SMED - Earnings call transcript Q2 2020

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Operator

Greetings, and welcome to the Sharps Compliance Second Quarter 2020 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host Ms. Jen Belodeau, Investor Relations for Sharps Compliance. Thank you, you may begin.

Jen Belodeau

you. Thank welcome Compliance and XXXX quarter the earnings. to morning second Sharps fiscal Good

today P. Vice have and the we On call David Financial Officer; Diana Chief Chief and Tusa, P. and Diaz, President Officer. Executive President Company's

will our growth while and call Immediately their participants. Diana performance, will we financials. strategies, formal the the remarks, business review take David review following operations company's will questions from

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

the turn So that Go the let David. David. to as ahead, with over call way, me

David Tusa

Good Jen. quarter earnings you, XXXX year morning call. second everyone to fiscal conference and our welcome Thank

of also Our $X.XX to share $XX.X to margins gross compares second billings the for momentum quarter year per results share continue of and respectively. growth strong record our periods. of to corresponding $X.XX This prior enhanced a increased of year fiscal and profitability. EPS revenue revenue - quarter The million, for generated $X.XX year record fiscal to-date the company per With million $XX.X revenue of in the of XXXX. second start the XX% customer

direct offerings. of from fiscal the to solution the growth generated our quarters company's strong provider in markets waste profitability solution related to is and a comprehensive the business mailback medical in retail believe transformation flu last only a fiscal We healthcare improved multiple successful - with three result company a and

markets, and Manufacturer, strong The driven Home by second following were Professional. quarter in billings the Pharmaceutical the growth Healthcare customer

across offer each base key driven solution growth mailback and management, for substantial delivered used the manufacturer strong by of the primarily three billing. with growth offerings also We traditional route medication mailback our pharmaceutical the and quarter

believe this only expand by When related very evidenced business that the fact flu and you business from the important billings, it's Now a is exclude I following. the we've to flu diversified

customers XX% billings XX% increase fiscal XX and periods. year the for and XX%, quarter second month to-date trailing

predictable of reflective and strategy is MedSafe, such markets a generate with as businesses, pharmaceutical manufacturer revenue our our growth related route-based flu the This more outside mailback strong and to focus business. on of recurring increasing and

go the will on more Now in growth a into Diane the later by the detail bit individual presentation. markets

quarter. ago, years solution our mailback So and grew we XX% as route-based route-based the expanding second from more to revenue. want predictable and we because a establish to presence business recurring, consolidated standpoint, offering a If in a compliment our began the few

significant to Our in increase market. allows waste, of the medical in route-based business. for medium for and the believe larger services related marketplace need route-based a the a and also continued also footprint allows We It opportunity to volumes fill us us the generator address there's quantity facilities. small to growth

continue the period. and quarter to which We demand medication unused for the for fiscal see year solutions, grew XX% XX% strong our in to-date

represents user quarter leader billings second the overall business, and Our include this envelops. in unused which the the believe solutions We management MedSafe XXXX. XX% segment we're patient in medication our the of medication system the takeaway ultimate recovery of dispense in

unused facilities. collection At drug retail, receptacles well XXXX of as treatment, base pharmacies, medications for XXXX enforcement and XX, MedSafe we installed hospital have care, December long in as an term law

of To processed in have lines we XX,XXX. perspective, installed collection and returned had over have put XX,XXX in liners. receptacles customers XXXX ago return inner that a Our we and year

year XXXX, crisis fiscal disposal As this half we prevention hopefully unused through move the as continued of and help and we to strong including address solve growth solution medication, opioid industry for anticipate substances. of proper we second the control

Our quarter, to programs. positively was timing compared year bills by to manufacturer Any mailback inventory pharmaceutical purchases. solutions these flu patients customer the mailback decreases were partially per offset the Recycle the orders business was and Growth for to impacted prior of X grew Takeaway the year in XX% sales for by compared prior System. related due

facilitate orders XXX,XXX recycling this as anticipated, the devices. for December made System, used same our with medical year. to is had designed System quarter progress Recycle Takeaway solid Recycle we the the a over Into in compared $XXX,XXX XXXX of We of in prior which quarter Takeaway single to little quarter

to create continue a excited System and number growth intent Recycle believe of term year the over offerings. positively awareness working and to its Takeaway solution by XXXX. company demand very on remain the strong we impact we which sustainable We and the on revenue recent are see We're prospects, calendar are for could experiencing the success we the longer the significant of we recurring and as driving energize

service, new be very We who customers. where believe for onboarding alternatives well that regulatory looking find which attract current greatly focused terms are our to markets support, business we reasonable are opportunity believe as provider. new securing important customers and in on We to are and there's underserved, as focus contract on we responsiveness, particularly a elements to significant customer their

with more to before closing we to few that, the turn afterwards, So it want a up section then cover over open I the Diana. detail. in for the And comments make bit let's a Diana call financial Q&A. to

