Span-America Medical Systems, Inc. (NASDAQ:SPAN) today reported its results for the third fiscal quarter ended July 2, 2011. Net income for the third quarter of fiscal 2011 rose to $1.0 million, or $0.36 per diluted share, compared with $945,000, or $0.33 per diluted share, in the third quarter of fiscal 2010. Net sales for the third quarter of fiscal 2011 increased to $13.7 million compared with $13.2 million in the third quarter of fiscal 2010.

“Span-America reported growth in sales from both of our major product segments in the third quarter,” stated Jim Ferguson, president and chief executive officer of Span-America Medical Systems. “Our growth in net income came from higher sales volume and lower operating costs compared with the third quarter of last year. This was our first quarter this fiscal year to report increases in both sales and net income. We remain optimistic about continued growth opportunities based on a higher number of requests for quotes from medical customers and positive customer response to new consumer sales programs and promotions.”

Third Quarter Results

Sales for the third quarter of fiscal 2011 increased 4% to $13.7 million compared with $13.2 million in the third quarter of last year. The increase in third quarter sales was due to higher volume in both the medical and custom products segments. The majority of sales growth occurred in the consumer product lines, which are part of our custom products business. Consumer sales increased 12% to $4.0 million compared with $3.6 million in the third quarter last year due to a successful sales program with a new retail customer and steady growth in our consumer Internet sales. All of our consumer products are sold through our long-time marketing and distribution partner, Louisville Bedding Company.

Within the custom products segment, industrial sales were down 1% in the third quarter of fiscal 2011 to $825,000 compared with $837,000 in the third quarter last year. The decline in industrial sales was due to the loss last year of a portion of our business with a customer in the water sports market. However, the lost business was almost fully offset by continued sales growth to customers in the automotive and packaging markets. Our industrial sales to the automotive market have shown steady growth for the past four quarters.

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