- Record customer billings up 30% year-over-year to $4.7 million in
the first quarter of fiscal 2009 HOUSTON, Oct. 27
/PRNewswire-FirstCall/ -- Sharps Compliance Corp. (OTC:SCOM)
(BULLETIN BOARD: SCOM) ("Sharps" or the "Company"), a leading
provider of cost-effective disposal solutions for small quantity
generators of medical waste, today reported record revenue of $4.3
million in the first quarter of fiscal 2009, which ended September
30, 2008, a 26% increase compared with revenue of $3.4 million in
the first quarter of fiscal 2008. The Company also reported record
customer billings of $4.7 million in the first quarter of fiscal
2009, a 30% increase compared with $3.6 million in the same period
the prior fiscal year, primarily driven by strong growth in the
pharmaceutical, retail, professional, commercial and agriculture
markets. The Company believes customer billings are an appropriate
measure of performance and progress of the business. Sales and
Billings Growth Customer billings from contracts with
pharmaceutical manufacturers increased to $874 thousand in the
first quarter of fiscal 2009 compared with $7 thousand in the same
period the prior year. The recently announced renewal of the
Company's first Patient Support Program with a top ten
pharmaceutical manufacturer contributed approximately $700 thousand
in billings in the first quarter of fiscal 2009 and is expected to
generate an additional $900 thousand in billings during the second
half of fiscal 2009 ending June 30, 2009. As previously announced,
two additional Patient Support Programs with pharmaceutical
manufacturers are scheduled to launch in the second quarter of
fiscal 2009, ending December 31, 2008, and are expected to generate
billings of up to $400 thousand in the second and third quarters of
fiscal 2009. Sharps' unique Patient Support Programs include the
direct fulfillment of the Sharps Disposal By Mail System(R) to the
pharmaceutical manufacturers' self-injecting patients, who use the
product as a convenient means of disposing of used syringes.
Sharp's proprietary SharpsTracer(TM) system tracks the return of
the Sharps Disposal By Mail System(R) by the patient to the
treatment facility, where the package is scanned and weighed prior
to destruction. This data is electronically transmitted to the
pharmaceutical manufacturer which assists them in monitoring drug
usage and provides them with a touch point for individual patient
follow-up. Customer billings to retail market customers increased
23% to $0.8 million in the first quarter of fiscal 2009 as a result
of strong seasonal demand for the Sharps Disposal By Mail
Systems(R) as pharmacies and medical clinics in retail settings
prepare for the upcoming flu shot season. Higher customer billings
to the professional, commercial and agricultural markets were
offset by slight year-over-year decreases in billings to healthcare
and hospitality customers. Dr. Burton J. Kunik, Chairman, Chief
Executive Officer and President of Sharps Compliance, commented,
"Throughout fiscal 2008, we wisely invested to build the breadth
and depth of our sales and marketing team by bringing on
experienced talent who have been diligently working to fill our
pipeline with prospects and convert those opportunities into sales.
Our success is now being evidenced by our record revenue and
customer billings in this quarter." First Quarter Fiscal 2009
Operating Performance Gross profit was $1.8 million, up 29% over
the prior year period. Gross margin was 43.3% in the first quarter
of fiscal 2009, a 100 basis point increase compared with 42.3% in
the same period the prior fiscal year. Gross margin was negatively
impacted by approximately $200 thousand due to excess air freight
shipping costs that were incurred to address supply and
manufacturing issues associated with the Company's Pitch-It IV
Poles. These issues were consequently resolved in August of 2008.
Excluding the $200 thousand in excess air freight shipping costs,
the gross margin for the quarter ended September 30, 2008 was 48%.
