Span America Medical Systems (SPAN) 10-Q 11 Aug 15 2015 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Jun. 27, 2015	Aug. 07, 2015
Entity Registrant Name	SPAN AMERICA MEDICAL SYSTEMS INC
Entity Central Index Key	718,924
Current Fiscal Year End Date	--10-03
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		2,988,633
Document Type	10-Q
Document Period End Date	Jun. 27, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3
Amendment Flag	false

Consolidated Balance Sheets (Cu

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Jun. 27, 2015	Sep. 27, 2014
Current assets:
Cash and cash equivalents	$ 6,159,687	$ 6,865,931
Accounts receivable, net of allowances of $251,000 (June 27, 2015) and $302,000 (Sept. 27, 2014)	7,512,051	5,851,822
Inventories - Note 3	6,639,527	7,395,955
Deferred income taxes	272,504	271,828
Prepaid expenses	607,398	760,967
Total current assets	21,191,167	21,146,503
Property, plant and equipment, net - Note 4	4,679,874	4,888,096
Goodwill	4,068,673	4,291,843
Intangibles, net - Note 5	2,411,612	2,860,260
Other assets - Note 6	2,738,736	2,660,132
	35,090,062	35,846,834
Current liabilities:
Accounts payable	3,000,639	2,477,198
Accrued and sundry liabilities	2,762,483	2,051,662
Total current liabilities	5,763,122	4,528,860
Deferred income taxes	371,080	160,685
Deferred compensation	396,319	457,457
Total long-term liabilities	767,399	618,142
Total liabilities	$ 6,530,521	$ 5,147,002
Commitments and contingencies - Note 11
Shareholders' equity:
Common stock, no par value, 20,000,000 shares authorized; issued and outstanding shares 2,991,192 (June 27, 2015) and 2,962,007 (Sept. 27, 2014)	$ 3,421,081	$ 3,064,658
Additional paid-in capital	926,811	906,834
Retained earnings	26,139,675	27,735,768
Accumulated other comprehensive loss	(1,928,026)	(1,007,428)
Total shareholders' equity	28,559,541	30,699,832
	$ 35,090,062	$ 35,846,834

Consolidated Balance Sheets (C3

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Jun. 27, 2015	Sep. 27, 2014
Allowance for doubtful accounts	$ 251,000	$ 302,000
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, authorized (in shares)	20,000,000	20,000,000
Common stock, issued (in shares)	2,991,192	2,962,007
Common stock, outstanding (in shares)	2,991,192	2,962,007

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)		3 Months Ended		9 Months Ended
		Jun. 27, 2015	Jun. 28, 2014	Jun. 27, 2015	Jun. 28, 2014
Net sales		$ 15,813,474	$ 13,250,985	$ 46,567,766	$ 42,812,791
Cost of goods sold		10,372,903	8,907,793	30,696,346	28,428,627
Gross profit		5,440,571	4,343,192	15,871,420	14,384,164
Selling and marketing expenses		2,717,470	2,532,889	8,090,610	7,623,819
Research and development expenses		281,798	256,596	877,726	819,503
General and administrative expenses		1,123,101	990,703	3,316,021	3,032,036
		4,122,369	3,780,188	12,284,357	11,475,358
Operating income		$ 1,318,202	563,004	3,587,063	2,908,806
Non-operating income (expense):
Interest expense			(3,160)	(6,285)	(9,479)
Other		$ 64,333	16,209	308,520	44,537
Net non-operating income		64,333	13,049	302,235	35,058
Income before income taxes		1,382,535	576,053	3,889,298	2,943,864
Provision for income taxes		420,000	198,000	1,183,000	1,009,000
Net income		962,535	378,053	2,706,298	1,934,864
Other comprehensive income (loss), after tax:
Foreign currency translation gain (loss)		207,013	357,259	(920,598)	(350,896)
Comprehensive income		$ 1,169,548	$ 735,312	$ 1,785,700	$ 1,583,968
Net income per share of common stock:
Basic (in dollars per share)		$ 0.32	$ 0.13	$ 0.91	$ 0.66
Diluted (in dollars per share)		0.32	0.13	0.90	0.65
Dividends per common share (1) (in dollars per share)	[1]	$ 0.15	$ 0.14	$ 1.45	$ 0.42
Denominator for diluted earnings per share:
Basic (in shares)		2,991,192	2,961,128	2,976,994	2,944,653
Diluted (in shares)		3,017,536	3,004,726	3,006,430	2,991,124
[1]	Dividends per common share for the nine months ended June 27, 2015 include a special dividend of $1.00 per share paid on January 7, 2015.

