Medical Action Industries Reports Fourth Quarter and Annual Results for the Fiscal Year Ended March 31, 2013

Medical Action Industries Reports Fourth Quarter and Annual Results for the
Fiscal Year Ended March 31, 2013

BRENTWOOD, N.Y., June 11, 2013 (GLOBE NEWSWIRE) -- Medical Action Industries
Inc. (the "Company") (Nasdaq:MDCI), a leading supplier of medical and surgical
disposable products, today reported financial results for the fourth quarter
and the twelve months ended March 31, 2013 (such twelve month period, "Fiscal
Year 2013").

For the fourth quarter of Fiscal Year 2013, the Company reported net sales of
$107.9 million, gross profit of $18.9 million or 17.5% of net sales, and net
income of $0.7 million or $0.04 per diluted share. The Company generated
EBITDA, as adjusted, of $6.8 million^(2). These gross profit, net income and
EBITDA, as adjusted, results represent significant improvements versus the
comparable results for the same period of fiscal 2012. On a non-GAAP basis,
excluding several adjustments described below, the Company generated non-GAAP
net income of $1.2 million^(1) or $0.08^(1) per diluted share.

For Fiscal Year 2013, the Company reported net sales of $441.6 million, gross
profit of $72.4 million or 16.4% of net sales, EBITDA, as adjusted, of $20.7
million^(2) and a net loss of $54.9 million or $3.35 per diluted share. The
net loss related principally to the impairment of goodwill, previously
disclosed in the third quarter of Fiscal Year 2013 and revised in the fourth
quarter of Fiscal Year 2013, of $57.0 million, net of revision and income tax
benefit, determined in connection with the Company's annual goodwill
impairment test. On a non-GAAP basis, excluding several adjustments described
below, the Company generated non-GAAP net income of $3.9 million^(1) or
$0.24^(1) per diluted share.

Additionally, on May 17, 2013, the Company entered into a credit agreement
(the "New Credit Agreement") with Wells Fargo Bank, National Association. The
New Credit Agreement provides for a maximum borrowing capacity of $65.0
million consisting of term and revolving loans. A portion of the proceeds from
the New Credit Agreement was used to repay all amounts owed under the
Company's prior credit agreement (the "Prior Credit Agreement"). The New
Credit Agreement removed certain restrictive covenants and other obligations
to which the Company was subject under the Prior Credit Agreement and will
generally result in lower interest rates. During Fiscal Year 2013, the Company
reduced the balance outstanding under the Prior Credit Agreement by $23.0
million.

Paul D. Meringolo, Chief Executive Officer said, "Fiscal Year 2013 was a
transitional year in which the Company made significant and positive strides
towards realigning our business to improve focus and accountability with
respect to our profitability and operating results. While we still have some
challenges ahead, I'm proud of the progress we've made as a management team
and I am excited about the momentum that continues to build as we move into
Fiscal Year 2014. The recent addition of Paul Chapman to the role of President
and Chief Operating Officer has energized our organization. His core values,
proven track record of managing multiple business unit structures and ability
to develop management teams that execute strategic goals is an important
complement to our executive management team. Finally, these changes, coupled
with our new credit facility reflect the measured approach management has
taken during the past twelve months to improve our financial results and
enhance stockholder value."

Fourth Quarter Results for Fiscal 2013

Net sales for the fourth quarter of Fiscal Year 2013 were $107.9 million, down
$0.3 million or less than 1.0% from net sales of $108.2 million for the fourth
quarter of the twelve month period ended March 31, 2012 (such twelve month
period, "Fiscal Year 2012"). This modest decrease results in part from
management's continued efforts to focus on profitable business and to decrease
or eliminate unprofitable or non-core sales. The reported gross profit of
$18.9 million, or 17.5% of net sales, represents continued success for the
Company as we strive to return to higher levels of profitability. By
comparison, gross profit in the fourth quarter of Fiscal Year 2012 amounted to
$14.1 million or 13.0% of net sales. This improvement in gross profit is the
result of management's cost savings initiatives, reduction of unprofitable
sales, as well as a change in the mix of products sold.

On a GAAP basis, in the fourth quarter of Fiscal Year 2013, the Company
reported net income of $0.7 million or $0.04 per diluted share, compared to a
reported net loss of $2.5 million or $0.15 per diluted share for the same
period of Fiscal Year 2012. Net income for the fourth quarter of Fiscal Year
2013 was, on an after-tax basis, negatively impacted by a write-off of
inventory discrepancies at one of our facilities of $0.6 million and
professional fees related to our Prior Credit Agreement of $0.5 million. These
items were partially offset by a $0.6 million reduction to our initial
goodwill impairment charge.

