Medical Action Industries Inc. (NASDAQ/MDCI), a leading supplier of medical and surgical disposable products, today reported results for the fiscal 2012 second quarter ended September 30, 2011.

Net sales for the second quarter of fiscal 2012 were $109,655,000, an increase of $23,707,000, or 28%, compared to the $85,948,000 in net sales reported for the comparable prior year period. Net sales for the second quarter of fiscal 2012 included $34,485,000 in custom procedure tray sales generated by AVID Medical Inc. (“AVID”), which was acquired by Medical Action on August 27, 2010. Excluding sales of custom procedure trays, Medical Action’s net sales for the second quarter of fiscal 2012 were $75,170,000, representing an increase of $3,360,000, or 5%, from the comparable prior year period.

Net income for the second quarter of fiscal 2012 was $554,000 or $0.04 per basic and diluted share, versus the $469,000, or $0.03 per basic and diluted share, reported for the comparable prior year period. Included in net income for the second quarter of fiscal 2012 was an extraordinary gain of $700,000 or $0.03 per basic and diluted share (net of applicable tax expense), due to an insurance settlement related to inventories damaged as a result of weather-related flooding. Included in net income for the second quarter of fiscal 2011 were one-time transaction costs of $1,335,000. These costs were included in our selling, general and administrative expenses and related to the acquisition of AVID.

Net sales for the six months ended September 30, 2011 were $216,128,000, an increase of $63,384,000 or 42% from the $152,744,000 in net sales reported for the comparable six months of fiscal 2011. Net sales for the six months ended September 30, 2011 included $68,082,000 in custom procedure tray sales generated by AVID. Excluding sales of custom procedure trays, Medical Action’s net sales for the six months ended September 30, 2011 were $148,046,000, representing an increase of $9,440,000 or 7% from the comparable prior year period.

Net income for the six months ended September 30, 2011 was $817,000 or $0.05 per basic and diluted share, versus the $965,000 or $0.06 per basic and diluted share reported for the comparable prior year period. Included in net income for the six months ended September 30, 2011 was the aforementioned extraordinary gain. Included in net income for the six months ended September 30, 2010 were the aforementioned one-time transaction costs and an extraordinary loss of $1,455,000 or $0.05 per basic and diluted share (net of applicable tax benefit) due to inventories damaged as a result of weather-related flooding.

“We continue to focus on organic growth and enhancing our product and service offerings,” said Chief Executive Officer and President, Paul D. Meringolo. “Net sales have increased from the comparable prior year period and sequentially. We have recently been notified by Novation LLC that Medical Action has been named as a vendor on their Custom Procedure Tray GPO contract effective February 1, 2012. The Novation CPT contract is one of the largest GPO contracts in our market and will provide us with the opportunity to generate substantial organic growth in our CPT product line. Persistent volatility in raw material costs, particularly resin and cotton, continue to influence our gross margins. We are managing through this period of volatility by continually reviewing our pricing strategies across our product lines, minimizing product sourcing costs and operating expenses.”

Medical Action invites its shareholders and other interested parties to attend its conference call at 10 a.m. (ET) on November 2, 2011. You may participate in the conference call by calling (888) 868-9080 (domestic) or (973) 935-8511 (international); conference ID #15958799. 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 11 a.m. (ET) on November 2, 2011.

Medical Action 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. Medical Action’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. Medical Action’s common stock trades on the NASDAQ Global Select Market under the symbol MDCI and is included in the Russell 2000 Index.

This news release contains forward-looking statements that involve risks and uncertainties regarding Medical Action’s operations and future results. Please see the Company’s filings with the Securities and Exchange Commission, including, without limitation, the Company’s Form 10-K and 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.