SMED - Earnings call transcript Q2 2022

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Operator

Good day, ladies and gentlemen and welcome to the Sharps Compliance Second Quarter Earnings Call. At this time, all participants have been placed on a listen-only mode and we will open up the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Jen Belodeau with IMS Investor Relations. Ma'am, the floor is yours.

Jennifer Belodeau

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

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

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

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

David Tusa

over quarter All prior to call. you right. and to second morning and I the XX% you second quarter the the Thanks see million for few our XX% in year am $XX.X good thank going highlights a increased first participating as cover everyone of Jen earnings quarter. sequentially. of revenue and

year-over-year, from best XX,XXX consistent believe XX% in the Those really which way measure market XX% route-based Our route-based locations. route-based we customer increase Professional the billings to of about is offering. the the to locations, locations with increase XX,XXX. grew success our

in inner in by back a XX% pharmacy of the continuation booster the while immunization liner X%. period. for mailback sold MedSafe And the from year-to-date sold, million. fiscal in the think billings the offering. of actually related this We $X.X vaccine the year-to-date retail increased really increased reflective And bounce increase recurring the COVID-XX model was liner revenue was driven is in -- this the by Our level. and sequential inner in was increase I the success illustrates saw quarterly it this unused administered for XX% medication revenue a shots And the quarter

generated Long year the were Term Our COVID quarter, billings Care and Care market headwinds. as related because December Long and customers. we were for being were talked was year-to-date of volumes significant Term down the our down, the heavy, in quarter of waste. by September And last last quarters about and they the That

Waste related Affordable business headwind We in the also and XXX,XXX we're in about September roughly very had then period more We closed quarter, in the route-based business headwind the year-to-date take you working overall high presently when by on increased lab the opportunities. the on October, XX%. as But XXX,XXX well. out acquisition acquisition

seen You recent have partnership PharMerica announced. the may

me problems Let just to our sure solve for in that, We importance pride customers. the to ability ourselves understands that. make of everyone one just complex really speak to

Care Term at the we're of pressing and management has industry problem proper hazardous controls and compliant including Long think medications, facing really good effective and the cost substances I waste. that been unused

upon I We Disposal the or were the beginning DEA Act. adopted MedSafe XXXX, designed primarily we've retail Secure rules leader. the in Responsible the and that designed the MedSafe MedSafe. and those rules also were for the DEA back think of job adopting Term the a in So, changed DEA retail And the becoming and pharmacy Well, Care Long Drug with I a was rule. believe And great based that done pharmacy.

slow Care Term to the MedSafe be Term MedSafe and market to adopt able it's for the been the Care time Long Long now it's So, and adopt. to

to catalyst of be really compliant. help So, in We and we the a provide catalyst. convenient save part the MedSafe that need PharMerica Term drive can money of we increase the And It start Term the We the and believe with MedSafe Long Long adoption can could could we them offering to a could Care. catalyst. very can how business. make raise a very, them and the solutions awareness MedSafe for Care need we

potential, about catalyst a in Care. look Long overall again, Term sales So, we excited that we're And move as MetSafe that. at to as a

So, let's look forward.

our opportunities we the quite all are position and capitalizing We the to we continue growing leadership all in see. energized the in solutions on We're markets offer.

have acquisition continue pipeline acquisition we ongoing we'll the the and acquisitions. vibrant. route-based remains immunizations, opportunity to opportunity to more organic emergence we've that business, close the focus an of growth opportunity move believe of compliment the can't And have or the But quite -- remain think we through XXXX, growth we the fiscal boosters. to variance hopefully any news seen business organic new related with the rollout We on The will In growth. of by volume the COVID-XX to causing orders -- variance the the watch COVID-XX timing shots we and of be quite fluid. hearing without the immunization about landscape continued driven year as related and again,

the As a of have we XX% reference, booster. about fully of vaccinated have Americans point only received that

of is variant vaccine how the to being could CDC is designed for and fourth for -- yesterday, the available This that's immunocompromised. about we heard there recommended You that heard everyone a being a Omicron were shot how XXXX. talking March be morning the variant news specifically

received orders bit received we see orders, all more that here about December So, Diane we'll to we to this. of we the quarter. because revenue in just will the speak continue immunization think the or related in a

front extremely that to from in opportunities And in the to us. opportunities. the all we're to to of really customers we're able our to continue as highly of support the So, it's perspective the current take important place know that all well-positioned we we infrastructure advantage the think standpoint have of be and well growth and confident

the to that, Diana So, turn can more it about address with I'll over financials. she and

