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spk00: Greetings. Welcome to the Sharps Compliance Corporation fourth quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. And please note that the conference is being recorded. I will now turn the conference over to your host, Jen Belladeau, IMS of Investor Relations. You may begin.
spk07: Thank you. Good morning and welcome to the SHARPS compliance fourth quarter fiscal 2021 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 out of the way, let me turn the call over to David Toose to begin the review. Go ahead, David.
spk03: Thanks, Shannon. Good morning, everyone. Thank you for participating in our fourth quarter fiscal year 2021 earnings call. I'm going to continue the same practice as I have previously with really just speaking informally about the business and about the quarter and the outlook. So the business, the quarter, and the outlook. We had great success in fiscal year 2021. And I've got to tell you, to me, it's most important is the fact that in addition to revenue growth and profitability, we ended the year as a much stronger company. We have much greater infrastructure, additional plant and route-based capacity, additional geographic coverage for our route-based business, and a very strong balance sheet with $28 million in cash. So, in my opinion, this is just what we need to support a much larger company and continue our leadership positions in the markets we're addressing, regulated medical aids and unused medication. Now, we also accomplished something I think of of equal or maybe even greater importance. The superhuman efforts that we've showed during COVID-19 slash the immunization business during the height of the pandemic to date further strengthen our customer relationships. We had no disruption in our business. We served all of our customers and we delivered solution offerings. And I think there's a lot to be said for that, and our customers recognize that. Now, of course, we can't have a business discussion without covering COVID. So regarding the COVID business, the March and the June quarters, they represent the height to date of our COVID-related mailbag business. Immunization-related orders were about $28 million in customer billings, about $25 million in revenue for both quarters combined. And this is a great start to the season. And while it's very impressive and we're very happy to have the business, as everyone has seen in the news, the immunizations over the last couple of months have slowed. So during the current quarter, there's fewer shots, the September quarter, to date. Fewer shots administered. As a result of mailbag activity, mailbag activity so far in the current September quarter has slowed. So, from a timing perspective and related to immunization orders, I anticipate a slower than expected September 2021 quarter, you know, consistent with fewer shots being administered, at least now, plus the fact that the rate of some of our customers have accumulated inventory. They may have some leftover inventory that can be used to facilitate a portion of the flu season. So, looking past the September 2021 quarter, and into the remaining fiscal year 2022, which includes the December, March, and June quarters, we have the potential, not a guarantee, but the potential for the resumption of larger immunization-related customer billings. And they would be driven by the following, an increase in adult and adolescents receiving their initial vaccines. As a matter of fact, if you just look at the numbers, we're at about 61%. of the adults that are fully vaccinated in this country. Hopefully we can move that higher. The approval this fall of the children's vaccine. There'll be one zero to four, and there'll be one five to 11. A strong flu season. Additional shots for the immunocompromised adults, which the FDA has approved the additional shots last week. And as many of you have seen on the news, today that the rollout of the boosters, which I just saw on the news, that could begin as early as September 20th. And that would be recommended for Americans eight months after they received their second COVID-19 shot. So we're watching this development closely, but the third shot looks to be a reality here next month, which is big news, really big news for us. So moving past the immunization business, as many of you know, we're much more than an immunization mail-back business. We're a comprehensive provider of medical, pharmaceutical, and hazardous waste services. We have the infrastructure footprint to efficiently serve small and medium quantity generators, and our markets are primarily healthcare and retail. We focused over the last seven years on positioning the company as this, not a mail-back company, but as a comprehensive service provider. We added the route-based business and the unused medications. They play a key role in our numbers and our growth, and we think they're going to continue to play a key role in the growth of the business. The route-based business continues to achieve 30-plus percent growth annually. We remain bullish about the business and the opportunities we're seeing to further penetrate the markets. We're in 37 states, 80% of the population with our direct service of our route-based business. Our customer locations are now over 16,000. A year ago, there were about 13,000. Impressive growth, and we believe we have the opportunity to continue to trend. Now, one more thing about the route-based business. We remain focused on our goal of supplementing our organic growth with acquisition growth. We're seeing more activity and possibly some viable acquisition opportunities on this front. We're not offering guarantees, but the strength of our balance sheet, the expanded route-based infrastructure provides us with great flexibility around this initiative to supplement the organic growth. I need medications, just a minute or two on that. The med-safe business was undoubtedly slowed by COVID-19 as retail pharmacies and long-term care were much more focused on COVID versus unused medication. The line of returns continue to be strong, and we have been receiving orders from med-safe units, and we think starting in the September quarter that we'll start to get back on track with some growth rates similar to what we've seen in the past. Unused medications, I think, will continue to play a big part in the future growth of the company, and as many of you know, The opioid epidemic has actually worsened during the pandemic. Our MedSafe is seen as a leading solution, so we like where we are there. So one more time, we ended the year extremely well positioned for further growth, and we built a much larger company with our increased infrastructure, additional plant and route-based capacity, geographic coverage, and again, strong balance sheet with... $28 million in cash. And just a quick word on the employee base. Dedicated. Everyone's been working quite hard. We have to recognize them for what they've done. We want to thank them for what they've done. And it's been busy, and my guess is it's getting ready to get busier. So with that, I'll turn it over to Diana, who will address the financials in a bit more detail.
