8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 4, 2008

Allion Healthcare, Inc.

(Exact name of registrant as specified in its charter)

Delaware	0-17821	11-2962027
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1660 Walt Whitman Road, Suite 105, Melville, New York 11747

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (631) 547-6520

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EX-99.1 PRESS RELEASE DATED AUGUST 7,2008

Item 2.02. Results of Operations and Financial Condition.

     On August 7, 2008, Allion Healthcare, Inc. (the “Company”) issued a press release announcing its results of operations for the second fiscal quarter ended June 30, 2008. A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.

     The information furnished pursuant to Item 2.02 and Exhibit 99.1 of this Current Report on Form 8-K shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information in this Current Report shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this Current Report, regardless of any general incorporation language in the filing.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.

     On August 4, 2008, Harvey Werblowsky notified the Company that he was resigning from the Board of Directors, effective upon the election of his successor.

     On August 4, 2008, the Board of Directors of the Company elected Flint Besecker to serve as a director in the vacancy created by Mr. Werblowsky’s resignation. The Board of Directors appointed Mr. Besecker to serve on the Nominating and Corporate Governance Committee and as chair of the Compensation Committee. There are no arrangements between Mr. Besecker and any other person pursuant to which Mr. Besecker was elected as a director, nor are there any transactions to which the Company was or is a participant and in which Mr. Besecker has a material interest subject to disclosure under Item 404(a) of Regulation S-K.

Item 9.01. Financial Statements and Exhibits.

     (d) Exhibits

  The following exhibits are furnished with this Current Report on Form 8-K:

Exhibit
Number	Description
99.1	Press release dated August 7, 2008.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ALLION HEALTHCARE, INC. (Registrant)
August 7, 2008	/s/ Russell J. Fichera
	By: Russell J. Fichera
	Its: Chief Financial Officer

EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press release dated August 7, 2008.

EX-99.1

Exhibit 99.1

Allion Healthcare, Inc.
1660 Walt Whitman Road, Suite 105
Melville, NY 11747
Tel: (631) 547-6520

Allion Healthcare Reports Second quarter 2008 Results

• Net sales for the quarter increased 39% to a record $86.4 million

• Net income increased 200% to $2.9 million

• Earnings per diluted share up 83% to $0.11

MELVILLE, NY — August 7, 2008 — Allion Healthcare (NASDAQ: ALLI) today announced financial results for the three months ended June 30, 2008, which include its recent expansion into the Specialty Infusion market. As a result of the April 4, 2008 acquisition of Biomed America, Inc. (“Biomed”), the Company now operates its business in two segments: Specialty HIV, which is the Company’s legacy specialty pharmacy and disease management services focused on HIV/AIDS patients, and Specialty Infusion, which is the Company’s recently acquired Biomed business of specialized biopharmaceutical medications and services to chronically ill patients. Results for the second quarter reflect the acquisition of Biomed effective April 4, 2008.

Summary of Results

Consolidated net sales for the second quarter of 2008 increased 39% to $86.4 million, compared to $62.3 million for the second quarter of 2007. Same store sales from the Company’s Specialty HIV segment increased 10% to $68.7 million principally resulting from patient growth in its California market. The number of Specialty HIV prescriptions filled increased 7% over the same period in 2007. The Biomed acquisition added $17.7 million in Specialty Infusion revenues during the second quarter of 2008. Approximately 93% of the Specialty Infusion sales were from Hemophilia patients receiving Blood Clotting Factor and patients with Auto Immune Disorders/Neuropathies receiving IVIG.

Gross profit was $17.1 million and $8.9 million for the three months ended June 30, 2008 and 2007, respectively, and represents 19.8% and 14.3% of net sales, respectively. The increase in gross profit as a percentage of revenues is primarily attributable to the relatively higher gross margins of our Specialty Infusion business compared to our Specialty HIV business. The Company’s gross margin from the Specialty HIV segment remained approximately at historical levels.

Selling, general and administrative expenses increased to $9.8 million, or 11.3% of net sales, during the second quarter of 2008, compared to $6.5 million, or 10.5% of net sales, during the second quarter of 2007. The increase was primarily due to the acquisition of the Specialty Infusion segment. The Company does not expect to realize significant cost efficiencies as a result of the Biomed acquisition.

The Company reported net income for the period of $2.9 million, a three fold increase when compared to net income of $973,000 for the second quarter of 2007.

Earnings per diluted share for the second quarter of 2008 were $0.11 compared to earnings per diluted share of $0.06 for the second quarter of 2007.

