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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year ended March 31, 1996 (Fee Required)
or
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)
For the transition period ________to________
Commission File No. 0-13251
MEDICAL ACTION INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
Delaware 11-2421849
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
150 Motor Parkway, Hauppauge, New York 11788
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (516)231-4600
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
Title of Class which Registered
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ___ No X
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [X].
The aggregate market value of the registrant's Common Stock, $.001 par value,
held by nonaffiliates of the registrant as of June 1, 1996 was approximately
$12,760,000 based on the closing price on that date on the NASDAQ-National
Market System. As of June 1, 1996, registrant had outstanding 8,199,789 shares
of Common Stock.
Parts of the following documents are incorporated by reference to Parts I, II,
III and IV of this Form 10-K Report: (1) Proxy Statement for registrant's 1996
Annual Meeting of Stockholders and (2) registrant's Annual Report to
Stockholders for the fiscal year ended March 31, 1996.
PART I
ITEM ONE - BUSINESS
Medical Action Industries Inc. (the "Company" or "Medical Action")
develops, manufactures, markets and distributes a variety of disposable surgical
related products. Medical Action is a leading manufacturer and distributor of
sterile disposable laparotomy sponges and operating room towels in the United
States. Laparotomy sponges and operating room towels, the Company's core
business, are produced from cotton and used for a multitude of purposes during
operating room procedures. To compliment these products, Medical Action
introduced a line of gauze sponges, gauze fluffs, dry burn dressings and
non-adherent gauze dressings. Gauze sponges and/or fluffs are used in all health
care facilities including hospitals, health maintenance organizations, dental
facilities and veterinary centers. Gauze fluffs are pre-folded gauze squares
used for compression in soft tissue surgery. Dry burn dressings are composed of
multiple layers of folded gauze that are typically customized for hospitals as
to size, weave, folds, stitching and packaging. Non-adherent dressings reduce
sticking and skin removal during dressing changes, thereby alleviating trauma
and pain to the wound site. The Company introduced during fiscal 1995 a line of
specialty sponges, including eye spears, dissecting, stick and tonsil sponges,
all of which are used in a variety of surgical procedures.
In August 1994, the Company acquired the disposable surgical products
business of QuanTech, Inc. in consideration of the assumption of specified
liabilities and the issuance of 453,000 unregistered shares of Medical Action
Common Stock. Up to an additional 250,000 unregistered shares of Medical Action
Common Stock may be issued, provided that the continued operations of QuanTech
generate a minimum of $1,756,000 of gross margin profit during a consecutive
twelve month period through July 1996. Management does not believe that such
additional shares will be issued.
The acquired QuanTech products include a proprietary surgical light
handle cover, uniquely designed and patented, which is used as a sterile barrier
on surgical light handles in the operating room. QuanTech also produces and
markets needle counters, instrument pouches, magnetic instrument drapes, and
related products used primarily in the operating room environment.
In January 1996 the Company acquired certain assets relating to the
sterilization packaging, monitoring and contamination control products business
of Lawson Mardon Medical Products, Inc. ("Lawson Mardon" or "SBW"). The purchase
price for the acquired assets consisted of $25,000 in cash (which was paid at
closing) and a Promissory Note in the amount of $855,793, which is payable in
four (4) equal monthly installments commencing on March 1, 1996, subject,
however, to reduction depending on the actual collections by the Registrant of
the purchased accounts receivable. In addition, the Company agreed to purchase
approximately $527,000 of SBW inventory on a consignment basis through August 1,
1996 and is required to purchase substantially all remaining unsold inventory at
that time.
2
The primary products acquired from Lawson Mardon include sterility
packaging, a line of sterilization indicators and integrators and such ancillary
products as infectious waste bags, laboratory specimen bags and sterility
maintenance covers. These products are used in hospital central supply,
operating rooms and in physicians' offices.
Management's growth strategy is to focus its resources on entering new
markets for its existing product lines, including alternate care, veterinary and
dental markets; accelerate the internal development of new products for its
existing markets and pursuit of acquisitions which include products that
complement existing product lines for utilization of the Company's extensive
sales and distribution channels; the introduction of its products into the
international marketplace; and to increase productivity by maximizing the
utilization of its existing facilities.
