Cantel Medical Reports Financial Results for its Second Quarter Fiscal Year 2019
Medical segment continues strong double-digit growth
Net sales of $224.5M, up 5.4%, with organic sales growth of 5.3%
GAAP diluted EPS of $0.45, down 42.1%
Non-GAAP diluted EPS of $0.57, down 20.0%
GAAP net income of $18.8M, down 42.1%
Non-GAAP net income of $23.6M, down 20.5%
Little Falls, New Jersey- (February 28, 2019) - Cantel Medical Corp. (NYSE: CMD) today announced financial results for its second quarter ended January 31, 2019.
Jørgen B. Hansen, President and Chief Executive Officer, stated, “We are pleased to see continued strong double-digit sales growth in our Medical segment, which was partly offset by softer results in our Life Sciences and Dental businesses. We expect continued momentum in our Medical segment, and acceleration in our Dental franchise in the second half of the year while managing through a challenging environment in our Hemodialysis Water business.
Our 5.4% reported sales increase was driven by organic growth of 5.3%, the impact from acquisitions of 1.1%, and an unfavorable impact from foreign currency of 1.0%. We continue to perform well internationally where sales were up 7.3%, with 11.3% organic growth. Our US business had a solid quarter and grew 4.7%.”
Medical sales grew 10.2%, with organic growth of 11.3%, with strong performance across all core product lines and regions. Recurring revenue for this segment was up 10.4%, and capital equipment grew 9.4%. Our Life Sciences segment decreased 0.9%, primarily due to softness in our Hemodialysis Water business and the sale of our High Purity Water business in Canada. Our Dental segment reported a year over year decline of 0.4%, including a decrease of 0.7% organically, predominantly related to the temporary effect of general inventory adjustments by our channel partners.
The prior year change in tax legislation, along with the specific investments we have made to our business have had an impact on both GAAP and Non-GAAP earnings. We estimate the impact to GAAP diluted EPS from the tax true up and investments to be a negative $0.26 per diluted share, with prior year tax rate driving $0.22 per diluted share and net investments of $0.04 per diluted share. The impact to Non-GAAP diluted EPS was a negative $0.08 per share, with prior year tax rate driving $0.04 per diluted share and net investments $0.04 per diluted share.
The Company's balance sheet remains strong with ample capacity to support the strategic plan. The second quarter ended with cash of $71.0M and gross debt of $240.0M, while generating adjusted EBITDAS of $42.4M in the quarter, down 7.7%.
Hansen further stated, “Our Medical division had a great quarter with double-digit growth in North America and Asia Pacific, we announced the acquisitions of Omnia S.p.A. and Vista Research Group LLC, as well as successfully launched the first phase of our new ERP platform in our US Medical business. On our earnings call, we will discuss revised guidance that will include the acquisition of Omnia and an updated Hemodialysis Water view.”
The following information was filed by Cantel Medical Corp (CMD) on Thursday, February 28, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.