<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1998
TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
for the transition period from ________ to ________.
Commission File Number: 0-22390
-------------------
SHARPS COMPLIANCE CORP.
(Name of Small Business Issuer in its Charter)
DELAWARE 74-2657168
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
9050 KIRBY DRIVE, HOUSTON, TEXAS 77054
(Address of principal executive offices) (Zip Code)
(713) 432-0300
Registrant's telephone number
Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. YES [X]
NO [ ]
Indicated below is the number of shares outstanding of the registrant's only
class of common stock at February 2, 1999:
<TABLE>
<CAPTION>
Number of Shares
Title of Class Outstanding
-------------- -----------
<S> <C>
Common Stock, $01 par value 7,626,444
</TABLE>
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE> 2
SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION PAGE
<S> <C> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets - December 31, 1998
(unaudited) and June 30, 1998 3
Condensed Consolidated Statements of Operations (Unaudited) - For
the three months ended December 31, 1998 and 1997 4
Condensed Consolidated Statements of Operations (Unaudited) - For
the six months ended December 31, 1998 and 1997 5
Condensed Consolidated Statements of Cash Flows (Unaudited) - For
the six months ended December 31, 1998 and 1997 6
Notes to Condensed Consolidated Financial Statements (Unaudited) 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II OTHER INFORMATION 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURE 13
</TABLE>
2
<PAGE> 3
PART I FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS
SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
ASSETS 1998 JUNE 30,
(UNAUDITED) 1998
---------- ----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 113,000 $ 444,000
Short-term investments 2,000,000 2,600,000
Accounts receivable 330,000 204,000
Inventory 157,000 172,000
Prepaids and other 67,000 81,000
---------- ----------
Total current assets 2,667,000 3,501,000
PROPERTY AND EQUIPMENT, net 179,000 122,000
INTANGIBLE ASSETS, net 94,000 101,000
NOTE RECEIVABLE FROM STOCKHOLDER 400,000 400,000
---------- ----------
Total assets $3,340,000 $4,124,000
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 179,000 $ 418,000
Accrued disposal costs 900,000 646,000
Current maturities of long-term debt 41,000 41,000
---------- ----------
Total current liabilities 1,120,000 1,105,000
LONG-TERM DEBT, net of current maturities 22,000 40,000
---------- ----------
Total liabilities 1,142,000 1,145,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value per share; -0- and 1,000,000 shares
authorized; -0- and 1,000,000 shares issued and outstanding, respectively -- 10,000
Common stock, $.01 par value per share; 20,000,000 shares authorized;
7,626,444 and 583,944 shares issued and outstanding, respectively 76,000 6,000
Additional paid-in capital 4,312,000 4,287,000
Accumulated deficit (2,190,000) (1,324,000)
---------- ----------
Total stockholders' equity 2,198,000 2,978,000
---------- ----------
Total liabilities and stockholders' equity $3,340,000 $4,124,000
========== ==========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
3
<PAGE> 4
SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED DECEMBER 31
1998 1997
-------- --------
<S> <C> <C>
SALES, net $ 510,000 $ 287,000
COSTS AND EXPENSES:
Cost of sales 331,000 199,000
Selling, general and administrative expenses 617,000 178,000
Depreciation and amortization 15,000 3,000
----------- -----------
Operating loss (453,000) (93,000)
INTEREST EXPENSE -- (2,000)
INTEREST INCOME 39,000 --
=========== ===========
Net loss $ (414,000) $ (95,000)
=========== ===========
BASIC AND DILUTED NET LOSS PER SHARE $ (.05) $ (.02)
=========== ===========
SHARES USED IN COMPUTING BASIC AND
DILUTED NET LOSS PER SHARE 7,619,379 4,978,261
=========== ===========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
4
<PAGE> 5
SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED DECEMBER 31
1998 1997
-------- --------
<S> <C> <C>
SALES, net $ 1,088,000 $ 516,000
COSTS AND EXPENSES:
Cost of sales 685,000 417,000
Selling, general and administrative expenses 1,328,000 277,000
Depreciation and amortization 25,000 6,000
----------- -----------
Operating loss (950,000) (184,000)
INTEREST EXPENSE (1,000) (8,000)
INTEREST INCOME 85,000 4,000
=========== ===========
Net loss $ (866,000) $ (188,000)
=========== ===========
BASIC AND DILUTED NET LOSS PER SHARE $ (.11) $ (.05)
=========== ===========
SHARES USED IN COMPUTING BASIC AND
DILUTED NET LOSS PER SHARE 7,603,183 3,989,130
=========== ===========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
5
<PAGE> 6
SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED DECEMBER 31
1998 1997
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(866,000) $(188,000)
Adjustments to reconcile net loss to net cash
used in operating activities-
Depreciation and amortization 25,000 6,000
Changes in operating assets and liabilities-
(Increase) in accounts receivable (126,000) (35,000)
(Increase) decrease in inventory 15,000 (21,000)
(Increase) decrease in other current assets 14,000 (3,000)
Increase (decrease) in accounts payable and accrued
liabilities (154,000) 20,000
Increase in accrued disposal costs 254,000 199,000
Net cash used in operating activities (838,000) (22,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (75,000) (25,000)
Sales of short-term investments 600,000 --
Note issued to stockholder -- (300,000)
Increase in deferred issuance costs -- (159,000)
Net cash provided by (used in) investing activities 525,000 (484,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock -- 145,000
Proceeds from notes payable -- 415,000
Payments on long-term debt (18,000) --
Net cash provided by (used in) financing activities (18,000) 560,000
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (331,000) 54,000
CASH AND CASH EQUIVALENTS, beginning of period 444,000 13,000
CASH AND CASH EQUIVALENTS, end of period $ 113,000 $ 67,000
========= =========
SUPPLEMENTAL DISCLOSURE OF NON-CASH
FINANCING ACTIVITIES:
Issuance of common stock to satisfy accrued liabilities
from fiscal 1998 $ 85,000 $ --
========= =========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
6
<PAGE> 7
SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
1. ORGANIZATION AND BACKGROUND:
ORGANIZATION
The accompanying consolidated financial statements include the accounts of
Sharps Compliance Corp. ("SCC") and its wholly owned subsidiaries, Sharps
Compliance, Inc., d.b.a. Sharps Compliance, Inc. of Texas ("Sharps"), and U.S.
Medical, Inc. ("USM") (collectively, the "Company"). All significant
intercompany accounts and transactions have been eliminated in consolidation.
On February 27, 1998, SCC and Sharps entered into an agreement and plan of
reorganization (the "Agreement"). SCC acquired all of the issued and
outstanding common stock, $.01 par value, of Sharps in consideration for the
issuance of 1,000,000 shares of preferred stock, $.01 par value, such that each
share of Sharps common stock outstanding on the closing date was exchanged for
0.142858 shares of SCC preferred stock. On July 23, 1998, SCC's stockholders
approved a 1-for-5.032715 reverse stock split of its outstanding common stock,
which has been given retroactive effect in the financial statements.
Simultaneously with the reverse stock split, each share of preferred stock was
converted into seven shares of common stock of SCC, resulting in the existing
stockholders of SCC holding 583,944 shares and the former stockholders of
Sharps holding 7,000,000 shares.
The Agreement was treated as a reverse acquisition for accounting and financial
reporting purposes. As such, Sharps is considered the accounting acquiror for
accounting and financial reporting purposes, and the net assets of SCC were
combined with those of Sharps at their historical basis, which approximated
their fair market value on the effective date of the Agreement. Sharps has
reflected the ongoing results of operations of SCC in its financial statements
from the effective date of the Agreement. Financial information for the three
months and six months ended December 31, 1997 reflects the results of
operations of Sharps prior to the Agreement.