Diana Diaz

Thank you, David.

million of billings as the fiscal fiscal XXXX of and compared to compared to in X% of fiscal sequentially by total and second compared billings XX% XX% quarter of increased increased XXXX, the of contributed million, revenue Route-based quarter quarter first $X.X pick XXXX. year quarter XXXX fiscal $XX.X to for for million up prior second up the $X.X are the quarter quarter. million to XX% in the Second $XX.X

of the quarter. are $X.X compared year and million of billings total medication contributed prior for up the to unused billings XX% Our XX% quarter

Our total quarter. this are mailback million XX% $X.X contributed year million up in of for prior compared to billings the $X.X XX% quarter, and billings of

medication $X the in our increase $XXX,XXX to with our to Medication related million related unused Medicaid billings, of program Recovery Of was the Takeaway System the increase remainder about Envelopes.

investments in compared the XX% and The prior the increase to SG&A year SG&A the of increases quarter XXXX to continued of in sales gross fiscal Margin $X as in Gross and the prior to compared million XX.X% compared revenue last quarter of $X.X to improved marketing second XX.X% second in to in quarter expense fees. XX% of second same margin is XX% increased SG&A in the million year. or of professional revenue for related quarter. to or quarter

than in Looking X% to as period the we've forward, growth. XXXX. more to increase XX% to this we're momentum in annual revenue SG&A marketing first, of to additional for past. XX% X% sales the we SG&A are follows; expect investing fiscal in is the The for into fiscal earnings higher over the This experienced continue XXXX reasons expense growth the increase and

increased Second, and finally, opportunities to confident on recurring earnings corresponding see revenue is significant increase And pipeline we in because ability more of the than more the of return closure. and in ever the forecasted visibility, full to SG&A. and accelerate our want the we're

net compared second the in second in $X.XX second We in to $X.XX $X.X EBITDA and income the of XXX,XXX income quarter income XXX,XXX quarter period of million basic of or net of XXXX, diluted XXXX this operating diluted reported or quarter per XXXX. compared second $X company of million recorded and same almost quarter of recorded in in company the income million the share $X.X of million fiscal compared last to operating as to of of quarter $X.X The per The year. the a share EBITDA XXXX. basic of over just

Currently XXX% adherence. could we XX% let manufacturers. and customers our to we quarter a manufacturer programs pharma fiscal touch period. which the in with have manufacturer points on some the additional start actionable XX details pharmaceutical provide Now additional market-by-market data designed growth I'll basis. their saw lead the programs with quarter and year-to-date to a where me provide for pharma create segment help around patients, with improve drug These are XX of

during several for billings the significantly, to new program support and contributed growing inventory adding patient mailback We strengthen programs which quarter, saw is second bills support strong quarter. particular drugs in injectable One significant the for self billings. the the to existing programs patient contributed which

And our drugs patient more field on new focused into introduced home efforts self are sales are more as very support and marketplace injectibles. the opportunities,

quarter. Our Retail flat million at the $X.X essentially segment for was

for experienced prior we recall flu quarter which may you strong quarter. the over the by $X.X September million orders increased very year As XXXX

billings For $XXX,XXX increase which the December retail in market. by flu-related XXXX billings ended quarter offset an by were medication XX, to the second unused decreased

in by December XXXX measure on we strong flu Of basis flu-related note the the were demonstrated XX calendar overall XX, trailing XX%. for increase orders orders as ended months very season which for XXXX a year up an

