Cantel Medical Overview

Transcription

1 (NYSE: CMN) FORWARD LOOKING STATEMENT This presentation contains forward-looking statements. All forward-looking statements involve risks and uncertainties, including, without limitation, the risks detailed in the Company s filings and reports with the Securities and Exchange Commission. Such statements are only predictions, and actual events or results may differ materially from those projected. 2014

2 Cantel Medical Overview $456M NYSE Leader in Infection Prevention & Control 1 The only pure-play in the growing ~$45B Global Infection Prevention & Control Market ( IP&C ) Government and industry focus on healthcare associated infections and IP&C generally is a growth driver and largely shields our markets from downward/weak economic cycles Hold leading share in every niche category where we compete Strong financial performance consistent for more than 10 years FY 2014 off to a record 1st half Proven expertise in identifying, executing and integrating acquisitions Completed 24 acquisitions in past 12 years Three prong growth strategy acquisitions, new product development and sales and marketing investments has positioned three largest business segments into addressable markets in excess of $5B Have Never Been Better Positioned for Future Growth 1 Latest twelve months ended January 31,

3 Cantel Medical Overview CATEGORY LEADERSHIP Endoscopy: Leader in automated endoscope reprocessing systems and procedural disposable products Water Purification & Filtration: Leading share in water purification systems to dialysis facilities as well as a suite of sterilants and filtration products Healthcare Disposables: Leading branded portfolio of IP&C disposable products for healthcare markets and sterility assurance products Dialysis & Other: Leader in hemodialysis dialyzer reprocessing systems and infectious sample packaging STRONG PERFORMANCE $456M in LTM sales and $90M in LTM EBITDAS (20% margin) 1 5-year Sales CAGR of 11% 2 5-year EBITDAS CAGR of 22% 2 5-year EPS CAGR of 32% 2 73% of consolidated sales are recurring 1 ~0.8x leverage on balance sheet 3 $0.09 per share annual dividend 1 Latest twelve months ended January 31, As reported for FYE 7/31/2008 through 7/31/ Gross debt to LTM EBITDAS as of January 31,

4 Three Synergistic Platforms Infection Prevention & Control Focus IP&C Device Management Endoscopy & Dialyzer Reprocessing Medivators; Minntech Purification & Filtration Medical Water Purification & Therapeutic Filters Mar Cor Purification; Minntech Disposable Products Dental, Sterility Assurance & Specialty Packaging Crosstex; SPS Medical 4

5 Well-Balanced Portfolio Latest Twelve Months Ended January 31, 2014 Net Sales $456.3M Operating Income $80.6M 1 Healthcare Disposables $ % Dialysis $31.1 7% All Other $6.0 1% Healthcare Disposables $ % Dialysis $8.0 10% All Other $0.8 1% Water Purification & Filtration $ % Endoscopy $ % Water Purification & Filtration $ % Reported EBITDAS = $89.7M 2 Endoscopy $ % All Other includes Specialty Packaging Products. Therapeutic Filtration and Chemistries are now reported in Water Purification & Filtration segment. 1 Before allocation of corporate expenses of ~$13.7M. 2 Earnings Before Interest, Taxes, Depreciation, Amortization, Stock Compensation Expense and (Gain)/Loss on Disposal of Fixed Asset. The effect of rounding may create minor data variances. 5

6 $ Millions Formula: Acquire, Improve Businesses, Repeat $475 $425 CAGR 03-6M 14 16% $375 $325 $275 $225 $175 $125 $75 $25 ($25) FY'03 FY'04 FY'05 FY'06 FY'07 FY'08 FY'09 FY'10 FY'11* FY'12 FY'13 LTM Net Sales $94.0 $123.0 $137.2 $192.2 $219.0 $249.4 $260.1 $274.0 $321.7 $386.5 $425.0 $456.3 EBITDAS $11.3 $14.0 $19.2 $26.5 $28.6 $31.8 $42.1 $47.5 $47.1 $71.4 $84.4 $89.7 Net Debt/(Cash) $3.7 $7.1 ($17.6) $8.1 $41.1 $40.0 $19.9 ($1.6) $103.6 $59.8 $60.9 $54.8 EBITDAS Margin 12.0% 11.4% 14.0% 13.8% 13.0% 12.8% 16.2% 17.3% 14.7% 18.5% 19.9% 19.7% *FY 11 Net Debt includes $98M in debt assumed on the first day of fiscal year 2012 upon closing of the Byrne Medical acquisition. Latest twelve months ended January 31, % 6

