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 News Release - July 27, 2006

Span-America Medical Systems, Inc. Signs Agreement for Secure I.V.(R) With Novation

GREENVILLE, S.C.--(HSMN NewsFeed)--July 27, 2006--Span-America Medical Systems, Inc. (NASDAQ:SPAN ) today announced that it signed an agreement to offer Secure I.V. to Novation, the industry's leading health care contracting services company.

"The agreement with Novation will increase substantially the visibility of Secure I.V. in our target markets," stated Jim Ferguson, president and chief executive officer of Span-America Medical Systems. "Novation recognized the potential of Secure I.V. because the product provides added protection against bloodborne pathogens."

The Novation contract has an initial three-year term and a renewal option for two years. Under the terms of the contract, Novation will offer Secure I.V. to its network of nearly 2,500 VHA and UHC members, including e-commerce distribution through its Marketplace@Novation(TM) web site. The agreement does not include any commitment for Novation, any VHA or UHC member or any other party to purchase any quantities of Secure I.V. products; however, the agreement does set pre-established prices for Secure I.V. products purchased by VHA and UHC members. Novation plans to make a separate announcement about this agreement around August 15, 2006.

Secure I.V. offers the new technology of a built-in occlusion valve, which reduces or eliminates exposure to blood while starting an I.V. The patented design is intended to give health care workers maximum protection against bloodborne pathogen exposure and remove a hazard from the workplace.

"To our knowledge the Secure I.V. is the only product of its kind on the market to offer both needle-stick protection and passive bloodborne pathogen protection in a single device," continued Mr. Ferguson. "We believe the Novation agreement validates the unique advantages of Secure I.V. compared with conventional catheters.

Note: The information set forth above and the following information about Novation have been confirmed by Novation to the Company; however, the Company makes no warranty regarding the accuracy of this information.

About Novation

Based in Irving, Texas, Novation is the leading health care contracting services company, delivering unmatched savings and value to nearly 2,500 members of VHA Inc. and the University HealthSystem Consortium (UHC), two national health care alliances. Through its public competitive bid process, Novation develops and manages contracts with more than 700 suppliers, both large and small. By combining scale and Agility with clinical knowledge and product expertise, Novation offers the most extensive range of innovative contracting services, including: contract development, contract and supplier management, custom contracting, enhanced savings programs, online contract management and analytical tools, order management and online supplier connectivity. VHA and UHC members used Novation's contracts to purchase more than $25 billion in supplies in 2005.

About Span-America Medical Systems, Inc.

Span-America manufactures and markets a comprehensive selection of pressure management products for the medical market, including Geo-Matt®, PressureGuard®, Geo-Mattress®, Span+Aids®, Isch-Dish®, and Selan® products. The Company also supplies custom foam and packaging products to the consumer and industrial markets. Span-America's stock is traded on The NASDAQ Global Market under the symbol "SPAN."

Forward-Looking Statements

Span-America has made forward-looking statements in this release, regarding management's expectations about the potential positive impact of the Novation agreement on Secure I.V. sales and market visibility. Management wishes to caution the reader that these statements are only predictions. The actual impact of the Novation agreement on the Company's safety catheter business is uncertain because (a) Secure I.V. is a new product and does not yet have a successful track record in the market, (b) the agreement does not guarantee any sales of Secure I.V. and (c) there can be no assurance that Novation members will select Secure I.V. over competing products also offered by Novation.

Source: Span-America Medical Systems

Issuer of this News Release is solely responsible for its content.
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