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Recession Continues to Depress Sales at Allied Healthcare Products

ST. LOUIS, Nov. 6 /PRNewswire-FirstCall/ -- Recession in domestic and international markets continued to depress sales for Allied Healthcare Products in the first quarter of fiscal year 2010 ending September 30, 2009.

Sales declines pushed Allied into a loss for the quarter. The net loss for the quarter was about $745,000, or negative 9 cents per share, compared to a net profit the year earlier of about $208,000, or 3 cents per share.

Sales fell about 21 percent in the quarter, from about $14.4 million in the first quarter of last year to $11.3 million in the current quarter.

Allied introduced a new product line late in fiscal 2009 - mass casualty ventilators designed for use in pandemics, natural disasters and terrorist attacks. Sales of the new products totaled $500,000 in the quarter.

Allied mass casualty ventilators address needs that traditional, full-featured ventilators do not meet, said Earl Refsland, president and chief executive officer. For example, Allied ventilators cost a fraction of the price of full-featured ventilators, can be operated by non-professionals after brief instruction and are rugged, for use in harsh field conditions. Also, Allied mass casualty ventilators have minimal maintenance requirements, making them ideal for government stockpiles, Refsland said.

A bright spot in the quarter was strong performance in cost reduction efforts in manufacturing and operations. Most of these savings represent long-term reductions that will continue to benefit the company in future quarters.

Allied earnings in the quarter were affected by a non-cash charge of $609,000 resulting from the company's grant to the chief executive officer of an option to purchase 320,000 shares of common stock in the next six years.

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 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
                                                         September 30,
                                                2009                   2008
                                                ----                   ----

    Net sales                            $11,323,676            $14,441,011
    Cost of sales                          8,920,800             10,939,957
                                           ---------             ----------

    Gross profit                           2,402,876              3,501,054

    Selling, general and
     Administrative expenses               3,591,776              3,183,587
                                           ---------              ---------

    Income (loss) from
     operations                           (1,188,900)               317,467

    Interest income                             (984)               (30,659)
    Interest expense                           2,413                      -
    Other expense, net                        11,014                 12,067
                                              ------                 ------
                                              12,443                (18,592)
                                              ------                -------

    Income (loss) before
     provision for
    (benefit from) income
     taxes                                (1,201,343)               336,059

    Provision for (benefit
     from) income taxes                     (456,405)               127,702
                                            --------                -------
    Net income (loss)                      $(744,938)              $208,357
                                           =========               ========

    Basic and diluted
     earnings (loss) per
     share                                    $(0.09)                 $0.03
                                              ======                  =====

    Weighted average
     common shares
    Outstanding - Basic                    7,988,321              7,891,232

    Weighted average
     common shares
    Outstanding - Diluted                  7,988,321              8,132,931

                          ALLIED HEALTHCARE PRODUCTS, INC.
                             CONSOLIDATED BALANCE SHEET

                                                    September 30,    June 30,
                                                        2009           2009
                                                    -------------    ---------
     Current assets:
        Cash and cash equivalents                    $2,298,957    $1,943,364
        Accounts receivable, net
         of allowances of
         $300,000                                     5,339,629     6,172,437
        Inventories, net                             12,597,816    12,663,938
        Income tax receivable                         1,632,577       937,273
        Other current assets                            334,337       327,203
                                                        -------       -------
            Total current assets                     22,203,316    22,044,215
                                                     ----------    ----------
        Property, plant and
         equipment, net                              10,510,423    10,799,089
        Other assets, net                               387,568       390,627
                                                        -------       -------
            Total assets                            $33,101,307   $33,233,931
                                                    ===========   ===========

     Current liabilities:
        Accounts payable                             $2,108,441    $1,633,568
        Other accrued liabilities                     2,175,676     2,316,558
        Deferred income taxes                           171,980       419,213
        Deferred revenue                                688,200       688,200
                                                        -------       -------
            Total current liabilities                 5,144,297     5,057,539
                                                      ---------     ---------

     Deferred revenue                                 1,319,050     1,491,100
                                                      ---------     ---------

     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;
            authorized; no shares
            issued and outstanding                            -             -
           Common stock; $0.01 par value;
            authorized; 10,395,378 and
            10,204,819 shares issued
            at September 30, 2009 and
            June 30, 2009, respectively;
            8,091,886 and 7,901,327 shares
            Outstanding at September 30,
            2009 and  June 30, 2009,
            respectively                                103,954       102,048
           Additional paid-in capital                48,327,749    47,632,049
           Accumulated deficit                       (1,062,315)     (317,377)
           Less: treasury stock, at cost;
            2,303,492 shares at September 30,
            2009 and June 30, 2009, respectively    (20,731,428)  (20,731,428)
                                                     -----------   -----------
              Total stockholders' equity             26,637,960    26,685,292
                                                     ----------    ----------
              Total liabilities and stockholders'
               equity                               $33,101,307   $33,233,931
                                                    ===========   ===========

SOURCE Allied Healthcare Products, Inc.

SOURCE Allied Healthcare Products, Inc.
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