<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
-----------------------------------
FORM 10-Q
-----------------------------------
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the Quarterly Period Ended July 1, 2000
OR
TRANSITIONAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From _________ to ________.
Commission File Number 0-11392
SPAN-AMERICA MEDICAL SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
South Carolina 57-0525804
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
70 Commerce Center
Greenville, South Carolina 29615
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (864) 288-8877
Not Applicable
Former name, former address and former fiscal year, if
changed since last report.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's class of
common stock, as of the latest practical date.
Common Stock, No Par Value - 2,503,400 shares as of August 1, 2000.
<PAGE> 2
INDEX
SPAN-AMERICA MEDICAL SYSTEMS, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance Sheets - July 1, 2000 and October 2, 1999..............................3
Statements of Income - three and nine months ended July 1, 2000
and July 3, 1999..........................................................4
Statements of Cash Flows - nine months ended July 1, 2000 and
July 3, 1999..............................................................5
Notes to Financial Statements - July 1, 2000...................................6
Item 2. Management's Discussion and Analysis of Interim Financial
Condition and Results of Operations......................................10
PART II. OTHER INFORMATION...................................................13
Item 1 Legal Proceedings
Item 2 Changes in Securities
Item 3 Defaults upon Senior Securities
Item 4 Submission of Matters to a Vote of Security Holders
Item 5 Other Information
Item 6 Exhibits and Reports on Form 8-K
SIGNATURES....................................................................14
2
<PAGE> 3
Part 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Span-America Medical Systems, Inc.
Balance Sheets
<TABLE>
<CAPTION>
July 1, October 2,
2000 1999
(Unaudited) (Note)
----------- ------------
Assets
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 1,102,319 $ 1,029,586
Securities available for sale 4,144,204 3,163,979
Accounts receivable, net of allowances of $336,000
(2000) and $414,000 (1999) 4,101,609 3,494,836
Inventories (Note 4) 2,245,323 2,186,436
Prepaid expenses and deferred income taxes 221,205 237,866
----------- -----------
Total current assets 11,814,660 10,112,703
Property and equipment, net (Note 5) 3,467,059 3,460,305
Cost in excess of fair value of net assets acquired,
net of accumulated amortization of $843,486 (2000)
and $732,919 (1999) 2,108,410 2,218,977
Other assets (Note 6) 1,926,333 1,886,608
----------- -----------
$19,316,462 $17,678,593
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 2,027,706 $ 1,279,167
Accrued and sundry liabilities 1,369,504 976,029
----------- -----------
Total current liabilities 3,397,210 2,255,196
Deferred income taxes 190,000 190,000
Deferred compensation 1,036,678 1,053,180
Shareholders' equity
Common stock, no par value, 20,000,000 shares
authorized; issued and outstanding shares 2,503,400
(2000) and 2,495,400 (1999) 28,000
Retained earnings 14,664,574 14,180,217
----------- -----------
Total shareholders' equity 14,692,574 14,180,217
Contingencies (Note 8)
$19,316,462 $17,678,593
=========== ===========
</TABLE>
See accompanying notes.
Note: The Balance Sheet at October 2, 1999 has been derived from the audited
financial statements at that date.
3
<PAGE> 4
Span-America Medical Systems, Inc.
Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------- -------------------------------
July 1, July 3, July 1, July 3,
2000 1999 2000 1999
---------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net sales $6,849,782 $ 5,619,535 $19,096,696 $ 17,296,204
Cost of goods sold 4,912,265 4,087,701 13,545,542 12,564,314
---------- ----------- ----------- ------------
Gross profit 1,937,517 1,531,834 5,551,154 4,731,890
Selling and marketing expenses 1,099,948 1,089,627 3,228,370 3,291,432
General and administrative expenses 576,464 596,120 1,654,209 1,646,726
---------- ----------- ----------- ------------
1,676,412 1,685,747 4,882,579 4,938,158
---------- ----------- ----------- ------------
Operating income (loss) 261,105 (153,913) 668,575 (206,268)
Investment income and other 164,534 75,803 391,854 249,714
---------- ----------- ----------- ------------
Income (loss) before income taxes
and discontinued operations 425,639 (78,110) 1,060,429 43,446
Provision for income taxes 151,000 (27,000) 376,000 16,000
---------- ----------- ----------- ------------
Income (loss) from continuing operations 274,639 (51,110) 684,429 27,446
Income from discontinued operations, net of
income taxes of $201,000 in 1999 (Note 2) -- 365,270 -- 365,270
---------- ----------- ----------- ------------
Net income $ 274,639 $ 314,160 $ 684,429 $ 392,716
========== =========== =========== ============
Earnings per share of common stock (Note 3)
Income from continuing operations:
Basic $ 0.11 $ (0.02) $ 0.27 $ 0.01
Diluted $ 0.11 $ (0.02) $ 0.27 $ 0.01
Income from discontinued operations,
net of income taxes:
Basic -- 0.15 -- 0.14
Diluted -- 0.15 -- 0.14
---------- ----------- ----------- ------------
Net income:
Basic $ 0.11 $ 0.13 $ 0.27 $ 0.15
Diluted $ 0.11 $ 0.13 $ 0.27 $ 0.15
========== =========== =========== ============
Dividends per common share $ 0.03 $ 0.025 $ 0.08 $ 0.075
Weighted average shares outstanding:
Basic 2,503,400 2,504,760 2,500,499 2,609,514
Diluted 2,504,265 2,507,486 2,500,787 2,636,488
</TABLE>
See accompanying notes
4
<PAGE> 5
Span-America Medical Systems, Inc.
