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Sharps Compliance (SMED)

Participants
Jen Belodeau IMS, Investor Relations
Pat Mulloy President & Chief Executive Officer
Eric Bauer Executive Vice President & Chief Financial Officer
Diana Diaz Chief Accounting Officer
Gerry Sweeney Roth Capital
Rob Brown Lake Street Capital
Michael Hoffman Stifel
Kevin Steinke Barrington Research Associates
Call transcript
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Operator

Good day, ladies and gentlemen and welcome to the Sharps Compliance Third Quarter 2022 Earnings Call. At this time, all participants have been placed on a listen-only mode and the floor will be opened for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Jen Belodeau with IMS Investor Relations. Ma'am, the floor is yours.

Jen Belodeau

Thank you. to Compliance welcome XXXX quarter and call. earnings morning the third Sharps fiscal Good

from today will Pat business the Executive their we President call will will Diana the On have review Officer Accounting and take Executive Chief Officer; remarks, our Pat and formal outlook, Diaz, and Eric Chief and the call Mulloy, following Officer; Eric operations participants. President financials. Bauer, company's questions Immediately Vice review Financial we and performance, Chief company's the while

we as you're we cause earnings With during Pat let uncertainties, statements found filed and Securities the are As to Exchange to Commission. well to results today. this outlined ahead, These question-and-answer with some the call which review formal discussion. may from risks Pat. me website begin in at could are factors Go the These These aware, as make portion Sharps as differ materially the be in the forward-looking and well presentation apply teleconference. are our over way, the events, company out to statements to as future and where the of other or and documents in subject can that of turn release, the by that at sec.gov. factors

Pat Mulloy

Thank call. Thank for earnings participating good and of third to morning. fiscal its morning. you, XXXX Good you Jen, you in Yes. be with this all quarter our

April. as this know, Sharps you of first early call my most my the As earnings since CEO in is appointment

I with today. with week to transition during many and and the is I've of In in appreciate speaking you had be your time this fifth glad my guidance, job. you the your I'm this fact, leadership, and on of pleasure

over served in you my And the I tell While it Sharps. CEO February senior as course have XX was have ours senior here housing; companies. years, at of as tenure is I at of a mission different I've that operating still housing that of last run Director this XXXX. I drawn since love the as to the Sharps, mission relatively company I as to the senior three is of and here early the much care

providing workspaces This environmentally paramount. taught of compliant the and lessons. healthy, of is all mission one most the safe, providers vital. a country care us compliant this pandemic critical for health safe, sound Our this across But workspaces has of the health care is secure, host

proper built three over of lots today. their in the hard health solutions Sharps sit, Our worked seat to solutions, on fifth I service mission, innovative a helping individuals oriented of it great health unused a in team. provide and medications recognize shoulders ever is years stand who relevant by five my more creating after the dispose that for In smart we fully providers are from disposal the to business in mailback waste you this product now nimble, in of which service XX-plus build office, material country. the weeks been. We that I customer tell can I I pickup critical of solutions my here care offerings. have is route-based providers We has core care that than week

of to as of network a this our MedSafe lot provider tremendous we I York-based our in network focused care facilities of Since my facilities. time XX-plus I’ve Board mailback focus. facilities, to controlled deal much innovative the founding my associates appointment CEO, larger tour with solutions, potential growth are an is a time our percent system, believed become have I unused a our weeks, than and New disposition over several Our From great businesses. truly has as the the the product that next product of Nesquehoning In start health the primary that Texas serves today. Sharp's US with member, Pennsylvania, innovative my medication scale route-based will our and substances opportunity of Carthage, in our country. ever-expanding company spent population Thoughtful business, time, across a this our

was to I'm company a pedaled continue what this our energized We I became products seen at infrastructure our believe before in and organically to aggressively and through have far, the people, capture acquisition. I by excited strategy. reach both time its and what will and be market CEO expand and to to geographic share, I've be strategy so I'm That is leading our development.

the quarter. Now, to

line Our performance third following strong our XXXX, in fiscal largely more they you ordering of significantly know, quarter the benefited return immunization customer patterns. been normalized historically as slowest to a revenue results reflect which are conditions, COVID-XX activities. and unusually from March and an in quarter seasonality due March with expectations, to our has market quarter,

