Investor’s Watch List: Sharps Compliance Corp. (NASDAQ: SMED)

Loretta Morfin

I am Loretta Morfin and I have over 16 years experience in the financial services industry giving me a vast understanding of how news affects the financial markets.

I am an active day trader spending the majority of my time analyzing earnings reports and watching commodities and derivatives. I have a Masters Degree in Economics from Westminster University with previous roles counting Investment Banking.

Address: 3966 Euclid Avenue, San Luis Obispo, CA 93401, USA
Phone: (+1) 805-361-3810
Email: lorettamorfin@importtourism.com
Loretta Morfin

HOUSTON, July 12, 2019 – Shares of Sharps Compliance Corp. (NASDAQ: SMED) showed the bullish trend with a higher momentum of 1.98% to $3.60. The company traded total volume of 7.401K shares as contrast to its average volume of 18.75K shares. The company has a market value of $56.84M and about 15.79M shares outstanding.

Sharps Compliance Corp. (SMED) reported a loss of $1.10M in its fiscal third quarter. The Houston-based company said it had a loss of 7 cents per share. The results missed Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for a loss of 1 cent per share.

Revenue in the third quarter of fiscal 2019 was $9.50M, a slight increase contrast to $9.40M in the same prior year quarter with gross margin of 21.5%, a decline from gross margin of 24.4% in the third quarter of fiscal 2018.  Gross margin was adversely influenced in the third quarter by higher than expected costs of sales related to a number of items counting costs associated with a once every three years EPA required test at the Company’s treatment facility in Texas which will not be required for another three years. Gross margin was also adversely influenced by about $0.10M, or 100 basis points, as a result of the application of the new revenue recognition standard contrast to the prior year quarter. The Company reported an operating loss of $1.10M in the third quarter of fiscal 2019, contrast to an operating loss of $0.70M in the third quarter of 2018.  Sharps recorded a net loss of $1.10M or a loss of $0.07 per basic and diluted share in the third quarter of fiscal 2019, as contrast to a net loss of $0.80M or a loss of $0.05 per basic and diluted share in the third quarter of fiscal 2018.

Third Quarter Review:

Professional market billings increased 15% to $3.70M in the third quarter of fiscal 2019 contrast to $3.20M in the prior year period. This totally organic growth is related to the Company’s success attracting customers from the small to medium quantity generator sector made up of physicians, clinics, dentists, surgery centers, veterinarians and other healthcare professionals, who typically use a combination of cost-effective and easy to use Sharps Recovery System™ and the Company’s route-based pick-up services. Billings for the inside and online sales channel, which mainly targets the Professional and Government markets, increased 7% to $2.00M in the third quarter of fiscal 2019 as contrast to $1.90M in the same prior year period.

Retail market billings of $1.60M were down slightly when contrast to the prior year period. Retail market billings for unused medication solutions were down about $0.20M contrast to the prior year quarter because of the timing of a launch of a major unused medication program.

Home Healthcare billings reduced 12% to $1.60M in the third quarter of 2019 contrast to $1.90M in the third quarter of 2018, mainly because of a shift in the timing of orders.

Pharmaceutical Manufacturer billings increased 6% to $1.00M in the third quarter of fiscal 2019 contrast to the third quarter of fiscal 2018. The increase is related to inventory builds for current and new patient support programs.

Government billings increased 9% to $0.60M in the third quarter of fiscal 2019. Government market billings included $0.20M of orders under the VA’s Blanket Purchase Agreement, up contrast with orders in the third quarter of fiscal 2018. MedSafe related orders to the government market were $0.20M for the third quarter of fiscal 2019, consistent with billings in the third quarter of fiscal 2018.

Financial Flexibility and a Strong Balance Sheet:

Cash was $5.20M at March 31, 2019, consistent with the cash level at June 30, 2018.  The Company had working capital of $9.90M at March 31, 2019 contrast to $10.30M at June 30, 2018.

The Company offered net profit margin of -1.00% while its gross profit margin was 29.30%. ROE was recorded as -1.60% while beta factor was 0.19. The stock, as of recent close, has shown the weekly upbeat performance of 1.41% which was maintained at 4.35% in this year.

Loretta Morfin

Loretta Morfin

I am Loretta Morfin and I have over 16 years experience in the financial services industry giving me a vast understanding of how news affects the financial markets. I am an active day trader spending the majority of my time analyzing earnings reports and watching commodities and derivatives. I have a Masters Degree in Economics from Westminster University with previous roles counting Investment Banking. Address: 3966 Euclid Avenue, San Luis Obispo, CA 93401, USA Phone: (+1) 805-361-3810 Email: lorettamorfin@importtourism.com