Statements of Cash Flows
(Unaudited)
Nine Months Ended
-----------------------------
July 1, July 3,
2000 1999
----------- -----------
Operating activities:
Net income $ 684,429 $ 392,716
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 547,394 578,850
Gain on disposal of business -- (365,270)
Provision for losses on accounts receivable (90,000) 86,223
Gains on sale and disposal of property,
plant and equipment (24,627)
Increase in cash value of life insurance (53,586) (143,193)
Deferred compensation (16,502) (9,279)
Changes in operating assets and liabilities:
Accounts receivable (526,998) 1,569,714
Inventory (58,887) (146,887)
Prepaid expenses and other assets 46,792 117,567
Income tax refund due -- 400,000
Accounts payable and accrued expenses 1,142,014 (483,045)
----------- -----------
Net cash provided by operating activities 1,650,029 1,997,396
Investing activities:
Purchases of marketable securities (970,000) (1,010,000)
Proceeds from sales of marketable securities -- 1,130,000
Purchases of property, plant and equipment (416,390) (121,824)
Proceeds from sale of property, plant,
and equipment 29,200
Payments for other assets (20,034) (34,475)
----------- -----------
Net cash used for investing activities (1,377,224) (36,299)
Financing activities:
Dividends paid (200,072) (201,136)
Purchase and retirement of common stock -- (1,931,934)
Common stock issued upon exercise of options -- 138,250
----------- -----------
Net cash used for financing activities (200,072) (1,994,820)
----------- -----------
Increase (decrease) in cash and cash equivalents 72,733 (33,723)
Cash and cash equivalents at beginning of year 1,029,586 1,121,437
----------- -----------
Cash and cash equivalents at end of year $ 1,102,319 $ 1,087,714
=========== ===========
See accompanying notes.
5
<PAGE> 6
SPAN-AMERICA MEDICAL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JULY 1, 2000
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting only of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three and nine-month periods ended July 1,
2000 are not necessarily indicative of the results that may be expected for the
year ended September 30, 2000. For further information, refer to the Company's
Annual Report on Form 10-K for the year ended October 2, 1999.
NOTE 2 - SALE OF CONTRACT PACKAGING BUSINESS UNIT
The Company's earnings for the third quarter of fiscal 1999 included a one-time
after-tax gain of $365,270, or $0.15 per diluted share, related to the sale of
substantially all of the assets of its contract packaging business unit in
February 1998. The purchase price for the contract packaging assets was $2.3
million, with $1.84 million paid in cash at closing and the remainder financed
by Span-America over five years. No gain or loss was recorded at the time of the
sale due to the uncertainty of collectibility of the amount financed. The
purchasers of the business unit chose an early payment option on an outstanding
warrant and note due to the Company. Because the Company assigned no value to
the amount of the note and warrant at closing, the early payment resulted in a
one-time gain. The gain, net of taxes, is shown as income from discontinued
operations.
Operating results of the discontinued contract packaging operations are as
follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
-------------------------- --------------------------
July 1, 2000 July 3, 1999 July 1, 2000 July 3, 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Gain on sale of business unit $-- $566,270 $-- $566,270
Provision for income taxes -- 201,000 -- 201,000
--- -------- --- --------
Income from discontinued operation $-- $365,270 $-- $365,270
=== ======== === ========
</TABLE>
6
<PAGE> 7
NOTE 3 - EARNINGS PER COMMON SHARE
The following table sets forth the computation of basic and diluted earnings per
share in accordance with SFAS 128, "Earnings Per Share."
