SMED - Earnings call transcript Q2 2019

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Operator

Good day ladies and gentlemen and welcome to your Sharps Compliance Second Quarter 2019 Earnings Call. All lines have been placed on a listen-only mode and the floor will be open for questions and comments following the presentation. [Operator Instructions] At this time, it is my pleasure to turn the floor over to your host, John Nesbett. Sir, the floor is yours.

John Nesbett

Good morning, and welcome to the Sharps Compliance second quarter fiscal 2019 earnings call.

we Officer; Tusa, President and Financial today, and Company's and call Officer. Executive Chief Diana the have the David President Chief On Diaz, Vice and performance, review and Company's will review business David growth financials. the strategies, Diana will the operations we formal call take questions Immediately participants. remarks, from following will their our

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

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

David Tusa

in of a The builds. year share or $XXX,XXX fiscal year by EBITDA billings million inventory of for lower as operating Sharps that million significant per are in good due compared $XXX,XXX and primary quarter waste the billings. quarter record to compares million Revenue medical income offset fiscal second partially believe offerings. timing income prior XXXX success quarter morning, Welcome John, $X.XX three revenue the improvement reflected our of increased quarter reported increased This We of our in same to $XX.X management the Thanks, quarter. unused orders year $X.X flu shot-related pick-up to to $XXX,XXX of the the prior quarter quarter, income market was Pharma about about prior value was growth of medical the driven quarter our in net the $XX.X of waste primarily call. strong the and share in XXXX, $XXX,XXX of three, was the second XX% solutions. operating quarter our million. earnings second This retail services; Company in year the in of our year second The One, our second solution the $X.XX XXXX conference second route-based to second to per reflects of fiscal the everyone. to by compared result basic or in medication compared quarter. $X.X in two, for year. $XXX,XXX XXXX. mailbacks; traditional second promoting Manufacturers

achieved strengthening we these growth healthcare position all in offerings, and a quarter, second markets. solutions solution the further to as of During comprehensive retail our provider leadership

market. and single-use of seasonal our unused professional few Additionally, a revenue add our and of as route-based we by in to recycling pick-up offerings last unpredictable revenue reflected the solutions our as strategic to business, in to well second minimize the billings years. line or the of in decision the medication made as over service a order is device impact contributed in Mailbacks new $XXX,XXX system solution quarter our In

abuse across growing population. retailers United route-based System Recovery now TakeAway occurring the for offering continues the prescription pick-up work of the XX% accidental unused intensify Envelopes, our XX of approximately States. in to solutions epidemic and healthcare and Medication the U.S. Furthermore, Our as operates MedSafe poisonings including address reaching to providers communities, states, medication drug demand and

MedSafe MedSafe, liners. collection of processed the now we to over XX,XXX subsequent MedSafe about with related Specifically units, installed we X,XXX have our

play excited the We're available a are opioid comprehensive the the our national disposal in committed to to role X,XXX a X,XXX fight year position, medications two solutions the as in units XXX about positioning cost-effective ago compares proper to start Through collection our Company leadership receptacles and off solid the used two effort quarters solutions year making substances ago. strategic growth, controlled crisis including increasing of assisting of convenient Now, fiscal years continued to of the provider. by manner. a with and we

for offerings training providing We management our the through TakeAway ultimate use to pricing. momentum United service, we've evolving unused could significant new Likewise, Medication this customer And We opportunity. of our and Recovery high Envelopes. for single in seen recording Recycle leader TakeAway quality two our and differentiate customized the solutions reasonable regulatory web-based System tools, MedSafe believe devices represent proper continuing focused and believe terms a from responsive the a as by offerings, continue we offering. States the recycling contract user we're and we're and on medication System the

to balance fiscal through to position. Diana. revenue of opportunities we're improve it growth XXXX, leadership improve to forward we move turn over to new continue look year well-positioned with that, leveraging add We believe we I'll And the and As customers, additional to track profitability. our

Diana Diaz

Thank you, David.

