<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) MARCH 15, 1996
- --------------------------------------------------------------------------------
CANTEL INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its character)
DELAWARE 0-6132 22-1760285
- ---------------------------- -------- ----------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1135 BROAD STREET, CLIFTON, NEW JERSEY 07013
- ----------------------------------------- --------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 201-470-8700
------------
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO-FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS. The following financial statements of
MediVators are filed as part of this Current Report on Form 8-K/A:
(1) The Consolidated Financial Statements of MediVators for
the fiscal years ended December 31, 1994 and December
31, 1993. Incorporated herein by reference to Item 7 of
the Annual Report on Form 10-KSB of MediVators for the
fiscal year ended December 31, 1994.
(2) The Consolidated Financial Statements of MediVators for
the nine months ended September 30, 1995. Incorporated
herein by reference to Part I of the Quarterly Report
on Form 10-QSB of MediVators for the quarterly period
ended September 30, 1995.
(3) Audited Consolidated Financial Statements of MediVators
for the fiscal years ended July 31, 1995 and July 31,
1994.
(b) PRO FORMA FINANCIAL INFORMATION. The following pro forma
statements of the Company are filed as part of this Current Report on
Form 8-K/A:
(1) The unaudited pro forma combined condensed statements of
operations of the Company for the fiscal years ended July
31, 1995, 1994, and 1993 and the three month periods ended
October 31, 1995 and 1994, and the unaudited pro forma
combined condensed balance sheet of the Company as at
October 31, 1995. Incorporated herein by reference to the
Joint Proxy Statement/Prospectus included in the S-4.
(2) Annexed hereto and filed herewith are the unaudited pro
forma combined condensed statements of operations of the
Company for the six month periods ended January 31, 1996 and
1995, and the unaudited pro forma combined condensed balance
sheet of the Company as at January 31, 1996.
<PAGE>
(c) EXHIBITS. The following exhibits are filed herewith:
(1) The Merger Agreement. Incorporated herein by reference to
Annex I to the Proxy Statement/Prospectus included in
the S-4.
(2) Consent of Price Waterhouse LLP
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CANTEL INDUSTRIES, INC.
By:/s/ Craig A. Sheldon
--------------------
Craig A. Sheldon,
Vice President
and Controller
Dated: May 28, 1996
<PAGE>
MEDIVATORS, INC.
-----------------
CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------
JULY 31, 1995 AND 1994
----------------------
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Board of Directors
and Stockholder of
MediVators, Inc.
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of stockholder's equity and of cash flows
present fairly, in all material respects, the financial position of MediVators,
Inc. and its subsidiary at July 31, 1995 and 1994, and the results of their
operations and their cash flows for the years then ended in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Minneapolis, Minnesota
May 3, 1996
<PAGE>
MEDIVATORS, INC.
----------------
CONSOLIDATED BALANCE SHEET
---------------------------
<TABLE>
<CAPTION>
July 31,
ASSETS 1995 1994
------ ---- ----
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 279,309 $ 976,151
Accounts receivable, net of allowance for doubtful
accounts of $104,000 and $100,000, respectively 488,731 803,816
Inventories 1,251,457 1,595,266
Prepaid expenses and other current assets 43,567 185,644
----------- -----------
Total current assets 2,063,064 3,560,877
Property and equipment, net 398,024 582,479
Goodwill, net of accumulated amortization of $124,323
in 1994 116,136
Other assets 47,137 47,418
----------- -----------
$2,508,225 $4,306,910
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
Current liabilities:
Note payable $290,000
Accounts payable $337,179 197,495
Accrued compensation 90,612 84,578
Other accrued expenses 47,643 37,290
----------- -----------
Total current liabilities 475,434 609,363
----------- -----------
Commitments and contingencies (Note 10)
Stockholder's equity:
Series B 10% cumulative redeemable convertible common
stock, par value $.01; authorized 500,000 shares; issued
and outstanding 2,000 and 125,950 shares, respectively 10,309 674,682
Series A common stock, par value $.01; authorized
10,000,000 shares; issued and outstanding 3,872,486
and 3,426,994 shares, respectively 38,725 34,270
Additional paid-in capital 7,947,398 7,195,480
Deferred compensation (7,083) (18,125)
Accumulated deficit (5,956,558) (4,188,760)
----------- -----------
2,032,791 3,697,547
----------- -----------
$ 2,508,225 $ 4,306,910
----------- -----------
----------- -----------
</TABLE>
See notes to consolidated financial statements.