XXXX, a compared the With provides period a quarter comparison. as million. shows March helpful being to third at normalized more looking $XX.X said, revenue XXXX quarter pre-COVID fiscal of XXXX significant $XX.X that that of believe increase XX% pre-COVID we third million So a revenue

required of was due market conditions. than operating increased wages lower margin anticipated, additional XX% hiring to personnel to increased primarily to meet related demand, to gross higher Our costs which match

to that ability the uninterrupted to ensure to on right we Our provide base. customer service, drive have our customer people in to service our can place, success relies

run So want minutes, cover country, short-term price of the of To rest route-based and outweigh solutions our long-term Also, bit impact far on In while pressure, the as context color of increased the you and cost. believe higher little the quarter, like services the our give are feeling few that. a a entire costs, benefits margin implemented during the more Eric increases. the a number some operating costs expense the fuel we of we causes we that to we particularly business. can customer

fiscal reflected of yet the However, these increases were XXXX. fully not during the revenue quarter in third

our impact initiatives continued increases of full the that going potential cost alleviate will expect mitigation We forward. cost

a last year. well route-based That perform locations with to the locations bring increase in customer customer of quarter, quarter compared in continued XX% to XX,XXX business drive the us in to locations, third to has XX% our increase quarter, the XX,XXX in route-based grew increased Our in route-based with to in Related billings customer quarter-over-quarter locations. year resulted again growth, in to consistent route-based the route-based third increase an professional compared prior billings. market XX%

acquisition and a serves focused quarter, solutions of active. fully it's We both across the we strategic and and During have on customer of those robust route-based operations. medical closed our is we locations it's uninterrupted, acquisition over remain our Midwest very organically footprint, Waste, via Medical waste acquisition route-based intently full-service Kansas, our integrated that growing provider pipeline XXX and

that the housing are model experience senior partnership cost to a waste. help care $X.X it MedSafe of as to That And skilled Looking post-acute at and pharmacies solve of I as the that to the Board and continued frankly, includes helped my as grew them long-term a the excuse a was XX% well this quarter. the a nationwide by space, number the a long-term of a the been of -- the focus discussed, [ph] a regulators on we simplest of early the PharMerica, enough management nursing rollout this pharmacy -- With an unused living that care focused retail is we compliant illustrate can't increased net services in announced as And to space growth revenue the the disposal X% driven relationship million. a table results recurring medications, and long-term me, when liners us MedSafe medication. within assisted in substances the always problem. and in with which the bring billings effect quarter, Billings for leader quarter during innings These working It's forward Within in management from increasingly in and with increase the uniquely that market. offering. MedSafe sold solve oftentimes other pharmacies XX% hazardous compliance to problem on problem safe previously to we're world faces and solution care member. in the of returned. and solutions and cleanest, positions industry now in We're I a comes success unused long-term XX% the I care, the compliance. look focus in Medication more and our market. this liners a proper category, in this generated area. controlled has post-acute in to complex bit more on challenge overlooked problem emphasize MedSafe, demanding increase

cost-effective solutions. this business it's is every to living care way trying we they're housing dementia the that senior rebound find believe nursing to independent whether solution or skilled to providers, for Additionally, living communities, every particular doing post-COVID, more assisted they're ideal it's and try better they're reexamining or whether issue. MedSafe And or

that disposal XXXX. developed know, MedSafe you As regulations were proper in established to was in response DEA

living particular adoption Our us opportunity attacking to proven in issue, markets, receptacle it care for care working penetrate this assisted it's We believe providers. is sleeves to long-term forward is and people the marketplace critical and before turn controlled country. move the roll and substance runway for We living the interesting country, as this out I to the front there's only our in receptacles to space. about and currently and with over Of intend XX,XXX real, the long-term government is space Eric. the we real which -- across XX,XXX this product MedSafe to increase to nearly this long-term and consumers out these we both markets. in and communities aggressively, our care PharMerica in markets. the diversion point. With of is We're it success There's these tremendous pharmacies leveraging communities in of the across care MedSafe our place, meet other the receptacles Of nursing relates I Last, XXX up skilled to XX,XXX in assisted pharmacy retail X,XXX in look nearly rolling X,XXX an believe think facilities. have and partnership in demand place long-term nearly we are to its tremendous.

