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Sharps Compliance Reports $5.4 Million In Revenue In Third Quarter Fiscal 2013

More information on the Company and its products can be found on its website at: www.sharpsinc.com

Safe Harbor Statement

The information made available in this news release contains certain forward-looking statements which reflect Sharps Compliance Corp.'s current view of future events and financial performance. Wherever used, the words "estimate," "expect," "plan," "anticipate," "believe," "may" and similar expressions identify forward-looking statements. Any such forward-looking statements are subject to risks and uncertainties and the company's future results of operations could differ materially from historical results or current expectations. Some of these risks include, without limitation, the company's ability to educate its customers, development of public awareness programs to educate the identified consumer, customer preferences, the Company's ability to scale the business and manage its growth, the degree of success the Company has at gaining more large customer contracts, managing regulatory compliance and/or other factors that may be described in the company's annual report on Form 10-K, quarterly reports on Form 10-Q and/or other filings with the Securities and Exchange Commission. Future economic and industry trends that could potentially impact revenues and profitability are difficult to predict. The Company assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results express or implied therein will not be realized.

This release contains certain financial information not derived in accordance with generally accepted accounting principles ("GAAP"), including customer billings information, EBITDA and non-GAAP net income (loss) per share. The Company believes this information is useful to investors and other interested parties. Such information should not be considered as a substitute for any measure derived in accordance with GAAP, and may not be comparable to other similarly titled measures of other companies. Reconciliation of this information to the most comparable GAAP measures is included as an attachment to this release.

FINANCIAL TABLES FOLLOW.

 
 
SHARPS COMPLIANCE CORP. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (in thousands, except per share data)
             
  Three-Months Ended   Nine-Months Ended  
  March 31,   March 31,  
  (Unaudited)   (Unaudited)  
             
  2013 2012 % Change 2013 2012 % Change
             
Revenue  $ 5,410  $ 5,291 2.2%  $ 16,280  $ 17,246 (5.6%)
             
Cost of revenue 3,894 3,766 3.4% 11,512 11,755 (2.1%)
Gross profit 1,516 1,525 (0.6%) 4,768 5,491 (13.2%)
Gross margin 28.0% 28.8%   29.3% 31.8%  
SG&A expense 2,351 2,218 6.0% 6,451 6,425 0.4%
Depreciation and amortization 107 115 (7.0%) 331 338 (2.1%)
             
Operating loss  (942)  (808)    (2,014)  (1,272)  
Operating margin (17.4%) (15.3%)   (12.4%) (7.4%)  
Other income 6  8   22 14  
             
Loss before income taxes  (936)  (800)    (1,992)  (1,258)  
Income tax expense (benefit)  19 (280)   30 (441)  
Net loss  $ (955)  $ (520)    $ (2,022)  $ (817)  
             
Net loss per share            
Basic  $ (0.06)  $ (0.03)    $ (0.13)  $ (0.05)  
Diluted  $ (0.06)  $ (0.03)    $ (0.13)  $ (0.05)  
             
Weighted Average Shares Outstanding            
Basic 15,246 15,111   15,229 15,084  
Diluted 15,246 15,111   15,229 15,084  
 
 
 
SHARPS COMPLIANCE CORP. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (in thousands)
     
  March 31, 2013 June 30, 2012
  (Unaudited)  
ASSETS:    
Current assets:    
Cash and cash equivalents  $ 16,079  $ 17,498
Accounts receivable, net 3,044 2,427
Inventory 1,904 2,219
Prepaid and other current assets 502 398
Total current assets 21,529 22,542
Property, plant and equipment, net 4,368 4,632
Intangible assets, net 607 464
Total assets  $ 26,504  $ 27,638
     
     
LIABILITIES AND STOCKHOLDERS' EQUITY:    
Current liabilities:    
Accounts payable  $ 1,405  $ 752
Accrued liabilities 1,393 1,302
Deferred revenue 1,376 1,881
Total current liabilities 4,174 3,935
Long-term deferred revenue 728 358
Other long-term liabilities 47 165
Total liabilities 4,949 4,458
Stockholders' equity:    
Total stockholders' equity 21,555 23,180
Total liabilities and stockholders' equity  $ 26,504  $ 27,638
 
 
 
SHARPS COMPLIANCE CORP. AND SUBSIDIARIES Supplemental Customer Billing and Revenue Information (unaudited) (in thousands)
           
 Three-Months Ended March 31,   
  2013 % Total 2012 $ Change %
BILLINGS BY MARKET:          
Home Health Care  $ 1,539 29.3%  $ 1,478  $ 61 4.1%
Retail  1,744 33.2%  1,399 345 24.7%
Professional  875 16.6%  815 60 7.4%
Pharmaceutical  339 6.4%  870 (531) (61.0%)
Assisted Living/ Hospitality  408 7.8%  368 40 10.9%
Core Government  96 1.8%  110  (14) (12.7%)
Other  255 4.9%  189 66 34.9%
U.S. Government Contract  -- 0.0%  241 (241) (100.0%)
Subtotal  5,256 100.0%  5,470  (214) (3.9%)
GAAP Adjustment *  154    (179)  333 (186.0%)
Revenue Reported  $ 5,410    $ 5,291  $ 119 2.2%
           
