<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
COMMISSION FILE NUMBER 0-13251
MEDICAL ACTION INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
DELAWARE 11-2421849
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 Motor Parkway, Hauppauge, New York 11788
(Address of Principal Executive Offices)
Registrant's telephone number, including area code:
(516) 231-4600
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No _
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date. 9,136,522 shares of common
stock as of October 31, 1999.
<PAGE>
Form 10-Q
CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets at September 30, 1999 (Unaudited) and March 31, 1999
Statements of Earnings for the Three and Six Months ended
September 30, 1999 and September 30, 1998 (Unaudited)
Notes to Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
Item 3. Quantitative and Qualitative Disclosures about Market Risk
PART II - OTHER INFORMATION
<PAGE>
MEDICAL ACTION INDUSTRIES INC.
Balance Sheets
(dollars in thousands)
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
September 30, March 31,
1999 1999
------------ ---------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 265 $ 672
Accounts Receivable less allowance for doubtful accounts of
$144 at September 30, 1999 and $129 at March 31, 1999 8,395 6,066
Inventories 13,965 15,502
Prepaid expenses 410 300
Deferred income taxes 118 118
Other current assets 151 87
------- -------
TOTAL CURRENT ASSETS: 23,304 22,745
Property, plant and equipment, net 8,313 8,371
Due from officers 283 283
Intangibles,
less accumulated amortization of $889
at September 30, 1999 and $657 at
March 31, 1999 7,841 8,205
Other Assets 496 549
------- -------
TOTAL ASSETS: $40,237 $40,153
======= =======
</TABLE>
The accompanying notes are an integral part of these
financial statements.
3
<PAGE>
MEDICAL ACTION INDUSTRIES INC.
Balance Sheets
(dollars in thousands)
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
September 30, March 31,
1999 1999
------------- ---------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 2,129 $ 1,880
Accrued expenses, payroll and payroll taxes 1,803 1,088
Current portion of capital lease obligations 166 162
Notes payable to bank -- 4,060
Other note payable -- 1,000
Current portion of long-term debt 610 360
------- -------
TOTAL CURRENT LIABILITIES: 4,708 8,550
Deferred income taxes 496 496
Capital lease obligations, less current portion 193 251
Long-term debt, less current portion 15,070 12,960
------- -------
TOTAL LIABILITIES: 20,467 22,257
SHAREHOLDERS' EQUITY:
Common stock 15,000,000 shares authorized,
$.001 par value; issued and outstanding
9,136,522 shares at September 30, 1999 and
8,574,289 shares at March 31, 1999 9 8
Additional paid-in capital, net 9,449 9,057
Retained earnings 10,312 8,831
------- -------
TOTAL SHAREHOLDERS' EQUITY: 19,770 17,896
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY: $40,237 $40,153
======= =======
</TABLE>
The accompanying notes are an integral part
of these financial statements
4
<PAGE>
MEDICAL ACTION INDUSTRIES INC.
Statements of Earnings
(dollars in thousands except per share data)
(Unaudited)
Three Months Ended
September 30,
1999 1998
---- ----
Net Sales $18,124 $14,502
Cost of Sales 13,455 11,133
------- -------
Gross Profit 4,669 3,369
Selling, general and administrative expenses 3,142 2,403
Interest expense 215 155
------- -------
Income before income taxes 1,312 811
Income tax expense 511 316
------- -------
Net Income $ 801 $ 495
======= =======
Net Income per share basic and diluted $ .09 $ .06
======= =======
The accompanying notes are an integral part of
these financial statements.
5
<PAGE>
MEDICAL ACTION INDUSTRIES INC.
Statements of Earnings
(dollars in thousands except per share data)
(Unaudited)
Six Months Ended
September 30,
1999 1998
---- ----
Net Sales $36,037 $28,641
Cost of Sales 26,890 22,059
------- -------
Gross Profit 9,147 6,582
Selling, general and administrative expenses 6,272 4,762
Interest expense 449 325
------- -------
Income before income taxes 2,426 1,495
Income tax expense 945 586
------- -------
Net Income $ 1,481 $ 909
======= =======
Net Income per share basic $ .17 $ .11
======= =======
Net Income per share diluted $ .16 $ .10
======= =======
The accompanying notes are an integral part of these
financial statements.
