Sharps Compliance Reports 46% Increase in Fiscal 2014 Fourth Quarter Customer Billings; 35% Increase in Revenue
- 63% improvement in fourth quarter gross profit with 8% increase in SG&A demonstrates leverage on incremental sales growth
- Retail market billings increase 184% as compared to prior year fourth quarter
- Professional market billings increase 38% over prior year fourth quarter driven by solid traction from inside and online sales channel
- Pharmaceutical manufacturer market billings increase 91% over prior year fourth quarter and up 55% over comparative trailing twelve month period; Fourth quarter includes resupply orders for several existing patient support programs of the Company's pharmaceutical manufacturer customers
- Environmental market billings increase more than 200% as compared to fourth quarter of fiscal 2013
-
Balance sheet remains solid with a cash balance of
$13.7 million and working capital of$17.9 million
Revenue in the fourth quarter of fiscal 2014 was
Customer billings grew 46% to
"During the quarter we also announced our
Focused sales and marketing initiatives continue to drive revenue
Pharmaceutical Manufacturer billings grew by 91% to
Professional market billings grew 38% to
Retail market billings grew 184% to
Environmental market billings grew more than 200% to
Home Health Care market billings decreased by 9% to
"During the June quarter we announced the expansion of our product offerings through the launch of our ship-back program for universal waste. We are working with Veolia to provide a safe, eco-friendly method for the disposal of fluorescent lights, batteries and other mercury containing devices. This arrangement demonstrates our commitment to providing environmentally sustainable waste management services and is an effective way for us to broaden our portfolio of mail and ship-back solutions by offering this complementary service to our customers."
Steady operating performance
Gross margin improved to 36.2% in the fourth quarter of fiscal 2014 compared with gross margin of 30.1% in the fourth quarter of fiscal 2013.
Selling, general and administrative (SG&A) expense increased to
For the fourth quarter of fiscal 2014 the Company generated operating income of
Fiscal 2014 Review
Sharps recorded revenue of
Fiscal 2014 gross margin was 33.8% as compared to gross margin of 29.5% in fiscal 2013. SG&A expense was
EBITDA grew to
Financial flexibility and a strong balance sheet
Cash and cash equivalents were
In
Outlook
"During the last few quarters we've made a concentrated effort to strengthen our sales team by adding more experienced sales personnel and we're beginning to see results from this initiative.
"Our Company is well positioned to benefit from the continuing changes in healthcare delivery from traditional to alternative sites, from the aging population and from increasing regulations related to the disposal of unused medications and medical waste. Likewise, we continue to build our already strong position with pharmaceutical manufacturers improving patient medication adherence, increasing compliance and enhancing branding."
Fourth quarter and fiscal year end 2014 webcast and conference call
The Company will host a teleconference today beginning at
The Sharps conference call can be accessed domestically by dialling (877) 407-0782 and international callers should dial (201) 689-8567. The webcast can be monitored at www.sharpsinc.com. Webcast listeners will have the opportunity to submit questions to the speakers. Select questions will be summarized and addressed during the question-and-answer portion of the call.
A telephonic replay will be available through
About
Headquartered in
More information on the Company and its products can be found on its website at: www.sharpsinc.com
Safe harbor statement
The information made available in this news release contains certain forward-looking statements which reflect
Non-GAAP measures
This release contains certain financial information not derived in accordance with generally accepted accounting principles ("GAAP"), including customer billings information, EBITDA and non-GAAP net income (loss) per share. The Company believes this information is useful to investors and other interested parties. Such information should not be considered as a substitute for any measure derived in accordance with GAAP, and may not be comparable to other similarly titled measures of other companies. Reconciliation of this information to the most comparable GAAP measures is included as an attachment to this release.
