Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2021 | Aug. 23, 2021 | Dec. 31, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Jun. 30, 2021 | ||
Current Fiscal Year End Date | --06-30 | ||
Document Transition Report | false | ||
Entity File Number | 001-34269 | ||
Entity Registrant Name | SHARPS COMPLIANCE CORP | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 74-2657168 | ||
Entity Address, Address Line One | 9220 Kirby Drive | ||
Entity Address, Address Line Two | Suite 500 | ||
Entity Address, City or Town | Houston | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 77054 | ||
City Area Code | 713 | ||
Local Phone Number | 432-0300 | ||
Title of 12(b) Security | Common Shares, $0.01 Par Value | ||
Trading Symbol | SMED | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 145 | ||
Entity Common Stock, Shares Outstanding | 17,243,388 | ||
Documents Incorporated by Reference | Portions of the Registrant’s Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A for the Annual Meeting of Shareholders to be held on November 19, 2020 are incorporated by reference into Part III. Such Proxy Statement will be filed within 120 days after the end of the registrant's fiscal year. | ||
Entity Central Index Key | 0000898770 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
CURRENT ASSETS | ||
Cash | $ 27,767 | $ 5,416 |
Accounts receivable, net | 9,738 | 11,789 |
Inventory | 6,114 | 5,638 |
Contract asset | 20 | 156 |
Prepaid and other current assets | 1,459 | 1,287 |
TOTAL CURRENT ASSETS | 45,098 | 24,286 |
PROPERTY, PLANT AND EQUIPMENT, net | 10,843 | 8,740 |
OPERATING LEASE RIGHT OF USE ASSET | 8,353 | 8,747 |
FINANCING LEASE RIGHT OF USE ASSET, net | 907 | 387 |
Inventory, net of current portion | 989 | 1,064 |
OTHER ASSETS | 110 | 154 |
GOODWILL | 6,735 | 6,735 |
INTANGIBLE ASSETS, net | 2,239 | 2,771 |
DEFERRED TAX ASSET, net | 157 | 1,252 |
TOTAL ASSETS | 75,431 | 54,136 |
CURRENT LIABILITIES | ||
Accounts payable | 2,922 | 3,291 |
Accrued liabilities | 3,940 | 2,768 |
Operating lease liability | 2,368 | 2,192 |
Financing lease liability | 160 | 65 |
Current maturities of long-term debt | 735 | 1,658 |
Contract liability | 7,028 | 3,262 |
TOTAL CURRENT LIABILITIES | 17,153 | 13,236 |
CONTRACT LIABILITY, net of current portion | 1,461 | 705 |
OPERATING LEASE LIABILITY, net of current portion | 6,118 | 6,671 |
FINANCING LEASE LIABILITY, net of current portion | 741 | 337 |
OTHER LIABILITIES | 45 | 104 |
LONG-TERM DEBT, net of current portion | 3,329 | 3,505 |
TOTAL LIABILITIES | 28,847 | 24,558 |
STOCKHOLDERS’ EQUITY | ||
Common stock, $0.01 par value per share; 40,000,000 shares authorized; 17,454,859 and 16,667,572 shares issued, respectively and 17,159,244 and 16,371,957 shares outstanding, respectively | 176 | 168 |
Treasury stock, at cost, 295,615 shares repurchased | (1,554) | (1,554) |
Additional paid-in capital | 34,333 | 30,203 |
Retained earnings | 13,629 | 761 |
TOTAL STOCKHOLDERS’ EQUITY | 46,584 | 29,578 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 75,431 | $ 54,136 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2021 | Jun. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 17,454,859 | 16,667,572 |
Common stock, shares outstanding (in shares) | 17,159,244 | 16,371,957 |
Treasury stock, shares repurchased (in shares) | 295,615 | 295,615 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | |||
REVENUES | $ 76,424 | $ 51,146 | $ 44,312 |
Cost of revenues | 47,514 | 35,384 | 31,042 |
GROSS PROFIT | 28,910 | 15,762 | 13,270 |
Selling, general and administrative | 15,761 | 14,046 | 12,003 |
Depreciation and amortization | 847 | 806 | 820 |
OPERATING INCOME | 12,302 | 910 | 447 |
OTHER INCOME (EXPENSE) | |||
Interest income | 0 | 14 | 24 |
Interest expense | (194) | (127) | (87) |
Income (loss) associated with derivative instrument | 47 | (113) | 0 |
Gain on forgiveness of PPP loan | 2,183 | 0 | 0 |
TOTAL OTHER INCOME (EXPENSE) | 2,036 | (226) | (63) |
INCOME BEFORE INCOME TAXES | 14,338 | 684 | 384 |
INCOME TAX EXPENSE (BENEFIT) | |||
Current | 375 | (87) | (81) |
Deferred | 1,095 | (1,495) | 251 |
TOTAL INCOME TAX EXPENSE (BENEFIT) | 1,470 | (1,582) | 170 |
NET INCOME | $ 12,868 | $ 2,266 | $ 214 |
NET INCOME PER COMMON SHARE | |||
Basic (in dollars per share) | $ 0.78 | $ 0.14 | $ 0.01 |
Diluted (in dollars per share) | $ 0.76 | $ 0.14 | $ 0.01 |
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE: | |||
Basic (in shares) | 16,593 | 16,249 | 16,116 |
Diluted (in shares) | 17,028 | 16,431 | 16,123 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid- in Capital | Retained Earnings (Accumulated Deficit) | Cumulative effect, period of adoption, adjustment | Cumulative effect, period of adoption, adjustmentRetained Earnings (Accumulated Deficit) |
Balances (in shares) at Jun. 30, 2018 | 16,377,636 | (295,615) | |||||
Balances at Jun. 30, 2018 | $ 25,174 | $ 164 | $ (1,554) | $ 28,621 | $ (2,057) | $ 338 | $ 338 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of stock options (in shares) | 0 | ||||||
Exercise of stock options | $ 0 | ||||||
Stock-based compensation | 400 | 400 | |||||
Issuance of restricted stock (in shares) | 55,492 | ||||||
Issuance of restricted stock | 0 | $ 1 | (1) | ||||
Net income (loss) | 214 | 214 | |||||
Balances (in shares) at Jun. 30, 2019 | 16,433,128 | (295,615) | |||||
Balances at Jun. 30, 2019 | $ 26,126 | $ 165 | $ (1,554) | 29,020 | (1,505) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of stock options (in shares) | 154,000 | 154,444 | |||||
Exercise of stock options | $ 668 | $ 2 | 666 | ||||
Stock-based compensation | 518 | 518 | |||||
Issuance of restricted stock (in shares) | 80,000 | ||||||
Issuance of restricted stock | 0 | $ 1 | (1) | ||||
Net income (loss) | 2,266 | 2,266 | |||||
Balances (in shares) at Jun. 30, 2020 | 16,667,572 | (295,615) | |||||
Balances at Jun. 30, 2020 | $ 29,578 | $ 168 | $ (1,554) | 30,203 | 761 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of stock options (in shares) | 712,000 | 712,394 | |||||
Exercise of stock options | $ 3,164 | $ 7 | 3,157 | ||||
Stock-based compensation | 974 | 974 | |||||
Issuance of restricted stock (in shares) | 74,893 | ||||||
Issuance of restricted stock | 0 | $ 1 | (1) | ||||
Net income (loss) | 12,868 | 12,868 | |||||
Balances (in shares) at Jun. 30, 2021 | 17,454,859 | (295,615) | |||||
Balances at Jun. 30, 2021 | $ 46,584 | $ 176 | $ (1,554) | $ 34,333 | $ 13,629 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income (loss) | $ 12,868 | $ 2,266 | $ 214 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 1,989 | 1,606 | 1,663 |
Bad debt expense | 157 | 111 | 81 |
Non-cash lease expense | 0 | 0 | 46 |
Inventory write-offs | 131 | 29 | 55 |
Loss on disposal of property, plant and equipment | 1 | 16 | 21 |
Stock-based compensation expense | 974 | 518 | 400 |
(Income) loss associated with derivative instrument | (47) | 113 | 0 |
Deferred tax expense (benefit) | 1,095 | (1,495) | 251 |
Vendor receivable write-off | 0 | 657 | 0 |
Gain on forgiveness of PPP loan | (2,183) | 0 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 1,894 | (2,971) | (3,000) |
Inventory | (532) | (1,887) | (492) |
Prepaid and other assets | (128) | (373) | (531) |
Accounts payable and accrued liabilities | 1,080 | 1,036 | 1,498 |
Contract asset and contract liability | 4,658 | 1,066 | 719 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 21,957 | 692 | 925 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchase of property, plant and equipment | (2,803) | (3,969) | (749) |
Proceeds from sale of property, plant and equipment | 3 | 3 | 0 |
Additions to intangible assets | (82) | (188) | (282) |
NET CASH USED IN INVESTING ACTIVITIES | (2,882) | (4,154) | (1,031) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from exercise of stock options | 3,164 | 668 | 0 |
Proceeds of long-term debt | 973 | 4,265 | 0 |
Repayments of long-term debt | (762) | (517) | (537) |
Payments on financing lease liabilities | (99) | 0 | 0 |
Payments of debt issuance costs | 0 | (50) | 0 |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 3,276 | 4,366 | (537) |
NET INCREASE (DECREASE) IN CASH | 22,351 | 904 | (643) |
CASH, beginning of year | 5,416 | 4,512 | 5,155 |
CASH, end of year | 27,767 | 5,416 | 4,512 |
SUPPLEMENTAL CASH FLOW DISCLOSURES: | |||
Income taxes paid, net of refunds | 128 | 99 | 37 |
Interest paid on long-term debt | 193 | 127 | 89 |
NON-CASH INVESTING ACTIVITIES: | |||
Transfer of equipment to inventory | 0 | 28 | 393 |
Property, plant and equipment financed through accounts payable | (272) | 331 | 12 |
Purchase of previously leased property, plant and equipment financed with note payable | $ 873 | $ 0 | $ 0 |
ORGANIZATION AND BACKGROUND
ORGANIZATION AND BACKGROUND | 12 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BACKGROUND | ORGANIZATION AND BACKGROUND Organization : The accompanying 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 and Sharps Properties, LLC (collectively, “Sharps", the “Company”, "we" or "our"). All significant intercompany accounts and transactions have been eliminated upon consolidation. Business : Sharps is a 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 Recovery 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 Recovery System . The Company also offers route-based pickup services in a thirty-seven (37) state region of the South, Southeast, Southwest, Midwest and Northeast portions of the United States. A novel strain of coronavirus ("COVID-19") was first identified in December 2019, and subsequently declared a global pandemic by the World Health Organization on March 11, 2020. As a result of the outbreak, many companies have experienced disruptions in their operations and in servicing customers. The Company has implemented some and may take additional precautionary measures intended to help ensure the well-being of its employees, facilitate continued uninterrupted servicing of customers and minimize business disruptions. The full extent of the future impacts of COVID-19 on the Company's operations is uncertain. A prolonged outbreak could have a material adverse impact on the financial results and business operations of the Company. To date, the Company has not identified any material adverse impact of COVID-19 on its financial position and results of operations. Concentration of Customers and Service Providers : There is an inherent concentration of credit risk associated with accounts receivable arising from sales to major customers. For the fiscal year ended June 30, 2021, two customers represented approximately 45% of revenues and 36%, or $3.5 million, of the total accounts receivable balance as of June 30, 2021. For the fiscal year ended June 30, 2020, two customers represented approximately 35% of revenues and 44%, or $5.2 million, of the total accounts receivable balance as of June 30, 2020. For the fiscal year ended June 30, 2019, two customers represented approximately 27% of revenues. In the event a major customer is lost, the Company may be adversely affected by its dependence on a limited number of high volume customers. The Company currently transports (from the patient or user to the Company's facility or subcontracted treatment facilities) many of its mailback and unused medication solution offerings using the United States Postal Service ("USPS"). The Company also has an arrangement with United Parcel Service Inc. (“UPS”) whereby UPS transports certain other mailback and unused medication solution offerings. Sharps maintains relationships with multiple raw materials suppliers and vendors in order to meet customer demands and assure availability of our products and solutions. With respect to the Sharps Recovery System solutions, the Company owns proprietary molds and dies and utilizes several contract manufacturers for the production of the primary raw materials. Sharps believes that alternative suitable contract manufacturers are readily available to meet the production specifications of our products and solutions. The Company utilizes national suppliers for the majority of the raw materials used in our other products and solutions and international suppliers for Pitch-It IV Poles. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition: The components of revenues by solution which reflect a disaggregation of revenue by contract type are as follows (dollar amounts in thousands): Year Ended June 30, 2021 % Total 2020 % Total 2019 % Total REVENUES BY SOLUTION: Mailbacks $ 49,617 64.9 % $ 26,578 52.0 % $ 24,501 55.2 % Route-based pickup services 13,677 17.9 % 10,390 20.3 % 9,029 20.4 % Unused medications 8,159 10.7 % 9,163 17.9 % 6,936 15.7 % Third party treatment services 570 0.7 % 247 0.5 % 290 0.7 % Other (1) 4,401 5.8 % 4,768 9.3 % 3,556 8.0 % Total revenues $ 76,424 100.0 % $ 51,146 100.0 % $ 44,312 100.0 % (1) The Company’s other products include IV poles, accessories, containers, asset return boxes and other miscellaneous items with single performance obligations. The Company recognizes revenue, net of applicable sales tax, when performance obligations are satisfied through the transfer of control of promised goods or services to the Company’s customers. Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the promised goods or services. Outbound shipping and handling activities to customers are considered fulfillment activities with the exception of mailbacks sold as part of the vendor managed inventory ("VMI") program. Shipping and handling are considered separate performance obligations for mailbacks sold under the VMI program. For performance obligations satisfied at a point in time, which applies to all contracts except for route-based pickup services, revenue recognition occurs when there is a transfer of control or completion of service. For performance obligations satisfied over time, which applies to the route-based pickup services, revenue is recognized in the amount to which the Company has a right to invoice pursuant to the right to invoice practical expedient. Provisions for certain rebates, product returns and discounts to customers are estimated at the inception of the contract, updated as needed throughout the contract term, and 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. Other than the Company’s mailbacks and unused medication solutions, the Company’s solutions have a single performance obligation. The Company's mailbacks and unused medication solutions have revenue producing components that are recognized over multiple delivery points (Sharps Recovery System and various other solutions like the MedSafe and TakeAway Medication Recovery Systems referred to as “mailbacks” or "unused medications") and can consist of up to two performance obligations, or units of measure, as follows: (1) the sale of the compliance and container system, and (2) return transportation and treatment service. For mailbacks that are p art of the VMI program, there is an additional element, or unit of measure, for outbound transportation. For contracts with multiple performance obligations, an estimated stand-alone selling price is determined for all performance obligations. The consideration is then allocated to the performance obligations based on their relative stand-alone selling price. The selling price for performance obligations for transportation and treatment utilizes third party evidence. The Company estimates the selling price of the compliance and container system based on the product and services provided, including the expected cost plus a margin. The allocated transaction price for the sale of the compliance and container system is recognized upon delivery to the customer, at which time the customer has control. The allocated transaction price for the return transportation and treatment 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 at which point the destruction or conversion and proof of receipt and treatment are performed on the container. Consideration received and allocated to the transportation and treatment performance obligation is recorded as a contract liability until the services are performed. 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 return transportation and treatment element is recognized at the point of sale. Furthermore, the current and long-term portions of amounts historically referred to as deferred revenues (shown as Contract Liability on the condensed consolidated balance sheets) are determined through regression analysis and historical trends. The VMI program includes terms that meet the “bill and hold” criteria and as such are recognized when the order is placed, title has transferred, there are no acceptance provisions and amounts are segregated in the Company’s warehouse for the customer. For the fiscal years ended June 30, 2021, 2020 and 2019, the Company recorded billings from inventory builds that are held in vendor managed inventory under these service agreements of $3.9 million, $3.5 million and $2.7 million, respectively. As of June 30, 2021 and 2020, $3.7 million and $2.8 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. The contract asset is related to VMI service agreements within the mailbacks contract type category when the revenue recognition exceeds the amount of consideration the Company was entitled to at the point in time of satisfying the performance obligation associated with the sale of the compliance and container system. The contract liability is related to the mailbacks and unused medications contract type categories in which cash consideration exceeds the transaction price allocated to completed performance obligation s. The amount recognized for the twelve months ended June 30, 2021 and June 30, 2020 related to contract liabilities recorded as of June 30, 2020 and 2019 were $2.8 million. and $2.7 million, respectively. Incremental costs to obtain contracts that are deemed to be recoverable, primarily related to the payment of sales incentives for contracts in the route-based pickup service category, are capitalized as contract costs and included in prepaids and other current assets in the amount of $0.2 million and $0.1 million as of June 30 2021 and 2020, respectively. The amortization of capitalized sales incentives, which is included in selling, general and administrative expense was $0.2 million and less than $0.1 million for the years ended June 30, 2021 and 2020, respectively. 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 a valuation allowance 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. The Company has historically recorded a valuation allowance to reduce its deferred tax assets to an amount that is more likely than not to be realized. However, during the year ended June 30, 2020, the Company released the full amount of the valuation allowance against its deferred tax assets on the basis of the Company's reassessment of the recoverability of its deferred tax assets. The Company is subject to income taxes in the United States and in numerous state tax jurisdictions. Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. The Company accounts for uncertain tax positions in accordance with FASB ASC 740, which prescribes the minimum recognition threshold a tax position taken or expected to be taken in a tax return is required to meet before being recognized in the financial statements. The Company has not recognized any material uncertain tax positions for the years ended June 30, 2021, 2020 and 2019. Tax return filings which are subject to review by federal and state tax authorities by jurisdiction are as follows: • United States – fiscal years ended June 30, 2018 and after • State of Texas – fiscal years ended June 30, 2016 and after • States of California, Georgia, Pennsylvania and New York - fiscal years ended June 30, 2018 and after • New York City - fiscal years ended June 30, 2018 and after • Other States – fiscal years ended June 30, 2017 and after None of the Company’s federal or state tax returns are currently under examination. The Company records income tax related interest and penalties, if applicable, as a component of the provision for income tax expense. However, there were no such amounts recognized in the consolidated statements of operations in the years ended June 30, 2021, 2020 and 2019. Leases: The Company has operating leases for real estate, field equipment, office equipment and vehicles and financing leases for vehicles and office equipment. Operating leases are included in Operating Lease Right of Use ("ROU") Asset and Operating Lease Liability on the consolidated balance sheets. Financing leases are included in Financing Lease ROU Asset and Financing Lease Liability on the consolidated balance sheets. Operating and financing lease asset and liability amounts are measured and recognized based on discounted future cash flow payment amounts the Company expects to make over the expected term of the underlying leases, including renewal periods the Company is reasonably certain to exercise. The lease liability for leases expected to be settled in twelve-months or less are classified as current liabilities. The general terms of the Company’s lease agreements require monthly payments. Some of the Company’s leases escalate either by fixed or variable amounts. Certain of the Company’s leases, which provide for variable lease payments based on index-based (i.e., the US Consumer Price Index) adjustments to lease payments over the term of the lease, are measured at the lease rate effective at the commencement of the lease or upon adoption, as applicable. Because the Company does not generally have access to the rate implicit in its leases, the Company utilizes its incremental borrowing rate as the discount rate for measuring the lease liability. At commencement, the operating lease ROU asset and lease liability are the same, with adjustments to the ROU asset for lease incentives and initial direct costs incurred. The Company reviews all options to extend, terminate or purchase its ROU assets at the commencement of the lease and on an ongoing basis and accounts for these options when they are reasonably certain of being exercised. The Company evaluates lease modifications as they occur and records such as a separate lease or an adjustment to the existing ROU asset and lease liability as appropriate. Operating lease expense is recorded on a straight-line basis over the lease term with amortization of the ROU asset calculated as the difference between the straight-line operating lease expense and the implied interest expense on the lease liability. Interest expense related to financing leases is calculated using the effective interest method and amortization of the financing lease ROU asset is recorded on a straight-line basis. On the statement of cash flows, operating lease expense is included in operating cash flows and repayment of financing leases is a financing activity. 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. See rollforward of allowance activity below: Allowance for Doubtful Balance Charges to Write-offs Balance End 2021 $ 162 $ 157 $ (127) $ 192 2020 $ 132 $ 111 $ (81) $ 162 2019 $ 102 $ 81 $ (51) $ 132 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). Contingently issued awards with a requisite service period that precedes the grant date are measured and recognized at the start of the requisite service period and remeasured each reporting period until the grant date. Total stock-based compensation expense for the fiscal years ended June 30, 2021, 2020 and 2019 are as follows: Year Ended June 30, 2021 2020 2019 Stock-based compensation expense included in: Cost of revenues $ — $ 4 $ 9 Selling, general and administrative 974 514 391 Total $ 974 $ 518 $ 400 The Company estimates the fair value of restricted stock awards based on the closing price of the Company’s common stock on the date of the grant. The Company estimates the fair value of stock options using the Black-Scholes valuation model. Key input assumptions used to estimate the fair value of stock options include the exercise price of the award, the expected option term, the expected volatility of the Company’s stock over the option’s expected term, the risk free interest rate over the option’s expected term and the Company’s expected annual dividend yield. The risk free interest rate is derived using the U.S. Treasury yield curve in effect at date of grant. Volatility, expected life and dividend yield are based on historical experience and activity. The fair value of the Company’s stock options was estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions: Year Ended June 30, 2021 2020 2019 Weighted average risk-free interest rate 0.2 % 0.3 % 2.6 % Weighted average expected volatility 50 % 49 % 44 % Weighted average expected life (in years) 4.52 3.13 3.08 Dividend yield — — — The Company considers an estimated forfeiture rate for stock options based on historical experience and the anticipated forfeiture rates during the future contract life. 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 years ended June 30, 2021, 2020 and 2019. Intangible Assets : Intangible assets consist of (i) acquired customer relationships, (ii) permit costs related to the Company’s treatment facilities and transfer stations, (iii) patents and (iv) defense costs related to certain existing patents. Cash : The Company maintains funds in bank accounts that, at times, may exceed the limit insured by the Federal Deposit Insurance Corporation (“FDIC”). The risk of loss attributable to these uninsured balances is mitigated by depositing funds only in high credit quality financial institutions. The Company has not experienced any losses in such accounts. Inventory : Inventory consists primarily of raw materials and finished goods held for sale and are stated at the lower of cost or net realizable value using the average cost method. The Company periodically reviews the value and classification of items in inventory and provides write-downs or write-offs of inventory based on its assessment of physical deterioration, obsolescence, changes in price levels and other causes. Write-offs totaled $0.1 million or less for each of the fiscal years ended June 30, 2021, 2020 and 2019. The components of inventory are as follows (in thousands): As of June 30, 2021 2020 Raw materials $ 2,040 $ 1,402 Finished goods 5,063 5,300 Total inventory 7,103 6,702 Less: current portion 6,114 5,638 Inventory, net of current portion $ 989 $ 1,064 The current portion of inventory includes amounts which the Company expects to sell in the next twelve month period based on historical sales. Property, Plant and Equipment and Financing Lease ROU Assets : Property, plant and equipment, including third party software and implementation costs, is stated at cost, or fair value if acquired in a business combination or financing lease ROU assets, less accumulated depreciation. Depreciation is computed using the straight-line method based on the estimated useful lives of the assets or the term of the lease. Additions, improvements and renewals significantly adding to the asset value or extending the life of the asset are capitalized. Ordinary maintenance and repairs, which do not extend the physical or economic life of the property or equipment, are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in the results of operations for the period. Computer and software development costs, which include costs of computer software developed or obtained for internal use, all programming, implementation and costs incurred with developing internal-use software, are capitalized during the development project stage. External direct costs of materials and services consumed in developing or obtaining internal-use computer software are capitalized. The Company expenses costs associated with developing or obtaining internal-use software during the preliminary project stage. Training and maintenance costs associated with system changes or internal-use software are expensed as incurred. Additionally, the costs of data cleansing, reconciliation, balancing of old data to the new system, creation of new/additional data and data conversion costs are expensed as incurred. Impairment of Long-lived Assets : The Company evaluates the recoverability of property, plant and equipment and intangible or other assets if facts and circumstances indicate that any of those assets might be impaired. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared to the asset’s carrying amount to determine if a write-down to fair value is necessary. No impairment loss was recognized during the years ended June 30, 2021, 2020 and 2019. Accrued Liabilities : The components of Accrued Liabilities on the balance sheet as of June 30, 2021 and 2020 are as follows: As of June 30, 2021 2020 (1) Accrued compensation $ 1,399 $ 767 Customer-related payables 1,214 1,108 Vendor-related payables 836 388 Other 491 505 Total $ 3,940 $ 2,768 (1) Certain prior year amounts have been reclassified to conform to current year presentation. Shipping and Handling Fees and Costs : The Company records amounts billed to customers for shipping and handling as revenue. Costs incurred by the Company for shipping and handling have been classified as cost of revenues. Advertising Costs : Advertising costs are charged to expenses when incurred and totaled $0.9 million for each of the fiscal years ended June 30, 2021, 2020 and 2019. Research and Development Costs : Research and development costs are charged to expense when incurred. Research activities represent an important part of the Company’s business and include both internal labor costs and payments to third parties related to the processes of discovering, testing and developing new products, improving existing products, as well as demonstrating product efficacy and regulatory compliance prior to launch of new products and services. Research and development expenses paid the third parties totaled less than $0.1 million for each of the fiscal years ended June 30, 2021, 2020 and 2019. Employee Benefit Plans : In addition to group health-related benefits, the Company maintains a 401(k) employee savings plan available to all full-time employees. The Company matches a portion of employee contributions with cash (25% of employee contribution up to 6%). Company contributions to the 401(k) plan were less than $0.1 million in each of the fiscal years ended June 30, 2021, 2020 and 2019, respectively and are included in selling, general and administrative expenses. For purposes of the group health benefit plan, the Company self-insures an amount equal to the excess of the employees’ deductible (range from $2,500 for each individual and family member covered) up to the amount by which the third-party insurance coverage begins (ranges from $2,500 for individual up to $10,000 for family coverage). The amount of liability at June 30, 2021 and 2020 was less than $0.1 million and is included in accrued liabilities. The Company also has an incentive plan for executives of the Company, which provides for performance based cash and stock-based compensation awards. There was $0.6 million recognized during the year ended June 30, 2021 for the incentive plan; no expense was recognized during the years 2020 and 2019 for cash awards pursuant to the plan. Net Income (Loss) Per Share : Basic earnings per share excludes dilution and is determined by dividing net income (loss) by the weighted average number of common shares outstanding including participating securities during the period. Diluted EPS reflects the potential dilution that could occur if securities and other contracts to issue common stock were exercised or converted into common stock. Fair Value of Financial Instruments : The Company considers the fair value of all financial instruments, including cash, accounts receivable and accounts payable to approximate their carrying values at year-end due to their short-term nature. The carrying value of the Company’s debt approximates fair value due to the market rates of interest. The fair value of the Company's interest rate swap related to a portion of its long-term debt is included in other long-term and short-term liabilities in the amount of $0.1 million a s of June 30, 2021 and 2020. Fair Value Measurements : The Company employs a hierarchy which prioritizes the inputs used to measure recurring fair value into three distinct categories based on the lowest level of input that is significant to the fair value measurement. The methodology for categorizing assets and liabilities that are measured at fair value pursuant to this hierarchy gives the highest priority to unadjusted quoted prices in active markets and the lowest levels to unobservable inputs, summarized as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities. • Level 2 – Other significant observable inputs (including quoted prices in active markets for similar assets or liabilities). • Level 3 – Significant unobservable inputs (including our own assumptions in determining fair value). We use the cost, income or market valuation approaches to estimate the fair value of our assets and liabilities when insufficient market-observable data is available to support our valuation assumptions. We determine the fair value of our interest rate swap executed during the year ended June 30, 2020 using third-party pricing information that is derived from observable market inputs, which we classify as level 2 with respect to the fair value hierarchy. Segment Reporting : The Company operates in a single segment, focusing on developing cost-effective management solutions for medical waste and unused dispensed medications generated by small and medium quantity generators. Use of Estimates : The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expense during the reporting period. The Company uses estimates to determine many reported amounts, including but not limited to allowance for doubtful accounts, recoverability of long-lived assets and intangibles, useful lives used in depreciation and amortization, income taxes and valuation allowances, stock-based compensation, fair values of assets and liabilities acquired in business combinations, selling price used in multiple-deliverable arrangements and return rates used to estimate the percentage of container systems sold that will not be returned. Actual results could differ from these estimates. Business Combinations : The Company includes the results of operations of the businesses that are acquired as of the respective dates of acquisition. The Company allocates the fair value of the purchase price of acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The Company estimates and records the fair value of purchased intangible assets, which primarily consists of customer relationships, trade-names, and non-competes. The excess of the fair value of the purchase price over the fair values of these identifiable assets, both tangible and intangible, and liabilities is recorded as goodwill. Deferred Offering Costs: The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with an offering as deferred offering costs in Other Assets (long-term) in the Consolidated Balance Sheets until such financings are consummated. These deferred costs will be reclassified to stockholders' equity or debt in the event the Company completes a debt or equity offering. Recently Issued Accounting Standards: In March 2020, guidance for applying optional expedients and exceptions to ease the potential burden in accounting for reference rate reform on financial reporting was issued. It is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform on financial reporting. The provisions of the new guidance are effective for interim periods beginning as of March 12, 2020 through December 31, 2022. There has been no material impact on the Company's consolidated financial statements and related disclosures from the modification of its arrangements as of June 30, 2021. The Company will continue to evaluate the standard as well as additional changes, modifications or interpretations which may impact the Company. In June 2016, guidance for credit losses of financial instruments was issued, which requires entities to measure credit losses for financial assets measured at amortized cost based on expected losses rather than incurred losses. The provisions of the new guidance are effective for annual periods beginning after December 15, 2022 (effective July 1, 2023 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. Reclassification of Prior Year Presentation in the Consolidated Balance Sheets: Certain prior year amounts have been reclassified for consistency with the current year presentation in the Consolidated Balance Sheets. The change in classification does not affect previously reported total current assets, total assets, total current liabilities, total liabilities or total stockholders' equity in the Consolidated Balance Sheets. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT At June 30, 2021 and 2020, property, plant and equipment consisted of the following (in thousands): June 30, Useful Life 2021 2020 Furniture and fixtures 3 to 5 years $ 248 $ 245 Plant and equipment 3 to 17 years 11,305 9,053 Manufacturing 15 years 169 169 Computers and software 3 to 5 years 2,435 2,132 Leasehold improvements Life of Lease 6,652 3,192 Land 97 19 Building 40 years 938 — Construction-in-progress 296 3,507 22,140 18,317 Less: accumulated depreciation 10,390 9,190 Less: financing lease ROU asset, net (1) 907 387 Net property, plant and equipment $ 10,843 $ 8,740 (1) Financing lease ROU assets in the net amount of $0.9 million and $0.4 million as of June 30, 2021 and 2020, respectively, are incorporated with leasehold improvements. Accumulated depreciation related to financing lease assets was $0.1 million and less than $0.1 million as of June 30, 2021 and 2020, respectively. Total depreciation expense in the fiscal years ended June 30, 2021, 2020 and 2019 was $1.4 million, $1.0 million and $1.1 million, respectively. Depreciation expense included in cost of revenues was $1.1 million for the fiscal year ended 2021, and $0.8 million for each of the fiscal years ended 2020 and 2019. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The components of income tax expense (benefit) are as follows (in thousands): Year ended June 30, 2021 2020 2019 Current: Federal $ — $ (122) $ (123) State 375 35 42 Total current $ 375 $ (87) $ (81) Deferred: Federal $ 1,205 $ (1,406) $ 217 State (110) (89) 34 Total deferred 1,095 (1,495) 251 Net income tax expense (benefit) $ 1,470 $ (1,582) $ 170 The reconciliation of the statutory income tax rate to the Company’s effective income tax rate for the fiscal years ended June 30, 2021, 2020 and 2019 is as follows : Year Ended June 30, 2021 2020 2019 Statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net 1.4 % (1.0) % 22.9 % Non-deductible expenses 0.2 % 1.6 % 2.7 % Stock-based compensation (10.5) % 0.7 % 16.1 % Non-deductible compensation 2.7 % — % — % PPP loan (3.2) % — % — % Research and development credits (1.3) % (5.3) % 7.3 % Other — % (1.5) % 1.5 % Effective rate before valuation allowance 10.3 % 15.5 % 71.5 % Change in valuation allowance — % (247.1) % (27.2) % Effective tax rate 10.3 % (231.6) % 44.3 % The Company has historically recorded a valuation allowance to reduce its deferred tax assets to an amount that is more likely than not to be realized. However, as of the year ended June 30, 2020, the Company released the full amount of the valuation allowance against its deferred tax assets on the basis of the Company's reassessment of the recoverability of its deferred tax assets. At each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. As of the years ended June 30, 2021 and June 30, 2020, the Company had a cumulative positive amount of pretax income over a period of three years. The Company expects to utilize all U.S. federal and state net operating loss carryforward balances and all remaining research and development credits. At June 30, 2021 and 2020, the significant components of deferred tax assets and liabilities are as follows (in thousands): June 30, 2021 2020 Deferred tax assets relating to: Stock-based compensation $ 85 $ 211 Research and development credits 717 490 Inventory 68 98 Professional fees 193 175 Deferred tax assets related to other items 251 140 Net operating loss carryforwards 142 1,016 Total deferred tax assets 1,456 2,130 Deferred tax liabilities related to depreciable and amortizable assets (1,278) (836) Deferred tax liabilities related to other items (21) (42) Net deferred tax asset $ 157 $ 1,252 At June 30, 2021, the Company had net operating loss carryforwards of $0.7 million, which will expire, if unused, between June 30, 2037 and June 30, 2038. At June 30, 2021, the Company had various tax credit carryforwards of $0.7 million which will expire beginning on June 30, 2030. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security ("CARES") Act was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, accelerated the Company's ability to recover refundable AMT credits to 2018 and 2019. As such, the Company recorded the remaining balance of its AMT credits as a current income tax receivable at June 30, 2020. The Company received $0.3 million and $0.2 million of refundable AMT credits in the years ended June 30, 2021 and 2020, respectively. |
