Delaware
|
|
22-1760285
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. employer identification no.)
|
150 Clove Road, Little Falls, New Jersey
|
|
07424
|
|
(973) 890-7220
|
(Address of principal executive offices)
|
|
(Zip code)
|
|
(Registrant's telephone number, including area code)
|
Common Stock
|
CMD
|
New York Stock Exchange
|
(Title of each class)
|
(Trading Symbol)
|
(Name of each exchange on which registered)
|
Large accelerated filer
☒
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company ☐
|
Emerging growth company ☐
|
|
|
Page No.
|
|
PART I – FINANCIAL INFORMATION
|
|
Item 1.
|
Financial Statements
(unaudited)
|
|
|
Condensed Consolidated Balance Sheets
(unaudited)
|
|
|
Condensed Consolidated Statements of Income
(unaudited)
|
|
|
||
|
Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited)
|
|
|
Condensed Consolidated Statements of Cash Flows
(unaudited)
|
|
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
PART II – OTHER INFORMATION
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
Signatures
|
|
|
April 30, 2019
|
|
July 31, 2018
|
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
51,348
|
|
|
$
|
94,097
|
|
Accounts receivable, net of allowance for doubtful accounts of $1,609 and $1,149
|
142,504
|
|
|
118,642
|
|
||
Inventories, net
|
134,193
|
|
|
107,592
|
|
||
Prepaid expenses and other current assets
|
23,018
|
|
|
17,912
|
|
||
Income taxes receivable
|
1,483
|
|
|
—
|
|
||
Total current assets
|
352,546
|
|
|
338,243
|
|
||
|
|
|
|
||||
Property and equipment, net
|
173,070
|
|
|
111,417
|
|
||
Intangible assets, net
|
148,075
|
|
|
137,361
|
|
||
Goodwill
|
378,144
|
|
|
368,027
|
|
||
Other assets
|
7,337
|
|
|
5,749
|
|
||
Deferred income taxes
|
3,621
|
|
|
2,911
|
|
||
Total assets
|
$
|
1,062,793
|
|
|
$
|
963,708
|
|
|
|
|
|
||||
Liabilities and stockholders’ equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
50,537
|
|
|
$
|
34,258
|
|
Compensation payable
|
29,665
|
|
|
30,595
|
|
||
Accrued expenses
|
33,412
|
|
|
28,525
|
|
||
Deferred revenue
|
26,635
|
|
|
28,614
|
|
||
Current portion of long-term debt
|
10,000
|
|
|
10,000
|
|
||
Income taxes payable
|
819
|
|
|
2,791
|
|
||
Total current liabilities
|
151,068
|
|
|
134,783
|
|
||
|
|
|
|
||||
Long-term debt
|
223,214
|
|
|
187,302
|
|
||
Deferred income taxes
|
25,663
|
|
|
27,624
|
|
||
Other long-term liabilities
|
6,983
|
|
|
5,132
|
|
||
Total liabilities
|
406,928
|
|
|
354,841
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred Stock, par value $1.00 per share; authorized 1,000,000 shares; none issued
|
$
|
—
|
|
|
$
|
—
|
|
Common Stock, par value $0.10 per share; authorized 75,000,000 shares; issued 46,356,251 shares and outstanding 41,765,917 shares as of April 30, 2019; issued 46,243,582 shares and outstanding 41,706,084 shares as of July 31, 2018
|
4,636
|
|
|
4,624
|
|
||
Additional paid-in capital
|
201,116
|
|
|
184,212
|
|
||
Retained earnings
|
534,449
|
|
|
491,540
|
|
||
Accumulated other comprehensive loss
|
(19,655
|
)
|
|
(11,456
|
)
|
||
Treasury Stock, at cost; 4,590,334 shares as of April 30, 2019; 4,537,498 shares as of July 31, 2018
|
(64,681
|
)
|
|
(60,053
|
)
|
||
Total stockholders’ equity
|
655,865
|
|
|
608,867
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,062,793
|
|
|
$
|
963,708
|
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product sales
|
$
|
197,478
|
|
|
$
|
189,861
|
|
|
$
|
587,251
|
|
|
$
|
564,310
|
|
Product service
|
31,074
|
|
|
27,407
|
|
|
91,428
|
|
|
78,758
|
|
||||
Total net sales
|
228,552
|
|
|
217,268
|
|
|
678,679
|
|
|
643,068
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product sales
|
99,867
|
|
|
93,762
|
|
|
299,595
|
|
|
283,005
|
|
||||
Product service
|
21,808
|
|
|
18,832
|
|
|
62,283
|
|
|
53,495
|
|
||||
Total cost of sales
|
121,675
|
|
|
112,594
|
|
|
361,878
|
|
|
336,500
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
106,877
|
|
|
104,674
|
|
|
316,801
|
|
|
306,568
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||
Selling
|
36,077
|
|
|
33,252
|
|
|
103,233
|
|
|
95,774
|
|
||||
General and administrative
|
48,634
|
|
|
37,784
|
|
|
122,527
|
|
|
102,068
|
|
||||
Research and development
|
7,354
|
|
|
6,571
|
|
|
22,355
|
|
|
17,543
|
|
||||
Total operating expenses
|
92,065
|
|
|
77,607
|
|
|
248,115
|
|
|
215,385
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income from operations
|
14,812
|
|
|
27,067
|
|
|
68,686
|
|
|
91,183
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
2,509
|
|
|
1,498
|
|
|
6,742
|
|
|
3,822
|
|
||||
Other income, net
|
—
|
|
|
—
|
|
|
(1,313
|
)
|
|
(1,138
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
12,303
|
|
|
25,569
|
|
|
63,257
|
|
|
88,499
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income taxes
|
4,128
|
|
|
6,833
|
|
|
17,040
|
|
|
14,346
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
8,175
|
|
|
$
|
18,736
|
|
|
$
|
46,217
|
|
|
$
|
74,153
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
0.20
|
|
|
$
|
0.45
|
|
|
$
|
1.11
|
|
|
$
|
1.78
|
|
Diluted
|
$
|
0.20
|
|
|
$
|
0.45
|
|
|
$
|
1.11
|
|
|
$
|
1.77
|
|
Dividends per common share
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.10
|
|
|
$
|
0.09
|
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
8,175
|
|
|
$
|
18,736
|
|
|
$
|
46,217
|
|
|
$
|
74,153
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency translation
|
(3,168
|
)
|
|
(6,538
|
)
|
|
(8,808
|
)
|
|
4,608
|
|
||||
Interest rate swap
|
609
|
|
|
—
|
|
|
609
|
|
|
—
|
|
||||
Total other comprehensive (loss) income:
|
(2,559
|
)
|
|
(6,538
|
)
|
|
(8,199
|
)
|
|
4,608
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income
|
$
|
5,616
|
|
|
$
|
12,198
|
|
|
$
|
38,018
|
|
|
$
|
78,761
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury stock,
at cost
|
|
Total Stockholders’ Equity
|
|||||||||||||||
|
Number of Shares Outstanding
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
Amount
|
|
|
|
|
|
|||||||||||||||||||
Balance, July 31, 2018
|
41,706,084
|
|
|
$
|
4,624
|
|
|
$
|
184,212
|
|
|
$
|
491,540
|
|
|
$
|
(11,456
|
)
|
|
$
|
(60,053
|
)
|
|
$
|
608,867
|
|
Repurchases of shares
|
(37,802
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,288
|
)
|
|
(4,288
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
2,576
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,576
|
|
||||||
Equity vestings/option exercises
|
53,320
|
|
|
7
|
|
|
948
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
955
|
|
||||||
Cancellations of restricted stock
|
(286
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
19,242
|
|
|
—
|
|
|
—
|
|
|
19,242
|
|
||||||
Cumulative impact of 606 adoption
|
—
|
|
|
—
|
|
|
—
|
|
|
865
|
|
|
—
|
|
|
—
|
|
|
865
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
(634
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(634
|
)
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,223
|
)
|
|
—
|
|
|
(5,223
|
)
|
||||||
Balance, October 31, 2018
|
41,721,316
|
|
|
$
|
4,631
|
|
|
$
|
187,102
|
|
|
$
|
511,647
|
|
|
$
|
(16,679
|
)
|
|
$
|
(64,341
|
)
|
|
$
|
622,360
|
|
Repurchases of shares
|
(880
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(67
|
)
|
|
(67
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
3,587
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,587
|
|
||||||
Equity vestings/option exercises
|
1,857
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cancellations of restricted stock
|
(1,107
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,173
|
)
|
|
—
|
|
|
—
|
|
|
(4,173