BUSINESS
Sharps, which operates as a wholly owned subsidiary of SCC, provides mail
disposal systems for certain medical sharps products (i.e., needles, razors and
syringes) as well as other systems to provide the home healthcare industry with
cost effective alternatives to traditional methods of transporting medical
equipment from home healthcare patients. Sharps' mail disposal systems are
designed primarily to facilitate small waste generators' compliance with state
and federal regulations for the disposal of medical waste.
Waste generators that use the Sharps mail disposal systems are responsible for
mailing the systems to a third party for incineration. The Company is
responsible for the postage and burn costs associated with the customer mailing
the mail disposal systems directly to the third party incinerator. The Company
records accrued disposal costs for estimated future postage and burn costs
assuming that all mail disposal systems sold will eventually be returned for
incineration. The accrual is based on all mail disposal systems sold as the
Company currently does not have sufficient historical information with respect
to the Company's returns to provide a basis for estimating the liability
assuming a non-return factor. If the Company is able to accumulate data and
establish a reasonable basis for an estimated non-return factor, the accrued
disposal costs will be adjusted prospectively. Depending upon the experience of
the Company, such revisions could be significant. However, there can be no
assurance that any such revisions will be necessary.
USM previously developed, produced and marketed products directed at the
over-the-counter consumer market and products related to infection prevention
for the professional dental care industry. Effective July 31, 1998, USM ceased
operating as a subsidiary of SCC.
7
<PAGE> 8
2. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the rules and regulations of the Securities
and Exchange Commission and, accordingly, do not include all information and
footnotes required under generally accepted accounting principles for complete
financial statements. In the opinion of management, these interim condensed
consolidated financial statements contain all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation of the
financial position of the Company as of December 31, 1998, and the results of
its operations for the three months and six months ended December 31, 1998 and
1997 and its cash flows for the six months ended December 31, 1998 and 1997.
The results of operations for the six months ended December 31, 1998 are not
necessarily indicative of the results to be expected for the entire fiscal year
ending June 30, 1999. These condensed consolidated financial statements should
be read in conjunction with the Company's 1998 Annual Report on Form 10-KSB.
3. NOTE RECEIVABLE FROM STOCKHOLDER:
In November 1997, Sharps entered into a note receivable with a stockholder and
officer of Sharps. The note is a personal, full recourse obligation of the
officer and allows the officer to borrow up to $400,000 from Sharps. The note
accrues interest at 8 percent per annum and is payable in five equal principal
installments, plus accrued interest, with the first installment due and payable
November 14, 1998. In November 1997 and February 1998, the stockholder borrowed
$300,000 and $100,000, respectively, from Sharps. The note was amended in
November 1998 to provide for deferral of the payment due November 14, 1998 to
February 28, 1999. At December 31, 1998, approximately $ 34,000 in accrued
interest was owed under the note.
4. NET LOSS PER SHARE
Earnings per share data for all periods presented has been computed pursuant to
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share," that requires a presentation of basic earnings per share ("basic EPS")
and diluted earnings per share ("diluted EPS"). Basic EPS excludes dilution and
is determined by dividing income or loss available to common stockholders by
the weighted average number of common shares outstanding during the period.
Diluted EPS reflects the potential dilution that could occur if securities and
other contracts to issue common stock were exercised or converted into common
stock. There are no differences between basic EPS and diluted EPS for all
periods presented.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This quarterly report on Form 10-QSB contains certain forward-looking
statements and information relating to SCC and its subsidiaries that are based
on the beliefs of the Company's management as well as assumptions made by and
information currently available to the Company's management. When used in this
report, the words "anticipate," "believe," "estimate" and "intend" and words or
phrases of similar import, as they relate to the Company or its subsidiaries or
Company management, are intended to identify forward-looking statements. Such
statements reflect the current risks, uncertainties and assumptions related to
certain factors including, without limitations, competitive factors, general
economic conditions, customer relations, relationships with vendors,
governmental regulation and supervision, seasonality, distribution networks,
product introductions and acceptance, technological change, changes in industry
practices, onetime events and other factors described herein. Based upon
changing conditions, should any one or more of these risks or uncertainties
materialize, or should any underlying assumptions prove incorrect, actual
results may vary materially from those described herein as anticipated,
believed, estimated, expected or intended. The Company does not intend to
update these forward-looking statements.