Diana Diaz

revenue fiscal of million million to inventory $X.X decreased immunization in million down or a lower is year. $XX.X second of in $X.X inventory of David. that million slightly million XXXX last to described billings at related in of in and second Long programs And $X.X earlier. Care solution decrease of distributor drove locations billings of volumes year an million COVID-XX of million decrease Within $XX year, year of as patient in second in the fiscal Professional $XXX,XXX orders the million David or compared fiscal of decreased more market million, billings. by in Retail X% same of billings to million quarter Pharmaceutical with $X.X Customer for customer period. The are $X.X $X.X X%. fiscal which of $X.X business order reported market $X.X $X.X quarter prior in of mailback the were in in quarter period. XXXX, quarter billings quarter Manufacture the increase $X.X $X.X markets. the in the to as timing same year XX%. the Thank retail in orders fiscal support waste prior We related million of customer healthcare period. in the second you, increase bills million than timing Manufacture of half $X.X which impacted compared than for was the XXXX management Term due by the most the grew quarter timing of the our second segment this compared second million route-based bills to second year, Pharmaceutical related quarter the the in as Billings the fiscal increased heightened the home the consistent billings. second to XX% to compared primarily to $X.X adversely prior million compared route-based the billings second to that last the $XXX,XXX XXXX in market to of XXXX in quarter market quarter the prior to XXXX were prior million of

fiscal prior unused as in of year quarter $X.X as grew increase to XX% result compared period, of billings the to a million X% the medications second in million number Our same the in for $X.X of the a our than we the lower MedSafe with but prior installed into liners of XXX quarter, the the MedSafe sold. consistent was during number This quarter. in going Related to forecast quarter MedSafe business, units. second our XXX XXXX installed

of On COVID-XX testing from to Omicron is were when than activity. For units units, installed quarter, lower continue vaccination installs our and have XXX year-to-date year-to-date and down retail units. to their slightly forecast of pharmacy XXX XXX the as installs basis, XXX a installs of units, the see concerns we you December, additional focused MedSafe prior XXXX so on business our we saw in related

from this the of believe down Related units, utilization We at calendar up XX, installs calendar the retail units liners installations Consistent trends at installs in over year, retail XXXX retail Term MedSafe activity to inception X,XXX of of the were time. pharmacy. year second additional XXXX. program A the year units indicating by required XXXX, were we XXX the prior in traffic total be in year with XXX,XXX installed related more than processed MedSafe the pharmacies. XX% since installed units more which X,XXX calendar existing over X,XXX will second MedSafe processed, quarter driven to is who liners Care and Long liners due was MedSafe MedSafe, X,XXX delay pharmacies MedSafe For of quarter return the chose was XX% year. to COVID December installs in liners of up and sold prior at XXXX the

$X.X XXXX $X.X quarter operating of million income The same income the primarily in XXXX. compared the second a of last $X.X improved to $X.X second investment gross second income of $X.X quarter reported $X the quarter compared XX% increase $XXX,XXX year. second gross incentive costs. million in operating SG&A fiscal million margin about related of increased million by basic management prior The comp share in or continued of the last per last $X.XX SG&A income million of $X.X margin quarter. We XX% of accrual and $XXX,XXX second compared of quarter year. in is for of or sales of net the and quarter second diluted to the of share We year the and net in XX% year. marketing. reported million related million EBITDA in XXXX quarter increase to to EBITDA the XXXX diluted of We second to second in this improved per $XXX,XXX through basic in acquisition to the recorded financials. or Moving quarter the to of in $X.XX to in compared compared of quarter about of quarter in and the

last of the of half $X.X negatively increased cost XX% in fiscal $XXX,XXX $XX.X half the of $X.XX compared share million accrual revenue million fiscal points few the in XXXX, as of million fiscal a the of for the million half first the half to of acquisition increased billings compared increase with share decreased half sales. revenue income of XXXX about half XXXX, X% first XXXX to results. a fiscal $X year. per by $XXX,XXX $X.X EBITDA half and per to Now million and cost in was in $X.X about diluted of fiscal to first in income for the of $XX.X fixed operating in of of recorded in last the compared essentially consistent XX.X% of million half first income We was of to first compared in related year-to-date million compared marketing. last is basic related continued sales flat This of for million of $XXX,XXX increase first XXXX incentive of Net first the fiscal half XXXX the to in the for expense net component it first first investments the impacted But XXXX. XXXX. to or comp company's half half was of first of first year. X% to diluted management We of the $X.X of first first the increase XXXX. of in reported margin the year. fiscal SG&A Gross was XX.X% the $XX.X fiscal of Customer an at as income $XXX,XXX half and operating of costs, EBITDA $XXX,XXX half or $X.XX and of fiscal year. basic last in the

