AHPI Allied Healthcare Products Inc

Allied Healthcare Products Reports Profitable Second Quarter and First Half - Lower production costs and expenses continue ST. LOUIS, Feb. 10 /PRNewswire-FirstCall/ -- Allied Healthcare Products, Inc. (NASDAQ:AHPI) reported that it earned a net income of $184,000, or 2 cents per share, during its second quarter ended December 31, 2004, compared to $384,000, or 5 cents per share, for the second quarter of 2004. For the first half of fiscal 2005, Allied earned a profit of $420,000, or 5 cents per share, compared to $387,000, or 5 cents per share for the first half of 2004. Allied orders for the first half of 2005 were about $100,000 higher than the prior year. However, because all orders were not released for shipment -- for example, because of time deferrals for hospital construction -- some orders could not be translated into sales. This has resulted in a backlog increase that should be worked off in the second half of 2005, according to Earl R. Refsland, chief executive officer. The company continued to hold down costs. Operating expenses decreased $529,000 for the first two quarters of 2005 versus 2004. Cost reductions have been realized through increased automation and in-house production of parts, staff reductions and lower insurance premiums. Interest expense also has been cut significantly -- from $341,000 in the first half of 2004 to $103,000 in 2005 -- by reducing debt from $7.1 to $1.3 million. Allied will introduce new products in the second half of fiscal 2005. The most significant, Refsland said, is the IMPACT(TM) (Integrated Multi-Parameter Alarm Control Technology) Alarm System for hospitals. "IMPACT(TM) will enable hospitals to deliver better care, at lower cost, by allowing computer monitoring of literally hundreds of critical functions. Instead of finding out a system has failed when it's too late, IMPACT(TM) will allow a hospital engineer to see a problem developing -- and correct it -- before a problem occurs." Refsland said that the company's focus in the second half will continue to be increasing sales and maintaining tight cost controls. "We have significantly strengthened our balance sheet through cost controls. We will continue that discipline and work on building sales," 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 hospital and 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, Six months ended, December 31, December 31, 2004 2003 2004 2003 Net sales $13,667,568 $15,077,334 $27,607,288 $28,884,862 Cost of sales 10,254,672 10,968,845 20,787,691 21,379,800 Gross profit 3,412,896 4,108,489 6,819,597 7,505,062 Selling General and administrative expenses 3,056,555 3,334,657 5,985,643 6,514,568 Income from operations 356,341 773,832 833,954 990,494 Interest expense 28,966 144,774 102,811 341,716 Other expense 11,410 (11,040) 18,772 (5,682) Other, net 40,376 133,734 121,583 336,034 Income before provision for income taxes 315,965 640,098 712,371 654,460 Provision for income taxes 131,779 255,891 292,684 267,480 Net income $184,186 $384,207 $419,687 $386,980 Net income per share - Basic and diluted $0.02 $0.05 $0.05 $0.05 Weighted average common shares Outstanding - Basic 7,818,432 7,814,910 7,818,432 7,814,421 Weighted average common shares Outstanding - Diluted 8,104,869 7,995,788 8,087,657 7,974,834 ALLIED HEALTHCARE PRODUCTS, INC. CONSOLIDATED BALANCE SHEET (UNAUDITED) December 31, 2004 June 30, 2004 ASSETS Current assets: Cash $10,398 $8,256 Accounts receivable, net of allowance for doubtful accounts of $475,000 and $475,000, respectively 7,023,692 7,708,969 Inventories, net 10,605,306 11,095,171 Income tax receivable - 130,548 Other current assets 325,564 127,127 Total current assets 17,964,960 19,070,071 Property, plant and equipment, net 11,504,339 11,999,927 Goodwill 15,979,830 15,979,830 Other assets, net 65,804 88,867 Total assets $45,514,933 $47,138,695 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $2,821,427 $3,125,593 Current portion of long-term debt 1,275,325 1,245,484 Deferred income taxes 389,644 389,644 Deferred revenue 465,000 - Other current liabilities 3,138,553 3,316,603 Total current liabilities 8,089,949 8,077,324 Deferred income taxes 242,478 242,478 Deferred revenue 310,000 - Long-term debt - 2,366,076 Commitments and contingencies Stockholders' equity: Preferred stock; $0.01 par value; 1,500,000 shares authorized; no shares issued and outstanding which includes 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; 7,818,432 shares issued and outstanding at December 31, 2004 and June 30, 2004 101,220 101,220 Additional paid-in capital 47,041,493 47,041,493 Common stock in treasury, at cost (20,731,428) (20,731,428) Retained earnings 10,461,221 10,041,532 Total stockholders' equity 36,872,506 36,452,817 Total liabilities and stockholders' equity $45,514,933 $47,138,695 DATASOURCE: Allied Healthcare Products, Inc. CONTACT: Daniel C. Dunn, Chief Financial Officer of Allied Healthcare Products, Inc., +1-314-771-2400 Web site: http://www.alliedhpi.com/

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