Our billings These the Home with for primarily major healthcare the Healthcare quarter year-to-date growth are segment of XX% expanded period. distributor. achieved and increases by second relationship fiscal the XX% driven in

which traditionally experienced encouraged We in low this mid growth. has single-digit are by growth the market, to

and Professional market pickup surgery veterinarians driven cost-effective waste billings small physicians, Recovery providers. other centers, medium addressing by is services. the our includes organic healthcare in quantity of We've clinics, generator grew XX% and That growth the market. route-based segment through easy-to-use to this Sharps a System, combination dentists, and

and by small the current fiscal second working quantity probably an on services a professional to provider. the to market The prospects sector channel medium compared We're the billing which online for country. quarter looking increased to in focus heavy underserved the in sales year. to prior inside generator in awareness and XX% of places the diligently market, the believe XXXX, professional We increase the their of our is most alternative

increased timing the billings of $X.X million. increased XX% pharmaceutical to were Professional million. increased to manufacturer government million, for of XX% comparisons increased essentially six unchanged and million $XX.X to to retail months $X.X $X.X increased XX% $X.X billings XXXX, key inventory $X.X revenue related the and buildings to XX% at to XX% market living million, home for XX% customer healthcare to at looking $X.X billings billings million, Now customers, several to grew assisted million, first builds fiscal $XX.X billings increased billings XX% million

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

prior online XX% same year, XX% medications prior period our the grew customer on and as to year. customer unused the the for the our grew a professional achieved XX% was before focused over For and mentioned The of billings compared of is of over I sales pickup and billings XX% was billings first route-based XXXX year. in last market half XX% increase inside fiscal heavily which and channel the

expect fiscal the SG&A $X.X XXXX. And margin XXXX XX% fiscal of I XX.X% on year-to-date months six we XX.X%. million marketing mentioned of gross related year Fiscal before, the of year increase to and expenditures. to over first to of SG&A XXXX in prior reflect year, an of increase as the the XXXX was increased XX% fiscal first improvement as an half spending full for over XX% we expense sales

million diluted share Net and $X.XX income and XXXX fiscal $X.XX compared in $XXX,XXX basic six of to the of half basic in weighted per first was or or first the year. diluted of income per share months $X.X last net

solid sheet Our in remained cash million. $X.X $XX.X balance of XXXX, December working at with and XX capital million

over I'll to turn David. back call Now the

David Tusa

Diana. Thanks

fiscal over XX have organic we I Q&A. soon road route-based want be of has of to business into expansion. strategic business a years from and states to to about the trucks Four in trailing turn X.X we This XXXX with before and via customer acquisition made points XX XX-month states XX% a key million move customers grown to we over year in servicing Today billings representing of the the leave for in current the on line to the call decision XX,XXX too ago, million XX XX country. everyone period. few

grow collection its first The is facilities. DEA which substances. receptacle and offering control the care allow We receptacle a system serve excellent rules our compliant destroy launch liner and an to company transport fit customer we’re retail In DEA for pharmacies, have we dispense pharmacies, our DEA the rules service and to collection the route-based opportunity changed long-term believe under unused and believe we the significantly. base, patient including to collect, operating hospitals, business to to design XXXX, medications, and late

our becoming is also solution a to industry name, When weak the coupled not the leading MedSafe by The industry our believe be in evidence it's to only standard but position. great the as million leadership We versus DEA TakeAway rules XXXX Medication X.X Envelopes over other unused System in million management XX months Recovery in X.X and the medication trailing generated year solutions. changed. fiscal when revenue with over

crisis. this getting to tremendous integral pioneered potential years of grow program. solve We and support business manufacturers while believe an especially with see pharmaceutical to XX of line we the to started opioid solution Mailback we're just significantly this be we helping business ago, patient About part

designed to improve a create the for manufacturer. as are well systems for increase Our touchpoints the as experience home patient branding patients, self-injecting opportunity

Additionally, our valuable programs compliance drug data to designed adherence. provide compliance improve and

leader trailing million revenue XX-month customer the more over X in continues drugs in the this with – marketplace. home for to We’re almost generating the pipeline self-injectable billings. in more business to build as and The new are introduced programs period,

I solely flu-related agree of variety that with you'll So, our is think solutions not driven a that, company provide with we by business.

