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Cantel Medical Reports 72% Increase in Net Income on Record Sales - EPS of $0.20 vs. $0.12 for Quarter Ended October 31, 2008

LITTLE FALLS, N.J., Dec. 5 /PRNewswire-FirstCall/ -- CANTEL MEDICAL CORP. (NYSE: CMN) reported net income of $3,333,000, or $0.20 per diluted share, on a 7% increase in sales to $64,406,000 for the first quarter ended October 31, 2008, inclusive of $0.02 of expenses related to the relocation of our Dutch manufacturing operations to the United States. This compares with net income of $1,939,000, or $0.12 per diluted share, on sales of $60,005,000 for the first quarter ended October 31, 2007, inclusive of $0.01 of expenses attributable to acquisitions and severance costs related to reducing manufacturing operations in Holland.

Andrew Krakauer, Cantel's President, stated "We are very pleased to have delivered by far our strongest quarterly performance of the past few years. These superior results attest to the success of our sales and marketing investments and various programs to improve operating margins. Cantel had solid sales growth in all reporting segments except for an expected decline in low margin dialysate concentrate shipments in our Dialysis segment. During the quarter, we achieved almost 13% revenue growth exclusive of Dialysis."

Krakauer added, "While all businesses performed well, our Endoscope Reprocessing and Water Purification and Filtration units were significantly ahead of last year, aided by strong sales of higher margin consumables including disinfectants, sterilants and filters. We also benefited from our active cost reduction and margin improvement programs, the implementation of price increases and reduced interest expenses."

Krakauer continued, "Despite economic uncertainties, we remain focused on our strategies to grow and improve performance. We believe our leadership positions in several infection prevention and control markets, coupled with the fact that over 70% of our sales come from disposables and service, will continue to benefit us despite difficult economic conditions. We are proactively taking steps to address challenges related to the weakening economy."

The Company further reported that its balance sheet at October 31, 2008 included current assets of $81,736,000, including cash of $15,735,000, a current ratio of 2.4:1, debt of $57,300,000, stockholders' equity of $167,838,000 and a ratio of funded debt to equity of .34:1. Krakauer stated, "The Company has a strong balance sheet and continues to generate significant cash. Our cash provided by operating activities for the quarter was $5,407,000. We have reduced our net debt position from the same quarter last year by 21% to $41.6 million."

Cantel Medical Corp. is a leading provider of infection prevention and control products in the healthcare market. Our products include specialized medical device reprocessing systems for renal dialysis and endoscopy, dialysate concentrates and other dialysis supplies, disposable infection control products primarily for the dental industry, water purification equipment, sterilants, disinfectants and cleaners, hollow fiber membrane filtration and separation products for medical and non-medical applications, and specialty packaging for infectious and biological specimens. We also provide technical maintenance for our products and offer compliance training services for the transport of infectious and biological specimens.

The Company will hold a conference call to discuss the results for the first quarter ended October 31, 2008 on Friday, December 5, 2008 at 11:00 AM Eastern time. To participate in the conference call, dial 1-877-407-8035 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 Friday, December 5 at 2:00 PM through midnight on December 6, by dialing 1-877-660-6853 and using passcode #286 and conference ID #305374.

The call will be simultaneously broadcast live over the Internet on at A replay of the webcast will be available on Vcall for 30 days.

For further information, visit the Cantel website at

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.
              (In thousands, except per share data)

                                            Three Months Ended
                                                October 31,
                                               2008     2007
                                               ----     ----

    Net sales                               $64,406  $60,005

    Cost of sales                            40,783   38,799
                                             ------   ------

    Gross profit                             23,623   21,206

      Selling                                 7,350    6,789
      General and administrative              9,024    8,957
      Research and development                1,065      990
                                              -----      ---
    Total operating expenses                 17,439   16,736
                                             ------   ------

    Income before interest and income taxes   6,184    4,470

    Interest expense                            751    1,222
    Interest income                             (70)    (147)
                                                ---     ----

    Income before income taxes                5,503    3,395

    Income taxes                              2,170    1,456
                                              -----    -----

    Net income                               $3,333   $1,939
                                             ======   ======

    Earnings per common share - diluted       $0.20    $0.12
                                              =====    =====

    Weighted average shares - diluted        16,349   16,331

                        CANTEL MEDICAL CORP.
                           (In thousands)

                                             October 31, July 31,
                                                 2008     2008
                                                 ----     ----
         Current assets                         $81,736  $84,561
         Property and equipment, net             37,139   37,920
         Intangible assets                       39,347   41,254
         Goodwill                               112,173  113,958
         Other assets                             1,290    1,497
                                                  -----    -----
                                               $271,685 $279,190
                                               ======== ========

           Liabilities and stockholders' equity
         Current portion of long-term debt       $8,500   $8,000
         Other current liabilities               26,248   30,922
         Long-term debt                          48,800   50,300
         Other long-term liabilities             20,299   21,256
         Stockholders' equity                   167,838  168,712
                                                -------  -------
                                               $271,685 $279,190
                                               ======== ========


    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, 2008 and 2007, respectively, is as follows (in

                                           Three Months Ended
                                              October 31,
                                              2008    2007
                                              ----    ----

    Net income                              $3,333  $1,939

    Income taxes                             2,170   1,456
    Interest expense                           751   1,222
    Interest income                            (70)   (147)
    Depreciation                             1,550   1,445
    Amortization                             1,338   1,399
    Loss on disposal of fixed assets            14       -
                                                --       -

    EBITDA                                   9,086   7,314

    Stock-based compensation expense           520     532
                                               ---     ---

    EBITDAS                                 $9,606  $7,846
                                            ======  ======

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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All rights reserved

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