Through its existing direct sales force, manufacturers' representatives
and internal sales department, the Company's products are sold throughout the
United States and internationally. The Company intends to utilize these sales
channels to expand its product lines to include both surgical and non-surgical
products.
The products presently manufactured and/or marketed by the Company
include:
Disposable Laparotomy Sponges - Laparotomy sponges are designed
primarily for use during surgical procedures in hospitals and health facilities.
They are single use (disposable) and made of gauze and sold in varying sizes and
utilized for a multitude of purposes. Laparotomy sponges cover exposed internal
organs, isolating them from the part of the body being operated upon. They also
absorb blood and act as a buffer between medical instruments and the skin,
thereby reducing trauma to skin tissue caused by the medical instrument.
Laparotomy sponges are sold in sterile packaging or as a non-sterile component
to be used with other health care companies' products, primarily surgical
pre-packaged procedure trays. The Company's laparotomy sponges contain an x-ray
detectable element and loop handle in order to facilitate easy counting and
identification in the operating room. For the fiscal years ended March 31, 1996,
1995 and 1994, laparotomy sponges accounted for 48%, 44% and 53%, respectively,
of the Company's total sales.
Absorbent Operating Room Towels - In January 1986, the Company
introduced ACTI-SORB(Trademark), a line of cotton absorbent operating room
towels, which are used during surgery for drying hands, rolled up for propping
instruments, on back tables and mayo stands for absorbing fluids, around the
incision site for absorbing blood and to allow the surgeon to clip tubing and
instruments close to the surgical site during the surgical procedure. Operating
room towels are sold in sterile packaging for single (disposable) use and as a
non-sterile component to be used with other health care companies' products,
primarily surgical pre-packaged procedure trays. For the fiscal years ended
March 31, 1996, 1995 and 1994, operating room towels accounted for 32%, 37% and
32%, respectively, of the Company's total sales.
3
Gauze Sponges - To round out its wound dressing line, the Company
developed a line of gauze sponges and gauze fluffs. The Company believes that
its brand recognition in the laparotomy sponge field will pave the way for its
entrance into the gauze sponge market. Gauze sponges are used in the operating
room as well as throughout the hospital. They are also used extensively
throughout the alternate care market, including physicians' offices, health
clinics, dentists' offices and in veterinary practices. The Company also
introduced gauze fluffs which are pre-folded gauze sponges used for compression
in soft tissue surgery.
Burn Dressings - As an extension of its product line, the Company
introduced dry burn and non-adherent gauze dressings. The dry burn dressing is
composed of multiple layers of folded gauze that are typically customized for
individual hospitals as to size, weave, folds, stitching and packaging. The
non-adherent dressings reduce sticking and skin removal during dressing changes,
thereby alleviating trauma and pain to the wound site.
Specialty Sponges - In fiscal 1995, the Company introduced a line of
specialty sponges as an extension to its laparotomy sponges. The Company's
specialty sponges are used invasively in a variety of surgical procedures and
are manufactured for a multitude of purposes and classified as follows:
(a) Dissecting Sponges - primarily utilized in surgical procedures
to separate tissue as opposed to cutting, thereby reducing bleeding and trauma
to the organ. The Company's dissecting sponges are produced in three specific
types of sponges.
(i) Peanut Sponge - a small, firm gauze sponge for dissecting
and delicate sponging. The peanut sponge is carefully folded
to encompass an x-ray element and is manufactured to allow the
surgeon to adjust firmness for specific application.
(ii) Kittner Dissector - a very firm, blunt dissector made of
ravel free abdominal tape, which is hand stitched to firmly
lock in an x-ray element and to ensure the sponge integrity.
(iii) Cherry Dissector - a round, soft dissector sponge
constructed from cotton for blunt dissection. A small hole
facilitates easy grasping with hemostatic forceps.
(b) Tonsil Sponges - a round, fiber filled gauze constructed with a
strong abdominal tape string sewn into the sponge to anchor the sponge
when used in hard to retrieve places.