The discussion below analyzes changes in the consolidated operating results and
financial condition of the Company during the three months and six months ended
December 31, 1998 and 1997. Financial information for the three months and six
months ended December 31, 1997 reflects the results of operations of Sharps
prior to the Agreement.
8
<PAGE> 9
GENERAL
The Company's revenues decreased 12% (from $578,000 to $510,000) for the
quarter ended December 31, 1998 from the quarter ended September 30, 1998. The
decrease in revenues is attributed to variations in the quarter-to-quarter
purchases by the Company's distribution customers who make such purchase
decisions based on internal inventory requirements. The Company believes that
the ultimate use of its product by the end user increased from the quarter
ended September 30, 1998 to the quarter ended December 31, 1998; however, this
increase was not reflected in the Company's revenues as its distribution
customers used previously purchased inventory to fill a larger portion of their
orders than during the previous quarter.
Consolidated selling, general and administrative ("SG&A") expenses decreased
13%, or $94,000 (from $711,000 to $617,000), compared to the quarter ended
September 30, 1998, while Sharps' SG&A expenses increased 4% (or $25,000).
During the quarter ended September 30, 1998, USM recorded $119,000 in SG&A
expenses, $92,000 of which pertained to a severance agreement with the SCC's
former chief executive officer and president. Effective July 31, 1998, USM
ceased operating as a subsidiary of SCC.
The Company's net loss narrowed 8% from $452,000 for the quarter ended
September 30, 1998 to $414,000 in the quarter ended December 31, 1998. The
decrease was due to the absence of USM in the operating results for the
quarter.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain items from
the Company's Condensed Consolidated Financial Statements of Operations,
expressed as a percentage of revenue:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED ENDED
DECEMBER 31 DECEMBER 31
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales 100% 100% 100% 100%
Costs and expenses:
Cost of sales (65%) (69%) (63%) (81%)
Selling, general and administrative (121%) (62%) (122%) (54%)
Depreciation and amortization (3%) (1%) (2%) (1%)
---- ---- ---- ----
Total operating expenses (189%) (132%) (187%) (136%)
---- ---- ---- ----
Loss from operations (89%) (32%) (87%) (36%)
Total other income (expense) 8% (1%) 7% (0%)
---- ---- ---- ----
Net loss (81%) (33%) (80%) (36%)
==== ==== ==== ====
</TABLE>
THREE MONTHS ENDED DECEMBER 31, 1998 COMPARED TO THREE MONTHS ENDED DECEMBER 31,
1997
Net sales increased 78% (or $223,000) during the three months ended December
31, from $287,000 in 1997 to $510,000 in 1998. The Company's increase in net
sales can be attributed to a wider acceptance of the Sharps Disposal by Mail
System ("Mail Disposal System") as a more cost effective means of disposing of
contaminated sharps than is currently being used by the small waste generator.
Secondly, Sharps has introduced a product line defined as the Trip
LesSystem(TM) which will further decrease the need for Sharps' primary
customer, home healthcare facilities, to make an additional trip to the
patient's home to retrieve the used sharps container. Finally, due to the
overall increase in exposure to contaminated sharps, the Company is continually
finding new markets where the Mail Disposal System is a natural fit. Sharps has
been successfully working with Ecolab, a major supplier of hotel and restaurant
cleansing products, to place the Mail Disposal System within many major hotel
and motel chains across the U.S.
