Medical Action Industries Inc. (MDCI, Financial) filed Quarterly Report for the period ended 2009-06-30.
Medical Action Industries develops manufactures markets and distributes a variety of disposable surgical related products. Through its existing direct sales force manufacturers\' representatives and internal sales department their products are sold throughout the United States and certain international markets and is expanding their end-user base to include physician dental and veterinary offices. Medical Action Industries Inc. has a market cap of $195.9 million; its shares were traded at around $12.23 with a P/E ratio of 39.4 and P/S ratio of 0.7. Medical Action Industries Inc. had an annual average earning growth of 19.8% over the past 10 years. GuruFocus rated Medical Action Industries Inc. the business predictability rank of 3.5-star.
Management believes that the declines are attributable to a fluctuation in customer ordering patterns particularly impacting our operating room disposables and sterilization products and dressings and surgical sponges product categories, an increase in competitive pressures, a decline in hospital admission rates and elective surgeries, back order positions on certain products and the termination of certain supply contracts. The termination of supply contracts negatively impacted the sales of crutches in the amount of $678, urinals of $515, disposable operating room towels of $332, and
Distribution expenses (which are included in selling, general and administrative expenses) decreased $187 to $1,831 for the three months ended June 30, 2009 as compared to $2,018 for the three months ended June 30, 2008. The decrease in distribution expenses was primarily due to decreased labor costs, primarily temporary labor and overtime expenses, as a result of the overall decline in net sales.
Cash provided by operating activities during the three months ended June 30, 2009 is primarily comprised of income from operations of $3,650, a decline in (i) inventories of $5,289, (ii) accounts receivable of $2,437 and (iii) prepaid income taxes of $2,118 and an increase in accounts payable of $2,068. The cash provided by operating activities was used to fund the payment of debt as well as working capital requirements and the cost of capital expenditures.
Cash and cash equivalents at June 30, 2009 were $2,592 and the Company had $17,928 available for borrowing under its revolving credit loan.
On October 17, 2006, the Company entered into a credit agreement with certain lenders and a bank acting as administration agent for the lenders (the Credit Agreement) and is described in more detail in Note 9 Long-Term Debt of the Companys Notes to Consolidated Financial Statements in the Companys 2009 Annual Report on Form 10-K. The Credit Agreement, as amended April 7, 2009, provides for total borrowings of up to $85,000, consisting of i) a term loan with a principal amount of $65,000, and (ii) a revolving credit loan, which amounts may be borrowed, repaid and re-borrowed up to $20,000.
Read the The complete ReportMDCI is in the portfolios of Robert Olstein of Olstein Financial Alert Fund.
Medical Action Industries develops manufactures markets and distributes a variety of disposable surgical related products. Through its existing direct sales force manufacturers\' representatives and internal sales department their products are sold throughout the United States and certain international markets and is expanding their end-user base to include physician dental and veterinary offices. Medical Action Industries Inc. has a market cap of $195.9 million; its shares were traded at around $12.23 with a P/E ratio of 39.4 and P/S ratio of 0.7. Medical Action Industries Inc. had an annual average earning growth of 19.8% over the past 10 years. GuruFocus rated Medical Action Industries Inc. the business predictability rank of 3.5-star.
Highlight of Business Operations:
The net unit volume decreases were primarily from losses in the operating room disposables and sterilization products, patient bedside utensils and laboratory product categories. These categories accounted for $3,182, $2,443 and $1,504, respectively of the total net unit volume decrease.Management believes that the declines are attributable to a fluctuation in customer ordering patterns particularly impacting our operating room disposables and sterilization products and dressings and surgical sponges product categories, an increase in competitive pressures, a decline in hospital admission rates and elective surgeries, back order positions on certain products and the termination of certain supply contracts. The termination of supply contracts negatively impacted the sales of crutches in the amount of $678, urinals of $515, disposable operating room towels of $332, and
Distribution expenses (which are included in selling, general and administrative expenses) decreased $187 to $1,831 for the three months ended June 30, 2009 as compared to $2,018 for the three months ended June 30, 2008. The decrease in distribution expenses was primarily due to decreased labor costs, primarily temporary labor and overtime expenses, as a result of the overall decline in net sales.
Cash provided by operating activities during the three months ended June 30, 2009 is primarily comprised of income from operations of $3,650, a decline in (i) inventories of $5,289, (ii) accounts receivable of $2,437 and (iii) prepaid income taxes of $2,118 and an increase in accounts payable of $2,068. The cash provided by operating activities was used to fund the payment of debt as well as working capital requirements and the cost of capital expenditures.
Cash and cash equivalents at June 30, 2009 were $2,592 and the Company had $17,928 available for borrowing under its revolving credit loan.
On October 17, 2006, the Company entered into a credit agreement with certain lenders and a bank acting as administration agent for the lenders (the Credit Agreement) and is described in more detail in Note 9 Long-Term Debt of the Companys Notes to Consolidated Financial Statements in the Companys 2009 Annual Report on Form 10-K. The Credit Agreement, as amended April 7, 2009, provides for total borrowings of up to $85,000, consisting of i) a term loan with a principal amount of $65,000, and (ii) a revolving credit loan, which amounts may be borrowed, repaid and re-borrowed up to $20,000.
Read the The complete ReportMDCI is in the portfolios of Robert Olstein of Olstein Financial Alert Fund.
