Span America Medical Systems (SPAN) 10-Q 16 Feb 16 2016 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Jan. 02, 2016	Feb. 15, 2016
Entity Registrant Name	SPAN AMERICA MEDICAL SYSTEMS INC
Entity Central Index Key	718,924
Trading Symbol	span
Current Fiscal Year End Date	--10-01
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)		2,725,468
Document Type	10-Q
Document Period End Date	Jan. 2, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Amendment Flag	false

Consolidated Balance Sheets (Cu

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Jan. 02, 2016	Oct. 03, 2015	[1]
Current assets:
Cash and cash equivalents	$ 1,318,001	$ 1,224,026
Accounts receivable, net of allowances of $152,000 (Jan. 2, 2016) and $148,000 (Oct. 3, 2015)	9,283,687	7,813,773
Inventories - Note 3	6,952,676	8,746,039
Deferred income taxes	352,603	351,452
Prepaid expenses	908,677	411,528
Total current assets	18,815,644	18,546,818
Property and equipment, net - Note 4	4,476,442	4,536,104
Goodwill	3,832,298	3,930,282
Intangibles, net - Note 5	2,062,783	2,214,762
Other assets - Note 6	2,827,614	2,953,656
	32,014,781	32,181,622
Current liabilities:
Accounts payable	2,613,457	4,035,333
Accrued and sundry liabilities	3,364,640	3,120,111
Total current liabilities	5,978,097	$ 7,155,444
Long-term debt	1,000,000
Deferred income taxes	344,695	$ 348,479
Deferred compensation	355,057	375,939
Total long-term liabilities	1,699,752	724,418
Total liabilities	$ 7,677,849	$ 7,879,862
Commitments and contingencies - Note 10
Common stock, no par value, 20,000,000 shares authorized; issued and outstanding shares 2,725,468 (Jan. 2, 2016) and 2,737,468 (Oct. 3, 2015)
Additional paid-in capital
Retained earnings	$ 27,345,097	$ 26,848,299
Accumulated other comprehensive loss	(3,008,165)	(2,546,539)
Total shareholders' equity	24,336,932	24,301,760
	$ 32,014,781	$ 32,181,622
[1]	The Balance Sheet at October 3, 2015, has been derived from the audited financial statements at that date.

Consolidated Balance Sheets (C3

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Jan. 02, 2016	Oct. 03, 2015	[1]
Allowance for doubtful accounts	$ 152,000	$ 148,000
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)	2,725,468	2,737,468
Common stock, outstanding (in shares)	2,725,468	2,737,468
[1]	The Balance Sheet at October 3, 2015, has been derived from the audited financial statements at that date.

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)		3 Months Ended
		Jan. 02, 2016	Jan. 03, 2015
Net sales		$ 21,452,182	$ 15,720,674
Cost of goods sold		15,968,882	10,271,694
Gross profit		5,483,300	5,448,980
Selling and marketing expenses		2,527,331	2,760,234
Research and development expenses		293,945	279,678
General and administrative expenses		1,105,569	1,065,004
		3,926,845	4,104,916
Operating income		1,556,455	1,344,064
Non-operating income (expense):
Foreign currency gain		117,352	70,560
Interest expense		(5,084)	(3,160)
Other		(3,971)	(1,139)
Net non-operating income (expense)		108,297	66,261
Income before income taxes		1,664,752	1,410,325
Provision for income taxes		522,000	440,000
Net income		1,142,752	970,325
Other comprehensive loss, after tax:
Foreign currency translation loss		(461,626)	(506,134)
Comprehensive income		$ 681,126	$ 464,191
Net income per share of common stock - Note 14:
Basic (in dollars per share)		$ 0.42	$ 0.33
Diluted (in dollars per share)		0.42	0.32
Special Dividend (in dollars per share)	[1]	$ 0.16	$ 1.15
Weighted average shares outstanding:
Basic (in shares)		2,726,127	2,962,007
Diluted (in shares)		2,751,870	2,997,116
[1]	Dividends per share for the three months ended January 3, 2015 included a special dividend of $1.00 per share declared on November 12, 2014 and paid on January 7, 2015 to shareholders of record on December 17, 2014.