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Jun. 27, 2015	Jun. 28, 2014
Operating activities:
Net income	$ 2,706,298	$ 1,934,864
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	917,544	967,081
Provision for losses on accounts receivable	41,956	$ 127,980
Gain on sale of equipment and patents	(45,850)
Increase in cash value of life insurance	(110,567)	$ (167,144)
Deferred compensation	(61,138)	(57,587)
Stock compensation expense	19,978	19,978
Changes in operating assets and liabilities:
Accounts receivable	(1,860,815)	1,757,013
Inventories	546,957	(293,514)
Prepaid expenses and other assets	326,793	(180,299)
Accounts payable and accrued and sundry liabilities	1,525,254	(1,043,177)
Net cash provided by operating activities	4,006,410	3,065,195
Investing activities:
Purchases of property and equipment	(505,085)	$ (528,713)
Proceeds from sale of equipment and patents	47,339
Payments for other assets	(65,592)	$ (68,494)
Net cash used for investing activities	(523,338)	(597,207)
Financing activities:
Dividends paid	(4,302,391)	(1,238,710)
Common stock issued upon exercise of options	180,708	273,397
Net cash used for financing activities	(4,121,683)	(965,313)
Effect of exchange rates on cash	(67,633)	(38,228)
(Decrease)/Increase in cash and cash equivalents	(706,244)	1,464,447
Cash and cash equivalents at beginning of period	6,865,931	5,424,521
Cash and cash equivalents at end of period	$ 6,159,687	$ 6,888,968

Note 1 - Significant Accounting

Note 1 - Significant Accounting Policies	9 Months Ended
	Jun. 27, 2015
Notes to Financial Statements
Significant Accounting Policies [Text Block]	1. SIGNIFICANT ACCOUNTING POLICIES Span-America Medical Systems, Inc., (the “Company,” “Span,” “Span-America,” “we,” “us” or “our”), located in Greenville, SC, has prepared the accompanying unaudited financial statements in accordance with accounting principles generally accepted in the United States of America 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 accounting principles generally accepted in the United States of America for complete financial statements. In our opinion, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine-month period ended June 27, 2015 are not necessarily indicative of the results that may be expected for the fiscal year ending October 3, 2015. For further information, refer to our Annual Report on Form 10-K for the fiscal year ended September 27, 2014. Our wholly-owned subsidiary, Span Medical Products Canada Inc. (“Span-Canada”), a British Columbia corporation, located in Beamsville, Ontario, Canada is operated under the registered business name M.C. Healthcare Products (“M.C. Healthcare”). Principles of Consolidation The consolidated financial statements include the accounts of the Company and Span-Canada, its wholly-owned subsidiary. Significant inter-entity accounts and transactions have been eliminated. Foreign Currency Translation Span-Canada uses the Canadian dollar as its functional currency. The assets and liabilities of Span-Canada are translated into U.S. dollars at the fiscal quarter-end exchange rate. Revenues and expenses are translated at weighted average exchange rates. The resulting translation adjustments are recorded as a separate component of shareholders’ equity in “Accumulated Other Comprehensive Income/Loss.” Revenue Recognition We recognize revenue when goods are shipped and title passes to the customer. However, in the case of one customer relationship, at this customer’s request, we recognize revenue and title passes to the customer when the goods are produced. Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." This ASU will supersede the revenue recognition requirements in ASC 605, "Revenue Recognition," and most industry-specific guidance. The standard requires an entity to recognize revenue in an amount that reflects the consideration the entity expects to receive in exchange for goods or services. The guidance is effective for annual reporting and interim periods beginning after December 15, 2017, with early adoption permitted after December 15, 2016, making it effective for our second quarter of the fiscal year beginning October 2018. We are currently evaluating the impact of adoption of this new standard on our consolidated financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption. Stock-Based Compensation We measure and recognize expense for all stock-based compensation at fair value. We have granted options to purchase common stock to some of our employees under various plans at prices equal to the market value of the stock on the dates the options were granted. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. New shares of stock are issued upon the exercise of stock options. We do not have treasury stock. We have not made any stock option grants since fiscal year 2011.

