Cantel Medical Corp. (NYSE: CMD) stock is facing pressure as GAAP gross margins decreased by 70 basis points to 49.6% versus 47.6% in 4Q ’17. Non-GAAP gross margins declined by 30 basis points year-over-year. GAAP operating expenses increased by $6.5 million or 9.2% in 4Q ’18 compared to the prior year. The impact of acquired costs from acquisitions was roughly $3.3 million or 4.6%.

The company has reported 11.4% rise in sales driven by organic growth of 7.5%, the impact from acquisitions of 3.4% and a favorable impact from foreign currency of 0.5%. The company’s 3 major segments performed well, including exceptional performance by the HCD business, followed by demand of the branded growth product categories. For the full fiscal year, the business grew 13.2% to a record $872 million, which came in at the higher end of the company’s guidance range

CMD continue to perform well internationally where sales were up 30.2% overall, driven by Germany and China. CMD’s U.S. business grew 5.7% in the period. Endoscopy sales grew 14.8%, with organic growth of 8.1%, showing continued performance across our core product lines. Revenue from stronger capital performance drove slight margin compression in the quarter, while recurring revenue for this segment was up 11.4%. Sales in Water Purification and Filtration increased 6.2%, led by strong demand for capital,service and chemistry. Given the cyclical nature of this segment, order and capital, specifically in medical water, were lower this quarter sequentially as expected. This was driven by record installs earlier in the year and due to one of the key customers moving to a dual-source approach. Healthcare Disposables reported year over year growth of 11.3%, with 10.1% organic, driven by the strategic branded portfolio which grew by 12.6%. This category is led by waterline disinfection, conscious sedation and mask franchises. For the full fiscal year, sales grew 7.4% with organic growth of 6.6%. The strategic branded portfolio grew 10.1%.

In the current quarter, the company accelerated the investments in the REVOX low-temp sterilization system. From a geographic perspective, the company’s international operations continued the high growth story, with sales increasing 30.2% year-over-year, which includes the impact of acquisitions, international growth, organic growth of 14.7% with strong performance in Canada, Germany and China. U.S. sales increased 5.7% in total and 5.3% organically versus prior year. For the full fiscal year, the international operations grew 33.8%, with organic growth of 12.7% and U.S. sales grew 7.4%.