Consolidated Statements of Com5

Consolidated Statements of Comprehensive Income (Unaudited) (Parentheticals) - $ / shares		3 Months Ended
		Jan. 02, 2016	Jan. 03, 2015
Special Dividend [Member]
Special Dividend (in dollars per share)			$ 1	[1]
Special Dividend (in dollars per share)	[2]	$ 0.16	$ 1.15
[1]	Dividends per share for the three months ended January 3, 2015 included a special dividend of $1.00 per share declared on November 12, 2014 and paid on January 7, 2015 to shareholders of record on December 17, 2014.
[2]	Dividends per share for the three months ended January 3, 2015 included a special dividend of $1.00 per share declared on November 12, 2014 and paid on January 7, 2015 to shareholders of record on December 17, 2014.

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Jan. 02, 2016		Jan. 03, 2015
Operating activities:
Net income	$ 1,142,752		$ 970,325
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	286,955		306,782
Provision for losses on accounts receivable	6,000		$ 6,000
Loss on disposal of equipment	4,028
Increase in cash value of life insurance	(66,847)		$ (65,560)
Deferred compensation	$ (20,882)		(20,379)
Stock compensation expense			6,659
Changes in operating assets and liabilities:
Accounts receivable	$ (1,556,333)		(1,302,994)
Inventories	1,689,902		1,060,546
Prepaid expenses and other assets	(326,648)		(98,503)
Accounts payable and accrued and sundry liabilities	(1,136,343)		112,232
Net cash provided by operating activities	22,584		975,108
Investing activities:
Purchases of equipment	(182,148)		(95,560)
Payments for other assets	(11,665)		(37,192)
Net cash used for investing activities	(193,813)		$ (132,752)
Financing activities:
Proceeds of long-term debt	2,900,000
Repayments of long-term debt	(1,900,000)
Purchase and retirement of common stock	(209,880)
Dividends paid	(436,075)		$ (444,301)
Net cash provided by (used for) financing activities	354,045		(444,301)
Effect of exchange rates on cash	(88,841)		(19,528)
Increase in cash and cash equivalents	93,975		378,527
Cash and cash equivalents at beginning of period	1,224,026	[1]	6,865,931
Cash and cash equivalents at end of period	$ 1,318,001		$ 7,244,458
[1]	The Balance Sheet at October 3, 2015, has been derived from the audited financial statements at that date.

Note 1 - Significant Accounting

Note 1 - Significant Accounting Policies	3 Months Ended
	Jan. 02, 2016
Notes to Financial Statements
Significant Accounting Policies [Text Block]	1. SIGNIFICANT ACCOUNTING POLICIES Span-America Medical Systems, Inc. (the “Company,” “we,” or “Span-America”), located in Greenville, SC, has prepared the accompanying unaudited consolidated 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 three-month period ended January 2, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending October 1, 2016. The unaudited Consolidated Financial Statements appearing in this Quarterly Report should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 3, 2015. Our accounting policies are consistent with those described in our Significant Accounting Policies in the Form 10-K, including but not limited to those set forth below. 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”). In addition, we use the name “Span-U.S.” in this report to refer to the original U.S. operations of Span-America prior to the acquisition of the assets of M.C. Healthcare Products Inc. Principles of Consolidation The consolidated financial statements include the accounts of Span-U.S. 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 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 Loss.” Revenue Recognition We recognize revenue when title and risk of loss pass to the customer and collection is reasonably assured. Our sales prices are fixed at the time revenue is recognized. Recently Issued Accounting Standards In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-07, "Balance Sheet Classification of Deferred Taxes (Topic 740)." Current guidance requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position; however, the new guidance requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is permitted. The Company is currently assessing the potential impact of this new accounting pronouncement on the Company's statement of financial position. 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 compensation expense for all stock-based payments at fair value. Stock-based payments include stock option grants. We grant 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 are granted. New shares of common stock are issued upon share option exercise. 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	3 Months Ended
	Jan. 02, 2016
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 certain Company assets as of January 2, 2016 and October 3, 2015 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: January 2, 2016 $ 2,610,039 - $ 2,610,039 - October 3, 2015 $ 2,543,192 - $ 2,543,192 -