Note 2 - Fair Value of Financia

Note 2 - Fair Value of Financial Instruments	9 Months Ended
	Jun. 27, 2015
Notes to Financial Statements
Fair Value Disclosures [Text Block]	2 . FAIR VALUE OF FINANCIAL INSTRUMENTS The following table summarizes information on the fair value measurement of the Company’s financial instruments as of June 27, 2015 and September 27, 2014 grouped by the categories prescribed by the FASB: Quoted Significant Prices in Other Significant Active Observable Unobservable Markets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Cash value of life insurance policies: June 27, 2015 $ 2,604,230 - $ 2,604,230 - September 27, 2014 $ 2,493,664 - $ 2,493,664 -

Note 3 - Inventories

Note 3 - Inventories	9 Months Ended
	Jun. 27, 2015
Notes to Financial Statements
Inventory Disclosure [Text Block]	3. INVENTORIES June 27, September 27, 2015 2014 Raw materials $ 5,169,476 $ 5,476,050 Work in process 360,748 517,652 Finished goods 1,635,319 1,899,253 Reserve for obsolescence (526,016 ) (497,000 ) $ 6,639,527 $ 7,395,955

Note 4 - Property and Equipment

Note 4 - Property and Equipment	9 Months Ended
	Jun. 27, 2015
Notes to Financial Statements
Property, Plant and Equipment Disclosure [Text Block]	4 . PROPERTY , PLANT AND EQUIPMENT June 27, September 27, 2015 2014 Land $ 469,718 $ 469,718 Land improvements 486,698 486,698 Buildings 6,930,202 6,920,512 Machinery and equipment 9,282,420 8,975,185 Furniture and fixtures 491,079 490,479 Construction in process 18,417 17,985 Automobiles 11,144 11,313 17,689,678 17,371,890 Less accumulated depreciation (13,009,804 ) (12,483,794 ) $ 4,679,874 $ 4,888,096

Note 5 - Intangibles

Note 5 - Intangibles	9 Months Ended
	Jun. 27, 2015
Notes to Financial Statements
Intangible Assets Disclosure [Text Block]	5 . INTANGIBLES June 27, September 27, 2015 2014 Patents and trademarks $ 2,187,953 $ 2,153,717 Trade names 366,037 404,129 Non-competition agreements 160,398 177,090 Customer relationships 2,690,581 2,970,574 5,404,969 5,705,510 Less accumulated amortization (2,993,357 ) (2,845,250 ) Net intangibles $ 2,411,612 $ 2,860,260 Changes in the balances shown for trade names, non-competition agreements and customer relationships result solely from foreign currency fluctuations.

Note 6 - Other Assets

Note 6 - Other Assets	9 Months Ended
	Jun. 27, 2015
Notes to Financial Statements
Other Assets Disclosure [Text Block]	6 . OTHER ASSETS June 27, September 27, 2015 2014 Cash value of life insurance policies - Note 2 $ 2,604,230 $ 2,493,664 Other 134,506 166,468 $ 2,738,736 $ 2,660,132

Note 7 - Product Warranties

Note 7 - Product Warranties	9 Months Ended
	Jun. 27, 2015
Notes to Financial Statements
Product Warranty Disclosure [Text Block]	7 . PRODUCT WARRANTIES We offer warranties of various lengths to our customers, depending on the specific product sold. If applicable, the warranties require us to repair or replace non-performing products during the warranty period at no cost to the customer. At the time revenue is recognized for products covered by warranties, we record a liability for estimated costs to be incurred under our warranties. The costs are estimated based on historical experience, any specific warranty problems that have been identified and recovery of secondary warranty cost from component suppliers. The amounts shown below are presented net of any expected cost recovery from suppliers. Although historical warranty costs have been within our expectations, there can be no assurance that future warranty costs will not exceed our current estimates. We regularly evaluate the adequacy of the warranty liability and adjust the balance as necessary. Changes in our product warranty liability for the nine months ended June 27, 2015 and June 28, 2014 are as follows: Nine Months Ended June 27, June 28, 2015 2014 Accrued liability at beginning of period $ 257,860 $ 318,824 Increase in reserve 197,850 91,954 Repairs and replacements (164,681 ) (158,258 ) Accrued liability at end of period $ 291,029 $ 252,520

