Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Aug. 31, 2019 | Jan. 31, 2019 | |
Document and Entity Information | |||
Entity Registrant Name | CANTEL MEDICAL CORP | ||
Entity Central Index Key | 0000019446 | ||
Document Type | 10-K | ||
Document Period End Date | Jul. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --07-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3,396,948,246 | ||
Entity Common Stock, Shares Outstanding | 41,771,036 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 44,535 | $ 94,097 |
Accounts receivable, net of allowance for doubtful accounts of $2,322 and $1,149 | 146,910 | 118,642 |
Inventories, net | 138,234 | 107,592 |
Prepaid expenses and other current assets | 20,920 | 17,912 |
Income taxes receivable | 1,197 | 0 |
Total current assets | 351,796 | 338,243 |
Property and equipment, net | 185,242 | 111,417 |
Intangible assets, net | 141,513 | 137,361 |
Goodwill | 378,109 | 368,027 |
Other assets | 9,425 | 5,749 |
Deferred income taxes | 4,281 | 2,911 |
Total assets | 1,070,366 | 963,708 |
Current liabilities: | ||
Accounts payable | 39,450 | 34,258 |
Compensation payable | 32,762 | 30,595 |
Accrued expenses | 38,545 | 28,525 |
Deferred revenue | 27,840 | 28,614 |
Current portion of long-term debt | 10,000 | 10,000 |
Income taxes payable | 2,803 | 2,791 |
Total current liabilities | 151,400 | 134,783 |
Long-term debt | 220,851 | 187,302 |
Deferred income taxes | 29,278 | 27,624 |
Other long-term liabilities | 7,300 | 5,132 |
Total liabilities | 408,829 | 354,841 |
Commitments and Contingencies (Note 12) | ||
Stockholders’ equity: | ||
Preferred Stock, par value $1.00 per share; authorized 1,000,000 shares; none issued | 0 | 0 |
Common Stock, par value $.10 per share; Authorized 75,000,000 shares; issued 46,362,902 shares and outstanding 41,771,228 shares as of July 31, 2019; issued 46,243,582 shares and outstanding 41,706,084 shares as of July 31, 2018 | 4,636 | 4,624 |
Additional paid-in capital | 204,795 | 184,212 |
Retained earnings | 539,097 | 491,540 |
Accumulated other comprehensive loss | (22,197) | (11,456) |
Treasury Stock, at cost; 4,591,674 shares as of July 31, 2019; 4,537,498 shares as of July 31, 2018 | (64,794) | (60,053) |
Total stockholders’ equity | 661,537 | 608,867 |
Total liabilities and stockholders’ equity | $ 1,070,366 | $ 963,708 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 2,322 | $ 1,149 |
Preferred Stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred Stock, authorized shares | 1,000,000 | 1,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common Stock, authorized shares | 75,000,000 | 75,000,000 |
Common Stock, shares issued | 46,362,902 | 46,243,582 |
Common Stock, shares outstanding | 41,771,228 | 41,706,084 |
Treasury Stock, shares | 4,591,674 | 4,537,498 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Net sales | |||
Net sales | $ 918,155 | $ 871,922 | $ 770,157 |
Cost of sales | |||
Cost of sales | 490,701 | 457,951 | 402,997 |
Gross profit | 427,454 | 413,971 | 367,160 |
Expenses: | |||
Selling | 140,232 | 129,642 | 116,113 |
General and administrative | 172,383 | 138,019 | 122,270 |
Research and development | 31,320 | 24,646 | 18,367 |
Total operating expenses | 343,935 | 292,307 | 256,750 |
Income from operations | 83,519 | 121,664 | 110,410 |
Interest expense, net | 9,505 | 5,289 | 4,303 |
Other income | (1,305) | (1,138) | (126) |
Income before income taxes | 75,319 | 117,513 | 106,233 |
Income taxes | 20,277 | 26,472 | 34,855 |
Net income | $ 55,042 | $ 91,041 | $ 71,378 |
Earnings per common share: | |||
Basic (in dollars per share) | $ 1.32 | $ 2.18 | $ 1.71 |
Diluted (in dollars per share) | 1.32 | 2.18 | 1.71 |
Dividends per common share (in dollars per share) | $ 0.20 | $ 0.17 | $ 0.14 |
Product sales | |||
Net sales | |||
Net sales | $ 795,403 | $ 765,158 | $ 684,678 |
Cost of sales | |||
Cost of sales | 406,514 | 385,597 | 343,641 |
Product service | |||
Net sales | |||
Net sales | 122,752 | 106,764 | 85,479 |
Cost of sales | |||
Cost of sales | $ 84,187 | $ 72,354 | $ 59,356 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 55,042 | $ 91,041 | $ 71,378 |
Other comprehensive (loss) income: | |||
Foreign currency translation | (13,287) | (1,556) | 1,895 |
Interest rate swap, net of tax | 2,546 | 0 | 0 |
Total other comprehensive (loss) income: | (10,741) | (1,556) | 1,895 |
Comprehensive income | $ 44,301 | $ 89,485 | $ 73,273 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock, at cost |
Beginning Balance (in shares) at Jul. 31, 2016 | 41,708,214 | |||||
Beginning Balance at Jul. 31, 2016 | $ 454,370 | $ 4,608 | $ 165,573 | $ 342,053 | $ (11,795) | $ (46,069) |
Increase (Decrease) in Stockholders' Equity | ||||||
Repurchases of shares (in shares) | (89,607) | |||||
Repurchases of shares | (6,910) | (6,910) | ||||
Stock-based compensation | $ 8,844 | 8,844 | ||||
Equity vests/option exercises (in shares) | 0 | 116,506 | ||||
Equity vests/option exercises | $ 0 | $ 12 | (12) | |||
Cancellations of restricted stock (in shares) | (6,179) | |||||
Cancellations of restricted stock | 0 | $ (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 (loss) | 1,895 | 1,895 | ||||
Ending Balance (in shares) at Jul. 31, 2017 | 41,728,934 | |||||
Ending Balance at Jul. 31, 2017 | 523,932 | $ 4,619 | 174,602 | 407,590 | (9,900) | (52,979) |
Increase (Decrease) in Stockholders' Equity | ||||||
Repurchases of shares (in shares) | (62,559) | |||||
Repurchases of shares | (7,074) | (7,074) | ||||
Stock-based compensation | $ 9,615 | 9,615 | ||||
Equity vests/option exercises (in shares) | 52,500 | 46,551 | ||||
Equity vests/option exercises | $ 0 | $ 5 | (5) | |||
Cancellations of restricted stock (in shares) | (6,842) | |||||
Cancellations of restricted stock | 0 | |||||
Dividends on common stock | (7,091) | (7,091) | ||||
Net income | 91,041 | 91,041 | ||||
Other comprehensive income (loss) | $ (1,556) | (1,556) | ||||
Ending Balance (in shares) at Jul. 31, 2018 | 41,706,084 | 41,706,084 | ||||
Ending Balance at Jul. 31, 2018 | $ 608,867 | $ 4,624 | 184,212 | 491,540 | (11,456) | (60,053) |
Increase (Decrease) in Stockholders' Equity | ||||||
Repurchases of shares (in shares) | (43,734) | |||||
Repurchases of shares | (4,741) | (4,741) | ||||
Stock-based compensation | 15,562 | 15,562 | ||||
Issuance of shares (in shares) | 42,703 | |||||
Issuance of shares | $ 3,210 | $ 4 | 3,206 | |||
Equity vests/option exercises (in shares) | 30,000 | 67,862 | ||||
Equity vests/option exercises | $ 950 | $ 8 | 942 | |||
Cancellations of restricted stock (in shares) | (1,687) | |||||
Cancellations of restricted stock | 0 | |||||
Dividends on common stock | (8,350) | (8,350) | ||||
Net income | 55,042 | 55,042 | ||||
Other comprehensive income (loss) | (10,741) | (10,741) | ||||
Other | $ 873 | 873 | ||||
Ending Balance (in shares) at Jul. 31, 2019 | 41,771,228 | 41,771,228 | ||||
Ending Balance at Jul. 31, 2019 | $ 661,537 | $ 4,636 | $ 204,795 | $ 539,097 | $ (22,197) | $ (64,794) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Cash flows from operating activities | |||
Net income | $ 55,042 | $ 91,041 | $ 71,378 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 21,510 | 17,473 | 15,045 |
Amortization | 20,849 | 17,357 | 18,407 |
Stock-based compensation expense | 15,562 | 9,615 | 8,844 |
Deferred income taxes | (2,062) | (7,520) | 118 |
Other non-cash items, net | (1,940) | 1,076 | 1,102 |
Changes in assets and liabilities, net of effects of business acquisitions/divestitures: | |||
Accounts receivable | (23,048) | (3,700) | (12,860) |
Inventories | (28,711) | (3,785) | 887 |
Prepaid expenses and other assets | (2,364) | (5,169) | (957) |
Accounts payable and other liabilities | 13,325 | 10,614 | 7,124 |
Income taxes | (1,232) | (1,090) | (895) |
Net cash provided by operating activities | 66,931 | 125,912 | 108,193 |
Cash flows from investing activities | |||
Capital expenditures | (95,438) | (37,698) | (27,065) |
Proceeds from disposal of fixed assets | 0 | 0 | 47 |
Proceeds from sale of business, net of cash retained and disposal costs | 3,053 | 0 | 0 |
Acquisition of businesses, net of cash acquired | (40,644) | (87,488) | (70,044) |
Net cash used in investing activities | (133,029) | (125,186) | (97,062) |
Cash flows from financing activities | |||
Proceeds from issuance of long-term debt | 0 | 200,000 | 0 |
Repayments of long-term debt | (15,207) | 0 | 0 |
Borrowings under revolving credit facility | 50,000 | 82,300 | 74,000 |
Repayments under revolving credit facility | (7,000) | (208,300) | (64,000) |
Debt issuance costs | 0 | (2,698) | 0 |
Dividends paid | (8,350) | (7,091) | (5,841) |
Purchases of treasury stock | (4,741) | (7,074) | (6,910) |
Net cash provided by (used in) financing activities | 14,702 | 57,137 | (2,751) |
Effect of exchange rate changes on cash and cash equivalents | 1,834 | (350) | (163) |
(Decrease) increase in cash and cash equivalents | (49,562) | 57,513 | 8,217 |
Cash and cash equivalents at beginning of period | 94,097 | 36,584 | 28,367 |
Cash and cash equivalents at end of period | 44,535 | 94,097 | 36,584 |
Supplemental disclosures of cash flow information: | |||
Cash interest payments | 9,296 | 5,156 | 3,455 |
Cash income tax payments | 19,024 | 35,251 | 35,858 |
Accruals related to purchases of property and equipment | $ 3,311 | $ 2,281 | $ 192 |
Business Description
Business Description | 12 Months Ended |
Jul. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Description | 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 2019 , 2018 , 2017 or “fiscal” 2019 , 2018 , 2017 or other years refer to our fiscal year ended July 31 of that respective year, and references to 2020 or “fiscal” 2020 refer to our fiscal year ending July 31, 2020 . 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 dental practitioners. 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, “Reportable Segments.” Most of our equipment, consumables and supplies are used to help prevent the occurrence or spread of infections. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 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 presentation. 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 through the date of issuance of the accompanying consolidated financial statements. See Note 19, “Subsequent Events.” 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 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 $9,469 , $8,401 , and $6,291 in fiscal 2019 , 2018 , and 2017 , 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. 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 2019 , 2018 and 2017 was $21,510 , $17,473 and $15,045 , respectively. Goodwill and Intangible Assets Certain of our identifiable intangible assets, including customer relationships, technology, brand names, non-compete agreements and patents, are amortized using the straight-line method over their estimated useful lives which range from 3 to 20 years. Additionally, we have recorded goodwill and trademarks and trade names, all of 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. We first assess 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 to be greater than the carrying value, we did not proceed to step one of the two-step quantitative goodwill impairment test for those two segments. We performed step one of the two-step quantitative goodwill impairment test for Dialysis due to the continuing 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 also performed step one of the two-step quantitative goodwill impairment test for Life Sciences as one of the segment’s key customers has been moving toward a dual source approach, in combination with a cyclical downturn in this business. In performing a detailed quantitative review for goodwill impairment, management uses a two-step process that begins 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. We perform our annual impairment review for 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 intangibles assets to their carrying values. At May 1, 2019 , because we determined through qualitative factors that the fair values of all of our indefinite lived intangible assets were more likely than not to be greater than the carrying value, we 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 recognize any impairment charges for goodwill or 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 , 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. Customer Relationship Intangible Assets Customer-relationship intangible assets are valued using an income-based valuation methodology which included 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. 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 and 2018 , such debt issuance costs, net of related amortization, were included as a reduction to long-term debt and amounted to $2,149 and $2,698 , respectively. 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 and water purification and filtration 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 and 2018 , our warranty reserves are included in accrued expenses in the consolidated balance sheets and amounted to $2,372 and $3,280 , respectively. Our warranty provisions and settlements in fiscal 2019 and 2018 were not material and principally relate to our endoscope reprocessing and water purification products. 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. Advertising Costs Our policy is to expense advertising costs as they are incurred. Advertising costs charged to expense were $2,885 , $4,115 and $3,694 in fiscal 2019 , 2018 and 2017 , 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. 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. If income tax rates were to change in the future, particularly in the United States 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, the FASB issued ASU 2017-12, “Targeted Improvements to Accounting for Hedging Activities,” (“ASU 2017-12”) to improve the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018 (our fiscal year 2020), including interim periods within that reporting period. We early adopted ASU 2017-12 effective August 1, 2018. The adoption of ASU 2017-12 did not have a material impact on our financial position, results of operations or cash flows. In May 2017, the FASB issued ASU 2017-09, “ (Topic 718) Scope of Modification Accounting ,” (“ASU 2017-09”) to provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC 718. ASU 2017-09 is effective for fiscal years beginning after December 15, 2017 (our fiscal year 2019), including interim periods within that reporting period. Accordingly, we adopted ASU 2017-09 on August 1, 2018. The adoption of ASU 2017-09 did not have a material impact on our financial position, results of operations or cash flows. In August 2016, the FASB issued ASU 2016-15, “(Topic 230) Classification of Certain Cash Receipts and Cash Payments , ” (“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 is effective for fiscal years beginning after December 15, 2017 (our fiscal year 2019). Accordingly, we adopted ASU 2016-15 on August 1, 2018. The adoption of ASU 2016-15 did not 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 Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service 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. In August 2018, the FASB issued ASU 2018-13, “ Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement ” (“ASU 2018-13”) to modify the disclosure requirements on fair value measurements in ASC 820, “Fair Value 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 2016, the FASB issued ASU 2016-02, “ (Topic 842) Leases, ” (“ASU 2016-02”) which requires lease assets and liabilities to be recorded on the balance sheet for leases with terms greater than twelve months. We will adopt this ASU and related amendments on August 1, 2019 and will elect certain practical expedients permitted under 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 associated with a recently announced acquisition, we currently estimate the impact of the adoption will result in the recognition of right of use assets and lease liabilities of approximately $30,000 to $35,000 as of August 1, 2019. The adoption of ASU 2016-02 is not expected to have a material impact on our results of operations or cash flows. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Jul. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 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, 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. The following table gives information as to the net sales disaggregated by geography and product line: Year Ended July 31, Net sales by geography 2019 2018 (1) United States $ 665,661 $ 643,744 Europe/Africa/Middle East 148,334 131,130 Asia/Pacific 66,228 57,108 Canada 32,152 33,524 Latin America/South America 5,780 6,416 Total $ 918,155 $ 871,922 Net sales by product line Capital equipment $ 221,668 $ 240,153 Consumables 569,412 523,073 Product service 122,752 106,764 All other (2) 4,323 1,932 Total $ 918,155 $ 871,922 _______________________________________________ (1) As noted above, prior year amounts have not been adjusted under the modified retrospective method. (2) Primarily includes software licensing revenues. Remaining Performance Obligations As of July 31, 2019 , the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) was approximately $73,735 , primarily within the Medical segment. We expect to recognize revenue on approximately 50% of these remaining performance obligations in fiscal 2020. These performance obligations primarily reflect the future product service revenues for multi-period service arrangements. Contract Liabilities A summary of contract liabilities activity for the year ended July 31, 2019 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 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. |
Acquisitions
Acquisitions | 12 Months Ended |
