AHPI Allied Healthcare Products Inc

ST. LOUIS, May 3 /PRNewswire-FirstCall/ -- Allied Healthcare Products, Inc. (NASDAQ:AHPI) reported today that its net income fell about 42 percent to $236,000, or 3 cents per diluted share, during its third quarter ended March 31, 2006, versus $408,000, or 5 cents per diluted share, for the third quarter last year. However, for the first three quarters of fiscal 2006, Allied's net income increased about 23 percent to $1,020,000, or 13 cents per diluted share, versus $828,000, or 10 cents per diluted share, for 2005's first three quarters. Sales increased in the third quarter to total $14.8 million. Sales for the fiscal year's three quarters increased about $1.2 million. Sales increases reflect the significant backlog that developed in the previous year. Orders for fiscal 2006 have been sluggish, said Earl Refsland, president and chief executive officer. A major factor in slow order volume has been the continuing downturn in the cyclical U.S. hospital construction market, Refsland said. Medical expenses for the nine-month period increased more than $400,000 over the previous year under the self-insured portion of the benefit; $280,000 of this increase occurred in the third quarter. Allied's medical costs per employee have grown at an annual rate of about 9 percent since 2002, but in fiscal 2006 medical costs per employee increased 21 percent over the prior year. This increase is considered an anomaly, and the company's medical costs are expected to return to patterns that reflect market trends in the future, 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. CONSOLODATED STATEMENT OF OPERATIONS (UNAUDITED) Three months ended Nine months ended March 31, March 31, 2006 2005 2006 2005 Net sales $14,756,600 $14,328,443 $43,082,670 $41,935,731 Cost of sales 11,352,190 10,596,050 32,130,802 31,383,741 Gross profit 3,404,410 3,732,393 10,951,868 10,551,990 Selling, general and administrative expenses 2,992,446 3,013,159 9,194,558 8,998,802 Income from operations 411,964 719,234 1,757,310 1,553,188 Interest expense - 15,416 - 118,227 Interest income (9,311) - (35,986) - Other, net 8,861 13,791 28,854 32,563 (450) 29,207 (7,132) 150,790 Income before provision for income taxes 412,414 690,027 1,764,442 1,402,398 Provision for income taxes 176,257 281,739 745,190 574,423 Net income $236,157 $408,288 $1,019,252 $827,975 Basic earnings per share $0.03 $0.05 $0.13 $0.11 Diluted earnings per share $0.03 $0.05 $0.13 $0.10 Weighted average shares outstanding - basic 7,849,910 7,821,404 7,837,132 7,819,408 Weighted average shares outstanding - diluted 8,068,817 8,083,671 8,057,166 8,081,925 ALLIED HEALTHCARE PRODUCTS, INC. CONSOLIDATED BALANCE SHEET (UNAUDITED) March 31, 2006 June 30, 2005 ASSETS Current assets: Cash and cash equivalents $720,525 $317,775 Short-term investments 350,000 - Accounts receivable, net of allowances of $605,000 and $565,000, respectively 7,797,317 7,215,799 Inventories, net 11,721,973 10,775,550 Other current assets 331,544 168,431 Total current assets 20,921,359 18,477,555 Property, plant and equipment, net 11,290,754 11,308,866 Goodwill 15,979,830 15,979,830 Other assets, net 327,036 330,969 Total assets $48,518,979 $46,097,220 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $3,366,374 $2,110,599 Revolving credit facility 81,000 - Deferred income taxes 689,008 711,416 Deferred revenue 465,000 465,000 Other accrued liabilities 3,232,124 2,940,763 Total current liabilities 7,833,506 6,227,778 Deferred revenue 658,750 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; 10,155,569 shares issued at March 31, 2006 and 10,133,069 shares issued at June 30, 2005; 7,852,077 outstanding at March 31, 2006 and 7,829,577 shares outstanding June 30, 2005, respectively 101,556 101,331 Additional paid-in capital 47,254,447 47,109,143 Retained earnings 13,402,148 12,382,896 Less treasury stock, at cost; 2,303,492 shares at March 31, 2006 and June 30, 2005, respectively (20,731,428) (20,731,428) Total stockholders' equity 40,026,723 38,861,942 Total liabilities and stockholders' equity $48,518,979 $46,097,220 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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