generate trailing XX% and for impact XX-month flu-related respectively. the second business, in route-based I the revenue billings as a earlier, This strong markets increased beyond such as fiscal and strategy business, growth mailback. reflects and XX%, pharmaceutical recurring have periods flu quarter customer MedSafe, the our our you growth As year-to-date from well businesses XX% the to when manufacturer of as business mentioned exclude

believe We're opportunity the to focused we long-term on the larger become have much a company. and

management waste medical believe billion also quantity we the provider take and small significant leading we're we're for further believe provider market, two $X number in margins. developing position in medication have and to management we $X these runway business country. or penetrate a the medium growth well billion We to advantage the generator use leadership ultimate With positioned our of and unused the

that the all getting to offerings, we're provider. a and to solution be as prospect efforts see solvers of and provider, seeing to very is our service in up, as believe of current increased the and alternative we just larger our with pursuing awareness result Needless company of paying innovators say, again, excited but dollar to a very opportunities an country we're we're much as full our started. our Finally, problem

and And to very the been busy, all the supporting for thank opportunity one efforts team management last employees few last thing an in It's the over is to their take our growth quarters. much and dedicated, challenges build to committed look forward employees these we and it to opportunities ahead a to larger group continue takes a deliver the results. company. as of We and driven

operator, we it that turn over with Q&A. And could to

Operator

with [Operator Sweeney your comes Instructions] the Gerry ROTH from line Please Our question. first question with of Markets. Capital proceed

Gerry Sweeney

mentioned pharma. higher is you - at growth et pipeline looking and SG&A full. the spending up in SG&A cetera. When on revenue? wanted translate do to route-based focus sort to the you I terms on this of to and speed we're Obviously, is focused got in expect or to also you this Where the of the where this more

David Tusa

the opportunities business, mailback the of MedSafe, it is the part same We whether whether cross has there it's a remember customer route-based all lines number it's a unused sell whether That’s within to business. believe opportunity offerings. opportunities the the of it's And affect medication via of the all having to or that of wonderful solution base.

continue across business. all lines - forward look we of So, growth

Gerry Sweeney

like - you name some comments, function mean, I earlier pipeline off the is is another of just a said is your client of, provider. with running And this just in it potential on out as contracts the the even prepared sounded getting then maybe there, comment Sharps your full.

to comment that bit maybe wanted and a just bracket see. Just little

David Tusa

disposal. when are opportunities, point crisis the we've leading we MedSafe, popular collection mention the beginning we're of more programs to I are both - the through unused country really I just Sure country had in it the medication this other at successful when more same believe and and and you unused and business the place prevention, opioid that at the becoming address quite it's medications. in again, the at to it's if you And look look in

and the So we're unused not marketplace really anyone, dispose taking into selling that's business a collect now from we're just of medications. to allowed properly

and awareness, When business. the only our you the is the higher improved you the percentage business, grow route-based directly what’s not route-based of I a And what it's see much continually also expanding look the is footprint. the at growth name, can you route-based service we're when in that footprint, driving business our

So it look new a those opportunity. becomes servicing can opportunities the when at when of we a route-based side, the significant then portion capture on we directly,

And quite the bit. lot expanded we've chasing and infrastructure a we're a those of

So growing think that's business. that's what that I

self-injectable is think can manufacturer continues patients how the provided that that On and the the pharma the awareness support awareness side, are with increase great can more more of And there pharmaceutical - I the with marketplace. the drugs be more great the introduced in And program. to increase the experience these being time, patient. at We've I’m got proper programs. same that a got just We've can the be sorry disposal. people

Gerry Sweeney

does one length It the how restocking. XX has or companies there support there little other I you does the which after been the on or you also the business bit working an bit inventory there On that. then refilling on out Can sounds offer little larger quarter progression maybe And an sounds of and that play further? - quarters products, guess even - also this opportunity than pharma how XX mentioned maybe patient a mailback. is last it that maybe a like but talk the manufacturing to maybe some build, through. like expand I Is with think that contract, of rolls

David Tusa

business, think when Right, the pieces. I pharmaceutical of you think right manufacturer two of so

first I inventory part. the think that's one builds the and

The the past our from existing launching home. the What inventory demands to consistent seeing inventory that patients, patients. are shipping trends really fulfillment, this the demands, programs. they're and customers is, we're saw number the of additional quarter on and the keeping some fulfillment the levels getting with we at on which the second focused of the build, and the is for But solution part are patients

self-injectable They the portfolio, may have ours in programs more they're so drugs. patients additional adding additional drugs patients drugs the their the to of support

inventory increases as the have So because on more you patients well that the program.

