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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

Commission File Number 0-11392

SPAN-AMERICA MEDICAL SYSTEMS, INC.
(Exact name of registrant as specified in its charter)

70 Commerce Center
Greenville, South Carolina 29615
(Address of principal executive offices)

(864) 288-8877
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

     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 period 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 o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2): YES x   NO o

     The aggregate market value of the voting stock held by non-affiliates of the registrant computed by reference to the last price at which the stock was sold on March 28, 2003, the last trading day of the registrant’s most recently completed second fiscal quarter, was $16,816,766.

     The number of shares of the registrant’s common stock, no par value, outstanding as of December 4, 2003 was 2,571,218.

Documents Incorporated By Reference

     Portions of the 2003 Annual Report to Shareholders are incorporated by reference into Parts I and II, and portions of the Company’s Definitive Proxy Statement for the annual shareholder’s meeting to be held February 12, 2004 are incorporated by reference into Part III.

PART I

Item 1. Business

Background

     Span-America Medical Systems, Inc. (the “Company” or “Span-America”) was incorporated under the laws of the state of South Carolina on September 21, 1970. The Company manufactures and distributes a variety of polyurethane foam products for the medical and custom products markets.

     Span-America commenced operations in 1975 as a manufacturer of polyurethane foam patient positioners. During the next several years, the Company expanded its product lines to produce lapidus (flat foam) and convoluted foam mattress overlays for the wound care market. Wound care products aid in the treatment or prevention of pressure ulcers, commonly known as bed sores or decubitus ulcers. In the late 1970’s the Company also began producing foam products for industrial applications, primarily to utilize excess manufacturing capacity. In 1985, the Company introduced its patented Geo-Matt® mattress overlay in the health care market, which became one of the Company’s leading products. At the same time, the Company began selling its mattress overlay products to retailers throughout the United States.

     The Company entered the replacement mattress segment of the pressure ulcer care market in 1992 through the acquisition of Healthflex, Inc. The Company is currently marketing the PressureGuard line of replacement mattresses directly and through distributors to hospitals, long-term care facilities, and home health care dealers.

     The Company’s long-term strategy is to become a leading health care manufacturer specializing in wound management products used in the prevention and treatment of pressure ulcers. Most of the Company’s medical products are currently directed toward wound care applications, and the Company is actively seeking to develop or acquire new products which are in this market segment. The Company also seeks to further develop and manufacture consumer and industrial applications of its medical products. In addition, the Company acquired the assets of the Secure I.V.® line of peripheral intravenous catheters in July 2002 and is currently in the process of bringing these products to market. The Secure I.V. products are expected to be sold directly and through distributors to health care facilities in the United States and Canada.

     The Company’s products are distributed primarily in the United States and to a lesser degree in several foreign countries. Total export sales during fiscal 2003 were approximately $2.2 million or 5% of total net sales. The majority of the Company’s export sales occurred in Canada. See Note 18 in the Notes to Financial Statements on page 28 of the Company’s 2003 Annual Report attached as Exhibit 13.1.

     The Company maintains a website at http://www.spanamerica.com. The Company’s reports and other filings made with the Securities and Exchange Commissions are available free of charge on the Company’s website, which includes a link to the Company’s filings in the SEC’s EDGAR filing database.

Industry Segment Data

     The industry segment data included in Note 18 to the Company’s audited financial statements for the year ended September 27, 2003, presented on pages 28 and 29 of the 2003 Annual Report, is incorporated herein by reference.

Medical

     Span-America’s principal medical products consist of support surfaces (polyurethane foam mattress overlays, non-powered therapeutic replacement mattresses, and powered therapeutic replacement mattresses), patient positioners, and seating products. These products are marketed to all health care settings, including acute care hospitals, long term care facilities, and home health care providers, primarily in North America. Sales of medical products represented 51% of total net sales in 2003, 59% of total net sales in 2002, and 60% of total net sales in 2001.