Selling, general and administrative (SG&A) expenses were $1.2
million in first quarters of both fiscal 2008 and 2009, but as a
percentage of sales, decreased from 34% in the first quarter of
fiscal 2008 to 27% in the first quarter of fiscal 2009. Dr. Kunik
continued, "The investment in the expansion and enhancement of our
operational infrastructure over the past year in anticipation of
this rapid growth in demand has allowed us to quickly and easily
ramp-up our production and fulfillment capabilities. As our level
of sales accelerates, we are now beginning to realize operational
leverage and greater earnings power." Operating income for the
first quarter of fiscal 2009 was $610 thousand, or 14.3% of sales,
an increase of $390 thousand, or 177%, compared with operating
income of $220 thousand, or 6.5% of sales, in the same period the
prior fiscal year. Net income was $605 thousand, or $0.04 per
diluted share, for the first quarter of fiscal 2009 compared with
net income of $242 thousand, or $0.02 per diluted share, in the
first quarter of fiscal 2008. Liquidity and Balance Sheet Strength
Cash and cash equivalents were $2.5 million at September 30, 2008,
up from $2.0 million at June 30, 2008. At September 30, 2008,
stockholders' equity and total assets were $3.7 million and $7.0
million, respectively, up from $2.9 million and $5.7 million at
June 30, 2008, respectively. Although Sharps maintains a $2.5
million line of credit with JPMorgan Chase, no amounts were
outstanding at June 30, 2008. The line of credit is available to
finance working capital, expansion and/or potential acquisition
opportunities. Dr. Kunik concluded, "There is a convergence of
factors driving interest and demand for our products. Greater
public awareness of the dangers of medical waste entering the
environment is growing and resulting in greater awareness
nationwide. We are increasing our customer base in a wider variety
of industries through continuous sales, marketing and educational
efforts. And we are regularly introducing new and innovative
products for the safe and cost-effective disposal of medical waste,
such as our recent launch of a product to dispose of unused
medications and the Medical Professional version of our Sharps
Disposal By Mail Systems(R). We believe our fiscal 2009 results
will reflect the magnitude of these unprecedented opportunities and
our ability to successfully meet our customers' expectations."
About Sharps Compliance Corp. Headquartered in Houston, Texas,
Sharps Compliance is a leading provider of cost-effective disposal
solutions for small quantity generators of medical waste and unused
pharmaceuticals. The Company's flagship product, the Sharps
Disposal by Mail System(R), is a cost-effective and easy-to-use
solution to dispose of medical waste such as hypodermic needles,
lancets and any other medical device or objects used to puncture or
lacerate the skin (referred to as "sharps"). The Company also
offers a number of products specifically designed for the home
healthcare market and products for the safe disposal of unused
pharmaceuticals, RxTakeAway(TM). Sharps Compliance focuses on
targeted growth markets such as the pharmaceutical, retail,
commercial, and hospitality markets, as well as serving a variety
of additional markets. Sharps is a leading proponent and
participant in the development of public awareness and solutions
for the safe disposal of needles, syringes and other sharps in the
community setting. As a fully integrated manufacturer providing
customer solutions and services, Sharps Compliance's solid business
model, with strong margins and significant operating leverage, and
early penetration into emerging markets, uniquely positions the
company for strong future growth. More information on Sharps
Compliance can be found on its website at:
http://www.sharpsinc.com/ Safe Harbor Statement The information
made available in this press release contains certain
forward-looking statements which reflect Sharps Compliance Corp.'s
current view of future events and financial performance. Wherever
used, the words "estimate", "expect", "plan", "anticipate",
"believe", "may" and similar expressions identify forward-looking
statements. Any such forward-looking statements are subject to
risks and uncertainties and the company's future results of
operations could differ materially from historical results or
current expectations. Some of these risks include, without