<PAGE>
MEDIVATORS, INC.
----------------
CONSOLIDATED STATEMENT OF OPERATIONS
------------------------------------
YEARS ENDED JULY 31, 1995 AND 1994
----------------------------------
1995 1994
---- ----
Net sales $ 3,473,261 $ 2,950,237
Cost of goods sold 2,162,126 2,042,193
----------- -----------
Gross profit 1,311,135 908,044
Selling, general and administrative expenses 1,916,178 1,609,429
Research and development 340,507 506,540
Provision for nonrealizable assets and discontinued
line of business 903,000 102,400
Other (income) expense (93,857) 14,547
Interest expense (income) 13,105 (18,126)
----------- -----------
Net loss $(1,767,798) $(1,306,746)
----------- -----------
----------- -----------
Loss per common share $(.47) $(.44)
----------- -----------
----------- -----------
Weighted average common shares outstanding 3,738,635 3,003,078
----------- -----------
----------- -----------
See notes to consolidated financial statements.
<PAGE>
MEDIVATORS, INC.
-----------------
CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
-----------------------------------------------
YEARS ENDED JULY 31, 1995 AND 1994
----------------------------------
<TABLE>
<CAPTION>
Series B 10% Cumulative
Redeemable Convertible Series A
COMMON STOCK COMMON STOCK Additional
------------ ---------------- Paid-In Deferred Accumulated
Shares Amount Shares Amount Capital Compensation Deficit Total
------ ------ ------ ------ ------- ------------ ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, July 31, 1993 2,846,494 $28,465 $5,999,860 $(25,625) $(2,882,014) $3,120,686
Sales of Series A common stock
(net of offering costs of $80,350) 580,500 5,805 1,195,620 1,201,425
Sale of Series B common stock
(net of offering costs of
$118,803) 125,950 $674,682 674,682
Compensation expense 7,500 7,500
Net loss (1,306,746) (1,306,746)
---------- -------- ---------- --------- ----------- -------- ----------- -----------
Balance, July 31, 1994 125,950 674,682 3,426,994 34,270 7,195,480 (18,125) (4,188,760) 3,697,547
Sales of Series A common stock 26,400 264 49,236 49,500
Conversion of Note Payable into
Series A Common Stock 23,810 238 49,762 50,000
Conversion of Series B common
stock into Series A common
stock (123,950) (664,373) 399,032 3,990 660,383
Compensation expense 3,542 3,542
Forfeiture of deferred
compensation (3,750) (37) (7,463) 7,500
Net loss (1,767,798) (1,767,798)
---------- -------- ---------- --------- ----------- -------- ----------- -----------
Balance, July 31, 1995 2,000 $10,309 3,872,486 $ 38,725 $7,947,398 $(7,083)$(5,956,558) $2,032,791
---------- -------- ---------- --------- ----------- -------- ----------- -----------
---------- -------- ---------- --------- ----------- -------- ----------- -----------
</TABLE>
See notes to consolidated financial statements.
<PAGE>
MEDIVATORS, INC.
