AHPI Allied Healthcare Products Inc

Allied Healthcare Reports Consistent Orders But Dip in Sales, Net Income -- Orders remain consistent for first three quarters FY 2005 ST. LOUIS, May 2 /PRNewswire-FirstCall/ -- Allied Healthcare Products, Inc. (NASDAQ:AHPI) reported net income of $408,000, or 5 cents per share, during its third quarter ended March 31, 2005, compared to $628,000, or 8 cents per share, for the third quarter of 2004. For the first three quarters of fiscal 2005, Allied earned a net income of $828,000, or 10 cents per share, compared to $1,015,000, or 13 cents per share, for the first three quarters of 2004. Allied's customer orders in fiscal 2005 have been consistent over the three quarter period with those of 2004. However, sales fell about $1.9 million, primarily because orders received were not released for shipment at the same rate as the prior year. About 25 percent of the $1.9 million in sales shortfall can be attributed to production capacity issues at Allied, primarily in product testing, according to Earl R. Refsland, Chief Executive Officer. "Internal production issues we can and will fix," Refsland said. "However, as a practical matter, there is little we can do about the product release backlog other than to respond as soon as we receive a customer's approval to ship." Refsland said that Allied offset some of the negative effects of the sales shortfall through continuing cost control efforts and debt reduction that reduced interest expense. The company has cut debt from $3.6 to about $1.0 million in fiscal 2005. In fiscal 2004, Allied reduced its debt from $10.0 to $3.6 million. Allied also continued progress in cost control by cutting operating expense $570,000 in fiscal 2005 versus 2004. Refsland said that the company would resolve capacity constraints and focus on new product releases and sales growth in the next few quarters. The company plans to release at least three new products during calendar 2005, he 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, Nine months ended, March 31, March 31, 2005 2004 2005 2004 Net sales $14,328,443 $14,956,873 $41,935,731 $43,841,734 Cost of sales 10,596,050 10,745,206 31,383,741 32,125,005 Gross profit 3,732,393 4,211,667 10,551,990 11,716,729 Selling General and administrative expenses 3,013,159 3,054,399 8,998,802 9,568,968 Income from operations 719,234 1,157,268 1,553,188 2,147,761 Interest expense 15,416 111,570 118,227 453,285 Other expense 13,791 7,748 32,563 2,066 Other, net 29,207 119,318 150,790 455,351 Income before provision for income taxes 690,027 1,037,950 1,402,398 1,692,410 Provision for income taxes 281,739 410,115 574,423 677,595 Net income $408,288 $627,835 $827,975 $1,014,815 Net income per share - Basic $0.05 $0.08 $0.11 $0.13 Net income per share - Diluted $0.05 $0.08 $0.10 $0.13 Weighted average common shares Outstanding - Basic 7,821,404 7,818,432 7,819,408 7,815,748 Weighted average common shares Outstanding - Diluted 8,083,671 8,005,365 8,081,925 7,957,881 ALLIED HEALTHCARE PRODUCTS, INC. CONSOLIDATED BALANCE SHEET (UNAUDITED) March 31, 2005 June 30, 2004 ASSETS Current assets: Cash $800 $8,256 Accounts receivable, net of allowance for doubtful accounts of $475,000 and $475,000, respectively 7,987,383 7,708,969 Inventories, net 10,635,740 11,095,171 Income tax receivable - 130,548 Other current assets 328,942 127,127 Total current assets 18,952,865 19,070,071 Property, plant and equipment, net 11,403,838 11,999,927 Goodwill 15,979,830 15,979,830 Other assets, net 64,493 88,867 Total assets $46,401,026 $47,138,695 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $3,339,988 $3,125,593 Current portion of long-term debt 970,754 1,245,484 Deferred income taxes 389,644 389,644 Deferred revenue 465,000 - Other accrued liabilities 3,498,559 3,316,603 Total current liabilities 8,663,945 8,077,324 Deferred income taxes 242,478 242,478 Deferred revenue 193,750 - 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 - - 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; 7,829,577 and 7,818,432 shares issued and outstanding at March 31, 2005 and June 30, 2004, respectively 101,331 101,220 Additional paid-in capital 47,061,441 47,041,493 Common stock in treasury, at cost (20,731,428) (20,731,428) Retained earnings 10,869,509 10,041,532 Total stockholders' equity 37,300,853 36,452,817 Total liabilities and stockholders' equity $46,401,026 $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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