Sharps Compliance (SMED) 10-Q 3 Nov 21 2022 Q1 Quarterly report Financial data

COVER

COVER - shares	3 Months Ended
	Sep. 30, 2021	Nov. 01, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
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 Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		19,229,244
Entity Central Index Key	0000898770
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021
CURRENT ASSETS
Cash	$ 41,162	$ 27,767
Accounts receivable, net	9,847	9,738
Inventory	7,272	6,114
Contract asset	27	20
Prepaid and other current assets	1,756	1,459
TOTAL CURRENT ASSETS	60,064	45,098
PROPERTY, PLANT AND EQUIPMENT, net	10,508	10,843
OPERATING LEASE RIGHT OF USE ASSET	7,919	8,353
FINANCING LEASE RIGHT OF USE ASSET, net	934	907
INVENTORY, net of current portion	982	989
OTHER ASSETS	118	110
GOODWILL	6,735	6,735
INTANGIBLE ASSETS, net	2,109	2,239
DEFERRED TAX ASSET, net	413	157
TOTAL ASSETS	89,782	75,431
CURRENT LIABILITIES
Accounts payable	2,972	2,922
Accrued liabilities	3,750	3,940
Operating lease liability	2,240	2,368
Financing lease liability	174	160
Current maturities of long-term debt	622	735
Contract liability	5,965	7,028
TOTAL CURRENT LIABILITIES	15,723	17,153
CONTRACT LIABILITY, net of current portion	1,352	1,461
OPERATING LEASE LIABILITY, net of current portion	5,810	6,118
FINANCING LEASE LIABILITY, net of current portion	772	741
OTHER LIABILITIES	44	45
LONG-TERM DEBT, net of current portion	3,236	3,329
TOTAL LIABILITIES	26,937	28,847
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value per share; 40,000,000 shares authorized; 19,524,859 and 17,454,859 shares issued, respectively and 19,229,244 and 17,159,244 shares outstanding, respectively	197	176
Treasury stock, at cost, 295,615 shares repurchased	(1,554)	(1,554)
Additional paid-in capital	51,363	34,333
Retained earnings	12,839	13,629
TOTAL STOCKHOLDERS' EQUITY	62,845	46,584
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 89,782	$ 75,431

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2021	Jun. 30, 2021
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)	19,524,859	17,454,859
Common stock, shares outstanding (in shares)	19,229,244	17,159,244
Treasury stock, shares repurchased (in shares)	295,615	295,615

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Income Statement [Abstract]
REVENUES	$ 13,915	$ 13,151
Cost of revenues	10,494	9,528
GROSS PROFIT	3,421	3,623
Selling, general and administrative	4,200	3,788
Depreciation and amortization	218	204
OPERATING LOSS	(997)	(369)
OTHER INCOME (EXPENSE)
Interest expense	(56)	(32)
Income associated with derivative instrument	7	5
TOTAL OTHER EXPENSE	(49)	(27)
LOSS BEFORE INCOME TAXES	(1,046)	(396)
INCOME TAX BENEFIT - Deferred	(256)	(103)
NET LOSS	$ (790)	$ (293)
NET LOSS PER COMMON SHARE - Basic (in dollars per share)	$ (0.04)	$ (0.02)
NET LOSS PER COMMON SHARE - Diluted (in dollars per share)	$ (0.04)	$ (0.02)
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET LOSS PER COMMON SHARE:
Basic (in shares)	17,879	16,391
Diluted (in shares)	17,879	16,391

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Retained Earnings
Balance at beginning (in shares) at Jun. 30, 2020		16,667,572	295,615,000
Balances at beginning 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)	50,531	50,531
Exercise of stock options	$ 225	$ 1		224
Stock-based compensation	162			162
Net loss	(293)				(293)
Balance at end (in shares) at Sep. 30, 2020		16,718,103	295,615,000
Balances at end at Sep. 30, 2020	29,672	$ 169	$ (1,554)	30,589	468
Balance at beginning (in shares) at Jun. 30, 2021		17,454,859	295,615,000
Balances at beginning at Jun. 30, 2021	46,584	$ 176	$ (1,554)	34,333	13,629
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock pursuant to secondary offering, net (in shares)		2,070,000
Issuance of common stock pursuant to secondary offering, net	$ 16,771	$ 21		16,750
Exercise of stock options (in shares)	0
Exercise of stock options	$ 0
Stock-based compensation	280			280
Net loss	(790)				(790)
Balance at end (in shares) at Sep. 30, 2021		19,524,859	295,615,000
Balances at end at Sep. 30, 2021	$ 62,845	$ 197	$ (1,554)	$ 51,363	$ 12,839