6
<PAGE>
MEDICAL ACTION INDUSTRIES INC
Statement of Cash Flows
(dollars in thousands)
(Unaudited)
Six Months Ended
September 30,
1999 1998
---- ----
(Unaudited) (Unaudited)
OPERATING ACTIVITIES
Net Income $ 1,481 $ 909
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 630 447
Provision for doubtful accounts 15 13
Deferred compensation 35 63
Changes in operating assets and liabilities:
Accounts receivable (2,344) (35)
Inventories 1,500 (771)
Prepaid expenses and other current assets (107) (104)
Other assets 11 6
Accounts payable 354 (630)
Income taxes payable 179 122
Accrued expenses, payroll and payroll taxes 715 93
------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 2,469 113
INVESTING ACTIVITIES
Purchase price and related acquisition costs 64 --
Purchase of property, plant and equipment (298) (170)
Loan to officers -- (158)
------- -------
NET CASH (USED IN) INVESTING ACTIVITIES (234) (328)
FINANCING ACTIVITIES
Proceeds from revolving line of credit and long-term
borrowings 6,464 1,333
Principal payments on revolving line of credit,
long-term debt, and capital lease obligations (9,217) (1,510)
Proceeds from exercise of employee stock options 111 294
------- -------
NET CASH (USED IN) PROVIDED BY FINANCING
ACTIVITIES (2,642) 117
------- -------
DECREASE IN CASH (407) (98)
Cash at beginning of year 672 275
------- -------
Cash at end of period $ 265 $ 177
======= =======
The accompanying notes are an integral part of these
financial statements.
7
<PAGE>
MEDICAL ACTION INDUSTRIES INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q for quarterly reports under Section 13 or
15(d) of the Securities Exchange Act of 1934. Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustment (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three and six
month periods ended September 30, 1999 are not necessarily indicative of the
results that may be expected for the year ended March 31, 2000. For further
information, refer to the financial statements and footnotes thereto included in
the Company's annual report for the year ended March 31, 1999.
Note 2. INVENTORIES
Inventories, which are stated at the lower of cost (first-in, first-out) or
market, consist of the following:
September 30, March 31,
1999 1999
---- ----
(Unaudited)
(in thousands of dollars)
Finished Goods $ 5,832 $ 6,740
Raw Materials 8,133 8,762
----- -----
Total $13,965 $15,502
======= =======
Note 3. NET INCOME PER SHARE
In 1997, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 128, Earning per Share. Statement 128 replaced the
previously reported primary and fully diluted earnings per share with the basic
and diluted earnings per share. Unlike primary earnings per share, basic
earnings per share excludes any dilutive effects of option, warrants, and
convertible securities. Diluted earnings per share is very similar to the
previously reported fully diluted earnings per share. All earnings per share
amounts for all periods have been presented, and where necessary, restated to
conform to the Statement 128 requirements. The following table sets forth the
computation of basic and diluted earnings per share for the three and six months
ended September 30,1999 and for the three and six months ended September 30,
1998.
8
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
------------- -------------
1999 1998 1999 1998
---- ---- ---- ----
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Dollars in thousands except
per share data
<S> <C> <C> <C> <C>
Numerator:
Net Income for basic
and dilutive earnings
per share $ 801 $ 495 $ 1,481 $ 909
========== ========== ========== ==========
Denominator:
Denominator for basic
earnings per share -
weighted average shares 9,102,137 8,436,192 8,860,847 8,393,042
---------- ---------- ---------- ----------
Effect of dilutive securities:
Employee stock options 224,439 455,672 291,902 553,546
Non-vested restricted stock 1,166 51,930 7,556 63,514
Warrants 14,722 23,026 16,898 28,303
---------- ---------- ---------- ----------
Dilutive potential common shares 240,327 530,628 316,356 645,363
---------- ---------- ---------- ----------
Denominator for diluted earnings per
share - adjusted weighted average
shares 9,342,464 8,966,820 9,177,203 9,038,405
========== ========== ========== ==========
Basic earnings per share $ .09 $ .06 $ .17 $ .11
========== ========== ========== ==========
Diluted earnings per share $ .09 $ .06 $ .16 $ .10
========== ========== ========== ==========
</TABLE>
9
<PAGE>
Note 4. ACQUISITIONS
On March 22, 1999 the Company acquired certain assets of the medical products
business of Acme United Corporation, a Connecticut Corporation ("Acme"). The
purchase price for the assets acquired was $8,307,000 of which $$7,476,000 was
paid at or prior to closing, with the balance paid on or about June 15, 1999.
