Cantel Medical F4Q07 (Qtr End 7/31/07) Earnings Call Transcript

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2007-10-09 13:30:17.0

Tags: Cantel Medical Corp.

Question-and-Answer Session

Operator

Your first question comes from Michael Gaugler - Brean Murray.

Michael Gaugler - Brean Murray

I will start off with the endo reprocessing segment. As we look forward to potential profits and margins, would you expect those to be in line with the company average?

R. Scott Jones

They will certainly get there. We have full expectations that once we are up to a steady state with the launch of our new product and full penetration with our MediVators sales force that the endoscope reprocessing segment will be very much at par with the rest of the segment. Now that, of course, will take time. We are expecting to return to profitability forthwith. But that will ramp up over time and it won't be an immediate return to those levels, but we will certainly get there.

Michael Gaugler - Brean Murray

Last quarter, the acquisition-related charges that we saw for the deals that were consummated in '07, are they essentially behind you now?

R. Scott Jones

The acquisition charges for those acquisitions are behind us. They are specific to those acquisitions that we did.

Michael Gaugler - Brean Murray

Finally, how does the pipeline for new opportunities look? I know that you were looking a little bit towards the west coast to build out the water treatment platform a bit more. Are you seeing anything interesting at the moment?

R. Scott Jones

The pipeline looks great. We want to give credit to our corporate development function. Under Seth Siegel's leadership we have really identified a tremendous pipeline. As you can imagine, you've got to turn over a lot of stones before you find the right acquisition. So it's a matter of timing. We find we would like to continue fleshing out our service delivery network and we have identified an opportunity on the west coast. We've identified another larger opportunity that has several geographic fill-ins for us. So it's a matter of timing and valuation. Hopefully before long we will be able to execute on those opportunities.

Operator

Your next question comes from Mitra Ramgopal - Sidoti & Co.

Mitra Ramgopal - Sidoti

The organic growth for the year, was it 10% for the top line?

R. Scott Jones

That's correct.

Mitra Ramgopal - Sidoti

As you look out to '08 do you expect that to hold steady or even improve further?

R. Scott Jones

We've got some good momentum across all of our segments at this point and again, we never know. There are no guarantees in terms of industry consolidation anywhere. Our objective is certainly to maintain that momentum that we have right now. So it is certainly our goal to keep up the pace.

 

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