NOTES PAYABLE AND LONG-TERM DEB
NOTES PAYABLE AND LONG-TERM DEBT | 12 Months Ended |
Jun. 30, 2021 | |
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 which was subsequently amended on June 29, 2018 and on December 28, 2020 (the "Credit Agreement"). The Credit Agreement, which expires on December 28, 2023, provides for a $14 million committed credit facility that can be increased to $18 million upon the Company's request. The proceeds of the Credit Agreement may be utilized as follows: (i) $6 million for working capital, letters of credit (up to $2.0 million) and general corporate purposes, (ii) $8 million for acquisitions and (iii) an additional $4 million for working capital, upon the Company's request. 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 lesser of (i) 50% of eligible inventory and (ii) $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) one-half 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 June 30, 2021 was approximately 3.0%. The Company pays a fee of 0.25% per annum on the unused amount of the credit facility. On August 21, 2019, certain subsidiaries of the Company entered into a Construction and Term Loan Agreement and a Master Equipment Finance Agreement with its existing commercial bank (collectively, the “Loan Agreement”). The Loan Agreement provides for a five-year, $3.2 million facility, the proceeds of which are to be utilized for expenditures to facilitate future growth at the Company’s treatment facility in Carthage, Texas (the “Texas Treatment Facility”) as follows: (i) $2.0 million for planned improvements and (ii) $1.2 million for equipment. Indebtedness under the Loan Agreement is secured by the Company’s real estate investment and equipment at the Texas Treatment Facility. Advances under the Loan Agreement mature five years from the Closing Date (August 21, 2019) with monthly payments beginning in the month after the advancing period ends. The advancing period extended through January 15, 2021 and August 2020 for the real estate portion and the equipment portion of the Loan Agreement, respectively. Borrowings during the advancing period for the real estate portion and for the entire term of the equipment portion of the Loan Agreement bear interest computed at the One Month ICE LIBOR, plus two-hundred and fifty (250) basis points which was a rate of 2.73% on June 30, 2021. The Company has entered into a forward rate lock to fix the rate on the real estate portion of the Loan Agreement at the expiration of the advancing period at 4.15%. On January 22, 2021, certain wholly owned subsidiaries of the Company entered into a real estate term loan agreement (the "Real Estate Loan Agreement" and together with the Credit Agreement and the Loan Agreement, the "Credit and Loan Agreements") with the Company's existing commercial bank. The Real Estate Loan Agreement provides for a five-year, $0.9 million facility, the proceeds of which have been utilized to purchase the property in Pennsylvania which had previously been leased by the Company for its operations. The Real Estate Loan Agreement matures five-years from January 22, 2021 with monthly payments based on a 20-year amortization and bears interest at 4%. On April 20, 2020, the Company received loan proceeds of $2.2 million under the Paycheck Protection Program (“PPP”) under a promissory note from its existing commercial bank (the “PPP Loan”). The PPP, established as part of the CARES Act, provides for loans to qualifying businesses for amounts up to 2.5 times the average monthly payroll expenses of the qualifying business. The loans and accrued interest may be forgivable after eight to twenty-four weeks providing that the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. On June 15, 2021, the Company received a notification from its existing commercial bank that the Small Business Administration ("SBA") fully approved the Company's PPP Loan forgiveness request and that the PPP Loan, reflected in the Company’s balance sheet as Long-Term Debt, was forgiven. The Company recognized the gain on forgiveness of PPP loan in the financial statements during the fourth quarter of the year ending June 30, 2021. Although the PPP Loan has been forgiven, records are to be maintained for at least six years following the date of forgiveness as the SBA may still audit the eligibility of the Company's receipt of the PPP Loan proceeds. To the extent the eligibility is challenged, the Company may have to repay all or part of the PPP Loan. At June 30, 2021 and 2020, long-term debt consisted of the following (in thousands): June 30, 2021 2020 Acquisition loan, monthly payments of $43; maturing March 2022. $ 431 $ 948 Equipment loan, monthly payments of $17; maturing August 2024, net of debt issuance costs of $40 830 929 Real estate loans, monthly payments of $9; maturing August 2024 and January 2026 2,803 1,103 Paycheck Protection Program loan — 2,183 Total long-term debt 4,064 5,163 Less: current portion 735 1,658 Long-term debt, net of current portion $ 3,329 $ 3,505 The Company has availability under the Credit Agreement of $13.9 million ($5.9 million for the working capital portion and $8.0 million f or the acquisitions) as of June 30, 2021 with the option to extend the availability up to $17.9 million. The Company also has $0.1 million in letters of credit outstanding as of June 30, 2021. The Credit and Loan Agreements contain affirmative and negative covenants that, among other things, require the Company to maintain a maximum cash flow leverage ratio of no more than 3.0 to 1.0 and a minimum debt service coverage ratio of not less than 1.15 to 1.00. The Credit and Loan Agreements also contain customary events of default which, if uncured, may terminate the agreements and require immediate repayment of all indebtedness to the lenders. The leverage ratio covenant may limit the amount available under the Credit Agreement. The Company was in compliance with all the financial covenants under the Credit and Loan Agreements as of June 30, 2021. Payments due on long-term debt subsequent to June 30, 2021 are as follows (in thousands): Twelve Months Ending June 30, 2022 $ 735 2023 316 2024 316 2025 2,041 2026 696 $ 4,104 |
EQUITY TRANSACTIONS
EQUITY TRANSACTIONS | 12 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
EQUITY TRANSACTIONS | EQUITY TRANSACTIONSDuring the years ended June 30, 2021, 2020 and 2019, stock options to purchase shares of the Company's common stock were exercised as follows (in thousands except per share amounts): Year ended June 30, 2021 2020 2019 Options exercised 712 154 — Proceeds $ 3,164 $ 668 $ — Average exercise price per share $ 4.44 $ 4.32 $ — |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 12 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK BASED COMPENSATION | STOCK BASED COMPENSATION The Company sponsors the Sharps Compliance Corp. 2010 Stock Plan (the “2010 Plan”) covering employees, consultants and non-employee directors. The 2010 Plan provides for the granting of stock-based compensation (stock options or restricted stock) of up to 3,000,000 shares of the Company’s common stock of which 354,621 options and restricted shares are outstanding as of June 30, 2021. Options granted generally vest over a period of four years and expire seven years after the date of grant. Restricted stock generally vests over one year. As of June 30, 2021, there were 956,089 shares available for grant under the 2010 Plan. The summary of activity for all restricted stock during the fiscal years ended June 30, 2021, 2020 and 2019 is presented in the table below (in thousands): Year ended June 30, 2021 2020 2019 Unvested at beginning of the year 22 13 13 Granted 75 80 63 Vested (83) (71) (55) Forfeited — — (8) Unvested at end of the year 14 22 13 The weighted average fair value per share of restricted stock granted during the fiscal years ended June 30, 2021, 2020 and 2019 was $7.53 , $4.31 and $3.53, respectively. The weighted average fair value per share of restricted stock which vested during the fiscal years ended June 30, 2021, 2020 and 2019 was $6.74 , $4.12 and $3.69, respectively. The summary of activity for all stock options during the fiscal years ended June 30, 2021, 2020 and 2019 is presented in the table below (in thousands except per share amounts): Options Weighted Options Outstanding at June 30, 2018 920 $ 4.57 Granted 578 $ 3.73 Forfeited or canceled (218) $ 4.16 Options Outstanding at June 30, 2019 1,280 $ 4.26 Granted 82 $ 6.74 Exercised (154) $ 4.32 Forfeited or canceled (63) $ 3.95 Options Outstanding at June 30, 2020 1,145 $ 4.45 Granted 27 $ 7.57 Exercised (712) $ 4.44 Forfeited or canceled (119) $ 6.61 Options Outstanding at June 30, 2021 341 $ 3.96 Options Exercisable at June 30, 2021 33 $ 4.85 The following table summarizes information about stock options outstanding as of June 30, 2021 (in thousands except per share amounts): Options Outstanding Range of Exercise Outstanding as Weighted Weighted $2.51 - $3.75 35 4.42 $ 3.26 $3.76 - $5.00 294 4.38 $ 3.93 $5.01 - $7.50 12 1.81 $ 6.68 341 $ 3.96 The following table summarizes information about stock options exercisable as of June 30, 2021 (in thousands except per share amounts): Options Exercisable Range of Exercise Exercisable as Weighted Weighted $2.51 - $3.75 10 4.42 $ 3.26 $3.76 - $5.00 13 1.92 $ 4.56 $5.01 - $7.50 10 1.15 $ 6.75 33 $ 4.85 As of June 30, 2021, there was $0.3 million of stock option and restricted stock compensation expense related to non-vested awards. This expense is expected to be recognized over a weighted average period of 1.54 years. |
LEASES
LEASES | 12 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
LEASES | LEASES During the twelve months ended June 30, 2021, lease cost amounts, which reflect the fixed rent expense associated with operating and financing leases, are as follows (in thousands): Year Ended June 30, 2021 2020 Lease cost (1) - fixed rent expense: Operating lease cost included in: Cost of revenues $ 2,448 $ 1,851 Selling, general and administrative 452 451 Financing lease cost included in: Cost of revenues (amortization expense) 91 26 Interest expense 18 4 Total $ 3,009 $ 2,332 (1) Short-term lease cost and variable lease cost were not significant during the period. During the twelve months ended June 30, 2021, the Company had the following cash and non-cash activities associated with leases (in thousands): Year Ended June 30, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflow for operating leases $ 2,844 $ 2,274 Non-cash changes to the Operating ROU Asset and Operating Lease Liability Reduction to ROU asset due to acquisition of previously leased asset $ (904) $ — Additions and modifications to ROU asset obtained from new operating lease liabilities $ 2,994 $ 6,214 Additions to ROU asset obtained from operating lease liabilities upon adoption of new guidance $ — $ 4,591 Additions to ROU asset obtained from new financing lease liabilities $ 598 $ 387 As of June 30, 2021, the weighted average remaining lease term for all operating and financing leases is 3.92 years and 5.42 years. The weighted average discount rate associated with operating and financing leases as of June 30, 2021 is 4% and 3%, respectively . The future payments due under leases as of June 30, 2021 is as follows (in thousands): Future payments due in the year ended June 30, Operating leases Financing leases 2022 $ 2,703 $ 186 2023 2,267 183 2024 2,066 182 2025 1,643 178 2026 614 162 Thereafter 124 89 Total undiscounted lease payments 9,417 980 Less effects of discounting (931) (79) Lease liability recognized $ 8,486 $ 901 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Performance bonds: The Company utilizes performance bonds to support operations based on certain state requirements. At June 30, 2021 , the Company had performance bonds outstanding covering financial assurance up to $1.3 million. Other: From time to time, the Company is involved in legal proceedings and litigation in the ordinary course of business. In the opinion of management, the outcome of such matters is not anticipated to have a material adverse effect on the Company’s consolidated financial position or consolidated results of operations. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHAREBasic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income 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 and diluted 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 amounts): Year Ended June 30, 2021 2020 2019 Net income as reported $ 12,868 $ 2,266 $ 214 Weighted average common shares outstanding 16,593 16,249 16,116 Effect of dilutive stock options 435 182 7 Weighted average diluted common shares outstanding 17,028 16,431 16,123 Net income per common share Basic $ 0.78 $ 0.14 $ 0.01 Diluted $ 0.76 $ 0.14 $ 0.01 Employee stock options excluded from computation of diluted income per share amounts because their effect would be anti-dilutive — 206 1,173 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS At June 30, 2021 and 2020, intangible assets consisted of the following (in thousands): June 30, 2021 2020 Estimated Original Accumulated Net Original Accumulated Net Customer relationships 7 years $ 3,007 $ (2,207) $ 800 $ 3,007 $ (1,780) $ 1,227 Permits 6 - 15 years 1,974 (705) 1,269 1,892 (596) 1,296 Patents 5 - 17 years 420 (327) 93 420 (311) 109 Tradename 7 years 270 (193) 77 270 (154) 116 Non-compete 5 years 117 (117) — 117 (94) 23 Total intangible assets, net $ 5,788 $ (3,549) $ 2,239 $ 5,706 $ (2,935) $ 2,771 Amortization expense was $0.6 million for the fiscal year ended June 30, 2021, and $0.6 million for each of the fiscal years ended 2020 and 2019. As of June 30, 2021, future amortization of intangible assets is as follows (in thousands): Year Ended June 30, 2022 $ 624 2023 570 2024 159 2025 158 2026 158 Thereafter 570 $ 2,239 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition: The Company recognizes revenue, net of applicable sales tax, when performance obligations are satisfied through the transfer of control of promised goods or services to the Company’s customers. Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the promised goods or services. Outbound shipping and handling activities to customers are considered fulfillment activities with the exception of mailbacks sold as part of the vendor managed inventory ("VMI") program. Shipping and handling are considered separate performance obligations for mailbacks sold under the VMI program. For performance obligations satisfied at a point in time, which applies to all contracts except for route-based pickup services, revenue recognition occurs when there is a transfer of control or completion of service. For performance obligations satisfied over time, which applies to the route-based pickup services, revenue is recognized in the amount to which the Company has a right to invoice pursuant to the right to invoice practical expedient. Provisions for certain rebates, product returns and discounts to customers are estimated at the inception of the contract, updated as needed throughout the contract term, and 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. Other than the Company’s mailbacks and unused medication solutions, the Company’s solutions have a single performance obligation. The Company's mailbacks and unused medication solutions have revenue producing components that are recognized over multiple delivery points (Sharps Recovery System and various other solutions like the MedSafe and TakeAway Medication Recovery Systems referred to as “mailbacks” or "unused medications") and can consist of up to two performance obligations, or units of measure, as follows: (1) the sale of the compliance and container system, and (2) return transportation and treatment service. For mailbacks that are p art of the VMI program, there is an additional element, or unit of measure, for outbound transportation. For contracts with multiple performance obligations, an estimated stand-alone selling price is determined for all performance obligations. The consideration is then allocated to the performance obligations based on their relative stand-alone selling price. The selling price for performance obligations for transportation and treatment utilizes third party evidence. The Company estimates the selling price of the compliance and container system based on the product and services provided, including the expected cost plus a margin. The allocated transaction price for the sale of the compliance and container system is recognized upon delivery to the customer, at which time the customer has control. The allocated transaction price for the return transportation and treatment 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 at which point the destruction or conversion and proof of receipt and treatment are performed on the container. Consideration received and allocated to the transportation and treatment performance obligation is recorded as a contract liability until the services are performed. 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 return transportation and treatment element is 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 a valuation allowance 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. The Company has historically recorded a valuation allowance to reduce its deferred tax assets to an amount that is more likely than not to be realized. However, during the year ended June 30, 2020, the Company released the full amount of the valuation allowance against its deferred tax assets on the basis of the Company's reassessment of the recoverability of its deferred tax assets. The Company is subject to income taxes in the United States and in numerous state tax jurisdictions. Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. The Company accounts for uncertain tax positions in accordance with FASB ASC 740, which prescribes the minimum recognition threshold a tax position taken or expected to be taken in a tax return is required to meet before being recognized in the financial statements. The Company has not recognized any material uncertain tax positions for the years ended June 30, 2021, 2020 and 2019. Tax return filings which are subject to review by federal and state tax authorities by jurisdiction are as follows: • United States – fiscal years ended June 30, 2018 and after • State of Texas – fiscal years ended June 30, 2016 and after • States of California, Georgia, Pennsylvania and New York - fiscal years ended June 30, 2018 and after • New York City - fiscal years ended June 30, 2018 and after • Other States – fiscal years ended June 30, 2017 and after |
Leases | Leases: The Company has operating leases for real estate, field equipment, office equipment and vehicles and financing leases for vehicles and office equipment. Operating leases are included in Operating Lease Right of Use ("ROU") Asset and Operating Lease Liability on the consolidated balance sheets. Financing leases are included in Financing Lease ROU Asset and Financing Lease Liability on the consolidated balance sheets. Operating and financing lease asset and liability amounts are measured and recognized based on discounted future cash flow payment amounts the Company expects to make over the expected term of the |
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. |
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). Contingently issued awards with a requisite service period that precedes the grant date are measured and recognized at the start of the requisite service period and remeasured each reporting period until the grant date. The Company estimates the fair value of restricted stock awards based on the closing price of the Company’s common stock on the date of the grant. The Company estimates the fair value of stock options using the Black-Scholes valuation model. Key input assumptions used to estimate the fair value of stock options include the exercise price of the award, the expected option term, the expected volatility of the Company’s stock over the option’s expected term, the risk free interest rate over the option’s expected term and the Company’s expected annual dividend yield. The risk free interest rate is derived using the U.S. Treasury yield curve in effect at date of grant. Volatility, expected life and dividend yield are based on historical experience and activity.The Company considers an estimated forfeiture rate for stock options based on historical experience and the anticipated forfeiture rates during the future contract life. |
Goodwill and Other Identifiable Intangible Assets | Goodwill and Other Identifiable Intangible Assets: |
Intangible Assets | Intangible Assets : Intangible assets consist of (i) acquired customer relationships, (ii) permit costs related to the Company’s treatment facilities and transfer stations, (iii) patents and (iv) defense costs related to certain existing patents. |
Cash | Cash : The Company maintains funds in bank accounts that, at times, may exceed the limit insured by the Federal Deposit Insurance Corporation (“FDIC”). The risk of loss attributable to these uninsured balances is mitigated by depositing funds only in high credit quality financial institutions. The Company has not experienced any losses in such accounts. |
Inventory | Inventory : Inventory consists primarily of raw materials and finished goods held for sale and are stated at the lower of cost or net realizable value using the average cost method. The Company periodically reviews the value and classification of items in inventory and provides write-downs or write-offs of inventory based on its assessment of physical deterioration, obsolescence, changes in price levels and other causes. |
Property, Plant and Equipment | Property, Plant and Equipment and Financing Lease ROU Assets : Property, plant and equipment, including third party software and implementation costs, is stated at cost, or fair value if acquired in a business combination or financing lease ROU assets, less accumulated depreciation. Depreciation is computed using the straight-line method based on the estimated useful lives of the assets or the term of the lease. Additions, improvements and renewals significantly adding to the asset value or extending the life of the asset are capitalized. Ordinary maintenance and repairs, which do not extend the physical or economic life of the property or equipment, are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in the results of operations for the period. Computer and software development costs, which include costs of computer software developed or obtained for internal use, all programming, implementation and costs incurred with developing internal-use software, are capitalized during the development project stage. External direct costs of materials and services consumed in developing or obtaining internal-use computer software are capitalized. The Company expenses costs associated with developing or obtaining internal-use software during the preliminary project stage. Training and maintenance costs associated with system changes or internal-use software are expensed as incurred. Additionally, the costs of data cleansing, reconciliation, balancing of old data to the new system, creation of new/additional data and data conversion costs are expensed as incurred. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets: The Company evaluates the recoverability of property, plant and equipment and intangible or other assets if facts and circumstances indicate that any of those assets might be impaired. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared to the asset’s carrying amount to determine if a write-down to fair value is necessary. |
Shipping and Handing Fees and Costs | Shipping and Handling Fees and Costs : The Company records amounts billed to customers for shipping and handling as revenue. Costs incurred by the Company for shipping and handling have been classified as cost of revenues. |
Advertising Costs | Advertising Costs : Advertising costs are charged to expenses when incurred and totaled $0.9 million for each of the fiscal years ended June 30, 2021, 2020 and 2019. |
Research and Development Costs | Research and Development Costs : Research and development costs are charged to expense when incurred. Research activities represent an important part of the Company’s business and include both internal labor costs and payments to third parties related to the processes of discovering, testing and developing new products, improving existing products, as well as demonstrating product efficacy and regulatory compliance prior to launch of new products and services. Research and development expenses paid the third parties totaled less than $0.1 million for each of the fiscal years ended June 30, 2021, 2020 and 2019. |
Employee Benefit Plans | Employee Benefit Plans : In addition to group health-related benefits, the Company maintains a 401(k) employee savings plan available to all full-time employees. The Company matches a portion of employee contributions with cash (25% of employee contribution up to 6%). Company contributions to the 401(k) plan were less than $0.1 million in each of the fiscal years ended June 30, 2021, 2020 and 2019, respectively and are included in selling, general and administrative expenses. For purposes of the group health benefit plan, the Company self-insures an amount equal to the excess of the employees’ deductible (range from $2,500 for each individual and family member covered) up to the amount by which the third-party insurance coverage begins (ranges from $2,500 for individual up to $10,000 for family coverage). |
