Exhibit 99.1
Sharps Compliance Corp. Announces Results for the Quarter and Fiscal Year Ended
June 30, 2006; Company Reports Record Annual Revenue and Earnings
HOUSTON--(BUSINESS WIRE)--Aug. 7, 2006--Sharps Compliance Corp. and
subsidiaries (OTCBB:SCOM) ("Sharps" or the "Company"), leading
providers of cost-effective medical waste disposal solutions for
industry and consumers, today announced its operating results for the
fourth quarter and fiscal year ended June 30, 2006.
Financial Results
For the fiscal year ended June 30, 2006, the Company generated
revenues of $10.6 million versus revenues for the corresponding prior
fiscal year of $9.0 million, an increase of 17%. The increase in
revenues is a result of higher billings in the retail, hospitality,
professional, agriculture and pharmaceutical markets.
For the three-months ended June 30, 2006, the Company generated
revenues of $2.7 million versus revenues for the corresponding quarter
of the prior fiscal year of $2.1 million, an increase of 28%.
For the fiscal year 2006, the Company reported a gross margin of
43% versus a gross margin of 39% for the corresponding period of the
prior year. The improvement in the gross margin is a result of
increased revenue and the mix of products sold.
S, G & A expense increased by $0.4 million, or 13%, for the fiscal
year 2006 versus 2005 as a result of the increase in, (i)
sales-related compensation expense and (ii) professional fees related
to the Attentus Medical litigation (settled in July 2006).
For the fiscal year 2006, the Company generated net income of $0.4
million, or $0.04 per share, versus a net loss of $0.2 million, or
$0.02 per share, for the prior fiscal year.
The improvement in the financial performance of the Company is a
result of the 17% increase in the revenues and the strength of the
gross margins, partially offset by the increase in S, G & A.
Market Developments
Retail Market
The Company generated billings of approximately $560,000 in the
Retail market during the year ended June 30, 2006. These billings were
driven by sales of the Company's Sharps Disposal By Mail System(R)
products to retail pharmacies and grocery stores to support the proper
disposal of syringes used to administer flu shots and other
inoculations. The billings for the year ended June 30, 2006 in the
Retail market represent an increase of over 150% in the corresponding
prior period billings.
Hospitality Market
The Company generated billings of over $550,000 in the Hospitality
market during the year ended June 30, 2006. This level of billings
represents an increase of over 60% as compared to the prior year
period. This growth was driven by an approximate $100,000 order from
one of the nation's largest contract food service providers for the
Company's biohazard spill clean-up kit. This newly-launched product
has an innovative mail-back feature and contains everything required
to safely and properly dispose of medical waste spills within U.S.
Postal Service regulations.
Agriculture Market
The Company generated billings of over $700,000 in its Agriculture
market during the year ended June 30, 2006. The current fiscal year
billings in this market represent a 24% increase over the
corresponding prior period billings.
Pharmaceutical Market
The Company generated approximately $100,000 in billings in the
Pharmaceutical market during the year ended June 30, 2006. These
billings were driven by sales of the Company's Sharps Disposal By Mail
System(R) products utilized to support the proper disposal of syringes
in the pharmaceutical clinical trial setting.
Residential Market
The Company's Sharps Disposal By Mail System(R) has been
implemented as an integral part of the municipal waste programs of six
(6) California cities to date. We are in various stages with nine (9)
additional municipalities and cities (seven (7) in California) that
have expressed interest in similar programs. Municipal programs are
designed to eliminate needles, syringes and lancets from the public
waste stream and assist self-injecting residents with proper disposal.
There are an estimated 3 billion syringes disposed outside of the
healthcare setting each year.
Regulatory Developments
California Senate Bill 1305
In July 2006, the Company announced the passage of California
Senate Bill 1305, an amendment to The Medical Waste Management Act.
The new law requires the proper disposal of home-generated sharps
waste (syringes, needles, lancets, etc.) and acknowledges mail-back
programs as one of the most convenient alternatives for the collection
and destruction of home-generated sharps.
Effective January 1, 2007 (with enforcement beginning September 1,
2008), SB 1305 addresses the need to meet the changing demands of
healthcare provided in alternate sights that currently allows hundreds
of millions of home-generated sharps waste to be disposed in solid
waste and recycling containers. The new law is designed to ensure
appropriate disposal of sharps waste necessary to protect the general
public and workers from potential exposure to contagious diseases and
health and safety risks.