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------- -----------------------------
July 1, 2000 July 3, 1999 July 1, 2000 July 3, 1999
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Numerator for basic and diluted
earnings per share:
Income (loss) from continuing operations $ 274,639 $ (51,110) $ 684,429 $ 27,446
Income from discontinued operations, net
of income taxes 365,270 365,270
---------- ----------- ---------- ------------
Net income $ 274,639 $ 314,160 $ 684,429 $ 392,716
========== =========== ========== ============
Denominator:
Denominator for basic earnings per share
weighted average shares 2,503,400 2,504,760 2,500,499 2,609,514
Effect of dilutive securities:
Employee and board stock options 865 2,726 288 26,974
---------- ----------- ---------- ------------
Denominator for diluted earnings per share:
Adjusted weighted average shares
and assumed conversions 2,504,265 2,507,486 2,500,787 2,636,488
========== =========== ========== ============
Income (loss) per share from continuing
operations:
Basic $ 0.11 $ (0.02) $ 0.27 $ 0.01
Diluted $ 0.11 $ (0.02) $ 0.27 $ 0.01
Income per share from discontinued
operations, net of income taxes:
Basic -- 0.15 -- 0.14
Diluted -- 0.15 -- 0.14
---------- ----------- ---------- ------------
Net income:
Basic $ 0.11 $ 0.13 $ 0.27 $ 0.15
Diluted $ 0.11 $ 0.13 $ 0.27 $ 0.15
========== =========== ========== ============
</TABLE>
NOTE 4 - INVENTORIES
The components of inventories are as follows:
July 1, 2000 Oct. 2, 1999
------------ ------------
Raw Materials $1,698,497 $ 1,440,327
Finished Goods 546,826 746,109
---------- -----------
$2,245,323 $ 2,186,436
========== ===========
7
<PAGE> 8
NOTE 5 - PROPERTY AND EQUIPMENT
Property and equipment, at cost, is summarized by major classification as
follows:
July 1, 2000 Oct. 2, 1999
------------ ------------
Land $ 317,343 $ 317,343
Land improvements 240,016 240,016
Buildings 3,700,111 3,700,111
Machinery and equipment 5,684,688 5,351,931
Furniture and fixtures 532,976 517,552
Automobiles 9,520 9,520
Leasehold improvements 66,006 66,006
----------- -----------
10,550,660 10,202,479
Less accumulated depreciation 7,083,601 6,742,174
----------- -----------
3,467,059 $ 3,460,305
=========== ===========
NOTE 6 - OTHER ASSETS
Other assets consist of the following:
July 1, 2000 Oct. 2, 1999
------------ ------------
Patents, net of accumulated amortization
of $874,286 (2000) and $793,223 (1999) $ 430,842 $ 491,871
Cash value of life insurance policies 1,401,212 1,347,627
Other 94,279 47,110
----------- -----------
$ 1,926,333 $ 1,886,608
=========== ===========
8
<PAGE> 9
NOTE 7 - OPERATIONS AND INDUSTRY SEGMENTS
The company reports on two segments of business: medical and custom products.
This industry segment information corresponds to the markets in the United
States for which the Company manufactures and distributes its polyurethane foam
and packaging products and therefore complies with the requirements of SFAS 131
"Disclosures about Segments of an Enterprise and Related Information."
The following table summarizes certain information on industry segments:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------- ------------------------------
July 1, 2000 July 3, 1999 July 1, 2000 July 3, 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Sales:
Medical $ 3,801,028 $ 3,511,682 $ 11,322,935 $ 11,241,320
Custom products 3,048,754 2,107,853 7,773,761 6,054,884
------------ ------------ ------------ ------------
Total 6,849,782 5,619,535 19,096,696 17,296,204
============ ============ ============ ============
Operating Profit (Loss):
Medical 265,214 6,886 864,537 611,563
Custom products 86,054 (90,941) 94,266 (582,069)
------------ ------------ ------------ ------------
Total 351,268 (84,055) 958,803 29,494
Corporate expense (90,163) (69,858) (290,228) (235,762)
Other income 164,534 75,803 391,854 249,714
------------ ------------ ------------ ------------
Income (loss) before income taxes and
discontinued operations $ 425,639 $ (78,110) $ 1,060,429 $ 43,446
============ ============ ============ ============
</TABLE>
Total sales by industry segment include sales from unaffiliated customers, as
reported in the Company's statements of income. In calculating operating profit,
non-allocable general corporate expenses, interest expense, other income, and
income taxes are not included, but certain corporate operating expenses incurred
for the benefit of all segments are included on an allocated basis.
