Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2017 | Jan. 29, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | SHARPS COMPLIANCE CORP | |
Entity Central Index Key | 898,770 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 16,082,021 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2017 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Dec. 31, 2017 | Jun. 30, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 5,763 | $ 4,675 |
Accounts receivable, net of allowance for doubtful accounts of $87 and $78, respectively | 7,518 | 7,553 |
Inventory, net | 4,359 | 4,098 |
Prepaid and other current assets | 708 | 694 |
TOTAL CURRENT ASSETS | 18,348 | 17,020 |
PROPERTY, PLANT AND EQUIPMENT, net | 6,678 | 6,543 |
OTHER ASSETS | 220 | 120 |
GOODWILL | 6,735 | 6,735 |
INTANGIBLE ASSETS, net | 3,790 | 4,046 |
TOTAL ASSETS | 35,771 | 34,464 |
CURRENT LIABILITIES | ||
Accounts payable | 2,613 | 1,710 |
Accrued liabilities | 1,910 | 1,800 |
Current maturities of long-term debt | 579 | 601 |
Deferred revenue | 2,375 | 2,421 |
TOTAL CURRENT LIABILITIES | 7,477 | 6,532 |
LONG-TERM DEFERRED REVENUE, net of current portion | 535 | 478 |
OTHER LONG-TERM LIABILITIES | 173 | 165 |
LONG-TERM DEBT, net of current portion | 1,724 | 2,002 |
TOTAL LIABILITIES | 9,909 | 9,177 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Common stock, $0.01 par value per share; 20,000,000 shares authorized; 16,377,636 and 16,304,027 shares issued, respectively, and 16,082,021 and 16,008,412 shares outstanding, respectively. | 164 | 163 |
Treasury stock, at cost, 295,615 shares repurchased | (1,554) | (1,554) |
Additional paid-in capital | 28,406 | 28,063 |
Accumulated deficit | (1,154) | (1,385) |
TOTAL STOCKHOLDERS' EQUITY | 25,862 | 25,287 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 35,771 | $ 34,464 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Jun. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 87 | $ 78 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 16,377,636 | 16,304,027 |
Common stock, shares outstanding (in shares) | 16,082,021 | 16,008,412 |
Treasury stock, shares repurchased (in shares) | 295,615 | 295,615 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||||
REVENUES | $ 11,119,000 | $ 9,707,000 | $ 20,802,000 | $ 19,238,000 |
Cost of revenues | 7,988,000 | 6,812,000 | 14,643,000 | 13,384,000 |
GROSS PROFIT | 3,131,000 | 2,895,000 | 6,159,000 | 5,854,000 |
Selling, general and administrative | 2,821,000 | 2,899,000 | 5,546,000 | 6,598,000 |
Depreciation and amortization | 203,000 | 200,000 | 405,000 | 400,000 |
OPERATING INCOME (LOSS) | 107,000 | (204,000) | 208,000 | (1,144,000) |
OTHER INCOME (EXPENSE) | ||||
Interest income | 5,000 | 4,000 | 10,000 | 8,000 |
Interest expense | (23,000) | (27,000) | (47,000) | (58,000) |
TOTAL OTHER EXPENSE | (18,000) | (23,000) | (37,000) | (50,000) |
INCOME (LOSS) BEFORE INCOME TAXES | 89,000 | (227,000) | 171,000 | (1,194,000) |
INCOME TAX BENEFIT | (67,000) | 0 | (60,000) | 0 |
NET INCOME (LOSS) | $ 156,000 | $ (227,000) | $ 231,000 | $ (1,194,000) |
NET INCOME (LOSS) PER COMMON SHARE - Basic and Diluted | ||||
Basic and Diluted (in dollars per share) | $ 0.01 | $ (0.01) | $ 0.01 | $ (0.08) |
WEIGHTED AVERAGE SHARES USED IN COMPUTING INCOME (LOSS) PER COMMON SHARE: | ||||
Basic (in shares) | 16,047 | 15,929 | 16,028 | 15,898 |
Diluted (in shares) | 16,068 | 15,929 | 16,081 | 15,898 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit |
Balance at beginning (in shares) at Jun. 30, 2016 | 15,740,458 | 295,615 | |||
Balances at beginning at Jun. 30, 2016 | $ 23,843 | $ 158 | $ (1,554) | $ 25,331 | $ (92) |
Exercise of stock options (in shares) | 95,050 | ||||
Exercise of stock options | 342 | $ 1 | 341 | ||
Stock-based compensation | 496 | 496 | |||
Issuance of common shares for acquisition (in shares) | 415,527 | ||||
Issuance of common shares for acquisition | 1,899 | $ 4 | 1,895 | ||
Issuance of restricted stock (in shares) | 52,992 | ||||
Net income (loss) | (1,293) | (1,293) | |||
Balance at end (in shares) at Jun. 30, 2017 | 16,304,027 | 295,615 | |||
Balances at end at Jun. 30, 2017 | $ 25,287 | $ 163 | $ (1,554) | 28,063 | (1,385) |
Exercise of stock options (in shares) | 0 | ||||
Stock-based compensation | $ 261 | 261 | |||
Issuance of common shares for lease (in shares) | 20,617 | ||||
Issuance of common shares for lease | 83 | 83 | |||
Issuance of restricted stock (in shares) | 52,992 | ||||
Issuance of restricted stock | $ 1 | (1) | |||
Net income (loss) | 231 | 231 | |||
Balance at end (in shares) at Dec. 31, 2017 | 16,377,636 | 295,615 | |||
Balances at end at Dec. 31, 2017 | $ 25,862 | $ 164 | $ (1,554) | $ 28,406 | $ (1,154) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ 231 | $ (1,194) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 784 | 708 |
Loss on disposal of property, plant and equipment | 0 | 6 |
Stock-based compensation expense | 261 | 273 |
Deferred tax benefit | (74) | 0 |
Changes in operating assets and liabilities, net of effects of business acquisitions: | ||
Accounts receivable | 35 | 543 |
Inventory | (156) | (359) |
Prepaid and other assets | 43 | (66) |
Accounts payable and accrued liabilities | 934 | 1,134 |
Deferred revenue | 11 | (70) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 2,069 | 975 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property, plant and equipment | (643) | (1,978) |
Cash proceeds from sale of property, plant and equipment | 10 | 13 |
Additions to intangible assets | (48) | (79) |
Payments for business acquisitions, net of cash acquired | 0 | (7,100) |
NET CASH USED IN INVESTING ACTIVITIES | (681) | (9,144) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from exercise of stock options | 0 | 259 |
Proceeds from long-term debt | 0 | 3,000 |
Repayments of long-term debt | (300) | (291) |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | (300) | 2,968 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1,088 | (5,201) |
CASH AND CASH EQUIVALENTS, beginning of period | 4,675 | 12,435 |
CASH AND CASH EQUIVALENTS, end of period | 5,763 | 7,234 |
SUPPLEMENTAL CASH FLOW DISCLOSURES: | ||
Income taxes paid | 3 | 0 |
Interest paid on long-term debt | 39 | 49 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Issuance of common stock for acquisition | 0 | 1,889 |
Issuance of common stock for lease | 83 | 0 |
Unpaid consideration related to acquisitions | 0 | 105 |
Transfer of equipment to inventory | 105 | 104 |
Property, plant and equipment financed through accounts payable | $ 87 | $ 368 |
ORGANIZATION AND BACKGROUND
