(dollar amounts in thousands except share and per share data or as otherwise specified) 4148

Cantel Medical Corp. ~~2019~~2020 Annual Report on Form 10-K

Notes to Consolidated Financial Statements.


1.	~~Business Description~~

1. Business Description

Throughout this document, references to “Cantel,” “us,” “we,” “our,” and the “Company” are references to Cantel Medical Corp. and its subsidiaries, except where the context makes it clear the reference is to Cantel itself and not its subsidiaries. Unless otherwise indicated, references in this Form 10-K to 2020, 2019, 2018 ~~2017~~ or “fiscal” 2020, 2019, 2018 ~~2017~~ or other years refer to our fiscal year ended July 31 of that respective year, and references to ~~2020~~2021 or “fiscal” ~~2020~~2021 refer to our fiscal year ending July 31, ~~2020.~~2021.

Cantel is a leading provider of infection prevention and control products and services in the healthcare market, specializing in the following reportable segments:

Medical: designs, develops, manufactures, sells and installs a comprehensive offering of products and services comprising a complete circle of infection prevention solutions. Our products include endoscope reprocessing and endoscopy procedure products.

Life Sciences: designs, develops, manufactures, sells and installs water purification systems for medical, pharmaceutical and other bacteria controlled applications. We also provide filtration/separation and disinfectant technologies to the medical and life science markets through a worldwide distributor network.

Dental: designs, manufactures, sells, supplies and distributes a broad selection of ~~infection prevention healthcare products, the majority of which are single-use~~ products used by the global dental ~~practitioners.~~profession, comprising a complete circle of protection. Our products include hand and powered dental instruments, infection control products, personal protective equipment (PPE) and water quality products for the dental suite.

Dialysis: designs, develops, manufactures, sells and services reprocessing systems and sterilants for dialyzers (a device serving as an artificial kidney), as well as dialysate concentrates and supplies utilized for renal dialysis.

See Note ~~17,~~18, “Reportable Segments.”

Most of our equipment, consumables and supplies are used to help prevent the occurrence or spread of infections.


2.	~~Summary of Significant Accounting Policies~~

2. Summary of Significant Accounting Policies

The following is a summary of our significant accounting policies used to prepare our consolidated financial statements.

Principles of Consolidation

The consolidated financial statements include the accounts of Cantel and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current ~~year's~~year’s presentation.

COVID-19

The unprecedented nature of the COVID-19 pandemic has adversely impacted the global economy. The COVID-19 pandemic and the rapidly evolving reaction of governments, private sector participants and the public in an effort to contain the spread of COVID-19 and address its impacts have intensified and have had significant direct and indirect effects on businesses and commerce generally, including disruption to supply chains, employee base and transactional activity, facilities closures and production suspensions, and significantly increased demand for certain goods and services, such as certain pandemic-related medical services and supplies, alongside decreased demand for others, such as elective surgery, retail, hospitality and travel.

The extent to which these events may impact our business, financial condition, results of operations and cash flows, will depend on future developments which are highly uncertain and many of which are outside our control. Such developments include the ultimate geographic spread and duration of the pandemic, new information which may emerge concerning the severity of the COVID-19 virus, the effectiveness and intensity of measures to contain the COVID-19 virus and address its impacts, and the economic impact of the pandemic and the reactions to it. Such developments, among others, depending on their nature, duration and intensity, could have an adverse effect on our business, financial condition, results of operations and cash flows. To date, we have been able to continue our operations with limited disruptions in supply and manufacturing. Although it is difficult to predict the broad macroeconomic effects that the COVID-19 virus will have on industries or individual companies, we have

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Cantel Medical Corp. 2020 Annual Report on Form 10-K

assessed the possible effects and outcomes of the pandemic on, among other things, our supply chain, customers and distributors, discounts and rebates, employee base, product sustainability, research and development efforts, product pipeline and consumer demand and currently believe that our estimates are reasonable. We have implemented several measures to proactively reduce operating costs, conserve liquidity and navigate through this unprecedented situation. These management cost reduction measures include salary reductions, employee furloughs, reductions to travel and expenses and the deferral of certain operating and capital expenditures.

In preparing the Consolidated Financial Statements, management is required to make estimates and assumptions, including estimates and assumptions regarding the nature, timing and extent of the impacts that the COVID-19 pandemic will have on our operations and cash flows. The estimates and assumptions used by management affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements, and the reported amounts of net sales and expenses during the reporting periods. Additionally, changes to estimates related to the COVID-19 disruptions could result in other impacts, including but not limited to goodwill and long-lived asset impairment charges, inventory write downs and bad debt expense. Actual results could differ from these estimates and the differences could be material. If historical experience and other factors used by management to make these estimates do not reasonably reflect future activity, our results of operations, financial position and cash flows could be adversely impacted.

Financial Covenants

The consolidated leverage ratio (as defined in our Amended Credit Agreement discussed in Note 11, “Financing Arrangements”) is tested at the end of each fiscal quarter and requires us to not exceed a maximum ratio of 4.25x. On May 11, 2020, we amended our credit agreement, which principal changes include (i) increasing the maximum consolidated leverage ratio covenant for the fiscal quarter ended April 30, 2020 from 4.25x to 5.25x, (ii) suspending such financial maintenance covenant until October 31, 2021, (iii) maintaining a minimum liquidity (as defined in the Amended Credit Agreement) of at least $50,000 during the fiscal quarter ended July 31, 2020 and $75,000 during each of the following fiscal quarters ending with the fiscal quarter ending July 31, 2021, (iv) requiring us to maintain minimum consolidated EBITDA (as defined in the Amended Credit Agreement) for each period of four fiscal quarters ending on the last day of the fiscal quarters ended July 31, 2020 through July 31, 2021 and (v) limiting our ability to pay dividends and repurchase shares of our common stock during the period the consolidated leverage ratio and consolidated interest coverage ratio are suspended.

Based on our current estimates regarding the magnitude and length of the disruptions to our business, we do not anticipate these disruptions will impact our ability to maintain compliance with our debt covenants for at least the next 12 months. However, the ultimate magnitude and length of time that the disruptions from COVID-19 will continue are highly uncertain.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. On an ongoing basis, we evaluate the adequacy of our reserves and the estimates used in calculations of reserves as well as other judgmental financial statement items, including, but not limited to: collectability of accounts receivable, volume rebates and trade-in allowances, inventory values and obsolescence reserves, warranty reserves, contingent consideration, contingent guaranteed obligations, depreciation and amortization periods, deferred income taxes, goodwill and intangible assets, impairment of long-lived assets, unrecognized tax benefits for uncertain tax positions, reserves for legal exposure, stock-based compensation and expense accruals. Such estimates and assumptions are subjective in nature. We reflect such amounts based upon the most recent information available.

Subsequent Events

We performed a review of events subsequent to July 31, ~~2019~~2020 through the date of issuance of the accompanying consolidated financial statements. ~~See Note 19, “Subsequent Events.”~~

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~~Cantel Medical Corp. 2019 Annual Report on Form 10-K~~

Revenue Recognition

Sales are recognized as the performance obligations to deliver products or services are satisfied and are recorded based on the amount of consideration we expect to receive in exchange for satisfying the performance obligations. Our sales continue to be recognized primarily when we transfer control to the customer, which can be on the date of shipment or on the date of receipt by the customer. Products and services are primarily transferred to customers at a point in time, with some transfers of services taking place over time. A provision for estimated sales returns, discounts and rebates is recognized as a reduction of sales in the same period that the sales are recognized. Our estimate of the provision for sales returns has been established based on contract

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Cantel Medical Corp. 2020 Annual Report on Form 10-K

terms with our customers and historical business practices and current trends. Shipping and handling costs incurred after the customer has obtained control of our products are treated as a fulfillment cost rather than as an additional promised service. Additionally, in certain U.S. states, we are required to collect sales taxes from our customers, and in certain international jurisdictions, we are required to collect value added taxes. The tax collected is recorded as a liability until remitted to the taxing authority.

With respect to certain of our customers, rebates are provided. Such rebates, which consist primarily of volume rebates, are provided for as a reduction of sales at the time of revenue recognition. Such allowances are determined based on estimated projections of sales volume for the entire rebate periods. If it becomes known that sales volume to customers will deviate from original projections, the rebate provisions originally established would be adjusted accordingly. We also offer certain volume-based rebates to our distribution customers, which we record as variable consideration when calculating the transaction price. We use information available at the time and our historical experience with each customer to estimate the rebate amount by applying the expected value method. Such rebates, which consist primarily of volume rebates, are provided for as a reduction of sales at the time of revenue recognition, and amounted to $13,638, $9,469, ~~$8,401,~~ and ~~$6,291~~$8,401 in fiscal 2020, 2019, ~~2018,~~ and ~~2017,~~2018, respectively.

Translation of Foreign Currency Financial Statements

Assets and liabilities of our foreign subsidiaries are translated into U.S. dollars at year-end exchange rates; sales and expenses are translated using average exchange rates during the year. The cumulative effect of the translation of the accounts of the foreign subsidiaries is presented as a component of accumulated other comprehensive income or loss. Foreign exchange gains and losses related to the purchase of inventories denominated in foreign currencies are included in cost of sales and foreign exchange gains and losses related to the incurrence of operating costs denominated in foreign currencies and the conversion of foreign assets and liabilities into functional currencies are included in general and administrative expenses.

Cash and Cash Equivalents

We consider all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable consist of amounts due to us from normal business activities. Allowances for doubtful accounts are reserves for the estimated loss from the inability of customers to make required payments. We use historical experience as well as current market information in determining the estimate. While actual losses have historically been within management’s expectations and provisions established, if the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Alternatively, if certain customers paid their delinquent receivables, reductions in allowances may be required.

Inventories

Inventories consist of raw materials, work-in-process and finished products which are sold in the ordinary course of our business and are stated at the lower of cost (first-in, first-out) or net realizable value. In assessing the value of inventories, we must make estimates and judgments regarding reserves required for product obsolescence, aging of inventories and other issues potentially affecting the saleable condition of products. In performing such evaluations, we use historical experience as well as current market information. With few exceptions, the saleable value of our inventories has historically been within management’s expectation and provisions established, however, rapid changes in the market due to competition, technology and various other factors could impact the value of our inventories, resulting in the need for additional reserves.

~~(dollar amounts in thousands except share and per share data or as otherwise specified)~~ 43

~~Cantel Medical Corp. 2019 Annual Report on Form 10-K~~

Property and Equipment

Property and equipment are stated at cost. Additions and improvements are capitalized, while maintenance and repair costs are expensed. When assets are retired or otherwise disposed, the cost and related accumulated depreciation or amortization is removed from the respective accounts and any resulting gain or loss is included in income. Depreciation and amortization is provided on the straight-line method over the estimated useful lives of the assets which generally range from 2-15 years for furniture and equipment, 3-10 years for software, 5-40 years for buildings and improvements and the shorter of the life of the asset or the life of the lease for leasehold improvements. Depreciation expense related to property and equipment in fiscal 2020, 2019 and 2018 was $30,441, $21,510 and ~~2017 was $21,510,~~ $17,473, ~~and $15,045,~~ respectively.

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Cantel Medical Corp. 2020 Annual Report on Form 10-K

Goodwill and Intangible Assets

Certain of our identifiable intangible assets, including customer relationships, technology, trade names, brand names, non-compete agreements and patents are amortized using the straight-line method over their estimated useful lives which range from 38 to 20 years. Additionally, we have recorded goodwill, ~~and~~ trademarks, ~~and~~ trade names ~~all of~~and brand names, which have indefinite useful lives and are therefore not amortized. All of our intangible assets and goodwill are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, and goodwill and intangible assets with indefinite lives are reviewed for impairment at least annually. Our management is responsible for determining if impairment exists and considers a number of factors, including third-party valuations, when making these determinations.

