Jun 14 2012
Medical Action Industries Inc. (the "Company" or "Medical Action")
(NASDAQ/MDCI), a leading supplier of medical and surgical disposable
products, today reported results for the fourth quarter and fiscal year
ended March 31, 2012.
Net sales for the fourth quarter of fiscal 2012 were $108.2 million, an
increase of $3.0 million or 3%, compared to $105.3 million in net sales
reported for the comparable prior year period. The Company incurred a
net loss for the fourth quarter of fiscal 2012 of $2.5 million or $0.15
per basic and diluted share, compared to net income of $1.1 million or
$0.07 per basic and diluted share, reported for the comparable prior
year period. When compared to the comparable prior year period, the
results for the fourth quarter of fiscal 2012 were negatively impacted
by $1.2 million in higher resin costs, $0.8 million relating to a
one-time tax valuation allowance against certain state net operating
loss carry forwards and $0.4 million in higher costs of products
procured from China-based vendors.
Net sales for fiscal 2012 were $437.3 million, an increase of $74.8
million or 21% from the $362.5 million in net sales reported for fiscal
2011. In fiscal 2011 (August 2010), the Company acquired AVID Medical,
Inc. ("AVID"); therefore fiscal 2011 reported results included
approximately seven months of AVID results. Excluding AVID, Medical
Action's net sales for fiscal 2012 were $298.9 million, representing a
comparable increase of $17.8 million or 6% from fiscal 2011. During
fiscal 2012, AVID generated net sales of $138.5 million, an increase of
approximately 1% over the twelve months ended March 31, 2011 of $137.2
million, of which $81.5 million were included in Medical Action's fiscal
2011 results.
The increase in net sales, excluding AVID, was comprised of $17.0
million in higher volumes and $0.8 million in higher average selling
prices. The increase in volumes was predominantly attributable to higher
domestic market penetration in our Patient Care market of $10.5 million
and our Clinical Care market of $6.5 million. The increase in average
selling prices resulted principally from net price increases of $1.4
million on certain products associated with our Clinical Care market.
These were partially offset by a $0.6 decrease in the aggregate average
selling price of our Patient Care market. These pricing fluctuations are
significantly influenced by competitive pressures, the renewal of
certain Group Purchasing Organization supply agreements and a change in
the mix of products purchased by our customers.
Net income for fiscal 2012 was $0.2 million or $0.01 per basic and
diluted share, versus the $4.4 million or $0.27 per basic and diluted
share reported for fiscal 2011. Included in net income for fiscal 2012
was an extraordinary pre-tax gain of $0.7 million or $0.03 per basic and
diluted share (net of applicable tax expense) due to an insurance
settlement related to inventories damaged in fiscal 2011 as a result of
weather-related flooding. Net income for fiscal 2011 included an
extraordinary pre-tax loss of $1.5 million 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 $1.3 million related to the acquisition of AVID.
As of March 31, 2012, the Company's cash on hand was $5.3 million and
working capital was $60.6 million. Additionally, the Company generated
operating cash flow of $4.0 million during the twelve months ended March
31, 2012.
On June 7, 2012, the Company entered into the Second Amended and
Restated Credit Agreement (the "Credit Agreement"), which governs our
borrowings. As of June 14, 2012, the Company had $70.7 million in
borrowings outstanding under the Credit Agreement and $5.3 million
available for borrowing under the Credit Agreement. The Company believes
that the anticipated future operating cash flow, coupled with cash on
hand and available funds under the Credit Agreement, should enable us to
allocate funds for purposes such as capital expenditures, marketing,
product development and other general corporate purposes.
"We continue to focus on organic growth and improving profitability, as
well as delivering exceptional service to our customers," said Chief
Executive Officer and President, Paul D. Meringolo. "Net sales have
increased from the comparable prior year period however profitability
was down. Competitive pricing pressures and persistent volatility in raw
material costs, particularly resin and cotton, continue to influence our
gross profits. As announced in April, we are realigning our business
into strategic business units in order to increase focus on targeted
market segments. Finally, we are pleased to have renegotiated a credit
agreement with our lenders which provides the Company with greater
flexibility to focus on the business and our operating plans."
Source:
Medical Action Industries Inc.