     Mattress Overlays. Span-America produces a variety of foam mattress overlays, including convoluted and lapidus foam pads and its patented Geo-Matt® overlay. Mattress overlays comprised approximately 10% of the Company’s total net sales in fiscal 2003. These products are designed to provide patients with greater comfort and to assist in treating patients who have or are susceptible to pressure ulcers. Span-America’s overlay products are mattress pads rather than complete mattresses and are marketed as less expensive alternatives to air and water mattresses. The mattress overlays are designed for single patient use.

     Geo-Matt was designed in conjunction with clinical studies performed by the Institute for Rehabilitation and Research at the Baylor College of Medicine. The product’s patented design includes over 800 individual cells which are cut to exacting tolerances on computer-controlled equipment to create a clinically effective mattress surface.

     The Company’s mattress overlays disperse body heat, increase air circulation beneath the patient, and reduce moisture build-up in order to prevent the development or promote the healing of pressure ulcers. Their convoluted or geometrically contoured construction also reduces shear forces and more evenly distributes the patient’s body weight, thereby reducing the pressure that causes ulcers.

     Replacement Mattresses. Span-America’s non-powered therapeutic replacement mattresses (as distinguished from overlays) are of two types. Geo-Mattress® products are single-density or multi-layered foam mattresses topped with the same patented Geo-Matt surface used in the Company’s overlays. These mattresses are sold as alternatives to standard innerspring and all-foam mattresses found facility-wide in acute and long term care settings.

     In 1997, the Company introduced the Geo-Mattress Max, Plus, and Pro models, foam therapeutic replacement mattresses. In early 1999, the Company extended the product line with the release of the Geo-Mattress with Wings®. This product, which features raised perimeter bolsters for added patient safety, has been a significant contributor to overall Geo-Mattress sales. A second line extension, the Geo-Mattress Atlas, was added in December 2000 to address the

needs of obese patients. With a carrying capacity up to 600 pounds, the Geo-Mattress Atlas is specifically designed for the unique pressure management challenges faced within this growing specialty area of patient care. In addition to the Max, Plus, Pro, Wings, and Atlas products, which are intended for in-facility use, the Company also offers the Geo-Mattress HC for in-home use.

     The Company’s more complex non-powered replacement mattresses consist of products from the PressureGuard® Series. The PressureGuard design was acquired through the acquisition of Healthflex, Inc. in February 1992. The original design combines a polyurethane foam shell and static air cylinders to form a replacement mattress that incorporates the comfort and pressure relieving features of both mattress overlays and more sophisticated dynamic mattresses. This original design, which the company later used as the basis for powered versions (see below) was further refined through a complete technical upgrade of all PressureGuard components in November 1997. In conjunction with this upgrade, some models were renamed to better reflect their functions.

     In addition to the non-powered, static PressureGuard Renew® (formerly PressureGuard II), the Company also offers the PressureGuard CFT®. This model incorporates patented design principles of constant force technology. First introduced as the CustomCare mattress in June of 1995, the PressureGuard CFT is unique in that it is a dynamic support surface that rivals very expensive powered surfaces in effectiveness, yet it requires no power source of any kind.

     The Company’s powered therapeutic replacement mattresses consist of the remaining models in the PressureGuard Series. In November 1993, the Company received FDA 510(k) marketing approval for its PressureGuard IV mattress system. Building on the comfort and support of the original PressureGuard design, PressureGuard IV was designed as a sophisticated, powered system for providing pressure reduction and patient comfort, with the added ability to turn the patient. The system was designed to automatically sense the patient’s weight and position, and to continually adjust the pressures appropriately while slowly and quietly repositioning the patient at angles up to 30 degrees in cycles of up to two hours. The upgraded version, renamed the PressureGuard Turn Select®, incorporates all of these capabilities, as well as several additional features. Of particular note is a pendant-operated, microprocessor-controlled motion system which is built into the mattress rather than being hung on the bed frame as a separate unit.

