Medical Action Industries Inc. (MDCI, Financial) filed Quarterly Report for the period ended 2012-06-30.
Medical Action Industries has a market cap of $57.5 million; its shares were traded at around $3.59 with a P/E ratio of 87.6 and P/S ratio of 0.1. Medical Action Industries had an annual average earning growth of 5.5% over the past 10 years.
During the three months ended June 30, 2012 and 2011, we reported revenues of $112,237 and $106,473, respectively. Our net income (loss) and earnings per diluted share during the three months ended June 30, 2012 and 2011 were ($137) or ($0.01) per diluted share, and $263 or $0.02 per diluted share, respectively.
Net sales were $112,237 and $106,473 during the three months ended June 30, 2012 and 2011, respectively. The increase in net sales was comprised of an increase in unit sales in the amount of $4,486 and an increase in the average selling prices of our products in the amount of $1,278. The increase in average selling prices resulted principally from increases in the average selling prices of our custom procedure trays and operating room disposable products. These increases were partially offset by declining average selling prices on our patient bedside disposable products. These declines resulted principally from competitive pressures, the renewal of certain GPO supply agreements and a change in mix of products purchased by our customers. The increase in unit sales was predominantly attributable to higher domestic market penetration within our patient bedside disposable and minor procedure kits and trays products.
Gross profit was $16,945 and $16,972 during the three months ended June 30, 2012 and 2011, respectively. Gross profits as a percentage of net sales were 15.1% during the three months ended June 30, 2012 and 15.9% during the three months ended June 30, 2011. The decline in gross profits was attributable to the mix of products sold and an increase in costs of raw materials resulting from rising global commodity prices. These increased costs were partially offset by increases in pricing to our customers and improved productivity in our manufacturing facilities.
On June 7, 2012, the Company entered into our Second Amended and Restated Credit Agreement. The Second Amended and Restated Credit Agreement requires us to comply with specified financial covenants relating to (i) maximum annual capital expenditures of $4,000, (ii) a minimum fixed charge coverage ratio of 1.00 to 1.00 on a rolling four fiscal quarter basis and (iii) minimum earnings before interest, taxes, depreciation and amortization for certain specified quarterly periods through the expiration of the loans, including $3,000 for the fiscal quarter ending on June 30, 2012, $7,500 for the two consecutive fiscal quarter period ending September 30, 2012, $13,750 for the three consecutive quarter period ending December 31, 2012, $18,000 for the four consecutive fiscal quarter period ending March 31, 2013 and $21,000 for the four consecutive fiscal quarter period ending June 30, 2013. In addition, the Company has committed to certain post-closing conditions, including providing monthly financial statements, quarterly updates of financial projections and filed mortgages on our North Carolina, West Virginia and Tennessee facilities. As of August 2, 2012, the Company is in compliance with all covenants and financial ratios under the Second Amended and Restated Credit Agreement.
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Medical Action Industries has a market cap of $57.5 million; its shares were traded at around $3.59 with a P/E ratio of 87.6 and P/S ratio of 0.1. Medical Action Industries had an annual average earning growth of 5.5% over the past 10 years.
Highlight of Business Operations:
We have supply agreements with substantially every major GPO and IDN in the country including Novation, Premier and MedAssets. A majority of the acute care facilities that we sell to are members of at least one GPO. The supply agreements we have been awarded through these GPOs designate the Company as a sole-source or multi-source provider for substantially all of our product offerings. We consider our relationships with the GPOs and IDNs that we conduct business with to be valuable intangible assets. The supply agreements with GPOs and IDNs typically have no minimum purchase requirements and terms of one to three years that can be terminated on ninety days advance notice. While the acute care facilities associated with the GPOs and IDNs are not obligated to purchase our product offerings, many of these supply agreements have resulted in unit sales growth for the Company. Acute care facility orders purchased through our supply agreements by the three largest GPOs in the healthcare industry, Novation Premier and MedAssets, accounted for $55,409 or 49% of our total net sales for the three months ended June 30, 2012.During the three months ended June 30, 2012 and 2011, we reported revenues of $112,237 and $106,473, respectively. Our net income (loss) and earnings per diluted share during the three months ended June 30, 2012 and 2011 were ($137) or ($0.01) per diluted share, and $263 or $0.02 per diluted share, respectively.
Net sales were $112,237 and $106,473 during the three months ended June 30, 2012 and 2011, respectively. The increase in net sales was comprised of an increase in unit sales in the amount of $4,486 and an increase in the average selling prices of our products in the amount of $1,278. The increase in average selling prices resulted principally from increases in the average selling prices of our custom procedure trays and operating room disposable products. These increases were partially offset by declining average selling prices on our patient bedside disposable products. These declines resulted principally from competitive pressures, the renewal of certain GPO supply agreements and a change in mix of products purchased by our customers. The increase in unit sales was predominantly attributable to higher domestic market penetration within our patient bedside disposable and minor procedure kits and trays products.
Gross profit was $16,945 and $16,972 during the three months ended June 30, 2012 and 2011, respectively. Gross profits as a percentage of net sales were 15.1% during the three months ended June 30, 2012 and 15.9% during the three months ended June 30, 2011. The decline in gross profits was attributable to the mix of products sold and an increase in costs of raw materials resulting from rising global commodity prices. These increased costs were partially offset by increases in pricing to our customers and improved productivity in our manufacturing facilities.
On June 7, 2012, the Company entered into our Second Amended and Restated Credit Agreement. The Second Amended and Restated Credit Agreement requires us to comply with specified financial covenants relating to (i) maximum annual capital expenditures of $4,000, (ii) a minimum fixed charge coverage ratio of 1.00 to 1.00 on a rolling four fiscal quarter basis and (iii) minimum earnings before interest, taxes, depreciation and amortization for certain specified quarterly periods through the expiration of the loans, including $3,000 for the fiscal quarter ending on June 30, 2012, $7,500 for the two consecutive fiscal quarter period ending September 30, 2012, $13,750 for the three consecutive quarter period ending December 31, 2012, $18,000 for the four consecutive fiscal quarter period ending March 31, 2013 and $21,000 for the four consecutive fiscal quarter period ending June 30, 2013. In addition, the Company has committed to certain post-closing conditions, including providing monthly financial statements, quarterly updates of financial projections and filed mortgages on our North Carolina, West Virginia and Tennessee facilities. As of August 2, 2012, the Company is in compliance with all covenants and financial ratios under the Second Amended and Restated Credit Agreement.
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