EBITDA increased to $7.3 million for the second quarter of 2008, from $2.3 million for the second quarter of 2007. An explanation and reconciliation of Net income under GAAP to EBITDA and adjusted EBITDA is provided below.

“Allion’s results for the second quarter exceeded our expectations,” commented Michael Moran, Chairman, President and Chief Executive Officer of Allion Healthcare. “We had a strong second quarter in our Specialty HIV segment, realizing double digit organic growth and steady gross margins. The Biomed acquisition is off to an excellent start and met our earnings target. We feel strongly that the acquisition of Biomed will continue to provide our stockholders with a stronger, more diversified Company and will continue to generate growth in earnings.”

The Company announced that it has established a new subsidiary called Alligenix. Alligenix will focus on relationships with Pharmaceutical manufacturers of both HIV and Specialty Pharmacy products. Bill Jones will serve as the President of Alligenix. Mr. Jones has previously served in senior positions with Medco and US Bioservices, as well as a consultant to Allion during the integration of Biomed. “We are thrilled to attract someone with Bill’s background to join Allion in this new opportunity. We have had some success in small programs working directly with Manufacturers, and believe that with our substantial data base of historical adherence data, and our ability to offer customized services for them, we will be able to generate new revenue opportunities through this division,” commented Mr. Moran.

The Company also announced today that its Board of Directors has appointed Flint D. Besecker as an independent director who will serve on the Nominating and Corporate Governance Committee and will chair the Compensation Committee. Mr. Besecker is currently principal of Firestone Asset Management, a Director with Care Investment Trust (NYSE: CRE) and most recently held the position of President, CIT Healthcare. Mr Besecker fills the vacancy created by the resignation of Harvey Werblowsky, Esq., which was effective upon the election of Mr. Besecker.

Mr. Moran stated, “We welcome Mr. Besecker to our Board of Directors. His extensive experience in the healthcare financial service sector will be an invaluable asset as we continue to broaden our products and services. I would also like to thank Harvey Werblowsky, Esq. for his dedicated service as a past member of the Allion Board.”

Third Quarter Guidance

The Company today provided financial guidance for the third quarter of 2008. This guidance assumes a 41% effective tax rate.

	Three Months Ended
	Sept 30 2008
	Guidance
Net Sales (millions)	$86.0 - $88.0
Earnings Per Diluted Share	$0.10 - $0.11

Operating Data — Specialty HIV

(in thousands except patient months & prescriptions data)

	Three Months Ended June 30,
	2008						2007
Distribution					Patient						Patient
Region	Net Sales		Prescriptions		Months (1)		Net Sales		Prescriptions		Months (1)
California (2)	$	46,026		179,008		36,810	$	40,504		162,315		34,601
New York		21,071		75,505		11,141		20,108		74,760		11,271
Florida		464		2,180		302		590		2,550		386
Washington		1,132		5,331		979		1,084		5,601		995
Total	$	68,693		262,024		49,232	$	62,286		245,226		47,253

(1)	“Patient months” represents a count of the number of months during a period that a patient received at least one prescription. If an individual patient received multiple medications during each month of a three month period, a count of three would be included in patient months irrespective of the number of medications filled in each month.
(2)	In the second quarter of 2007, the Company identified an error in the reporting of Gardena prescriptions and patient months and corrected the previously reported number of prescriptions of 162,339 in California for the three-month period ended June 30, 2007.

Conference Call Information

A conference call to discuss the results will be held at 5:00 p.m. ET; on Thursday, August 7, 2008. To join the call, please dial (913) 312-0378 from the U.S. or from abroad. The conference call will also be webcast on Allion Healthcare’s website at www.allionhealthcare.com. To join the webcast, please go to Allion Healthcare’s web site at least 15 minutes prior to the start of the conference call to register, download, and install any necessary audio software. An audio replay of the conference call will be available from 8:00 p.m. ET on Thursday, August 7, 2008, through 8:00 p.m. ET on Thursday, August 14, 2008, by dialing (719) 457-0820 from the U.S. or abroad and entering confirmation code 5124358. The audio webcast will also be available on the company’s website, www.allionhealthcare.com, for one year. Questions during the live call will be reserved for investment professionals only.

