Attached files
| file | filename |
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| 8-K - ALLIED HEALTHCARE PRODUCTS INC | v195572_8k.htm |
Exhibit 99.1
Contact:
Daniel
C. Dunn
Chief
Financial Officer
314/771-2400
Recession
Leads to Sales Decline and Loss
For
Allied Healthcare Products in Fiscal 2010
ST.
Louis, August 30, 2010 – Recession-driven budget cuts by hospitals and
governmental entities reduced sales for Allied Healthcare Products, Inc.
(NASDAQ: AHPI) throughout fiscal 2010. The company managed to
offset much of the year’s sales decline by cutting overhead and operating
costs. Still, the company reported a loss for the year.
For the fiscal year ending June 30,
2010, Allied sales fell about $6 million, or more than 11.7 percent, from about
$52.1 million in 2009 to $46.0 million in the current fiscal
year. The cost of sales was reduced by 13.4 percent, from about $40.3
million to $34.9 million. The company also cut its selling, general
and administrative costs by about 8.5 percent, from about $13.0 million to $11.9
million in the current year.
The net loss for fiscal 2010 was
$600,000, or a negative seven cents per basic and diluted share. This
compared to a loss of more than $16.8 million, or a negative $2.12 per basic and
diluted share, for fiscal 2009. The 2009 loss included the effect of
a non-cash accounting charge of $16.0 million relating to the impairment of
goodwill in the fourth quarter. The 2009 goodwill impairment was
caused by the decline of the Allied stock price in the year and a general
downturn in orders caused by the recession.
Sales for the fourth quarter ending
June 30, 2010, fell about 7.9 percent, from about $12.7 million to $11.7
million. As it had throughout fiscal 2010, Allied reduced its cost of
sales in the quarter by about 8.3 percent from approximately $9.6 million to
less than $8.8 million. The company also cut selling, general and
administrative costs by about 18.2 percent, or $585,000, compared to the
previous year.
Net income for the fourth quarter of
fiscal 2010 was about $86,000, or one cent per basic and diluted
share. This compared to a loss in the prior year’s fourth quarter of
almost $16.1 million, or a negative $2.04 per basic and diluted share,
reflecting the $16.0 million accounting charge for impairment of
goodwill.
Despite the recession, Allied ended
fiscal 2010 with an improved cash position, increasing cash on hand from $1.9
million last year to $5.3 million at the end of fiscal 2010.
“Strong execution by our operations
team helped Allied offset much of the negative effects of sales declines,” said
Earl Refsland, president and chief executive officer. “Sales of mass casualty
ventilators we introduced in the second half of fiscal 2009 also
helped. But we could not overcome the effects of unprecedented budget
cuts by our customers.”
Surveys by Allied Healthcare Products
indicate that sales declines throughout 2010 and latter 2009 were caused by the
recession rather than losses of market share to competitors, Refsland
said.
Sales of the new mass casualty
ventilators, which cost a fraction of the price of traditional full-featured
ventilators and designed to be operated by non-professionals after brief
instruction, totaled about $1.9 million for fiscal 2010, Refsland
said. As with the company’s core products, sales of mass casualty
ventilators were depressed by budget cuts by cash-strapped healthcare
customers.
