SOURCE: Allied Healthcare International Inc.

Allied Healthcare International Inc.

December 07, 2010 07:00 ET

Allied Healthcare International Inc. Reports Fiscal 2010 Fourth Quarter and Year-End Results

Fiscal 2010 Revenues Increased 8.0%, at Constant Exchange Rates; Fiscal 2010 Operating Income Increased 7.7%, at Constant Exchange Rates & Excluding Acquisition Costs

NEW YORK, NY--(Marketwire - December 7, 2010) - Allied Healthcare International Inc. (NASDAQ: AHCI), a leading provider of flexible healthcare staffing services in the United Kingdom, today issued financial results for its fiscal 2010 fourth quarter and year-ended September 30, 2010.

To provide investors with a better understanding of the Company's performance and because of fluctuations in foreign exchange rates, Allied is discussing its revenues, gross profit, selling, general & administrative (SG&A) expenses and operating income at constant exchange rates, which are calculated using the comparable prior period weighted average exchange rates. In addition, as the Company's revenues and gross profit from our principal operations are denominated in pounds sterling but reported in United States dollars, an analysis, which is contained in the Historical Revenues and Gross Profit table at the end of this press release, is included of the last eight quarters' revenues and gross profit in pounds sterling to enable investors to fully understand the underlying trends over these periods without the effects of currency exchange rates.

Fiscal Fourth Quarter Results

              Three Months Ended
                 September 30,         Three Months Ended September 30,
            -----------------------  -------------------------------------
                                %                                     %
              2010     2009   Change   2010     %      2009     %   Change
            -------- -------- ------ -------  -----  -------- ----- ------
                    Revenues                     Gross Profit
            ------------------------ -------------------------------------

(Amounts in
 thousands)
Homecare    $64,244  $ 58,388  10.0% $19,934   31.0% $ 17,893  30.6%  11.4%
Nursing
 Homes        4,998     6,568 -23.9%   1,641   32.8%    2,070  31.5% -20.7%
Hospitals     5,120     4,889   4.7%   1,326   25.9%    1,233  25.2%   7.5%
            -------  -------- -----  -------         --------        -----
Total, at
 constant
 exchange
 rates       74,362    69,845   6.5%  22,901   30.8%   21,196  30.3%   8.0%
Effect of
 foreign
 exchange    (3,945)        -  -5.6%  (1,189)               -         -5.6%
            -------  -------- -----  -------         --------        -----
Total, as
 reported   $70,417  $ 69,845   0.8% $21,712         $ 21,196          2.4%
            =======  ======== =====  -------         --------        -----


                                                     SG&A
                                     -------------------------------------
SG&A, at
 constant
 exchange
 rates &
 excluding
 acquisition
 costs                               $19,033         $ 17,010         11.9%
Acquisition
 costs, at
 constant
 exchange
 rates                                   157                -          0.9%
                                     -------         --------        -----
SG&A, at
 constant
 exchange
 rates                                19,190           17,010         12.8%
Effect of
 foreign
 exchange                               (946)               -         -5.6%
                                     -------         --------        -----
Total SG&A,
 as reported                         $18,244         $ 17,010          7.3%
                                     -------         --------        -----


                                               Operating Income
                                     -------------------------------------
Operating
 income, at
 constant
 exchange
 rates &
 excluding
 acquisition
 cost                                $ 3,868         $  4,186         -7.6%
Acquisition
 costs, at
 constant
 exchange
 rates                                  (157)               -         -3.8%
                                     -------         --------        -----
Operating
 income, at
 constant
 exchange
 rates                                 3,711            4,186        -11.3%
Effect of
 foreign
 exchange                               (243)               -         -5.8%
                                     -------         --------        -----
Operating
 income, as
 reported                            $ 3,468         $  4,186        -17.2%
                                     =======         ========        =====


                                       Net Income Attributable to Allied
                                     -------------------------------------
                                              Basic           Basic
                                               and             and
                                             Diluted         Diluted
                                               EPS             EPS
                                     -------------------------------------
Income from continuing
 operations attributable
 to Allied, excluding
 acquisition costs                   $ 2,858  $0.07  $  2,937 $0.07
Acquisition Costs                       (146) -0.01         -     -
                                     -------  -----  -------- -----
Income from continuing
 operations attributable
 to Allied                           $ 2,712  $0.06  $  2,937 $0.07
                                     =======  =====  ======== =====