end remains at with of the September, XX, the Our as balance very cash to $XX.X sheet million $XX.X which of XXXX, December XXXX. strong, million XXXX and of June, million compares end $XX at of

at million capital June, working $X.X XXXX. end $XX.X XX, working that the have of We of December million capital XXXX compares of to at

to to sheet as the active provides we with strategy opportunities. us pipeline broader our our acquisition opportunity balance of continue strong execute on Our work

have to Looking low forward March, seasonally related XXXX revenue. we typically immunization the quarter, billings of

example, we COVID immunization quarter, of expected vaccine, pre-COVID seasonally related sold in million, For March, quarter, in is March, XXXX over light a was immunization we XXXX low $X.X quarter which in in so To-date, mailbacks. about orders immunizations. the $XXX,XXX not the of

the Looking turn higher of about the prior XXXX March, in quarter, excluded. forward more about year Long and the Term see a to back activity quarter, year related COVID business the expect call in route-based is XX% $XXX,XXX XXXX prior that, labs over the And over to Care or March, we I'll in increase David. if with to

David Tusa

it for ahead and go the Q&A. let's Diana. Thanks open Operator, up

Operator

is question affiliation, floor questions. coming Please Gerry announce question. your is pose then now for today from gentlemen, the Your Ladies Certainly. for Instructions] open your first [Operator Sweeney. and

Gerry Sweeney

Hey, for guys David, you know. my call. as taking Ralph Diana, Capital, Thanks

David Tusa

You bet.

Gerry Sweeney

and some Wanted little or about growth route-based investments you've this I detail to apologize internal I from. --? growth if business, on the talk made to sales. coming this acquisitions, business there think not and sales -- just curious internally growth? bit XX% where in more is base. a based invest some this -- little this you continue a from drive a is give bit Can broad opportunity with an customer And external some of sort And is and

David Tusa

but invested all generator all And we've with small we're market, the medium to well. been sales have team. it's in we and our markets, we've across sales a route-based what the more solution and pushing pleased more the our and growth seen markets in chain, that's vet quantity as what in invested. base on of offerings those center, broad everything board and surgery We've It's Sure. of

Gerry Sweeney

shifted as got growth Obviously, impact and or of type that like of markets? Has with outsourced, to Care terms in the -- disposal. used and Long is any Term And headwind a outside has dealing hospital on any COVID on COVID services? reduced negatively use they PPE been there their the positively or other of

David Tusa

only thing in -- say obviously the we normalized. period, to continuing the kind we the had year work the know headwinds from the Long immunization of side, really Term would I No. I don't prior it's I Care through vaccine, and on is The Long we're it. Care on that's Term then, mean, the and

I Term in say this, Long lab to a Although, Care, the will seems January. be the here side bit stronger

more Long So, appears this And be what out we've and Care month coming maybe latest what the there just January. for of of Term to seen variant labs. volume again

Gerry Sweeney

the Term --? meds, opportunities to it. going over see gears little anything there's is rollout retail Obviously, terms for the that growth then dealing there Got and But more shifting Care market. market the comment pharmacies with made from of focus bit switching are to or unused that in on market COVID you're the a there. fundamentally big Long And retail probably pharmacy a

David Tusa

pharmacies like Diana's we XXX like the resources focused very, of above. that's focused boosters quarter, so testing, right December where very, on And immunization, on being originally numbers, it bit think in we had you installed over was maybe saw the and like and retail inspection XXX Well, for are I now. all that MedSafe, very are a on XXX, I think little the

a retail be the year they're the quite again, going likely, it's calendar it installs on continues, that and as long the probably we going installs on now what's light pharmacy. at look from on MedSafe, on on as to the So, basis then

we Term at Care. be the calendar way year think XXXX it Long the year the look for could Now, is we

hoping for MedSafe on that pharmacy. we're Term what potential more than the make retail Care the the potential for strengthen Long will So or on is make any shortfall

Gerry Sweeney

it. Got

I Okay. want many lined, I back don't other questions. to people queue. there's you. in ask jump so too I'll Thank know

David Tusa

All right. Thanks Gerry.