Note 8 - Revolving Credit Facil

Note 8 - Revolving Credit Facility	9 Months Ended
	Jun. 27, 2015
Notes to Financial Statements
Debt Disclosure [Text Block]	8 . R E VOLVIN G C R EDIT FACILITY In May 2015, we renewed our revolving credit facility from a bank. As part of the renewal, we extended the line for three years until April 30, 2018. The maximum principal amount we can borrow at any one time was reduced to $5.0 million. There is no longer an unused commitment fee charged for the credit facility. The previously included covenant that restricted dividend payments to 50% of net income was eliminated.

Note 9 - Earnings Per Share of

Note 9 - Earnings Per Share of Common Stock	9 Months Ended
	Jun. 27, 2015
Notes to Financial Statements
Earnings Per Share [Text Block]	9 . EARNINGS PER SHARE OF COMMON STOCK The following table sets forth the computation of basic and diluted earnings per share of our common stock. Three Months Ended Nine Months Ended June 27, June 28, June 27, June 28, 2015 2014 2015 2014 Numerator for basic and diluted earnings per share: Net income $ 962,535 $ 378,053 $ 2,706,298 $ 1,934,864 Denominator: Denominator for basic earnings per share: Weighted average shares 2,991,192 2,961,128 2,976,994 2,944,653 Effect of dilutive securities: Employee stock options 26,344 43,598 29,436 46,471 Denominator for diluted earnings per share: Adjusted weighted average shares and assumed conversions 3,017,536 3,004,726 3,006,430 2,991,124 Net income per share of common stock: Basic $ 0.32 $ 0.13 $ 0.91 $ 0.66 Diluted $ 0.32 $ 0.13 $ 0.90 $ 0.65

Note 10 - Operations and Indust

Note 10 - Operations and Industry Segments	9 Months Ended
	Jun. 27, 2015
Notes to Financial Statements
Segment Reporting Disclosure [Text Block]	10 . OPERATIONS AND INDUSTRY SEGMENTS For management and reporting purposes, we divide our business into two segments: medical and custom products. This industry segment information corresponds to the markets in the United States and Canada for which we manufacture and distribute our various products. The following table summarizes certain information on industry segments: Three Months Ended Nine Months Ended June 27, June 28, June 27, June 28, 2015 2014 2015 2014 Net sales: Medical $ 11,663,716 $ 10,293,467 $ 35,602,295 $ 32,062,039 Custom products 4,149,758 2,957,518 10,965,471 10,750,752 Total $ 15,813,474 $ 13,250,985 $ 46,567,766 $ 42,812,791 Operating profit (loss) before corporate expense: Medical $ 1,404,066 $ 756,035 $ 4,404,386 $ 2,927,520 Custom products 89,762 (61,915 ) (255,893 ) 419,756 Total 1,493,828 694,120 4,148,493 3,347,276 Non-allocable corporate expenses (175,626 ) (131,116 ) (561,430 ) (438,470 ) Operating income 1,318,202 563,004 3,587,063 2,908,806 Net non-operating income (expense) 64,333 13,049 302,235 35,058 Income before income taxes $ 1,382,535 $ 576,053 $ 3,889,298 $ 2,943,864 Total sales by industry segment include only sales to unaffiliated customers, as reported in our statements of comprehensive income. In calculating operating profit by segment, 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 11 - Commitments and Conti

Note 11 - Commitments and Contingencies	9 Months Ended
	Jun. 27, 2015
Notes to Financial Statements
Commitments and Contingencies Disclosure [Text Block]	1 1 . COMMITMENTS AND CONTINGENCIES From time to time we are defendants in legal actions involving claims arising in the normal course of business. We believe that, as a result of legal defenses and insurance arrangements with parties we believe to be financially capable, none of these actions, if determined adversely, will have a material adverse effect on our operations or financial condition.