Note 3 - Inventories

Note 3 - Inventories	3 Months Ended
	Jan. 02, 2016
Notes to Financial Statements
Inventory Disclosure [Text Block]	3. INVENTORIES January 2, October 3, 2016 2015 Raw materials $ 5,601,578 $ 5,455,942 Work in process 347,000 338,296 Finished goods 1,576,098 3,521,801 Reserve for obsolescence (572,000 ) (570,000 ) $ 6,952,676 $ 8,746,039

Note 4 - Property and Equipment

Note 4 - Property and Equipment	3 Months Ended
	Jan. 02, 2016
Notes to Financial Statements
Property, Plant and Equipment Disclosure [Text Block]	4 . PROPERTY AND EQUIPMENT January 2, October 3, 2016 2015 Land $ 469,718 $ 469,718 Land improvements 486,698 486,698 Buildings 6,974,870 6,941,084 Machinery and equipment 9,326,552 9,241,581 Furniture and fixtures 493,318 487,856 Construction in process 66,595 85,329 Automobiles 23,103 9,520 17,840,854 17,721,786 Less accumulated depreciation 13,364,412 13,185,682 $ 4,476,442 $ 4,536,104

Note 5 - Intangibles

Note 5 - Intangibles	3 Months Ended
	Jan. 02, 2016
Notes to Financial Statements
Intangible Assets Disclosure [Text Block]	5 . INTANGIBLES January 2, October 3, 2016 2015 Patents and trademarks $ 2,214,344 $ 2,203,673 Trade names 325,692 342,416 Non-competition agreements 142,719 150,048 Customer relationships 2,394,020 2,516,952 5,076,775 5,213,089 Less accumulated amortization (3,013,992 ) (2,998,327 ) $ 2,062,783 $ 2,214,762 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	3 Months Ended
	Jan. 02, 2016
Notes to Financial Statements
Other Assets Disclosure [Text Block]	6 . OTHER ASSETS January 2, October 3, 2016 2015 Cash value of life insurance policies - Note 2 $ 2,610,039 $ 2,543,192 Other 217,575 410,464 $ 2,827,614 $ 2,953,656

Note 7 - Product Warranties

Note 7 - Product Warranties	3 Months Ended
	Jan. 02, 2016
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. 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 that may 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 historical amounts. We regularly evaluate the adequacy of the warranty liability and adjust the balance as necessary. Changes in our product warranty liability for the three months ended January 2, 2016 and January 3, 2015 are as follows: Three Months Ended January 2, January 3, 2016 2015 Accrued liability at beginning of period $ 291,980 $ 257,860 Increase in reserve 42,352 88,280 Repairs and replacements (47,406 ) (52,529 ) Accrued liability at end of period $ 286,926 $ 293,611

Note 8 - Earnings Per Share of

Note 8 - Earnings Per Share of Common Stock	3 Months Ended
	Jan. 02, 2016
Notes to Financial Statements
Earnings Per Share [Text Block]	8 . 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 January 2, January 3, 2016 2015 Numerator for basic and diluted earnings per share: Net income $ 1,142,752 $ 970,325 Denominator: Denominator for basic earnings per share: Weighted average shares 2,726,127 2,962,007 Effect of dilutive securities: Employee stock options 25,743 35,109 Denominator for diluted earnings per share: Adjusted weighted average shares and assumed conversions 2,751,870 2,997,116 Net income per share: Basic $ 0.42 $ 0.33 Diluted $ 0.42 $ 0.32

