SMED - Earnings call transcript Q3 2021

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Operator

Greetings and welcome to the Sharps Compliance 3Q 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I’ll now turn the conference over to your host, Jennifer Belodeau. Ms. begin. may you Belodeau,

Jennifer Belodeau

morning, XXXX to earnings Good third Sharps quarter fiscal call. and you. the welcome Compliance Thank

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

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

way, that me of the David. let with So, to turn it out over

David Tusa

we Thanks, the in many this the of looking morning, I'm morning's attendees. participating have us. at the outlook. like and Jennie. business the for how in that call. front everyone. just And thank And much and opportunity of Good about me, the I list you talking it's And of

about going scripted talk I'm So presentation. do, the instead that's of what going I'm kind to business any of to

truly grow is getting believe that what's important to just So larger just started, We're But numbers organization. very much, much the very company that's impressive. everyone's we're as proud more they're I the the numbers and I the a we very, the seen of this performance. than fact numbers, March believe

near knew significant growth. don't I the won the third we anywhere for that think sure everyone immunization very I But to just want was And getting think again, strong. going revenue they generating I be understand with we're to revenue we're very, and Of done. make quarter course, started

quite tremendous of it's And contrary. I again, front in we've got So us. really the believe opportunity

you I the immunization it's the part COVID-XX It's also at me opposite; playing business, rollout look fantastic. how at key a vaccines, we're let flow. course, or of We're in And So it. tell is the COVID-XX, which you've of to proud the whether XX% do we vaccine. revenue that. adult way the the immunized. we're of I love about is we it news; But on look that only associated seen have rollout Americans are that see the And with working right you fully at the of the now

got rolling So out. how go, to here's it obviously, see we've I but a ways

So for adults we now. have vaccine right are going which the on

it'll in efficacy, the we summer, for children. vaccine be with us, then hears flu potential followed move as or it shots think shots, I booster everyone I vaccine think and seasonal by the the for for I And the the could happen adolescence, for there's the vaccines think vaccine that to followed variant. address an opportunity then

lot have a have and experts rate And of going is vaccine adolescent this XX% to achieving things if chance lot the in be the of any have going they're we it's children, adolescence; we I immunized be and role immunization. any to to achieving it's that's a of the playing why be chance immunity, key going saying are children's to to herd it the the that's of we're So going and of XX% are mentioned what activity. if on a that of

potential I this into XXXX, the there's COVID-XX be very, I three vaccine, the So layer going we how think much again be following on like that, additional to But emotional know at that booster immunization toll going COVID quarters. economy, hit on think quarters. look XXXX. particular when four a much work over and to development, exactly will you I only don't the it's any at next it the way going believe to continue that health of through is look and year I care, the don't further And than proactive the to be between probably business for that end business or forward of or the the four more of what all about the to immunization I those on is three very it it's we're addressing mean, XXXX And calendar there's just into and feel busy impact year. going we more that devastating and confident we quarter consider coronaviruses. and

see the I that participate very And quarters, continue. strong in then I different we of four next the all as very, level three thereafter, will So, vaccines mentioned. to that some

that do about into we're business vaccine, billion and it's think medium generators. It's my quantity And I'm business. the much where for love XX% we're excellent; we market route-based think states, and you, XX% So that, XX%. totally I of not I increase, population. service better addressing service, the XX enjoyed, small we But can businesses. growing I that's than with that. got in one have happy I tell direct a I've $X of favorites about really great to that it's really

And our where revenue, growth plans into jumped of turn sales, very more continue a our part more proud we look this the a business this our designing And line the now or understandable. big to business I it's the to it And the and business disposal. user did this rules. important make we're pandemic, this going. and and into what's slow grow that's more vaccines I like, of leader medication. ultimate are big, medication opportunity beginning -XXXX the I yesterday, dispensed boardroom, doing. and had back we what we in some MedSafe and or it for long doing. during forget of footprint, in of the think tracks footprint based it continued route-based we this And DEA of part again, we're thought so business, patient's business the been orders a a to see There's this in will growth from on is stronger but the focused growth what the like we larger continue September okay and to and/ retail and And business see that we're and we're a expansion. make see pandemic, never And geographic need I'm up. it before will we're part be room But contribution part immunizations. the real the and XXXX the seems line quarter. here the it dollars, Just we big and use in was develop a here strong rebounding, get think MedSafe in doing. to big the and change growth back we the big term growth starting on upon experienced We we've in be a we're And what were of we're pharmacies we of