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (790)	$ (293)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	582	423
Bad debt expense	25	65
Inventory write-off	0	10
Loss on disposal of property, plant and equipment	0	1
Stock-based compensation expense	280	162
Income associated with derivative instrument	(7)	(5)
Deferred tax benefit	(256)	(103)
Changes in operating assets and liabilities:
Accounts receivable	(134)	1,095
Inventory	(1,151)	182
Prepaid and other assets	(305)	296
Accounts payable and accrued liabilities	(116)	(311)
Contract asset and contract liability	(1,179)	239
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	(3,051)	1,761
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment	(47)	(925)
Additions to intangible assets	(18)	(48)
NET CASH USED IN INVESTING ACTIVITIES	(65)	(973)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options	0	225
Proceeds from issuance of common stock, net	16,771	0
Proceeds from long-term debt	0	508
Repayments of long-term debt	(206)	(152)
Payments on financing lease liabilities	(54)	0
NET CASH PROVIDED BY FINANCING ACTIVITIES	16,511	581
NET INCREASE IN CASH	13,395	1,369
CASH, beginning of period	27,767	5,416
CASH, end of period	41,162	6,785
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Income taxes paid, net of refunds	170	(283)
Interest paid on long-term debt	58	23
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Property, plant and equipment financed through accounts payable	$ 20	$ 85

ORGANIZATION AND BACKGROUND

ORGANIZATION AND BACKGROUND	3 Months Ended
	Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND BACKGROUND	ORGANIZATION AND BACKGROUND Organization : The accompanying unaudited condensed consolidated financial statements include the financial transactions and accounts of Sharps Compliance Corp. and its wholly owned subsidiaries, Sharps Compliance, Inc. of Texas (dba Sharps Compliance, Inc.), Sharps e-Tools.com Inc. (“Sharps e-Tools”), Sharps Manufacturing, Inc., Sharps Environmental Services, Inc. (dba Sharps Environmental Services of Texas, Inc.), Sharps Safety, Inc., Alpha Bio/Med Services LLC, Bio-Team Mobile LLC, Citiwaste, LLC and Sharps Properties, LLC (collectively, “Sharps” or the “Company”). 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 its route-based pick-up services in a thirty-seven (37) state region of the South, Southeast, Southwest, Midwest and Northeast portions of the United States.

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION	BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information and with instructions to Form 10-Q and, accordingly, do not include all information and footnotes required under generally accepted accounting principles in the United States of America ("GAAP") for complete financial statements. Additionally, the preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts. In the opinion of management, these interim condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial position of the Company as of September 30, 2021, the results of its operations for the three months ended September 30, 2021 and 2020, cash flows for the three months ended September 30, 2021 and 2020, and stockholders’ equity for the three months ended September 30, 2021 and 2020. The results of operations for the three months ended September 30, 2021 are not necessarily indicative of the results to be expected for the entire fiscal year ending June 30, 2022. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2021. 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.