spk08: Thank you, David. Sharps reported revenue of $18.7 million this an increase of $6.1 million, or 49%, primarily due to an increase of $4.7 million in our immunization business and increased route-based pickup services of about $800,000. Customer billings were $18.7 million in the fourth quarter of fiscal 2021, an increase of $5.1 million, or 38%. The increase in customer billings for the fourth quarter was driven by an increase of $4.2 million in our immunization business and an increase in the route-based pickup services of $800,000. Retail market billings grew 68% to $9 million in the fourth quarter of fiscal 2021 as compared to $5.4 million in the same prior year period. The increase in retail billings is primarily due to immunization-related orders of $7.8 million, which were higher than the prior year at $3.6 million. Professional market billings increased 44% to $4.7 million in the fourth quarter of the 2021 fiscal year, as compared to $3.3 million in the fourth quarter of last year. Related to our MedSafe business, we installed 172 MedSafes during the fourth quarter, which is pretty consistent with our forecast going into the quarter. Our large retail pharmacy customer accelerated their annual MedSafe installation program into the summer months of 2020 so that they could focus on COVID-related response in the December, March, and June quarters, and we're still seeing minimal sales activity as current and potential customers deal with COVID. But on a positive note, as David mentioned, our MedSafe liners processed for the quarter of 8,200 were up 73% over the prior year and 6% higher than the preceding March 2021 quarter, indicating a lot more traffic in retail pharmacies. As we said previously, we continue to believe there's significant opportunity for further penetration of the MedSafe in the long-term care market and safe disposal of unused medications is a key contributor to fighting the opioid crisis. Therefore, we believe the lower unused medication billings and lower med-safe installs that we saw this quarter is a temporary situation and expect to see a return to pre-COVID levels once the vaccine program has gained meaningful traction. So looking forward, in the September and December 2021 quarters, we expect the number of installs to increase by about 300 units in each quarter. Incremental revenue associated with this higher level of installs would be about $400,000 to $500,000 per quarter. Gross margin for the fourth quarter was 33%, consistent with the gross margin in the fourth quarter of last year. The fourth quarter of this year gross margin of 33% reflects a year-over-year increase in the fixed portion of cost of goods sold of about $450,000 or 240 basis points as a result of investments in our treatment plants, autoclaves, route-based infrastructure, and other expenditures designed to address the increased immunization business and to facilitate growth. Our SDNA expense increased by about $700,000 or 21% for the quarter. This is related primarily to a $200,000 increase in management incentive comps both stock and cash, $100,000 increase in board member compensation, and continued investments in sales and marketing. We reported operating income of $2 million and an operating margin of 10.6% in the fourth quarter of 2021, compared to operating income of $700,000 in the fourth quarter of 2020. The company recorded a gain on forgiveness of our Paycheck Protection Program, or PPP, loans of $2.2 million in the fourth quarter of fiscal 2021. We reported net income of $5.1 million or 30 cents per basic and 29% per diluted share this quarter compared to $2.2 million or 13 cents per basic and diluted share in last year's fourth quarter. Without the impact of the PPP loan debt forgiveness, EPS would have been 17 cents per diluted share for the quarter. We generated EBITDA of $4.7 million or 25% of revenue in the fourth quarter of fiscal 2021 compared to EBITDA of $1 million or 8% of revenue in the fourth quarter of last year. Without the impact of the PCP loan debt forgiveness, adjusted EBITDA was $2.5 million or 14% of revenue for the current quarter. Now we'll take a look at the full fiscal year results. Sharks reported revenue of $76.4 million, an