rest. think the numbers they And put doubts the gross leverage should talking in a Now may operating about think our to talked operating leverage talk those operating. I've without model, any doubts, the XXXX But about about business can't for if about margins, I and while. both quarter I the financial had the you person March

last not results It's our us. pains. us, P&L, capacity, whether struggling most but it is, out warehousing, we whether and you micro great I just quite something a dealing interruption it's mailback we're accordingly. planning plan be I've year we not which organization, many service, during personnel, this at in it operations well it's important, it service, we this the have to think be a we'll We're and this again, most of. all March and we really in micro which first in disruption the is I inventory, we're customer proud that say got with and Finally, and on important did the And and and played executing we the with be to is employees. said class typical is whether the good March growing started we're think cap small company, of growth, what well the not it pandemic, times, tribute cap professional the no typical see no be -- company for very We for

to the the going with you and mailbacks take leverage. opportunities growth business, we're excited well look generate the about see the three more operating you like significant opportunity, revenue we March hope business think business. growth We're the got in look quarter our and where forward, significant all extremely at We So coupled We've of quarters lines we've to positioned in when also businesses; of advantage at unused business medication. outlook. our I got core route-based these

more turn of with the over and address it to financials me So Diana out in she'll detail. that let way, the

Diana Diaz

of David. quarter XXXX, and $X million our Sharpe or $XX million the volumes XX% XX% the customer billings deferred or achieved route-based services and year. in long-term route-based the XX% compared of distributor grew last quarter immunization driven Health net an quarter in timing immunization and for margin due retail customer customers in revenue as compared market the respectively. of $X.X revenue billion XX% as in reflected to $XX.X third The billings million. was third of $XX.X and XXXX. last record you, increase care increases new was the million million customers. well quarter million the $XX.X the business of increase year, existing in the million of XXX%, increase related of increase using third of quarter increased million XXX% These of XX% fiscal by quarter $X.X third third Thank and are the third to of from Care by orders. in related due our million quarter markets gross of The respectively, revenue to in an primarily increase Gross the $X the record professional margin billings was fiscal in $X for in Billings $XX.X almost of of $XX.X market and million about increased of Home business. $XX.X is of million to in as in billings third route-based business which driven to pickup

the deferral of net much $X.XX cost per per year. marketing compared third in the We billings have by during of of Therefore, described million, of in and net of will management basic earlier, for the $X a and Our $X.X quarter. EBITDA that recognition cash both revenue that I This that this gross at which quarter, in quarter Without loss the increase of per operating Board an XXXX loss or this recognized really be of million and Director revenue future and of diluted not last about a in billings about margin recorded million last million, reported fiscal operating XX%. the to billings $XXX,XXX, $XXX,XXX $X.X recorded the $XXX,XXX. higher to and complex, margin recorded compared quarter loss revenue $X.X quarter for impact third loss revenue Without third XX% method XX%. in $X margin impact share margin deferred of revenue the quarter these in recognition of was for net of recognized the $X.XX this would third I lower year. EBITDA an customer $X.X million, deferred of income of recognition income been We without basic compared a generated EBITDA third impact accounting Sharps to gross about of margin million, quarter or and quarter the are equity of of periods. year an resulted third quarter a $XXX,XXX for have margin XX%. for earlier, that of of of or quarter When is of the higher compensation expense increased million been XXXX at the recognition quarter higher share and of $X.XX last of margin. purposes, a gross favorable margin a operating included year. to $X.X third described third compensation on SG&A the of on would incentive XX% XXXX, gross sales the operating diluted bit

at $XX.X the $XX.X million of remains as which working XXXX. March with $X.X Our million, balance from of at June million up solid of XXXX, XXXX, up sheet and end XX, is XX, of cash $XX from June million capital

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

David Tusa

which ahead I'll the and Q&A, up go Operator, few a let's after remarks. make open Diana. for Thanks Great. it closing

Operator

Instructions] Gerry Our from first is ROTH [Operator with question Sweeney Capital.