7 Three-Prong Strategy Drives Growth Opportunities Significant Investments in Sales & Marketing in FY09 FY14+ Total spending in sales and marketing has more than doubled over last five years through the economic downturn Now accelerating investment in sales/marketing organization to drive international expansion Attractive opportunity to expand into new market segments non-gi hospital, physician office, etc. Substantial increase in R&D/New Product Development in FY 09 FY 14 R&D spending up over 130% over last five years Invest in higher margin liquid chemical germicides Rapicide PA, Rapicide OPA-28, expanded use of existing chemistries and other new chemistries in development Broader portfolio of endoscope reprocessors Advantage Plus, DSD Edge, CER Optima, Next Gen AER and new sterilizer technology in development Continued portfolio expansion of endoscopy procedural products Next generation water treatment equipment with focus on heat disinfection Unique disposables such as Sure-Check pouch, Secure Fit mask, and now focus on sterility assurance Acquisitions: Recent significant acquisitions in all three core segments Sterilator/SPS Medical Supply Corp. combined with ConFirm Monitoring creates a leading sterility assurance monitoring platform to drive further growth in acute care, dental and physician office settings Byrne Medical, now called Medivators Procedural Products, has leadership position to drive a large, global market conversion to profitable disposable endoscopy components Continued advancement of the new product cycle from the Gambro Water acquisition and integration of the Siemens Water Technologies dialysis water business Proven ability to integrate, leverage and grow acquired businesses 7

8 Significant Growth Drivers in all Three Core Segments Endoscopy Large global addressable markets totaling ~$4BN for our existing product portfolio Penetration and adoption of procedural products remains a large opportunity still at early stages Adoption of proprietary, single-shot chemistry for AERs drives continued high-margin chemistry sales Established US Sales and Service team a key differentiator in market new SVP Sales and Service Water Purification & Filtration US demographic trends in ESRD patients creates a continued pipeline of de novo clinic build Market is rapidly adopting Mar Cor s higher value heat-based water disinfection technology platform Better IP&C standards for dialysis patients, while affording labor savings to facility operators Substantial upgrade opportunity 6,000 US clinics, vast majority on older, cold systems Focus on filtration and chemical sterilants represent a significant upside opportunity Launch of new Revox Sterilization System is an upside Healthcare Disposables Leading branded player in healthcare disposables in the US dental market Newly acquired sterility assurance categories adds highly complementary growth platform New product segment to develop and drive growth New hospital channel presence to drive sales of entire healthcare disposables product portfolio New and innovative face masks Rapicide OPA/28 launched in the United States, now launching in international markets New SVP Sales 8

9 Historical P&L Reveals Success of Growth Programs $ in millions, except per share data Net Sales Continuing Operations Fiscal Years Ended July 31 CAGR '07 - '13 2Q'14 LTM 5 $219.0 $249.4 $260.1 $274.0 $321.7 $386.5 $ % $119.0 $456.3 Gross Profit $79.0 $87.6 $99.5 $111.0 $122.8 $164.2 $ % $52.3 $198.4 Gross Margin 36.1% 35.1% 38.3% 40.5% 38.2% 42.5% 43.2% 44.0% 43.5% EBITDAS 1 Op. Profit 2 Net Income Diluted EPS 3 $28.6 $31.8 $42.1 $47.5 $47.1 $72.0 $ % $24.4 $89.7 $16.8 $18.0 $27.5 $32.7 $31.3 $52.1 $ % $18.2 $66.9 $8.1 $8.7 $15.6 $19.9 $20.4 $31.3 $ % $11.1 $41.5 $0.22 $0.24 $0.42 $0.52 $0.52 $0.77 $ % $0.27 $ Earnings before Interest, Taxes, Depreciation, Amortization, and Stock Compensation Expense. 2 Equivalent to Income from Continuing Operations. 3 Retroactively applies the 3:2 stock splits effective February 2012 and July Compound Annual Growth Rate. 5 Latest twelve months ended January 31,

