SMED - Earnings call transcript Q1 2018

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Operator

Greetings and welcome to the Sharps Compliance Inc.

First Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. to conference like to now would turn over the Mr. I of IMS. Nesbett John Mr. Nesbett, please begin.

John Nesbett

and Sharps Good fiscal to welcome morning the call. XXXX Compliance earnings quarter first

question-and-answer On business President the their and the Financial Officer. will David session. Executive we review review financials. and and Chief the formal the growth will will and Diana Company's Officer, Vice following President have operations remarks, Chief Tusa, Diaz, Diana David call today, performance, Immediately a Company's we have strategies,

aware, differ portion are These sec.gov. are to forward-looking apply can during teleconference. you as which earnings SEC. where some that As we the be as uncertainties, filed statements in and events, in statements well our this the at make actual in materially factors are other at as outlined and the our question could These today. risks subject well to future as by formal These found of release presentation documents the results and we are to answer with from this Company cause website factors

me that, ahead, turn David. call David to over let begin discussion. the with So Go to review and the

David Tusa

good earnings first to and everyone fiscal year quarter XXXX Thanks, welcome and call. John morning, our

market, market. when home in Our saw the decline professional market of XX% the first growth and in excluding XX%. government X% healthcare in by quarter XX% revenue which increased the XX%, in We retail market, the experienced a quarterly billings

We Xx also the saw increase an of over billing. in environmental

medication mail related XX% result billing. and XX% retail based solution of Billings down pick by of The as up the business back unused XX% in lower offering, a route were a market we growth generated billings increase Regarding billing.

the company $XXXXX income just of year. was into prior bit get X first versus We’ll in just million acquisitions and the at launched shy in So Diana loss a let into of of a distribution as in importantly route the almost where of we facility a transformation for on XXXX penny, It quarter by of year with a future square growth. we’ve based and we the a but we’re focus more warehouse the fiscal was detail moved a associated definitely but going. I year quarters bit the three a where the been of first were minutes few and XX,XXX and Fiscal treatment more foot Pennsylvania. new for business, numbers, Through of want net to as year now company incremental costs virtually the XXXX, positioned impacted was expenses necessary we have transformation. the painful, integrated

larger a provider, full markets compete service geographic we for As and deals area. in additional

a stone So to transformation now company much larger the stepping and a we're as company. see a building much different

benefits all quarter as as we’ve September of recent Additionally, quarter seen XX. of financial our in these XXXX well results June the the changes ended

opportunity optimistic we’re from the offering medication we the have fiscal ’XX both XX% growth year sales increase only saw growth forward, remaining our the the with quarter in our key growth and first year unused believe even in Meditation We beyond, revenue for unused and solution on key the going we envelope. XXXX more System a with but So Takeaway also fiscal and offerings, more solutions. quite Recovery in in with medication the MedSafe not markets

crisis seeing news coverage daily can’t without in You or TV country. newspaper, the read a our a watch abuse of website opioid

solutions. XXXX, MedSafe program addressing on we talk our in the since a the believe country at country more focus disposal solutions and foresight for the course has trimming user when time we the a X of of versus a the medication unused launched medication. seeing announced systems problem XXXX. we takeaway to are around we And for our problem ultimate million we as yesterday, leader we're when and mark envelope We had Finally, think surpassed providing about is we’ve been looking pound

to in billion market we the markets, medium for medication, unused small about be quantity medical market $X management the waste regarding market across the and size country. and So generator our estimate for the the similar

that the to important know So that solutions. is medication our back entire what and mail with country service we unused our

reasonable believe and or We proven further this, course pick positioned of also with our of our offering. these customer dedicated about our service up XX to offerings, the infrastructure, states population great With penetrate with XX% routed markets based contract uniquely service, terms employees. we expanded we're

I’ll over bit more Diana to she a the in that, it with turn So financials detail. and can cover

Diana Diaz

Thank you, David.