     Introduced at the same time as the Turn Select in November 1997, the PressureGuard Site Select® includes many of the features of the Turn Select, including the built-in microprocessor-controlled motion system. However, instead of turning the patient, the Site Select is designed to give the caregiver the ability to selectively adjust the pressure at particular body sites based on patient need. Like the Turn Select, it is completely programmable through a hand-held pendant.

     Another powered system in the PressureGuard line is the PressureGuard APM®, a simpler but very effective alternating pressure mattress. Originally introduced as the DynaGuard®, in November 1994, the APM is targeted primarily at the long term care and home care markets. In March 2000, the Company added a more feature-laden version of this mattress called the PressureGuard APM². The APM² gives the caregiver the flexibility to offer either

alternating pressure or a basic lateral rotation modality by flipping a toggle switch on the control panel. The APM² represents the Company’s single largest product in terms of revenues.

     Early in fiscal 2002, the company introduced the PressureGuard Easy Air®, its first offering in the category of low air loss therapy. The Easy Air incorporates several patent-pending design innovations which the company believes allow it to overcome several common performance compromises inherent in other competitive low air loss products. Additionally, the Easy Air has been independently documented to outperform all leading competitors in controlling excess skin moisture, a key performance advantage in the competitive support surfaces marketplace.

     All of the powered products in the PressureGuard Series are sold primarily through home health care equipment dealers for daily rental in home care, long term care and, less commonly, in acute care settings. Beginning with the government’s 1998 implementation of the Prospective Payment System of reimbursement, however, long term care facilities increasingly are electing to purchase these products outright through the Company’s distributors rather than continuing to rent them. During fiscal 2003, replacement mattresses and related products made up approximately 29% of total net sales.

     Patient Positioners. Span-America’s specialty line of patient positioners is sold primarily under the trademark Span-Aids®. Span-Aids accounted for approximately 10% of the Company’s net sales in fiscal 2003. This is the Company’s original product line and consists of over 300 different foam items which aid in relieving the basic patient positioning problems of elevation, immobilization, muscle contracture, foot drop, and foot or leg rotation. Span-Aids patient positioners hold the patient’s body in orthopedically correct positions, provide greater patient comfort, and tend to promote healing for long-term comatose patients or those with a flaccid or immobilized condition. The positioners also aid in the prevention of pressure ulcers by promoting more effective dispersion of pressure, heat and moisture. Span-Aids are intended for single-patient use throughout the patient’s entire treatment program. Among the Span-Aids products presently marketed are abduction pillows, body aligners, head supports, limb elevators and various foot and wrist positioners.

     Span-America’s patient positioners are sold primarily to hospitals and long-term care facilities by several national medical products distributors. The Company believes that Span-Aids are one of the most effective patient positioning devices available in the health care market, as compared to pillows, rolled towels and other similar materials traditionally used by nursing personnel to position immobilized patients. Span-Aids are constructed of open-cell polyurethane foam which allows air to circulate next to the patient’s skin, thereby reducing heat and moisture build-up.

     Most Span-Aids body positioners are pressure packaged to reduce the amount of storage space required by hospitals and other facilities that utilize them. This patented packaging method reduces the package size by as much as 75% while protecting the positioners from dust and contamination during transportation and storage.

     Seating Products. The final category of medical products made by Span-America consists of seating cushions and related seating products. The Company’s offerings in this category can be subdivided into three main groups:

			• wound healing aids,
			• patient positioning and general pressure management products, and
			• pressure management products without patient positioning elements.

     Seating products made specifically as an aid to wound healing include the Isch-Dish® and Sacral Dish® pressure relief cushions. Seating products made for patient positioning and general pressure management include the Isch-Dish Thin, the Geo-Matt® Contour™ cushion, the Equalizer™, and the EZ-Dish™. The Equalizer contoured positioning cushion has a multi-component design that includes a viscoelastic foam top, proprietary soft polymer inserts, and a contoured base. Like the Isch-Dish, the Equalizer is included among seating products covered for reimbursement by the Medicare system. This makes it an attractive option for durable medical equipment suppliers and rehab seating specialists. The EZ-Dish pressure relief cushion, which uses some of the features of the original Isch-Dish design, offers a simpler, more affordable solution to the seating problems of nursing home patients.