Interim Impairment Assessment

As discussed in the “COVID-19” section above, the unprecedented nature of the COVID-19 pandemic has adversely impacted the global economy. As the global economic landscape changes, there is a wide range of possible outcomes regarding the nature and timing of events and reactions to the COVID-19 pandemic, each of which is highly dependent on variables that are currently difficult to predict. In response to the COVID-19 pandemic, we have taken actions to protect our employees, customers and other stakeholders and mitigate the negative impact of the COVID-19 pandemic on our operations and operating results. These and additional actions can increase the costs of doing business during the pandemic and in the periods that follow, including the costs of idling and reopening certain facilities in affected areas. Further, precautionary measures taken by customers, health care patients and consumers in response to the pandemic are expected to impact the timing and amount of sales during the COVID-19 pandemic.

During the pandemic, the public has been advised to (i) remain at home, (ii) limit social interaction, (iii) close non-essential businesses and (iv) postpone certain surgical and elective medical procedures in order to prioritize/conserve available health care resources. This has negatively impacted, most notably, the net sales and operating results of our Dental reporting unit as the offices of many dentists were closed and certain routine dental procedures were being deferred. Based on this assessment, we believe our sales and income from operations in this reporting unit were impacted by the pandemic during the third quarter ended April 30, 2020, and we performed an interim step one of the two-step quantitative impairment test of our Dental reporting unit.

To determine the fair value of the Dental reporting unit, we used a discounted cash flow model with market-based support as its valuation technique. The discounted cash flow model used a ten-year forecasted cash flow plus a terminal value by capitalizing the last period’s cash flows using a perpetual growth rate. Our significant assumptions in the discounted cash flow model included, but were not limited to, the discount rate, revenue growth rates, gross margin percentages, terminal growth rate, operating income before depreciation and amortization, and capital expenditures forecasts. We considered the current market conditions when determining these assumptions. The cash flow and sales forecasts considered the nature and timing of the expected sales declines, operating cost savings, as well as any incremental costs that we expect to incur due to the COVID-19 pandemic.

In conjunction with testing goodwill for impairment, we tested the indefinite-lived intangible assets related to the Hu-Friedy brand name within our Dental reporting unit for impairment. We performed this test using an income approach, more specifically the relief-from-royalty method. In the development of the forecasted cash flows, we applied significant judgment to determine key assumptions, including royalty rates and discount rates. Royalty rates used are consistent with those assumed for the original purchase accounting valuation.

Our analysis concluded that the fair values of goodwill and indefinite-lived intangible assets of our Dental reporting unit were not impaired as of April 30, 2020. The use of estimates and the development of assumptions result in uncertainties around forecasted revenues and cash flows. A change in any of these estimates and assumptions, as well as unfavorable changes in the ongoing COVID-19 pandemic, could produce a different fair value, which could have a negative impact and result in a future impairment charge that could materially impact our results of operations. Given the proximity of our annual impairment assessment date, along with the gradual recovery we noted in our Dental reporting unit’s performance during the fourth quarter of fiscal 2020, at a level that exceeded our previous expectations, we did not perform an additional quantitative impairment assessment at May 1, 2020, rather we qualitatively evaluated the Dental reporting unit goodwill and indefinite-lived intangible assets for impairment and concluded that it was not more likely than not that the fair values of goodwill and indefinite-lived intangible assets were less than their respective carrying values at the annual impairment assessment date.

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Cantel Medical Corp. 2020 Annual Report on Form 10-K

Annual Impairment Assessment

~~We first~~As part of our annual goodwill impairment assessment, we assess various qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than the carrying amount before proceeding to step one of the two-step quantitative goodwill impairment test, if necessary. Such qualitative factors that are assessed include evaluating a segment’s financial performance, industry and market conditions, macroeconomic conditions and specific issues that can directly affect the segment such as changes in business strategies, competition, supplier relationships, operating costs, regulatory matters, litigation and the composition of the segment’s assets due to acquisitions or other events. ~~At May 1, 2019, because we determined through qualitative factors that the fair values of our Medical, and Dental segments were more likely than not~~

We decided to ~~be greater than the carrying value, we did not proceed to~~perform step one of the two-step quantitative goodwill impairment test for ~~those two segments. We performed step one~~our Medical, Life Sciences and Dialysis reporting units as a result of the ~~two-step quantitative goodwill impairment test for Dialysis~~macroeconomic conditions caused by the COVID-19 pandemic, primarily due to the ~~continuing~~deferral of elective procedures within our Medical reporting unit. In addition, our Dialysis reporting unit has continued to experience a shift by our customers from reusable to single-use dialyzers, which is having an adverse impact on our business and is expected to continue. ~~In addition, we~~We also performed step one of the two-step quantitative goodwill impairment test for our Life Sciences reporting unit as ~~one of the segment’s~~certain key customers ~~has~~have been moving ~~toward~~towards a dual source approach, in combination with a cyclical downturn in this business. In performing athese detailed quantitative ~~review~~reviews for goodwill impairment, management ~~uses~~utilized a two-step process that ~~begins~~began with an estimation of the fair value of the related reporting units by using weighted fair value results of the discounted cash flow methodology, as well as the market multiple and comparable transaction methodologies, where applicable. The first step is a review for potential impairment, and the second step measures the amount of impairment, if any.

WeIn addition, we perform our annual impairment review for ~~indefinite lived~~indefinite-lived intangibles by first assessing qualitative factors, such as those described above, to determine whether it is more likely than not that the fair value of such assets is less than the carrying values, and if necessary, we perform a quantitative analysis comparing the current fair value of our ~~indefinite lived~~indefinite-lived intangibles assets to their carrying values. ~~At May 1, 2019, because we~~We determined through qualitative factors that the fair values of ~~all of~~ our ~~indefinite lived~~remaining indefinite-lived intangible assets were more likely than not to be greater than the carrying value, weand did not perform a quantitative analysis for those assets. With respect to amortizable intangible assets when impairment indicators are present, management would determine whether expected future non-discounted cash flows would be sufficient to recover the carrying value of the assets; if not, the carrying value of the assets would be adjusted to their fair value.

We did ~~not~~0t recognize any impairment charges for goodwill, definite-lived or ~~indefinite lived~~indefinite-lived intangibles in the years presented.

Long-Lived Assets

We evaluate the carrying value of long-lived assets including property, equipment and other assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An assessment is made to determine if the sum of the expected future non-discounted cash flows from the use of the assets and eventual disposition is less than the carrying value. If the sum of the expected non-discounted cash flows is less than the carrying value, an impairment loss is recognized based on fair value. Our historical assessments of our long-lived assets have not differed significantly from the actual amounts realized. However, the determination of fair value requires us to make certain assumptions and estimates and is highly subjective. On July 31, ~~2019,~~2020, management concluded that no other events or changes in circumstances have occurred that would indicate that the carrying amount of our long-lived assets may not be recoverable.

~~(dollar amounts in thousands except share and per share data or as otherwise specified)~~ 44

~~Cantel Medical Corp. 2019 Annual Report on Form 10-K~~

Customer Relationship Intangible Assets

Customer-relationship intangible assets are valued using an income-based valuation methodology which ~~included~~include certain assumptions such as forecasted cash flows, customer attrition rates, terminal growth rates and discount rates. The assumptions used in the financial forecasts are based on historical data, supplemented by current and anticipated growth rates, management plans, and market-comparable information. Fair-value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. Preliminary assumptions may change and may result in significant changes to the final valuation.

Trade Name and Brand Name Intangible Assets

Trade name and brand name intangible assets are valued using the relief-from-royalty method, an income-based valuation methodology. This method assumes that the trade or brand name and trademarks have value to the extent that their owner is relieved of the obligation to pay royalties for the benefits received from them. The fair value determination of the trade and

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Cantel Medical Corp. 2020 Annual Report on Form 10-K

brand name intangible assets requires us to make significant estimates and assumptions related to forecasted future cash flows, including the selection of customer attrition rates, royalty rates, terminal growth rates, and discount rates.

Debt Issuance Costs

Debt issuance costs are capitalized and amortized to interest expense over the term of the related credit agreements. As of July 31, ~~2019~~2020 and ~~2018,~~2019, such debt issuance costs, net of related amortization, were included as a reduction to long-term debt and amounted to $11,166 and $2,149, respectively. In connection with the issuance of our convertible debt in May 2020, $4,365 and ~~$2,698,~~$1,377 of debt issuance costs were allocated to the liability and equity components of our convertible debt, respectively. At July 31, 2020, the remaining unamortized portion of debt issuance costs allocated to the liability component was $4,246.

Warranties

We provide for estimated costs that may be incurred to remedy deficiencies of quality or performance of our products at the time of revenue recognition. Most of our products have a one year warranty, although certain ~~endoscopy~~medical and ~~water purification and filtration~~life sciences products that require installation may carry a warranty period of up to 24 months. Additionally, many of our consumables, accessories, parts and service have a 90-day warranty. We record provisions for product warranties as a component of cost of sales based upon an estimate of the amounts necessary to settle existing and future claims on products sold. As of July 31, ~~2019~~2020 and ~~2018,~~2019, our warranty reserves are included in accrued expenses in the consolidated balance sheets and amounted to ~~$2,372~~$3,040 and ~~$3,280,~~$2,372, respectively. Our warranty provisions and settlements in fiscal ~~2019~~2020 and ~~2018~~2019 were not material and principally relate to our endoscope reprocessing and water purification products.

Convertible Debt

Convertible debt that includes a cash conversion feature is allocated between a liability and an equity component. The carrying amount of the liability component is determined by measuring the fair value of a similar debt instrument of similar credit quality and maturity which does not have the conversion feature. The carrying amount of the equity component, representing an embedded conversion option, is determined by deducting the fair value of the liability component from the principal amount of the convertible debt as a whole. The equity component is recorded to additional paid-in capital and is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount over the carrying amount of the liability component is recorded as a debt discount and is amortized to interest expense using the effective interest method through the maturity date. In fiscal 2020, discount amortization of $1,370 was included in interest expense, net. We allocate the total amount of debt issuance costs incurred to the liability and equity components using the same proportion as the proceeds from the issuance. The debt issuance costs attributable to the liability component are recorded as a direct deduction from the liability component and will be being amortized to interest expense using the effective interest method through the maturity date. Issuance costs attributable to the equity component are netted within the equity component in additional paid-in capital.

Stock-Based Compensation

Stock-based compensation expense is recognized for any option or stock award grant based upon the fair value of the award. Our stock options and time-based stock awards are subject to graded vesting in which portions of the award vest ratably over the vesting period. We recognize compensation expense for the awards with performance conditions using the accelerated attribution method over the requisite service period for each separately vesting portion of the award when it is probable that the performance condition will be achieved. We record expense for the awards with market conditions ratably over the vesting period regardless of whether the market condition is satisfied. We account for forfeitures as they occur, rather than estimate forfeitures over the course of the vesting period.

We determine the fair value of each time-based stock award and performance-based stock award by using the closing market price of our common stock on the last trading date immediately prior to the date of grant. We determine the fair value of each award with market conditions using a Monte Carlo simulation model on the date of grant. We estimate the fair value of each option grant on the date of grant using the Black Scholes option valuation model. The determination of fair value using valuation models is affected by our stock price as well as assumptions regarding a number of subjective variables. These variables may include, but are not limited to, the expected price volatility over the term of the award, the expected dividend yield, the expected term of the award, the probability of meeting performance objectives and the stock price of our peers in the S&P Healthcare Equipment Index.

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Cantel Medical Corp. 2020 Annual Report on Form 10-K

Advertising Costs

Our policy is to expense advertising costs as they are incurred. Advertising costs charged to expense were $5,695, $2,885 ~~$4,115~~ and ~~$3,694~~$4,115 in fiscal 2020, 2019 ~~2018~~ and ~~2017,~~2018, respectively.

Income Taxes

Our provision for income taxes is based on our current period income, changes in deferred income tax assets and liabilities, statutory income tax rates, changes in uncertain tax benefits and the deductibility of expenses or availability of tax credits in various taxing jurisdictions. Tax laws are complex, subject to different interpretations by the taxpayer and the respective governmental taxing authorities and are subject to future modification, expiration or repeal by government legislative bodies. We use significant judgment on a quarterly basis in determining our annual effective income tax rate and evaluating our tax positions.