Jul. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions 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 $19,808 , consisting of $16,598 of cash and $3,210 of stock consideration, plus additional earn-outs ranging from zero to a maximum of $5,800 , which is 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. 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) The excess purchase price over net assets acquired was assigned to goodwill, all of which is deductible for income tax purposes. Unaudited Pro Forma Summary of Operations 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. |
Inventories, Net
Inventories, Net | 12 Months Ended |
Jul. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | Inventories, Net A summary of inventories, net, is as follows: July 31, 2019 2018 Raw materials and parts $ 69,498 $ 49,054 Work-in-process 5,801 13,189 Finished goods 73,050 53,948 Less: reserve for excess and obsolete inventory (10,115 ) (8,599 ) Total inventories, net $ 138,234 $ 107,592 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Jul. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net A summary of property and equipment, net, is as follows: July 31, 2019 2018 Land, buildings and improvements $ 81,556 $ 50,162 Furniture and equipment 130,852 112,661 Leasehold improvements 14,428 9,544 Software 33,869 8,587 Construction in process 38,728 26,003 Less: accumulated depreciation (114,191 ) (95,540 ) Total property and equipment, net $ 185,242 $ 111,417 |
Derivatives
Derivatives | 12 Months Ended |
Jul. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives Foreign Currency We recognize all derivatives on the balance sheet at fair value. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. If the derivative is designated as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in the fair value of the hedged assets, liabilities or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of the change in fair value of a derivative that is designated as a hedge will be recognized immediately in earnings. As of July 31, 2019 and 2018 , all of our derivatives were designated as hedges. We do not hold any derivative financial instruments for speculative or trading purposes. Changes in the value of the Euro, British Pound, Singapore dollar, Canadian dollar, Australian dollar, Chinese Renminbi and Sri Lankan Rupee against the U.S. dollar affect our results of operations because certain cash bank accounts, accounts receivable, and liabilities of Cantel and its subsidiaries are denominated and ultimately settled in U.S. dollars or these foreign currencies, but must be converted into each entity’s functional currency. In order to hedge against the impact of fluctuations in the value of the Euro, British Pound, Canadian dollar, Australian dollar, Singapore dollar and Chinese Renminbi relative to the U.S. dollar on the conversion of such net assets into the functional currencies, we enter into short-term forward contracts to purchase Euros, British Pounds, Canadian dollars, Australian dollars, Singapore dollars and Chinese Renminbi, which contracts are one -month in duration. These short-term contracts are designated as fair value hedge instruments. There were seven foreign currency forward contracts with an aggregate notional value of $78,264 at July 31, 2019 , and seven foreign currency forward contracts with an aggregate notional value of $30,159 at July 31, 2018 , which covered certain assets and liabilities that were denominated in currencies other than each entity’s functional currency. These foreign currency forward contracts are continually replaced with new one -month contracts as long as we have significant net assets that are denominated and ultimately settled in currencies other than each entity’s functional currency. For the fiscal years ended July 31, 2019 , 2018 and 2017 , such forward contracts offset the impact on operations relating to certain assets and liabilities that were denominated in currencies other than each entity’s functional currency. This resulted in an immaterial amounts of net currency conversion gains, net of tax, on the hedged items for each of those fiscal years. Gains and losses related to hedging contracts to buy Euros, British Pounds, Canadian dollars, Australian dollars, Singapore dollars and Chinese Renminbi forward are immediately realized within general and administrative expenses due to the short-term nature of such contracts. We do not currently hedge against the impact of fluctuations in the value of the Sri Lankan Rupee relative to the U.S. dollar because the overall foreign currency exposures relating to this currency is currently not deemed significant. Variable Rate Borrowings In order to hedge against the impact of fluctuations in the interest rate associated with our variable rate borrowings, on April 9, 2019, we entered into two interest rate swaps with a combined notional value of $150,000 , expiring on June 28, 2023. The swaps fixed interest rates at 2.265% . As of July 31, 2019, we had a short term asset of $486 recorded in prepaid expenses and other current assets, and a long term asset of $2,826 recorded in other assets, which represent the fair value of the interest rate swaps. The fair value of these interest rate swaps is subject to movements in LIBOR and will fluctuate in future periods. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jul. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair Value Hierarchy We apply the provisions of ASC 820, “Fair Value Measurements and Disclosures,” (“ASC 820”), for our financial assets and liabilities that are re-measured and reported at fair value each reporting period and our nonfinancial assets and liabilities that are re-measured and reported at fair value on a non-recurring basis. We define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three level fair value hierarchy to prioritize the inputs used in valuations, as defined below: Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs for the asset or liability. Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis Our financial assets that are re-measured at fair value on a recurring basis include money market funds that are classified as cash and cash equivalents in the consolidated balance sheets. These money market funds are classified within Level 1 of the fair value hierarchy and are valued using quoted market prices for identical assets. For the Aexis acquisition, additional purchase price payments ranging from $0 to $1,850 are contingent upon the achievement of certain purchase order targets through March 21, 2020. We estimated the original fair value of the contingent consideration using the weighted probabilities of the possible contingent payments. At the date of acquisition, we estimated the original fair value of the contingent consideration to be $1,292 . We are required to reassess the fair value of contingent payments on a periodic basis. The significant inputs used in these estimates include numerous possible scenarios for the payments based on the contractual terms of the contingent consideration, for which probabilities are assigned to each scenario. Given the short term nature of the financial instrument, the contingent consideration will not be discounted to present value. Although we believe our assumptions are reasonable, different assumptions or changes in the future may result in different estimated amounts. In connection with the Jet Prep Ltd. (“Jet Prep”) acquisition in fiscal 2014, we assumed a contingent obligation payable to the Israeli Government based on future sales. This fair value measurement was based on significant inputs not observed in the market and thus represent Level 3 measurements. In November 2017, the Israeli Government formally notified us that they would forgive any future amounts payable due to our decision to exit the Jet Prep business. During the first quarter of fiscal 2018, we reduced the fair value of this obligation to $0 . See Note 12, “Commitments and Contingencies.” The fair values of our financial instruments measured on a recurring basis were categorized as follows: July 31, 2019 Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents: Money markets $ 104 $ — $ — $ 104 Prepaid expenses and other current assets: Interest rate swap — 486 — 486 Other Assets: Interest rate swap — 2,826 — 2,826 Total assets $ 104 $ 3,312 $ — $ 3,416 Liabilities: Other long-term liabilities: Contingent consideration — — 1,411 1,411 Total liabilities $ — $ — $ 1,411 $ 1,411 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 A reconciliation of our liabilities that are measured and recorded at fair value on a recurring basis using significant unobservable inputs (Level 3) for fiscal 2019 , 2018 and 2017 is as follows: 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 Disclosure of Fair Value of Financial Instruments As of July 31, 2019 and 2018 , the carrying amounts for cash and cash equivalents (excluding money markets), accounts receivable and accounts payable approximated fair value due to the short maturity of these instruments. As of July 31, 2019 and 2018 , the carrying value of our outstanding borrowings under our credit facility approximated the fair value of these obligations as the borrowing rates reflect prevailing market interest rates. |
Intangibles and Goodwill
Intangibles and Goodwill | 12 Months Ended |
Jul. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangibles and Goodwill | Intangibles and Goodwill Our intangible assets with definite lives consist primarily of customer relationships, technology, brand names, non-compete agreements and patents. These intangible assets are being amortized on the straight-line method over the estimated useful lives of the assets ranging from 3 - 20 years and have a weighted average amortization period of 12 years . Amortization expense related to intangible assets was $20,849 , $17,357 and $18,407 for fiscal 2019 , 2018 and 2017 , respectively. Our intangible assets that have indefinite useful lives, and therefore are not amortized, consist of trademarks and trade names. Our intangible assets consist of the following: 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 . During fiscal 2017, we decided to exit the Jet Prep business that was acquired in fiscal 2014. The Jet Prep acquisition was a fully integrated business within our Medical segment. The useful life of the technology related intangible asset was revised to its respective cease use date, which resulted in accelerated amortization of approximately $2,401 that was recorded in the consolidated statement of income. We expect to recognize $18,025 , $17,706 , $17,324 , $16,294 and $15,427 of amortization expense related to intangible assets in fiscal 2020 , 2021 , 2022 , 2023 and 2024 , respectively. The expected amortization expense reflects those purchased intangible assets on our consolidated balance sheet as of July 31, 2019. Goodwill changed during fiscal 2019 and 2018 as follows: Medical Life Sciences Dental Dialysis Total Goodwill Balance, August 1, 2017 $ 129,945 $ 59,088 $ 114,279 $ 8,133 $ 311,445 Acquisitions 58,026 — — — 58,026 Foreign currency translation (1,281 ) (163 ) — — (1,444 ) Balance, July 31, 2018 186,690 58,925 114,279 8,133 368,027 Acquisitions — 6,137 11,340 — 17,477 Divestitures — (491 ) — — (491 ) Foreign currency translation (6,493 ) (90 ) (321 ) — (6,904 ) Balance, July 31, 2019 $ 180,197 $ 64,481 $ 125,298 $ 8,133 $ 378,109 |
Financing Arrangements
Financing Arrangements | 12 Months Ended |
Jul. 31, 2019 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | Financing Arrangements Our long-term debt consists of the following: July 31, 2019 2018 Revolving credit loans outstanding $ 43,000 $ — Tranche A term loan outstanding 190,000 200,000 Unamortized debt issuance costs (2,149 ) (2,698 ) Total long-term debt, net of unamortized debt issuance costs 230,851 197,302 Current portion of long-term debt (10,000 ) (10,000 ) Long-term debt, net of unamortized debt issuance costs and excluding current portion $ 220,851 $ 187,302 On June 28, 2018, we entered into a Fourth Amended and Restated Credit Agreement (the “2018 Credit Agreement”). The Amended Credit Agreement refinances our credit facility under the Third Amended and Restated Credit Agreement (the “Existing Credit Agreement”) dated March 4, 2011, to include a $200,000 tranche A term loan and a $400,000 revolving credit facility. Subject to the satisfaction of certain conditions precedent, including the consent of the lenders, we may from time to time increase its borrowing capacity under the revolving credit facility or tranche A term loan by an aggregate amount not to exceed $300,000 . The 2018 Credit Agreement expires on June 28, 2023. Additionally, subject to certain restrictions and conditions (i) any of our domestic or foreign subsidiaries may become borrowers and (ii) borrowings may occur in multi-currencies. As of July 31, 2019 , we had $190,000 of term loan A borrowings outstanding and $43,000 revolver borrowings under the 2018 Credit Agreement. The tranche A term loan is subject to principal amortization, with $10,000 due and payable in each of fiscal 2019, 2020, 2021 and 2022, with the remaining $160,000 due and payable at maturity on June 28, 2023. During fiscal 2019, we made principal payments of $10,000 . We also settled $5,207 of debt which was assumed as part of the Omnia acquisition. Borrowings under the 2018 Credit Agreement bear interest at rates ranging from 0.00% to 1.00% above prime rate for base rate borrowings, or at rates ranging from 1.00% to 2.00% above the London Interbank Offered Rate (“LIBOR”), depending upon our “Consolidated Leverage Ratio,” which is defined as the consolidated ratio of total funded debt to earnings before interest, taxes, depreciation and amortization, and as further adjusted under the terms of the 2018 Credit Agreement (“Consolidated EBITDA”). The Amended Credit Agreement also provides for fees on the unused portion of the revolving credit facility at rates ranging from 0.20% to 0.35% , depending on our Consolidated Leverage Ratio. At July 31, 2019 , the lender’s base rate was 5.50% and the LIBOR rate was 2.23% . The margins applicable to our outstanding borrowings were 0.25% above the lender’s base rate or 1.25% above LIBOR. All of our outstanding borrowings were under LIBOR contracts at July 31, 2019 . The 2018 Credit Agreement also provides for fees on the unused portion of our facility at rates ranging from 0.20% to 0.35% , depending upon our Consolidated Leverage Ratio, which was 1.26x at July 31, 2019 . At July 31, 2019 , the interest rate on our outstanding borrowings was approximately 3.48% . The 2018 Credit Agreement contains affirmative and negative covenants reasonably customary for similar credit facilities and is secured by (i) substantially all assets of Cantel and its U.S.-based subsidiaries, (ii) a pledge by Cantel of all of the outstanding shares of its U.S.-based subsidiaries and 65% of the outstanding shares of certain of Cantel’s foreign-based subsidiaries and (iii) a guaranty by Cantel’s domestic subsidiaries. We are in compliance with all financial covenants under the 2018 Credit Agreement. |
Income Taxes
Income Taxes | 12 Months Ended |
Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On December 22, 2017, the U.S. government enacted wide-ranging tax legislation, the Tax Cuts and Jobs Act (the “2017 Tax Act”). The 2017 Tax Act significantly revised U.S. tax law by, among other provisions, (a) lowering the applicable U.S. federal statutory income tax rate from 35% to 21%, (b) creating a partial territorial tax system that includes imposing a mandatory one-time transition tax on previously deferred foreign earnings, (c) creating provisions regarding the (1) Global Intangible Low Tax Income (“GILTI”), (2) the Foreign Derived Intangible Income (“FDII”) deduction, and (3) the Base Erosion Anti-Abuse Tax (“BEAT”), and (d) eliminating or reducing certain income tax deductions, such as interest expense, executive compensation expenses and certain employee expenses. ASC 740, “ Income Taxes, ” requires the effects of changes in tax laws to be recognized in the period in which the legislation is enacted. However, due to the complexity and significance of the 2017 Tax Act’s provisions, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which allows companies to record the tax effects of the 2017 Tax Act on a provisional basis and then, if necessary, subsequently adjust such amounts during a limited measurement period as more information becomes available. The measurement period ends when a company has obtained, prepared, and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year from enactment. As a result, we provided a provisional estimate of the effect of the 2017 Tax Act for the fiscal year ended July 31, 2018, and recorded a net benefit of $8,657 due to the impact on our deferred taxes on the basis of the actual fiscal 2018 results of operations. The measurement period provided by SAB 118 concluded during the second quarter of fiscal 2019, and no material adjustments were made to the provisional estimates recorded. As part of U.S. tax reform, the 2017 Tax Act imposed a one-time transition tax on certain accumulated positive foreign earnings (net of foreign deficits) across all non-U.S. subsidiaries, as computed under U.S. tax principles. As of December 31, 2017, our non-U.S. subsidiaries were in a net foreign deficit position in the aggregate, and therefore no accrual for the transition tax was made. Section 15 of the Internal Revenue Code (the “Code”) governs rate changes and was not amended by the 2017 Tax Act. Section 15 requires a blended tax rate for fiscal-year taxpayers for their fiscal year that includes the effective date of the rate change, which was January 1, 2018. As a result of the 2017 Tax Act, we revised our estimated annual effective rate to reflect the change in the U.S. federal statutory rate by computing a tentative tax under both rates, and then prorating the tentative tax based on the number of days with and without the rate change to arrive at