Sharps Compliance (SMED) 10-Q 4 Nov 15 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Sep. 30, 2015	Nov. 02, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	SHARPS COMPLIANCE CORP
Entity Central Index Key	898,770
Current Fiscal Year End Date	--06-30
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		15,487,716
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2015	Jun. 30, 2015
CURRENT ASSETS
Cash and cash equivalents	$ 15,956	$ 15,157
Accounts receivable, net of allowance for doubtful accounts of $39 and $34, respectively	4,892	6,647
Inventory	3,419	2,738
Prepaid and other current assets	553	733
TOTAL CURRENT ASSETS	24,820	25,275
PROPERTY, PLANT AND EQUIPMENT, net	4,175	3,810
GOODWILL	413	0
INTANGIBLE ASSETS, net of accumulated amortization of $406 and $385, respectively	912	666
TOTAL ASSETS	30,320	29,751
CURRENT LIABILITIES
Accounts payable	1,439	1,770
Accrued liabilities	2,034	1,917
Deferred revenue	1,910	1,877
TOTAL CURRENT LIABILITIES	5,383	5,564
LONG-TERM DEFERRED REVENUE, net of current portion	501	483
OTHER LONG-TERM LIABILITIES	221	118
TOTAL LIABILITIES	$ 6,105	$ 6,165
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value per share; 20,000,000 shares authorized;15,676,466 and 15,575,041 shares issued, respectively and 15,485,216 and 15,383,791 shares outstanding, respectively	$ 157	$ 156
Treasury stock, at cost, 191,250 shares repurchased	(809)	(809)
Additional paid-in capital	24,752	24,344
Retained earnings (accumulated deficit)	115	(105)
TOTAL STOCKHOLDERS' EQUITY	24,215	23,586
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 30,320	$ 29,751

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2015	Jun. 30, 2015
CURRENT ASSETS
Accounts receivable, allowance for doubtful accounts	$ 39	$ 34
INTANGIBLE ASSETS, accumulated amortization	$ 406	$ 385
STOCKHOLDERS' EQUITY
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	20,000,000	20,000,000
Common stock, shares issued (in shares)	15,676,466	15,575,041
Common stock, shares outstanding (in shares)	15,485,216	15,383,791
Treasury stock, shares repurchased (in shares)	191,250	191,250

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) [Abstract]
REVENUES	$ 7,869	$ 7,047
Cost of revenues	4,990	4,713
GROSS PROFIT	2,879	2,334
Selling, general and administrative	2,596	2,323
Depreciation and amortization	52	85
OPERATING INCOME (LOSS)	231	(74)
INTEREST INCOME
Interest income	9	8
TOTAL INTEREST INCOME	9	8
INCOME (LOSS) BEFORE INCOME TAXES	240	(66)
INCOME TAX EXPENSE
Current	20	8
TOTAL INCOME TAX EXPENSE	20	8
NET INCOME (LOSS)	$ 220	$ (74)
NET INCOME (LOSS) PER COMMON SHARE
Basic (in dollars per share)	$ 0.01	$ 0
Diluted (in dollars per share)	$ 0.01	$ 0
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME (LOSS) PER COMMON SHARE:
Basic (in shares)	15,419	15,288
Diluted (in shares)	15,926	15,288

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings (Accumulated Deficit) [Member]	Total
Balances at Jun. 30, 2014	$ 155	$ (681)	$ 23,695	$ (1,265)	$ 21,904
Balances (in shares) at Jun. 30, 2014	15,460,940	(161,801)
Exercise of stock options	$ 0	$ 0	139	0	139
Exercise of stock options (in shares)	61,109	0
Stock-based compensation	$ 0	$ 0	511	0	511
Issuance of restricted stock	$ 1	$ 0	(1)	0	0
Issuance of restricted stock (in shares)	52,992	0
Shares repurchased	$ 0	$ (128)	0	0	(128)
Shares repurchased (in shares)	0	(29,449)
Net income (loss)	$ 0	$ 0	0	1,160	1,160
Balances at Jun. 30, 2015	$ 156	$ (809)	24,344	(105)	$ 23,586
Balances (in shares) at Jun. 30, 2015	15,575,041	(191,250)			15,383,791
Exercise of stock options	$ 1	$ 0	267	0	$ 268
Exercise of stock options (in shares)	101,425	0			101,425
Stock-based compensation	$ 0	$ 0	141	0	$ 141
Shares repurchased (in shares)					0
Net income (loss)	0	0	0	220	$ 220
Balances at Sep. 30, 2015	$ 157	$ (809)	$ 24,752	$ 115	$ 24,215
Balances (in shares) at Sep. 30, 2015	15,676,466	(191,250)			15,485,216

