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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Sharps Compliance Corp | NASDAQ:SMED | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 8.75 | 5.00 | 8.74 | 0 | 01:00:00 |
☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
74-2657168
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
9220 Kirby Drive, Suite 500, Houston, Texas
|
77054
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of Each Class
|
Name of Each Exchange on Which Registered
|
Common Shares, $0.01 Par Value
|
The NASDAQ Capital Market
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company ☒
|
(1)
|
Portions of the Registrant’s Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A for the Annual Meeting of Shareholders to be held on November 16, 2017 are incorporated by reference into Part III.
|
PART I
|
||
Item 1
|
4
|
|
Item 1A
|
13
|
|
Item 1B
|
17
|
|
Item 2
|
17
|
|
Item 3
|
17
|
|
Item 4
|
17
|
|
PART II
|
||
Item 5
|
17
|
|
Item 6
|
18
|
|
Item 7
|
19
|
|
Item 8
|
28
|
|
Item 9
|
28
|
|
Item 9A
|
28
|
|
Item 9B
|
29
|
|
PART III
|
||
Item 10
|
29
|
|
Item 11
|
29
|
|
Item 12
|
29
|
|
Item 13
|
29
|
|
Item 14
|
29
|
|
PART IV
|
||
Item 15
|
30
|
|
Item 16
|
31
|
|
32
|
||
*This Table of Contents is inserted for convenience of reference only and is not a part of this Report as filed.
|
· |
ultimate users, which is designed for use in the long-term care, hospice and consumer markets.
|
· |
DEA registrants, which DEA Reverse Distribution solution is a DEA-compliant collection, return and destruction solution for DEA registrants’ expired or unused controlled substances. The system includes prepaid return transportation, materials to package for return, complete documentation of returned pharmaceuticals and proper disposal with online proof of destruction.
|
· |
A large professional market that consists of dentists, veterinarians, clinics, private practice physicians, urgent care facilities, ambulatory surgical centers and other healthcare facilities. This regulated market consists of small to medium quantity generators of medical, pharmaceutical and hazardous waste where we can offer a lower cost to service with solutions to match individual facility needs. The Company addresses this market from two directions: (i) field sales which focus on larger-dollar and nationwide opportunities where we can integrate the route-based pickup service along with our mailback solutions to create a comprehensive medical waste management offering and (ii) inside and online sales which focus on the individual or small group professional offices, government agencies, smaller retail pharmacies and clinics and assisted living/long term care facilities. The Company is able to compete more aggressively in the medium quantity generator market with the addition of route-based services where the mailback may not be as cost effective. The Company’s route-based business provides direct service to areas encompassing about 155 million people or 48% of the U.S. population.
|
· |
In July 2015 and December 2015, the Company augmented its network of medical and hazardous waste service providers with acquisitions of route-based pickup services in the Northeast serving Pennsylvania, Maryland, Ohio and other neighboring states. In July 2016, the Company acquired another route-based pickup service which expanded service to New York and New Jersey and strengthened the Company’s position in the Northeast. Through a combination of acquisition and organic growth, the Company now offers route-based pickup services in a twenty-three (23) state region of the South, Southeast and Northeast portions of the United States. The Company directly serves more than 9,500 customer locations with route-based pickup services. With the addition of these route-based pickup regions and the network of medical and hazardous waste service providers servicing the entire U.S., the Company offers customers a blended product portfolio to effectively manage multi-site and multi-sized locations, including those that generate larger quantities of waste. The network has had a significant positive impact on our pipeline of sales opportunities - over 60% of this pipeline is attributable to opportunities providing comprehensive waste management service offerings where both the mailback and pickup service are integrated into the offering.
|
· |
The changing demographics of the U.S. population – according to the U.S. Census Bureau, 2012 Population Estimates and National Projections, one out of five Americans will be 65 years or older by 2030, which will increase the need for cost-effective medical waste management solutions, especially in the long-term care and home healthcare markets. With multiple solutions for managing regulated healthcare-related waste, the Company delivers value as a single-source provider with blended mailback and route-based pickup services matched to the waste volumes of each facility.
|
· |
The shift of healthcare from traditional settings to the retail pharmacy and clinic markets, where the Company focuses on driving increased promotion of the Sharps Recovery System. According to the Centers for Disease Control (“CDC”), 24% of flu shots for adults were administered in a retail clinic. Over the flu seasons from 2011 to 2014, the growth in the Retail flu business for Sharps was between 24% and 36%. Despite the decrease in Retail flu business for fiscal year 2017 (the 2016 flu season) of 15% due to a mild flu season and the loss of one retail pharmacy customer, Sharps believes the Retail market should continue to contribute to long-term growth for the Company as consumers increasingly use alternative sites, such as retail pharmacies, to obtain flu and other immunizations.
|
· |
The passage of regulations for ultimate user medication disposal allows the Company to offer new solutions (MedSafe and TakeAway Medication Recovery System envelopes) that meet the regulations for ultimate user controlled substances disposal (Schedules II-V) to retail pharmacies. Additionally, with the new regulations, the Company is able to provide the MedSafe and TakeAway Medication Recovery Systems to assisted living and hospice to address a long standing issue within long-term care.
|
· |
Local, state and federal agencies have growing needs for solutions to manage medical and pharmaceutical waste — the Company’s Sharps Recovery System is ideal for as-needed disposal of sharps and other small quantities of medical waste generated within government buildings, schools and communities. The Company also provides TakeAway Medication Recovery System envelopes and MedSafe solutions to government agencies in need of proper and regulatory compliant medication disposal.
|
· |
With an increased number of self-injectable medication treatments and local regulations, the Company believes its flagship product, the Sharps Recovery System, continues to offer the best option for proper sharps disposal at an affordable price. The Company delivers comprehensive services to pharmaceutical manufacturers that sell high-dollar, self-injectable medications, which include data management, compliance reporting, fulfillment, proper containment with disposal, branding and conformity with applicable regulations. In addition, the Company provides self-injectors with online and retail purchase options of sharps mailback systems, such as the Sharp Recovery System and Complete Needle Collection & Disposal System, respectively.
|
· |
A heightened interest by many commercial companies who are looking to improve workplace safety with proper sharps disposal and unused medication disposal solutions — the Company offers a variety of services to meet these needs, including the Sharps Secure Needle Disposal System, Sharps Recovery System, Spill Kits and TakeAway Medication Recovery System envelopes.
|
· |
The Company continually develops new solution offerings such as ultimate user medication disposal (MedSafe and TakeAway Medication Recovery System), mailback services for DEA registrant expired inventory of controlled substances (TakeAway Medication Recovery System DEA Reverse Distribution for Registrants) and shipback services for collection and recycling of single-use medical devices from surgical centers and other healthcare facilities (TakeAway Recycle System).