Included in the payment at closing was the fair value of Warrants (valued at
$73,500) to purchase 50,000 shares of its common stock at a purchase price of
$2.84 per share.
The assets acquired included principally inventory, factory and office equipment
and trademarks, used in the manufacture of Acme's medical products, including
(i) kit and tray products including suture removal trays, I.V. start kits and
central line trays; (ii) net, padding, wound care and antiseptic products
including Acu-Dyne(Registered), an antimicrobacterial solution of povidone
iodine prep swabs and a line of proprietary Tubegauz(Registered) elastic netting
used in dressing retention; and (iii) instrument packs which include a broad
line of sterile instruments such as hemostats, scalpels and forceps. The
acquisition has been accounted for as a purchase and the operations of Acme have
been included in the Company's Statement of Earnings since the acquisition date.
The excess of the purchase price and related expenses over the net tangible
assets and trademarks acquired ("Goodwill") amounted to $5,377,000 and is being
amortized over twenty (20) years.
Pro forma information is not presented as complete historical operating results
of Acme are not available. The following table summarizes the assets acquired
from Acme:
Inventory.................................... $2,147,000
Factory and Office Equipment................. 336,000
Trademarks................................... 447,000
Goodwill..................................... 5,377,000
----------
$8,307,000
==========
Note 5. EXERCISE OF WARRANTS AND EMPLOYEE STOCK OPTIONS
For the three (3) months ended September 30, 1999, 612,592 stock options and
warrants were exercised in accordance with the Company's 1994 Stock Incentive
Plan, the Company's 1989 Non-Qualified Stock Option Plan and pursuant to an
Employment Agreement dated August 1994. The exercise price of the options and
warrants exercised ranged from $.97 per share to $2.188 per share. Employees
exercised 57,000 shares with cash proceeds of $111,000. Warrants to purchase
80,592 shares of common stock were exercised using cashless exercises pursuant
to which 30,233 shares of the Company's common stock were issued in accordance
with the Employment Agreement dated August 1994. Officers exercised 475,000
shares at the combined exercise price of $784,600. The exercise price for each
of the options exercised by the officers has been loaned to the respective
officer by the Company, which is evidenced by a non-interest bearing demand note
and secured by the shares issued thereunder pursuant to a Pledge Agreement. The
aggregate loan amount of $784,600 has been deducted from Shareholder's equity.
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
FORWARD-LOOKING STATEMENT
This report on Form 10-Q contains forward-looking statements as defined by
Private Securities Litigation Reform Act of 1995. Forward-looking statements
include plans and objectives of management for future operations, including
plans and objectives relating to the future economic performance and financial
results of the Company. The forward-looking statements related to (i) the
expansion of the Company's market share, (ii) the Company's growth into new
markets, (iii) the development of new products and product lines to appeal to
the needs of the Company's customers, (iv) the procurement of export visas for
raw materials for operating room towels from China, which may impact the
availability and pricing of operating room towels, and (v) the retention of the
Company's earnings for use in the operation and expansion of the Company's
business.
Important factors and risks that could cause actual results to differ materially
from those referred to in the forward-looking statements include, but are not
limited to, the effect of economic and market conditions, the impact of the
consolidation throughout the healthcare supply chain, the impact of healthcare
reform, opportunities for acquisitions and the Company's ability to effectively
integrate acquired companies, the ability of the Company to maintain its gross
profit margins, the ability to obtain additional financing to expand the
Company's business, the failure of the Company to successfully compete with the
Company's competitors that have greater financial resources, the loss of key
management personnel or the inability of the Company to attract and retain
qualified personnel, the availability and possible increases in raw material
prices for operating room towels, the impact of current or pending legislation
and regulation, as well as the risks described from time to time in the
Company's filings with the Securities and Exchange Commission, which include
this report on Form 10-Q and the Company's annual report on Form 10-K for the
year ended March 31, 1999.