ORGANIZATION AND BACKGROUND | 6 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BACKGROUND | ORGANIZATION AND BACKGROUND Organization : The accompanying unaudited condensed consolidated financial statements include the financial transactions and accounts of Sharps Compliance Corp. and its wholly owned subsidiaries, Sharps Compliance, Inc. of Texas (dba Sharps Compliance, Inc.), Sharps e-Tools.com Inc. (“Sharps e-Tools”), Sharps Manufacturing, Inc., Sharps Environmental Services, Inc. (dba Sharps Environmental Services of Texas, Inc.), Sharps Safety, Inc., Alpha Bio/Med Services LLC, Bio-Team Mobile LLC and Citiwaste, LLC (collectively, “Sharps” or the “Company”). All significant intercompany accounts and transactions have been eliminated upon consolidation. Business : Sharps is a leading full-service national provider of comprehensive waste management services including medical, pharmaceutical and hazardous for small and medium quantity generators. The Company’s solutions include Sharps Recovery System™ (formerly Sharps Disposal by Mail System ® ), TakeAway Medication Recovery System™, MedSafe ® , TakeAway Recycle System™, ComplianceTRAC SM , SharpsTracer ® , Sharps Secure ® Needle Disposal System, Complete Needle™ Collection & Disposal System, TakeAway Environmental Return System™, Pitch-It IV™ Poles, Asset Return System and Spill Kit and Recovery System . The Company also offers its route-based pick-up service in a twenty-three ( 23 ) state region of the South, Southeast and Northeast portions of the United States. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Dec. 31, 2017 | |
BASIS OF PRESENTATION [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information and with instructions to Form 10-Q and, accordingly, do not include all information and footnotes required under generally accepted accounting principles in the United States of America ("GAAP") for complete financial statements. Additionally, the preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts. In the opinion of management, these interim condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial position of the Company as of December 31, 2017 , the results of its operations for the three and six months ended December 31, 2017 and 2016 , cash flows for the six months ended December 31, 2017 and 2016 and stockholders’ equity for the six months ended December 31, 2017 . The results of operations for the three and six months ended December 31, 2017 are not necessarily indicative of the results to be expected for the entire fiscal year ending June 30, 2018 . These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2017 . |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition: The Company recognizes revenue when services are provided and from product sales when (i) goods are shipped or delivered, and title and risk of loss pass to the customer, (ii) the price is substantially fixed or determinable and (iii) collectability is reasonably assured except for those sales via multiple-deliverable revenue arrangements. Provisions for certain rebates, product returns and discounts to customers are accounted for as reductions in sales in the same period the related sales are recorded. Product discounts granted are based on the terms of arrangements with direct, indirect and other market participants, as well as market conditions, including prices charged by competitors. Rebates are estimated based on contractual terms, historical experience, trend analysis and projected market conditions in the various markets served. Service agreements which include a vendor managed inventory program include terms that meet the “bill and hold” criteria and as such are recognized when the order is completed, at which point title has transferred, there are no acceptance provisions and amounts are segregated in the Company’s warehouse. During the three and six months ended December 31, 2017 , the Company recorded revenue from inventory builds that are held in vendor managed inventory under these service agreements of $0.9 million and $1.9 million , respectively. During the three and six months ended December 31, 2016 , the Company recorded revenue from inventory builds that are held in vendor managed inventory under these service agreements of $0.8 million and $2.0 million , respectively. As of December 31, 2017 and June 30, 2017 , $3.1 million and $2.7 million , respectively, of solutions sold through that date were held in vendor managed inventory pending fulfillment or shipment to patients of pharmaceutical manufacturers who offer these solutions to patients in an ongoing patient support program. Certain products offered by the Company have revenue producing components that are recognized over multiple delivery points (Sharps Recovery System and various other solutions like the TakeAway Medication Recovery Systems referred to as “Mailbacks” and Sharps Pump and Asset Return Systems, referred to as “Pump Returns”) and can consist of up to three separate elements, or units of measure, as follows: (1) the sale of the compliance and container system, (2) return transportation and (3) treatment service. In accordance with the relative selling price methodology, an estimated selling price is determined for all deliverables that qualify for separate units of accounting. The actual consideration received in a multiple-deliverable arrangement is then allocated to the units based on their relative sales price. The selling price for the transportation revenue and the treatment revenue utilizes third party evidence. The Company estimates the selling price of the compliance and container system based on the product and services, provided, including compliance with local, state and federal laws, adherence to stringent manufacturing and testing requirements, safety to the patient and the community as well as storage and containment capabilities. Revenue for the sale of the compliance and container is recognized upon delivery to the customer, at which time the customer takes title and assumes risk of ownership. Transportation revenue is recognized when the customer returns the compliance and container system and the container has been received at the Company’s owned or contracted facilities. The compliance and container system is mailed or delivered by an alternative logistics provider to the Company’s owned or contracted facilities. Treatment revenue is recognized upon the destruction or conversion and proof of receipt and treatment having been performed on the container. Since the transportation element and the treatment elements are undelivered services at the point of initial sale of the compliance and container, transportation and treatment revenue is deferred until the services are performed. The current and long-term portions of deferred revenues are determined through regression analysis and historical trends. Furthermore, through regression analysis of historical data, the