Significant Accounting Policies

Significant Accounting Policies (Policies)	9 Months Ended
	Jun. 27, 2015
Accounting Policies [Abstract]
Consolidation, Policy [Policy Text Block]	Principles of Consolidation The consolidated financial statements include the accounts of the Company and Span-Canada, its wholly-owned subsidiary. Significant inter-entity accounts and transactions have been eliminated.
Foreign Currency Transactions and Translations Policy [Policy Text Block]	Foreign Currency Translation Span-Canada uses the Canadian dollar as its functional currency. The assets and liabilities of Span-Canada are translated into U.S. dollars at the fiscal quarter-end exchange rate. Revenues and expenses are translated at weighted average exchange rates. The resulting translation adjustments are recorded as a separate component of shareholders’ equity in “Accumulated Other Comprehensive Income/Loss.”
Revenue Recognition, Policy [Policy Text Block]	Revenue Recognition We recognize revenue when goods are shipped and title passes to the customer. However, in the case of one customer relationship, at this customer’s request, we recognize revenue and title passes to the customer when the goods are produced.
New Accounting Pronouncements, Policy [Policy Text Block]	Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." This ASU will supersede the revenue recognition requirements in ASC 605, "Revenue Recognition," and most industry-specific guidance. The standard requires an entity to recognize revenue in an amount that reflects the consideration the entity expects to receive in exchange for goods or services. The guidance is effective for annual reporting and interim periods beginning after December 15, 2017, with early adoption permitted after December 15, 2016, making it effective for our second quarter of the fiscal year beginning October 2018. We are currently evaluating the impact of adoption of this new standard on our consolidated financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption.
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]	Stock-Based Compensation We measure and recognize expense for all stock-based compensation at fair value. We have granted options to purchase common stock to some of our employees under various plans at prices equal to the market value of the stock on the dates the options were granted. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. New shares of stock are issued upon the exercise of stock options. We do not have treasury stock. We have not made any stock option grants since fiscal year 2011.

Note 2 - Fair Value of Financ18

Note 2 - Fair Value of Financial Instruments (Tables)	9 Months Ended
	Jun. 27, 2015
Notes Tables
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Table Text Block]	Quoted Significant Prices in Other Significant Active Observable Unobservable Markets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Cash value of life insurance policies: June 27, 2015 $ 2,604,230 - $ 2,604,230 - September 27, 2014 $ 2,493,664 - $ 2,493,664 -

Note 3 - Inventories (Tables)

Note 3 - Inventories (Tables)	9 Months Ended
	Jun. 27, 2015
Notes Tables
Schedule of Inventory, Current [Table Text Block]	June 27, September 27, 2015 2014 Raw materials $ 5,169,476 $ 5,476,050 Work in process 360,748 517,652 Finished goods 1,635,319 1,899,253 Reserve for obsolescence (526,016 ) (497,000 ) $ 6,639,527 $ 7,395,955

Note 4 - Property and Equipme20

Note 4 - Property and Equipment (Tables)	9 Months Ended
	Jun. 27, 2015
Notes Tables
Property, Plant and Equipment [Table Text Block]	June 27, September 27, 2015 2014 Land $ 469,718 $ 469,718 Land improvements 486,698 486,698 Buildings 6,930,202 6,920,512 Machinery and equipment 9,282,420 8,975,185 Furniture and fixtures 491,079 490,479 Construction in process 18,417 17,985 Automobiles 11,144 11,313 17,689,678 17,371,890 Less accumulated depreciation (13,009,804 ) (12,483,794 ) $ 4,679,874 $ 4,888,096

Note 5 - Intangibles (Tables)

Note 5 - Intangibles (Tables)	9 Months Ended
	Jun. 27, 2015
Notes Tables
Schedule of Finite-Lived Intangible Assets [Table Text Block]	June 27, September 27, 2015 2014 Patents and trademarks $ 2,187,953 $ 2,153,717 Trade names 366,037 404,129 Non-competition agreements 160,398 177,090 Customer relationships 2,690,581 2,970,574 5,404,969 5,705,510 Less accumulated amortization (2,993,357 ) (2,845,250 ) Net intangibles $ 2,411,612 $ 2,860,260

Note 6 - Other Assets (Tables)

Note 6 - Other Assets (Tables)	9 Months Ended
	Jun. 27, 2015
Notes Tables
Schedule of Other Assets, Noncurrent [Table Text Block]	June 27, September 27, 2015 2014 Cash value of life insurance policies - Note 2 $ 2,604,230 $ 2,493,664 Other 134,506 166,468 $ 2,738,736 $ 2,660,132