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ 220	$ (74)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization	188	242
Stock-based compensation expense	141	116
Changes in operating assets and liabilities, net of effects of business acquisition:
Restricted cash	0	111
Accounts receivable	1,806	255
Legal settlement receivable	0	1,538
Inventory	(681)	(113)
Prepaid and other current assets	180	(144)
Accounts payable and accrued liabilities	(282)	331
Deferred revenue	51	334
NET CASH PROVIDED BY OPERATING ACTIVITIES	1,623	2,596
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment	(462)	(46)
Payments for acquisition, net of cash acquired	(630)	0
NET CASH USED IN INVESTING ACTIVITIES	(1,092)	(46)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options	268	0
Shares repurchased	0	(128)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	268	(128)
NET INCREASE IN CASH AND CASH EQUIVALENTS	799	2,422
CASH AND CASH EQUIVALENTS, beginning of period	15,157	13,717
CASH AND CASH EQUIVALENTS, end of period	15,956	16,139
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Income taxes paid	85	10
Escrow related to acquisition	$ 70	$ 0

ORGANIZATION AND BACKGROUND

ORGANIZATION AND BACKGROUND	3 Months Ended
	Sep. 30, 2015
ORGANIZATION AND BACKGROUND [Abstract]
ORGANIZATION AND BACKGROUND	NOTE 1 - ORGANIZATION AND BACKGROUND 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. and Alpha Bio/Med Services LLC (collectively, “Sharps” or the “Company”). All significant intercompany accounts and transactions have been eliminated upon consolidation.

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Sep. 30, 2015
BASIS OF PRESENTATION [Abstract]
BASIS OF PRESENTATION	NOTE 2 - 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 accounting principles generally accepted in the United States of America for complete financial statements. 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, 2015, the results of its operations for the three months ended September 30, 2015 and 2014, cash flows for the three months ended September 30, 2015 and 2014 and stockholders’ equity for the three months ended September 30, 2015 and the year ended June 30, 2015. The results of operations for the three months ended September 30, 2015 are not necessarily indicative of the results to be expected for the entire fiscal year ending June 30, 2016. 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, 2015.

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Sep. 30, 2015
SIGNIFICANT ACCOUNTING POLICIES [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition : The Company recognizes revenue from product sales and services when goods are shipped or delivered, services provided, and title and risk of loss pass to the customer except for those sales via multiple-deliverable revenue arrangements. Provisions for certain rebates, product returns and discounts to customers are accounted for as reductions in sales in the same period the related sales are recorded. Product discounts granted are based on the terms of arrangements with direct, indirect and other market participants, as well as market conditions, including prices charged by competitors. Rebates are estimated based on contractual terms, historical experience, trend analysis and projected market conditions in the various markets served. Service agreements which include a vendor managed inventory program include terms that meet the “bill and hold” criteria and as such are recognized when the order is completed at which point title has transferred, there are no acceptance provisions and amounts are segregated in the Company’s warehouse. During the three months ended September 30, 2015 and 2014, the Company recorded revenue from inventory builds that are held in vendor managed inventory under these service agreements of $0.6 million and $0.8 million respectively. As of September 30, 2015 and June 30, 2015, $1.9 and $1.6 million, respectively, of solutions sold through that date were held in vendor managed inventory pending fulfillment or shipment to patients of pharmaceutical manufacturers who offer these solutions to patients in an ongoing patient support program. Certain products offered by the Company have revenue producing components that are recognized over multiple delivery points (Sharps Recovery System™ and various other solutions like the TakeAway Environmental Return Systems™ referred to as “Mailbacks” and Sharps® Pump and Asset Return Boxes, referred to as “Pump Returns”) and can consist of up to three separate elements, or units of measure, as follows: (1) the sale of the compliance and container system, (2) return transportation and (3) treatment service. In accordance with the relative selling price methodology, an estimated selling price is determined for all deliverables that qualify for separate units of accounting. The actual consideration received in a multiple-deliverable arrangement is then allocated to the units based on their relative sales price. The selling price for the transportation revenue and the treatment revenue utilizes third party evidence. The Company estimates the selling price of the compliance and container system based on the product and services provided including compliance with local, state and Federal laws, adherence to stringent manufacturing and testing requirements, safety to the patient and the community as well as storage and containment capabilities. Revenue for the sale of the compliance and container is recognized upon delivery to the customer, at which time the customer takes title and assumes risk of ownership. Transportation revenue is recognized when the customer returns the compliance and container system and the container has been received at the Company’s owned or contracted facilities. The compliance and container system is mailed or delivered by an alternative logistics provider to the Company’s owned or contracted facilities. Treatment revenue is recognized upon the destruction or conversion and proof of receipt and treatment having been performed on the container. Since the transportation element and the treatment elements are undelivered services at the point of initial sale of the compliance and container, transportation and treatment revenue is deferred until the services are performed. The current and long-term portions of deferred revenues are determined through regression analysis and historical trends. Furthermore, through regression analysis of historical data, the Company has determined that a certain percentage of all compliance and container systems sold may not be returned. Accordingly, a portion of the transportation and treatment elements are recognized at the point of sale. Income Taxes Accounts Receivable Stock-Based Compensation

