SPAN-AMERICA REPORTS HIGHER SALES AND INCOME
FOR THIRD QUARTER OF FISCAL 2000

Declares Quarterly Dividend

GREENVILLE, S.C. (July 25, 2000) -- Span-America Medical Systems, Inc. (Nasdaq/NM:SPAN) today reported an increase in net sales and income from continuing operations for the third quarter ended July 1, 2000.  Net sales rose 22% to $6.8 million, and income from continuing operations increased to $274,600, or 11 cents a diluted share, compared with a loss of $51,100, or 2 cents a share, in the third quarter of last year.

 The Company also declared a regular quarterly cash dividend of $0.03 per share payable on September 1, 2000, to shareholders of record on August 15, 2000.

 Third Quarter Results

"Sales from our core medical products rose 8% to $3.8 million in the third quarter, primarily due to strong performance in our mattress business," stated Jim Ferguson, president and chief executive officer of Span-America Medical Systems, Inc.  "Medical mattress sales were up 59% in the third quarter as a result of healthy demand for our Geo-Mattress product line.  Our new PressureGuard APM2, introduced in March, also added to the performance of our mattress product line during the latest quarter.  Our mattress business is showing renewed vitality after last year's weakness related to Medicare cutbacks. Sales of seating products were up 9% during the quarter, while sales of overlays and positioners were down 14% and 7%, respectively.  Overall, we are pleased with the recovery we are seeing in our medical business.

"Custom products sales increased 45% to $3.0 million compared with the same quarter of fiscal 1999.  Primary contributors were our lines of pillows and mattress overlays, which are sold through our marketing partner, Louisville Bedding Company. We have developed a number of new customers since joining forces with Louisville Bedding last year, and the products and programs have been very successful.  We anticipate further growth in this business for the remainder of the year."

Earnings from continuing operations for the third quarter were $274,600, or 11 cents a diluted share, compared with a loss of $51,100, or 2 cents a share, in the year-earlier quarter.  Most of the earnings growth during the quarter was due to higher sales volume, lower administrative expenses, and continued improvements in manufacturing efficiencies.  Additionally, there were higher royalties and investment income during the quarter.  Last year, net income for the third quarter included a one-time gain related to the 1998 sale of the Company's contract packaging business.  The gain resulted in after-tax income from discontinued operations of $365,300, or 15 cents a diluted share.

"We are pleased with the Company's progress in the third quarter," continued Mr. Ferguson.  "As we finish fiscal year 2000 and look forward, we will remain focused on sales and earnings growth, new products, and new business opportunities."        

Year-to-Date Results

Net sales for the first nine months of fiscal 2000 increased 10% to $19.1 million compared with $17.3 million for the same period in fiscal 1999. Earnings from continuing operations for the year to date were $684,400, or 27 cents a diluted share, compared with $27,400, or 1 cent a share, in the first nine months of fiscal 1999. 

Mr. Ferguson added, "Almost all of the year-to-date sales increase resulted from the custom products segment and was due to strong demand for our consumer bedding products.  Custom products sales grew by 28% during the first nine months to $7.8 million.  In the medical segment, sales rose 1% during the period to $11.3 million, driven by solid increases in mattress sales which were mostly offset by declines in overlay sales."

 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®, and Isch-Dish® 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) F.D.A. 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.