Note 7 - Product Warranties (Ta

Note 7 - Product Warranties (Tables)	9 Months Ended
	Jun. 27, 2015
Notes Tables
Schedule of Product Warranty Liability [Table Text Block]	Nine Months Ended June 27, June 28, 2015 2014 Accrued liability at beginning of period $ 257,860 $ 318,824 Increase in reserve 197,850 91,954 Repairs and replacements (164,681 ) (158,258 ) Accrued liability at end of period $ 291,029 $ 252,520

Note 9 - Earnings Per Share o24

Note 9 - Earnings Per Share of Common Stock (Tables)	9 Months Ended
	Jun. 27, 2015
Notes Tables
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	Three Months Ended Nine Months Ended June 27, June 28, June 27, June 28, 2015 2014 2015 2014 Numerator for basic and diluted earnings per share: Net income $ 962,535 $ 378,053 $ 2,706,298 $ 1,934,864 Denominator: Denominator for basic earnings per share: Weighted average shares 2,991,192 2,961,128 2,976,994 2,944,653 Effect of dilutive securities: Employee stock options 26,344 43,598 29,436 46,471 Denominator for diluted earnings per share: Adjusted weighted average shares and assumed conversions 3,017,536 3,004,726 3,006,430 2,991,124 Net income per share of common stock: Basic $ 0.32 $ 0.13 $ 0.91 $ 0.66 Diluted $ 0.32 $ 0.13 $ 0.90 $ 0.65

Note 10 - Operations and Indu25

Note 10 - Operations and Industry Segments (Tables)	9 Months Ended
	Jun. 27, 2015
Notes Tables
Schedule of Segment Reporting Information, by Segment [Table Text Block]	Three Months Ended Nine Months Ended June 27, June 28, June 27, June 28, 2015 2014 2015 2014 Net sales: Medical $ 11,663,716 $ 10,293,467 $ 35,602,295 $ 32,062,039 Custom products 4,149,758 2,957,518 10,965,471 10,750,752 Total $ 15,813,474 $ 13,250,985 $ 46,567,766 $ 42,812,791 Operating profit (loss) before corporate expense: Medical $ 1,404,066 $ 756,035 $ 4,404,386 $ 2,927,520 Custom products 89,762 (61,915 ) (255,893 ) 419,756 Total 1,493,828 694,120 4,148,493 3,347,276 Non-allocable corporate expenses (175,626 ) (131,116 ) (561,430 ) (438,470 ) Operating income 1,318,202 563,004 3,587,063 2,908,806 Net non-operating income (expense) 64,333 13,049 302,235 35,058 Income before income taxes $ 1,382,535 $ 576,053 $ 3,889,298 $ 2,943,864

Note 2 - Fair Value Measurement

Note 2 - Fair Value Measurement of Assets (Details) - USD ($)	Jun. 27, 2015	Sep. 27, 2014
Fair Value, Inputs, Level 2 [Member]
Cash value of life insurance policies	$ 2,604,230	$ 2,493,664
Cash value of life insurance policies	$ 2,604,230	$ 2,493,664

Note 3 - Components of Inventor

Note 3 - Components of Inventories (Details) - USD ($)	Jun. 27, 2015	Sep. 27, 2014
Raw materials	$ 5,169,476	$ 5,476,050
Work in process	360,748	517,652
Finished goods	1,635,319	1,899,253
Reserve for obsolescence	(526,016)	(497,000)
	$ 6,639,527	$ 7,395,955

Note 4 - Property and Equipme28

Note 4 - Property and Equipment (Details) - USD ($)	Jun. 27, 2015	Sep. 27, 2014
Land	$ 469,718	$ 469,718
Land improvements	486,698	486,698
Buildings	6,930,202	6,920,512
Machinery and equipment	9,282,420	8,975,185
Furniture and fixtures	491,079	490,479
Construction in process	18,417	17,985
Automobiles	11,144	11,313
	17,689,678	17,371,890
Less accumulated depreciation	(13,009,804)	(12,483,794)
	$ 4,679,874	$ 4,888,096