About Allion Healthcare

Allion Healthcare, Inc. is a national provider of specialty pharmacy and disease management services focused on HIV/AIDS patients as well as specialized biopharmaceutical medications and services to chronically ill patients. Allion Healthcare sells HIV/AIDS medications, ancillary drugs and nutritional supplies under the trade name MOMS Pharmacy. Allion Healthcare provides services for the intravenous immunoglobulin, Blood Clotting Factor and other therapies through its Biomed America division. Allion Healthcare works closely with physicians, nurses, clinics, AIDS Service Organizations, and with government and private payors to improve clinical outcomes and reduce treatment costs.

Safe Harbor Statement

This press release contains certain “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements about the Company’s growth strategy, future effective tax rate, and future financial performance. Words such as “continue,” “will,” “assume,” and similar expressions identify forward-looking statements. Such forward-looking statements represent Allion Healthcare’s expectations and beliefs and involve a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, successful integration of the Biomed acquisition, competitive pressures, demand for Allion Healthcare’s products and services, changes in reimbursement and other changes in customer mix, changes in third party reimbursement rates or Allion Healthcare’s qualification for preferred reimbursement rates in California and New York, changes in government regulations or the interpretation of these regulations, Allion Healthcare’s ability to manage growth successfully, Allion Healthcare’s ability to effectively market its services, receipt of licensing and regulatory approvals, successful identification of strategic alliances and satellite facilities, and other risks set forth in Item 1A. Risk Factors in Allion Healthcare’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007 and in Part II, Item 1A. Risk Factors of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008. You are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date the statement was made. Except to the extent required by applicable securities laws, Allion Healthcare undertakes no obligation to update any forward-looking statement contained herein, whether as a result of new information, future events, or otherwise.

Company Contact:	Investor Contact:
Allion Healthcare, Inc.	The Cockrell Group
Russ Fichera, Chief Financial Officer	Rich Cockrell
(631) 870-5126	(404) 942-3369

ALLION HEALTHCARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

	At June 30,			At December 31,
(in thousands)	2008			2007
Assets
Current assets:
Cash and cash equivalents	$	9,395		$	19,557
Short term investments and securities held for sale		—			9,283
Accounts receivable, (net of allowance for doubtful accounts of $1,648 in 2008 and $136 in 2007)		34,905			18,492
Inventories		12,713			8,179
Prepaid expenses and other current assets		778			767
Deferred tax asset		344			344
Total current assets		58,135			56,622
Property and equipment, net		1,232			790
Goodwill		130,478			41,893
Intangible assets, net		60,935			27,228
Marketable securities, non-current		2,152			—
Other assets		1,152			83
Total assets	$	254,084		$	126,616
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	21,372		$	15,832
Accrued expenses		3,787			2,319
Revolving credit facility		12,821			—
Current maturities of long term debt		1,698			—
Current portion of capital lease obligations		27			47
Total current liabilities		39,705			18,198
Long Term Liabilities:
Long term debt		33,053			—
Notes payable — affiliate		3,644			—
Deferred tax liability		16,779			2,212
Capital lease obligations		6			—
Other		30			44
Total liabilities		93,217			20,454
Commitments & Contingencies
Stockholders’ Equity:
Convertible preferred stock, $.001 par value, shares authorized 20,000; issued and outstanding - -0- in 2008 and 2007		—			—
Common stock, $.001 par value, shares authorized 80,000; issued and outstanding 25,554 in 2008 and 16,204 2007		26			16
Additional paid-in capital		165,721			112,636
Accumulated deficit		(4,844	)		(6,487	)
Accumulated other comprehensive loss		(36	)		(3	)
Total stockholders’ equity		160,867			106,162
Total Liabilities and Stockholders’ Equity	$	254,084		$	126,616

ALLION HEALTHCARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands except per share data)	Three months ended					Six months ended
	June 30,					June 30,
	2008		2007			2008		2007
Net sales	$	86,430	$	62,286		$	151,687	$	121,253
Cost of goods sold		69,344		53,405			124,948		103,944
Gross profit		17,086		8,881			26,739		17,309
Operating expenses:
Selling, general and administrative expenses		9,752		6,538			16,811		13,263
Depreciation and amortization		1,710		864			2,585		1,829
Litigation settlement		—		—			3,950		—
Impairment of long-lived asset		—		—			—		599
Operating income		5,624		1,479			3,393		1,618
Interest expense (income), net		836		(176	)		621		(342	)
Income before taxes		4,788		1,655			2,772		1,960
Provision for taxes		1,875		682			1,129		802
Net income	$	2,913	$	973		$	1,643	$	1,158
Basic earnings per common share	$	0.15	$	0.06		$	0.10	$	0.07
Diluted earnings per common share	$	0.11	$	0.06		$	0.08	$	0.07
Basic weighted average of common shares outstanding		19,472		16,204			17,067		16,204
Diluted weighted average of common shares outstanding		26,333		16,976			19,459		16,990

