Span-America Medical Systems, Inc. (NASDAQ:SPAN) today reported growth in sales for the third fiscal quarter and nine months ended June 30, 2012. Net sales for the third quarter of fiscal 2012 increased 24% to $16.9 million compared with net sales of $13.7 million in the third quarter of fiscal 2011. Net sales for the first nine months of fiscal 2012 rose 50% to $58.4 million compared with $38.9 million in the same period of fiscal 2011. Net income for the third quarter of fiscal 2012 decreased 27% to $743,000, or $0.25 per diluted share, compared with $1.0 million, or $0.36 per diluted share, in the third quarter of fiscal 2011. Net income for the first nine months of fiscal 2012 increased 32% to $3.7 million, or $1.26 per diluted share, compared with $2.8 million, or $0.98 per diluted share, for the first nine months of fiscal 2011. “Span-America sales benefited from the addition of M.C. Healthcare that was acquired in December 2011 and continued sales growth from our medical, consumer and industrial products,” stated Jim Ferguson, president and chief executive officer of Span-America Medical Systems. “Our third quarter earnings were affected by significant increases in foam raw material prices, which we were not able to fully pass along to customers during the quarter. “We expect our fourth quarter margins to improve over third quarter levels due to recent price reductions on certain foam raw materials, sales price increases and production changes we made to improve foam yields for selected products. Longer term, we believe we can pass on the higher raw material costs as additional customer contracts renew. “We remain very positive about our medical business based on the continued integration of the Span-America and M.C. Healthcare product lines. We believe we have excellent opportunities to gain market share as we cross-sell our therapeutic support surface and bed frame products and introduce new products that are currently in the development phase. Our outlook for the custom products segment is also positive based on current order levels scheduled into next fiscal year,” continued Mr. Ferguson.