Sharps Compliance Corporation (NASDAQ: SMED) has been a great local growth story in Houston. If you have been to a doctor’s office of late, you may have noticed the company’s box on the wall in the rooms where patients are met by doctors or physicians who dispose of needles and other one-time use medical bits and pieces.
The company put out a release today noting that it expects $6.2 million for its quarter-end of December 31, 2011. While this is a 35% gain over the prior year’s second quarter, the company noted that “it anticipates that from margin expansion on higher volume, it will report break-even to slightly positive net income.”
Unfortunately, Sharps Compliance is losing a government contract after disclosing that it has received notification that the third year option on annual maintenance contract for managing MWMS™ inventory for the U.S. Center for Disease Control contract will not be exercised.
The company noted, “While we are disappointed that the U.S. Government’s maintenance contract will not be renewed for the third option year, beginning February 1, 2012, we expect that we will be able to replace the revenue through our sales and marketing efforts to the retail, professional and pharmaceutical markets. Excluding the government maintenance contract, billings in the second quarter were up 43%.”
Shares are down only 3.6% at $4.00 on today’s news against a 52-week range of $2.66 to $5.79.
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