CANTEL MEDICAL CORP. (NYSE: CMN) today reported US GAAP net income of $14,019,000, or $0.34 per diluted share, on a 22.8% increase in sales to a record$173,703,000 for the third quarter ended April 30, 2016. This compares with US GAAP net income of$12,356,000 or $0.30 per diluted share, on sales of $141,508,000 for the third quarter ended April 30, 2015. For the nine months ended April 30, 2016, the Company reported record US GAAP net income of $43,662,000, or $1.05 per diluted share on a 17.4% increase in sales to a record $485,753,000. This compares with US GAAP net income of $34,680,000, or $0.83 per diluted share, on sales of $413,749,000 for the nine months ended April 30, 2015.
Under non-GAAP financial measures, adjusted net income this quarter increased 24.1% to $18,243,000 or$0.44 per diluted share, compared with adjusted net income of $14,697,000, or $0.35 per diluted share for the same quarter last year. For the nine months ended April 30, 2016, the Company reported a 20% increase in adjusted net income to $52,776,000 or $1.26 per diluted share compared to adjusted net income for the nine months ended April 30, 2015 of $43,979,000 or $1.06 per diluted share.
Andrew Krakauer, Cantel's Chief Executive Officer stated, "We are pleased to have delivered record sales and adjusted earnings performance this quarter. Our 22.8% reported sales growth can be broken down into strong organic growth of 17.6%, a 0.6% decline due to foreign currency translation, with acquisitions making up the remaining 5.8% demonstrating the continued success of our acquisition program. The majority of this quarter's excellent performance was driven by the Endoscopy business. All three of our major business units including Water Purification and Filtration and Healthcare Disposables, in addition to Endoscopy, have greatly benefited from continued investments in new product development, sales and marketing programs and the integration of recent acquisitions. We are also pleased to report gross margins improved approximately 130 basis points compared with the same quarter last year."
Krakauer added, "Our Endoscopy segment led sales growth for the Company this quarter with a remarkable year-over-year increase of 44.2%, of which 33.1% was organic. This fast growing segment represented 53% of Cantel's total revenue this quarter. All product categories in this segment were strong including procedure room products, reprocessing equipment, disinfectants, as well as service and spare parts. Our exceptional growth and record sales volumes continued to be led by our dedicated United States sales and service team.
In our Healthcare Disposables segment, quarterly sales increased by over 20.3% compared to the same period last year. Organic sales growth was 13.4%. While last year's sales were unusually low, this quarter's performance was a record with several categories delivering very strong growth, including dental waterlines and sterility assurance products. On a further positive note, sales from our newly acquired NAMSA's Sterility Assurance Products Division have been very strong and exceeded our expectations. This acquisition reflects our continued focus on sterility assurance as a key growth driver for our Healthcare Disposables segment. Compared to the same quarter last year, sales in our Water Purification and Filtration unit were lower by less than 1%. Organic sales growth was flat in this segment as growth in consumables were offset by some lower equipment and service revenue. We did see a good increase in orders, and backlog is now at an all-time record level which bodes well as we enter fiscal year 2017. Overall for Cantel, the strong revenue growth drove record adjusted net income."
The Company further reported that its balance sheet at April 30, 2016 included current assets of $225,929,000, including cash of $25,498,000, a current ratio of 2.5:1, gross debt of $132,000,000 and stockholders' equity of$447,638,000. Krakauer stated, "The Company has a strong balance sheet and continues to generate significant cash flow and EBITDAS. Compared to the first nine months of last year, Cash Flow from Operations and Adjusted EBITDAS grew by 55% and 21%, respectively to $51.8 million and $100.3 million, respectively."
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.