For the fourth quarter of fiscal 2010, total revenue increased 6.5%, to $74.4 million, compared with $69.8 million reported during the same period in fiscal 2009. Allied's Homecare revenue grew 10.0% to $64.2 million. The acquisition completed in our third fiscal quarter contributed 7.5%, or $4.4 million, to the increase in Homecare revenues. Nursing Homes revenue declined 23.9% to $5.0 million and Hospitals revenue increased 4.7% to $5.1 million. After the unfavorable impact of currency exchange of $3.9 million, revenue increased 0.8% year over year to the reported $70.4 million.

Total gross profit for the fourth fiscal quarter increased 8.0% to $22.9 million, from $21.2 million for the comparable quarter in fiscal 2009. Homecare gross profit grew 11.4% to $19.9 million. The acquisition completed in our third fiscal quarter contributed 7.6%, or $1.4 million, to the increase in Homecare gross profit. Nursing Homes gross profit declined 20.7% to $1.7 million and Hospitals gross profit increased 7.5% to $1.3 million. Gross profit as a percentage of revenue was 30.8%, compared with 30.3% for the comparable prior-year period. Foreign exchange decreased gross profit by $1.2 million to the reported $21.7 million for the 2010 fourth fiscal quarter.

SG&A, excluding acquisition costs, for the fourth fiscal quarter was $19.0 million (25.6% of revenues), an increase of 11.9%, from $17.0 million (24.4% of revenues) reported last year. The acquisition completed in our third fiscal quarter contributed 6.4%, or $1.0 million, to the increase in SG&A. The Company also incurred acquisition costs of $0.1 million. Foreign exchange decreased costs by $0.9 million to the reported $18.2 million for the 2010 fourth fiscal quarter.

Operating income, before acquisition costs, for the fourth quarter of fiscal 2010 decreased by 7.6% to $3.9 million from $4.2 million a year ago. Acquisition costs decreased operating income by $0.1 million. Foreign exchange decreased operating income by $0.3 million to the reported $3.5 million for the 2010 fourth fiscal quarter.

Income from continuing operations attributable to Allied, excluding acquisition costs, for the fourth quarter of fiscal 2010 was $2.9 million, or $0.07 per diluted share. Income from continuing operations attributable to Allied for the fourth quarter of fiscal 2010 was $2.7 million, or $0.06 per diluted share, compared with $2.9 million, $0.07 per diluted share, reported during the 2009 fourth fiscal quarter.

Fiscal 2010 Full Year Results

            Year Ended September 30,       Year Ended September 30,
            ------------------------ -------------------------------------
                                %                                     %
              2010     2009   Change   2010     %      2009     %   Change
            -------- -------- ------ -------  -----  -------- ----- ------
                    Revenue                      Gross Profit
            ------------------------ -------------------------------------

(Amounts in
 thousands)
Homecare    $231,718 $203,885  13.7% $71,314   30.8% $ 63,176  31.0%  12.9%
Nursing
 Homes        18,469   25,863 -28.6%   5,971   32.3%    8,097  31.3% -26.3%
Hospitals     19,571   20,062  -2.4%   4,618   23.6%    5,075  25.3%  -9.0%
            -------- -------- -----  -------         --------       ------
Total, at
 constant
 exchange
 rates       269,758  249,810   8.0%  81,903   30.4%   76,348  30.6%   7.3%
Effect of
 foreign
 exchange      1,321        -   0.5%     402                -          0.5%
            -------- -------- -----  -------         --------       ------
Total, as
 reported   $271,079 $249,810   8.5% $82,305         $ 76,348          7.8%
            ======== ======== =====  -------         --------       ------