NOTE 8 - CONTINGENCIES
From time to time the company is a defendant in legal actions involving claims
arising in the normal course of business. The company believes that, as a result
of legal defenses and insurance arrangements, none of these actions should have
a material adverse effect on its operations or financial condition.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF
INTERIM FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales for the third quarter of fiscal 2000 increased 22% to $6.8
million compared with $5.6 million in the third quarter of fiscal 1999. For the
year to date in fiscal 2000, net sales increased 10% to $19.1 million from $17.3
million in the same period last year. The increases in sales for both the
quarter and year to date were primarily due to higher sales in the custom
products segment, resulting from increased demand for consumer pillows and
mattress pads.
Earnings from continuing operations for the third quarter of 2000 were
$274,600 or 11 cents a diluted share, compared with a loss of $51,100 or 2 cents
a diluted share, in the third quarter of fiscal 1999. Most of the earnings
growth during the quarter was due to higher sales volume, lower administrative
expenses, and continued improvements in manufacturing efficiencies.
Additionally, there were higher royalties and investment income during the
quarter. Last year, net income for the third quarter included a one-time gain
related to the 1998 sale of the Company's contract packaging business. The gain
resulted in after-tax income from discontinued operations of $365,300 or 15
cents a diluted share.
Earnings from continuing operations for the year to date were $684,400
or 27 cents a diluted share, compared with $27,400 or 1 cent a diluted share, in
the first nine months of fiscal 1999. The year-to-date increase was due mostly
to the higher sales volume and, to a lesser extent, lower selling costs and
higher non-operating income.
The Company's total medical sales increased by 8% to $3.8 million in
the third quarter this year from $3.5 million in the same quarter last year.
Medical mattress sales were up 59% in the third quarter as a result of healthy
demand for our GeoMattress product line. Sales of seating products were up 9%
during the quarter, while sales of overlays and positioners were down 14% and
7%, respectively. For the year to date in fiscal 2000, medical sales rose 1% to
$11.3 million from $11.2 million in the same period last year due to an increase
in unit sales of mattresses which was mostly offset by declines in overlay
sales. Management expects that sales of medical products for the remainder of
fiscal 2000 will be higher than those of the same period in fiscal 1999.
Sales of custom products increased by 45% during the third quarter to
$3.0 million from $2.1 million in the same period last year. Year-to-date sales
of custom products increased 28% to $7.8 million from $6.1 million in the same
period last year. The sales increases resulted from higher demand for consumer
mattress pads and pillows sold through our marketing partner, Louisville Bedding
Company. Management expects that custom product sales during the fourth quarter
will be similar to the previous quarters in fiscal 2000.
10
<PAGE> 11
The Company's gross profit increased by approximately 26% to $1.9
million for the third quarter of 2000 from $1.5 million in the third quarter of
fiscal 1999. The gross margin percentage for the third quarter of fiscal 2000
increased to 28% compared with 27% in the third quarter last year. Year-to-date
gross profit increased 17% to $5.6 million in the first nine months of fiscal
2000 from $4.7 million for the same period last year. The year-to-date gross
margin increased to 29% compared with 27% for the same period last year. The
increases in gross profit level and gross margin percentage resulted from higher
sales volume and improved manufacturing efficiencies. Management expects the
Company's gross margin percentage for fiscal 2000 to be slightly higher than
that of fiscal 1999.
Sales and marketing expenses increased by 1% to $1.1 million during the
third quarter of fiscal 2000 compared with the same quarter last year. For the
year to date in fiscal 2000, these expenses declined 2% to $3.2 million in
fiscal 2000 compared with $3.3 million for the same period last year. The
changes were due to small variances in a number of expense categories. Total
sales and marketing expenses for fiscal 2000 are expected to be slightly higher
than those of fiscal 1999 as the Company expects to increase its investment in
marketing and product development during the next several quarters.
General and administrative expenses decreased 3% for the third quarter
of fiscal 2000 to $576,000 compared with $596,000 in the third fiscal quarter of
last year. For the year-to-date in fiscal 2000, general and administrative
expenses remained level at $1.65 million compared with the same period in fiscal
1999. The decrease in general and administrative expenses for the third quarter
of fiscal 2000 resulted from lower payroll and professional fee expense. General
and administrative expenses for fiscal year 2000 are expected to be similar to
those of fiscal 1999.
Non-operating income increased by 117% to $165,000 in the third quarter
of fiscal 2000 compared with the same quarter last year. For the first nine
months of fiscal 2000 non-operating income increased by 57% to $392,000 compared
with the same period last year. The increases for the quarter and year-to-date
were due to higher royalty and interest income. Non-operating income for the
third quarter also included a gain on the sale of assets of $25,000. Management
expects non-operating income in the fourth quarter to be lower than third
quarter levels but similar to first and second quarter levels.
