Despite a nearly 60 percent increase in sales, Brentwood-based Medical Action Industries Inc., a maker of disposable health-care products, reports a sharp decrease in quarterly profit.
The company on Wednesday reported income of $263,000 on sales of $106.47 million for the quarter ended June 30, 2011, down from $496,000 profit on sales of $66.79 million in the year-ago quarter.
Management attributed the downturn in profits to an "extraordinary loss." Medical Action last summer lost nearly $1.5 million in inventory due to weather-related water damage at one of its warehouses in Tennessee.
As in past quarters, the company continued to cite increases in the cost of raw materials such as resin and cotton as a partial explanation for the pressure on company profits. Medical Action also said it has raised prices to reflect the increases in raw material costs.
Most of the company's quarterly increase in net sales came from a company Medical Action acquired last year. Net sales for the period included $33.59 million in sales of custom procedure trays by AVID Medical Inc., which Medical Action bought in August 2010.
Excluding sales of AVID's custom procedure trays, Medical Action's net sales for the first quarter of fiscal 2012 were $72.87 million, an increase of $6 million, or 9 percent, from the comparable period a year ago.
Trading on the Nasdaq under the symbol MDCI, Medical Action's shares have been battered by the Tennessee warehouse loss, falling from a high closing price of $13.86 on Aug. 4, 2010, to a closing price of $7.83 on Aug. 26 of the same year. It continues to trade at a lower level, closing at $6.79 on Thursday.
With a $116.81-million marketing capitalization, Medical Action during the trailing 12 months had net income of $5.19 million on revenue of $362 million, Yahoo finance reports.