Note 9 - Operations and Industr

Note 9 - Operations and Industry Segments	3 Months Ended
	Jan. 02, 2016
Notes to Financial Statements
Segment Reporting Disclosure [Text Block]	9 . 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 our industry segments: Three Months Ended January 2, January 3, 2016 2015 Net sales: Medical $ 11,392,797 $ 12,832,643 Custom Products 10,059,385 2,888,031 $ 21,452,182 $ 15,720,674 Operating profit (loss): Medical $ 1,501,851 $ 1,785,174 Custom Products 204,800 (276,181 ) 1,706,651 1,508,993 Corporate expense (150,196 ) (164,929 ) Other income 108,297 66,261 Income before income taxes $ 1,664,752 $ 1,410,325 Total sales by industry segment include sales to unaffiliated customers as reported in our consolidated statements of comprehensive 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 both segments are included on an allocated basis.

Note 10 - Commitments and Conti

Note 10 - Commitments and Contingencies	3 Months Ended
	Jan. 02, 2016
Notes to Financial Statements
Commitments and Contingencies Disclosure [Text Block]	1 0 . COMMITMENTS AND CONTINGENCIES As disclosed in a Form 8-K filed on February 8, 2016, on February 2, 2016, the Company and Nipro Consumer Healthcare, Inc., d/b/a P.J. Noyes Company entered into an Amendment No. 1 to the License and Distribution Agreement between the Company and PJ Noyes to extend the term of the agreement through December 31, 2020. The other terms of and the amount of the minimum purchases under this agreement did not change. However, because the term of the agreement is now extended to 2020, we are committed to minimum purchases of $700,000 of Selan® skin care products per calendar year for each calendar year through 2020. Our purchases of Selan have exceeded the required minimum purchase level for each calendar year since the agreement has been in effect. 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, would have a material adverse effect on our operations or financial condition.

Significant Accounting Policies

Significant Accounting Policies (Policies)	3 Months Ended
	Jan. 02, 2016
Accounting Policies [Abstract]
Consolidation, Policy [Policy Text Block]	Principles of Consolidation The consolidated financial statements include the accounts of Span-U.S. 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 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 Loss.”
Revenue Recognition, Policy [Policy Text Block]	Revenue Recognition We recognize revenue when title and risk of loss pass to the customer and collection is reasonably assured. Our sales prices are fixed at the time revenue is recognized.
New Accounting Pronouncements, Policy [Policy Text Block]	Recently Issued Accounting Standards In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-07, "Balance Sheet Classification of Deferred Taxes (Topic 740)." Current guidance requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position; however, the new guidance requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is permitted. The Company is currently assessing the potential impact of this new accounting pronouncement on the Company's statement of financial position. 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 compensation expense for all stock-based payments at fair value. Stock-based payments include stock option grants. We grant 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 are granted. New shares of common stock are issued upon share option exercise. 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)	3 Months Ended
	Jan. 02, 2016
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: January 2, 2016 $ 2,610,039 - $ 2,610,039 - October 3, 2015 $ 2,543,192 - $ 2,543,192 -

Note 3 - Inventories (Tables)

Note 3 - Inventories (Tables)	3 Months Ended
	Jan. 02, 2016
Notes Tables
Schedule of Inventory, Current [Table Text Block]	January 2, October 3, 2016 2015 Raw materials $ 5,601,578 $ 5,455,942 Work in process 347,000 338,296 Finished goods 1,576,098 3,521,801 Reserve for obsolescence (572,000 ) (570,000 ) $ 6,952,676 $ 8,746,039

Note 4 - Property and Equipme20

Note 4 - Property and Equipment (Tables)	3 Months Ended
	Jan. 02, 2016
Notes Tables
Property, Plant and Equipment [Table Text Block]	January 2, October 3, 2016 2015 Land $ 469,718 $ 469,718 Land improvements 486,698 486,698 Buildings 6,974,870 6,941,084 Machinery and equipment 9,326,552 9,241,581 Furniture and fixtures 493,318 487,856 Construction in process 66,595 85,329 Automobiles 23,103 9,520 17,840,854 17,721,786 Less accumulated depreciation 13,364,412 13,185,682 $ 4,476,442 $ 4,536,104

