Exhibit 99.1
Sharps Compliance Corp. Announces First Quarter Fiscal Year 2007 Results
Company Reports Record Quarterly Revenues and Operating Income
HOUSTON--(BUSINESS WIRE)--Oct. 23, 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
three-months ended September 30, 2006.
Financial Results
For the three-months ended September 30, 2006, the Company
generated record quarterly revenues of $3.0 million versus $2.7
million for the three months ended September 30, 2005, an increase of
12%. The increase in the first quarter revenues was a result of
increased billings in virtually all of the Company's markets and led
by significant growth in billings in the Retail market. The increase
in the Retail market billings was driven by the strong 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
increase in the billings in the Company's other markets are a result
of the Company's direct sales and marketing efforts and increased
awareness of the proper disposal of medical sharps.
The Company generated a gross margin of 43% for the three-months
ended September 30, 2006 versus a gross margin of 41% for the
corresponding quarter of the prior fiscal year.
The Company reported operating income of $0.3 million for the
quarter ended September 30, 2006 versus operating income for the
quarter ended September 30, 2005 of $0.2 million.
Business Developments
Retail Market
The Company reported billings of approximately $630,000 in its
Retail market during the quarter ended September 30, 2006. As noted
above, these billings were driven by sales of 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 shot and other inoculations. The first quarter fiscal year 2007
billings in the Retail market represent an increase of 66% over the
prior fiscal year quarter billings in this market.
Residential Market
The Company's Sharps Disposal By Mail System(R) has been
implemented as an integral part of the municipal waste programs of
sixteen (16) cities to date. The Company is in various stages of
marketing and implementation with fifteen (15) additional
municipalities and counties that have expressed interest in similar
programs. We believe the increase in activity in the residential
market is directly attributed to the new California legislation (SB
1305) mandating proper disposal of home-generated sharps. 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 Developments
The Company's 2006 Annual Meeting of Stockholders will be held on
Thursday, November 9, 2006 at 10:00 am in the Great Room of the Hotel
Derek in Houston, Texas. Stockholders as of the September 21, 2006
record date will be asked to vote on the election of six (6) directors
and such other business that may properly be presented at the Annual
Meeting.
Comments
Regarding the first quarter results, Dr. Burton J. Kunik,
Chairman, Chief Executive Officer and President of Sharps Compliance
Corp. stated, "We achieved our record first quarter operating results
through strong sales in all of our key markets led by continued
expansion in our Retail segment. Over the past few years we have
developed successful business relationships with numerous immunizing
pharmacies that have resulted in significant sales for the Company.
Industry data shows that the immunizing pharmacy market is expected to
continue to grow significantly. We believe Sharps is very well
positioned to take advantage of this growth by providing the
immunizing pharmacies with an efficient and cost effective method of
disposing of used syringes."
"We continue to be very optimistic about fiscal year 2007 and our
growth opportunities in the many markets we serve. We believe our
near-term revenue expansion opportunities will focus on sales in the
majority of our key markets including pharmaceutical manufacturer."
Kunik added, "The positive operating results continue to
strengthen the Company's balance sheet with higher cash, working
capital, asset and stockholders' equity balances. This financial
strength provides the Company greater flexibility in executing its
business plan and investing in markets with significant sales
opportunities."
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
September 30,
---------------------------------
2006 2005
(Unaudited) (Unaudited)
---------------- ----------------
REVENUES $2,990,884 $2,660,112
COSTS AND EXPENSES:
Cost of revenues 1,693,588 1,560,919
Selling, general and
administrative 954,422 894,524
Depreciation and amortization 44,212 32,863
---------------- ----------------
Operating income 298,662 171,806
INTEREST (EXPENSE) INCOME, net 1,640 (1,769)
---------------- ----------------
Net Income before income taxes 300,302 170,037
Income taxes (8,714) (5,505)
---------------- ----------------
Net income $291,588 $164,532
================ ================
BASIC AND DILUTED NET INCOME PER
SHARE $0.03 $0.02
================ ================
SHARES USED IN NET INCOME PER SHARE
BASIC 10,562,723 10,547,311
================ ================
DILUTED 10,991,339 10,732,740
================ ================
SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, June 30,
2006 2006
(Unaudited)
-------------- -------------
Assets
Current assets:
Cash and cash equivalents $354,463 $296,959
Restricted cash 10,010 10,010
Accounts receivable, net 1,211,731 935,283
Inventory 400,508 325,688
Prepaid and other assets 130,189 88,348
-------------- -------------
Total current assets 2,106,901 1,656,288
Property and equipment, net 466,850 473,387
Intangible assets, net 66,029 60,427
-------------- -------------
Total assets $2,639,780 $2,190,102
============== =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $503,086 $526,582
Accrued liabilities 322,035 262,219
Current portion of deferred revenue 913,289 826,764
Current maturities of capital lease
obligations 28,265 40,260
-------------- -------------
Total current liabilities 1,766,675 1,655,825
Long-term deferred revenue 241,552 211,568
Obligations under capital leases, net of
current
maturities 465 1,809
Other 69,750 69,000
-------------- -------------
Total liabilities 2,078,442 1,938,202
Stockholders' Equity:
Total Stockholders' Equity 561,338 251,900
-------------- -------------
Total Liabilities and
Stockholders' Equity $2,639,780 $2,190,102
============== =============
CONTACT: Sharps Compliance Corp., Houston
David P. Tusa, 713-660-3514
dtusa@sharpsinc.com
www.sharpsinc.com