FINANCIAL TABLES FOLLOW
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| Condensed Consolidated Statements of Operations | ||||||
| (in thousands, except per share data) | ||||||
|
Three-Months Ended June 30, |
Twelve-Months Ended June 30, |
|||||
| (Unaudited) | (Unaudited) | |||||
| 2014 | 2013 |
% Change |
2014 | 2013 |
% Change |
|
| Revenue | $7,096 | $5,250 | 35.2% | $26,570 | $21,530 | 23.4% |
| Cost of revenue | 4,529 | 3,671 | 23.4% | 17,581 | 15,183 | 15.8% |
| Gross profit | 2,567 | 1,579 | 62.6% | 8,989 | 6,347 | 41.6% |
| Gross margin | 36.2% | 30.1% | 33.8% | 29.5% | ||
| SG&A expense | 2,344 | 2,168 | 8.1% | 9,100 | 8,619 | 5.6% |
| Legal settlement | (1,538) | -- | 100.0% | (1,538) | -- | 100.0% |
| Depreciation and amortization | 111 | 106 | 4.7% | 462 | 437 | 5.7% |
| Operating income (loss) | 1,650 | (695) | 965 | (2,709) | ||
| Operating margin | 23.3% | (13.2%) | 3.6% | (12.6%) | ||
| Other income (expense) | 8 | (10) | 24 | 12 | ||
| Income (loss) before income taxes | 1,658 | (705) | 989 | (2,697) | ||
| Income tax expense (benefit) | 9 | (15) | 33 | 15 | ||
| Net income (loss) | $1,649 | $(690) | $956 | $(2,712) | ||
| Net income (loss) per share | ||||||
| Basic | $0.11 | $(0.05) | $0.06 | $(0.18) | ||
| Diluted | $0.11 | $(0.05) | $0.06 | $(0.18) | ||
| Weighted Average Shares Outstanding | ||||||
| Basic | 15,270 | 15,333 | 15,289 | 15,255 | ||
| Diluted | 15,381 | 15,333 | 15,401 | 15,255 | ||
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| Condensed Consolidated Balance Sheets | ||
| (in thousands) | ||
|
2014 |
2013 |
|
| (Unaudited) | ||
| ASSETS: | ||
| Current assets: | ||
| Cash and cash equivalents | $ 13,717 | $ 15,503 |
| Restricted cash | 111 | 111 |
| Accounts receivable, net | 4,728 | 2,595 |
| Legal settlement receivable | 1,538 | -- |
| Inventory | 1,320 | 1,632 |
| Prepaid and other current assets | 474 | 583 |
| Total current assets | 21,888 | 20,424 |
| Property, plant and equipment, net | 3,858 | 4,440 |
| Intangible assets, net | 715 | 668 |
| Total assets | $ 26,461 | $ 25,532 |
| LIABILITIES AND STOCKHOLDERS' EQUITY: | ||
| Current liabilities: | ||
| Accounts payable | $ 1,617 | $ 1,085 |
| Accrued liabilities | 1,046 | 1,345 |
| Deferred revenue | 1,337 | 1,351 |
| Total current liabilities | 4,000 | 3,781 |
| Long-term deferred revenue | 524 | 579 |
| Other long-term liabilities | 33 | 102 |
| Total liabilities | 4,557 | 4,462 |
| Stockholders' equity: | ||
| Total stockholders' equity | 21,904 | 21,070 |
| Total liabilities and stockholders' equity | $ 26,461 | $ 25,532 |
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| Supplemental Customer Billing and Revenue Information | |||||
| (unaudited) | |||||
| (in thousands) | |||||
| Three-Months Ended June 30, | |||||
| 2014 | % Total | 2013 | $ Change | % | |
| BILLINGS BY MARKET: | |||||
| Home Health Care | $ 1,717 | 23.3% | $ 1,876 | $ (159) | (8.5%) |
| Retail | 1,985 | 26.9% | 698 | 1,287 | 184.4% |
| Professional | 1,431 | 19.4% | 1,037 | 394 | 38.0% |
| Pharmaceutical Manufacturer | 1,149 | 15.6% | 602 | 547 | 90.9% |
| Assisted Living | 433 | 5.9% | 416 | 17 | 4.1% |
| Environmental | 323 | 4.4% | 102 | 221 | 216.7% |
| Core Government | 126 | 1.7% | 136 | (10) | (7.4%) |
| Other | 207 | 2.8% | 192 | 15 | 7.8% |
| Subtotal | 7,371 | 100.0% | 5,059 | 2,312 | 45.7% |
| GAAP Adjustment * | (275) | 191 | (466) | (244.0%) | |
| Revenue Reported | $ 7,096 | $ 5,250 | $ 1,846 | 35.2% | |
| Twelve-Months Ended June 30, | |||||
| 2014 | % Total | 2013 | $ Change | % | |
| BILLINGS BY MARKET: | |||||
| Home Health Care | $ 7,251 | 27.3% | $ 6,721 | $ 530 | 7.9% |
| Retail | 6,406 | 24.1% | 5,041 | 1,365 | 27.1% |
| Professional | 5,311 | 20.0% | 3,863 | 1,448 | 37.5% |
| Pharmaceutical Manufacturer | 3,735 | 14.0% | 2,413 | 1,322 | 54.8% |
| Assisted Living | 1,713 | 6.4% | 1,576 | 137 | 8.7% |
| Environmental | 755 | 2.8% | 182 | 573 | 314.8% |
| Core Government | 495 | 1.9% | 732 | (237) | (32.4%) |
| Other | 941 | 3.5% | 755 | 186 | 24.6% |
| Subtotal | 26,607 | 100.0% | 21,283 | 5,324 | 25.0% |
| GAAP Adjustment * | (37) | 247 | (284) | (115.0%) | |
| Revenue Reported | $26,570 | $21,530 | $5,040 | 23.4% | |
| * Represents the net impact of the revenue recognition adjustments to arrive at reported GAAP revenue. Customer billings include all invoiced amounts for products shipped during the period reported. GAAP revenue includes customer billings as well as numerous adjustments necessary to reflect, (i) the deferral of a portion of current period sales and (ii) recognition of certain revenue associated with product returned for treatment and destruction. The difference between customer billings and GAAP revenue is reflected in the Company's balance sheet as deferred revenue. | |||||
