Sharps Compliance ups revenue, but reports loss

Houston-based Sharps Compliance Corp., which describes itself as a full-service national provider of medical, pharmaceutical and hazardous waste management services, has reported revenue of $10.4 million in its recently completed financial quarter, along with an operating loss of $1.6 million.

The company says the revenue figure for its fiscal third quarter, which ended March 31, 2020, was 10 percent higher than the $9.5 million in revenue from the same timeframe in 2019.

Sharps Compliance says its gross margin “remained consistent at 21 percent” compared the third quarter of the previous fiscal year. However, the company reported an operating loss of $1.6 million in the third quarter of 2020, an increase over the operating loss of $1.1 million in the third quarter of 2019.

“March is typically our slowest revenue quarter as a result of seasonality and customer ordering patterns,” says David P. Tusa, president and CEO of the firm. “In spite of this, we achieved growth in revenue with increased customer billings in our retail, professional and assisted living markets and substantial growth in two of our three key solutions: unused medication management and route-based, with our traditional mail-back offering essentially flat for the quarter. We expected higher gross margins for the March 2020 quarter, but the cost of goods sold for the quarter was adversely impacted by the proactive 10 percent increase in [staffing of] route-based drivers, plant and operations personnel and by the pay increase for frontline workers we implemented to ensure uninterrupted service during the COVID-19 pandemic.”

Says Tusa of the current health care sector environment, “At Sharps Compliance, we’re taking every precaution to ensure the safety of our employees, while at the same time remaining active as a leading national provider of comprehensive medical waste solutions, bringing uninterrupted essential support to our customers and the health care industry.  In support of this, we increased our route-based drivers, plant and operations personnel by 10 percent in advance of the COVID-19 pandemic to make sure that our operations and servicing of customers would not be adversely affected by the potential absence of employees due to COVID-19. We also temporarily increased the pay for our front-line operations personnel and drivers during the pandemic.”

Sharps Compliance also says it is focused on expanding its infrastructure to support what it believes will be a strong 2020 flu and immunization season as well as medical waste disposal related to a potential COVID-19 vaccine that may become available for administration in the United States.

Additionally, the company says it sees other potential increased medical waste volumes related to COVID-19, such as in the long-term care market, where personal protective equipment (PPE) at many facilities is being disposed of as medical waste and not as trash, as often had been the historical practice.

Sharps says it is increasing its medical waste processing capacity from 5,000 tons to 13,500 tons per year with the addition of a larger autoclave at its Texas facility and an additional autoclave at its Pennsylvania facility.