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Revenue increased 7%, to $2.9 million, in the fourth quarter of fiscal2007 compared with the prior year's fourth quarter. Customer billings, whichthe Company believes is an appropriate measure of performance and progress ofthe business, increased to $3.0 million for the fiscal 2007 fourth quarter, up19% over the prior year period. Higher customer billings in the quarter weredriven by growth in the healthcare, hospitality and retail markets. Thedifference between customer billings and revenue is reflected as deferredrevenue on the Company's balance sheet.
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For fiscal year 2007, revenue increased 13%, to $12.0 million, comparedwith $10.6 million for fiscal year 2006. During the same period, customerbillings increased 19%, to $12.3 million, over the prior year period.Expansion of the retail, hospitality and professional sector business andstrong customer penetration contributed to growth for the full-year period.Additionally, the contract awarded to Sharps by a major pharmaceuticalmanufacturer that is providing Sharps Disposal By Mail Systems(R) products toits patients resulted in a four-fold increase in billings to this market.During fiscal year 2007, Sharps doubled customer billings to the retail marketwhich consisted primarily of the sale of its flagship Sharps Disposal By MailSystems(R) products to facilitate the proper disposal of flu shotsadministered in the retail setting, such as pharmacies, grocery store chainsand mass merchandisers, across the country.
Approximately 15% - 30% of customer billings are deferred to futurereporting periods and recognized as GAAP revenue when the Sharps Disposal ByMail Systems(R) products are returned to the Company's treatment facility forprocessing and destruction. This GAAP revenue recognition method is thereason for the significant difference in the reported revenue amounts, versusbillings, for both the fourth quarter and fiscal year ending June 30, 2007.
Dr. Burton J. Kunik, Chairman, President and Chief Executive Officer ofSharps, commented, "During fiscal year 2007, we successfully executed theinitial order received from a major pharmaceutical manufacturer thatrecognized the benefits of the Sharps Disposal by Mail System(R) for itspatients and the environment. We are very focused on the pharmaceuticalindustry because of the magnitude of opportunities this market presents, andwe continue to make measurable progress with several prospects. In addition,we believe public opinion and patient behavior patterns regarding the properdisposal of medical sharps in the small quantity generator market are changingas a result of new and proposed legislation as well as increased awareness ofthe proper means of sharps disposal."
For both three-month periods ended June 30, 2007 and 2006, the Companygenerated essentially break-even results. GAAP net income for fiscal year2007 was $785 thousand, or $0.06 per diluted share, a 105% increase over netincome of $382 thousand, or $0.03 per diluted share, in fiscal 2006.
Fourth Quarter Growth and Performance
Higher customer billings for the fourth quarter of fiscal 2007 were led bya 17%, or $283 thousand, increase in healthcare market billings. Thehospitality market, which more than doubled, and the retail market, which morethan tripled, are rapidly increasing as a percentage of total billings.
Dr. Kunik noted, "The retail clinic market, an ideal application for ourSharps Disposal By Mail Systems(R) products, is a rapidly expanding phenomenonin the U.S. Retail health clinics are described as being an efficient meansto reduce health care costs and