|
Year Ended June 30,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
BILLINGS BY MARKET:
|
||||||||||||
Professional
|
31
|
%
|
22
|
%
|
20
|
%
|
||||||
Home Health Care
|
21
|
%
|
22
|
%
|
22
|
%
|
||||||
Retail
|
19
|
%
|
26
|
%
|
28
|
%
|
||||||
Pharmaceutical Manufacturer
|
16
|
%
|
17
|
%
|
15
|
%
|
||||||
Assisted Living
|
6
|
%
|
6
|
%
|
6
|
%
|
||||||
Government
|
4
|
%
|
4
|
%
|
5
|
%
|
||||||
Environmental
|
1
|
%
|
1
|
%
|
1
|
%
|
||||||
Other
|
2
|
%
|
2
|
%
|
3
|
%
|
||||||
100
|
%
|
100
|
%
|
100
|
%
|
· |
Web and Inside Sales
— Through targeted telemarketing initiatives (inside sales), e-commerce driven website and web-based promotional activities, we believe we can drive significant additional growth as we increase awareness of the Company’s innovative solution offerings with a focus on individual or small group professional offices, government agencies, smaller retail pharmacies and clinics and assisted living/long-term care facilities.
|
· |
Field Sales
– The field sales team focuses on larger dollar and nationwide opportunities in most of the markets served. The field sales team is able to address larger opportunities where we can integrate the route-based pickup service along with our mailback solutions to create a comprehensive waste management offering.
|
ITEM 5. |
Common Stock
|
||||||||
High
|
Low
|
|||||||
Fiscal Year Ending June 30, 2016
|
||||||||
First Quarter
|
$
|
9.53
|
$
|
6.10
|
||||
Second Quarter
|
$
|
10.11
|
$
|
7.32
|
||||
Third Quarter
|
$
|
8.57
|
$
|
4.75
|
||||
Fourth Quarter
|
$
|
6.03
|
$
|
4.16
|
||||
Fiscal Year Ending June 30, 2017
|
||||||||
First Quarter
|
$
|
5.84
|
$
|
4.29
|
||||
Second Quarter
|
$
|
4.51
|
$
|
3.40
|
||||
Third Quarter
|
$
|
4.86
|
$
|
4.17
|
||||
Fourth Quarter
|
$
|
4.61
|
$
|
4.00
|
||||
Fiscal Year Ending June 30, 2018
|
||||||||
First Quarter (August 21, 2017)
|
$
|
5.67
|
$
|
4.17
|
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
|
Weighted average
exercise price of
outstanding
options, warrants
and rights
|
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
|
||||||||||
Plan Category
|
(a)
|
(b)
|
(c)
|
|||||||||
2010 Stock Plan as approved by shareholders (1) (2)
|
877,904
|
$
|
4.53
|
1,561,891
|
|
For the Year Ended June 30,
|
|||||||||||||||||||
|
2017
|
2016
|
2015
|
2014
|
2013
|
|||||||||||||||
|
||||||||||||||||||||
Revenues
|
$
|
38,188
|
$
|
33,383
|
$
|
30,902
|
$
|
26,570
|
$
|
21,530
|
||||||||||
Operating Income (Loss)
|
$
|
(1,187
|
)
|
$
|
5
|
$
|
1,236
|
$
|
965
|
$
|
(2,709
|
)
|
||||||||
Net Income (Loss)
|
$
|
(1,293
|
)
|
$
|
13
|
$
|
1,160
|
$
|
956
|
$
|
(2,712
|
)
|
||||||||
|
||||||||||||||||||||
Net Income (Loss) per share:
|
||||||||||||||||||||
Basic
|
$
|
(0.08
|
)
|
$
|
0.00
|
$
|
0.08
|
$
|
0.06
|
$
|
(0.18
|
)
|
||||||||
Diluted
|
$
|
(0.08
|
)
|
$
|
0.00
|
$
|
0.07
|
$
|
0.06
|
$
|
(0.18
|
)
|
||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Total Assets
|
$
|
34,464
|
$
|
30,147
|
$
|
29,751
|
$
|
26,461
|
$
|
25,532
|
||||||||||
Total Debt
|
$
|
2,603
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Cash and Cash Equivalents
|
$
|
4,675
|
$
|
12,435
|
$
|
15,157
|
$
|
13,717
|
$
|
15,503
|
||||||||||
Working Capital
|
$
|
10,488
|
$
|
17,232
|
$
|
19,623
|
$
|
17,888
|
$
|
16,643
|
||||||||||
Total Stockholders’ Equity
|
$
|
25,287
|
$
|
23,843
|
$
|
23,586
|
$
|
21,904
|
$
|
21,070
|
·
|
2014 Operating income and net income include $1.5 million for a legal settlement received by the Company.
|
·
|
2016 Revenues, operating income and net income include the results of operations for the acquisitions during the year which were not individually or in the aggregate material to the Company’s financial position. Additionally, the acquisitions pro forma results would not have a material impact on the Company’s results had the acquisitions occurred at the beginning of the current year or previous year.
|
·
|
2017 Revenues, operating income and net income include the results of operations for the acquisition during the year. See Note 12 in the notes to the consolidated financial statements for acquisition pro forma results.