                                                    SG&A
                                     -------------------------------------
SG&A, at
 constant
 exchange
 rates &
 excluding
 acquisition
 costs                               $67,776         $ 63,234          7.2%
Acquisition
 costs, at
 constant
 exchange
 rates                                   752                -          1.2%
                                     -------         --------        -----
SG&A, at
 constant
 exchange
 rates                                68,528           63,234          8.4%
Effect of
 foreign
 exchange                                318                -          0.5%
                                     -------         --------        -----
Total SG&A,
 as reported                         $68,846         $ 63,234          8.9%
                                     -------         --------        -----


                                                 Operating Income
                                     -------------------------------------
Operating
 income, at
 constant
 exchange
 rates &
 excluding
 acquisition
 cost                                $14,127         $ 13,114          7.7%
Acquisition
 costs, at
 constant
 exchange
 rates                                  (752)               -         -5.7%
                                     -------         --------        -----
Operating
 income, at
 constant
 exchange
 rates                                13,375           13,114          2.0%
Effect of
 foreign
 exchange                                 84                -          0.6%
                                     -------         --------        -----
Operating
 income, as
 reported                            $13,459         $ 13,114          2.6%
                                     =======         ========        =====


                                       Net Income Attributable to Allied
                                     -------------------------------------
                                              Basic            Basic
                                               and              and
                                             Diluted          Diluted
                                               EPS              EPS
                                     -------------------------------------
Income from continuing
 operations attributable to
 Allied, excluding
 acquisition cost                    $10,624  $0.24  $  9,936 $0.22

Acquisition costs                       (756) -0.02         -     -
                                     -------  -----  -------- -----
Income from continuing
 operations attributable to
 Allied                              $ 9,868  $0.22  $  9,936 $0.22
                                     =======  =====  ======== =====

For the year ended September 30, 2010 total revenue increased 8.0%, to $269.8 million, compared with $249.8 million for the same period in fiscal 2009. Allied's Homecare revenue grew 13.7% to $231.7 million. The acquisition completed in the third quarter of fiscal 2010 contributed 3.2%, or $6.5 million, to the increase in Homecare revenues. Nursing Homes revenue declined 28.6% to $18.5 million and Hospitals revenue declined 2.4% to $19.6 million. After the favorable impact of currency exchange of $1.3 million, revenue increased 8.5% year over year to the reported $271.1 million for fiscal 2010.

Total gross profit for the year ended September 30, 2010 increased 7.3% to $81.9 million, from $76.3 million for the comparable period in fiscal 2009. Homecare gross profit grew 12.9% to $71.3 million. The acquisition completed in our third fiscal quarter contributed 3.1%, or $2.0 million, to the increase in Homecare gross profit. Nursing Homes gross profit declined 26.3% to $6.0 million and Hospitals gross profit declined 9.0% to $4.6 million. Gross profit as a percentage of revenue was 30.4%, compared with 30.6% for the comparable prior-year period. Foreign exchange increased gross profit by $0.4 million to the reported $82.3 million for fiscal 2010.

SG&A, excluding acquisition costs, for the year ended September 30, 2010 was $67.8 million (25.1% of revenues), an increase of 7.2%, from $63.2 million (25.3% of revenues) reported last year. The acquisition completed in our third fiscal quarter contributed 2.4%, or $1.5 million, to the increase in SG&A. We also incurred acquisition costs of $0.7 million. Foreign exchange increased costs by $0.3 million to the reported $68.8 million for fiscal 2010.

Operating income, before acquisition costs, for the year ended September 30, 2010 increased by 7.7% to $14.1 million from $13.1 million a year ago. Acquisition costs decreased operating income by $0.7 million. Foreign exchange increased operating income by $0.1 million to the reported $13.5 million for fiscal 2010.

Income from continuing operations attributable to Allied, excluding acquisition costs, for the year ended September 30, 2010 was $10.6 million, or $0.24 per diluted share. Income from continuing operations attributable to Allied for the year ended September 30, 2010 was $9.9 million, or $0.22 per diluted share, compared with $9.9 million, $0.22 per diluted share, reported during fiscal 2009.

At September 30, 2010 and September 30, 2009, Allied cash balance was $39.0 million (£24.7 million) and $35.3 million (£22.2 million), respectively, represent an underlying increase in the cash balance of $3.7 million (£2.5 million).

