Span-America Medical Systems, Inc. (SPAN) has reported a 9.67 percent rise in profit for the quarter ended Oct. 01, 2016. The company has earned $1.41 million, or $0.51 a share in the quarter, compared with $1.29 million, or $0.43 a share for the same period last year.
Revenue during the quarter dropped 9.99 percent to $15.97 million from $17.75 million in the previous year period. Gross margin for the quarter expanded 478 basis points over the previous year period to 37.27 percent. Total expenses were 88.24 percent of quarterly revenues, down from 90.59 percent for the same period last year. This has led to an improvement of 235 basis points in operating margin to 11.76 percent.
Operating income for the quarter was $1.88 million, compared with $1.67 million in the previous year period.
"Span-America’s earnings rose in the fourth quarter on a solid 13% increase in operating income, and our earnings per share benefited from fewer shares outstanding as a result of the stock repurchases we made near the end of fiscal 2015," stated Jim Ferguson, president and chief executive officer of Span-America. "Our growth in operating income came from a combination of higher sales in our medical segment and improved margins in our custom products segment. These improvements were partly offset by lower foreign exchange gains related to our operations in Canada.
Working capital increases sharply
Span-America Medical Systems, Inc. has recorded an increase in the working capital over the last year. It stood at $14.61 million as at Oct. 01, 2016, up 28.29 percent or $3.22 million from $11.39 million on Oct. 03, 2015. Current ratio was at 3.44 as on Oct. 01, 2016, up from 2.59 on Oct. 03, 2015.
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