RECENTLY ISSUED ACCOUNTING STAN

RECENTLY ISSUED ACCOUNTING STANDARDS	3 Months Ended
	Sep. 30, 2015
RECENTLY ISSUED ACCOUNTING STANDARDS [Abstract]
RECENTLY ISSUED ACCOUNTING STANDARDS	NOTE 4 – RECENTLY ISSUED ACCOUNTING STANDARDS In May 2014, guidance for revenue recognition was issued which supersedes the revenue recognition requirements currently followed by the Company. The new guidance provides for a single five-step model to be applied in determining the amount and timing of the recognition of revenue related to contracts with customers. The new standard also requires additional financial statement disclosures that will enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows relating to customer contracts. Companies have an option to use either a retrospective approach or cumulative effect adjustment approach to implement the standard. In July 2015, the FASB decided to defer the original effective date by one year to be effective for annual reporting periods beginning after December 15, 2017 instead of December 15, 2016 for public entities (effective July 1, 2018 for the Company). The Company is still evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures and has not yet determined the method by which it will adopt the standard. In July 2015, guidance for inventory measurement was issued, which supersedes the policy currently followed by the Company. The new guidance requires the Company to measure inventory at the lower of cost or net realizable value. The provisions of the new guidance are effective for annual reporting periods beginning after December 15, 2016 (effective July 1, 2017 for the Company) including interim periods within the reporting period. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. In September 2015, guidance for business combinations was issued, which simplifies the accounting for measurement-period adjustments. The new guidance eliminates the requirement to restate prior period financial statements for measurement period adjustments following a business combination and requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The provisions of the new guidance are effective for annual reporting periods beginning after December 15, 2015 (effective July 1, 2016 for the Company) including interim periods within the reporting period. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

INCOME TAXES

INCOME TAXES	3 Months Ended
	Sep. 30, 2015
INCOME TAXES [Abstract]
INCOME TAXES	NOTE 5 - INCOME TAXES The establishment of valuation allowances and development of projected annual effective tax rates requires significant judgment and is impacted by various estimates. Both positive and negative evidence, as well as the objectivity and verifiability of that evidence, is considered in determining the appropriateness of recording a valuation allowance on deferred tax assets. Under generally accepted accounting principles, the valuation allowance has been recorded to reduce the Company’s net deferred tax asset to an amount that is more likely than not to be realized and is based upon the uncertainty of the realization of certain federal and state deferred tax assets related to net operating loss carryforwards and other tax attributes. The Company’s net deferred tax assets have been fully reserved by a tax valuation allowance. The Company’s effective tax rate for the three months ended September 30, 2015 and 2014 was 8.3% and (12.1%), respectively, reflecting estimated state income taxes. The Company’s tax expense associated with taxable income during the three months ended September 30, 2015 was offset by the utilization of net operating loss carryforwards. The Company’s tax benefit associated with taxable losses during the three months ended September 30, 2014 was offset by a deferred tax valuation allowance.