Massachusetts Senate Bill 2569
In July 2006, The Massachusetts Legislature enacted Senate Bill
2569 which requires the Massachusetts department of public health, in
conjunction with other relevant state and local agencies and
government departments, to design, establish and implement a program
for the collection and disposal of non-commercially generated, spent
hypodermic needles and lancets. Recommended disposal methods include
mail-back products approved by the U.S. Postal Service such as the
Sharps Disposal By Mail Systems(R). The Massachusetts legislation
addresses the need for proper disposal of used syringes, needles and
lancets outside of the traditional healthcare setting.
Corporate and Business Developments
Three-year Exclusive Agreement with InterFit Health
In April 2006, the Company announced, the execution of a
three-year exclusive agreement with InterFit Health to provide the
Sharps Disposal By Mail System(R) to its health screening and
RediClinic operations. Since 1989, InterFit Health has provided
individuals with easy access to convenient, accurate and affordable
health screening and other personal health management services. Today,
InterFit is the largest provider of retail health screening services
in the United States while its RediClinics are a leader in convenient
care.
New Bank Line of Credit and Relationship
In March 2006, the Company announced the execution of a $1.5
million Credit Agreement and new banking relationship with JPMorgan
Chase Bank, N.A. The Credit Agreement provides for a revolving line of
credit (the "Line of Credit") in the principal amount of $1.5 million.
The proceeds of the Line of Credit may be used for working capital,
letters of credit, acquisitions and general corporate purposes.
The Line of Credit is structured to provide the Company with
additional financial support for its planned organic growth as well as
capital to support potential future acquisitions.
Settlement of Litigation
In July 2006, the Company announced the resolution of the Attentus
Medical Sales, Inc. ("Attentus") and Jason Jodway litigation. In
conjunction with the resolution of the matter, the Company entered
into a business relationship whereby Attentus will market and sell the
Company's Sharps Disposal By Mail Systems(R). The Company, Attentus
and Jason Jodway have dismissed all claims against each other.
New Office/Warehouse Facility
In July 2006, we executed a new facility lease encompassing 18,231
square feet of office and warehouse space. The new lease will replace
the Company's current lease of the Company's existing 10,634 square
foot facility. The new facility, which should be ready for occupancy
in the October - November 2006 timeframe is designed to facilitate the
transition of our product assembly operations from an outsourced
vender to an in-house function and accommodate our planned growth
plans.
Comments
Commenting on the announcement, Dr. Burt Kunik, Chairman, Chief
Executive Officer and President of Sharps Compliance Corp. stated, "We
ended the fiscal year 2006 with record annual revenues and earnings
driven by growth in our retail, agriculture, hospitality and
pharmaceutical markets. This growth was achieved through continued
market expansion which was a direct result of our sales and marketing
strategic plans.
On the regulatory front, the states of California and
Massachusetts passed legislation requiring the proper disposal of
sharps waste (syringes, needles, lancets, etc.) and acknowledging
mail-back programs as a recommended method for their collection and
destruction. We believe the new legislation to be a "break-through"
event for the Company as the country recognizes that the proper
disposal of sharps are on the legislative radar screen.
We believe that the new laws (California SB 1305 and Massachusetts
SB 2569) could prove to be the model for additional legislation
throughout the country. We anticipate further regulatory actions by
other states as the country recognizes the significant benefits to
removing the billions of used syringes from the solid waste stream
thereby protecting the general public and workers from potential
exposure to contagious diseases and health and safety risks."
Kunik added, "Our FY 2007 internal plans envision, (i) strong
first quarter (ending September 30, 2006) results driven by increased
billings in the retail/flu shot market, (ii) increased annual billings
generated in the pharmaceutical, healthcare, agriculture and
hospitality markets, (iii) continued strong gross margins and (iv) a
minimal increase in overhead expenses. We believe the anticipated
growth in the markets we serve will be a result of our focused sales
and marketing efforts of all of our products as well as the expected
positive effects of the recent California and Massachusetts
legislation."
Headquartered in Houston, Texas, Sharps is a leading developer of
superior solutions for improving safety, efficiency and cost related
to the proper disposal of medical waste by industry and consumers.
Sharps primary markets include healthcare, agriculture, hospitality,
professional, industrial, commercial and retail. The Company's
products and services represent cutting edge solutions for a variety
of industries dealing with the complexity of managing regulatory
compliance, environmental sensitivity, employee and customer safety,
corporate risk and operating costs related to medical waste disposal.