The forward-looking statements are based on current expectations and involve a
number of known and unknown risks and uncertainties that could cause the actual
results, performance and/or achievements of the company to differ materially
from any future results, performance or achievements, express or implied, by the
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, and that in light of the significant
uncertainties inherent in forward-looking statements, the inclusion of such
statements should not be regarded as a representation by the Company or any
other person that the objectives or plans of the Company will be achieved.
11
<PAGE>
RESULTS OF OPERATIONS
Six months ended September 30, 1999 compared to six months ended September 30,
1998
Net sales for the six months ended September 30, 1999 increased 26% to
$36,037,000 from $28,641,000 for the six months ended September 30, 1998. The
increase in net sales was primarily attributable to $5,264,000 in net sales of
the Acme product line acquired in March 1999; a $1,624,000, or 18%, increase in
net sales of the operating room towel product line; and a $441,000, or 4%,
increase in net sales of laparotomy sponges. Management believes that the
increase in net sales of laparotomy sponges was due to increased penetration of
international markets and the increase in the operating room towel product line
was primarily due to greater domestic market penetration.
The Company presently obtains a portion of its raw materials for operating room
towels from China. These operating room towels are designated as a textile, for
which an export visa is required. The export visas could adversely impact the
availability and pricing of operating room towels. In the event that these quota
restrictions reduce the availability of operating room towels, the Company will
accelerate its procurement of operating room towels from China and secure
operating room towels from sources outside of China. Management presently
anticipates that it will be able to meet the Company's requirements of operating
room towels through fiscal 2000 without an adverse effect on pricing.
Gross profit for the six months ended September 30, 1999 increased 39% to
$9,147,000 from $6,582,000 for the six months ended September 30, 1998. Gross
profits as a percentage of net sales for the six months ended September 30, 1999
increased to 25% of net sales from 23% of net sales for the six months ended
September 30, 1998. The increase in gross profit dollars and gross profit
percentage was primarily attributable to the increase in net sales and increased
manufacturing efficiencies.
Selling, general and administrative expenses for the six months ended September
30, 1999 increased 32% to $6,272,000 from $4,762,000 for the six months ended
September 30, 1998. As a percentage of net sales, selling, general and
administrative expenses remained at 17% for the six months ended September 30,
1999 and for the six months ended September 30, 1998. The increase in selling,
general and administrative expense dollars was primarily attributable to
increased commissions and distributor fees associated with increased sales
volume and increased administrative costs as a result of the Acme product line
acquisition.
Interest expense for the six months ended September 30, 1999 increased 38% to
$449,000 from $325,000 for the six months ended September 30, 1998.
12
<PAGE>
This increase in interest expense was due to the interest expense associated
with the acquisition of the Acme product line. Net income for the six months
ended September 30, 1999 increased to $1,481,000 from $909,000 for the six
months ended September 30, 1998. The increase in net income is attributable to
the aforementioned increase in net sales and gross profits, which were partially
offset by an increase in selling, general and administrative expenses and
interest expense.
Three months ended September 30, 1999 compared to three months ended September
30, 1998
Net sales for the three months ended September 30, 1999 increased 25% to
$18,124,000 from $14,502,000 for the three months ended September 30, 1998. The
increase in net sales was primarily attributed to $2,645,000 in net sales of the
Acme product line acquired in March 1999 and a $732,000, or 16%, increase in net
sales of the operating room towel product line. Management believes that the
increase in net sales of the operating room towel product line was primarily due
to greater domestic market penetration.