NOTES PAYABLE AND LONG-TERM DEB

NOTES PAYABLE AND LONG-TERM DEBT	3 Months Ended
	Sep. 30, 2015
NOTES PAYABLE AND LONG-TERM DEBT [Abstract]
NOTES PAYABLE AND LONG-TERM DEBT	NOTE 6 - NOTES PAYABLE AND LONG-TERM DEBT On April 9, 2015, the Company entered into a credit agreement with a commercial bank (“Credit Agreement”). The Credit Agreement, which replaces, in its entirety, the Company’s prior credit agreement, which was executed effective January 28, 2014 with the same commercial bank, provides for a two-year, $9.0 million line of credit facility, the proceeds of which may be utilized as follows: (i) $4.0 million for working capital, letters of credit (up to $500,000) and general corporate purposes and (ii) $5.0 million for acquisitions. Indebtedness under the Credit Agreement is secured by the Company’s accounts receivable and inventory 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 50% of eligible inventory. 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. Borrowings bear interest at WSJ Prime (for the working capital line) and WSJ Prime plus 0.25% (for the acquisition line), which was approximately 3.25% and 3.50%, respectively, as of September 30, 2015. The Company pays a fee of 0.25% per annum on the unused amount of the line of credit. As of September 30, 2015, the Company had no outstanding borrowings other than $0.3 million in letters of credit, which left $8.7 million of credit available under the Credit Agreement. The Credit Agreement contains affirmative and negative covenants that, among other things, require the Company to maintain a minimum level of tangible net worth of $12.5 million, minimum liquidity of $7.0 million and a minimum debt service coverage ratio of not less than 1.15 to 1.00. The Credit Agreement, which expires on April 9, 2017, also contains customary events of default which, if uncured, may terminate the Credit Agreement and require immediate repayment of all indebtedness to the lenders. The Company was in compliance with all the financial covenants under the Credit Agreement as of September 30, 2015.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	3 Months Ended
	Sep. 30, 2015
STOCK-BASED COMPENSATION [Abstract]
STOCK-BASED COMPENSATION	NOTE 7 – 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 performance-based award and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity grant). Stock-based compensation costs from performance-based stock option awards are estimated at the date when key terms and conditions of the performance-based stock option award are known (the “service inception date”), and subsequent reporting periods, trued up at the grant date and recognized as expense over the employee’s requisite period (from the service inception date through the end of the vesting period). During the three months ended September 30, 2015 and 2014, stock-based compensation amounts are as follows (in thousands): Three-Months Ended September 30, 2015 2014 (Unaudited) Stock-based compensation expense included in: Cost of revenues $ 8 $ 4 Selling, general and administrative 133 112 Total $ 141 $ 116

EARNINGS PER SHARE

EARNINGS PER SHARE	3 Months Ended
	Sep. 30, 2015
EARNINGS PER SHARE [Abstract]
EARNINGS PER SHARE	NOTE 8 - 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 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, restricted stock and performance-based stock option awards. In computing diluted earnings per share, the outstanding common stock options and performance-based stock option awards are considered dilutive using the treasury stock method. The Company’s restricted stock awards are treated as outstanding for earnings per share calculations since these shares have full voting rights and are entitled to participate in dividends declared on common shares, if any, and undistributed earnings. As participating securities, the shares of restricted stock are included in the calculation of basic EPS using the two-class method. For the periods presented, the amount of earnings allocated to the participating securities was not material. The following information is necessary to calculate earnings per share for the periods presented (in thousands, except per-share data): Three-Months Ended September 30, 2015 2014 (Unaudited) Net income (loss), as reported $ 220 $ (74 ) Weighted average common shares outstanding 15,419 15,288 Effect of dilutive stock options 507 - Weighted average diluted common shares outstanding 15,926 15,288 Net income (loss) per common share Basic $ 0.01 $ (0.00 ) Diluted $ 0.01 $ (0.00 ) Employee stock options excluded from computation of dilutive income per share amounts because their effect would be anti-dilutive 216 237