a blended tax rate of 26.9% , as required by the Code. This blended rate was applied for fiscal 2018 (beginning with the second quarter) and the new U.S. federal statutory rate of 21% applies to fiscal 2019 and beyond. As noted above, the 2017 Tax Act also establishes new tax laws that will affect the fiscal year ending July 31, 2019, which include the GILTI provision, the FDII deduction, a new minimum tax related to payments to foreign subsidiaries and affiliates known as BEAT and certain employee expense deductions. The provisional estimates were based on our understanding of the 2017 Tax Act and other information available at the time of the estimates, including assumptions and expectations about future events, such as projected financial performance, and are subject to further refinement as additional information becomes available, including potential new or interpretative guidance issued by the SEC, the FASB, or Internal Revenue Service (“IRS”). The consolidated effective tax rate was 26.9% , 22.5% and 32.8% for fiscal 2019 , 2018 and 2017 , respectively, and reflects income tax expense for our U.S. and international operations at their respective statutory rates. The provision for income taxes consists of the following: Year Ended July 31, 2019 2018 2017 Current Deferred Current Deferred Current Deferred United States: Federal $ 13,494 $ 683 $ 24,288 $ (7,308 ) $ 28,900 $ 2,020 State 3,976 (15 ) 5,078 491 4,352 261 International 4,869 (2,730 ) 4,626 (703 ) 1,545 (2,223 ) Total $ 22,339 $ (2,062 ) $ 33,992 $ (7,520 ) $ 34,797 $ 58 The geographic components of income (loss) before income taxes are as follows: Year Ended July 31, 2019 2018 2017 United States $ 68,342 $ 115,697 $ 108,329 International 6,977 1,816 (2,096 ) Total $ 75,319 $ 117,513 $ 106,233 The consolidated effective income tax rate differed from the U.S. statutory tax rate of 21.0% in fiscal 2019 , 26.9% in fiscal 2018 and 35.0% in 2017 due to the following: Year Ended July 31, 2019 2018 2017 Expected statutory tax (1) 21.0 % 26.9 % 35.0 % Differential attributable to: Foreign operations 0.8 % 0.6 % — % State and local taxes 4.8 % 3.7 % 3.9 % Domestic production deduction — % (1.8 )% (2.7 )% Acquisition-related items, net 0.1 % — % 0.1 % Impact of tax legislation on deferred taxes (0.1 )% (7.4 )% — % R&E tax credit (1.0 )% (0.7 )% (1.4 )% Executive compensation 1.4 % 0.2 % 0.3 % Excess tax benefits (0.7 )% (1.7 )% (2.2 )% Valuation allowance 0.1 % 2.4 % — % Other 0.5 % 0.3 % (0.2 )% Consolidated effective income tax rate 26.9 % 22.5 % 32.8 % _______________________________________________ (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%. Tax assets and liabilities, shown before and after jurisdictional netting of deferred tax assets (liabilities), are comprised of the following: July 31, 2019 2018 Deferred tax assets: Accrued expenses $ 4,175 $ 5,354 Inventories 5,408 3,165 Accounts receivable 593 306 Other long-term liabilities 211 103 Stock-based compensation 3,586 2,700 Capital investment 426 426 Domestic NOLs 137 — Foreign NOLs 10,284 8,605 Subtotal 24,820 20,659 Valuation allowance (5,701 ) (6,358 ) 19,119 14,301 Deferred tax liabilities: Property and equipment (11,342 ) (7,352 ) Intangible assets (21,156 ) (21,300 ) Goodwill (11,618 ) (10,362 ) (44,116 ) (39,014 ) Net deferred income taxes $ (24,997 ) $ (24,713 ) Reported in Consolidated Balance Sheets as: Deferred income taxes (assets) $ 4,281 $ 2,911 Deferred income taxes (liabilities) (29,278 ) (27,624 ) $ (24,997 ) $ (24,713 ) For foreign tax reporting purposes, our Net Operating Losses (“NOLs”) are $10,421 and $8,605 as of July 31, 2019 and 2018, respectively, which originated primarily from our foreign acquisitions and operations. Most of these NOLs do not expire and are fully available for utilization against future profits in certain non-U.S. tax jurisdictions. However, we have recorded a valuation allowance of $5,701 for these foreign NOLs, which are primarily associated with certain early-stage foreign operations, as well as $2,785 recorded in fiscal 2018 relating to pre-acquisition losses attributed to our U.K. operations. Furthermore, the accumulated loss is also related to the exit of the Jet Prep business which is more fully described in Note 9, “Intangibles and Goodwill.” We believe it is more likely than not that we will be unable to utilize these NOLs. During fiscal 2019 and 2018 , no dividends were repatriated from our foreign subsidiaries. As a result of the mandatory one-time transition tax required under the 2017 Tax Act, all of the undistributed earnings of our foreign subsidiaries are deemed repatriated and considered previously taxed income (“PTI”). Additionally, we continue to be indefinitely reinvested and continue to evaluate our assertion for certain legal entities. Accordingly, deferred taxes are not provided on undistributed earnings of foreign subsidiaries that are indefinitely reinvested. Determining the tax liability that would arise if these earnings were remitted is not practicable. As of July 31, 2019 , the cumulative amount of such undistributed earnings, inclusive of PTI, indefinitely reinvested outside the U.S. was approximately $45,566 . 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. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon settlement with the tax authorities. Any adjustments upon resolution of income tax uncertainties are recognized in our results of operations. Our policy is to record potential interest and penalties related to income tax positions in income tax expense in our consolidated financial statements. However, such amounts have been relatively insignificant due to the nominal amount of our unrecognized tax benefits relating to uncertain tax positions. We have uncertain tax positions of $432 , primarily related to acquisitions, as of July 31, 2019 and $0 as of July 31, 2018 . Although we remain subject to audit by the IRS for fiscal years ended July 31, 2016 and forward, we are currently under IRS audit only for fiscal year 2017. With respect to state or foreign income tax examinations, we are generally no longer subject to examinations for fiscal years ended prior to July 31, 2013. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jul. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases We have several non-cancelable operating leases, primarily for our corporate headquarters, certain of our leased manufacturing facilities, warehouses, office space and equipment. Total rental expense related to our operating leases was $9,601 , $8,801 and $7,715 for fiscal 2019 , 2018 and 2017 , respectively. As of July 31, 2019 , 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: 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 Contingent Consideration As of July 31, 2019 , we had $1,411 recorded related to the Aexis acquisition, which is for the estimated fair value of contingent consideration payable upon the achievement of certain purchase order targets through March 21, 2020. During fiscal 2017, we decided to exit the Jet Prep business that was acquired in fiscal 2014. At the time of the acquisition, we assumed a contingent obligation payable to the Israeli Government based on future sales. In November 2017, the Israeli Government formally notified us that they would forgive any future amounts payable due to our decision to exit the Jet Prep business. As a result of this formal notification, we reduced the $1,138 contingent obligation to $0 during the first quarter of fiscal 2018, resulting in a benefit through other income for the fiscal year ended July 31, 2018. Legal Proceedings In May 2017, Cantel Medical (UK) Limited and Cantel (UK) Limited filed a lawsuit in the U.K. High Court of Justice against ARC Medical Design Limited (“ARC”) seeking a judgment of invalidity on two of ARC’s patents and additionally/alternatively a declaration of non-infringement of our AmplifEYE TM Endoscopic device. ARC filed counterclaims alleging that the AmplifEYE TM device infringed the two patents as well as registered community design marks and unregistered design rights that ARC had in its Endocuff TM and Endocuff Vision TM devices. In February 2018, the trial judge entered a judgment in favor of ARC, and we decided not to appeal the decision. We entered into a settlement agreement with ARC in March 2018 under which we agreed not to make, use, sell or offer to sell the AmplifEYE TM device in the European Union until ARC’s rights expire, and reimbursed ARC for a portion of their legal costs. During fiscal 2018, we recorded $2,608 of litigation costs within selling, general and administrative expenses associated with this matter. In the normal course of business, we are subject to pending and threatened legal actions. It is our policy to accrue for amounts related to these legal matters if it is probable that a liability has been incurred and an amount of anticipated exposure can be reasonably estimated. We do not believe that any of these pending claims or legal actions will have a material effect on our business, financial condition, results of operations or cash flows. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Jul. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The components and changes in accumulated other comprehensive loss for fiscal 2019 , 2018 and 2017 were as follows: Foreign Currency Translation Adjustments Changes in Fair Value of Interest Rate Swaps Tax effects Total Balance, August 1, 2016 $ (11,795 ) $ — $ — $ (11,795 ) Other comprehensive income 1,895 — — 1,895 Balance, July 31, 2017 (9,900 ) — — (9,900 ) Other comprehensive loss (1,556 ) — — (1,556 ) Balance, July 31, 2018 (11,456 ) — — (11,456 ) Other comprehensive (loss) income (13,287 ) 3,312 (766 ) (10,741 ) Balance, July 31, 2019 $ (24,743 ) $ 3,312 $ (766 ) $ (22,197 ) |
Earnings Per Common Share
Earnings Per Common Share | 12 Months Ended |
Jul. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Earnings Per Common Share Basic Earnings Per Common Share (“EPS”) is computed based upon the weighted average number of common shares outstanding for the year. Diluted EPS is computed based upon the weighted average number of common shares outstanding for the year plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the year. We include participating securities (nonvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents) in the computation of EPS pursuant to the two-class method. Our participating securities consist solely of nonvested restricted stock awards, which have contractual participation rights equivalent to those of stockholders of unrestricted common stock. The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities. The following table sets forth the computation of basic and diluted EPS available to stockholders of common stock (excluding participating securities): Year Ended July 31, 2019 2018 2017 Numerator for basic and diluted earnings per share: Net income $ 55,042 $ 91,041 $ 71,378 Less income allocated to participating securities (51 ) (320 ) (431 ) Net income available to common shareholders $ 54,991 $ 90,721 $ 70,947 Denominator for basic and diluted earnings per share, as adjusted for participating securities: Denominator for basic earnings per share - weighted average number of shares outstanding attributable to common stock 41,700,926 41,567,722 41,468,487 Dilutive effect of stock options using the treasury stock method and the average market price for the year 56,190 67,356 74,278 Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock 41,757,116 41,635,078 41,542,765 Earnings per share attributable to common stock: Basic earnings per share $ 1.32 $ 2.18 $ 1.71 Diluted earnings per share $ 1.32 $ 2.18 $ 1.71 Stock options excluded from weighted average dilutive common shares outstanding because their inclusion would have been antidilutive — — — A reconciliation of weighted average number of shares and common stock equivalents attributable to common stock, as determined above, to our total weighted average number of shares and common stock equivalents, including participating securities, is set forth in the following table: Year Ended July 31, 2019 2018 2017 Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock 41,757,116 41,635,078 41,542,765 Participating securities 38,905 148,700 254,727 Total weighted average number of shares and common stock equivalents attributable to both common stock and participating securities 41,796,021 41,783,778 41,797,492 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Jul. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation 2016 Equity Incentive Plan On January 7, 2016, we terminated the Cantel Medical Corp. 2006 Equity Incentive Plan (the “2006 Plan”) and adopted the Cantel Medical Corp. 2016 Equity Incentive Plan (the “2016 Plan”). As a result, no further options or awards will be granted under the 2006 Plan. The 2016 Plan provides for the granting of stock options, stock appreciation rights (“SARs”), restricted stock awards, restricted stock units (“RSUs”) and performance-based awards to our employees, independent contractors and consultants. It also provides the flexibility to grant equity-based awards to our non-employee directors. The 2016 Plan does not permit the granting of discounted options or discounted stock appreciation rights. The maximum number of shares as to which equity awards may be granted under the 2016 Plan is 1,200,000 shares. The 2016 Plan will terminate on the date of our annual meeting of stockholders following the close of our fiscal year ending in 2025, unless terminated earlier by the Board of Directors. Stock awards under this plan: • will be granted at the closing market price at the time of the grant, • will include terms which may not exceed ten years, subject to certain exceptions, and • may be granted in the form of restricted stock and RSUs, performance awards, or dividends. Stock awards outstanding under the 2016 Plan are subject to risk of forfeiture solely due to an employment length-of-service restriction, with such restriction lapsing as to one-third of the shares of each of the first three anniversaries of the grant date subject to being employed through such vesting date. At July 31, 2019 , 307,153 unvested restricted stock shares were outstanding under the 2016 Plan. No options were outstanding under the 2016 Plan. At July 31, 2019 , 755,429 shares are collectively available pursuant to restricted stock and other stock awards, stock options and SARs. 2006 Equity Incentive Plan A total of 5,591,000 shares of common stock were granted under the 2006 Plan, of which 2,700,000 shares were authorized for issuance pursuant to stock options and stock appreciation rights and 2,891,000 shares were authorized for issuance pursuant to restricted stock and other stock awards. Restricted stock shares outstanding under this plan are subject to risk of forfeiture solely due to an employment length-of-service restriction, with such restriction lapsing as to one-third of the shares on each of the first three anniversaries of the grant date subject to being employed through such vesting date. At July 31, 2019 , options to purchase 40,000 shares of common stock were outstanding, and no unvested restricted stock shares were outstanding under the 2006 Plan. The following table shows the components of stock-based compensation expense recognized in the consolidated statements of income: Year Ended July 31, 2019 2018 2017 Cost of sales $ 1,010 $ 663 $ 371 Operating expenses: Selling 2,428 1,458 1,582 General and administrative 11,828 7,292 6,774 Research and development 296 202 117 Total operating expenses 14,552 8,952 8,473 Stock-based compensation before income taxes $ 15,562 $ 9,615 $ 8,844 Our stock options and time-based stock awards are subject to graded vesting in which portions of the awards vest at different times during the vesting period. We recognize compensation expense for awards subject to graded vesting using the straight-line basis over the vesting period. In October 2016, we granted for the first time to certain employees both equity awards with performance conditions and equity awards with market conditions. The actual number of equity awards earned and eligible to vest will be determined based on the level of achievement against budgeted revenue and a defined gross profit percentage or based on the level of achievement against budgeted earnings per share, with respect to the awards with performance conditions, and our 3-year relative total stockholder return performance as measured against the S&P Healthcare Equipment Index, with respect to the awards with market conditions. The maximum share attainment of these awards are 200% of the initial granted shares. 