AHPI Allied Healthcare Products Inc

-- Costs, margins continue to be favorable -- Company remains debt-free ST. LOUIS, Feb. 6 /PRNewswire-FirstCall/ -- Allied Healthcare Products, Inc. (NASDAQ:AHPI) reported today that its net income increased by 72 percent to total $317,000, or 4 cents per diluted share, during its second quarter ended December 31, 2005, versus $184,000, or 2 cents per share, for the second quarter last year. For the first two quarters of fiscal 2006, Allied reported net income of $783,000, or 10 cents per diluted share, versus $420,000, or 5 cents per share, for the previous year's first two quarters. Sales for the second quarter of fiscal 2006 totaled $13.3 million compared to almost $13.7 million for the previous year's second quarter. However, sales for the first half of the year exceeded the prior year by about $700,000. Orders for the first half of 2006 declined by $900,000, or about 3 percent, compared to the previous year. Allied's gross margin for the first half of 2006 improved to almost 27 percent, a second year of advances on higher sales volume. Operating expenses for 2006 increased about $217,000 over the first half of 2005. Net interest costs were $130,000 lower than the prior year, partially offsetting higher operating expenses. Allied paid off its corporate debt in the last quarter of fiscal 2005 and has about $2.0 million in cash and short term investments. Increased sales quote activity in the first half of the fiscal year indicates that the hospital construction market may be turning around after more than a year-long slump, Earl Refsland, president and chief executive officer, 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, 2005 2004 2005 2004 Net sales $13,339,789 $13,667,568 $28,326,070 $27,607,288 Cost of sales 9,766,848 10,254,672 20,778,612 20,787,691 Gross profit 3,572,941 3,412,896 7,547,458 6,819,597 Selling General and administrative expenses 3,032,153 3,056,555 6,202,112 5,985,643 Income from operations 540,788 356,341 1,345,346 833,954 Interest expense - 28,966 - 102,811 Interest income (18,718) - (26,675) - Other, net 8,924 11,410 19,993 18,772 (9,794) 40,376 (6,682) 121,583 Income before provision for income taxes 550,582 315,965 1,352,028 712,371 Provision for income taxes 233,328 131,779 568,933 292,684 Net income $317,254 $184,186 $783,095 $419,687 Net income per share - Basic and diluted $0.04 $0.02 $0.10 $0.05 Weighted average common shares Outstanding - Basic 7,832,186 7,818,432 7,830,881 7,818,432 Weighted average common shares Outstanding - Diluted 8,050,069 8,104,869 8,041,758 8,087,657 ALLIED HEALTHCARE PRODUCTS, INC. CONSOLIDATED BALANCE SHEET (UNAUDITED) December 31, 2005 June 30, 2005 ASSETS Current assets: Cash and cash equivalents $717,076 $317,775 Short-term investments 1,250,000 - Accounts receivable, net of allowances of $584,212 and $565,000, respectively 6,756,521 7,215,799 Inventories, net 11,337,984 10,775,550 Other current assets 416,375 168,431 Total current assets 20,477,956 18,477,555 Property, plant and equipment, net 11,249,400 11,308,866 Goodwill 15,979,830 15,979,830 Other assets, net 328,347 330,969 Total assets $48,035,533 $46,097,220 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $3,234,326 $2,110,599 Deferred income taxes 697,094 711,416 Deferred revenue 465,000 465,000 Other accrued liabilities 3,122,985 2,940,763 Total current liabilities 7,519,405 6,227,778 Deferred revenue 775,000 1,007,500 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; 10,148,069 shares issued at December 31, 2005 and 10,133,069 shares issued at June 30, 2005; 7,844,577 outstanding at December 31, 2005 and 7,829,577 shares outstanding June 30, 2005, respectively 101,481 101,331 Additional paid-in capital 47,205,084 47,109,143 Retained earnings 13,165,991 12,382,896 Less treasury stock, at cost; 2,303,492 shares at December 31, 2005 and June 30, 2005, respectively (20,731,428) (20,731,428) Total stockholders' equity 39,741,128 38,861,942 Total liabilities and stockholders' equity $48,035,533 $46,097,220 First Call Analyst: FCMN Contact: 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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