Medical Action Industries Inc. (the “Company” or “Medical Action”) (NASDAQ/MDCI), a leading supplier of medical and surgical disposable products, today reported results for the first quarter ended June 30, 2012.
Chief Executive Officer and President, Paul D. Meringolo said, “As always, we continue to focus on delivering exceptional service and value to our customers. In addition, we have embarked on a multi-pronged effort to improve our internal operations and management effectiveness. Net sales have increased from the comparable prior year period. Relative to the fourth quarter of fiscal 2012, we achieved gains in net sales, operating income and net income. As announced in April, we have realigned our business into strategic business units in order to increase focus on targeted market segments. While we still have a significant amount of work ahead of us, I am extremely pleased with the additional clarity and accountability provided by these realignments. As noted in early June, we renegotiated a credit agreement with our lenders. Since then, we have made significant strides in reducing the Company’s overall debt and improving our financial position and available liquidity. During the three months ended June 30, 2012, $5.0 million was paid on our term loan and $9.7 million was paid on our revolving credit loan.”
Net sales for the first quarter of fiscal 2013 were $112.2 million, an increase of $5.7 million or 5.4%, compared to $106.5 million in net sales reported for the comparable prior year period. Competitive pricing pressures and persistent volatility in raw material costs, particularly resin, continue to influence our profitability. Excluding professional expenses related to our renegotiated credit agreement, the Company generated adjusted net income of $0.2 million or $0.01 per basic and diluted share, compared to net income of $0.3 million or $0.02 per basic and diluted share, reported for the comparable prior year period. Without this adjustment, the Company incurred a net loss for the first quarter of fiscal 2013 of $0.1 million or $0.01 per basic and diluted share. When compared to the comparable prior year period, the results for the first quarter of fiscal 2013 were negatively impacted by $0.7 million in higher net material costs, primary resin.