For the year ended September 30, 2010, depreciation and amortization was $4.4 million (£2.8 million), capital expenditures were $2.8 million (£1.8 million). Days Sales Outstanding was 26 days at September 30, 2010 (43 days including unbilled account receivables), and 25 days at September 30, 2009 (40 days including unbilled account receivables).

Management Discussion

Sandy Young, Chief Executive Officer of Allied, commented, "Allied's financial performance during the fourth quarter reflects tightening in the U.K. government's spending and challenging macroeconomic factors. The acquisition of Homecare business in Ireland contributed $4.4 million to Allied's top line during the quarter, resulting in 10% growth of our Homecare revenue compared to the fourth quarter a year ago. Excluding the acquisition, our Homecare revenue grew 2.5% year over year, with an 11.5% increase in continuing care.

"In order to reduce the U.K. government's fiscal deficit, following its Comprehensive Spending Review, HM Treasury announced in October 2010 its plans to achieve a significant reduction in public spending. While the U.K. government has stated that it will increase spending in the National Health Service over the next four years to support healthcare, we note the increase will be partially offset as the NHS have increased obligations and cost of treatments going forward due to the growing population and demand for better healthcare. However, the Comprehensive Spending Review will also allocate £2 billion a year of additional funding by 2014-15 to support social care. Combined with a program of reform and efficiency savings, such as greater use of personal budgets, the U.K. government believes this should mean local authorities should be able to improve outcomes and should not need to reduce eligibility for services.

"The Comprehensive Spending Review also announced significant cuts in funding to local authorities, the main providers of social care, and other public bodies, which are a key source of revenue to Allied. Individual local authorities will decide which of their back office costs and front line services to allocate savings to.

"Based on the current and anticipated changes in the U.K. government's policies, we believe that it is possible that demand will be flat on a consecutive basis for the near term. However, due to Allied's favorable position in the industry, strong reputation and innovative business approach, we expect to return to growth in the mid-term.

"Allied is in a good position to benefit from joint commissioning of health and social care. For example:

-- Within our homecare revenue, we have over $159 million (£102 million) in
   social care revenue, $57.7 million (£37 million) in continuing care
   revenue and $13.3 million (£8.5 million) in learning disability revenue;
-- We are introducing new Primary Care Trust services this year. They will
   include our night roaming service, our end of life services and other
   specialist health services;
-- We are winning extra care contracts, a potentially new revenue stream;
-- We are looking at new homecare solutions, including
   Telecare/Telehealth; and
-- We are extending the boundaries of the care and supported living we
   provide to include children's services and services for drug and alcohol
   abuse.  Some of these require rental housing to be part of the package.

"Although we anticipate that there will be continuing tension in spending, we believe that councils and PCTs are likely to:

-- Outsource more than they do at present, particularly in Scotland, Wales
   and Ireland;
-- Have the ability to get incremental savings by directing greater volumes
   to providers of scale like Allied;
-- Keep individuals out of hospital and in their own homes;
-- Favor lower cost homecare over more  expensive residential care;
-- Pursue new and quite entrepreneurial services around the end of life
   pathway; and
-- Still need to provide for the increasing numbers of elderly each year.

"So today, Allied can claim to be one of the leading providers of health and social care in the U.K., and we continue to expand our market footprint. During the fourth quarter and in subsequent months we won a number of domiciliary care framework contracts, the two largest being:

-- East Sussex County Council -- Up to 2,000 hours per week for four years,
   which commenced November 2010.
-- Cardiff City Council -- Up to 2,000 hours per week for three years,
   commencing April 2011.

"In addition we have won a community homecare contract with Leeds City Council and NHS, and a contract for nursing supplied with Welsh Health Supply. We have also seen a number of positive wins in continuing care from framework agreements, including Doncaster and an additional opportunity in Sheffield.

"In a consistent pursuit of improving and expanding our value proposition, we continued to make investments in our operational infrastructure. To date, 55 of our branches are live on Coldharbour, and the software rollout is continuing according to plan. Our customer complaints and risk management system, which was built in house, is currently under testing and is planned to go live at the beginning of calendar 2011. Additionally, we are actively working on several other projects, such as call monitoring, carer retention and the centralization of our on-call out of hours service. We also piloted our recruitment screening and compliance department project in Wales and have received very positive feedback. Our recruitment pipeline tracker is undergoing design changes for full rollout to the business in the near future.