Sharps is a leading proponent and participant in the development of
public awareness and solutions for the safe disposal of needles,
syringes and other sharps in the community setting.
Sharps Compliance Corp. is the exclusive supplier of Sharps
Disposal by Mail systems to the Consumer Health Care division of
Becton, Dickinson and Company. The Company also maintains an exclusive
sales and marketing arrangement with Waste Management, Inc. whereby
Sharps provides safe disposal systems and related services for Waste
Management's residential and commercial customers.
Sharps Compliance Corp.'s common stock trades on the OTC Bulletin
Board under the symbol SCOM.
The information made available in this press release contains
certain forward-looking statements which reflect Sharps Compliance
Corp.'s current view of future events and financial performance.
Wherever used, the words "estimate", "expect", "plan", "anticipate",
"believe", "may" and similar expressions identify forward-looking
statements. Any such forward-looking statements are subject to risks
and uncertainties and the company's future results of operations could
differ materially from historical results or current expectations.
Some of these risks include, without limitation, the company's ability
to educate its customers, development of public awareness programs to
educate the identified consumer, managing regulatory compliance and/or
other factors that may be described in the company's annual report on
Form 10-KSB, quarterly reports on Form 10-QSB and/or other filings
with the Securities and Exchange Commission. Future economic and
industry trends that could potentially impact revenues and
profitability are difficult to predict. The company assumes no
obligation to publicly update or revise its forward-looking statements
even if experience or future changes make it clear that any projected
results express or implied therein will not be realized.
(Financial Highlights Follow)
SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Year Ended
June 30, June 30,
------------------------- -------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited)
------------ ------------ ------------ ------------
REVENUES $2,708,021 $2,120,102 $10,562,720 $9,001,177
COSTS AND
EXPENSES:
Cost of revenues 1,543,881 1,382,723 6,068,399 5,499,355
Selling, general
and
administrative 1,078,298 895,269 3,957,652 3,520,045
Depreciation and
amortization 43,744 36,406 154,476 157,460
------------ ------------ ------------ ------------
Operating income
(loss) 42,098 (194,296) 382,193 (175,683)
Other income
(expense), net 1,724 (2,362) (564) (17,417)
------------ ------------ ------------ ------------
Net Income
(loss) before
Income Taxes $43,822 ($196,658) $381,629 ($193,100)
============ ============ ============ ============
Income Taxes 8,815 - - -
Net Income (Loss) $52,637 ($196,658) $381,629 ($193,100)
============ ============ ============ ============
Net Income (Loss)
Per Share:
============ ============ ============ ============
Basic - ($0.02) $0.04 ($0.02)
============ ============ ============ ============
Diluted - ($0.02) $0.03 ($0.02)
============ ============ ============ ============
============ ============ ============ ============
Shares Used in
Computing Net
Income (Loss) Per
Share:
============ ============ ============ ============
Basic 10,549,442 10,542,439 10,547,846 10,539,215
Diluted 10,950,196 10,542,439 10,953,831 10,539,215
SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, June 30,
2006 2005
(Unaudited)
----------- -----------
Assets
Current assets:
Cash and cash equivalents $296,959 $258,427
Restricted cash 10,010 10,010
Accounts receivable, net 935,283 964,148
Inventory 325,688 368,495
Prepaid and other assets 88,348 79,320
----------- -----------
Total current assets 1,656,288 1,680,400
Property and equipment, net 473,387 438,064
Intangible assets, net 60,427 11,779
Total assets $2,190,102 $2,130,243
=========== ===========
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Accounts payable $526,582 $567,398
Accrued liabilities 262,219 283,953
Current portion of deferred revenue 826,764 996,597
Current maturities of capital lease
obligations 40,260 48,558
----------- -----------
Total current liabilities 1,655,825 1,896,506
Long-term deferred revenue 211,568 272,781
Obligations under capital leases, net of
current maturities 1,809 42,112
Other 69,000 62,500
----------- -----------
Total liabilities 1,938,202 2,273,899
Stockholders' Equity (Deficit):
Total Stockholders' Equity (Deficit) 251,900 (143,656)
----------- -----------
Total Liabilities and Stockholders'
Equity (Deficit) $2,190,102 $2,130,243
=========== ===========
CONTACT: Sharps Compliance Corp., Houston
David P. Tusa, 713-660-3514
dtusa@sharpsinc.com
www.sharpsinc.com