The increase in cost of sales of $132,000, or 66%, is due to the increase in
the Company's sales volume. Cost of sales decreased as a percentage of sales
primarily due to increased coverage of fixed costs through increased sales
volume.
9
<PAGE> 10
The increase in SG&A expenses of $439,000, or 247%, is due to expansion of the
Company's infrastructure and additional resources expended to penetrate new
markets. This increase began in January 1998. Since January 1998, the Company
has incurred significant SG&A expenses, which is the primary reason for the
Company's net loss. SG&A expenses have increased significantly in the second
quarter of fiscal 1999 in relation to the same period in fiscal 1998 due to
additional support and sales staffing, travel expenses associated with Sharps
sales personnel and additional overall increased marketing efforts.
SIX MONTHS ENDED DECEMBER 31, 1998 COMPARED TO SIX MONTHS ENDED DECEMBER 31,
1997
Net sales increased 111% (or $572,000) during the six months ended December 31,
from $516,000 in 1997 to $1,088,000 in 1998. The Company's increase in net
sales can be attributed to a wider acceptance of the Mail Disposal System as a
more cost effective means of disposing of contaminated sharps than is currently
being used by the small waste generator. Secondly, Sharps has introduced a
product line defined as the Trip LesSystem(TM) which will further decrease the
need for Sharps' primary customer, home healthcare facilities, to make an
additional trip to the patient's home to retrieve the used sharps container.
Finally, due to the overall increase in exposure to contaminated sharps, the
Company is continually finding new markets where the Sharps product is a
natural fit. Sharps has been successfully working with Ecolab, a major supplier
of hotel and restaurant cleansing products, to place the Mail Disposal System
within many major hotel and motel chains across the U.S.
The increase in cost of sales of $268,000, or 64%, is due to the increase in
the Company's sales volume. Cost of sales decreased as a percentage of sales
primarily due to increased coverage of fixed costs through increased sales
volume.
SG&A expenses increased $1,051,000, or 379%. During the quarter ended September
30, 1998, USM recorded $119,000 in SG&A expenses, $92,000 of which pertained to
the effects of the Severance Agreement with the SCC's former chief executive
officer and president. The balance of the increase ($932,000) is due to
expansion of the Company's infrastructure and additional resources expended to
penetrate new markets. This increase began in January 1998. Since January 1998,
the Company has incurred significant SG&A expenses, which is the primary reason
for the Company's net loss. SG&A expenses have increased significantly in the
first six months of fiscal 1999 in relation to the same period in fiscal 1998
due to additional support and sales staffing, travel expenses associated with
Sharps sales personnel and additional overall increased marketing effort.
LIQUIDITY AND CAPITAL RESOURCES
Sharps completed a $4 million private equity offering immediately prior to its
acquisition by SCC on February 27, 1998. A portion of these capital resources
is being used to provide Sharps with a more nationally identifiable image.
Sharps has retained a Houston, Texas based marketing firm to better assist the
Company with this new image effort. Additionally, a sales team has been
assembled to strategically cover the U.S. to better identify, qualify and
assist the existing and new customer base in the use and efficiency benefits of
the Sharps product line. At December 31, 1998, the Company had approximately
$2,113,000 in cash and short-term investments, and its working capital was
$1,547,000.
Capital expenditures for the consolidated Company during the six months ended
December 31, 1998 were approximately $75,000 and consisted of office equipment,
computers and furniture and fixtures.
At December 31, 1998, total long-term debt outstanding was approximately
$22,000 for the Company.
The Company expects to incur substantial costs related to sales, marketing and
administrative activities. The amount and timing of anticipated expenditures
will depend upon numerous factors both within and outside the Company's
control, including the nature and timing of marketing and sales activities.
Moreover, the Company's ability to generate income from operations will be
dependent upon, among other things, sufficient penetration of the home
healthcare, industrial and other markets. Management believes that the
Company's available resources will satisfactorily fund operations for the next
12 to 18 months. There can be no assurance that the Company will be able to
obtain additional financing on acceptable terms, if at all, to fund operations
beyond that time frame.
