BRENTWOOD, N.Y.–(BUSINESS WIRE)–Medical Action Industries Inc. (NASDAQ/MDCI), a leading supplier of
medical and surgical disposable products, today reported results for the
fiscal 2012 third quarter ended December 31, 2011.
“We continue to focus on organic growth and enhancing our product and
service offerings”
Net sales for the third quarter of fiscal 2012 were $112,969,000, an
increase of $8,492,000, or 8%, compared to the $104,477,000 in net sales
reported for the comparable prior year period. Net sales for the third
quarter of fiscal 2012 included $34,905,000 in custom procedure tray
sales generated by AVID Medical Inc. (“AVID”), which was acquired by
Medical Action on August 27, 2010. Excluding sales of custom procedure
trays, Medical Action’s net sales for the third quarter of fiscal 2012
were $78,064,000, representing an increase of $6,691,000, or 9%, from
the comparable prior year period.
Net income for the third quarter of fiscal 2012 was $1,825,000 or $0.11
per basic and diluted share, versus the $2,304,000, or $0.14 per basic
and diluted share, reported for the comparable prior year period.
Net sales for the nine months ended December 31, 2011 were $329,097,000,
an increase of $71,876,000 or 28% from the $257,221,000 in net sales
reported for the comparable nine months of fiscal 2011. Net sales for
the nine months ended December 31, 2011 included $102,987,000 in custom
procedure tray sales generated by AVID. Excluding sales of custom
procedure trays, Medical Action’s net sales for the nine months ended
December 31, 2011 were $226,110,000, representing an increase of
$16,131,000 or 8% from the comparable prior year period.
Net income for the nine months ended December 31, 2011 was $2,642,000 or
$0.16 per basic and diluted share, versus the $3,269,000 or $0.20 per
basic and diluted share reported for the comparable prior year period.
Included in net income for the nine months ended December 31, 2011 was
an extraordinary pre-tax gain of $700,000 or $0.03 per basic and diluted
share (net of applicable tax expense) due to an insurance settlement
related to inventories damaged as a result of weather-related flooding.
Net income for the nine months ended December 31, 2010 included an
extraordinary pre-tax loss of $1,455,000 or $0.05 per basic and diluted
share (net of applicable tax benefit) due to inventories damaged as a
result of weather-related flooding and one-time pre-tax transaction
costs of $1,335,000 related to the acquisition of AVID.
“We continue to focus on organic growth and enhancing our product and
service offerings,” said Chief Executive Officer and President, Paul D.
Meringolo. “Net sales have increased from the comparable prior year
period and sequentially. Persistent volatility in raw material costs,
particularly resin and cotton, continue to influence our gross margins.
We are managing through this period of volatility by continually
reviewing our pricing strategies across our product lines, minimizing
product sourcing costs and operating expenses.”
Medical Action invites its shareholders and other interested parties to
attend its conference call at 10 a.m. (ET) on February 1, 2012. You may
participate in the conference call by calling (888) 868-9080 (domestic)
or (973) 935-8511 (international); conference ID #40049844.
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 11 a.m. (ET) on February 1, 2012.
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 BALANCE SHEETS
(dollars in thousands, except share and per share data)
December 31,
March 31,
2011
2011
ASSETS
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents
$
1,003
$
1,691
Accounts receivable, less allowance for doubtful accounts of
$818 at December 31, 2011 and $804 at March 31, 2011
35,728
32,330
Inventories, net
55,650
54,674
Prepaid expenses
2,258
1,702
Deferred income taxes
3,008
2,801
Prepaid income taxes
318
1,938
Other current assets
1,709
1,637
Total current assets
99,674
96,773
Property, plant and equipment, net
50,205
53,901
Goodwill, net
108,764
108,652
Other intangible assets, net
39,882
41,860
Other assets, net
2,940
3,319
Total assets
$
301,465
$
304,505
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable
$
14,272
$
17,069
Accrued expenses
22,578
22,235
Current portion of capital lease obligation
121
92
Current portion of long-term debt
16,000
16,360
Total current liabilities
52,971
55,756