Net Income (Loss) Per Share | Net Income (Loss) Per Share : Basic earnings per share excludes dilution and is determined by dividing net income (loss) by the weighted average number of common shares outstanding including participating securities during the period. Diluted EPS reflects the potential dilution that could occur if securities and other contracts to issue common stock were exercised or converted into common stock. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments: The Company considers the fair value of all financial instruments, including cash, accounts receivable and accounts payable to approximate their carrying values at year-end due to their short-term nature. The carrying value of the Company’s debt approximates fair value due to the market rates of interest. |
Fair Value Measurements | Fair Value Measurements : The Company employs a hierarchy which prioritizes the inputs used to measure recurring fair value into three distinct categories based on the lowest level of input that is significant to the fair value measurement. The methodology for categorizing assets and liabilities that are measured at fair value pursuant to this hierarchy gives the highest priority to unadjusted quoted prices in active markets and the lowest levels to unobservable inputs, summarized as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities. • Level 2 – Other significant observable inputs (including quoted prices in active markets for similar assets or liabilities). • Level 3 – Significant unobservable inputs (including our own assumptions in determining fair value). We use the cost, income or market valuation approaches to estimate the fair value of our assets and liabilities when insufficient market-observable data is available to support our valuation assumptions. We determine the fair value of our interest rate swap executed during the year ended June 30, 2020 using third-party pricing information that is derived from observable market inputs, which we classify as level 2 with respect to the fair value hierarchy. |
Segment Reporting | Segment Reporting : The Company operates in a single segment, focusing on developing cost-effective management solutions for medical waste and unused dispensed medications generated by small and medium quantity generators. |
Use of Estimates | Use of Estimates : The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expense during the reporting period. The Company uses estimates to determine many reported amounts, including but not limited to allowance for doubtful accounts, recoverability of long-lived assets and intangibles, useful lives used in depreciation and amortization, income taxes and valuation allowances, stock-based compensation, fair values of assets and liabilities acquired in business combinations, selling price used in multiple-deliverable arrangements and return rates used to estimate the percentage of container systems sold that will not be returned. Actual results could differ from these estimates. |
Business Combinations | Business Combinations : The Company includes the results of operations of the businesses that are acquired as of the respective dates of acquisition. The Company allocates the fair value of the purchase price of acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The Company estimates and records the fair value of purchased intangible assets, which primarily consists of customer relationships, trade-names, and non-competes. The excess of the fair value of the purchase price over the fair values of these identifiable assets, both tangible and intangible, and liabilities is recorded as goodwill. |
Deferred Offering Costs | Deferred Offering Costs: The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with an offering as deferred offering costs in Other Assets (long-term) in the Consolidated Balance Sheets until such financings are consummated. These deferred costs will be reclassified to stockholders' equity or debt in the event the Company completes a debt or equity offering. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards: In March 2020, guidance for applying optional expedients and exceptions to ease the potential burden in accounting for reference rate reform on financial reporting was issued. It is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform on financial reporting. The provisions of the new guidance are effective for interim periods beginning as of March 12, 2020 through December 31, 2022. There has been no material impact on the Company's consolidated financial statements and related disclosures from the modification of its arrangements as of June 30, 2021. The Company will continue to evaluate the standard as well as additional changes, modifications or interpretations which may impact the Company. In June 2016, guidance for credit losses of financial instruments was issued, which requires entities to measure credit losses for financial assets measured at amortized cost based on expected losses rather than incurred losses. The provisions of the new guidance are effective for annual periods beginning after December 15, 2022 (effective July 1, 2023 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. |
Reclassification of Prior Year Presentation in the Consolidated Balance Sheets | Reclassification of Prior Year Presentation in the Consolidated Balance Sheets: Certain prior year amounts have been reclassified for consistency with the current year presentation in the Consolidated Balance Sheets. The change in classification does not affect previously reported total current assets, total assets, total current liabilities, total liabilities or total stockholders' equity in the Consolidated Balance Sheets. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of revenue by solution | The components of revenues by solution which reflect a disaggregation of revenue by contract type are as follows (dollar amounts in thousands): Year Ended June 30, 2021 % Total 2020 % Total 2019 % Total REVENUES BY SOLUTION: Mailbacks $ 49,617 64.9 % $ 26,578 52.0 % $ 24,501 55.2 % Route-based pickup services 13,677 17.9 % 10,390 20.3 % 9,029 20.4 % Unused medications 8,159 10.7 % 9,163 17.9 % 6,936 15.7 % Third party treatment services 570 0.7 % 247 0.5 % 290 0.7 % Other (1) 4,401 5.8 % 4,768 9.3 % 3,556 8.0 % Total revenues $ 76,424 100.0 % $ 51,146 100.0 % $ 44,312 100.0 % (1) The Company’s other products include IV poles, accessories, containers, asset return boxes and other miscellaneous items with single performance obligations. |
Schedule of allowance for doubtful accounts | The Company has a history of minimal uncollectible accounts. See rollforward of allowance activity below: Allowance for Doubtful Balance Charges to Write-offs Balance End 2021 $ 162 $ 157 $ (127) $ 192 2020 $ 132 $ 111 $ (81) $ 162 2019 $ 102 $ 81 $ (51) $ 132 |
Schedule of stock-based compensation expense | Total stock-based compensation expense for the fiscal years ended June 30, 2021, 2020 and 2019 are as follows: Year Ended June 30, 2021 2020 2019 Stock-based compensation expense included in: Cost of revenues $ — $ 4 $ 9 Selling, general and administrative 974 514 391 Total $ 974 $ 518 $ 400 |
Schedule of stock option valuation assumptions | The fair value of the Company’s stock options was estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions: Year Ended June 30, 2021 2020 2019 Weighted average risk-free interest rate 0.2 % 0.3 % 2.6 % Weighted average expected volatility 50 % 49 % 44 % Weighted average expected life (in years) 4.52 3.13 3.08 Dividend yield — — — |
Schedule of inventory | The components of inventory are as follows (in thousands): As of June 30, 2021 2020 Raw materials $ 2,040 $ 1,402 Finished goods 5,063 5,300 Total inventory 7,103 6,702 Less: current portion 6,114 5,638 Inventory, net of current portion $ 989 $ 1,064 |
Schedule of accrued liabilities | The components of Accrued Liabilities on the balance sheet as of June 30, 2021 and 2020 are as follows: As of June 30, 2021 2020 (1) Accrued compensation $ 1,399 $ 767 Customer-related payables 1,214 1,108 Vendor-related payables 836 388 Other 491 505 Total $ 3,940 $ 2,768 (1) Certain prior year amounts have been reclassified to conform to current year presentation. |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | At June 30, 2021 and 2020, property, plant and equipment consisted of the following (in thousands): June 30, Useful Life 2021 2020 Furniture and fixtures 3 to 5 years $ 248 $ 245 Plant and equipment 3 to 17 years 11,305 9,053 Manufacturing 15 years 169 169 Computers and software 3 to 5 years 2,435 2,132 Leasehold improvements Life of Lease 6,652 3,192 Land 97 19 Building 40 years 938 — Construction-in-progress 296 3,507 22,140 18,317 Less: accumulated depreciation 10,390 9,190 Less: financing lease ROU asset, net (1) 907 387 Net property, plant and equipment $ 10,843 $ 8,740 (1) Financing lease ROU assets in the net amount of $0.9 million and $0.4 million as of June 30, 2021 and 2020, respectively, are incorporated with leasehold improvements. Accumulated depreciation related to financing lease assets was $0.1 million and less than $0.1 million as of June 30, 2021 and 2020, respectively. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Components of income tax expense (benefit) | The components of income tax expense (benefit) are as follows (in thousands): Year ended June 30, 2021 2020 2019 Current: Federal $ — $ (122) $ (123) State 375 35 42 Total current $ 375 $ (87) $ (81) Deferred: Federal $ 1,205 $ (1,406) $ 217 State (110) (89) 34 Total deferred 1,095 (1,495) 251 Net income tax expense (benefit) $ 1,470 $ (1,582) $ 170 |
Effective income tax rate reconciliation | The reconciliation of the statutory income tax rate to the Company’s effective income tax rate for the fiscal years ended June 30, 2021, 2020 and 2019 is as follows : Year Ended June 30, 2021 2020 2019 Statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net 1.4 % (1.0) % 22.9 % Non-deductible expenses 0.2 % 1.6 % 2.7 % Stock-based compensation (10.5) % 0.7 % 16.1 % Non-deductible compensation 2.7 % — % — % PPP loan (3.2) % — % — % Research and development credits (1.3) % (5.3) % 7.3 % Other — % (1.5) % 1.5 % Effective rate before valuation allowance 10.3 % 15.5 % 71.5 % Change in valuation allowance — % (247.1) % (27.2) % Effective tax rate 10.3 % (231.6) % 44.3 % |
Components of deferred tax assets and liabilities | At June 30, 2021 and 2020, the significant components of deferred tax assets and liabilities are as follows (in thousands): June 30, 2021 2020 Deferred tax assets relating to: Stock-based compensation $ 85 $ 211 Research and development credits 717 490 Inventory 68 98 Professional fees 193 175 Deferred tax assets related to other items 251 140 Net operating loss carryforwards 142 1,016 Total deferred tax assets 1,456 2,130 Deferred tax liabilities related to depreciable and amortizable assets (1,278) (836) Deferred tax liabilities related to other items (21) (42) Net deferred tax asset $ 157 $ 1,252 |
NOTES PAYABLE AND LONG-TERM D_2
NOTES PAYABLE AND LONG-TERM DEBT (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | At June 30, 2021 and 2020, long-term debt consisted of the following (in thousands): June 30, 2021 2020 Acquisition loan, monthly payments of $43; maturing March 2022. $ 431 $ 948 Equipment loan, monthly payments of $17; maturing August 2024, net of debt issuance costs of $40 830 929 Real estate loans, monthly payments of $9; maturing August 2024 and January 2026 2,803 1,103 Paycheck Protection Program loan — 2,183 Total long-term debt 4,064 5,163 Less: current portion 735 1,658 Long-term debt, net of current portion $ 3,329 $ 3,505 |
Schedule of payments due on long-term debt | Payments due on long-term debt subsequent to June 30, 2021 are as follows (in thousands): Twelve Months Ending June 30, 2022 $ 735 2023 316 2024 316 2025 2,041 2026 696 $ 4,104 |
EQUITY TRANSACTIONS (Tables)
EQUITY TRANSACTIONS (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Schedule of exercised stock options | During the years ended June 30, 2021, 2020 and 2019, stock options to purchase shares of the Company's common stock were exercised as follows (in thousands except per share amounts): Year ended June 30, 2021 2020 2019 Options exercised 712 154 — Proceeds $ 3,164 $ 668 $ — Average exercise price per share $ 4.44 $ 4.32 $ — |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of activity for all restricted stock | The summary of activity for all restricted stock during the fiscal years ended June 30, 2021, 2020 and 2019 is presented in the table below (in thousands): Year ended June 30, 2021 2020 2019 Unvested at beginning of the year 22 13 13 Granted 75 80 63 Vested (83) (71) (55) Forfeited — — (8) Unvested at end of the year 14 22 13 |
Schedule of activity for all stock options | The summary of activity for all stock options during the fiscal years ended June 30, 2021, 2020 and 2019 is presented in the table below (in thousands except per share amounts): Options Weighted Options Outstanding at June 30, 2018 920 $ 4.57 Granted 578 $ 3.73 Forfeited or canceled (218) $ 4.16 Options Outstanding at June 30, 2019 1,280 $ 4.26 Granted 82 $ 6.74 Exercised (154) $ 4.32 Forfeited or canceled (63) $ 3.95 Options Outstanding at June 30, 2020 1,145 $ 4.45 Granted 27 $ 7.57 Exercised (712) $ 4.44 Forfeited or canceled (119) $ 6.61 Options Outstanding at June 30, 2021 341 $ 3.96 Options Exercisable at June 30, 2021 33 $ 4.85 |