increased to orders. of fiscal to $XX.X second million by offset lower partially due increase compared inventory of million our was revenue by This $X.X mentioned the quarter increase with flu a Manufacturer the primarily XX.X% the builds. business second to increase $XX.X of in related David, year As to billings as quarter timing million in Pharma XXXX last shot-related

and or continue long-term year. same our million With second of we reported double XXXX, as necessary revenue year XX% second act in quarter fiscal marketing the not the With is for our growth. quarter profitability, to more prior that revenue in drove and second dollars. operating quarter the margin in to for rate. of income Company Our increase an gross revenue over operating on only XX% million of SG&A margin marketing $XXX,XXX $X.X quarter balancing the the controllable of or the the revenue improvement of our also overall an quarter closely continued manage on in a compared their increased than of reported of from last of XX% average second the revenue XXXX for is sales second $XXX,XXX. fiscal gross the improved SG&A of quarter it’s quarter XX% million year acquired $X.XX focus quarter, year of revenue than the for or this generated some It’s XXXX, SG&A that share. XX% the increased higher based income sales pre-acquisition of businesses, fiscal expense of growth, $X.X of had as $X last to believe quarter, last quarterly run costs. ongoing route-based net $XXX,XXX. recorded a compared investment to which year quarter. than than million pick-up we in company year’s the higher $X.XX revenue in income last diluted of investments EBITDA this second $X.X We The EBITDA second is higher of to of year, in Sharps and $XXX,XXX share $XXX,XXX basic which second this quarter or is in per prior

Pharmaceutical year inventory to Government billings million. billings of Flu increased to Manufacturer at quarter XX% and Looking the billings Professional million, for immunization-related of million. due market the $XXX,XXX, billings customer increased and comparisons increased billings prior the respectively. primarily $X.X the and of key for of immunization-related to we $XX.X orders XX% XXXX, fiscal $X.X million to $XXX,XXX second were and achieved million $XX.X million. decreased to quarter timing flu builds. billings $X.X $X.X and revenue XX% XX% Retail included

the solutions over XX% and increased customer second the quarter year. our For represented mailback prior XXXX, of fiscal billings of XX%

of billings same billings solution our prior pick-up and medication XX% the XX% prior customer unused was year. customer route-based For finally, over XX% was the period, of X% and the the grew over grew And year.

the year. $X.X primarily XX%. On higher comments which million was markets, now targets fiscal the government flu $X.X which inside This to about flu few in as achieved more in in sales administered and flu the trailing the billings increase the compared Our were retail quarter adults online than of XXXX in professional more flu per the million. sector versus XX% of channel, A XXXX, the retail over XX, business. increase ended XX-month December million more XXXX a $X.X and basis shots well XXXX, of and a shot is second of CDC prior by XXXX prior receiving in clinic driven as amount orders immunization-related

to million. Manufacturer inventory builds. $X.X for to XX% of increased $X.X at customer XX% million million billings XXXX, due Looking billings Pharmaceutical million. increased and flat billings increased $X.X fiscal X% $XX.X to timing revenue Retail comparisons the $XX.X decreased the were care months essentially million. X% Professional to at $X.X first XX% six key market billings Home million. to the of to increased health billings

fiscal billings XXXX Assisted Pharma will to increased $X.X flat billings Manufacturer government $X.X to believe and of the compared the when million increased be With fiscal billings, we market living relatively slightly $X.X XX% XXXX the respect to billings million. to million. pharma billings

impact in the in builds their have programs half programs the do pharma new fiscal reoccur for to significant XXXX inventory we is significant offset launching While in XXXX, which pharma a size. by XXXX, due larger fiscal did fiscal not of first

XX% XXXX, six and increase year. solutions customer mailback represented For the of the first over of months prior billings fiscal XX% our

period, medications billings XX% of of route-based over our billings same was year. to the channel ‘XX, customer a of the the For first the sales pick-up the billings XX% our and inside was and period, And XX% in customer over increase prior And year-to-date the compared online for XX% unused year. grew half in year. and prior achieved fiscal grew prior the XX%

$X.XX first of six year-to-date and increased year $X.XX was the was in to which is the net XXXX half first XXXX share half was SG&A of XXXX. months XXXX fiscal $XXX,XXX a last million $X Our fiscal of months for or $XXX,XXX, in gross first first XX.X%, net an the improvement to of income per share margin XX.X%. the six over X% or of first income compared

sheet XXXX the of capital at the at million solid million $X.X end December remains balance with was XX, of and cash $XX.X quarter. Our working

David about business. I'll continue call grow prospects we remain marketing key and focused turn for as David. to the And the that, we're back as our with to on As fiscal in the needed XXXX mentioned, invest and sales to streams revenue over excited