The Company presently obtains a portion of its raw materials for operating room
towels from China. These operating room towels are designated as a textile, for
which an export visa is required. These export visas could adversely impact the
availability and pricing of operating room towels. In the event that these quota
restrictions reduce the availability of operating room towels, the Company will
accelerate its procurement of operating room towels from China and secure
operating room towels from sources outside of China. Management presently
anticipates that it will be able to meet the Company's requirements of operating
room towels through fiscal 2000 without an adverse effect on pricing.
Gross profit for the three months ended September 30, 1999 increased 39% to
$4,669,000 from $3,369,000 for the three months ended September 30, 1998. Gross
profit as a percentage of net sales for the three months ended September 30,
1999 increased to 26% of net sales from 23% of net sales for the three months
ended September 30, 1998. The increase in gross profit dollars and gross profit
percentage was primarily attributable to the increase in net sales and increased
manufacturing efficiencies.
Selling, general and administrative expenses for the three months ended
September 30, 1999 increased 31% to $3,142,000 from $2,403,000 for the three
months ended September 30, 1998. As a percentage of net sales, selling, general
and administrative expenses remained at 17% for the three months ended September
30, 1999 and for the three months ended September 30, 1998. The increase in
selling, general and administrative expense dollars was primarily attributable
to increased commissions and distributor fees associated with increased sales
volume and increased administrative costs as a result of the Acme product line
acquisition.
Interest expense for the three months ended September 30, 1999 increased 39% to
$215,000 from $155,000 for the three months ended September 30, 1998. This
13
<PAGE>
increase in interest expense was due to the interest expense associated with the
acquisition of the Acme product line. Net income for the three months ended
September 30, 1999 increased to $801,000 from $495,000 for the three months
ended September 30, 1998. The increase in net income is attributable to the
aforementioned increase in net sales and gross profits, which were partially
offset by an increase in selling, general and administrative expenses and
interest expense.
LIQUIDITY AND CAPITAL RESOURCES
The Company had working capital of $18,596,000 with a current ratio of 4.9 at
September 30, 1999 as compared to working capital of $14,195,000 with a current
ratio of 2.7 at March 31, 1999. Total bank borrowings outstanding, including
Industrial Revenue Bonds of $5,140,000, were $15,680,000 with a debt to equity
ratio of .79 at September 30, 1999 as compared to $18,380,000 with a debt to
equity ratio of 1.03 at March 31, 1999. The decrease in total borrowings
outstanding at September 30, 1999 was primarily attributable to the reduction of
the cash balance and net cash provided by operating activities.
The Company has financed its operations primarily through cash flow from
operations and borrowings from its existing credit facilities. At September 30,
1999, the Company had a cash balance of $265,000 compared to $672,000 at March
31, 1999.
The Company's operating activities provided cash of $2,469,000 for the six
months ended September 30, 1999 as compared to $113,000 for the six months ended
September 30, 1998. Net cash provided for the six months ended September 30,
1999 consisted primarily of net income from operations, decreases in inventories
and increases in accrued expenses and accounts payable. These sources of cash
more than offset the increase in accounts receivable associated with increased
sales.
Investing activities used net cash of $234,000 and $328,000 for the six months
ended September 30, 1999 and September 30, 1998, respectively. The principal
uses for the six months ended September 30, 1999 were purchases of property and
equipment.
Financing activities used cash of ($2,642,000) for the six months ended
September 30, 1999 compared to $117,000 provided by financing activities for the
six months ended September 30, 1998. The cash used in financing activities along
with the decrease in the cash balance was used to pay down the Company's debt in
connection with its credit facilities and to pay off the note payable in
connection with the Acme acquisition.
At September 30, 1999, the Company did not have any material commitments for
capital expenditures.
The Company believes that the anticipated future cash flow from operations,
coupled with its cash on hand and available funds under its revolving credit
agreements, will be sufficient to meet working capital requirements.
