Despite profits that squeaked to black in Q1, Medical Action Industries (NSDQ:MDCI) shares slid 38% in the hours following the release and never fully bounced back, still down 28% of their value before the Q1 news.

Medical’s adjusted numbers, which account for substantial deferred financing costs, still rang in below analysts’ consensus estimates of 4¢ per share. Adjusted for special expenses, the company posted earnings of $4.5 million, which equates to about 3¢ per share, but it wasn’t enough to persuade investors to hold on to MDCI.

Overall, the Brentwood, N.Y.-based company posted a modest swing to profits in the 1st quarter of 2014, with earnings of $300,000 million, or 2¢ per diluted share, on sales of $107.2 million. That compared to Q1 2013 losses of $100,000 million, or 1¢ per share, on sales of $112.2 million.

In the Q&A conference call with analysts, CFO Brian Baker explained the deferred financing costs, which related to the company’s decision to end a credit agreement with JP Morgan in favor of Wells Fargo.

"As a result of the retirement of the prior credit agreement the company wrote off approximately $0.7 million in deferred financing costs during F1Q 2014," he said. "Net income for F1Q 2014 was $0.3 million or $0.02 per diluted share which represents an increase of $0.4 million or $0.03 per diluted share over F1Q 2013. The improvement is a combination of gross profit dollars as well as a decline in selling, general and administrative expenses, both of which were partially offset by an increase in interest expense."

The company has also undergone some C-Suite shuffling, with former CFO John Sheffield out the doors at the end of June, replaced by then-controller Baker.

MDCI shares closed last night at $6.53, down 6.5% on the day and still down 26.8% since the start of August.