Medical Action Industries Inc. (NSDQ:MDCI) posted third-quarter sales of $73.2 million for the three months ended Dec. 31, 2009, up 1.6 percent compared with $72 million during the same period in 2008. Net income surged 245 percent to $4 million, compared with $157,000 during Q3 2009:
Press Release
Medical Action Industries Reports Strong Third Quarter 2010 Fiscal Results
Company Reports Gains in Net Income and Gross Profit; Increase in Cash Flow Facilitates a $9.7 Million Debt Reduction in the Third Quarter and a $30.7 Million Debt Reduction Year to Date
BRENTWOOD, N.Y.–(BUSINESS WIRE)–Medical Action Industries Inc. (NASDAQ:MDCI), a leading supplier of
medical and surgical disposable products, today reported strong third
quarter 2010 results marked by significant gains in net income and gross
margin versus the prior year period, as well as an increase in cash flow
that allowed the company to reduce debt by another $9,715,000 during the
quarter.
Chief Executive Officer and President Paul D. Meringolo stated, “Our
third quarter performance benefited from stable resin prices for its
U.S. and Chinese-made products, from continuous improvements at its
Tennessee plant and from ongoing investments in sales and marketing.”
Net sales for the three months ended December 31, 2009 totaled
$73,176,000, an increase of $1,181,000, or 1.6% above the $71,995,000 in
net sales reported for the three months ended December 31, 2008. Net
income for the third quarter of fiscal 2010 was $4,010,000, or $0.25 per
basic and diluted share, up significantly from the $157,000, or $.01 per
basic and diluted share, reported for the comparable three months of
fiscal 2009.
Net sales for the nine months ended December 31, 2009 amounted to
$218,923,000, a decrease of $4,291,000, or 1.9%, from the $223,214,000
in net sales reported for the nine months ended December 31, 2008. Net
income for the nine months ended December 31, 2009 was $11,647,000, or
$0.72 per basic and diluted share, an increase of $8,464,000 or $0.52
per basic and diluted share from the $3,183,000, or $0.20 per basic and
diluted share, reported for the comparable nine months of fiscal 2009.
Medical Action continued to report strong gross profit, with gross
profit for the third quarter of 2010 reaching 23.5% versus 23.0%, 23.9%
and 19.9%, respectively, for the previous three quarters, and 14.0%
reported in the third quarter of fiscal 2009.
“In fiscal 2010,” Meringolo noted, “we have continued to invest in
capital equipment and personnel at our Tennessee plant so that it is now
stable and poised to give us the additional manufacturing benefits we
strive to achieve. We’ve made important advancements in sales and
marketing as we create a new structure to take us to the next level of
growth and maximize our competitive advantages. We are not finished with
our work in these functional areas and intend to make continual
investments in each department over the foreseeable future. On the
financial side, the benefit of lower resin costs as well as our focus on
revenue and costs has delivered gross margins in the 23% range. We have
also continued to generate strong cash flow, allowing us to consider
potential acquisitions and reduce our debt by $30,721,000 over the last
nine months.”
“While we’re proud of this year’s achievements and see many
opportunities for future growth,” Meringolo added, “we also need to
prepare for potentially higher resin costs in fiscal 2011 as a
competitive marketplace limits our ability to pass along price increases
to customers. Our goal is to continue to grow the Company by focusing on
the core strategies under our control, including an emphasis on revenue
growth, bringing added value and innovation to customer relationships,
extracting additional benefits from our manufacturing facilities and
pursuing appropriate acquisition candidates.”