ST. LOUIS, Sept. 25 /PRNewswire-FirstCall/ -- Allied Healthcare
Products, Inc., (NASDAQ:AHPI) reported that recession-driven budget
cuts in its healthcare markets led to a $4.3 million, or 7.6
percent, decrease in sales for 2009 and a net loss for the fiscal
year of $2.12 per share, compared to a profit of 11 cents per share
in fiscal year 2008. This includes the effect of a non-cash
accounting charge of $16.0 million relating to the impairment of
goodwill in the fourth quarter ended June 30, 2009. The impairment
was identified during the company's annual evaluation of the
carrying value of goodwill and reflects the decline of the Allied
stock price during the past year and a general downturn in orders,
operating profits and cash flows as a result of the current
recession. This non-cash charge does not affect operations or cash
flow. After this impairment charge, Allied will no longer have a
goodwill balance and will not record any additional goodwill
impairment. For the quarter ended June 30, 2009, Allied reported a
net loss of $16.1 million, or $2.04 per diluted share, on sales of
$12.7 million, compared to net income of $0.7 million, or 8 cents
per diluted share, for the prior year period. Results for the
fourth quarter of 2009 include the $16.0 million charge for
impairment of goodwill. Allied sales in domestic hospital and
emergency markets suffered most in 2009. The domestic hospital
construction market remained flat, reflecting lead times that
preceded the recession. Sales to international markets fell less
than 3 percent, reflecting the relative strength of emerging
economies. Allied studies indicate that lower sales did not reflect
loss of market share to competitors. Instead, lower sales
represented a decrease in overall market demand caused by the
recession in the United States and global markets. Allied believes
that its new line of mass casualty ventilators represents a
potential boost to future sales. These products are specifically
designed for use in pandemics like the current H1N1 pandemic,
natural disasters like Katrina and terrorist attacks such as 9/11.
Introduced late in fiscal 2009, these products did not affect sales
in the fiscal year. However, "Allied mass casualty ventilators have
attracted strong interest wherever we have had an audience because
the H1N1 pandemic has heightened awareness among planners that
ventilators represent a weak link in our preparedness to address
mass casualty events," said Earl Refsland, president and chief
executive officer. Allied ventilators solve not only the problem of
a lack of ventilators but also the corollary problem of a lack of
respiratory care therapists, Refsland said, because they cost a
fraction of the price of full-featured ventilators and were
designed to be operated by non-professionals after brief
instruction. Allied ventilators also were designed for harsh field
conditions outside hospital environments and can operate
off-the-grid on batteries, making them viable, affordable back-ups
for natural disasters, terrorist incidents and use in remote areas,
Refsland said. Allied also announced that earnings in the first
quarter of fiscal year 2010 will be affected by a non-cash charge
attributable to the company's grant to its chief executive officer
of an option to purchase 320,000 shares of common stock in the next
six years. The option is subject to shareholder approval at the
next annual meeting of shareholders but is otherwise fully vested.
Assuming approval is obtained, generally accepted accounting
principles will require Allied to recognize the full fair value of
this option as a compensation related expense in the first quarter
of fiscal 2010. The company currently estimates fair value of the
option to be approximately $610,000. Allied Healthcare Products,
Inc. manufactures a variety of respiratory products used in the
healthcare industry in a range of hospital and alternate care
settings including sub-acute facilities, home healthcare and
emergency medical care. Allied's product lines include respiratory
care products, medical gas equipment and emergency medical
products. Allied products are marketed to hospitals, hospital
equipment dealers, hospital construction contractors, home
healthcare dealers and emergency medical products dealers. "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, Twelve months ended, June 30, June 30, 2009 2008 2009 2008
Net sales $12,710,683 $14,692,626 $52,072,676 $56,364,111 Cost of
sales 9,595,502 10,577,599 40,273,089 43,006,007 Gross profit
3,115,181 4,115,027 11,799,587 13,358,104 Selling General and
administrative expenses 3,259,500 3,096,161 13,041,564 12,084,971
Impairment of goodwill 15,979,830 - 15,979,830 - Income (loss) from
operations (16,124,149) 1,018,866 (17,221,807) 1,273,133 Interest
income (11,971) (25,245) (60,277) (118,119) Other, net 13,479
24,501 50,062 60,005 1,508 (744) (10,215) (58,114) Income (loss)
before provision for (benefit from) income taxes (16,125,657)
1,019,610 (17,211,592) 1,331,247 Provision for (benefit from)
income taxes (41,854) 330,327 (449,779) 448,748 Net income (loss)
($16,083,803) $689,283 ($16,761,813) $882,499 Net income (loss) per
share - Basic ($2.04) $0.09 ($2.12) $0.11 Net income (loss) per
share - Diluted ($2.04) $0.08 ($2.12) $0.11 Weighted average common
shares Outstanding - Basic 7,901,327 7,883,907 7,898,782 7,883,659
Weighted average common shares Outstanding - Diluted 7,901,327
8,124,826 7,898,782 8,119,776 ALLIED HEALTHCARE PRODUCTS, INC.
CONSOLIDATED BALANCE SHEET (UNAUDITED) June 30, 2009 June 30, 2008
ASSETS Current assets: Cash and cash equivalents $1,943,364
$6,149,015 Accounts receivable, net of allowances of $300,000
6,172,437 6,441,683 Inventories, net 12,663,938 12,046,450 Income
tax receivable 937,273 - Other current assets 327,203 394,975 Total
current assets 22,044,215 25,032,123 Property, plant and equipment,
net 10,799,089 10,542,573 Goodwill - 15,979,830 Other assets, net
390,627 703,328 Total assets $33,233,931 $52,257,854 LIABILITIES
AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable
$1,633,568 $2,590,804 Other accrued liabilities 2,316,558 2,960,334
Deferred income taxes 419,213 500,238 Deferred revenue 688,200
690,000 Total current liabilities 5,057,539 6,741,376 Deferred
revenue 1,491,100 2,177,500 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; 10,204,819 and 10,188,569 shares
issued at June 30, 2009 and June 30, 2008, respectively; 7,901,327
and 7,885,077 shares outstanding at June 30, 2009 and June 30,
2008, respectively 102,048 101,886 Additional paid-in capital
47,632,049 47,524,084 Retained earnings (deficit) (317,377)
16,444,436 Less treasury stock, at cost; 2,303,492 shares at June
30, 2009 and June 30, 2008, respectively (20,731,428) (20,731,428)
Total stockholders' equity 26,685,292 43,338,978 Total liabilities
and stockholders' equity $33,233,931 $52,257,854 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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