Medical Action Industries Reports Record Earnings and Revenues for the Fiscal 2002 First Quarter.

Business Editors/Health & Medical Writers

HAUPPAUGE, N.Y.--(BW HealthWire)--July 19, 2001

Record Net Income Rises 34% on Highest Quarterly Revenue

in Company's History

Medical Action Industries Inc. (NASDAQ/NM:MDCI), a leading supplier of medical and surgical disposable products, today reported the highest quarterly revenue and net income in its history for the three months ended June 30, 2001.

Net sales for the first quarter reached a record $20,089,000, an increase of $1,281,000 over the $18,808,000 in net sales reported for the three months ended June 30, 2000. Operating income reached a record $2,262,000 in the first quarter, while net income for the period increased 34% to a record $1,342,000 or $.15 per basic ($.14 per diluted share), compared with $1,003,000 or $.11 per basic and diluted share, reported for the comparable quarter in fiscal 2001. This represents the twelfth consecutive record quarter of net income. Cash flow from operations as measured by earnings before interest, taxes, depreciation and amortization ("EBITDA") was $2,596,000 in the first quarter. As a result of recently approved, but unissued statements by the Financial Accounting Standards Board, which eliminated the amortization of goodwill, the Company has adopted the approach that only goodwill that is determined to be impaired needs to be amortized. Accordingly, the results for the three months ended June 30, 2001 excluded $113,000 of such amortization, which was included in the comparable quarter last year.

Medical Action invites its shareholders and other interested parties to attend its conference call at 10:30 a.m. (EST) on July 19, 2001. You may participate in the conference call by calling 1-800-370-0869 and asking for the Medical Action conference call with Paul D. Meringolo, CEO and President. If you are unable to attend the conference call, you may listen to a live webcast of the call by visiting our website: www.medical-action.com, commencing at 10:30 a.m. (EST) on July 19, 2001. The complete call and discussion will be available for replay on our website beginning at 2:00 p.m. (EST).

"Our record operating results reflect the successful integration of the small kit and tray product line acquired in March 1999, strong growth from our line of collection systems and biohazardous bags, and further penetration for the Company's core products," said Paul D. Meringolo, Chief Executive Officer and President of Medical Action Industries Inc.

In connection with the recent adoption of new SEC rules on corporate disclosure, Medical Action is providing limited guidance on several aspects of its fiscal 2002 performance. The following statements are based on current expectations. These are forward-looking statements and actual results may differ materially, as discussed later in this release.

-- For the year ended March 31, 2002, Medical Action anticipates reporting
record net income and record revenue.

-- Earnings per share for fiscal 2002 should be in the range of $.55 to $.60
without an acquisition or strategic alliance.

-- Net sales from organic growth for fiscal 2002 should increase at a higher
rate than fiscal 2001.

-- Consolidation within the health care industry together with our record cash
flow will continue to drive our acquisition strategy.

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
                              (Unaudited)

                                           For the Three Months Ended
                                                6/30/01      6/30/00

Net Sales                                    $20,089,000  $18,808,000
Operating Income                               2,262,000    1,914,000
Net Income                                  (a)1,342,000    1,003,000
Earnings per Share:
         Basic                                      $.15         $.11
         Diluted                                    $.14         $.11
Weighted Average Number of Shares
 Outstanding:
         Basic                                 9,106,051    9,209,478
         Diluted                               9,877,095    9,552,317

(a) Excludes $113,000 of goodwill amortization, which resulted in
    $69,000 of additional net income


                          Balance Sheet Data
                                           As of 6/30/01 As of 3/31/01

Current Ratio:                                      3.73         3.95
Shareholder's Equity:                        $26,255,000  $25,922,000
Total Assets:                                $38,730,000  $39,804,000
Working Capital:                             $15,705,000  $16,687,000