Good day, ladies and gentlemen, and welcome to the Sharps Compliance second quarter earnings call. At this time, all participants have been placed on a listen only mode, and we will open up the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Jennifer Belodeau, with IMS Investor Relations. Ma'am, the floor is yours. Thank you. Good morning and welcome to the Sharps Compliance second quarter fiscal 2022 earnings call. On the call today, we have David P. Tusa, the company's President and Chief Executive Officer, and Diana P. Diaz, Executive Vice President and Chief Financial Officer. David will review the company's business performance, operations and outlook while Diana will review the financials. Immediately following their formal remarks, we will take questions from our call participants. As you're aware, we may make some forward-looking statements during the formal presentation and in the question and answer portion of this teleconference. These statements apply to future events which are subject to risks and uncertainties, as well as other factors that could cause actual results to differ materially from where we are today. These factors are outlined in our earnings release as well as in documents filed by the company with the Securities and Exchange Commission. These can be found at our website or at sec.gov. With that, let me turn the call over to David to begin the review and discussion. Go ahead, David. Great. Thanks, Jen, and good morning to everyone and thank you for participating in our second quarter earnings call. I'm gonna first cover a few highlights of the quarter. As you see, the second quarter revenue of $18.9 million increased 11% over the prior year and 36% sequentially. Our route-based locations, which we really believe is the best way to measure the success of our route-based offering, those locations increased 17% from about 14,900 to 17,400. Professional market billings grew 15% year-over-year, consistent with the increase in the route-based customer locations. Our unused medication revenue for the quarter increased 9%. What this was driven by was a 25% increase in the inner liner sold. It was actually a 31% increase in inner liner sold for the year to date, fiscal year to date period. I think this really illustrates the success and the recurring revenue model from the MedSafe offering. We saw a bounce back in the sequential quarterly immunization-related mailback billings, increased by $2.8 million, and this is reflective of the continuation of the COVID-19 vaccine and booster shots administered in the retail pharmacy level. Our long-term care market billings for the quarter and year to date were down, and they were down because of the headwinds. As we talked about last quarter, the September and the December quarters of last year were heavy. Significant volumes in COVID-related waste that was being generated by our long-term care customers. We also had very high lab related business as well. When you take out the roughly $400,000 headwind in the September quarter, $800,000 headwind in the year to date period, then the route-based business overall increased by about 15%. We closed on the Affordable Waste acquisition in October and we're presently working on more acquisition opportunities. You may have seen the recent PharMerica partnership announcement. Let me just speak to that just to make sure everyone understands the importance of that. We really pride ourselves in our ability to solve complex problems for customers. I think we're really good at that. A pressing problem facing the long-term care industry has been the proper cost-effective and compliant management of unused medications, you know, including controlled substances and hazardous waste. The DEA rules were changed back in 2014, or the DEA adopted the Secure and Responsible Drug Disposal Act, and that was the beginning of the MedSafe. We designed the MedSafe based upon the DEA adopting that rule. Well, those rules were primarily designed for long-term care and, you know, also retail pharmacy. I think we've done a great job in retail pharmacy with the MedSafe and I believe becoming the leader. Now it's time for long-term care and the long-term care market to be able to adopt the MedSafe. The MedSafe has been slow to adopt, so we need a catalyst. We need a catalyst to really start to drive the MedSafe offering in long-term care. We believe the partnership with PharMerica could be that catalyst. It could help increase the adoption of the MedSafe and could raise awareness of the MedSafe and how we can make them compliant. We can save them money, and we can provide a very, very convenient solutions for the long-term care business. We're excited about that. Again, we look at that overall as a potential catalyst to move MedSafe sales in long-term care. Let's look forward. We are quite energized to continue capitalizing on the opportunities we see. We're growing our leadership position in all markets and in all the solutions we offer. We continue to focus on organic growth of the route-based business and hopefully we'll have the opportunity to complement that organic growth with acquisition growth. The acquisition pipeline remains quite vibrant and again, we