AHPI Allied Healthcare Products Inc

ST. LOUIS, Feb. 7 /PRNewswire-FirstCall/ -- Allied Healthcare Products, Inc. (NASDAQ:AHPI) reported that its net income declined 7.6 percent to $293,000, or 4 cents per share, during its second quarter ending December 31, 2006, versus $317,000, or 4 cents per share, for the second quarter last year. Net income for the first two quarters of fiscal 2007 fell 36.8 percent to $495,000, or 6 cents per share, from $783,000, or 10 cents per share, for the first two quarters of the prior year. Higher material prices cost about $1 million in pretax profit for the first half of the fiscal year, or about 7 cents per share, compared to the previous year, according to Earl Refsland, president and chief executive officer. Higher prices for raw materials, particularly copper and brass, have eroded company margins for the last 18 months. Refsland said that Allied had not increased its prices as planned due to competition in some product lines. Higher material prices will be addressed with a combination of pricing guidelines based on market conditions and negotiations with suppliers, he said. Sales in the second quarter increased about 8 percent to $14.3 million from $13.3 million the previous year. For the first two quarters of fiscal 2007, sales increased only slightly. 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, 2006 2005 2006 2005 Net sales $14,273,950 $13,339,789 $28,751,392 $28,326,070 Cost of sales 10,757,222 9,766,848 21,715,111 20,778,612 Gross profit 3,516,728 3,572,941 7,036,281 7,547,458 Selling General and administrative expenses 3,091,418 3,032,153 6,282,415 6,202,112 Income from operations 425,310 540,788 753,866 1,345,346 Interest income (28,059) (18,718) (56,228) (26,675) Other, net (53,182) 8,924 (43,878) 19,993 (81,241) (9,794) (100,106) (6,682) Income before provision for income taxes 506,551 550,582 853,972 1,352,028 Provision for income taxes 213,395 233,328 359,183 568,933 Net income $293,156 $317,254 $494,789 $783,095 Net income per share - Basic and diluted $0.04 $0.04 $0.06 $0.10 Weighted average common shares Outstanding - Basic 7,877,120 7,832,186 7,868,512 7,830,881 Weighted average common shares Outstanding - Diluted 8,059,573 8,050,069 8,064,650 8,041,758 ALLIED HEALTHCARE PRODUCTS, INC. CONSOLIDATED BALANCE SHEET (UNAUDITED) December 31, 2006 June 30, 2006 ASSETS Current assets: Cash and cash equivalents $2,842,638 $2,696,324 Accounts receivable, net of allowances of $400,000 and $430,000, respectively 7,357,596 7,429,355 Inventories, net 12,187,592 11,491,305 Other current assets 498,154 224,853 Total current assets 22,885,980 21,841,837 Property, plant and equipment, net 10,902,795 11,252,934 Goodwill 15,979,830 15,979,830 Other assets, net 253,222 255,845 Total assets $50,021,827 $49,330,446 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $3,666,116 $3,208,699 Deferred income taxes 677,188 689,942 Deferred revenue 465,000 465,000 Other accrued liabilities 2,670,374 2,834,495 Total current liabilities 7,478,678 7,198,136 Deferred revenue 1,240,000 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; 10,187,069 shares issued at December 31, 2006 and 10,155,569 shares issued at June 30, 2006; 7,883,577 outstanding at December 31, 2006 and 7,852,077 shares outstanding June 30, 2006, respectively 101,871 101,556 Additional paid-in capital 47,406,417 47,258,182 Retained earnings 14,526,289 14,031,500 Less treasury stock, at cost; 2,303,492 shares at December 31, 2006 and June 30, 2006, respectively (20,731,428) (20,731,428) Total stockholders' equity 41,303,149 40,659,810 Total liabilities and stockholders' equity $50,021,827 $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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