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 that are subject to market conditions ratably over the vesting period regardless of whether the market condition is satisfied. As of July 31, 2019 , total unrecognized stock-based compensation expense, before income taxes, related to total nonvested stock options and restricted stock awards was $13,874 with a remaining weighted average period of 12 months over which such expense is expected to be recognized. The majority of our nonvested awards relate to restricted stock awards. We account for forfeitures as they occur, rather than estimate expected forfeitures over 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 date of grant. We determine the fair value of each stock award with market conditions using a Monte Carlo simulation on the date of grant using the following assumptions: 2019 2018 Volatility of common stock 27.54 % 26.60 % Average volatility of peer companies 36.55 % 33.72 % Average correlation coefficient of peer companies 27.18 % 32.26 % Risk-free interest rate 2.93 % 1.62 % A summary of nonvested stock award activity for fiscal 2019 , 2018 and 2017 follows: Number of Time-based Shares Number of Performance-based Shares Number of Market-based Shares Number of Total Shares Weighted Average Fair Value August 1, 2016 331,367 — — 331,367 $ 46.09 Granted 86,305 16,960 9,800 113,065 $ 81.77 Vested (1) (214,932 ) (725 ) (555 ) (216,212 ) $ 43.62 Forfeited (5,922 ) — — (5,922 ) $ 59.40 July 31, 2017 196,818 16,235 9,245 222,298 $ 66.28 Granted 94,309 17,486 10,465 122,260 $ 101.74 Vested (1) (115,943 ) (5,845 ) — (121,788 ) $ 60.25 Forfeited (6,864 ) (1,800 ) (2,000 ) (10,664 ) $ 95.09 July 31, 2018 168,320 26,076 17,710 212,106 $ 88.87 Granted 188,431 35,981 25,320 249,732 $ 85.16 Vested (1) (105,516 ) (13,327 ) (5,265 ) (124,108 ) $ 80.44 Forfeited (16,371 ) (8,520 ) (5,686 ) (30,577 ) $ 96.54 July 31, 2019 234,864 40,210 32,079 307,153 $ 88.99 _______________________________________________ (1) The aggregate fair value of all nonvested stock awards which vested was approximately $9,985 , $7,338 and $9,431 in fiscal 2019 , 2018 and 2017 , respectively. A summary of stock option activity for fiscal 2019 , 2018 and 2017 follows: Number of shares Weighted Average Exercise Price Weighted Average Contractual Life Remaining Aggregate Intrinsic Value Outstanding at August 1, 2016 122,500 $ 29.36 Exercised — $ — Outstanding at July 31, 2017 122,500 $ 29.36 Exercised (52,500 ) $ 17.04 Outstanding at July 31, 2018 70,000 $ 38.60 Exercised (30,000 ) $ 31.81 Outstanding at July 31, 2019 40,000 $ 43.70 0.57 years $ 1,943 Exercisable at July 31, 2019 40,000 $ 43.70 0.57 years $ 1,943 In fiscal 2019, 2018 and 2017, 5,000 , 13,333 and 23,333 , respectively, options vested, with an aggregate fair value of approximately $277 , $226 and $349 , respectively. At July 31, 2019 , 2018 and 2017 , there were 40,000 , 70,000 and 122,500 , respectively, outstanding options with an aggregate fair value of $1,943 , $3,788 and $5,493 , respectively. At July 31, 2019 and 2018 , all of the outstanding options had vested or were expected to vest in future periods. We do not currently have a publicly announced stock repurchase program. All of the shares purchased during fiscal 2019 , 2018 and 2017 represent shares surrendered relating to cashless exercises of stock options and to pay employee withholding taxes due upon the vesting of restricted stock or the exercise of stock options. In fiscal 2019 , 2018 and 2017, such purchases amounted to 54,176 , 72,058 and 89,607 shares at a total average price per share of $87.51 , $98.16 and $77.12 , respectively. Upon exercise of stock options or grant of stock awards, we typically issue new shares of our common stock as opposed to using treasury shares. Additionally, all options were considered to be deductible for tax purposes in the valuation model. Such non-qualified options were tax-effected using our estimated U.S. effective tax rate at the time of grant. All of our stock options and restricted stock awards are expected to be deductible for tax purposes, except for certain stock awards granted to employees residing outside of the United States, and were tax-effected using our estimated U.S. effective tax rate at the time of grant. Excess tax benefits arise when the ultimate tax effect of the deduction for tax purposes is greater than the income tax benefit on stock-based compensation described above. For fiscal 2019 , income tax deductions of $2,592 were generated, of which $2,008 were recorded as a reduction in income tax expense over the equity awards’ vesting period and the remaining excess tax benefit of $584 was recorded as a reduction in income tax expense. For fiscal 2018 , income tax deductions of $4,161 were generated, of which $1,988 were recorded as a reduction in income tax expense over the equity awards’ vesting period and the remaining excess tax benefits of $2,173 were recorded as a reduction in income tax expense. For fiscal 2017 , income tax deductions of $5,292 were generated, of which $3,351 were recorded as a reduction in income tax expense over the equity awards’ vesting period and the remaining excess tax benefits of $2,241 were recorded as a reduction in income tax expense. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Jul. 31, 2019 | |
Retirement Benefits [Abstract] | |
Retirement Plans | Retirement Plans We have 401(k) Savings and Retirement Plans for the benefit of eligible U.S. employees. Additionally, our Canadian and certain European subsidiaries maintain profit sharing plans for the benefit of eligible employees. Employer contributions are both discretionary and non-discretionary and are limited in any year to the amount allowable by government tax authorities. Aggregate employer contributions recognized under these plans were $4,999 , $4,676 and $3,863 for fiscal 2019 , 2018 and 2017 , respectively. |
Reportable Segments
Reportable Segments | 12 Months Ended |
Jul. 31, 2019 | |
Segment Reporting [Abstract] | |
Reportable Segments | Reportable Segments In accordance with ASC Topic 280, “ Segment Reporting,” (“ASC 280”), we have determined our reportable business segments based upon an assessment of product types, organizational structure, customers and internally prepared financial statements. The primary factors used by us in analyzing segment performance are net sales and income from operations. During the first quarter of fiscal 2019, we changed the names of our reportable segments to better align with our key customers and the markets we serve. As a result of this change, our industrial biological and chemical indicator business has moved from the Dental segment to the Life Sciences segment. Prior year segment disclosures have been recast to conform to the current year presentation. None of our customers accounted for 10% or more of our consolidated net sales during fiscal 2019 , 2018 and 2017 . Our reportable segments are as follows: 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. Two customers collectively accounted for approximately 40.2% , 48.0% and 50.2% of our Life Sciences segment net sales in fiscal 2019 , 2018 and 2017 , respectively. 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 dental practitioners. Three customers collectively accounted for approximately 47.6% , 45.1% and 43.4% of our Dental segment net sales in fiscal 2019 , 2018 and 2017 , respectively. 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. Two customers collectively accounted for approximately 41.0% , 40.6% and 44.2% of our Dialysis segment net sales in fiscal 2019 , 2018 and 2017 , respectively. These customers are the same two customers noted above under our Life Sciences segment. Information as to reportable segments is summarized below: Year Ended July 31, 2019 2018 2017 Net sales: Medical $ 523,669 $ 473,937 $ 398,773 Life Sciences (1) 201,022 217,030 196,446 Dental (1) 161,608 149,360 144,457 Dialysis 31,856 31,595 30,481 Total $ 918,155 $ 871,922 $ 770,157 _______________________________________________ (1) In fiscal 2018, approximately $5,820 of net sales were reclassified out of our Dental segment and into our Life Sciences segment associated with the changes in our segments noted above. Fiscal 2017 amounts were not material and were not adjusted. Year Ended July 31, 2019 2018 2017 Income from operations: Medical $ 98,356 $ 86,833 $ 73,440 Life Sciences (1) 20,552 36,803 33,159 Dental (1) 22,289 30,004 28,000 Dialysis 4,922 7,380 8,154 146,119 161,020 142,753 General corporate expenses 62,600 39,356 32,343 Income from operations 83,519 121,664 110,410 Interest expense, net 9,505 5,289 4,303 Other income (1,305 ) (1,138 ) (126 ) Income before income taxes $ 75,319 $ 117,513 $ 106,233 _______________________________________________ (1) In fiscal 2018, approximately $1,704 of income from operations were reclassified out of our Dental segment and into our Life Sciences segment associated with the changes in our segments noted above. Fiscal 2017 amounts were not material and were not adjusted. July 31, 2019 2018 Identifiable assets: Medical $ 532,250 $ 490,702 Life Sciences 184,737 151,460 Dental 272,309 210,831 Dialysis 19,016 22,614 General corporate, including cash and cash equivalents 62,054 88,101 Total $ 1,070,366 $ 963,708 Year Ended July 31, 2019 2018 2017 Capital expenditures: Medical $ 52,907 $ 18,996 $ 13,816 Life Sciences 16,408 4,409 3,689 Dental 16,243 2,441 2,492 Dialysis 3,203 644 1,296 General corporate 6,677 11,208 5,772 Total $ 95,438 37,698 27,065 Year Ended July 31, 2019 2018 2017 Depreciation and amortization: Medical $ 23,033 $ 19,002 $ 18,245 Life Sciences 7,482 5,628 5,706 Dental 9,844 8,756 8,556 Dialysis 39 711 427 General corporate 1,961 733 518 Total $ 42,359 $ 34,830 $ 33,452 Information as to geographic areas (including net sales which represent the geographic area from which we derive its net sales from external customers) is summarized below: Year Ended July 31, 2019 2018 2017 Net sales: United States $ 665,661 $ 643,744 $ 599,657 Europe/Africa/Middle East 148,334 131,130 95,753 Asia/Pacific 66,228 57,108 40,964 Canada 32,152 33,524 26,648 Latin America/South America 5,780 6,416 7,135 Total $ 918,155 $ 871,922 $ 770,157 July 31, 2019 2018 Total long-lived assets: United States $ 128,010 $ 80,918 Europe/Africa/Middle East 64,742 35,824 Asia/Pacific 4,201 2,531 Canada 1,995 804 Total 198,948 120,077 Goodwill and intangible assets, net 519,622 505,388 Total $ 718,570 $ 625,465 |
Quarterly Results of Operations
Quarterly Results of Operations (unaudited) | 12 Months Ended |
Jul. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations (unaudited) | Quarterly Results of Operations (unaudited) The following is a summary of the quarterly results of operations for fiscal 2019 and 2018 : Fiscal 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 225,589 $ 224,538 $ 228,552 $ 239,476 Cost of sales 120,340 119,863 121,675 128,823 Gross profit 105,249 104,675 106,877 110,653 Gross profit percentage 46.7 % 46.6 % 46.8 % 46.2 % Net income $ 19,242 $ 18,800 $ 8,175 $ 8,825 Earnings per common share: Basic $ 0.46 $ 0.45 $ 0.20 $ 0.21 Diluted $ 0.46 $ 0.45 $ 0.20 $ 0.21 Fiscal 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 212,766 $ 213,034 $ 217,268 $ 228,854 Cost of sales 112,107 111,799 112,594 121,451 Gross profit 100,659 101,235 104,674 107,403 Gross profit percentage 47.3 % 47.5 % 48.2 % 46.9 % Net income $ 22,929 $ 32,488 $ 18,736 $ 16,888 Earnings per common share: Basic $ 0.55 $ 0.78 $ 0.45 $ 0.41 Diluted $ 0.55 $ 0.78 $ 0.45 $ 0.41 |
Subsequent Event
Subsequent Event | 12 Months Ended |
Jul. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Events Hu-Friedy Acquisition On July 30, 2019, we signed a definitive agreement to acquire Hu-Friedy, a leading global manufacturer of instruments and instrument reprocessing workflow systems serving the dental industry. The acquisition is subject to regulatory approvals and other customary closing conditions, and is expected to close during our first quarter fiscal 2020. After closing, we plan to combine Hu-Friedy with our Dental segment. Under the terms of the acquisition, Cantel will pay $725,000 upfront for Hu-Friedy, a portion of which will be paid in our stock (with the specific amount at our election) with the remainder to be paid in cash. An additional amount in potential cash and stock earnout payments may be payable to Hu-Friedy shareholders upon achievement of certain commercial milestones in the eighteen months following closing of the transaction. As a result of the transaction structure, the acquisition will generate an anticipated tax benefit, which we estimate at more than $100,000 , which we expect to reduce our cash taxes over approximately 15 years . Amendment to 2018 Credit Agreement On September 6, 2019, we entered into a First Amendment (the “Amendment”), amending the 2018 Credit Agreement, and as amended by the Amendment, the (“Amended Credit Agreement”) dated as of June 28, 2018. The Amendment adds a $400,000 delayed draw term loan facility (the “Delayed Draw Facility”), which we may draw subject to the satisfaction of certain limited conditions precedent, to our 2018 Credit Agreement, in addition to the existing tranche A term loan and existing revolving credit facility. Pursuant to the Amended Credit Agreement, subject to the satisfaction of certain conditions precedent, including the consent of the lenders, the Company may from time to time increase its borrowing capacity under the revolving credit facility by, or incur incremental term loans in, an aggregate amount not to exceed the sum of (i) the greater of (x) $300,000 or (y) an amount equal to two times the our consolidated EBITDA, calculated on a pro forma basis, plus (ii) the aggregate principal amount of voluntary prepayments of the revolving loans and term loans. The Delayed Draw Facility and a portion of the revolving credit facility will be used to finance all or a portion of the cash consideration for our acquisition of Hu-Friedy. The remaining proceeds of the Amended Credit Agreement will be used to refinance certain existing indebtedness of Cantel and Hu-Friedy, and to pay the fees and expenses incurred in connection therewith, as well as for working capital, capital expenditures and other lawful corporate purposes. Borrowings under the Amended Credit Agreement bear interest at rates ranging from 0.00% to 1.25% above prime rate for base rate borrowings, or at rates ranging from 1.00% to 2.25% above LIBOR for LIBOR based borrowings, depending on our “Consolidated Leverage Ratio,” which is the consolidated ratio of total funded debt (minus certain unrestricted cash) to consolidated EBITDA. The Amended Credit Agreement also provides for fees on the unused portion of the revolving credit facility at rates ranging from 0.20% to 0.40% , depending on our Consolidated Leverage Ratio. The Amended Credit Agreement contains affirmative and negative covenants reasonably customary for similar credit facilities and is secured by (i) substantially all assets of Cantel and its U.S.-based subsidiaries, (ii) a pledge by each Loan Party of all of the outstanding shares of its U.S.-based subsidiaries and 65% of the outstanding shares of certain of Cantel’s foreign-based subsidiaries and (iii) a guaranty by Cantel’s domestic subsidiaries. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Jul. 31, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | Schedule II - Valuation and Qualifying Accounts Balance at Beginning of Period Additions Deductions Translation Adjustments Balance at End of Period Allowance for doubtful accounts Year ended July 31, 2019 $ 1,149 $ 1,541 $ (336 ) $ (32 ) $ 2,322 Year ended July 31, 2018 $ 1,808 $ 326 $ (977 ) $ (8 ) $ 1,149 Year ended July 31, 2017 $ 1,850 $ 998 $ (1,056 ) $ 16 $ 1,808 Reserve for excess and obsolete inventory Year ended July 31, 2019 $ 8,599 $ 2,937 $ (1,218 ) $ (203 ) $ 10,115 Year ended July 31, 2018 $ 8,853 $ 1,719 $ (1,862 ) $ (111 ) $ 8,599 Year ended July 31, 2017 $ 5,390 $ 5,016 $ (1,580 ) $ 27 $ 8,853 Deferred tax asset valuation allowance Year ended July 31, 2019 $ 6,358 $ 1,086 $ (1,891 ) $ 148 $ 5,701 Year ended July 31, 2018 $ 2,984 $ 3,538 $ (119 ) $ (45 ) $ 6,358 Year ended July 31, 2017 $ 2,334 $ 615 $ — $ 35 $ 2,984 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | 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 presentation. |
Use of Estimates | 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 | Subsequent Events We performed a review of events subsequent to July 31, 2019 through the date of issuance of the accompanying consolidated financial statements. |
Revenue Recognition | 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 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 $9,469 , $8,401 , and $6,291 in fiscal 2019 , 2018 , and 2017 , respectively. |
Translation of Foreign Currency Financial Statements | 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 | 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 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 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. |
Property and Equipment | 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. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Certain of our identifiable intangible assets, including customer relationships, technology, brand names, non-compete agreements and patents, are amortized using the straight-line method over their estimated useful lives which range from 3 to 20 years. Additionally, we have recorded goodwill and trademarks and trade names, all of 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. We first assess 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 to be greater than the carrying value, we did not proceed to step one of the two-step quantitative goodwill impairment test for those two segments. We performed step one of the two-step quantitative goodwill impairment test for Dialysis due to the continuing 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 also performed step one of the two-step quantitative goodwill impairment test for Life Sciences as one of the segment’s key customers has been moving toward a dual source approach, in combination with a cyclical downturn in this business. In performing a detailed quantitative review for goodwill impairment, management uses a two-step process that begins 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. We perform our annual impairment review for 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 intangibles assets to their carrying values. At May 1, 2019 , because we determined through qualitative factors that the fair values of all of our indefinite lived intangible assets were more likely than not to be greater than the carrying value, we 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 recognize any impairment charges for goodwill or indefinite lived intangibles in the years presented. |
Long-Lived Assets | 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 , 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. |