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
18,800
|
|
|
—
|
|
|
—
|
|
|
18,800
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
1,513
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,513
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(417
|
)
|
|
—
|
|
|
(417
|
)
|
||||||
Balance, January 31, 2019
|
41,721,186
|
|
|
$
|
4,631
|
|
|
$
|
192,202
|
|
|
$
|
526,274
|
|
|
$
|
(17,096
|
)
|
|
$
|
(64,408
|
)
|
|
$
|
641,603
|
|
Issuance of shares
|
42,705
|
|
|
4
|
|
|
3,193
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,197
|
|
||||||
Repurchases of shares
|
(3,712
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(273
|
)
|
|
(273
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
5,722
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,722
|
|
||||||
Equity vestings/option exercises
|
5,875
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cancellations of restricted stock
|
(137
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
8,175
|
|
|
—
|
|
|
—
|
|
|
8,175
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,559
|
)
|
|
—
|
|
|
(2,559
|
)
|
||||||
Balance, April 30, 2019
|
41,765,917
|
|
|
$
|
4,636
|
|
|
$
|
201,116
|
|
|
$
|
534,449
|
|
|
$
|
(19,655
|
)
|
|
$
|
(64,681
|
)
|
|
$
|
655,865
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury stock,
at cost
|
|
Total Stockholders’ Equity
|
|||||||||||||||
|
Number of Shares Outstanding
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
Amount
|
|
|
|
|
|
|||||||||||||||||||
Balance, July 31, 2017
|
41,728,934
|
|
|
$
|
4,619
|
|
|
$
|
174,602
|
|
|
$
|
407,590
|
|
|
$
|
(9,900
|
)
|
|
$
|
(52,979
|
)
|
|
$
|
523,932
|
|
Repurchases of shares
|
(52,008
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,822
|
)
|
|
(5,822
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
1,851
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,851
|
|
||||||
Equity vestings/option exercises
|
42,168
|
|
|
5
|
|
|
874
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
879
|
|
||||||
Cancellations of restricted stock
|
(1,315
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
22,929
|
|
|
—
|
|
|
—
|
|
|
22,929
|
|
||||||
Other
|
88,100
|
|
|
10
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,233
|
)
|
|
—
|
|
|
(1,233
|
)
|
||||||
Balance, October 31, 2017
|
41,805,879
|
|
|
$
|
4,634
|
|
|
$
|
177,359
|
|
|
$
|
430,519
|
|
|
$
|
(11,133
|
)
|
|
$
|
(58,801
|
)
|
|
$
|
542,578
|
|
Repurchases of shares
|
(1,272
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(131
|
)
|
|
(131
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
2,739
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,739
|
|
||||||
Equity vestings/option exercises
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cancellations of restricted stock
|
(1,604
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,545
|
)
|
|
—
|
|
|
—
|
|
|
(3,545
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
32,488
|
|
|
—
|
|
|
—
|
|
|
32,488
|
|
||||||
Other
|
(88,100
|
)
|
|
(10
|
)
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,379
|
|
|
—
|
|
|
12,379
|
|
||||||
Balance, January 31, 2018
|
41,714,903
|
|
|
4,624
|
|
|
180,083
|
|
|
459,462
|
|
|
1,246
|
|
|
(58,932
|
)
|
|
586,483
|
|
||||||
Repurchases of shares
|
(2,336
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(264
|
)
|
|
(264
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
2,443
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,443
|
|
||||||
Equity vestings/option exercises
|
620
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cancellations of restricted stock
|
(3,482
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
18,736
|
|
|
—
|
|
|
—
|
|
|
18,736
|
|
||||||
Other
|
(370
|
)
|
|
(578
|
)
|
|
1,025
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
446
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,538
|
)
|
|
—
|
|
|
(6,538
|
)
|
||||||
Balance, April 30, 2018
|
41,709,335
|
|
|
$
|
4,046
|
|
|
$
|
183,551
|
|
|
$
|
478,197
|
|
|
$
|
(5,292
|
)
|
|
$
|
(59,196
|
)
|
|
$
|
601,306
|
|
|
Nine Months Ended April 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities
|
|
|
|
|
|
||
Net income
|
$
|
46,217
|
|
|
$
|
74,153
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation
|
15,455
|
|
|
12,816
|
|
||
Amortization
|
15,508
|
|
|
12,892
|
|
||
Stock-based compensation expense
|
11,885
|
|
|
7,033
|
|
||
Deferred income taxes
|
(2,671
|
)
|
|
(7,499
|
)
|
||
Other non-cash items, net
|
263
|
|
|
586
|
|
||
Changes in assets and liabilities, net of effects of acquisitions/dispositions:
|
|
|
|
|
|
||
Accounts receivable
|
(18,642
|
)
|
|
892
|
|
||
Inventories
|
(24,671
|
)
|
|
(9,791
|
)
|
||
Prepaid expenses and other assets
|
(4,929
|
)
|
|
(7,256
|
)
|
||
Accounts payable and other liabilities
|
13,608
|
|
|
13,859
|
|
||
Income taxes
|
(3,537
|
)
|
|
(7,682
|
)
|
||
Net cash provided by operating activities
|
48,486
|
|
|
90,003
|
|
||
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
||
Capital expenditures
|
(75,387
|
)
|
|
(23,772
|
)
|
||
Proceeds from sale of business
|
3,053
|
|
|
—
|
|
||
Acquisitions, net of cash acquired
|
(40,644
|
)
|
|
(84,595
|
)
|
||
Net cash used in investing activities
|
(112,978
|
)
|
|
(108,367
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
||
Repayments of long-term debt
|
(12,707
|
)
|
|
—
|
|
||
Borrowings under revolving credit facility
|
50,000
|
|
|
82,300
|
|
||
Repayments under revolving credit facility
|
(7,000
|
)
|
|
(39,300
|
)
|
||
Dividends paid
|
(4,173
|
)
|
|
(3,546
|
)
|
||
Purchases of treasury stock
|
(4,628
|
)
|
|
(6,216
|
)
|
||
Net cash provided by financing activities
|
21,492
|
|
|
33,238
|
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
251
|
|
|
458
|
|
||
|
|
|
|
||||
(Decrease) increase in cash and cash equivalents
|
(42,749
|
)
|
|
15,332
|
|
||
Cash and cash equivalents at beginning of period
|
94,097
|
|
|
36,584
|
|
||
Cash and cash equivalents at end of period
|
$
|
51,348
|
|
|
$
|
51,916
|
|
3.
|
Acquisitions
|
|
|
2019
|
|
2018
|
||||||||||||
Purchase Price Allocation
|
|
Omnia
|
|
CES Business
(1)
|
|
Aexis
|
|
BHT Group
|
||||||||
|
|
(Preliminary)
|
|
(Preliminary)
|
|
(Final)
|
|
(Final)
|
||||||||
Purchase Price:
|
|
|
|
|
|
|
|
|
||||||||
Cash paid
|
|
$
|
16,597
|
|
|
$
|
17,047
|
|
|
$
|
20,308
|
|
|
$
|
60,216
|
|
Fair value of contingent consideration
|
|
—
|
|
|
—
|
|
|
1,292
|
|
|
—
|
|
||||
Common stock issued
|
|
3,211
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
19,808
|
|
|
$
|
17,047
|
|
|
$
|
21,600
|
|
|
$
|
60,216
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allocation:
|
|
|
|
|
|
|
|
|
||||||||
Property and equipment
|
|
1,285
|
|
|
539
|
|
|
130
|
|
|
835
|
|
||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
||||||||
Customer relationships
|
|
9,259
|
|
|
8,100
|
|
|
1,800
|
|
|
12,500
|
|
||||
Technology
|
|
1,600
|
|
|
—
|
|
|
4,600
|
|
|
6,200
|
|
||||
Brand names
|
|
1,600
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Goodwill
|
|
9,101
|
|
|
6,137
|
|
|
17,092
|
|
|
40,934
|
|
||||
Deferred income taxes
|
|
—
|
|
|
—
|
|
|
(1,639
|
)
|
|
(5,881
|
)
|
||||
Other working capital
|
|
2,170
|
|
|
2,271
|
|
|
909
|
|
|
5,628
|
|
||||
Contingent consideration
|
|
—
|
|
|
—
|
|
|
(1,292
|
)
|
|
—
|
|
||||
Long-term debt
|
|
(5,207
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
19,808
|
|
|
$
|
17,047
|
|
|
$
|
21,600
|
|
|
$
|
60,216
|
|
(1)
|
The excess purchase price over net assets acquired was assigned to goodwill, all of which is deductible for income tax purposes.