(c) Stick Sponges - a round, fiber filled gauze sponge used for deep
sponging or prepping.
(d) Eye Spears - a cellulose fiber tip utilized during eye surgery,
constructed with a memory-free plastic handle in order to bend to any
angle the surgeon desires. The eye spear absorbs 10 times its weight in
fluid.
4
Disposable Surgical Light Handle Covers - Light Shields(Trademark) - A
patented design assures a secure fit and acts as a sterile barrier on surgical
light handles in the operating room. Light shields(Trademark) are manufactured
of a heavy gauge flexible plastic for the optimum assurance of a sterile
barrier.
Needle Counters - Red plastic boxes manufactured from medical grade
materials designed to resist breakage and punctures. They are produced with a
variety of designs, including surgical grade magnets in order to facilitate
sharps disposal, foam blocks which adhere to most surfaces in an operating room
environment and foam strips with varying count capacity and designs.
Surgical Marking Pens - Specifically designed so that the pen barrel
fits comfortably in the surgeon's hand and is made with gentian violet color
ink. All pen barrels are embossed with a 5 cm. ruler and may also include a 15
cm. coated ruler and blank labels.
Convenience Kits - The Company offers its customers the ability to
purchase multiple products packaged with its needle counters. The Company has
the flexibility to package many different kits to individualize a hospital's
requirements.
Medical Pouches - Used to house instruments during the sterilization
process and maintain sterility of the instrument until it is needed. The pouches
are primarily used in hospital central supply, operating rooms and in
physicians' and dentists' offices as well as in any environment where sterile
instruments are needed. There are three different styles of pouches available -
self seal, heat seal and rolls. The self seal is already sealed on three sides
and includes a peel back adhesive strip on the bottom of the package, which when
folded over will seal the package. The second type is heat seal, which is also
sealed on three sides but needs a heat sealer to seal the fourth side. The
Company also markets a roll product, where the user could pull as long a pouch
as needed. This requires both ends to be sealed.
Infectious Waste Bags - Used to collect, store and transport
biohazardous and infectious waste. The bags come in a variety of sizes, and are
red with the international biohazard symbol clearly marked on the bag. The bags
are made of high quality resins with reinforced seals for puncture resistance
and to reduce the risk of leakage.
Laboratory Specimen Transport Bags - Used to collect and transport
laboratory specimens. The bag features a separate pouch which can be used for
accompanying paperwork. The pouch has a special seal that will ensure that the
paperwork does not get contaminated or contaminate the lab specimen.
Sterility Maintenance Covers - Used to cover sterile products and
protect against dust, moisture or any other contaminants that may render the
product non-sterile. They are used to package, store, and transport while
maintaining a dust-free environment for sterile packs. Sterility maintenance
covers come in a variety of sizes and are self seal like the sterilization
pouches. Sterility maintenance covers are clear so that you can view the
contents, are strong for protection, and tear in a linear fashion for easy
access to the product.
5
Trademarks and Patents
The Company owns numerous trademarks. While it considers that in the
aggregate the trademarks are important in the operation of its business, it does
not consider that any of its trademarks, or any group of them, are of such
importance that termination would materially affect its business.
The Company has a United States Patent (No. 4976299) for its surgical
light handle cover which expires in 2007. Although there is no assurance that
other companies will not be successful in developing similar products without
violating the rights of the Company, management believes that the loss of this
patent could adversely affect the Company's ability to market this product.
Competition
There are many companies, both public and private, engaged in the
development and marketing of disposable sterile and non-sterile surgical
supplies, including laparotomy sponges. The Company is subject to various levels
of competition based upon performance, quality and pricing. The Company's major
competitors include large manufacturers, which have greater financial resources
than the Company. The competitors differ based upon the products being sold. In
the sale of sterile laparotomy sponges, where Kendall Healthcare Products
Company and Medline Industries, Inc. are major competitors, Medical Action's
sales represent a significant share of the domestic market. In June 1992 the
Company entered into a three-year agreement with Baxter for the purchase of
Medical Action disposable sterile laparotomy sponges. The agreement has been
extended through June 1997. The Company's primary competitors in the sale of
sterile operating room towels, in which the Company is a leading supplier, are
Baxter Surgical Products Division of Baxter Healthcare Corp., Medline
Industries, Inc. and DeRoyal, Inc. In the sale of medical pouches, where the
Company is one of the leading suppliers, the Company's primary competitors
include Tower Medical. In the sale of QuanTech products, where the Company's
portion of the market is relatively insignificant, the Company's primary
competitor is Devon Industries, Inc.