Customer Relationship Intangible Assets | Customer Relationship Intangible Assets Customer-relationship intangible assets are valued using an income-based valuation methodology which included 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. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs are capitalized and amortized to interest expense over the term of the related credit agreements. |
Warranties | 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 and water purification and filtration 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. |
Stock-Based Compensation | 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. |
Advertising Costs | Advertising Costs Our policy is to expense advertising costs as they are incurred. |
Income Taxes | 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. 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. If income tax rates were to change in the future, particularly in the United States 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. |
Recently Issued Accounting Standards | Newly Adopted Accounting Standards In August 2017, the FASB issued ASU 2017-12, “Targeted Improvements to Accounting for Hedging Activities,” (“ASU 2017-12”) to improve the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018 (our fiscal year 2020), including interim periods within that reporting period. We early adopted ASU 2017-12 effective August 1, 2018. The adoption of ASU 2017-12 did not have a material impact on our financial position, results of operations or cash flows. In May 2017, the FASB issued ASU 2017-09, “ (Topic 718) Scope of Modification Accounting ,” (“ASU 2017-09”) to provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC 718. ASU 2017-09 is effective for fiscal years beginning after December 15, 2017 (our fiscal year 2019), including interim periods within that reporting period. Accordingly, we adopted ASU 2017-09 on August 1, 2018. The adoption of ASU 2017-09 did not have a material impact on our financial position, results of operations or cash flows. In August 2016, the FASB issued ASU 2016-15, “(Topic 230) Classification of Certain Cash Receipts and Cash Payments , ” (“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 is effective for fiscal years beginning after December 15, 2017 (our fiscal year 2019). Accordingly, we adopted ASU 2016-15 on August 1, 2018. The adoption of ASU 2016-15 did not 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 Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service 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. In August 2018, the FASB issued ASU 2018-13, “ Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement ” (“ASU 2018-13”) to modify the disclosure requirements on fair value measurements in ASC 820, “Fair Value 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 2016, the FASB issued ASU 2016-02, “ (Topic 842) Leases, ” (“ASU 2016-02”) which requires lease assets and liabilities to be recorded on the balance sheet for leases with terms greater than twelve months. We will adopt this ASU and related amendments on August 1, 2019 and will elect certain practical expedients permitted under 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 associated with a recently announced acquisition, we currently estimate the impact of the adoption will result in the recognition of right of use assets and lease liabilities of approximately $30,000 to $35,000 as of August 1, 2019. The adoption of ASU 2016-02 is not expected to have a material impact on our results of operations or cash flows. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of net sales disaggregated by geography and product line | The following table gives information as to the net sales disaggregated by geography and product line: Year Ended July 31, Net sales by geography 2019 2018 (1) United States $ 665,661 $ 643,744 Europe/Africa/Middle East 148,334 131,130 Asia/Pacific 66,228 57,108 Canada 32,152 33,524 Latin America/South America 5,780 6,416 Total $ 918,155 $ 871,922 Net sales by product line Capital equipment $ 221,668 $ 240,153 Consumables 569,412 523,073 Product service 122,752 106,764 All other (2) 4,323 1,932 Total $ 918,155 $ 871,922 _______________________________________________ (1) As noted above, prior year amounts have not been adjusted under the modified retrospective method. (2) Primarily includes software licensing revenues. |
Schedule of contract liabilities activity | A summary of contract liabilities activity for the year ended July 31, 2019 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 Contract liabilities included in Other long-term liabilities (395 ) Deferred revenue $ 27,840 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocations of Material Acquisitions | 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) The excess purchase price over net assets acquired was assigned to goodwill, all of which is deductible for income tax purposes. |
Inventories, Net (Tables)
Inventories, Net (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Summary of inventories | A summary of inventories, net, is as follows: July 31, 2019 2018 Raw materials and parts $ 69,498 $ 49,054 Work-in-process 5,801 13,189 Finished goods 73,050 53,948 Less: reserve for excess and obsolete inventory (10,115 ) (8,599 ) Total inventories, net $ 138,234 $ 107,592 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Summary of property and equipment | A summary of property and equipment, net, is as follows: July 31, 2019 2018 Land, buildings and improvements $ 81,556 $ 50,162 Furniture and equipment 130,852 112,661 Leasehold improvements 14,428 9,544 Software 33,869 8,587 Construction in process 38,728 26,003 Less: accumulated depreciation (114,191 ) (95,540 ) Total property and equipment, net $ 185,242 $ 111,417 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair values of financial instruments measured on a recurring basis | The fair values of our financial instruments measured on a recurring basis were categorized as follows: July 31, 2019 Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents: Money markets $ 104 $ — $ — $ 104 Prepaid expenses and other current assets: Interest rate swap — 486 — 486 Other Assets: Interest rate swap — 2,826 — 2,826 Total assets $ 104 $ 3,312 $ — $ 3,416 Liabilities: Other long-term liabilities: Contingent consideration — — 1,411 1,411 Total liabilities $ — $ — $ 1,411 $ 1,411 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 |
Reconciliation of liabilities measured and recorded at fair value on a recurring basis using significant unobservable inputs (Level 3) | A reconciliation of our liabilities that are measured and recorded at fair value on a recurring basis using significant unobservable inputs (Level 3) for fiscal 2019 , 2018 and 2017 is as follows: 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 |
Intangibles and Goodwill (Table
Intangibles and Goodwill (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Our intangible assets consist of the following: 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 . |
Schedule of changes in goodwill | Goodwill changed during fiscal 2019 and 2018 as follows: Medical Life Sciences Dental Dialysis Total Goodwill Balance, August 1, 2017 $ 129,945 $ 59,088 $ 114,279 $ 8,133 $ 311,445 Acquisitions 58,026 — — — 58,026 Foreign currency translation (1,281 ) (163 ) — — (1,444 ) Balance, July 31, 2018 186,690 58,925 114,279 8,133 368,027 Acquisitions — 6,137 11,340 — 17,477 Divestitures — (491 ) — — (491 ) Foreign currency translation (6,493 ) (90 ) (321 ) — (6,904 ) Balance, July 31, 2019 $ 180,197 $ 64,481 $ 125,298 $ 8,133 $ 378,109 |
Financing Arrangements (Tables)
Financing Arrangements (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Our long-term debt consists of the following: July 31, 2019 2018 Revolving credit loans outstanding $ 43,000 $ — Tranche A term loan outstanding 190,000 200,000 Unamortized debt issuance costs (2,149 ) (2,698 ) Total long-term debt, net of unamortized debt issuance costs 230,851 197,302 Current portion of long-term debt (10,000 ) (10,000 ) Long-term debt, net of unamortized debt issuance costs and excluding current portion $ 220,851 $ 187,302 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income taxes | The provision for income taxes consists of the following: Year Ended July 31, 2019 2018 2017 Current Deferred Current Deferred Current Deferred United States: Federal $ 13,494 $ 683 $ 24,288 $ (7,308 ) $ 28,900 $ 2,020 State 3,976 (15 ) 5,078 491 4,352 261 International 4,869 (2,730 ) 4,626 (703 ) 1,545 (2,223 ) Total $ 22,339 $ (2,062 ) $ 33,992 $ (7,520 ) $ 34,797 $ 58 |
Schedule of geographic components of income before income taxes | The geographic components of income (loss) before income taxes are as follows: Year Ended July 31, 2019 2018 2017 United States $ 68,342 $ 115,697 $ 108,329 International 6,977 1,816 (2,096 ) Total $ 75,319 $ 117,513 $ 106,233 |
Schedule of reconciliation of differences in effective tax rate from the United States statutory tax rate | The consolidated effective income tax rate differed from the U.S. statutory tax rate of 21.0% in fiscal 2019 , 26.9% in fiscal 2018 and 35.0% in 2017 due to the following: Year Ended July 31, 2019 2018 2017 Expected statutory tax (1) 21.0 % 26.9 % 35.0 % Differential attributable to: Foreign operations 0.8 % 0.6 % — % State and local taxes 4.8 % 3.7 % 3.9 % Domestic production deduction — % (1.8 )% (2.7 )% Acquisition-related items, net 0.1 % — % 0.1 % Impact of tax legislation on deferred taxes (0.1 )% (7.4 )% — % R&E tax credit (1.0 )% (0.7 )% (1.4 )% Executive compensation 1.4 % 0.2 % 0.3 % Excess tax benefits (0.7 )% (1.7 )% (2.2 )% Valuation allowance 0.1 % 2.4 % — % Other 0.5 % 0.3 % (0.2 )% Consolidated effective income tax rate 26.9 % 22.5 % 32.8 % _______________________________________________ (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%. |
Schedule of deferred income tax assets and liabilities | Tax assets and liabilities, shown before and after jurisdictional netting of deferred tax assets (liabilities), are comprised of the following: July 31, 2019 2018 Deferred tax assets: Accrued expenses $ 4,175 $ 5,354 Inventories 5,408 3,165 Accounts receivable 593 306 Other long-term liabilities 211 103 Stock-based compensation 3,586 2,700 Capital investment 426 426 Domestic NOLs 137 — Foreign NOLs 10,284 8,605 Subtotal 24,820 20,659 Valuation allowance (5,701 ) (6,358 ) 19,119 14,301 Deferred tax liabilities: Property and equipment (11,342 ) (7,352 ) Intangible assets (21,156 ) (21,300 ) Goodwill (11,618 ) (10,362 ) (44,116 ) (39,014 ) Net deferred income taxes $ (24,997 ) $ (24,713 ) Reported in Consolidated Balance Sheets as: Deferred income taxes (assets) $ 4,281 $ 2,911 Deferred income taxes (liabilities) (29,278 ) (27,624 ) $ (24,997 ) $ (24,713 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments under non-cancelable operating leases | As of July 31, 2019 , 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: 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 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | The components and changes in accumulated other comprehensive loss for fiscal 2019 , 2018 and 2017 were as follows: Foreign Currency Translation Adjustments Changes in Fair Value of Interest Rate Swaps Tax effects Total Balance, August 1, 2016 $ (11,795 ) $ — $ — $ (11,795 ) Other comprehensive income 1,895 — — 1,895 Balance, July 31, 2017 (9,900 ) — — (9,900 ) Other comprehensive loss (1,556 ) — — (1,556 ) Balance, July 31, 2018 (11,456 ) — — (11,456 ) Other comprehensive (loss) income (13,287 ) 3,312 (766 ) (10,741 ) Balance, July 31, 2019 $ (24,743 ) $ 3,312 $ (766 ) $ (22,197 ) |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted EPS available to stockholders of common stock (excluding participating securities) | The following table sets forth the computation of basic and diluted EPS available to stockholders of common stock (excluding participating securities): Year Ended July 31, 2019 2018 2017 Numerator for basic and diluted earnings per share: Net income $ 55,042 $ 91,041 $ 71,378 Less income allocated to participating securities (51 ) (320 ) (431 ) Net income available to common shareholders $ 54,991 $ 90,721 $ 70,947 Denominator for basic and diluted earnings per share, as adjusted for participating securities: Denominator for basic earnings per share - weighted average number of shares outstanding attributable to common stock 41,700,926 41,567,722 41,468,487 Dilutive effect of stock options using the treasury stock method and the average market price for the year 56,190 67,356 74,278 Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock 41,757,116 41,635,078 41,542,765 Earnings per share attributable to common stock: Basic earnings per share $ 1.32 $ 2.18 $ 1.71 Diluted earnings per share $ 1.32 $ 2.18 $ 1.71 Stock options excluded from weighted average dilutive common shares outstanding because their inclusion would have been antidilutive — — — |
Schedule of reconciliation of weighted average number of shares and common stock equivalents attributable to common stock to the Company's total weighted average number of shares and common stock equivalents including participating securities | A reconciliation of weighted average number of shares and common stock equivalents attributable to common stock, as determined above, to our total weighted average number of shares and common stock equivalents, including participating securities, is set forth in the following table: Year Ended July 31, 2019 2018 2017 Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock 41,757,116 41,635,078 41,542,765 Participating securities 38,905 148,700 254,727 Total weighted average number of shares and common stock equivalents attributable to both common stock and participating securities 41,796,021 41,783,778 41,797,492 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of the components of stock-based compensation expense recognized in the consolidated statements of income | The following table shows the components of stock-based compensation expense recognized in the consolidated statements of income: Year Ended July 31, 2019 2018 2017 Cost of sales $ 1,010 $ 663 $ 371 Operating expenses: Selling 2,428 1,458 1,582 General and administrative 11,828 7,292 6,774 Research and development 296 202 117 Total operating expenses 14,552 8,952 8,473 Stock-based compensation before income taxes $ 15,562 $ 9,615 $ 8,844 |
Schedule of weighted-average assumuptions used to estimate fair value of stock options | We determine the fair value of each stock award with market conditions using a Monte Carlo simulation on the date of grant using the following assumptions: 2019 2018 Volatility of common stock 27.54 % 26.60 % Average volatility of peer companies 36.55 % 33.72 % Average correlation coefficient of peer companies 27.18 % 32.26 % Risk-free interest rate 2.93 % 1.62 % |
Summary of nonvested stock award activity | A summary of nonvested stock award activity for fiscal 2019 , 2018 and 2017 follows: Number of Time-based Shares Number of Performance-based Shares Number of Market-based Shares Number of Total Shares Weighted Average Fair Value August 1, 2016 331,367 — — 331,367 $ 46.09 Granted 86,305 16,960 9,800 113,065 $ 81.77 Vested (1) (214,932 ) (725 ) (555 ) (216,212 ) $ 43.62 Forfeited (5,922 ) — — (5,922 ) $ 59.40 July 31, 2017 196,818 16,235 9,245 222,298 $ 66.28 Granted 94,309 17,486 10,465 122,260 $ 101.74 Vested (1) (115,943 ) (5,845 ) — (121,788 ) $ 60.25 Forfeited (6,864 ) (1,800 ) (2,000 ) (10,664 ) $ 95.09 July 31, 2018 168,320 26,076 17,710 212,106 $ 88.87 Granted 188,431 35,981 25,320 249,732 $ 85.16 Vested (1) (105,516 ) (13,327 ) (5,265 ) (124,108 ) $ 80.44 Forfeited (16,371 ) (8,520 ) (5,686 ) (30,577 ) $ 96.54 July 31, 2019 234,864 40,210 32,079 307,153 $ 88.99 _______________________________________________ (1) The aggregate fair value of all nonvested stock awards which vested was approximately $9,985 , $7,338 and $9,431 in fiscal 2019 , 2018 and 2017 , respectively. |
Summary of stock option activity | A summary of stock option activity for fiscal 2019 , 2018 and 2017 follows: Number of shares Weighted Average Exercise Price Weighted Average Contractual Life Remaining Aggregate Intrinsic Value Outstanding at August 1, 2016 122,500 $ 29.36 Exercised — $ — Outstanding at July 31, 2017 122,500 $ 29.36 Exercised (52,500 ) $ 17.04 Outstanding at July 31, 2018 70,000 $ 38.60 Exercised (30,000 ) $ 31.81 Outstanding at July 31, 2019 40,000 $ 43.70 0.57 years $ 1,943 Exercisable at July 31, 2019 40,000 $ 43.70 0.57 years $ 1,943 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Segment Reporting [Abstract] | |
Information as to operating segments | Information as to reportable segments is summarized below: Year Ended July 31, 2019 2018 2017 Net sales: Medical $ 523,669 $ 473,937 $ 398,773 Life Sciences (1) 201,022 217,030 196,446 Dental (1) 161,608 149,360 144,457 Dialysis 31,856 31,595 30,481 Total $ 918,155 $ 871,922 $ 770,157 _______________________________________________ (1) In fiscal 2018, approximately $5,820 of net sales were reclassified out of our Dental segment and into our Life Sciences segment associated with the changes in our segments noted above. Fiscal 2017 amounts were not material and were not adjusted. Year Ended July 31, 2019 2018 2017 Income from operations: Medical $ 98,356 $ 86,833 $ 73,440 Life Sciences (1) 20,552 36,803 33,159 Dental (1) 22,289 30,004 28,000 Dialysis 4,922 7,380 8,154 146,119 161,020 142,753 General corporate expenses 62,600 39,356 32,343 Income from operations 83,519 121,664 110,410 Interest expense, net 9,505 5,289 4,303 Other income (1,305 ) (1,138 ) (126 ) Income before income taxes $ 75,319 $ 117,513 $ 106,233 _______________________________________________ (1) In fiscal 2018, approximately $1,704 of income from operations were reclassified out of our Dental segment and into our Life Sciences segment associated with the changes in our segments noted above. Fiscal 2017 amounts were not material and were not adjusted. July 31, 2019 2018 Identifiable assets: Medical $ 532,250 $ 490,702 Life Sciences 184,737 151,460 Dental 272,309 210,831 Dialysis 19,016 22,614 General corporate, including cash and cash equivalents 62,054 88,101 Total $ 1,070,366 $ 963,708 Year Ended July 31, 2019 2018 2017 Capital expenditures: Medical $ 52,907 $ 18,996 $ 13,816 Life Sciences 16,408 4,409 3,689 Dental 16,243 2,441 2,492 Dialysis 3,203 644 1,296 General corporate 6,677 11,208 5,772 Total $ 95,438 37,698 27,065 Year Ended July 31, 2019 2018 2017 Depreciation and amortization: Medical $ 23,033 $ 19,002 $ 18,245 Life Sciences 7,482 5,628 5,706 Dental 9,844 8,756 8,556 Dialysis 39 711 427 General corporate 1,961 733 518 Total $ 42,359 $ 34,830 $ 33,452 |