increase of $25.3 million, or 49%, primarily due to an increase of $21.9 million in our immunization business net of deferrals, and an increase in route-based pickup services of $3.3 million. Customer billings were $81.6 million in fiscal 2021, an increase of $28.6 million or 54%. The increase in customer billings for 2021 was driven by an increase of $25.3 million in our immunization business and an increase in route-based pickup services of $3.3 million. Retail market billings grew 153% to $40.5 million for 2021 as compared to $16 million for the prior year, due primarily to an increase in billings for immunization-related orders of $21.9 million net deferrals, partially offset by a decrease in unused medication billings in the retail market of $700,000. Professional market billings increased 15% to $18 million for the year, compared to $15.6 million in the prior year. Long-term care market billings increased 25% to $4.2 million for 2021 compared to $3.3 million in the prior year, and that was related primarily to an increased volume of COVID-19-related waste management and ancillary supplies. Our pharmaceutical manufacturer market billings increased 12% to $5.2 million for 2021 as compared to $4.7 million in last year. Risk margin increased to 38% in the full fiscal year 2021 as compared to 31% for the full fiscal year last year. And this was due primarily to the leverage from higher revenue partially offset by year-over-year increase in the fixed portion of our cost of goods sold of $1.7 million for 225 basis points. That's as a result of those investments in our treatment plans, auto plays, route-based infrastructure, and other expenditures designed to address our increased immunization business and to facilitate growth. For the year, SD&A expense increased $1.8 million, or 12%. The increase is related primarily to a $600,000 increase in management incentive comp, including both stock and cash, a $400,000 increase in board member compensation, and $700,000 due to our continued investment in sales and marketing. We recorded operating income of $12.3 million and an operating margin of 16.1% for the year of 2021. And as previously mentioned, we recorded the gain on forgiveness of our PPP loan of $2.2 million during the fourth quarter of fiscal 2021. The effective tax rate of 10.2% for the year reflects a $1.1 million tax benefit associated with stock compensation and a half of half a million dollar benefit associated with the permanent exclusion of the gain on forgiveness of the PPP loan from taxable income. We recorded net income of $12.9 million or 76 cents per diluted share for the year of 2021 compared to net income of $2.3 million or 14 cents per diluted share for the prior year. Without the impact of the PPP loan, debt forgiveness EPS would have been 63 cents per diluted share for the year. We generated EBITDA in 2021 of $16.5 million or 22% of revenue compared to EBITDA of $2.4 million or 4.7% for the prior year. Without the impact of the PCP loan debt forgiveness, adjusted EBITDA for the full year was $14.3 million or 19% of revenue for the current year. David mentioned our balance sheet remains solid with $27.8 million cash as of June 30, 2021, up from $5.4 million at the end of last year. And our working capital is $27.9 million, up from $11.1 million at the end of last year. And with that, I'll turn the call back over to David.
spk03: Thanks, Diana. Operator, let's go ahead and open up for questions.
spk00: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question. It comes from the line of Jerry Sweeney with Roth Capital. You may proceed with your question.
spk05: Good morning, David and Diane. Thanks for taking my call.
spk03: You bet.
spk05: Good morning. I want to start on the vaccine front. Obviously, a little bit of disappointment, vaccines that slow down. You know, we've talked a lot about vaccines being given in the retail setting, and as we look out to the rest of this year, I mean, I know you talked about boosters, adolescence shots, et cetera. How do you feel about the activity taking place in the retail setting? Is this matching your expectations, and is there any thoughts on how this develops on a go-forward basis the rest of the year?
