Medical Action Industries Inc. (MDCI, Financial) filed Quarterly Report for the period ended 2011-12-31.
Medical Action Industries Inc. has a market cap of $98.3 million; its shares were traded at around $6 with a P/E ratio of 25.1 and P/S ratio of 0.2. Medical Action Industries Inc. had an annual average earning growth of 4% over the past 10 years.
During the nine months ended December 31, 2011 and 2010, we reported revenues of $329,097 and $257,221, respectively. Our net income and earnings per diluted share during the nine months ended December 31, 2011 and 2010 were $2,642 or $0.16 and $3,269 or $0.20, respectively. Net income during the nine months ended December 31, 2011 included a pre-tax gain of $700 on an insurance settlement relating to inventories damaged as a result of weather-related water damage and net income for the nine months ended December 31, 2010 included a pre-tax loss of $1,455 relating to the aforementioned damaged inventories and one-time transaction costs of $1,335 related to the acquisition of AVID.
Gross profit decreased $1,277 or 6.9% to $17,145 from $18,422 during the three months ended December 31, 2011 and 2010, respectively. Gross profit as a percentage of net sales was 15.2% during the three months ended December 31, 2011 and 17.6% during the three months ended December 31, 2010. The decline in gross profit was attributable to the mix of products sold, an increase in costs of raw materials resulting from rising global commodity prices and higher freight-out costs. These increased costs were partially offset by increases in pricing to our customers and improved productivity in our manufacturing facilities.
Net sales were $329,097 and $257,221 during the nine months ended December 31, 2011 and 2010, respectively. The increase in net sales includes $55,745 in higher sales of custom procedure trays acquired through the AVID acquisition. Excluding the custom procedure tray products we experienced an overall increase in net sales during the nine months ended December 31, 2011 of $16,131. The increase in net sales, excluding custom procedure tray products, was comprised of an increase in unit sales in the amount of $15,484, which was partially offset by a decrease in the average selling price of our products in the amount of $392. The increase in unit sales was predominantly attributable to higher domestic market penetration within our patient bedside plastics, operating room, measurement and collection, protective apparel and containment systems for medical waste products. The decrease in average selling prices resulted principally from declining prices on our patient bedside plastics and minor procedure kits and tray products, which were partially offset by price increases implemented on our operating room 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.
Gross profit increased $4,997 or 10.9% to $50,803 from $45,806 during the nine months ended December 31, 2011 and 2010, respectively. Gross profit as a percentage of net sales was 15.4% during the nine months ended December 31, 2011 and 17.8% during the nine months ended December 31, 2010. Increased sales volume of $55,745 in sales of custom procedure trays acquired through the AVID acquisition contributed to the increase in gross profit. However, we experienced a decline in gross profit on our remaining product lines of $4,170 during the nine months ended December 31, 2011 when compared to the nine months ended December 31, 2010. The decline in gross profit was attributable to the mix of products sold, an increase in costs of raw materials resulting from rising global commodity prices and higher freight-out costs. These increased costs were partially offset by improved productivity in our manufacturing facilities.
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Medical Action Industries Inc. has a market cap of $98.3 million; its shares were traded at around $6 with a P/E ratio of 25.1 and P/S ratio of 0.2. Medical Action Industries Inc. had an annual average earning growth of 4% over the past 10 years.
Highlight of Business Operations:
Our growth strategy has included both acquisitions and expansion of existing product lines. On August 27, 2010, we acquired AVID Medical Inc. (AVID) which markets and assembles custom procedure trays. AVIDs net sales were $34,905 and $102,987 for the three and nine months ended December 31, 2011, respectively. We had previously made both custom and standard minor procedure kits and trays. The acquisition of AVID significantly expanded our product line offerings within the Clinical Care market, increased our sales team and provided opportunities to cross sell our existing product lines. 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 belong to 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. We were recently recognized for performance excellence by the two largest GPOs in the healthcare industry, Novation and Premier. Acute care facility orders purchased through our supply agreements with these two GPOs accounted for $30,985 and $96,289 or 27% and 29% of our total net sales for the three and nine months ended December 31, 2011, respectively.During the nine months ended December 31, 2011 and 2010, we reported revenues of $329,097 and $257,221, respectively. Our net income and earnings per diluted share during the nine months ended December 31, 2011 and 2010 were $2,642 or $0.16 and $3,269 or $0.20, respectively. Net income during the nine months ended December 31, 2011 included a pre-tax gain of $700 on an insurance settlement relating to inventories damaged as a result of weather-related water damage and net income for the nine months ended December 31, 2010 included a pre-tax loss of $1,455 relating to the aforementioned damaged inventories and one-time transaction costs of $1,335 related to the acquisition of AVID.
Gross profit decreased $1,277 or 6.9% to $17,145 from $18,422 during the three months ended December 31, 2011 and 2010, respectively. Gross profit as a percentage of net sales was 15.2% during the three months ended December 31, 2011 and 17.6% during the three months ended December 31, 2010. The decline in gross profit was attributable to the mix of products sold, an increase in costs of raw materials resulting from rising global commodity prices and higher freight-out costs. These increased costs were partially offset by increases in pricing to our customers and improved productivity in our manufacturing facilities.
Net sales were $329,097 and $257,221 during the nine months ended December 31, 2011 and 2010, respectively. The increase in net sales includes $55,745 in higher sales of custom procedure trays acquired through the AVID acquisition. Excluding the custom procedure tray products we experienced an overall increase in net sales during the nine months ended December 31, 2011 of $16,131. The increase in net sales, excluding custom procedure tray products, was comprised of an increase in unit sales in the amount of $15,484, which was partially offset by a decrease in the average selling price of our products in the amount of $392. The increase in unit sales was predominantly attributable to higher domestic market penetration within our patient bedside plastics, operating room, measurement and collection, protective apparel and containment systems for medical waste products. The decrease in average selling prices resulted principally from declining prices on our patient bedside plastics and minor procedure kits and tray products, which were partially offset by price increases implemented on our operating room 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.
Gross profit increased $4,997 or 10.9% to $50,803 from $45,806 during the nine months ended December 31, 2011 and 2010, respectively. Gross profit as a percentage of net sales was 15.4% during the nine months ended December 31, 2011 and 17.8% during the nine months ended December 31, 2010. Increased sales volume of $55,745 in sales of custom procedure trays acquired through the AVID acquisition contributed to the increase in gross profit. However, we experienced a decline in gross profit on our remaining product lines of $4,170 during the nine months ended December 31, 2011 when compared to the nine months ended December 31, 2010. The decline in gross profit was attributable to the mix of products sold, an increase in costs of raw materials resulting from rising global commodity prices and higher freight-out costs. These increased costs were partially offset by improved productivity in our manufacturing facilities.
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