Note 5 - Intangibles (Tables)

Note 5 - Intangibles (Tables)	3 Months Ended
	Jan. 02, 2016
Notes Tables
Schedule of Finite-Lived Intangible Assets [Table Text Block]	January 2, October 3, 2016 2015 Patents and trademarks $ 2,214,344 $ 2,203,673 Trade names 325,692 342,416 Non-competition agreements 142,719 150,048 Customer relationships 2,394,020 2,516,952 5,076,775 5,213,089 Less accumulated amortization (3,013,992 ) (2,998,327 ) $ 2,062,783 $ 2,214,762

Note 6 - Other Assets (Tables)

Note 6 - Other Assets (Tables)	3 Months Ended
	Jan. 02, 2016
Notes Tables
Schedule of Other Assets, Noncurrent [Table Text Block]	January 2, October 3, 2016 2015 Cash value of life insurance policies - Note 2 $ 2,610,039 $ 2,543,192 Other 217,575 410,464 $ 2,827,614 $ 2,953,656

Note 7 - Product Warranties (Ta

Note 7 - Product Warranties (Tables)	3 Months Ended
	Jan. 02, 2016
Notes Tables
Schedule of Product Warranty Liability [Table Text Block]	Three Months Ended January 2, January 3, 2016 2015 Accrued liability at beginning of period $ 291,980 $ 257,860 Increase in reserve 42,352 88,280 Repairs and replacements (47,406 ) (52,529 ) Accrued liability at end of period $ 286,926 $ 293,611

Note 8 - Earnings Per Share o24

Note 8 - Earnings Per Share of Common Stock (Tables)	3 Months Ended
	Jan. 02, 2016
Notes Tables
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	Three Months Ended January 2, January 3, 2016 2015 Numerator for basic and diluted earnings per share: Net income $ 1,142,752 $ 970,325 Denominator: Denominator for basic earnings per share: Weighted average shares 2,726,127 2,962,007 Effect of dilutive securities: Employee stock options 25,743 35,109 Denominator for diluted earnings per share: Adjusted weighted average shares and assumed conversions 2,751,870 2,997,116 Net income per share: Basic $ 0.42 $ 0.33 Diluted $ 0.42 $ 0.32

Note 9 - Operations and Indus25

Note 9 - Operations and Industry Segments (Tables)	3 Months Ended
	Jan. 02, 2016
Notes Tables
Schedule of Segment Reporting Information, by Segment [Table Text Block]	Three Months Ended January 2, January 3, 2016 2015 Net sales: Medical $ 11,392,797 $ 12,832,643 Custom Products 10,059,385 2,888,031 $ 21,452,182 $ 15,720,674 Operating profit (loss): Medical $ 1,501,851 $ 1,785,174 Custom Products 204,800 (276,181 ) 1,706,651 1,508,993 Corporate expense (150,196 ) (164,929 ) Other income 108,297 66,261 Income before income taxes $ 1,664,752 $ 1,410,325

Note 2 - Fair Value Measurement

Note 2 - Fair Value Measurement of Assets (Details) - USD ($)	Jan. 02, 2016	Oct. 03, 2015
Fair Value, Inputs, Level 2 [Member]
Cash value of life insurance policies	$ 2,610,039	$ 2,543,192
Cash value of life insurance policies	$ 2,610,039	$ 2,543,192

Note 3 - Components of Inventor

Note 3 - Components of Inventories (Details) - USD ($)	Jan. 02, 2016	Oct. 03, 2015
Raw materials	$ 5,601,578	$ 5,455,942
Work in process	347,000	338,296
Finished goods	1,576,098	3,521,801
Reserve for obsolescence	(572,000)	(570,000)
	$ 6,952,676	$ 8,746,039	[1]
[1]	The Balance Sheet at October 3, 2015, has been derived from the audited financial statements at that date.

