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

  Declares Quarterly Dividend

GREENVILLE, S.C. (October 31, 2000) Span-America Medical Systems, Inc. (Nasdaq/NM:SPAN) today reported higher sales and net income for the fourth quarter and fiscal year ended September 30, 2000.  Fourth quarter sales advanced 30% to $7.5 million and net income rose 173% to $286,000, or 11 cents per diluted share, compared with the fourth quarter of fiscal 1999.  The Company also announced a regular cash dividend of $0.03 per share, payable on December 4, 2000, to shareholders of record on November 16, 2000.

Fourth Quarter Results

Sales increased across all segments in the fourth quarter," stated Jim Ferguson, president and chief executive officer of Span-America Medical Systems, Inc.  "The solid increase in sales and our continued focus on operating efficiencies were the main drivers of our significant earnings growth in the fourth quarter.

"The majority of the fourth quarter sales increase came from the custom products segment where sales rose 59% to $3.3 million compared with $2.1 million in the fourth quarter of fiscal 1999.  Our expanding relationship with Louisville Bedding Company was the primary contributor to sales growth in the custom products business.  Sales also increased in the medical segment, rising 13% to $4.2 million in the fourth quarter compared with $3.7 million in the year-earlier period.  We took advantage of this higher sales base to expand selected marketing and product development efforts during the quarter.

The leading product lines in the fourth quarter were our consumer mattress pads and pillows which are sold through Louisville Bedding.  Their excellent reputation and market relationships have provided a major boost to our consumer sales.  In addition, industrial sales, which are part of the custom products segment, were up 8% in the fourth quarter resulting from new projects with new customers.

Our core medical business has strengthened throughout fiscal 2000," continued Mr. Ferguson.  "The overall medical market environment is much more positive than it was a year ago. Our medical sales reflected that trend, increasing 13% compared with the same quarter last year.  Most of the increase came from sales of our therapeutic replacement mattresses which grew 42% compared with the fourth quarter of last year and have shown solid performance all year.  In addition to the gains in our mattress business, our lines of patient positioners and seating products increased 3% and 15%, respectively.  Sales of mattress overlays declined by 8% in the quarter.

The Company's gross profit margin remained approximately level at 28% in the fourth quarter of fiscal 2000 even though most of the quarter's sales increase came from our lower-margin consumer products.  Operating profit for the fourth quarter was $234,000, up almost six-fold from $40,000 for the fourth quarter of fiscal 1999.  The increase in operating profit was due to the higher sales base and the continued contribution from improved manufacturing efficiencies.  Net income jumped 173% to $286,000, or 11 cents per diluted share, compared with net income of $105,000, or 4 cents per diluted share, in the fourth quarter of fiscal 1999." 

Year-End Results

Net sales for fiscal 2000 rose 15% to $26.6 million compared with $23.1 million in fiscal 1999. Most of the increase came in the custom products segment where sales rose 36% to $11.1 million compared with $8.1 million in 1999.  The medical segment also contributed to growth, with sales rising 4% to $15.5 million for the year.  The strongest performers in the medical business were the lines of therapeutic replacement mattresses, including Geo-Mattress® and PressureGuard® products, which grew 25% in fiscal 2000.

Mr. Ferguson continued, "We are pleased with the Company's overall performance improvements in fiscal 2000.  The environment in our key markets is positive, and we will continue to focus on sales and earnings growth as we begin fiscal year 2001."

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.