Sharps Compliance Corp. Announces Results for Third Quarter of Fiscal Year 2008
Customer billings of $3.0 million for the fiscal 2008 third quarter werealso flat compared with the prior fiscal year's third quarter billings.Year-over-year, growth in billings from the healthcare, professional andcommercial markets were offset by decreased billings primarily in thehospitality and pharmaceutical sectors, as the first year of the Company'scontract with its first pharmaceutical manufacturer was completed.
Dr. Burton J. Kunik, Chairman, Chief Executive Officer and President ofSharps Compliance, commented, "Although billings and sales were relativelyflat in the third quarter, which is historically our slowest quarter, we madesignificant progress on a number of other fronts. Many of the opportunitieswe have been pursuing are now coming to fruition. We gained traction from thesuccessful execution of our first Patient Support Program for a top tenpharmaceutical customer by providing our Sharps Disposal by Mail System(R)direct to its patients. We are very pleased to announce that we were awarded aPatient Support Program by a second top ten pharmaceutical manufacturersimilar to our existing program. We expect the program to be launched by theend of the calendar year 2008. We have also entered into an exclusiveagreement with a nationwide pharmacy chain to provide a wide range of ourproducts and services. Our pipeline is full, and we expect the activity toenhance our growth in fiscal year 2009."
Third Quarter Operating Performance
For the three-month period ended March 31, 2008, gross margin was 39.0%,down from 41.9% in the third quarter of fiscal 2007. The reduction in grossmargin was a result of increased costs, product and customer mix. Gross marginis expected to be about 42% for fiscal year 2008, ending June 30, 2008.
Selling, general and administrative (SG&A) expenses were $1.2 million inthe third quarter of fiscal 2008 compared with $953 thousand in the sameperiod of the prior year and $1.2 million in the second quarter of fiscal2008. The year-over-year increase in SG&A expense was a result of highersales and marketing expenses, facilities rent expense, as well as expensesrelated to investor relations activities. SG&A is expected to beapproximately $4.6 million for fiscal year 2008, exclusive of any non-cashstock-based compensation expense (SFAS 123R).
For the three months ended March 31, 2008, net loss was $84 thousand, or$0.01 per diluted share, compared with net income of $82 thousand, or $0.01per diluted share, in the third quarter of fiscal 2007.
For the nine-month period ended March 31, 2008, revenue was $10.1 million,an 11% increase compared with revenue of $9.1 million in the first nine monthsof fiscal 2007. Customer billings for the same period were $10.4 million infiscal 2008 and $9.3 million in fiscal 2007, an increase of 12%. The Companyexpects customer billing of approximately $14 million for fiscal year 2008, anincrease of 14% over the prior fiscal year.
Gross margin for the first nine months of fiscal 2008 was 41.5% comparedwith 42.7% for the same period of the prior year due to product mix. SG&A forthe first nine months of fiscal 2008 was $3.5 million compared with$2.8 million in the same period of the prior fiscal year. Higher sales andmarketing expenses, non-cash stock-based compensation expense, recruitingfees, facilities rent expenses and expenses related
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