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Cost of sales
|
$
|
245
|
|
|
$
|
167
|
|
|
$
|
769
|
|
|
$
|
463
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling
|
538
|
|
|
559
|
|
|
1,684
|
|
|
1,188
|
|
||||
General and administrative
(1)
|
4,874
|
|
|
1,641
|
|
|
9,249
|
|
|
5,231
|
|
||||
Research and development
|
65
|
|
|
76
|
|
|
183
|
|
|
151
|
|
||||
Total operating expenses
|
5,477
|
|
|
2,276
|
|
|
11,116
|
|
|
6,570
|
|
||||
Stock-based compensation expense
|
$
|
5,722
|
|
|
$
|
2,443
|
|
|
$
|
11,885
|
|
|
$
|
7,033
|
|
(1)
|
The increase in stock-based compensation expense primarily relates to the accelerated vesting of awards resulting from organizational leadership changes.
|
|
Nine Months Ended April 30,
|
||||
|
2019
|
|
2018
|
||
Volatility of common stock
|
27.54
|
%
|
|
26.60
|
%
|
Average volatility of peer companies
|
36.55
|
%
|
|
33.72
|
%
|
Average correlation coefficient of peer companies
|
27.18
|
%
|
|
32.26
|
%
|
Risk-free interest rate
|
2.93
|
%
|
|
1.62
|
%
|
|
|
Number of
Time-based Awards
|
|
Number of Performance-based Awards
|
|
Number of Market-based Awards
|
|
Number of
Total
Awards
|
|
Weighted Average
Fair Value
|
||||||
July 31, 2018
|
|
168,320
|
|
|
26,076
|
|
|
17,710
|
|
|
212,106
|
|
|
$
|
88.87
|
|
Granted
|
|
143,144
|
|
|
35,981
|
|
|
25,320
|
|
|
204,445
|
|
|
$
|
88.48
|
|
Vested
(1)
|
|
(95,459
|
)
|
|
(12,742
|
)
|
|
(4,335
|
)
|
|
(112,536
|
)
|
|
$
|
79.53
|
|
Forfeited
|
|
(10,251
|
)
|
|
(7,034
|
)
|
|
(5,686
|
)
|
|
(22,971
|
)
|
|
$
|
98.73
|
|
April 30, 2019
|
|
205,754
|
|
|
42,281
|
|
|
33,009
|
|
|
281,044
|
|
|
$
|
91.86
|
|
(1)
|
The aggregate fair value of all nonvested stock awards which vested was approximately
$8,952
.
|
|
Number of shares
|
|
Weighted Average Exercise Price
|
|
Weighted Average Contractual Life Remaining (Years)
|
|
Aggregate Intrinsic Value
|
|||||
Outstanding at July 31, 2018
|
70,000
|
|
|
$
|
38.60
|
|
|
|
|
|
||
Exercised
|
(30,000
|
)
|
|
$
|
31.81
|
|
|
|
|
|
||
Outstanding at April 30, 2019
|
40,000
|
|
|
$
|
43.70
|
|
|
0.82
|
|
$
|
1,010
|
|
Exercisable at April 30, 2019
|
40,000
|
|
|
$
|
43.70
|
|
|
0.82
|
|
$
|
1,010
|
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
||||||||||||
Net sales by geography
|
2019
|
|
2018
(1)
|
|
2019
|
|
2018
(1)
|
||||||||
United States
|
$
|
163,367
|
|
|
$
|
159,375
|
|
|
$
|
497,469
|
|
|
$
|
478,024
|
|
Europe/Africa/Middle East
|
39,949
|
|
|
33,702
|
|
|
106,278
|
|
|
94,254
|
|
||||
Asia/Pacific
|
15,140
|
|
|
14,341
|
|
|
46,476
|
|
|
41,190
|
|
||||
Canada
|
8,555
|
|
|
7,842
|
|
|
24,064
|
|
|
24,638
|
|
||||
Latin America/South America
|
1,541
|
|
|
2,008
|
|
|
4,392
|
|
|
4,962
|
|
||||
Total
|
$
|
228,552
|
|
|
$
|
217,268
|
|
|
$
|
678,679
|
|
|
$
|
643,068
|
|
Net sales by product line
|
|
|
|
|
|
|
|
||||||||
Capital equipment
|
$
|
51,351
|
|
|
$
|
58,935
|
|
|
$
|
166,870
|
|
|
$
|
177,175
|
|
Consumables
|
144,515
|
|
|
130,155
|
|
|
417,067
|
|
|
385,963
|
|
||||
Product service
|
31,074
|
|
|
27,407
|
|
|
91,428
|
|
|
78,758
|
|
||||
All other
(2)
|
1,612
|
|
|
771
|
|
|
3,314
|
|
|
1,172
|
|
||||
Total
|
$
|
228,552
|
|
|
$
|
217,268
|
|
|
$
|
678,679
|
|
|
$
|
643,068
|
|
(1)
|
As noted above, prior year amounts have not been adjusted under the modified retrospective method.
|
(2)
|
Primarily includes software licensing revenues.
|
|
Contract Liabilities
|
||
Balance, August 1, 2018
|
$
|
29,015
|
|
Revenue deferred in current year
|
48,589
|
|
|
Deferred revenue recognized
|
(49,710
|
)
|
|
Foreign currency translation
|
(435
|
)
|
|
Balance, April 30, 2019
|
27,459
|
|
|
Contract liabilities included in Other long-term liabilities
|
(824
|
)
|
|
Deferred revenue
|
$
|
26,635
|
|
|
April 30, 2019
|
|
July 31, 2018
|
||||
Raw materials and parts
|
$
|
68,557
|
|
|
$
|
49,054
|
|
Work-in-process
|
4,816
|
|
|
13,189
|
|
||
Finished goods
|
70,887
|
|
|
53,948
|
|
||
Reserve for excess and obsolete inventory
|
(10,067
|
)
|
|
(8,599
|
)
|
||
Total
|
$
|
134,193
|
|
|
$
|
107,592
|
|
|
April 30, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money markets
|
$
|
104
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
104
|
|
Other Assets:
|
|
|
|
|
|
|
|
||||||||
Interest rate swap
|
—
|
|
|
751
|
|
|
—
|
|
|
751
|
|
||||
Total assets
|
$
|
104
|
|
|
$
|
751
|
|
|
$
|
—
|
|
|
$
|
855
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accrued expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap
|
—
|
|
|
142
|
|
|
—
|
|
|
142
|
|
||||
Other long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent consideration
|
—
|
|
|
—
|
|
|
1,374
|
|
|
1,374
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
142
|
|
|
$
|
1,374
|
|
|
$
|
1,516
|
|
|
July 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money markets
|
$
|
104
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
104
|
|
Total assets
|
$
|
104
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
104
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent consideration
|
—
|
|
|
—
|
|
|
1,298
|
|
|
1,298
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,298
|
|
|
$
|
1,298
|
|
|
Aexis Contingent Consideration
|
||
Balance, July 31, 2018
|
$
|
1,298
|
|
Net activity
|
76
|
|
|
Balance, April 30, 2019
|
$
|
1,374
|
|
9.
|
Intangibles and Goodwill
|
|
April 30, 2019
|
|
July 31, 2018
|
||||||||||||||||||||
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Intangible assets with finite lives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Customer relationships
(1)
|
$
|
144,003
|
|
|
$
|
(49,042
|
)
|
|
$
|
94,961
|
|
|
$
|
133,347
|
|
|
$
|
(45,618
|
)
|
|
$
|
87,729
|
|
Technology
(1)
|
59,652
|
|
|
(21,722
|
)
|
|
37,930
|
|
|
54,585
|
|
|
(19,836
|
)
|
|
34,749
|
|
||||||
Brand names
(1)
|
8,462
|
|
|
(3,116
|
)
|
|
5,346
|
|
|
8,141
|
|
|
(3,857
|
)
|
|
4,284
|
|
||||||
Non-compete agreements
(1)
|
2,880
|
|
|
(1,604
|
)
|
|
1,276
|
|
|
3,060
|
|
|
(1,628
|
)
|
|
1,432
|
|
||||||
Patents and other registrations
|
3,103
|
|
|
(1,236
|
)
|
|
1,867
|
|
|
2,826
|
|
|
(1,179
|
)
|
|
1,647
|
|
||||||
|
218,100
|
|
|
(76,720
|
)
|
|
141,380
|
|
|
201,959
|
|
|
(72,118
|
)
|
|
129,841
|
|
||||||
Trademarks and tradenames
|
6,695
|
|
|
—
|
|
|
6,695
|
|
|
7,520
|
|
|
—
|
|
|
7,520
|
|
||||||
Total intangible assets
|
$
|
224,795
|
|
|
$
|
(76,720
|
)
|
|
$
|
148,075
|
|
|
$
|
209,479
|
|
|
$
|
(72,118
|
)
|
|
$
|
137,361
|
|
(1)
|
During the nine months ended
April 30, 2019
, we wrote off
$10,127
of fully amortized intangible assets.