were with costs those saw an regarding our with second quarters you of their the the because last all we many billing of the and our carrier our nearly first quarters. service majority invoices second year invoiced in negotiated to underreported during auditors, entire had billing the impacted $XXX,XXX carrier largest charges attached. six largest misunderstanding three the at We XXXX. of during received of and dates that concerning the willing and formally quarters third of fiscal a carrier and because during first freight As consolidated these fiscal X-K change error. The restatement for software take successfully with were we quarter, the but to after the associated months for allocate with year one filed were charges rendered our of the related refund statements a to of and the their date of retroactively agreed The of late, between related disputed later quarter charges a the the cost services of XXXX in We financial error program third facilities. these charge and and a by fiscal first in second quarters to the no of evening, services discussions

prior this no restatement not financials clear, year XXXX on affect quarters. effect of fiscal reallocation XXXX. two fiscal cost the does be me impact, full It no is has the and to Let about

are changes and be equivalents in and Importantly, found this The resolved. details The can affected revenue, It's relationship excellent. cash remain by not and in and with these our from cash net the settled continues cash flows was carrier is to adjustments. activities X-K. issue operating

the intent expand continuing our for Thank pipeline. circulation robust by the an infrastructure expand waste. you. that Sharps the continued despite provider of fiscal our organic I've the now MedSafe as CEO which often great unused are for to markets and balance and route-based significant for solutions we fueled all acquisition address time to solutions been prevent and more new Thank we opportunity to focused the into helping leadership is exciting in with footprint of potential than to business as detail. promising compliance on As your I've also people, more position the right the opportunities for comprehensive through grow disposal hazardous serve. we the company cost-efficient, seat, next have this We're Bauer, use we that We This our and many lead our I'll growth Sharps' the And role to for time. I'm overdose, in financials TakeAway to a of of solutions level. acquisition over short in across on of move medications my take accidental you leadership XXXX, CFO, our colleague, growing of medical turn that and time Solutions, discussed. of to well Eric us the our Envelope to confident it see

Eric Bauer

of Thank or million you, the for Pat. $XX.X XX%. We million, a quarter of reported $XX revenue decrease

Pat prior quarter fiscal were in excluding COVID-XX-related XXXX. of third $XX.X million third the increased As decrease third the the XX% fiscal third XXXX, quarter a XXXX immunization to period. to mentioned in quarter were quarter mailback $XX.X compared or million compared million as earlier, Immunization-related in activity, $XX.X of XXXX, Customer billings of billings XX%. $X.X year million revenue

the in million business, quarter $X.X quarter of the in immunization driven quarter the $X XX%. in million in the primarily this compared reflecting of market that third March locations. revenue billings same increased XXXX, in is On billings million as increase fiscal year occurred Excluding to with customer in have million to quarter more for to the realized quarter million vaccine. to over in compared third billings. related XXXX the in third that to XXXX activity of period, $X.X the in Retail as prior XX% professional note, normalized decreased $XX.X following demand market returns activity first market increased COVID-XX COVID-XX the XX% the surge $X.X XXXX, immunization by to the consistent fiscal the customer increase route-based in route-based related Professional we mailbacks, billings

fiscal billings. market quarter market, market same XXXX over $X.X $X.X year, the billings of in most related third to to which prior increased $X.X timing quarter million care the pre-COVID Long-term stayed same support in $X.X of to route-based third the decreased period year million related of fiscal in related billings Within immunizations are waste by management compared quarter the compared in fiscal in of million. the or fiscal inventory for quarter $X.X volume million million XX% $X million immunization-related orders XXXX, billings Billings $XX.X Year-to-date for XXXX, of in Medications primarily billings third in year patient prior impacted heightened increase XXXX, COVID-XX fiscal the from the Compared year XXXX, third Manufacturer million the to consistent in quarter the in programs. XXXX, the to to $X.X compared fiscal prior the of the retail quarter were builds the of increased million to period. to third third the of year prior the retail the same current an of $XXX,XXX in with customer $X.X period for as XXX%. Pharmaceutical quarter Unused million. of prior at $X.X period, million

and higher-than-normal in offset increase billings liner MedSafe liners was $X.X XX% shift a Mesa increased prior decrease for $X.X The by million MedSafe a takeaway year the XX% medication MedSafe’s year in the the in the prior down installed envelope in three-quarter quarter sales fiscal due sales in quarter XXXX. XXX the period during quarter. to prior year. a compared same third to from units, XX% for We On in comparable year-to-date XXX basis, from increase processing. billings Within period, return unused MedSafe category, mostly XX% a year XXX consistent with we've the million in to increase installed