Company has determined that a certain percentage of all compliance and container systems sold may not be returned. Accordingly, a portion of the transportation and treatment elements are recognized at the point of sale. Income Taxes : Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The establishment of valuation allowances and development of projected annual effective tax rates requires significant judgment and is impacted by various estimates. Both positive and negative evidence, as well as the objectivity and verifiability of that evidence, is considered in determining the appropriateness of recording a valuation allowance on deferred tax assets. Under GAAP, the valuation allowance has been recorded to reduce the Company’s deferred tax assets to an amount that is more likely than not to be realized and is based upon the uncertainty of the realization of certain federal and state deferred tax assets related to net operating loss carryforwards and other tax attributes. Goodwill and Other Identifiable Intangible Assets: Finite-lived intangible assets are amortized over their respective estimated useful lives and evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying values may not be fully recoverable. Goodwill is assessed for impairment at least annually. The Company generally performs its annual goodwill impairment analysis using a quantitative approach. The quantitative goodwill impairment test identifies the existence of potential impairment by comparing the fair value of our single reporting unit with its carrying value, including goodwill. If the fair value of a reporting unit exceeds its carrying value, the reporting unit's goodwill is considered not to be impaired. If the carrying value of a reporting unit exceeds its fair value, an impairment charge is recognized in an amount equal to that excess. The impairment charge recognized is limited to the amount of goodwill present in our single reporting unit. These estimates and assumptions could have a significant impact on whether or not an impairment charge is recognized and the amount of any such charge. The Company performs its annual impairment assessment of goodwill during the fourth quarter of each fiscal year. The Company determined that there was no impairment during the prior year ended June 30, 2017 and there have been no triggering events since that would warrant further impairment testing. Accounts Receivable : Accounts receivable consist primarily of amounts due to the Company from normal business activities. Accounts receivable balances are determined to be delinquent when the amount is past due based on the contractual terms with the customer. The Company maintains an allowance for doubtful accounts to reflect the likelihood of not collecting certain accounts receivable based on past collection history and specific risks identified among uncollected accounts. Accounts receivable are charged to the allowance for doubtful accounts when the Company determines that the receivable will not be collected and/or when the account has been referred to a third party collection agency. The Company has a history of minimal uncollectible accounts. Stock-Based Compensation : Stock-based compensation cost for options and restricted stock awarded to employees and directors is measured at the grant date, based on the calculated fair value of the award and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant). Fair Value of Financial Instruments : The Company considers the fair value of all financial instruments, including cash and cash equivalents, accounts receivable and accounts payable to approximate their carrying values at December 31, 2017 and June 30, 2017 due to their short-term nature. The carrying value of the Company’s debt approximates fair value due to the market rates of interest. |
RECENTLY ISSUED ACCOUNTING STAN
RECENTLY ISSUED ACCOUNTING STANDARDS | 6 Months Ended |
Dec. 31, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENTLY ISSUED ACCOUNTING STANDARDS | RECENTLY ISSUED ACCOUNTING STANDARDS In May 2014, guidance for revenue recognition was issued which supersedes the revenue recognition requirements currently followed by the Company. The new guidance provides for a single five-step model to be applied in determining the amount and timing of the recognition of revenue related to contracts with customers. The new standard also requires additional financial statement disclosures that will enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows relating to customer contracts. In March 2016, guidance for revenue from contracts with customers regarding principal versus agent considerations was issued which modified examples to assist in the application of the guidance. Companies have an option to use either a retrospective approach or cumulative effect adjustment approach to implement the standard. The guidance is effective for annual reporting periods beginning after December 15, 2017 (effective July 1, 2018 for the Company). The Company is in the initial stages of evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures as well as evaluating the available transition methods. The Company will continue to evaluate the standard as well as additional changes, modifications or interpretations which may impact the Company. In February 2016, guidance for leases was issued, which requires balance sheet recognition for rights and obligations of all leases with terms in excess of twelve months. The new guidance also requires additional disclosures about the amount, timing and uncertainty of cash flows arising from leases. The provisions of the new guidance are effective for annual periods beginning after December 15, 2018 (effective July 1, 2019 for the Company), including interim periods within the reporting period, and early application is permitted. The Company is in the initial stages of evaluating the impact of the new guidance on its consolidated financial statements and related disclosures as well as evaluating the available transition methods. The Company will continue to evaluate the standard as well as additional changes, modifications or interpretations which may impact the Company. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s effective tax rate for the six months ended December 31, 2017 was (35.1)% reflecting the impact of the 2017 tax law change discussed below, net of estimated state income taxes. For the six months ended December 31, 2017 , the Company recorded an income tax benefit of approximately $74,000 , which was offset by estimated state income tax expense of $14,000 . No income tax expense was recorded for the six months ended December 31, 2016 as it was not material due to the valuation allowance and net operating losses. The Tax Cuts and Jobs Act of 2017, enacted on December 22, 2017, contains significant changes to U.S. tax law, including lowering the U.S. corporate income tax rate to 21% . During the six months ended December 31, 2017, the Company recorded a $ 74,000 deferred tax asset in Other Assets on the balance sheet, representing the net benefit of remeasuring its deferred tax assets for recoverable alternative minimum tax credits offset by deferred tax liabilities related to indefinite lived assets, such as goodwill, which cannot be used as a source of future taxable income in evaluating the need for a valuation allowance against deferred tax assets. The Company's remaining net deferred tax assets continue to be fully offset by a valuation allowance. The Company's gross deferred tax assets and the offsetting valuation allowance decreased by approximately $0.8 million as a result of the reduction of the U.S. tax rate to 21% . |