Nine-Months Ended March 31,  
  2013 % Total 2012 $ Change %
BILLINGS BY MARKET:          
Home Health Care  $ 4,845 29.8%  $ 4,985  $ (140) (2.8%)
Retail  4,343 26.8%  4,425 (82) (1.9%)
Professional  2,826 17.4%  2,237 589 26.3%
Pharmaceutical  1,811 11.2%  1,849 (38) (2.1%)
Assisted Living/ Hospitality  1,160 7.1%  937 223 23.8%
Core Government  596 3.7%  325  271 83.4%
Other  643 4.0%  892 (249) (27.9%)
U.S. Government Contract  -- 0.0%  1,685 (1,685) (100.0%)
Subtotal  16,224 100.0%  17,335  (1,111) (6.4%)
GAAP Adjustment *  56    (89)  145 (162.9%)
Revenue Reported  $ 16,280    $ 17,246  (966) (5.6%)
           
           
* Represents the net impact of the revenue recognition adjustments to arrive at reported GAAP revenue. Customer billings include all invoiced amounts for products shipped 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 product returned for treatment and destruction. The difference between customer billings and GAAP revenue is reflected in the Company's balance sheet as deferred revenue.
 
 
 
SHARPS COMPLIANCE CORP. AND SUBSIDIARIES Supplemental Customer Billing by Channel Information (unaudited) (in thousands)
           
 Three-Months Ended March 31,
  2013 % Total 2012 $ Change % Change
BILLINGS BY CHANNEL:          
Direct Sales  $ 2,285 43.5%  $ 2,662  $ (377) (14.2%)
Distributors  2,183 41.5%  1,921  262 13.6%
Inside and Online Sales  788 15.0%  646 142 22.0%
U.S. Government Contract  -- 0.0%  241 (241) (100.0%)
Total Billings By Channel  $ 5,256 100.0%  $ 5,470  $ (214) (3.9%)
           
           
           
Nine-Months Ended March 31,
  2013 % Total 2012 $ Change % Change
BILLINGS BY CHANNEL:          
Direct Sales  $ 6,434 39.7%  $ 7,141  $ (707) (9.9%)
Distributors  7,455 46.0%  6,835 620 9.1%
Inside and Online Sales  2,335 14.3%  1,674 661 39.5%
U.S. Government Contract  -- 0.0%  1,685  (1,685) (100.0%)
Total Billings By Channel  $ 16,224 100.0%  $ 17,335  $ (1,111) (6.4%)
 
 
 
SHARPS COMPLIANCE CORP. AND SUBSIDIARIES Supplemental Table to Reconcile Net Loss to EBITDA (unaudited) (in thousands)
         
  Three-Months Ended Nine-Months Ended
  March 31, March 31,
  2013 2012 2013 2012
         
Net loss  $ (955)  $ (520)  $ (2,022)  $ (817)
         
Income tax expense (benefit)  19  (280)  30  (441)
Interest income  (6)  (8)  (22)  (28)
Depreciation and amortization  274  281  827  829
         
EBITDA  $ (668)  $ (527)  $ (1,187)  $ (457)
         
         
The Company defines earnings before interest, taxes, depreciation and amortization ("EBITDA") as net income (loss), plus income tax (benefit) expense, interest (income) expense, and depreciation and amortization. Other companies may define EBITDA differently. EBITDA is presented because it is a financial measure that is frequently requested by third parties. However, EBITDA is not considered under generally accepted accounting principles as a primary measure of an entity's financial results, and accordingly, EBITDA should not be considered an alternative to operating income (loss), net income (loss), or cash flows as determined under generally accepted accounting principles and as reported by the Company.
 
 
 
SHARPS COMPLIANCE CORP. AND SUBSIDIARIES Supplemental Reconciliation of GAAP to Non-GAAP Net Loss per Share * (unaudited) (dollars in thousands)
         
  Three-Months Ended Nine-Months Ended
  March 31, March 31,
  2013 2012 2013 2012
         
Net Income (Loss)  $ (955)  $ (520)  $ (2,022)  $ (817)
         
Diluted net income (loss) per share  $ (0.06)  $ (0.03)  $ (0.13)  $ (0.05)
         
Adjustments, net of tax:        
Accrued loss on sublease  89  --   154  -- 
Severance costs  184  --   184  -- 
         
Adjustments  $ 273  $ --   $ 338  $ -- 
         
Adjusted Net Income (Loss)  $ (682)  $ (520)  $ (1,684)  $ (817)
         
Adjusted diluted net income (loss) per share  $ (0.04)  $ (0.03)  $ (0.11)  $ (0.05)
         
         
* In accordance with U.S. generally accepted accounting principles (GAAP), reported net income (loss) per share includes the after-tax impact of the items identified in this table. The Company believes this information is useful to investors and other interested parties. Such information would not be considered as a substitute for any measure derived in accordance with GAAP, and may not be comparable to other similarly titled measures of other companies.
CONTACT: Diana P. Diaz
         Sharps Compliance Corp.
         Vice President and Chief Financial Officer
         Phone: (713) 660-3547
         Email: ddiaz@sharpsinc.com
         
         - OR -
         
         Deborah K. Pawlowski
         Kei Advisors LLC
         Investor Relations
         Phone: (716) 843-3908
         Email: dpawlowski@keiadvisors.com

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