Medical Action announces agreements with Physician Sales and Services.

HAUPPAUGE, N.Y.--(BUSINESS WIRE)--June 25, 1996--Medical Action Industries Inc. (NASDAQ: MDCI), a leading supplier of medical and surgical disposable products, today announced that it has entered into a series of agreements for the sale and distribution of certain products with Physician Sales and Services Inc. (NASDAQ: PSSI). Physican Sales and Services Inc., PSS, is the leading distributor of medical supplies, equipment and pharmaceuticals to primary care and other office-based physicians in the United States.

The agreements cover sterile and non-sterile gauze sponges, sterilization pouches, bio-hazard bags, steam autoclave tape and elastic bandages.

During fiscal 1996, Medical Action had sales to PSS of approximately $1.2 million. "We expect sales to significantly increase to PSS as a result of our agreements during the current fiscal year. Historically, Medical Action has focused on the acute care hospital marketplace and we are extremely pleased to have been selected as a healthcare partner by PSS in the office-based physician market. Medical Action is continuing to develop strong distribution channels to access the full continuum of care in our changing marketplace," said Paul D. Meringola, president and chief operating officer.

"These agreements, which include the company's introduction of an elastic bandage roll to its list of product offerings, represent a further step in achieving our goal of product diversification," Meringola concluded.

CONTACT: Medical Action Industries, Inc.

Richard G. Satin, 516/231-4600

or

Porter, Le Vay & Rose, Inc.

Jeffrey O'Keefe, 212/564-4700