MTS Announces Financial Results for Fourth Quarter and Fiscal Year Ended March 31, 2009

Revenue up 32% - EPS up 19% for the Year Provides General Business Update
ST. PETERSBURG, Fla.--(Business Wire)--
MTS Medication Technologies, Inc. (NASDAQ: MTSI), an international provider of
medication adherence packaging systems, today announced its financial results
for its fourth quarter and year ended March 31, 2009.

Fourth Quarter

Revenue for the fourth quarter increased 20% to $17.0 million from $14.2 million
in the prior year. Net income was $865,000, or $0.13 per diluted common share,
compared with $136,000, or $0.02 per diluted common share, in the prior year.
Gross margin for the fourth quarter increased to 37.8% compared with 35.1% in
the prior year. SG&A expenses were down to $4.3 million from $4.4 million in the
prior year. Operating profit was $1.4 million, or 8.3%, compared to an operating
loss of $259,000 in the prior year.

Fiscal Year

Revenue for the 2009 fiscal year increased 32% to $76.3 million from $57.8
million in the prior year. Net income increased to $2.5 million, or $0.37 per
diluted common share, from $2.1 million, or $0.31 per diluted common share, in
the prior year. Gross margin for the fiscal year declined to 33.2% compared with
37.9% the prior year. SG&A expenses rose to $18.3 million compared with $15.7
million in the prior year. Operating profit was $4.1 million, or 5.4%, compared
with $3.4 million, or 5.9%, in the prior year. Operating cash flow was $5.6
million compared with $859,000 in the prior year. Total outstanding debt was
reduced by $3.6 million in fiscal year 2009.

Todd E. Siegel, President and Chief Executive Officer, commented, "Our
consolidated revenue for both the fourth quarter and the 2009 fiscal year
increased over the prior year primarily due to the delivery of twenty-three
OnDemand machines to our largest customer. We are very pleased with the progress
made on this significant contract, and we believe we have been successful in
providing a new generation of state-of-the-art pharmacy automation."

"In the U.S., we continue to be successful in adding and retaining new
independent pharmacy customers and also benefit from the growth experienced by
our existing national accounts. As a result, our consumable product sales in the
U.S. increased almost 9% this year. In Europe, our sales growth was
approximately 19% when expressed in both the British Pound and the Euro.
However, a strengthened U.S. Dollar affected our dollar-denominated European
sales, and therefore, European net sales increased only 4% when expressed in the
U.S. Dollar."

Our gross margin decreased in fiscal year 2009 compared with the prior year
because of the lower gross margins we realized on the OnDemand machine sales and
the impact of a stronger U.S. Dollar on European consumable sales. Despite these
factors, we were successful in generating $5.6 million in operating cash flow
and used our free cash flow to reduce our debt by 31%.

Although we saw an increase in our SG&A expenses, we had anticipated that it
would be necessary to add costs to the organization to fully install, train and
support the OnDemand contract with Omnicare. In addition, our R&D spending in
fiscal 2009 was much higher than the prior year as we continued to invest in the
development of new products and markets to help fuel our future growth.

Segment Results

Net Sales

Three Months Ended Twelve Months Ended
March 31, March 31,
2009 2008 2009 2008
(In Millions)

Consumables $ 13.6 $ 12.7 $ 53.9 $ 50.4
Packaging Automation $ 3.1 $ 1.4 $ 21.7 $ 7.2
Medication Administration Systems $ 0.3 $ 0.1 $ 0.6 $ 0.2

Gross Margin

Three Months Ended Twelve Months Ended
March 31, March 31,
2009 2008 2009 2008

Consumables 41.9% 40.3% 40.8% 42.2%
Packaging Automation 20.0% 5.6% 14.6% 8.7%
Medication Administration Systems 36.4% 9.3% 21.2% 4.3%

Operating Profit (Loss)/Margin

Operating profit (loss), as presented below, is net sales less the cost of sales
and other operating expenses that are directly identifiable to the respective
segment, or if not directly identifiable to a segment, allocated on the basis of
sales or manpower. Operating profit (loss) is reconciled to earnings before
income taxes in the Consolidated Financial Statements included in the Company`s
Form 10-K filed with the SEC.

Three Months Ended Twelve Months Ended
March 31, March 31,
2009 2008 2009 2008
( In Thousands, Except for Percentages)

Consumables $ 2.0 $ 1.4 $ 7.3 $ 7.4
14.7% 11.7% 13.5% 14.8%
Packaging Automation $ (0.2) $ (1.0) $ (1.1) $ (2.8)
(7.6%) (54.8%) (5.0%) (39.8%)
Medication Administration Systems $ (0.2) $ (0.2) $ (1.4) $ (0.6)
(57.0%) (225.3%) (219.0%) (254.9%)

Todd Siegel continued, "Our operating margins in the Consumables segment felt
the effect of the stronger U.S. Dollar as it relates to punch cards manufactured
in the U.S. and sold in Europe. We also experienced increases in our raw
material costs during the first half of fiscal 2009 as the price of oil spiked.
We reacted to these cost increases, as well as higher transport fuel costs, by
adjusting selling prices and introducing cost saving measures in our
manufacturing processes.

