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Medical Action Industries Reports Third Quarter Fiscal 2013 Results

Stocks in this article: MDCI

BRENTWOOD, N.Y., Feb. 11, 2013 (GLOBE NEWSWIRE) -- Medical Action Industries Inc. (Nasdaq:MDCI), a leading supplier of medical and surgical disposable products, today reported financial results for the third quarter ended December 31, 2012, including quarterly net sales of $109.4 million and gross profit of $19.1 million (the highest in Company history) or 17.5% of net sales. The Company generated non-GAAP net income (before a goodwill impairment charge and certain professional fees) of $1.6 million (1)or $0.10 (1) per diluted share and EBITDA, as adjusted, of $6.1 million (2). These gross profit, non-GAAP net income and EBITDA, as adjusted results represent significant increases versus the comparable non-GAAP results for the same period of fiscal 2012. On a GAAP basis, the Company reported a net loss of $55.5 million or $3.39 per diluted share, principally related to the impairment of goodwill of $56.8 million, net of income tax benefit, determined in connection with the Company's annual goodwill impairment test as of December 31, 2012.

For the nine months ended December 31, 2012, the Company reported net sales of $333.7 million, gross profit of $53.5 million or 16.0% of net sales, non-GAAP net income of $2.0 million (1) or $0.12 (1) per diluted share and EBITDA, as adjusted, of $14.1 million (2), all of which exceeded the comparable non-GAAP results for the first nine months of fiscal 2012. On a GAAP basis, the Company reported a net loss of $55.6 million or $3.39 per diluted share. Additionally, since March 31, 2012, the Company has reduced the balance outstanding under its debt facilities by $21.3 million.

Paul D. Meringolo, Chief Executive Officer and President said, "We have made significant improvements in our gross profit culminating with the $19.1 million reported during the third quarter, which is the highest quarterly amount in the Company's thirty-six year history. This improvement in gross profit is the result of management's cost savings initiatives, elimination of unprofitable sales, as well as a reduction in raw material costs. Since June 2012, when the Company was realigned into strategic business units, management's focus on targeted markets has improved considerably and the action plans centered on improving profit and containing costs have yielded the year over year and sequential gross profit improvements we are reporting today. We have been able to make these impressive strides by improving upon our internal operations and management effectiveness without compromising our focus on delivering exceptional service and value to our customers. We still have challenges and opportunities ahead of us and I am extremely pleased at the success we have had in the last several months as we have refocused the Company. Finally, I am excited about the opportunity to work with our interim Chief Operating Officer, Paul Chapman, on continuing to drive improvements in profit and cost containment."

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