GerrySweeney

population. with about you They're one Diana. XX% about Good least adult morning, shot. COVID at David, vaccines David. talked

have have variants. boosters, we We

We But and be are in year? population even you kick us flu help potential different is to into have of over suspect process. what benchmark and they're adult adolescence, and [Indiscernible] sort this be a think do Is bracket all value going of or next they this going there adolescence you this I the wrapped participation to rates. just and how this really XX-XX months a a not next also maybe write way could Thanks. does up the

DavidTusa

between I on COVID-XX, will good some to that the as shots, I'll and we flu may X bit, out year. run And the saying adults, know not million, the We we've And get the the down. by worse flu little in be be what and tell this is business. But and so this even I'll many, to community question. for probably just maybe they adolescents going are children back two No, a to are assumptions, the year. think many into, - million that And half and mailback. typical way, need that the flu. adolescents these, experts even think the if purposes, as that's of we X booster actually you done half, levels the flu shot, it can the assumption you vaccine you the XXX news a for boosters, Covid the even be a a we've even even boosters, it going an hear higher. receive calculations as XX% demands made and of be XX third that's a adults, of will much million or maybe if as on very potentially adults number significant of many of children, get planning on the make And are

as next COVID-XX be with just be another, can million a months, the the on a there be on for months, XX could that mailbacks So booster. think we the flu as It X-XX and be XXX,XXX on mailbacks maybe another much the could million say, and could XXX,XXX, COVID-XX.

So math, you And in mailbacks, kind is we to generate $XX about on we're the but X.X and $XX you as much in would million it that could going as the in equates gives I'm revenue. that as addressable million the million I revenue, many when of saying that that the as do market have not think be vaccine.

so generated we $XX about So far million in business. immunization

generate for right the opportunities to next XX more the are it's to $XX there and over And So X-XX, another above maybe we million now. over that's business. million related months if where are $XX immunization revenue significantly even

hope that have And I we and long are We the over your to numbers that and also answering want to of question. market. that available plans, making to we time period, say really important mailbacks service do, we is and able was sure we have way will those meet be X.X will million a requirements, the

GerrySweeney

step say, to tried of really maths take trying that to But further. different Have it actually numbers. literally, end what again, mean, envelope. a boosters to you be? and You're at like that Then could variances business, as going as a we you to do looking into right like, wave rates I do something was COVID million. there. rough right? the participation right? that little that on of those tail now, the of back I are to XX That's that's I a and any was And get vaccines, to with answering there's 'XX beginning the 'XX, math and Yes. were this maybe first we'll tail

DavidTusa

way two say years, at foreseeable boosters the when the have the the I, it they'll to will visitor versus children's children's let's there'll have strong. like adolescence, on the think And future the so for year, way, to flu you I be the is, in I you the vaccines, get Right. one this continue by ultimately be future. look the shots received vaccine, just

continue So future, see upon a what of Coronavirus the even kind variants future. come depends as on you XX%, it just other maybe It maybe half. or we about, what in may It could in of as may the third think maybe XX%, pretty other of vaccines. as say I can depends conservatively kind the maybe much

we're say comfortable a I maybe with in thereafter. think So at much as continuing least as of that 'XX third and

GerrySweeney

obviously term. longer you. Got And then gears, great drivers great and growth business, shifting route-based

mean, year, do As opportunity, you next look I probably organic the for what out and to investment. inorganic there's

think to organic I sales both up a On on What's and a the the lot year-over-year sort inside inorganic? et on million sales, and from the cetera. over that out aspects numbers, your investment of a year, the carve organic year next and marketing $X set your for view on side, of some you're it's it's of

DavidTusa

because XX sales marketing roughly as I'll of to we on in Well, in going just tell and our because think moment. immunization desire really many salespeople on business, the important, and of XX another we're invest and roughly people we're we'll go the that as sales process the grow hiring that because side, heavily it's you the route-based which significantly from to XX what to experiencing we're side and our is

in service. direct And heavily we provide are something we organically, are the providing may where we helps. areas we're into of brings states service. opportunities, in wouldn't we four and all we go the areas states we service. the that the we're all Southwest, that's direct the subcontracted previously opportunities, we are those because a did include direct XX When we areas have performing move an revenue into Those call And because directly in what don't so really in after right of Midwest. larger doing lot marketing it That think this I area southwest. we're successfully now

a I geographic and business, more So well a more the marketing, bump, from greater think more direct as give in growth us area. salespeople, that'll a in revenue route-based service