|
Year Ended June 30,
|
||||||||||||||||||||||||
2017
|
%
|
2016
|
%
|
2015
|
%
|
|||||||||||||||||||
Revenues
|
$
|
38,188
|
100.0
|
%
|
$
|
33,383
|
100.0
|
%
|
$
|
30,902
|
100.0
|
%
|
||||||||||||
Cost of revenues
|
26,351
|
69.0
|
%
|
22,272
|
66.7
|
%
|
19,907
|
64.4
|
%
|
|||||||||||||||
Gross profit
|
11,837
|
31.0
|
%
|
11,111
|
33.3
|
%
|
10,995
|
35.6
|
%
|
|||||||||||||||
SG&A expense
|
12,223
|
32.0
|
%
|
10,812
|
32.4
|
%
|
9,496
|
30.7
|
%
|
|||||||||||||||
Depreciation and amortization
|
801
|
2.1
|
%
|
294
|
0.9
|
%
|
263
|
0.9
|
%
|
|||||||||||||||
Operating income (loss)
|
(1,187
|
)
|
(3.1
|
%)
|
5
|
0.0
|
%
|
1,236
|
4.0
|
%
|
||||||||||||||
Other income (expense)
|
(102
|
)
|
(0.3
|
%)
|
32
|
0.1
|
%
|
36
|
0.1
|
%
|
||||||||||||||
Income (loss) before income taxes
|
(1,289
|
)
|
37
|
1,272
|
||||||||||||||||||||
Income tax expense
|
4
|
0.0
|
%
|
24
|
0.1
|
%
|
112
|
0.4
|
%
|
|||||||||||||||
Net income (loss)
|
$
|
(1,293
|
)
|
(3.4
|
%)
|
$
|
13
|
0.0
|
%
|
$
|
1,160
|
3.8
|
%
|
Year Ended June 30,
|
||||||||||||
2017
|
2016
|
Variance
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
BILLINGS BY MARKET:
|
||||||||||||
Professional
|
$
|
11,962
|
$
|
7,571
|
$
|
4,391
|
||||||
Home Health Care
|
7,901
|
7,378
|
523
|
|||||||||
Retail
|
7,010
|
8,798
|
(1,788
|
)
|
||||||||
Pharmaceutical Manufacturer
|
5,961
|
5,708
|
253
|
|||||||||
Assisted Living
|
2,442
|
2,194
|
248
|
|||||||||
Government
|
1,680
|
1,541
|
139
|
|||||||||
Environmental
|
414
|
259
|
155
|
|||||||||
Other
|
763
|
845
|
(82
|
)
|
||||||||
Subtotal
|
38,133
|
34,294
|
3,839
|
|||||||||
GAAP Adjustment *
|
55
|
(911
|
)
|
966
|
||||||||
Revenue Reported
|
$
|
38,188
|
$
|
33,383
|
$
|
4,805
|
Year Ended June 30,
|
||||||||||||||||
2017
|
% Total
|
2016
|
% Total
|
|||||||||||||
REVENUES BY SOLUTION:
|
||||||||||||||||
Mailbacks
|
$
|
24,080
|
63.1
|
%
|
$
|
24,654
|
71.9
|
%
|
||||||||
Route-based pickup services
|
6,348
|
16.6
|
%
|
2,061
|
6.0
|
%
|
||||||||||
Unused medications
|
3,377
|
8.9
|
%
|
3,531
|
10.3
|
%
|
||||||||||
Third party treatment services
|
413
|
1.1
|
%
|
258
|
0.8
|
%
|
||||||||||
Other
(1)
|
3,915
|
10.3
|
%
|
3,790
|
11.0
|
%
|
||||||||||
Total billings
|
$
|
38,133
|
100.0
|
%
|
$
|
34,294
|
100.0
|
%
|
||||||||
GAAP adjustment
(2)
|
55
|
(911
|
)
|
|||||||||||||
Revenue reported
|
$
|
38,188
|
$
|
33,383
|
(1)
|
The Company’s other products include IV poles, accessories, containers, asset return boxes and other miscellaneous items.
|
(2)
|
Represents the net impact of the revenue recognition adjustments required to arrive at reported generally accepted accounting principles (“GAAP”) revenue. Customer billings include all invoiced amounts associated with products shipped or services rendered 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 products returned for treatment and destruction. The difference between customer billings and GAAP revenue is reflected in the Company’s balance sheet as deferred revenue.
|
Year Ended June 30,
|
||||||||||||
2016
|
2015
|
Variance
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
BILLINGS BY MARKET:
|
||||||||||||
Retail
|
$
|
8,798
|
$
|
8,726
|
$
|
72
|
||||||
Professional
|
7,571
|
6,225
|
1,346
|
|||||||||
Home Health Care
|
7,378
|
6,802
|
576
|
|||||||||
Pharmaceutical Manufacturer
|
5,708
|
4,855
|
853
|
|||||||||
Assisted Living
|
2,194
|
1,879
|
315
|
|||||||||
Government
|
1,541
|
1,756
|
(215
|
)
|
||||||||
Environmental
|
259
|
368
|
(109
|
)
|
||||||||
Other
|
845
|
891
|
(46
|
)
|
||||||||
Subtotal
|
34,294
|
31,502
|
2,792
|
|||||||||
GAAP Adjustment *
|
(911
|
)
|
(600
|
)
|
(311
|
)
|
||||||
Revenue Reported
|
$
|
33,383
|
$
|
30,902
|
$
|
2,481
|
Year Ended June 30,
|
||||||||||||||||
2016
|
% Total
|
2015
|
% Total
|
|||||||||||||
REVENUES BY SOLUTION:
|
||||||||||||||||
Mailbacks
|
$
|
24,654
|
71.9
|
%
|
$
|
23,643
|
75.1
|
%
|
||||||||
Route-based pickup services
|
2,061
|
6.0
|
%
|
862
|
2.7
|
%
|
||||||||||
Unused medications
|
3,531
|
10.3
|
%
|
2,667
|
8.5
|
%
|
||||||||||
Third party treatment services
|
258
|
0.8
|
%
|
367
|
1.2
|
%
|
||||||||||
Other
(1)
|
3,790
|
11.0
|
%
|
3,963
|
12.5
|
%
|
||||||||||
Total billings
|
$
|
34,294
|
100.0
|
%
|
$
|
31,502
|
100.0
|
%
|
||||||||
GAAP adjustment
(2)
|
(911
|
)
|
(600
|
)
|
||||||||||||
Revenue reported
|
$
|
33,383
|
$
|
30,902
|
(1)
|
The Company’s other products include IV poles, accessories, containers, asset return boxes and other miscellaneous items.
|
(2)
|
Represents the net impact of the revenue recognition adjustments required to arrive at reported generally accepted accounting principles (“GAAP”) revenue. Customer billings include all invoiced amounts associated with products shipped or services rendered 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 products returned for treatment and destruction. The difference between customer billings and GAAP revenue is reflected in the Company’s balance sheet as deferred revenue.
|
· |
A large professional market that consists of dentists, veterinarians, clinics, private practice physicians, urgent care facilities, ambulatory surgical centers and other healthcare facilities. This regulated market consists of small to medium quantity generators of medical, pharmaceutical and hazardous waste where we can offer a lower cost to service with solutions to match individual facility needs. The Company addresses this market from two directions: (i) field sales which focus on larger-dollar and nationwide opportunities where we can integrate the route-based pickup service along with our mailback solutions to create a comprehensive medical waste management offering and (ii) inside and online sales which focus on the individual or small group professional offices, government agencies, smaller retail pharmacies and clinics and assisted living/long-term care facilities. The Company is able to compete more aggressively in the medium quantity generator market with the addition of route-based services where the mailback may not be as cost effective. The Company’s route-based business provides direct service to areas encompassing about 155 million people or 48% of the U.S. population.
|
· |
In July 2015 and December 2015, the Company augmented its network of medical and hazardous waste service providers with acquisitions of route-based pickup services in the Northeast serving Pennsylvania, Maryland, Ohio and other neighboring states. In July 2016, the Company acquired another route-based pickup service which expanded service to New York and New Jersey and strengthened the Company’s position in the Northeast. Through a combination of acquisition and organic growth, the Company now offers route-based pickup services in a twenty-three (23) state region of the South, Southeast and Northeast portions of the United States. The Company directly serves more than 9,500 customer locations with route-based pickup services. With the addition of these route-based pickup regions and the network of medical and hazardous waste service providers servicing the entire U.S., the Company offers customers a blended product portfolio to effectively manage multi-site and multi-sized locations, including those that generate larger quantities of waste. The network has had a significant positive impact on our pipeline of sales opportunities - over 60% of this pipeline is attributable to opportunities providing comprehensive waste management service offerings where both the mailback and pickup service are integrated into the offering.