The Company generated non-GAAP net income (excluding the inventory adjustment,
the goodwill impairment reduction and professional fees related to our Prior
Credit Agreement) of $1.2 million^(1)or $0.08^(1) per diluted share for the
fourth quarter of Fiscal Year 2013 compared to a non-GAAP net loss of $2.5
million^(1) or $0.15^(1) per diluted share for the same period of Fiscal Year
2012. EBITDA, as adjusted, for the fourth quarter of Fiscal Year 2013 was $6.8
million^(2) compared to $1.3 million^(2) for the same period of Fiscal Year
2012.

Annual Results for Fiscal Year 2013

Net sales for Fiscal Year 2013 were $441.6 million, an increase of $4.3
million or 1.0% from net sales of $437.3 million for Fiscal Year 2012. Our
gross profit of $72.4 million or 16.4% of net sales in Fiscal Year 2013 has
improved compared to the gross profit of $64.9 million or 14.8% for Fiscal
Year 2012. This improvement in gross profit is the result of management's cost
savings initiatives, reduction of unprofitable sales, as well as a change in
the mix of products sold.

On a GAAP basis, for Fiscal Year 2013, the Company reported a net loss of
$54.9 million or $3.35 per diluted share, compared to reported net income of
$0.2 million or $0.01 per diluted share for the same period of Fiscal Year
2012. The results for Fiscal Year 2013 were, on an after-tax basis, impacted
by the goodwill impairment charge of $57.0 million, a write-off of inventory
discrepancies at one of our facilities of $0.6 million and professional fees
related to our Prior Credit Agreement of $1.2 million. The results for Fiscal
Year 2012 benefitted from an extraordinary gain of $0.5 million, net of income
taxes, resulting from an insurance settlement associated with damaged
inventories.

In Fiscal Year 2013, the Company generated non-GAAP net income (excluding the
non-recurring adjustments mentioned above) of $3.9 million^(1)or $0.24^(1) per
diluted share compared to non-GAAP net loss (excluding extraordinary gain) of
$0.3 million^(1) or $0.02^(1) per diluted share in Fiscal Year 2012. EBITDA,
as adjusted for the non-recurring items above, for Fiscal Year 2013 was $20.7
million^(2) compared to $16.0 million^(2) for Fiscal Year 2012.

Liquidity and Capital Resources

The Company manages cash and cash equivalent balances to minimize the amounts
outstanding under the New Credit Agreement in an effort to reduce borrowing
costs. The balance of cash and cash equivalents was $0.6 million at March 31,
2013, down $4.8 million from March 31, 2012. For Fiscal Year 2013, the Company
reported cash provided by operating activities of $19.7 million compared to
cash provided by operating activities of $4.0 million for Fiscal Year 2012.

As of March 31, 2013, the balance sheet classification of the Company's debt
is based upon the maturity terms of the New Credit Agreement and the Company
was in compliance with all covenants and financial ratios applicable under our
Prior Credit Agreement. Furthermore, we believe that the anticipated future
cash flow from operations, coupled with our cash on hand and available funds
under our New Credit Agreement will be sufficient to meet working capital
requirements for the next twelve months.

Investors Conference Call

The Company invites its stockholders and other interested parties to attend
its conference call at 10:00 a.m. (ET) on June 11, 2013. You may listen to the
conference call by calling (888) 868-9080 (domestic) or (973) 935-8511
(international); conference ID #87609853.  The conference call will be
simultaneously web cast on our website: www.medical-action.com. The complete
call and discussion will be available for replay on our website beginning at
1:00 p.m. (ET) on June 11, 2013.

About Medical Action Industries Inc.

Medical Action Industries Inc. (Nasdaq:MDCI), is a diversified manufacturer
and distributor of disposable medical devices and a leader in many of the
markets where it competes. Its products are marketed primarily to acute care
facilities in domestic and certain international markets. The Company has
expanded its target market to include physician, dental and veterinary
offices, out-patient surgery centers, long-term care facilities and
laboratories. The Company's products are marketed nationally by its direct
sales personnel and extensive network of healthcare distributors. The Company
has preferred vendor agreements with national and regional distributors, as
well as sole and multi-source agreements with group purchasing organizations.
The Company's common stock trades on the NASDAQ Global Select Market under the
symbol MDCI and is included in the Russell Microcap^® Index.

