Cantel Medical Corp. (NYSE: CMD) today announced financial results for its second quarter ended January 31, 2020.
Second quarter 2020 net sales were $288.5M, up 28.5% compared to the prior year. Excluding the impact from foreign currency, net sales increased by 28.7%, primarily driven by the impact from acquisitions of 27.4% and organic growth of 1.3%.
Second quarter 2020 GAAP earnings per diluted share decreased 111.1% to $(0.05), compared to GAAP earnings per diluted share of $0.45 in the prior year period. GAAP earnings per diluted share was negatively impacted by higher amortization and one-time acquisition related costs associated with Hu-Friedy.
Second quarter 2020 non-GAAP earnings per diluted share increased 7.0% to $0.61, compared to non-GAAP earnings per diluted share of $0.57 in the prior year period.
With the acquisition of Hu-Friedy, the Company's balance sheet has changed from historical trends. The second quarter ended with cash of $58.7M and gross debt of $925.3M, while generating adjusted EBITDAS of $55.8M in the quarter, up 31.6%.
Second quarter financial results and key updates:
- Solid Dental revenue performance, organic +2.9% for the quarter and +7.5% on a year to date basis
- Hu-Friedy (HF) integration performing ahead of expectations, organic growth for HF in the high single digits
- Life Sciences organic revenue growth of +1.6%, better than previous guidance
- Operating Cash and CAPEX return to traditional levels
- Medical organic revenue growth of 2.2%, which was softer than anticipated due primarily to capital equipment
- Two key new product launches inclusive of DEFENDOTM Single-use Cleaning Adapter and SCOPE BUDDYTM PLUS performing as expected
George Fotiades, President and Chief Executive Officer, stated, "Reported sales and non-GAAP earnings showed continued growth this quarter and we are pleased with the progression we are seeing in the Dental segment, where both the integration of Hu-Friedy and organic growth in our legacy business is off to a terrific start. In Medical, we had expected similar performance to the first quarter, however capital equipment placements came in below our expectations. On a positive note, the second quarter launch of our new cleaning adapter and SCOPE BUDDYTM PLUS have been successful and we anticipate continued strong performance into the second half of our fiscal year."
Based off the softer Medical performance and assumed procedure impact in China due to COVID19, the Company is revising their current year non-GAAP diluted EPS guidance to $2.58 - $2.61.
Company launches CANTEL 2.0
On the earnings call today, the Company will discuss a new set of initiatives, known as CANTEL 2.0, that are designed to accelerate growth. Commenting on the go-forward plan, Peter Clifford, EVP and Chief Operating Officer, stated, "We are looking forward to sharing the potential of the new plan we have developed. While there is specific emphasis on the Medical business, we have many promising opportunities across the Company that we believe can drive sustainable revenue and earnings growth in the future."
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, instruments and instrument reprocessing workflow systems serving the dental industry, 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.