The as quarter the long-term to pharmacy company $X.XX and quarter customer of retail in quarter in third diluted basic and million of $X.X is long-term we market reported XXX care quarter in pharmacy. year be of $X.X long-term a believe million in income by per the of of in Although, MidSafe there the compared base There in X,XXX to care XXXX nearly basic XX% the is our $X.X of opportunity over SG&A general. $X.X this more XXXX. since retail growth in quarter transition the million $X.X long-term other XXXX We million third in driven third increased prior there program. $X Sharps assisted Gross today, fiscal opportunity in pharmacies. or other year. loss noted, X,XXX third lines operating the of and last $X.X of or per per million of MedSafe primarily million Total in skilled investment real in in related believe quarter X,XXXin primarily was to up existing third of And The in X,XXX XX% compared installs $X.X XX% MedSafe’s XX,XXX relationships about the costs fiscal and quarter and to XX% breakeven third the to compared care acquisition the near of million quarter is in marketing. of in to X,XXX remaining at installed continued margin the since the SG&A country. million we net that $X.XX reported share income quarter installed Related costs, margin in increase operating compared more $X.XX share XXXX Liner XX% quarter. having are inception EBITDA COVID, We XXXX million diluted process calendar or quarter EBITDA This communities only for by to decreased Liners compared of of and loss Pat third of XXXX, side will believe the utilization liners living are the significant processed care the net $X.X on space traffic PharMerica same XXXX. is of year in of retail prior and the gross indicates third MedSafe, income of ship units up. this third at to and to MedSafe we X XXX,XXX. sales to quarter compared are XXXX XXXX. pounds year million solver quarter, year-over-year. and the over a over returns MedSafe in XX, reached in an of exciting of Total community. inception program March the milestone management of up reported the in medications returned and

$XX.X $XX.X Our at of XXXX, $XX XX, March $XX.X balance June $XX.X of million at XX, XXXX. The XX, cash at as to June to sheet $XX.X working of XXXX, March remains capital as had XXXX, very of compared million cash of at million and million XX, XXXX, million September December company million strong with compared XXXX. XX, as XX,

sheet execute balance with broader continue strong pipeline the that, opportunities. Pat. Our to us the back strategies provides of to to our opportunity I'll active call to on Great. work Eric. acquisition With our Thanks, turn

Pat Mulloy

it up And I've the got open with few Q&A let's closing at Operator, remarks, a of session. a quick that, end just please.

Operator

pose Certainly. first your Instructions] question. question gentlemen, for is now from [Operator is open for the and announce Please today floor Sweeney. questions. Your affiliation coming then your Gerry Ladies

Gerry Sweeney

Capital. Good morning. Sweeney Gerry It's from Roth

So thank you.

Eric Bauer

Hi, Gerry.

Gerry Sweeney

you long host how through A its least. if through eligible these how be then I'm increased was way the impacted way question there out do margins do all have contracts of due a because want take some customers the et maybe at how that Is you can margins sure the whole and you customers at the bucket follow-up just that, the system? on working a does it of to to system? inflationary because we have gross not the and environment. pose And but are to cetera, gross work? And price I salaries, go it much know of necessarily a and to do detail, How would hiring increases look new or

Pat Mulloy

high speak it about all Why turn this I'll because level you morning. don't pricing, were first over at talking to about a then the I we and

give I you So context some cost. drivers on key on Gerry the will then

been of when came came here One to They has team good I of got to fuel see leaders. they for begin all comprehensive -- the is with cost, five when ago and inflationary in a particularly that -- I November on last the And got to starting we that first reasons started lot everybody Dina a board about year labor in the our have. is understand operating November examination I pricing product questions did news weeks to and review or every here trends, of of a I together Diana the they products pricing. start critical every or I of to our aware And last leader that when asked price in of of started of. costs was

that that you know, reputational and direct. As customer a we fairly fairly straightforward. one the all friendly of issues contracts is Sharps are for our organization They're are

so every not beginning an can there limitations the actual But that to did costs part increases. discuss we starting going really some they're contractual yet. in and a and mean, not of across price a do. this in appropriate and our I quarter, increases. in to fully situations where comprehensive, in I'm resulted in line. of percentages some look We increases it's series can November of And we that drive But implemented are normal drive last comprehensive way November And third but began what get in products that price in there's business, one-off product last earnest the

increase more quarter. You fourth because revenue see more will in of fully implemented those price robust increases the

that. context the would think that of to if in you to all drivers, and particular give Let terms labor, speak be I ask, fuel, cost want me Eric, to helpful

Eric Bauer

a a falling Yeah. And mailback activity on through of we we're also the is last lot that. expense a lot had that part just, of the of seeing the margin, year,

Diana Diaz

Correct.