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Sep. 30, 2021
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	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): Three-Months Ended September 30, 2021 % Total 2020 % Total REVENUES BY SOLUTION: Mailbacks $ 6,748 48.5 % $ 6,162 46.8 % Route-based pickup services 3,199 23.0 % 3,156 24.0 % Unused medications 2,629 18.9 % 2,361 18.0 % Third party treatment services 31 0.2 % 135 1.0 % Other (1) 1,308 9.4 % 1,337 10.2 % Total revenues $ 13,915 100.0 % $ 13,151 100.0 % (1) The Company’s other products include IV poles, accessories, containers, asset return boxes and other miscellaneous items with single performance obligations. Vendor Managed Inventory ("VMI") - 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. During the three months ended September 30, 2021 and 2020, the Company recorded billings from inventory builds that are held in VMI under these service agreements of $0.1 million and $1.0 million, respectively. As of September 30, 2021 and June 30, 2021, $3.1 million and $3.7 million , respectively, of solutions sold through that date were held in VMI 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 maibacks 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 obligations. The amount recognized during the three months ended September 30, 2021 and 2020 related to contract liabilities recorded as of June 30, 2021 and 2020 were $2.4 million and $0.8 million, 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 valuation allowances 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. No such allowance was deemed necessary based on the Company's assessment of the recoverability of its deferred tax assets.

RECENTLY ISSUED ACCOUNTING STAN

RECENTLY ISSUED ACCOUNTING STANDARDS	3 Months Ended
	Sep. 30, 2021
Accounting Policies [Abstract]
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 September 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.

INCOME TAXES

INCOME TAXES	3 Months Ended
	Sep. 30, 2021
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXESThe Company’s effective tax rate for the three months ended September 30, 2021 and 2020 was 24.5% and 26.0%, respectively. During the three months ended September 30, 2021 and 2020, the effective tax rate is based on the statutory federal tax rate of 21% as well as an approximated state income tax rate net of the federal benefit.

LEASES

LEASES	3 Months Ended
	Sep. 30, 2021
Leases [Abstract]
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 our Condensed Consolidated Balance Sheets. Financing leases are included in Financing Lease ROU Asset and Financing Lease Liability on the Condensed Consolidated Balance Sheets. During the three months ended September 30, 2021 and 2020, lease cost amounts, which reflect the fixed rent expense associated with operating and financing leases, are as follows (in thousands): Three-Months Ended September 30, 2021 2020 Lease cost (1) - fixed rent expense: Operating lease cost included in: Cost of revenues $ 653 $ 571 Selling, general and administrative 110 113 Financing lease cost included in: Cost of revenues (amortization expense) 65 18 Interest expense 8 4 Total $ 836 $ 706 (1) Short-term lease cost and variable lease cost were not significant during the period. During the three months ended September 30, 2021 and 2020, the Company had the following cash and non-cash activities associated with leases (in thousands): Three-Months Ended September 30, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflow for operating leases $ 774 $ 646 Non-cash changes to the Operating ROU Asset and Operating Lease Liability Additions and modifications to ROU asset obtained from new operating lease liabilities $ 340 $ 1,676 Additions to ROU asset obtained from new financing lease liabilities $ 99 $ — As of September 30, 2021, the weighted average remaining lease term for all operating and financing leases is 3.80 years 5.23 years. The weighted average discount rate associated with operating and financing leases as of September 30, 2021 is 4% and 3%, respectively. The future payments due under operating leases as of September 30, 2021 is as follows (in thousands): Future payments due in the twelve months ended September 30, Operating lease Financing lease 2022 $ 2,505 $ 201 2023 2,224 198 2024 1,999 198 2025 1,480 191 2026 328 165 Thereafter 108 71 Total undiscounted lease payments 8,644 1,024 Less effects of discounting (594) (78) Lease liability recognized $ 8,050 $ 946

