Span-America Medical Systems, Inc. (NASDAQ:SPAN) today reported its results for the second fiscal quarter ended April 2, 2011. Net income for the second quarter of 2011 was $1.1 million, or $0.37 per diluted share, compared with $1.2 million, or $0.44 per diluted share, in the second quarter of fiscal 2010. Net sales for the second quarter of 2011 rose to $13.5 million compared with net sales of $13.1 million in the second quarter of fiscal 2010.

“Span-America’s sales increased in the second fiscal quarter to $13.5 million on the strength of a new customer for consumer bedding products,” stated Jim Ferguson, president and chief executive officer of Span-America Medical Systems. “The growth in consumer sales offset lower medical segment sales that were affected by soft demand for our therapeutic support surfaces. The change in sales mix from last year also reduced earnings compared with the second quarter of fiscal 2010 due to the shift toward lower-margin consumer product lines.

“We are encouraged about the second half of this fiscal year based on our improvement in sales and earnings from the first quarter to the second quarter, increased customer interest in our medical support surface product lines and new medical products recently introduced. We expect that higher demand for our medical products will be a key driver in improving our earnings in the second half of fiscal 2011,” continued Mr. Ferguson.

Second Quarter Results

Second quarter sales for fiscal 2011 rose 2% to $13.5 million compared with $13.1 million in the second quarter of last year. The 2% sales growth since last year was due to higher sales of consumer bedding products, which are part of the custom products segment.

Total medical sales decreased 6% to $8.9 million compared with $9.5 million in last year’s second quarter. The majority of the sales decline in the medical segment came from our lines of therapeutic support surfaces, particularly among our high-end, powered products, which have been the products most affected by the economic downturn. Total support surface sales, including powered and non-powered products, were down 11% in the second quarter to $5.3 million compared with $6.0 million in the second quarter of last year. Second quarter support surface sales included $211,000 in sales of our new Custom Care® product line that was launched in the first quarter of this fiscal year.

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