So that's excited. really it. drives what We're

a number business continue of think this growth and that have to are lead to we the us. We to be - pipeline, we opportunities it's going continue in drive for a

Gerry Sweeney

I'll and last line. One back question then in jump

these of about you're the up Is you working feels a a with ahead MedSafe calendar you're I'm number be there of partner talking might that pace. of speed XXXX sort think still that is of in good meds, pharmacy projected and the that some like year with? I On been earlier, or the deployments entering

David Tusa

because about think way don't let's talk I it that or Sure, have well about to XXXX year calendar In year calendar XXXX we year calendar calendar typically XXXX. you our it calendar customers. X,XXX at in about let's talk And year if you at XXXX, calendar we think in if customers good budgets it it, look that at to calendar calendar that we about is from exceed basis, in X,XXX which XXXX, number the really in a a for installation opportunity have year, mind, MedSafe MedSafe standpoint, look so in - think I X,XXX all XXXX. year year from look X,XXX

we And only pleased really going liners but have aggregate returned customers that increase. very XX,XXX from lot standpoint, one to X,XXX including you have lot there, we and that's to mentioned. a at look a So out of we're it have we growing the customers, and of the an

Operator

Steinke from Please comes next line Research. Barrington with question your question. Kevin Our with of proceed

Kevin Steinke

the to you I pharmaceutical an sure helping to, program, yeah, So the within results quarter. in that follow-up was to I manufacturer interesting about on it growth I existing just the thought drive talked discussion. wanted wanted

a opportunity more about a maybe programs. the new driver existing of adding that with in little is to terms to talk addition potential expand growth just bit So opportunity customers in

David Tusa

other of continued XX see do We forward. XX Sure, happened. as manufacturers, so the going patients. the continue manufacturers success of programs what and - they some on could programs multiple we the again drugs have that's can obviously looking They're that programs. And it see more at with what adding for to

that. we think I of new efforts a new We're lot of of you'll have probably number what programs. programs our see, and a more on focused chasing

So on new in both probably going programs probably forward other. sides growth than the were more

Kevin Steinke

about talk maybe Recycle. And TakeAway

had service. in strong the for You billings that prospects million roughly so half And of - mentioned quarter. continued you

momentum real this taking - driver optimism for there going few So do how see like quarters a provides feel give the sounds there to the hold, maybe could wanted business some and it where to point forward? now be a was growth it like a offering you you it but real that some I future. is it at know is

be any - more So would commentary that just helpful? around

David Tusa

think Recycle what that We've we're soon a It's to in there. devices. of the hopefully the use TakeAway had that everyone devices And out we'll of tremendous single sure is and just of our all amount interest close TakeAway is understands I be keeping the make Recycle. healthcare. about recycling system

it's putting alternative taking healthcare, a recycle with the facilities breaking of down devices out its into some it reprocessing. this is to is, what do and individual it this traditionally to So components what And an stream. healthcare

or they it, out of in clean and they devices recycle introduce it they back sustainable them and a healthcare healthcare. We manner. keep the into Where

amount have number have an launching with a at from of I large discussion this And We companies of them. later are think we of a looking stage in that a number we're interest very with real we’ll for business. amount the quarter we've or Probably more of but we've to been from opportunity two, industry. become know the very, a received the interest this that over next tremendous encouraged

Kevin Steinke

contribution in look, home the billings front, prospects contribute, healthcare home think forward growth new Okay, mean, to to some with we expect other healthcare you sounds level going we trying any should a next growth that in to the to how you good. maybe there business more couple quarters about, go or that off the forward? that contribution kind I just the here. and And for to Is for opportunity relationship sector that in going as expect relationship mentioned distributor. of over again, - next is large expanded do quarters couple the healthcare from

David Tusa

expansion with the homecare Sure, distributor. help every that's pleased healthcare healthcare day with single-digit the growth. question. growth, our probably really mailback primarily We're this been of to low years. with and growth We're large growth. the obviously, great the single-digit we've been years a pleased a really them with for business, seen that's with mailback awareness it's of working where We're the working We've

the we've growth continue think in past. than show we to to what had stronger opportunity And the

I think too little able it's probably a bit be to. early to

Diana Diaz

I agree.

