Exhibit 99.1
| | |
| CONTACT: | | Richard G. Satin – Vice President Operations and General Counsel |
| | MEDICAL ACTION INDUSTRIES INC. |
| | (631) 231-4600 |
FOR IMMEDIATE RELEASE
MEDICAL ACTION INDUSTRIES REPORTS RECORD EARNINGS
AND REVENUES FOR THE FISCAL YEAR ENDED
MARCH 31, 2006
Eleventh Consecutive Year of Record Revenue and
Ninth Consecutive Year of Record Net Income
HAUPPAUGE, N.Y., June 1, 2006 – Medical Action Industries Inc. (NASDAQ/NM:MDCI), a leading supplier of medical and surgical disposable products, today reported record revenue and earnings for the fiscal year ended March 31, 2006.
Net sales for the twelve months ended March 31, 2006 increased 7% to a record $150,942,000, as compared to $141,423,000 for the twelve months ended March 31, 2005. Income before income taxes increased 10% to a record $18,515,000 as compared to $16,908,000 reported for this same period last year, while net income for the period rose 7% to a record $11,461,000, or $1.10 per basic share ($1.08 per diluted share), compared with $10,682,000 or $1.04 per basic share ($1.02 per diluted share), reported for the same period last year. This marks the eleventh consecutive year of record revenue and the ninth consecutive year of record net income.
Net sales for the fiscal 2006 fourth quarter increased to $37,932,000 from the $36,734,000 in net sales reported for the three months ended March 31, 2005. Net income for the fiscal 2006 fourth quarter increased to $2,874,000, or $.27 per basic share ($.27 per diluted share), from the $2,705,000, or $.26 per basic share ($.26 per diluted share), reported for the same period in 2005.
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“These record operating results are extremely satisfying given the difficult challenges we faced in fiscal 2006, including record resin costs, the primary raw material of our line of containment products, and a very competitive healthcare landscape which put additional pressure on our gross margins. We continue our strong organic growth from our line of minor procedure kits and trays, containment systems for medical waste and operating room towels. Our financial condition also was significantly strengthened during the past fiscal year, which allowed us to accumulate more than $16 million of cash,” said Paul D. Meringolo, Chief Executive Officer and President of Medical Action Industries Inc.
Medical Action invites its shareholders and other interested parties to attend its conference call at 10:00 a.m. (EST) on June 1, 2006. You may participate in the conference call by calling1-800-690-3108 and asking for the Medical Action conference call with Paul D. Meringolo, CEO and President. The conference call will be simultaneously webcast on our website:www.medical-action.com. The complete call and discussion will be available for replay on our website beginning at 2:00 p.m. (EST) on June 1, 2006.
In connection with the recent adoption of new SEC rules on corporate disclosure, Medical Action is providing limited guidance on several aspects of its fiscal 2007 performance. The following statements are based on current expectations. These are forward-looking statements and actual results may differ materially, as discussed later in this release.
| | • | | For the year ended March 31, 2007, Medical Action anticipates reporting record net income for the tenth consecutive year and record revenue for the twelfth consecutive year. |
| | • | | Consolidation within the health care industry together with our strong cash flow will continue to drive our acquisition strategy. |
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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.
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MEDICAL ACTION INDUSTRIES INC.
Financial Highlights
(dollars in thousands, except per share data)
| | | | | | | | | | | | | | |
| | | For the Three Months
Ended (Unaudited) | | For the Twelve Months
Ended |
| | | 3/31/06 | | | 3/31/05 | | 3/31/06 | | | 3/31/05 |
Statements of Operations: | | | | | | | | | | | | | | |
Net sales | | $ | 37,932 | | | $ | 36,734 | | $ | 150,942 | | | $ | 141,423 |
Cost of sales | | | 27,899 | | | | 27,232 | | | 111,622 | | | | 104,714 |
| | | | | | | | | | | | | | |
Gross profit | | | 10,033 | | | | 9,502 | | | 39,320 | | | | 36,709 |
| | | | |
Selling, general and administrative expenses | | | 5,468 | | | | 5,252 | | | 20,990 | | | | 19,524 |
Interest (income) expense, net | | | (121 | ) | | | 33 | | | (184 | ) | | | 277 |
Income before income taxes | | | 4,686 | | | | 4,217 | | | 18,514 | | | | 16,908 |
Income tax expense | | | 1,812 | | | | 1,512 | | | 7,053 | | | | 6,226 |
| | | | | | | | | | | | | | |
Net income | | | 2,874 | | | | 2,705 | | | 11,461 | | | | 10,682 |
| | | | | | | | | | | | | | |
Net income per share basic: | | $ | 0.27 | | | $ | 0.26 | | $ | 1.10 | | | $ | 1.04 |
Net income per share diluted: | | $ | 0.27 | | | $ | 0.26 | | $ | 1.08 | | | $ | 1.02 |
Balance Sheets as of March 31, 2006 and
March 31, 2005 (dollars in thousands)
| | | | | | |
| | | March 31,
2006 | | March 31,
2005 |
ASSETS | | | | | | |
Current Assets: | | | | | | |
Cash and Cash Equivalents | | $ | 16,067 | | $ | 549 |
Receivables, net | | | 11,045 | | | 11,486 |
Inventories, net | | | 18,837 | | | 19,095 |
Prepaid expenses and other assets | | | 1,260 | | | 1,470 |
| | | | | | |
Total Current Assets | | | 47,209 | | | 32,600 |
| | |
Property and equipment, net | | | 12,303 | | | 12,946 |
Goodwill | | | 37,086 | | | 37,086 |
Trademarks | | | 666 | | | 666 |
Other intangible assets, net | | | 1,675 | | | 1,944 |
Other assets, net | | | 1,452 | | | 638 |
| | | | | | |
Total Assets | | $ | 100,391 | | $ | 85,880 |
| | | | | | |
Liabilities and Shareholders’ Equity | | | | | | |
Accounts payable | | | 6,135 | | | 5,817 |
Accrued expenses | | | 3,284 | | | 3,737 |
Deferred income taxes | | | 5,029 | | | 4,095 |
Total debt | | | 2,800 | | | 3,160 |
Shareholders’ equity | | | 83,143 | | | 69,071 |
| | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | 100,391 | | $ | 85,880 |
| | | | | | |
| | |
| Key Financial Statistics | | | | | | |
| | |
Current ratio | | | 4.8 | | | 3.3 |
Debt to equity ratio | | | .03 | | | 0.05 |
Book value per share | | $ | 7.90 | | $ | 6.71 |
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