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Allied Healthcare Posts Third Quarter Loss

ST. LOUIS, May 12 /PRNewswire-FirstCall/ -- Allied Healthcare Products, Inc. (Nasdaq: AHPI) reported that its net income for the third quarter ending March 31, 2009, declined from about $100,000, or 1 cent per share, in the prior year period, to a loss of about $450,000, or a negative 6 cents per share, due to lower sales.

Net sales in the third quarter declined about 11 percent, or $1.5 million, to about $12.4 million. Sales fell in all segments except domestic hospital construction, reflecting that market's long-term contracts. International sales, which had increased more than 10 percent for the first half of fiscal 2009, declined by about 2 percent, due in part to a stronger dollar.

For the first nine months of the 2009 fiscal year, Allied net income fell from about $193,000 in 2008, or about 2 cents per share, to a loss of about $678,000, or negative 9 cents per share, for 2009. Net sales for the three quarters fell about 5.5 percent, or about $2.3 million.

The third quarter's accelerated sales decline reflects a stronger recessionary effect than Allied has experienced in previous economic downturns, said Earl Refsland, Allied president and chief executive officer. "Clearly, our near-term focus must be to align costs with sales revenues," Refsland said.

Allied achieved progress in cost reduction projects that amounted to about $330,000 in the third quarter, Refsland said. But those savings in negotiated material costs and production efficiencies could not absorb the fixed operating costs related to lower sales and shipments.

Allied also incurred about $220,000 in new product development expenses in the first three quarters of fiscal 2009 primarily associated with its new line of mass casualty ventilators specifically designed for pandemics, natural disasters and terrorist attacks.

Refsland expressed optimism for market acceptance of the new mass casualty ventilators, particularly in light of heightened public awareness that pandemics would overwhelm available ventilators in hospitals.

Allied Healthcare Products, Inc. manufactures a variety of respiratory products used in the healthcare industry in a range of hospital and alternate care settings including sub-acute facilities, home healthcare and emergency medical care. Allied's product lines include respiratory care products, medical gas equipment and emergency medical products. Allied products are marketed to hospitals, hospital equipment dealers, hospital construction contractors, home healthcare dealers and emergency medical products dealers.

"SAFE HARBOR" STATEMENT: Statements contained in this release that are not historical facts or information are "forward-looking statements." Words such as "believe," "expect," "intend," "will," "should," and other expressions that indicate future events and trends identify such forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause the outcome and future results of operations and financial condition to be materially different than stated or anticipated based on the forward-looking statements. Such risks and uncertainties include both general economic risks and uncertainties, risks and uncertainties affecting the demand for and economic factors affecting the delivery of health care services, and specific matters which relate directly to the Company's operations and properties as discussed in its periodic filings with the Securities and Exchange Commission. The Company cautions that any forward-looking statement contained in this report reflects only the belief of the Company or its management at the time the statement was made. Although the Company believes such forward-looking statements are based upon reasonable assumptions, such assumptions may ultimately prove inaccurate or incomplete. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement was made.

                          ALLIED HEALTHCARE PRODUCTS, INC.

                              Three months ended,      Nine months ended,
                                  March 31,                 March 31,
                              2009         2008        2009          2008
    Net sales            $12,389,640  $13,943,852  $39,361,993  $41,671,485
    Cost of sales          9,915,884   10,779,631   30,677,586   32,428,408
    Gross profit           2,473,756    3,164,221    8,684,407    9,243,077

    Selling General and
     expenses              3,198,135    3,013,413    9,782,064    8,988,810
    Income (loss) from
     operations             (724,379)     150,808   (1,097,657)     254,267

    Interest income           (5,041)     (13,928)     (54,155)     (92,874)
    Interest expense               -            -        5,849            -
    Other, net                13,403        9,241       36,583       35,504
                               8,362       (4,687)     (11,723)     (57,370)

    Income (loss) before
     provision for
     (benefit from)
     income taxes           (732,741)     155,495   (1,085,934)     311,637

    Provision for
     (benefit from)
     income taxes           (282,469)      55,824     (407,925)     118,421
    Net income (loss)      ($450,272)     $99,671    ($678,009)    $193,216

    Net income (loss)
     per share - Basic
     and diluted              ($0.06)       $0.01       ($0.09)       $0.02

    Weighted average
     common shares
     Outstanding - Basic   7,901,327    7,883,577    7,897,937    7,883,577

    Weighted average
     common shares
     Outstanding -
     Diluted               7,901,327    8,122,888    7,897,937    8,117,684

                             ALLIED HEALTHCARE PRODUCTS, INC.
                               CONSOLIDATED BALANCE SHEET

                                                  March 31,     June 30,
                                                    2009          2008
    Current assets:
        Cash and cash equivalents                $2,036,057   $6,149,015
        Accounts receivable, net of
         allowances of $300,000                   5,758,278    6,441,683
        Inventories, net                         13,658,441   12,046,450
        Other current assets                        454,631      394,975
            Total current assets                 21,907,407   25,032,123
        Property, plant and equipment, net       10,878,246   10,542,573
        Goodwill                                 15,979,830   15,979,830
        Other assets, net                           694,144      703,328
            Total assets                        $49,459,627  $52,257,854

    Current liabilities:
        Accounts payable                         $2,303,360   $2,590,804
        Other accrued liabilities                 1,530,382    2,960,334
        Deferred income taxes                       514,461      500,238
        Deferred revenue                            688,200      690,000
            Total current liabilities             5,036,403    6,741,376

    Deferred revenue                              1,663,150    2,177,500

    Commitments and contingencies

    Stockholders' equity:
        Preferred stock; $0.01 par value;
         1,500,000 shares authorized; no
         shares issued and outstanding                    -            -
        Series A preferred stock; $0.01 par
         value; 200,000 shares authorized;
         no shares issued and outstanding                 -            -
        Common stock; $0.01 par value;
         30,000,000 shares authorized;
         10,204,819 and 10,188,569 shares
         issued at March 31, 2009 and June 30,
         2008, respectively; 7,901,327 and
         7,885,077 shares outstanding at
         March 31, 2009 and June 30, 2008,
         respectively                               102,048      101,886
        Additional paid-in capital               47,623,027   47,524,084
        Retained earnings                        15,766,427   16,444,436
        Less treasury stock, at cost;
         2,303,492 shares at March 31,
         2009 and June 30, 2008,
         respectively                           (20,731,428) (20,731,428)
            Total stockholders' equity           42,760,074   43,338,978
            Total liabilities and
             stockholders' equity               $49,459,627  $52,257,854

SOURCE Allied Healthcare Products, Inc.
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