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~~Cantel Medical Corp. 2019 Annual Report on Form 10-K~~

We regularly review our deferred tax assets for recoverability and establish a valuation allowance, if necessary, based on historical taxable income, projected future taxable income, and the expected timing of the reversals of existing temporary differences. Although realization is not assured, management believes it is more likely than not that the recorded deferred tax assets, as adjusted for valuation allowances, will be realized. Additionally, deferred tax liabilities are regularly reviewed to confirm that such amounts are appropriately stated. A review of our deferred tax items considers known future changes in various income tax rates, principally in the ~~United States.~~U.S. If income tax rates were to change in the future, particularly in the ~~United States~~U.S. and to a lesser extent Germany, the U.K. and Italy, our items of deferred tax could be materially affected. All of such evaluations require significant management judgments.

We record liabilities for an unrecognized tax benefit when a tax benefit for an uncertain tax position is taken or expected to be taken on a tax return, but is not recognized in our consolidated financial statements because it does not meet the more-likely-than-not recognition threshold that the uncertain tax position would be sustained upon examination by the applicable taxing authority. Any adjustments upon resolution of income tax uncertainties are recognized in our results of operations. Unrecognized tax benefits are analyzed periodically and adjustments are made as events occur to warrant adjustment to the related liability. Historically, we have not had significant unrecognized tax benefits.

Newly Adopted Accounting Standards

In ~~August 2017,~~February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “(Topic 842) Leases,” (“ASU 2016-02”). The new guidance requires the recording of assets and liabilities arising from leases on our consolidated balance sheet accompanied by enhanced qualitative and quantitative disclosures in the notes to the financial statements. ASU 2016-02 is effective for fiscal years beginning after December 31, 2018 (our fiscal year 2020), including interim periods within that reporting period. Early adoption is permitted as of the beginning of an interim or annual period. In July 2018, the FASB issued ASU ~~2017-12,~~ 2018-10, “~~Targeted~~Codification Improvements to Topic 842, Leases,” and ASU 2018-11, “Leases (Topic 842) Targeted Improvements,” in December 2018, the FASB issued ASU 2018-20, “Narrow-Scope Improvements for Lessors” andin March 2019, the FASB issued ASU 2019-01, “Leases (Topic 842): Codification Improvements.” These ASUs provide adjustments relating to ASU 2016-02 and improvements to comparative reporting requirements for initial adoption and for separating components of a contract for lessors. We adopted the collective standard “ASC 842” using the modified retrospective transition approach with optional transition relief and recognized the cumulative effect of applying the new leasing standard to existing contracts on our consolidated balance sheet on August 1, 2019. Therefore, results for reporting periods beginning after August 1, 2019 are presented under the new leasing standard; however, the comparative prior period amounts have not been restated and continue to be reported in accordance with historic accounting under Accounting Standards Codification (“ASC”) 840. The most significant effects of adoption of the new leasing standard relate to the recognition of right-of-use assets of $35,842 and lease liabilities of $36,417 for ~~Hedging Activities,”~~operating leases, which we recorded on our consolidated balance sheet on August 1, 2019. Additionally, the amortization of the right-of-use assets and the cash flow impact from lease liabilities are separately disclosed in the consolidated statement of cash flows. The new leasing standard did not impact our consolidated statements of income. See Note 5, “Leases” for a discussion of the impact to the consolidated balance sheets and related disclosures.

In February 2018, the FASB issued ASU 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU ~~2017-12”~~2018-02”) to ~~improve~~allow for the ~~financial reporting~~reclassification from accumulated other comprehensive income to retained earnings of ~~hedging relationships to better portray~~stranded tax effects resulting from the ~~economic results of an entity's risk management activities~~Tax Cuts and Jobs Act enacted in ~~its financial statements.~~December 2017. ASU ~~2017-12~~2018-02 is effective for fiscal years beginning after December 15, 2018 (our fiscal year 2020), including interim periods within that

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Cantel Medical Corp. 2020 Annual Report on Form 10-K

reporting period. ~~We early~~Accordingly, we adopted ASU ~~2017-12 effective~~2018-02 on August 1, ~~2018.~~2019. The adoption of ASU ~~2017-12~~2018-02 did not have a material impact on our financial position, results of operations or cash flows.

Recently Issued Accounting Standards

In ~~May 2017,~~August 2020, the FASB issued ASU ~~2017-09, “(Topic 718) Scope of Modification Accounting~~,”2020-06, “(Subtopic 470-20): Debt—Debt with Conversion and Other Options” (“ASU ~~2017-09”~~2020-06”) to ~~provide guidance about which changes~~address the complexity associated with applying GAAP to certain financial instruments with characteristics of liabilities and equity. The ASU includes amendments to the ~~terms~~guidance on convertible instruments and the derivative scope exception for contracts in an entity’s own equity and simplifies the accounting for convertible instruments which include beneficial conversion features or ~~conditions of a share-based payment award~~cash conversion features by removing certain separation models in Subtopic 470-20. Additionally, the ASU will require ~~an entity~~entities to ~~apply modification accounting in ASC 718.~~use the “if-converted” method when calculating diluted earnings per share for convertible instruments. ASU ~~2017-09~~2020-06 is effective for fiscal years beginning after December 15, ~~2017~~2021 (our fiscal year ~~2019)~~2022), including interim periods within those fiscal years. We are currently evaluating the impact of ASU 2020-06 on our financial position, results of operations or cash flows. The impact on our diluted earnings per share could be material upon the adoption of ASU 2020-06.

In March 2020, the FASB issued ASU 2020-04, “(Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” (“ASU 2020-04”) to provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. ASU 2020-04 is elective and applies to all entities, subject to meeting certain criteria, that ~~reporting period. Accordingly, we adopted~~have contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. ASU ~~2017-09~~2020-04 was subject to election as of March 20, 2020 and can be elected for both interim and annual periods through December 31, 2022. We plan to adopt ASU 2020-04 on August 1, ~~2018.~~2020 (our fiscal 2021). The adoption of ASU ~~2017-09 did~~2020-04 is not expected to have a material impact on our financial position, results of operations or cash flows.

In ~~August 2016,~~December 2019, the FASB issued ASU ~~2016-15,~~ “(2019-12, “(Topic ~~230) Classification~~740) Simplifying the Accounting for Income Taxes,” (“ASU 2019-12”) to simplify the accounting for income taxes by removing certain exceptions to the general principles in ASC 740. The amendments also improve consistent application of ~~Certain Cash Receipts~~ and ~~Cash Payments~~,” (“simplify GAAP for other areas of ASC 740 by clarifying and amending existing guidance. ASU ~~2016-15”). This guidance makes eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15~~2019-12 is effective for fiscal years beginning after December 15, ~~2017~~2020 (our fiscal year ~~2019). Accordingly, we adopted ASU 2016-15 on August 1, 2018.~~2022), including interim periods within that reporting period. The adoption of ASU ~~2016-15 did~~2019-12 is not expected to have a material impact on our financial position, results of operations or cash flows.

~~In May 2014, the FASB issued ASU 2014-09,~~ ~~“Revenue from Contracts with Customers (Topic 606)~~,” ~~(“ASU 2014-09”), which supersedes the revenue recognition requirements in Accounting Standards Codification 605,~~ ~~“Revenue Recognition”~~ (“ASC 605”). ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU 2015-14, ~~“Revenue from Contracts with Customers (Topic 606),”~~ (“ASU 2015-14”), which defers the effective date of ASU 2014-09 by one year to fiscal years beginning after December 15, 2017 (our fiscal year 2019), including interim periods within that reporting period. In May 2016, the FASB issued ASU 2016-12, ~~“Revenue from Contracts with Customers (Topic 606),”~~ (“ASU 2016-12”), which provided narrow scope improvements and practical expedients relating to ASU 2014-09. We adopted the collective standard (“ASC 606”) on August 1, 2018. See Note 3, “Revenue Recognition” for a discussion of the impact and required disclosures.

~~Recently Issued Accounting Standards~~

In August 2018, the FASB issued ASU 2018-15, “~~Customer’s~~“Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service ~~Contract~~”Contract” (“ASU 2018-15”) to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. ASU 2018-15 is effective for fiscal years beginning after December 15, 2019 (our fiscal year 2021), including interim periods within that reporting period. The adoption of ASU 2018-15 is not expected to have a material impact on our financial position, results of operations or cash flows.

~~(dollar amounts in thousands except share and per share data or as otherwise specified)~~ 46

~~Cantel Medical Corp. 2019 Annual Report on Form 10-K~~

In August 2018, the FASB issued ASU 2018-13, “~~Disclosure~~“Disclosure Framework—Changes to the Disclosure Requirements for Fair Value ~~Measurement~~”Measurement” (“ASU 2018-13”) to modify the disclosure requirements on fair value measurements in ASC 820, “Fair Value ~~Measurement”.~~Measurement.” ASU 2018-13 is effective for fiscal years beginning after December 15, 2019 (our fiscal year 2021), including interim periods within that reporting period. The adoption of ASU 2018-13 is not expected to have a material impact on our financial position, results of operations or cash flows.

~~In February 2018, the FASB issued ASU 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income~~” (“ASU 2018-02”) to allow for the reclassification from accumulated other comprehensive income to retained earnings of stranded tax effects resulting from the Tax Cuts and Jobs Act enacted in December 2017. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018 (our fiscal year 2020), including interim periods within that reporting period. The adoption of ASU 2018-02 is not expected to have a material impact on our financial position, results of operations or cash flows.

In January 2017, the FASB issued ASU 2017-04, “(“(Topic 350) Simplifying the Test for Goodwill Impairment,” (“ASU 2017-04”) to simplify the test for goodwill impairment. The revised guidance eliminates the existing Step 2 of the goodwill impairment test which required an entity to compute the implied fair value of its goodwill at the testing date in order to measure the amount of the impairment charge when the fair value of the reporting unit failed Step 1 of the goodwill impairment test. The guidance will be applied on a prospective basis on or after the effective date. ASU 2017-04 is effective for fiscal years beginning after December 31, 2019 (our fiscal year 2021) and early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of ASU 2017-04 is not expected to have a material impact on our financial position, results of operations or cash flows.

In ~~February~~June 2016, the FASB issued ASU ~~2016-02, “(Topic 842) Leases,~~2016-13, “Measurement of Credit Losses on Financial Instruments,” (“ASU ~~2016-02”~~2016-13”) ~~which requires lease assets~~to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and ~~liabilities~~other commitments to ~~be recorded on the balance sheet for leases with terms greater than twelve months. We will adopt~~extend credit held by a reporting entity at each reporting date. The amendments in this ASU ~~and related amendments on August 1, 2019 and will elect certain practical expedients permitted under~~replace the transition guidance. Additionally, we will elect the optional transition method that allows for a cumulative-effect adjustment in the period of adoption and will not restate prior periods. We are substantially complete in assessing the transitional impact from adopting the standard; however, we are still assessing the lessor provisions under the standard but do not expect any material adjustments to the estimated right of use asset and/or lease liability. Excluding any impact associatedincurred loss impairment methodology with a ~~recently announced acquisition, we currently estimate the impact~~methodology that reflects expected credit losses and requires consideration of ~~the adoption will result~~a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is

(dollar amounts in ~~the recognition of right of use assets~~thousands except share and ~~lease liabilities of approximately $30,000 to $35,000~~per share data or as ~~of August 1, 2019.~~otherwise specified) 56

Cantel Medical Corp. 2020 Annual Report on Form 10-K

effective for fiscal years beginning after December 15, 2019 (our fiscal year 2021). The adoption of ASU ~~2016-02~~2016-13 is not expected to have a material impact on our financial position, results of operations or cash flows.