"In summary, Allied is well positioned to capitalize on the growing elderly population, shift from residential to homecare services and the move towards joint commissioning of health and social care," concluded Mr. Young.

Dr. Jeffrey Peris, Chairman of Allied, commented, "The Board remains confident in the opportunities for growth through management actions on innovative initiatives. Based on our identified strategies for growth being successfully implemented, our financial track record over the last few years, our focus and results in improving operating efficiencies, and the recruitment and retention of talented people -- we continue to strive to enhance shareholder value."

Conference Call Information: December 7, 2010 at 10:00 AM Eastern Time / 3:00 PM UK Time

Allied will host a call and webcast today at 10:00 AM Eastern Time / 3:00 PM UK Time, to discuss its financial results. To join the call, please dial (877) 407-8031 for domestic participants and (201) 689-8031 for international participants. Participants may also access a live webcast of the conference call through the "Investors" section of Allied Healthcare's Website: www.alliedhealthcare.com. A telephone replay will be available for two weeks following the call by dialing (877) 660-6853 for domestic participants and (201) 612-7415 for international participants. When prompted, please enter account number 286 and conference ID number 360782. A webcast replay will also be available and archived on the Company's website for ninety days.

Reconciliation of GAAP and Non-GAAP Data

In addition to disclosing results of operations that are determined in accordance with generally accepted accounting principles ("GAAP"), this press release also discloses non-GAAP results of operations that exclude or include certain charges. These non-GAAP measures adjust for foreign exchange effects and acquisition costs. Management believes that the presentation of these non-GAAP measures provides useful information to investors regarding the Company's results of operations, as these non-GAAP measures allow investors to better evaluate ongoing business performance. Investors should consider non-GAAP measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP. A reconciliation of the non-GAAP measures disclosed in this press release with the most comparable GAAP measures are included in the financial tables included in this press release.

ABOUT ALLIED HEALTHCARE INTERNATIONAL INC.

Allied Healthcare International Inc. is a leading provider of flexible healthcare staffing services in the United Kingdom. Allied operates a community-based network of approximately 115 branches with the capacity to provide carers (known as home health aides in the U.S.), nurses, and specialized medical personnel to locations covering approximately 90% of the U.K. population. Allied meets the needs of private patients, community care, nursing and care homes, and hospitals. For more news and information please visit: www.alliedhealthcare.com.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this news release may be forward-looking statements. These forward-looking statements are based on current expectations and projections about future events. Actual results could differ materially from those discussed in, or implied by, these forward-looking statements. Factors that could cause actual results to differ from those implied by the forward-looking statements include: general economic and market conditions; the effect of the change in the U.K. government and the impact of proposed changes in recent policy making related to health and social care that may reduce revenue and profitability; the impact of the HM Treasury Comprehensive Spending Review 2010 setting out the U.K. government's plans to reduce spending; Allied's ability to continue to recruit and retain flexible healthcare staff; Allied's ability to enter into contracts with local government social services departments, NHS Trusts, hospitals, other healthcare facility clients and private clients on terms attractive to Allied; the general level of demand and spending for healthcare and social care; dependence on the proper functioning of Allied's information systems; the effect of existing or future government regulation of the healthcare and social care industry, and Allied's ability to comply with these regulations; the impact of medical malpractice and other claims asserted against Allied; the effect of regulatory change that may apply to Allied and that may increase costs and reduce revenues and profitability; the effect of existing or future government regulation in relation to employment and agency workers' rights and benefits, including changes to National Insurance rates and pension provision; Allied's ability to use net operating loss carry forwards to offset net income; the effect that fluctuations in foreign currency exchange rates may have on our dollar-denominated results of operations; and the impairment of goodwill, of which Allied has a substantial amount on the balance sheet, may have the effect of decreasing earnings or increasing losses. Other factors that could cause actual results to differ from those implied by the forward-looking statements in this press release include those described in Allied's most recently filed SEC documents, such as its most recent annual report on Form 10-K, all quarterly reports on Form 10-Q and any current reports on Form 8-K filed since the date of the last Form 10-K. Allied undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