spk03: Sure. Yeah, I think that we felt good about, you know, the shots administered in the retail setting. What we were surprised with, and I think everyone is surprised with, that only 61% of adults and 50% of Americans have received the vaccine. That was a bit of a surprise. Going forward, let me just tell you how I look at it. And in my world, if I stand back and look at, for fiscal year 2022, for the vaccine side, I'm going to do a little bit of math here. But for the March and June quarter, we had $28 million in billings. We had about $2 million right in the December quarter for long-term care. So call it $30 million so far. So I do think that there will be some increase in not a lot, but some increase in the adults. From what I understand, there's a percentage of the population that are not vaccinated that are waiting for full approval from the FDA, which I understand is going to be around Labor Day. So, you know, let's say that we get another, I don't know, 10, 15, 20% pickup in the adults. That 30 may look like 34. I will say this. Our mail back that's used for immunization is the same mail back that's used for flu. It's fungible. The orders they typically make in June and September were really all part of the orders that they placed for the last couple of quarters, March and June quarters. I'm guessing it looks like about five million of the purchases that have been made so far it looks like would be designated for the initial flu orders that we would have received in June and September. So if you were just looking at COVID, you take the five away from the 34, and that really puts you at about 20, 29. The children's vaccine is supposed to be available in the fall, zero to 11. Who knows? But you would think there'd be a couple of million dollars of business related to that, which gets you a little bit over 30. 30 million in the opportunity for the entire season. And if you believe that the folks that received the vaccine are going to get the booster, then since it's one shot instead of two, the 30 is really 45 if everyone gets a booster. So, you know, you're looking at roughly maybe 45. And that's if all these things happen. So call it 45. we'll have some remaining flu, some additional flu that probably was not used in that stock that they currently have. So maybe we hit it closer to 48, 49 million. So what is that, 18 to 19 million increment over what we've received so far. And that's if all of those things happen, and that seems to make some sense. I will tell you this. The September quarter, the quarter that we're in, although it may change now because of what happened this morning with the announcement of the booster being available September 20th, September's been slow. We've only received about a half a million dollars, right, about a half a million dollars in orders. So hopefully we'll receive more related to more shots or the booster, and maybe that may increase a bit. But I think it's likely that that roughly, I don't know, 18, 19 million, again, if everything happens, would probably be spread between December, March, and June, maybe heavier in December and March as people are getting their boosters. That's how we see it. And, you know, how it rolls out is really going to be dependent upon the number of shots that will be administered. But that's just sharing with you thoughts on how we see it.
spk05: I hope that makes sense. That's incremental over sort of historically mail back has been running 24, 25, 26. Right. Higher depending on. So that's the incremental above that.
spk03: Well, immunization. Immunization type.
spk05: Yeah. Gotcha. Gotcha. Okay. Switching gears a little bit. Route based. I think you mentioned some pretty strong growth, 30% type growth. Okay. What's driving that activity? Obviously, it's an underserved market. We've talked about that. You've got some geographic expansion. You made some expansion into the Southwest. What is driving that market? It had been growing 20%, 25%, but it feels like it's actually accelerating a little bit.
spk03: We've got a tremendous focus on the route-based business. Our sales team is very, very focused on that and I remind you, one of the reasons why we went into these areas is we weren't selling into those areas before. We weren't selling into the Midwest or in the Southwest. We were subcontracting that. So now we're selling in those areas. And that doesn't necessarily have to be part of a much larger opportunity. So we're selling directly in four states in the Southwest and in the Midwest where we really haven't before. And I think That's one of the drivers. You agree?
spk08: I agree. We're just focused on our direct markets, and our sales team is getting out there and adding customers.
spk03: They're good. They're good. They're good at it, and we remain bullish, and we can hope to keep up those trends.
spk05: And then acquisitions you mentioned specifically. More geographic expansion, or is this sort of a route density play, or what are you seeing, or is there a particular focus?
spk03: I think we're talking about really more route density improvement. We've worked really hard in putting in place an infrastructure in 37 states, 80% of the population. What these look like, assuming that we're able to complete these, They almost look like tuck-ins because we already have the infrastructure in place. I like those because that not only improves the route density but improves the profitability as well for the business. We're talking to four or five different folks. We're in due diligence on a couple of them. They would look much more like a tuck-in than they would a geographic expansion.
spk05: Got it. Then just final question for me, unused meds. Long-term care, always a huge opportunity that's been out there, and obviously COVID pushed that back because nursing homes, et cetera, were sort of ground zero. Where does that stand opportunity-wise in the next, I don't know, 12, 18 months?
spk03: I think we're finally starting to see some business. Dennis and the team is finally starting to see some interest in the, in the long-term care side, as they're coming out of the COVID, out of COVID and in our sales meetings and some of the prospects that we're looking at, it seems like long-term care is popping up more and more. So, you know, we're hopeful that 22, that we'd have the opportunity to be able to get more of the med-safes into long-term care. It's been definitely shut down, but hopefully we'll be able to see some movement on that in the fiscal year 22.
spk05: Okay, that's it for me. I'll jump back in line. Thank you. All right, thanks.
