SPAN-AMERICA REPORTS IMPROVED SECOND QUARTER RESULTS

Announces Quarterly Dividend

GREENVILLE, S.C. -- (April 24, 2002) -- Span-America Medical Systems, Inc. (Nasdaq:SPAN) today reported higher sales and net income for the second fiscal quarter ended March 30, 2002.  Net sales increased 16% to $7.6 million and net income rose 163% to $462,000, or 18 cents a diluted share, compared with the same quarter of fiscal 2001.

The Board also declared a regular quarterly dividend of $0.03 per share payable on June 5, 2002, to shareholders of record on May 15, 2002.  

"Span-America's second quarter results benefited from higher medical product sales, improved product mix and good manufacturing cost controls," stated Jim Ferguson, president and chief executive officer of Span-America Medical Systems, Inc.  "Our medical sales continue to benefit from increased demand for our powered mattress products, including our new PressureGuard APM2Ô and PressureGuard Easy AirÔ mattresses."

Second Quarter Results

Second quarter sales rose to $7.6 million compared with $6.5 million in the second quarter of last year.  The majority of the sales increase was due to higher medical product sales that rose 27% to $4.7 million compared with $3.7 million in the second quarter of fiscal 2001.  Approximately $600,000 of the increase in medical product sales was due to increased demand for the Company's products and $400,000 was due to timing differences related to a customer's purchases last year in anticipation of a price increase.  In the first quarter of 2001, the customer accelerated its purchases by approximately $400,000 in advance of a price increase.  The accelerated purchasing was reflected in corresponding lower purchases in the second quarter of 2001.  Without the sales related to the timing difference, medical sales in the second quarter of fiscal 2002 would have increased approximately 14% compared with the second quarter of fiscal 2001.

The majority of Span-America's medical sales growth from last year was in mattress products that rose 48% to $2.2 million compared with the second quarter of last year. Medical mattress sales were not affected by the unusual purchase patterns last year.   Sales of overlays rose 4% during the quarter, while positioner and seating products rose 24% and 16%, respectively. 

Custom product sales rose 2% to $2.8 million, primarily due to the strength of consumer products," continued Mr. Ferguson. "Our successful marketing program with Louisville Bedding Company was largely responsible for the 12% increase in consumer sales, including higher volumes of our Geo-Systems™ bedding products.

"Industrial sales declined 20% compared with the second quarter of 2001, due primarily to the loss of a large customer who redesigned their product to remove the foam components, and to a general slowdown in business among many of our key industrial customers.  We expect industrial sales to improve over time as the manufacturing sector in our region regains its footing. 

The Company's gross profit margin increased 35% during the quarter to $2.5 million from $1.9 million in the same quarter last year.  The gross margin percentage climbed to 33.7% compared with 29.0% last year, primarily the result of higher sales volume, a more profitable mix in the medical business, and good manufacturing cost control.

Operating profit for the second quarter increased 295% to $440,000 compared with $111,000 in the second quarter of last year mainly attributable to higher sales volume.  Sales and marketing expenses increased by 31% as a result of shipping costs and commissions related to the higher sales volume.

Non-operating income increased 75% in the quarter to $274,000 compared with $157,000.  Most of the increase was due to a one-time pre-tax gain of $84,000 ($55,000, or 2 cents a share after taxes) as a result of common stock received through the demutualization of Prudential Insurance Company.  The balance of the increase came from royalty income on a syringe product licensed to Becton and Dickinson Company.

Net income in the second quarter rose 163% to $462,000, or 18 cents a diluted share, compared with $175,000, or 7 cents a diluted share, in the second quarter of last year. 

Year-to-Date Results

Net sales for the first six months of fiscal 2002 rose 6% to $14.4 million compared with $13.6 million for the first half of fiscal 2001.  Net income was up 62% to $817,000, or 32 cents a diluted share, in the first six months of fiscal 2002 compared with $503,000, or 20 cents a diluted share, for the same period in fiscal 2001.

The majority of the sales increase compared with last year was due to a 9% increase in medical product sales to $9.1 million.  The year-to-date increase was driven by sales of mattresses and seating products, which grew by 24% and 12%, respectively.  These increases were partly offset by sales declines in our positioner and overlay product lines, which decreased by 4% and 12%, respectively.

Sales in the custom products segment increased by 1% to $5.3 million during the first half of fiscal 2002.  Within that segment, consumer sales were up 13% to $4.0 million, and industrial sales declined 23% to $1.3 million. 

"Consumer sales are being driven by growth in our GeoSystems™ line of mattress overlays that are sold through our marketing partner, Louisville Bedding Company," continued Mr. Ferguson.  "We recently renewed and extended our distribution agreement with Louisville Bedding, and we look forward to continued growth in our consumer product lines."

The year-to-date growth in consumer sales was mostly offset by a decline in sales of industrial products.  Industrial sales declined 23% in the first half due to the loss of a customer as noted above and the general weakness in the manufacturing sector.

"Overall, we are pleased with the Company's performance in the first half. We are benefiting from solid sales growth in our medical and consumer product lines.  This translates into increased volume through our plant and improved manufacturing efficiencies.  We are also getting a boost from higher royalty income and the one-time gain from Prudential's demutualization process.  We are continuing work on new product development to broaden our current product lines, and we are actively looking for growth opportunities outside our existing business," concluded Mr. Ferguson.

About Span-America Medical Systems, Inc.

Span-America manufactures and markets a comprehensive selection of pressure management products for the medical market, including Geo-Matt®, PressureGuard®, Geo-Mattress®, Span+Aids®, Isch-Dish®, and Selan® products.  The Company also supplies custom foam and packaging products to the consumer and industrial markets.  Span-America's stock is traded on The Nasdaq Stock Market's National Market under the symbol SPAN.

The Company has made forward-looking statements in this release, regarding management's expectations for future sales and earnings performance. Management wishes to caution the reader that these statements are only predictions.  Actual events or results may differ materially as a result of risks and uncertainties facing the Company including: (a) the loss of a major distributor of the Company's medical or custom products, (b) inability to achieve anticipated sales volumes of medical or custom products, (c) changes in relationships with large customers, (d) the impact of competitive products and pricing, (e) government reimbursement changes in the medical market, (f) FDA regulation of medical device manufacturing, (g) raw material cost increases; and (h) other risks referenced in the Company's Securities and Exchange Commission filings.  The Company disclaims any obligation to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise.  Span-America Medical Systems, Inc. is not responsible for changes made to this document by wire services or Internet services.