Sharps Compliance (SMED) Misses Q1 EPS by 6c, Revenues Miss

Sharps Compliance (NASDAQ: SMED) reported Q1 EPS of ($0.02), $0.06 worse than the analyst estimate of $0.04. Revenue for the quarter came in at $13.2 million versus the consensus estimate of $14.98 million.

David P. Tusa, President and Chief Executive Officer of Sharps, stated, “During the first quarter we saw a significant rebound in our route-based business with revenues increasing 19% and surpassing pre-COVID-19 levels as well as our internal expectations. Likewise, Professional market billings have recovered and first quarter billings from this segment also exceeded pre-COVID-19 levels. This strength represents not only the resumption of operations for most of our COVID-19 affected customers but also reflects sales to new customers.

“We have always viewed flu-related activity as a nine-month season, comprising the June, September and December quarters. Historically, order volumes, within the season, have often varied from quarter to quarter, depending upon customer ordering patterns and their distribution and warehouse facility operations which, this season, have been impacted by COVID-19. Accordingly, we experienced a shift in flu immunization and COVID-19 related orders from the September 2020 to the December quarter.

“From our vantage point today, we remain confident that we’re in the midst of a very strong flu immunization season as evidenced by 50%+ increase in flu-related return mailbacks processed for August, September and October 2020. We are also hopeful that the flu immunization season could be followed by substantial activity related to a potential COVID-19 vaccine which many experts believe could be available later this year or early 2021. We have a robust inventory of our medical waste mailback solutions in place to meet anticipated strong demand and this month are commissioning a new autoclave online at our Pennsylvania facility, expanding our medical waste processing capacity from 18 million to 27 million pounds per year, which is up from 10 million pounds a year ago.

“In addition to flu and potential COVID-19 vaccine related business, we remain keenly focused on landing larger route-based opportunities serviced by our expanded footprint which now serves 32 states, addressing 70% of the population. The pipeline of these opportunities is robust and very active, with prospects more engaged now than they were during the onset of the pandemic in March of 2020. Our goal is to close many of these opportunities in the December 2020 quarter, and begin generating revenue from these new contracts starting as early as the March 2021 quarter.”

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

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