ST. LOUIS, Feb. 8 /PRNewswire-FirstCall/ -- Allied Healthcare
Products, Inc. (NASDAQ:AHPI) reported today that its net income in
the second quarter ending December 31 fell almost 98 percent from
$293,000 last year, or 4 cents per share, to about $6,500 in the
current quarter, or zero cents per share. For the first half of the
2008 fiscal year ending December 31, net income fell about 81
percent, from about $495,000 last year, or six cents per share, to
about $93,500, or one cent per share, in the current fiscal year.
Customer orders for the first two quarters of fiscal 2008 were
consistent with those of the prior year, declining only about
$235,000. Sales, however, which depend on customer purchase order
releases, declined about $1,000,000 or 3.6 percent, for the first
two quarters of this fiscal year. Customer release rates are
expected to return to more normal levels in the second half of the
year, Allied said. The sharp decline in net income resulted from
gross margins that fell by about $960,000 compared to last year.
Low production levels, caused by lower sales, combined with
decreases in inventory to result in lower absorption of fixed
costs. Also, cost reduction programs to offset higher labor and
material costs did not take effect as planned in the first two
quarters. Material costs increased by 2.2 percent and labor costs
by 4.5 percent compared to the previous year, Allied said. "Those
increases should have been offset by cost reduction efforts, but we
failed to execute in the first two quarters," said Earl Refsland,
Allied president and chief executive officer. Difficulties in
introducing a new product contributed to production delays,
Refsland said. "We know what we have to do to correct problems we
encountered," Refsland said. "We just have to focus on the basics
and execute." Despite difficulties, Allied once again improved its
cash position, Refsland said. The company had a cash balance of
about $4.7 million at the end of the first half of the fiscal year,
an increase of more than 17 percent over the previous quarter and
30 percent over the previous year end. 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 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, 2007 2006 2007
2006 Net sales $13,626,016 $14,273,950 $27,727,634 $28,751,392 Cost
of sales 10,714,172 10,757,222 21,648,777 21,715,111 Gross profit
2,911,844 3,516,728 6,078,857 7,036,281 Selling General and
administrative expenses 2,932,428 3,091,418 5,975,398 6,282,415
Income (loss) from operations (20,584) 425,310 103,459 753,866
Interest income (38,177) (28,059) (78,946) (56,228) Other, net
11,113 (53,182) 26,263 (43,878) (27,064) (81,241) (52,683)
(100,106) Income before provision for income taxes 6,480 506,551
156,142 853,972 Provision for income taxes - 213,395 62,597 359,183
Net income $6,480 $293,156 $93,545 $494,789 Net income per share -
Basic and diluted $0.00 $0.04 $0.01 $0.06 Weighted average common
shares Outstanding - Basic 7,883,577 7,877,120 7,883,577 7,868,512
Weighted average common shares Outstanding - Diluted 8,130,901
8,059,573 8,122,607 8,064,650 ALLIED HEALTHCARE PRODUCTS, INC.
CONSOLIDATED BALANCE SHEET (UNAUDITED) December 31, 2007 June 30,
2007 ASSETS Current assets: Cash and cash equivalents $4,732,692
$3,638,870 Accounts receivable, net of allowances of $325,000 and
$460,000, respectively 6,190,756 7,251,767 Inventories, net
11,810,149 12,999,472 Other current assets 523,486 275,254 Total
current assets 23,257,083 24,165,363 Property, plant and equipment,
net 10,267,716 10,677,000 Goodwill 15,979,830 15,979,830 Other
assets, net 562,161 496,127 Total assets $50,066,790 $51,318,320
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts
payable $2,719,389 $3,040,313 Other accrued liabilities 1,945,603
2,508,820 Deferred income taxes 726,861 882,001 Deferred revenue
465,000 465,000 Total current liabilities 5,856,853 6,896,134
Deferred revenue 1,705,000 1,937,500 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, 2007 and June 30, 2007; 7,883,577 shares outstanding at
December 31, 2007 and June 30, 2007 101,871 101,871 Additional
paid-in capital 47,479,012 47,441,163 Retained earnings 15,655,482
15,673,080 Less treasury stock, at cost; 2,303,492 shares at
December 31, 2007 and June 30, 2007, respectively (20,731,428)
(20,731,428) Total stockholders' equity 42,504,937 42,484,686 Total
liabilities and stockholders' equity $50,066,790 $51,318,320
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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