So before, is as it sell higher come we when when is margin a they we bit back. said mailback immunization the the than

during is in quarters. the different those And margin so there some swing

Pat Mulloy

drivers lot a and on But it the seen we've folks from to cost piece And labor. cost polls seen. the cost side it, of earnings to on also was cost have to at we related because of lot particularly we facet to comment lot the fill driver as the that, to seats and appropriate side, that business replace and people we a single meet every corrugate we and think from I we've but side add growth. the also mentioned not things on and seen, a in those other labor a of really other -- of good our just And the number A, of have fuel people. lot been of necessarily we RV aluminum were for in need also replace, looking perspective; the a when resort on of we've to But diesel increases struggling to the at look

And side our costs. side so -- those two the but less and kind operating the of on really gasoline are costs labor of than XX% total combined

So we And in pretty feel at just fleet. scale like and really was right we to point. the right we feel needing much some think this of that up get the people there that I are

that given So hope we see coming an improvement the should the plus quarter we coming price to quarters and there really the in increases, go. would that

Gerry Sweeney

comments How I a Got do came -- right? PharMerica to it. little we agreement. we even care there of mentioned, this long-term -- expect care gears year? the and you obviously, Switching in you bit So growth part retail as long-term think some growth, than and on from the more industry was

Pat Mulloy

Yes, sir.

Gerry Sweeney

look of opportunity some eye some maybe that understand facilities? those we relationship and terms what with in How for to gaining traction milestones that, some an is out do could key of moving forward we are that keep at that timing,

Pat Mulloy

and of house attend senior that be to going first I'm to it X,XXX, question. great the will which and I've the the pay a that's side X,XXX there been able at be think where for the on there Tuesday money is people leading time there chairs. the conference, outgoing conference, will forward Argentum private spend to patch Sharp the conference I

guaranteeing I country, you can an care. gave of So though, of that a that that not across one of issue. interesting would today is think XX -- it these overstatement, locations are afterthought. of is watch post-acute you medication metrics tell boxes chain out sale. largest really in one to of will I'm it in I them pharmacy wasn't customers. having an terms most our XXX The the only should food visibility. and in with down way are little X,XXX company in And the issue retail veterans them diversion dealing but years, but the an disposition equate an hospitals in the of get I important it and issue That's nearly is it that of metric in the was space. business medication But And lived for I

watch I I months so talked would this Dennis force facilities and drives we just these. building Halligan out sales care and where really in many the several yesterday at leader team in PharMerica implement our this national long-term here how to And was last sales we And relationship. to instrumental the the on as introducing have PharMerica. that marketing been

early the in it's So stages.

ask of not got to packs, labor packs you medications after most bubble -- tuned. those building drive to where in way either XX-something multipack years, different often and I've in build to I So because how been very let's We're a to they going this come figure building but it of come out stay over is models, disposed the you'll -- they best possible through industry. are types mean, it has generally But multi-dose but of be they very empty of the huge of there. disposed go away dispose And DEA front in in we and a of and where things amount drugs a all in and all us There's take through rule those the I developing then a of can runway just go those cenerate them. certain out this them for way the and can in, drugs give cost-effective way. here, XXXX, in folks credit David around and product Tusa,

Gerry Sweeney

back queue. Got in and I'll you. then And question, final jump one

we I'm moving? out that side, we're has of well year, think, PPE disposal this normalized route-based sort last in environment equipment benefit, of of from just in On -- post-COVID sort saw long-term that of curious also some the if sort I care. as of

Pat Mulloy

Yes.

