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

May 07, 2010 | About:
10qk

10qk

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Allied Healthcare Products Inc. (AHPI) filed Quarterly Report for the period ended 2010-03-31.

Allied Healthcare Products Inc. has a market cap of $29.8 million; its shares were traded at around $3.68 with and P/S ratio of 0.6. AHPI is in the portfolios of Chuck Royce of Royce& Associates.

Highlight of Business Operations:

Allied had net sales of $11.6 million for the three months ended March 31, 2010, down $0.8 million, or 6.5%, from net sales of $12.4 million in the prior year same quarter. Customer orders of $10.6 million were $1.9 million lower than the prior year same quarter. Purchase order releases were only $1.0 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 $140,035 for the three months ended March 31, 2010 compared to loss from operations of $0.7 million for the three months ended March 31, 2009. Allied had income before provision for income taxes in the third quarter of fiscal 2010 of $62,010, compared to a loss before benefit from income taxes in the third quarter of fiscal 2009 of $0.7 million. The Company recorded a tax provision of $24,480 for the three-months ended March 31, 2010 compared to a tax benefit of $0.3 million for the three months ended March 31, 2009.

Allied had net sales of $34.4 million for the nine months ended March 31, 2010, down $5.0 million, or 12.7%, from net sales of $39.4 million in the prior year same period. Customer orders of $33.1 million were $5.0 million lower than the prior year same period. Purchase order releases were $5.0 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 nine months ended March 31, 2010 were $9.2 million compared to selling, general and administrative expenses of $9.8 million for the nine months ended March 31 2009. 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 offset by a decrease of approximately $0.6 million for compensation expense as a result of a reduction in the Company s workforce, a decrease of approximately $46,000 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 nine months of fiscal 2010, sales commissions decreased $154,000 compared to the same period of the prior year. Additionally, selling expenses for business travel decreased approximately $210,000, vehicle expenses decreased approximately $40,000, and expenses for trade shows decreased approximately $110,000 compared to the same period of the prior year.

Loss from operations was $1.0 million for the nine months ended March 31, 2010 compared to loss from operations of $1.1 million for the nine months ended March 31, 2009. Interest income was $4,403 for the nine months ended March 31, 2010 compared to interest income of $54,155 for the nine months ended March 31, 2009. Allied had loss before benefit from income taxes in the first nine months of fiscal 2010 and fiscal 2009 of $1.1 million. The Company recorded a tax benefit of $0.4 million for the nine months ended March 31, 2010 and March 31, 2009.

The Company s working capital was $17.5 million at March 31, 2010 compared to $17.0 million at June 30, 2009. Cash increased $1.3 million and income taxes receivable increased $0.7 million. The current deferred income tax liability decreased $0.3 million and accrued liabilities decreased $0.3 million. At March 31, 2010 these increases in working capital were offset by a decrease in inventory of $0.7 million, a decrease in other current assets of $0.1 million, a $0.5 million increase in accounts payable and a decrease in accounts receivable of $0.8 million to $5.4 million at March 31, 2010. Accounts receivable as measured in days of sales outstanding (“DSO”) decreased to 42 DSO at March 31, 2010; down from 43 DSO at June 30, 2009.

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