Cantel Medical Corp. (NYSE: CMD) in the third quarter of FY 17 has reported the adjusted earnings per share of 51 cents and the company had reported the adjusted revenue growth of 10.6 percent to $192.1 million in the third quarter of FY 17. However, the results were below the expectations leading the stock fall to 2% today (As of  12:44PM EDT on June 8th, 2017; Source: Google finance)

The sales growth is driven by organic growth of 7.4%, acquisitions contributed 4.4% and foreign currency impact of (1.2%). Cantel Medical saw record performance internationally, where sales grew 18.1% overall, with strong underlying organic growth. The gross margin has expanded 140 basis points to 47.6% due to a strategic focus on driving favorable product mix as well as the strong execution of the continuous improvement efforts. The Non-GAAP net income has increased 17.2% for the third quarter ended April 30, 2017 to $21,377,000, compared with non-GAAP net income of $18,243,000,  for the same quarter last year.

Moreover, for the third consecutive quarter, the Healthcare Disposables segment has yielded the strongest sales growth, which is up 21.5% and the majority of growth is due to the Accutron acquisition. The favorable product mix coupled with double-digit growth of the company’s higher margin branded portfolio drove gross margin expansion in this segment. The Endoscopy segment had strong organic growth of 9.9%.  Sales performance is driven by the continued growth in consumables, chemistries, procedural products, and service, up 13.2%. In April, Cantel Medical has successfully completed the acquisition of the distributed endoscopy business in Australia. We look forward to future growth in Australia as well as strengthening our leadership in the infection prevention category in this important market.

Overall the sales in the Water Purification and Filtration segment has increased 7.4%, which is in-line with the company’s expectations. The continued strength of the backlog translated into solid shipments of equipment, which drove the majority of the growth over prior year. The order intake remained strong in the third quarter, and the company’s backlog ended at a record level for the fourth consecutive quarter, positioning the company well for the remainder of fiscal year 2017.

Additionally, Cantel Medical has a strong balance sheet and continues to generate significant cash flow and EBITDAS. CMD has finished the third quarter with cash of $30,873,000 and gross debt of $145,000,000, while generating adjusted EBITDAS of $38,813,000 in the quarter, up 11.5%