Buzz Stock of the Day – Sharps Compliance (SMED)

Our Buzz Stock of the Day — Sharps Compliance Corp. (OTCBB: SCOM) — provides medical waste disposal solutions for the healthcare industry and U.S. consumers. The Houston-based company’s flagship product, the Sharps Disposal by Mail System, is used to dispose of medical waste including hypodermic needles, lancets and other medical devices and objects used to puncture or lacerate the skin.

Sharps Compliance Corp. reported a sharp increase in Q3 profits, thanks in large part to a recently announced $40 million contract with an agency of the U.S. Government Customer billings. Revenue for the third quarter increased to $6 million, from $2.9 million a year earlier. Revenue for the nine-month period ended March 31, 2009 increased 35 percent to $13.6 million, compared to the same period last year.

“Our third quarter results reflect the success of our full-service medical waste management solutions and the business model that we have developed as we execute our first large scale government contract,” said the company’s chairman and CEO, Dr. Burton J. Kunik. “We have created a convenient, cost-effective and safe method to properly dispose of medical and pharmaceutical waste in locations outside of the hospital setting to include homes, alternative care facilities, retail clinics, industrial and commercial facilities and emergency management programs.”

Gross margin for the quarter was 59.2 percent, compared to 49 percent a year earlier. Operating income, or profit realized from the company’s operations, was $2 million or 33.2 percent of revenue for the quarter, compared with an operating loss of $100,000 for same period a year ago.

As of March 31st, Sharps Compliance Corp. had $3.6 million in working capital, up from $1.9 million at June 30, 2008. Total assets increased to $11.8 million, from $5.7 million at june30, 2008.

There is a growing interest for the company’s RXTakeAway(TM) line of products, according to a recent earnings release.

“We believe our new line of products address a very serious disposal issue in the country that is currently harming our environment and placing our children at risk,” said Kunik. “Our existing solutions and infrastructure are uniquely positioned to facilitate the proper and cost-effective disposal of unused medications in the consumer / community markets.”

The company has a very small float — only 5.6 million shares, and has outperformed the S&P 500 over the past 52-weeks. Sharps has quarterly earnings growth (yoy) of 317 percent, and earned about $1.6 million, on revenue of $13.3 million (ttm).

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Tags: biotech, buzz stocks, healthcare, micro cap, small cap stocks

This entry was posted on Wednesday, April 29th, 2009 at 5:28 pm by admin and is filed under Health Care Stocks, Industrial Stocks. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.