3. Acquisitions

Fiscal 2020

Hu-Friedy: On October 1, 2019, we purchased all of the issued and outstanding membership interests of Hu-Friedy Mfg. Co. LLC (“Hu-Friedy”), for total consideration (net of cash acquired), excluding acquisition-related costs, of $716,542, consisting of $662,151 of cash and $54,391 of common stock consideration (subject to adjustment), plus contingent consideration payable in cash. The additional contingent consideration payments were (i) subject to the achievement of certain commercial milestones through March 31, 2021 ranging from 0 to a maximum of $50,000 and (ii) contingent upon changes in our stock price from the date of closing through a future date subject to a registration rights agreement. See Note 9, “Fair Value Measurements,” for further details regarding these contingent payments. Hu-Friedy is a leading global manufacturer of instruments and instrument reprocessing systems serving the dental industry and is included in our Dental segment.

Fiscal 2019

Omnia: On February 1, 2019, we purchased all of the issued and outstanding stock of Omnia S.p.A. (“Omnia”), an Italian-based market leader in dental surgical consumables solutions, for total consideration (net of cash acquired), excluding acquisition-related costs, of $19,007, consisting of $15,797 of cash and $3,210 of stock consideration, plus additional earn-outs ranging from 0 to a maximum of $5,800, which were payable upon the achievement of certain performance-based financial targets. Omnia’s business consists of a wide-ranging portfolio of sutures, irrigation tubing and customized dental surgical procedure kits, with a focus on procedure room set-up and cross-contamination prevention, and is included in our Dental segment.

CES business: On August 1, 2018, we acquired certain net assets of Stericycle Inc. related to its controlled environmental solutions business (“CES business”) for total cash consideration, excluding acquisition-related costs, of $17,047. The CES business is a leading provider of testing and certification, environmental monitoring and decontamination services for clean rooms and other controlled environments to ensure safety, regulatory compliance and quality control, and is included in our Life Sciences segment.

(dollar amounts in thousands except share and per share data or as otherwise specified) 57

Cantel Medical Corp. 2020 Annual Report on Form 10-K

The following table presents our purchase price allocation of our material acquisitions (each of which was accounted for as a business combination in accordance with ASC Topic 805, “Business Combinations”):


	2020				2019
Purchase Price Allocation	Hu-Friedy⁽¹⁾⁽²⁾		Omnia			CES Business⁽²⁾
	(Preliminary)		(Final)			(Final)
Purchase Price:
Cash paid	$	662,151	$	15,797		$	17,047
Fair value of contingent consideration	38,371		0			0
Common stock issued	54,391		3,210			0
Total	$	754,913	$	19,007		$	17,047

Allocation:
Property and equipment	38,571		1,285			539
Intangible assets:
Customer relationships	225,000		10,206			8,100
Technology	32,000		1,257			0
Brand names	112,000		1,600			0
Goodwill	276,744		10,539			6,137
Deferred income taxes	(135)		(2,346)			0
Inventories	63,680		0			0
Other working capital	7,053		1,673			2,271
Long-term debt	0		(5,207)			0
Total	$	754,913	$	19,007		$	17,047

(1)During the second quarter of fiscal 2020, we paid $25,000 to settle a portion of the contingent consideration, and during the third quarter of fiscal 2020, we paid $35,000 to repurchase a portion of the common stock issued, both of which were included in Acquisitions, net of cash acquired in the Consolidated Statement of Cash Flows. See Note 9, “Fair Value Measurements” for additional information.

(2)The excess purchase price over net assets acquired was assigned to goodwill, substantially all of which is deductible for income tax purposes.

Unaudited Pro Forma Summary of Operations

The following pro forma summary of operations presents our operations as if the Hu-Friedy acquisition had occurred as of the beginning of fiscal 2019. In addition to including the results of operations of this acquisition, the pro forma information gives effect to amortization of the step-up in inventory, depreciation of the step-up in property and equipment, the interest on additional borrowings, the amortization of intangible assets and the issuance of shares of common stock. On an actual basis, the Hu-Friedy acquisition contributed $148,317 to our consolidated net sales for the year ended July 31, 2020.


	Year Ended July 31,
Pro Forma Summary of Operations	2020		2019
Net sales	$	1,054,972	$	1,132,603
Net income	$	8,690	$	53,984
Earnings per common share:
Basic	$	0.20	$	1.27
Diluted	$	0.20	$	1.27

The pro forma information presented above does not purport to be indicative of the results that actually would have been attained had the Hu-Friedy acquisition occurred as of the beginning of fiscal 2019.

(dollar amounts in thousands except share and per share data or as otherwise specified) 58

Cantel Medical Corp. 2020 Annual Report on Form 10-K

4. Revenue Recognition

~~Adoption of “Revenue from Contracts with Customers (ASC 606)”~~

We adopted ASC 606, effective August 1, 2018, using the modified retrospective method applied to those contracts which were not completed as of August 1, 2018. Results for reporting beginning after August 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and will continue to be reported in accordance with our historic accounting under ASC 605.

Due to the cumulative impact of adopting ASC 606, we recorded a net increase of $865 to opening retained earnings, net of tax, as of August 1, 2018. The impact is primarily related to the timing of revenue recognition for the shipment of products in both our Medical and Life Sciences segments where risk of loss provisions are present (“synthetic FOB destination”). The ~~new~~ standard does not require us to defer revenue for these products and allows us to recognize revenue at the time of shipment. The cumulative adjustment to retained earnings also includes the impact of the change in timing of revenue recognition associated with software licensing arrangements in our Medical segment. Additionally, revenue related to software renewals was historically recognized on a ratable basis over the license period. Under ASC 606, the license is considered functional intellectual property, and is considered to be transferred to the customer at a point in time, specifically, at the start of each annual renewal period. As a result, revenue related to our annual software license renewals has been accelerated. Contract liabilities primarily relate to payments received from customers in advance of performance under the contract.

As part of the cost to obtain a contract, we may pay incremental commissions to sales employees upon entering into a sales contract. Under ASC 606, we have elected to expense these costs as incurred when the period of benefit is less than one year. For certain multi-period contracts, we capitalize these amounts as contract costs, and amortize them based on the contract duration to which the assets relate, which ranges from two to five years. The amounts at July 31, 2020 and 2019, were not material. For certain international contracts with distributors, we recognize a receivable at the point in time in which we have an unconditional right to payment. Most customers are required to pay a portion of the transaction price in advance and the remaining balance within 30 days of receiving the related products. Accordingly, we have elected to use the practical expedient which allows us to ignore the possible existence of a significant financing component within these contracts.

~~(dollar amounts in thousands except share and per share data or as otherwise specified)~~ 47

~~Cantel Medical Corp. 2019 Annual Report on Form 10-K~~

The following table gives information as to the net sales disaggregated by geography and product line:


	Year Ended July 31,					Year Ended July 31,
Net sales by geography	2019		2018⁽¹⁾		Net sales by geography	2020		2019		2018⁽¹⁾
United States	$	665,661	$	643,744	United States	$	742,410	$	665,661	$	643,744
Europe/Africa/Middle East	148,334		131,130		Europe/Africa/Middle East	167,360		148,334		131,130
Asia/Pacific	66,228		57,108		Asia/Pacific	73,517		66,228		57,108
Canada	32,152		33,524		Canada	27,417		32,152		33,524
Latin America/South America	5,780		6,416		Latin America/South America	5,344		5,780		6,416
Total	$	918,155	$	871,922	Total	$	1,016,048	$	918,155	$	871,922
Net sales by product line					Net sales by product line
Capital equipment	$	221,668	$	240,153	Capital equipment	$	213,723	$	221,668	$	240,153
Consumables	569,412		523,073		Consumables	570,710		569,412		523,073
Product service	122,752		106,764		Product service	123,771		122,752		106,764
Instrument					Instrument	104,440		0		0
All other⁽²⁾	4,323		1,932		All other⁽²⁾	3,404		4,323		1,932
Total	$	918,155	$	871,922	Total	$	1,016,048	$	918,155	$	871,922

(1)As noted above, fiscal year 2018 amounts have not been adjusted under the modified retrospective method.


~~(1)~~	~~As noted above, prior year amounts have not been adjusted under the modified retrospective method.~~


~~(2)~~	~~Primarily includes software licensing revenues.~~

(2)Primarily includes software licensing revenues.

Remaining Performance Obligations

As of July 31, ~~2019,~~2020, the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) was approximately ~~$73,735,~~$78,487, primarily within the Medical segment. We expect to recognize revenue on approximately ~~50%~~75% of these remaining performance obligations in fiscal ~~2020.~~2021. These performance obligations primarily reflect the future product service revenues for multi-period service arrangements.

(dollar amounts in thousands except share and per share data or as otherwise specified) 59

Cantel Medical Corp. 2020 Annual Report on Form 10-K

Contract Liabilities

A summary of contract liabilities activity for the year ended July 31, ~~2019~~2020 follows:


	Contract Liabilities
Balance, August 1, 2018	$	29,015
Revenue deferred in current year	61,996
Deferred revenue recognized	(61,913)
Foreign currency translation	(863)
Balance, July 31, 2019	28,235
Revenue deferred in current year	58,221
Deferred revenue recognized	(60,229)
Foreign currency translation	293
Balance, July 31, 2020	26,520
Contract liabilities included in Other long-term liabilities	(297)
Deferred revenue	$	26,223

Contract Liabilities
Balance, August 1, 2018 $ 29,015
Revenue deferred in current year 61,996
Deferred revenue recognized (61,913 )
Foreign currency translation (863 )
Balance, July 31, 2019 $ 28,235
Contract liabilities included in Other long-term liabilities (395 )
Deferred revenue $ 27,840

Our contract liabilities arise primarily in the Medical and Life Sciences segments when payment is received upfront for various multi-period extended service arrangements. We expect to recognize substantially all of this revenue over the next twelve months.


4.	~~Acquisitions~~

~~Fiscal 2019~~5. Leases

~~Omnia:~~ ~~On February~~Adoption of “Leases (ASC 842)”

We adopted ASC 842, effective August 1, 2019, using the modified retrospective transition approach with optional transition relief, and recognized the cumulative effect of applying the new leasing standard to existing contracts on our consolidated balance sheet on August 1, 2019. Results for reporting beginning after August 1, 2019 are presented under ASC 842, while prior period amounts are not adjusted and will continue to be reported in accordance with our historical accounting under ASC 840.

We elected a package of practical expedients that were consequently applied to all leases. We did not reassess whether expired or existing contracts contain leases under the new definition of a lease, lease classification for expired or existing leases, nor whether previously capitalized initial direct costs would qualify for capitalization under the new standard. Upon transition, we ~~purchased~~did not elect to use hindsight with respect to lease renewals and purchase options when accounting for existing leases, as well as assessing the impairment of right-of-use assets. Therefore, lease terms largely remained unchanged. In addition, we elected the short-term lease recognition exemption and did not recognize a lease liability and right-of-use asset on our consolidated balance sheet for all leases with terms of 12 months or less. We elected the practical expedient to combine lease and non-lease components, such as common area maintenance fees, in total gross rent for all of ~~the issued~~our leases which resulted in larger lease liabilities recorded on our consolidated balance sheet.

Our lease portfolio consists primarily of real estate, equipment and outstanding stock of Omnia S.p.A. (“Omnia”), an Italian-based market leader in dental surgical consumables solutions, for total consideration (net of cash acquired), excluding acquisition-related costs, of $19,808, consisting of $16,598 of cash and $3,210 of stock consideration, plus additional earn-outsvehicles. We have approximately 90 real estate leases with lease terms ranging from ~~zero~~1 year to 16 years, which include our corporate headquarters, regional headquarters, and other facilities for sales and administration, warehousing, manufacturing and training. Our equipment leases primarily consist of furniture, computers and other office equipment.

Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. At lease commencement, we record a ~~maximum~~liability for our lease obligation measured at the present value of ~~$5,800, which~~future lease payments and a right-of-use asset equal to the lease liability adjusted for prepayments and lease incentives. As it related to long-lived assets, the accounting standards for right-of-use assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We use our collateralized incremental borrowing rate to calculate the present value of lease liabilities as most of our leases do not provide an implicit rate that is ~~payable upon the achievement of certain performance-based financial targets. Omnia’s business consists~~readily determinable. Some real estate leases include 1 or more options to renew or terminate a lease. The exercise of a ~~wide-ranging portfolio~~lease renewal or termination option is assessed at commencement of ~~sutures, irrigation tubing~~the lease and ~~customized dental surgical procedure kits, with a focus on procedure room set-up and cross-contamination prevention, and is included~~only reflected in ~~our Dental segment.~~

the lease

(dollar amounts in thousands except share and per share data or as otherwise specified) 4860

Cantel Medical Corp. ~~2019~~2020 Annual Report on Form 10-K

term if we are reasonably certain to exercise the option. Operating lease expense is recognized on a straight-line basis over the respective lease term.