ALLIED HEALTHCARE INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)


                                         Year Ended  Year Ended  Year Ended
                                         September   September   September
                                          30, 2010    30, 2009    30, 2008
                                         ----------  ----------  ---------
Revenues:
    Net patient services                 $  271,079  $  249,810  $ 298,577
                                         ----------  ----------  ---------

Cost of revenues:
    Patient services                        188,774     173,462    208,192
                                         ----------  ----------  ---------

          Gross profit                       82,305      76,348     90,385

Selling, general and administrative
 expenses                                    68,846      63,234     77,655
                                         ----------  ----------  ---------

          Operating income                   13,459      13,114     12,730

Interest income                                 361         537        935
Interest expense                                (30)       (110)      (542)
Foreign exchange loss                          (210)       (197)      (586)
                                         ----------  ----------  ---------

          Income before income taxes
           and discontinued operations       13,580      13,344     12,537

Provision for income taxes                    3,524       3,408      3,751
                                         ----------  ----------  ---------

          Income from continuing
           operations                        10,056       9,936      8,786
                                         ----------  ----------  ---------

Discontinued operations:
Income from discontinued operations,
 net of taxes                                     -         367          -
                                         ----------  ----------  ---------

Net income                                   10,056      10,303      8,786

Less:  Net income attributable to
 noncontrolling interest                       (188)          -          -
                                         ----------  ----------  ---------

Net income attributable to Allied
 Healthcare International Inc.           $    9,868  $   10,303  $   8,786
                                         ==========  ==========  =========

Amounts attributable to Allied
 Healthcare International Inc.:
          Income from continuing
           operations, net of tax        $    9,868  $    9,936  $   8,786
          Discontinued operations,
           net of tax                             -         367          -
                                         ----------  ----------  ---------
          Net income                     $    9,868  $   10,303  $   8,786
                                         ==========  ==========  =========

Basic earnings per share - attributable
 to Allied Healthcare International Inc.
 common shareholders
          Income from continuing
           operations                    $     0.22  $     0.22  $    0.20
          Income from discontinued
           operations                             -        0.01          -
                                         ----------  ----------  ---------
Net income attributable to Allied
 Healthcare International Inc. common
 shareholders                            $     0.22  $     0.23  $    0.20
                                         ==========  ==========  =========

Diluted earnings per share - attributable
 to Allied Healthcare International Inc.
 common shareholders
          Income from continuing
           operations                    $     0.22  $     0.22  $    0.19
          Income from discontinued
           operations                             -        0.01          -
                                         ----------  ----------  ---------
Net income attributable to Allied
 Healthcare International Inc. common
 shareholders                            $     0.22  $     0.23  $    0.19
                                         ==========  ==========  =========

Weighted average number of common
 shares outstanding:
          Basic                              44,796      44,986     44,986
                                         ==========  ==========  =========
          Diluted                            45,009      45,011     45,078
                                         ==========  ==========  =========





ALLIED HEALTHCARE INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)

                                              September 30,  September 30,
                                                  2010           2009
                                              -------------  -------------
                          ASSETS

Current assets:
  Cash and cash equivalents                   $      39,031  $      35,273
  Accounts receivable, less allowance for
   doubtful accounts of $732 and $839,
   respectively                                      20,092         19,594
  Unbilled accounts receivable                       13,393         11,572
  Deferred income taxes                                 552            389
  Prepaid expenses and other assets                   1,943          1,188
                                              -------------  -------------
         Total current assets                        75,011         68,016

Property and equipment, net                           8,924          7,756
Goodwill                                            102,945         95,649
Other intangible assets, net                          3,501          1,646
                                              -------------  -------------
         Total assets                         $     190,381  $     173,067
                                              =============  =============

       LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable                            $       1,581  $       1,186
  Current maturities of debt and capital leases         614              -
  Accrued expenses, inclusive of payroll and
   related expenses                                  25,897         24,304
  Taxes payable                                       2,310            201
                                              -------------  -------------
         Total current liabilities                   30,402         25,691