|
|
Medical
|
|
Life Sciences
|
|
Dental
|
|
Dialysis
|
|
Total
Goodwill
|
||||||||||
Balance, July 31, 2018
|
$
|
186,690
|
|
|
$
|
58,925
|
|
|
$
|
114,279
|
|
|
$
|
8,133
|
|
|
$
|
368,027
|
|
Acquisitions
|
—
|
|
|
6,137
|
|
|
9,101
|
|
|
—
|
|
|
15,238
|
|
|||||
Divestitures
|
—
|
|
|
(491
|
)
|
|
—
|
|
|
—
|
|
|
(491
|
)
|
|||||
Foreign currency translation
|
(4,244
|
)
|
|
(176
|
)
|
|
(210
|
)
|
|
—
|
|
|
(4,630
|
)
|
|||||
Balance, April 30, 2019
|
$
|
182,446
|
|
|
$
|
64,395
|
|
|
$
|
123,170
|
|
|
$
|
8,133
|
|
|
$
|
378,144
|
|
|
April 30, 2019
|
|
July 31, 2018
|
||||
Revolving credit loans outstanding
|
$
|
43,000
|
|
|
$
|
—
|
|
Tranche A term loan outstanding
|
192,500
|
|
|
200,000
|
|
||
Unamortized debt issuance costs
|
(2,286
|
)
|
|
(2,698
|
)
|
||
Total long-term debt, net of unamortized debt issuance costs
|
233,214
|
|
|
197,302
|
|
||
Current portion of long-term debt
|
(10,000
|
)
|
|
(10,000
|
)
|
||
Long-term debt, net of unamortized debt issuance costs and excluding current portion
|
$
|
223,214
|
|
|
$
|
187,302
|
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Numerator for basic and diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income
|
$
|
8,175
|
|
|
$
|
18,736
|
|
|
$
|
46,217
|
|
|
$
|
74,153
|
|
Less income allocated to participating securities
|
(5
|
)
|
|
(59
|
)
|
|
(51
|
)
|
|
(281
|
)
|
||||
Net income available to common shareholders
|
$
|
8,170
|
|
|
$
|
18,677
|
|
|
$
|
46,166
|
|
|
$
|
73,872
|
|
Denominator for basic and diluted earnings per share, adjusted for participating securities:
|
|
|
|
|
|
|
|
|
|
|
|||||
Denominator for basic earnings per share - weighted average number of shares outstanding attributable to common stock
|
41,720,733
|
|
|
41,580,387
|
|
|
41,685,623
|
|
|
41,559,312
|
|
||||
Dilutive effect of stock awards using the treasury stock method and the average market price for the year
|
38,705
|
|
|
69,134
|
|
|
40,608
|
|
|
63,642
|
|
||||
Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock
|
41,759,438
|
|
|
41,649,521
|
|
|
41,726,231
|
|
|
41,622,954
|
|
||||
Earnings per share attributable to common stock:
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic earnings per share
|
$
|
0.20
|
|
|
$
|
0.45
|
|
|
$
|
1.11
|
|
|
$
|
1.78
|
|
Diluted earnings per share
|
$
|
0.20
|
|
|
$
|
0.45
|
|
|
$
|
1.11
|
|
|
$
|
1.77
|
|
Stock options excluded from weighted average dilutive common shares because their inclusion would have been anti-dilutive
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock
|
41,759,438
|
|
|
41,649,521
|
|
|
41,726,231
|
|
|
41,622,954
|
|
Participating securities
|
25,002
|
|
|
133,954
|
|
|
45,485
|
|
|
159,932
|
|
Total weighted average number of shares and common stock equivalents attributable to both common stock and participating securities
|
41,784,440
|
|
|
41,783,475
|
|
|
41,771,716
|
|
|
41,782,886
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||
Effective Rate, April 30, 2018
|
26.7
|
%
|
|
16.2
|
%
|
Deferred tax revaluation
|
1.0
|
%
|
|
10.0
|
%
|
U.S. federal statutory rate decrease
|
(5.8
|
)%
|
|
(5.8
|
)%
|
Foreign operations
|
4.9
|
%
|
|
2.4
|
%
|
State taxes
|
(0.9
|
)%
|
|
0.2
|
%
|
Excess tax benefit
|
3.5
|
%
|
|
1.4
|
%
|
Other
|
4.2
|
%
|
|
2.5
|
%
|
Effective Rate, April 30, 2019
|
33.6
|
%
|
|
26.9
|
%
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Beginning balance
|
$
|
(17,096
|
)
|
|
$
|
1,246
|
|
|
$
|
(11,456
|
)
|
|
$
|
(9,900
|
)
|
Foreign currency translation
|
(3,168
|
)
|
|
(6,538
|
)
|
|
(8,808
|
)
|
|
4,608
|
|
||||
Interest rate swap
|
609
|
|
|
—
|
|
|
609
|
|
|
—
|
|
||||
Ending balance
|
$
|
(19,655
|
)
|
|
$
|
(5,292
|
)
|
|
$
|
(19,655
|
)
|
|
$
|
(5,292
|
)
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
||||||||||||
Net sales
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Medical
|
$
|
130,722
|
|
|
$
|
118,396
|
|
|
$
|
386,854
|
|
|
$
|
347,446
|
|
Life Sciences
|
46,478
|
|
|
54,020
|
|
|
151,692
|
|
|
161,127
|
|
||||
Dental
|
43,628
|
|
|
36,832
|
|
|
116,189
|
|
|
110,599
|
|
||||
Dialysis
|
7,724
|
|
|
8,020
|
|
|
23,944
|
|
|
23,896
|
|
||||
Total net sales
|
$
|
228,552
|
|
|
$
|
217,268
|
|
|
$
|
678,679
|
|
|
$
|
643,068
|
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
||||||||||||
Income from operations
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Medical
|
$
|
24,302
|
|
|
$
|
20,515
|
|
|
$
|
75,038
|
|
|
$
|
64,662
|
|
Life Sciences
|
4,842
|
|
|
9,018
|
|
|
18,496
|
|
|
27,976
|
|
||||
Dental
|
4,758
|
|
|
7,025
|
|
|
15,571
|
|
|
22,258
|
|
||||
Dialysis
|
1,151
|
|
|
1,778
|
|
|
3,728
|
|
|
5,795
|
|
||||
|
35,053
|
|
|
38,336
|
|
|
112,833
|
|
|
120,691
|
|
||||
General corporate expenses
|
20,241
|
|
|
11,269
|
|
|
44,147
|
|
|
29,508
|
|
||||
Total income from operations
|
$
|
14,812
|
|
|
$
|
27,067
|
|
|
$
|
68,686
|
|
|
$
|
91,183
|
|
•
|
Net sales increased by
5.2%
to
$228,552
from
$217,268
, with organic net sales growth of
2.7%
|
•
|
Net income decreased by
56.4%
to
$8,175
from
$18,736
|
•
|
Non-GAAP net income decreased by
7.9%
to
$22,966
from
$24,929
|
•
|
Diluted EPS decreased by
56.4%
to
$0.20
from
$0.45
|
•
|
Non-GAAP diluted EPS decreased by
7.5%
to
$0.55
from
$0.60
|
•
|
Adjusted EBITDAS decreased by
5.0%
to
$41,384
from
$43,569
|
|
Three Months Ended April 30,
|
|
Percentage Change
|
|||||||||||
Statement of Income Data:
|
2019
|
|
2018
|
|
||||||||||
Net sales
|
$
|
228,552
|
|
100.0
|
%
|
|
$
|
217,268
|
|
100.0
|
%
|
|
5.2
|
%
|
Cost of sales
|
121,675
|
|
53.2
|
%
|
|
112,594
|
|
51.8
|
%
|
|
8.1
|
%
|
||
Gross profit
|
106,877
|
|
46.8
|
%
|
|
104,674
|
|
48.2
|
%
|
|
2.1
|
%
|
||
|
|
|
|
|
|
|
|
|||||||
Selling
|
36,077
|
|
15.8
|
%
|
|
33,252
|
|
15.3
|
%
|
|
8.5
|
%
|
||
General and administrative
|
48,634
|
|
21.3
|
%
|
|
37,784
|
|
17.4
|
%
|
|
28.7
|
%
|
||