David Tusa

open Operator, the we're for up it Thank you, Q&A. Diana. ready to

Operator

Absolutely. floor for from open gentlemen, the question question. comes first from Instructions] now Rabover And Peter questions. [Operator Capital. Ladies is state and RCO your Please our

Peter Rabover

[technical quarter. nice on a difficulty] but guys. Congratulations actually fine. Hey, that’s It’s

[technical difficulty] medicine how signed hazardous to difficulty] [technical curious So, anything give I [technical and I difficulty] there us that rule, able just guys I’m color can disposal you new you et about any guess rule is respect waste December -- of waste [technical with and awesome? hazardous cetera, [technical into guess, to and fit EPA was and whether be in difficulty] difficulty] a would

David Tusa

Okay.

I your I think, understood question.

and cutting out. were in You

dispensed. using this we ultimate may It's medications that we what's medication but rules. everything me at new driven unused of a But it say do First applies and under that, we're facilities cabinet user. right studying unused are be we're of EPA these go by consumer all, And see called we medications now, to if about Ultimate may lot rules different medicine process user that to your the outside is Vast you unused. opportunity. internally majority for rules, rules. drugs there themselves. that looking in of that We're EPA studying let fall an looks And are have is medication. that, treat those we those

Peter Rabover

your in guess what Is labeled, medicine? I incinerator able of hazardous Okay. terms EPA take, to now waste

David Tusa

transport stream Hazardous do hazardous that. a waste medical waste, from of Hazardous waste use stream. waste parties is third different No. different and from for different waste, We a waste material. different pharma it. the is destruction We is

and have hazardous of ultimate existing can have transportation largest offering, already haz the we and we we customer, we the waste transportation to if the waste customer, added use to third-party customers, and way one we is the for and But, waste. incinerator facilitate it’s would that just medical our our do we that a instance, provide the that So, a can destruction. offering for

Peter Rabover

would What difficulty]. incinerator your take for be it able [technical to

David Tusa

You I out, were you… but cutting think

Peter Rabover

to hazardous it would labeled What take waste? as take for your Sorry. being able be incinerator to

David Tusa

it's we -- animal different than just different a totally what It's a totally process.

capability difficult very pharma incinerators waste we're use expand waste we're very, about we the dispose serve the pharma going trying and X% And are of going and the a of very, work the off; perform hazardous best. to three what into have very them But, that good do waste, waste that We markets with to talk do instead that. customers. medical -- great we third-party resources stay service or want waste. we than incineration haz two focused on medical waste huge, we a and haz look it devoting markets we to we with focused or of on You of we're We're on less waste. third-parties. and And for our department, service the can incineration, to complementary then that very, best in stay to all penetrated we'll to the our with

Peter Rabover

you Okay. sounds for many how very Could installed? -- ultimate for maybe the seeing how that trends metrics, the to for kind think waste color. Thank difficulty] like, per market some installed many exciting. I there guess, you do installed what [Technical liners us give what's And -- be of there? -- things is per are? these you're you

David Tusa

long-term be pharmacy upto to collection And in and service care, the retail we receptacles collection out are Pharmacy X,XXX there pharmacy, all and rules about long-term law those the that facilities markets. Well, industries license right used. that the receptacles of in enforcement, drug now, five treatment and marketplace. -- DEA under hospital, can we’re in is

returned X,XXX out of XX,XXX. We’ve liners have about so far there. We

And some may some may two once of the return markets, markets, of months. once return the liner every month; a they

say, liner of I’d on will from So, base receptacle. somewhere come installed between collection in a a back one average, -- that, one months back about that two liner probably every comes between an a

think about still out of penetration couple there’s But in Your only good probably market And think the a reports are really there. opportunity, for we’re leader on and market. the market, X% that rate country. the the is I the This it’s think is we still this a our question in one. based in again study been GAO that we new

So, we just beginning. is is really this just that this and think new

could excited unused we’re market. very in and be the leader be about ultimately we’re significant excited because We’re medication, this a to think excited that market, really that we

So, we’ve it’s If what X% then a is than you could much numbers the the do the in so larger numbers. opportunity penetrated, industry seen itself far.

Peter Rabover

just for it the about [Technical Company equal is difficulty] split?

David Tusa

can’t We sorry. question. am I that understand

Peter Rabover

difficulty]. [Technical

Diana Diaz

you’re We can’t understand any saying. of words that the

David Tusa

It’s gabbling. very

Peter Rabover

all better? at Is

David Tusa

A little bit.