|
· |
The changing demographics of the U.S. population – according to the U.S. Census Bureau, 2012 Population Estimates and National Projections, one out of five Americans will be 65 years or older by 2030, which will increase the need for cost-effective medical waste management solutions, especially in the long-term care and home healthcare markets. With multiple solutions for managing regulated healthcare-related waste, the Company delivers value as a single-source provider with blended mailback and route-based pickup services matched to the waste volumes of each facility.
|
· |
The shift of healthcare from traditional settings to the retail pharmacy and clinic markets, where the Company focuses on driving increased promotion of the Sharps Recovery System. According to the Centers for Disease Control (“CDC”), 24% of flu shots for adults were administered in a retail clinic. Over the flu seasons from 2011 to 2014, the growth in the Retail flu business for Sharps was between 24% and 36%. Despite the decrease in Retail flu business for fiscal year 2017 (the 2016 flu season) of 15% due to a mild flu season and the loss of one retail pharmacy customer, Sharps believes the Retail market should continue to contribute to long-term growth for the Company as consumers increasingly use alternative sites, such as retail pharmacies, to obtain flu and other immunizations.
|
· |
The passage of regulations for ultimate user medication disposal allows the Company to offer new solutions (MedSafe and TakeAway Medication Recovery System envelopes) that meet the regulations for ultimate user controlled substances disposal (Schedules II-V) to retail pharmacies. Additionally, with the new regulations, the Company is able to provide the MedSafe and TakeAway Medication Recovery Systems to assisted living and hospice to address a long standing issue within long-term care.
|
· |
Local, state and federal agencies have growing needs for solutions to manage medical and pharmaceutical waste — the Company’s Sharps Recovery System is ideal for as-needed disposal of sharps and other small quantities of medical waste generated within government buildings, schools and communities. The Company also provides TakeAway Medication Recovery System envelopes and MedSafe solutions to government agencies in need of proper and regulatory compliant medication disposal.
|
· |
With an increased number of self-injectable medication treatments and local regulations, the Company believes its flagship product, the Sharps Recovery System, continues to offer the best option for proper sharps disposal at an affordable price. The Company delivers comprehensive services to pharmaceutical manufacturers that sell high-dollar, self-injectable medications, which include data management, compliance reporting, fulfillment, proper containment with disposal, branding and conformity with applicable regulations. In addition, the Company provides self-injectors with online and retail purchase options of sharps mailback systems, such as the Sharp Recovery System and Complete Needle Collection & Disposal System, respectively.
|
· |
A heightened interest by many commercial companies who are looking to improve workplace safety with proper sharps disposal and unused medication disposal solutions — the Company offers a variety of services to meet these needs, including the Sharps Secure Needle Disposal System, Sharps Recovery System, Spill Kits and TakeAway Medication Recovery System envelopes.
|
· |
The Company continually develops new solution offerings such as ultimate user medication disposal (MedSafe and TakeAway Medication Recovery System), mailback services for DEA registrant expired inventory of controlled substances (TakeAway Medication Recovery System DEA Reverse Distribution for Registrants) and shipback services for collection and recycling of single-use medical devices from surgical centers and other healthcare facilities (TakeAway Recycle System).
|
· |
The Company’s strong financial position with a cash balance of $4.7 million, debt of $2.6 million and additional availability under the Credit Agreement.
|
· |
Cash Flows used in Operating Activities
- Working capital decreased by $6.7 million to $10.5 million at June 30, 2017 from $17.2 million at June 30, 2016. The decrease is primarily attributed to a decrease in cash and cash equivalents offset by:
|
· |
An increase in accounts receivable of $1.2 million, net of assets acquired, to $7.6 million at June 30, 2017 from $5.8 million at June 30, 2016 due to timing of billings and collections,
|
· |
An increase in inventory of $0.1 million to $4.1 million at June 30, 2017 from $3.9 million at June 30, 2016 due to timing of sales and adjustment of inventory levels to facilitate customer orders and
|
· |
An increase in accounts payable and accrued liabilities of $0.1 million, net of liabilities assumed and unpaid consideration, to $3.5 million at June 30, 2017 from $3.2 million at June 30, 2016 due to the timing of payments.
|
· |
Cash Flows used in Investing Activities
- Investing activities include capital expenditures and business acquisitions as follows:
|
· |
Capital expenditures of $2.5 million are attributable primarily to investments in treatment facility improvements.
|
· |
The Company acquired Citiwaste for $9.0 million during the year ended June 30, 2017 of which $1.9 million was for 415,527 shares of common stock of the Company.
|
· |
Cash Flows provided by Financing Activities
– Financing activities include $5.6 million of proceeds from long-term debt in connection with the Citiwaste acquisition and the new debt agreement (see Note 5 “Notes Payable and Long-Term Debt”), proceeds from the exercise of stock options of $0.3 million offset in part by repayments of debt of $3.2 million.
|
· |
Level 1 – Quoted prices in active markets for identical assets or liabilities.
|
· |
Level 2 – Other significant observable inputs (including quoted prices in active markets for similar assets or liabilities).
|
· |
Level 3 – Significant unobservable inputs (including our own assumptions in determining fair value).
|
ITEM 12. |
Exhibit
Number
|
Description of Exhibit
|
2.1
|
Agreement for Purchase and Sale of LLC Units dated July 1, 2016 by and between Sharps Compliance, Inc. and Citiwaste, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on July 6, 2016).
|
3.1
|
Amended and Restated Certificate of Incorporation of U.S. Medical Systems, Inc. (incorporated by reference from Exhibit 3.5 to the Registrant’s Transition Report on Form 10KSB40 (File No. 000-22390; Film No. 98716804), filed on September 29, 1998).
|
3.2
|
Certificate of Elimination of the Series A 10% Voting Convertible Preferred Stock of Sharps Compliance Corp. (incorporated by reference from Exhibit 3.6 to Form 10KSB40 (File No. 000-22390; Film No. 98716804), filed September 29, 1998).
|
3.3
|
Amended and Restated Bylaws of Sharps Compliance Corp dated May 23, 1994 (incorporated by reference to Exhibit 3.2 to Form 8-K, filed November 19, 2010).
|
4.1
|
Specimen Stock Certificate (incorporated by reference from Exhibit 4.4 to Form 10KSB40 (File No. 000-22390; Film No. 98716804), filed September 29, 1998).
|
10.1
|
Form of Restricted Stock Award Agreement dated June 9, 2008 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 000-22390; Film No. 08888237), filed June 9, 2008).
|
10.2
|
Sharps Compliance Corp. 2010 Stock Plan dated November 22, 2010 (incorporated by reference
to
Exhibit A of the Registrant’s Proxy Statement on Schedule 14A, filed October 12, 2010).
|
10.3
|
Lease Agreement dated as of July 13, 2006, between Sharps Compliance, Inc. and Warehouse Associates Corporate Centre Kirby II, Ltd. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 000-22390; Film No. 06962703), filed July 14, 2006).