     Seating products designed to address pressure management without additional positioning benefits include the Gel-T® cushion and the Geo-Matt and Geo-Matt PRT® wheelchair cushions. The Gel-T is a gel/foam combination cushion that is especially popular with elderly patients. The Geo-Matt and Geo-Matt PRT cushions incorporate the Company’s proprietary Geo-Matt anti-shearing surface. Seating products accounted for approximately 4% of the Company’s net sales in fiscal 2003.

     Distributor Relationship. During fiscal 2003, approximately 15% of the Company’s medical products were sold to Cardinal Healthcare, Inc. (“Cardinal”) which distributes these products to hospitals nationwide. Span-America has maintained a distribution relationship with Cardinal (formerly Allegiance Healthcare Corporation and Baxter Healthcare Corporation) for 24 years. In September 1996, Baxter spun off its healthcare distribution and cost management business to create Allegiance. In 1998, Allegiance was acquired by Cardinal and has continued to function as a separate unit of Cardinal. The Company’s distribution agreement with Cardinal has been unaffected by these ownership changes.

Custom Products

     Span-America’s custom products segment includes two major product lines: consumer products and industrial products. The Company’s consumer product line consists primarily of convoluted and geo-cut mattress overlays and specially designed pillows for the consumer bedding market. The consumer products are marketed to retailers through Louisville Bedding Company (LBC), a leading manufacturer and distributor of bedding products in North America. LBC is the exclusive distributor of the Company’s products pursuant to a distribution agreement between the companies, which expires in December 2006. The agreement can be renewed for successive terms based on mutual agreement by both companies.

     Span-America’s industrial product line consists primarily of foam packaging and cushioning materials. The Company also produces foam products that are used for flotation, sound insulation and gasketing purposes. The majority of these products are made to order according to customer specifications. To date, most of the Company’s industrial sales have been in the specialty packaging segment of the custom products market. The Company currently has one full-time sales representative and several manufacturer’s representatives selling its foam fabrication capabilities primarily in the southeastern United States. Its customers represent a wide variety of markets, including the photographic film, durable goods, electronics, automotive, and sports equipment industries.

     Custom products represented approximately 49% of the Company’s total net sales in fiscal 2003, compared with 41% in fiscal 2002 and 40% in fiscal 2001. In fiscal 2003, approximately 82% of the Company’s total custom products sales were distributed through Louisville Bedding Company.

Safety Catheters

     On July 15, 2002, the Company acquired assets related to the Secure I.V.® product line from VADUS®, Inc., a privately owned designer and manufacturer of peripheral intravenous catheters. The assets consist primarily of patents and equipment related to the design, production and sale of the Secure I.V. catheter. The Secure I.V. has FDA 510(k) approval and is protected by 11 patents. The Company is currently preparing to manufacture and market the new product line. We currently anticipate that sales of Secure I.V. will begin in fiscal 2004. We will operate this portion of our business as a separate segment.

Competition

     Medical. In the medical market segment, the Company faces significant competition for sales of its foam mattress overlays. The competition for convoluted mattress overlays is primarily based on price and delivery. For other foam mattress overlay products (such as the Geo-Matt overlay), the competition is based mainly on product performance and quality. However, to a lesser extent, the competition for Geo-Matt type overlays is also based on price and delivery. Competition with respect to the Company’s Span-Aid products is primarily based on price. However, a secondary source of competition for patient positioners results from alternative methods such as the use of pillows and other devices to position patients.

     The Company believes that it is among the top three nationwide suppliers of foam mattress overlays and patient positioners to the U.S. health care market. The Company’s primary competitor in the overlay and positioner markets is Sunrise Medical.