NOTES PAYABLE AND LONG-TERM DEB

NOTES PAYABLE AND LONG-TERM DEBT	3 Months Ended
	Sep. 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 a credit agreement with a commercial bank which was subsequently amended on June 29, 2018 and on December 28, 2020 (“Credit Agreement”). The amended Credit Agreement, which expires on December 28, 2023, provides for a $14.0 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) $6.0 million for working capital, letters of credit (up to $2.0 million) and general corporate purposes, (ii) $8.0 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 September 30, 2021 was approximately 3.0%. The Company pays a fee of 0.25% per annum on the unused amount of the committed 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 2.71% on September 30, 2021. The Company has entered into a forward rate lock which fixed 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") with its 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%. At September 30, 2021 and June 30, 2020, long-term debt consisted of the following (in thousands): September 30, 2021 June 30, 2021 Acquisition loan, monthly payments of $43; maturing March 2022 $ 302 $ 431 Equipment loan, monthly payments of $17; maturing August 2024, net of debt issuance costs of $38 780 830 Real estate loans, monthly payments of $9; maturing August 2024 and January 2026 2,776 2,803 Total long-term debt 3,858 4,064 Less: current portion 622 735 Long-term debt, net of current portion $ 3,236 $ 3,329 The Company has availability under the Credit Agreement of $13.3 million ($5.3 million for the working capital and $8.0 million for acquisitions) as of September 30, 2021 with the option to extend the availability up to $17.3 million. The Company ha s $0.7 million in letters of credit outstanding as of September 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 agreements. The Company was in compliance with all the financial covenants under the Credit and Loan Agreements as of September 30, 2021. Payments due on long-term debt subsequent to September 30, 2021 are as follows (in thousands): Twelve Months Ending September 30, 2022 $ 622 2023 320 2024 2,238 2025 44 2026 and thereafter 672 $ 3,896

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	3 Months Ended
	Sep. 30, 2021
Share-based Payment Arrangement [Abstract]
STOCK-BASED COMPENSATION	STOCK-BASED COMPENSATIONStock-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 three months ended September 30, 2021 and 2021 is as follows (in thousands): Three-Months Ended September 30, 2021 2020 Stock-based compensation expense included in: Cost of revenues $ 9 $ — Selling, general and administrative 271 162 Total $ 280 $ 162

EARNINGS PER SHARE

EARNINGS PER SHARE	3 Months Ended
	Sep. 30, 2021
Earnings Per Share [Abstract]
EARNINGS PER SHARE	EARNINGS PER SHARE Basic earnings per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) by the weighted average number of common shares after considering the additional dilution related to common stock options and restricted stock. In computing diluted earnings per share, the outstanding common stock options are considered dilutive using the treasury stock method. The Company’s restricted stock awards are included in the calculations for diluted weighted average shares 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): Three-Months Ended September 30, 2021 2020 Net loss as reported $ (790) $ (293) Weighted average common shares outstanding 17,879 16,391 Effect of dilutive stock options — — Weighted average diluted common shares outstanding 17,879 16,391 Net loss per common share Basic and Diluted $ (0.04) $ (0.02) Employee stock options excluded from computation of dilutive income per share amounts because their effect would be anti-dilutive — 25

EQUITY TRANSACTIONS

EQUITY TRANSACTIONS	3 Months Ended
	Sep. 30, 2021
Stockholders' Equity Note [Abstract]
EQUITY TRANSACTIONS	EQUITY TRANSACTIONS During the three months ended September 30, 2021 and 2020, respectively, stock options to purchase shares of the Company's common stock were exercised as follows: Three-Months Ended September 30, 2021 2020 Options exercised — 50,531 Proceeds (in thousands) $ — $ 225 Average exercise price per share $ — $ 4.44 As of September 30, 2021, there was $1.5 million of stock compensation expense related to non-vested awards, which is expected to be recognized over a weighted average period of 2.98 years . On August 30, 2021, the Company closed its previously announced underwritten secondary offering of a total of 2,070,000 shares of its common stock at a public offering price of $8.65 per share, including the exercise in full by the underwriter of its option to purchase an additional 270,000 shares to cover over-allotments in connection with the offering. After the underwriting discount and offering expenses payable by the Company of $1.1 million, the Company received net proceeds of approximately $16.8 million.

INVENTORY

INVENTORY	3 Months Ended
	Sep. 30, 2021
Inventory Disclosure [Abstract]
INVENTORY	INVENTORY The components of inventory are as follows (in thousands): September 30, 2021 June 30, 2021 Raw materials $ 2,449 $ 2,040 Finished goods 5,805 5,063 Total inventory 8,254 7,103 Less: current portion 7,272 6,114 Inventory, net of current portion $ 982 $ 989 The current portion of inventory includes amounts which the Company expects to sell in the next twelve month period based on historical sales.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Sep. 30, 2021
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS Effective on October 22, 2021, the Company acquired Affordable Medical Waste LLC, a route-based provider of medical waste solutions with over 500 locations in the Midwest, primarily in Indi ana, for $2.2 million paid in cash from funds on hand.

