Sharps Compliance Reports $5.7 Million in Revenue in Second Quarter Fiscal 2013

Sharps Compliance Reports $5.7 Million in Revenue in Second Quarter Fiscal
2013

  *Second quarter core revenue and billings, which exclude the U.S.
    Government contract, achieved new records led by solid growth in targeted
    Professional, Pharmaceutical and Retail markets
  *Billings through the inside and online sales channel in the second quarter
    increased 39% year-over-year to $0.8 million
  *Balance sheet remains solid with cash of $16.8 million, working capital of
    $18.1 million and no debt as of December 31, 2012
  *Company authorized $3.0 million stock repurchase program in January 2013

HOUSTON, Jan. 30, 2013 (GLOBE NEWSWIRE) -- Sharps Compliance Corp.
(Nasdaq:SMED) ("Sharps" or the "Company"), a leading full-service provider of
solutions for the cost-effective management of medical waste, used healthcare
materials and unused dispensed medications, today reported financial results
for the second quarter of fiscal year 2013 ended December 31, 2012.

Revenue in the second quarter of fiscal 2013 was $5.7 million. Growth in key
targeted markets helped to offset the $0.7 million decrease associated with
the maintenance portion of a U.S. Government contract with the Division of
Strategic National Stockpile of the Centers for Disease Control that was
terminated on January 31, 2012. When compared with the trailing fiscal 2013
first quarter, revenue increased $0.6 million, or 10.9%. Comparable core
market revenue for the second quarter of fiscal 2012 was $5.5 million.

Customer billings, which the Company believes is an appropriate measure of
performance and progress of the business, were down $0.4 million compared with
the prior year period, reflecting the $0.7 million impact from the termination
of the maintenance portion of the U.S. government contract. Excluding that
impact, core customer billings increased $0.3 million, or 5.2%, year-over-year
to a record $5.5 million in the second quarter of fiscal 2013. Solid growth in
billings to the professional, pharmaceutical and retail markets were partially
offset by lower billings to the home health care and other markets, which were
softer due to the timing of orders. Compared with the trailing fiscal 2013
first quarter, core customer billings increased $0.1 million, or 2.0%, from
$5.4 million in the trailing first quarter. (See Reconciliation of Customer
Billings to Revenue in the supplemental table included at the end of this
release.)

"Record sales in our core markets demonstrated our continued focus on
delivering the most cost-effective and convenient medical waste management
solutions to our customers as we continue to capture market share," stated
David P. Tusa, President and CEO of Sharps Compliance. "Moreover, our pipeline
of targeted opportunities, excluding government, has increased to over $30
million as we pursue larger prospects resulting from our strategic alliances
and positioning the Company as a comprehensive medical waste management
provider."

Aggressive sales and marketing initiatives drive market growth

Professional market billings grew $0.2 million, or 31.9%, to $1.0 million in
the second quarter of fiscal 2013. The growth in the market was a direct
result of the Company's targeted telemarketing activities and corresponding
promotional activities to educate doctors, dentists and veterinarians on the
significant cost advantage and convenience of the Company's Sharps^® Recovery
System over the traditional pick-up service in the small quantity generator
sector. The Company's inside and online sales channel, which is focused
primarily on the professional market, saw billings increase 38.6%, to $0.8
million in the fiscal 2013 second quarter from $0.6 million in the prior year
period. The second quarter billings from this channel were basically flat when
compared to the sequential quarter reflecting the slowdown in the professional
market during the holiday season.

Second quarter pharmaceutical market billings grew $0.2 million, or 28.3%, to
$0.9 million as a result of timing of customer orders and resupply orders from
one of the three new Patient Support Programs that were awarded in fiscal
2012.

Retail market billings for the second quarter of fiscal 2013 increased $0.1
million, or 10.1%, to $1.4 million compared with the prior-year period. This
increase was due to higher sales related to the flu season of $122,000 and
higher sales for the Company's Complete Needle Collection & Disposal System™
of $62,000, partially offset by lower sales of the TakeAway Environmental
Return System™ solutions of $70,000 due to initial launches in the prior year.

Although the flu shot-related orders in the retail market for the second
quarter of fiscal 2013 were up 12% over the prior year, they were up 36%, to
$3.8 million, for the trailing twelve month period representing continued
strength in this sector. As the leading solutions provider to retail
pharmacies administering flu-related and other immunizations, we have seen
this sector nearly quadruple over the past four years as more healthcare is
provided in the alternate site setting.

Growth from these markets was slightly offset by a $0.2 million year-over-year
decline in the home health care market due to timing of distributor orders.

