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Allied Healthcare Products Inc. Reports Operating Results (10-Q)

February 08, 2010 | About:
10qk

10qk

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Allied Healthcare Products Inc. (AHPI) filed Quarterly Report for the period ended 2009-12-31.

Allied Healthcare Products Inc. has a market cap of $39.81 million; its shares were traded at around $4.92 with and P/S ratio of 0.76. AHPI is in the portfolios of Chuck Royce of ROYCE & ASSOCIATES.

Highlight of Business Operations:

Allied had net sales of $11.4 million for the three months ended December 31, 2009, down $1.1 million, or 8.8%, from net sales of $12.5 million in the prior year same quarter. Customer orders of $10.9 million were $1.4 million lower than the prior year same quarter. Purchase order releases were only $0.8 million lower than in the prior year same quarter. Purchase order release times depend on the scheduling practices of individual customers, and do vary over time.

Income from operations was $44,626 for the three months ended December 31, 2009 compared to loss from operations of $0.7 million for the three months ended December 31, 2008. Allied had income before provision for income taxes in the second quarter of fiscal 2010 of $33,143, compared to a loss before benefit from income taxes in the second quarter of fiscal 2009 of $0.7 million. The Company recorded a tax provision of $11,573 for the three-months ended December 31, 2009 compared to a tax benefit of $0.3 million for the three months ended December 31, 2008.

Allied had net sales of $22.7 million for the six months ended December 31, 2009, down $4.3 million, or 15.9%, from net sales of $27.0 million in the prior year same period. Customer orders of $22.4 million were $3.1 million lower than the prior year same period. Purchase order releases were $4.0 million lower than in the prior year same period. Purchase order release times depend on the scheduling practices of individual customers, and do vary over time.

Selling, general and administrative expenses for the six months ended December 31, 2009 were $6.5 million compared to selling, general and administrative expenses of $6.6 million for the six months ended December 31 2008. Stock option expense increased approximately $0.6 million due to the grant of immediately vested stock options to the Company s President and CEO. This increase was partially offset by a decrease of approximately $260,000 for compensation expense as a result of a reduction in the Company s workforce, a decrease of approximately $48,000 for recruiting expenses, and a decrease of approximately $80,000 for outside professional services compared to the same period of the prior year. Due to the low level of sales for the first half of fiscal 2010, sales commissions decreased $83,000 compared to the same period of the prior year. Additionally, selling expenses for business travel decreased approximately $136,000, vehicle expenses decreased approximately $29,000, and expenses for trade shows decreased approximately $61,000 compared to the same period of the prior year.

Loss from operations was $1.1 million for the six months ended December 31, 2009 compared to loss from operations of $0.4 million for the six months ended December 31, 2008. Interest income was $1,448 for the six months ended December 31, 2009 compared to interest income of $49,114 for the six months ended December 31, 2008. Allied had loss before benefit from income taxes in the first half of fiscal 2010 of $1.2 million, compared to loss before benefit from income taxes in the first half of fiscal 2009 of $0.4 million. The Company recorded a tax benefit of $0.4 million for the six months ended December 31, 2009 compared to a tax benefit of $0.1 million for the six months ended December 31, 2008.

The Company s working capital was $17.4 million at December 31, 2009 compared to $17.0 million at June 30, 2009. Cash increased $0.5 million, income taxes receivable increased $0.7 million and inventory increased $0.1 million. The current deferred income tax liability decreased $0.3 million and accrued liabilities decreased $0.4 million. At December 31, 2009 these increases in working capital were offset by a $0.7 million increase in accounts payable and a decrease in accounts receivable of $0.9 million to $5.3 million at December 31, 2009. Accounts receivable as measured in days of sales outstanding (“DSO”) decreased to 42 DSO at December 31, 2009; down from 43 DSO at June 30, 2009.

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