Sharps Compliance reports narrow profits in its most recent quarter

Houston-based Sharps Compliance Corporation, a provider of waste management services for the medical, pharmaceutical and hazardous waste sectors, has reported revenue and profits in its 2016 fiscal fourth quarter that are down from the comparable period in 2015.

In its 2016 fourth quarter, which ended June 30, 2016, the company’s revenue was $8.9 million, compared to revenue of $9.0 million in the comparable 2015 quarter. Sharps Compliance reports operating income of $0.2 million in the fourth quarter of 2016, compared to operating income of $1.4 million in the fourth quarter of fiscal 2015.

“Our fourth quarter revenue was down slightly from the same quarter last year, which included several inventory builds for pharmaceutical manufacturer patient support programs, $0.5 million of Veterans Administration (VA) envelope orders and the launch of the TakeAway Medication Recovery envelopes by one of our retail customers,” says David P. Tusa, president and CEO of Sharps.

For the fiscal year, Sharps recorded revenue of $33.4 million, an increase of 8 percent compared to revenue of $30.9 million in fiscal 2015. Customer billings increased 9 percent to $34.3 million in fiscal 2016, with professional billings increasing by 22 percent to $7.6 million in fiscal 2016 while government billings decreased by 12 percent to $1.5 million for the year.

Retail sales for the 2016 fiscal year were negatively impacted by a mild flu season, says Sharps, but positively impacted by the launch of the TakeAway Medication Recovery System envelopes by some retail customers. In the flu seasons from 2011 to 2014, the growth in the retail flu business for Sharps was between 24 percent and 36 percent. “Despite the decrease in retail flu business for fiscal 2016 (the 2015 flu season) of 13 percent due to a mild flu season, Sharps believes the retail market should continue to drive long-term growth for the company as consumers increasingly use alternative sites, such as retail pharmacies, to obtain flu and other immunizations,” says the company.

States Tusa, “As we close out fiscal year 2016, we've made significant progress repositioning the company as a comprehensive service provider to drive organic growth, increase our critical mass through acquisitions and develop new products and solutions that will help our customers comply with waste disposal regulations in a cost effective manner.”

He adds, “We're optimistic about opportunities around our TakeAway Recycle System for the collection and recycling of single-use medical devices.”

Following the close of the quarter, Sharps also announced the acquisition of Brooklyn, New York-based Citiwaste LLC, which it describes as a full service, route-based provider of medical, pharmaceutical and hazardous waste services to more than 5,500 customer locations in New York, New Jersey, Connecticut and Massachusetts. Citiwaste was acquired for $9 million. Prior to the acquisition date, Citiwaste had annual revenue of approximately $3 million, serving small-to-medium-sized waste generators primarily in the health care, professional, and assisted living and long-term care markets.

Sharps also has announced receiving a permit from the Commonwealth of Pennsylvania Department of Environmental Protection Bureau of Waste Management for the processing of medical waste at a treatment facility located in northeastern Pennsylvania. The 40,000-square-foot facility has been permitted as both a medical waste treatment facility, using an autoclave, and as a transfer station for medical, pharmaceutical and trace chemotherapy waste of up to 82 tons per day. Sharps says the facility is designed “to cost-effectively and efficiently process medical waste generated by the company’s route-based and mail back customers and also doubles as a distribution center of mail back solutions.”

Says Tusa, “The Citiwaste acquisition is a significant step as we strategically build critical mass through our targeted acquisition program. With Citiwaste, Sharps becomes a leading provider of route-based services in the Northeast, serving an 11 contiguous state region and increasing our Northeast customer locations to more than 7,800, in attractive and densely populated areas. With the establishment of our Northeast-based treatment facility, we believe Sharps has strengthened its market position in the route-based business to service areas which encompass about 100 million people, or 31 percent of the U.S. population.”