This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements other than
statements of historical fact are forward-looking statements for purposes of
these provisions, including any projections of earnings, revenues or other
financial items, any statements of the plans and objectives for management for
future operations, any statements concerning proposed new products or
services, any statements regarding future economic conditions or performance,
and any statements of assumptions underlying any of the foregoing. All
forward-looking statements included in this news release are made as of the
date hereof and are based on information available to us as of such date. The
Company assumes no obligation to update any forward-looking statement. In some
cases, forward-looking statements can be identified by the use of terminology
such as "may," "will," "expects," "plans," "anticipates," "intends,"
"believes," "estimates," "potential," or "continue," or the negative thereof
or other comparable terminology. Although the Company believes that the
expectations reflected in the forward-looking statements contained herein are
reasonable, there can be no assurance that such expectations or any of the
forward-looking statements will prove to be correct, and actual results could
differ materially from those projected or assumed in the forward-looking
statements. Future financial condition and results of operations, as well as
any forward-looking statements, are subject to inherent risks and
uncertainties, including manufacturing inefficiencies, termination or
interruption of relationships with our suppliers, potential delays in
obtaining regulatory approvals, product recalls, product liability claims, our
inability to successfully manage growth through acquisitions, our failure to
comply with governing regulations, risks of international procurement of raw
materials and finished goods, market acceptance of our products, market price
of our Common Stock, foreign currency fluctuations, resin volatility and other
factors referred to in our press releases and reports filed with the
Securities and Exchange Commission (the "SEC"). Please see the Company's
filings with the SEC, including, without limitation, the Company's Annual
Report on Form 10-K and Quarterly Reports on Form 10-Qs, which identify
specific factors that would cause actual results or events to differ
materially from those described in the forward-looking statements.

MEDICAL ACTION INDUSTRIES INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share data)
                                                              
                                                March 31, 2013 March 31, 2012
ASSETS                                           (Unaudited)    
Current Assets                                                 
Cash and cash equivalents                        $0.6         $5.4
Accounts receivable, less allowance for doubtful 32.6          30.8
accounts of $0.8 at March31, 2013 and 2012
Inventories, net                                 53.0          53.8
Prepaid expenses                                 1.4           1.8
Deferred income taxes                            1.4           3.1
Prepaid income taxes                             1.0           1.3
Other current assets                             2.3           1.9
Total current assets                             92.3          98.2
                                                              
Property, plant and equipment, net of
accumulated depreciation of $38.1 at March 31,   45.0          49.1
2013 and $35.3 at March 31, 2012
Goodwill                                         30.0          107.8
Other intangible assets, net                     36.6          39.2
Other assets, net                                3.0           2.9
Total assets                                     $206.9       $297.1
                                                              
LIABILITIES AND STOCKHOLDERS' EQUITY                           
Current Liabilities                                            
Accounts payable                                 $13.5        $11.3
Accrued expenses                                 25.1          18.1
Current portion of capital lease obligations     0.2           0.1
Current portion of long-term debt                1.4           8.0
Total current liabilities                        40.2          37.6
                                                              
Other long-term liabilities                      0.6           --
Deferred income taxes                            6.4           29.5
Capital lease obligations, less current portion  13.5          13.7
Long-term debt, less current portion             51.3          67.7
Total liabilities                                112.0         148.3
                                                              
Stockholders' equity:                                          
Common stock 40.0 shares authorized, $.001 par
value; issued and outstanding 16.4 shares at     0.0           0.0
March31, 2013 and 2012
Additional paid-in capital                       35.5          34.5
Accumulated other comprehensive loss             (0.8)         (0.7)
Retained earnings                                60.2          115.0
Total stockholders' equity                       94.9          148.8
Total liabilities and stockholders' equity       $206.9       $297.1




MEDICAL ACTION INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
                                                                 
                                     Three Months Ended Twelve Months Ended
                                      March 31,         March 31,
                                     2013     2012      2013        2012
                                     (Unaudited)        (Unaudited) 
                                                                 
Net sales                             $107.9 $108.2  $441.6    $437.3
Cost of sales                         89.0    94.1     369.2      372.4
Gross profit                          18.9    14.1     72.4       64.9
                                                                 
Selling, general and administrative   16.3    15.3     64.3       59.4
expenses
Goodwill impairment charge            (0.8)   --      77.8       --
Operating income (loss)               3.4     (1.1)    (69.7)     5.6
                                                                 
Interest expense, net                 1.2     1.2      4.8        4.6
                                                                 
Income (loss) before income taxes and 2.2     (2.3)    (74.5)     1.0
extraordinary items
Income tax expense (benefit)          1.5     0.2      (19.6)     1.3
Income (loss) before extraordinary    0.7     (2.5)    (54.9)     (0.3)
items
                                                                 
Extraordinary gain, net of income     --     0.0      --        0.5
taxes
                                                                 
Net income (loss)                     $0.7   $(2.5)  $(54.9)   $0.2
                                                                 
Earnings (loss) per share:                                        
Basic                                                             
Income (loss) before extraordinary    $0.04  $(0.15) $(3.35)   $(0.02)
items
Extraordinary gain, net of income     --     --      --        0.03
taxes
Net income (loss)                     $0.04  $(0.15) $(3.35)   $0.01
Weighted-average common               16.4     16.4      16.4        16.4
sharesoutstanding (basic)
                                                                 