NOTES PAYABLE AND LONG-TERM DEB
NOTES PAYABLE AND LONG-TERM DEBT | 6 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND LONG-TERM DEBT | NOTES PAYABLE AND LONG-TERM DEBT On March 29, 2017, the Company entered into to a credit agreement with a commercial bank (“Credit Agreement”). The Credit Agreement, which replaced the Company’s prior credit agreement, provides for a $14.0 million credit facility, the proceeds of which may be utilized as follows: (i) $6.0 million for working capital, letters of credit (up to $2.0 million ) and general corporate purposes and (ii) $8.0 million for acquisitions. Indebtedness under the Credit Agreement is secured by substantially all of the Company’s assets with advances outstanding under the working capital portion of the credit facility at any time limited to a Borrowing Base (as defined in the Credit Agreement) equal to 80% of eligible accounts receivable plus the lessor of 50% of eligible inventory and $3.0 million . Advances under the acquisition portion of the credit facility are limited to 75% of the purchase price of an acquired company and convert to a five -year term note at the time of the borrowing. Borrowings bear interest at the greater of (a) zero percent or (b) the One Month ICE LIBOR plus a LIBOR Margin of 2.5% . The LIBOR Margin may increase to as high as 3.0% depending on the Company’s cash flow leverage ratio. The interest rate as of December 31, 2017 was approximately 4.0% . The Company pays a fee of 0.25% per annum on the unused amount of the line of credit. At December 31, 2017 , long-term debt consisted of the following (in thousands): Non-interest bearing, unsecured note payable assumed in acquisition, monthly payments of $7; maturing September 2018. $ 62 Term loan, bearing interest at 4.0%, monthly payments of $43; maturing March 2022. 2,241 Total long-term debt 2,303 Less: current portion 579 Long-term debt, net of current portion $ 1,724 The Company has availability under the Credit Agreement of $11.7 million ( $6.0 million for the working capital and $5.7 million for the acquisitions) as of December 31, 2017 which may be limited by its leverage covenant. The Company also has $30,000 in letters of credit outstanding as of December 31, 2017 . The Credit Agreement contains affirmative and negative covenants that, among other things, require the Company to maintain a maximum cash flow leverage ratio of no more than 3.25 to 1.0 and a minimum debt service coverage ratio of not less than 1.15 to 1.00. The maximum cash flow leverage ratio will decrease to 3.0 to 1.0 on March 31, 2018 and onwards. The Credit Agreement, which expires on March 29, 2019 , also contains customary events of default which, if uncured, may terminate the Credit Agreement and require immediate repayment of all indebtedness to the lenders. Payments due on long-term debt during each of the five years subsequent to December 31, 2017 are as follows (in thousands): Twelve Months Ending December 31, 2018 $ 579 2019 517 2020 517 2021 517 2022 173 $ 2,303 The Company utilizes performance bonds to support operations based on certain state requirements. At December 31, 2017 , the Company had performance bonds outstanding covering financial assurance up to $0.6 million . |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-based compensation cost for options and restricted stock awarded to employees and directors is measured at the grant date, based on the calculated fair value of the award and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant). During the three and six months ended December 31, 2017 and 2016 , stock-based compensation amounts are as follows (in thousands): Three-Months Ended Six-Months Ended 2017 2016 2017 2016 Stock-based compensation expense included in: Cost of revenues $ 13 $ 13 $ 27 $ 25 Selling, general and administrative 127 121 234 248 Total $ 140 $ 134 $ 261 $ 273 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) by the weighted average number of common shares after considering the additional dilution related to common stock options and restricted stock. In computing diluted earnings per share, the outstanding common stock options are considered dilutive using the treasury stock method. The Company’s restricted stock awards are treated as outstanding for earnings per share calculations since these shares have full voting rights and are entitled to participate in dividends declared on common shares, if any, and undistributed earnings. As participating securities, the shares of restricted stock are included in the calculation of basic EPS using the two-class method. For the periods presented, the amount of earnings allocated to the participating securities was not material. The following information is necessary to calculate earnings per share for the periods presented (in thousands, except per-share data): Three-Months Ended Six-Months Ended 2017 2016 2017 2016 Net income (loss), as reported $ 156 $ (227 ) $ 231 $ (1,194 ) Weighted average common shares outstanding 16,047 15,929 16,028 15,898 Effect of dilutive stock options 21 — 53 — Weighted average diluted common shares outstanding 16,068 15,929 16,081 15,898 Net income (loss) per common share Basic and diluted $ 0.01 $ (0.01 ) $ 0.01 $ (0.08 ) Employee stock options excluded from computation of dilutive income (loss) per share amounts because their effect would be anti-dilutive 778 834 401 305 |
EQUITY TRANSACTIONS
EQUITY TRANSACTIONS | 6 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
