AHPI Allied Healthcare Products Inc

ST. LOUIS, May 12 /PRNewswire-FirstCall/ -- Allied Healthcare Products, Inc. (NASDAQ:AHPI) reported today that its net income for the third quarter ending March 31 fell 64 percent, from about $278,000 last year, or 4 cents per share, to about $100,000 in the current quarter, or 1 cent per share. Sales for the third quarter increased by about $240,000 compared to the third quarter of the prior year. However, higher material and labor costs this fiscal year eroded margins and profits for the quarter. For the first three quarters of the 2008 fiscal year ending March 31, Allied net income fell about 75 percent, from about $772,000 last year, or 10 cents per share, to about $193,000, or 2 cents per share this year. Customer orders for the first three quarters of fiscal 2008 remained essentially flat compared to the previous period. However, actual sales declined by about $784,000, or about 1.8 percent, primarily because manufacturing delays slowed Allied shipments of some customer orders. Allied's manufacturing problems led to eroded profit margins and reduced net income. Higher material and labor costs also pressured margins and net income. Allied was able to achieve a modest price increase of 0.8 percent. But that price relief could not offset the combined effects of manufacturing delays and higher costs. Planned cost reduction efforts began to show positive effects in the last quarter, said Earl Refsland, Allied president and chief executive officer. The company will lower costs by bringing production of some products in house, he said. New investment in equipment is planned to help resolve the manufacturing throughput problem and reduce the cost of machined components. 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, Nine months ended, March 31, March 31, 2008 2007 2008 2007 Net sales $13,943,852 $13,703,784 $41,671,485 $42,455,176 Cost of sales 10,779,631 10,251,494 32,428,408 31,966,606 Gross profit 3,164,221 3,452,290 9,243,077 10,488,570 Selling General and administrative expenses 3,013,413 3,003,928 8,988,810 9,286,343 Income from operations 150,808 448,362 254,267 1,202,227 Interest income (13,928) (25,844) (92,874) (82,071) Other, net 9,241 9,328 35,504 (34,551) (4,687) (16,516) (57,370) (116,622) Income before provision for income taxes 155,495 464,878 311,637 1,318,849 Provision for income taxes 55,824 187,198 118,421 546,381 Net income $99,671 $277,680 $193,216 $772,468 Net income per share - Basic $0.01 $0.04 $0.02 $0.10 Net income per share - Diluted $0.01 $0.03 $0.02 $0.10 Weighted average common shares Outstanding - Basic 7,883,577 7,883,577 7,883,577 7,873,460 Weighted average common shares Outstanding - Diluted 8,122,888 8,077,696 8,117,684 8,071,832 ALLIED HEALTHCARE PRODUCTS, INC. CONSOLIDATED BALANCE SHEET (UNAUDITED) March 31, 2008 June 30, 2007 ASSETS Current assets: Cash and cash equivalents $3,849,144 $3,638,870 Accounts receivable, net of allowances of $340,000 and $460,000, respectively 7,146,268 7,251,767 Inventories, net 11,587,283 12,999,472 Other current assets 451,250 275,254 Total current assets 23,033,945 24,165,363 Property, plant and equipment, net 10,223,948 10,677,000 Goodwill 15,979,830 15,979,830 Other assets, net 559,100 496,127 Total assets $49,796,823 $51,318,320 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $2,231,057 $3,040,313 Other accrued liabilities 2,254,815 2,508,820 Deferred income taxes 633,173 882,001 Deferred revenue 465,000 465,000 Total current liabilities 5,584,045 6,896,134 Deferred revenue 1,588,750 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 March 31, 2008 and June 30, 2007; 7,883,577 shares outstanding at March 31, 2008 and June 30, 2007 101,871 101,871 Additional paid-in capital 47,498,432 47,441,163 Retained earnings 15,755,153 15,673,080 Less treasury stock, at cost; 2,303,492 shares at March 31, 2008 and June 30, 2007, respectively (20,731,428) (20,731,428) Total stockholders' equity 42,624,028 42,484,686 Total liabilities and stockholders' equity $49,796,823 $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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