I through think came sheets. system, Mattress bed I a it down, when stripped that lot mattresses came artificially a it exactly our whole mean, they through yet and we post-COVID visibility was -- including is in of lot and during operators artificial. that covers the not of mattresses. world. that where everything high. period stuff there's the COVID, A has are got But our stuff lot quarantine of clear grandmother which

think the ago. this I that quarter happens that to something I [indiscernible] going you'll it's think those so see COVID in I overused, or don't hoping all I'm saw -- today, we're new it's like in think year the yes, in you a of a terms that's artificial rationalized world post unless levels use not but pandemic. word

Diana Diaz

last Right. we costs was And we year's to COVID really related talked that about numbers route-based $XXX,XXX could on in $XXX,XXX costs, see activity. of

a And to in the of last year. so headwinds that's little the bit comparison

Pat Mulloy

that, businesses did be doing guarding, it's than caution before. data, businesses were differently because more – the population we those now in quantify can't hit are more said most frail know Having the as will this, all There business country. ever masking, I more from Gerry, the Yes. but because they they hardest

So...

Gerry Sweeney

Got of suffice say, normalized it. in sort But a we're to environment in...

Pat Mulloy

are. we appears It

Gerry Sweeney

Okay. Got it. Perfect. I my Thank you you questions. appreciate taking very much.

Pat Mulloy

you. Thank Okay.

Operator

today Brown. then Your question. announce Please is next affiliation from your your question for pose Rob coming

Rob Brown

Brown my Rob with question. Lake Hi, taking for Street. Thanks

What's pretty you that think seeing you're question on low a recovery? the is really is margin of that sort take or you XXs First get here do quickly, quarters? margin. know does can rate the you recovering. range it back few -- to on of Where I ramp think sort

Pat Mulloy

Yes.

passed I we between was think said, these also the in we touched we like a think some costs, which, on price this and seats. increases people see -- point. that think that I do the to just I bit. of right think just I getting the should that your we point, that some And at that of and

to come move of expect to that that would that see we normalize the level would next I couple quarters. over So

Rob Brown

you how Okay. on there? the at Great. mailback how in business, from think the And do COVID impact possible much is is the it it Is then this And inventory point? over or normal, elevated remains COVID? channel

Pat Mulloy

Eric.

Eric Bauer

sure. Yes,

year-to-date, $X.X immunizations. we as done about million So of mentioned, we've

kind to quarter, with out. the think got X.X I be we we think that date the about -- to shakes look frankly, we've as billings to fourth quarter forward next expect I the way of and million

is normalized. think more that, the think between So do we I inventory,

bit forward of now revenue we're the that frankly, we out. done where I think how we've can job focused what is we're what on to really to inventory mailbacks really is, looking we're get a themselves, going be time, to at think I going this COVID, think this And between the forward see focusing and on the good stronger. I a shake

Pat Mulloy

Yes, interesting. it's

you the artificial to and in mentioned $XXX,XXX. quarter at pre-COVID, out that If quarter is the million you a of look the take quarter immunization we it of above back at where go to number XXXX, settled an but I XXXX bit of the think, third that for of pre-COVID, internally, pretty look and just comparison, data which $X.X have third the set was, some if was substantially line immunization it's that Eric seems you graphs

fully of vaccinated. that's just it's you the So country on the can -- and yet booster is level there's -- clarity you've all substantial a we elevation it's read information two-thirds not read. got that all And of the

how one You've got and seen. booster, and all of another remains be that's that got think, XX% goes, how that hard how deep I to far number

So...

Eric Bauer

we've as the... mentioned inventory, think, the we burn of lot I And off on a seen in the right. That's

Diana Diaz

Correct. Correct.

Eric Bauer

Yeah.

So of of so... the in versus it versus of I time think just And seen kind normalized at we're lumpiness, this a the lumpy point, we've it more in I past. think, some is now, it's the of really, seeing as

Rob Brown

in I immunization. segment or that's your to Did you Okay. the wanted of of what and just think manufacture say, in $X.X sort just million clarify the billings quarter, you thus statement. far

Diana Diaz

have hand $X.X billings We million today. in of

could we that now. there what but more be quarter, have this So that's come right

Eric Bauer

May. early Through

Diana Diaz

Through May. early

Eric Bauer

Yeah.

Rob Brown

it, much. I'll very Thank over. turn Okay, you right. just all got

Eric Bauer

Thank you.

Operator

Please question for from pose affiliation is then your question. your next announce Michael Hoffman. today Your coming

Michael Hoffman

somewhere. $X,XXX, my business context then, Thank longer-term of very has Hi. Pardon, And I much. Good where voice call the $X,XXX managed a bigger you do it go? lose about been MedSafe, I to sort of you talk the a a growth and If it, installs short-term the aspects had year. XXX of morning. could of of XXX, within a the on have pre-COVID quarter, some pace

Eric Bauer

Right.