EQUITY TRANSACTIONS | EQUITY TRANSACTIONS During the three and six months ended December 31, 2017 and 2016 , stock options to purchase shares of the Company’s common stock were exercised as follows: Three-Months Ended Six-Months Ended 2017 2016 2017 2016 Options Exercised — 29,527 — 75,750 Proceeds (in thousands) $ — $ 118 $ — $ 259 Average exercise price per share $ — $ 3.98 $ — $ 3.41 As of December 31, 2017 , there was $0.5 million of stock option and restricted stock compensation expense related to non-vested awards which is expected to be recognized over a weighted average period of 2.3 years . During the three months ended December 31, 2017, the Company issued 20,617 shares of common stock as a portion of consideration for a third-party lease agreement. The shares were issued at $4.00 per share based on the closing price on the date of grant. Non-cash expense recorded during the three months ended December 31, 2017 was $12,000 . The remaining cost will be amortized over the life of the lease and is included in Prepaid and Other Current Assets or Other Assets on the balance sheet. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS At December 31, 2017 and June 30, 2017 , intangible assets consisted of the following (in thousands): December 31, 2017 June 30, 2017 Estimated Original Amount Accumulated Amortization Net Amount Original Amount Accumulated Amortization Net Amount Customer relationships 7 years $ 3,007 $ (704 ) $ 2,303 $ 3,007 $ (490 ) $ 2,517 Permits 6 - 15 years 1,421 (340 ) 1,081 1,373 (288 ) 1,085 Patents 5 - 17 years 383 (271 ) 112 383 (264 ) 119 Tradename 7 years 270 (58 ) 212 270 (39 ) 231 Non-compete 5 years 117 (35 ) 82 117 (23 ) 94 Total intangible assets, net $ 5,198 $ (1,408 ) $ 3,790 $ 5,150 $ (1,104 ) $ 4,046 During both the six months ended December 31, 2017 and 2016 , amortization expense was $0.3 million . There have been no changes in the carrying amount of goodwill since June 30, 2017 . As of December 31, 2017 , future amortization of intangible assets is as follows (in thousands): Twelve Months Ending December 31, 2018 $ 606 2019 606 2020 606 2021 592 2022 561 Thereafter 819 $ 3,790 |
INVENTORY
INVENTORY | 6 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY The components of inventory are as follows (in thousands): December 31, 2017 June 30, 2017 Raw materials $ 1,507 $ 1,272 Finished goods 2,852 2,826 Total $ 4,359 $ 4,098 |
REVENUES BY SOLUTION
REVENUES BY SOLUTION | 6 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
REVENUES BY SOLUTION | REVENUES BY SOLUTION The components of revenues by solution are as follows (in thousands): Three-Months Ended December 31, 2017 % Total 2016 % Total REVENUES BY SOLUTION: Mailbacks $ 6,677 60.1 % $ 6,415 66.1 % Route-based pickup services 1,830 16.5 % 1,580 16.3 % Unused medications 1,317 11.8 % 742 7.6 % Third party treatment services 337 3.0 % 74 0.8 % Other (1) 958 8.6 % 896 9.2 % Total revenues $ 11,119 100.0 % $ 9,707 100.0 % Six-Months Ended December 31, 2017 % Total 2016 % Total REVENUES BY SOLUTION: Mailbacks $ 12,016 57.8 % $ 12,664 65.9 % Route-based pickup services 3,591 17.3 % 3,045 15.8 % Unused medications 2,489 12.0 % 1,533 8.0 % Third party treatment services 771 3.7 % 142 0.7 % Other (1) 1,935 9.2 % 1,854 9.6 % Total revenues $ 20,802 100.0 % $ 19,238 100.0 % (1) The Company’s other products include non-mailback products such as IV poles, accessories, containers, asset return boxes and other miscellaneous items. |
SIGNIFICANT ACCOUNTING POLICI19
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition: The Company recognizes revenue when services are provided and from product sales when (i) goods are shipped or delivered, and title and risk of loss pass to the customer, (ii) the price is substantially fixed or determinable and (iii) collectability is reasonably assured except for those sales via multiple-deliverable revenue arrangements. Provisions for certain rebates, product returns and discounts to customers are accounted for as reductions in sales in the same period the related sales are recorded. Product discounts granted are based on the terms of arrangements with direct, indirect and other market participants, as well as market conditions, including prices charged by competitors. Rebates are estimated based on contractual terms, historical experience, trend analysis and projected market conditions in the various markets served. Service agreements which include a vendor managed inventory program include terms that meet the “bill and hold” criteria and as such are recognized when the order is completed, at which point title has transferred, there are no acceptance provisions and amounts are segregated in the Company’s warehouse. During the three and six months ended December 31, 2017 , the Company recorded revenue from inventory builds that are held in vendor managed inventory under these service agreements of $0.9 million and $1.9 million , respectively. During the three and six months ended December 31, 2016 , the Company recorded revenue from inventory builds that are held in vendor managed inventory under these service agreements of $0.8 million and $2.0 million , respectively. As of December 31, 2017 and June 30, 2017 , $3.1 million and $2.7 million , respectively, of solutions sold through that date were held in vendor managed inventory pending fulfillment or shipment to patients of pharmaceutical manufacturers who offer these solutions to patients in an ongoing patient support program. Certain products offered by the Company have revenue producing components that are recognized over multiple delivery points (Sharps Recovery System and various other solutions like the TakeAway Medication Recovery Systems referred to as “Mailbacks” and Sharps Pump and Asset Return Systems, referred to as “Pump Returns”) and can consist of up to three separate elements, or units of measure, as follows: (1) the sale of the compliance and container system, (2) return transportation and (3) treatment service. In accordance with the relative selling price methodology, an estimated selling price is determined for all deliverables that qualify for separate units of accounting. The actual consideration received in a multiple-deliverable arrangement is then allocated to the units based on their relative sales price. The selling price for the transportation revenue and the treatment revenue utilizes third party evidence. The Company estimates the selling price of the compliance and container system based on the product and services, provided, including compliance with local, state and federal laws, adherence to stringent manufacturing and testing requirements, safety to the patient and the community as well as storage and containment capabilities. Revenue for the sale of the compliance and container is recognized upon delivery to the customer, at which time the customer takes title and assumes risk of ownership. Transportation revenue is recognized when the customer returns the compliance and container system and the container has been received at the Company’s owned or contracted facilities. The compliance and container system is mailed or delivered by an alternative logistics provider to the Company’s owned or contracted facilities. Treatment revenue is recognized upon the destruction or conversion and proof of receipt and treatment having been performed on the container. Since the transportation element and the treatment elements are undelivered services at the point of initial sale of the compliance and container, transportation and treatment revenue is deferred until the services are performed. The current and long-term portions of deferred revenues are determined through regression analysis and historical trends. Furthermore, through regression analysis of historical data, the Company has determined that a certain percentage of all compliance and container systems sold may not be returned. Accordingly, a portion of the transportation and treatment elements are recognized at the point of sale. |