     The competition in the therapeutic replacement mattress market is based on product performance, price and durability. Potential customers typically select a product based on these criteria after conducting a formal clinical evaluation of sample mattresses for periods of one to six months. A secondary source of competition results from alternative products such as mattress overlays, which are significantly less expensive than replacement mattresses.

     The market for therapeutic replacement mattresses has developed principally during the 1990’s. Competitors include BG Industries, Invacare, Sunrise Medical, KCI, and Hill-Rom. The other competitors use combinations of their own sales representatives and manufacturer’s representatives to sell directly to hospitals, distributors, and long-term care facilities nationwide.

     Most of the Company’s competitors in the health care segment are larger and have greater resources than Span-America.

     Custom Products. In the custom products segment, Span-America has encountered significant competition for its mattress pad and pillow products. The competition is principally based on price, which is largely determined by foam density and thickness. However, competition also exists due to variations in product design and packaging. There are presently a number of companies with the manufacturing capability to produce similar bedding products. The Company’s primary competitors in this market are Foamex, Leggett and Platt, and ER Carpenter, all of which are larger and have greater resources than Span-America. The Company also has a number of competitors in the market for its industrial products, including Tuscarora and UFP Technology. These competitors are larger and have greater resources than Span-America. The competition for industrial foam products is largely based on price. In some instances, however, design and delivery capabilities are also important.

     Safety Catheters. The Company’s Secure I.V. products will compete in the protected, short peripheral catheter marketplace. Two major companies, Medex (acquired from Johnson and Johnson) and Becton Dickinson and Company, supply about 80% of this market. Both of these companies have established national sales forces and world-wide distribution networks. Their resources are greater than those of Span-America. Span-America has no established distribution base or sales force for Secure I.V. at the present time.

     The Company believes that Secure I.V.’s design offers a competitive advantage in that it allows for bloodless starts without the need for vein occlusion, which helps protect healthcare workers from exposure to blood and other body fluids. However, potential customers may choose the Company’s competitors over the Company because the competitors offer a wider range of custom variations for their safety catheters than the Company does for Secure I.V. In addition, the competitors are able to supply a wider variety of other medical devices to their customers. Because of design differences and economies of scale, competing devices are less costly to make.

Major Customers

     The Company has a business relationship with Cardinal to distribute certain of its medical foam products. In fiscal 2003 sales to Cardinal amounted to approximately 8% of the Company’s total net sales and approximately 15% of the Company’s sales in the medical segment. Span-America also has a relationship with Louisville Bedding Company to distribute certain of its consumer foam products. Sales to Louisville Bedding during fiscal 2003 made up approximately 40% of the Company’s total net sales and approximately 82% of sales in the custom products segment.

     See “Distributor Relationship” on page 5 and “Competition” on pages 6 and 7 for more information on major customers.

Seasonal Trends

     Some seasonality can be identified in certain of the Company’s medical and consumer foam products. However, the fluctuations have minimal effect on the Company’s operations because of offsetting trends among these product lines. Span-America has not experienced significant seasonal fluctuations in its industrial product line.

Patents and Trademarks

     The Company holds 41 federally registered trademarks and 16 foreign trademark registrations, including Span-America, Span-Aids, Geo-Matt, Geo-Mattress, PressureGuard, and Isch Dish in the medical and consumer segments. Other federal registration applications are presently pending. The Company believes that these trademarks are readily identifiable in their respective markets and add value to the Company’s product lines.

     The Company also holds 53 United States patents and 6 foreign patents relating to various components of its patient positioners, mattress overlays, and replacement mattresses for the medical segment. Additional patent applications have been filed. Management believes that these patents are important to the Company. However, while the Company has a number of products covered by patents, there are competitive alternatives available which are not covered by these patents. Therefore, the Company does not rely solely on its patents to maintain its competitive position in the medical foam marketplace.