Michael Hoffman

Can add and assisted without living that we assisted that. the get to living back then to

Eric Bauer

Yeah, Care is assisted whole Senior is living, though think assisted it's think we in, a We not that's reasonable. deep think Yeah living there nursing. generally there's just skilled advanced We that's market reasonable.

Michael Hoffman

and that then got distracted we're normal. to around pace to to to your And pharmacies $XXX why back million not normal that own incremental. a those what's distracted before is there's but calling the return but thought in back an all any is of being the -- so again, the visibility and point the an things, even get endemic you add the the of reasons getting and or But it deferred, were then like the everybody on seems incremental? what's COVID, And life's words

Diana Diaz

seen haven't in continued from stop our any that to customers plan the they indication We program. their investment

seen So have that they will but going stop indication units not adding that could forward. we any change,

Michael Hoffman

Okay.

little in a that seeing this So million towards the it fourth you last ramp back over Are in quarter. it's quarter? XXX $XXX

Eric Bauer

Sure.

Diana Diaz

from We customers larger our this calendar won't see investments in year.

Eric Bauer

Okay.

Diana Diaz

year, this there's after in there think would But we've year, definitely said and calendar They expectation that continue. about that talked a prior pause I it an this quarters. is

Michael Hoffman

We not point. just all your have of remember belabor to And fiscal to to that's year. the Okay. straddling

next it's first for half So your fiscal.

right. me. Okay, Pardon

to of the fees extend manage leverage cost a like on of or issues, price? of context surcharging, relying being trying unit there only the limitations as are the do to opposed able this point help structural things Within inflation to that on

Eric Bauer

speak to three can You structure. that,

Diana Diaz

want – There not. take approach we whether to aren't we and limitations. we decide structural address how any to that's need It's to want or the just that

Pat Mulloy

It's of marketplace. your this a differentiation pricing get I But other philosophical some of the positive in had discussion that point been from difference company a competitors, has the frankly point. and that it's a has historically

going to everything We at look that’s that. will be to We do got Smart.

Michael Hoffman

get the But mean an there's raise expanding in that, other I your there on best inflation. absolute options I this opportunity recover pressure is is price. of Just if optionality, effort some to

Pat Mulloy

think do discussion There are It We any it. structural was an there point impediments to ongoing are. here. don't

Michael Hoffman

don't but on a I growth, nice it's this a pace And a think continue do at guys that's of management pace then and change you low base.

So probably into to does million how gets turn when? I'm revenue asking a and a or question this $XXX that but $XXX realize company million chuckle, I

Pat Mulloy

my goal chuckle. got is… You a That's My goal.

Michael Hoffman

Somewhere...

Pat Mulloy

good million company. and that's our thoughtful twice we the This to in organic be No, as to are way. We've that's big right. goal in or ought growth Xx a embedded got $XX platform It's do all respectful. as it

of did. of as have that minute here pointed one Martin Dave We Eric the a lot things people a other out ago, David Cruze did did, around

Over infrastructure. last built year, the out we the

We have the drivers.

locations. have We the

We stations. centers, dispatch transfer have the

organic and and product great on infrastructure We Eric I company grow the to are two, a three an offering of looking week. have all basis. a this times

more I'll that an We there are figure pipeline, grow how one are in is Midwest live take – out It's fashion, bigger is steps and wise want companies we acquisition conversations we bigger in need the a in acquisition. our to good there just be that to to want good are with The we're the say end it a some prudent, way. that appropriate we very – be out But trying it, are – affordable acquisition. accelerate. to but can to and

you several like out think I should grow about. see our revenue the over years, I So, next us thought

Michael Hoffman

small a very And a base. rate, growth admirable Right. organic do albeit you off have of

Pat Mulloy

right. That’s

Michael Hoffman

rate a have does $XXX they into to to disciplined willing and valuation? sort have curious context Are a slower M&A up in addressable acceleration about million your able turn the pick a of market, the being company, pace how staying you it's the being returns, and it about the seller, pragmatic of of willingness revenue of around seller. a means thoughts which about So,

