EX-99.1 6 v173509_ex99-1.htm
                              

Contact: 
Daniel C. Dunn
    Chief Financial Officer
    314/771-2400

Allied Healthcare Products Returns to Profitability
   By Offsetting Depressed Sales with Cost Reductions

ST. LOUIS, February 8, 2010 – Cost reductions offset a recession-driven sales decline to move Allied Healthcare Products (NASDAQ: AHPI) narrowly back into profitability in the second quarter of fiscal year 2010.
 
Sales for the quarter ended December 31, 2009 declined almost 9 percent, from approximately $12.5 million during the same quarter last year to $11.4 million in the current quarter. However, Allied’s costs of sales were reduced even more sharply, from approximately $9.8 million to less than $8.5 million, or almost 14 percent.  Also, selling, general, and administrative costs for the quarter were reduced to $2.9 million from $3.4 million, a reduction of almost 15 percent.  The result was a break-even quarter with net income of about $22,000, equating to zero cents per share, versus a loss of $436,000, or negative six cents per share in the same quarter last year.
 
Cost reductions were achieved throughout the company, including operations, personnel and other overhead.
 
Allied’s sales in U.S. markets for hospital and emergency equipment have been particularly hard hit by recession-driven budget cuts by hospitals and municipalities.  “At some point, this basic equipment must be replaced, so sales in these markets are expected to return to normal levels.  What we do not, and cannot, know is when that will be,” said Earl Refsland, Allied president and chief executive officer.
 
 
In the meantime, Allied has made preparations to begin manufacturing a formerly outsourced product in the second half of fiscal 2010, realizing a significant new cost reduction, Refsland said.
 
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, emergency medical products and mass casualty ventilators.  Allied’s 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.

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ALLIED HEALTHCARE PRODUCTS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)

   
Three months ended,
    
Six months ended,
  
   
December 31,
    
December 31,
  
   
2009
    
2008
    
2009
    
2008
  
                         
Net sales
   $ 11,414,908     $ 12,531,342     $ 22,738,584     $ 26,972,353  
Cost of sales
     8,470,169       9,821,746       17,390,969       20,761,703  
Gross profit
     2,944,739       2,709,596       5,347,615       6,210,650  
                                 
Selling General and administrative expenses
     2,900,113       3,400,342       6,491,891       6,583,929  
Income (loss) from operations
     44,626       (690,746 )     (1,144,276 )     (373,279 )
                                 
Interest income
     (464 )     (18,455 )     (1,448 )     (49,114 )
Interest expense
     162       5,849       2,574       5,849  
Other, net
     11,785       11,112       22,798       23,179  
      11,483       (1,494 )     23,924       (20,086 )
                                 
Income (loss) before provision for
                          
(benefit from) income taxes
     33,143       (689,252 )     (1,168,200 )     (353,193 )
                                 
Provision for (benefit from) income taxes
     11,573       (253,158 )     (444,832 )     (125,456 )
Net income (loss)
   $ 21,570     $ (436,094 )   $ (723,368 )   $ (227,737 )
                                 
Net income (loss) per share - Basic and diluted
   $ 0.00     $ (0.06 )   $ (0.09 )   $ (0.03 )
                                 
Weighted average common shares
                                
Outstanding - Basic
     8,092,734       7,901,327       8,040,528       7,896,279  
                                 
Weighted average common shares
                          
Outstanding - Diluted
     8,217,103       7,901,327       8,040,528       7,896,279  
 

ALLIED HEALTHCARE PRODUCTS, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)

   
December 31, 2009
    
June 30, 2009
  
ASSETS
            
Current assets:
            
Cash and cash equivalents
   $ 2,492,160     $ 1,943,364  
Accounts receivable, net of allowances
                
 of $300,000
     5,283,980       6,172,437  
Inventories, net
     12,736,488       12,663,938  
Income tax receivable
     1,653,573       937,273  
Other current assets
     308,451       327,203  
 Total current assets
     22,474,652       22,044,215  
Property, plant and equipment, net
     10,209,764       10,799,089  
Other assets, net
     189,132       390,627  
 Total assets
   $ 32,873,548     $ 33,233,931  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                
Current liabilities:
                
Accounts payable
   $ 2,315,688     $ 1,633,568  
Other accrued liabilities
     1,880,039       2,316,558  
Deferred income taxes
     168,136       419,213  
Deferred revenue
     688,200       688,200  
 Total current liabilities
     5,052,063       5,057,539  
                 
Deferred revenue
     1,147,000       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; 200,000 shares
                
 authorized; no shares issued and outstanding
     -       -  
Common stock; $0.01 par value; 30,000,000 shares
                
 authorized; 10,396,878 and 10,204,819 shares issued
                
 at December 31, 2009 and June 30, 2009, respectively;
                
 8,093,386 and 7,901,327 shares outstanding at
                
 December 31, 2009 and June 30, 2009, respectively
     103,969       102,048  
Additional paid-in capital
     48,342,689       47,632,049  
Accumulated deficit
     (1,040,745 )     (317,377 )
Less treasury stock, at cost; 2,303,492 shares at
                
 December 31, 2009 and June 30, 2009, respectively
     (20,731,428 )     (20,731,428 )
 Total stockholders' equity
     26,674,485       26,685,292  
 Total liabilities and stockholders' equity
   $ 32,873,548     $ 33,233,931