Diluted                                                           
Income (loss) before extraordinary    $0.04  $(0.15) $(3.35)   $(0.02)
items
Extraordinary gain, net of income     --     --      --        0.03
taxes
Net income (loss)                     $0.04  $(0.15) $(3.35)   $0.01
Weighted-average common shares        16.4     16.4      16.4        16.4
outstanding (diluted)

Footnotes

The press release includes the use of non-GAAP financial measures that are not
prepared in accordance with U.S. generally accepted accounting principles and
that exclude the effects of a goodwill impairment charge (reduction), a
write-off of inventory discrepancies at one of our facilities, professional
fees related to our Prior Credit Agreement and an extraordinary gain.These
non-GAAP financial measures should not be considered a substitute for measures
of financial performance prepared in accordance with GAAP.These non-GAAP
financial measures have been used in this press release because management
believes they are useful to investors by providing greater transparency to the
Company's operating performance.

 (1) Reconciliation of net income (loss) to non-GAAP net income and non-GAAP
income (loss) per share

                                       Three Months Ended Twelve Months Ended
                                       March 31,          March 31,
(in millions, except per share data)    2013     2012      2013      2012
                                       (Unaudited)        (Unaudited)
                                                                 
Net income (loss)                       $0.7   $(2.5)  $(54.9) $0.2
                                                                 
Adjustments, net of income taxes;                                 
Inventory discrepancies                 0.6     --      0.6      --
Extraordinary gain                      --     --      --      (0.5)
Goodwill impairment charge (reduction)  (0.6)   --      57.0     --
Professional fees associated with Prior 0.5     --      1.2      --
Credit Agreement
Non-GAAP net income (loss)              $1.2   $(2.5)  $3.9    $(0.3)
                                                                 
Non-GAAP diluted income (loss) per      $0.08  $(0.15) $0.24   $(0.02)
common share
                                                                 
Weighted average number of common       16.4     16.4      16.4      16.4
shares outstanding - diluted

 (2)Reconciliation of net income (loss) to EBITDA and EBITDA, as adjusted

(dollars in millions)                   Three Months Ended Twelve Months Ended
                                        March 31,          March 31,
                                       2013     2012      2013       2012
                                       (Unaudited)        (Unaudited)
                                                                  
Net income (loss)                       $0.7   $(2.5)  $(54.9)  $0.2
Interest expense                        1.2     1.2      4.8       4.6
Income tax expense (benefit)            1.5     0.2      (19.6)    1.3
Depreciation                            1.2     1.3      5.0       5.7
Amortization                            1.1     1.0      3.9       4.3
EBITDA                                  $5.7   $1.2    $(60.8)  $16.1
                                                                  
Stock-based compensation                $0.2   $0.1    $1.0     $0.6
Inventory discrepancies                 0.8     --      0.7       --
Extraordinary gain                      --     --      --       (0.7)
Goodwill impairment charge (reduction)  (0.8)   --      77.8      --
Professional fees related to Prior      0.9     --      2.0       --
Credit Agreement
EBITDA, as adjusted                     $6.8   $1.3    $20.7    $16.0

EBITDA is defined as earnings (loss) before interest, income taxes,
depreciation and amortization. EBITDA is a non-GAAP financial measure.

EBITDA, as adjusted represents EBITDA as defined above adjusted for
stock-based compensation, a write-off of inventory discrepancies at one of our
facilities, an extraordinary gain, a goodwill impairment charge (reduction)
and professional fees related to our Prior Credit Agreement.Stock-based
compensation represents compensation expenses associated with stock options
and restricted stock.

Management believes EBITDA and EBITDA, as adjusted, to be meaningful
indicators of our performance that provides useful information to investors
regarding our financial condition and results of operations.Presentations of
EBITDA and EBITDA, as adjusted, are non-GAAP financial measures commonly used
by financial analysts and our lenders to measure operating performance.While
management considers EBITDA and EBITDA, as adjusted, to be important measures
of comparative operating performance, they should be considered in addition
to, but not as a substitute for, net income and other measures of financial
performance reported in accordance with GAAP.EBITDA and EBITDA, as adjusted
do not reflect cash available to fund cash requirements.Not all companies
calculate EBITDA or EBITDA, as adjusted in the same manner and the measure as
presented may not be comparable to similarly-titled measures presented by
other companies.

CONTACT: John Sheffield
         Executive Vice President and Chief Financial Officer
         MEDICAL ACTION INDUSTRIES INC.
         (631) 231-4600

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