|
10.4
|
Lease Termination Agreement dated as of July 13, 2006, between Sharps Compliance, Inc., Warehouse Associates Corporate Centre Kirby, Ltd. and Warehouse Associates Corporate Centre Kirby II, Ltd. (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 000-22390; Film No. 06962703), filed July 14, 2006).
|
10.5
|
Second Amendment to Lease Agreement between Sharps Compliance, Inc. and Warehouse Associates Corporate Centre Kirby II, ltd. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-34269; Film No. 10667451), filed March 9, 2010).
|
10.6
|
Third Amendment to Lease Agreement dated February 6, 2015, between Sharps Compliance, Inc. and Warehouse Associates Corporate Centre Kirby II, Ltd. (incorporated by reference to 10.1 to the Registrant’s Current Report on Form 8-K, filed on February 17, 2015).
|
10.7
|
Fourth Amendment to Lease Agreement dated August 5, 2015, between Sharps Compliance Inc. and Warehouse Associates Corporate Centre Kirby IV, Ltd. (incorporated by reference to Exhibit 10.29 to the Registrant’s Annual Report on Form 10-K, filed on August 26, 2015).
|
10.8
|
Lease Agreement dated as of January 30, 2009, between Sharps Compliance, Inc. and Park 288 Industrial, LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 000-22390; Film No. 09565104), filed February 3, 2009).
|
10.9
|
Amended Lease Agreement dated as of May 27, 2009, between Sharps Compliance, Inc. and Park 288 Industrial, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-24269; Film No. 09866215), filed June 2, 2009).
|
10.10
|
Fourth Amendment to Lease Agreement dated June 24, 2014, between Sharps Compliance, Inc. of Texas and Park 288 Industrial, L.L.C. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on June 24, 2014).
|
10.11
|
Lease Agreement dated as of October 7, 2015, between Sharps Compliance, Inc. and Alpha Bio-
Med Services LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on October 9, 2015).
|
10.12
|
Loan Agreement dated March 29, 2017, by and between Sharps Compliance, Inc. of Texas and a commercial bank (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on April 3, 2017).
|
10.13
|
Executive Employment Agreement Amendment by and between Sharps Compliance Corp. and David P. Tusa dated June 14, 2010 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-34269; Film No. 10893750), filed June 14, 2010) *
|
10.14
|
Executive Employment Agreement Amendment between Sharps Compliance Corp. and David P. Tusa dated March 6, 2012 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed March 7, 2012).*
|
10.15
|
Executive Employment Agreement Amendment by and between Sharps Compliance Corp. and David P. Tusa dated September 10, 2015 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed September 11, 2015).*
|
10.16
|
Employment Agreement by and between Sharps Compliance Corp. and Diana P. Diaz dated June 14, 2010 (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K(File No. 001-34269; Film No. 10893750), filed June 14, 2010).*
|
10.17
|
Executive Employment Agreement Amendment between Sharps Compliance Corp. and Diana P. Diaz dated March 6, 2012 (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K, filed March 7, 2012).*
|
10.18
|
Executive Employment Agreement Amendment by and between Sharps Compliance Corp. and Diana P. Diaz dated September 10, 2015 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed September 11, 2015).*
|
10.19
|
Letter Agreement by and between Sharps Compliance Corp. and Al Aladwani dated March 24, 2008 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 000-22390; Film No. 08706090), filed March 12, 2008).*
|
10.20
|
Employment Agreement by and between Sharps Compliance, Inc. and Gregory C. Davis dated May 18, 2011 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-34269; Film No. 11866772), filed May 24, 2011).*
|
10.21
|
Lease between SIT Realty LLC and Sharps Compliance, Inc., dated as of September 28, 2016 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed October 3, 2016).
|
Subsidiaries of Sharps Compliance Corp. (filed herewith).
|
|
Consent of BDO USA, LLP (filed herewith).
|
|
Certification of Chief Executive Officer in accordance with Section 302 of the Sarbanes-Oxley Act (furnished herewith).
|
|
Certification of Chief Financial Officer in accordance with Section 302 of the Sarbanes-Oxley Act (furnished herewith).
|
|
Certification of Chief Executive Officer in accordance with Section 906 of the Sarbanes-Oxley Act (furnished herewith).
|
|
Certification of Chief Financial Officer in accordance with Section 906 of the Sarbanes-Oxley Act (furnished herewith).
|
|
101.INS
|
XBRL Instance Document (filed herewith)
|
101.SCH
|
XBRL Taxonomy Extension Schema Document (filed herewith)
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith)
|
101.DEF
|
XBRL Taxonomy Extension Linkbase Document (filed herewith)
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document (filed herewith)
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith)
|
* |
This exhibit is a management contract or a compensatory plan or arrangement.
|
Dated: August 23, 2017
|
By: /s/ DAVID P. TUSA
|
David P. Tusa
|
|
Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
Dated: August 23, 2017
|
By: /s/ DAVID P. TUSA
|
David P. Tusa
|
|
Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
|
Dated: August 23, 2017
|
By: /s/ DIANA P. DIAZ
|
Diana P. Diaz
|
|
Vice President and
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
|
Dated: August 23, 2017
|
By: /s/ F. GARDNER PARKER
|