EQUITY TRANSACTIONS

EQUITY TRANSACTIONS	3 Months Ended
	Sep. 30, 2015
EQUITY TRANSACTIONS [Abstract]
EQUITY TRANSACTIONS	NOTE 9 - EQUITY TRANSACTIONS During the three months ended September 30, 2015 and 2014, stock options to purchase shares of the Company’s common stock were exercised as follows: Three-Months Ended September 30, 2015 2014 (Unaudited) Options Exercised 101,425 - Proceeds (in thousands) $ 268 $ - Average exercise price per share $ 2.64 $ - As of September 30, 2015, there was $0.6 million of stock option and restricted stock compensation expense related to non-vested awards which is expected to be recognized over a weighted average period of 2.95 years. On January 7, 2013, the Company announced that its Board of Directors approved a stock repurchase program effective January 3, 2013, authorizing the Company to repurchase in the aggregate up to $3.0 million of its outstanding common stock over a two-year period. On March 5, 2015, the Board approved a two-year extension on the stock repurchase program through January 1, 2017. During the three months ended September 30, 2015 and 2014, shares were repurchased as follows: Three-Months Ended September 30, 2015 2014 (Unaudited) Shares repurchased - 29,449 Cash paid for shares repurchased (in thousands) $ - $ 128 Average price paid per share $ - $ 4.35 Total shares repurchased under the program are 191,250 shares at a cost of $0.8 million. As of September 30, 2015, approximately $2.2 million remained of the Company’s $3.0 million repurchase program. Sharps purchased all shares with cash resources.

INVENTORY

INVENTORY	3 Months Ended
	Sep. 30, 2015
INVENTORY [Abstract]
INVENTORY	NOTE 10 – INVENTORY The components of inventory are as follows (in thousands): September 30, 2015 June 30, 2015 (Unaudited) Raw materials $ 1,207 $ 1,345 Finished goods 2,212 1,393 Total $ 3,419 $ 2,738

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS	3 Months Ended
	Sep. 30, 2015
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]
FAIR VALUE OF FINANCIAL INSTRUMENTS	NOTE 11 – FAIR VALUE OF FINANCIAL INSTRUMENTS The Company considers the fair value of all financial instruments, including cash and cash equivalents, accounts receivable and accounts payable to approximate their carrying values at September 30, 2015 due to their short-term nature.

ACQUISITION

ACQUISITION	3 Months Ended
	Sep. 30, 2015
ACQUISITION [Abstract]
ACQUISITION [Text Block]	NOTE 12 – ACQUISITION Effective on July 17, 2015, the Company acquired Alpha Bio/Med Services LLC, a route-based pickup service located in Pennsylvania for total cash consideration of $0.7 million of which $0.1 million has been withheld for possible settlement amounts through July 2016. The following amounts represent the fair value of the assets acquired and liabilities assumed: Accounts receivable $ 51 Fixed assets 70 Intangibles 267 Goodwill 413 Accounts payable and accrued liabilities (101 ) Total purchase price $ 700 During the three months ended September 30, 2015, the Company incurred $0.1 million of acquisition related expenses for investment banking, legal and accounting fees which are included within selling, general and administrative expenses on our condensed consolidated statements of operations. The results of operations of the acquired business have been included in the condensed consolidated statements of operations from the date of acquisition.