Schedule of information about stock options outstanding | The following table summarizes information about stock options outstanding as of June 30, 2021 (in thousands except per share amounts): Options Outstanding Range of Exercise Outstanding as Weighted Weighted $2.51 - $3.75 35 4.42 $ 3.26 $3.76 - $5.00 294 4.38 $ 3.93 $5.01 - $7.50 12 1.81 $ 6.68 341 $ 3.96 |
Schedule of information about stock options exercisable | The following table summarizes information about stock options exercisable as of June 30, 2021 (in thousands except per share amounts): Options Exercisable Range of Exercise Exercisable as Weighted Weighted $2.51 - $3.75 10 4.42 $ 3.26 $3.76 - $5.00 13 1.92 $ 4.56 $5.01 - $7.50 10 1.15 $ 6.75 33 $ 4.85 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Summary of lease components and other information | During the twelve months ended June 30, 2021, lease cost amounts, which reflect the fixed rent expense associated with operating and financing leases, are as follows (in thousands): Year Ended June 30, 2021 2020 Lease cost (1) - fixed rent expense: Operating lease cost included in: Cost of revenues $ 2,448 $ 1,851 Selling, general and administrative 452 451 Financing lease cost included in: Cost of revenues (amortization expense) 91 26 Interest expense 18 4 Total $ 3,009 $ 2,332 (1) Short-term lease cost and variable lease cost were not significant during the period. During the twelve months ended June 30, 2021, the Company had the following cash and non-cash activities associated with leases (in thousands): Year Ended June 30, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflow for operating leases $ 2,844 $ 2,274 Non-cash changes to the Operating ROU Asset and Operating Lease Liability Reduction to ROU asset due to acquisition of previously leased asset $ (904) $ — Additions and modifications to ROU asset obtained from new operating lease liabilities $ 2,994 $ 6,214 Additions to ROU asset obtained from operating lease liabilities upon adoption of new guidance $ — $ 4,591 Additions to ROU asset obtained from new financing lease liabilities $ 598 $ 387 |
Schedule of maturities of operating lease liabilities | The future payments due under leases as of June 30, 2021 is as follows (in thousands): Future payments due in the year ended June 30, Operating leases Financing leases 2022 $ 2,703 $ 186 2023 2,267 183 2024 2,066 182 2025 1,643 178 2026 614 162 Thereafter 124 89 Total undiscounted lease payments 9,417 980 Less effects of discounting (931) (79) Lease liability recognized $ 8,486 $ 901 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per share | The following information is necessary to calculate earnings per share for the periods presented (in thousands, except per share amounts): Year Ended June 30, 2021 2020 2019 Net income as reported $ 12,868 $ 2,266 $ 214 Weighted average common shares outstanding 16,593 16,249 16,116 Effect of dilutive stock options 435 182 7 Weighted average diluted common shares outstanding 17,028 16,431 16,123 Net income per common share Basic $ 0.78 $ 0.14 $ 0.01 Diluted $ 0.76 $ 0.14 $ 0.01 Employee stock options excluded from computation of diluted income per share amounts because their effect would be anti-dilutive — 206 1,173 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible assets, amortization expense | At June 30, 2021 and 2020, intangible assets consisted of the following (in thousands): June 30, 2021 2020 Estimated Original Accumulated Net Original Accumulated Net Customer relationships 7 years $ 3,007 $ (2,207) $ 800 $ 3,007 $ (1,780) $ 1,227 Permits 6 - 15 years 1,974 (705) 1,269 1,892 (596) 1,296 Patents 5 - 17 years 420 (327) 93 420 (311) 109 Tradename 7 years 270 (193) 77 270 (154) 116 Non-compete 5 years 117 (117) — 117 (94) 23 Total intangible assets, net $ 5,788 $ (3,549) $ 2,239 $ 5,706 $ (2,935) $ 2,771 |
Schedule of future amortization of intangible assets | As of June 30, 2021, future amortization of intangible assets is as follows (in thousands): Year Ended June 30, 2022 $ 624 2023 570 2024 159 2025 158 2026 158 Thereafter 570 $ 2,239 |
ORGANIZATION AND BACKGROUND (De
ORGANIZATION AND BACKGROUND (Details) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021USD ($)state_regionnumberOfCustomer | Jun. 30, 2020USD ($)numberOfCustomer | Jun. 30, 2019numberOfCustomer | |
Concentration Risk [Line Items] | |||
Number of state regions where route-based pick-up services are offered | state_region | 37 | ||
Accounts receivable | $ | $ 9,738 | $ 11,789 | |
Customer concentration risk | Revenue | |||
Concentration Risk [Line Items] | |||
Number of customers | numberOfCustomer | 2 | 2 | 2 |
Credit concentration risk | Accounts receivable | |||
Concentration Risk [Line Items] | |||
Number of customers | numberOfCustomer | 2 | 2 | |
Two customers | Customer concentration risk | Revenue | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 45.00% | 35.00% | 27.00% |
Two customers | Credit concentration risk | Accounts receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 36.00% | 44.00% | |
Accounts receivable | $ | $ 3,500 | $ 5,200 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of Revenue by Solution (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 76,424 | $ 51,146 | $ 44,312 |
Revenue | Product Concentration Risk | |||
Disaggregation of Revenue [Line Items] | |||
Revenue Percentage | 100.00% | 100.00% | 100.00% |
Mailbacks | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 49,617 | $ 26,578 | $ 24,501 |
Mailbacks | Revenue | Product Concentration Risk | |||
Disaggregation of Revenue [Line Items] | |||
Revenue Percentage | 64.90% | 52.00% | 55.20% |
Route-based pickup services | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 13,677 | $ 10,390 | $ 9,029 |
Route-based pickup services | Revenue | Product Concentration Risk | |||
Disaggregation of Revenue [Line Items] | |||
Revenue Percentage | 17.90% | 20.30% | 20.40% |
Unused medications | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 8,159 | $ 9,163 | $ 6,936 |
Unused medications | Revenue | Product Concentration Risk | |||
Disaggregation of Revenue [Line Items] | |||
Revenue Percentage | 10.70% | 17.90% | 15.70% |
Third party treatment services | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 570 | $ 247 | $ 290 |
Third party treatment services | Revenue | Product Concentration Risk | |||
Disaggregation of Revenue [Line Items] | |||
Revenue Percentage | 0.70% | 0.50% | 0.70% |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 4,401 | $ 4,768 | $ 3,556 |
Other | Revenue | Product Concentration Risk | |||
Disaggregation of Revenue [Line Items] | |||
Revenue Percentage | 5.80% | 9.30% | 8.00% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | |||
Revenue recorded from bill and hold inventory | $ 3,900 | $ 3,500 | $ 2,700 |
Bill and hold inventory | 3,700 | 2,800 | |
Disaggregation of Revenue [Line Items] | |||
Contract liability | 7,028 | 3,262 | |
Mailbacks and unused medications | |||
Disaggregation of Revenue [Line Items] | |||
Contract liability | 2,800 | $ 2,700 | |
Route-based pickup services | |||
Disaggregation of Revenue [Line Items] | |||
Capitalized contract cost, incremental costs to obtain contracts | 200 | 100 | |
Capitalized contract cost, amortization | $ 200 | $ 100 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance Beginning of Year | $ 162 | $ 132 | $ 102 |
Charges to Expense | 157 | 111 | 81 |
Write-offs /Recoveries | (127) | (81) | (51) |
Balance End of Year | $ 192 | $ 162 | $ 132 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Stock-Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 974 | $ 518 | $ 400 |
Stock Option | |||
Valuation assumptions [Abstract] | |||
Weighted average risk-free interest rate | 0.20% | 0.30% | 2.60% |
Weighted average expected volatility | 50.00% | 49.00% | 44.00% |
Weighted average expected life (in years) | 4 years 6 months 7 days | 3 years 1 month 17 days | 3 years 29 days |
Dividend yield | 0.00% | 0.00% | 0.00% |
Cost of revenues | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 0 | $ 4 | $ 9 |
Selling, general and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 974 | $ 514 | $ 391 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill, Other Identifiable Intangible Assets and Impairment of Long-lived Assets (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Intangible Assets [Abstract] | |||
Goodwill impairment loss | $ 0 | $ 0 | $ 0 |
Inventory [Line Items] | |||
Inventory write-offs | 131,000 | 29,000 | 55,000 |
Maximum | |||
Inventory [Line Items] | |||
Inventory write-offs | $ 100,000 | $ 100,000 | $ 100,000 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Inventory [Abstract] | ||
Raw materials | $ 2,040 | $ 1,402 |
Finished goods | 5,063 | 5,300 |
Total inventory | 7,103 | 6,702 |
Less: current portion | 6,114 | 5,638 |
Inventory, net of current portion | $ 989 | $ 1,064 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impairment of Long-lived Assets, Advertising Costs and Research and Development Costs (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | |||
Asset impairment losses recognized | $ 0 | $ 0 | $ 0 |
Advertising costs | 900,000 | 900,000 | 900,000 |
Research and development expenses paid to third parties | $ 100,000 | $ 100,000 | $ 100,000 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Accounting Policies [Abstract] | ||
Accrued compensation | $ 1,399 | $ 767 |
Customer-related payables | 1,214 | 1,108 |
Vendor-related payables | 836 | 388 |
Other | 491 | 505 |
Total | $ 3,940 | $ 2,768 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Employee Benefit Plans (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | |||
Employers match percentage | 25.00% | 25.00% | 25.00% |
Maximum annual percentage contribution per employee | 6.00% | 6.00% | 6.00% |
Company contributions to the 401(k) plan (less than) | $ 100,000 | $ 100,000 | $ 100,000 |
Group health benefit plan, individual deductible | 2,500 | 2,500 | 2,500 |
Group health benefit plan, family deductible | 2,500 | 2,500 | 2,500 |
Group health benefit plan, third party insurance company coverage beginning amount, individual | 2,500 | 2,500 | 2,500 |
Group health benefit plan, third party insurance company coverage beginning amount, family | 10,000 | 10,000 | 10,000 |
Self-insured liability, health insurance (less than) | 100,000 | 100,000 | |
Aggregate stock-based compensation expense | $ 600,000 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Jun. 30, 2020 |
Interest Rate Swap | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, fair value | $ 0.1 | $ 0.1 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Gross property, plant and equipment | $ 22,140 | $ 18,317 | |
Less: accumulated depreciation | 10,390 | 9,190 | |
Less: financing lease ROU asset, net | 907 | 387 | |
Net property, plant and equipment | 10,843 | 8,740 | |
Finance lease, ROU asset, accumulated amortization | 100 | 100 | |
Depreciation expense | 1,400 | 1,000 | $ 1,100 |
Depreciation included in cost of revenues | 1,100 | 800 | $ 800 |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Gross property, plant and equipment | $ 248 | 245 | |
Furniture and fixtures | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 3 years | ||
Furniture and fixtures | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 5 years | ||
Plant and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Gross property, plant and equipment | $ 11,305 | 9,053 | |
Plant and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 3 years | ||
Plant and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 17 years | ||
Manufacturing | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 15 years | ||
Gross property, plant and equipment | $ 169 | 169 | |
Computers and software | |||
Property, Plant and Equipment [Line Items] | |||
Gross property, plant and equipment | $ 2,435 | 2,132 | |
Computers and software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 3 years | ||
Computers and software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 5 years | ||
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Gross property, plant and equipment | $ 6,652 | 3,192 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Gross property, plant and equipment | $ 97 | 19 | |
Building | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 40 years | ||
Gross property, plant and equipment | $ 938 | 0 | |
Construction-in-progress | |||
Property, Plant and Equipment [Line Items] | |||
Gross property, plant and equipment | $ 296 | $ 3,507 |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Current: | |||
Federal | $ 0 | $ (122) | $ (123) |
State | 375 | 35 | 42 |
Total current | 375 | (87) | (81) |
Deferred: | |||
Federal | 1,205 | (1,406) | 217 |
State | (110) | (89) | 34 |
Total deferred | 1,095 | (1,495) | 251 |
TOTAL INCOME TAX EXPENSE (BENEFIT) | $ 1,470 | $ (1,582) | $ 170 |
INCOME TAXES - Effective Income
INCOME TAXES - Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |||
Statutory rate | 21.00% | 21.00% | 21.00% |
State income taxes, net | 1.40% | (1.00%) | 22.90% |
Non-deductible expenses | 0.20% | 1.60% | 2.70% |
Stock-based compensation | (10.50%) | 0.70% | 16.10% |
Non-deductible compensation | 2.70% | 0.00% | 0.00% |
PPP loan | (3.20%) | 0.00% | 0.00% |
Research and development credits | (1.30%) | (5.30%) | 7.30% |
Other | 0.00% | (1.50%) | 1.50% |
Effective rate before valuation allowance | 10.30% | 15.50% | 71.50% |
Change in valuation allowance | 0.00% | (247.10%) | (27.20%) |
Effective tax rate | 10.30% | (231.60%) | 44.30% |
INCOME TAXES - Components of De
INCOME TAXES - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Income Tax Disclosure [Abstract] | ||