F. Gardner Parker
|
|
Director
|
|
Dated: August 23, 2017
|
By: /s/ JOHN W. DALTON
|
John W. Dalton
|
|
Director
|
|
Dated: August 23, 2017
|
By: /s/ PARRIS H. HOLMES
|
Parris H. Holmes
|
|
Director
|
|
Dated: August 23, 2017
|
By: /s/ PHILIP C. ZERRILLO
|
Philip C. Zerrillo
|
|
Chairman of the Board Of Directors
|
CONSOLIDATED FINANCIAL STATEMENTS
|
PAGE
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets as of June 30, 2017 and 2016
|
F-3
|
Consolidated Statements of Operations for the Years Ended June 30, 2017, 2016 and 2015
|
F-4
|
Consolidated Statements of Stockholders’ Equity for the Years Ended June 30, 2017, 2016 and 2015
|
F-5
|
Consolidated Statements of Cash Flows for the Years Ended June 30, 2017, 2016 and 2015
|
F-6
|
Notes to Consolidated Financial Statements
|
F-7
|
Year Ended June 30,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
REVENUES
|
$
|
38,188
|
$
|
33,383
|
$
|
30,902
|
||||||
|
||||||||||||
Cost of revenues
|
26,351
|
22,272
|
19,907
|
|||||||||
GROSS PROFIT
|
11,837
|
11,111
|
10,995
|
|||||||||
Selling, general and administrative
|
12,223
|
10,812
|
9,496
|
|||||||||
Depreciation and amortization
|
801
|
294
|
263
|
|||||||||
OPERATING INCOME (LOSS)
|
(1,187
|
)
|
5
|
1,236
|
||||||||
OTHER INCOME (EXPENSE)
|
||||||||||||
Interest income
|
13
|
32
|
36
|
|||||||||
Interest expense
|
(115
|
)
|
-
|
-
|
||||||||
TOTAL OTHER (EXPENSE) INCOME
|
(102
|
)
|
32
|
36
|
||||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
(1,289
|
)
|
37
|
1,272
|
||||||||
INCOME TAX EXPENSE - Current
|
4
|
24
|
112
|
|||||||||
NET INCOME (LOSS)
|
$
|
(1,293
|
)
|
$
|
13
|
$
|
1,160
|
|||||
NET INCOME (LOSS) PER COMMON SHARE
|
||||||||||||
Basic
|
$
|
(0.08
|
)
|
$
|
0.00
|
$
|
0.08
|
|||||
Diluted
|
$
|
(0.08
|
)
|
$
|
0.00
|
$
|
0.07
|
|||||
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME (LOSS) PER COMMON SHARE:
|
||||||||||||
Basic
|
15,949
|
15,448
|
15,327
|
|||||||||
Diluted
|
15,949
|
15,838
|
15,564
|
Common Stock
|
Treasury Stock
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Additional Paid-
in Capital
|
Accumulated
Deficit
|
Total Stockholders’
Equity
|
||||||||||||||||||||||
Balances, June 30, 2014
|
15,460,940
|
$
|
155
|
(161,801
|
)
|
$
|
(681
|
)
|
$
|
23,695
|
$
|
(1,265
|
)
|
$
|
21,904
|
|||||||||||||
Exercise of stock options
|
61,109
|
-
|
-
|
-
|
139
|
-
|
139
|
|||||||||||||||||||||
Stock-based compensation
|
-
|
-
|
-
|
-
|
511
|
-
|
511
|
|||||||||||||||||||||
Issuance of restricted stock
|
52,992
|
1
|
-
|
-
|
(1
|
)
|
-
|
-
|
||||||||||||||||||||
Shares repurchased
|
-
|
-
|
(29,449
|
)
|
(128
|
)
|
-
|
-
|
(128
|
)
|
||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
-
|
1,160
|
1,160
|
|||||||||||||||||||||
Balances, June 30, 2015
|
15,575,041
|
156
|
(191,250
|
)
|
(809
|
)
|
24,344
|
(105
|
)
|
23,586
|
||||||||||||||||||
Exercise of stock options
|
112,425
|
1
|
-
|
-
|
312
|
-
|
313
|
|||||||||||||||||||||
Stock-based compensation
|
-
|
-
|
-
|
-
|
676
|
-
|
676
|
|||||||||||||||||||||
Issuance of restricted stock
|
52,992
|
1
|
-
|
-
|
(1
|
)
|
-
|
-
|
||||||||||||||||||||
Shares repurchased
|
-
|
-
|
(104,365
|
)
|
(745
|
)
|
-
|
-
|
(745
|
)
|
||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
-
|
13
|
13
|
|||||||||||||||||||||
Balances, June 30, 2016
|
15,740,458
|
158
|
(295,615
|
)
|
(1,554
|
)
|
25,331
|
(92
|
)
|
23,843
|
||||||||||||||||||
Exercise of stock options
|
95,050
|
1
|
-
|
-
|
341
|
-
|
342
|
|||||||||||||||||||||
Stock-based compensation
|
-
|
-
|
-
|
-
|
496
|
-
|
496
|
|||||||||||||||||||||
Issuance of common shares for acquisition
|
415,527
|
4
|
-
|
-
|
1,895
|
-
|
1,899
|
|||||||||||||||||||||
Issuance of restricted stock
|
52,992
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(1,293
|
)
|
(1,293
|
)
|
|||||||||||||||||||
Balances, June 30, 2017
|
16,304,027
|
$
|
163
|
(295,615
|
)
|
$
|
(1,554
|
)
|
$
|
28,063
|
$
|
(1,385
|
)
|
$
|
25,287
|
· |
United States – fiscal years ended June 30, 2014 and after
|
· |
State of Texas – fiscal years ended June 30, 2012 and after
|
· |
State of Georgia – fiscal years ended June 30, 2014 and after
|
· |
State of Pennsylvania – fiscal years ended June 30, 2014 and after
|
· |
Other States – fiscal years ended June 30, 2013 and after
|
Allowance for Doubtful
Accounts
|
Balance
Beginning
of Year
|
Charges to
Expense
|
Write-offs
/Payments
|
Balance End
of Year
|
||||||||||||
|
||||||||||||||||
2017
|
$
|
63
|
$
|
20
|
$
|
(5
|
)
|
$
|
78
|
|||||||
2016
|
$
|
34
|
$
|
34
|
$
|
(5
|
)
|
$
|
63
|
|||||||
2015
|
$
|
23
|
$
|
22
|
$
|
(11
|
)
|
$
|
34
|
Year Ended June 30,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Stock-based compensation expense included in:
|
||||||||||||
Cost of revenue
|
$
|
41
|
$
|
31
|
$
|
22
|
||||||
Selling, general and administrative
|
455
|
645
|
489
|
|||||||||
Total
|
$
|
496
|
$
|
676
|
$
|
511
|
Year Ended June 30,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Weighted average risk-free interest rate
|
1.1
|
%
|
1.0
|
%
|
0.4
|
%
|
||||||
Weighted average expected volatility
|
47
|
%
|
45
|
%
|
45
|
%
|
||||||
Weighted average expected life (in years)
|
5.15
|
4.56
|
3.49
|
|||||||||
Dividend yield
|
-
|
-
|
-
|
· |
Level 1 – Quoted prices in active markets for identical assets or liabilities.
|
· |
Level 2 – Other significant observable inputs (including quoted prices in active markets for similar assets or liabilities).
|
· |
Level 3 – Significant unobservable inputs (including our own assumptions in determining fair value).