Income Taxes | Income Taxes : Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The establishment of valuation allowances and development of projected annual effective tax rates requires significant judgment and is impacted by various estimates. Both positive and negative evidence, as well as the objectivity and verifiability of that evidence, is considered in determining the appropriateness of recording a valuation allowance on deferred tax assets. Under GAAP, the valuation allowance has been recorded to reduce the Company’s deferred tax assets to an amount that is more likely than not to be realized and is based upon the uncertainty of the realization of certain federal and state deferred tax assets related to net operating loss carryforwards and other tax attributes. |
Goodwill and Other Identifiable Intangible Assets | Goodwill and Other Identifiable Intangible Assets: Finite-lived intangible assets are amortized over their respective estimated useful lives and evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying values may not be fully recoverable. Goodwill is assessed for impairment at least annually. The Company generally performs its annual goodwill impairment analysis using a quantitative approach. The quantitative goodwill impairment test identifies the existence of potential impairment by comparing the fair value of our single reporting unit with its carrying value, including goodwill. If the fair value of a reporting unit exceeds its carrying value, the reporting unit's goodwill is considered not to be impaired. If the carrying value of a reporting unit exceeds its fair value, an impairment charge is recognized in an amount equal to that excess. The impairment charge recognized is limited to the amount of goodwill present in our single reporting unit. These estimates and assumptions could have a significant impact on whether or not an impairment charge is recognized and the amount of any such charge. The Company performs its annual impairment assessment of goodwill during the fourth quarter of each fiscal year. |
Accounts Receivable | Accounts Receivable : Accounts receivable consist primarily of amounts due to the Company from normal business activities. Accounts receivable balances are determined to be delinquent when the amount is past due based on the contractual terms with the customer. The Company maintains an allowance for doubtful accounts to reflect the likelihood of not collecting certain accounts receivable based on past collection history and specific risks identified among uncollected accounts. Accounts receivable are charged to the allowance for doubtful accounts when the Company determines that the receivable will not be collected and/or when the account has been referred to a third party collection agency. The Company has a history of minimal uncollectible accounts. |
Stock-Based Compensation | Stock-Based Compensation : Stock-based compensation cost for options and restricted stock awarded to employees and directors is measured at the grant date, based on the calculated fair value of the award and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant). |
Fair Value of Financial Instruments | Fair Value of Financial Instruments : The Company considers the fair value of all financial instruments, including cash and cash equivalents, accounts receivable and accounts payable to approximate their carrying values at December 31, 2017 and June 30, 2017 due to their short-term nature. The carrying value of the Company’s debt approximates fair value due to the market rates of interest. |
New Accounting Pronouncement | In May 2014, guidance for revenue recognition was issued which supersedes the revenue recognition requirements currently followed by the Company. The new guidance provides for a single five-step model to be applied in determining the amount and timing of the recognition of revenue related to contracts with customers. The new standard also requires additional financial statement disclosures that will enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows relating to customer contracts. In March 2016, guidance for revenue from contracts with customers regarding principal versus agent considerations was issued which modified examples to assist in the application of the guidance. Companies have an option to use either a retrospective approach or cumulative effect adjustment approach to implement the standard. The guidance is effective for annual reporting periods beginning after December 15, 2017 (effective July 1, 2018 for the Company). The Company is in the initial stages of evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures as well as evaluating the available transition methods. The Company will continue to evaluate the standard as well as additional changes, modifications or interpretations which may impact the Company. In February 2016, guidance for leases was issued, which requires balance sheet recognition for rights and obligations of all leases with terms in excess of twelve months. The new guidance also requires additional disclosures about the amount, timing and uncertainty of cash flows arising from leases. The provisions of the new guidance are effective for annual periods beginning after December 15, 2018 (effective July 1, 2019 for the Company), including interim periods within the reporting period, and early application is permitted. The Company is in the initial stages of evaluating the impact of the new guidance on its consolidated financial statements and related disclosures as well as evaluating the available transition methods. The Company will continue to evaluate the standard as well as additional changes, modifications or interpretations which may impact the Company. |
NOTES PAYABLE AND LONG-TERM D20