Effects of Health Care Reform
Proposed health care legislation, if enacted, could contain provisions
intended to reform the availability, delivery and financing of health care in
the United States. Such proposed legislative packages mandate universal coverage
for all legal U.S. residents and control over health care costs. While the
Company cannot predict whether any health care reform legislation will be
approved or what effect, if any, that such health care reform legislation will
have on the Company or its operations, the Company believes that based on the
Company's understanding of current proposals, health care legislation may have
some beneficial effects on its business by increasing the availability of health
care.
6
Regulation
The manufacture and marketing of medical devices are regulated under
the 1976 Medical Device Amendments to the Federal Food, Drug and Cosmetic Act as
administered by the Food and Drug Administration ("FDA"). The FDA considers the
Company's current products to be medical devices. The FDA has the authority to
determine the safety and effectiveness of all new medical devices introduced
into interstate commerce and to grant approval to applications to market such
products on a national basis.
If a new product is substantially equivalent (such term being used on
safety and intended use equivalence rather than indicating a similarity in
technology) to approved products that are commercially available, a "510(K)"
pre-market notification to the FDA is required before the product may be
commercially marketed. The FDA has ninety (90) days to respond to a pre- market
notification and, after satisfaction of all FDA comments, the Company can market
the product in the United States. All of the Company's products have been
approved to market under 510(K) notifications.
The Company believes that its proposed products are also considered
medical devices. However, there can be no assurance that the FDA will choose to
characterize future products as medical devices. Any such change in FDA
characterization would potentially involve a more lengthy procedure, including
detailed laboratory, clinical testing, and sampling activities.
Compliance with current Good Manufacturing Practices ("GMP")
regulations is necessary to receive FDA approval to market new products and to
continue to market current products. The Company's manufacturing, quality
control and quality assurance procedures and documentation are inspected and
evaluated periodically by the FDA.
Marketing and Distribution
The Company's products are presently marketed and sold throughout the
United States through a network of direct sales personnel and manufacturers'
representatives. There are approximately 20 manufacturers' representatives and
18 direct sales personnel throughout the United States engaged in the sales and
marketing of the Company's products. Sales are primarily made to distributors,
who maintain sufficient inventory to service customer requirements. The
Company's distribution network is comprised of hospital distributors, alternate
care distributors, veterinary distributors, dental distributors and industrial
safety distributors covering the entire United States and Canadian marketplace.
7
Management believes that the continuing pressure to utilize low-cost,
disposable medical products has significantly expanded the use of custom
procedure trays, which contain the necessary items designed for use in specific
procedures by surgical teams. Many of the custom tray suppliers are vertically
integrating the packaging process by buying bulk, non-sterile operating room
towels, laparotomy sponges and other products manufactured by the Company to
place in these custom trays. The trays are then sterilized, saving valuable
nursing time and the costs associated with individual product packaging.
In addition to private and public hospitals and health facilities,
customers for the Company's products include group purchasing organizations and
investor-owned hospital chains. With the emergence of these cooperative buying
groups and chains as major purchasers of medical/surgical products, a
significant portion of the Company's sales are dependent upon its ability to
provide its products throughout a wide geographical area and to service
substantially all members of the group or chain. The Company's present
distributor-oriented marketing network has enabled it to become a selected
source for many of the cooperative buying groups and chains. For the fiscal year
ended March 31, 1996, no single customer accounted for more than 10% of the
Company's net sales, except for Owens & Minor, Inc., Baxter Healthcare Hospital
Supply Division and General Medical Corporation, which accounted for
approximately 23%, 21% and 10%, respectively, of total net sales. For the fiscal
year ended March 31, 1995, Baxter Healthcare Hospital Supply Division (19%), and
Owens and Minor, Inc. (19%) were the only customers that accounted for more than
10% of total net sales. The Company's ten largest customers accounted for
approximately 80% of its net sales in fiscal 1996.