essentially quarter of was XX%, revenue compared gross in gross XXXX year, margin margin with as for decreased to million fiscal of the also $X.X $X.X quarter with year. to million SG&A XXXX. first consistent last same flat at first $X.X as $X.X of million XX% to period expense first XX% or the Our the of or last sales the of quarter of sales compared significantly in million

the cost we launched of an million. $XXX,XXX included operating in expenses $X.X Citiwaste. SG&A reported in first of adjusted quarter million acquisition the first quarter to initiatives that the Company The $XXX,XXX quarter savings the reflects second decrease first last income year the XXXX. of of $X.X The costs, was one-time last of operating fiscal fiscal of year related XXXX. of loss SG&A compared these $X of of quarter million The our in quarter Without impact about first of in in to about

compared the last to $X.XX this reported the a of last net related year We EBITDA achieved quarter quarter The and to $XXX,XXX same basic the quarter of diluted Citiwaste in or compared $X.X $XXX,XXX $X with breakeven in in year. loss of the of first EBITDA the million of million, one-time per acquisition. included of a company per of first income year expenses of or earnings of period diluted share, last this net as basic loss loss $XXX,XXX share year. first quarter, The and an

billings quarter Professional billings $X.X million. increased fiscal decreased the XX% billings healthcare market $X to first Home of of million of the due XXXX, for of the and $X.X revenue comparisons billings $X.X achieved inventory key million. to XX% million. timing the manufacturer to at X% Pharmaceutical build. company Looking customer million increased to $X.X

billing decline million. reflecting million XX% living retail one customer. billings Assisted billings XX% orders million, $X.X declined in a X% Government to loss to $X.X retail and increased of for increased to $X.X the billings flu-shot and related pharmacy

million. with and turn that, balance remains $X.X XXXX to of equivalents the with at cash I'll at call And XX, David. back solid Our capital sheet cash and million working $XX.X right over September

David Tusa

Thanks, Diana.

Let’s go ahead and open for questions please. up it

Operator

comes of line question the first Hewitt Hallum. of Our Instructions] Matt Craig from [Operator

Matt Hewitt

questions. our Good morning. Thank you for taking

in environmental onetime that is or sustainable the business, nature there? First was something growth there question, uptick regarding the in nice

David Tusa

some was one-time, There some sustainable growth.

hundred a You’ll probably time. thousand of thousand the a couple of see probably it in so one was hundred couple quarter, of December

Matt Hewitt

retail And could segment, wondering retail the provide I'm regarding what on customer. to if quarter looks then an last you obviously announced the large apples apples you a like you that lost segment had basis.

here, yea one that to from decline a So out look does customer period customer what year-ago ex look like if that you were at if for the we that QX go. the segment back the growth or

Diana Diaz

the by So just quarter?

Matt Hewitt

for here. Yeah QX

Diana Diaz

$XXX,XXX that quarter For under year. for just last one the accounted customer

Matt Hewitt

a issue Thank quarter, you. how up away about quarter just one DSO to is then will DSOs. be ticked timing in whirl you And should thinking that or from next bit able the little a me, last here be first that

Diana Diaz

I came in the of last think, related sales in, that to the it's month really quarter.

a on XX revenue, the one days. DSO so about month And was

a can you little quarter So last that maybe not than but see higher a lot.

Operator

your proceed question of Butler with from question. Please of Stifel. Brian the Our line comes next

Brian Butler

the the first Just just the touch first much one ’XX business quarter versus ‘XX. how on back, flu retail, in to was

Diana Diaz

quarter year year the first in was flu $X.X first versus The in quarter quarter. $XXX,XXX business this the last

Brian Butler

have this around a about much weak or because we in weaker second the last that a just seen quarter. you reverse quarter timing date that last is season issue And there you season time in at already that when that to think on the just year a is were and

David Tusa

goes a timing I bit look baseline weakness reach think roughly the The December it instance we like tough flu million the for have $X million its versus a market market up. the season can is the be this a last year, our about The orders XXX probably way for of unless product in flu was little or orders. what really this the at will a of a there's volatile of It related flu-related $X.X it’s and December. plus quarter in both, demand also quarter.

a Brian, probably and administered. unless X.X baseline, colder we So more with of shots an flu weather uptick being see

Brian Butler

high-single the side, digit it’s us about should but pharmaceutical quarter, of but it quarter LTM quarter growth, basis, is obviously volatile next color is And unknown. you on months, give still X%. down think to really next more that a we over how Can kind the it's XX even grower necessarily some or not then on

David Tusa

very months or and volatile of it's volatile, six because it's the a and it's predict. whether is it difficult, difficult Well, to year timing of you're for they very right, built bills

forward launch seen we're a to demand. the optimistic potential with We've manufacturers. where Going pharmaceutical new deals quite looking at we're

that would some what ‘XX. for opportunity we growth ’XX think have I level we of the year So show fiscal to have over in done