10 Capacity for Continued Investments ($ and shares in millions) Fiscal Year Ended July 31, Q'14 Total Assets Current Ratio Equity Funded Debt to Equity Gross Debt / EBITDAS 2 # of Diluted Shares 3 $263.7 $279.2 $277.9 $280.7 $321.4 $434.8 $487.7 $ :1 2.2:1 2.3:1 2.3:1 2.6:1 2.4:1 2.5:1 3.1:1 $155.1 $168.7 $187.1 $209.4 $234.3 $275.9 $321.1 $ x 1.8x 1.0x 0.4x 2.6x 1.3x 1.1x 0.8x Adjusted to include $98 million in debt assumed on 8/1/12 following the acquisition of Byrne Medical. 2 Earnings before Interest, Taxes, Depreciation, Amortization, and Stock Compensation Expense. 3 Retroactively reflects 3:2 stock splits effective February, 2012 and July,

11 Experienced Executive Team Gary Steinberg President & CEO Crosstex Int l Jorgen B. Hansen Exec. Vice President & Chief Operating Officer Eric W. Nodiff Sr. Vice President General Counsel Curtis Weitnauer President & CEO Mar Cor Purification Don Byrne President Medivators Endoscopy Andrew A. Krakauer President & CEO Craig A. Sheldon Sr. Vice President Chief Financial Officer & Treasurer Seth M. Yellin Sr. Vice President Corporate Development Javier Henao EVP, International Paul Helms EVP, Operations Medivators Chris Geschickter Vice President Human Resources 11

12 Strategic Objectives Remain Focused within Infection Prevention & Control Clear mission to reduce healthcare associated infections, improving patient safety and outcomes, and helping save lives Near-term build a profitable $500 Million IP&C Business setting the strategy for $1 Billion Achieve accelerated growth and profits from recent acquisitions Announced aspiration to double sales and profit in 5 years Invest in higher technology, higher margin and higher growth organic programs with near-to-mid-term payoff High-value, unique IP&C disposables (e.g. Byrne Medical) Orientation around Liquid Chemical Germicides (LCG s) Capital Equipment / Proprietary Consumable combination solutions Focus on channel expansion including international, non-gi hospital and opportunistically with flu preparation/source control face masks Substantial increased sales and marketing investments in base business Continue aggressive and proven acquisition program to leverage existing assets and channels Continue focus on operational excellence Evolving organization structure focusing on future growth 12

13 Cantel Medical - Summary Growing ~$45B Global Market in Infection Prevention & Control Pure-play focus Fragmented nature creates opportunities for further growth and expansion $456M NYSE Specialty Infection Prevention & Control Leader 1 Strong, recession-buffered core business with high future growth prospects 73% recurring revenue and $89.7M in LTM EBITDAS 1 Successfully acquired 24 businesses since 2001 Substantial investments in new product development and increased sales and marketing capabilities Pristine record with the FDA, EPA and global regulatory bodies 90+% of products are made in the USA Strong cash flow and balance sheet (0.8x leverage ratio) $0.09 per share annual dividend Included in the S&P SmallCap 600 Index 2012/2013 Forbes Best Small Companies in America 1 Latest twelve months ended January 31,

14 APPENDIX

15 Selected Acquired Product Portfolio Endoscopy Byrne / Procedural Products Healthcare Disposables Sterility Assurance Products H2O Purification & Filtration Heat-Based Water Disinfection Products 15