Operator

next Our Street comes question Brown from with Markets. Capital Lake Rob

RobBrown

David nice Diana. on morning, a Congrats and very Good quarter.

point? bit of how the and wanted you channel? guess, And point? the guess more the the of COVID prepared into are What this Just inventory dive sort in planning a what's of And your to little I sort activity. seeing fall this for terms you I at vaccine at are filling what

DavidTusa

that our are we hold over on, the X.X as again, think even calendar you We're or a quarter. week. in sold at mentioned about X.X this. the So mailbacks how, we many Sharps the this year, roughly right are of I I'll got now, before, million I of as tell are now, as containers I could March we our that the million of sell about weekly critical part right XX,XXX And mailback production

the we're meet year a we on go So be week those manufacturing about we to ongoing, throughout this needs that upcoming COVID business. able have of XX,XXX will to

RobBrown

capacity Okay, utilization at terms added great. And are in know I you capacity facility? processing capacity, in of you the for returns, your significant where

DavidTusa

significant it, grow. autoclave of of additional capacity. we're We lot the capacity, in that the doing autoclave have because And using Pennsylvania, capacity more we we we additional room the at larger substantially gives the a we still you not triple to you capacity; facility, Texas have when are plenty the add that did of we but more in tripled fine, installed

the we're business. to or the hard run having all terribly the of also runs if of what's tell same waste, medical the don't see because it the two whether And you additional will needed be have, places while. to be autoclave efficient a improvement it'd two, that problem you so But we treat of crew whether it that permits to operation mailback the the be I route-based I is I other important for fine we facilities well. with more for and think the it But were a have capacity. Pennsylvania, have, using any able wouldn't But be I to add think capacity In additional we too use efficiency. one. as makes the we

RobBrown

talked about you you point? you growth something scale at do thought your guess, are Okay, there? even your accelerating better organic seeing great. XX% business, Are what's footprint on benefit, route-based than that place? And is as seeing the you then on of route-based growth this I And gotten you've sort growth scale in the think the at the benefit I but you could growth view

DavidTusa

the and big to we higher ago, growth expect XX% as I'll other a seeing see plus saw from Midwest to that are. much the significant of we're Midwest, with seen. a it that is yes, we year about the just went the southwest, growth when And but we're into rate. And We regions we've contribution we growth into the opportunity we that that directly happy not of part well organic and went the generate say we great, think, higher service. a that's we

Operator

is from question Amit next Our Dayal Wainwright. of H.C.

Amit Dayal

levels. Thank guys. from this margins utilization morning, levels margins strengthened revenues these elevated coming we to is Should With you. to these through? at continue if of coming basically Good the better expect, and respect stay operating capacity

DavidTusa

a line margins share a sales levels. then in you is significant going time There's So some at fixed. different we of revenue Diana item cost of have you and -- things, couple different and that's with gross give some to

that gross at the Diana different revenue share going can a it's levels. think that different drove cost really, only. we variable So with margin But forward. We expansion see margins you

DianaDiaz

we would Sure, expect expect million expect a the gross revenue margins million revenue we gross we XX%. level, about a margin levels level, be XX% of benefited quarterly ignore gross gross we quarter, of a we, million would And $XX would these $XX if revenue current for XX%. margin margin that at quarterly $XX we the at at expect recognition quarter, the at our of revenue to impact at level

Amit Dayal

capacity margin mean, should given side, stable, costs enough remain in I your on you relatively have right place And that operating operating the now.

DianaDiaz

Correct.

DavidTusa

income the a see line gross portion Right, flow you see, of you to additional yes, operating item. significant through profit of should that should a

Amit Dayal

longer a unused Could and is medication, David, from might for? In you're and shooting three between a contribution from in sense few might terms years of the term, mix target where be or there of you us you see a relative route-based to now where segments? revenue these immunization give business the

DavidTusa

all upon grew. to all. to Well depending grow be strong mailbacks, it unused in while medication will the sectors be business the in is want I sector will immunizations for quarter. mix we the and which bigger rates, September them is I going of heavily and with the The to and think want significantly, a a also I mailbacks grow the sort grow quite healthy think again, a way route-based and at continue will come back online influenced of

significant we'll and top three of where line road, down that line them. but are, target there's I'll than few growing And a So that growth no the we years top take other from see significantly. all

Amit Dayal

of be to of vaccinations expect need just some sort June forward that levels et are that to quarter still to given should the we And 'XX there quarter relative completed, looking third sequential growth the cetera?