NOTES PAYABLE AND LONG-TERM DEBT (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | At December 31, 2017 , long-term debt consisted of the following (in thousands): Non-interest bearing, unsecured note payable assumed in acquisition, monthly payments of $7; maturing September 2018. $ 62 Term loan, bearing interest at 4.0%, monthly payments of $43; maturing March 2022. 2,241 Total long-term debt 2,303 Less: current portion 579 Long-term debt, net of current portion $ 1,724 |
Schedule of payments due on long-term debt | Payments due on long-term debt during each of the five years subsequent to December 31, 2017 are as follows (in thousands): Twelve Months Ending December 31, 2018 $ 579 2019 517 2020 517 2021 517 2022 173 $ 2,303 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock-Based Compensation | During the three and six months ended December 31, 2017 and 2016 , stock-based compensation amounts are as follows (in thousands): Three-Months Ended Six-Months Ended 2017 2016 2017 2016 Stock-based compensation expense included in: Cost of revenues $ 13 $ 13 $ 27 $ 25 Selling, general and administrative 127 121 234 248 Total $ 140 $ 134 $ 261 $ 273 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following information is necessary to calculate earnings per share for the periods presented (in thousands, except per-share data): Three-Months Ended Six-Months Ended 2017 2016 2017 2016 Net income (loss), as reported $ 156 $ (227 ) $ 231 $ (1,194 ) Weighted average common shares outstanding 16,047 15,929 16,028 15,898 Effect of dilutive stock options 21 — 53 — Weighted average diluted common shares outstanding 16,068 15,929 16,081 15,898 Net income (loss) per common share Basic and diluted $ 0.01 $ (0.01 ) $ 0.01 $ (0.08 ) Employee stock options excluded from computation of dilutive income (loss) per share amounts because their effect would be anti-dilutive 778 834 401 305 |
EQUITY TRANSACTIONS (Tables)
EQUITY TRANSACTIONS (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stock options exercised to purchase common stock | During the three and six months ended December 31, 2017 and 2016 , stock options to purchase shares of the Company’s common stock were exercised as follows: Three-Months Ended Six-Months Ended 2017 2016 2017 2016 Options Exercised — 29,527 — 75,750 Proceeds (in thousands) $ — $ 118 $ — $ 259 Average exercise price per share $ — $ 3.98 $ — $ 3.41 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | At December 31, 2017 and June 30, 2017 , intangible assets consisted of the following (in thousands): December 31, 2017 June 30, 2017 Estimated Original Amount Accumulated Amortization Net Amount Original Amount Accumulated Amortization Net Amount Customer relationships 7 years $ 3,007 $ (704 ) $ 2,303 $ 3,007 $ (490 ) $ 2,517 Permits 6 - 15 years 1,421 (340 ) 1,081 1,373 (288 ) 1,085 Patents 5 - 17 years 383 (271 ) 112 383 (264 ) 119 Tradename 7 years 270 (58 ) 212 270 (39 ) 231 Non-compete 5 years 117 (35 ) 82 117 (23 ) 94 Total intangible assets, net $ 5,198 $ (1,408 ) $ 3,790 $ 5,150 $ (1,104 ) $ 4,046 |
Schedule of future amortization of intangible assets | As of December 31, 2017 , future amortization of intangible assets is as follows (in thousands): Twelve Months Ending December 31, 2018 $ 606 2019 606 2020 606 2021 592 2022 561 Thereafter 819 $ 3,790 |
INVENTORY (Tables)
INVENTORY (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | The components of inventory are as follows (in thousands): December 31, 2017 June 30, 2017 Raw materials $ 1,507 $ 1,272 Finished goods 2,852 2,826 Total $ 4,359 $ 4,098 |
REVENUES BY SOLUTION (Tables)
REVENUES BY SOLUTION (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of billings by solution | The components of revenues by solution are as follows (in thousands): Three-Months Ended December 31, 2017 % Total 2016 % Total REVENUES BY SOLUTION: Mailbacks $ 6,677 60.1 % $ 6,415 66.1 % Route-based pickup services 1,830 16.5 % 1,580 16.3 % Unused medications 1,317 11.8 % 742 7.6 % Third party treatment services 337 3.0 % 74 0.8 % Other (1) 958 8.6 % 896 9.2 % Total revenues $ 11,119 100.0 % $ 9,707 100.0 % Six-Months Ended December 31, 2017 % Total 2016 % Total REVENUES BY SOLUTION: Mailbacks $ 12,016 57.8 % $ 12,664 65.9 % Route-based pickup services 3,591 17.3 % 3,045 15.8 % Unused medications 2,489 12.0 % 1,533 8.0 % Third party treatment services 771 3.7 % 142 0.7 % Other (1) 1,935 9.2 % 1,854 9.6 % Total revenues $ 20,802 100.0 % $ 19,238 100.0 % (1) The Company’s other products include non-mailback products such as IV poles, accessories, containers, asset return boxes and other miscellaneous items. |
ORGANIZATION AND BACKGROUND (De
ORGANIZATION AND BACKGROUND (Details) | 6 Months Ended |
Dec. 31, 2017state_region | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of route-based pick-up service in state region | 23 |
SIGNIFICANT ACCOUNTING POLICI28
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2017 | |
Revenue Recognition [Abstract] | |||||
Revenue recorded from inventory builds | $ 0.9 | $ 0.8 | $ 1.9 | $ 2 | |
Solutions sold that were held in vendor managed inventory | $ 3.1 | $ 3.1 | $ 2.7 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | (35.10%) | |||
Income tax benefit | $ 74,000 | |||
State income tax expense | 14,000 | |||
Income tax expense | $ (67,000) | $ 0 | (60,000) | $ 0 |
Alternative minimum tax credits, deferred tax asset | $ 74,000 | 74,000 | ||
Decrease of deferred tax assets and offsetting valuation allowance | $ 800,000 |
NOTES PAYABLE AND LONG-TERM D30
NOTES PAYABLE AND LONG-TERM DEBT - Narrative (Details) | 6 Months Ended |
Dec. 31, 2017USD ($) | |
Performance bonds | |
Line of Credit Facility [Line Items] | |
Performance bonds outstanding, financial assurance | $ 600,000 |
Term Loan | |
Line of Credit Facility [Line Items] | |
Maturity period | 5 years |
Interest rate | 4.00% |
Credit Agreement | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity | $ 14,000,000 |
Percentage of eligible accounts receivable considered for borrowing base | 80.00% |
Percentage of eligible inventory considered for borrowing base | 50.00% |
Borrowing base, monetary benchmark | $ 3,000,000 |
Basis spread of variable rate | 0.00% |
Unused capacity, commitment fee percentage | 0.25% |
Remaining borrowing capacity | $ 11,700,000 |
Credit Agreement | Minimum | |
Line of Credit Facility [Line Items] | |
Debt service coverage ratio | 1.15 |
Credit Agreement | Maximum | |
Line of Credit Facility [Line Items] | |
Debt cash flow leverage ratio | 3.25 |
Decrease in cash flow of leverage ratio as on March 31, 2018 and onwards | 3 |
Credit Agreement | Working Capital | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity | $ 6,000,000 |
Remaining borrowing capacity | 6,000,000 |
Credit Agreement | Letter of Credit | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity | 2,000,000 |