Operator

then your pose is Your question announce Brown. Please your coming affiliation, question. next from Rob

Rob Brown

medicine would am question in expect I do Diana. term? expect really how it with you with just though David, or Markets. reevaluate -- you to Lake COVID up morning, Capital them or the sort when of pick that you Street -- long normalizes, unused retail would Is pharmacy good expect activity the Hi, that Gerry. with would is it, My

David Tusa

No.

and they through after normalized pick it'll if up normal. that to expect, pharmacy and we to normalized quite you've retail It's don't but think, levels. they're any I just to know expect back think back busy. of been when But get in this, go should they more levels. be to back us I a we're we going lately, more back -- I don't know get

Rob Brown

then, build at And just inventory the seeing terms customers. Okay. in Great. the of you're

talked out quarter. you strong customers pretty the What's your play at think of calendar activity how the -- the about the inventory is in for kind immunization the sort on for of bill I orders and sense seasonality XXXX?

David Tusa

good So a question. that's

mentioned I $X last limited excess I talking about think knowledge that had mailback million the you're have just we inventory. that -- may upon had, they I thought call, based

Rob Brown

Yeah. Correct. Correct.

David Tusa

burned that two, So, we excessive. to out there's that's but some know and they're off that overly down order still don't I think inventory levels there. continue maybe that been to they five, are

a Diana's fact, orders -- few end quarter. in In received numbers, saw of you we December from the as quite

or changed immunization, COVID there's whether you mailback more be I it's the no flu, fungible, what's use So, kind or can or any is for -- tell flu whatever. it's shingles of

more the we're what future, they're predictable shots the that and lot they or a will like So, appear fact over I see driven whatever is the to or say do I like, think be is quarters. that vaccines foreseeable the whatever orders to the orders going what -- by for smooth I administering,

versus quarters I'd of million $XX have $X the three example, first. million each rather For

evidence orders, immunization saw the did quarter. the million-plus of see we What in we'll $X that. bill four for think I And that. So, plus -- the we

Diana Diaz

$X million-plus for the quarter.

David Tusa

Yeah.

and -- as mentioned well. So then Diana

we So have immunization. far in $X.X for January, in revenues already million

going that that much I be -- inventory predictable vary That's spikes but more out smooth again, do. and things levels. So, to that hope orders I think we the and best significant questions, are your we've seen answer versus the in can

Rob Brown

Yeah. Thank very over. Thank I'll you. turn helpful. That's it you.

Operator

Michael Your your announce question. then next your Please affiliation, from coming question Hoffman. is pose

Michael Hoffman

David, Diana, Thanks. Stifel.

throws kind year it $X maybe, up up Following little a vaccines, it $X on build obviously million. place. the million a bit of of all million pace, $X inventory. around over COVID, of bounced but kind pre-COVID call

that add in baseline a walk out what a think sustained and of you then flu and do of of COVID. then kind you combination You new

So, $XX are think a million year towards year? at in it ticks $XX million, fiscal we $XX this point? landing little number up Or do a million on million, $XX this the you

David Tusa

So, I'm sorry.

immunization about So you're talking the billings?

Michael Hoffman

that, piece which is $X-ish was the Just flu a like vaccine year. of million historically

David Tusa

Right.

So …

Diana Diaz

we're So million through year-to-date, December. $X.X at already

David Tusa

a So, we're use million. if at if -- use -- guess at quarter $X.X million $X.X plus, If we're this as but and just a guide, the you X you is maybe December December million, was

Diana Diaz

million. $X.X

David Tusa

$X.X million-plus a six.

could So, Americans by administered think -- going with it's million higher, to plus more If get -- it's maybe adoption and vaccines now. really XX and end be your I a don't but bit you don't I pretty I comfortable think could unreasonable. there's low conservatively, be it

Michael Hoffman

right it is $XX looks year having conversation get million million. to $XX back And And the have then million inventory And more you, to $XX $XX like probably now what I'm I and next build. that million range.

David Tusa

I think that's reasonable.

