EX-99.1 2 ex99_1.htm EXHIBIT 99.1 ex99_1.htm
1
David P. Tusa
Chief Executive Officer
and President
Diana P. Diaz
Vice President and
Chief Financial Officer
 
NASDAQ: SMED
JANUARY 2012
Investor Presentation
 
 
 
800.772.5657 / www.sharpsinc.com
2
Safe Harbor Statement
These slides contain (and the accompanying oral discussion will contain) “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
The words “believe”, “estimate”, “anticipate”, “project” and “expect” and similar
expressions are intended to identify forward-looking statements. Such statements involve
known and unknown risks, uncertainties and other factors that could cause the actual
results of the Company to differ materially from the results expressed or implied by such
statements, including general economic and business conditions, conditions affecting the
industries served by the Company, conditions affecting the Company’s customers and
suppliers, competitor responses to the Company’s products and services, the overall
market acceptance of such products and services, the effectiveness of the Company’s
strategy and other factors disclosed in the Company’s periodic reports filed with the
Securities and Exchange Commission. Consequently, such forward looking statements
should be regarded as the Company’s current plans, estimates and beliefs. The Company
does not undertake and specifically declines any obligation to publicly release the results
of any revisions to these forward-looking statements that may be made to reflect any
future events or circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events.
 
 
 
800.772.5657 / www.sharpsinc.com
3
Sharps Compliance
NASDAQ: SMED
Market capitalization  $54.4 million
Recent price                                                                 $3.61
52-week range  $5.79 - $2.66
Avg. daily trading volume      40,434
(3 mos.)     
Market data as of January 20, 2012, ownership as of most recent filing
Fiscal Year-End  June 30th
Total shares outstanding     15.1 million
Ownership:
 • Institutional  17%
 • Insider   16%
Sharps Compliance is the country’s leading
environmental services provider of innovative,
cost-effective mail-back solutions for
medical waste and unused medications.
 
 
 
800.772.5657 / www.sharpsinc.com
4
Capitalizing on Major National Challenges
 
 
 
800.772.5657 / www.sharpsinc.com
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Ø Estimated 7.8 billion used syringes annually disposed
 of outside of the hospital setting(1) requires over
 80 million mail-backs per year
Ø Tripled since 2001(1)
Ø 13.5 million self-injectors(1)
Ø Creates danger for self-injectors, families,
 and communities
$2 Billion Unregulated Market Opportunity
(1) Source: Human Capital Management Services Group
Growing Volume of Medical Waste…
…Requires an Innovative Solution
 
 
 
800.772.5657 / www.sharpsinc.com
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States with sharps legislation or regulations in place
States with specific guidelines or pending legislation
States with no legislation but encourage proper disposal
Ø Proposed or enacted legislation covers 43% of the U.S. population
 (18 states plus D.C.)
 Sharps Disposal Legislation for Self-Injectors
Increasing Legislation
 
 
 
800.772.5657 / www.sharpsinc.com
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(1) Source: Associated Press Investigative Report
Water Supply Contamination…
$1 Billion Unregulated Market Opportunity
…Requires an Innovative Solution
 
 
 
800.772.5657 / www.sharpsinc.com
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Legislative Mandates
States which introduced legislation
States with legislation in place
Ø Proposed or enacted legislation covers 65% of the U.S. population
 (29 states plus D.C.)
 Unused Medication Disposal Legislation
 
 
 
800.772.5657 / www.sharpsinc.com
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(1) Source: Centers for Disease Control and Prevention
Rising Costs for Heathcare Providers
Ø Healthcare providers looking for ways to reduce costs
Ø Decentralization of healthcare delivery
$800 Million Regulated Market Opportunity
Addressing the Professional Market and
the Changing Health Care Delivery System
 
 
 
800.772.5657 / www.sharpsinc.com
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Growth Strategy
Ø Leverage our leadership position
Ø Develop innovative solutions to address
 national challenges
Ø Target four key markets
to penetrate the $3.8 billion market opportunity
 
 
 
800.772.5657 / www.sharpsinc.com
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Targeted Market Approach
Direct Sales
Telemarketing / Inside Sales
E-commerce
Distributors
 
 
 
800.772.5657 / www.sharpsinc.com
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$40 Million Market Opportunity
 for TakeAway envelopes
Sharps Recovery System™
needles and syringes
TakeAway Environmental Return
System™
unused disposed medication
$50 Million Flu Shot Market
Opportunity
Major Customer Relationships
Direct Sales
Distributors
 
 
 