Research and development
|
7,354
|
|
3.2
|
%
|
|
6,571
|
|
3.0
|
%
|
|
11.9
|
%
|
||
Total operating expenses
|
92,065
|
|
40.3
|
%
|
|
77,607
|
|
35.7
|
%
|
|
18.6
|
%
|
||
|
|
|
|
|
|
|
|
|||||||
Income from operations
|
14,812
|
|
6.5
|
%
|
|
27,067
|
|
12.5
|
%
|
|
(45.3
|
)%
|
||
|
|
|
|
|
|
|
|
|||||||
Interest expense, net
|
2,509
|
|
1.1
|
%
|
|
1,498
|
|
0.7
|
%
|
|
67.5
|
%
|
||
Other income, net
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
|
—
|
%
|
||
Income before income taxes
|
12,303
|
|
5.4
|
%
|
|
25,569
|
|
11.8
|
%
|
|
(51.9
|
)%
|
||
Income taxes
|
4,128
|
|
1.8
|
%
|
|
6,833
|
|
3.2
|
%
|
|
(39.6
|
)%
|
||
Net income
|
$
|
8,175
|
|
3.6
|
%
|
|
$
|
18,736
|
|
8.6
|
%
|
|
(56.4
|
)%
|
|
Nine Months Ended April 30,
|
|
Percentage Change
|
|||||||||||
Statement of Income Data:
|
2019
|
|
2018
|
|
||||||||||
Net sales
|
$
|
678,679
|
|
100.0
|
%
|
|
$
|
643,068
|
|
100.0
|
%
|
|
5.5
|
%
|
Cost of sales
|
361,878
|
|
53.3
|
%
|
|
336,500
|
|
52.3
|
%
|
|
7.5
|
%
|
||
Gross profit
|
316,801
|
|
46.7
|
%
|
|
306,568
|
|
47.7
|
%
|
|
3.3
|
%
|
||
|
|
|
|
|
|
|
|
|||||||
Selling
|
103,233
|
|
15.2
|
%
|
|
95,774
|
|
14.9
|
%
|
|
7.8
|
%
|
||
General and administrative
|
122,527
|
|
18.1
|
%
|
|
102,068
|
|
15.9
|
%
|
|
20.0
|
%
|
||
Research and development
|
22,355
|
|
3.3
|
%
|
|
17,543
|
|
2.7
|
%
|
|
27.4
|
%
|
||
Total operating expenses
|
248,115
|
|
36.6
|
%
|
|
215,385
|
|
33.5
|
%
|
|
15.2
|
%
|
||
|
|
|
|
|
|
|
|
|||||||
Operating income
|
68,686
|
|
10.1
|
%
|
|
91,183
|
|
14.2
|
%
|
|
(24.7
|
)%
|
||
|
|
|
|
|
|
|
|
|||||||
Interest expense, net
|
6,742
|
|
1.0
|
%
|
|
3,822
|
|
0.6
|
%
|
|
76.4
|
%
|
||
Other income, net
|
(1,313
|
)
|
(0.2
|
)%
|
|
(1,138
|
)
|
(0.2
|
)%
|
|
—
|
%
|
||
Income before income taxes
|
63,257
|
|
9.3
|
%
|
|
88,499
|
|
13.8
|
%
|
|
(28.5
|
)%
|
||
Income taxes
|
17,040
|
|
2.5
|
%
|
|
14,346
|
|
2.3
|
%
|
|
18.8
|
%
|
||
Net income
|
$
|
46,217
|
|
6.8
|
%
|
|
$
|
74,153
|
|
11.5
|
%
|
|
(37.7
|
)%
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
||||||||||||||||||||
Net sales by segment
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||
Medical
|
$
|
130,722
|
|
57.2
|
%
|
|
$
|
118,396
|
|
54.5
|
%
|
|
$
|
386,854
|
|
57.0
|
%
|
|
$
|
347,446
|
|
54.0
|
%
|
Life Sciences
|
46,478
|
|
20.3
|
%
|
|
54,020
|
|
24.9
|
%
|
|
151,692
|
|
22.4
|
%
|
|
161,127
|
|
25.1
|
%
|
||||
Dental
|
43,628
|
|
19.1
|
%
|
|
36,832
|
|
17.0
|
%
|
|
116,189
|
|
17.1
|
%
|
|
110,599
|
|
17.2
|
%
|
||||
Dialysis
|
7,724
|
|
3.4
|
%
|
|
8,020
|
|
3.6
|
%
|
|
23,944
|
|
3.5
|
%
|
|
23,896
|
|
3.7
|
%
|
||||
Total net sales
|
$
|
228,552
|
|
100.0
|
%
|
|
$
|
217,268
|
|
100.0
|
%
|
|
$
|
678,679
|
|
100.0
|
%
|
|
$
|
643,068
|
|
100.0
|
%
|
Net sales by geography
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
163,367
|
|
71.5
|
%
|
|
$
|
159,375
|
|
73.4
|
%
|
|
$
|
497,469
|
|
73.3
|
%
|
|
$
|
478,024
|
|
74.3
|
%
|
International
|
65,185
|
|
28.5
|
%
|
|
57,893
|
|
26.6
|
%
|
|
181,210
|
|
26.7
|
%
|
|
165,044
|
|
25.7
|
%
|
||||
Total net sales
|
$
|
228,552
|
|
100.0
|
%
|
|
$
|
217,268
|
|
100.0
|
%
|
|
$
|
678,679
|
|
100.0
|
%
|
|
$
|
643,068
|
|
100.0
|
%
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
||||||||||||||||||||
Income from operations by segment
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||
Medical
|
$
|
24,302
|
|
18.6
|
%
|
|
$
|
20,515
|
|
17.3
|
%
|
|
$
|
75,038
|
|
19.4
|
%
|
|
$
|
64,662
|
|
18.6
|
%
|
Life Sciences
|
4,842
|
|
10.4
|
%
|
|
9,018
|
|
16.7
|
%
|
|
18,496
|
|
12.2
|
%
|
|
27,976
|
|
17.4
|
%
|
||||
Dental
|
4,758
|
|
10.9
|
%
|
|
7,025
|
|
19.1
|
%
|
|
15,571
|
|
13.4
|
%
|
|
22,258
|
|
20.1
|
%
|
||||
Dialysis
|
1,151
|
|
14.9
|
%
|
|
1,778
|
|
22.2
|
%
|
|
3,728
|
|
15.6
|
%
|
|
5,795
|
|
24.3
|
%
|
||||
Income from operations by segment
|
35,053
|
|
15.3
|
%
|
|
38,336
|
|
17.6
|
%
|
|
112,833
|
|
16.6
|
%
|
|
120,691
|
|
18.8
|
%
|
||||
General corporate expenses
|
20,241
|
|
8.8
|
%
|
|
11,269
|
|
5.1
|
%
|
|
44,147
|
|
6.5
|
%
|
|
29,508
|
|
4.6
|
%
|
||||
Income from operations
|
$
|
14,812
|
|
6.5
|
%
|
|
$
|
27,067
|
|
12.5
|
%
|
|
$
|
68,686
|
|
10.1
|
%
|
|
$
|
91,183
|
|
14.2
|
%
|
|
Three Months Ended April 30,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
Net income/Diluted EPS, as reported
|
$
|
8,175
|
|
|
$
|
0.20
|
|
|
$
|
18,736
|
|
|
$
|
0.45
|
|
Intangible amortization, net of tax
(1)
|
3,850
|
|
|
0.09
|
|
|
3,468
|
|
|
0.08
|
|
||||
Acquisition-related items, net of tax
(2)
|
2,047
|
|
|
0.05
|
|
|
651
|
|
|
0.02
|
|
||||
Restructuring-related charges, net of tax
(3)
|
8,401
|
|
|
0.20
|
|
|
991
|
|
|
0.02
|
|
||||
Litigation matters
(1)
|
—
|
|
|
—
|
|
|
1,637
|
|
|
0.04
|
|
||||
Excess tax expenses
(4)
|
434
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
||||
Tax matters
(4)
|
59
|
|
|
—
|
|
|
(554
|
)
|
|
(0.01
|
)
|
||||
Non-GAAP net income/Non-GAAP diluted EPS
|
$
|
22,966
|
|
|
$
|
0.55
|
|
|
$
|
24,929
|
|
|
$
|
0.60
|
|
(1)
|
Amounts were recorded in general and administrative expenses.
|
(2)
|
For the three months ended
April 30, 2019
, pre-tax acquisition-related items of $47 were recorded in net sales, $394 were recorded in cost of sales and $2,400 were recorded in general and administrative expenses. For the three months ended
April 30, 2018
, pre-tax acquisition-related items of $953 were recorded in general and administrative expenses.
|
(3)
|
For the three months ended
April 30, 2019
, pre-tax restructuring-related items of $272 were recorded in cost of sales and $9,840 were recorded in general and administrative expenses. For the three months ended
April 30, 2018
, pre-tax restructuring-related items of $17 were recorded in cost of sales and $1,466 were recorded in general and administrative expenses.
|
(4)
|
Amounts were recorded in income taxes.