Peter Rabover

[technical question difficulty] difficulty]. is Okay. it [technical My pick-up, based or liner, mail the

David Tusa

the to call we use. on trucking what customer carrier, that kind model is schedule that It’s like common waiting the dedicated It’s common because convenient driver that’s is a And liner. up most of for a via the return not carrier. we we think the UPS. inner model And pick

With the that to they a shut not we receptacle we carrier marketplace have can the to are that’s same they be day stay that UPS, use But the full and can therefore use and be the of down. common pushed our model see and collection liners up most operable facility. the the to that’s efficient in transport

Operator

question our Please from And you. Thank from Kevin next Steinke comes your state question. Barrington Research.

Kevin Steinke

talked recycle TakeAway bit. the system about a you So, little

had revenue to $XXX,XXX You that. of about related

and marketplace around seems little you're It So, offering, about there? more demand be can bit in talk newer that like a continues there terms pipeline of you there? some optimism the maybe to the what seeing in

David Tusa

great a That's Sure. question.

reprocessing which healthcare is years. said that manufacturers device us And it industry traditional device, devices came back to use or to couple of us system, on And not the they process wanted working did something a of autoclaving, continue of single remember, We into to do came the cleaning that of single and and been cautiously it, to then be the want it's a and do the we've if they optimistic. this you to less. use sending

people is had a the four with them working center. itself, we move hospital on the into been or they the use or and bit they with sales manufacturers. we've that So, device that system it and five And with little surgery customization idea single then and work the of

XXX,XXX a we're deal guaranteed minimum been that on is of far part and was well. one signed, hit that we which server others so that We But, that. the few the have has purchases, have as working

they hospital through our by back to that system, collection sent recycle these these systems to And we're down forth. stainless It's not come then system, goes recycling to it's individual a broken steel use country. the steel back in what where sent is the way device in manufacturers, to And our to the so being put doing to different components streams. take our they're back it's So, in a battery across devices, single brought sense on pilots and so plan. the recycler battery they're true cleaned and solution the Stainless goes their and recycling appropriate health care. them recycler; and

we've well-recognized So, and lot seen device manufacturers. the on a interest of with we’re working names

regarding have driving and over in calendar that concern play we're hospital idea. that'll the probably infections reducing very is So, next initiatives But, important setting. in the we’ll -- devices the is manufacturers device potentially over better out sustainability excited to what's infection the the is health a well. setting, And setting health that XXXX it. I think hospital about be the may as from care concern increased And care reused a recycling driving of while device the reducing

So, very Hopefully, manufacturers ‘XX. continue Between or to have on I news we different pleased, to far, calendar But systems XX we the about, we've have we'll over across the work very, pilots say know, with we pilots. right so now. country about have been more work XX that. XX different we with, XX probably hospital different probably don't

Kevin Steinke

revenue from still further? be quarter potentially but in that is the kind would the coming system, up relationship in $XXX,XXX that’s the as generated TakeAway or could recycle phase you -- the from So, characterize solidified pilot of of a ramp that

David Tusa

No. program. a out. pilot out into That That of a rolled rolled real was was

to customers with manufacturer, one pilot guaranteed but is that like but this customers is customer roll-out a one provide and to they from going what a my I device a a program can it theirs, minimum so, of that's they want the of of hospital manufacturer, And -- what we're have device is doing about customer, whatever purchases. their, we

Kevin Steinke

Okay.

got Okay, Great. it.

I the there? Okay. to one-time ask anything there wanted gross strong. obviously just The margin. revenue If about in were levels is

of they the you see target to quarters, Is gross trying margins in maybe gross I low margin. mid-XX% just to gross at what in that think the potentially future in higher factored kind have these revenue might there margin levels quarter?