16 Fragmented Nature of Infection Prevention & Control Disinfectants & Cleaners Disposables Masks / Headwear Air & Water Quality Protective Apparel Brushes Disposable kits / trays Face shields Air filtration systems Aprons / bibs / arm protectors Dispensers Disposable medical products Masks Germicidal air cleaners Gloves Enzymatic cleaners Disposable surgical products Nurse/MD/Surg/Lab Hats Negative pressure isolation Lab gowns Medical device disinfectants Protection goggles Smoke evacuators Overshoes / coated boots Surface disinfectants Respirators Toxic gas detection systems Shirt jackets Wipes Wrap around lenses Water purification systems Surgical gowns Sterilization Drapes & Barrier Products Hand Hygiene Wound Care & Closures Needles / Sharps / Transport Autoclaves Antimicrobial linens Automated hand washers Adhesives / adhesive removers Antimicrobial catheters Chemical sterilizers Fluid control drapes Hand cleaners / soaps Antimicrobial dressings Blood pressure cuff covers EtO sterilizers General purpose drapes Hand sanitizers (waterless) Dressings Catheter securement devices Low temperature sterilizers Surgical drapes Drains / suction Dispenser boxes Medical device drying cabinets Hydrogel adhesive dressings Needle protection devices Medical device reprocessing Silver bandages / dressings Safety I.V. catheters Steam sterilizing units Surgical site skin prep Specimen transport bags Sterilization containers Sterilization packaging Washers / decontaminators Sterilization Services Quality Control & Testers Fluid / Temperature/ Positioning Medical Waste & Cleaning Equipment Environmental Surveillance / Software / Education Biological indicators Filtration systems Antimicrobial casters Antimicrobial paint Alert systems Chemical integrators Fluid control systems Cleaning carts Containment systems Handwashing EtO monitors Fluid warming systems Decontamination equip Washable keyboards Surveillance software Glutaraldehyde monitors Forced air warming Infectious waste bags Pest management Training Respirator fit testers Patient positioning Microfiber mops Rapid MRSA diagnostics Sterility assurance products Pressure mgmt systems Room decontaminators Temperature mgmt kits Sharps containers Solidifiers / Spill Kits Suction canister systems Key strategic priorities 16

17 Medivators Plus Byrne Medical Complementary Fit IN THE PROCEDURE ROOM REPROCESSING AREA (Post-Procedure) Scope Buddy Intercept SmartCap / EndoGator Intercept Wipes Veriscan CER/DSD/ Advantage Rapicide Rapicide PA A/W/S Valves Medivators Procedural Products (Byrne Medical) Treatment Room Physicians & Nurses Medivators Endoscope Reprocessing Products Principally in Post-Procedure, Reprocessing Area Sterile Processing Department / Nurses 17

18 Consumable/ 1 Consumables includes service. Splits represent latest twelve months ended January 31, Acquisition of Minntech Corporation in September 2001 is represented in Endoscopy, Renal/Dialysis, and Therapeutic Filtration. Cantel Medical: Snapshot by Product, Customer, Channel IP&C DEVICE MGMT Endoscopy Equipment, Disinfectants, Consumables, Service Infection Prevention & Control Focus Healthcare & Life Sciences Orientation PURIFICATION & FILTRATION HEALTHCARE DISPOSABLES Dialysis Water Purification Therapeutic Healthcare Specialty Filtration Disposables Packaging Equipment, Sterilants, Consumables, Service Equipment, Field Service, Consumables Hollow Fiber Filters Disposables, Sterility Assurance Monitoring Packaging, Training Capital 1 Hospitals, GI Clinics/ASC s Direct Sales Dialysis Chains Direct Sales Dialysis Clinics, Industrial Direct Sales & Distributors Hospitals, Biotech Firms Distributors / OEM Dental & Dr. Offices, Hospitals Direct Sales & Distributors Diverse Customer Set Direct Sales 81/19% 90/10% 42/58% 100/0% 100/0% 100/0% Acquired