----------------
CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------
YEARS ENDED JULY 31, 1995 AND 1994
----------------------------------
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $(1,767,798) $(1,306,746)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation 236,198 196,551
Amortization 200,575 143,481
Provision for nonrealizable assets 903,000
Changes in assets and liabilities:
Accounts receivable 315,085 (79,883)
Inventories (559,191) 40,281
Other current assets 144,794 (10,865)
Current liabilities 156,071 (218,427)
----------- -----------
Net cash used in operating activities (371,266) (1,235,608)
----------- -----------
Cash flows from investing activities:
Purchases of property and equipment (135,076) (75,710)
----------- -----------
Net cash used in investing activities (135,076) (75,710)
----------- -----------
Cash flows from financing activities:
Proceeds from note payable (240,000) 290,000
Net proceeds from sale of Series B common stock 674,682
Net proceeds from sale of Series A common stock 49,500 1,201,425
----------- -----------
Net cash (used in) provided by financing activities (190,500) 2,166,107
----------- -----------
(Decrease) increase in cash and cash equivalents (696,842) 854,789
Cash and cash equivalents:
Beginning 976,151 121,362
----------- -----------
Ending $ 279,309 $ 976,151
----------- -----------
----------- -----------
Supplemental schedule of non-cash activity:
Common stock issued in satisfaction of note payable $ 50,000
</TABLE>
See notes to consolidated financial statements.
<PAGE>
MEDIVATORS, INC.
----------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------------------
NATURE OF BUSINESS
MediVators, Inc. (the Company) designs, manufactures and markets endoscope
disinfection equipment and supplies and medical waste disposal systems.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiary. Intercompany balances and transactions are
eliminated.
REVENUE RECOGNITION
Revenues are recognized at the time of product shipment.
CASH AND CASH EQUIVALENTS
Cash equivalents are highly liquid marketable securities with original
maturities of three months or less.
INVENTORIES
Inventories are stated at the lower of cost or market on a first-in, first-out
basis. Provisions for excess or obsolete inventories are made based on
management's assessment of expected future demand for various products.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost less accumulated depreciation.
Depreciation is provided using the straight-line method over the estimated
useful lives of the assets.
<PAGE>
GOODWILL
Goodwill represents the excess cost over the fair value of net assets acquired
in business combinations accounted for under the purchase method. Goodwill is
amortized on a straight-line basis over the periods estimated to be benefitted.
The recoverability of unamortized goodwill is assessed on an ongoing basis by
comparing the carrying value of goodwill to estimated undiscounted future cash
flows.
RESEARCH AND DEVELOPMENT
Expenditures for research and development are expensed as incurred.
INCOME TAXES
Income taxes are accounted for by the liability method.
LOSS PER COMMON SHARE
Loss per common share is computed using the average number of Series A common
stock and common stock equivalents outstanding during the year. Common stock
equivalents consist of stock options, warrants and Series B shares. Series B
common stock is a senior security which is considered to be a common stock
equivalent and is only included in shares outstanding in those periods where its
inclusion would have a dilutive effect. Common stock equivalents are not
included in weighted average common shares in periods in which their inclusion
would be anti-dilutive.
FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, short-term trade
receivables and payables for which carrying amounts approximate fair market
value.
POST-RETIREMENT BENEFITS
The Company does not currently provide post-retirement benefits.
NOTE 2 - INVENTORIES
- --------------------
Inventories at July 31 are comprised of the following:
1995 1994
---- ----
Raw material $426,572 $1,063,711
Work-in-process 369,749 157,820
Finished goods 455,136 373,735
---------- ----------
$1,251,457 $1,595,266
---------- ----------
---------- ----------
<PAGE>
NOTE 3 - PROPERTY AND EQUIPMENT
- -------------------------------
Property and equipment is comprised as follows at July 31:
1995 1994
---- ----
Machinery and equipment $ 747,203 $ 624,372
Office equipment 224,573 208,151
Leasehold improvements 208,448 204,992
Vehicles 80,918 88,552
--------- ---------
1,261,142 1,126,067
Less: Accumulated depreciation 863,118 543,588
--------- ---------
$ 398,024 $ 582,479
--------- ---------
--------- ---------
NOTE 4 - NOTE PAYABLE
- ---------------------
At July 31, 1994, the Company had a $290,000 convertible note payable to a
corporation which was also a stockholder. In January 1995, $50,000 of the note
payable was converted into 23,810 shares of Series A common stock. In March
1995, the remaining $240,000 balance of the note payable was repaid.
