefit Cantel in the future. First was the acquisition of SPS Medical Supply Corp., which now brings Cantel's sales in the growing sterilization assurance market to over $30 million. It also significantly expanded the presence of our Crosstex business into the hospital and alternative care markets. Second, we announced the appointment of Jorgen B. Hansen as Cantel's Executive Vice President and Chief Operating Officer. Jorgen brings a wealth of senior executive management experience in the medical device and healthcare industry to Cantel. He also has great knowledge of international markets. 

The Company also reported that its balance sheet at October 31, 2012 included current assets of $133,211,000, including cash of $27,866,000, a current ratio of 2.44:1, gross debt of $80,000,000 and stockholders' equity of $284,597,000. Krakauer stated, "We continue to maintain a strong balance sheet and generate substantial cash flow and EBITDAS. When compared with the same quarter last year, our EBITDAS grew by 34% to $20,998,000. We were able to reduce our net debt position by approximately $7.7 million to $52,134,000, during the quarter."

Cantel Medical Corp. (NYSE:CMN) is a leading provider of infection prevention and control products in the healthcare market. Our products include water purification equipment, sterilants, disinfectants and cleaners, specialized medical device reprocessing systems for endoscopy and renal dialysis, disposable infection control products primarily for dental and GI endoscopy markets, dialysate concentrates and other dialysis supplies, hollow fiber membrane filtration and separation products for medical and non-medical applications, and specialty packaging for the transport and temperature regulation of infectious and biological specimens.

The Company will hold a conference call to discuss the results for the first quarter ended October 31, 2012 on Thursday, December 6, 2012 at 11:00 AM Eastern time. To participate in the conference call, dial (877) 407-8033 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, December 6, 2012 at 2:00 PM through midnight on February 6, 2013 by dialing (877) 660-6853 and using conference ID # 404890.

The call will be simultaneously broadcast live over the Internet on vcall.com at http://www.investorcalendar.com/IC/CEPage.asp?ID=170281.  A replay of the webcast will be available on Vcall for 90 days.

For further information, visit the Cantel website at www.cantelmedical.com.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks and uncertainties, including, without limitation, the risks detailed in Cantel's filings and reports with the Securities and Exchange Commission. Such forward-looking statements are only predictions, and actual events or results may differ materially from those projected or anticipated.

CANTEL MEDICAL CORP. 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(unaudited)















Three Months Ended




October 31,




2012


2011








Net sales


$     99,681


$     93,262








Cost of sales


55,954


55,312








Gross profit


43,727


37,950








Expenses:






  Selling


13,413


12,923


  General and administrative


12,048


12,102


  Research and development


2,294


2,145


Total operating expenses


27,755


27,170








Income before interest and income taxes


15,972


10,780








Interest expense  


646


1,031


Interest income


(13)


(30)








Income before income taxes


15,339


9,779








Income taxes


5,763


3,559








Net income 


$      9,576


$      6,220








Earnings per common share - diluted  


$        0.35


$        0.23








Dividends per common share 


$        0.06


$        0.05








Weighted average shares - diluted 


27,361


26,899


 

CANTEL MEDICAL CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)













October 31,


July 31,



2012


2012

                    Assets





     Current assets


$     133,211


$     133,892

     Property and equipment, net


42,403


43,022

     Intangible assets, net


69,096


71,311

     Goodwill


183,703


183,655

     Other assets


3,061


2,932



$     431,474


$     434,812






            Liabilities and stockholders' equity




     Current portion of long-term debt


$      10,000


$      10,000

     Other current liabilities


44,615


45,141

     Long-term debt


70,000


80,000

     Other long-term liabilities 


22,262


23,735

     Stockholders' equity


284,597


275,936



$     431,474


$     434,812






 

SUPPLEMENTARY INFORMATION










Reconciliation of Earnings Before Interest, Taxes, Depreciation, Amortization and Stock-Based

Compensation Expense ("EBITDAS")










The reconciliation of EBITDAS with net income for the three months ended October 31, 2012 and 2011, respectively, is as follows (in thousands):









Three Months Ended



October 31,



2012


2011











Net income


$      9,576


$      6,220






Income taxes


5,763


3,559

Interest expense  


646


1,031

Interest income


(13)


(30)

Depreciation


1,760


1,677

Amortization


2,267


2,289

Loss on disposal of fixed assets


41


3






EBITDA


20,040


14,749






Stock-based compensation expense


958


931






EBITDAS


$    20,998


$    15,680
















EBITDAS is a measure of the Company's performance that is not required by, or presented in accordance with,

Generally Accepted Accounting Principles ("GAAP"). EBITDAS is a non-GAAP financial measure defined by the

Company as income before interest, taxes, depreciation, amortization and stock-based compensation expense.

The Company believes EBITDAS is an important valuation measurement for management and investors given

the increasing effect that non-cash charges, such as stock-based compensation, amortization related to acquisitions

and depreciation of capital equipment, has on the Company's net income. In particular, acquisitions have historically

resulted in significant increases in amortization of intangible assets that reduced the Company's net income.

Additionally, the Company regards EBITDAS as a useful measure of operating performance and cash flow before

the effect of interest expense and complements operating income, net income and other GAAP financial 

performance measures. Generally, a non-GAAP financial measure is a numerical measure of a Company's 

performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded 

or included in the most directly comparable measure calculated and presented in accordance with GAAP. 

This measure, however, should be considered in addition to, and not as a substitute or superior to, net income, 

cash flows, or other measures of financial performance prepared in accordance with GAAP.








SOURCE Cantel Medical Corp.

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