Stock-based compensation | $ 85 | $ 211 |
Research and development credits | 717 | 490 |
Inventory | 68 | 98 |
Professional fees | 193 | 175 |
Deferred tax assets related to other items | 251 | 140 |
Net operating loss carryforwards | 142 | 1,016 |
Total deferred tax assets | 1,456 | 2,130 |
Deferred tax liabilities related to depreciable and amortizable assets | (1,278) | (836) |
Deferred tax liabilities related to other items | (21) | (42) |
Net deferred tax asset | $ 157 | $ 1,252 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Jun. 30, 2020 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 0.7 | |
Tax credit carryforward, amount | 0.7 | |
Tax credit carryforwards, alternative minimum tax | $ 0.3 | $ 0.2 |
NOTES PAYABLE AND LONG-TERM D_3
NOTES PAYABLE AND LONG-TERM DEBT - Narrative (Details) - USD ($) | Jan. 22, 2021 | Aug. 21, 2019 | Jun. 29, 2018 | Jun. 30, 2021 | Dec. 28, 2020 | Apr. 20, 2020 |
Term Loan | ||||||
Line of Credit Facility [Line Items] | ||||||
Term at time of borrowing | 5 years | |||||
Interest rate | 3.00% | |||||
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% | |||||
Amount of covenant for borrowing base | $ 3,000,000 | |||||
Basis spread of variable rate | 50.00% | |||||
Unused capacity, commitment fee percentage | 0.25% | |||||
Remaining borrowing capacity | $ 13,900,000 | |||||
Maximum borrowing capacity, option | 17,900,000 | |||||
Credit Agreement | Working Capital | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 6,000,000 | |||||
Remaining borrowing capacity | 5,900,000 | |||||
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 | $ 8,000,000 | |||||
Credit Agreement | Additional Working Capital | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 4,000,000 | |||||
Credit Agreement | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt cash flow leverage ratio | 3 | |||||
Credit Agreement | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt service coverage ratio | 1.15 | |||||
Credit Agreement | LIBOR | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread of variable rate | 2.50% | |||||
Credit Agreement | LIBOR | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread of variable rate | 3.00% | |||||
Credit Agreement | Letter of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 2,000,000 | |||||
Amount outstanding | $ 100,000 | |||||
Credit Agreement Amendment | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 18,000,000 | |||||
Loan Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 3,200,000 | |||||
Term at time of borrowing | 5 years | |||||
Basis spread of variable rate | 2.50% | |||||
Interest rate | 2.73% | |||||
Loan Agreement | Real Estate Improvements | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 2,000,000 | |||||
Loan Agreement | Equipment Loan | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 1,200,000 | |||||
Loan Agreement | LIBOR | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate at expiration of advance period | 4.15% | |||||
Real estate loan | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 900,000 | |||||
Term at time of borrowing | 5 years | |||||
Debt payment, amortization period | 20 years | |||||
Debt instrument, interest rate, stated percentage | 4.00% | |||||
Paycheck Protection Program loan | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, face amount | $ 2,200,000 |
NOTES PAYABLE AND LONG-TERM D_4
NOTES PAYABLE AND LONG-TERM DEBT - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 4,064 | $ 5,163 |
Less: current portion | 735 | 1,658 |
Long-term debt, net of current portion | 3,329 | 3,505 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 4,104 | |
Acquisition loan | Term Loan | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 431 | 948 |
Monthly payments | 43 | |
Equipment loan | Term Loan | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 830 | 929 |
Monthly payments | 17 | |
Debt issuance costs | 40 | |
Real estate loan | Term Loan | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 2,803 | 1,103 |
Monthly payments | 9 | |
Paycheck Protection Program loan | Term Loan | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 0 | $ 2,183 |
NOTES PAYABLE AND LONG-TERM D_5
NOTES PAYABLE AND LONG-TERM DEBT - Payments Due on Long-term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
Total long-term debt | $ 4,064 | $ 5,163 |
Term Loan | ||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2022 | 735 | |
2023 | 316 | |
2024 | 316 | |
2025 | 2,041 | |
2026 | 696 | |
Total long-term debt | $ 4,104 |
EQUITY TRANSACTIONS (Details)
EQUITY TRANSACTIONS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Equity [Abstract] | |||
Exercised (in shares) | 712 | 154 | 0 |
Proceeds | $ 3,164 | $ 668 | $ 0 |
Average exercise price per share (in dollars per share) | $ 4.44 | $ 4.32 | $ 0 |
STOCK BASED COMPENSATION - Narr
STOCK BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expense for non-vested awards | $ 0.3 | ||
Weighted average period for expense recognition | 1 year 6 months 14 days | ||
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average fair value of granted (in dollars per share) | $ 7.53 | $ 4.31 | $ 3.53 |
Weighted average fair value vested (in dollars per share) | $ 6.74 | $ 4.12 | $ 3.69 |
2010 Stock Plan | Restricted Stock and Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of common shares authorized (in shares) | 3,000,000 | ||
Shares outstanding (in shares) | 354,621 | ||
2010 Stock Plan | Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Expiration period | 7 years | ||
Options available for grant (in shares) | 956,089 | ||
2010 Stock Plan | Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 1 year |
STOCK BASED COMPENSATION - Rest
STOCK BASED COMPENSATION - Restricted Stock Activity (Details) - Restricted Stock - shares shares in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Unvested at beginning of the year (in shares) | 22 | 13 | 13 |
Granted (in shares) | 75 | 80 | 63 |
Vested (in shares) | (83) | (71) | (55) |
Forfeited (in shares) | 0 | 0 | (8) |
Unvested at end of the year (in shares) | 14 | 22 | 13 |
STOCK BASED COMPENSATION - Stoc
STOCK BASED COMPENSATION - Stock Option Activity (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Options Outstanding | |||
Options outstanding at beginning of period (in shares) | 1,145 | 1,280 | 920 |
Granted (in shares) | 27 | 82 | 578 |
Exercised (in shares) | (712) | (154) | 0 |
Forfeited or canceled (in shares) | (119) | (63) | (218) |
Options outstanding at end of period (in shares) | 341 | 1,145 | 1,280 |
Options exercisable (in shares) | 33 | ||
Weighted Average Exercise Price | |||
Options outstanding at beginning of period (in dollars per share) | $ 4.45 | $ 4.26 | $ 4.57 |
Granted (in dollars per share) | 7.57 | 6.74 | 3.73 |
Exercised (in dollars per share) | 4.44 | 4.32 | 0 |
Forfeited or canceled (in dollars per share) | 6.61 | 3.95 | 4.16 |
Options outstanding at end of period (in dollars per share) | 3.96 | $ 4.45 | $ 4.26 |
Options exercisable (in dollars per share) | $ 4.85 |
STOCK BASED COMPENSATION - Summ
STOCK BASED COMPENSATION - Summary of Stock Options Outstanding and Exercisable (Details) shares in Thousands | 12 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Options Outstanding | |
Outstanding (in shares) | shares | 341 |
Weighted average exercise price (in dollars per share) | $ 3.96 |
Options Exercisable | |
Exercisable (in shares) | shares | 33 |
Weighted average exercise price (in dollars per share) | $ 4.85 |
$2.51 - $3.75 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Price, minimum (in dollars per share) | 2.51 |
Range of Exercise Price, maximum (in dollars per share) | $ 3.75 |
Options Outstanding | |
Outstanding (in shares) | shares | 35 |
Weighted average remaining life | 4 years 5 months 1 day |
Weighted average exercise price (in dollars per share) | $ 3.26 |
Options Exercisable | |
Exercisable (in shares) | shares | 10 |
Weighted average remaining life | 4 years 5 months 1 day |
Weighted average exercise price (in dollars per share) | $ 3.26 |
$3.76 - $5.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Price, minimum (in dollars per share) | 3.76 |
Range of Exercise Price, maximum (in dollars per share) | $ 5 |
Options Outstanding | |
Outstanding (in shares) | shares | 294 |
Weighted average remaining life | 4 years 4 months 17 days |
Weighted average exercise price (in dollars per share) | $ 3.93 |
Options Exercisable | |
Exercisable (in shares) | shares | 13 |
Weighted average remaining life | 1 year 11 months 1 day |
Weighted average exercise price (in dollars per share) | $ 4.56 |
$5.01 - $7.50 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Price, minimum (in dollars per share) | 5.01 |
Range of Exercise Price, maximum (in dollars per share) | $ 7.50 |
Options Outstanding | |
Outstanding (in shares) | shares | 12 |
Weighted average remaining life | 1 year 9 months 21 days |
Weighted average exercise price (in dollars per share) | $ 6.68 |
Options Exercisable | |
Exercisable (in shares) | shares | 10 |
Weighted average remaining life | 1 year 1 month 24 days |
Weighted average exercise price (in dollars per share) | $ 6.75 |
LEASES - Components of Net Leas
LEASES - Components of Net Lease (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Lessee, Lease, Description [Line Items] | ||
Cost of revenues (amortization expense) | $ 91 | $ 26 |
Interest expense | 18 | 4 |
Total | 3,009 | 2,332 |
Cost of revenues | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | 2,448 | 1,851 |
Selling, general and administrative | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | $ 452 | $ 451 |
LEASES - Cash and Non-cash Acti
LEASES - Cash and Non-cash Activities Associated with Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Lessee, Lease, Description [Line Items] | ||
Operating cash flows from operating leases | $ 2,844 | $ 2,274 |
Reduction to ROU asset due to acquisition of previously leased asset | (904) | 0 |
Additions and modifications to ROU asset obtained from new operating lease liabilities | 2,994 | 6,214 |
Additions to ROU asset obtained from new financing lease liabilities | 598 | 387 |
Accounting Standards Update 2016-02 | ||
Lessee, Lease, Description [Line Items] | ||
Additions and modifications to ROU asset obtained from new operating lease liabilities | $ 0 | $ 4,591 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | Jun. 30, 2021 |
Leases [Abstract] | |
Weighted average remaining lease term, operating leases | 3 years 11 months 1 day |
Weighted average remaining lease term, financing leases | 5 years 5 months 1 day |
Weighted average discount rate, operating leases | 4.00% |
Weighted average discount rate, financing leases | 0.03% |
LEASES - Maturities of Lease Li
LEASES - Maturities of Lease Liabilities (Details) $ in Thousands | Jun. 30, 2021USD ($) |
Operating leases | |
2022 | $ 2,703 |
2023 | 2,267 |
2024 | 2,066 |
2025 | 1,643 |
2026 | 614 |
Thereafter | 124 |
Total undiscounted lease payments | 9,417 |
Less effects of discounting | (931) |
Lease liability recognized | 8,486 |
Financing leases | |
2022 | 186 |
2023 | 183 |
2024 | 182 |
2025 | 178 |
2026 | 162 |
Thereafter | 89 |
Total undiscounted lease payments | 980 |
Lease liability recognized | (79) |
Lease liability recognized | $ 901 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Millions | Jun. 30, 2021USD ($) |
Leases [Abstract] | |
Performance bonds outstanding covering financial assurance | $ 1.3 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |||
Net income as reported | $ 12,868 | $ 2,266 | $ 214 |
Net income as reported | $ 12,868 | $ 2,266 | $ 214 |
Weighted average common shares outstanding (in shares) | 16,593 | 16,249 | 16,116 |
Effect of dilutive stock options (in shares) | 435 | 182 | 7 |
Weighted average diluted common shares outstanding (in shares) | 17,028 | 16,431 | 16,123 |
Net income per common share | |||
Basic (in dollars per share) | $ 0.78 | $ 0.14 | $ 0.01 |
Diluted (in dollars per share) | $ 0.76 | $ 0.14 | $ 0.01 |
Employee stock options excluded from computation of diluted income per share amounts because their effect would be anti-dilutive (in shares) | 0 | 206 | 1,173 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Original Amount | $ 5,788 | $ 5,706 | |
Accumulated Amortization | (3,549) | (2,935) | |
Net Amount | 2,239 | 2,771 | |
Intangible assets, amortization expense | $ 600 | 600 | $ 600 |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 7 years | ||
Original Amount | $ 3,007 | 3,007 | |
Accumulated Amortization | (2,207) | (1,780) | |
Net Amount | 800 | 1,227 | |
Permits | |||
Finite-Lived Intangible Assets [Line Items] | |||
Original Amount | 1,974 | 1,892 | |
Accumulated Amortization | (705) | (596) | |
Net Amount | $ 1,269 | 1,296 | |
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 | $ 420 | 420 | |
Accumulated Amortization | (327) | (311) | |
Net Amount | $ 93 | 109 | |
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 | 270 | |
Accumulated Amortization | (193) | (154) | |
Net Amount | $ 77 | 116 | |
Non-compete | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 5 years | ||
Original Amount | $ 117 | 117 | |
Accumulated Amortization | (117) | (94) | |
Net Amount | $ 0 | $ 23 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 624 | |
2023 | 570 | |
2024 | 159 | |
2025 | 158 | |
2026 | 158 | |
Thereafter | 570 | |
Net Amount | $ 2,239 | $ 2,771 |