SIGNIFICANT ACCOUNTING POLICI19

SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Sep. 30, 2015
SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Revenue Recognition	Revenue Recognition : The Company recognizes revenue from product sales and services when goods are shipped or delivered, services provided, and title and risk of loss pass to the customer except for those sales via multiple-deliverable revenue arrangements. Provisions for certain rebates, product returns and discounts to customers are accounted for as reductions in sales in the same period the related sales are recorded. Product discounts granted are based on the terms of arrangements with direct, indirect and other market participants, as well as market conditions, including prices charged by competitors. Rebates are estimated based on contractual terms, historical experience, trend analysis and projected market conditions in the various markets served. Service agreements which include a vendor managed inventory program include terms that meet the “bill and hold” criteria and as such are recognized when the order is completed at which point title has transferred, there are no acceptance provisions and amounts are segregated in the Company’s warehouse. During the three months ended September 30, 2015 and 2014, the Company recorded revenue from inventory builds that are held in vendor managed inventory under these service agreements of $0.6 million and $0.8 million respectively. As of September 30, 2015 and June 30, 2015, $1.9 and $1.6 million, respectively, of solutions sold through that date were held in vendor managed inventory pending fulfillment or shipment to patients of pharmaceutical manufacturers who offer these solutions to patients in an ongoing patient support program. Certain products offered by the Company have revenue producing components that are recognized over multiple delivery points (Sharps Recovery System™ and various other solutions like the TakeAway Environmental Return Systems™ referred to as “Mailbacks” and Sharps® Pump and Asset Return Boxes, referred to as “Pump Returns”) and can consist of up to three separate elements, or units of measure, as follows: (1) the sale of the compliance and container system, (2) return transportation and (3) treatment service. In accordance with the relative selling price methodology, an estimated selling price is determined for all deliverables that qualify for separate units of accounting. The actual consideration received in a multiple-deliverable arrangement is then allocated to the units based on their relative sales price. The selling price for the transportation revenue and the treatment revenue utilizes third party evidence. The Company estimates the selling price of the compliance and container system based on the product and services provided including compliance with local, state and Federal laws, adherence to stringent manufacturing and testing requirements, safety to the patient and the community as well as storage and containment capabilities. Revenue for the sale of the compliance and container is recognized upon delivery to the customer, at which time the customer takes title and assumes risk of ownership. Transportation revenue is recognized when the customer returns the compliance and container system and the container has been received at the Company’s owned or contracted facilities. The compliance and container system is mailed or delivered by an alternative logistics provider to the Company’s owned or contracted facilities. Treatment revenue is recognized upon the destruction or conversion and proof of receipt and treatment having been performed on the container. Since the transportation element and the treatment elements are undelivered services at the point of initial sale of the compliance and container, transportation and treatment revenue is deferred until the services are performed. The current and long-term portions of deferred revenues are determined through regression analysis and historical trends. Furthermore, through regression analysis of historical data, the Company has determined that a certain percentage of all compliance and container systems sold may not be returned. Accordingly, a portion of the transportation and treatment elements are recognized at the point of sale.
Income Taxes	Income Taxes
Accounts Receivable	Accounts Receivable
Stock-Based Compensation	Stock-Based Compensation

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	3 Months Ended
	Sep. 30, 2015
STOCK-BASED COMPENSATION [Abstract]
Allocated cost of share based compensation	During the three months ended September 30, 2015 and 2014, stock-based compensation amounts are as follows (in thousands): Three-Months Ended September 30, 2015 2014 (Unaudited) Stock-based compensation expense included in: Cost of revenues $ 8 $ 4 Selling, general and administrative 133 112 Total $ 141 $ 116

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	3 Months Ended
	Sep. 30, 2015
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 data): Three-Months Ended September 30, 2015 2014 (Unaudited) Net income (loss), as reported $ 220 $ (74 ) Weighted average common shares outstanding 15,419 15,288 Effect of dilutive stock options 507 - Weighted average diluted common shares outstanding 15,926 15,288 Net income (loss) per common share Basic $ 0.01 $ (0.00 ) Diluted $ 0.01 $ (0.00 ) Employee stock options excluded from computation of dilutive income per share amounts because their effect would be anti-dilutive 216 237

EQUITY TRANSACTIONS (Tables)

EQUITY TRANSACTIONS (Tables)	3 Months Ended
	Sep. 30, 2015
EQUITY TRANSACTIONS [Abstract]
Stock options exercised to purchase common stock	During the three months ended September 30, 2015 and 2014, stock options to purchase shares of the Company’s common stock were exercised as follows: Three-Months Ended September 30, 2015 2014 (Unaudited) Options Exercised 101,425 - Proceeds (in thousands) $ 268 $ - Average exercise price per share $ 2.64 $ -
Schedule of share repurchases	During the three months ended September 30, 2015 and 2014, shares were repurchased as follows: Three-Months Ended September 30, 2015 2014 (Unaudited) Shares repurchased - 29,449 Cash paid for shares repurchased (in thousands) $ - $ 128 Average price paid per share $ - $ 4.35

INVENTORY (Tables)

INVENTORY (Tables)	3 Months Ended
	Sep. 30, 2015
INVENTORY [Abstract]
Components of inventory	The components of inventory are as follows (in thousands): September 30, 2015 June 30, 2015 (Unaudited) Raw materials $ 1,207 $ 1,345 Finished goods 2,212 1,393 Total $ 3,419 $ 2,738

ACQUISITION (Tables)

ACQUISITION (Tables)	3 Months Ended
	Sep. 30, 2015
ACQUISITION [Abstract]
Preliminary purchase price allocation	The following amounts represent the fair value of the assets acquired and liabilities assumed: Accounts receivable $ 51 Fixed assets 70 Intangibles 267 Goodwill 413 Accounts payable and accrued liabilities (101 ) Total purchase price $ 700

