AHPI Allied Healthcare Products Inc

Allied Healthcare Products Reports Profitable Second Quarter and First Half -- Lower production costs and operating expenses improve margins. -- Debt is reduced by 29% in the first half. ST. LOUIS, Feb. 9 /PRNewswire-FirstCall/ -- Allied Healthcare Products Inc. today reported that its second quarter ended December 31, 2003, with a net income of $384,000, or five cents per share, compared to a net loss of $176,000, or negative two cents per share, for the second quarter of fiscal 2003. Second quarter earnings improved over the first quarter's break-even results, reflecting higher sales in the second quarter and higher gross margins. Year-to-date results improved from a loss of $416,000 for the first half of fiscal 2003 to a net income of $387,000 for the first half of fiscal 2004. Lower production costs in 2004 resulted in a $937,000 improvement in gross margins versus the prior year. Production costs were lowered through automation and increased production of parts in-house. Operating expenses were reduced by savings resulting from staff reductions, as well as lower property and casualty insurance rates. Sales for the second quarter increased by about 2 percent compared to same quarter prior year. Sales for the first half of the year were down 4 percent from the previous year. Debt was reduced by $2.9 million, or 29 percent, in the first half and has been reduced by $5.4 million, or 43 percent, in the last 12 months. "Our order levels began to show modest positive growth in the second quarter, and we hope to strengthen those results with new products, two of which will be launched in the next two quarters," said Earl R. Refsland, chief executive officer. "Meanwhile, our efforts to reduce costs have had even better results than we projected, improving our gross margins by four percentage points over fiscal year 2003. Two additional automation projects became operational in January, and we estimate they will save an additional $200,000 per year," Refsland said. "Finally, close attention to inventory management and receivables has continued to reduce debt and significantly improve our cash flow position," 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 suchas "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 andfuture 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, 2003 2002 2003 2002 Net Sales $15,077,334 $14,852,228 $28,884,862 $30,092,899 Cost of Sales 10,968,845 11,467,535 21,379,800 23,524,527 Gross Profit 4,108,489 3,384,693 7,505,062 6,568,372 Selling General And Admin 3,334,657 3,424,554 6,514,568 6,747,998 Income/(loss) from operations 773,832 (39,861) 990,494 (179,626) Interest Expense 144,774 219,708 341,716 443,642 Other, net (11,040) 10,343 (5,682) 22,887 133,734 230,051 336,034 466,529 Income/(loss) before provision/(benefit) for income taxes 640,098 (269,912) 654,460 (646,155) Provision/(benefit) for income taxes 255,891 (93,823) 267,480 (229,668) Net Income/(loss) $384,207 $(176,089) $386,980 $(416,487) Net Income/(loss) per share - Basic and Diluted $0.05 $(0.02) $0.05 $(0.05) Weighted average common shares Outstanding - Basic 7,814,910 7,813,932 7,814,421 7,813,932 Weighted average common shares Outstanding - Diluted 7,995,788 7,813,932 7,974,834 7,813,932 ALLIED HEALTHCARE PRODUCTS INC. CONSOLIDATED BALANCE SHEET (UNAUDITED) December 31, 2003 June 30, 2003 ASSETS Current assets: Cash $73,646 $12,016 Accountsreceivable, net of allowance for doubtful accounts of $500,000 and $475,000, respectively 7,497,617 7,848,977 Inventories, net 11,191,335 12,274,972 Income tax receivable 392,259 392,259 Other current assets 474,325 149,995 Total current assets 19,629,182 20,678,219 Property, plant and equipment, net 12,332,497 12,630,289 Deferred income taxes 989,710 989,710 Goodwill 15,979,830 15,979,830 Other assets, net 111,698 134,528 Totalassets $49,042,917 $50,412,576 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $3,458,308 $2,192,717 Current portion of long-term debt 3,039,990 5,409,304 Deferred income taxes 412,079 412,079 Other current liabilities 3,098,573 3,218,981 Total current liabilities 10,008,950 11,233,081 Long-term debt 4,068,822 4,612,320 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; 7,818,432 and 7,813,932 shares issued and outstanding at December 31, 2003 and June 30, 2003, respectively 101,175 101,175 Additional paid-in capital 47,041,536 47,030,549 Common stock in treasury, at cost (20,731,428) (20,731,428) Retained earnings 8,553,862 8,166,879 Total stockholders' equity 34,965,145 34,567,175 Total liabilities and stockholders' equity $49,042,917 $50,412,576 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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