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8-K - FORM 8-K - ALLIED HEALTHCARE INTERNATIONAL INCc09389e8vk.htm
Exhibit 99.1
(ALLIED HEALTHCARE LOGO)
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 — 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  
(Amounts in thousands)   Revenues     Gross Profit  
 
                                                               
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          
 
                                                       

 

 


 

(ALLIED HEALTHCARE LOGO)
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.

 

 


 

(ALLIED HEALTHCARE LOGO)
Fiscal 2010 Full Year Results
                                                                 
    Year Ended September 30,     Year Ended September 30,  
                    %                                     %  
    2010     2009     Change     2010     %     2009     %     Change  
(Amounts in thousands)   Revenue     Gross Profit  
 
                                                               
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 costs
                          $ 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.

 

 


 

(ALLIED HEALTHCARE LOGO)
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.

 

 


 

(ALLIED HEALTHCARE LOGO)
“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 PCT’s 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.

 

 


 

(ALLIED HEALTHCARE LOGO)
“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.

 

 


 

(ALLIED HEALTHCARE LOGO)
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 LOGO)
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

 

 


 

(ALLIED HEALTHCARE LOGO)
ALLIED HEALTHCARE INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)
                         
    Year Ended     Year Ended     Year Ended  
    September 30,     September 30,     September 30,  
    2010     2009     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 LOGO)
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 LOGO)
ALLIED HEALTHCARE INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)
                         
    Year Ended     Year Ended     Year Ended  
    September 30,     September 30,     September 30,  
    2010     2009     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 LOGO)
ALLIED HEALTHCARE INTERNATIONAL INC.
HISTORICAL REVENUES AND GROSS PROFIT

(In thousands, except foreign exchange rate)
(Unaudited)
                                                                 
    Revenues  
    Q4     Q3     Q2     Q1     Q4     Q3     Q2     Q1  
    2010     2010     2010     2010     2009     2009     2009     2009  
Homecare
  £ 39,255     £ 38,323     £ 35,860     £ 35,903     £ 35,763     £ 34,162     £ 30,858     £ 30,620  
Nursing Homes
    3,048       2,731       2,864       3,261       3,986       3,716       4,159       4,808  
Hospitals
    3,114       2,933       3,235       3,330       2,956       2,914       3,448       3,612  
 
                                               
Total
  £ 45,417     £ 43,987     £ 41,959     £ 42,494     £ 42,705     £ 40,792     £ 38,465     £ 39,040  
Foreign Exchange rate
    1.55       1.49       1.56       1.63       1.64       1.55       1.44       1.58  
 
                                               
 
  $ 70,417     $ 65,748     $ 65,530     $ 69,384     $ 69,845     $ 63,103     $ 55,334     $ 61,528  
 
                                               
                                                                 
    Gross Profit  
    Q4     Q3     Q2     Q1     Q4     Q3     Q2     Q1  
    2010     2010     2010     2010     2009     2009     2009     2009  
Homecare
  £ 12,188     £ 11,651     £ 11,083     £ 11,041     £ 10,951     £ 10,525     £ 9,753     £ 9,487  
Nursing Homes
    1,002       882       931       1,033       1,257       1,187       1,298       1,477  
Hospitals
    812       696       755       712       745       679       874       973  
 
                                               
Total
  £ 14,002     £ 13,229     £ 12,769     £ 12,786     £ 12,953     £ 12,391     £ 11,925     £ 11,937  
Foreign Exchange rate
    1.55       1.49       1.56       1.63       1.64       1.55       1.44       1.58  
 
                                               
 
  $ 21,712     $ 19,768     $ 19,948     $ 20,877     $ 21,196     $ 19,173     $ 17,166     $ 18,813  
 
                                               
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