Michael Hoffman

the XQ, fiscal route-based What's Okay. XQ? headwind in

David Tusa

about -- March about it's XXX zero. the $XXX,XXX It's quarter. in XQ, it's In

Michael Hoffman

Okay.

to So, as by ought opposed million $XX XQ real see organic growth. $XX we to million adjusted

David Tusa

hopefully, higher, the even be hopefully will yes. And but Right. potential --

Michael Hoffman

the on source? then in regardless the X,XXX, the to year, think wherever at X,XXX, you're calendar be sources, the you MedSafe going still do And Okay. of

David Tusa

that how Maybe. side, targeted, -- on the going mean, Term Long of It's can a Long that but with be XXXX, We Care guarantees, XXXX we on pharmacy to like going probably factor really key retail XXXX up goal It's the any the the short we'll be that always which we've units. Care Term make that to tough by I what is know but can't will predict. the Long to adopt XXXX a is. making And make optimistic adoption Care We're driver the shortfall Term number. Long MedSafe. that's Care, into be -- to Term the quickly

Michael Hoffman

much. very you Thank Great. right. All

David Tusa

All right. Michael. Thank

Operator

Steinke. question Kevin pose is Your your coming Please your next from then question. affiliation, announce

Kevin Steinke

just like partnership, PharMerica how I Kevin Hi. X,XXX to the an to It roughly about the they Barrington facilities of ask approved looks the Steinke, vendor that serve. and wanted going that's Research. work. more you're for just mechanics

a So, still working? hunting to or just how partnership what's signed of by them one, think you should or -- details more license can of adopted get do out on have be the up think you we kind kind one see of you any facilities essentially you as and ramping where quickly and go up the to -- this this how

David Tusa

pharmacy pharmacy So, have picture Care Term talk contract stand little of the a Term a Long third-party of Long retail and a difference facility the the facility, a Term me a a it's Care the we to let a since retail pharmacy. we Care, with three-party back. a operations MedSafe we In in the There's kind usually first, retail big a agreement. In bit and pharmacy, than really retail pharmacy. and is sell Long in

of They pharmacy have collector. has the to to and be be the program. Care in sense, Long Term part a run So DEA long authorized really to -- a

as have of that in it. of complex had So, one than was It's things well. the it kind to down middle more slowed they And of the launching that be the adoption.

the are communities great and there PharMerica and their they up help helping employees board helping to to to they're training. way training. speed this on and The pitching and work are in any the is with getting possible. PharMerica with But ones We're we're them to pitching it communities. been the with that So to have

being the able Term really Care lead see taking the I to to significant think So, their this offer they're communities. they Long because advantage

Kevin Steinke

Yeah. right. All

dedicating sounds it So, I so to -- partnership that they're and mean, given some obviously meaningful it. like the on board resources

David Tusa

Right.

Kevin Steinke

Right. Okay.

-- the on that about potentially the Long lot potentially and you're makeup a making that so, retail comments be And that by pharmacy relationship. up the be potentially it? shortfall, installations how PharMerica about driven could Term Care driven Is of your side, MedSafe -- thinking

David Tusa

I PharMerica I Care. look of to mean, great. at it. great They're with. partnership move all look catalyst the forward work Term to don't -- is of this We to more Well, people Long I a

I be PharMerica Term is use of significant the of But customers. money -- how what think saves currently Again, all doing. to MedSafe very, think ease sees it when a catalyst it'll sales I our very all the communities of bring and the to of and awareness them Care and opportunity So, really Long I Term Long compliance, Long think using it we Care the advantage makes Care that increase it'll the throughout have helpful. Term versus think they're the I to it

Kevin Steinke

other working Long mean, this pharmacies? the significant? and potential avenue I like is you you're Term are partnerships kind this penetrate that more And Right. to with of market really on Care taking attack

David Tusa

integral of the have pharmacy Long the pharmacy you process, Care, they yes, to sale, others. and the part to the serve to and we're be with talking Term Right. have the -- had Because Exactly. operation

Kevin Steinke

good or … pipeline the And Okay. is there,

David Tusa

quite Yeah. aware all Sure. the They're of MedSafe.

Kevin Steinke

for thanks my Well, questions. Great. Okay. taking

David Tusa

You bet. Thanks, Kevin.

Operator

now over comments. for David to on would floor closing back to I the like any

David Tusa

you. next Thank to We operator. we our the participating forward talking you, in appreciate you Thank support for Thank quarter. everyone and call. look

Operator

you. today's Thank and conclude does conference gentlemen, call. Ladies this

participation. your your You a this at and time for lines may you phone Thank wonderful disconnect have day.

Sharps Compliance (SMED) 26 Jan 222022 Q2 Earnings call transcript