NOTE 5 - SERIES B 10% CUMULATIVE REDEEMABLE CONVERTIBLE COMMON STOCK
- --------------------------------------------------------------------
During the year ended July 31, 1994, the Company issued a total of 125,950
shares of Series B 10% cumulative redeemable convertible common stock at $6.30
per share. The Series B shares are convertible at any time at the option of the
holder into three shares of Series A common stock and two warrants, each to
purchase one share of Series A common stock at an exercise price of $5.00 per
share until December 31, 1998.
The Series B shares have a liquidation preference of $6.30 per share and are
entitled to vote with Series A common stock (one vote per share). The Series B
shares bear a 10% annual dividend until conversion, payable solely in shares of
Series A common stock; the dividend accumulates but is not payable except upon
conversion of the Series B shares. At conversion of the Series B shares,
accumulated and unpaid dividends convert automatically into additional shares of
Series A common stock at a conversion price based upon the fair market value of
the Series A shares immediately preceding the conversion date.
During the year ended July 31, 1995, 123,950 shares of Series B common stock,
plus accumulated dividends, were converted into 399,032 shares of Series A
common stock and associated warrants to purchase 247,900 Series A shares.
The Company, in its sole discretion, may redeem the Series B shares at a
redemption price of $7.00 per share provided that the Company's Series A common
stock has traded at a price in excess of $6.00 per share on 20 of the 30 trading
days immediately preceding the date of redemption notice. Holders of Series B
shares have 30 days after notice of redemption to determine whether to convert
or redeem their shares.
<PAGE>
NOTE 6 - COMMON STOCK OPTIONS AND STOCK WARRANTS
- ------------------------------------------------
The Company has a stock option plan (Plan) which permits granting of both
qualified and nonqualified Series A common stock options to employees. Under
the Plan, the Board of Directors is authorized to grant up to 550,000 shares of
Series A common stock and establish the terms and conditions of all stock
options granted. At July 31, 1995, a total of 323,500 stock options were
outstanding under the Plan. In addition to options granted under the Plan, the
Board of Directors has granted 268,750 non-qualified Series A common stock
options to certain employees. Options have been granted at an option price per
share equal to or greater than the fair value at the date of the grant. The
options generally vest over a three to five year period and expire after seven
to ten years.
The table below summarizes all stock option activity:
Number Exercise Price
of Shares Per Share
--------- ---------
Outstanding at July 31, 1993 502,750 $2.00-$2.13
Cancelled (31,250) $2.00-$2.13
-------
Outstanding at July 31, 1994 471,500 $2.00-$2.13
Granted 139,250 $1.63-$1.75
Cancelled (18,500) $1.63-$2.13
-------
Outstanding at July 31, 1995 592,250 $1.63-$2.13
-------
-------
Exercisable at July 31, 1995 500,000
-------
-------
The Company has also granted warrants to purchase shares of Series A and Series
B common stock, at or above fair market value, to certain unrelated entities.
At July 31, 1995, outstanding common stock warrants are as follows:
Purchase Expiration
Description Shares Price Date
- ----------- ------ ----- ----
Series A common stock 150,000 $4.20 September 1996
Series A common stock 208,900 $5.00 December 1998
Series B common stock 12,595 $7.56 January 1999
<PAGE>
NOTE 7 - INCOME TAXES
- ---------------------
At July 31, 1995, the Company has net operating loss carryforwards of
approximately $4,100,000 which expire in the years ending December 31, 2000
through 2009. As a result of the merger described in Note 11, the Company
underwent an "ownership change" pursuant to Section 382 of the Internal Revenue
Code. Accordingly, the Company's net operating loss carryforwards are subject
to an annual utilization limit.