10
<PAGE> 11
YEAR 2000 ISSUES
Many currently installed computer systems and software products were coded
using two digits rather than four to define the applicable year. As a result
these computer systems and software products have time-sensitive software that
recognize a date using "00" as the year 1900 rather than the year 2000. This
could cause a system failure or miscalculations, causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, to send invoices or to engage in similar normal business
activities. Finally, computer systems and software product devices may fail to
process accurately leap year logic associated with the Year 2000.
The Company believes that the adverse impact of Year 2000 issues on its
internal computer systems will not be material. Most of the personal computers
and computer systems used by the Company have been installed in the past year
as the Company has been growing its organization. The Company has conducted a
manual review of all of its software and has found no incidence of Year 2000
coding issues.
The Company has not contacted its material vendors and suppliers to determine
if such vendors and suppliers have any Year 2000 issues that have not been
resolved or may not be resolved in a timely manner. However, the Company does
not believe that its financial condition or results of operations would be
materially adversely affected by Year 2000 issues if its vendors or suppliers
were unable to successfully address these issues.
To date, minimal expenses have been incurred associated with the Company's
evaluation of Year 2000 issues, and the Company does not expect that
expenditures for upgrades or additional testing for Year 2000 issues will be
material.
The above Year 2000 disclosure statement constitutes a "Year 2000 Readiness
Disclosure" as defined in The Year 2000 Information and Readiness Disclosure
Act (the "Act"), which was signed into law on October 19, 1998. The Act
provides added protection from liability for certain public and private
statements concerning a company's Year 2000 readiness.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Stockholders held on November 12, 1998, the following
matters were adopted by the margins indicated:
1) To elect directors to serve until the 1999 Annual Meeting of Stockholders.
<TABLE>
<S> <C>
Lee Cooke
For 5,904,605
Against N/A
Abstain 6,071
Parris H. Holmes, Jr.
For: 5,910,562
Against N/A
Abstain 114
Dr. Burt Kunik
For: 5,940,578
Against N/A
Abstain 98
</TABLE>
2) To ratify the appointment of Arthur Andersen LLP as independent public
accountants of the Company for the fiscal year ended June 30, 1999
<TABLE>
<S> <C>
For: 5,910,462
Against 98
Abstain 35
</TABLE>
11
<PAGE> 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
The following exhibit is filed as part of this report.
Exhibit No. Description
27.1 Financial Data Schedule (filed herewith)
b) Reports on Form 8-K
None.
ITEMS 1, 2, 3 AND 5 ARE NOT APPLICABLE AND HAVE BEEN OMITTED.
12
<PAGE> 13
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereto duly authorized.
REGISTRANT:
SHARPS COMPLIANCE CORP.
Dated: February 12, 1999 By: /s/ Kent D. Manby
-----------------------------
Kent D. Manby, Vice President and
Chief Financial Officer
13
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF DECEMBER 31, 1998, AND THE STATEMENT OF OPERATIONS FOR THE PERIOD
THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 113,000
<SECURITIES> 2,000,000
<RECEIVABLES> 330,000
<ALLOWANCES> 0
<INVENTORY> 157,000
<CURRENT-ASSETS> 2,667,000
<PP&E> 214,000
<DEPRECIATION> 35,000
<TOTAL-ASSETS> 3,340,000
<CURRENT-LIABILITIES> 1,120,000
<BONDS> 76,000
0
0
<COMMON> 63,000
<OTHER-SE> 2,122,000
<TOTAL-LIABILITY-AND-EQUITY> 3,340,000
<SALES> 510,000
<TOTAL-REVENUES> 510,000
<CGS> 331,000
<TOTAL-COSTS> 331,000
<OTHER-EXPENSES> 632,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 414,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 414,000
<EPS-PRIMARY> 0.05
<EPS-DILUTED> 0.05
</TABLE>