SIGNIFICANT ACCOUNTING POLICI_2

SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Sep. 30, 2021
Accounting Policies [Abstract]
Income Taxes	Income Taxes : Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The establishment of valuation allowances 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. No such allowance was deemed necessary based on the Company's assessment of the recoverability of its deferred tax assets.
Accounts Receivable	Accounts Receivable: Accounts receivable consist primarily of amounts due to the Company from normal business activities. Accounts receivable balances are determined to be delinquent when the amount is past due based on the contractual terms with the customer. The Company maintains an allowance for doubtful accounts to reflect the likelihood of not collecting certain accounts receivable based on past collection history and specific risks identified among uncollected accounts. Accounts receivable are charged to the allowance for doubtful accounts when the Company determines that the receivable will not be collected and/or when the account has been referred to a third party collection agency. The Company has a history of minimal uncollectible accounts.
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 September 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.

SIGNIFICANT ACCOUNTING POLICI_3

SIGNIFICANT ACCOUNTING POLICIES (Tables)	3 Months Ended
	Sep. 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): Three-Months Ended September 30, 2021 % Total 2020 % Total REVENUES BY SOLUTION: Mailbacks $ 6,748 48.5 % $ 6,162 46.8 % Route-based pickup services 3,199 23.0 % 3,156 24.0 % Unused medications 2,629 18.9 % 2,361 18.0 % Third party treatment services 31 0.2 % 135 1.0 % Other (1) 1,308 9.4 % 1,337 10.2 % Total revenues $ 13,915 100.0 % $ 13,151 100.0 % (1) The Company’s other products include IV poles, accessories, containers, asset return boxes and other miscellaneous items with single performance obligations.

LEASES (Tables)

LEASES (Tables)	3 Months Ended
	Sep. 30, 2021
Leases [Abstract]
Summary of lease components and other information	During the three months ended September 30, 2021 and 2020, lease cost amounts, which reflect the fixed rent expense associated with operating and financing leases, are as follows (in thousands): Three-Months Ended September 30, 2021 2020 Lease cost (1) - fixed rent expense: Operating lease cost included in: Cost of revenues $ 653 $ 571 Selling, general and administrative 110 113 Financing lease cost included in: Cost of revenues (amortization expense) 65 18 Interest expense 8 4 Total $ 836 $ 706 (1) Short-term lease cost and variable lease cost were not significant during the period. During the three months ended September 30, 2021 and 2020, the Company had the following cash and non-cash activities associated with leases (in thousands): Three-Months Ended September 30, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflow for operating leases $ 774 $ 646 Non-cash changes to the Operating ROU Asset and Operating Lease Liability Additions and modifications to ROU asset obtained from new operating lease liabilities $ 340 $ 1,676 Additions to ROU asset obtained from new financing lease liabilities $ 99 $ —
Schedule of maturities of operating lease liabilities	The future payments due under operating leases as of September 30, 2021 is as follows (in thousands): Future payments due in the twelve months ended September 30, Operating lease Financing lease 2022 $ 2,505 $ 201 2023 2,224 198 2024 1,999 198 2025 1,480 191 2026 328 165 Thereafter 108 71 Total undiscounted lease payments 8,644 1,024 Less effects of discounting (594) (78) Lease liability recognized $ 8,050 $ 946

NOTES PAYABLE AND LONG-TERM D_2

NOTES PAYABLE AND LONG-TERM DEBT (Tables)	3 Months Ended
	Sep. 30, 2021
Debt Disclosure [Abstract]
Schedule of long-term debt	At September 30, 2021 and June 30, 2020, long-term debt consisted of the following (in thousands): September 30, 2021 June 30, 2021 Acquisition loan, monthly payments of $43; maturing March 2022 $ 302 $ 431 Equipment loan, monthly payments of $17; maturing August 2024, net of debt issuance costs of $38 780 830 Real estate loans, monthly payments of $9; maturing August 2024 and January 2026 2,776 2,803 Total long-term debt 3,858 4,064 Less: current portion 622 735 Long-term debt, net of current portion $ 3,236 $ 3,329
Schedule of payments due on long-term debt	Payments due on long-term debt subsequent to September 30, 2021 are as follows (in thousands): Twelve Months Ending September 30, 2022 $ 622 2023 320 2024 2,238 2025 44 2026 and thereafter 672 $ 3,896

