Sharps Compliance (SMED) Reports In-Line Q2 EPS, Revenues Beat

Sharps Compliance (NASDAQ: SMED) reported Q2 EPS of $0.07, in-line with the analyst estimate of $0.07. Revenue for the quarter came in at $17 million versus the consensus estimate of $16.13 million.

• Second Quarter Revenue of $17.0 million, increased 17% from the prior year
• Second Quarter Customer Billings of $18.5 million, increased 24% over the prior year
• Retail market billings increased 46%; Long-Term Care market billings increased 56%; Pharmaceutical Manufacturer market billings grew 35%
• Route-Based Pickup billings increased 41% for the quarter
• Second Quarter Net Income of $0.07 per share
• Company now expects approximately $15 Million in COVID-19 related advance mailback orders in the March quarter, up from previous expectation of $10 million
• Robust COVID-19 related mailback order activity; Playing a key role in COVID-19 vaccine programs in Retail and Long-Term Care Settings

David P. Tusa, President and Chief Executive Officer of Sharps, stated, “Our second quarter results reflect growth across all markets, as well as significantly increased customer billings in our mailback and route-based solution offerings. We anticipated this growth, and in March 2020 we launched several substantial infrastructure projects to support this growth. In September 2020, we completed projects including: (i) new autoclaves (one each) at the Company’s Texas and Pennsylvania treatment facilities, essentially tripling capacity, (ii) the addition of mailback related warehouse and distribution space of 52,000 square feet in Pennsylvania and (iii) mailback inventory on January 1, 2021 of 300,000 units with an ongoing plan to manufacture as many as an additional 1 million units by the end of the fiscal year 2021. These projects have proven to be critical to the business, allowing us to facilitate uninterrupted service to our customers throughout the COVID-19 pandemic; treat the increased volume of medical waste from all of our markets; and to continue the fulfillment of COVID-19 related mailback orders which began in December 2020 and should continue as the country immunizes Americans with the COVID-19 vaccines.

“In addition to significant growth in our mailback business, we are very pleased with the 41% increase in the route-based business billings for the second quarter. Contributing to this growth was an increase in customers and new business of about $700,000 as well as increased volumes from our Long-Term Care customers of about $300,000. We continue to be bullish on the growth prospects for our route-based offering, which we believe has the strong potential to provide long term, recurring revenue in a market we believe is greatly underserved.

“Earlier this month, we announced $10 million in advance mailback orders to be filled primarily in the March 2021 quarter, for the expected support of COVID-19 related immunization activity in the long-term care and retail markets. Today, those advance mailback orders total approximately $15 million and include our mailback solutions for both COVID-19 vaccine and COVID-19 testing waste management. While these orders are expected to be shipped during the March 2021 quarter, the unprecedented economic and public health situation in the U.S. could affect the timing and status of these orders.

“We believe the mailback orders received to date related to COVID-19 medical waste management are just the beginning of the COVID-19 immunization activity and could likely be followed by additional orders as the country works to immunize all Americans with the COVID-19 vaccine. As we have all come to understand, the current COVID-19 vaccines involve 2 shots – the initial immunization followed by a booster a few weeks later. Given what is being reported in the news, and what we are hearing from healthcare professionals, we believe there is also the potential for additional booster shots to address variants of the virus plus the eventual vaccines for children which are currently in clinical trials.”

For earnings history and earnings-related data on Sharps Compliance (SMED) click here.

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