Allied Healthcare Products 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 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,
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|||||||||||||||
|
2010
|
2009
|
2010
|
2009
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|||||||||||||
|
Net
sales
|
$ | 11,668,246 | $ | 12,710,683 | $ | 46,034,248 | $ | 52,072,676 | ||||||||
|
Cost
of sales
|
8,772,006 | 9,595,502 | 34,944,714 | 40,273,089 | ||||||||||||
|
Gross
profit
|
2,896,240 | 3,115,181 | 11,089,534 | 11,799,587 | ||||||||||||
|
Selling
General and administrative expenses
|
2,674,223 | 3,259,500 | 11,871,758 | 13,041,564 | ||||||||||||
|
Impairment
of goodwill
|
- | 15,979,830 | - | 15,979,830 | ||||||||||||
|
Income
(loss) from operations
|
222,017 | (16,124,149 | ) | (782,224 | ) | (17,221,807 | ) | |||||||||
|
Interest
income
|
(5,764 | ) | (11,971 | ) | (10,168 | ) | (60,277 | ) | ||||||||
|
Interest
expense
|
1,505 | - | 4,269 | - | ||||||||||||
|
Other,
net
|
13,599 | 13,479 | 117,189 | 50,062 | ||||||||||||
| 9,340 | 1,508 | 111,290 | (10,215 | ) | ||||||||||||
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Income
(loss) before provision for
|
||||||||||||||||
|
(benefit
from) income taxes
|
212,677 | (16,125,657 | ) | (893,514 | ) | (17,211,592 | ) | |||||||||
|
Provision
for (benefit from) income taxes
|
126,412 | (41,854 | ) | (293,941 | ) | (449,779 | ) | |||||||||
|
Net
income (loss)
|
$ | 86,265 | $ | (16,083,803 | ) | $ | (599,573 | ) | $ | (16,761,813 | ) | |||||
|
Net
income (loss) per share - Basic
|
$ | 0.01 | $ | (2.04 | ) | $ | (0.07 | ) | $ | (2.12 | ) | |||||
|
Net
income (loss) per share - Diluted
|
$ | 0.01 | $ | (2.04 | ) | $ | (0.07 | ) | $ | (2.12 | ) | |||||
|
Weighted
average common shares
|
||||||||||||||||
|
Outstanding
- Basic
|
8,093,386 | 7,901,327 | 8,066,740 | 7,898,782 | ||||||||||||
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Weighted
average common shares
|
||||||||||||||||
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Outstanding
- Diluted
|
8,112,373 | 7,901,327 | 8,066,740 | 7,898,782 | ||||||||||||
ALLIED
HEALTHCARE PRODUCTS, INC.
CONSOLIDATED
BALANCE SHEET
(UNAUDITED)
|
June 30, 2010
|
June 30, 2009
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|||||||
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ASSETS
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||||||||
|
Current
assets:
|
||||||||
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Cash
and cash equivalents
|
$ | 5,263,324 | $ | 1,943,364 | ||||
|
Accounts
receivable, net of allowances of $300,000
|
5,418,253 | 6,172,437 | ||||||
|
Inventories,
net
|
11,155,456 | 12,663,938 | ||||||
|
Income
tax receivable
|
877,665 | 937,273 | ||||||
|
Other
current assets
|
221,840 | 327,203 | ||||||
|
Total
current assets
|
22,936,538 | 22,044,215 | ||||||
|
Property,
plant and equipment, net
|
9,661,395 | 10,799,089 | ||||||
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Other
assets, net
|
333,084 | 390,627 | ||||||
|
Total
assets
|
$ | 32,931,017 | $ | 33,233,931 | ||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
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||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 1,950,446 | $ | 1,633,568 | ||||
|
Other
accrued liabilities
|
2,241,259 | 2,316,558 | ||||||
|
Deferred
income taxes
|
429,699 | 419,213 | ||||||
|
Deferred
revenue
|
688,200 | 688,200 | ||||||
|
Total
current liabilities
|
5,309,604 | 5,057,539 | ||||||
|
Deferred
revenue
|
802,900 | 1,491,100 | ||||||
|
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; 10,396,878 and
10,204,819 shares issued at June 30, 2010 and June 30, 2009,
respectively; 8,093,386 and 7,901,327 shares outstanding at June 30, 2010
and June 30, 2009, respectively
|
103,969 | 102,048 | ||||||
|
Additional
paid-in capital
|
48,362,922 | 47,632,049 | ||||||
|
Accumulated
deficit
|
(916,950 | ) | (317,377 | ) | ||||
|
Less
treasury stock, at cost; 2,303,492 shares at June 30, 2010 and June 30,
2009, respectively
|
(20,731,428 | ) | (20,731,428 | ) | ||||
|
Total
stockholders' equity
|
26,818,513 | 26,685,292 | ||||||
|
Total
liabilities and stockholders' equity
|
$ | 32,931,017 | $ | 33,233,931 | ||||