Diana Diaz

have did as in quarter; unusual any came items We this expected. they not

David Tusa

before. believe it’s infrastructure years we the over as pretty to leverage that Company in the level because that couple the we're Kevin, gross operating as as far that -- to the invested route-based business and last continue said support investment. the we have at margin to some significant as well We've excited just plants, that of we of

in we improvement should operating So, higher revenue. gross the increased see level revenue, both margin the and with

Kevin Steinke

got Okay, it. Yes.

a talked it be Okay. from That's clinic market, shots data But, that I the there retail pause the at overall? bit could them I a was that more strong last me flu flu a reignited about the do you in here, retail what you're I of think a that you helpful. growth. retail of that being And is it's clinic the setting. your think do you I bit quarter customers, maybe what's mean, maybe mean, and mean, season as you of clinic indicating you from it'll that seems in advertising administered kind I a or and mentioned mean, to look continue? pretty think view more. trend hearing season, little that's market

David Tusa

talk markets. We’ll the look second flu back at about a to

cold has been what about weak And on last million been from years, and it’s side the of years. weather year, a was the flu million. and in is before lot been the this different million really that year shots. not delaying couple in late year what versus was of shot it's we the understand getting or revenue This it's the year, a flu revenue shots and $X.X of couple been $X.X we which weaker Over over last the hitting have flu people in about had weak; northeast in about past $X attributable to this

make XX%. in flu And and to administered. see we if remember shots. there's way million XX% she of not them flu But, that’s I that two now flu continued the but Diana can't more could the upon only going or XX% what's of -- were for setting of $X.X don’t the sees, and a administration over $X shots, setting getting seasons. that what year and was and I'm adults more to flu I more could based and say any trying be a So, assuming guarantees, weak shots what being it on the what said. adults, now And flu happen, administered is, normalized hope retail what it we in think of seasons the million, season, we retail prior potentially but their

bit on million prior the we love or something flu That’s we prediction. that but it, the before we million that this than were it is take representative strong of have not $X something have closer than hopeful So, in and had the the a and weak, our two $X business, a this it’s is revenue a years. million It’s hate wrong see. been see just been -- we while year. to season normalized what And we on we're $X.X flu more pleased to over

Kevin Steinke

commentary. And jump helpful back queue. taking That’s I’ll it. Thanks my Okay. questions. into appreciate I for

Operator

Butler And Thank Brian our from question you. your Stifel. Please state from question. next comes

Brian Butler

for questions. morning. you Thank Good taking my

David Tusa

you are How doing? morning. Good

Brian Butler

Good.

quarter, a I get second that the little answers on the didn’t circle look Just growth? the quarter second lot is should about penetration, medication, as versus you how the to we you into almost business, quarter-to-quarter? going far Is this like the it is because kind XX%. back from be like the volatility color at to give market? are be growth think Can unused some we first of from only so mature X% far only going it that in a this on to steady we quarter first well long-term flu it’s being X.X% settled mature how how growth volatility penetration. But, as about here I should think this can of mean, When was in we this or of and sounds question.

David Tusa

stand the medication. back unused the on let’s let’s and at look numbers again, Well,

call $X in So, we XXXX. did million, about fiscal related medications revenue year year to last year in $X.X XXXX, unused fiscal million it

June portion March primarily significant in was them the in March quarters; is rollout quarters June quarters out a year. our unused medications, with generated the to last and June because and for and of year Now, of -- March largest affects that customer the get they million want $X their

So, although we expect multiply year. not first March would only the you this in had X, but it’d times $X million June it’s of which you year, that lead reflect believe, is and the to we quarters. look rollout fiscal is like six true, to in But which if what orders doesn’t months the the flat for the it

affected So, March rollout about XXXX quarters for quarters last year. of year instance, $X that in were last June the million, a and for the

Diana Diaz

Correct.

David Tusa

And opportunity potentially we year. happen that this to think has the

a should you it heavy growth do fiscal have last this million more look growth in expect at the unused medications, June. expect more we this the the quarters it March be year June to think, yes, you within really year, fiscal trailing of XX But year. have I orders with of and So, $X this in to or on look at because we say over and

Brian Butler

Okay.

occur million included that it Again, seems again? will again improving occurring those be potentially $X going So, million going to I rollout rollouts -- is last if seen quarter this the year you and a or $X are not, they’re heard that correctly forward. growth of not like we’ve

David Tusa

the one roll roll again, to out So, to going only that’s customer, it’s it out is again $X including going million okay? this The rollout, year.

larger hit that quarters. really doesn’t the I’m $X and what million that So, should the our generated is the March June so be we’ve impacted, customers from impact orders saying it should far

Brian Butler

related flu on then, And Okay. business. the

X.X% true still of second being here? mean, kind for about number quarter season. talked possibly statement? has about a mean, should how historically, think very on Is low X% you annualized weak and Is that I based I third half guys bottom, it we been good You for quarter-to-date. that flu you're the a of seeing what to kind the is lower