Information as to geographic areas | Information as to geographic areas (including net sales which represent the geographic area from which we derive its net sales from external customers) is summarized below: Year Ended July 31, 2019 2018 2017 Net sales: United States $ 665,661 $ 643,744 $ 599,657 Europe/Africa/Middle East 148,334 131,130 95,753 Asia/Pacific 66,228 57,108 40,964 Canada 32,152 33,524 26,648 Latin America/South America 5,780 6,416 7,135 Total $ 918,155 $ 871,922 $ 770,157 July 31, 2019 2018 Total long-lived assets: United States $ 128,010 $ 80,918 Europe/Africa/Middle East 64,742 35,824 Asia/Pacific 4,201 2,531 Canada 1,995 804 Total 198,948 120,077 Goodwill and intangible assets, net 519,622 505,388 Total $ 718,570 $ 625,465 |
Quarterly Results of Operatio_2
Quarterly Results of Operations (unaudited) (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of quarterly results of operations | The following is a summary of the quarterly results of operations for fiscal 2019 and 2018 : Fiscal 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 225,589 $ 224,538 $ 228,552 $ 239,476 Cost of sales 120,340 119,863 121,675 128,823 Gross profit 105,249 104,675 106,877 110,653 Gross profit percentage 46.7 % 46.6 % 46.8 % 46.2 % Net income $ 19,242 $ 18,800 $ 8,175 $ 8,825 Earnings per common share: Basic $ 0.46 $ 0.45 $ 0.20 $ 0.21 Diluted $ 0.46 $ 0.45 $ 0.20 $ 0.21 Fiscal 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 212,766 $ 213,034 $ 217,268 $ 228,854 Cost of sales 112,107 111,799 112,594 121,451 Gross profit 100,659 101,235 104,674 107,403 Gross profit percentage 47.3 % 47.5 % 48.2 % 46.9 % Net income $ 22,929 $ 32,488 $ 18,736 $ 16,888 Earnings per common share: Basic $ 0.55 $ 0.78 $ 0.45 $ 0.41 Diluted $ 0.55 $ 0.78 $ 0.45 $ 0.41 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Revenue recognition - reductions | |||
Volume rebates | $ 9,469 | $ 8,401 | $ 6,291 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 21,510 | $ 17,473 | $ 15,045 |
Furniture and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 2 years | ||
Furniture and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 15 years | ||
Software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 3 years | ||
Software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 10 years | ||
Buildings and improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 5 years | ||
Buildings and improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 40 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets impairment | $ 0 | $ 0 | $ 0 |
Goodwill impairment | $ 0 | $ 0 | $ 0 |
Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful lives | 3 years | ||
Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful lives | 20 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Debt Issuance Costs (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Accounting Policies [Abstract] | ||
Net debt issuance costs | $ 2,149 | $ 2,698 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Warranties (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Product Warranty Liability [Line Items] | ||
Warranty reserves | $ 2,372 | $ 3,280 |
Most products | ||
Product Warranty Liability [Line Items] | ||
Warranty period | 1 year | |
Endoscopy, Water Purification and Filtration products | ||
Product Warranty Liability [Line Items] | ||
Warranty period | 24 months | |
Consumables, accessories and parts | ||
Product Warranty Liability [Line Items] | ||
Warranty period | 90 days |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Advertising Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Advertising Costs | |||
Advertising costs charged to expense | $ 2,885 | $ 4,115 | $ 3,694 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies Summary of Significant Accounting Policies - New Accounting Standards (Details) - Subsequent Event - Forecast $ in Thousands | Aug. 01, 2019USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Right of use assets | $ 30,000 |
Accounting Standards Update 2016-02 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Lease liability | $ 35,000 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Aug. 01, 2018 | Jul. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ 539,097 | $ 491,540 | |
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ 865 | ||
Minimum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Capitalized contract cost, amortization period | 2 years | ||
Maximum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Capitalized contract cost, amortization period | 5 years |
Revenue Recognition - Summary o
Revenue Recognition - Summary of net sales by geography and product line (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 239,476 | $ 228,552 | $ 224,538 | $ 225,589 | $ 228,854 | $ 217,268 | $ 213,034 | $ 212,766 | $ 918,155 | $ 871,922 | $ 770,157 |
Capital equipment | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 221,668 | 240,153 | |||||||||
Consumables | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 569,412 | 523,073 | |||||||||
Product service | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 122,752 | 106,764 | 85,479 | ||||||||
All other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 4,323 | 1,932 | |||||||||
United States | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 665,661 | 643,744 | 599,657 | ||||||||
Europe/Africa/Middle East | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 148,334 | 131,130 | 95,753 | ||||||||
Asia/Pacific | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 66,228 | 57,108 | 40,964 | ||||||||
Canada | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 32,152 | 33,524 | 26,648 | ||||||||
Latin America/South America | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 5,780 | $ 6,416 | $ 7,135 |
Revenue Recognition - Remaining
Revenue Recognition - Remaining Performance Obligations (Details) $ in Thousands | Jul. 31, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 73,735 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-08-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 50.00% |
Remaining performance obligation, satisfaction period | 1 year |
Revenue Recognition - Summary_2
Revenue Recognition - Summary of contract liabilities activity (Details) $ in Thousands | 12 Months Ended |
Jul. 31, 2019USD ($) | |
Contract Liabilities | |
Beginning Balance | $ 29,015 |
Revenue deferred in current year | 61,996 |
Deferred revenue recognized | (61,913) |
Foreign currency translation | (863) |
Ending Balance | 28,235 |
Contract liabilities included in Other long-term liabilities | (395) |
Deferred revenue | $ 27,840 |
Acquisitions Acquisitions - Omn
Acquisitions Acquisitions - Omnia (Details) - USD ($) $ in Thousands | Feb. 01, 2019 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 |
Business Acquisition [Line Items] | ||||
Acquisition of business, net of cash acquired | $ 40,644 | $ 87,488 | $ 70,044 | |
Omnia S.p.A. | ||||
Business Acquisition [Line Items] | ||||
Total consideration for the transaction, excluding acquisition-related costs | $ 19,808 | |||
Acquisition of business, net of cash acquired | 16,598 | |||
Common stock issued | 3,210 | |||
Contingent consideration | 0 | |||
Minimum | Omnia S.p.A. | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration | 0 | |||
Maximum | Omnia S.p.A. | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration | $ 5,800 |
Acquisitions - CES Business (De
Acquisitions - CES Business (Details) $ in Thousands | Aug. 01, 2018USD ($) |
CES Business | |
Business Acquisition [Line Items] | |
Total consideration for the transaction, excluding acquisition-related costs | $ 17,047 |
Acquisitions - Aexis Medical (D
Acquisitions - Aexis Medical (Details) - USD ($) | Mar. 21, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 |
Business Acquisition [Line Items] | ||||
Acquisition of business, net of cash acquired | $ 40,644,000 | $ 87,488,000 | $ 70,044,000 | |
Aexis Medical | ||||
Business Acquisition [Line Items] | ||||
Total consideration for the transaction, excluding acquisition-related costs | $ 21,600,000 | |||
Acquisition of business, net of cash acquired | 20,308,000 | |||
Contingent consideration | 1,292,000 | |||
Minimum | Aexis Medical | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration | 0 | |||
Maximum | Aexis Medical | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration | $ 1,850,000 |
Acquisitions - BHT Group (Detai
Acquisitions - BHT Group (Details) $ in Thousands | Aug. 23, 2017USD ($) |
BHT Group | |
Business Acquisition [Line Items] | |
Total consideration for the transaction, excluding acquisition-related costs | $ 60,216 |
Acquisitions - Summary of Acqui
Acquisitions - Summary of Acquisitions (Details) - USD ($) $ in Thousands | Feb. 01, 2019 | Aug. 01, 2018 | Mar. 21, 2018 | Aug. 23, 2017 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 378,109 | $ 368,027 | $ 311,445 | ||||
Omnia S.p.A. | |||||||
Business Acquisition [Line Items] | |||||||
Cash paid | $ 16,598 | ||||||
Fair value of contingent consideration | 0 | ||||||
Common stock issued | 3,210 | ||||||
Total | 19,808 | ||||||
Property and equipment | 1,285 | ||||||
Goodwill | 11,340 | ||||||
Deferred income taxes | (2,346) | ||||||
Other working capital | 1,673 | ||||||
Contingent consideration | 0 | ||||||
Long-term debt | (5,207) | ||||||
Total | 19,808 | ||||||
Omnia S.p.A. | Customer relationships | |||||||
Business Acquisition [Line Items] | |||||||
Amortizable intangible assets | 10,206 | ||||||
Omnia S.p.A. | Technology | |||||||
Business Acquisition [Line Items] | |||||||
Amortizable intangible assets | 1,257 | ||||||
Omnia S.p.A. | Brand names | |||||||
Business Acquisition [Line Items] | |||||||
Amortizable intangible assets | $ 1,600 | ||||||
CES Business | |||||||
Business Acquisition [Line Items] | |||||||
Cash paid | $ 17,047 | ||||||
Fair value of contingent consideration | 0 | ||||||
Common stock issued | 0 | ||||||
Total | 17,047 | ||||||
Property and equipment | 539 | ||||||
Goodwill | 6,137 | ||||||
Deferred income taxes | 0 | ||||||
Other working capital | 2,271 | ||||||
Contingent consideration | 0 | ||||||
Long-term debt | 0 | ||||||
Total | 17,047 | ||||||
CES Business | Customer relationships | |||||||
Business Acquisition [Line Items] | |||||||
Amortizable intangible assets | 8,100 | ||||||
CES Business | Technology | |||||||
Business Acquisition [Line Items] | |||||||
Amortizable intangible assets | 0 | ||||||
CES Business | Brand names | |||||||
Business Acquisition [Line Items] | |||||||
Amortizable intangible assets | $ 0 | ||||||
Aexis Medical | |||||||
Business Acquisition [Line Items] | |||||||
Cash paid | $ 20,308 | ||||||
Fair value of contingent consideration | 1,292 | ||||||
Common stock issued | 0 | ||||||
Total | 21,600 | ||||||
Property and equipment | 130 | ||||||
Goodwill | 17,092 | ||||||
Deferred income taxes | (1,639) | ||||||
Other working capital | 909 | ||||||
Contingent consideration | (1,292) | ||||||
Long-term debt | 0 | ||||||
Total | 21,600 | ||||||
Aexis Medical | Customer relationships | |||||||
Business Acquisition [Line Items] | |||||||
Amortizable intangible assets | 1,800 | ||||||
Aexis Medical | Technology | |||||||
Business Acquisition [Line Items] | |||||||
Amortizable intangible assets | 4,600 | ||||||
Aexis Medical | Brand names | |||||||
Business Acquisition [Line Items] | |||||||
Amortizable intangible assets | $ 0 | ||||||
BHT Group | |||||||
Business Acquisition [Line Items] | |||||||
Cash paid | $ 60,216 | ||||||
Fair value of contingent consideration | 0 | ||||||
Common stock issued | 0 | ||||||
Total | 60,216 | ||||||
Property and equipment | 835 | ||||||
Goodwill | 40,934 | ||||||
Deferred income taxes | (5,881) | ||||||
Other working capital | 5,628 | ||||||
Contingent consideration | 0 | ||||||
Long-term debt | 0 | ||||||
Total | 60,216 | ||||||
BHT Group | Customer relationships | |||||||
Business Acquisition [Line Items] | |||||||
Amortizable intangible assets | 12,500 | ||||||
BHT Group | Technology | |||||||
Business Acquisition [Line Items] | |||||||
Amortizable intangible assets | 6,200 | ||||||
BHT Group | Brand names | |||||||
Business Acquisition [Line Items] | |||||||
Amortizable intangible assets | $ 0 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials and parts | $ 69,498 | $ 49,054 |
Work-in-process | 5,801 | 13,189 |
Finished goods | 73,050 | 53,948 |
Less: reserve for excess and obsolete inventory | (10,115) | (8,599) |
Total inventories, net | $ 138,234 | $ 107,592 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (114,191) | $ (95,540) |
Total property and equipment, net | 185,242 | 111,417 |
Land, buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 81,556 | 50,162 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 130,852 | 112,661 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 14,428 | 9,544 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 33,869 | 8,587 |
Construction in process | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 38,728 | $ 26,003 |
Derivatives (Details)
Derivatives (Details) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019USD ($)instrument | Apr. 09, 2019USD ($)instrument | Jul. 31, 2018USD ($)instrument | |
Foreign currency forward contracts | Designated as hedging instrument | Fair value hedge instruments | |||
Derivatives | |||
Term of contracts | 1 month | ||
Number of contracts | instrument | 7 | 7 | |
Aggregate value of contracts | $ 78,264 | $ 30,159 | |
Term of renewed contracts | 1 month | ||
Interest rate swap | |||
Derivatives | |||
Derivative asset, short term | $ 486 | ||
Derivative asset, long term | $ 2,826 | ||
Interest rate swap | Designated as hedging instrument | |||
Derivatives | |||
Number of contracts | instrument | 2 | ||
Notional value | $ 150,000 | ||
Fixed interest rate | 2.265% |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring Basis (Details) - USD ($) | Jul. 31, 2019 | Mar. 21, 2018 | Oct. 31, 2017 | Jul. 31, 2017 |
Aexis Medical | ||||
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis | ||||
Contingent Consideration, low end of range | $ 0 | |||
Contingent Consideration, high end of range | 1,850,000 | |||
Contingent consideration | $ 1,292,000 | |||
Assumed contingent obligation | $ 1,411,000 | |||
Jet Prep Ltd. | ||||
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis | ||||
Assumed contingent obligation | $ 0 | $ 1,138,000 | ||
Level 3 | Recurring basis | Jet Prep Ltd. | ||||
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis | ||||
Assumed contingent obligation | $ 0 |
Fair Value Measurements - Hiera
Fair Value Measurements - Hierarchy Levels (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Recurring basis | ||
Assets: | ||
Total assets | $ 3,416 | $ 104 |
Liabilities: | ||
Contingent consideration | 1,411 | 1,298 |
Total liabilities | 1,411 | 1,298 |
Recurring basis | Money markets | ||
Assets: | ||
Money markets | 104 | 104 |
Recurring basis | Level 1 | ||
Assets: | ||
Total assets | 104 | 104 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Recurring basis | Level 1 | Money markets | ||
Assets: | ||
Money markets | 104 | 104 |
Recurring basis | Level 2 | ||
Assets: | ||
Total assets | 3,312 | 0 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Recurring basis | Level 2 | Money markets | ||
Assets: | ||
Money markets | 0 | 0 |
Recurring basis | Level 3 | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 1,411 | 1,298 |
Total liabilities | 1,411 | 1,298 |
Recurring basis | Level 3 | Money markets | ||
Assets: | ||
Money markets | 0 | $ 0 |
Interest Rate Swap | ||
Assets: | ||
Derivative asset, short term | 486 | |
Derivative asset, long term | 2,826 | |
Interest Rate Swap | Recurring basis | ||
Assets: | ||
Derivative asset, short term | 486 | |
Derivative asset, long term | 2,826 | |
Interest Rate Swap | Recurring basis | Level 1 | ||
Assets: | ||
Derivative asset, short term | 0 | |
Derivative asset, long term | 0 | |
Interest Rate Swap | Recurring basis | Level 2 | ||
Assets: | ||
Derivative asset, short term | 486 | |
Derivative asset, long term | 2,826 | |
Interest Rate Swap | Recurring basis | Level 3 | ||
Assets: | ||
Derivative asset, short term | 0 | |
Derivative asset, long term | $ 0 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Liabilities (Details) - Level 3 - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Reconciliation of liability measured and recorded at fair value on a recurring basis using Level 3 | |||
Beginning balance | $ 1,298 | $ 1,138 | $ 1,579 |
Original fair value of contingent consideration | 1,292 | ||
Loss included in general and administrative expense | 113 | 6 | (265) |
Net purchases, issuances, sales and settlements | (1,138) | (176) | |
Ending balance | 1,411 | 1,298 | 1,138 |
Contingent Consideration | Aexis Medical | |||
Reconciliation of liability measured and recorded at fair value on a recurring basis using Level 3 | |||
Beginning balance | 1,298 | 0 | 0 |
Original fair value of contingent consideration | 1,292 | ||
Loss included in general and administrative expense | 113 | 6 | 0 |
Net purchases, issuances, sales and settlements | 0 | 0 | |
Ending balance | 1,411 | 1,298 | 0 |
Assumed Contingent Obligation | Jet Prep Ltd. | |||
Reconciliation of liability measured and recorded at fair value on a recurring basis using Level 3 | |||
Beginning balance | 0 | 1,138 | 1,138 |