Operating Performance

Gross margin was 29.7% in the second quarter of fiscal 2013 compared with
gross margin of 34.6% in the fiscal 2012 second quarter. The margin
contraction reflected the impact of (i) the January 31, 2012 termination of
the maintenance portion of the U.S. Government contract including the
absorption of approximately $0.1 million, or 200 basis points, of ongoing
facility costs, (ii) $64 thousand, or 110 basis points, associated with an
additional accrued loss for lease related liabilities for the Atlanta
facility, (iii) treatment facility-related repairs and seasonal labor and (iv)
lower revenue compared with the prior year which included the U.S. Government
contract.

Selling, general and administrative (SG&A) expense of $2.0 million in the
second quarter of fiscal year 2013 was relatively flat compared with the
prior-year period. This reflects the Company's continued commitment to strong
cost discipline and focused use of resources on the Company's target markets.
Sharps expects the quarterly SG&A run rate to increase approximately 5% going
forward as a result of increased sales-related personnel and marketing
expenditures.

For the second quarter of fiscal 2013, the Company had an operating loss of
$0.4 million compared with operating income of $34 thousand in the same period
of the prior year.

Earnings before interest, taxes, depreciation, and amortization, or EBITDA,
was a loss of $0.2 million for the second quarter of fiscal 2013 compared with
EBITDA of $0.3 million in the same period of the prior fiscal year. Sharps
believes that when used in conjunction with GAAP measures, EBITDA, which is a
non-GAAP measure, provides additional information related to its operating
performance. (See Reconciliation of Net Loss to EBITDA in the supplemental
table included at the end of this release.)

Net loss for the fiscal 2013 second quarter was $0.4 million, or $0.03 per
diluted share, compared with net income of $28 thousand, or basically
breakeven, for the corresponding prior-year period.

First half fiscal 2013 review

For the six months ended December 31, 2012, revenue was $10.9 million compared
with $12.0 million during the prior-year period, which included $1.4 million
associated with the maintenance portion of the U.S. government contract.
Excluding that impact, core customer billings increased 5.2%, or $0.5 million,
to $11.0 million during the year-to-date period in fiscal 2013. Professional
billings increased 37.2% to $2.0 million over the first half of fiscal 2012.
Pharmaceutical billings increased 50.4% to $1.5 million compared with $1.0
million over the prior-year period.

Retail billings were down $0.4 million to $2.6 million compared with the first
half of fiscal 2012, as a result of timing of customer orders and new program
launches in the prior-year period of both the Complete Needle Collection &
Disposal System™ and the TakeAway Environmental Return System™ solutions. Flu
business related orders were essentially flat at $1.9 million for the
year-to-date period. Core government billings increased 132.6%, or $0.3
million, to $0.5 million as a result of a large stocking order placed by the
U.S. Department of Defense for $0.2 million through the distributor channel.

For the fiscal 2013 year-to-date period, gross margin was 29.9% compared with
33.2% in the same period of the prior fiscal year as operating leverage was
impacted by similar items as those noted in the second quarter discussion.
SG&A expense over the comparable period decreased $0.1 million to $4.1
million. Operating loss for the six months ended December 31, 2012 and 2011
was $1.1 million and $0.5 million, respectively.

EBITDA loss for the first six months of fiscal 2013 was $0.5 million compared
with EBITDA of $70 thousand in the prior-year period. (See Reconciliation of
Net Loss to EBITDA in the supplemental table included at the end of this
release.) Net loss was $1.1 million, or $0.07 per diluted share, for the six
months ended December 31, 2012, compared with a net loss of $0.3 million, or
$0.02 per diluted share, for the six months ended December 31, 2011.

Financial Flexibility and a Strong Balance Sheet

Cash and cash equivalents were $16.8 million at December 31, 2012 compared
with $17.5 million at June 30, 2012. Working capital was $18.1 million at
December 31, 2012, compared with $18.6 million at the end of fiscal year 2012.
At December 31, 2012, stockholders' equity and total assets were $22.4 million
and $27.0 million, respectively, compared with $23.2 million and $27.6
million, respectively, at June 30, 2012.

At December 31, 2012, the Company had no debt outstanding and $3.0 million
available under its revolving line of credit.

Given the strength of the Company's balance sheet coupled with management's
confidence in the business and strategic direction, a stock repurchase program
was authorized in January 2013 for up to $3 million of Sharps' outstanding
common stock over a two-year period.

Outlook

Mr. Tusa concluded, "Over the past few quarters we believe we have begun to
transform the Company from a seller of mailback solutions to a provider of
comprehensive medical waste management services. We believe that execution of
our business strategy and closing on many of the opportunities in our pipeline
will bode well for the Company's growth and financial performance over
calendar year 2013."