David Tusa

give flu all, for first just one million, the what last the no quarter fiscal we've did Well, flu of in sure. was you is But the seen as earlier, of year million, saw I year fiscal we we and season, what mentioned $X.X year, quarter, as did knows about June $X $XXX,XXX the -- ‘XX. X.X we weak and that this to idea, orders, March in was in in in about an ‘XX,

So, estimate they're to last I'm had number year. if probably, little not to numbers more I year. type the for for be a going year. those this guess going are to this a that's I of of baseline what But, think bit

Brian Butler

already been support the on And or in gives the confidence with I or Do here? programs, or programs support $X.X that's can $X -- pharmaceutical have almost up. discussed then, at made be flat you have ‘XX patient of up gives million that to ramping in revenues half the the some mean what you're looking that you again, of the patient $X confidence? million you you million what that get of that need second kind year-over-year to

David Tusa

Right.

a one quarter last ordering of which had of pharmaceuticals Pharmaceutical the have of existing which quite I'm that’d coming we’re bit orders, huge year, of inventory, Manufacturer be a off build comparison quarter, new new in we negative now. the expansion ‘XX, inventory a the negative burning fiscal that it online programs was amount bit and that have in created the members December of we ‘XX a December We that the stocking comparison in Brian, year -- causes are Kevin, programs. and of we have things that coming, is, sorry, are

going So, to we're that orders receive not to in fiscal year related ‘XX customer.

new see on should based what be or last we're existing was launching programs for with pharma out overall year. we flat, But that from making that expansion we're relatively now, million delta that $X.X So, program. the we of right

Brian Butler

of costs seeing what then, might watching be your kind on side. there? And you kind trends third-party guys are inflationary that just of be cost outsized there Okay. as waste we that you to seeing maybe to need for any hazardous the such Are now, like,

David Tusa

of some the those that I been we’ll and concern. about costs, been drivers, Labor the a very think, side, plant the labor operations large have be have costs hit, on especially ones concerned is operators. bit

The a of total very, bit, gone really little impact third-party it total tiny haz our up cost, yes, doesn't very component costs. but it's cost, it's you a look still at that. our When

increases our bet to increases. price that. may look hit price pass we But, on at to we a continue the customers, cost, we labor bit So,

Brian Butler

have Okay. And last think for acquisition do one what and on update you guys second of then, a you Can little one. you kind of pipeline give XXXX? just opportunities half the the

David Tusa

stock, would few But to as well. key at there going parts look and that there's different helpful a think forward in to trend nice timing. to opportunities. to would of do little has look more grow. with the to back country. timing at. I'm We geographic bit of our direct acquisitions us currency be get do can make do country lot opportunities think of specific also we’re that we looking be that opportunity. expand footprint. pick-up A It to areas get with are to the that parts in have lot think will it We the in continue of of We A opportunities a that I more the would our not we

Brian Butler

right capital that's the it is it finding deals? or you And really is just back holding Okay.

David Tusa

the for acquisitions -- it's are In for It’s lot typically a has some opportunities be to business. owned much when probably at of a family higher it's We family them obviously These of there more a are again, be price. the too. sort stock really triggering try with just to currency the opportunistic. in cases, both. And event prudent The deployment. capital

does with to be it do of contact in when keep we opportunistic many them but you arrive. So, have

Operator

comes from question state your next John our Please question. Sturges And Oppenheimer. Instructions] from [Operator

John Sturges

Dave progression. That year-over-year my for call. a and taking nice Diana, was you thank

to looking it's I'm we’re obviously, do costs So, more. about single curious what profitable to big market? forward How the is I'm thing use Lot a Is are you to of going curious device. the the there other devices a think business? domain that? just become at way benchmark falling. profile. about The questions, point is

things these opposed your for as through the So, becomes and recycling to it easier in-house. probably sterilization greater dispose with devices service demand to

to market, are you these range provide general size helpful. just ambulatory, size, color of more the can I'm for of a devices? the the be arthroscopic So, they devices trying get like would customer are the Whatever feel

David Tusa

an works in spend money recycling can we And because prices it observation becomes down It's our devices a bit device. device it down, work more could come complicated the $X,XXX, opportunities in that $XX, mean, that or devices are coming fact actually a I favor made Sure. like on be more you as price. interesting something a about the possible. much be to

to us out you the We're think again, there's industry think I are help and So, -- ones in devices to through the that. metal used But problem. mean, reached solve of health that complicated that We see, care. pleased working one devices that that the these us; ones we're millions recycle. few others. that bit a got a we've working they a have about they more weren't the maybe on plastics, deal battery, we're Again, behind

really if be we similar what unused could if market it or through market, a it to off would be see waste it's something mean, have I a such takes and calendar ‘XX here. market, But we'll all for the big think medical if I medication.