believe we have an opportunity to close more acquisitions in immunizations. We've seen the ongoing emergence of the new variants, can't watch the news without hearing about the variants, causing the COVID-19 related business landscape to remain quite fluid. As we move through the remaining fiscal year 2022, we think the immunization related orders will be driven by timing and volume of the continued rollout of the COVID-19 shots and boosters. As a point of reference, we only have about 40% of fully vaccinated Americans that have received the booster. You heard, everyone heard on the news yesterday, the Omicron variant and how there's been a vaccine that's being specifically designed for that variant. Could be available in March 2022. This morning we're talking about how the CDC has recommended a fourth shot for the immunocompromised. We think we'll continue to see more immunization related orders because of all this. Diana will speak to you here in just a bit about the orders that we received or the revenue we received in the December quarter. We think we're extremely well positioned to continue to take advantage of the opportunities. It's really important to note from all of our standpoint that we're highly confident that we have the infrastructure in place as well to be able to support the current and the prospective customers and all the growth opportunities in front of us. With that, I'll turn it over to Diana, and she can address more about the financials. Thank you, David. We reported revenue of $18.9 million, an increase of $1.9 million or 11%. Customer billings were $17 million in the second quarter of fiscal 2022, which is a decrease of $1.5 million or 8%. Billings for the second quarter are lower than the second quarter of last year due to the timing of inventory bills in our pharmaceutical manufacturer segment and the timing of distributor orders in the home healthcare market. Professional market billings increased 15% to $5.2 million in the second quarter of fiscal 2022, as compared to $4.5 million in the second quarter of last year, consistent with the increase in route-based customer locations that David described earlier. Retail market billings grew 4% - $6.4 million in the second quarter of fiscal 2022, as compared to $6.1 million in the same prior period. Within that retail market, immunization-related orders were down slightly at $4.6 million in the second quarter of fiscal 2022, compared to $4.8 million in the prior year. Pharmaceutical manufacturer market billings decreased by $1.2 million- $1.9 million in the second quarter of fiscal 2022, as compared to $3.1 million in the same prior year period. The timing of inventory bills for patient support programs drove more than half of the $1.7 million decrease in mail back solution billings. Long-term care billings decreased by $300,000- $800,000 in the second quarter of fiscal 2022, compared to $1.1 million in the prior year period. This was related primarily to heightened volumes of COVID-19 related waste management in the prior year, most of which adversely impacted the route-based business customer billings. Our billings for unused medications grew 9%- $1.9 million in the second quarter of fiscal 2022, as compared to $1.7 million in the same prior year period as a result of a 25% increase in the number of MedSafe liners sold. Related to our MedSafe business, we installed 106 MedSafes during the second quarter. This was lower than our forecast going into the quarter, but consistent with the number installed in the prior quarter of 137 units. For the December 2021 quarter, our installs of 106 units were lower than our forecast of 400 units, as we saw and continue to see concerns in retail pharmacy related to additional MedSafe installs when their business is so focused on COVID-19, Omicron testing, and vaccination activity. On a year-to-date basis, we have installed 504 units, down slightly from the prior year-to-date installs of 552 units. For calendar year 2021, we installed 817 units, which is down from the installs in the calendar year 2020 of 1,330 units due to COVID-related activity required of retail pharmacies who chose to delay additional MedSafe installations at this time. We believe calendar year 2022 MedSafe installs will be driven more by long-term care than retail pharmacy. Related to utilization of existing installed MedSafe liners processed in the second quarter of 2022, 8,200 was up 23% over the prior year, indicating more traffic in retail pharmacies. Consistent with the trends in liners processed, MedSafe liners sold in the second quarter of 9,000 units was up 25% over the prior year. The total liners returned since the program at inception are 100,679, and MedSafe units installs were at 6,627 at December 31, 2021. Moving through the financials, the gross margin for the second quarter improved to 35% compared to gross margin of 33% in the second quarter of fiscal 2021. SG&A increased by about $600,000 or 17% to $4.4 million in the second quarter of 2022 compared to the same prior year quarter. The increase in SG&A is related primarily to about $200,000 in acquisition-related costs, a $200,000 increase in the accrual of management incentive comp, and continued