     Span-America’s principal patents include the patents on its Geo-Matt, Geo-Mattress, PressureGuard, and Span-Aids products. The Company’s Geo-Matt and Geo-Mattress patents have remaining lives ranging from 3 to 10 years with additional patents pending. The Company’s PressureGuard patents have remaining lives ranging from 11 to 15 years with additional patents pending. The Company’s Span-Aids patents have remaining lives ranging from 0 to 11 years.

     As previously noted, in July 2002, the Company acquired assets related to the Secure I.V.® catheter product line of VADUS®, Inc., a privately owned designer and manufacturer of peripheral intravenous catheters. The Secure I.V. has FDA 510(k) approval and is protected by 11 U. S. patents and five foreign patents. Additional patent applications have been filed. “Secure I.V.” is a federally registered trademark. The Company holds two foreign trademark registrations related to Secure I.V.

Raw Materials and Backlog

     Polyurethane foam and nylon/vinyl mattress covers and tubes account for approximately 80% of Span-America’s raw materials. In addition, the Company uses corrugated shipping cartons, polyethylene plastic packaging material and hook-and-loop fasteners. The Company believes that its basic raw materials are in adequate supply and are available from many suppliers at competitive prices.

     As of September 27, 2003, Span-America had unshipped orders of approximately $1.7 million which represents a 46% increase compared to a backlog of $1.1 million, at fiscal year end 2002. All orders in the current backlog are expected to be filled in the 2004 fiscal year.

Employees

     On September 27, 2003, the Company had 264 full-time employees, including 5 officers and two part-time employees. Of these employees, 19 were executive or management personnel, 21 were administrative and clerical personnel, 19 were sales personnel, and 202 were manufacturing employees. The Company is not a party to any collective bargaining agreement and has never experienced an interruption or curtailment of operations due to labor controversy. Management believes that its relations with its employees are good.

Supervision and Regulation

     The Federal Food, Drug and Cosmetic Act, and regulations issued or proposed thereunder, provide for regulation by the Food and Drug Administration (the “FDA”) of the marketing, manufacture, labeling, packaging and distribution of medical devices, including the Company’s products. These regulations require, among other things, that medical device manufacturers register with the FDA, list devices manufactured by them, and file various types of reports. In addition, the Company’s manufacturing facilities are subject to periodic inspections by regulatory authorities and must comply with “good manufacturing practices” as required by the FDA and state regulatory authorities. The Company believes that it is in substantial compliance with applicable regulations and does not anticipate having to make any material expenditures as a result of FDA or other regulatory requirements.

     In August 2003 the Company received certification as an ISO 9002 and ISO 13488 supplier for our PressureGuard mattress products from our Greenville, South Carolina plant. These standards are prepared by the American Society for Quality Control Standards Committee to correspond to the International Standard ISO 9002:1994. ISO (the International Organization for Standardization) is a worldwide federation of national standards bodies dealing with quality-system requirements that can be used by a supplier to demonstrate its capability and for the assessment of the capability of a supplier by external parties. Compliance with ISO standard 13488 is required by Health Canada for all Class II medical devices sold there. The certification is subject to reassessment at six month intervals.

Environmental Matters

     The Company’s manufacturing operations are subject to various government regulations pertaining to the discharge of materials into the environment. Span-America believes that it is in substantial compliance with applicable regulations. The Company does not anticipate that continued compliance will have a material effect on the Company’s capital expenditures, earnings or competitive position.

Item 2. Properties

     The Company’s principal office and manufacturing facility is owned by the Company and located in Greenville, South Carolina. This facility contains approximately 125,000 square feet and is located on a 13-acre site.

     The Company produces foam mattress overlays for the medical and consumer markets in a 40,000 square foot leased facility in Norwalk, California. The lease expires on December 31, 2006 and provides for a rental rate of $18,657 per month, increasing annually to $20,198 per month.

     The South Carolina and California facilities are considered suitable and adequate for their intended purposes.

