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SPAN-AMERICA REPORTS HIGHER SALES AND NET INCOME
FOR SECOND QUARTER OF FISCAL 1998
Declares Quarterly Dividend
Receives FDA Marketing Approval for New Dynamic Mattress Products
Greenville, South Carolina (April 21, 1998) Span-America Medical Systems, Inc. (Nasdaq/NM:SPAN) today reported higher sales and net income from continuing operations for the second
quarter and six months ended March 28, 1998. The Company's results for all periods presented have been restated to reflect the sale of the contract packaging business as a discontinued operation. Span-America
sold the packaging business on February 27, 1998.
The Company also announced a regular cash dividend of $0.025 per share payable on June 4, 1998, to shareholders of record as of May 15, 1998.
Span-America announced that it received two FDA 510(k) clearances for its dynamic mattress products. The FDA marketing clearances were granted for the Turn Select® and Site
Select® PressureGuard® mattresses.
"We have made significant progress in positioning Span-America for improved results," stated Jim Ferguson, president and chief executive officer of Span-America Medical
Systems, Inc. "The recent sale of our contract packaging business will allow our management team to focus on building our core medical business and leveraging our manufacturing technologies to expand our
industrial and consumer businesses. We also believe the recent repurchase of 280,579 shares, or 9.0%, of the Company's outstanding Common Stock highlights our confidence in the future of Span-America.
"Span-America's quarterly medical sales rose to their highest level in four years and benefitted from demand for convoluted overlays, foam mattresses and dynamic mattresses.
The recent FDA marketing approval for our newest dynamic mattress products also contributed to second quarter sales growth. We are pleased with Span-America's solid progress in rebuilding our core medical
business in recent years," continued Mr. Ferguson.
Second Quarter Results
Net sales from continuing operations increased 2% to $7.4 million in the second quarter of fiscal 1998 compared with $7.2 million in the second quarter last year. Medical sales rose 1%
to $4.2 million, industrial sales were up 30% to $1.0 million and consumer sales were down 5% to $2.2 million compared with the second quarter of fiscal 1997.
"Industrial sales continue to build as we expand our shipments to existing customers and add new ones. We believe consumer sales were lower in the second quarter primarily due to
timing differences in seasonal orders compared with last year. We remain optimistic about the continued growth of these business units," concluded Mr. Ferguson.
Net income from continuing operations rose 11% to $496,000, or $0.16 per diluted share, compared with $446,000, or $0.14 per diluted share, in the second quarter of last year. The
improved profit performance came from higher sales volume combined with lower overhead and administrative expenses. Net income, including discontinued operations, increased 28% to $509,000, or $0.16 per diluted
share, in the second quarter of fiscal 1998 compared with net income of $399,000, or $0.12 per diluted share, in the second quarter of fiscal 1997.
Six-Month Results
Net sales from continuing operations for the first six months of fiscal 1998 increased 2% to $13.7 million compared with $13.5 million in the first six months of the prior fiscal year.
Medical sales declined 4% to $7.7 million, industrial sales were up 26% to $2.0 million and consumer sales rose 4% to $4.1 million compared with the first six months of fiscal 1997.
Net income from continuing operations for the first six months of fiscal 1998 rose 3% to $767,000, or $0.24 per diluted share, compared with $746,000, or $0.23 per diluted share, in the
first six months of fiscal 1997. Net income, including discontinued operations, increased 23% to $921,000, or $0.29 per diluted share, in the first six months of fiscal 1998 compared with net income of $749,000, or
$0.23 per diluted share, in the first six months of fiscal 1997.
Span-America Medical Systems, Inc. manufactures and markets products to the health care industry for the prevention and treatment of pressure ulcers. The Company also is a manufacturer
and marketer of custom foam and packaging products for the consumer and industrial markets. Span-America's stock is traded on The Nasdaq Stock Market's National Market under the symbol SPAN
With the exception of historical factual information, the statements made in this press release constitute forward-looking statements, contain the words "believes,"
"anticipates," "expects," and words of similar import based upon current expectations and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements involve certain assumptions, risks and uncertainties that could cause actual results to differ materially from those included in or contemplated by the statements. The Company
disclaims any obligation to update any forward-looking statements as a result of developments occurring after the issuance of this press release.
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