investment in sales and marketing. We reported operating income of $2 million in the second quarter of 2022 compared to operating income of $1.7 million in the second quarter of last year. We recorded net income of $1.4 million or $0.07 per basic and diluted share this quarter compared to net income of $1.2 million or $0.07 per basic and diluted share in the second quarter of last year. We reported improved EBITDA of $2.6 million in the second quarter of 2022 compared to EBITDA of $2.2 million in the second quarter of last year. Now a few points about year-to-date results. We reported revenue of $32.8 million in the first half of fiscal 2022, an increase of 9% compared to revenue of $30.2 million in the first half of last year. Customer billings decreased 7% to $29.7 million for the first half of fiscal 2022. Gross margin was essentially flat at 30.6% for the first half of fiscal 2022, as compared to 30.7% in the first half of last year. It was negatively impacted by about $800,000 of the fixed cost component of cost of sales. SG&A expense increased 14% to $8.6 million in the first half of fiscal 2022 compared to $7.5 million in the first half of fiscal 2021. This increase is related to the $200,000 of acquisition-related costs, a $500,000 increase in the accrual of management incentive comp, and the company's continued investments in sales and marketing. We recorded operating income of $1 million in the first half of fiscal 2022 as compared to operating income of $1.3 million in the first half of last year. Net income for the first half of fiscal 2022 was $600,000 or $0.03 per basic and diluted share compared to net income of $900,000 or $0.06 per basic and diluted share for the first half of last year. EBITDA was $2.2 million in the first half of fiscal 2022, consistent with EBITDA in the first half of fiscal 2021. Our balance sheet remains very strong with $36 million of cash as of December 31, 2021, which compares to $41.2 million at the end of September 2021 and $27.8 million at the end of June 2021. We have working capital of $42.8 million at December 31, 2021. That compares to $27.9 million of working capital at the end of June 2021. Our strong balance sheet provides us with the opportunity to execute on our broader acquisition strategy as we continue to work our active pipeline of opportunities. Looking forward to the March 2022 quarter, we typically have seasonally low immunization-related billings of revenue. For example, in the March 2020 quarter, which was pre-COVID vaccine, we sold about $700,000 in immunization mailbacks. To date, in the March 2022 quarter, we have immunization orders of over $1.8 million, so a seasonally low quarter is not expected in light of COVID-related immunizations. Looking forward to the route-based business in the March 2022 quarter, we expect to see about a 15% or more increase over the prior year, March 2021 quarter, if higher COVID-related activity of about $300,000 in long-term care and labs in the prior year is excluded. With that, I'll turn the call back over to David. Thanks, Diana. Operator, let's go ahead and open it up for the Q&A. Certainly. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. Your first question for today is coming from Gerry Sweeney. Please announce your affiliation, then pose your question. Hey, David and Diana, Roth Capital, as you guys know. Thanks for taking my call. You bet. Wanted to talk a little bit about route-based business, the 17% growth in customer base. Can you give a little bit more detail on this growth? I think you've made some or not acquisitions, I apologize. Some investments internally with some internal sales and external sales. Just curious if this is broad-based growth and where this is coming from, and is there an opportunity to continue to invest and sort of drive this business from a Sure. It's broad base growth in all of our markets in the small and medium quantity generator market, everything, you know, to a vet chain, to surgery center. It's across the board. We've invested in more and more in our sales team, and that's what we're pushing sales of all solution offerings in those markets. We've been pleased with what we've seen on the route base as well. Obviously, long-term care has been a headwind as, you know, they got used to dealing with COVID and reduced their PPE use and disposal. Has COVID shifted any other like growth in terms of, you know, outsourced or the, you know, outside of hospital type of services? Is there any impact on that, you know, positively or negatively on the markets? No, the only thing I would say is we know we had the headwinds, you know, in the long-term care from the prior year period. That's really it. I don't. I mean, we're kind of continuing to work through obviously on the vaccine, the immunization side. You know, in the long-term care then, it's normalized. Although I will say this, the long-term care and the lab side seems to be a bit stronger here in January. So maybe with this latest variant, there appears to be more volume coming out of long-term care and labs. Again, it's really we've seen just for the month of January. Got it. Then switching gears a little bit to unused meds. Made the comment that you're