For financial reporting purposes, the Company has approximately $5,300,000 of
available loss carryforwards and net temporary differences. At existing tax
rates the future benefit approximates $2,130,000. A valuation allowance has
been established for the entire net tax benefit associated with all
carryforwards and temporary differences at July 31, 1995 as their realization is
not assured. The composition of expected future tax benefits at July 31, 1995
is as follows:
Loss carryforward $1,640,000
Temporary differences:
Accounts receivable 80,000
Inventory 380,000
Depreciation and amortization (20,000)
Other, net 50,000
---------
2,130,000
Less: Valuation allowance (2,130,000)
---------
$ 0
---------
---------
NOTE 8 - COMMITMENTS AND CONTINGENCIES
- --------------------------------------
OPERATING LEASES
The Company leases office and production facilities on a month-to-month basis
from an officer who is also a stockholder. Total rent expense included in the
statement of operations for the years ended July 31, 1995 and 1994 was
approximately $106,000 per annum.
LICENSE AGREEMENT
Under the terms of an exclusive license agreement with the Mayo Foundation for
Medical Education and Research, the Company is required to pay royalties
associated with sales of disinfectors. The duration of the agreement is
15 years from 1990, or the life of the related patent, whichever is greater.
Minimum royalty payments of $75,000 are required for each license year.
<PAGE>
NOTE 9 - PROVISION FOR NONREALIZABLE ASSETS AND DISCONTINUED LINE OF BUSINESS
- -----------------------------------------------------------------------------
During the year ended July 31, 1995, the Company reassessed the salability of
certain medical waste disposal products and, as a result, the Company
recorded a provision for slow-moving inventory, related goodwill and other
assets totalling $903,000.
In October 1992, the Company and certain individuals formed an 80% owned
subsidiary primarily involved in the development of diagnostic and therapeutic
endoscopic systems. In December 1993, the operations of this business were
discontinued and the related assets and liabilities were liquidated. The
Company's share of losses, after offset of the minority shareholders' interest,
was $102,400 during the year ended July 31, 1994.
NOTE 10 - SIGNIFICANT CUSTOMERS AND EXPORT SALES
- ------------------------------------------------
During the year ended July 31, 1995, sales to one customer represented 14% of
total sales. During the year ended July 31, 1994, sales to another customer
represented 14% of total sales. Total export sales, primarily to European and
Canadian customers, comprised 26% and 21% of the Company's total sales during
the years ended July 31, 1995 and 1994, respectively. Amounts due from
international customers comprised approximately 25% of accounts receivable at
July 31, 1995.
NOTE 11 - SUBSEQUENT EVENT
- --------------------------
On March 12, 1996, the Company's stockholders approved an Agreement and Plan of
Merger by and among Cantel Industries, Inc. (Cantel), Cantel Acquisition Corp.
and the Company, whereupon the Company became a wholly-owned subsidiary of
Cantel.
<PAGE>
CANTEL INDUSTRIES, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
JANUARY 31, 1996
ASSETS
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS
-------------------- GIVING EFFECT TO PRO FORMA
CANTEL MEDIVATORS THE MERGER COMBINED (G)
-------- ---------- ----------------- ------------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents. . . . . . . . . . . . $ 236 $ 244 $ 480
Accounts receivable, net . . . . . . . . . . . . 4,692 504 $ (102)(C) 5,094
Inventories. . . . . . . . . . . . . . . . . . . 7,377 1,422 8,799
Prepaid expenses and other current assets. . . . 658 49 707
------- ------- ------- -------
Total current assets . . . . . . . . . . . . . . . 12,963 2,219 (102) 15,080
Property and equipment, net. . . . . . . . . . . . 437 388 825
Other assets . . . . . . . . . . . . . . . . . . . 941 43 984
------- ------- ------- -------
$14,341 $ 2,650 $ (102) $16,889
------- ------- ------- -------
