Cantel Medical Q4 Profit Surges On Higher Sales - Update

(RTTNews) - Friday, Cantel Medical Corp. (CMN: News ), a manufacturer of infection prevention and control products, reported a 65% growth in profit for the fourth quarter, helped by increased sales of higher margin consumables, as well as an increase in service. Looking ahead, the company said it remains optimistic that its strong momentum will continue into fiscal year 2010.

Fourth-quarter net income was $4.28 million or $0.26 per share, compared to $2.60 million or $0.16 per share last year. On average, two analysts polled by Thomson Reuters expected the company to report earnings of $0.25 per share. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 4% to $66.79 million from $64.28 million in the prior year quarter. In the quarter, Healthcare Disposables segment's sales and operating profits grew 21% and 146%, respectively, primarily driven by face mask sales tied to the spread of the 'swine flu' or novel H1N1 virus.

Commenting on the results, Andrew Krakauer, Cantel's President and Chief Executive Officer, said, "We are pleased to have delivered another quarter of substantial earnings growth. This reflects our seventh sequential quarter of improved results. Cantel continued to benefit from increased sales of higher margin consumables, including disinfectants, sterilants and face masks, as well as an increase in service. These recurring revenues now make up 75% of overall sales."

The company noted that its dialysis and endoscope reprocessing businesses also performed well during the quarter due to increased sales of both reprocessing equipment and consumables, further aided by reductions in manufacturing and distribution costs.
For the fiscal year 2009, Cantel Medical reported a 79% increase in net income to $15.57 million or $0.94 per share from last year's net income of $8.69 million or $0.53 per share. Annual sales increased 4% to $260.05 million from $249.37 million a year ago. Excluding the Dialysis segment, where sales of low margin dialysate concentrate fell, as expected, revenue growth for the full fiscal year was 7.6%.

Looking ahead, Krakauer said, "We remain optimistic that our strong momentum will continue into fiscal year 2010, and we plan to accelerate our new product development efforts, continue investing in sales and marketing (including our alternative channel programs) and aggressively seek strategic acquisitions to improve our revenue growth rate and operating margins in fiscal year 2011 and beyond."
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