AHPI Allied Healthcare Products Inc

Allied Healthcare Products Has Profitable First Quarter - Controls on production costs, expenses continue to yield positive results. ST. LOUIS, Nov. 5 /PRNewswire-FirstCall/ -- Allied Healthcare Products, Inc. (NASDAQ:AHPI) reported today that it earned net income of $235,500, or 3 cents per share, during its first quarter ended September 30, 2004, compared to $3,000, or zero cents per share, for the first quarter of 2003. Revenues for the first quarter of fiscal 2005, historically the weakest quarter of the year for Allied, totaled $13.9 million compared with $13.8 million for the prior year period. Revenues reflect a one-time payment of $600,000 by Abbott Laboratories to Allied for the cost of suspending production of Baralyme(R) in Allied's New York facility. Additionally, cost of sales includes approximately $600,000 for the cost of suspending operations at that facility. Allied continued to demonstrate its ability to lower manufacturing costs from automation and increased in-house production of parts during the quarter. Allied also continued to realize reductions in expenses from staff cuts and lower insurance premiums. For the quarter, Allied reduced manufacturing costs by about $350,000 and cut selling, general, and administrative expenses by about $250,000 versus the prior year. Allied also continued to reduce debt. Debt decreased during the first quarter by $2.2 million, from $3.6 to $1.4 million. About $1.5 million of that reduction is attributable to Abbott Laboratories' first payment of $1,530,000 for Allied's agreement to cease production of Baralyme(R). Under terms of the agreement, reached August 27, 2004, Abbott will pay Allied $930,000 annually for up to four more years. The net cash flow for Allied under the agreement is expected to equal the net cash flow Allied would have realized from continued manufacture and sale of Baralyme(R) during the five year period. Allied's debt reduction cut interest expense by about $123,000 for the quarter. Sales, exclusive of the $600,000 one-time payment from Abbott Laboratories, were down 3.4%. Domestic sales were even with the prior year while international business, which represented 13.4% of first quarter sales, was down 17.7%. 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 September 30, 2004 2003 Net sales $13,939,720 $13,807,529 Cost of sales 10,533,018 10,410,955 Gross profit 3,406,702 3,396,574 Selling, general and administrative expenses 2,929,088 3,179,912 Income from operations 477,614 216,662 Other expense: Interest expense 73,846 196,941 Other, net 7,362 5,359 81,208 202,300 Income before provision for income taxes 396,406 14,362 Provision for income taxes 160,905 11,589 Net income $235,501 $2,773 Net income per share - Basic $0.03 $- Net income per share - Diluted $0.03 $- Weighted average common shares Outstanding - Basic 7,818,432 7,813,932 Weighted average common shares Outstanding - Diluted 8,065,741 7,951,334 ALLIED HEALTHCARE PRODUCTS, INC. CONSOLIDATED BALANCE SHEET (UNAUDITED) September 30, 2004 June 30, 2004 ASSETS Current assets: Cash $93,768 $8,256 Accounts receivable, net of allowance for doubtful accounts of $475,000 and $475,000, respectively 7,160,225 7,708,969 Inventories, net 11,036,930 11,095,171 Income tax receivable - 130,548 Other current assets 291,492 127,127 Total current assets 18,582,415 19,070,071 Property, plant and equipment, net 11,739,786 11,999,927 Goodwill 15,979,830 15,979,830 Other assets, net 77,452 88,867 Total assets $46,379,483 $47,138,695 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $2,961,361 $3,125,593 Current portion of long-term debt 609,258 1,245,484 Deferred income taxes 389,644 389,644 Deferred revenue 465,000 - Other current liabilities 3,816,343 3,316,603 Total current liabilities 8,241,606 8,077,324 Deferred income taxes 242,478 242,478 Deferred revenue 426,250 - Long-term debt 780,831 2,366,076 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 shares issued and outstanding at September 30, 2004 and June 30, 2004 101,220 101,220 Additional paid-in capital 47,041,493 47,041,493 Common stock in treasury, at cost (20,731,428) (20,731,428) Retained earnings 10,277,033 10,041,532 Total stockholders' equity 36,688,318 36,452,817 Total liabilities and stockholders' equity $46,379,483 $47,138,695 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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