------- ------- ------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable . . . . . . . . . . . . . . . . $ 2,109 $ 493 $ 98 (B)(C) $ 2,700
Compensation payable . . . . . . . . . . . . . . 697 111 808
Other accrued expenses . . . . . . . . . . . . . 425 78 503
------- ------- ------- -------
Total current liabilities. . . . . . . . . . . . . 3,231 682 98 4,011
Long-term debt . . . . . . . . . . . . . . . . . . 4,441 4,441
Other long-term liabilities. . . . . . . . . . . . 98 98
Stockholders' equity:
Preferred Stock, $1.00 par value . . . . . . . . -- --
Common Stock, $.10 par value . . . . . . . . . . 277 100 (A) 377
Series A Common Stock, $.01 par value. . . . . . 39 (39)(A) --
Series B Common Stock, $.01 par value. . . . . . -- --
Additional capital . . . . . . . . . . . . . . . 8,546 7,957 (61)(A) 16,442
Deferred compensation. . . . . . . . . . . . . . (5) (5)
Accumulated deficit. . . . . . . . . . . . . . . (933) (6,023) (200)(B) (7,156)
Cumulative foreign currency translation
adjustment. . . . . . . . . . . . . . . . . . . (1,319) (1,319)
------- ------- ------- -------
Total stockholders' equity . . . . . . . . . . . . 6,571 1,968 (200) 8,339
------- ------- ------- -------
$14,341 $ 2,650 $ (102) $16,889
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
<PAGE>
CANTEL INDUSTRIES, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JANUARY 31, 1996
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS
-------------------- GIVING EFFECT TO PRO FORMA
CANTEL MEDIVATORS THE MERGER(D) COMBINED (G)
-------- ---------- ----------------- ------------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net sales. . . . . . . . . . . . . . . . . . . . . $12,205 $ 1,897 $ (150)(F) $13,952
Cost of sales. . . . . . . . . . . . . . . . . . . 8,280 1,195 (150)(F) 9,325
------- ------- ------- -------
Gross profit . . . . . . . . . . . . . . . . . . . 3,925 702 -- 4,627
Expenses:
Shipping and warehouse . . . . . . . . . . . . . 379 379
Selling. . . . . . . . . . . . . . . . . . . . . 1,967 315 2,282
General and administrative . . . . . . . . . . . 1,204 458 1,662
Research and development . . . . . . . . . . . . 150 150
------- ------- ------- -------
Total operating expenses . . . . . . . . . . . . . 3,550 923 -- 4,473
------- ------- ------- -------
Income (loss) from continuing operations before
other (income) expense and income taxes . . . . . 375 (221) -- 154
Other (income) expense:
Interest (income) expense. . . . . . . . . . . . 120 (1) 119
Other. . . . . . . . . . . . . . . . . . . . . . 1 1
------- ------- ------- -------
120 -- -- 120
------- ------- ------- -------
Income (loss) from continuing operations before
income taxes. . . . . . . . . . . . . . . . . . . 255 (221) -- 34
Income taxes . . . . . . . . . . . . . . . . . . . 1 1
------- ------- ------- -------
Net income (loss) from continuing operations . . . $ 254 $ (221) $ -- $ 33
------- ------- ------- -------
------- ------- ------- -------
Earnings per common share from
continuing operations:
Primary. . . . . . . . . . . . . . . . . . . . . $ .08 $ .01
------- -------
------- -------
Fully diluted. . . . . . . . . . . . . . . . . . $ .08 $ .01
------- -------
------- -------
Weighted average number of common and
common equivalent shares outstanding:
Primary. . . . . . . . . . . . . . . . . . . . . 3,283 1,024(H) 4,307 (E)
Fully diluted. . . . . . . . . . . . . . . . . . 3,303 1,024(H) 4,327 (E)
</TABLE>
<PAGE>
CANTEL INDUSTRIES, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JANUARY 31, 1995
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS
-------------------- GIVING EFFECT TO PRO FORMA
CANTEL MEDIVATORS THE MERGER(D) COMBINED (G)
-------- ---------- ----------------- ------------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net sales. . . . . . . . . . . . . . . . . . . . . $14,751 $ 1,855 $ (307)(F) $16,299
Cost of sales. . . . . . . . . . . . . . . . . . . 10,086 1,233 (307)(F) 11,012
------- ------- ------- -------
Gross profit . . . . . . . . . . . . . . . . . . . 4,665 622 -- 5,287
Expenses:
Shipping and warehouse . . . . . . . . . . . . . 390 390
Selling. . . . . . . . . . . . . . . . . . . . . 2,092 302 2,394