David Tusa

say we to To relationship. the and levels But very in seen much will - it's that we're higher growth think with going growth we've see that that what new be encouraged recently. very, from the prior years this

Kevin Steinke

in to the higher then called lastly, growth SG&A, some sales the driving investments, you've couple and professional And out in addition last higher fees marketing quarters.

the get off continue if quarters? to have how as move those trying if over kind meaningful half fiscal year trail of next SG&A and those or in sense to the maybe to a we the Just those been here, first the of as couple

David Tusa

quarter. and $XXX,XXX December tweak and to had in those at $XXX,XXX did look fees I along the professional incurred improve going some in December we the the the patents. much if try those patents opportunities we that the quarter and think come We is firm, to pending in some going but a have that we're respect and see about new to professional forward, patent and that brought don't we in with We there impact more of to process to had those, have to move to fees, of

Kevin Steinke

kind the as going or - that effort just out is more an that of you how could patents? terms if play to to have in mean, on you follow-up know of in any phase evaluation I I just If sense still

David Tusa

and can't We at as we're a this process Well and innovator conjecture along know, and But we make and to - the MedSafe technology MedSafe. patents or are that we'd we're always successful related further It's not. takes you that with protect the longer. point along. the to the any whether long be moving we’ll primarily further developed really love over pushing them the

on to So, we if we no spending see but it's get dollars we this some yet, we assurances worthy don't but can think that try issue, of to will. know

Operator

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

Brian Butler

typically business season been look XXXX Just, first what the like demand? your of maybe mean kind into the flu playing looks out still here? strength pretty at the mean more it the If order kind is the quarter roll for to adding is upside third bad. we that of some one the third the the on that been has I is I weakest, has quarter of way, season

Diana Diaz

So yes, you know XX I would is The But the flu is the flu in March year, orders quarter. March agree the a send that Last XX%. lowest orders basis flu orders. to quarter flu of had were season. typically XXX,XXX we about in the trailing months on which up really

David Tusa

couple What quarter thousand. what a so would had far be the March we've hundred

Diana Diaz

Couple yeah. hundred thousand

David Tusa

which We thousand had the a couple slowdown business flu the - hundred quarter. we've March in seen but is a we typically see in

quarter entire year. of the in XXX last So

Diana Diaz

Yes.

David Tusa

first far month March so the quarter. the XXX,XXX within of current And

Brian Butler

somewhere given of looks on kicked just demand it MedSafe piece like, on On is for liners the the maybe the around XXXX were probably that and kind - X,XXX second looks kind business like quarter of up. data you've X,XXX you averaging in X,XXX I higher than of around of XXXX? It in somewhere you the processed seems the processed. - mean, liners the that to

Is you or or there? hit mass now the just of something more something there some somewhere order big, demand is critical changed the base is liners for seeing there there were in a are restocking kind that else

David Tusa

collection and increase exponentially. there out mean once a it's get liners I about beautiful business the more more the you and increase No receptacles part

the right you're just liner. it's with So normal inner but turns that are the expected

revenue those business from the generated the once So MedSafe in recurring place. you beautiful liners is part about get

Brian Butler

professional the the of also growth, it was growth current a kind on or price that then XX% new customer was that and demand there Okay, increased you in from little some business, the color side was or of base? all on there customer can

David Tusa

primarily customers adding. that we're new Always

Brian Butler

Are you seeing any pricing pressure out there?

David Tusa

really we changes way the really, of Not haven't seen pricing in much on side. the

Brian Butler

much talked segment should the your can bigger that in route-based the have you I spend? make with of a kind of how CapEx or expanding that say. you infrastructure before to when footprint kind Professional get current about And you Is

David Tusa

population. the about go opportunities, into population, will XX% that Well Midwest. latter - moving been again of up of stages talked we the to into and XX% we've And see after the organically of we it's areas. doing as footprint larger want those really services we've larger and capture moving the states It's we're prospect XX because those in We're important, add we the states, and to roughly seven another can the to going directly. that

that done acquisitions far and to backfill time, areas the right we'd those or in so been prospects start whether And we've we acquisition, via opportunity - else with acquisitions, it's at presence tuck-ins. now, have a these was like in important and areas, we those potentially with the the can has everything point So so three some customers. it in organic. But to thought

Brian Butler

I looking and color much also me you acquisition market? spent guess that that that XXXX. of is there of How of deals capital then my think that when can pipeline around on is And the kind Okay, or at that footprint, some of puts deployment. question out you be another you give expanding may on what capital into the being kind are

