“We made someprogress in improving our raw material and labor usage, particularly in thelower-margin custom products segment,” said Mr Ferguson. Second quarter gross profit declined 14% to $4.8 million compared with $5.5million in the same period last year because of lower sales volume during thequarter. The impact of lower sales was partially offset by improvedmanufacturing efficiencies, which resulted in an increase in second quartergross margin to 35.7% from 35.2% in the second quarter last year. Industrial sales have been affectedmainly by lower volume to automotive industry customers. In the consumer part of the custom products segment, sales declined 1% to $3.35million compared with $3.37 million in the same quarter last year. Sales toWal-Mart were up during the second quarter; however, the increase was offset bylower sales to other consumer customers related to the general weakness inretail sales. We expect new product introductions and a strengthening economy tocontribute to improved results in the second half of this fiscal year.” Among other medical product lines, sales of seating products increased 8% duringthe second quarter, patient positioner sales decreased by 2%, Selan skin careproduct sales were down 4%, and overlays decreased 9% compared with the secondquarter of fiscal 2008.

The decline in custom products sales was due primarily to lower sales in theindustrial product lines where sales were down 26% to $695,000 compared with$938,000 in the second quarter last year. Themajority of the remaining sales decline was due to a large order forPressureGuard Easy Air support surfaces from a long-term care customer in thesecond quarter of last year that was not repeated in the same period this year. “We launched our Risk Manager bedside safety mat in December 2008,” continuedMr Ferguson. “Initial sales were very promising at $182,000 for the secondquarter. The decline was primarily due to lower sales of private label productsthat were provided to a medical customer under an agreement that originallyexpired in May 2008. Sales to this customer declined by $1.4 million in thesecond quarter of fiscal 2009 and accounted for 66% of the total sales declinein the medical segment compared with the second quarter of last year.

Medical segment sales decreased 19%to $9.3 million compared with $11.5 million in last year`s second quarter. Salesin the custom products segment declined 6% in the second quarter to $4.0 millioncompared with $4.3 million in the second quarter last year. Within the medical segment, sales of therapeutic support surfaces declined by26% to $6.6 million compared with $8.9 million in the second quarter of lastyear. “Our sales were down from last year due to lower medical segment sales followingthe expiration of a private label supply contract in May 2008, and a large orderfor therapeutic support surfaces that shipped in last year`s second quarter wasnot repeated this year,” stated Jim Ferguson, president and CEO of Span-AmericaMedical Systems. (NASDAQ:SPAN) today reported its results forthe second fiscal quarter ended March 28, 2009. Second quarter 2009 salesdeclined 15% to $13.4 million, and net income was down 23% to $1.1 million, or$0.38 per diluted share, compared with the second quarter of fiscal 2008. AMDTeresa Osborne, 512-633-8228 (PR)Copyright Business Wire 2009.