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	3 Months Ended
	Sep. 30, 2021
Share-based Payment Arrangement [Abstract]
Schedule of stock-based compensation	Total stock-based compensation expense for the three months ended September 30, 2021 and 2021 is as follows (in thousands): Three-Months Ended September 30, 2021 2020 Stock-based compensation expense included in: Cost of revenues $ 9 $ — Selling, general and administrative 271 162 Total $ 280 $ 162

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	3 Months Ended
	Sep. 30, 2021
Earnings Per Share [Abstract]
Schedule of earnings per share	The following information is necessary to calculate earnings per share for the periods presented (in thousands, except per-share amounts): Three-Months Ended September 30, 2021 2020 Net loss as reported $ (790) $ (293) Weighted average common shares outstanding 17,879 16,391 Effect of dilutive stock options — — Weighted average diluted common shares outstanding 17,879 16,391 Net loss per common share Basic and Diluted $ (0.04) $ (0.02) Employee stock options excluded from computation of dilutive income per share amounts because their effect would be anti-dilutive — 25

EQUITY TRANSACTIONS (Tables)

EQUITY TRANSACTIONS (Tables)	3 Months Ended
	Sep. 30, 2021
Stockholders' Equity Note [Abstract]
Schedule of stock option activity	During the three months ended September 30, 2021 and 2020, respectively, stock options to purchase shares of the Company's common stock were exercised as follows: Three-Months Ended September 30, 2021 2020 Options exercised — 50,531 Proceeds (in thousands) $ — $ 225 Average exercise price per share $ — $ 4.44

INVENTORY (Tables)

INVENTORY (Tables)	3 Months Ended
	Sep. 30, 2021
Inventory Disclosure [Abstract]
Schedule of inventory	The components of inventory are as follows (in thousands): September 30, 2021 June 30, 2021 Raw materials $ 2,449 $ 2,040 Finished goods 5,805 5,063 Total inventory 8,254 7,103 Less: current portion 7,272 6,114 Inventory, net of current portion $ 982 $ 989

ORGANIZATION AND BACKGROUND (De

ORGANIZATION AND BACKGROUND (Details)	3 Months Ended
	Sep. 30, 2021state_region
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of route-based pick-up services in state region	37

SIGNIFICANT ACCOUNTING POLICI_4

SIGNIFICANT ACCOUNTING POLICIES - Summary of Revenue by Solution (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Disaggregation of Revenue [Line Items]
Total revenues	$ 13,915	$ 13,151
Revenue Benchmark | Product Concentration Risk
Disaggregation of Revenue [Line Items]
Revenue percentage	100.00%	100.00%
Mailbacks
Disaggregation of Revenue [Line Items]
Total revenues	$ 6,748	$ 6,162
Mailbacks | Revenue Benchmark | Product Concentration Risk
Disaggregation of Revenue [Line Items]
Revenue percentage	48.50%	46.80%
Route-based pickup services
Disaggregation of Revenue [Line Items]
Total revenues	$ 3,199	$ 3,156
Route-based pickup services | Revenue Benchmark | Product Concentration Risk
Disaggregation of Revenue [Line Items]
Revenue percentage	23.00%	24.00%
Unused medications
Disaggregation of Revenue [Line Items]
Total revenues	$ 2,629	$ 2,361
Unused medications | Revenue Benchmark | Product Concentration Risk
Disaggregation of Revenue [Line Items]
Revenue percentage	18.90%	18.00%
Third party treatment services
Disaggregation of Revenue [Line Items]
Total revenues	$ 31	$ 135
Third party treatment services | Revenue Benchmark | Product Concentration Risk
Disaggregation of Revenue [Line Items]
Revenue percentage	0.20%	1.00%
Other
Disaggregation of Revenue [Line Items]
Total revenues	$ 1,308	$ 1,337
Other | Revenue Benchmark | Product Concentration Risk
Disaggregation of Revenue [Line Items]
Revenue percentage	9.40%	10.20%