During the first nine months of fiscal 2000, the Company paid dividends
of $200,072, or 29% of net income for the year-to-date period. This amount
represented two quarterly dividends of $.025 per share and one quarterly
dividend of $.03 per share.
The statements contained in "Results of Operations" which are not
historical facts are forward-looking statements that involve risks and
uncertainties. Management wishes to caution the reader that these
forward-looking statements such as the Company's expectations for future sales
and expense levels compared with previous periods are forecasts. Actual events
or results may differ materially as a result of risks facing the Company. Such
risks include but are not limited to: (a) the loss of a major distributor of the
Company's products, (b) the inability to achieve anticipated sales volume, (c)
changes in relationships with large customers, (d) the impact of competitive
products and pricing, (e) government reimbursement
11
<PAGE> 12
changes in the medical market, (f) FDA regulation of medical device
manufacturing, (g) raw material cost increases, and other risks referenced in
the Company's Annual Report on Form 10-K.
LIQUIDITY AND CAPITAL RESOURCES
The Company generated cash from operations of approximately $1.6
million during the first three quarters of fiscal 2000 compared with $2.0
million in the same period last year. The Company's working capital increased by
$560,000 during the nine months ended July 1, 2000. In addition, the current
ratio decreased to 3.5 at July 1, 2000 from 4.5 at fiscal year end 1999.
Accounts receivable, net of allowances, increased by $607,000 or 17% to
$4.1 million at the end of the third quarter of fiscal 2000 compared with $3.5
million at the end of fiscal 1999. The majority of the increase was due to
higher sales levels. All of the Company's accounts receivable are unsecured.
Inventory levels increased 3% or $59,000 to $2.2 million at the end of
the third quarter of fiscal 2000. Management expects inventory levels during the
remainder of fiscal 2000 to be similar to those of fiscal 1999.
Net property and equipment remained level during the first nine months
of fiscal 2000. Capital expenditures of $416,000 were offset by normal
depreciation expense. Management does not expect to make significant capital
expenditures during the fourth quarter of fiscal 2000.
The Company's trade accounts payable increased by $749,000 or 59%
compared with fiscal year end 1999, reflecting normal monthly fluctuations and
increased revenues and associated costs. Accrued and sundry liabilities
increased by $393,000 or 40% compared with fiscal year end 1999 as a result of
increases in income taxes payable and accrued incentive compensation.
Management believes that funds on hand, funds generated from
operations, and funds available under the company's $2.5 million unused line of
credit are adequate to finance operations and expected capital requirements
during fiscal 2000.
IMPACT OF INFLATION
Inflation was not a significant factor for the Company during the third
quarter of fiscal 2000. However, the Company expects its material costs to
increase the fourth and future quarters due to anticipated raw material price
increases. The Company's profit margin could be adversely affected to the extent
that the Company is unable to pass along to its customers any increased costs.
12
<PAGE> 13
YEAR 2000
The Company has completed its assessment and modification of all significant
information technology systems that could be affected by the Year 2000. All
changes have been tested and implemented, and the Company has experienced no
significant Year 2000 problems to date. The Company has also reviewed its
product lines and has determined that the products it has sold and will continue
to sell do not require modification to be Year 2000 compliant. Management
believes that it has resolved its material Year 2000 issues. In the event that
unexpected Year 2000 issues arise, the Company has contingency plans for certain
critical applications. These contingency plans involve, among other actions,
manual workarounds, increasing inventories and adjusting staffing strategies.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
The Company is from time to time party to various legal actions arising
in the normal course of business. However, management believes that as a result
of legal defenses and insurance arrangements with parties believed to be
financially capable, there are no proceedings threatened or pending against the
Company that, if determined adversely, would have a material adverse effect on
the business or financial position of the Company.
ITEM 2. Changes in Securities - None
ITEM 3. Defaults Upon Senior Securities - None
ITEM 4. Submission of Matters to a Vote of Security Holders - None
ITEM 5. Other Information - None
ITEM 6. Exhibits & Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule (For SEC Use Only)
(b) The Company filed a Form 8-K on June 1, 2000 and a Form 8-K/A
on June 6, 2000, both regarding a change in the Company's
independent auditors effective May 25, 2000.
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SPAN-AMERICA MEDICAL SYSTEMS, INC.
/s/ Richard C. Coggins
-------------------------------------
Richard C. Coggins
Chief Financial Officer
/s/ James D. Ferguson
-------------------------------------
James D. Ferguson
President and Chief Executive Officer
DATE: August 11, 2000
14