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| Supplemental Customer Billing by Channel Information | |||||
| (unaudited) | |||||
| (in thousands) | |||||
|
Three-Months Ended |
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| 2014 | % Total | 2013 | $ Change |
% Change |
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| BILLINGS BY CHANNEL: | |||||
| Direct Sales | $ 3,813 | 51.7% | $ 1,705 | $ 2,108 | 123.6% |
| Distributors | 2,507 | 34.0% | 2,429 | 78 | 3.2% |
| Inside and Online Sales | 1,051 | 14.3% | 925 | 126 | 13.6% |
| Total Billings By Channel | $ 7,371 | 100.0% | $ 5,059 | $ 2,312 | 45.7% |
|
Twelve-Months Ended |
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| 2014 | % Total | 2013 | $ Change |
% Change |
|
| BILLINGS BY CHANNEL: | |||||
| Direct Sales | $ 11,996 | 45.1% | $ 8,139 | $ 3,857 | 47.4% |
| Distributors | 10,615 | 39.9% | 9,884 | 731 | 7.4% |
| Inside and Online Sales | 3,996 | 15.0% | 3,260 | 736 | 22.6% |
| Total Billings By Channel | $ 26,607 | 100.0% | $ 21,283 | $ 5,324 | 25.0% |
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| Supplemental Table to Reconcile Net Income (Loss) to EBITDA | ||||
| (unaudited) | ||||
| (in thousands) | ||||
|
Three-Months Ended |
Twelve-Months Ended |
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| 2014 | 2013 | 2014 | 2013 | |
| Net Income (loss) | $ 1,649 | $ (690) | $ 956 | $ (2,712) |
| Income tax expense (benefit) | 9 | (15) | 33 | 15 |
| Interest income | (8) | (6) | (24) | (28) |
| Depreciation and amortization | 270 | 276 | 1,105 | 1,103 |
| EBITDA | $ 1,920 | $ (435) | $ 2,070 | $ (1,622) |
| The Company defines earnings before interest, taxes, depreciation and amortization ("EBITDA") as net income (loss), plus income tax expense (benefit), interest income, and depreciation and amortization. Other companies may define EBITDA differently. EBITDA is presented because it is a financial measure that is frequently requested by third parties. However, EBITDA is not considered under generally accepted accounting principles as a primary measure of an entity's financial results, and accordingly, EBITDA should not be considered an alternative to operating income (loss), net income (loss), or cash flows as determined under generally accepted accounting principles and as reported by the Company. | ||||
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| Supplemental Reconciliation of GAAP to Non-GAAP Net Income (Loss) Per Share* | ||||
| (unaudited) | ||||
| (in thousands, except per share data) | ||||
|
Three-Months Ended |
Twelve-Months Ended |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Net Income (Loss) | $ 1,649 | $ (690) | $ 956 | $ (2,712) |
| Diluted net income (loss) per share | $ 0.11 | $ (0.05) | $ 0.06 | $ (0.18) |
| Adjustments: | ||||
| Severance costs | -- | -- | 102 | 184 |
| Legal costs related to CDC claim | 30 | -- | 280 | -- |
| Accrued loss on sublease | -- | -- | -- | 154 |
| Legal settlement | (1,538) | -- | (1,538) | -- |
| Adjustments | (1,508) | -- | (1,156) | 338 |
| Adjusted Net Income (loss) | $ 141 | $ (690) | $ (200) | $ (2,374) |
| Adjusted diluted net income (loss) per share | $ 0.01 | $ (0.05) | $ (0.01) | $ (0.16) |
| * In accordance with U.S. generally accepted accounting principles (GAAP), the Company's net deferred tax assets have been fully reserved by a tax valuation allowance and any tax expense (benefit) has been offset by the utilization of net operating loss carryforwards or additional deferred tax valuation allowance. Therefore, the amounts shown in this schedule have not been adjusted to reflect any tax impact. The Company believes this information is useful to investors and other interested parties. Such information would not be considered as a substitute for any measure derived in accordance with GAAP, and may not be comparable to other similarily titled measures of other companies. | ||||
CONTACT: For more information contact:
Diana P. Diaz Sharps Compliance Corp.
Vice President and Chief Financial Officer
Phone: (713) 660-3547
Email: ddiaz@sharpsinc.com
John Nesbett /Jennifer Belodeau
Institutional Marketing Services (IMS)
Phone: (203) 972-9200
Email: jnesbett@institutionalms.com
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