800.772.5657 / www.sharpsinc.com
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Direct Sales
Unique Promotional Program
Ø Consumer focused
Ø Subsidized by sponsors
Ø  Pull through drivers: Consumer Behavior
  - self injector awareness
$25 to $40 Million Market Opportunity for
Complete Needle™
With 10% to 15% of self-injectors using Complete Needle™
 
 
 
800.772.5657 / www.sharpsinc.com
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Sharps Recovery System™
Ø Support the proper disposal of medical
 waste generated in physician, dental,
 veterinarian and other service-related
 practices
Ø Regulated industry: requires proper
 disposal
Ø Estimated 800,000 professional offices
 across the U.S.
Market With the Lowest Cost Solution
$600 Million Market Opportunity
Telemarketing / Inside Sales
E-commerce
Distributors
 
 
 
800.772.5657 / www.sharpsinc.com
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What they need
Ø Product differentiation
Ø Improved interaction with patients
Ø Touch points with patients
Ø Improved therapy outcomes
What we offer
Ø Launched three new programs from
 Sept 2011 thru December 2012
Ø Combined value of more than
 $3 million annually
Creating Solutions
Ø Our solutions provide the tools
 to satisfy the needs of the
 pharmaceutical manufacturers
Direct Sales
 
 
 
800.772.5657 / www.sharpsinc.com
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Direct Sales
Sharps Recovery System™ &
TakeAway Environmental Return System™
     U.S. Department of Veterans Affairs
Driving New Behaviors
Around Medical Waste and Unused Medications
Ø Innovative pilot program
Ø VA evaluating broad roll-out program to
 make solutions available across all
 regions and 5.5 million veterans
$0.2
$0.3
$0.6
$2.8
$6.3
$23.8
$3.4
$6.0
$23.2
$2.1
$2.8
$0.6
$20 to 30 Million Estimated
Market Opportunity
Core Government Billings
(in millions)
 
 
 
800.772.5657 / www.sharpsinc.com
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Innovative Solutions…
SharpsTracer™
MedTracer™
… for the Professional Market
… for the Pharmaceutical Market
… for regulatory compliant tracking
and proof of receipt and treatment
… for the Retail Pharmacy Market
See supplemental slides for descriptions of solution offerings
 
 
 
800.772.5657 / www.sharpsinc.com
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Fully-Integrated Solutions Provider
Vertical Integration:
manufacturing
assembly
distribution
treatment
online tracking
customer reporting
regulatory expertise
Barriers to Entry
Unique solutions
Large addressable market
 
 
 
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Financial
Highlights
 
 
 
800.772.5657 / www.sharpsinc.com
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Growth and Diversity
FY 2008 Billings
$13.2 million
 
 
 
800.772.5657 / www.sharpsinc.com
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($ in millions)
Building Core Revenue
Fiscal Years
$39.2
$20.3
Quarterly Trends
$4.6
$5.0
$4.5
$5.7
Core Business (recurring revenue markets) U.S. Government Contract
$19.4
$21.5
$6.2
 
 
 
800.772.5657 / www.sharpsinc.com
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Gross Margin
EBITDA*
* See supplemental slides for EBITDA reconciliation and other important disclaimers regarding EBITDA.
($ in millions)
Strong Operating Leverage
Gross Margin
EBITDA*
Fiscal Years
Quarterly Trends
 
 
 
800.772.5657 / www.sharpsinc.com
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Net Income
* Excludes special charge of $512 thousand and an unusual tax benefit of $1.8 million.
** Excludes Q1 FY 2011 special charge of $570 thousand and Q4 FY 2011 unusual expenses of $398 thousand.
*** Excludes Q4 FY 2011 unusual expenses of $398 thousand.
($ in millions)
Investing in Growth
Net Income
Fiscal Years
Quarterly Trends
 
 
 
800.772.5657 / www.sharpsinc.com
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(As of and for the period ending December 31, 2011)
Strong Balance Sheet: Financial Flexibility
Cash and
Cash
Equivalents
$18.3M
Shareholder
Equity
Growth
6/30/09 vs. 6/30/11
170%
Line of
Credit
$5.0M
No debt
as of
12/31/11
 
 
 
800.772.5657 / www.sharpsinc.com
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Capturing Opportunities - Creating Growth
Ø $3.8 billion market opportunity
Ø First mover advantage
Ø Winning major customers in key markets
Ø Increasing state and federal regulatory drivers
Ø Vertically integrated full-service operations
Ø Highly scalable business model with operating leverage
Sharps is on track to deliver.
 
 
 
26
Q & A
 
 
 
27
Supplemental
Information
 
 
 
800.772.5657 / www.sharpsinc.com
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EBITDA Reconciliation
($ in thousands)
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.
 