~~CES business:~~ ~~On August 1, 2018, we acquired certain net assets of Stericycle Inc.~~

Supplemental balance sheet information related to its controlled environmental solutions business (“CES business”) for total cash consideration, excluding acquisition-related costs, of $17,047. The CES business is a leading provider of testing and certification, environmental monitoring and decontamination services for clean rooms and other controlled environments to ensure safety, regulatory compliance and quality control, and is included in our ~~Life Sciences segment.~~leases follows:

~~Fiscal 2018~~

~~Aexis:~~ On March 21, 2018, we purchased all of the issued and outstanding stock of Aexis Medical BVBA (“Aexis”), which is based in Belgium, for total consideration, excluding acquisition-related costs, of $21,600, consisting of $20,308 of cash consideration (net of cash acquired), plus contingent consideration ranging from zero to a maximum of $1,850, which is payable upon the achievement of certain purchase order targets through March 21, 2020. Aexis specializes in advanced software solutions focused on the tracking and monitoring of instrument reprocessing for hospitals and healthcare professionals, and is included in our Medical segment.

~~BHT Group:~~ On August 23, 2017, we purchased all of the issued and outstanding stock of BHT Hygienetechnik Holding GmbH (“BHT Group”), a leader in the German market in automated endoscope reprocessing and related equipment and services for total consideration (net of cash acquired), excluding acquisition related costs, of $60,216. BHT Group consists of a portfolio of high-quality automatic endoscope reprocessors, advanced endoscope storage and drying cabinets (products globally distributed by our Company prior to the acquisition under an agreement with BHT Group), washer-disinfectors for central sterile applications, associated technical service and parts as well as flexible endoscope repair services. BHT Group is included in our Medical segment.

~~The following table presents our purchase price allocation of our material acquisitions (each of which was accounted for as a business combination in accordance with ASC Topic 805, “Business Combinations”~~):

2019 2018
Purchase Price Allocation Omnia
CES Business⁽¹⁾
Aexis BHT Group
(Preliminary) (Preliminary) (Final) (Final)
Purchase Price:
Cash paid $ 16,598
$ 17,047
$ 20,308
$ 60,216
Fair value of contingent consideration —
—
1,292
—
Common stock issued 3,210
—
—
—
Total $ 19,808
$ 17,047
$ 21,600
$ 60,216

Allocation:
Property and equipment 1,285
539
130
835
Amortizable intangible assets:
Customer relationships 10,206
8,100
1,800
12,500
Technology 1,257
—
4,600
6,200
Brand names 1,600
—
—
—
Goodwill 11,340
6,137
17,092
40,934
Deferred income taxes (2,346 ) —
(1,639 ) (5,881 )
Other working capital 1,673
2,271
909
5,628
Contingent consideration —
—
(1,292 ) —
Long-term debt (5,207 ) —
—
—
Total $ 19,808
$ 17,047
$ 21,600
$ 60,216


~~(1)~~Lease Type	~~The excess purchase price over~~	July 31, 2020
Assets:
Operating lease assets		$	44,267
Finance lease assets		4,417
Right-of-use assets, net ~~assets acquired was assigned to goodwill, all~~		$	48,684

Liabilities:
Operating lease liabilities		$	9,852
Finance lease liabilities		416
Current portion of ~~which is deductible for income tax purposes.~~lease liabilities		10,268

Operating lease liabilities		36,515
Finance lease liabilities		4,164
Long-term lease liabilities		40,679
Total lease liabilities		$	50,947

~~Unaudited Pro Forma Summary~~


Additional Lease Data	July 31, 2020
Weighted average remaining lease term:
Operating leases	6.11 years
Finance leases	5.86 years
Weighted average discount rate:
Operating leases	2.73	%
Finance leases	23.39	%

At July 31, 2020, maturities of ~~Operations~~lease liabilities for the periods set forth below were as follows:

The acquisitions above, both individually and in the aggregate, were not material to our consolidated results of operations or financial position and, therefore, pro forma financial information is not presented.


Fiscal year	Operating		Finance		Total

2021	10,938		1,446		12,384
2022	8,976		1,432		10,408
2023	7,903		1,425		9,328
2024	6,739		1,434		8,173
2025	5,011		1,422		6,433
Thereafter	11,279		922		12,201
Total lease payments	50,846		8,081		58,927
Less: interest	(4,479)		(3,501)		(7,980)
Present value of lease liabilities	$	46,367	$	4,580	$	50,947

(dollar amounts in thousands except share and per share data or as otherwise specified) 4961

Cantel Medical Corp. 2020 Annual Report on Form 10-K

As previously disclosed in our 2019 Annual Report on Form 10-K

and in accordance with our historical accounting under ASC 840, future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) for the periods set forth below were as follows:

(dollar amounts in thousands except share and per share data or as otherwise specified) 6883

Cantel Medical Corp. ~~2019~~2020 Annual Report on Form 10-K

PART IV

Item 15. Exhibits, Financial Statement Schedules.


~~(a)~~	~~The following documents are filed as part of this Annual Report on Form 10-K for the fiscal year ended July 31, 2019.~~

(a)The following documents are filed as part of this Annual Report on Form 10-K for the fiscal year ended July 31, 2020.

~~Consolidated Financial Statements~~:

1.Consolidated Financial Statements:

(i)Report of Independent Registered Public Accounting Firm.

(ii)Consolidated Balance Sheets as of July 31, 2020 and 2019.

(iii)Consolidated Statements of Income for the years ended July 31, 2020, 2019 and 2018.

(iv)Consolidated Statements of Comprehensive Income for the years ended July 31, 2020, 2019 and 2018.

(v)Consolidated Statements of Changes in Stockholders’ Equity for the years ended July 31, 2020, 2019 and 2018.

(vi)Consolidated Statements of Cash Flows for the years ended July 31, 2020, 2019 and 2018.

(vii)Notes to Consolidated Financial Statements.

2.Consolidated Financial Statement Schedules:

(i)Schedule II - Valuation and Qualifying Accounts for the years ended July 31, 2020, 2019 and 2018.


~~(i)~~	~~Report of Independent Registered Public Accounting Firm.~~


~~(ii)~~	~~Consolidated Balance Sheets as of July 31, 2019 and 2018.~~


~~(iii)~~	~~Consolidated Statements of Income for the years ended July 31, 2019, 2018 and 2017.~~


~~(iv)~~	~~Consolidated Statements of Comprehensive Income for the years ended July 31, 2019, 2018 and 2017.~~


~~(v)~~	~~Consolidated Statements of Changes in Stockholders’ Equity for the years ended July 31, 2019, 2018 and 2017.~~


~~(vi)~~	~~Consolidated Statements of Cash Flows for the years ended July 31, 2019, 2018 and 2017.~~


~~(vii)~~	~~Notes to Consolidated Financial Statements.~~


2.	~~Consolidated Financial Statement Schedules~~:


~~(i)~~	~~Schedule II - Valuation and Qualifying Accounts for the years ended July 31, 2019, 2018 and 2017.~~

All other financial statement schedules are omitted since they are not required, not applicable, or the information has been included in the Consolidated Financial Statements or Notes thereto.


3.	~~Exhibits~~: 3.Exhibits:

2(a) - Purchase and Sale Agreement, dated as of July 29, 2019, by and among Cantel Medical Corp., Hu-Friedy Mfg. Co., LLC, Dental Holding, LLC, and, for limited purposes set forth therein, Ken Serota and Ron Saslow. (Incorporated herein by reference to Exhibit 2.1 to Registrant’s Current Report on Form 8-K filed on July 30, ~~2019, File No. 001-31337.~~2019.)

3(a) - Registrant’s Restated Certificate of Incorporation, dated July 20, 1978. (Incorporated herein by reference to Exhibit 3(a) to Registrant’s 1981 Annual Report on Form 10-K.)

3(b) - Certificate of Amendment of Certificate of Incorporation of Registrant, filed on February 16, 1982. (Incorporated herein by reference to Exhibit 3(b) to Registrant’s 1982 Annual Report on Form 10-K.)

3(c) - Certificate of Amendment of Certificate of Incorporation of Registrant, filed on May 4, 1984. (Incorporated herein by reference to Exhibit 3(c) to Registrant’s Quarterly Report on Form 10-Q for the quarter ended April 30, 1984.)

3(d) - Certificate of Amendment of Certificate of Incorporation of Registrant, filed on August 19, 1986. (Incorporated herein by reference to Exhibit 3(d) to Registrant’s 1986 Annual Report on Form 10-K.)

3(e) - Certificate of Amendment of Certificate of Incorporation of Registrant, filed on December 12, 1986. (Incorporated herein by reference to Exhibit 3(e) to Registrant’s 1987 Annual Report on Form 10-K [the “1987 10-K”].)

3(f) - Certificate of Amendment of Certificate of Incorporation of Registrant, filed on April 3, 1987. (Incorporated herein by reference to Exhibit 3(f) to Registrant’s 1987 10-K.)

3(g) - Certificate of Change of Registrant, filed on July 12, 1988. (Incorporated herein by reference to Exhibit 3(g) to Registrant’s 1988 Annual Report on Form ~~10-K, File No. 001-31337.~~10-K.)

3(h) - Certificate of Amendment of Certificate of Incorporation of Registrant, filed on April 17, 1989. (Incorporated herein by reference to Exhibit 3(h) to Registrant’s 1989 Annual Report on Form ~~10-K, File No. 001-31337.~~10-K.)

Cantel Medical Corp. 2020 Annual Report on Form 10-K

3(i) - Certificate of Amendment of Certificate of Incorporation of Registrant, filed on May 10, 1999. (Incorporated herein by reference to Exhibit 3(i) to Registrant’s 2000 Annual Report on Form 10-K ~~File No. 001-31337~~ [the “2000 10-K”].)

~~Cantel Medical Corp. 2019 Annual Report on Form 10-K~~

3(j) - Certificate of Amendment of Certificate of Incorporation of Registrant, filed on April 5, 2000. (Incorporated herein by reference to Exhibit 3(j) to Registrant’s 2000 10-K.)

3(k) - Certificate of Amendment of Certificate of Incorporation of Registrant, filed on September 6, 2001. (Incorporated herein by reference to Exhibit 3(k) to Registrant’s 2001 Annual Report on Form ~~10-K, File No. 001-31337.~~10-K.)

3(l) - Certificate of Amendment of Certificate of Incorporation of Registrant, filed on June 7, 2002. (Incorporated herein by reference to Exhibit 3(l) to Registrant’s 2002 Annual Report on Form ~~10-K, File No. 001-31337.~~10-K.)

3(m) - Certificate of Amendment of Certificate of Incorporation of Registrant, filed on December 22, 2005. (Incorporated herein by reference to Exhibit 3(m) to Registrant’s 2006 Annual Report on Form ~~10-K, File No. 001-31337.~~10-K.)

3(n) - Certificate of Amendment of Certificate of Incorporation of Registrant filed on January 14, 2013. (Incorporated herein by reference to Exhibit 3(n) to Registrant’s 2013 Annual Report on Form ~~10-K, File No. 001-31337.~~10-K.)

3(o) - Registrant’s ~~By-Laws, as amended through November 1, 2013. (Incorporated herein by reference to~~ ~~Exhibit 3.1~~ ~~to Registrant’s Current Report on Form 8-K filed on November 7, 2013, File No. 001-31337.)~~

~~3(p) - Registrant's~~ By-Laws, as amended through January 3, 2018. (Incorporated herein by reference to Exhibit 3.1 to Registrant’s Current Report on Form 8-K filed on ~~January 9, 2018, File No. 001-31337.~~November 7, 2013.)

