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A Letter To The CEO Of Span-American Medical Systems

|Includes: Span - America Medical Systems, Inc. (SPAN)

I write letters to the CEOs of companies whose shares I own, suggesting marketing strategies, acquisitions and new products based on some fundamental trend or opportunity. A shockingly high percentage of those CEOs have written back to me. I am reprinting the unanswered letters here in the event they were not seen.

February 29, 2016

Dear Mr. Ferguson,

Here are a few ideas for driving growth at Span-American Medical Systems in 2016 and beyond:

Launch a line of maternity products - Pregnant women use body pillows, seat cushions, nursing pillows and other soft goods to make their pregnancy and postpartum more comfortable. Your foam products can be tailored to meet these needs. You can market this product line to pregnant women and their doctors and explore sales opportunities with maternity stores.

Repurpose your floor protection products - Standing mats (also called anti-fatigue mats) are wildly popular and they are essentially the same thing as the floor protection products that you already sell. The reason these mats are so popular is because more and more office workers are using standing desks. Tap into this market.

Develop pillows and head rests for air travelers - I think more people would buy their own pillows for long flights if the pillows were easier to store and transport. One way to do this is to put a foam pillow inside of a vacuum sealed bag that has a small pump and release valve. The pump would evacuate the bag and compress it. The release valve would allow the foam to regain its shape by filling the bag with air.

Create insulation for window air conditioning units - Millions of people who live in apartment buildings are forced to leave their window air conditioners installed all year long. This is a problem in the winter because cold air floods through the baffles and the gaps around the sash. I don't know of any good products that are meant to address this problem from the inside of the apartment (which is the only viable option for most renters). Practically speaking, the insulation would have to adapt to different size windows and air conditioners, and it needs to be reasonably good looking. A product like this should be marketed to real estate management companies (they will reduce heating costs) and to municipalities (they will reduce pollution). The goal is for this product to be purchased on behalf of every resident in a building.

Wishing you (and me) many happy returns this year,

John W. DeFeo


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Disclosure: I am/we are long SPAN.