|
|
June 30,
|
||||||||
Useful Life
|
2017
|
2016
|
|||||||
Furniture and fixtures
|
3 to 5 years
|
$
|
260
|
$
|
247
|
||||
Plant and equipment
|
3 to 17 years
|
7,975
|
6,524
|
||||||
Manufacturing
|
15 years
|
220
|
220
|
||||||
Computers and software
|
3 to 5 years
|
2,246
|
2,009
|
||||||
Leasehold improvements
|
Life of Lease
|
2,681
|
964
|
||||||
Land
|
|
19
|
19
|
||||||
Construction-in-progress
|
|
347
|
1,372
|
||||||
|
13,748
|
11,355
|
|||||||
Less: accumulated depreciation
|
|
7,205
|
6,323
|
||||||
|
|||||||||
Net property, plant and equipment
|
|
$
|
6,543
|
$
|
5,032
|
Year ended June 30,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Current
|
||||||||||||
Federal
|
$
|
-
|
$
|
-
|
$
|
29
|
||||||
State
|
4
|
24
|
83
|
|||||||||
$
|
4
|
$
|
24
|
$
|
112
|
Year Ended June 30,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Statutory rate
|
34.0
|
%
|
34.0
|
%
|
34.0
|
%
|
||||||
State income taxes, net
|
(4.5
|
%)
|
(18.6
|
%)
|
5.3
|
%
|
||||||
Meals and entertainment
|
(1.5
|
%)
|
38.7
|
%
|
1.2
|
%
|
||||||
AMT and research and development credits
|
0.0
|
%
|
(218.9
|
%)
|
0.0
|
%
|
||||||
Other
|
0.2
|
%
|
1.5
|
%
|
0.0
|
%
|
||||||
Effective rate before valuation allowance
|
28.2
|
%
|
(163.3
|
%)
|
40.5
|
%
|
||||||
Change in valuation allowance
|
(28.5
|
%)
|
228.2
|
%
|
(31.7
|
%)
|
||||||
Effective tax rate
|
(0.3
|
%)
|
64.9
|
%
|
8.8
|
%
|
June 30,
|
||||||||
2017
|
2016
|
|||||||
Deferred tax assets relating to:
|
||||||||
Stock compensation
|
$
|
398
|
$
|
627
|
||||
AMT and research and development credits
|
523
|
523
|
||||||
Deferred rent
|
77
|
82
|
||||||
Inventory
|
211
|
169
|
||||||
Professional fees
|
155
|
140
|
||||||
Accrued vacation
|
43
|
33
|
||||||
Accounts receivable allowance
|
49
|
24
|
||||||
Contribution carryovers
|
12
|
8
|
||||||
Net operating loss carryforwards
|
1,443
|
1,044
|
||||||
Total deferred tax assets
|
2,911
|
2,650
|
||||||
Deferred tax liablities related to depreciation differences
|
(783
|
)
|
(621
|
)
|
||||
Net deferred tax assets before valuation allowance
|
2,128
|
2,029
|
||||||
Valuation allowance
|
(2,128
|
)
|
(2,029
|
)
|
||||
Net deferred tax assets
|
$
|
-
|
$
|
-
|
Non-interest bearing, unsecured note payable assumed in acquisition (See Note 12), monthly payments of $7; maturing September 2018.
|
$
|
104
|
||
Term loan, bearing interest at 3.63%, monthly payments of $43; maturing March 2022.
|
2,499
|
|||
Total long-term debt
|
2,603
|
|||
Less: current portion
|
601
|
|||
Long-term debt, net of current portion
|
$
|
2,002
|
Twelve Months Ending June 30,
|
||||
2018
|
$
|
601
|
||
2019
|
537
|
|||
2020
|
517
|
|||
2021
|
517
|
|||
2022
|
431
|
|||
|
$
|
2,603
|
Year Ended June 30,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Shares repurchased
|
-
|
104,365
|
29,449
|
|||||||||
Cash paid for shares repurchased (in thousands)
|
$
|
-
|
$
|
745
|
$
|
128
|
||||||
Average price paid per share
|
$
|
-
|
$
|
7.14
|
$
|
4.35
|
|
Year Ended June 30,
|
|||||||||||
|
2017
|
2016
|
2015
|
|||||||||
|
||||||||||||
Unvested at beginning of the year
|
13
|
13
|
15
|
|||||||||
Granted
|
53
|
53
|
53
|
|||||||||
Vested
|
(53
|
)
|
(53
|
)
|
(55
|
)
|
||||||
Unvested at end of the year
|
13
|
13
|
13
|
Options
Outstanding
|
Weighted
Average
Exercise
Price
|
|||||||
Options Outstanding at June 30, 2014
|
950
|
$
|
4.27
|
|||||
Granted
|
516
|
$
|
4.63
|
|||||
Exercised
|
(61
|
)
|
$
|
2.30
|
||||
Forfeited or canceled
|
(30
|
)
|
$
|
4.68
|
||||
Options Outstanding at June 30, 2015
|
1,375
|
$
|
4.49
|
|||||
Granted
|
45
|
$
|
6.62
|
|||||
Exercised
|
(112
|
)
|
$
|
2.77
|
||||
Forfeited or canceled
|
(18
|
)
|
$
|
5.99
|
||||
Options Outstanding at June 30, 2016
|
1,290
|
$
|
4.69
|
|||||
Granted
|
38
|
$
|
4.55
|
|||||
Exercised
|
(95
|
)
|
$
|
3.60
|
||||
Forfeited or canceled
|
(368
|
)
|
$
|
5.32
|
||||
Options Outstanding at June 30, 2017
|
865
|
$
|
4.53
|
|||||
Options Exercisable at June 30, 2017
|
561
|
$
|
4.39
|
Options Outstanding
|
|||||||||||||||
Range of Exercise
Price
|
Outstanding as
of
June 30, 2017 |
Weighted
Average
Remaining
Life
(in Years) |
Weighted
Average
Exercise
Price
|
||||||||||||
$
|
2.51 - $3.50
|
41
|
2.49
|
$
|
2.95
|
||||||||||
$
|
3.51 - $5.50
|
692
|
3.27
|
$
|
4.35
|
||||||||||
$
|
5.51 - $7.50
|
132
|
4.82
|
$
|
5.97
|
||||||||||
865
|
$
|
4.53
|
Options Exercisable
|
||||||||||||||
Range of Exercise
Price
|
Exercisable as
of
June 30, 2017 |
Weighted
Average
Remaining
Life
(in Years) |
Weighted
Average
Exercise
Price
|
|||||||||||
$
|
2.51 - $3.50
|
39
|
2.46
|
$
|
2.96
|
|||||||||
$
|
3.51 - $5.50
|
464
|
2.66
|
$
|
4.32
|
|||||||||
$
|
5.51 - $7.50
|
58
|
4.78
|
$
|
5.87
|
|||||||||
561
|
$
|
4.39
|
|
Year Ended June 30,
|
|||||||||||||||||||||||
|
2018
|
2019
|
2020
|
2021
|
2022
|
Thereafter
|
||||||||||||||||||
Operating lease obligations
|
$
|
1,812
|
$
|
1,827
|
$
|
1,725
|
$
|
943
|
$
|
274
|
$
|
5
|
Year Ended June 30, | ||||||||||||
2017
|
2016
|
2015
|
||||||||||