|
|
Nine Months Ended April 30,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
Net income/Diluted EPS, as reported
|
$
|
46,217
|
|
|
$
|
1.11
|
|
|
$
|
74,153
|
|
|
$
|
1.77
|
|
Intangible amortization, net of tax
(1)
|
11,928
|
|
|
0.29
|
|
|
9,844
|
|
|
0.24
|
|
||||
Acquisition-related items, net of tax
(2)
|
4,236
|
|
|
0.10
|
|
|
2,307
|
|
|
0.06
|
|
||||
Restructuring-related charges, net of tax
(3)
|
10,486
|
|
|
0.25
|
|
|
2,844
|
|
|
0.07
|
|
||||
Gain on disposition of business, net of tax
(4)
|
(929
|
)
|
|
(0.02
|
)
|
|
—
|
|
|
—
|
|
||||
Excess tax benefits
(5)
|
(563
|
)
|
|
(0.01
|
)
|
|
(2,012
|
)
|
|
(0.05
|
)
|
||||
Tax matters
(5)
|
959
|
|
|
0.02
|
|
|
(8,952
|
)
|
|
(0.22
|
)
|
||||
Litigation matters
(1)
|
134
|
|
|
—
|
|
|
1,637
|
|
|
0.04
|
|
||||
Resolution of contingent liability
(4)
|
—
|
|
|
—
|
|
|
(1,138
|
)
|
|
(0.03
|
)
|
||||
Non-GAAP net income/Non-GAAP diluted EPS
|
$
|
72,468
|
|
|
$
|
1.74
|
|
|
$
|
78,683
|
|
|
$
|
1.88
|
|
(1)
|
Amounts were recorded in general and administrative expenses.
|
(2)
|
For the nine months ended
April 30, 2019
, pre-tax acquisition-related items of $351 were recorded in net sales, $486 were recorded in cost of sales and $4,960 were recorded in general and administrative expenses. For the nine months ended
April 30, 2018
, pre-tax acquisition-related items of $893 were recorded in cost of sales and $2,409 were recorded in general and administrative expenses.
|
(3)
|
For the nine months ended
April 30, 2019
, pre-tax restructuring-related items of $272 were recorded in cost of sales, $12,533 were recorded in general and administrative expenses and $1,313 of expenses were recorded in other income. For the nine months ended
April 30, 2018
, pre-tax restructuring-related items of $1,164 were recorded in cost of sales and $2,656 were recorded in general and administrative expenses.
|
(4)
|
Amounts were recorded in other income, net.
|
(5)
|
Amounts were recorded in income taxes.
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income, as reported
|
$
|
8,175
|
|
|
$
|
18,736
|
|
|
$
|
46,217
|
|
|
$
|
74,153
|
|
Interest expense, net
|
2,509
|
|
|
1,498
|
|
|
6,742
|
|
|
3,822
|
|
||||
Income taxes
|
4,128
|
|
|
6,833
|
|
|
17,040
|
|
|
14,346
|
|
||||
Depreciation
|
5,892
|
|
|
4,626
|
|
|
15,455
|
|
|
12,816
|
|
||||
Amortization
|
4,956
|
|
|
4,480
|
|
|
15,508
|
|
|
12,892
|
|
||||
Loss on disposal of fixed assets
|
529
|
|
|
187
|
|
|
1,368
|
|
|
521
|
|
||||
Stock-based compensation expense
|
5,722
|
|
|
2,443
|
|
|
11,885
|
|
|
7,033
|
|
||||
EBITDAS
|
31,911
|
|
|
38,803
|
|
|
114,215
|
|
|
125,583
|
|
||||
Acquisition-related items
|
2,841
|
|
|
953
|
|
|
5,797
|
|
|
3,302
|
|
||||
Restructuring-related charges
(1)
|
6,632
|
|
|
1,468
|
|
|
8,871
|
|
|
3,721
|
|
||||
Gain on disposition of business
|
—
|
|
|
—
|
|
|
(1,313
|
)
|
|
—
|
|
||||
Litigation matters
|
—
|
|
|
2,345
|
|
|
163
|
|
|
2,345
|
|
||||
Resolution of contingent liability
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,138
|
)
|
||||
Adjusted EBITDAS
|
$
|
41,384
|
|
|
$
|
43,569
|
|
|
$
|
127,733
|
|
|
$
|
133,813
|
|
(1)
|
Excludes stock-based compensation expense.
|
|
April 30, 2019
|
|
July 31, 2018
|
||||
Long-term debt (excluding debt issuance costs)
|
$
|
235,500
|
|
|
$
|
200,000
|
|
Less cash and cash equivalents
|
(51,348
|
)
|
|
(94,097
|
)
|
||
Net debt
|
$
|
184,152
|
|
|
$
|
105,903
|
|
Period
|
|
Total number of
shares purchased
|
|
Average price
paid per share
|
|
Total number of shares purchased as part of publicly announced plans or programs
|
|
Maximum number of shares that may yet be purchased under the program
|
|||||
February 1 - February 28
|
|
535
|
|
|
$
|
83.12
|
|
|
—
|
|
|
—
|
|
March 1 - March 31
|
|
1,951
|
|
|
$
|
73.93
|
|
|
—
|
|
|
—
|
|
April 1 - April 30
|
|
1,226
|
|
|
$
|
69.01
|
|
|
—
|
|
|
—
|
|
Total
|
|
3,712
|
|
|
$
|
73.63
|
|
|
—
|
|
|
—
|
|
|
|
Retirement Agreement and General Release dated as of March 29, 2019 between the Company and Eric W. Nodiff.
|
|
|
|
|
|
|
|
Certification of Principal Executive Officer.
|
|
|
|
|
|
|
|
Certification of Principal Financial Officer.
|
|
|
|
|
|
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
|
|
|
|
|
|
|
101
|
|
The following materials from this report, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Changes in Stockholders’ Equity, (v) the Condensed Consolidated Statements of Cash Flows and (vi) Notes to Condensed Consolidated Financial Statements.
|
|
CANTEL MEDICAL CORP.
|
|
|
|
|
Date: June 6, 2019
|
|
|
|
|
|
|
By:
|
/s/ George L. Fotiades
|
|
|
George L. Fotiades
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
By:
|
/s/ Peter G. Clifford
|
|
|
Peter G. Clifford,
|
|
|
Executive Vice President and Chief Operating Officer
|
|
|
(Principal Financial Officer through April 30, 2019)
|
|
|
|
|
|
|
|
By:
|
/s/ Brian R. Capone
|
|
|
Brian R. Capone
|
|
|
Senior Vice President and Chief Accounting Officer
|
|
|
(Principal Accounting Officer)
|
1.
|
Final Pay and Benefits
. Regardless of whether you sign and return the General Release, you will receive the final pay and benefits set forth in this Section 1 as follows:
|
•
|
Final Pay
. Provided that you continue to meet the duties and responsibilities of your position, you will be paid your regular base salary through and including the Retirement Date, as well as any accrued and unused PTO through such date.
|
•
|
Reimbursement of Expenses
. Provided that you apply for reimbursement in accordance with the Company’s established expense reimbursement procedures (within the period required by such procedures but under no circumstances later than ninety (90) days after the Retirement Date), the Company will reimburse you for expenses to the extent to which you are entitled under such procedures not later than the payment date for the payroll period next following the date on which you apply for reimbursement.
|
•
|
Benefits
. Your 401(k) and welfare benefits (to the extent you continue to remain eligible under the various plans) will remain in effect through your Retirement Date. You will have the option to continue your existing group health (medical, dental and/or vision) benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) for up to 18 months, or for such other period as provided by law, provided that you pay the required premiums for COBRA continuation coverage (subject to Section 2 below). Your COBRA period will begin on August 1, 2019 (the first day of the first month following the month in which the Retirement Date occurs) (your “COBRA Start Month”). You will receive COBRA information from our COBRA administrator within fourteen (14) days following the Retirement Date, which will include information regarding the premiums you would be required to pay. All other benefits, including but not limited to PTO and holiday pay, end on the Retirement Date. Your 401(k) benefits are governed by applicable plan documents.
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2.
|
Retirement Package
. In addition to the final pay and benefits addressed in Section 1 above, the Company will provide you with the benefits (including the Consultant Agreement, defined below)
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◦
|
Retirement Payment
: The Company will pay you the sum of $491,438 (the “Retirement Payment”). Such payment will be made in a lump sum at a time agreed by you and the Company that is (i) no sooner than two weeks after the Company’s receipt of the original signed General Release from you within the required time period and the expiration of the Rescission Period without rescission by you, and (ii) no later than January 31, 2020, and is subject to abiding by all other terms of this Agreement.
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◦
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MICP Payment
: You will receive your full (unprorated and unadjusted as a result of performance) MICP payment with respect to the fiscal year ending July 31, 2019 (“FY2019”) at the target percentage (55%) of your base salary in effect on your Retirement Date. Such MICP payment will be made in a lump sum two weeks after the Company’s receipt of the original signed General Release from you within the required time period and the expiration of the Rescission Period without rescission by you.