Item 3. Legal Proceedings

     As previously reported in the Company’s Form 10-Q for the quarter ended June 28, 2003, on July 17, 2003, shareholder Jerry Zucker filed suit against the Company in the Court of Common Pleas in Charleston, South Carolina challenging certain aspects of the Company’s Shareholder Rights Plan. In his suit, Mr. Zucker sought, among other relief, a court declaration that certain provisions of the Shareholder Rights Plan are unenforceable and an injunction precluding the Company from interpreting the Shareholder Rights Plan to restrict certain actions that Mr. Zucker might take in the future. Both a committee of independent directors and the full board of directors had previously concluded that the Shareholder Rights Plan is designed to help ensure that the Company’s shareholders receive fair treatment in the event of an unsolicited attempt to gain control of the Company and to discourage certain coercive takeover tactics. The plan, however, is not designed to deter a proxy contest or a fair offer for the whole Company.

     In November 2003, Mr. Zucker and the Company reached a settlement agreement whereby Mr. Zucker agreed to dismiss his lawsuit without prejudice in exchange for the Company’s agreement to delete certain language in the definition of “Person” contained in the Shareholder Rights Plan. The Company believes removal of the language clarifies the scope of the definition of “Person” but will not significantly change the protections afforded the Company and its shareholders by the Shareholder Rights Plan.

     From time to time the Company is a 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 4. Submission of Matters to a Vote of Security Holders

     No matters were submitted to a vote of security holders during the fourth quarter of the Company’s 2003 fiscal year.

PART II

Item 5. Market for the Registrant’s Common Stock and Related Shareholder Matters

     The stock price information contained under “Quarterly Financial Data” within the table and the information set forth below the table on page 9 of the Company’s 2003 Annual Report is incorporated herein by reference. In addition, the information under “Stock Information” on the inside back cover of the Company’s 2003 Annual Report is incorporated herein by reference.

     In September 1994, the Board of Directors approved a resolution changing their annual Director’s compensation from cash to stock. Each non-employee Director, except the Chairman, receives 1,000 shares of Company common stock per year in lieu of their annual cash compensation. The Chairman of the Board receives 2,000 shares of Company common stock per year as compensation for additional duties as Chairman. The following table sets forth information about unregistered shares of common stock issued in the prior three fiscal years to the Company’s non-employee Directors for their service as Directors.

     The Company did not register the shares issued to non-employee Directors in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended, which exempts stock issued outside of a public offering from registration requirements.

Item 6. Selected Financial Data

     The information contained in the “Selected Financial Information” on page 8 of the Company’s 2003 Annual Report is incorporated herein by reference.

Item 7. Management’s Discussion and Financial Analysis

     Management’s Discussion and Financial Analysis on pages 10 through 15 of the Company’s 2003 Annual Report are incorporated herein by reference.

Item 7a. Qualitative and Quantitative Disclosures About Market Risk

     The information contained in the section titled “Market Risk” on page 14 of the Company’s 2003 Annual Report is incorporated herein by reference.

Item 7b. Off-Balance Sheet Arrangements

     The Company does not have any off-balance sheet arrangements.

Item 7c. Contractual Obligations

     The following table summarizes the Company’s significant contractual obligations and commercial commitments at September 27, 2003 and the future periods in which such obligations are expected to be settled in cash. For additional information regarding these obligations see the referenced footnotes to the Company’s audited financial statements for the year ended September 27, 2003, presented on pages 24 and 30 of the 2003 Annual Report.

Item 8. Financial Statements and Supplementary Data

     The financial statements of the Company included on pages 16 through 30 of the Company’s 2003 Annual Report are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

     None

Item 9A. Controls and Procedures

     The Company has evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures within 90 days of the filing date of this annual report, and, based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures are effective. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

     Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure

that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow for timely decisions regarding required disclosure.

PART III

Item 10. Directors and Executive Officers of the Registrant

Item 11. Executive Compensation

     Information required under Items 10 and 11 of Part III is incorporated herein by reference to portions of the definitive Proxy Statement filed or to be filed with the Securities and Exchange Commission on or prior to 120 days following the end of the Company’s 2003 fiscal year under the headings “Election of Directors,” “Business Experience of Nominees and Directors,” “Executive Officers,” and “Compensation of Directors and Executive Officers.”