General and administrative . . . . . . . . . . . 1,188 580 1,768
Research and development . . . . . . . . . . . . 153 153
------- ------- ------- -------
Total operating expenses . . . . . . . . . . . . . 3,670 1,035 -- 4,705
------- ------- ------- -------
Income (loss) from continuing operations before
other (income) expense and income taxes . . . . . 995 (413) -- 582
Other (income) expense:
Interest (income) expense. . . . . . . . . . . . 213 (5) 208
Other. . . . . . . . . . . . . . . . . . . . . . 1 1
------- ------- ------- -------
213 (4) -- 209
------- ------- ------- -------
Income (loss) from continuing operations before
income taxes. . . . . . . . . . . . . . . . . . . 782 (409) -- 373
Income taxes . . . . . . . . . . . . . . . . . . . 417 417
------- ------- ------- -------
Net income (loss) from continuing operations . . . $ 365 $ (409) $ -- $ (44)
------- ------- ------- -------
------- ------- ------- -------
Earnings (loss) per common share from
continuing operations:
Primary. . . . . . . . . . . . . . . . . . . . . $ .12 $ (.01)
------- -------
------- -------
Fully diluted. . . . . . . . . . . . . . . . . . $ .12 $ (.01)
------- -------
------- -------
Weighted average number of common and
common equivalent shares outstanding:
Primary. . . . . . . . . . . . . . . . . . . . . 3,118 608(H)(I) 3,726 (E)
Fully diluted. . . . . . . . . . . . . . . . . . 3,118 608(H)(I) 3,726 (E)
</TABLE>
<PAGE>
CANTEL INDUSTRIES, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
- --------------------
(A) To record 997,158 shares of Cantel Stock issued to MediVators stockholders.
(B) To record anticipated direct costs associated with the Merger.
(C) To eliminate intercompany accounts and note receivable and accounts and
note payable between Cantel and MediVators.
(D) The Unaudited Pro Forma Combined Condensed Statements of Operations do not
include the anticipated direct costs associated with the Merger since they
are non-recurring items.
(E) Weighted average number of shares for the combined company consists of the
outstanding shares of Cantel, and outstanding shares of MediVators
converted into Cantel shares at the rate of .2571 shares of Cantel Stock
for each outstanding share of MediVators Series A Stock and .7713 shares of
Cantel Stock for each outstanding share of MediVators Series B Stock. The
outstanding MediVators Convertible Securities which are considered common
stock equivalents are not included in the computation of primary or fully
diluted earnings per share for the six months ended January 31, 1995 since
they would be antidilutive upon conversion into Cantel Convertible
Securities.
(F) To eliminate intercompany sales between Cantel and MediVators.
(G) In order to effect the Unaudited Pro Forma Combined Condensed Balance Sheet
as of January 31, 1996 (Cantel quarter-end), the balance sheets of Cantel
and MediVators were combined as of January 31, 1996. In order to effect
the Unaudited Pro Forma Combined Condensed Statements of Operations for the
six month periods ended January 31, 1996 and 1995 (Cantel quarter-end),
the operating results for Cantel and MediVators were combined for the six
month periods ended January 31.
(H) To reflect weighted average new Cantel shares and dilutive Convertible
Securities issued in exchange for the MediVators shares.
(I) To eliminate Cantel Convertible Securities from the calculation of weighted
average shares outstanding for the six months ended January 31, 1995 since
they are antidilutive due to the combined net loss from continuing
operations.
<PAGE>
Exhibit 2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (Registration No.
33-73492) and to the incorporation by reference in the Registration Statements
on Form S-8 (Registration Nos. 33-73446 and 33-04496) of Cantel Industries,
Inc. of our report dated March 29, 1995 appearing on page 18 of MediVators,
Inc.'s Annual Report on Form 10-KSB for the year ended December 31, 1995 and
of our report dated May 3, 1996 relating to the financial statements of
MediVators, Inc. as of and for the years ended July 31, 1995 and 1994
appearing in this Form 8-K.
PRICE WATERHOUSE LLP
Minneapolis, Minnesota
May 28, 1996