we're use the prominent we're single some in well. prominent with So, names systems with working quite very device as hospital and optimistic and industry cautiously

So, before far, or quarters quite give it But, we us of more how so victory. claim couple goes we’ve kind a to encouraged. been few see

John Sturges

the of So, am that correct? from to Is in I I the you this as device am been is curious, a how offering product brought facility manufacturer. part understanding

David Tusa

correct. That’s

John Sturges

So, if what some it’s use face, liability simply handled? some -- the you’re isn’t after manufacturer and if of properly doing bad PR, the of may it isn’t is really that device handling

David Tusa

Right.

device doing that we’re the and is versus with them creating with autoclaved liability things eliminating working that for we’re helping otherwise be them by a differentiation go maybe other healthcare what system. But, manufacturers we��re their may also hospital helping yes, the is the we’re back reduce and of for The one device competitors. into

one And it. the other sustainability. there’s angles So, three or is two into sales different

we many out the were look of our is a lot And the recycling that customers you show and big certificates If they of issues. healthcare recycled result into of very pounds recycling system. and at how devices systems, are of produce the their what kept hospitals sustainability or of to

it’s it’s use -- whether single customer could what So, healthcare, by three it’s the it’s we’re sales then unused case, what something logistics medication; medical helping we getting waste, to we whether them. four well because in this do, and it we fit It’s which in their system devices. out or excited angles of properly disposing recycling use. reverse But, different that into as do

John Sturges

the mailback Now, route-based of program the or you these either program, have… part or do are

David Tusa

get systems systems -- the and seen this again efficient coming are when the And that’s UPS, drivers all back is we’ve the for for and UPS back us. waiting to everyday, facility. they a full, is are to most to way the these pick them and up return Again, This transported is UPS. our pick-up, container what

John Sturges

mean am but am a can you I some on curious, carry of risk your side? actually disease the Sharps I these liability recycling, incinerate are you -- assuming curious I I handling some think I part. your handling at just am these require devices, those, whereas just certain how you’re so on just

David Tusa

Well, the autoclaved. don’t the single use they standard as incineration. well as medical into go That’s -- are and waste industry for the devices

put the them the So, fully use handled devices. thing before sure through make sent single process a or do to decontaminated with we to the stream. it’s autoclave same otherwise that being We recycling

John Sturges

a have the hospitals just might curious, at picking few doctors And offices, et dealing assume a you the larger there you’re clinics, you’re also right ambulatory -- are cetera. now quite time it. business, same where which I Sharps benefit Got also but possibly with up

a… size overall and of the you curious, the do have just am I market, So,

David Tusa

of and the it we’ve size a unused We’ve the at or market the And be calculated opportunity. looked similar market again, What’s medication. huge would waste for it. medical it for we for It’s the is to us exciting a think multiple single on setting. the of setting healthcare single within to times devices use standard I devices. be we healthcare the It’s -- can recycle kind new in the about use a mean, use forefront of establishing

So, of healthcare single And use. part we’ll about be we're that excited making the single being in setting. what use truly that's device

John Sturges

looking FDA like, you're it work? doing establishing sounds you be with So, of standards, at that some the might

David Tusa

it, and marketplace. so them to with manufacturers And and into -- we're leave good. the with the far some get working device working of it’s the just systems the so major I'll out

John Sturges

standard they're the set? So, the of getting handling liability

David Tusa

I'll leave it just at that.

John Sturges

Very the I'll Thank back you. queue. good. in Okay. go

David Tusa

All Okay. right. Thanks, John.

Operator

Excellent. Thank you. I back will closing to for now floor turn management over remarks. the

David Tusa

Right. Thanks. our to Have to Thank day. a you We you, next appreciate Thank you forward it. We everyone for look today. call quarter. great talking participating Karen. in

Operator

and today's does for your you We conclude teleconference. gentlemen, Ladies you. Thank this thank participation.

You may great lines day. have this a at disconnect time your and and safe

Sharps Compliance (SMED) 23 Jan 192019 Q2 Earnings call transcript