~~Exhibit 4~~4(a) - Description of Securities. (Incorporated herein by reference to Exhibit 4 to Registrant’s 20019 Annual Report on Form 10-K.)

4(b) - Indenture, dated as of May 15, 2020, between Cantel Medical Corp. and Wells Fargo Bank, National Association, as Trustee, including form of 3.25% Convertible Senior Note due 2025. (Incorporated herein by reference to

Exhibit 4.1 Registrant’s Current Report on Form 8-K filed on May 15, 2020.)

10(a) - 2006 Equity Incentive Plan, as amended. (Incorporated herein by reference to Exhibit 10(a) to Registrant’s Quarterly Report on Form 10-Q for the quarter ended October 31, ~~2013, File No. 001-31337.~~2013.)*

10(b) - Form of Stock Option Agreement for option grants to directors and executive officers under Registrant’s 2006 Equity Incentive Plan. (Incorporated herein by reference to Exhibit 10.4 to Registrant’s Current Report on Form 8-K filed on October 27, 2011 ~~File No. 001-31337~~ [the “October 2011 8-K”].)*

10(c) - Form of Restricted Stock Agreement under Registrant’s 2006 Equity Incentive Plan for grants to executive officers. (Incorporated herein by reference to Exhibit 10.5 to Registrant’s October 2011 8-K.)*

10(d) - Form of Restricted Stock Agreement under Registrant’s 2006 Equity Incentive Plan for grants to directors. (Incorporated herein by reference to Exhibit 10.6 to Registrant’s October 2011 8-K.)*

10(e) - Separation Agreement and General Release dated as of March 8, 2019 between the Company and Jorgen B. Hansen. (Incorporated herein by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed on March 8, ~~2019, File No. 001-31337.~~2019.)*

10(f) - Retirement Agreement and General Release dated as of March 29, 2019 between the Company and Eric W. Nodiff. (Incorporated herein by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q filed on June 6, ~~2019, File No. 001-31337.~~2019.)*

10(g) - Confidentiality and Non-Competition Agreement dated as of November 15, 2012 between Registrant and Jorgen B. Hansen (Incorporated herein by reference to Exhibit 10.2 to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, ~~2012, File No. 001-31337.~~2012.)*

10(h) - Confidentiality and Non-Competition Agreement dated as of January 1, 2010 between Registrant and Eric W. Nodiff (Incorporated herein by reference to Exhibit 10.9 to Registrant’s February 2010 8-K.)*

10(i) - Confidentiality and Non-Competition Agreement dated as of March 23, 2015 between Registrant and Peter Clifford (Incorporated herein by reference to Exhibit 10.2 to Registrant’s March 2015 8-K.)*

Cantel Medical Corp. 2020 Annual Report on Form 10-K

10(j) - Cantel Medical Corp. 2016 Equity Incentive Plan (Incorporated herein by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q filed on November 30, ~~2018, File No. 001-31337.~~2018.)*

~~Cantel Medical Corp. 2019 Annual Report on Form 10-K~~

10(k) - Form of Restricted Stock Agreement (Time-Based Grants) under Cantel Medical Corp. 2016 Equity Incentive Plan for grants to executive officers (Incorporated herein by reference to Exhibit 10(r) to Registrant's Annual Report on From 10-K for the fiscal year ended July 31, 2016 ~~File No. 001-31337~~ [the "2016 10-K"].) *

10(l) - Form of Restricted Stock Agreement (Time-Based Grants) under Cantel Medical Corp. 2016 Equity Incentive Plan for grants to directors (Incorporated herein by reference to Exhibit 10(s) to Registrant's 2016 10-K.)*

10(m) - Form of Restricted Stock Agreement (Performance-Based Grants – Revenue Based) under Cantel Medical Corp. 2016 Equity Incentive Plan for grants to executive officers (Incorporated herein by reference to Exhibit 10(t) to Registrant's 2016 10-K.) *

10(n) - Form of Restricted Stock Agreement (Performance-Based Grants – TSR Based) under Cantel Medical Corp. 2016 Equity Incentive Plan for grants to executive officers (Incorporated herein by reference to Exhibit 10(u) to Registrant's 2016 10-K.)*

10(o) - Form of Restricted Stock Agreement (Time-Based) under Cantel Medical Corp. 2016 Equity Incentive Plan for annual grants to directors (Incorporated herein by reference to Exhibit 10(v) to Registrant's 2016 10-K.)*

10(p) - Fourth Amended and Restated Credit Agreement dated as of June 28, 2018 among Cantel Medical Corp., Bank of America, N.A., Wells Fargo Bank, National Association, JPMorgan Chase Bank, N.A., and the other lenders party hereto. (Incorporated herein by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on July 2, ~~2018, File No. 001-31337.~~2018.)

10(q) - ~~Earnout Agreement, dated as of July 29, 2019, by and between Dental Holding, LLC and Cantel Medical Corp. (Incorporated herein by reference to~~ ~~Exhibit 10.1~~ ~~to Registrant’s Current Report on Form 8-K filed on July 30, 2019, File No. 001-31337.)~~

~~10(r) -~~ First Amendment, dated as of September 6, 2019, among Cantel Medical Corp., the subsidiary obligors party thereto, the lenders party thereto, and Bank of America, N.A. (Incorporated herein by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on September 9, 2019.)

10(r) - Second

10(s) - Earnout Agreement, dated as of July 29, 2019, ~~File No. 001-31337.)~~

by and between Dental Holding, LLC and Cantel Medical Corp. (Incorporated herein by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on July 30, 2019.)

10(t) – Registration Rights Agreement, dated as of October 1, 2019, by and between Dental Holdings, LLC and Cantel Medical Corp. (Incorporated herein by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on October 2, 2019.)

10(u)- Letter Agreement, dated as of December 12, 2019, by and between Dental Holding, LLC, Hu-Friedy Mfg. Co., LLC and Cantel Medical Corp. (Incorporated herein by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on December 16, 2019.)

10(v) - Stock Repurchase Agreement, dated as of February 13, 2020, by and between Cantel Medical Corp. and Dental Holding, LLC. (Incorporated herein by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on February 14, 2020.)

10 (w) - Cantel Medical Corp. Executive Severance and Change in Control Plan.*

~~Exhibit~~ 21 - Subsidiaries of Registrant.

~~Exhibit 23.1~~23 - Consent of Deloitte & Touche LLP.

~~Exhibit 23.2~~ ~~- Consent of Ernst & Young LLP.~~

~~Exhibit~~ 31.1 - Certification of Principal Executive Officer.

~~Exhibit~~ 31.2 - Certification of Principal Financial Officer.

~~Exhibit~~ 32 - Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

Cantel Medical Corp. 2020 Annual Report on Form 10-K

101The following materials from Cantel Medical Corp.’s Form 10-K for the fiscal year ended July 31, ~~2019,~~2020, formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets at July 31, ~~2019~~2020 and ~~2018,~~2019, (ii) Consolidated Statements of Income for each of the three years in the period ended July 31, ~~2019,~~2020, (iii) Consolidated Statements of Comprehensive Income for each of the three years in the period ended July 31, ~~2019,~~2020, (iv) Consolidated Statements of Changes in Stockholders’ Equity for each of the three years in the period ended July 31, ~~2019,~~2020, (v) Consolidated Statements of Cash Flows for each of the three years in the period ended July 31, ~~2019~~2020 and (vi) Notes to Consolidated Financial Statements.

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*Management contract or compensatory plan or arrangement of the Company required to be filed as an exhibit.

Item 16. Form 10-K Summary

None.

7187

Cantel Medical Corp. ~~2019~~2020 Annual Report on Form 10-K

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 MEDICAL CORP.

Date: September 25, ~~2019~~2020

~~By:~~

By:

/s/ George L. Fotiades

George L. Fotiades, President,

Chief Executive Officer

(Principal Executive Officer)

~~By:~~

By:

/s/ Shaun M. Blakeman

Shaun M. Blakeman, Senior Vice President,

Chief Financial Officer

(Principal Financial Officer)

~~By:~~

By:

/s/ Brian R. Capone

Brian R. Capone, Senior Vice President,

Chief Accounting Officer

(Principal Accounting Officer)

Cantel Medical Corp. ~~2019~~2020 Annual Report on Form 10-K

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:



/s/ Charles M. Diker	Date:	~~Date:~~	September 25, ~~2019~~2020
Charles M. Diker, Director and Chairman of the Board

/s/ Alan. R. Batkin	Date:	~~Date:~~	September 25, ~~2019~~2020
Alan R. Batkin, Lead Independent Director

/s/ Ann E. Berman	Date:	~~Date:~~	September 25, ~~2019~~2020
Ann E. Berman, Director

/s/ Mark N. Diker	Date:	~~Date:~~	September 25, ~~2019~~2020
Mark N. Diker, Director

/s/ Anthony B. Evnin	Date:	~~Date:~~	September 25, ~~2019~~2020
Anthony B. Evnin, Director

/s/ Laura L. Forese	Date:	~~Date:~~	September 25, ~~2019~~2020
Laura L. Forese, Director

/s/ George L. Fotiades	Date:	~~Date:~~	September 25, ~~2019~~2020
George L. Fotiades, Director, President and CEO

/s/ Ronnie Myers	Date	~~Date~~	September 25, ~~2019~~2020
Ronnie Myers, Director

/s/ Karen N. Prange	Date:	September 25, 2020
Karen N. Prange, Director

/s/ Peter J. Pronovost, M.D., Ph.D.	Date:	~~Date:~~	September 25, ~~2019~~2020
Peter J. Pronovost, M.D., Ph.D., Director

7389



Delaware						22-1760285
(State or other jurisdiction of incorporation or organization)						(I.R.S. employer identification no.)
150 Clove Road, Little Falls, New Jersey						07424
(Address of principal executive offices)						(Zip code)


				Page No.
			~~Page No.~~
	PART I
Item 1.		Business		3
Item 1A.		Risk Factors		910
Item 1B.		Unresolved Staff Comments		1619
Item 2.		Properties		1619
Item 3.		Legal Proceedings		1720
Item 4.		Mine Safety Disclosures		1720
		PART II
Item 5.		Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		1720
Item 6.		Selected Consolidated Financial Data		1922
Item 7.		Management's Discussion and Analysis of Financial Condition and Results of Operations		1922
Item 7A.		Quantitative and Qualitative Disclosures About Market Risk		3237
Item 8.		Financial Statements and Supplementary Data		3339
		Reports of Independent Registered Public Accounting Firm		3339
		Consolidated Balance Sheets		3744
		Consolidated Statements of Income		3845
		Consolidated Statements of Comprehensive Income		3946
		Consolidated Statements of Changes in ~~Stockholders'~~Stockholders ’ Equity		4047
		Consolidated Statements of Cash Flows		4148
		Notes to Consolidated Financial Statements		4249
		Schedule II - Schedule of Valuation and Qualifying Accounts		6681
Item 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		6681
Item 9A.		Controls and Procedures		6682
Item 9B.		Other Information		6883
		PART III
Item 10.		Directors, Executive Officers and Corporate Governance		6883
Item 11.		Executive Compensation		6883
Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		6883
Item 13.		Certain Relationships and Related Transactions, and Director Independence		6883
Item 14.		Principal Accountant Fees and Services		6883
		PART IV
Item 15.		Exhibits, Financial Statement Schedules		6984
Item 16.		Form 10-K Summary		7187
Signatures.					7288


Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares that may yet be under the plan or programs	Period	Total number of shares purchased⁽¹⁾	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares that may yet be under the plan or programs
May 1 - May 31	22	⁽¹⁾	$	68.94	—	—	May 1 - May 31	4,056	$	35.94	—	—
June 1 - June 30	224	⁽¹⁾	$	71.01	—	—	June 1 - June 30	—	$	—	—	—
July 1 - July 31	1,094	⁽¹⁾	$	87.85	—	—	July 1 - July 31	1,176	$	43.88	—	—
	1,340	⁽¹⁾	$	84.73	—	—		5,232	$	37.73	—	—


	July 31,
	2015		2016		2017		2018		2019		2020
Cantel Medical Corp.⁽¹⁾	$	100.00	$	122.23	$	135.71	$	169.85	$	169.49	$	86.93
Russell 2000 Index	$	100.00	$	100.00	$	118.45	$	140.64	$	134.43	$	128.26
Dow Jones U.S. Health Care Equipment & Services Index	$	100.00	$	105.81	$	122.36	$	153.07	$	169.27	$	199.76



	July 31,
	2014		2015		2016		2017		2018		2019
Cantel Medical Corp.⁽¹⁾	$	100.00	$	164.02	$	200.47	$	222.59	$	278.58	$	277.99
Russell 2000 Index	$	100.00	$	112.03	$	112.03	$	132.70	$	157.56	$	149.74
Dow Jones U.S. Health Care Equipment & Services Index	$	100.00	$	131.02	$	138.64	$	160.32	$	200.55	$	221.78



☒			Annual Report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934



☐			Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


~~(1)~~	The Company does not currently have a share repurchase program. All of the shares purchased during the fourth quarter of fiscal 2019 represent shares surrendered to the Company to pay employee withholding taxes due upon the vesting of restricted stock.