David Tusa

new First of when a into lot expenditures of a not you move capital there's all, market.

hirer on candidates. capital the the You maintain but move facility a geographic into you acquisition and pipeline not new of some rent area. when you side and you acquisition rent a list the lot a is trucks We there drivers

geographic to of contact in will efforts increased into these stay - in to that slow an Look, look down these them not the additional talking moving folks in and we're with we've about acquisition. about areas. potentially with us some - going We

Brian Butler

after two $X on looks maybe more base to were or pharmaceutical about here it - probably on one you like right, guys - you where All just depending of forward kind the sustainability on years, you the is able on guess the programs get? growth year the still or going the go X you of have you're to how two, is couple versus trying kind of some choppy turns million, close a go? base if it to you a ago, an some million this to that were years to - But here three and seen expect I that mean, it this level I'm annualized mean, growth of out. I have is to base. What back coming, close years probably million ago good four the understand X.X customers I going you maybe rest programs some you're be the be

Diana Diaz

I terms that about a that million our basis, the They're see are we patients these continuing market have manufacturer anyway of think quarter the expect on each. is mean to the grow utilizing billings continuing quarters services, short-term fourth third pharmaceutical $X programs. I customers goal a for are to and in their and we So for

Brian Butler

of I know about I the it XX% you all XX% aggregate in the about mean, businesses, top or I operating are talked that XX%. in last and incremental that run XX% on leverage XX% running mean, about still And the range? to able line supporting it you potentially guess is to you business, I think - XX% the then like the to that, idea helping the SG&A. call one the growth. it to when margins. but thinking the that's I increasing mean, how

David Tusa

very, think I kind increases as see don't you'll pipeline increase marketing of don't in this that investment is that very, seen in that mentioned I before we've driving very the Well, revenue. to quite sales the And and the I is full. if momentum, think do in keeping important past, additional we then

these going and the marketing element - focused with we're So it a sales revenue. on revenue very, and we again significant But growth want strong growth on recurring of revenue more focused efforts opportunities. continued very on after

Brian Butler

sneak one can I in. and it if one Okay, last

of you XXXX, relationship, home or half is that business? a call customer of health, is should recurring going new away pace is that of the back that had a the kind business, of so the that $X.X or durable, is about quarterly XXXX. that think million, sustainable revenue, recurring kind we Just of real Or that $X million in

Diana Diaz

current that's going would may the in the first recall forward. is not increasing we had order, time, over but level business, was hopefully part December expect will that quarter and the to normal, we but that quarter, in recur level that So there see a you ongoing stocking the probably

Operator

question. from Joe line of question proceed your next Our Munda with with Please First comes Analysis.

Joe Munda

just up is But an the questions processing and wanted I interesting of offering. the that's already wanted - to David, TakeAway asked wanted So, answered. been I follow device to on a lot that ask I the med

guys hands some make walk some a get works you reprocessors. are on to of up So or how through out devices give of to end keeping color types for those and I clarity there, the the you of example can it me products essentially, you're collecting guess the from maybe reprocessor? the of into give in hands getting And us us devices don't how, sure that the

David Tusa

them. over reuse effort going is not good of them is to last is, it do great, a use And an that's with let's we're single part there's years has the what question. happened this for not to What devices. few That's been use

facilities device back if one from So other a sure we an And you are then are really with keep from see what make single And reusing the into One, and fell, been the is that it's device. how standpoint main it's issues. the use going not potentially healthcare from doing use would of standpoint sustainability go and it can land two a it a the more to getting away looking that go issue, nevertheless single sale. from keeping more ways hot sustainability healthcare, reprocessor. in

Joe Munda

your - the in that have it the you reprocessor device a for box box? their puts doc the make are - how the the you that is versus puts it sure there getting specific in is in have at I'm the how do also in doesn't wherever box room, it What that like putting room box a in

David Tusa

single the push persona I the of but of help protocol mean, satisfy working complex to the used a surgery the or very being center requirements that's hospital the as we're the way from device devices after to same to manufacturer, their a to anything or at use the who scope device surgery hospital trying in be device, this Shortly healthcare manufacturers, laryngoscope use setting, are major the a with about hospital, obviously. talking that the time could of needs you

Joe Munda

are their them your essentially? boxes, into to encouraging So put them reps

David Tusa

Absolutely.