DavidTusa

to want know talk was I don't about them. more a the month talking opportunity like quarters. standpoint. I X about talking from I you why about XX to That's

opportunity busy how We a month. it yet. falls quite have that of I strong. the April huge will was a say quarter. April in know strong. I into all us, don't it front was And was

we'll have just look, really And see see. individual opportunity; to to XX those about talking quarters, really how months. X-XX the significant for I of it falls more quarters, instead between So

Amit Dayal

be than you will? March, this stronger Would if

DavidTusa

it I'm we'll Well, I I'm XX company not going see say to to isn't. revenue as X have But months. over consolidated anything's say is. we're not next see. going think with the to a - possible. going to strength it continued But

Amit Dayal

think your that on on front? on side last terms seeing you And Compared do you're a making you in the growth well. with progress stronger the you are this immunization share of, do and as have front so year, Especially the market feel last time to one share? market just gains, you improvements route-based

DavidTusa

the the this pharmacies, it of immunization was And year. it year. side last the retail have on as about that XX% that's roughly we business, of what about same what as same is the and Well, was the

Now that's that business think share just grow, taking the we like market other in markets we're more improving when route-based market do share. we the and

And more retail where on so you'll probably that's is share where market but pharmacy. XX% are growth, we see the

Operator

is question Steinke from next Our Kevin Barrington with Research.

KevinSteinke

Hey, good morning.

again the grow XX% it see potentially route-based growing What efforts? obviously or gets growing that growth do faster? even faster geographic you more but that up what on to think is healthy business you expansion following of do rate, the think? So Or faster? business you can you Is just catalyst a business around kind sales is it

DavidTusa

salesforce that the all we after it's in expansion. of geographically really marketing. directly, area above. expand a if more Well, it's Right. more it's we, an that an It's personnel, we we time will And service geographic versus Every area go directly against subcontracting.

have that business. grow the So every opportunity we we do that, to time

larger deals larger larger we larger business. other majority as one the just And on close the and opportunities closing prospects our and route-based as vast deals, well. is of The focus

growth So we will it's added believe rates. that higher out that those really all three of lead to

KevinSteinke

about quarter. giving medications about talk Okay, the you bit you potentially pipeline September just got it. And and that confidence Can a you're in that's rebounding going more rebound? there little seeing maybe growth seeing a what's unused here to in you've some talked start the

DianaDiaz

XX% address talked customers had with plan last related we've which COVID response, they and Kevin, their year, liner back starting get and large retail installation to earlier of one the summer. increases installs Sure, up our to their about the were adjusted in process December pharmacy We're XX% over processed in quarter. those liners quarter, the current boost than also expect in higher seeing

the expect September during would third of And good quarter, installation impact that MedSafe, each XXX we are in those $XXX,XXX facts. an quarters We increase this incremental in quarter revenue to to about installs units So about number the that and about And see quarter. December a think to XXX the higher of installed by activity. we quarter. have the due $XXX,XXX

KevinSteinke

salesforce, of great are of about and expect how you think forward? here -- would how in about just kind then Okay, what some it $X million you've thinking Or detail. the this Or going that. appreciate you plus? talked you run rate are invest forward? And lastly, Is kind SG&A that's we line? going that I what should about more

DianaDiaz

little I be where target Yes, year-over-year, We But there we're the be. may about there. up it we to increase of with we're %to an bump XX% headcount of being may we're we on still increases expect in talked kind a the think and X it bit.

DavidTusa

the salespeople think five XX, have more But, Kevin, and we're bringing that as accelerating getting additional we and and is we that, salespeople hire was did the the probably XX% I more, anything, we in as it but to target If think directly bring be will good in fact game so far going revenue we I in if see growth related start it results sales, that roughly rate. the for see confident now. were we of increase this to we works from would working to, XX% to exponentially

DianaDiaz

Exactly.