Pat Mulloy

Yes. year if yesterday is of or go to numbers, back you've how this. of had talked got where you've I to you're COVID? -- it's artificial, And and counterintuitive, things the out business a forward. going earth so, It of coming artificial And -- is understand got like much scale during year sort It's there think the does offer on the at look look look infrastructure. the is, has of interesting the of but back to is that situations quarters of time take are their the we've like had when at they've what going at had on the that an their got it's interesting. it ago. got much a there about some a the where one we're same looking looking, And of is business we've now in business that we fact, Eric that that's incremental one two, their the a owners potential without industry how operated over the infrastructure last the really opportunity we've – a to whole economies period that's dynamic we lot and seller is

will that makes I that dynamic, be that, that I So push sense continue as conversations. dynamic we think important believe hope that's... we an to

Michael Hoffman

$XXX there feel pretty between got you compounding companies to organic million M&A, sell? on there's get $XX to $XX too. a the million of or of somewhere good of X -- million million pool do $XX -- to Is And to to about to $XX willing because side. be so Xx million Basically, and

Pat Mulloy

We are Yes. that stuff. in Yes there believe targets

Michael Hoffman

very you much. Thank Great.

Pat Mulloy

Mike... Thank you,

Operator

coming from pose --. is today Steinke. for question next Your Kevin your then your Please announce affiliation

Kevin Steinke

Barrington Steinke, Research Associates. Kevin morning, Good

business long-term care organic greater -- gaining business to business discussion you the up short guess. where something business maybe scaling and or that we would the you organically? margin of pipeline the resources the on feel investments development acquisition about and be the some you resources need I to Is cost penetration and development term, willing of the like pace side and more an market sales think the just the and from perspective to upfront apply about scaling when there the but and accelerate make at the continuing professional So and others. discussion the market about And

Pat Mulloy

as that how to and growth. may -- we're about we and nimble think, marketing that the need doing things the issues we think stuff more table. how challenge this recently of channels But all sales our those on we we of are here. week, a conversations not I to we be accelerate that leader attack well All rethink and very bit as

is to And side. yes, Eric this on and yes side So, -- business the organic are answer – I there’s the both converses questions those that so having development yes

Kevin Steinke

business? margins down inflationary to Is this given do about that to or the know incremental nail I possible reasonable -- you it's about if it's think XX% don't still continuing been you for the so. but previously, talked changes way of environment gross right. think All Great. a in

Pat Mulloy

we've if good do I number. some done And is. still we think It a like the that's as acquisitions, other activity, feel

see to going inflation. wait we're and think this on some I of

I of think we And to lot frankly, seen it. get we've price increases a there. are doing

So, we're total in that number. the confident think pretty I in

Kevin Steinke

Appreciate question. Thanks taking it. Okay. the for

Pat Mulloy

you. Thank

Operator

closing Malloy no are I for the would to turn Pat over floor in There questions further remarks. queue. to like

Pat Mulloy

you. Thank

First do of want I just all, I appreciate few you. closing, thank everyone's time you thoughts. this to leave with and a morning, In

current cash quarter, noted, by we a costs no our of our restatement only activities issue affected carrier. The any errors equivalent cash operating invoicing caused manner as fiscal with flows or one-time the we largest this cash or year from First, in our billing corrected affected revenue, positions. of our and

looking we are days that best us. Sharps believe Second, in ahead, front of

up route-based medication unused were We over quarter In have business quarter, by critical lines this three mailback, of with a disposition. platform route-based and our third great operating business: XX%. third billings third quarter

this increased point -- but Our I that I didn't number, know to company's really XX% But the the is million. week. a first quarter this data didn't our in route-based this milestone. exceeded I route revenue history almost understand $X XX,XXX the tremendous locations. customer That's locations

increased the $XX.X increased shipped quarter XX%. model. Our professional Non-COVID liners quarter-over-quarter $XX.X XXXX. in million immunization immunization market validating third to billings XX% of our XXXX non-COVID million of revenue, XX% MedSafe third grew revenue quarter-over-quarter quarter-over-quarter, by from quarter

made we've investment quarter. and next pursue and appreciate want I we we this infrastructure with time build look and the As take care. everyone speaking forward Everyone, acquisition thank out and for to to talked to it, business I aggressively conscious and your a you opportunities. organic continue about going are to growth grow both to our repeatedly, to

Operator

ladies This and does today's call. gentlemen. conference you, Thank conclude

wonderful for participation. your have Thank a your You phone day. time, may you at disconnect lines this and