Medical Action Industries Reports Fourth Quarter And Fiscal 2011 Results

Medical Action Industries Inc. (NASDAQ: MDCI), a supplier of medical and surgical disposable products, today reported fourth quarter and fiscal 2011 results.

Net sales for the fiscal 2011 fourth quarter were $105,273,000 an increase of $34,050,000 or 48%, above the $71,223,000 in net sales reported for the comparable three months of fiscal 2010. Net sales for the most recent quarter included $34,227,000 in custom procedure tray sales generated by AVID Medical, Inc. which was acquired by Medical Action on August 27, 2010. Excluding sales of custom procedure trays, Medical Action’s net sales for the three months ended March 31, 2011 were $71,046,000, which approximated net sales from the comparable prior year period.

Net income for the fiscal 2011 fourth quarter was $1,085,000 or $0.07 per basic and diluted share, compared to $5,194,000 or $0.32 per basic and diluted share reported for the comparable three months of fiscal 2010.

Net sales for the twelve months ended March 31, 2011 were $362,494,000 an increase of $72,348,000 or 25%, from the $290,146,000 in net sales reported for the comparable twelve months of fiscal 2010. Net sales for fiscal 2011 included $81,468,000 in custom procedure tray sales generated by AVID Medical, Inc. Excluding sales of custom procedure trays, Medical Action’s net sales for the twelve months ended March 31, 2011 were $281,026,000 representing a decline of $9,120,000 from the comparable prior year period. “We have substantially completed the integration of AVID Medical, Inc. during the fourth quarter,” said Paul D. Meringolo. “Our management team is focused on growing sales across each of our product lines, improving operational efficiencies and enhancing our product and service offerings. Our results of operations during the year were adversely effected by rising raw material costs and one time expenses relating to acquisition transaction costs and weather-related water damage at one of our manufacturing facilities,” Meringolo said. “We believe that raw material costs, particularly resin and cotton, will continue to influence our gross margins in the near term. We have responded to rising raw material costs by implementing price increases where commercially practical and managing our operating expenses.”

Net income for the twelve months ended March 31, 2011 was $4,354,000 or $0.27 per basic and diluted share, compared to the $16,841,000 or $1.04 per basic and $1.03 per diluted share, reported for the comparable prior year period. Included in net income for the twelve months ended March 31, 2011 was an extraordinary loss of $1,455,000 or $0.05 per basic and diluted share (net of applicable tax benefit), due to weather-related water damage at an off-site warehouse used to store finished goods inventory and one time transaction costs, which were not tax deductible of $1,335,000 or $0.08 per basic and diluted share related to the acquisition of AVID Medical, Inc.

Medical Action invites its shareholders and other interested parties to attend its conference call at 10 a.m. (ET) on May 25, 2011. You may participate in the conference call by calling (888) 334-3932 (domestic) or (973) 935-8511 (international); conference ID #55561759. The conference call will be simultaneously web cast on our website: www.medical-action.com. The complete call and discussion will be available for replay on our website beginning at 1:00 p.m. (ET) on May 25, 2011.

Medical Action is a diversified manufacturer and distributor of disposable medical devices and a leader in many of the markets where it competes. Its products are marketed primarily to acute care facilities in domestic and certain international markets. The Company has expanded its target market to include physician, dental and veterinary offices, out-patient surgery centers, long-term care facilities and laboratories. Medical Action’s products are marketed nationally by its direct sales personnel and extensive network of healthcare distributors. The Company has preferred vendor agreements with national and regional distributors, as well as sole and multi-source agreements with group purchasing organizations. Medical Action’s common stock trades on the NASDAQ Global Select Market under the symbol MDCI and is included in the Russell 2000 Index.

This news release contains forward-looking statements that involve risks and uncertainties regarding Medical Action’s operations and future results. Please see the Company’s filings with the Securities and Exchange Commission, including, without limitation, the Company’s Form 10-K and Form 10-Qs, which identify specific factors that would cause actual results or events to differ materially from those described in the forward-looking statements.

                 
Medical Action Industries Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
 
Fiscal Year Ended March 31,
2011 2010 2009
Net sales $ 362,494 $ 290,146 $ 296,070
Cost of sales   298,615   221,242   245,135
 
Gross profit 63,879 68,904 50,935
 
Selling, general and administrative expenses   51,978   40,198   40,161
Operating income 11,901 28,706 10,774
 
Interest expense 2,889 1,352 2,682
Interest income   (1)   (4)   (4)
 
Income before income taxes and extraordinary item 9,013 27,358 8,096
Income tax expense   3,821   10,517   3,141
 
Income before extraordinary item 5,192 16,841 4,955
Extraordinary loss (net of tax benefit of $617)   (838)   -   -
 
Net income $ 4,354 $ 16,841 $ 4,955
 

Per share basis:
Basic
Income before extraordinary items $ 0.32 $ 1.04 $ 0.31
Extraordinary loss (net of tax benefit)   (0.05)   -   -
Net income $ 0.27 $ 1.04 $ 0.31
 
Diluted
Income before extraordinary items $ 0.32 $ 1.03 $ 0.31
Extraordinary loss (net of tax benefit)   (0.05)   -   -
Net income $ 0.27 $ 1.03 $ 0.31
 
             
Medical Action Industries Inc.
Consolidated Balance Sheets
(In thousands, except share data)
 
March 31, March 31,
2011 2010
Current Assets
Cash and cash equivalents $ 1,691 $ 5,641

Accounts receivable, less allowance fordoubtful accounts of $804 at March 31, 2011 and $659 atMarch 31, 2010
32,330 18,294
Inventories, net 54,674 34,860
Prepaid expenses 1,702 1,109
Deferred income taxes 2,801 2,363
Prepaid income taxes 1,938 785
Other current assets   1,637   396
Total Current Assets 96,773 63,448
 
Property, plant and equipment, net 53,901 39,816
Goodwill 108,652 80,699
Other intangible assets, net 41,860 14,457
Other assets, net   3,319   2,376
 
Total Assets $ 304,505 $ 200,796
 
Current Liabilities
Accounts payable $ 17,069 $ 11,691
Accrued expenses 22,235 12,216
Current portion of capital lease obligation 92 -
Current portion of long-term debt   16,360   15,501
Total Current Liabilities 55,756 39,408
 
Deferred income taxes 27,956 15,932
Capital lease obligation, less current portion 13,790 -
Long-term debt, less current portion   58,776   2,734
 
Total Liabilities 156,278 58,074
 
Stockholders’ Equity
 

Common stock 40,000,000 shares authorized, $.001par value; issued and outstanding 16,383,128shares at March 31, 2011 and 16,344,411 shares atMarch 31, 2010
16 16
Additional paid-in capital 33,799 32,585
Accumulated other comprehensive loss (437) (374)
Retained earnings   114,849   110,495
 
Total Stockholders’ Equity   148,227   142,722
 
Total Liabilities and Stockholders’ Equity $ 304,505 $ 200,796
 

 

 

 

 
 

Copyright Business Wire 2010

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