Amount outstanding | 30,000 |
Credit Agreement | Acquisitions | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity | $ 8,000,000 |
Percentage of portion allocated to acquisition purchase price | 75.00% |
Remaining borrowing capacity | $ 5,700,000 |
Credit Agreement | LIBOR | |
Line of Credit Facility [Line Items] | |
Basis spread of variable rate | 2.50% |
Debt instrument, term of variable rate | 1 month |
Credit Agreement | LIBOR | Maximum | |
Line of Credit Facility [Line Items] | |
Basis spread of variable rate | 3.00% |
NOTES PAYABLE AND LONG-TERM D31
NOTES PAYABLE AND LONG-TERM DEBT - Schedule of debt instruments (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2017 | Jun. 30, 2017 | |
Long-term Debt, Unclassified [Abstract] | ||
Total long-term debt | $ 2,303 | |
Less: current portion | 579 | $ 601 |
Long-term debt, net of current portion | 1,724 | $ 2,002 |
Unsecured Note Payable | ||
Long-term Debt, Unclassified [Abstract] | ||
Monthly payments | 7 | |
Total long-term debt | 62 | |
Term Loan | ||
Long-term Debt, Unclassified [Abstract] | ||
Monthly payments | $ 43 | |
Interest rate | 4.00% | |
Total long-term debt | $ 2,241 |
NOTES PAYABLE AND LONG-TERM D32
NOTES PAYABLE AND LONG-TERM DEBT - Schedule of payments due on long-term debt (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2,018 | $ 579 |
2,019 | 517 |
2,020 | 517 |
2,021 | 517 |
2,022 | 173 |
Total long-term debt | $ 2,303 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 140 | $ 134 | $ 261 | $ 273 |
Cost of revenues | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 13 | 13 | 27 | 25 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 127 | $ 121 | $ 234 | $ 248 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |||||
Net income (loss), as reported | $ 156 | $ (227) | $ 231 | $ (1,194) | $ (1,293) |
Weighted average common shares outstanding (in shares) | 16,047 | 15,929 | 16,028 | 15,898 | |
Effect of dilutive stock options (in shares) | 21 | 0 | 53 | 0 | |
Weighted average diluted common shares outstanding (in shares) | 16,068 | 15,929 | 16,081 | 15,898 | |
Net income (loss) per common share | |||||
Basic and Diluted (in dollars per share) | $ 0.01 | $ (0.01) | $ 0.01 | $ (0.08) | |
Employee stock options excluded from computation of dilutive income (loss) per share amounts because their effect would be anti-dilutive (in shares) | 778 | 834 | 401 | 305 |
EQUITY TRANSACTIONS (Details)
EQUITY TRANSACTIONS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock options exercised [Abstract] | ||||
Options exercised (in shares) | 0 | 29,527 | 0 | 75,750 |
Proceeds | $ 0 | $ 118 | $ 0 | $ 259 |
Average exercise price per share (in dollars per share) | $ 0 | $ 3.98 | $ 0 | $ 3.41 |
Compensation expense related to non-vested awards | $ 500 | $ 500 | ||
Weighted average period | 2 years 3 months 17 days | |||
Shares of common stock issued for third-party lease agreement (in shares) | 20,617 | |||
Price per share (in dollars per share) | $ 4 | $ 4 | ||
Noncash expense | $ 12 |
GOODWILL AND INTANGIBLE ASSET36
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Original Amount | $ 5,198,000 | $ 5,150,000 | |
Accumulated Amortization | (1,408,000) | (1,104,000) | |
Net Amount | 3,790,000 | 4,046,000 | |
Intangible assets, amortization expense | 300,000 | $ 300,000 | |
Changes in goodwill | 0 | ||
Future amortization of intangible assets [Abstract] | |||
2,018 | 606,000 | ||
2,019 | 606,000 | ||
2,020 | 606,000 | ||
2,021 | 592,000 | ||
2,022 | 561,000 | ||
Thereafter | 819,000 | ||
Net Amount | $ 3,790,000 | 4,046,000 | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 7 years | ||
Original Amount | $ 3,007,000 | 3,007,000 | |
Accumulated Amortization | (704,000) | (490,000) | |
Net Amount | 2,303,000 | 2,517,000 | |
Future amortization of intangible assets [Abstract] | |||
Net Amount | 2,303,000 | 2,517,000 | |
Permits | |||
Finite-Lived Intangible Assets [Line Items] | |||
Original Amount | 1,421,000 | 1,373,000 | |
Accumulated Amortization | (340,000) | (288,000) | |
Net Amount | 1,081,000 | 1,085,000 | |
Future amortization of intangible assets [Abstract] | |||
Net Amount | $ 1,081,000 | 1,085,000 | |
Permits | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 6 years | ||
Permits | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 15 years | ||
Patents | |||
Finite-Lived Intangible Assets [Line Items] | |||
Original Amount | $ 383,000 | 383,000 | |
Accumulated Amortization | (271,000) | (264,000) | |
Net Amount | 112,000 | 119,000 | |
Future amortization of intangible assets [Abstract] | |||
Net Amount | $ 112,000 | 119,000 | |
Patents | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 5 years | ||
Patents | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 17 years | ||
Tradename | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 7 years | ||
Original Amount | $ 270,000 | 270,000 | |
Accumulated Amortization | (58,000) | (39,000) | |
Net Amount | 212,000 | 231,000 | |
Future amortization of intangible assets [Abstract] | |||
Net Amount | $ 212,000 | 231,000 | |
Non-compete | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 5 years | ||
Original Amount | $ 117,000 | 117,000 | |
Accumulated Amortization | (35,000) | (23,000) | |
Net Amount | 82,000 | 94,000 | |
Future amortization of intangible assets [Abstract] | |||
Net Amount | $ 82,000 | $ 94,000 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jun. 30, 2017 |
Components of inventory [Abstract] | ||
Raw materials | $ 1,507 | $ 1,272 |
Finished goods | 2,852 | 2,826 |
Total | $ 4,359 | $ 4,098 |
REVENUES BY SOLUTION (Details)
REVENUES BY SOLUTION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||||
Revenue reported | $ 11,119 | $ 9,707 | $ 20,802 | $ 19,238 |
Revenue percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Mailbacks | ||||
Segment Reporting Information [Line Items] | ||||
Revenue reported | $ 6,677 | $ 6,415 | $ 12,016 | $ 12,664 |
Revenue percentage | 60.10% | 66.10% | 57.80% | 65.90% |
Route-based pickup services | ||||
Segment Reporting Information [Line Items] | ||||
Revenue reported | $ 1,830 | $ 1,580 | $ 3,591 | $ 3,045 |
Revenue percentage | 16.50% | 16.30% | 17.30% | 15.80% |
Unused medications | ||||
Segment Reporting Information [Line Items] | ||||
Revenue reported | $ 1,317 | $ 742 | $ 2,489 | $ 1,533 |
Revenue percentage | 11.80% | 7.60% | 12.00% | 8.00% |
Third party treatment services | ||||
Segment Reporting Information [Line Items] | ||||
Revenue reported | $ 337 | $ 74 | $ 771 | $ 142 |
Revenue percentage | 3.00% | 0.80% | 3.70% | 0.70% |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue reported | $ 958 | $ 896 | $ 1,935 | $ 1,854 |
Revenue percentage | 8.60% | 9.20% | 9.20% | 9.60% |