SIGNIFICANT ACCOUNTING POLICI_5

SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2021
Accounting Policies [Abstract]
Billings recorded from inventory builds	$ 0.1	$ 1
Solutions sold that were held in vendor managed inventory	3.1		$ 3.7
Contract with customer, liability, revenue recognized	$ 2.4	$ 0.8

INCOME TAXES (Details)

INCOME TAXES (Details)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Effective income tax rate	24.50%	26.00%

LEASES - Components of Net Leas

LEASES - Components of Net Lease (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Lessee, Lease, Description [Line Items]
Cost of revenues (amortization expense)	$ 65	$ 18
Interest expense	8	4
Total	836	706
Operating cash outflow for operating leases	774	646
Additions and modifications to ROU asset obtained from new operating lease liabilities	340	1,676
Additions to ROU asset obtained from new financing lease liabilities	$ 99	0
Weighted average remaining lease term, operating leases	3 years 9 months 18 days
Weighted average remaining lease term, financing leases	5 years 2 months 23 days
Weighted average discount rate, operating leases	4.00%
Weighted average discount rate, financing leases	3.00%
Cost of revenues
Lessee, Lease, Description [Line Items]
Operating lease cost	$ 653	571
Selling, general and administrative
Lessee, Lease, Description [Line Items]
Operating lease cost	$ 110	$ 113

LEASES - Maturities of Leases (

LEASES - Maturities of Leases (Details) $ in Thousands	Sep. 30, 2021USD ($)
Operating lease
2022	$ 2,505
2023	2,224
2024	1,999
2025	1,480
2026	328
Thereafter	108
Total undiscounted lease payments	8,644
Less effects of discounting	(594)
Lease liability recognized	8,050
Financing lease
2022	201
2023	198
2024	198
2025	191
2026	165
Thereafter	71
Total undiscounted lease payments	1,024
Less effects of discounting	(78)
Lease liability recognized	$ 946

NOTES PAYABLE AND LONG-TERM D_3

NOTES PAYABLE AND LONG-TERM DEBT - Narrative (Details) - USD ($)	Jan. 21, 2021	Aug. 21, 2019	Jun. 29, 2018	Sep. 30, 2021	Jan. 22, 2021	Dec. 28, 2020
Letter of Credit
Line of Credit Facility [Line Items]
Amount outstanding				$ 700,000
Credit Agreement
Line of Credit Facility [Line Items]
Maximum borrowing capacity			$ 14,000,000
Percentage of eligible accounts receivable considered for borrowing base			80.00%
Percentage of eligible inventory considered for borrowing base			50.00%
Borrowing base, monetary benchmark			$ 3,000,000
Basis spread of variable rate			50.00%
Interest rate				3.00%
Unused capacity, commitment fee percentage				0.25%
Remaining borrowing capacity				$ 13,300,000
Maximum borrowing capacity, option				17,300,000
Credit Agreement | Working Capital
Line of Credit Facility [Line Items]
Maximum borrowing capacity			$ 6,000,000
Remaining borrowing capacity				5,300,000
Credit Agreement | Business 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 | Term Loan
Line of Credit Facility [Line Items]
Maturity period			5 years
Credit Agreement | Letter of Credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity			$ 2,000,000
Credit Agreement | LIBOR
Line of Credit Facility [Line Items]
Basis spread of variable rate			2.50%
Debt instrument, term of variable rate			1 month
Credit Agreement | LIBOR | Maximum
Line of Credit Facility [Line Items]
Basis spread of variable rate			3.00%
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
Interest rate				2.71%
Interest rate at expiration of advancing period				4.15%
Loan Agreement | Real Estate
Line of Credit Facility [Line Items]
Remaining borrowing capacity		2,000,000
Loan Agreement | Equipment
Line of Credit Facility [Line Items]
Remaining borrowing capacity		$ 1,200,000
Loan Agreement | Term Loan
Line of Credit Facility [Line Items]
Maturity period		5 years
Loan Agreement | LIBOR
Line of Credit Facility [Line Items]
Basis spread of variable rate			2.50%
Debt instrument, term of variable rate			1 month
Real Estate Loan Agreement
Line of Credit Facility [Line Items]
Maximum borrowing capacity					$ 900,000
Maturity period	5 years
Amortization period	20 years
Interest rate					4.00%

