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Derma Sciences, Source Medical Announce Distribution Agreement

May 12, 2005

Derma Sciences, a manufacturer and full line supplier of wound and skin care products, announced it has entered into an agreement with Source Medical under which Source will become Derma's exclusive distributor of the company's products to the Canadian market. The five-year agreement begins on June 1 and provides for strong revenue growth for Derma Science and incentives to Source Medical. In addition to distribution fees for expanding Derma's market share in Canada, Derma Sciences will manufacture certain products that Source markets and distributes under the Source Medical brand.

Reuters (http://today.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?view=PR&symbol=DSCI.OB&storyID=239763%2B10-May-2005%2BBW)