Long-term debt and capital leases, net of
 current maturities                                     389              -
Deferred income taxes                                 1,534            103
Other long-term liabilities                             308              -
                                              -------------  -------------
         Total liabilities                           32,633         25,794
                                              -------------  -------------

Commitments and contingencies

Noncontrolling interest                               4,358              -
                                              -------------  -------------

Shareholders' equity:
  Preferred stock, $.01 par value; authorized
   10,000 shares, issued and outstanding - none           -              -
  Common stock, $.01 par value; authorized
   80,000 shares, issued 45,721 and 45,571
   shares, respectively                                 457            456
  Additional paid-in capital                        242,478        241,555
  Accumulated other comprehensive loss              (15,267)       (14,418)
  Accumulated deficit                               (68,158)       (78,026)
                                              -------------  -------------
                                                    159,510        149,567
  Less cost of treasury stock (2,150 and 585
   shares, respectively)                             (6,120)        (2,294)
                                              -------------  -------------
         Total shareholders' equity                 153,390        147,273
                                              -------------  -------------
         Total liabilities and shareholders'
          equity                              $     190,381  $     173,067
                                              =============  =============





ALLIED HEALTHCARE INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

                                        Year Ended  Year Ended  Year Ended
                                        September   September   September
                                         30, 2010    30, 2009    30, 2008
                                        ----------  ----------  ----------
Cash flows from operating activities:
  Net income                            $   10,056  $   10,303  $    8,786
  Adjustments to reconcile net income
   to net cash provided by operating
   activities:
    Income from discontinued operations          -        (367)          -
    Depreciation and amortization            3,108       2,590       3,231
    Amortization of intangible assets        1,324       1,252       1,634
    Foreign exchange (gain) loss               (43)          7           -
    Increase (decrease) in provision for
     allowance for doubtful accounts            30         360        (167)
    Loss on sale of fixed assets                31          20         166
    Stock based compensation                   636         537         812
    Deferred income taxes                       61         117          88
  Changes in operating assets and
   liabilities, excluding
   the effect of businesses acquired
   and sold:
    Decrease (increase) in accounts
     receivable                                 82      (4,281)      1,579
    (Increase) decrease in prepaid
     expenses and other assets              (1,544)      2,318      (3,488)
    Increase (decrease) in accounts
     payable and other liabilities           2,260       2,867      (3,779)
                                        ----------  ----------  ----------

      Net cash provided by continuing
       operations                           16,001      15,723       8,862
      Net cash used in discontinued
       operations                                -           -        (561)
                                        ----------  ----------  ----------
      Net cash provided by operating
       activities                           16,001      15,723       8,301
                                        ----------  ----------  ----------

Cash flows from investing activities:
  Capital expenditures                      (2,768)     (2,850)     (3,344)
  Acquisition of controlling interest,
   net of cash acquired                     (5,680)          -           -
  Proceeds from sale of business held in
   escrow and designated for debt
   repayment                                     -         116      53,638
  Proceeds from sale of property and
   equipment                                    73           1          50
  Payments on acquisitions payable               -      (1,082)          -
                                        ----------  ----------  ----------

      Net cash (used in) provided by
       investing activities                 (8,375)     (3,815)     50,344
                                        ----------  ----------  ----------

Cash flows from financing activities:
  Repayments of debt and capital lease
   obligations                                (152)          -           -
  Payments under revolving loan, net             -           -     (24,664)
  Borrowings (payments) under invoice
   discounting facility, net                   255           -      (4,458)
  Principal payments on long-term debt           -           -     (23,678)
  Proceeds from sale of interest rate
   swap agreements                               -           -         617
  Treasury shares acquired                  (3,826)          -           -
  Stock options exercised                      288           -           -
                                        ----------  ----------  ----------

      Net cash used in financing
       activities                           (3,435)          -     (52,183)
                                        ----------  ----------  ----------

Effect of exchange rate on cash               (433)     (2,834)       (504)
                                        ----------  ----------  ----------

Increase in cash                             3,758       9,074       5,958

Cash and cash equivalents, beginning of
 year                                       35,273      26,199      20,241
                                        ----------  ----------  ----------

Cash and cash equivalents, end of year  $   39,031  $   35,273  $   26,199
                                        ==========  ==========  ==========