Second Quarter Fiscal Year 2013 Webcast and Conference Call

The Company will host a conference call and webcast today beginning at 11:00
a.m. Eastern Time, during which management will review the financial and
operating results for the period, key market initiatives and discuss Sharps'
corporate strategy and outlook. A question-and-answer session will follow.

The Sharps conference call can be accessed by dialing (201) 689-8560. The
webcast can be monitored at www.sharpsinc.com.Webcast listeners will have the
opportunity to submit questions to the speakers. Select questions will be
summarized and addressed during the question-and-answer portion of the call.

A telephonic replay will be available from 2:00 p.m. ET the day of the
teleconference until Wednesday, February 6, 2013. To listen to the archived
call, dial (858) 384-5517, and enter conference ID number 406940.A transcript
will also be posted to Sharps' website once available.

About Sharps Compliance Corp.

Headquartered in Houston, Texas, Sharps Compliance is a leading full-service
provider of solutions for the cost-effective management of medical waste, used
healthcare materials and unused dispensed medications. Its strategy is to
capture a large part of the estimated $3.8 billion untapped market for its
solutions by targeting the major agencies that are interrelated with this
medical waste stream, including pharmaceutical manufacturers, home healthcare
providers, retail pharmacies and clinics, the U.S. government and the
professional market which is comprised of physicians, dentists and veterinary
practices. As a fully integrated medical waste management company providing
customer solutions and services, the Company's solid business model, which
provides strong margins and significant operating leverage, combined with its
early penetration into emerging markets, uniquely positions it for strong
future growth. The Company's flagship product, the Sharps^® Recovery System,
is a comprehensive solution for the containment, transportation, treatment and
tracking of medical waste and used healthcare materials. The Company's
TakeAway Environmental Return System™ is designed for individual consumers,
retail or mail-order pharmacies, communities and facilities including assisted
living, long-term care and correction operations to facilitate the proper
disposal of unused dispensed medications. The Complete Needle Collection &
Disposal System™ is a safe, easy-to-use and cost-effective solution designed
for self-injecting consumers and includes the Company's containment,
packaging, return shipping via the U.S. Postal Service, tracking and
treatment.

The Company has partnered with Daniels Sharpsmart in a joint marketing
alliance to serve the entire U.S. medical waste market, offering customers a
blended product portfolio to effectively target healthcare customers with
multi-site and multi-size locations. The alliance also enables a team effort
for cross selling each company's capabilities where best suited.

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.



SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
                                                                
                 Three-Months Ended         Six-Months Ended        
                 December 31,              December 31,           
                 (Unaudited)                (Unaudited)             
                 2012      2011     % Change 2012        2011        % Change
                                          (Unaudited) (Unaudited) 
Revenue           $5,717  $6,212 (8.0%)   $10,870   $11,955   (9.1%)
                                                                
Cost of revenue   4,017     4,065    (1.2%)   7,618       7,989       (4.6%)
Gross profit      1,700     2,147    (20.8%)  3,252       3,966       (18.0%)
Gross margin      29.7%     34.6%            29.9%       33.2%       
SG&A expense      2,020     1,997    1.2%     4,100       4,207       (2.5%)
Depreciation and  111       116      (4.3%)   224         223         0.4%
amortization
                                                                
Operating income  (431)    34              (1,072)    (464)      
(loss)
Operating margin  (7.5%)    0.5%             (9.9%)      (3.9%)      
Other income     8         9               16          6           
                                                                
Income (loss)
before income     (423)    43              (1,056)    (458)      
taxes
Income tax        5        15               11          (161)       
expense (benefit)
Net income (loss) $(428)  $28            $(1,067)  $(297)    
                                                                
Net income (loss)                                                
per share
Basic           $(0.03) $0.00          $(0.07)   $(0.02)   
Diluted          $(0.03) $0.00          $(0.07)   $(0.02)   
                                                                
Weighted Average
Shares                                                           
Outstanding
Basic            15,232    15,077           15,221      15,071      
Diluted          15,232    15,404           15,221      15,071      



SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
                                                           
                                          December 31, 2012 June 30, 2012
                                          (Unaudited)       
ASSETS:                                                     
Current assets:                                             
Cash and cash equivalents                 $16,785         $17,498
Accounts receivable, net                  2,901             2,427
Inventory                                 1,967             2,219
Prepaid and other current assets          315               398
Total current assets                      21,968            22,542
Property, plant and equipment, net        4,492             4,632
Intangible assets, net                    587               464
Total assets                              $27,047         $27,638
                                                           