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◦
|
LTI
: All unvested restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) granted to you by Cantel will be accelerated (with any performance-based RSAs and RSUs vesting based on target performance (notwithstanding the terms thereof), with no upward or downward adjustment to the award regardless of the actual performance thresholds achieved), fully vested and no longer subject to forfeiture as of the Retirement Date, or a cash equivalent payment to any such accelerated award will be paid by Cantel; provided that the election to make a cash equivalent payment shall be at Cantel’s sole discretion. Notwithstanding any provision in any applicable RSA agreement or RSU agreement to the contrary, (i) shares in settlement of the vested RSAs, and accrued and unpaid dividends associated therewith, will be delivered or the cash equivalent paid, as applicable, shortly after your Retirement Date (but effective as of the Retirement Date) and (ii) shares in settlement of the vested RSUs, including all dividend equivalents associated therewith, will be delivered or the cash equivalent paid, as applicable, as of the vesting date provided for in the original grant of such RSUs. You acknowledge and agree that you are not entitled to, and are not receiving, any additional equity awards or cash equivalents on or after the date of this Retirement Agreement, other than as set forth in this Section and Section 7 of this Retirement Agreement.
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◦
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Full Payment of COBRA Premiums
: Beginning with the COBRA Start Month, the Company will pay the employer and employee portion of the premiums for COBRA continuation coverage for you and/or one or more qualified beneficiaries (to the extent you elect such COBRA coverage) until the earliest of (i) nineteen (19) months, (ii) you become eligible for coverage under another group health plan offered by your employer or your spouse’s employer or (iii) you are no longer eligible for COBRA coverage (as applicable, the “COBRA Payment Period”). If you wish to continue COBRA coverage beyond the end of the COBRA Payment Period and such coverage is otherwise available under the applicable plan, you must pay the required COBRA premiums as in effect from time to time and as set forth in the COBRA information you receive from the Company’s COBRA administrator.
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◦
|
Consultant Agreement
. The Company will provide you with a twelve (12) month Consultant Agreement (substantially in the form of
Exhibit B
hereto), commencing on the first day following the Retirement Date and ending on July 31, 2020 pursuant to which you will be available to consult on matters such as mergers & acquisitions and anti-corruption training, as well as other legal work as may be agreed from time to time. During the consulting period you will report to Jeff Mann. The consulting fee will be $27,500 per month, subject to the terms of the Consultant Agreement. The Company will have the option to renew the consulting term for an additional year in its discretion (provided that you are willing to continue providing services).
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◦
|
Miscellaneous
. Following the Retirement Date, you will be permitted to retain your cell phone provided by the Company; provided, however, that you must first have the Company’s IT department delete from the cell phone any proprietary or confidential information, software and other information and material deemed necessary or appropriate by the Company. The Company will reimburse you up to $1,500 for the purchase of a new laptop computer, and the Company’s IT department will transfer documents/data it deems appropriate, e.g., contact file, personal documents and photographs, to your new personal computer. You acknowledge that the Company may be required to impute the value of the cell phone into your income or treat the reimbursement for the purchase of a new laptop computer as additional taxable compensation.
|
4.
|
Tax Consequences
. Notwithstanding any action the Company takes under Section 2 with respect to any or all income tax, payroll tax or other tax-related withholding with respect to payments under this Retirement Agreement, the ultimate liability for all taxes with respect to such payments is and remains your responsibility and the Company (i) makes no representation or undertakings regarding the treatment of any tax-related items in connection with this Retirement Agreement, and (ii) does not commit to structure the payments to reduce or eliminate your liability for any taxes with respect to the payments.
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5.
|
Section 409A
. This Retirement Agreement, and any payment hereunder, is intended to be exempt from Section 409A of the Internal Revenue Code (“Section 409A”) under the short-term deferral exemption to the maximum extent permitted by Section 409A. However, to the extent that this Retirement Agreement or any payment hereunder is subject to Section 409A, this Retirement Agreement will be construed and interpreted in a manner that is consistent with the requirements of Section 409A. For these purposes, each “payment” (as defined by Section 409A) made under this Retirement Agreement shall be considered a “separate payment.” Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Retirement Agreement comply with Section 409A and in no event will the Company, its divisions and affiliates nor their respective directors, officers, employees or advisers be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by you on account of non-compliance with Section 409A.
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6.
|
Severability
. If any one or more of the provisions of this Retirement Agreement is held invalid, illegal or unenforceable, the remaining provisions of this Retirement Agreement shall be unimpaired, and the invalid, illegal or unenforceable provision shall be replaced by a mutually acceptable valid, legal and enforceable provision that comes closest to the intent of the parties.
|
7.
|
2014 Severance Agreement; Change in Control
. You agree that you are not entitled to severance or any other amounts payable or benefits due under the Amended and Restated Executive Severance Agreement dated as of November 17, 2014 between you and the Company (the “2014 Severance Agreement”) and that agreement shall have no further force and effect as between the parties except with respect to the definitions provided in the following paragraph.
|
•
|
I have had adequate time to consider whether to sign this Retirement Agreement.
|
•
|
I have read this Retirement Agreement carefully.
|
•
|
I understand, accept and agree to all of the terms of this Retirement Agreement.
|
•
|
At the time of signing this Retirement Agreement, I have no knowledge of any Claims (as defined in the General Release).
|
•
|
I have not, in signing this Retirement Agreement, relied upon any representations or statements, written or oral, or explanations made by the Company except for those specifically set forth in this Retirement Agreement.
|
•
|
I intend this Retirement Agreement to be legally binding.
|
•
|
I have kept a full copy of this Retirement Agreement for my records.
|
1.
|
General Release of Claims
. By signing this General Release, you agree that the Retirement Package, and other benefits set forth in the Retirement Agreement, constitute adequate consideration for your release and waiver of claims as set forth below. For valuable consideration you receive from the Company pursuant to the Retirement Agreement, you, on behalf of yourself and your heirs, executors, administrators, trustees, representatives, successors and assigns (collectively, the “Releasors”) hereby release, waive and forever discharge all claims, demands, causes of actions, administrative claims, obligations, liabilities, claims for punitive or liquidated damages or penalties, any other damages, any claims for costs, disbursements or attorney’s fees, any individual or class action claims, and any other claims or demands of any nature whatsoever, whether asserted or unasserted, known or unknown, absolute or contingent that you or any of the other Releasors have or may have against the Company, any parent, subsidiary, division, affiliated or related entities, its and their present and former officers, directors, shareholders, trustees, employees, agents, attorneys, insurers, representatives and consultants, and the current and former trustees and administrators of any pension or other benefit plan applicable to the employees or former employees of any of them, and the successors, predecessors and assigns of each (collectively “Releasees”), arising out of, or in any manner based upon, or related to, any act, occurrence, transaction, omission or communication that transpired or occurred at any time on or before the date of your signing of this General Release.
|
2.
|
Release of Unknown Claims
. You understand that this release extends to all of the aforementioned claims and potential claims, whether now known or unknown, suspected or unsuspected (collectively, “Claims”).
|
3.
|
Excluded Claims
. You are not, by signing this General Release, releasing or waiving (i) any vested interest you may have in any stock grants, stock options or other forms of equity awards, 401(k) or other retirement plan by virtue of your employment with the Company, subject to the terms and conditions of the applicable plans, any grant or award agreement and applicable law, (ii) any rights or claims that may arise after this General Release is signed by you, (iii) the right to institute legal action for the purpose of enforcing the provisions of this General Release or the Retirement Agreement, (iv) any right you may have to apply for any state unemployment insurance benefits, (v) any workers compensation benefits to which you may be entitled under applicable law, (vi) any rights to indemnification under any agreement with the Company, any certificate of incorporation or by laws (or comparable organizational document) of the Company or any applicable insurance policy of the Company with respect to acts or omissions by you occurring or alleged to have occurred during the course of your employment by the Company (and/or by any of the other Releasee entities), subject to the applicable definitions, terms and conditions of any such agreement, certificate of incorporation, by laws (or comparable organizational document), insurance policy and applicable law, or (vii) any rights for continuation coverage under COBRA. Additionally, nothing in this General Release waives or otherwise limits your right to: file a charge or complaint with the U.S. Equal Employment Opportunity Commission (“EEOC”) (and/or with any other government agency); testify, assist or participate in any investigation, hearing or proceeding conducted by the EEOC (and/or by any other government agency); or challenge under the Older Workers Benefit Protection Act (“OWBPA”) (29 U.S.C. § 626) the knowing and voluntary nature of your release of any claims that you may have under the ADEA. However, neither the immediately preceding sentence nor any other provision in this General Release constitute a waiver of any kind by any of the Releasees of their right to assert the Release set forth in this General Release as a defense to any charge or complaint filed with the EEOC, any other government agency, any court, and/or any other tribunal. Additionally, you hereby waive any right to, and agree that you will not accept, any monetary award or recovery resulting from a filing of a charge or complaint by or with the EEOC, any other government agency, any court, and/
|
4.
|
Cooperation on Transition of Business
. You agree that you will provide to the Company on or before your Retirement Date, and at any time upon the Company’s reasonable request following the Retirement Date, a list and status of current work projects and other information requested by the Company to ensure an orderly transition of such projects. You agree to also provide a list of any current action items with key customers and/or vendors or external communication follow up with customers or vendors that need to occur to ensure continuation of business. You also agree to assist and cooperate with the Company in the transition of work responsibilities.