NOTES PAYABLE AND LONG-TERM D_4

NOTES PAYABLE AND LONG-TERM DEBT - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2021	Jun. 30, 2021
Debt Instrument [Line Items]
Total long-term debt	$ 3,858	$ 4,064
Less: current portion	622	735
Long-term debt, net of current portion	3,236	3,329
Term Loan
Debt Instrument [Line Items]
Total long-term debt	3,896
Acquisition loan | Term Loan
Debt Instrument [Line Items]
Monthly payments	43
Total long-term debt	302	431
Equipment loan | Term Loan
Debt Instrument [Line Items]
Monthly payments	17
Debt issuance costs, net	38
Total long-term debt	780	830
Real estate loan | Term Loan
Debt Instrument [Line Items]
Monthly payments	9
Total long-term debt	$ 2,776	$ 2,803

NOTES PAYABLE AND LONG-TERM D_5

NOTES PAYABLE AND LONG-TERM DEBT - Schedule of Payments Due on Long-term Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021
Long-term Debt, Fiscal Year Maturity [Abstract]
Total long-term debt	$ 3,858	$ 4,064
Term Loan
Long-term Debt, Fiscal Year Maturity [Abstract]
2022	622
2023	320
2024	2,238
2025	44
2026 and thereafter	672
Total long-term debt	$ 3,896

STOCK-BASED COMPENSATION (Detai

STOCK-BASED COMPENSATION (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation	$ 280	$ 162
Cost of revenues
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation	9	0
Selling, general and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation	$ 271	$ 162

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Earnings Per Share [Abstract]
Net loss as reported	$ (790)	$ (293)
Net loss as reported	$ (790)	$ (293)
Weighted average common shares outstanding (in shares)	17,879	16,391
Effect of dilutive stock options (in shares)	0	0
Weighted average diluted common shares outstanding (in shares)	17,879	16,391
Net loss per common share
Basic (in dollars per share)	$ (0.04)	$ (0.02)
Diluted (in dollars per share)	$ (0.04)	$ (0.02)
Employee stock options excluded from computation of dilutive income per share amounts because their effect would be anti-dilutive (in shares)	0	25

EQUITY TRANSACTIONS (Details)

EQUITY TRANSACTIONS (Details) - USD ($) $ / shares in Units, $ in Thousands	Aug. 30, 2021	Sep. 30, 2021	Sep. 30, 2020
Stockholders' Equity Note [Abstract]
Options exercised (in shares)		0	50,531
Proceeds		$ 0	$ 225
Average exercise price per share (in dollars per share)		$ 0	$ 4.44
Compensation expense related to non-vested awards		$ 1,500
Weighted average period		2 years 11 months 23 days
Class of Stock [Line Items]
Issuance of common stock (in shares)	2,070,000
Shares price (in dollars per share)	$ 8.65
Underwriting discount and offering expenses	$ 1,100
Proceeds from issuance of common stock, net	$ 16,800	$ 16,771	$ 0
Over-Allotment Option
Class of Stock [Line Items]
Issuance of common stock (in shares)	270,000

INVENTORY (Details)

INVENTORY (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021
Components of inventory [Abstract]
Raw materials	$ 2,449	$ 2,040
Finished goods	5,805	5,063
Total inventory	8,254	7,103
Less: current portion	7,272	6,114
Inventory, net of current portion	$ 982	$ 989

Subsequent Events (Details)

Subsequent Events (Details) - Subsequent Event - Affordable Medical Waste LLC $ in Millions	Oct. 22, 2021USD ($)numberOfLocation
Subsequent Event [Line Items]
Business combination, consideration transferred | $	$ 2.2
Minimum
Subsequent Event [Line Items]
Number of locations | numberOfLocation	500