Three Months Ended
 
12/31/2011
 
9/30/2011
 
6/30/2011
 
3/31/2011
 
12/31/2010
 
 
 
 
 
 
 
 
 
 
Net Income (loss)
$ 28
 
$ (325)
 
$ (712)
 
$ (659)
 
$ (807)
 
 
 
 
 
 
 
 
 
 
Income tax (benefit) expense
 15
 
 (176)
 
 (281)
 
 (445)
 
 (378)
Interest (income) expense
 (10)
 
 (10)
 
 (13)
 
 (14)
 
 (15)
Depreciation and amortization
 278
 
 270
 
 252
 
 252
 
 249
 
 
 
 
 
 
 
 
 
 
EBITDA
$ 311
 
$ (241)
 
$ (754)
 
$ (866)
 
$ (951)
 
Year Ended
 
6/30/2011
 
6/30/2010
 
6/30/2009
 
6/30/2008
 
 
 
 
 
 
 
 
Net Income (loss)
$ (2,975)
 
$ 9,356
 
$ 4,197
 
$ 82
 
 
 
 
 
 
 
 
Income tax (benefit) expense
 (1,516)
 
 5,079
 
 (700)
 
 3
Interest (income) expense
 (55)
 
 (37)
 
 (27)
 
 (85)
Depreciation and amortization
 1,003
 
 796
 
 418
 
 266
 
 
 
 
 
 
 
 
EBITDA
$ (3,543)
 
$ 15,194
 
$ 3,888
 
$ 266
 
 
 
800.772.5657 / www.sharpsinc.com
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ØSharps Recovery System™ (formerly Sharps Disposal by Mail System®)
         A cost-effective and comprehensive solution for the containment, transportation, treatment
         and tracking of medical waste and used healthcare materials such as hypodermic
         needles, lancets, and other used healthcare materials. The solution offering
         is ideal for individuals who self-inject or medical facilities generating small
         quantities of medical waste.
ØTakeAway Environmental Return System™
         Designed for individual consumers, communities and facilities, such as
         pharmacies, assisted living facilities, long-term care facilities, mail-order
         pharmacies and correctional operations, to manage their unused
         dispensed medications (other than controlled substances). This
         solution consists of customized containment, transportation, destruction or
         conversion and tracking services. The Company’s proprietary tracking system,
         MedsTracer™, is designed for tracking unused dispensed medications.
Ø30-Gallon TakeAway Recovery System™
         This versatile and cost-effective method for the proper management of used
         healthcare materials, including sharps containers, eliminates the need for costly,
         inconvenient pick up service. Pre-loaded with six Covidien 5-Quart SharpStar™
         In-Room™ Sharps Containers, the unit can accommodate up to nine containers when
         returning it for disposal via pre-paid UPS freight to our fully-permitted treatment
         facility.
Descriptions
 
 
 
800.772.5657 / www.sharpsinc.com
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Descriptions
ØComplete Needle™ Collection & Disposal System
 A comprehensive solution focused on the traditional under-served home self-injector required to
regularly use needles or syringes for their health and well-being, such as people with
diabetes. The Complete Needle™ Collection and Disposal System is actually two offerings
in one. First, the product provides the individual self-injector with a reasonably priced
containment solution designed to protect self-injectors and their family members. Second,
the product includes an optional disposal feature utilizing the USPS designed to protect
the individual’s community, solid waste workers and the environment. Our solution offers
significant convenience as it utilizes the same delivery channel, the retail pharmacy, that the
self-injector typically uses to obtain medications, for example insulin, and needles or syringes. Our solution is also
designed to enhance the interactions between the pharmacist and the individual thereby creating counseling
opportunities and possibly better treatment outcomes.
ØSharps® MWMS™ - Sharps Medical Waste Management System™
A comprehensive solution which includes an array of services and products necessary
to effectively collect, store, transport, treat, document and audit medical waste and
dispensed unused medications generated in a large scale or catastrophic situation.
The system, which is designed for rapid deployment in emergency situations, features
the Sharps Recovery System™ and TakeAway Environmental Return System™ products
combined with warehousing, inventory management, training, data and other services
necessary to provide a comprehensive portable solution. Sharps® MWMS™ is
designed to be an integral part of governmental and commercial emergency
preparedness programs for large scale or catastrophic situations such as natural
disasters, pandemics, terrorist events or other national emergencies.
 
 
 
31
David P. Tusa
Chief Executive Officer
and President
Diana P. Diaz
Vice President and
Chief Financial Officer
 
NASDAQ: SMED
JANUARY 2012
Investor Presentation