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Jun. 30, 2015
Revenue Recognition [Abstract]
Revenue recorded from bill and hold inventory	$ 0.6	$ 0.8
Bill and hold inventory	$ 1.9		$ 1.6

INCOME TAXES (Details)

INCOME TAXES (Details)	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Effective income tax rate reconciliation [Abstract]
Effective income tax rate	8.30%	(12.10%)

NOTES PAYABLE AND LONG-TERM D27

NOTES PAYABLE AND LONG-TERM DEBT (Details) - Credit Agreement [Member]	3 Months Ended
	Sep. 30, 2015USD ($)
Line of Credit Facility [Line Items]
Period of line of credit	2 years
Maximum borrowing capacity	$ 9,000,000
Percentage of eligible accounts receivable considered for borrowing base	80.00%
Percentage of eligible inventory considered for borrowing base	50.00%
Percentage of portion allocated to acquisition purchase price	75.00%
Maturity period	5 years
Unused capacity, commitment fee percentage	0.25%
Amount outstanding	$ 0
Remaining borrowing capacity	8,700,000
Minimum amount of tangible net worth to be maintained under financial covenants	12,500,000
Minimum amount of liquidity to be maintained under financial covenants	$ 7,000,000
Minimum debt service coverage ratio	1.15
Maturity date	Apr. 9, 2017
Letters of Credit [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 500,000
Amount outstanding	300,000
Acquisitions [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 5,000,000
Description of variable rate basis	WSJ Prime
Interest rate (in hundredths)	3.50%
Basis spread of variable rate	0.25%
Working Capital [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 4,000,000
Description of variable rate basis	WSJ Prime
Interest rate (in hundredths)	3.25%

STOCK-BASED COMPENSATION (Detai

STOCK-BASED COMPENSATION (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 141	$ 116
Cost of Revenues [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	8	4
Selling, General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 133	$ 112

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Jun. 30, 2015
EARNINGS PER SHARE [Abstract]
Net income (loss), as reported	$ 220	$ (74)	$ 1,160
Weighted average common shares outstanding (in shares)	15,419	15,288
Effect of dilutive stock options (in shares)	507	0
Weighted average diluted common shares outstanding (in shares)	15,926	15,288
Net income (loss) per common share
Basic (in dollars per share)	$ 0.01	$ 0
Diluted (in dollars per share)	$ 0.01	$ 0
Employee stock options excluded from computation of dilutive income per share amounts because their effect would be anti-dilutive (in shares)	216	237

EQUITY TRANSACTIONS (Details)

EQUITY TRANSACTIONS (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Jun. 30, 2015
Stock options exercised [Abstract]
Options Exercised (in shares)	101,425	0
Proceeds	$ 268	$ 0
Average exercise price per share (in dollars per share)	$ 2.64	$ 0
Compensation expense related to non-vested awards	$ 600
Weighted average period	2 years 11 months 12 days
Stock repurchase program, authorized amount	$ 3,000
Stock repurchase program, period	2 years
Stock repurchase program term extension	2 years
Shares repurchased [Abstract]
Shares repurchased (in shares)	0	29,449
Cash paid for shares repurchased	$ 0	$ 128
Average price paid per share (in dollars per share)	$ 0	$ 4.35
Total shares repurchased under the program (in shares)	191,250		191,250
Total shares repurchased under the program, at cost	$ 809		$ 809
Amount remaining under repurchase program	$ 2,200

INVENTORY (Details)

INVENTORY (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Jun. 30, 2015
Components of inventory [Abstract]
Raw materials	$ 1,207	$ 1,345
Finished goods	2,212	1,393
Total	$ 3,419	$ 2,738

ACQUISITION (Details)

ACQUISITION (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2015	Jun. 30, 2015
Purchase Price Allocation
Goodwill	$ 413	$ 0
Alpha Bio Med Services LLC [Member]
Purchase Price Allocation
Accounts receivable	51
Fixed Assets	70
Intangibles	267
Goodwill	413
Accounts payable and accrued liabilities	(101)
Total purchase price	700
Acquisition related expenses	100
Cash consideration withheld for possible settlement amounts through 2016	$ 100