Allied Healthcare Net Declines Due to Manufacturing Delays, Higher Costs

Sales for the fourth quarter increased by about 4.6 percent, or almost $650,000, compared to the fourth quarter of last year. However, Allied sales for the fiscal year tracked very closely with the previous year, totaling about $56.4 million for 2008 and $56.5 million for 2007.

Sales revenue for 2008 included $1.2 million as a result of a 2004 agreement with Abbott Laboratories to reimburse certain Research and Development costs related to new CO2 absorbent techniques. Sales for 2007 included about $584,000 in reimbursement from that agreement. Sales for the fourth quarter of 2008 included $525,000 in reimbursement of Research and Development cost, versus $134,000 for 2007.

For the fiscal year ending June 30, Allied net income fell about 46 percent, from about $1.64 million last year, or 21 cents per basic share, to about $882,000, or 11 cents per share, in 2008.

Manufacturing delays meant that some customer orders were not filled and could not be translated into sales revenue in 2008. Also, material costs -- primarily metals and oil-based resins -- increased by about 2 percent and labor costs by about 3.8 percent over fiscal 2007. A modest overall price increase by Allied could not offset the year's higher material and labor costs.

Manufacturing productivity programs planned for fiscal 2008 were not implemented as quickly as anticipated. However, these programs are proceeding and will result in cost reductions and improved throughput in fiscal 2009, according to Earl Refsland, Allied president and chief executive officer.

Despite problems in the year, positive cash flow of about $2.5 million increased Allied's cash position to about $6.1 million at the end of the fiscal year, Refsland said.

Allied Healthcare Products, Inc. is a leading manufacturer of respiratory care products, medical gas equipment and emergency medical products used in a wide range of alternate care settings.

"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.
                     CONSOLIDATED STATEMENT OF OPERATIONS
                                 (UNAUDITED)

                           Three months ended,        Twelve months ended,
                                 June 30,                   June 30,
                            2008         2007          2008          2007

    Net sales          $14,692,626  $14,045,798    $56,364,111  $56,500,974
    Cost of sales       10,577,599   10,061,519     43,006,007   42,028,125
    Gross profit         4,115,027    3,984,279     13,358,104   14,472,849


    Selling General and
     administrative
     expenses            3,096,161    2,765,157     12,084,971   12,051,500
    Income from
     operations          1,018,866    1,219,122      1,273,133    2,421,349


    Interest income        (25,245)     (28,719)      (118,119)    (110,790)
    Other, net              24,501       10,710         60,005      (23,841)
                              (744)     (18,009)       (58,114)    (134,631)

    Income before
     provision for income
     taxes               1,019,610    1,237,131      1,331,247    2,555,980

    Provision for income
     taxes                 330,327      368,019        448,748      914,400
    Net income            $689,283     $869,112       $882,499   $1,641,580


    Net income per share -
     Basic                   $0.09        $0.11          $0.11        $0.21

    Net income per share -
     Diluted                 $0.08        $0.11          $0.11        $0.20

    Weighted average
     common shares
    Outstanding - Basic  7,883,907    7,883,577      7,883,659    7,875,982

    Weighted average
     common shares
     Outstanding -
      Diluted            8,124,826    8,111,872      8,119,776    8,085,375



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

                                              June 30, 2008     June 30, 2007
    ASSETS
    Current assets:
      Cash and cash equivalents                 $6,149,015        $3,638,870
      Accounts receivable, net of allowances
       of $300,000 and $460,000, respectively    6,441,683         7,251,767
      Inventories, net                          12,046,450        12,999,472
      Other current assets                         394,975           275,254
          Total current assets                  25,032,123        24,165,363
      Property, plant and equipment, net        10,542,573        10,677,000
      Goodwill                                  15,979,830        15,979,830
      Other assets, net                            703,328           496,127
          Total assets                         $52,257,854       $51,318,320

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Accounts payable                          $2,590,804        $3,040,313
      Other accrued liabilities                  2,960,334         2,508,820
      Deferred income taxes                        500,238           882,001
      Deferred revenue                             690,000           465,000
          Total current liabilities              6,741,376         6,896,134

    Deferred revenue                             2,177,500         1,937,500

    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;
       10,188,569 and 10,187,069 shares
       issued at June 30, 2008
       and June 30, 2007; respectively.
       7,885,077 and 7,883,577
       outstanding at June 30, 2008 and
       June 30, 2007, respectively.                101,886           101,871
      Additional paid-in capital                47,524,084        47,441,163
      Retained earnings                         16,444,436        15,673,080
      Less treasury stock, at cost;
       2,303,492 shares at
       June 30, 2008 and June 30, 2007,
       respectively                            (20,731,428)      (20,731,428)
          Total stockholders' equity            43,338,978        42,484,686
          Total liabilities and
           stockholders' equity                $52,257,854       $51,318,320

SOURCE Allied Healthcare Products, Inc.

Copyright © 2009, PRNewswire
Copyright © 2009, NewsBlaze, Daily News

Tags: ,HEA,ERN,MO-Allied-Health-ern