exv99w1

SHARPS COMPLIANCE CORP. ANNOUNCES RESULTS FOR THE
QUARTER ENDED DECEMBER 31, 2003

HOUSTON, Texas, (January 28, 2004) — Sharps Compliance Corp. and subsidiaries (OTC BB: SCOM) (“Sharps” or the “Company”), leading providers of cost-effective medical waste disposal solutions for industry and consumers, today announced, its operating results for the second quarter of fiscal year 2004.

For the three-months ended December 31, 2003, the Company generated revenues of $2.1 million versus revenues for the corresponding quarter of the prior fiscal year of $2.3 million. For the six-months ended December 31, 2003, the Company generated revenues of $4.1 million versus revenues for the corresponding quarter of the prior year of $4.4 million. The prior year revenue amounts included a major sale of the Sharps Disposal by Mail System™ to a leading syringe manufacturer which generated $0.5 million in revenue.

The Company realized an improved gross margin of 40% for the three-months ended December 31, 2003 versus a gross margin of 32% for the corresponding quarter of the prior fiscal year. Additionally, the Company’s S, G & A expenses were 17% lower in the current quarter ended December 31, 2003 when compared to the prior year fiscal quarter. The improvement in margins and reduction in S, G & A expenses is the direct result of operational efficiencies and implementation of the cost reduction program previously announced by the Company.

The Company reported essentially break-even operating results for the quarter ended December 31, 2003. This loss represents a significant improvement over the prior fiscal year quarterly operating loss of $0.3 million.

Regarding the results, Dr. Burt Kunik, Chairman, Chief Executive Officer and President of Sharps Compliance Corp. stated, “We are very pleased with the improved second quarter 2004 operating results which reflected solid gross margins, reduced overhead and positive cash flow. We are extremely focused on new revenue opportunities in the industrial, commercial, healthcare and other markets. Our pipeline of new sales opportunities is at a level far above that experienced by the Company in any period.”

Headquartered in Houston, Texas, Sharps is a leading developer of superior solutions for improving safety, efficiency and cost related to the proper disposal of medical waste by industry and consumers. The Company’s products and services represent cutting edge solutions for a variety of industries dealing with the complexity of managing regulatory compliance, environmental sensitivity, employee and customer safety, corporate risk and operating costs related to medical waste disposal. Sharps is a leading proponent and participant in the development of public awareness and solutions for the safe disposal of needles, syringes and other sharps in the community setting.

Sharps Compliance Corp. is the exclusive supplier of Sharps Disposal by Mail systems to the Consumer Health Care division of Becton, Dickinson and Company. The Company also maintains an exclusive sales and marketing arrangement with Waste Management, Inc. whereby Sharps provides safe disposal systems and related services for Waste Management’s residential and commercial customers.

The Company also has a mutually exclusive joint marketing agreement with McKesson Health Solutions (“McKesson”), a subsidiary of McKesson Corporation, to co-market and sell the Sharps Disposal by Mail System™ products and services to pharmaceutical manufacturers and biotechnology companies. McKesson is a leader in the design, implementation and management of marketing programs, specialty pharmaceutical services and patient support centers that help pharmaceutical and biotechnology manufactures successfully commercialize their products.

Sharps Compliance Corp.’s common stock trades on the OTC Bulletin Board under the symbol SCOM.

The information made available in this press release contains certain forward-looking statements which reflect Sharps Compliance Corp.’s current view of future events and financial performance. Wherever used, the words “estimate”, “expect”, “plan”, “anticipate”, “believe”, “may” and similar expressions identify forward-looking statements. Any such forward-looking statements are subject to risks and uncertainties and the company’s future results of operations could differ materially from historical results or current expectations. Some of these risks include, without limitation, the company’s ability to educate its customers, development of public awareness programs to educate the identified consumer, managing regulatory compliance and/or other factors that may be described in the company’s annual report on Form 10-K and/or other filings with the Securities and Exchange Commission. Future economic and industry trends that could potentially impact revenues and profitability are difficult to predict. The company assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results express or implied therein will not be realized.


			Three Months Ended						Six Months Ended
			December 31,						December 31,

			2003			2002			2003			2002

			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

REVENUES			$	2,074,220		$	2,339,809		$	4,071,432		$	4,388,677
COSTS AND EXPENSES:
	Cost of revenues			1,251,600			1,598,551			2,469,310			2,979,941
	Selling, general and administrative			798,339			958,146			1,634,725			1,799,957
	Depreciation and amortization			39,590			46,695			78,248			67,846

Operating income (loss)				(15,309	)		(263,583	)		(110,851	)		(459,067	)
INTEREST (EXPENSE) INCOME, net				(7,052	)		6,563			(28,087	)		13,845

		Net loss	$	(22,361	)	$	(257,020	)	$	(138,938	)	$	(445,222	)

BASIC AND DILUTED NET LOSS PER SHARE			$	(0.00	)	$	(0.03	)	$	(0.01	)	$	(0.05	)

SHARES USED IN COMPUTING BASIC AND DILUTED NET LOSS PER SHARE				10,538,256			9,862,784			10,247,955			9,842,403


				December 31,		June 30,
				2003		2003

				(Unaudited)
Assets
	Current assets:
		Cash and cash equivalents		$	190,028	$	135,884
		Restricted cash			91,347		152,851
		Accounts receivable, net			743,028		740,760
		Inventory			432,114		299,136
		Prepaid and other assets			97,191		125,808

			Total current assets		1,553,708		1,454,439
	Property and equipment, net				546,613		597,691
	Intangible assets, net				10,409		—
	Other assets				5,478		11,695

			Total assets	$	2,116,208	$	2,063,825

Liabilities and stockholders’ (deficit) equity
	Current liabilities:
		Accounts payable		$	601,595	$	567,918
		Accrued liabilities			235,459		226,427
		Deferred revenue — pump return			192,554		205,125
		Current portion of deferred revenue — incineration			93,962		108,547
		Current portion of deferred revenue — transportation			434,735		476,630
		Notes payable and current portion of long-term debt			172,321		407,374
		Current maturities of capital lease obligations			32,960		36,501

			Total current liabilities		1,763,586		2,028,522
	Long-term deferred revenue — incineration, net of current portion				31,186		35,794
	Long-term deferred revenue — transportation, net of current portion				150,912		164,142
	Long-term debt, net of current portion				14,373		45,563
	Obligations under capital leases, net of current maturities				99,599		102,314
	Other				35,000		27,000

			Total liabilities		2,094,656		2,403,335
	Stockholders’ (deficit) equity:
			Total stockholders’ (deficit) equity		21,552		(339,510	)

			Total liabilities and stockholders’ (deficit) equity	$	2,116,208	$	2,063,825