Cantel Medical Corp. (NYSE:CMD) Q4 2020 Earnings Conference Call - Final Transcript
Sep 17, 2020 • 08:30 am ET
Gentlemen, thank you for your remarks. And to our phone audience joining today, we will now segue to our interactive Q&A session. [Operator Instructions] We'll hear first from Larry Keusch at Raymond James.
Thanks. Good morning, everyone. I guess just a couple of questions and maybe the easiest one first. So, just with the new mass manufacturing, you're obviously doubling your capacity. What does that incremental capacity represent in a dollar amount? Just trying to think about -- once you're up at full speed, how we should be thinking about that? And does it also imply that with all those machines on, you should be at full capacity by the end of this fiscal year?
Yes, Larry, I'll give some color on capacity here. Look, it's going to probably take us a month or two with each deployment wave of the machines coming in to calibrate and get those up to full capacity. So, I would think by the end of fiscal '21, we should have at least six of the eight machines probably up and running at full capacity.
From a monetized perspective, look, I think the way we're looking at the revenue opportunity is -- look, this capacity obviously gives us an ability to be very opportunistic in markets right now that are looking for high quality manufactured PPE. And it also gives us an opportunity to use mask as an effective bundling anchor in the portfolio on the Dental side of the business.
So, we feel very well positioned to again grow that business pretty aggressively. Whether we can cover eight machines 24/7 is something that we've got to determine as we get deeper into the year.
So, maybe just on -- thank you for that, Peter. And maybe just on that, just in case I missed it. So, if you had all those machines running full capacity, what would the incremental revenues be coming off of that?
I would say the size of the prize, if we could get to full capacity is probably $3 million or $4 million a quarter.
Okay. Perfect. Then secondly, just trying to think through Dental. And if I have my numbers right, I think it got worse both on a dollar and percentage basis in the 4Q versus the 3Q. So, just trying to understand, obviously you didn't have April in your 4Q. So -- and things start to recover as you start to talk about. So, again I'm just trying to understand what else may be going on there that resulted in that?
Yes, I think that the -- it's like all of the business, right? Even though April wasn't in our Q4, you still had overall Q4 being COVID volume affected; whereas in Q3, you did have two months that arguably weren't yet materially affected by COVID. So, I really don't think there's any more to it than that really from our point of view that is just like volumes overall. We're down more in Q4 than they were