AHPI Allied Healthcare Products Inc

ST. LOUIS, Nov. 9 /PRNewswire-FirstCall/ -- Allied Healthcare Products, Inc. (NASDAQ:AHPI) reported that its net income fell about 57 percent to $202,000, or 3 cents per diluted share, during its first quarter ended September 30, 2006, versus $466,000, or 6 cents per share, for the first quarter last year. Sales in the first quarter totaled about $14.5 million, a decline of about $509,000, or 3.4 percent, compared to the same period last year. Most of the sales shortfall -- about $400,000 -- was caused by insufficient deliveries of components by suppliers. Actual customer order rates for the quarter were basically flat, compared to the prior year. Allied margins were squeezed by higher material costs. Continuing a trend that became evident in fiscal 2006, material costs increased by 8.3 percent over the first quarter of fiscal 2006, primarily for copper and zinc-based parts. Suppliers' delivery problems should be resolved by the end of the second quarter, according to Earl Refsland, president and chief executive officer. A combination of price increases for products and purchased material cost reductions will be put in place to offset higher material costs, 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 September 30, 2006 2005 Net sales $14,477,442 $14,986,280 Cost of sales 10,957,890 11,011,763 Gross profit 3,519,552 3,974,517 Selling, general and administrative expenses 3,190,997 3,169,959 Income from operations 328,555 804,558 Interest income (28,169) (7,957) Other expense, net 9,302 11,069 (18,867) 3,112 Income before provision for income taxes 347,422 801,446 Provision for income taxes 145,788 335,605 Net income $201,634 $465,841 Basic and diluted earnings per share $0.03 $0.06 Weighted average common shares Outstanding - Basic 7,859,903 7,829,577 Weighted average common shares Outstanding - Diluted 8,065,153 8,061,758 ALLIED HEALTHCARE PRODUCTS, INC. CONSOLIDATED BALANCE SHEET (UNAUDITED) September 30, 2006 June 30, 2006 ASSETS Current assets: Cash and cash equivalents $2,418,227 $2,696,324 Accounts receivable, net of allowances of $430,000 7,586,497 7,429,355 Inventories, net 11,944,922 11,491,305 Other current assets 660,555 224,853 Total current assets 22,610,201 21,841,837 Property, plant and equipment, net 11,063,163 11,252,934 Goodwill 15,979,830 15,979,830 Other assets, net 254,534 255,845 Total assets $49,907,728 $49,330,446 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $3,670,235 $3,208,699 Deferred income taxes 687,056 689,942 Deferred revenue 465,000 465,000 Other accrued liabilities 2,778,569 2,834,495 Total current liabilities 7,600,860 7,198,136 Deferred revenue 1,356,250 1,472,500 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; 10,178,069 shares issued at September 30, 2006 and 10,155,569 shares issued at June 30, 2006: 7,874,577 shares outstanding at September 30, 2006 and 7,852,077 shares outstanding June 30, 2006, respectively 101,781 101,556 Additional paid-in capital 47,347,131 47,258,182 Retained earnings 14,233,134 14,031,500 Less: treasury stock, at cost; 2,303,492 shares at September 30, 2006 and June 30, 2006, respectively (20,731,428) (20,731,428) Total stockholders' equity 40,950,618 40,659,810 Total liabilities and stockholders' equity $49,907,728 $49,330,446 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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