The Company believes it has established an efficient system for
marketing its products throughout the United States, and intends to utilize
these existing sales methods and channels to market new products as they are
developed or acquired.
Research and Development
Product development costs charged to income were $291,000, $211,000 and
$328,000 for the fiscal years ended March 31, 1996, 1995 and 1994, respectively.
Employees
As of June 1, 1996, the Company had 170 full-time employees with 126 in
manufacturing and distribution, 27 in marketing and sales, and 17 in
administration. None of the Company's employees are represented by a labor
union. The Company believes that its employee relations are satisfactory.
8
Raw Materials
The principal raw materials used by the Company are a four-ply mesh
gauze laparotomy sponge and cotton huck towel. Other materials and supplies used
by the Company include gauze, gauze sponges, injection molded and thermoformed
plastics, foam, medical grade magnets and a variety of packaging material. The
Company presently purchases its principal raw materials primarily from the
Peoples Republic of China. The Company is currently exploring alternate sources
of supply for those raw materials. The Company's operating room towels have been
classified as a non-medical device by the U.S. Department of Customs, and
therefore, are subject to import quota restrictions which could limit the
Company's future ability to bring them into the country.
Backlog
The Company does not believe that its backlog figures are necessarily
indicative of its business since most hospitals and health related facilities
order their products on a continuous basis and not pursuant to any contractual
arrangements. Since typical shipment times range from five to seven days, the
Company must maintain sufficient inventories of all products at all times.
Manufacturing
The Company currently purchases its laparotomy sponges, burn dressings
and operating room towels from the Peoples Republic of China, including two
joint venture facilities. During the past fiscal year, the Company also
purchased certain of these products, to a lesser extent, from Mexico and the
Dominican Republic. These joint ventures were entered into in fiscal 1990. Prior
to the formation of these joint ventures, the Company purchased its laparotomy
sponges and operating room towels from these factories. The joint venture
factories are located in Wu Jiang and Lin Hai, which are rural areas of China.
After these products are manufactured, they are shipped to the Company's
domestic manufacturing facilities located in Asheville, North Carolina, where
they are packaged and sterilized.
Upon completion of the acquisition of the disposable surgical products
business of QuanTech, Inc. in August 1994 and sterilization packaging business
of Lawson Mardon Medical Products, Inc. in January 1996, the operations of the
QuanTech and Lawson Mardon product lines were transferred to the Company's
Asheville, North Carolina facilities.
As a result of our efforts to develop a new protocol for sterilization
of certain of its cotton products, in November 1993 the Company developed a
decontamination cycle to its sterilization process. This decontamination
process, which utilizes gamma radiation, is conducted by independent outside
contract facilities prior to packaging and sterilization in Asheville, North
Carolina. The Company owns substantially all of its manufacturing and ethylene
oxide sterilization equipment.
9
ITEM TWO - PROPERTIES
The Company occupies approximately 100,400 square feet of
manufacturing, general office and warehouse space at its facilities in North
Carolina and New York under real estate leases expiring through fiscal 1999,
with aggregate minimum annual rental commitments of approximately $502,200. The
Company also owns a 52,000 square foot manufacturing facility in Asheville,
North Carolina. Management believes that the Company's facilities are adequate
to meet its current needs and should continue to be adequate for the foreseeable
future. Set forth below is a summary of the facilities owned or leased by the
Company.
Location Primary Use Square Feet
Asheville, North Carolina manufacturing 52,000 (a)
Fletcher, North Carolina warehouse/distribution 70,000 (b)
Asheville, North Carolina manufacturing/warehouse 17,000 (c)
Farmingdale, New York warehouse 6,000 (d)
Hauppauge, New York executive offices 7,400 (e)
- -------------------------
(a) The principal manufacturing facility of the Company is located on
premises which the Company owns in Asheville, North Carolina. A
mortgage in the amount of approximately $997,000 was outstanding as of
March 31, 1996.