                                                           
LIABILITIES AND STOCKHOLDERS' EQUITY:                       
Current liabilities:                                        
Accounts payable                          $830            $752
Accrued liabilities                       1,349             1,302
Deferred revenue                           1,706             1,881
Total current liabilities                 3,885             3,935
Long-term deferred revenue                588               358
Other long-term liabilities                135               165
Total liabilities                         4,608             4,458
Stockholders' equity:                                       
Total stockholders' equity                22,439            23,180
Total liabilities and stockholders' equity $27,047         $27,638



SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
Supplemental Customer Billing and Revenue Information
(unaudited)
(in thousands)
                                                               
                      Three-Months Ended December 31,            
                      2012        % Total   2011        $ Change   %
BILLINGS BY MARKET:                                             
Home Health Care       $1,559    28.2%     $1,740    $(181)   (10.4%)
Retail                 1,434      25.9%     1,303      131        10.1%
Professional           950        17.2%     720        230        31.9%
Pharmaceutical        910        16.4%     709        201        28.3%
Assisted Living/       376        6.8%      269        107        39.8%
Hospitality
Core Government       108        1.9%      90         18        20.0%
Other                  202        3.6%      434        (232)      (53.5%)
U.S. Government        --         0.0%      722        (722)      (100.0%)
Contract
Subtotal               5,539      100.0%    5,987      (448)     (7.5%)
GAAP Adjustment *      178                 225        (47)      (20.9%)
Revenue Reported       $5,717             $6,212    $(495)   (8.0%)
                                                               
                      Six-Months Ended December 31,               
                      2012        % Total   2011        $ Change   %
BILLINGS BY MARKET:                                             
Home Health Care       $3,306    30.1%     $3,507    $(201)   (5.7%)
Retail                 2,599      23.7%     3,026      (427)      (14.1%)
Professional           1,951      17.8%     1,422      529        37.2%
Pharmaceutical        1,472      13.4%     979        493        50.4%
Assisted Living/       752        6.9%      569        183        32.2%
Hospitality
Core Government       500        4.6%      215        285       132.6%
Other                  388        3.5%      703        (315)      (44.8%)
U.S. Government        --         0.0%      1,444      (1,444)    (100.0%)
Contract
Subtotal               10,968     100.0%    11,865     (897)     (7.6%)
GAAP Adjustment *      (98)                90         (188)     (208.9%)
Revenue Reported       $10,870            $11,955   (1,085)   (9.1%)
                                                               
                                                               
* 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 December 31,
                         2012      % Total 2011      $ Change % Change
BILLINGS BY CHANNEL:                                       
Direct Sales              $2,377  42.9%   $2,390  $(13)  (0.5%)
Distributors              2,387    43.1%   2,316    71      3.1%
Inside and Online Sales   775      14.0%   559      216      38.6%
U.S. Government Contract  --       0.0%    722      (722)    (100.0%)
Total Billings By Channel $5,539  100.0%  $5,987  $(448) (7.5%)
                                                          
                                                          
                                                          
                         Six-Months Ended December 31,
                         2012      % Total 2011      $ Change % Change
BILLINGS BY CHANNEL:                                       
Direct Sales              $4,149  37.8%   $4,478  $(329) (7.3%)
Distributors              5,272    48.1%   4,914    358      7.3%
Inside and Online Sales   1,547    14.1%   1,029    518      50.3%
U.S. Government Contract  --       0.0%    1,444    (1,444) (100.0%)
Total Billings By Channel $ 10,968 100.0%  $11,865 $(897) (7.6%)



SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
Supplemental Table to Reconcile Net Income (Loss) to EBITDA
(unaudited)
(in thousands)
                                                                
                       Three-Months Ended           Six-Months Ended
                       December 31,                 December 31,
                       2012            2011         2012           2011
                                                                
Net Income (Loss)       $(428)         $28         $(1,067)      $(297)
                                                                
Income tax expense      5               15           11             (161)
(benefit)
Interest income         (8)             (10)         (16)           (20)
Depreciation and        277             278          553            548
amortization
                                                                
EBITDA                  $(154)         $311        $(519)        $70
                                                                
                                                                
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 financialresults, 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.

CONTACT: Diana P. Diaz
         Sharps Compliance Corp.
         Vice President and Chief Financial Officer
         Phone: (713) 660-3547
         Email: ddiaz@sharpsinc.com
        
         Deborah K. Pawlowski
         Kei Advisors LLC
         Investor Relations
         Phone: (716) 843-3908
         Email: dpawlowski@keiadvisors.com

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