Operator

is final Butler Our Brian Stifel. question with from

BrianButler

this I and have just was in for my MedSafe on morning. -- installs the the on the for missed Good sorry; taking liners. the Thanks what might I'm But quarter questions. the

DianaDiaz

were was quarter The the in during of X,XXX. the And installed the quarter liners number processed XXX. MedSafe

BrianButler

and of where of us think how kind in about X,XXX. be? the in install could on remind of what's I what going we size, market size ramp Can are basis? big go you know just installed mean, the the this up. back and to it now we what kind the would But just larger progress they're is MedSafe of market kind I a of forward

DavidTusa

Right.

number care One right there's primary of in of look the targets, if do MedSafe two those at those and facilities what number to are that you the And and X,XXX. least is XXX,XXX at just two. the pharmacies long-term look have at we between the says now, X,XXX, about facilities, ways retail deployed

So if you from market. roughly think large in penetrated about standpoint, a that a quite you're it X%

it were long-term adopt, long So care. rules runway, little about focused of is say as to the of a well. And we bit lot where care will facilities adopting COVID Long have course, term originally long down slower term care care and a term slowed been this the DAA I has from on.

more approach for new came term and to try has seen whole medication and the we're And be we've opportunities, him, term sales way. way, board, unused to who long long us the us director, contact of to long side Pat MedSafe care, drive by term some actually our from in cares, coming to that'd looking help Now, our with experiences getting house. waste, on tremendous medical help or our more and the help care, working Mulloy, regulated to who opportunities identify the we're savings, refine cost

could be we approach a of the timing So business to as we it try MedSafe think all term long good accelerate sales. standpoint, on re care these and from the growth

BrianButler

sustainable? -- the incremental Okay, about then gave that I Is incremental were new very that, you gave. the detail think you And on revenue look margin and point gave Is on to like margin think going that the kind right grow, that forward? to that's if And comes like helpful. way XX this margins, was is of as over the is you XX% at the revenues that math plus at margin when on percent that the the gross XX% math helpful. it we on I gross looks do out

DavidTusa

a depending to a XX% maybe this mix a XX%, business. upon XX%, depends good somewhere said the good but the than And it be quarter always closer it'll It probably I I've and mix the -- between XX% the to mix, think XX% XX% was was XX%, on measure. revenue of from Yes, is standpoint.

BrianButler

think, investments. do supported the sort obviously, infrastructure that the to current I of COVID, out revenue on and to kind be can have, more of just deal know, is you with of current have before size expanded you what make kind Okay, you infrastructure kind you what overall, the

DavidTusa

So on business; trucks there of -- there the the third and you because on we're really the using any infrastructure. a isn't roughly capacity just limitations the route-based drivers side, on existing to add treatment the

with the of As we some as we we year, talked of don't far projections that quarter, these this and you mailback can a plus two out have saw as can business, crank million a week any we'll we easily about a restrictions. to side. XX,XXX really in earlier, easily June, last mention here timeframe, the XX,XXX, Actually, XX,XXX now July XX,XXX, up the about or capacity we're a -- mailback be while do earlier, I had on week, to to meant right about the to in

a being to grow able see much I us company much, much, larger. So

our additional way, and installed, we about We to that an them did the have the lease we are drivers as add the it's use by Now, mailbacks, manufacturing of many Sharps if adding contract of $XXX,XXX containers, far to across the is have could and the investments more. make molds make we we autoclave, the which, country. as the the expense trucks an and trucks, operating manufacturers have because

need, of medical we assured have plenty there this really deliver shortage reassured we capital COVID because parts much that's think we have we expenditure so waste significant the of we able much, one of, they of was would the ourselves Sharps we're in them, any and Brian. to before make our in and you many I beginning industry, and have it's because to real there's them So a things the customers as at some make, containers as larger have that

BrianButler

including demand Is And first X of that's going to you in that the million million cost I'm little guess; quarter. XXX, X.X want to is of And months. flu, the just about that's talk next kind the the over back including you think that did flu helpful. a XXX,XXX the well, remaining the as XX case. switch to over $X about talked when mailbacks the And that's and just calendar kind about correct? clear to I Okay, year we -- be vaccine

DavidTusa

for it shingles It fungible, can flu, used used for used used mailback Because correct. and be be for That's it shots, can Right. for the be can anything. COVID-XX. it can is be

BrianButler

pick which there's is Right, which and kind out way is to flu no of vaccine.