14
<PAGE>
The Company has completed its program to prepare computer systems and
applications for the Year 2000. The costs associated with this program did not
have a material effect on its financial position and have been incurred. The
Company is also communicating with customers and suppliers with whom it conducts
business to help identify and resolve any potential Year 2000 issues.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to interest rate change market risk with respect to its
credit facility with a financial institution which is priced based on the prime
rate of interest plus a spread of up to 1/4%, libor rate plus a spread of up to
2 1/2%, or at 1 1/4% over the prevailing bankers acceptance rate. The spread
over prime and libor rates is determined based upon the Company's performance
with regard to agreed upon financial ratios. The Company decides at its sole
discretion at to whether borrowings will be at prime, libor or bankers
acceptance rates. At September 30, 1999, $10,265,000 was outstanding under the
credit facility. Changes in the prime rate, libor rates or bankers acceptance
rates during fiscal 2000 will have a positive or negative effect on the
Company's interest expense. Each 1% fluctuation in the interest rate will
increase or decrease interest expense for the Company by approximately $103,000
on an annualized basis.
In addition, the Company is exposed to interest rate change market risk with
respect to the proceeds received from the issuance and sale by the Buncombe
County Industrial and Pollution Control Financing Authority Industrial
Development Revenue Bonds. At September 30, 1999, $5,140,000 was outstanding for
these Bonds. The Bonds bear interest at a variable rate determined weekly.
During fiscal 2000, the average interest rate on the Bonds has approximated
3.5%. Each 1% fluctuation in interest rates will increase or decrease interest
expense on the Bonds by approximately $51,000 on an annualized basis.
A significant portion of the Company's raw materials are purchased from China
and to a lesser extent from India. All such purchases are transacted in U.S.
dollars. The Company's financial results, therefore, could be impacted by
factors such as changes in foreign currency, exchange rates or weak economic
conditions in foreign countries in the procurement of such raw materials. To
date, sales of the Company's products outside the United States have not been
significant.
15
<PAGE>
MEDICAL ACTION INDUSTRIES INC.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no material legal proceedings against the Company
or in which any of its property is subject.
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
A. The Registrant held its Annual Meeting of Stockholders on
August 17, 1999.
B. One Director was elected at the Annual Meeting to
serve until the Annual Meeting of Stockholders in
2002. The name of the Director and votes cast in
favor of his election and shares withheld are as
follows:
Name Votes for Votes Withheld
---- --------- --------------
Dr. Philip F. Corso 6,661,499 70,646
The stockholders also approved a proposal to ratify the selection
of Grant Thornton LLP as independent certified public accountants
of the Company for the fiscal year ended March 31, 2000;
6,584,740 shares voted in favor of the proposal, 136,960 shares
voted against and 9,994 shares abstained from voting.
Item 5. Other Information
None
16
<PAGE>
Item 6. (a) Exhibits
None
(b) Reports on Form 8-K
(i) Amendment No. 2 dated July 19, 1999 to Current Report on
Form-8K relating to Item 7 - Financial Statements, Pro Forma
Financial Information and Exhibits.
(ii) Current Report on Form 8-K dated July 21, 1999 relating to
Item 5 - Other Events and Item 7 - Financial Statements, Pro
Forma Financial Information and Exhibits.
(iii) Amendment No. 3 dated September 14, 1999 to Current Report
on Form 8-K relating to Item 7 - Financial Statements, Pro
Forma Financial Information and Exhibits.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MEDICAL ACTION INDUSTRIES INC.
Dated: By: /s/ Richard G. Satin
------------- ----------------------------
Richard R. Satin, Vice President
(Principal Accounting Officer)
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Form 10-Q
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 265
<SECURITIES> 0
<RECEIVABLES> 8539
<ALLOWANCES> 144
<INVENTORY> 13965
<CURRENT-ASSETS> 23304
<PP&E> 12907
<DEPRECIATION> 4594
<TOTAL-ASSETS> 40237
<CURRENT-LIABILITIES> 4708
<BONDS> 0
9
0
<COMMON> 0
<OTHER-SE> 19761
<TOTAL-LIABILITY-AND-EQUITY> 40237
<SALES> 36037
<TOTAL-REVENUES> 36037
<CGS> 26890
<TOTAL-COSTS> 33162
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 449
<INCOME-PRETAX> 2426
<INCOME-TAX> 945
<INCOME-CONTINUING> 1481
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1481
<EPS-BASIC> .17
<EPS-DILUTED> .16
</TABLE>