Original fair value of contingent consideration | 0 | ||
Loss included in general and administrative expense | 0 | 0 | 0 |
Net purchases, issuances, sales and settlements | (1,138) | 0 | |
Ending balance | 0 | 0 | 1,138 |
Contingent Guaranteed Obligation | Cantel Medical (UK) | |||
Reconciliation of liability measured and recorded at fair value on a recurring basis using Level 3 | |||
Beginning balance | 0 | 0 | 441 |
Original fair value of contingent consideration | 0 | ||
Loss included in general and administrative expense | 0 | 0 | (265) |
Net purchases, issuances, sales and settlements | 0 | (176) | |
Ending balance | $ 0 | $ 0 | $ 0 |
Intangibles and Goodwill - Narr
Intangibles and Goodwill - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 20,849 | $ 17,357 | $ 18,407 |
Amortization expense, 2020 | 18,025 | ||
Amortization expense, 2021 | 17,706 | ||
Amortization expense, 2022 | 17,324 | ||
Amortization expense, 2023 | 16,294 | ||
Amortization expense, 2024 | $ 15,427 | ||
Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful lives | 3 years | ||
Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful lives | 20 years | ||
Weighted average | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful lives | 12 years | ||
Technology | Jet Prep Ltd. | |||
Finite-Lived Intangible Assets [Line Items] | |||
Accelerated amortization | $ 2,401 |
Intangibles and Goodwill - Inta
Intangibles and Goodwill - Intangible Assets Summary (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Intangible assets with finite lives: | ||
Gross | $ 220,343 | $ 201,959 |
Accumulated Amortization | (85,108) | (72,118) |
Net | 135,235 | 129,841 |
Intangible assets with indefinite lives: | ||
Trademarks and tradenames | 6,278 | 7,520 |
Total intangible assets | ||
Gross | 226,621 | 209,479 |
Accumulated Amortization | (85,108) | (72,118) |
Net | 141,513 | 137,361 |
Fully amortized intangibles written off | 6,087 | |
Customer relationships | ||
Intangible assets with finite lives: | ||
Gross | 146,204 | 133,347 |
Accumulated Amortization | (54,866) | (45,618) |
Net | 91,338 | 87,729 |
Total intangible assets | ||
Accumulated Amortization | $ (54,866) | (45,618) |
Weighted average amortization period remaining | 13 years | |
Technology | ||
Intangible assets with finite lives: | ||
Gross | $ 60,032 | 54,585 |
Accumulated Amortization | (24,081) | (19,836) |
Net | 35,951 | 34,749 |
Total intangible assets | ||
Accumulated Amortization | $ (24,081) | (19,836) |
Weighted average amortization period remaining | 10 years | |
Brand names | ||
Intangible assets with finite lives: | ||
Gross | $ 8,361 | 8,141 |
Accumulated Amortization | (3,256) | (3,857) |
Net | 5,105 | 4,284 |
Total intangible assets | ||
Accumulated Amortization | $ (3,256) | (3,857) |
Weighted average amortization period remaining | 13 years | |
Non-compete agreements | ||
Intangible assets with finite lives: | ||
Gross | $ 2,880 | 3,060 |
Accumulated Amortization | (1,653) | (1,628) |
Net | 1,227 | 1,432 |
Total intangible assets | ||
Accumulated Amortization | $ (1,653) | (1,628) |
Weighted average amortization period remaining | 15 years | |
Patents and other registrations | ||
Intangible assets with finite lives: | ||
Gross | $ 2,866 | 2,826 |
Accumulated Amortization | (1,252) | (1,179) |
Net | 1,614 | 1,647 |
Total intangible assets | ||
Accumulated Amortization | $ (1,252) | $ (1,179) |
Weighted average amortization period remaining | 18 years |
Intangibles and Goodwill - Good
Intangibles and Goodwill - Goodwill Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Changes in Goodwill | ||
Balance at the beginning of the period | $ 368,027 | $ 311,445 |
Acquisitions | 17,477 | 58,026 |
Divestitures | (491) | |
Foreign currency translation | (6,904) | (1,444) |
Balance at the end of the period | 378,109 | 368,027 |
Medical | ||
Changes in Goodwill | ||
Balance at the beginning of the period | 186,690 | 129,945 |
Acquisitions | 0 | 58,026 |
Divestitures | 0 | |
Foreign currency translation | (6,493) | (1,281) |
Balance at the end of the period | 180,197 | 186,690 |
Life Sciences | ||
Changes in Goodwill | ||
Balance at the beginning of the period | 58,925 | 59,088 |
Acquisitions | 6,137 | 0 |
Divestitures | (491) | |
Foreign currency translation | (90) | (163) |
Balance at the end of the period | 64,481 | 58,925 |
Dental | ||
Changes in Goodwill | ||
Balance at the beginning of the period | 114,279 | 114,279 |
Acquisitions | 11,340 | 0 |
Divestitures | 0 | |
Foreign currency translation | (321) | 0 |
Balance at the end of the period | 125,298 | 114,279 |
Dialysis | ||
Changes in Goodwill | ||
Balance at the beginning of the period | 8,133 | 8,133 |
Acquisitions | 0 | 0 |
Divestitures | 0 | |
Foreign currency translation | 0 | 0 |
Balance at the end of the period | $ 8,133 | $ 8,133 |
Financing Arrangements - Schedu
Financing Arrangements - Schedule of long-term debt (Details) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 | Jun. 28, 2018 |
Debt Instrument [Line Items] | |||
Total long-term debt, net of unamortized debt issuance costs | $ 230,851,000 | $ 197,302,000 | |
Current portion of long-term debt | (10,000,000) | (10,000,000) | |
Long-term debt, net of unamortized debt issuance costs and excluding current portion | 220,851,000 | 187,302,000 | |
Line of Credit | |||
Debt Instrument [Line Items] | |||
Unamortized debt issuance costs | (2,149,000) | (2,698,000) | |
Revolving credit loan | Line of Credit | |||
Debt Instrument [Line Items] | |||
Loans outstanding | 43,000,000 | 0 | $ 400,000,000 |
Tranche A term loan | Line of Credit | |||
Debt Instrument [Line Items] | |||
Loans outstanding | $ 190,000,000 | $ 200,000,000 | $ 200,000,000 |
Financing Arrangements - Narrat
Financing Arrangements - Narrative (Details) - USD ($) | 12 Months Ended | |||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | Jun. 28, 2018 | |
Debt Instrument [Line Items] | ||||
Principal payment made | $ 15,207,000 | $ 0 | $ 0 | |
Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 300,000,000 | |||
Consolidated Leverage Ratio | 1.26 | |||
Shares of foreign subsidiaries pledged as security (as a percent) | 65.00% | |||
Line of Credit | Minimum | ||||
Debt Instrument [Line Items] | ||||
Fees on unused portion of credit facilities (as a percent) | 0.20% | |||
Line of Credit | Maximum | ||||
Debt Instrument [Line Items] | ||||
Fees on unused portion of credit facilities (as a percent) | 0.35% | |||
Line of Credit | Lender's base rate | ||||
Debt Instrument [Line Items] | ||||
Margin on reference rate (as a percent) | 0.25% | |||
Reference rate (as a percent) | 5.50% | |||
Line of Credit | Lender's base rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Margin on reference rate (as a percent) | 0.00% | |||
Line of Credit | Lender's base rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Margin on reference rate (as a percent) | 1.00% | |||
Line of Credit | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Margin on reference rate (as a percent) | 1.25% | |||
Line of Credit | LIBOR | Minimum | ||||
Debt Instrument [Line Items] | ||||
Margin on reference rate (as a percent) | 1.00% | |||
Reference rate (as a percent) | 2.23% | |||
Line of Credit | LIBOR | Maximum | ||||
Debt Instrument [Line Items] | ||||
Margin on reference rate (as a percent) | 2.00% | |||
Line of Credit | Tranche A term loan | ||||
Debt Instrument [Line Items] | ||||
Revolving credit loans outstanding | $ 190,000,000 | 200,000,000 | 200,000,000 | |
Borrowings outstanding | 190,000,000 | |||
Principal amortization, periodic payment due 2019, 2020, 2021, and 2022 | 10,000,000 | |||
Balance due and payable at maturity in 2023 | 160,000,000 | |||
Principal payment made | $ 10,000,000 | |||
Interest rate (as a percent) | 3.48% | |||
Line of Credit | Revolving credit loan | ||||
Debt Instrument [Line Items] | ||||
Revolving credit loans outstanding | $ 43,000,000 | $ 0 | $ 400,000,000 | |
Line of Credit | Revolving credit loan | Minimum | ||||
Debt Instrument [Line Items] | ||||
Fees on unused portion of credit facilities (as a percent) | 0.20% | |||
Line of Credit | Revolving credit loan | Maximum | ||||
Debt Instrument [Line Items] | ||||
Fees on unused portion of credit facilities (as a percent) | 0.35% | |||
Omnia Debt Acquired | ||||
Debt Instrument [Line Items] | ||||
Principal payment made | $ 5,207,000 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | ||||
TCJA, Revaluation of deferred tax assets and liabilities, provisional income tax expense (benefit) | $ 8,657,000 | |||
Statutory tax rate | 26.90% | 21.00% | 26.90% | 35.00% |
Consolidated effective tax rate | 26.90% | 22.50% | 32.80% | |
Repatriated dividends | $ 0 | $ 0 | ||
Cumulative amount of undistributed earnings indefinitely reinvested in foreign subsidiaries | 45,566,000 | |||
Uncertain tax positions | $ 0 | 432,000 | 0 | |
Foreign | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards (NOLs) | $ 8,605,000 | 10,421,000 | $ 8,605,000 | |
Valuation allowance on NOLs | 5,701,000 | |||
Jet Prep Ltd. | Foreign | ||||
Operating Loss Carryforwards [Line Items] | ||||
Valuation allowance on NOLs | $ 2,785,000 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Current | |||
Federal | $ 13,494 | $ 24,288 | $ 28,900 |
State | 3,976 | 5,078 | 4,352 |
International | 4,869 | 4,626 | 1,545 |
Total | 22,339 | 33,992 | 34,797 |
Deferred | |||
Federal | 683 | (7,308) | 2,020 |
State | (15) | 491 | 261 |
International | (2,730) | (703) | (2,223) |
Total | $ (2,062) | $ (7,520) | $ 58 |
Income Taxes - Geographic Compo
Income Taxes - Geographic Components (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Income Taxes | |||
Income (loss) before income taxes | $ 75,319 | $ 117,513 | $ 106,233 |
United States | |||
Income Taxes | |||
Income (loss) before income taxes | 68,342 | 115,697 | 108,329 |
International | |||
Income Taxes | |||
Income (loss) before income taxes | $ 6,977 | $ 1,816 | $ (2,096) |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) | 9 Months Ended | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||||
Expected statutory tax | 26.90% | 21.00% | 26.90% | 35.00% |
Differential attributable to: | ||||
Foreign operations | 0.80% | 0.60% | 0.00% | |
State and local taxes | 4.80% | 3.70% | 3.90% | |
Domestic production deduction | (0.00%) | (1.80%) | (2.70%) | |
Acquisition-related items, net | 0.10% | 0.00% | 0.10% | |
Impact of tax legislation on deferred taxes | (0.10%) | (7.40%) | (0.00%) | |
R&E tax credit | (1.00%) | (0.70%) | (1.40%) | |
Executive compensation | 1.40% | 0.20% | 0.30% | |
Excess tax benefits | (0.70%) | (1.70%) | (2.20%) | |
Valuation allowance | 0.10% | 2.40% | 0.00% | |
Other | 0.50% | 0.30% | (0.20%) | |
Consolidated effective tax rate | 26.90% | 22.50% | 32.80% |
Income Taxes - Deferred Taxes (
Income Taxes - Deferred Taxes (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Deferred tax assets: | ||
Accrued expenses | $ 4,175 | $ 5,354 |
Inventories | 5,408 | 3,165 |
Accounts receivable | 593 | 306 |
Other long-term liabilities | 211 | 103 |
Stock-based compensation | 3,586 | 2,700 |
Capital investment | 426 | 426 |
Domestic NOLs | 137 | 0 |
Foreign NOLs | 10,284 | 8,605 |
Subtotal | 24,820 | 20,659 |
Valuation allowance | (5,701) | (6,358) |
Deferred tax assets, net of valuation allowance | 19,119 | 14,301 |
Deferred tax liabilities: | ||
Property and equipment | (11,342) | (7,352) |
Intangible assets | (21,156) | (21,300) |
Goodwill | (11,618) | (10,362) |
Deferred tax liabilities, gross | (44,116) | (39,014) |
Deferred income taxes (assets) | 4,281 | 2,911 |
Deferred income taxes (liabilities) | (29,278) | (27,624) |
Net deferred income taxes | $ (24,997) | $ (24,713) |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) | 12 Months Ended | |||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | Oct. 31, 2017 | |
Total contractual obligations | ||||
Rent expense | $ 9,601,000 | $ 8,801,000 | $ 7,715,000 | |
Litigation costs | $ 2,608,000 | |||
Aexis Medical | ||||
Total contractual obligations | ||||
Assumed contingent obligation | $ 1,411,000 | |||
Jet Prep Ltd. | ||||
Total contractual obligations | ||||
Assumed contingent obligation | $ 1,138,000 | $ 0 |
Commitments and Contingencies_2
Commitments and Contingencies - Annual Required Payments (Details) $ in Thousands | Jul. 31, 2019USD ($) |
Minimum commitments under noncancelable operating leases | |
2020 | $ 9,099 |
2021 | 7,671 |
2022 | 6,021 |
2023 | 5,659 |
2024 | 5,159 |
Thereafter | 15,251 |
Total | $ 48,860 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Increase (Decrease) in Stockholders' Equity | |||
Beginning Balance | $ 608,867 | $ 523,932 | $ 454,370 |
Total other comprehensive (loss) income: | (10,741) | (1,556) | 1,895 |
Ending Balance | 661,537 | 608,867 | 523,932 |
Total | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning Balance | (11,456) | (9,900) | (11,795) |
Total other comprehensive (loss) income: | (10,741) | (1,556) | 1,895 |
Ending Balance | (22,197) | (11,456) | (9,900) |
Foreign Currency Translation Adjustments | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning Balance | (11,456) | (9,900) | (11,795) |
Other comprehensive (loss) income, before tax | (13,287) | (1,556) | 1,895 |
Ending Balance | (24,743) | (11,456) | (9,900) |
Changes in Fair Value of Interest Rate Swaps | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning Balance | 0 | 0 | 0 |
Other comprehensive (loss) income, before tax | 3,312 | 0 | 0 |
Ending Balance | 3,312 | 0 | 0 |
Tax effects | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning Balance | 0 | 0 | 0 |
Other comprehensive (loss) income, tax | (766) | 0 | 0 |
Ending Balance | $ (766) | $ 0 | $ 0 |
Earnings Per Common Share - Com
Earnings Per Common Share - Computation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Numerator for basic and diluted earnings per share: | |||||||||||
Net income | $ 8,825 | $ 8,175 | $ 18,800 | $ 19,242 | $ 16,888 | $ 18,736 | $ 32,488 | $ 22,929 | $ 55,042 | $ 91,041 | $ 71,378 |
Less income allocated to participating securities | (51) | (320) | (431) | ||||||||
Net income available to common shareholders | $ 54,991 | $ 90,721 | $ 70,947 | ||||||||
Denominator for basic and diluted earnings per share, as adjusted for participating securities: | |||||||||||
Denominator for basic earnings per share - weighted average number of shares outstanding attributable to common stock (in shares) | 41,700,926 | 41,567,722 | 41,468,487 | ||||||||
Dilutive effect of stock options using the treasury stock method and the average market price for the year (in shares) | 56,190 | 67,356 | 74,278 | ||||||||
Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock (in shares) | 41,757,116 | 41,635,078 | 41,542,765 | ||||||||
Earnings per share attributable to common stock: | |||||||||||
Basic earnings per share (in dollars per share) | $ 0.21 | $ 0.20 | $ 0.45 | $ 0.46 | $ 0.41 | $ 0.45 | $ 0.78 | $ 0.55 | $ 1.32 | $ 2.18 | $ 1.71 |
Diluted earnings per share (in dollars per share) | $ 0.21 | $ 0.20 | $ 0.45 | $ 0.46 | $ 0.41 | $ 0.45 | $ 0.78 | $ 0.55 | $ 1.32 | $ 2.18 | $ 1.71 |
Stock options excluded from weighted average dilutive common shares outstanding because their inclusion would have been antidilutive (in shares) | 0 | 0 | 0 |
Earnings Per Common Share - Wei
Earnings Per Common Share - Weighted Average Shares (Details) - shares | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Reconciliation of weighted average number of shares and common stock equivalents attributable to common stock, to the entity's total weighted average number of shares and common stock equivalents, including participating securities | |||
Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock (in shares) | 41,757,116 | 41,635,078 | 41,542,765 |
Participating securities (in shares) | 38,905 | 148,700 | 254,727 |
Total weighted average number of shares and common stock equivalents attributable to both common stock and participating securities (in shares) | 41,796,021 | 41,783,778 | 41,797,492 |
Stock-Based Compensation - 2016
Stock-Based Compensation - 2016 Plan (Details) | 12 Months Ended | ||||
Jul. 31, 2019Installmentshares | Jul. 31, 2018shares | Jul. 31, 2017shares | Jul. 31, 2016shares | Jan. 07, 2016shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Outstanding unvested restricted stock shares | 307,153,000 | 212,106,000 | 222,298,000 | 331,367,000 | |
2016 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum number of shares authorized for issuance | 1,200,000 | ||||
Number of anniversaries of grant date on which awards vest | Installment | 3 | ||||
Outstanding unvested restricted stock shares | 307,153 | ||||
Outstanding options (in shares) | 0 | ||||
Shares available under Plan | 755,429 | ||||
2016 Plan | First anniversary vesting | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 33.33% | ||||
Vesting period | 1 year | ||||
2016 Plan | Second anniversary vesting | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 33.33% | ||||
Vesting period | 2 years | ||||
2016 Plan | Third anniversary vesting | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 33.33% | ||||
Vesting period | 3 years |
Stock-Based Compensation - 2006
Stock-Based Compensation - 2006 Plan (Details) | 12 Months Ended | |||
Jul. 31, 2019Installmentshares | Jul. 31, 2018shares | Jul. 31, 2017shares | Jul. 31, 2016shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding unvested restricted stock shares | 307,153,000 | 212,106,000 | 222,298,000 | 331,367,000 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding options (in shares) | 40,000 | 70,000 | 122,500 | |
2006 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum number of shares authorized for issuance | 5,591,000 | |||
2006 Plan | Stock options and stock appreciation rights | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum number of shares authorized for issuance | 2,700,000 | |||
2006 Plan | Restricted stock and other stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum number of shares authorized for issuance | 2,891,000 | |||