(b) The lease may be terminated by the Company or the landlord on nine (9)
months prior written notice. The current annual rental is $272,000.
(c) Premises are leased through January 31, 1997 at an annual rental of
$34,700.
(d) Premises are leased through March 31, 1997 at an annual rental of
$33,000.
(e) Premises are leased through February 28, 2001 at a current annual
rental of $162,500.
ITEM THREE - LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company is
a party or to which any of their property is subject.
ITEM FOUR - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year.
10
PART II
ITEM FIVE - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The information under the captions "Selected Financial Data" and "Stock
Trading" on page 1 and the inside back cover, respectively, of the Company's
1996 Annual Report to Stockholders is incorporated herein by reference.
ITEM SIX - SELECTED FINANCIAL DATA
The information contained under the caption "Selected Financial Data"
on page 1 of the Company's 1996 Annual Report to Stockholders is incorporated
herein by reference.
ITEM SEVEN - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The information contained under the caption "Management's Discussion
and Analysis of Financial Condition and Results of Operations" on pages 5 and 6
of the Company's 1996 Annual Report to Stockholders is incorporated herein by
reference.
ITEM EIGHT - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of the Company and its
subsidiary, which appear on pages 7 through 15 of the Company's 1996 Annual
Report to Stockholders, and the report thereon of Ernst & Young LLP dated May
24, 1996, appearing on page 16 of such Annual Report, are incorporated herein by
reference.
ITEM NINE - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
The information required by Part III is incorporated by reference to
the Company's definitive proxy statement in connection with its Annual Meeting
of Stockholders scheduled to be held in August 1996, to be filed with the
Securities and Exchange Commission within 120 days following the end of the
Company's fiscal year ended March 31, 1996.
11
PART IV
ITEM FOURTEEN - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) and (2) List of Financial Statements and Financial Statement Schedules
The following consolidated financial statements of Medical Action
Industries Inc. and subsidiary, included in the annual report of the Company to
its stockholders for the year ended March 31, 1996, are incorporated by
reference in Item 8:
Consolidated Balance Sheets at March 31, 1996 and 1995
Consolidated Statements of Operations
for the Years Ended March 31, 1996, 1995 and 1994
Consolidated Statements of Shareholders'
Equity for the Years Ended March 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows
for the Years Ended March 31, 1996, 1995 and 1994
Notes to Consolidated Financial
Statements
The following consolidated financial statement schedule of Medical
Action Industries Inc. and subsidiary is included in Item 14(d):
II Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and therefore have
been omitted.
12
(3) Exhibits:
Exhibit No.
2.1 Agreement and Plan of Reorganization dated as of August 12,
1994 among Registrant, QuanTech Acquisition Corp. and
QuanTech, Inc. (Exhibit 2.1 to the Company's Annual Report on
Form 10-K for the year ended March 31, 1995).
2.2 Purchase Agreement dated as of January 30, 1996 among
Registrant, SBW Acquisition Corp., Lawson Mardon Medical
Products, Inc. and Lawson Mardon Medical Products, a trading
division of Lawson Mardon Packaging UK Ltd. (Exhibit 2 to the
Company's Current Report on Form 8-K dated February 6, 1996).
3.1 Certificate of Incorporation, as amended (Exhibit 3.2 to the
Company's Annual Report on Form 10-K for the year ended March
31, 1994).
3.2 By-Laws, as amended (Exhibit 3(b) to the Company's Annual
Report on Form 10-K for the year ended March 31, 1988).
10.1 Incentive Stock Option Plan, as amended (Exhibit 10(a) to the
Company's Annual Report on Form 10-K for the year ended March
31, 1988).
10.2 Restricted Management Stock Bonus Plan, as amended (Exhibit
10(b) to the Company's Annual Report on Form 10-K for the year
ended March 31, 1988).
10.3 1989 Non-Qualified Stock Option Plan, as amended (Exhibit 10.4
to the Company's Annual Report on Form 10-K for the year ended
March 31, 1990).
10.4 1994 Stock Incentive Plan (Exhibit 10.4 to the Company's
Annual Report on Form 10-K for the year ended March 31, 1995).