Brian Butler

that. growth X.X% something ’XX better than Because so in was

David Tusa

see Yeah unrealistic launched. being it's think deals to maybe I to with don't something new I closer think XX%,

But down, use we these has it up, patient is more they that count better The they The for drugs. than other with thing a expect would less backs; patient to particular mail something X%. do use counts of goes backs. lot to goes see mail

Brian Butler

mail Professional, some based base good or expense come something in that of on it you it decline. back there revenues, might causes you mail just color at is cannibalizing back. increases that if that looked give but XX% else route it the is growth Can have route there, like collection had like the looks

David Tusa

I’d business past you XX%. cannibalizing we is up were Strength group a lot tell are see our route saw unused for And in also bit quite fielding that medication a is what calls back quarter not the of market. which saw this It's the definitely with professional business, sales based unused inside we medication. the mail freight, the numbers with you what

into government, the markets they other some medication So than fall those unused into dollars living, so retail, assisted of professional. fall

cannibalization, the inquiries September there's really in happy the medication no were with quarter. just very So it's unused

Brian Butler

be you I historically something that it's professional much that So comfortable in are with mean XX% much or growth should higher. is faster. grown really

David Tusa

a rate should at than I has. No, XX% higher XX%. that I’m It comfortable it not and with grow think

out than we have throughout ’XX there XX%. think you'll I do see growth that And that. think to opportunities think the I I better

Brian Butler

it little up the And cost, bit year? a made this this through right good level, guys pace, the cost the quarter one X.X million SG&A like you at it tick or on is of on a the remainder savings, does the last then new just the seems progress

David Tusa

to I tick think probably going a bit, up It's quarter, little a XXX,XXX Diana? or XXX,XXX

Diana Diaz

right. That’s

David Tusa

be to marketing. going So XXX,XXX per that’s or focused and more XXX,XXX on and marketing, sales sales and just sales and quarter marketing,

we're hard control working and SG&A the our keep on same So to at marketing. time cost, spending sales but high

Brian Butler

million of X the the for kind a to pace maybe at the right look year? So is remainder quarter of

Diana Diaz

I think X.X about or X.X million. more

Operator

First Our question.. next your with Joe question of Instructions] [Operator from Munda Analysis. Please proceed the comes line of

Joe Munda

piggybacking question guess for off any growth in bit dynamics been expectation the the competitive I XX%. Brian's marketplace, about So in of seeing you're little a talking here, you've over professional

little as is Assisted as growth expected focus a as service was far that lower the think living I were and key well concerned. supposed bit two these to pickup was areas than on

offer any some competitive to curious the would appreciated. commentary on seeing competitors similar that still value the the offering, greatly savings just that Thank there of end, in or you are you’re there some growth marketplace you. be is similar I’m your are your stunting able is So prop dynamics

David Tusa

market higher. business any that's seen route-based We as the question, growth Sure And focused assisted dynamic see it guest, a the Joe. same market. marketplace. in be really change and is on yes, professional living in now professional the We haven’t the in the primarily the great should

the prospects to think will real we through savings we be in ’XX, higher but the to it and go changes we're past. have as that still out the there no provide I able of type

Joe Munda

this us I'm their as hopped far one, a contribution and some of I what And acquisitions give there. the I'm their were split revenues for other maybe and or blanking contribution the concern call missed revenues you us quarter. that this, on way contributions as can were Is Alpha but the Bio/Med sense sorry, late, what from there any I then on out from

David Tusa

Citiwaste.

Joe Munda

Citiwaste. sorry. I'm Yeah, Yeah.

David Tusa

the the majority that It’s revenue in of it’s of that, majority route-based…

Diana Diaz

July from were in last they Joe, our year operations X.

So it’s the organic on. there that brought all business that revenue, time is no we acquired from growth

Joe Munda

route-based I or a a you understand, using to pick third-party acquisitions, I mean - correct, prior but that were provider up. acquisition those

David Tusa

The vast numbers up number. in those We those the are relatively of the a or to were attributable majority in pick what that’s route-based but acquisitions. small growth you see numbers

Operator

portion conference. time over I at for to the to There are like would of audio no management questions back now the over remarks. this further conference turn the closing

David Tusa

you support, to forward with everyone Thank your quarter. Thank continuous look Everyone speaking you. we great a have you for next day.

Operator

you conference. Thank concludes today's your for This participation.

You time, rest your may this have of disconnect at day. a lines your wonderful

Sharps Compliance (SMED) 25 Oct 172018 Q1 Earnings call transcript