Supplemental cash flow information:
  Cash paid for interest                $       30  $      405  $    1,143
                                        ==========  ==========  ==========

  Cash paid for income taxes, net       $    1,459  $    1,102  $    4,872
                                        ==========  ==========  ==========

Supplemental disclosure of non-cash
 investing and financing activities:
  Capital expenditures included in
   accrued expenses and other long-term
   liabilities                          $      609
                                        ==========

  Details of business acquired in
   purchase transactions:
    Fair value of assets acquired       $   12,319
                                        ==========

    Liabilities assumed or incurred     $    2,715
                                        ==========

    Noncontrolling interest             $    3,888
                                        ==========

    Cash paid for acquisitions          $    5,716
    Cash acquired                               36
                                        ----------

    Net cash paid for acquisitions      $    5,680
                                        ==========





ALLIED HEALTHCARE INTERNATIONAL INC.
HISTORICAL REVENUES AND GROSS PROFIT
(In thousands, except foreign exchange rate)
(Unaudited)


                                             Revenues

                             Q4           Q3           Q2           Q1
                            2010         2010         2010         2010
                        ------------ ------------ ------------ ------------

Homecare                  GBP 39,255   GBP 38,323   GBP 35,860   GBP 35,903
Nursing Homes                  3,048        2,731        2,864        3,261
Hospitals                      3,114        2,933        3,235        3,330
                        ------------ ------------ ------------ ------------
Total                     GBP 45,417   GBP 43,987   GBP 41,959   GBP 42,494
Foreign Exchange rate           1.55         1.49         1.56         1.63
                        ------------ ------------ ------------ ------------
                        $     70,417 $     65,748 $     65,530 $     69,384
                        ============ ============ ============ ============


                                           Gross Profit

                              Q4           Q3           Q2           Q1
                             2010         2010         2010         2010
                        ------------ ------------ ------------ ------------

Homecare                  GBP 12,188   GBP 11,651   GBP 11,083   GBP 11,041
Nursing Homes                  1,002          882          931        1,033
Hospitals                        812          696          755          712
                        ------------ ------------ ------------ ------------
Total                     GBP 14,002   GBP 13,229   GBP 12,769   GBP 12,786
Foreign Exchange rate           1.55         1.49         1.56         1.63
                        ------------ ------------ ------------ ------------
                        $     21,712 $     19,768 $     19,948 $     20,877
                        ============ ============ ============ ============


                                             Revenues

                             Q4           Q3           Q2           Q1
                            2009         2009         2009         2009
                        ------------ ------------ ------------ ------------

Homecare                  GBP 35,763   GBP 34,162   GBP 30,858   GBP 30,620
Nursing Homes                  3,986        3,716        4,159        4,808
Hospitals                      2,956        2,914        3,448        3,612
                        ------------ ------------ ------------ ------------
Total                     GBP 42,705   GBP 40,792   GBP 38,465   GBP 39,040
Foreign Exchange rate           1.64         1.55         1.44         1.58
                        ------------ ------------ ------------ ------------
                        $     69,845 $     63,103 $     55,334 $     61,528
                        ============ ============ ============ ============


                                           Gross Profit

                             Q4           Q3           Q2           Q1
                            2009         2009         2009         2009
                        ------------ ------------ ------------ ------------

Homecare                  GBP 10,951   GBP 10,525    GBP 9,753    GBP 9,487
Nursing Homes                  1,257        1,187        1,298        1,477
Hospitals                        745          679          874          973
                        ------------ ------------ ------------ ------------
Total                     GBP 12,953   GBP 12,391   GBP 11,925   GBP 11,937
Foreign Exchange rate           1.64         1.55         1.44         1.58
                        ------------ ------------ ------------ ------------
                        $     21,196 $     19,173 $     17,166 $     18,813
                        ============ ============ ============ ============

Contact Information

  • Allied Healthcare International Inc.
    Sandy Young
    Chief Executive Officer
    Paul Weston
    Chief Financial Officer
    +44 (0) 17 8581 0600

    Or

    ICR, LLC
    Sherry Bertner
    Managing Director
    +1 646 277 1200
    sherry.bertner@icrinc.com