Net income (loss), as reported
|
$
|
(1,293
|
)
|
$
|
13
|
$
|
1,160
|
|||||
Weighted average common shares outstanding
|
15,949
|
15,448
|
15,327
|
|||||||||
Effect of dilutive stock options
|
-
|
390
|
237
|
|||||||||
Weighted average diluted common shares outstanding
|
15,949
|
15,838
|
15,564
|
|||||||||
Net income (loss) per common share
|
||||||||||||
Basic
|
$
|
(0.08
|
)
|
$
|
0.00
|
$
|
0.08
|
|||||
Diluted
|
$
|
(0.08
|
)
|
$
|
0.00
|
$
|
0.07
|
|||||
Employee stock options excluded from computation of diluted income per share amounts because their effect would be anti-dilutive
|
304
|
137
|
210
|
|
June 30,
|
||||||||||||||||||||||||
|
2017
|
2016
|
|||||||||||||||||||||||
Estimated
Useful Lives
|
Original
Amount
|
Accumulated
Amortization
|
Net
Amount
|
Original
Amount
|
Accumulated
Amortization
|
Net
Amount
|
|||||||||||||||||||
|
|||||||||||||||||||||||||
Customer relationships
|
7 years
|
$
|
3,007
|
$
|
(490
|
)
|
$
|
2,517
|
$
|
580
|
$
|
(60
|
)
|
$
|
520
|
||||||||||
Permits
|
6 - 15 years
|
1,373
|
(288
|
)
|
1,085
|
668
|
(191
|
)
|
477
|
||||||||||||||||
Patents
|
5 - 17 years
|
383
|
(264
|
)
|
119
|
383
|
(251
|
)
|
132
|
||||||||||||||||
Tradename
|
7 years
|
270
|
(39
|
)
|
231
|
-
|
-
|
-
|
|||||||||||||||||
Non-compete
|
5 years
|
117
|
(23
|
)
|
94
|
-
|
-
|
-
|
|||||||||||||||||
Total intangible assets, net
|
|
$
|
5,150
|
$
|
(1,104
|
)
|
$
|
4,046
|
$
|
1,631
|
$
|
(502
|
)
|
$
|
1,129
|
Year Ended June 30,
|
||||||||
2017
|
2016
|
|||||||
Beginning Balance
|
$
|
1,039
|
$
|
-
|
||||
Goodwill Acquired
|
5,696
|
1,039
|
||||||
Ending Balance
|
$
|
6,735
|
$
|
1,039
|
Year Ending June 30,
|
||||
2018
|
$
|
616
|
||
2019
|
616
|
|||
2020
|
616
|
|||
2021
|
615
|
|||
2022
|
590
|
|||
Thereafter
|
993
|
|||
|
$
|
4,046
|
Year Ended June 30,
|
||||||||||||||||||||||||
2017
|
% Total
|
2016
|
% Total
|
2015
|
% Total
|
|||||||||||||||||||
REVENUES BY SOLUTION:
|
||||||||||||||||||||||||
Mailbacks
|
$
|
24,135
|
63.2
|
%
|
$
|
23,743
|
71.1
|
%
|
$
|
23,043
|
74.6
|
%
|
||||||||||||
Route-based pickup services
|
6,348
|
16.6
|
%
|
2,061
|
6.2
|
%
|
862
|
2.8
|
%
|
|||||||||||||||
Unused medications
|
3,377
|
8.8
|
%
|
3,531
|
10.6
|
%
|
2,667
|
8.6
|
%
|
|||||||||||||||
Third party treatment services
|
413
|
1.1
|
%
|
258
|
0.8
|
%
|
367
|
1.2
|
%
|
|||||||||||||||
Other
(1)
|
3,915
|
10.3
|
%
|
3,790
|
11.3
|
%
|
3,963
|
12.8
|
%
|
|||||||||||||||
Total revenues
|
$
|
38,188
|
100.0
|
%
|
$
|
33,383
|
100.0
|
%
|
$
|
30,902
|
100.0
|
%
|
(1)
|
The Company’s other products include non-mailback products such as IV poles, accessories, containers, asset return boxes and other miscellaneous items.
|
Accounts receivable
|
$
|
51
|
||
Fixed assets
|
70
|
|||
Intangibles
|
267
|
|||
Goodwill
|
413
|
|||
Accounts payable and accrued liabilities
|
(101
|
)
|
||
Total purchase price
|
$
|
700
|
Accounts receivable
|
$
|
42
|
||
Fixed assets
|
68
|
|||
Intangibles
|
313
|
|||
Goodwill
|
626
|
|||
Accounts payable and accrued liabilities
|
(16
|
)
|
||
Total purchase price
|
$
|
1,033
|
Cash
|
$
|
5
|
||
Accounts receivable
|
495
|
|||
Fixed assets
|
30
|
|||
Intangibles
|
3,357
|
|||
Goodwill
|
5,696
|
|||
Accounts payable and accrued liabilities
|
(356
|
)
|
||
Debt assumed
|
(187
|
)
|
||
Total purchase price
|
$
|
9,040
|
|
Twelve-Months Ended
June 30,
|
|||||||||||
|
2017
|
2016
|
2015
|
|||||||||
|
||||||||||||
Acquisition-related expenses
|
$
|
702
|
$
|
190
|
$
|
-
|
Twelve-Months Ended
June 30,
|
||||
2016 | ||||
Revenues
|
$
|
36,306
|
||
Net loss
|
$
|
(159
|
)
|
|
Weighted average common shares outstanding
|
15,861
|
|||
Net loss per common share basic and diluted
|
$
|
(0.01
|
)
|
Quarter Ended
|
||||||||||||||||
September 30,
2016
|
December 31,
2016
|
March 31,
2017
|
June 30,
2017
|
|||||||||||||
Total revenues
|
$
|
9,531
|
$
|
9,707
|
$
|
8,588
|
$
|
10,362
|
||||||||
Gross profit
|
$
|
2,959
|
$
|
2,895
|
$
|
2,352
|
$
|
3,631
|
||||||||
Operating income (loss)
|
$
|
(940
|
)
|
$
|
(204
|
)
|
$
|
(638
|
)
|
$
|
595
|
|||||
Net income (loss)
|
$
|
(967
|
)
|
$
|
(227
|
)
|
$
|
(668
|
)
|
$
|
569
|
|||||
Net income (loss) per share - basic and diluted
|
$
|
(0.06
|
)
|
$
|
(0.01
|
)
|
$
|
(0.04
|
)
|
$
|
0.04
|
|||||
Weighted average shares-diluted
|
15,868
|
15,929
|
15,994
|
16,029
|
Quarter Ended
|
||||||||||||||||
September 30,
2015
|
December 31,
2015
|
March 31,
2016
|
June 30,
2016
|
|||||||||||||
Total revenues
|
$
|
7,869
|
$
|
9,992
|
$
|
6,652
|
$
|
8,870
|
||||||||
Gross profit
|
$
|
2,879
|
$
|
3,319
|
$
|
1,693
|
$
|
3,220
|
||||||||
Operating income (loss)
|
$
|
231
|
$
|
664
|
$
|
(1,104
|
)
|
$
|
214
|
|||||||
Net income (loss)
|
$
|
220
|
$
|
615
|
$
|
(1,042
|
)
|
$
|
220
|
|||||||
Net income (loss) per share - basic and diluted
|
$
|
0.01
|
$
|
0.04
|
$
|
(0.07
|
)
|
$
|
0.01
|
|||||||
Weighted average shares-diluted
|
15,926
|
16,062
|
15,462
|
15,575
|
1 Year Sharps Compliance Chart |
1 Month Sharps Compliance Chart |
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