2006 Plan | Restricted shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of anniversaries of grant date on which awards vest | Installment | 3 | |||
Outstanding unvested restricted stock shares | 0 | |||
2006 Plan | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding options (in shares) | 40,000 | |||
First anniversary vesting | 2006 Plan | Restricted shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 33.33% | |||
Vesting period | 1 year | |||
Second anniversary vesting | 2006 Plan | Restricted shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 33.33% | |||
Vesting period | 2 years | |||
Third anniversary vesting | 2006 Plan | Restricted shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 33.33% | |||
Vesting period | 3 years |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Income statement components of stock-based compensation expense recognized in Consolidated Statements of Income | |||
Stock-based compensation before income taxes | $ 15,562 | $ 9,615 | $ 8,844 |
Maximum share attainment as a percentage of initially granted shares | 200.00% | ||
Total unrecognized stock-based compensation cost | $ 13,874 | ||
Remaining weighted average period for unrecognized compensation cost | 12 months | ||
Cost of sales | |||
Income statement components of stock-based compensation expense recognized in Consolidated Statements of Income | |||
Stock-based compensation before income taxes | $ 1,010 | 663 | 371 |
Selling | |||
Income statement components of stock-based compensation expense recognized in Consolidated Statements of Income | |||
Stock-based compensation before income taxes | 2,428 | 1,458 | 1,582 |
General and administrative | |||
Income statement components of stock-based compensation expense recognized in Consolidated Statements of Income | |||
Stock-based compensation before income taxes | 11,828 | 7,292 | 6,774 |
Research and development | |||
Income statement components of stock-based compensation expense recognized in Consolidated Statements of Income | |||
Stock-based compensation before income taxes | 296 | 202 | 117 |
Total operating expenses | |||
Income statement components of stock-based compensation expense recognized in Consolidated Statements of Income | |||
Stock-based compensation before income taxes | $ 14,552 | $ 8,952 | $ 8,473 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value Monte Carlo Simulation (Details) - Restricted shares | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility of common stock | 27.54% | 26.60% |
Average volatility of peer companies | 36.55% | 33.72% |
Average correlation coefficient of peer companies | 27.18% | 32.26% |
Risk-free interest rate | 2.93% | 1.62% |
Stock-Based Compensation - Nonv
Stock-Based Compensation - Nonvested Stock Award Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Number of Shares | |||
Nonvested stock awards at the beginning of the period (in shares) | 212,106,000 | 222,298,000 | 331,367,000 |
Granted (in shares) | 249,732,000 | 122,260,000 | 113,065,000 |
Vested (in shares) | (124,108,000) | (121,788,000) | (216,212,000) |
Forfeited (in shares) | (30,577,000) | (10,664,000) | (5,922,000) |
Nonvested stock awards at the end of the period (in shares) | 307,153,000 | 212,106,000 | 222,298,000 |
Weighted Average Fair Value | |||
Nonvested stock awards at the beginning of the period (in dollars per share) | $ 88.87 | $ 66.28 | $ 46.09 |
Granted (in dollars per share) | 85.16 | 101.74 | 81.77 |
Vested (in dollars per share) | 80.44 | 60.25 | 43.62 |
Forfeited (in dollars per share) | 96.54 | 95.09 | 59.40 |
Nonvested stock awards at the end of the period (in dollars per share) | $ 88.99 | $ 88.87 | $ 66.28 |
Aggregate fair value, vested in period | $ 9,985 | $ 7,338 | $ 9,431 |
Number of Time-based Shares | |||
Number of Shares | |||
Nonvested stock awards at the beginning of the period (in shares) | 168,320,000 | 196,818,000 | 331,367,000 |
Granted (in shares) | 188,431,000 | 94,309,000 | 86,305,000 |
Vested (in shares) | (105,516,000) | (115,943,000) | (214,932,000) |
Forfeited (in shares) | (16,371,000) | (6,864,000) | (5,922,000) |
Nonvested stock awards at the end of the period (in shares) | 234,864,000 | 168,320,000 | 196,818,000 |
Number of Performance-based Shares | |||
Number of Shares | |||
Nonvested stock awards at the beginning of the period (in shares) | 26,076,000 | 16,235,000 | 0 |
Granted (in shares) | 35,981,000 | 17,486,000 | 16,960,000 |
Vested (in shares) | (13,327,000) | (5,845,000) | (725,000) |
Forfeited (in shares) | (8,520,000) | (1,800,000) | 0 |
Nonvested stock awards at the end of the period (in shares) | 40,210,000 | 26,076,000 | 16,235,000 |
Number of Market-based Shares | |||
Number of Shares | |||
Nonvested stock awards at the beginning of the period (in shares) | 17,710,000 | 9,245,000 | 0 |
Granted (in shares) | 25,320,000 | 10,465,000 | 9,800,000 |
Vested (in shares) | (5,265,000) | 0 | (555,000) |
Forfeited (in shares) | (5,686,000) | (2,000,000) | 0 |
Nonvested stock awards at the end of the period (in shares) | 32,079,000 | 17,710,000 | 9,245,000 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Stock Option Activity, Number of shares | |||
Outstanding at beginning of period (in shares) | 70,000 | 122,500 | 122,500 |
Exercised (in shares) | (30,000) | (52,500) | 0 |
Outstanding at end of period (in shares) | 40,000 | 70,000 | 122,500 |
Stock Option Activity, Weighted Average Exercise Price | |||
Outstanding at beginning of period (in dollars per share) | $ 38.60 | $ 29.36 | $ 29.36 |
Exercised (in dollars per share) | 31.81 | 17.04 | 0 |
Outstanding at end of period (in dollars per share) | $ 43.70 | $ 38.60 | $ 29.36 |
Stock Option Activity, Additional Disclosures | |||
Exercisable at end of period, Number of shares (in shares) | 40,000 | ||
Exercisable at end of period, Weighted Average Exercise Price (in dollars per share) | $ 43.70 | ||
Outstanding at end of period, Weighted Average Contractual Life Remaining | 6 months 25 days | ||
Exercisable at end of period, Weighted Average Contractual Life Remaining | 6 months 25 days | ||
Outstanding at end of period, Aggregate Intrinsic Value | $ 1,943 | ||
Exercisable at end of period, Aggregate Intrinsic Value | $ 1,943 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options aggregate fair value | $ 1,943 | ||
Deduction in income tax due to exercise of options and vesting of restricted stock | 2,592 | $ 4,161 | $ 5,292 |
Reduction in income tax expense over the equity awards' vesting period | 2,008 | 1,988 | 3,351 |
Share-based compensation, excess tax benefit, amount | $ 584 | $ 2,173 | $ 2,241 |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options vested during period (in shares) | 5,000 | 13,333 | 23,333 |
Aggregate fair value of all options vested | $ 277 | $ 226 | $ 349 |
Outstanding options (in shares) | 40,000 | 70,000 | 122,500 |
Options aggregate fair value | $ 1,943 | $ 3,788 | $ 5,493 |
Exercise of stock options (in shares) | 54,176 | 72,058 | 89,607 |
Total average price per share (in dollars per share) | $ 87.51 | $ 98.16 | $ 77.12 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Retirement Benefits [Abstract] | |||
Aggregate employer contributions recognized under 401(k) Savings and Retirement Plans | $ 4,999 | $ 4,676 | $ 3,863 |
Reportable Segments - Narrative
Reportable Segments - Narrative (Details) - Customer concentration - Segment sales | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Two Customers | Life Sciences | |||
Segment Reporting Information [Line Items] | |||
Concentration risk within segment (as a percent) | 40.20% | 48.00% | 50.20% |
Two Customers | Dialysis | |||
Segment Reporting Information [Line Items] | |||
Concentration risk within segment (as a percent) | 41.00% | 40.60% | 44.20% |
Three Customers | Dental | |||
Segment Reporting Information [Line Items] | |||
Concentration risk within segment (as a percent) | 47.60% | 45.10% | 43.40% |
Reportable Segments - Operating
Reportable Segments - Operating Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 239,476 | $ 228,552 | $ 224,538 | $ 225,589 | $ 228,854 | $ 217,268 | $ 213,034 | $ 212,766 | $ 918,155 | $ 871,922 | $ 770,157 |
Income from operations | 83,519 | 121,664 | 110,410 | ||||||||
Interest expense, net | 9,505 | 5,289 | 4,303 | ||||||||
Other income | (1,305) | (1,138) | (126) | ||||||||
Income before income taxes | 75,319 | 117,513 | 106,233 | ||||||||
Identifiable assets | 1,070,366 | 963,708 | 1,070,366 | 963,708 | |||||||
Capital expenditures | 95,438 | 37,698 | 27,065 | ||||||||
Depreciation and amortization | 42,359 | 34,830 | 33,452 | ||||||||
Operating Segment | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Income from operations | 146,119 | 161,020 | 142,753 | ||||||||
General corporate | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Income from operations | 62,600 | 39,356 | 32,343 | ||||||||
Identifiable assets | 62,054 | 88,101 | 62,054 | 88,101 | |||||||
Capital expenditures | 6,677 | 11,208 | 5,772 | ||||||||
Depreciation and amortization | 1,961 | 733 | 518 | ||||||||
Medical | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 523,669 | 473,937 | 398,773 | ||||||||
Medical | Operating Segment | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Income from operations | 98,356 | 86,833 | 73,440 | ||||||||
Identifiable assets | 532,250 | 490,702 | 532,250 | 490,702 | |||||||
Capital expenditures | 52,907 | 18,996 | 13,816 | ||||||||
Depreciation and amortization | 23,033 | 19,002 | 18,245 | ||||||||
Life Sciences | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 201,022 | 217,030 | 196,446 | ||||||||
Life Sciences | Operating Segment | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Income from operations | 20,552 | 36,803 | 33,159 | ||||||||
Identifiable assets | 184,737 | 151,460 | 184,737 | 151,460 | |||||||
Capital expenditures | 16,408 | 4,409 | 3,689 | ||||||||
Depreciation and amortization | 7,482 | 5,628 | 5,706 | ||||||||
Dental | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 161,608 | 149,360 | 144,457 | ||||||||
Dental | Operating Segment | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Income from operations | 22,289 | 30,004 | 28,000 | ||||||||
Identifiable assets | 272,309 | 210,831 | 272,309 | 210,831 | |||||||
Capital expenditures | 16,243 | 2,441 | 2,492 | ||||||||
Depreciation and amortization | 9,844 | 8,756 | 8,556 | ||||||||
Dialysis | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 31,856 | 31,595 | 30,481 | ||||||||
Dialysis | Operating Segment | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Income from operations | 4,922 | 7,380 | 8,154 | ||||||||
Identifiable assets | $ 19,016 | $ 22,614 | 19,016 | 22,614 | |||||||
Capital expenditures | 3,203 | 644 | 1,296 | ||||||||
Depreciation and amortization | $ 39 | 711 | $ 427 | ||||||||
Restatement Adjustment | Life Sciences | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 5,820 | ||||||||||
Income from operations | 1,704 | ||||||||||
Restatement Adjustment | Dental | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | (5,820) | ||||||||||
Income from operations | $ (1,704) |
Reportable Segments - Geographi
Reportable Segments - Geographic Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | $ 239,476 | $ 228,552 | $ 224,538 | $ 225,589 | $ 228,854 | $ 217,268 | $ 213,034 | $ 212,766 | $ 918,155 | $ 871,922 | $ 770,157 |
Total long-lived assets | 198,948 | 120,077 | 198,948 | 120,077 | |||||||
Goodwill and intangible assets, net | 519,622 | 505,388 | 519,622 | 505,388 | |||||||
Total | 718,570 | 625,465 | 718,570 | 625,465 | |||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 665,661 | 643,744 | 599,657 | ||||||||
Total long-lived assets | 128,010 | 80,918 | 128,010 | 80,918 | |||||||
Europe/Africa/Middle East | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 148,334 | 131,130 | 95,753 | ||||||||
Total long-lived assets | 64,742 | 35,824 | 64,742 | 35,824 | |||||||
Asia/Pacific | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 66,228 | 57,108 | 40,964 | ||||||||
Total long-lived assets | 4,201 | 2,531 | 4,201 | 2,531 | |||||||
Canada | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 32,152 | 33,524 | 26,648 | ||||||||
Total long-lived assets | $ 1,995 | $ 804 | 1,995 | 804 | |||||||
Latin America/South America | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | $ 5,780 | $ 6,416 | $ 7,135 |
Quarterly Results of Operatio_3
Quarterly Results of Operations (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 239,476 | $ 228,552 | $ 224,538 | $ 225,589 | $ 228,854 | $ 217,268 | $ 213,034 | $ 212,766 | $ 918,155 | $ 871,922 | $ 770,157 |
Cost of sales | 128,823 | 121,675 | 119,863 | 120,340 | 121,451 | 112,594 | 111,799 | 112,107 | 490,701 | 457,951 | 402,997 |
Gross profit | $ 110,653 | $ 106,877 | $ 104,675 | $ 105,249 | $ 107,403 | $ 104,674 | $ 101,235 | $ 100,659 | 427,454 | 413,971 | 367,160 |
Gross profit percentage | 46.20% | 46.80% | 46.60% | 46.70% | 46.90% | 48.20% | 47.50% | 47.30% | |||
Net income | $ 8,825 | $ 8,175 | $ 18,800 | $ 19,242 | $ 16,888 | $ 18,736 | $ 32,488 | $ 22,929 | $ 55,042 | $ 91,041 | $ 71,378 |
Earnings per common share: | |||||||||||
Basic (in dollars per share) | $ 0.21 | $ 0.20 | $ 0.45 | $ 0.46 | $ 0.41 | $ 0.45 | $ 0.78 | $ 0.55 | $ 1.32 | $ 2.18 | $ 1.71 |
Diluted (in dollars per share) | $ 0.21 | $ 0.20 | $ 0.45 | $ 0.46 | $ 0.41 | $ 0.45 | $ 0.78 | $ 0.55 | $ 1.32 | $ 2.18 | $ 1.71 |
Subsequent Event - Narrative (D
Subsequent Event - Narrative (Details) - USD ($) | Sep. 06, 2019 | Oct. 31, 2019 | Jul. 31, 2019 | Jun. 28, 2018 |
Forecast | Hu-Friedy | ||||
Subsequent Event [Line Items] | ||||
Acquisition consideration | $ 725,000,000 | |||
Estimated acquisition tax benefit | $ 100,000,000 | |||
Estimated acquisition tax benefit, cash reduction period | 15 years | |||
Line of Credit | ||||
Subsequent Event [Line Items] | ||||
Maximum borrowing capacity | $ 300,000,000 | |||
Shares of foreign subsidiaries pledged as security (as a percent) | 65.00% | |||
Line of Credit | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Potential increased borrowing capacity | $ 300,000,000 | |||
Shares of foreign subsidiaries pledged as security (as a percent) | 65.00% | |||
Delayed draw term loan facility | Line of Credit | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Maximum borrowing capacity | $ 400,000,000 | |||
Minimum | Line of Credit | ||||
Subsequent Event [Line Items] | ||||
Fees on unused portion of credit facilities (as a percent) | 0.20% | |||
Minimum | Revolving credit loan | Line of Credit | ||||
Subsequent Event [Line Items] | ||||
Fees on unused portion of credit facilities (as a percent) | 0.20% | |||
Minimum | Revolving credit loan | Line of Credit | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Fees on unused portion of credit facilities (as a percent) | 0.20% | |||
Maximum | Line of Credit | ||||
Subsequent Event [Line Items] | ||||
Fees on unused portion of credit facilities (as a percent) | 0.35% | |||
Maximum | Revolving credit loan | Line of Credit | ||||
Subsequent Event [Line Items] | ||||
Fees on unused portion of credit facilities (as a percent) | 0.35% | |||
Maximum | Revolving credit loan | Line of Credit | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Fees on unused portion of credit facilities (as a percent) | 0.40% | |||
Lender's base rate | Line of Credit | ||||
Subsequent Event [Line Items] | ||||
Margin on reference rate (as a percent) | 0.25% | |||
Lender's base rate | Minimum | Line of Credit | ||||
Subsequent Event [Line Items] | ||||
Margin on reference rate (as a percent) | 0.00% | |||
Lender's base rate | Minimum | Line of Credit | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Margin on reference rate (as a percent) | 0.00% | |||
Lender's base rate | Maximum | Line of Credit | ||||
Subsequent Event [Line Items] | ||||
Margin on reference rate (as a percent) | 1.00% | |||
Lender's base rate | Maximum | Line of Credit | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Margin on reference rate (as a percent) | 1.25% | |||
LIBOR | Line of Credit | ||||
Subsequent Event [Line Items] | ||||
Margin on reference rate (as a percent) | 1.25% | |||
LIBOR | Minimum | Line of Credit | ||||
Subsequent Event [Line Items] | ||||
Margin on reference rate (as a percent) | 1.00% | |||
LIBOR | Minimum | Line of Credit | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Margin on reference rate (as a percent) | 1.00% | |||
LIBOR | Maximum | Line of Credit | ||||
Subsequent Event [Line Items] | ||||
Margin on reference rate (as a percent) | 2.00% | |||
LIBOR | Maximum | Line of Credit | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Margin on reference rate (as a percent) | 2.25% |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Allowance for doubtful accounts | |||
Changes in valuation and qualifying accounts | |||
Balance at Beginning of Period | $ 1,149 | $ 1,808 | $ 1,850 |
Additions | 1,541 | 326 | 998 |
Deductions | (336) | (977) | (1,056) |
Translation Adjustments | (32) | (8) | 16 |
Balance at End of Period | 2,322 | 1,149 | 1,808 |
Reserve for excess and obsolete inventory | |||
Changes in valuation and qualifying accounts | |||
Balance at Beginning of Period | 8,599 | 8,853 | 5,390 |
Additions | 2,937 | 1,719 | 5,016 |
Deductions | (1,218) | (1,862) | (1,580) |
Translation Adjustments | (203) | (111) | 27 |
Balance at End of Period | 10,115 | 8,599 | 8,853 |
Deferred tax asset valuation allowance | |||
Changes in valuation and qualifying accounts | |||
Balance at Beginning of Period | 6,358 | 2,984 | 2,334 |
Additions | 1,086 | 3,538 | 615 |
Deductions | (1,891) | (119) | 0 |
Translation Adjustments | 148 | (45) | 35 |
Balance at End of Period | $ 5,701 | $ 6,358 | $ 2,984 |
Uncategorized Items - cmd-20190
Label | Element | Value |
Accounting Standards Update 2014-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 865,000 |
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 865,000 |