"We were successful in significantly reducing our operating losses in the
Packaging Automation segment by virtue of the additional profit realized on the
OnDemand machines we sold this year. Although we expect this segment to operate
at a loss for the near future, we continue to view this as an important
investment in light of its contribution to the Consumables segment.

"MedLocker sales finished strong for the 2009 fiscal year, and we expect that
this product will generate increased gross profit in fiscal 2010. In addition,
we are optimistic that our MedTimes pilot sites will help validate the positive
return on investment that pharmacies can achieve, and thereby, begin to
contribute to our Medication Administration Systems segment.

Siegel continued, "We consider fiscal year 2009 a very successful year, and we
are proud of our accomplishments in terms of growth, profitability and cash flow
during very challenging economic times."

The Company also announced today that it has discontinued its practice of
providing revenue and EPS guidance for future periods.

However, the Company expects operating margins in its Consumables segment to
increase in fiscal year 2010, compared with fiscal year 2009, primarily due to
the increased product margin that we expect to result from growth in net sales
for this segment in both the U.S. and Europe.

Although the Company expects that its Packaging Automation segment will continue
to operate at a loss in fiscal year 2010, we believe the value of this segment
is inherent in its ability to support and grow the recurring revenue and
profitability of the Consumables segment. The Company intends to continue to
invest in its Medication Administration Systems segment and plans to evaluate it
on an ongoing basis as pilot sites progress.

MTS also announced today that it has entered into an exclusive agreement with
Microfil LLC to license and develop the Microfil automated robotic medication
dispensing system. Founded in 2002 by its CEO Rusty Baker, Microfil has designed
an under-the-counter pill dispensing system to store, retrieve, fill by count
and label prescription medications into a vial. The system is designed for use
in high volume retail pharmacies, and six systems to date have been in operation
in that market for several years. The terms of the agreement grant MTS exclusive
rights to Microfil`s intellectual property and to manufacture and sell the
systems. During the initial phase of the agreement, the parties will cooperate
to fully commercialize the product and begin to manufacture and sell systems to
retail pharmacies.

Siegel said, "We are pleased to begin this relationship with Microfil. Rusty
Baker developed the Baker Cell equipment that was widely used by retail and
central fulfillment pharmacies prior to being acquired by a large pharmaceutical
wholesaler in 1998. Microfil has now developed a product that we believe has a
competitive advantage due to its space saving, under-the-counter profile and
improved technology. We are optimistic that our manufacturing, assembly,
installation, training and support infrastructure can be leveraged to provide
MTS an opportunity to compete in what we believe to be a substantial market in
the U.S."

MTS has also entered into agreements with two pharmacies, one in Ohio and the
other in Indiana, to install the MedTimes medication administration system into
nursing homes as pilot sites. These should be fully operational within six weeks
and are expected to last for approximately six months. The sites will provide
MTS and its customers with information regarding the benefits that MedTimes can
offer both to institutional pharmacies and skilled nursing facilities.

"We believe this is a very important step in the evolution of our MedTimes
product," added Siegel. "We are pleased to have received Board of Pharmacy
approvals in Ohio and Indiana to proceed with these pilot sites. We believe
these opportunities will allow us to demonstrate how our medication
administration system can provide both substantial improvements in quality and
help validate the attractive returns on investment for pharmacies and nursing
homes. We are optimistic that successful results will allow us to roll out
MedTimes to more of our institutional pharmacy customer base.

"Our expansion in the retail pharmacy market with our RxMap, multi-med product
has continued, and pilot programs are underway with two retail drug store
chains. One is with a regional chain in the Midwestern United States, and the
other is in the United Kingdom with our largest international customer, which is
also one of the largest chains in the Europe. The U.S. site will be manually
filling custom blister packs and measuring customer response during the next six
to nine months. Our U.K. customer has been using multi-med blister packs for
several years and has already validated customer acceptance, and its pilot will
focus on the use of automation to improve fulfillment. We recently signed an
agreement to place an OnDemand Multi-Med in a central fulfillment site for this
customer and expect to deliver the machine in our second quarter beginning July
1, 2009. In addition to the placement of OnDemand Multi-Med in England, we have
delivered additional machines in Germany and Spain to service independent
pharmacies in those markets.

Siegel concluded, "We believe fiscal 2010 will be a very exciting and
challenging year for the Company. Our Consumables segment continues to show
steady growth and sufficient operating cash flow to fund our investment in the
Packaging Automation and Medication Administration Systems segments, while
providing free cash flow to reduce our debt. We are optimistic that our
investments in automation will yield a positive return to our stockholders as we
continue to expand our penetration of new markets for our products."

Notice of Conference Call

Management of the Company will host a conference call today at 11:00 a.m.
Eastern Time. To access the conference call, please telephone 888-459-5609 and
enter 14238961 for the conference ID number. A digital replay will be available
and may be accessed by visiting the Company`s web site at www.mts-mt.com.