spk00: Our next question comes from the line of Rob Brown with Lake Street Capital Markets. Rob, you may proceed with your question.
spk01: Good morning.
spk02: I just wanted to kind of continue on the MedSafe discussion here. I think you said about 300 units are kind of planned to go in over the next or each of the next two quarters. And is that sort of representing kind of a step back to a normalized run rate, or is that some catch-up from being held back for the last year?
spk03: Probably a little bit of both. Right. You know, they were suspended there for a while, at least in retail pharmacy, because of COVID. So I think we're getting back on track with – with getting the units out, and probably a little bit of that is a catch-up from what should have probably gone out a year ago.
spk02: Okay, great. And then back to the mail-back business, what's sort of the baseline there of non-immunization business in that segment? There's about $15 million a year, and so you're saying that the $18 or so million of immunization would be on top of that to sort of get you to a $30 million kind of mail-back business. Is that what you're thinking?
spk03: business 19 and 20 of about 25 to 28.
spk08: 28 last year and 55 this year and it included a revenue of $9 million last year and $31 million of immunizations this year.
spk03: So that $28 million for 20 included about $9 million for what immunization? Right. So the Malbec was roughly 20 million without immunization baseline.
spk09: And this year was right at 25.
spk03: At 25 without immunization. So 25 this year without the immunization of the Malbec business, right.
spk02: Okay, good. So the immunization numbers you were talking about would be sort of additive. Whatever they are would be additive to sort of that 20 to 25 baseline.
spk03: Correct. Right.
spk02: Okay, great. And then maybe just on the September quarter, walking through the order rates, how does that sort of flow through the mailback business? Do you expect, you know, what's sort of the tail on returns and expectations of shipments? I would presume that makes the mailback fairly low in September, but could you help us kind of understand how that flows through in just the September quarter?
spk03: You mean in September? And revenue, I mean, just as it normally would. I mean, if it was a half a million dollars in sales, it would be half a million dollars in revenue. There would be a deferral component of, what, 15% or 20% of that. Right. So, what, 80%, 85% of it would be recognized as revenue in September quarter.
spk09: Some of the items would be coming back, so you'd have, you know, offset that maybe a little bit more.
spk02: Okay. Got it. Good. And then in terms of the route-based business, do you feel that's sort of fully recovered from COVID and now this is a new baseline of growth and this sort of 30-plus percent should be able to continue?
spk03: You know, we didn't really see. If you think about our route-based business, while we had a little bit of the business, I think it was April through June of 2020, where we saw a bit of a downtick on the route base. Remember, that was offset or more than offset by the substantially increased volumes coming out of long-term care, which is route-based as well. One really offset the other, so we really didn't see that much of a downtick. Now, the long-term care volumes have reduced, but the other businesses that we have have increased. we think we're extremely well positioned and very, very fortunate to have that long-term care volume to offset a bit of a slowdown in the, what was it, it was like dermatology and dental and physicians that may have been slowed down for a short period of time. Very short.
spk02: Okay, great. Thank you for the call. I'll turn it over. Sure.
spk00: Our next question comes from the line of Amit Dayal with H.C. Wainwright. You may proceed with your question.
spk04: Thank you, guys. Appreciate you taking the questions. Most of them have been asked, but just on the margin front, should we think about gross margins as sort of stabilizing at these levels with potential upside coming from any volume increases you may see, you know, as people continue to get the COVID vaccines and as the flu season sort of comes in play for you?
spk03: You know, it's all really driven by revenues, operating leverage model, and it's, you know, they ran us this year because the volume was as high as it could be. If the revenue is lower, they'll be down. If the revenue is higher, they will be up.
spk04: Okay. Thank you for that. And then, you know, it looks like you've had a decent increase in customer locations to 16,000 from 13,000 year over year. Do you have a target? to where you might want to be over the next 12, 18 months in terms of customer locations?
spk03: Well, you know, we've talked about this 30% increase in the route-based business, and I think you can directly correlate that with the number of locations. We've been growing at 30%, so you can do the math. And, of course, if we supplemented that with acquisitions, that percentage could be higher.
spk04: Okay. And in terms of how the quarterly revenues are now coming through for you, do you feel because of how COVID has played out, there should be some changes in how the cadence in revenues, quarterly revenues, kind of plays out for you? Or in a few quarters, do we go back to maybe sort of a more normalized trend for you?
