Greenville, South Carolina - Span-America Medical Systems Inc., a manufacturer of pressure-management products for the medical industry, some of which include polyurethane foam, has reported sales down by 4 percent to $14.3 million compared with $14.9 million in Q3 2008, the company said recently.
The drop in sales was primarily due to the expiration in May 2008 of a supply contract for private label therapeutic support surfaces that made up $1.5 million of the company's medical sales during Q3 2008, said Jim Ferguson, president and ceo of Span-America. Ferguson said without the effect of the expired contract, sales would have only declined by 3 percent.
Medical sales decreased by 15 percent to $9.1 million in Q3 compared to $10.8 million in the same period last year. However custom products sales were up by 27 percent to $5.2 million, almost offsetting the decline in medical sales for the quarter.
"Span-America's medical sales have proven to be somewhat recession resistant; however, we experienced a slight reduction in average order size as medical customers have been more cautious about spending this year," continued Ferguson. "As a result, we have found it more difficult to secure large corporate orders that we landed in the past."
Other medical sales were mixed in the third quarter. Medical overlay sales were down 16 percent, and patient positioner sales declined 12 percent.
"Our long-term outlook for Span-America remains positive based on the company's strong medical product lines and our ability to leverage our manufacturing capabilities through expanded sales of custom products," said Ferguson. He added that he expects Span-America to finish fiscal 2009 with solid sales and earnings performance in Q4. "We believe medical sales will remain steady as spending caution among our customers is balanced with several potential growth opportunities in the quarter." (RD)