|
5.
|
Return of Property
. You acknowledge by your signature to this General Release that as of the date you sign this General Release you have returned to the Company all property of the Company or any related entity, including laptops, tablets, external storage devices, any other electronic devices and equipment, or any other property issued to you during the course of employment and all documents, files, correspondence, emails and other electronic communications, reports, materials, legal documents, contracts, marketing materials, and other items, whether in hard copy, on DVD, disc, flash drive or other storage mechanism, or on any electronic device, or otherwise, including all copies, which belong to the Company or any related entity or are related to the business of, or the services you performed for, the Company or any related entity, for any customer, including but not limited to any property, documents, files, correspondence, emails and other electronic communications, reports, materials, legal documents, contracts, marketing materials, and other items containing trade secret, proprietary or confidential information and materials.
|
6.
|
Non-Disparagement
. You agree that you will not make any material disparaging or negative remarks, whether oral or in writing, regarding the Company, or their respective officers, directors, employees or affiliates, or their respective operations, products and/or services except for remarks to employees or directors of the Company in connection with the performance of services under the Consultant Agreement. Neither this Section nor any other provision of this General Release affects or restricts your obligation to provide good faith truthful information in connection with an application for state unemployment compensation benefits, or to provide any other good faith truthful information required in response to a government inquiry, in response to a valid subpoena or court order, in an action to enforce the terms of this General Release or as otherwise specifically required by law. In addition, neither this Section nor any other provision of this General Release affects or restricts your obligation to provide good faith truthful information in connection with the filing of a claim or charge with, or an investigation, hearing or proceeding conducted by, a governmental agency, including the SEC, the CFTC, the EEOC or similar state agencies. You acknowledge and agree however (as indicated above in Section 1 of this General Release) that you will not be entitled to recover any award of money, compensation, costs, attorney’s fees or damages whatsoever from the Company or any of the other Releasees in connection with any charge of discrimination or other claim that has been released and/or waived under Section 1 of this General Release or if you have such a charge or claim filed on your behalf, and you agree that the Retirement Package, and other benefits set forth in the Retirement Agreement, that you receive or for which you are eligible under the Retirement Agreement fully and completely compensate you for any and all claims you may have against the Company or any of the related entities and individuals released in Section 1 of this General Release. You may not be held
|
7.
|
Return of Retirement Package
. You will not receive the Retirement Package, and other benefits set forth in the Retirement Agreement, and you will be required to return any such payments or benefits made to you or on your behalf if you (i) do not sign this General Release and return the original of this General Release within the time period specified in this General Release, (ii) rescind the release of ADEA Claims under this General Release after signing the General Release, (iii) violate any of the terms and conditions set forth in this General Release or (iv) intentionally and materially breach any provision of the Confidentiality and Non-Competition Agreement between you and the Company dated as of January 1, 2010 (the “Confidentiality Agreement”) and fail to cure such breach (if curable) within thirty (30) days. The remedies provided for in this Section 7 are in addition to any other remedies that may be available to the Company under law or equity.
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8.
|
Binding Effect
. This General Release is final and binding upon and inures to the benefit of the parties and their respective successors and legal representatives and permitted assigns, and together with the applicable provisions of the Confidentiality Agreement (defined above) constitutes the complete and exclusive statement of the terms and conditions of your retirement. You acknowledge that you have not relied on any representations or statements, whether oral or written, other than the express statements of the Retirement Agreement and this General Release (and the applicable provisions of the Confidentiality Agreement), in signing this General Release. With the exception of the Confidentiality Agreement and the Retirement Agreement, this General Release supersedes and merges all prior negotiations, agreements and understandings between the Company and you, if any. No modification, release, discharge or waiver of any provision of this General Release shall be of any force or effect unless made in writing and signed by the Company and you, and specifically identified as an amendment, modification, release or discharge of this General Release. If any term, clause or provision of this General Release is determined for any reason by a court of competent jurisdiction to be invalid, unenforceable or void, the determination shall not impair or invalidate any of the other provisions of this General Release, all of which shall be performed in accordance with their respective terms. However, if any of the waivers and releases set forth in Section 1 of this General Release are held to be invalid, void and/or unenforceable by a court or arbitrator then: the remaining waivers and releases shall remain fully valid and enforceable and, upon request by the Company, you shall immediately duly execute and deliver to the Company a release and waiver that is legal and enforceable to the fullest extent of the law.
|
9.
|
Signing Period
. By your signature to this General Release, you acknowledge and agree that you have been given a period of at least twenty-one (21) calendar days to consider this General Release prior to signing it and that you have not signed it until the twenty-first day after receiving it or, if you have signed it prior to the expiration of the twenty-one (21) day period, you are acknowledging that you have done so knowingly and voluntarily and on the advice of your own attorney at your expense and that the Company has in no way requested, asked or required that you sign this General Release prior to the expiration of the twenty-one (21) day period. By your signature you also acknowledge and agree that the Company has advised you to consult with an attorney of your choice at your expense prior to signing this General Release and you have done so, or chosen not to do so, of your own accord. You further agree that any modifications made to this General Release, material or otherwise,
|
10.
|
Confidentiality Agreement
. By signing this General Release, you acknowledge and agree that the post-termination obligations and provisions of the Confidentiality Agreement will continue in full force and effect according to the applicable terms of the Confidentiality Agreement following your termination. By signing this General Release, you represent that you have complied with all obligations, terms and provisions of the Confidentiality Agreement and will continue to comply with the obligations that survive termination of your employment.
|
11.
|
Right to Rescind Release of ADEA Claims
. You are hereby notified of your right to rescind the release of claims in regard to claims arising under the Federal Age Discrimination in Employment Act, 29 U.S.C. § 621
et
seq
. (“ADEA Claims”) within seven (7) calendar days after signing this General Release (the “Rescission Period”). In order to be effective, the rescission must be in writing and delivered to Ms. Casner, Senior Vice President - Chief Human Resources Office, Cantel Medical Corp., 150 Clove Road, Little Falls, New Jersey 07424, by hand, email to
HRIS@cantelmedical.com
(with a copy to jcasner@cantelmedical.com and pclifford@cantelmedical.com) or mail. If delivered by mail, the rescission must be postmarked within the required period, properly addressed to Ms. Casner, as set forth above, and sent by certified mail, return receipt requested. It is further understood that, if you rescind the release of ADEA Claims in accordance with this Section, or if you decide not to sign this General Release, the Company shall have no obligation to provide the Retirement Package or any other benefits provided under the Retirement Agreement, and you shall be required to return or repay any such payments or benefits already provided to you or made on your behalf.
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12.
|
Governing Law; Jurisdiction
. This General Release will be governed by and construed in accordance with the laws of the State of New Jersey without regard to principles of conflicts of laws. As to any dispute concerning or arising out of this General Release, each of Cantel and you hereby expressly consent to personal jurisdiction in the State of New Jersey, hereby submit to the exclusive jurisdiction of the state and federal courts located in the State of New Jersey, County of Passaic, and further agree not to assert that any action brought in such jurisdiction has been brought in an inconvenient forum or that such venue is improper. To the extent permitted by law, any and all claims asserted in such an action shall be adjudicated by a judge sitting without a jury.
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13.
|
Severability
. If any one or more of the provisions of this General Release is held invalid, illegal or unenforceable, the remaining provisions of this General Release shall be unimpaired, and the invalid, illegal or unenforceable provision shall be replaced by a mutually acceptable valid, legal and enforceable provision that comes closest to the intent of the parties.
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•
|
I have had adequate time to consider whether to sign this General Release.
|
•
|
I have read this General Release carefully.
|
•
|
I understand, accept and agree to all of the terms of this General Release.
|
•
|
I am knowingly and voluntarily releasing my claims as set forth in this General Release.
|
•
|
I have not, in signing this General Release, relied upon any representations or statements, written or oral, or explanations made by the Company except for those specifically set forth in this General Release.
|
•
|
I intend this General Release to be legally binding.
|
•
|
I have kept a full copy of this General Release for my records.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Cantel Medical Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
Date:
|
June 6, 2019
|
|
|
By:
|
/s/ George L. Fotiades
|
George L. Fotiades, President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Cantel Medical Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
Date:
|
June 6, 2019
|
|
|
||
By:
|
/s/ Peter G. Clifford
|
|
Peter G. Clifford, Executive Vice President and Chief Operating Officer
|
||
(Principal Financial Officer through April 30, 2019)
|
1.
|
The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company, as of the date and for the period referred to in this report.
|
Date:
|
June 6, 2019
|
|
|
|
|
|
|
|
|
|
/s/ George L. Fotiades
|
|
|
George L. Fotiades
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
/s/ Peter G. Clifford
|
|
|
Peter G. Clifford
|
|
|
Executive Vice President and Chief Operating Officer
|
|
|
(Principal Financial Officer through April 30, 2019)
|