DavidTusa

No. lot and to will I And And you mailbacks. to Right tell building, to we now, keep stop, going make the that's can keep with customers. them. this, what's of we're building again, on we right going working with And, especially more what now plan a on going we're is with COVID just we're facilitate. not

throughout to year, We are calendar but to the stop. expect we Brian, not going growth be

And I XXX,XXX go meaning have the inventory well think in doubt. is warehouse year have an needed mailbox, over warehouse to the levels at that was we par we goal leased up levels Pennsylvania. another my -- We support this below a would without that will warehouse that additional is and least if And not XXX,XXX. past for warehouses. just But again,

part as not business. this just expanding we are expenditure in expenditure. operating additional the a capital about would. it is a And beautiful It's we not significant that's it's just of some So that CapEx lot

BrianButler

some that about. should can and X Okay any how take to the these. of you for talking kind don't a again, evened I and to just period. have trying mean I and Is But of to million expect? to about any around mean, guess, that quarters, I mean, we like realize you kind we I or vaccine? be you I whatever over see? do delivering there plays how kind I'm X.X perspective, is one you about of the what the guessing think million, out have out. But going Is from prepared try just we could or Jeez, out model know this, seasonality I think there's expect volatility there but it remaining the dilemma may or figure I'm point this volatility similar and a think planning

DavidTusa

to flu it's available, you And kinds watch adolescent just XX XX watch, like see more your as shot, hear the that's And just the in about to you boosters. you I year as when for a that'll the vaccine and There's think And important think olds. important, more very soon. is and drive. become be and talk pretty boosters do, well. to events and going it going you're those talk I how is very, potential more of the we that about and fall are to get going flu there's more

I think day, there's look look XXX of at the have So to XX to have roughly what you different is rollout XX shot. I vaccines had million at the you have they immunizations that's million the that shots, received every injections, percentage of we population XXX have the have one, it's it's million of people, had have, XX, about one another about watch and about two

So Yes, that's that's XX a million. XXX.

these would we and we slow to then numbers it everybody XX% if immunizations, So of should an think estimate will kind ones we of account. we watch up And numbers, that XX% took about down, that XX% then I the think that that's and made assumptions down, the business all XX% million the again, be be could into pick the that these we, maybe well. these to adults, it planning for of picks kids, kind described that were retail is watch. as And slows And that if that setting. that in Brian, them are market. see I able XX% the our purposes, the of as up of administered with we I the X.X about made of have business account

tell to very, to you to got efficient I be very flu, run retail, immunization. to spot are proven about be They they get a just thing well. the of very, One phenomenal pharmacy able this the retail and is

market guess I the the in think shot, went in you where pharmacy. they they COVID-XX their could got flu retail get it a the retail because at got pickup and pharmacy

So I out is it a X really to That's again it months well bode think at I of going out. big like our look for But out a XX pharmacy like out to falls it to part it the it's roll retail business. falls the standpoint. side over which like why rolls

BrianButler

for just kind else? in competitive the the Curtis hands there. guys you out then change with quick for changing Okay saw sale or of me. the last, of one Bay that one seen market Have we We anything and any

DavidTusa

No, standpoint. Bay the There's no no really or from in really industry change. in been a change Curtis

Operator

session. have will the turn we gentlemen, and remarks. Tusa the for Ladies to you. I question-and-answer over closing Thank the end now reached call of David

David Tusa

to of today. Thank We participating call to forward more everyone employees, quarter. the opportunity look up. operator. we business. still our our follow you, you in Thank think We to next for also a forward And real it's thank look all

Diana Diaz

asset. And

David Tusa

forward so. look to employees. everyone We to Thanks the participating. thank anyway, to all talking you for you So all

Operator

conference. This great And you And disconnect this participation. Thank time. your a day. lines for concludes may you today's your have at

Jennifer Belodeau	IMS IR
David Tusa	President and CEO
Diana Diaz	VP and CFO
Gerry Sweeney	ROTH Capital
Rob Brown	Lake Street Capital Markets
Amit Dayal	H.C. Wainwright
Kevin Steinke	Barrington Research
Brian Butler	Stifel

Sharps Compliance (SMED) 29 Apr 212021 Q3 Earnings call transcript