About the Company

Founded in 1984, MTS Medication Technologies (www.mts-mt.com) is an
international provider of medication adherence packaging systems designed to
improve medication dispensing and administration. MTS manufactures automated
packaging machines and related consumables for prescription medications and
nutritional supplements.

This press release contains forward-looking statements within the meaning of
that term in Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934.Additional written or oral forward-looking
statements may be made by the Company from time to time, in filings with the
Securities and Exchange Commission or otherwise. Statements contained herein
that are not historical facts are forward-looking statements made pursuant to
the safe harbor provisions described above.Forward-looking statements may
include, but are not limited to, projections of revenue, income or losses, the
value of contracts, capital expenditures, plans for future operations, the
elimination of losses under certain programs, financing needs or plans,
compliance with financial covenants in loan agreements, plans for sale of assets
or businesses, plans relating to products or services of the Company,
assessments of materiality, predictions of future events and the effects of
pending and possible litigation, as well as assumptions relating to the
foregoing. In addition, when used in this discussion, the words "anticipates,"
"estimates," "expects," "intends," "believes," "plans" and variations thereof
and similar expressions are intended to identify forward-looking statements.In
particular, all statements regarding the continuing of any trend or expected
sales are forward-looking statements, as is any statement regarding the
potential growth of our core business and incremental revenue from our OnDemand,
MedLocker and MedTimes product, as are any statements related to future
equipment sales or concerning general economic conditions in the United States
and elsewhere.Forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified based on current
expectations. Consequently, future events and actual results could differ
materially from those set forth in, contemplated by, or underlying the
forward-looking statements contained herein.Statements in the Press Release
describe factors, among others, that could contribute to or cause such
differences.Other factors that could contribute to or cause such differences
include, but are not limited to, unanticipated increases in operating costs,
changes in the United Kingdom or German healthcare regulatory system, labor
disputes, customer rejection of any installed OnDemand machine, capital
requirements, increases in borrowing costs, product demand, pricing, market
acceptance, hurricanes, intellectual property rights and litigation ,foreign
exchange rate risks, risks in product and technology development and other risk
factors detailed in the Company`s Securities and Exchange Commission
filings.Readers are cautioned not to place undue reliance on any forward-looking
statements contained herein, which speak only as of the date hereof.The Company
undertakes no obligation to publicly release the result of any revisions of
these forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of unexpected
events.

MTS MEDICATION TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2009 AND 2008
(In Thousands)
(Unaudited)

ASSETS

2009 2008

Current Assets:
Cash $ 493 $ 662
Restricted Cash 79 158
Accounts Receivable, Net 8,567 8,213
Inventories, Net 10,001 14,504
Prepaids and Other 708 2,528
Deferred Tax Asset 393 495
Total Current Assets 20,241 26,560

Property and Equipment, Net 8,127 7,746
Goodwill 1,196 1,161
Other Intangible Assets, Net 531 783
Other Assets, Net 1,831 2,198

Total Assets $ 31,926 $ 38,448

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts Payable and Accrued Liabilities $ 6,170 $ 8,653
Current Maturities of Long-Term Debt 19 74
Current Maturities of Related Party Note Payable - 106
Customer Deposits 1,330 4,123
Total Current Liabilities 7,519 12,956

Long-Term Debt, Less Current Maturities 8,196 11,691
Other Liabilities 1,211 834
Deferred Tax Liability, Net 612 376
Total Liabilities 17,538 25,857

Stockholders' Equity:
Common Stock 65 64
Capital In Excess of Par Value 10,500 10,137
Accumulated Other Comprehensive (Loss) Income (674 ) 374
Retained Earnings 4,825 2,344
Treasury Stock (328 ) (328 )
Total Stockholders' Equity 14,388 12,591
Total Liabilities and Stockholders' Equity $ 31,926 $ 38,448

MTS MEDICATION TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands; Except Earnings Per Share Amounts)
(Unaudited)

Three Months Ended March 31, Year Ended March 31,
2009 2008 2009 2008

Net Sales $ 16,973 $ 14,151 $ 76,275 $ 57,809

Costs and Expenses:
Cost of Sales 10,550 9,189 50,966 35,880
Selling, General and Administrative 4,333 4,355 18,266 15,716
Depreciation and Amortization 684 866 2,948 2,785
Total Costs and Expenses 15,567 14,410 72,180 54,381

Operating Profit (Loss) 1,406 (259 ) 4,095 3,428

Interest Expense 103 136 479 637

Income (Loss) Before Taxes 1,303 (395 ) 3,616 2,791

Income Tax Expense (Benefit) 438 (531 ) 1,135 736

Net Income 865 136 2,481 2,055

Net Income Per Basic Common Share $ 0.13 $ 0.02 $ 0.38 $ 0.32

Net Income Per Diluted Common Share $ 0.13 $ 0.02 $ 0.37 $ 0.31

MTS Medication Technologies, Inc.
Michael P. Conroy, CFO, 727-576-6311, Ext. 1464
Fax: 727-579-8067
ir@mts-mt.com
or
Investor Relations:
Porter, LeVay & Rose, Inc.
Michael Porter, 212-564-4700
Fax: 212-244-3075
plrmail@plrinvest.com

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