spk03: Well, it all depends on the things that I mentioned earlier about what happens with respect to the immunizations and with the boosters and so on and so forth. In that example that I mentioned earlier, there's a potential for maybe another 18 or 19 million in immunization revenue for fiscal year 2022. I will say this, kind of looking out past 22, another way to look at it is, what does this mean going forward in 23 and going forward? And the way I've always looked at it is, you know, I think that the two-shot regiment, meaning a flu and a COVID something shot, is probably here to stay. So the way I look at 23 and going forward is probably 15 to 20 million of revenue, which think of it as like two flu seasons going forward. So maybe an additional as much as 19 million for 22. and then going forward pass at maybe 15 or 20 million for a couple of flu shots a year.
spk01: Thank you.
spk04: That's all I have for now. Thank you so much.
spk03: Thanks a million.
spk00: Our next question comes from the line of Kevin Stanky with Barrington Research. You may proceed with your question.
spk06: Good morning. So just when we think about the flu season, and you mentioned there what, you know, the numbers typically are, I think the last couple calendar years, flu season billings were $7 million to $8 million. You mentioned about $5 million sitting in inventory that could be used for the flu season. So, you know, should we just kind of think about the $7 million to $8 million minus $5 million is how flu season – the remaining flu season orders might play out?
spk03: Right, yeah, I think so. I think that, hey, you're right. I think last year, 20 was like 8.2 million. So the way we looked at it is we would have typically had about 5 million of orders, about 5 million of flu-related orders in June and September. So I think you subtract the 5 from the 8 and about 3 million remaining. I think that's a good way to look at it, Kevin.
spk06: Okay, understood. Makes sense. And since you specifically called out the added $5 million impact on gross margin as a result of the various investments you've made in infrastructure and treatment, should we think about that as having an impact on gross margin for the next couple of quarters here, or is that something you start to I mean, kind of what was the timing of those investments and how does that play out on the impact on gross margin over the next couple of quarters?
spk03: So we started with the infrastructure investments in mid to late 2020 calendar. And the impact on the current quarter, what was that, Diana?
spk08: It was about $400,000.
spk03: Yeah, about $400,000 for the quarter.
spk08: Yeah. And it's about at the same level that we had in this quarter looking out throughout fiscal year 22. We don't see increases over that.
spk03: So this is related to the addition of expansion of the Texas facility, the addition of the autoclaves, the continued build-out of the route-based business. But once we get through 22, then the incremental fixed cost will be much less on an annual basis because we would have built out the infrastructure, maybe a half a million or so a year, right, going forward, 23, and going forward. So I think we're going to have most of it behind us this fiscal year 22. And by the way, it's a good thing that we did it because the volume that we're processing has obviously increased tremendously. because of the increase in the route-based business and, as well, the significant increase in the mailbacks relative to the immunization business.
spk06: All right. Yeah, great. Understood. And you specifically talked about your ability to serve your customers and effectively throughout the pandemic and how you believe that strengthened your customer relationships. Is there any way you can capitalize on that going forward in terms of the stronger relationships, just from a competitive standpoint? How do you see that perhaps playing out or benefiting you moving forward?
spk03: That's a good question. Our relationship with our customers, all customers, and including the immunization side, I think are very strong. I think they're much, much, much stronger now that we delivered. We've received many compliments, and we're the go-to company to support their medical waste management needs, whether it be immunization or otherwise. And sure, we're going to try to parlay that into some cross-selling. We're going to try to use that in capturing more business. But we're really pleased with that. And again, the customer relationship is strong, and I think it's stronger now.
spk06: All right, great. And then just lastly, can you talk about the competitive environment in the route-based business when you're bidding on deals? Is that about the same as it's always been or any changes competitively there?
spk03: No, we haven't really seen any changes. We're well positioned. We continue to lead with great customer service and flexibility and flexibility and contracts, great responsiveness, and that's how we sell. And I think it shows in that 30% increase in the right-based business.
spk06: Okay, great. Thanks for taking the questions.
spk03: All right, you bet.
spk06: Thanks, Kevin.
spk00: At this time, we have reached the end of the question and answer session. I will now turn the call back over to management for closing remarks.
spk03: Thank you, Operator. Thank you, everyone, for participating in our call today. We remain very excited and bullish about the business. We look forward to the continued growth, revenue opportunities, and expansion for fiscal year 22 and beyond. Thank you. We'll talk next quarter.
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