limitation, the company's ability to educate its customers,
development of public awareness programs to educate the identified
consumer, customer preferences, the Company's ability to scale the
business and manage its growth, the degree of success the Company
has at gaining more large customer contracts, managing regulatory
compliance and/or other factors that may be described in the
company's annual report on Form 10-K, quarterly reports on Form
10-Q and/or other filings with the Securities and Exchange
Commission. Future economic and industry trends that could
potentially impact revenues and profitability are difficult to
predict. The company assumes no obligation to publicly update or
revise its forward-looking statements even if experience or future
changes make it clear that any projected results express or implied
therein will not be realized. For more information contact: David
P. Tusa Executive Vice President, Chief Financial Officer &
Business Development Phone: (713) 660-3514 - OR - Tammy Poblete Kei
Advisors LLC Investor Relations Phone: (716) 843-3853 Email:
FINANCIAL TABLES FOLLOW. SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
Consolidated Statements of Income (unaudited) Three-Months Ended
September 30, 2008 2007 % Change Revenue $4,269,536 $3,391,112
25.9% Cost of revenue 2,420,360 1,957,735 23.6% Gross profit
1,849,176 1,433,377 29.0% Gross margin 43.3% 42.3% SG&A expense
1,162,954 1,155,381 0.7% Depreciation and amortization 76,380
57,697 32.4% Operating income (loss) 609,842 220,299 176.8%
Operating margin 14.3% 6.5% Other income 14,871 26,302 (43.5%) Net
income before income taxes 624,713 $246,601 153.3% Income taxes
(19,372) (4,997) Net income $605,341 $241,604 150.6% Net income per
share Basic $0.05 $0.02 Diluted $0.04 $0.02 Weighted Average Shares
Outstanding Basic 12,662,408 12,061,734 Diluted 13,703,683
13,535,520 SHARPS COMPLIANCE CORP. AND SUBSIDIARIES Consolidated
Balance Sheets 9/30/2008 6/30/2008 (Unaudited) ASSETS: Current
assets: Cash and cash equivalents $2,547,276 $2,035,219 Restricted
cash - 10,010 Accounts receivable, net 1,870,881 1,183,975
Inventory 569,754 580,861 Prepaid and other assets 282,504 359,894
Total current assets 5,270,415 4,169,959 Property and equipment,
net 1,547,498 1,375,657 Intangible assets, net 141,121 130,702
Total assets $6,959,034 $5,676,318 LIABILITIES AND STOCKHOLDERS'
EQUITY: Current liabilities: Accounts payable $1,004,492 $778,423
Accrued liabilities 360,743 432,971 Current portion of deferred
revenue 1,219,736 1,063,016 Total current liabilities 2,584,971
2,274,410 Long-term deferred revenue 676,626 516,372 Total
liabilities 3,261,597 2,790,782 Stockholders' equity: Total
stockholders' equity 3,697,437 2,885,536 Total liabilities and
stockholders' equity $6,959,034 $5,676,318 SHARPS COMPLIANCE CORP.
AND SUBSIDIARIES Supplemental Customer Billing and Revenue
Information (unaudited) Three-Months Ended September 30, 2008 %
Total 2007 % Change BILLINGS BY MARKET: Health Care $1,906,697
40.9% $1,919,264 (0.7%) Pharmaceutical 874,614 18.8% 7,185 12072.8%
Retail 840,762 18.0% 685,436 22.7% Professional 248,441 5.3%
171,184 45.1% Hospitality 209,453 4.5% 363,235 (42.3%) Commercial
184,499 4.0% 116,108 58.9% Agriculture 174,011 3.7% 93,304 86.5%
ProTec 130,353 2.8% 125,270 4.1% Government 55,150 1.2% 56,060
(1.6%) Other 38,154 0.8% 49,204 (22.5%) Subtotal 4,662,134 100.0%
3,586,250 30.0% GAAP Adjustment * (392,598) (195,138) (101.2%)
Revenue Reported 4,269,536 3,391,112 25.9% * Represents the net
impact of the revenue recognition adjustments to arrive at reported
GAAP revenue. Customer billings include all invoiced amounts for
products shipped during the period reported. GAAP revenue includes
customer billings as well as numerous adjustments necessary to
reflect, (i) the deferral of a portion of current period sales and
(ii) recognition of certain revenue associated with product
returned for treatment and destruction. The difference between
customer billings and GAAP revenue is reflected in the Company's
balance sheet as deferred revenue. DATASOURCE: Sharps Compliance
Corp. CONTACT: David P. Tusa, Executive Vice President, Chief
Financial Officer & Business Development of Sharps Compliance
Corp., +1-713-660-3514, ; or Investor Relations, Tammy Poblete of
Kei Advisors LLC, +1-716-843-3853, , for Sharps Compliance Corp.
Web site: http://www.sharpsinc.com/
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