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To Our Shareholders:
During fiscal year 2007, Cantel responded to the
increased world-wide demand for improved infection prevention
and control. We solidified our six existing businesses
by investing in the development, expansion and acquisition of
new products to complement our existing product lines.
Five acquisitions were completed during the fiscal
year and the first quarter of 2008, which added to the Water
Purification and Filtration, Endoscope Reprocessing and
Healthcare Disposables segments. The return on these
investments is beginning to be realized, and momentum is
building across the Company.
Our Results
We are pleased with fiscal 2007 revenues of
$219,044,000, an increase of 14% over last year's revenues
of $192,179,000. Organic revenue growth was 10%. Income
from continuing operations of $8,104,000, or $0.50 per
diluted share, was up 22%, compared with fiscal 2006
income from continuing operations of $6,653,000, or $0.41
per diluted share.
As of July 31, 2007, the Company's balance sheet
included cash and cash equivalents of $15,860,000, bank
debt of $57,000,000 and stockholders' equity of $155,070,000.
Cash flow from operating activities on continuing operations
was $10,834,000, or $0.67 per diluted share. Cash flow generated
by net income from continuing operations, after adjusting
for non-cash charges related only to depreciation and
amortization and stock-based compensation expense (but
excluding other elements of cash flow from operations), was
$19,826,000, or $1.23 per diluted share.
Water Purification and Filtration
Cantel's acquisition of GE Water & Process Technologies'
dialysis water business was a transformative event for our Mar
Cor Purification division, further establishing it as a leader
in the water purification industry. Our product portfolio ranges
from small single-patient solutions to full-scale industrial
ultra-purification systems that are utilized to produce U.S.
Pharmacopeia-grade water. This breadth of offerings, coupled
with our dedicated direct sales and service network, now reaches
nearly 7,000 customer sites across the entire United States. The
Company's priority is to drive operating efficiencies, to pursue
more product and consumable sales and to expand our service business.
We are very optimistic that Mar Cor Purification will continue to
grow and flourish as we continue to launch new products and pursue
other acquisitions in this segment.
Healthcare Disposables
During fiscal 2007, our Crosstex subsidiary acquired the Twist-2-It® line of branded proprietary prophy-angles, designed to eliminate splatter and frictional heat during routine dental hygienic procedures. Additionally, since yearend, Crosstex acquired Strong Dental Products, Inc. and its suite of barrier products for patient protection and comfort during dental x-ray procedures. Both acquisitions have added to Crosstex' growing Patient's Choice™ product line and expanded our focus on the dental hygienist community.
We believe there are significant growth opportunities
for our Healthcare Disposable products in our core dental
segment, as well as other areas of healthcare. We will continue
to explore the acquisition and development of new and
innovative products.
Endoscope Reprocessing
In August 2006, the Company launched a direct sales
and service force to address the needs of our endoscope
reprocessing customers for our Medivators® products. To
date, approximately fifty sales and service professionals have
been added in the U.S., and the team has achieved a solid
first year performance. This approach enables us to communicate
closely with our customers, leverage our expertise in
the marketplace and gain access to enhancements and new
growth opportunities.
With the recent acquisition of Verimetrix' Veriscan® endoscope leak and fluid detection product, we have expanded the Medivators product line. Our MDS™ premium-tier endoscope reprocessing product has been cleared by the FDA for sale in the U.S., and our efforts now are focused on commercialization. With continued growth in endoscopy procedures, we expect demand to remain strong for our products.
Dialysis
Our Renatron® product is utilized throughout the world
as the standard for dialyzer reprocessing, a process by which
dialyzers are prepared for reuse in a cost-effective, efficacious
and environmentally responsible manner. Our customers
continue to invest in our dialyzer reprocessing technology,
and we experienced strong sales of Renatrons throughout
the year, driven mostly by new clinic openings. Likewise, a
record number of units were shipped to Asia during 2007.
End-stage renal disease continues to plague the U.S. and
international populations, and we expect that our Dialysis
segment will continue to address the needs of dialysis clinics
for the foreseeable future.
Other (Therapeutic Filtration and Specialty Packaging)
During 2007, a large customer re-launched its product
that utilizes our pediatric filter after a lengthy FDA hold
unrelated to our product. Therapeutic product sales have
since returned to historical levels. Our proprietary Specialty
Packaging products have grown at a solid pace during the
year, reflecting progress related to significant marketing and
sales initiatives.
Looking Forward
We believe that Cantel is well-positioned for growth
and that our investments are well-placed. We participate in a
vital area of healthcare that continues to receive significant
attention around the world with infection-causing agents on
the rise. As we look forward, we plan to enhance our product
portfolio, through both internal development of new products
and acquisitions to address customer needs.
We would like to offer a special acknowledgement and
thanks to James P. Reilly, who retired in January 2007 after
successfully leading Cantel as its President and CEO for
17 years. Jim led the Company through many challenges
and, through his leadership, built Cantel to the successful
and strong Infection Prevention and Control company that it
is today.
During the past year, Dr. Spencer Foreman resigned
from our Board of Directors. Dr. Foreman actively contributed
to our board, and we thank him for his service. We welcome
Mark N. Diker to the Board and look forward to his
contributions.
Lastly, we are proud of the accomplishments and dedication
of our employees. We thank our many loyal customers
and shareholders and look forward to a prosperous 2008.
Charles M. Diker
Chairman of the Board
R. Scott Jones
President and Chief Executive Officer
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© 2005 Cantel Medical Corp. All rights reserved.
150 Clove Road - 9th Floor, Little Falls, NJ 07424-2139
Phone: (973) 890-7220, Fax: (973) 890-7270