Hot stock to watch: Cantel Medical Corp. (NYSE: CMD)

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Cantel Medical Corp. (NYSE: CMD) stock rose over 0.5%  on 24th September, 2019 (as of 9:39 am GMT-4; Source: Google finance) as the company posted better than expected results for the fourth quarter of FY 19. The company has ended the fourth quarter with $44.5 million in cash and cash equivalents and $200.4 million in working capital. The company had the gross debt, at the end of the quarter, of $233 million. Capital expenditures in the fourth quarter were $20.1 million.

Moreover, for the Medical segment, in the fourth quarter the sales grew 8.2% year-over-year to $136.8 million. Organic growth of the segment was 9.8% and Non-GAAP operating profit rose 11.3% to $30.1 million. Life Sciences segment, for the fourth quarter, sales declined by 11.8% year-over-year to $49.3 million and its organic was negative 9.3%. The backlog saw compression of about $2.5 million during the fourth quarter, mainly due to REVOX with offsetting increases in medical water. The non-GAAP operating profit had fallen 30.1% to $6.6 million. For the Dental segment, for the fourth quarter, sales rose 17.2% year-over-year to $45 million. Organic growth of the segment was 0.8% and non-GAAP operating profit increased 9.6% to $10.1 million. For the Dialysis segment, in the fourth quarter, sales grew 2.8% year-over-year to $7.9 million and non-gap operating profit fell 13.3%.

Meanwhile, in the fourth quarter 2019, the company had announced the acquisition of Hu-Friedy, which is a premier global dental instrumentation and instrument management system manufacturer. After this acquisition, the company will able to expand their position as a leading global provider of innovative infection prevention and reprocessing workflow solutions that will cater to the medical and dental industry. The company expect this transaction to close in the first quarter of fiscal year 2020 and will result in about 10% accretive to the fiscal year 2020 non-GAAP earnings per share

CMD in the fourth quarter of FY 19 has reported the adjusted earnings per share of 63 cents, beating the analysts’ estimates for the adjusted earnings per share of 61 cents, as per Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 4.6 percent to $239.48 million in the fourth quarter of FY 19, beating the analysts’ estimates for revenue by 0.37%.

For fiscal year 2020, non-GAAP EPS is expected to be in the range  of $2.78 to $2.83, with the acquisition of Hu-Friedy contributing approximately $0.25 on a GAAP and non-GAAP basis.

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