Note 4 - Property and Equipme28

Note 4 - Property and Equipment (Details) - USD ($)	Jan. 02, 2016	Oct. 03, 2015
Land	$ 469,718	$ 469,718
Land improvements	486,698	486,698
Buildings	6,974,870	6,941,084
Machinery and equipment	9,326,552	9,241,581
Furniture and fixtures	493,318	487,856
Construction in process	66,595	85,329
Automobiles	23,103	9,520
	17,840,854	17,721,786
Less accumulated depreciation	(13,364,412)	(13,185,682)
	$ 4,476,442	$ 4,536,104	[1]
[1]	The Balance Sheet at October 3, 2015, has been derived from the audited financial statements at that date.

Note 5 - Intangibles (Details)

Note 5 - Intangibles (Details) - USD ($)	Jan. 02, 2016	Oct. 03, 2015
Patents and trademarks	$ 2,214,344	$ 2,203,673
Trade names	325,692	342,416
Non-competition agreements	142,719	150,048
Customer relationships	2,394,020	2,516,952
	5,076,775	5,213,089
Less accumulated amortization	(3,013,992)	(2,998,327)
	$ 2,062,783	$ 2,214,762

Note 6 - Other Assets (Details)

Note 6 - Other Assets (Details) - USD ($)	Jan. 02, 2016	Oct. 03, 2015
Cash value of life insurance policies - Note 2	$ 2,610,039	$ 2,543,192
Other	217,575	410,464
	$ 2,827,614	$ 2,953,656	[1]
[1]	The Balance Sheet at October 3, 2015, has been derived from the audited financial statements at that date.

Note 7 - Changes in Product War

Note 7 - Changes in Product Warranty Liability (Details) - USD ($)	3 Months Ended
	Jan. 02, 2016	Jan. 03, 2015
Accrued liability at beginning of period	$ 291,980	$ 257,860
Increase in reserve	42,352	88,280
Repairs and replacements	(47,406)	(52,529)
Accrued liability at end of period	$ 286,926	$ 293,611

Note 8 - Basic and Diluted Earn

Note 8 - Basic and Diluted Earnings Per Share (Details) - USD ($)	3 Months Ended
	Jan. 02, 2016	Jan. 03, 2015
Numerator for basic and diluted earnings per share:
Net income	$ 1,142,752	$ 970,325
Denominator for basic earnings per share:
Weighted average shares (in shares)	2,726,127	2,962,007
Effect of dilutive securities:
Employee stock options (in shares)	25,743	35,109
Weighted average shares outstanding:
Adjusted weighted average shares and assumed conversions (in shares)	2,751,870	2,997,116
Net income per share of common stock - Note 14:
Basic (in dollars per share)	$ 0.42	$ 0.33
Diluted (in dollars per share)	$ 0.42	$ 0.32

Note 9 - Operations and Indus33

Note 9 - Operations and Industry Segments (Details Textual)	3 Months Ended
	Jan. 02, 2016
Number of Reportable Segments	2

Note 9 - Information on Industr

Note 9 - Information on Industry Segments (Details) - USD ($)	3 Months Ended
	Jan. 02, 2016	Jan. 03, 2015
Medical [Member] | Operating Segments [Member]
Net sales	$ 11,392,797	$ 12,832,643
Operating profit	1,501,851	1,785,174
Custom Products [Member] | Operating Segments [Member]
Net sales	10,059,385	2,888,031
Operating profit	204,800	(276,181)
Operating Segments [Member]
Net sales	1,706,651	1,508,993
Corporate, Non-Segment [Member]
Corporate expense	(150,196)	(164,929)
Operating profit	1,556,455	1,344,064
Corporate expense	3,926,845	4,104,916
Other income	108,297	66,261
Income before income taxes	$ 1,664,752	$ 1,410,325

Note 10 - Commitments and Con35

Note 10 - Commitments and Contingencies (Details Textual)	Feb. 02, 2016USD ($)
Selan Skin Care Products [Member] | Subsequent Event [Member]
Long-term Purchase Commitment, Amount	$ 700,000