Joe Munda

now, it's I that solution Coronavirus, we question saw last my people read for a Hysteria but whether hysteria, were now being any you you're are these ago, years result. orders then a guess in different to are see not doctors sold is providers as news And or anything with Okay. any that this impact or providers potential of more any about few now you the looking you with having think, going about out, Ebola, it's masks just potential conversations

David Tusa

currently be Well, stages flu vaccine. it that and we We customers potential ready talk or our say the all to of and we've and out to communicating is syringes, be a them know seen the no we not this, needs. facilitate that that this let with and of other our about disposal should to-date, any there coronavirus immunizations. But know shot. flu in early communicated reach to early to them but whether to orders related there directly shot it's have really continue kind customers obviously it's significant we surge them we're We're and are

Operator

of comes Michael [Operator next with line question. question Stifel. proceed Our with your Please Hoffman Instructions] from

Michael Hoffman

a view that physical a could investment five I about David. think of I to what get your the in the augment of the - year G&A? you questions want couple investment incremental you, you Thank given installed is the to had MedSafe, When of that if ongoing took just base base started. installed Brian view

David Tusa

- Hopefully, you maybe you the and and uptick is think into based more to look launched. conservatively see And be look programs of some of are you at could I could you that a these that there you could that the at could MedSafe have we have upon there some what it. trends year an is, and right state saying. if of more Well, now, others X,XXX what trends X,XXX retailers jump add we're currently

Michael Hoffman

And places turnover, installed, once more we able sense what's installed, then so mature step stair it's turnover at where to on your liners at over trends of the of of, map liners, and get been of the to XYZ a liner of the are pace of and X,XXX point rate building be we're sort if model that. that watch this sort turning they've

David Tusa

So to as true of good a MedSafe facility really but than the depends a six the to it longer the on stays out just two facilities, five the maybe the the liners that's probably anywhere or and and in of many three year. question increase, as turns lower inner from or as is type

Michael Hoffman

the the where XX, leverage. get getting around going that consistent we this densify, model, and sort collection the in the of we are your of growth, the start on mean, are and I to been new operating places to I would side of densification so opportunity I on and the business, your we then but from understand that you customer your of frame majority And view? of that XX you've sort where how within strategy that densification markets XX in

David Tusa

so footprint, currently in Yes, that increasing are that's we one, is service we're density team geo-targeting the service and do that to areas as have and really well we we to believe job focused doing, - a two we we're great on things great marketing we the question. There increase can density. at customers they I opportunities of our good what does, areas with where think job opportunity more

So we're of focused on both those.

that really you're So trucks route. the drivers, that route-based areas increase you're hopefully, opportunity where seeing of density and growth we're we'll have the businesses and more more the pickups adding on see that just majority existing to we to add not

Michael Hoffman

vaccines is of a bunch is rate other pandemic this the happening without turning as no there basis addressing to or more growing to sense And me lastly role the the around therefore, given you any loop role moment particular people. in the moving whole practical then coronavirus, in closer at on just nobody there disposal. so, get be hey, which is for a more expose there opportunity disposal? going, then just But on is a and a infection Is the at this speed and pandemic knowing that Sharps actually send seems

David Tusa

an be would yet. definitely there there is there opportunity. one, things. if Sure, mean One, is not well, a couple a And of I vaccine

flu The pick we're so It's to and in there encourage could not shot, customers, well. received get is the you with we'll flu CDC have discussions really to out thing get go other to up folks see, early, our shot continues if a just as a potentially from and

Michael Hoffman

Okay, shot related. given some which is to moving flu this other speed is the still not There so clear, be just at the moment. it's opportunity at

it flu would a shots. in be So surge

it. you. you Thank for Thank Okay. the extra questions. appreciate I taking

Operator

any Tusa and our turn for Ladies this you. to Mr. comments. back session. gentlemen the -answer Thank floor final question-and concludes I'll

David Tusa

your we Well, participating thank for you operator. quarter. speaking next to forward We in look and you appreciate call support. everyone Thank the

Operator

today's Thank concludes teleconference. you. This

lines at participation. You for your you this time. your Thank may disconnect

Sharps Compliance (SMED) 28 Jan 202020 Q2 Earnings call transcript