~~(1)~~	~~$100 invested on July 31, 2014 in Cantel Medical Corp.'s common stock or index, including reinvestment of dividends. Indexes are calculated on month-end basis.~~


	Year Ended July 31,
Consolidated Statements of Income Data	2020		2019		2018		2017		2016
Net sales	$	1,016,048	$	918,155	$	871,922	$	770,157	$	664,755
Cost of Sales	580,075		490,701		457,951		402,997		355,569
Gross profit	435,973		427,454		413,971		367,160		309,186

Income from operations	48,307		83,519		121,664		110,410		97,251
Interest expense, net	41,355		9,505		5,289		4,303		3,320
Other income	—		(1,305)		(1,138)		(126)		—

Income before income taxes	6,952		75,319		117,513		106,233		93,931
Income taxes	(6,756)		20,277		26,472		34,855		33,978
Net income	$	13,708	$	55,042	$	91,041	$	71,378	$	59,953
Earnings Per Share Data
Weighted average basic shares outstanding	42,238,282		41,700,926		41,567,722		41,468,487		41,344,013
Weighted average diluted shares outstanding	42,309,216		41,757,116		41,635,078		41,542,765		41,390,194
Basic earnings per common share	$	0.32	$	1.32	$	2.18	$	1.71	$	1.44
Diluted earnings per common share	$	0.32	$	1.32	$	2.18	$	1.71	$	1.44
Dividends per common share	$	0.105	$	0.20	$	0.17	$	0.14	$	0.12
Other Financial Data
Net cash provided by operating activities	$	136,857	66,931		$	125,912	$	108,193	$	80,268
Capital expenditures	33,796		95,438		37,698		27,065		18,889
Acquisition of businesses, net of cash acquired	721,350		40,644		87,488		70,044		94,528
Depreciation	30,441		21,510		17,473		15,045		11,989
Amortization	32,961		20,849		17,357		18,407		13,095
	July 31,
Consolidated Balance Sheets Data	2020		2019		2018		2017		2016
Cash and cash equivalents	$	277,871	$	44,535	$	94,097	$	36,584	$	28,367
Total assets	2,071,754		1,070,366		963,708		786,373		694,532
Working capital	467,130		200,396		203,460		150,592		126,407
Long-term debt	1,113,375		233,000		200,000		126,000		116,000
Stockholders’ equity	729,599		661,537		608,867		523,932		454,370


	Year Ended July 31,															Percentage Change					Year Ended July 31,																			Percentage Change
Statement of income data	2019					2018					2017					2019 / 2018		2018 / 2017		Statement of income data	2020						2019						2018					2020 / 2019	2019 / 2018
Net sales	$	918,155		100.0	%	$	871,922		100.0	%	$	770,157		100.0	%	5.3	%	13.2	%	Net sales	$	1,016,048	100.0	%	$	918,155	100.0	%	$	871,922	100.0	%		10.7	%	5.3	%
Cost of sales	490,701			53.4	%	457,951			52.5	%	402,997			52.3	%	7.2	%	13.6	%	Cost of sales	580,075		57.1	%	490,701		53.4	%	457,951		52.5	%		18.2	%	7.2	%
Gross profit	427,454			46.6	%	413,971			47.5	%	367,160			47.7	%	3.3	%	12.7	%	Gross profit	435,973		42.9	%	427,454		46.6	%	413,971		47.5	%		2.0	%	3.3	%

Selling	140,232			15.3	%	129,642			14.9	%	116,113			15.1	%	8.2	%	11.7	%	Selling	157,732		15.5	%	140,232		15.3	%	129,642		14.9	%		12.5	%	8.2	%
General and administrative	172,383			18.8	%	138,019			15.8	%	122,270			15.9	%	24.9	%	12.9	%	General and administrative	197,562		19.4	%	172,383		18.8	%	138,019		15.8	%		14.6	%	24.9	%
Research and development	31,320			3.4	%	24,646			2.8	%	18,367			2.4	%	27.1	%	34.2	%	Research and development	32,372		3.2	%	31,320		3.4	%	24,646		2.8	%		3.4	%	27.1	%
Total operating expenses	343,935			37.5	%	292,307			33.5	%	256,750			33.4	%	17.7	%	13.8	%	Total operating expenses	387,666		38.1	%	343,935		37.5	%	292,307		33.5	%		12.7	%	17.7	%

Income from operations	83,519			9.1	%	121,664			14.0	%	110,410			14.3	%	(31.4	)%	10.2	%	Income from operations	48,307		4.8	%	83,519		9.1	%	121,664		14.0	%		(42.2)	%	(31.4)	%

Interest expense, net	9,505			1.0	%	5,289			0.6	%	4,303			0.5	%	79.7	%	22.9	%	Interest expense, net	41,355		4.1	%	9,505		1.0	%	5,289		0.6	%		335.1	%	79.7	%
Other income	(1,305		)	(0.1	)%	(1,138		)	(0.1	)%	(126		)	—	%	—	%	—	%	Other income	—		—	%	(1,305)		(0.1)	%	(1,138)		(0.1)	%		—	%	—	%
Income before income taxes	75,319			8.2	%	117,513			13.5	%	106,233			13.8	%	(35.9	)%	10.6	%	Income before income taxes	6,952		0.7	%	75,319		8.2	%	117,513		13.5	%		(90.8)	%	(35.9)	%
Income taxes	20,277			2.2	%	26,472			3.1	%	34,855			4.5	%	(23.4	)%	(24.1	)%	Income taxes	(6,756)		(0.6)	%	20,277		2.2	%	26,472		3.1	%		(133.3)	%	(23.4)	%
Net income	$	55,042		6.0	%	$	91,041		10.4	%	$	71,378		9.3	%	(39.5	)%	27.5	%	Net income	$	13,708	1.3	%	$	55,042	6.0	%	$	91,041	10.4	%		(75.1)	%	(39.5)	%


	Year Ended July 31,
Net sales by segment	2020						2019						2018
Medical	$	468,078	46.1	%	$	523,669	57.0	%	$	473,937	54.4	%
Life Sciences	195,410		19.2	%	194,950		21.2	%	211,210		24.2	%
Dental	322,398		31.7	%	167,680		18.3	%	155,180		17.8	%
Dialysis	30,162		3.0	%	31,856		3.5	%	31,595		3.6	%
Total net sales	$	1,016,048	100.0	%	$	918,155	100.0	%	$	871,922	100.0	%
Net sales by geography
United States	$	742,410	73.1	%	$	665,661	72.5	%	$	643,744	73.9	%
International	273,638		26.9	%	252,494		27.5	%	228,178		26.1	%
Total net sales	$	1,016,048	100.0	%	$	918,155	100.0	%	$	871,922	100.0	%


~~(1)~~	~~Amounts were recorded in general and administrative expenses.~~


~~(2)~~	For comparative purposes, we have revised the amounts associated with CEO retirement costs for the twelve months ended July 31, 2017 to exclude stock-based compensation expense which was reported in “Stock-based compensation expense” above.


(Unaudited)	July 31, 2020		July 31, 2019
Long-term debt (excluding debt issuance costs)	$	945,375	$	233,000
Convertible debt (excluding debt issuance costs and discount)	168,000		—
Less cash and cash equivalents	(277,871)		(44,535)
Net debt	$	835,504	$	188,465


	July 31,																			July 31,
	2019						2018						2017							2020						2019						2018
Net income/Diluted EPS, as reported	$	55,042		$	1.32		$	91,041		$	2.18		$	71,378		$	1.71		Net income/Diluted EPS, as reported	$	13,708	$	0.32	$	55,042	$	1.32	$	91,041	$	2.18
Intangible amortization, net of tax⁽¹⁾	16,021			0.38			13,267			0.32			12,800			0.30			Intangible amortization, net of tax⁽¹⁾	24,944		0.59		16,021		0.38		13,267		0.32
Acquisition-related items, net of tax⁽²⁾	9,689			0.23			2,835			0.07			1,533			0.04			Acquisition-related items, net of tax⁽²⁾	22,564		0.54		9,689		0.23		2,835		0.07
Restructuring-related charges, net of tax⁽³⁾	18,015			0.43			4,658			0.11			2,057			0.05			Restructuring-related charges, net of tax⁽³⁾	16,626		0.39		18,015		0.43		4,658		0.11
Non-cash interest, net of tax⁽⁴⁾																			Non-cash interest, net of tax⁽⁴⁾	2,220		0.05		—		—		—		—
Litigation matters, net of tax⁽¹⁾	134			—			1,637			0.04			—			—			Litigation matters, net of tax⁽¹⁾	—		—		134		—		1,637		0.04
CEO retirement costs, net of tax⁽¹⁾	—			—			—			—			1,213			0.03
Loss on debt extinguishment, net of tax⁽⁴⁾	—			—			91			—			—			—			Loss on debt extinguishment, net of tax⁽⁴⁾	—		—		—		—		91		—
Gain on disposition of business, net of tax⁽⁵⁾	(943		)	(0.02		)	—			—			—			—			Gain on disposition of business, net of tax⁽⁵⁾	95		—		—		—		—		—
Loss on disposition of product line, net of tax⁽¹⁾																			Loss on disposition of product line, net of tax⁽¹⁾	—		—		(943)		(0.02)		—		—
Resolution of contingent liability⁽⁵⁾	—			—			(1,138		)	(0.03		)	—			—			Resolution of contingent liability⁽⁵⁾	—		—		—		—		(1,138)		(0.03)
Excess tax benefits⁽⁶⁾	(584		)	(0.01		)	(2,173		)	(0.05		)	(2,241		)	(0.05		)	Excess tax benefits⁽⁶⁾	559		0.01		(584)		(0.01)		(2,173)		(0.05)
Tax matters⁽⁶⁾	1,625			0.04			(5,872		)	(0.13		)	—			—			Tax matters⁽⁶⁾	(10,864)		(0.25)		1,625		0.04		(5,872)		(0.13)
Non-GAAP net income/Non-GAAP diluted EPS	$	98,999		$	2.37		$	104,346		$	2.51		$	86,740		$	2.08		Non-GAAP net income/Non-GAAP diluted EPS	$	69,852	$	1.65	$	98,999	$	2.37	$	104,346	2.51



	Net Sales		Medical Net Sales		Life Sciences Net Sales		Dental Net Sales		Dialysis Net Sales
Net sales growth	5.3	%	10.5	%	(7.4	)%	8.2	%	0.8	%
Impact due to foreign currency translation	1.0	%	1.7	%	0.3	%	—	%	0.2	%
Sales related to acquisitions	(2.4	)%	(0.7	)%	(2.2	)%	(8.4	)%	—	%
Organic sales growth	3.9	%	11.5	%	(9.3	)%	(0.2	)%	1.0	%


~~(1)~~	Does not include anticipated required payments under the Delayed Draw Facility related to the financing of the Hu-Friedy acquisition. However, anticipated payments will be $7,125, $9,500, $9,500 and $373,875 for fiscal 2020, 2021, 2022 and 2023, respectively.