ALLION HEALTHCARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)	Six months ended June 30,
	2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	1,643		$	1,158
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,585			1,829
Impairment of long-lived asset		—			599
Deferred rent		(14	)		(7	)
Amortization of deferred financing costs		45			—
Amortization of debt discount on acquisition notes		13			—
Change in fair value of interest rate cap contract		5			—
Provision for doubtful accounts		550			325
Non-cash stock compensation expense		94			186
Deferred income taxes		(22	)		554
Changes in operating assets and liabilities:
Accounts receivable		(1,000	)		(996	)
Inventories		(2,619	)		(3,194	)
Prepaid expenses and other assets		165			151
Accounts payable and accrued expenses		(887	)		1,873
Net cash provided by operating activities		558			2,478
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(226	)		(111	)
Purchases of short term securities		(300	)		(38,993	)
Sales of short term securities		7,398			38,150
Payments for investment in Oris Medical’s Assets		—			(204	)
Payments for investment in Biomed, net of cash acquired		(50,143	)		—
Net cash used in investing activities		(43,271	)		(1,158	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from CIT revolver note		12,821			—
Net proceeds from CIT term loan		34,738			—
Payment for CIT interest rate cap contract		(112	)		—
Payment for deferred financing costs		(907	)		—
Payment for Biomed loans assumed		(14,925	)		—
Tax benefit from exercise of employee stock options		960			155
Repayment of notes payable and capital leases		(24	)		(723	)
Net cash provided by (used in) financing activities		32,551			(568	)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(10,162	)		752
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		19,557			17,062
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	9,395		$	17,814
SUPPLEMENTAL DISCLOSURE
Income taxes paid		297			32
Interest paid		121			43

Allion Healthcare, Inc.
Reconciliation of Net income, Diluted EPS, Adjusted Net income, and Adjusted
Diluted EPS, Excluding Litigation Settlement and expense and Impairment of
long-lived asset (UNAUDITED)

(in thousands except per share data)	Three months ended				Six months ended
	June 30,				June 30,
	2008		2007		2008		2007
Diluted earnings per common share	$	0.11	$	0.06	$	0.08	$	0.07
Diluted weighted average of common shares outstanding		26,333		16,976		19,459		16,990
Net income	$	2,913	$	973	$	1,643	$	1,158
Oris litigation settlement, net of tax		—		—		2,342		—
Impairment of long-lived asset, net of tax		—		—		—		354
Adjusted Net Income	$	2,913	$	973	$	3,985	$	1,512
Adjusted Diluted earnings per common share	$	0.11	$	0.06	$	0.20	$	0.09
Diluted weighted average of common shares outstanding		26,333		16,976		19,459		16,990

Adjusted Net income and Diluted EPS excludes the litigation settlement and expenses related to Oris and the impairment of long-lived assets to reflect comparable year over year impact and provide investors with supplemental information to assess recurring performance.

Allion Healthcare, Inc.

Reconciliation of Net Income to EBITDA, Excluding Litigation Settlement and
expense and Impairment of long-lived asset (UNAUDITED)

(in thousands)	Three months ended					Six months ended
	June 30,					June 30,
	2008		2007			2008		2007
Net income	$	2,913	$	973		$	1,643	$	1,158
Income tax provision		1,875		682			1,129		802
Interest expense (income)		836		(176	)		621		(342	)
Depreciation and amortization		1,710		864			2,585		1,829
EBITDA	$	7,334	$	2,343		$	5,978	$	3,447
Oris litigation settlement		—		—			3,950		—
Impairment of long-lived asset		—		—			—		599
Adjusted EBITDA	$	7,334	$	2,343		$	9,928	$	4,046

EBITDA refers to net income before interest, income tax expense, and depreciation and amortization. Allion considers EBITDA to be a good indication of the Company’s ability to generate cash flow in order to liquidate liabilities and reinvest in the Company. EBITDA is not a measurement of financial performance under GAAP and should not be considered a substitute for net income as a measure of performance. Adjusted EBITDA excludes the litigation settlement and expenses related to the Oris litigation, and the impairment of long-lived assets to reflect comparable year over year EBITDA performance and provide investors with supplemental information to assess recurring EBITDA performance.