gonna see more growth probably from the you know the long-term care market over the retail pharmacy market. You know obviously retail pharmacies you know are dealing with COVID and you know there's a big focus there, but is there anything fundamentally shifting on that market in terms of rollout or opportunities for the MedSafe? Well, I think like you saw in Diana's numbers, I think we had originally expected like maybe 400 MedSafes, and it was like 100, a little bit over 100 that we installed for the December quarters. Retail pharmacies are very focused on testing, on immunization, on boosters, and all of the above, and that's where the resources are being focused right now. It's quite likely, and again, we look at it from a calendar year basis on the installs on the MedSafe, that as long as what's going on now continues, then they're probably gonna be light on the installs on the retail pharmacy. Now, the way we look at it is we think the calendar year 2022 could be the year for long-term care. What we're hoping for is that potential strength in the long-term care on the MedSafe will make up or more than make up for any potential shortfall on the retail pharmacy. Got it. Okay, I don't want to ask too many questions. I know there's other people in line, so I'll jump back in queue. Thank you. All right. Thanks, Gerry. Your next question is coming from Rob Brown. Please announce your affiliation, then pose your question. Hi, good morning, David and Diana. I'm with Lake Street Capital Markets. My question is really just a follow-up, Jerry. Is it, you know, with when COVID normalizes, would you expect the unused medicine activity would pick up in the retail pharmacy, or would you expect them to sort of reevaluate it, or how do you expect that long term? No, I think it'll pick back up and go back to more normalized levels. It's just, you know, I don't think any of us know when we're gonna get back to normal. I don't know if you've been in a retail pharmacy lately, but they're quite busy. They expect, and we expect after we get through this, that they should be back to more normalized levels. Okay, great. Great. Then, just in terms of the inventory build you're seeing at the customers, I think you talked about pretty strong immunization orders in the quarter. What's your sense on the inventory build at customers and how sort of the activity is going to play out for the kind of the seasonality for calendar 2022? That's a good question. I think I mentioned last call, I thought, just based upon the limited knowledge that we had, that they may have had $5 million in... You're talking about excess mailbag inventory? Yeah, correct. We know that that's been burned off, that five maybe down to two. But they continue to order, and there's still some inventory levels that are out there. I don't think they're overly excessive. In fact, as you saw from Diana's numbers, we received quite a few orders in the December quarter. I tell you what's changed is there's no more flu. You know, the mailbag can be used, it's fungible, whether it's for flu or any kind of immunization, COVID or shingles or whatever. I think that what we're going to see is, for the foreseeable future, the orders driven by, you know, whatever vaccines or shots or whatever they're administering. I like a lot is the fact that they appear to be the orders more predictable and smoothed over the quarters. For example, I'd rather have 3 quarters of $5 million each versus $15 million the first. I think we'll see that, and we saw the evidence of that. What did we bill in the immunization orders? $4+ million for the quarter. four point something, yeah. Diana mentioned as well, so far in January, we already have $1.8 million in revenues for immunization. I think things are going to be again much more smooth and predictable versus the significant variability spikes that we've seen in orders and inventory levels. That's. I hope that answered your questions, but that's about the best we can do. Yes. Thank you. That's very helpful. I'll turn it over. Thank you. Your next question is coming from Michael Hoffman. Please announce your affiliation, then pose your question. David, Diana, Stifel. Thanks. Following up on vaccines, pre-COVID, kind of 9 million a year pace, bounced around a little bit maybe, but kind of call it 9 million. COVID obviously throws it all over the place. 5 million of built-up inventory, you kind of walk that out of a baseline and then add in what you think the combination of the sustained flu and then new COVID. Are we landing on a 10-11 million number this year at this point? Or do you think it ticks up a little towards 12-13 in the fiscal year? I'm sorry. You're talking about the immunization billings- Just the vaccine piece of that, you know, which is historically flu was like 9-ish million a year. Right. Year to date, we're already at $6.4 million. We're at $6.4 million. Through December. If we're at $6.4 million, if you use, and this is just a guess, but if you use, you know, maybe December as a guide, the December quarter was $4+ million. 