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

     The following table summarizes information regarding the Company’s equity compensation plans as of September 27, 2003:

     For additional information on the Company’s stock option plans, see Note 12 to the Company’s audited financial statements for the year ended September 27, 2003, presented on pages 25 and 26 of the 2003 Annual Report.

     See Item 5 of Part II for more information on shares of Company common stock issued to Directors in lieu of their annual cash compensation.

Item 13. Certain Relationships and Related Transactions

     Additional information required under Items 12 and 13 of Part III is incorporated herein by reference to portions of the definitive Proxy Statement filed or to be filed with the Securities and Exchange Commission on or prior to 120 days following the end of the Company’s 2003 fiscal year under the headings “Election of Directors,” “Business Experience of Nominees and Directors,” “Executive Officers,” “Compensation of Directors and Executive Officers,” “Certain Transactions,” and “Security Ownership of Certain Beneficial Owners and Management.”

Item 14. Principal Accountant Fees and Services

     Additional information required under Item 14 of Part III is incorporated herein by reference to portions of the definitive Proxy Statement filed or to be filed with the Securities and Exchange Commission on or prior to 120 days following the end of the Company’s 2003 fiscal year under the heading “Principal Accountant Fees and Services,”

PART IV

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

     (a)  (1) and (2) Financial Statements and Financial Statement Schedules

     The response to this portion of Item 15 is submitted as a separate section of this report beginning on page F-1.

            (3)  Listing of Exhibits

     (b)  Reports on Form 8-K

	Report on Form 8-K filed July 23, 2003 related to the Company’s press release regarding a lawsuit filed against the Company by Jerry Zucker challenging certain aspects of the Company’s Shareholder Rights Plan.
	Report on Form 8-K filed July 24, 2003 related to the Company’s earnings release for the third quarter of fiscal 2003.
	Report on form 8-K filed October 30, 2003 related to the Company’s earnings release for the year ended September 27, 2003.
	Report on form 8-K filed December 2, 2003 related to the Company’s press release regarding settlement of a lawsuit filed against the Company by Jerry Zucker challenging certain aspects of the Company’s Shareholder Rights Plan.

     (c)  Exhibits

	The exhibits required by this section of Item 15 are attached hereto or incorporated by reference.

     (d)  Financial Statement Schedules

	The response to this portion of Item 15 is submitted as a separate section of this report beginning on page F-1.

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.

     Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the date indicated.

December 22, 2003

Annual Report on Form 10-K

Items 15 (a) (1) and (2), (c) and (d)

List of Financial Statements and Financial Statement Schedules

Certain Exhibits

Financial Statement Schedules

Year Ended September 27, 2003

Span-America Medical Systems, Inc.

Greenville, South Carolina

F-1

Span-America Medical Systems, Inc.

Form 10-K — Item 15(a)(1) and (2)

List of Financial Statements and Financial Statement Schedules

The following financial statements of Span-America Medical Systems, Inc. included in the annual report of the registrant to its shareholders for the year ended September 27, 2003 are incorporated by reference in Item 8:

     Balance Sheets — September 27, 2003 and September 28, 2002.

     Statements of Income — Years ended September 27, 2003, September 28, 2002, and September 29, 2001

     Statements of Shareholders’ Equity — Years ended September 27, 2003, September 28, 2002, and September 29, 2001.

     Statements of Cash Flows — Years ended September 27, 2003, September 28, 2002, and September 29, 2001.

     Notes to Financial Statements — September 27, 2003.

The following financial statement schedule of Span-America Medical Systems, Inc. is included in Item 15(d):

     Schedule VIII — Valuation and Qualifying Accounts

All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.

F-2

Schedule VIII Valuation and Qualifying Accounts
Span-America Medical Systems, Inc.

(a) Uncollectible accounts written off.
(b) Discounts claimed by customers.

F-3