10.5 Employment Agreement dated as of February 1, 1993 between the
Registrant and Paul D. Meringola (Exhibit 10.4 to the
Company's Annual Report on Form 10- K for the year ended March
31, 1993).
10.6 Modification Agreement dated as of February 5, 1996 between
the Registrant and Paul D. Meringola (Exhibit 10 to the
Company's Current Report on Form 8-K dated February 7, 1996).
10.7 Joint Venture Agreement between the Registrant and Wujiang
Medical & Health Articles Factory dated March 29, 1989
(Exhibit 10(b) to the Company's Annual Report on Form 10-K for
the year ended March 31, 1989).
13
10.8* Third Amended and Restated Revolving Credit Note and
Agreement between the Registrant and a lending
institution dated as of October 24, 1995.
10.9 Change in Control Agreement dated as of June 1, 1995 between
the Registrant and certain executive officers (Exhibit 10.8 to
the Company's Annual Report on Form 10-K for the year ended
March 31, 1995).
23* Consent of Ernst & Young LLP.
27* Financial Data Schedule
99* Additional Exhibit - Undertakings
(b) Reports on Form 8-K:
(a) Current Report on Form 8-K dated February 5, 1996 covering
Item 5 - Other Events, Item 6 - Resignation of Registrant's
Directors and Item 7 - Financial Statements, Pro Forma
Financial Information and Exhibits.
(b) Current Report on Form 8-K dated February 6, 1996 covering
Item 2 - Acquisition or Disposition of Assets and Item 7 -
Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits
The response to this portion of Item 14 is submitted as a separate
section of this report.
(d) Financial Statement Schedules
The response to this portion of Item 14 is submitted as a separate
section of this report.
- ----------------------
With the exception of the aforementioned information incorporated by
reference in this Annual Report on Form 10-K, the Company's Annual Report to
Stockholders for the year ended March 31, 1996 is not to be deemed "filed" as
part of this report.
*filed herewith
14
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on the 5th day of June,
1996.
MEDICAL ACTION INDUSTRIES INC.
By: s/ Paul D. Meringola
---------------------
Paul D. Meringola
President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below on June 5, 1996 by the following persons in
the capacities indicated:
s/ Joseph R. Meringola Chairman of the Board
- ------------------------ (Chief Executive Officer)
Joseph R. Meringola
s/ Paul D. Meringola President
- ------------------------ (Chief Operating Officer)
Paul D. Meringola and Director
s/ Richard G. Satin Vice President - Operations, General Counsel,
- ------------------------ Corporate Secretary and Director
Richard G. Satin
s/ Bernard Wengrover Director
- ------------------------
Bernard Wengrover
s/ Philip F. Corso Director
- ------------------------
Dr. Philip F. Corso
s/ Thomas A. Nicosia Director
- ------------------------
Dr. Thomas A. Nicosia
15
S-1
Schedule II - Valuation and Qualifying Accounts
Medical Action Industries Inc. and Subsidiary
- --------------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- --------------------------------------------------------------------------------------------------------------------------------
ADDITIONS
- --------------------------------------------------------------------------------------------------------------------------------
Additions Charged to Other
Balance at Charged to Other Changes- Balance at
Beginning Costs and Accounts- Add (Deduct) End
Description of Period Expenses Describe Describe of Period
- -------------------------------------------------------------------------------------------------------------------------------
Year ended March 31, 1996
Deducted from asset accounts:
Allowance for doubtful accounts $110,953 $110,953
Year ended March 31, 1995
Deducted from asset accounts:
Allowance for doubtful accounts 110,953 110,953
Year ended March 31, 1994
Deducted from asset accounts:
Allowance for doubtful accounts 110,953 110,953
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED March 31, 1996
------------------
MEDICAL ACTION INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
EXHIBIT INDEX
Exhibit No.
10.8 Third Amended and Restated Revolving Credit Note and Agreement
between the Registrant and a lending institution dated as of
October 24, 1995.
23 Consent of Ernst & Young LLP.
27 Financial Data Schedule
99 Additional Exhibit - Undertakings