Medical Action Industries Inc. (MDCI)
F4Q10 (Qtr End 03/31/2010) Earnings Call
June 2, 2010 10:00 AM ET
Charles Kelly – Chief Financial Officer
Paul Meringolo – President and CEO
Larry Solow – CJS Securities
Matt Dolan – Roth Capital Partners
Mitra Ramgopal – Sidoti & Company
Steve Friedman – Wells Fargo Advisors
Gerry Heffernan – Lord Abbett
Previous Statements by MDCI
» Medical Action Industries Inc. Q2 2010 Earnings Call Transcript
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» Medical Action Industries Inc. F2Q09 (Qtr End 09/30/08) Earnings Call Transcript
I will now turn the conference call over to Mr. Charles Kelly, Chief Financial Officer. Please go ahead, sir.
Thank you, Salina. Good morning and thank you for holding. With me on this call is Paul D. Meringolo, CEO and President of Medical Action. The primary purpose of this call is to discuss our results for the three and 12 months ended March 31, 2010, which were released this morning.
As you know, we must first touch all the bases by noting both our commentary and responses to your questions may include forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties discussed in detail in our annual report on Form 10-K and annual report to stockholders and our quarterly reports on Form 10-Q, all of which have been filed with the Securities and Exchange Commission. The company’s actual results could differ materially from those projected or assumed in these forward-looking statements.
It is now my pleasure to introduce Paul Meringolo.
Thanks, Chuck. Good morning and thank you for being here today. I assume you've all had a chance to read our press release. We would like to report that net sales for the three months ended March 31, 2010, totaled $71, 223,000, a decrease of $1, 633,000 or 2% versus the $72, 856,000 in net sales reported for the three months ended March 31, 2009.
Net income for the fourth quarter of fiscal 2010 was $5,194,000 or $0.31 per basic and $0.30 per diluted share, which has significantly improved upon the net income of $1,772,000 or $0.11 per basic and diluted share reported in the prior year period.
Net sales for the 12 months ended March 31, 2010 were $290,146,000, a decline of $5,924,000, or 2%, versus the $296,070,000 reported for the 12 months ended March 31, 2009.
Net income for fiscal 2010 was $16,841,000, or $1.04 per basic and $1.03 per diluted share, which compares favorably to the $4,955,000, or $0.31 per basic and diluted share earning -- earned during the prior -- our prior fiscal year.
Net income for the 12 months ended March 31, 2010, was a record for Medical Action Industries.
Many of the internal challenges that we have discussed with you over the past two years have been brought under control. While we will always be impacted by volatility in global commodity prices particularly oil, resin and current base products, we have benefited from a combination of forward resin purchases made last year and relative stability and our other commodity cost during fiscal 2010.
We have eliminated the underlying causes of production inefficiencies in our Galloway, Tennessee injection molding facility and are no longer affected by persistent back order issues.
The cost of products sourced from China have stabilized and we have discussed with you throughout the year, we have benefited from our decision to make advanced purchases of approximately 50% of our resin requirements in March of 2009, which has partially protected us from the rise in the resin costs during fiscal year 2010.
As a result of our actions to successfully manage through these challenges the company is able to report record earnings for the year ended March 31, 2010. In addition to our record earnings, cash generated from operating activities increased $40,206,000 to $43,268,000. We use this cash to reduce debt by $41,811,000 from $60,046,000 down to $18,235,000 at the close of the fiscal year.
We have successfully overcome the operational challenges that demanded most of our attention during the past two years. We have refocused our efforts internally to improve our sales and marketing activities across our many product lines.
We continue to maintain our commitment with our back-to-basic approach by defining our core values, excellence, responsibility, innovation, community and growth in revenues, profit and market share.
We are aware that we need to do a better job with revenues. As we mentioned last quarter we are working to repair and strengthen our existing customer relationships. We believe that there is opportunity to add value to our customers sourcing of our products by assisting them in managing costs and improving efficiencies in the use of our products.
We have an opportunity to leverage our core values and long time position as a provider of high quality products and cost effective solutions with exceptional customer service and a continued focus on building stronger relationships with our customers.
We have recently retained Harriet Overbeck, a seasoned industry executive as Vice President of our Executive Health Services team. Harriet and her team of area Vice Presidents will focus on relations with [Street Suite] executives in GPO’s and IDM’s and will coordinate the efforts of our sales force, marketing teams and operations group to provide an integrated process to support our customer base.