SPAN-AMERICA REPORTS RESULTS
FOR FOURTH QUARTER OF FISCAL 1998

Declares Quarterly Dividend

GREENVILLE, S.C. (November 16, 1998) ) Span-America Medical Systems, Inc. (Nasdaq/NM:SPAN) today reported fourth quarter sales of $7.2 million and net income of $214,100, or 7 cents a diluted share. The Company's fourth quarter results include a one-time charge of $175,000, or 4 cents a diluted share after tax, from retail markdown allowances and other expenses associated with exiting part of the Company's consumer convoluted foam business. The Company also announced a regular cash dividend of $0.025 per share, payable on December 4, 1998, to shareholders of record on November 16, 1998.

Fourth Quarter Results

"Our fourth quarter sales and earnings were hurt by extra expenses related to our decision to discontinue two lines of low-margin consumer mattress pad products," stated Jim Ferguson, president and chief executive officer of Span-America Medical Systems, Inc. "We are encouraged, though, by the excellent performance in our medical and industrial business units. Medical sales were up by 20% to $4.3 million and reached the second highest quarterly level in five years. The new medical mattress products introduced within the last year were big contributors to the growth, along with positioners and seating products. Our industrial sales set a record, increasing 22% to $1.1 million, mostly on higher sales to our largest customers. These gains were offset by a decline in consumer foam sales during the quarter.

"Consumer sales decreased 33% to $1.8 million during the quarter. The decline was evenly split between consumer mattress pads and private label bath mat products. We plan to discontinue selling two lines of our private label consumer mattress pads in fiscal 1999. Although the two lines generated about $4.2 million in revenues in fiscal 1998, recent competitive pricing pressures have reduced product line profitability below acceptable levels. We expect to offset the majority of the lost sales volume with increases in sales of other product lines. One of our key medical distributors has recently signed long-term distribution agreements with Premier, Inc. and Kaiser Permanente, which we expect will have a positive impact on our medical sales. In addition, we have signed a licensing agreement with a regional consumer mattress manufacturer and marketer to incorporate some of our patented medical mattress and overlay products in their consumer lines."

Total net sales were flat during the fourth quarter at $7.2 million. Solid increases in medical and industrial sales were offset by a decline in consumer sales. Income from continuing operations during the quarter fell 26% to $214,100, or 7 cents a diluted share, compared with $288,900, or 9 cents a diluted share, in the fourth quarter last year. The decline in net income was caused by the one-time charge of $175,000 ($119,700 after tax) as a result of markdown allowances and other expenses related to discontinuing the two low-margin consumer foam product lines. Without the charge, earnings from continuing operations for the fourth quarter would have been $333,700, or 12 cents a diluted share. The loss of revenues from the discontinued product lines and plant consolidation expenses are expected to cause sales and earnings in the first quarter of fiscal 1999 to be lower than those of the first quarter last year.

Year-End Results

Sales increased 2% to a record $28.3 million in fiscal 1998 compared with $27.7 million in fiscal 1997. The Company's medical sales, its core business, rose 6% to $16.1 million on solid growth in the positioner and seating product lines. Consumer sales declined 11% to $8.1 million because of lower consumer mattress pad and private label bath mat sales. Industrial sales rose 23% to a record $4.1 million in fiscal 1998.

Income from continuing operations in fiscal 1998 increased 3% to $1.41 million from $1.37 million last year. Earnings per diluted share from continuing operations rose 9% to 47 cents from 43 cents in fiscal 1997. Excluding the fourth quarter one-time charge in fiscal 1998, earnings from continuing operations would have been $1.52 million, or 50 cents a diluted share.

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.

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 consumer products, (b) inability to achieve anticipated sales volume of medical 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, (h) disruptions caused by the Company's plant consolidation, and (i) 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.
                Financial Highlights
                   
                 Three Months Ended  Twelve Months Ended
                 Oct.3,  Sept. 27,  Oct. 3,   Sept. 27,
                 1998    1997    1998     1997
                   From Continuing Operations(1):
                   Net sales        $7,215,500 $7,192,700 $28,345,800 $27,695,400
                   Gross profit       1,857,100 1,953,400  8,498,800  8,428,200 
                   
                   Operating income      219,800  354,600  1,804,700  1,833,300
                   
                   Net income         214,100  288,900  1,412,000  1,370,200
                   Net income per share:
     Basic            0.08    0.09    0.48    0.43
     Diluted           0.07    0.09    0.47    0.43
                   
                   From Discontinued Operations:
                   Net income            --  175,400   153,500   241,700
                   Net income per share:
     Basic             --    0.06    0.05    0.08
     Diluted            --    0.05    0.05    0.07
                   
                   Total:
                   Net income         214,100  464,300  1,565,500  1,611,900
                   
                   Net income per share:
     Basic            0.08    0.15    0.53    0.51
     Diluted           0.07    0.14    0.52    0.50
                   
                   Weighted Average Number of Common
    Shares Outstanding:
     Basic         2,813,294 3,144,992  2,931,362  3,188,397
     Diluted        2,894,465 3,202,387  3,038,350  3,223,927
                   
                   
                   Selected Balance Sheet Data
                            Oct. 3,  Sept. 27,
                             1998    1997
                   
                   Current assets                 $10,963,800 $13,508,700
                   Total assets                  19,012,300 22,626,300
                   Current liabilities               2,215,200  4,115,400
                   Total liabilities                3,315,900  5,646,800
                   Shareholders' equity              15,696,400 16,979,500
                   
      (1) Span-America sold its contract packaging business effective
                   February 27, 1998. All periods shown have been restated to reflect the
                   contract packaging business as a discontinued operation.