4.6. $4.6 million, $4.6 million plus the $6 million. I think pretty conservatively, you could get comfortable with $10+ million. Now, if there's, you know, more vaccines administered, and it's really gonna be a, you know, adoption by Americans, and maybe it could be a bit higher, but I don't think your low end is unreasonable. 10-12 is probably the right range, and then next year I get back that inventory build and what have you, and now I'm having a conversation that looks more like 14-15. I think that's reasonable. Okay. What's the route-based headwind in Q4, fiscal Q4? It's zero in 4Q. Okay. It's about $300,000 in the March quarter. March quarter. Okay. By Q4, we ought to see a real 15% as opposed to adjusted 15%. Right. Organic growth. Right. Hopefully, even hopefully, you know, the potential will be higher, but yes. Okay. On the MedSafe, wherever the source is, do you still think in the calendar year you're gonna be at 1,200-1,300 regardless of the source? Maybe. It's tough to predict. We know that we're probably short on the long-term care. I mean, on the retail pharmacy side, which we've always targeted, like, you know, 1,000-1,200 units. It's really gonna be a factor of how quickly the long-term care will adopt the MedSafe. You know, we're optimistic that we can make up that shortfall, the 1,000-1,200 with long-term care. Can't make any guarantees, but that's what the goal is. The adoption by long-term care is gonna be a key driver into making that number. All right. Great. Thank you very much. All right. Thanks, Michael. Your next question is coming from Kevin Steinke. Please announce your affiliation, then propose your question. Hi. Kevin Steinke, Barrington Research. I just wanted to ask more about the PharMerica partnership and just the mechanics of how that's gonna work. You know, it looks like you're an approved vendor for the roughly 2,500 facilities that they serve. So should we kind of think of this essentially as a hunting license where, you know, you still have to go out to the facilities and get them signed up one by one, or, you know, what's kind of how quickly do you think this can be adopted? Just any more details on how you see the partnership ramping up or working. Right. Let me talk a little bit big picture first, so we kind of stand back. There's a difference in the operations of a MedSafe at a long-term care facility than in a retail pharmacy. In a retail pharmacy, we have a contract with the retail pharmacy, and we sell the retail pharmacy. In long-term care, since the pharmacy is really usually a third party to the long-term care facility, then it's a three-party agreement. In a sense, the pharmacy to long-term care has to be part of and really run this program. They have to be a DEA-authorized collector, so they have to be in the middle of it as well. That was one of the things that had kind of slowed down the adoption. It's more complex than launching it. PharMerica is on board, and they are pitching this to their communities. We're helping with the training. Yeah, the PharMerica employees have been great to work with and helping with getting them up to speed and training. But they're the ones that are pitching it to the communities, and we're there to help in any way possible. I think really they're taking the lead because they see the significant advantage of being able to offer this to their long-term care communities. All right. Yeah, I mean, it sounds like they're obviously on board, given the partnership and dedicating some meaningful resources to it. Right. Your comments about potentially long-term care, you know, potentially making up the shortfall in MedSafe installations on the retail pharmacy side, you know, a lot of that could potentially be driven, that makeup be driven by the PharMerica relationship. Is that how you're thinking about it? Well, I mean, the PharMerica partnership is great. We look forward to it. They're great people to work with. I look at this more of a catalyst to move all of long-term care. When all of long-term care, you know, sees the ease of use and how it saves them money and it makes them compliant, I think that we have the opportunity to increase sales throughout all of our long-term care customers. Again, I think PharMerica is a catalyst, and I think it'll be very, very helpful, but I think it'll really bring awareness to the long-term care communities of the significant advantage to using the MedSafe versus, you know, what they're currently doing. Right. Are you working on other potential partnerships like this with long-term care pharmacies? I mean, is that kind of the avenue you're taking to really attack and penetrate this market more significantly? Right. Exactly. Because you have to have, you know, the pharmacy that serves the long-term care. They have to be an integral part of the process, the operation and the sale. Yes, we're talking with others. Okay. The pipeline is good there or Sure. What? Yeah. Yeah, they're all quite aware of the MedSafe. Okay, great. Well, thanks for taking my questions. You bet. Thank you, Kevin. I would now like to turn the floor back over to David for any closing comments. Thank you, operator. Thank you everyone for participating in our call. We appreciate the support, and we look forward to talking next quarter. Thank you. Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.