Net sales for the three months ended June 30, 2009 totaled $70,687,000 a decrease of $6,708,000, from the $77,395,000, in net sales reported for the three months ended June 30, 2008. Net income for the first quarter of fiscal 2010 was $3,650,000 or $.23 per basic and diluted share, up 43% versus $2,546,000 or $.16 per basic and diluted share, reported for the comparable three months of fiscal 2009.

Medical Action continued to achieve gains in gross profit, with gross margin for the first quarter of 2010 reaching 23.9% versus 19.9% and 14.0%, respectively, for the previous two quarters, and 19.4% reported in the first quarter of 2009.

"Medical Action is continuing to benefit from the fiscal 2010 opportunities that we outlined last quarter," said Chief Executive Officer and President Paul D. Meringolo. "With relative price stability in raw materials and products sourced from China-based vendors, we are currently focused on accelerating our revenue growth and expanding relationships with existing customers. We're managing competitive changes in the marketplace, including declining hospital admissions, maximizing our sales and marketing teams and continuing to make progress at our Tennessee plant, with new leadership, additional new equipment, and even higher quality and productivity. Given these factors, we remain cautiously optimistic about this fiscal year and our ability to take Medical Action to the next level of growth."

Medical Action invites its shareholders and other interested parties to attend its conference call at 10:00 a.m. (ET) on August 6, 2009. You may participate in the conference call by calling (888) 868-9080 (domestic) or (973) 935-8511 (international); conference ID #20508783. 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 August 6, 2009.

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 office, 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.

                                                                                    MEDICAL ACTION INDUSTRIES INC.                                                    Financial Highlights                                                              (dollars in thousands, except per share data)                                                                                                                                                                       For the Three Months Ended                                                        June 30, 2009    June 30, 2008                                                    (Unaudited)                       Statements of Operations:                                                         Net sales                                       $  70,687        $  77,395        Cost of sales                                      53,765           62,345                                                                                          Gross profit                                       16,922           15,050                                                                                          Selling, general and administrative expenses       10,389           10,461        Interest expense, net                              470              484           Income before income taxes                         6,063            4,105         Income tax expense                                 2,413            1,559                                                                                           Net income                                      $  3,650         $  2,546                                                                                           Net income per share basic:                     $  0.23          $  0.16          Net income per share diluted:                   $  0.23          $  0.16                                                                                                                                                                              Balance Sheets as of June 30, 2009 and                                            March 31, 2009 (dollars in thousands)                                                                                                                                                                               June 30, 2009    March 31, 2009                                                   (Unaudited)                       Current Assets:                                                                   Cash and cash equivalents                       $  2,592         $  3,459         Accounts receivable, net                           19,004           21,459        Inventories, net                                   37,932           43,221        Prepaid expenses and other current assets          4,629            6,404         Total Current Assets                               64,157           74,543                                                                                          Property, plant and equipment, net                 40,744           40,313        Goodwill                                           80,699           80,699        Other intangible assets, net                       15,523           15,886        Other assets, net                                  3,677            3,725         Total Assets                                    $  204,800       $  215,166                                                                                                                                                                           Liabilities and Shareholders' Equity:                                             Accounts payable                                $  10,258        $  8,190         Accrued expenses                                   11,371           10,643        Deferred income taxes                              14,282           14,282        Total debt                                         42,842           60,046        Shareholders' equity                               126,047          122,005                                                                                         Total Liabilities and Shareholders' Equity      $  204,800       $  215,166                                                                                         Key Financial Statistics                                                          Current ratio                                      2.1              2.9           Debt to equity ratio                               .34              .49           Book value per share                               $7.86            $7.61          -------------------------------------------------------------------------------  

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