Healthcare Industry News:  Medegen 


 News Release - February 15, 2007

Medical Action Industries to Consolidate Medegen's Colorado Plant into Tennessee Manufacturing Facility

HAUPPAUGE, N.Y.--(HSMN NewsFeed)--Medical Action Industries Inc. (NASDAQ: MDCI ), a leading supplier of medical and surgical disposable products, today announced that after extensive review of its recently acquired Medegen Medical Products, LLC ("Medegen") operations, Medical Action will implement a plant closing of Medegen's leased facility in Northglenn, Colorado.

The plant closing will be conducted in phases commencing in August 2007 and is anticipated to be completed on or about March 2008. The operations that were conducted in the Colorado plant will be consolidated into Medegen's Tennessee facility, as well as some products being outsourced. The Tennessee facility, which is owned by Medegen, is a 265,000 square foot manufacturing plant on approximately 25 acres. Approximately 70 Medegen employees and 90 leased employees are affected by the consolidation in Colorado.

Paul D. Meringolo, Chief Executive Officer and President of Medical Action Industries Inc., commented that "the consolidation of the facilities, while a very difficult decision, was a necessary part of the Medegen integration plan to reduce its overall cost structure and increase efficiency. Our employees in the Colorado facility are a valuable part of our team, and many will be offered the opportunity to relocate to Tennessee," Meringolo added.

Medical Action is a diversified manufacturer of disposable medical devices. Its products are marketed primarily to acute care facilities in domestic and certain international markets. Further, Medical Action has expanded its target market to include physician, dental and veterinary office, out-patient surgery centers and long-term facilities. Medical Action is a leading manufacturer and distributor of many of its products in the markets we compete in. Our products are marketed through an extensive network of direct sales personnel and independent distributors. Medical Action has preferred vendor agreements with national distributors, as well as contracts with nearly every major group purchasing alliance. The Company'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.

Source: Medical Action Industries

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