Deferred income taxes
27,956
27,956
Capital lease obligation, less current portion
13,690
13,790
Long-term debt, less current portion
55,470
58,776
Total liabilities
150,087
156,278
STOCKHOLDERS’ EQUITY:
Common stock – 40,000,000 shares authorized, $.001 par value;
issued and outstanding 16,390,628 shares at December 31, 2011 and
16,383,128 shares at March 31, 2011
16
16
Additional paid-in capital
34,308
33,799
Accumulated other comprehensive loss
(437
)
(437
)
Retained earnings
117,491
114,849
Total stockholders’ equity
151,378
148,227
Total liabilities and stockholders’ equity
$
301,465
$
304,505
MEDICAL ACTION INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
Three Months Ended
December 31,
Nine Months Ended
December 31,
2011
2010
2011
2010
(Unaudited)
(Unaudited)
Net sales
$
112,969
$
104,477
$
329,097
$
257,221
Cost of sales
95,824
86,055
278,294
211,415
Gross profit
17,145
18,422
50,803
45,806
Selling, general and administrative expenses
13,327
13,551
44,110
37,299
Operating income
3,818
4,871
6,693
8,507
Interest expense, net
1,174
1,116
3,421
1,742
Income before income taxes and extraordinary item
2,644
3,755
3,272
6,765
Income tax expense
819
1,451
1,070
2,600
Income before extraordinary item
1,825
2,304
2,202
4,165
Extraordinary gain (loss), net of applicable taxes
-
-
440
(896
)
Net income
$
1,825
$
2,304
$
2,642
$
3,269
Per share basis:
Basic
Income before extraordinary item
$
0.11
$
0.14
$
0.13
$
0.25
Extraordinary gain (loss), net of applicable taxes
$
-
$
-
$
0.03
$
(0.05
)
Net income
$
0.11
$
0.14
$
0.16
$
0.20
Diluted
Income before extraordinary item
$
0.11
$
0.14
$
0.13
$
0.25
Extraordinary gain (loss), net of applicable taxes
$
-
$
-
$
0.03
$
(0.05
)
Net income
$
0.11
$
0.14
$
0.16
$
0.20
MEDICAL ACTION INDUSTRIES INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
NINE MONTHS ENDED DECEMBER 31, 2011
(Unaudited)
(dollars in thousands, except share data)
Common Stock
Additional
Paid-In
Capital
Accumulated Other
Comprehensive
Loss
Retained
Earnings
Total
Stockholders’
Equity
Shares
Amount
Balance at April 1, 2011
16,383,128
$
16
$
33,799
$
(437)
$
114,849
$
148,227
Exercise of stock options
7,500
-
20
20
Amortization of deferred compensation
15
15
Tax benefit from vesting of restricted stock
and exercise of stock options
19
19
Stock-based compensation
455
455
Net income
2,642
2,642
Balance at December 31, 2011
16,390,628
$
16
$
34,308
$
(437)
$
117,491
$
151,378
MEDICAL ACTION INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
Nine Months Ended December 31,
2011
2010
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
2,642
$
3,269
Adjustments to reconcile net income to net cash used in operating
activities:
Extraordinary (gain) loss
(700
)
1,455
Depreciation
4,394
3,960
Amortization
3,264
2,321
Provision for doubtful accounts
39
9
Deferred income taxes
-
(45
)
Stock-based compensation
470
589
Excess tax liability from stock-based compensation
(207
)
-
Loss on disposal of property and equipment
-
20
Tax benefit from vesting of restricted stock
19
79
and exercise of stock options
Changes in operating assets and liabilities:
Accounts receivable
(3,652
)
303
Inventories
(998
)
(16,372
)
Prepaid expenses and other current assets
72
423
Other assets
(907
)
(1,933
)
Accounts payable
(2,797
)
583
Prepaid income taxes
1,620
8
Accrued expenses
343
4,955
Net cash provided by (used in) operating activities
3,602
(376
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase price and related acquisition costs
125
(62,525
)
Purchases of property, plant and equipment
(701
)
(2,914
)
Proceeds from sale of property and equipment
3
4
Net cash used in investing activities
(573
)
(65,435
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving line of credit and long-term borrowings
74,217
155,380
Principal payments on revolving line of credit and long-term
borrowings
(77,883
)
(90,428
)
Principal payments on capital lease obligation
(71
)
(20
)
Proceeds from exercise of stock options
20
152
Net cash (used in) provided by financing activities
(3,717
)
65,084
Net decrease in cash and cash equivalents
(688
)
(727
)
Cash and cash equivalents at beginning of period
1,691
5,641
Cash and cash equivalents at end of period
$
1,003
$
4,914
Supplemental disclosures:
Interest paid
$
2,347
$
1,189
Income taxes (refunded) paid
$
(491
)
$
1,947
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