Note 5 - Intangible Assets (Det

Note 5 - Intangible Assets (Details) - USD ($)	Jun. 27, 2015	Sep. 27, 2014
Patents and trademarks	$ 2,187,953	$ 2,153,717
Trade names	366,037	404,129
Non-competition agreements	160,398	177,090
Customer relationships	2,690,581	2,970,574
	5,404,969	5,705,510
Less accumulated amortization	(2,993,357)	(2,845,250)
Net intangibles	$ 2,411,612	$ 2,860,260

Note 6 - Other Assets (Details)

Note 6 - Other Assets (Details) - USD ($)	Jun. 27, 2015	Sep. 27, 2014
Cash value of life insurance policies - Note 2	$ 2,604,230	$ 2,493,664
Other	134,506	166,468
	$ 2,738,736	$ 2,660,132

Note 7 - Changes in Product War

Note 7 - Changes in Product Warranty Liability (Details) - USD ($)	9 Months Ended
	Jun. 27, 2015	Jun. 28, 2014
Accrued liability at beginning of period	$ 257,860	$ 318,824
Increase in reserve	197,850	91,954
Repairs and replacements	(164,681)	(158,258)
Accrued liability at end of period	$ 291,029	$ 252,520

Note 8 - Revolving Credit Fac32

Note 8 - Revolving Credit Facility (Details Textual) - Revolving Credit Facility [Member] - USD ($)	1 Months Ended
	May. 31, 2015	Jun. 27, 2015
Debt Instrument, Term	3 years
Line of Credit Facility, Maximum Borrowing Capacity		$ 5

Note 9 - Basic and Diluted Earn

Note 9 - Basic and Diluted Earnings Per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 27, 2015	Jun. 28, 2014	Jun. 27, 2015	Jun. 28, 2014
Numerator for basic and diluted earnings per share:
Net income	$ 962,535	$ 378,053	$ 2,706,298	$ 1,934,864
Denominator for basic earnings per share:
Weighted average shares (in shares)	2,991,192	2,961,128	2,976,994	2,944,653
Effect of dilutive securities:
Employee stock options (in shares)	26,344	43,598	29,436	46,471
Denominator for diluted earnings per share:
Adjusted weighted average shares and assumed conversions (in shares)	3,017,536	3,004,726	3,006,430	2,991,124
Net income per share of common stock:
Basic (in dollars per share)	$ 0.32	$ 0.13	$ 0.91	$ 0.66
Diluted (in dollars per share)	$ 0.32	$ 0.13	$ 0.90	$ 0.65

Note 10 - Operations and Indu34

Note 10 - Operations and Industry Segments (Details Textual)	9 Months Ended
	Jun. 27, 2015
Number of Reportable Segments	2

Note 10 - Information on Indust

Note 10 - Information on Industry Segments (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 27, 2015	Jun. 28, 2014	Jun. 27, 2015	Jun. 28, 2014
Medical [Member] | Operating Segments [Member]
Net sales:
Net sales	$ 11,663,716	$ 10,293,467	$ 35,602,295	$ 32,062,039
Operating profit (loss) before corporate expense:
Operating profit	1,404,066	756,035	4,404,386	2,927,520
Operating income	1,404,066	756,035	4,404,386	2,927,520
Custom Products [Member] | Operating Segments [Member]
Net sales:
Net sales	4,149,758	2,957,518	10,965,471	10,750,752
Operating profit (loss) before corporate expense:
Operating profit	89,762	(61,915)	(255,893)	419,756
Operating income	89,762	(61,915)	(255,893)	419,756
Corporate Segment [Member]
Operating profit (loss) before corporate expense:
Non-allocable corporate expenses	(175,626)	(131,116)	(561,430)	(438,470)
Operating Segments [Member]
Operating profit (loss) before corporate expense:
Operating profit	1,493,828	694,120	4,148,493	3,347,276
Operating income	1,493,828	694,120	4,148,493	3,347,276
Net sales	15,813,474	13,250,985	46,567,766	42,812,791
Operating profit	1,318,202	563,004	3,587,063	2,908,806
Operating income	1,318,202	563,004	3,587,063	2,908,806
Net non-operating income (expense)	64,333	13,049	302,235	35,058
Income before income taxes	$ 1,382,535	$ 576,053	$ 3,889,298	$ 2,943,864