																																				Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock, at cost			Total Stockholders’ Equity
						Additional Paid-in Capital				Retained Earnings				Accumulated Other Comprehensive Loss				Treasury Stock, at cost			Total Stockholders’ Equity					Common Stock
	Common Stock																Shares							Amount
	Shares		Amount
Balance, August 1, 2016	41,708,214		$	4,608					$	165,573			$				342,053								$	(11,795	)	$	(46,069	)		$	454,370
Repurchases of shares	(89,607	)	—						—				—				—						(6,910		)		(6,910	)
Stock-based compensation	—		—			8,844				—					—					—			8,844
Equity vests/option exercises	116,506		12			(12		)		—				—				—			—
Cancellations of restricted stock	(6,179	)	(1		)	1				—				—				—			—
Excess tax benefit from exercises of stock options and vesting of restricted stock	—		—			196				—				—				—			196
Dividends on common stock	—		—			—				(5,841		)		—				—			(5,841		)
Net income	—		—			—				71,378				—				—			71,378
Other comprehensive income	—		—			—				—				1,895				—			1,895
Balance, July 31, 2017	41,728,934		$	4,619		$	174,602			$	407,590			$	(9,900	)		$	(52,979	)	$	523,932
Balance, August 1, 2017																								Balance, August 1, 2017		41,728,934					$	4,619		$	174,602		$	407,590		$	(9,900)		$	(52,979)		$	523,932
Repurchases of shares	(62,559	)	—			—				—				—				(7,074		)	(7,074		)	Repurchases of shares		(62,559)					—			—		—			—			(7,074)			(7,074)
Stock-based compensation	—		—			9,615				—				—				—			9,615			Stock-based compensation		—					—			9,615		—			—			—			9,615
Equity vests/option exercises	46,551		5			(5		)		—				—				—			—			Equity vests/option exercises		46,551					5			(5)		—			—			—			—
Cancellations of restricted stock	(6,842	)	—			—				—				—				—			—			Cancellations of restricted stock		(6,842)					—			—		—			—			—			—
Dividends on common stock	—		—			—				(7,091		)		—				—			(7,091		)	Dividends on common stock		—					—			—		(7,091)			—			—			(7,091)
Net income	—		—			—				91,041				—				—			91,041			Net income		—					—			—		91,041			—			—			91,041
Other comprehensive loss	—		—			—				—				(1,556		)		—			(1,556		)	Other comprehensive loss		—					—			—		—			(1,556)			—			(1,556)
Balance, July 31, 2018	41,706,084		$	4,624		$	184,212			$	491,540			$	(11,456	)		$	(60,053	)	$	608,867		Balance, July 31, 2018		41,706,084					4,624			184,212		491,540			(11,456)			(60,053)			608,867
Repurchases of shares	(43,734	)	—			—				—				—				(4,741		)	(4,741		)	Repurchases of shares		(43,734)					—			—		—			—			(4,741)			(4,741)
Stock-based compensation	—		—			15,562				—				—				—			15,562			Stock-based compensation		—					—			15,562		—			—			—			15,562
Issuance of shares	42,703		4			3,206				—				—				—			3,210			Issuance of shares		42,703					4			3,206		—			—			—			3,210
Equity vests/option exercises	67,862		8			942				—				—				—			950			Equity vests/option exercises		67,862					8			942		—			—			—			950
Cancellations of restricted stock	(1,687	)	—			—				—				—				—			—			Cancellations of restricted stock		(1,687)					—			—		—			—			—			—
Dividends on common stock	—		—			—				(8,350		)		—				—			(8,350		)	Dividends on common stock		—					—			—		(8,350)			—			—			(8,350)
Net income	—		—			—				55,042				—				—			55,042			Net income		—					—			—		55,042			—			—			55,042
Cumulative impact of ASC 606 adoption	—		—			—				865				—				—			865			Cumulative impact of ASC 606 adoption		—					—			—		865			—			—			865
Other comprehensive loss	—		—			—				—				(10,741		)		—			(10,741		)	Other comprehensive loss		—					—			—		—			(10,741)			—			(10,741)
Other	—		—			873				—				—				—			873			Other		—					—			873		—			—			—			873
Balance, July 31, 2019	41,771,228		$	4,636		$	204,795			$	539,097			$	(22,197	)		$	(64,794	)	$	661,537		Balance, July 31, 2019		41,771,228					4,636			204,795		539,097			(22,197)			(64,794)			661,537
Repurchases of shares																								Repurchases of shares		(497,217)					(44)			(28,236)		—			—			(4,063)			(32,343)
Stock-based compensation																								Stock-based compensation		—					—			12,076		—			—			—			12,076
Issuance of shares																								Issuance of shares		751,471					75			54,316		—			—			—			54,391
Equity vests/option exercises																								Equity vests/option exercises		137,914					14			905		—			—			—			919
Cancellations of restricted stock																								Cancellations of restricted stock		(1,178)					—			—		—			—			—			—
Dividends on common stock																								Dividends on common stock		—					—			—		(4,471)			—			—			(4,471)
Net income																								Net income		—					—			—		13,708			—			—			13,708
Equity component of convertible debt																								Equity component of convertible debt		—					—			29,184		—			—			—			29,184
Other comprehensive loss																								Other comprehensive loss		—					—			—		—			(5,402)			—			(5,402)
Balance, July 31, 2020																								Balance, July 31, 2020		42,162,218					$	4,681		$	273,040	$	548,334		$	(27,599)		$	(68,857)		$	729,599


	Year Ended July 31, 2020
Operating lease costs
Amortization of right-of-use assets	$	10,292
Interest on lease obligations	1,226
Finance lease costs:
Amortization of right-of-use assets	650
Interest on lease obligations	885
Variable lease costs	3,256
Short-term lease costs	1,427
Net lease cost	$	17,736


	Year Ended July 31, 2020
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases⁽¹⁾	$	20,450
Finance leases⁽²⁾	$	4,920


										July 31, 2020
	July 31, 2019									Level 1		Level 2		Level 3		Total
	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents:									Cash and cash equivalents:
Money markets	$	104	$	—	$	—	$	104	Money markets	$	106	$	0	$	0	$	106
Prepaid expenses and other current assets:
Total assets									Total assets	$	106	$	0	$	0	$	106

Accrued expenses:									Accrued expenses:
Interest rate swap	—		486		—		486		Interest rate swap	$	0	$	5,462	$	0	$	5,462
Other Assets:
Contingent consideration									Contingent consideration	0		0		0		0
Other long-term liabilities:									Other long-term liabilities:
Interest rate swap	—		2,826		—		2,826		Interest rate swap	0		15,694		0		15,694
Total assets	$	104	$	3,312	$	—	$	3,416
Liabilities:
Other long-term liabilities:
Contingent consideration	—		—		1,411		1,411
Total liabilities	$	—	$	—	$	1,411	$	1,411	Total liabilities	$	0	$	21,156	$	0	$	21,156



	July 31, 2018
	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents:
Money markets	$	104	$	—	$	—	$	104
Total assets	$	104	$	—	$	—	$	104
Liabilities:
Other long-term liabilities:
Contingent consideration	—		—		1,298		1,298
Total liabilities	$	—	$	—	$	1,298	$	1,298



	Aexis Medical Contingent Consideration		Jet Prep Assumed Contingent Obligation			Cantel Medical (U.K.) Contingent Guaranteed Obligation			Total
Balance, August 1, 2016	$	—	$	1,138		$	441		$	1,579
Income included in general and administrative expenses	—		—			(265		)	(265		)
Net purchases, issuances, sales and settlements	—		—			(176		)	(176		)
Balance, July 31, 2017	—		1,138			—			1,138
Original fair value of contingent consideration	1,292		—			—			1,292
Loss included in general and administrative expenses	6		—			—			6
Net purchases, issuances, sales and settlements	—		(1,138		)	—			(1,138		)
Balance, July 31, 2018	1,298		—			—			1,298
Loss included in general and administrative expense	113		—			—			113
Balance, July 31, 2019	$	1,411	$	—		$	—		$	1,411


	Aexis Contingent Consideration		Jet Prep Assumed Contingent Obligation		Hu-Friedy Contingent Consideration (Earnouts)		Hu-Friedy Contingent Consideration (Stock Price)		Total
Balance, August 1, 2017	$	0	$	1,138	$	0	$	0	$	1,138
Acquisitions	1,292		0		0		0		1,292
Fair value adjustments⁽¹⁾	6		0		0		0		6
Settlements/payments	0		(1,138)		0		0		(1,138)
Balance, July 31, 2018	1,298		0		0		0		1,298
Fair value adjustments⁽¹⁾	113		0		0		0		113
Balance, July 31, 2019	1,411		0		0		0		1,411
Acquisitions	0		0		35,100		3,271		38,371
Fair value adjustments⁽¹⁾	280		0		(10,100)		3,450		(6,370)
Settlements/payments	(1,691)		$	0	$	(25,000)	$	(6,721)	(33,412)
Balance, July 31, 2020	$	0	$	0	$	0	$	0	$	0



	July 31, 2019							July 31, 2018
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Intangible assets with finite lives⁽¹⁾:
Customer relationships⁽²⁾	$	146,204	$	(54,866	)	$	91,338	$	133,347	$	(45,618	)	$	87,729
Technology⁽³⁾	60,032		(24,081		)	35,951		54,585		(19,836		)	34,749
Brand names⁽²⁾	8,361		(3,256		)	5,105		8,141		(3,857		)	4,284
Non-compete agreements⁽⁴⁾	2,880		(1,653		)	1,227		3,060		(1,628		)	1,432
Patents and other registrations⁽⁵⁾	2,866		(1,252		)	1,614		2,826		(1,179		)	1,647
	220,343		(85,108		)	135,235		201,959		(72,118		)	129,841
Trademarks and tradenames	6,278		—			6,278		7,520		—			7,520
Total intangible assets	$	226,621	$	(85,108	)	$	141,513	$	209,479	$	(72,118	)	$	137,361


~~(1)~~	~~During fiscal 2019, we wrote off $6,087 of fully amortized intangible assets.~~


~~(2)~~	~~Weighted average amortization period remaining of 13 years.~~


~~(3)~~	~~Weighted average amortization period remaining of 10 years.~~


~~(4)~~	~~Weighted average amortization period remaining of 15 years.~~


~~(5)~~	~~Weighted average amortization period remaining of 18 years.~~


~~(1)~~	(1) During fiscal 2018, we revised our estimated annual rate to reflect a blended U.S. federal statutory rate of 26.9% as compared to 35.0%.


	Unrecognized Tax Benefits⁽¹⁾
Balance, July 31, 2018	$	0

Additions for tax positions of prior years	432
Balance, July 31, 2019	432
Lapses in statutes of limitations	(8)
Additions for tax positions of prior years	302
Foreign currency translation	20
Balance, July 31, 2020	$	746



Fiscal year ending:	Total
2020	$	9,099
2021	7,671
2022	6,021
2023	5,659
2024	5,159
Thereafter	15,251
Total	$	48,860


	Foreign Currency Translation Adjustments		Changes in Fair Value of Interest Rate Swaps⁽¹⁾		Tax effects		Total
Balance, August 1, 2017	$	(9,900)	$	0	$	0	$	(9,900)
Other comprehensive loss	(1,556)		0		0		(1,556)
Balance, July 31, 2018	(11,456)		0		0		(11,456)
Other comprehensive loss	(13,287)		3,312		(766)		(10,741)
Balance, July 31, 2019	(24,743)		3,312		(766)		(22,197)
Other comprehensive loss	11,951		(22,905)		5,552		(5,402)
Balance, July 31, 2020	$	(12,792)	$	(19,593)	$	4,786	$	(27,599)


	2020		2019
Volatility of common stock	30.73	%	27.54	%
Average volatility of peer companies	36.28	%	36.55	%
Average correlation coefficient of peer companies	24.63	%	27.18	%
Risk-free interest rate	1.49	%	2.93	%